Teenage take over 18 - The budget!
Hi guys, I am back again with another blog! This time I’m going to be talking about the budget, my nan wanted to give us her pensions after she died tax free but now those bastards are gonna take 40%!
This is the first time I’ve ever really heard the word budget partly because I am older and now taking A level economics but it’s been flying around everywhere…
So I got curious and here’s the scoop…
Q: What does retirement mean to you personally?
Nan’s response – no more work! Finding things to fill the time and financial worries – Which she did have a plan for!
Q: When did you first start thinking seriously about saving for retirement?
Not till 40, majority of pensions savings done over the last 15 years. This is definitely sub-optimal!
Now we all know the truth teenagers aren’t the most likely people you’ll find talking about pensions. We’re probably talking about something random like Shrek or complaining about the maths homework that no matter how much I seem to do there’s always more. Yet, the Pay Your Pension Some Attention campaign is happening, telling us to start saving for something that feels a lifetime away. But does it connect with young people? Has anyone under 30 even seen it? – (I don’t count by the way I only heard of this from my hip and cool mother (was not paid to say this I promise)). And more importantly, does it make us care?
Q: Did your perspective on pensions or retirement change over time?
When I was younger it didn’t enter my world and I didn’t think about it seriously until I had some proper dosh to save.
Q: What challenges did you face while saving for retirement, and how did you overcome them?
To save or to spend? That is the question! But it is difficult to save when the people around you are all spending more on holidays, clothes, cars … Because I started late it was like having 2 mortgages – also the career break didn’t help.
Q: How did you decide on the amount you wanted to save?
As much as I could afford, here we revisit an early blog with Martin Lewis’s formula of half your age as a percentage of your income.
Q: How did you decide on the amount you wanted to save?
To save or to spend? That is the question! But it is difficult to save when the people around you are all spending more on holidays, clothes, cars … Because I started late it was like having 2 mortgages – also the career break didn’t help.
Q: What are some things you wish you had known about pensions earlier?
That they could change the rules!
Q: What role did the state pension play in your retirement plan?
Minimal, never thought it was an amount I could live off of.
Q: Were there any particular goals or dreams that kept you motivated to save?
No work but still have a comfortable income.
Q: What advice would you give to someone just starting to save for retirement?
Start early and with what you can afford, there are other ways to save. There is tax relief on pensions saving but an ISA is saved from taxed income but is tax free afterwards. The government is squeezing the basic rate tax band down so more and more start paying at 40% tax rates.
Q: How do you plan to spend your time in retirement, and what are you most looking forward to?
No idea, the plan changed too much.
Q: Did you get any help from advisors, or did you mostly plan on your own?
Initially I got help but the with-profits pensions pot wasn’t growing so I reached out to loads of advisors to see what to do about it. Switched advisor (to the only one that replied) to a stakeholder pot. Which came at quite a financial loss.
Q: Is there a financial or life lesson you’d like younger people to know about preparing for the future?
Never trust a politician! And don’t put all your eggs in one basket. And don’t spend out of your reach. Save in a pension but also an ISA, you never what’s round the corner!
Q: How did the budget change all this?
Very significantly, since I’m a widow and have yet to take from my pension, my hard earned and saved pension pot will not pass to my descendants tax free whereas I was planning UFPLS (uncrystallised flexi-access drawdown) believing anything unspent would be outside my estate which is no longer the case, now that annuity rates are much better than they were; taking 25% tax free and then an annuity is seeming like a better option.
