It's another Q&A show where Roger and Pete answer YOUR questions about such mighty subjects as bridging the gap from retirement to state pension, CGT for non-taxpayers and much more besides!

Shownotes: https://meaningfulmoney.tv/QA48 

02:18  Question 1

Hello Pete and Roger, wonderful podcast and I'll try and acceed to your short question desire. And I'll try not to use the word should.

I am 52 and my wife and I would like to retire at 60. I have a DB pension that should pay me £20k per year from 65.  I would like to live off £50k per year and currently have £220k in a DC pension. That will hopefully get to £500k by age of 60. Equally I am hoping to have £100k in a S&S ISA and hoping to have the first year of retirement spending in cash.
 
My question is around my bridging requirements before my DB pension and state pensions kick in (my wife is 46).
 
Am I better off pulling 25% of DC tax free at the age of 60 and putting that into ISA's  or is it better to just pull pension money per year with and ongoing 25% tax free Allowance and using the smaller ISA amount to minimise tax.
Just interested in your thoughts :-)
Thanks and please keep up the great work.
Kind regards, Adrian

06:38  Question 2

Hi Pete & Roger

A few months ago a friend recommended your podcast and I've been devouring it ever since! Having worked in Compensation & Benefits for the past 15 years, and spending much of my time these days in the design and operation of pension plans, I thought I had a pretty good grasp on such things. But I've already learned a few tips and tricks to help as I plan my retirement, so huge thanks to you both!

My question for you is about CGT liabilities when one is a non-tax payer. My son is in the fortunate position of having a healthy savings pot in a GIA, thanks to gifts/inheritances from grandparents over the years, which each year he sweeps into his LISA and stocks and shares ISA up to the £20k limit. The return has been really good this year and he is likely to realise a gain in excess of the £3k limit next April when doing the sweep.

As he is still at university and only earning a few pounds here and there as a freelance musician, his earnings are well below the Personal Allowance. My Googling suggests that he would therefore not have to pay any CGT if the gain was above £3k next April.

Is that correct?

Many thanks in advance and keep up the good work!
Kind regards, Marion

10:03  Question 3

Hi Pete and Roger,

I am 56 and have been paying closer attention to my Pensions for the last 12 months. This is with a view to making an informed decision about my retirement plans at 60.

Pete's videos and the podcast have been a great help.

I am aiming for the Retirement Living Standards 'comfortable' figure for a single person because a) why not?, b) I am pretty sure I will be able to afford it, and c) I have estimated my needs and that more than covers it.

I have a spreadsheet which models everything for me.

I have 2 questions. A quarter of my pension will come from a DB which starts at 65. A quarter from the state from 67. The rest from my DC pot which I expect to be at least £600,000 by 60. The bridge from 60-65 comes from other assets. Any thoughts on the equity/bond split for my DC pot given that 50% of my pension is secure? 60:40 feels too bond heavy to me, I was thinking 80:20.

And, following your 'not advice' I have modelled what I know now, inflation at 3.6%. I experimented by dropping inflation by 1.0%. I was amazed to see that at 3.6% my pot runs down but not out at age 100. At 2.6% it keeps accumulating and never turns down. I have used 8.25% for growth but made no allowance for tax free cash, UFPLS etc. It just shows the pernicious impact of inflation. Does that feel about right to you.

Thanks, Mike

18:31 Question 4

Hi Chaps

A thought just occurred to me and I wondered whether you've covered this already....

Will v Pension Expression of Wishes - which one wins in that battle if there's a conflict (from April 2027)? I've just noticed that my wife's EOW for her pension is different to that in her will, and would therefore be a problem from April 2027?

Cheers, John

 

21:34 Question 5

Hi Gentlemen (Pension Gurus)

My 18 year old children are setting out in the wonderful world of work and (with my "encouragement") are squirrelling away 10-12.5% of their salary into pensions (with their employers contributing 4 and 12.5% respectively). So one ok and one really good.

Q: Their workplace pensions are with Aviva and L&G respectively and at the moment they are in the "default" scheme. As default pensions are a "one size fits all" I don't think that it's necessarily the best for my children with at least 35 years of investing left. Plus I don't like the idea of 10% being gambled on start ups. I'd like to come out of the default scheme but am not sure what to invest in i.e. if I DIY what % global index? global bonds what %? multi asset and if so what %? Or something simple like life strategy etc? What would your guidance be to an 18 year old on what to invest in their pension?

Many thanks, London Mum

27:48  Question 6

Hi both, I am wondering how to approach retirement.
I am 32 years of age and I have a DB pension with work. I am single with 18 years left on my mortgage. No kids.

I have been splitting my saving contributions between workplace pension which goes out before I get my pay, cash ISA, S&S ISA and Lifetime ISA. With the latest budget I am conscious of the constant messing of the pensions and ISA's, mainly the lifetime ISA as they are potentially getting rid of it.

Do I just carry on with the contributions as is? Will the lifetime ISA still be ok to contribute to for retirement planning?
Thanks, Lisa