Mr Pickles is back and this time he has £300,000 in his Personal Pension. Thanks as always for watching and do let me know if you have any questions or queries. All the very best!🙏

Thaanks Edmund

@EdmundBaileyUK

15 күн бұрын

Thank you! 🙏

Thank you so much. That was a really valuable video. It's refreshing to see achievable figures.

@EdmundBaileyUK

15 күн бұрын

You're very welcome! 👍👍

Thanks Edmund great video as always

@EdmundBaileyUK

15 күн бұрын

Thanks as always Stephen!! 👍👍

Wow, thanks Ed So much useful info in a shortish video Really really helpful, great practical , realistic examples Thank you very much 👏🏽

@EdmundBaileyUK

15 күн бұрын

Glad it was helpful! 👍

Thank you. I don't look at annuity rates or tax free lumpsum but in my head I always think of a rough rule of thumb as 5k pa for every 100k in the pension pot. So a 250k pot gets you something just around the personal allowance, around 12.5k pa. Very useful and informative and for my pov supremely timely as always. Its like your video drops at exactly the right moment when I am contemplating a similar question.

@EdmundBaileyUK

15 күн бұрын

Thanks and using percentages is a nice and simple way to call it in relation to sustainability dependent on the long term objectives. And thanks as always for watching, it’s very much appreciated. 👍

@iannoble4854

15 күн бұрын

200k will give just over £12.5k pa with a single life annuity.

@ushasundaram1

15 күн бұрын

@@iannoble4854 depends on annuity rates I suppose but yes its a good rough estimate to have.

Good video, I like to see how the models work. Also I like to read comments from people who are actually retired, stating how much income you really need. Personally it gives me comfort that at 53 I am completely sorted financially for retirement (between my wife and I we have £1.6m in DC pensions and investments) and can retire at 55 if I choose. I will wait until I am 56 as our son will still be in sixth form until then and I really can’t see the point in retiring until he finishes school and is old enough to be independent. Being retired while still needing to do school runs during term time seems a bit pointless when for us retirement is about freedom to travel.

I think its about being flexible in retirement, keep your higher growth conviction stocks but if they have a bad year or 2 cut back on spending to preserve the pot until it recovers as it always does given a few years

Great Video. I have about 5 years until retirement, so absolutely maximizing my pension allowances. I suspect that the 25% tax free is gonna be reduced or scrapped all together in future by Labour should they get in. Pensions for the better off, will be targeted for sure.

@EdmundBaileyUK

15 күн бұрын

Thanks for the kind words and comment! Pensions make up almost half of the net worth of the UK so absolutely government will certainly have an eye on them for additional charges/taxation.

@johnristheanswer

15 күн бұрын

Just like Gordon Brown did.

@tancreddehauteville764

14 күн бұрын

Tories had already decided to freeze the 25% allowance limit at £268k, this will just continue under Labour. They won't get rid of it, they don't need to.

@AgileSnowWeasel

14 күн бұрын

Pensions for the better off were already targeted by the Tories when they dropped the LTA from £1.8m to £1m. Sure, they scrapped it very recently, but for a long time there was a punitive tax rate for people who had saved over £1m in pensions, possibly by sacrificing earlier in their life. I expect the 25% tax free amount will be frozen for a long time, or even reduced to 20% or 15% (in which case I wouldn't take a tax free lump sum if I could avoid it, hoping it would rise again one day).

@tancreddehauteville764

13 күн бұрын

@@AgileSnowWeasel Given the state of the national finances there will be belt tightening, that's only to be expected, whoever wins the election.

Any pension drawn from investing is an assumption of what could happen based on the past, as no one can predict the future. I think the important point is the lump sum? and what you do with it, if you spend it all, then you are giving away your security. I think at least 1 year pension money should be ring fenced in a separate interest bearing bank account in case the brown stuff hits the fan and some or all of your investments fail to pay out. Who could have foreseen the pandemic, and the reaction of the government preventing financial institutions from paying a dividend. Then the choice is yours either to cut back or take out of your ring fenced bank account to take you through. Remember It is not the income you have coming in, it is what you spend is the problem that many find themselves in the inability to moderate their expenditure.

@EdmundBaileyUK

14 күн бұрын

Certainly having sufficient in reserve of cash and liquidity will be hugely important and dependent on the individuals asset position, risk and their capacity for loss. The cash allocation will vary whether 1-3 years of expenses plus an emergency/buffer is typical.

“Mr Pickles will be in retirement for 20-25yrs…” haha what a nice way of putting it 😅

@EdmundBaileyUK

15 күн бұрын

😀

The PLSA figures are scaring people so unnecessarily. People take them as gospel and don';t seem to smell a rat when their recommendations are higher than some are currently earning ! If you survive without that amount of salary, why would you not be able to when retired ?! I heard on a finance radio programme that the PLSA figures are calculated by simply asking people who are no where near that age, what they would like to be able to do when they retire - essentially asking people for their hopes and dreams and not their realistic aspirations. It's no wonder the figures are so high !

@EdmundBaileyUK

15 күн бұрын

Thanks and agreed! 👍

@davidpearson243

15 күн бұрын

I think you need to £2000 per month (net) to live as a couple (no mortgage or rent) to live a basic lifestyle if you want “ experiences” then add about another £1000 per month to the budget

Could you do a video touching on Strathclyde pension scheme combined with AVCs additional voluntary contributions for those unaware my AVCs are with prudential but there no videos out there see lot pension wise AVCs stuff which I guess work similar at 19 year pension stage think pension worth about £11.000 per year at the moment but normally goes up £1000 per year or least my projection retirement pension pot does.

66 ? .... bloody get it , spend it !

I agree that the Which figures are way more realistic than the PLSA figures. The Which figures are more in tune with average wages if you factor in that once retired your not paying a mortgage and smaller / none pension payments. My preferred route is Annuity over Drawdown particularly as i had a Gauranteed Annuity Rate. For a pot of just over half your £300,000 i am getting a comparable annuity pension to the one you have given though i did not take the tax free cash. With more people ending up in care homes the cost of which is staggeringly high i wonder if there is a way of doing a calculation of the average care home costs and how long your pension will last. There are horror tales of many people paying £1000+ a week and once all assets are sold and the cash is exhausted they have to move out into lesser accommodation. The figures used in this video would see Mr Pickles burning through his funds a lot quicker if he were in a care home.

@EdmundBaileyUK

15 күн бұрын

Thanks for the comment and agreed. 👍 Yes cost of care is a real issue to plan for especially when we really don’t know if it will even be required.

@johnjones7410

15 күн бұрын

I have a historic pension with Scottish widows, I have 70k that will payout 7.5k a year, 3 and a half years to go so it might be worth more

@AgileSnowWeasel

14 күн бұрын

@@johnjones7410 7.5k pa from 70k is astounding!

@DeeCee-nb6ev

13 күн бұрын

@@AgileSnowWeasel its probably single life flat rate (does not increase each year) and no minimum Gauranteed term and no cash lump sum. On those terms with a 120,000 pot i could have had just over a 10k pension however i took an escalating pension with a 5 year guarantee. As its got a GAR its nigh on two thirds more than without a GAR.

I do think the Which retirement spending numbers are realistic if there is no mortgage or rent to pay

@EdmundBaileyUK

15 күн бұрын

Agreed! 👍

@Lookup2Wakeup

15 күн бұрын

I agree. I'm 67 & with my full state pension & drawdown of £15k gross per year. This gives me £2k a month nett, which is plenty. Interesting to see the projected values of the pot under different circumstances. I've currently got £450k in mine & the value keeps going up .....more than the £15k I withdraw per year since I retired at 60....😮

@adm58

15 күн бұрын

I lived on £18.5k last year and I pay rent (for a studio flat in Manchester).

@davidpearson243

15 күн бұрын

@@adm58 your doing well my Daughter is living in a shared flat in Manchester paying £600 per month each

@adm58

14 күн бұрын

@@davidpearson243 luckily for me, I am a natural minimalist; it's my nature to live a rather monk like life. I even sleep on the floor (though, at the moment I do have the extravagance of running an old, not really necessary, car). I will start to get my state pension in Sept.

Edmund I’m trying to understand if the annual ufpls would better than drawdown if you plan to use up all the pot, since any growth in crystallised funds is taxable right?……. Is this significant?? Thank you David

@EdmundBaileyUK

15 күн бұрын

Hi. UFPLS will be the same net outcome as DD in terms of tax if the same is taken out of the pension over the course of the tax year. £10k as an UFPLS will be the same as £10k as drawdown in regards to tax.

@DKNW62

15 күн бұрын

@@EdmundBaileyUK Thank you Edmund what about over 20 or 30 years ? Say if Mr Pickles has 300k. Assuming all tax allowances used by state pension for simplicity. He wants 10k per year so he could take 10k each year as drawdown (Crystalising 30k per year, until 25% tax free used up). Would he pay the same tax over 30 years as if he took an annual ufpls of 2.5k plus 7.5k (paying 1,500 in tax). ? Sorry rough figures but you can see where I’m going.

Could you please do a video showing the amounts youd need to retire at 50 please.

@EdmundBaileyUK

13 күн бұрын

Great idea! 💡

Hi. Can Mr. Pickles and yourself please do some number crunching based on early retirement? I'm currently watching cars being automated - a relatively complex task involving hardware & software tackling an infinite number of 'life or death' edge case scenarios. So I realise from this that most jobs at this point are not safe and many of us will be pushed into early retirement.

@EdmundBaileyUK

12 күн бұрын

Sounds like a good idea! 👍

@shoelessjoe428

12 күн бұрын

@@EdmundBaileyUK Thanks Edmund. Keep up the great videos.

Seems like you forgot to mention that if the company that supports the annuity goes out of business then the annuity goes to zero. AGI almost bit the dust.

@EdmundBaileyUK

15 күн бұрын

Thanks for the comment. An appropriate annuity is a contract of long term insurance and is covered by the FSCS for 100% with no upper limit. Not sure what AGI is… sorry.

@fanfeck2844

15 күн бұрын

@@EdmundBaileyUKAIG

Also have you got any videos on ISAs reading bank information just make simple things sound confusing so if I put 20k in 2022 and in 2023 can I stick that 20k into 2023 pot so that keeps gettin new interest rate

@dabe1971

15 күн бұрын

Sounds like to wish to action an ISA *transfer*. Perfectly possible but you must do it by asking the provider you want to move them money to make the arrangements. They will then ensure the money is moved over but it retains the 0% tax status of the funds and doesn't count towards the £20k limit of the current tax year. It's not the fastest process in my experience but it's pretty trouble free. What you absolutely must *not* do is try and move the money yourself by withdrawing it and then paying it into your new ISA yourself.

@TROZJAN

14 күн бұрын

@@dabe1971 but can you do with same provider and get interest on full pot for following year or do you just get the decent interest rate on the new 20k you save every year then once years up ur matured 20k joins yer other 20k in a lower isa pot no one or no bank explains that properly why so confusing.

@papiyarussell5630

10 күн бұрын

​@@TROZJANsome banks have an introductory bonus rate for a year, is that what you mean? It should be applied to the account, not dependent on it having to be "new ISA money" to be eligible for the rate. So yes, if you open a new ISA account which now has the 1 year introductory bonus on it, you should then be able to transfer your old ISAs into it to get the new rate. You should check with your own bank, but this is what I've done in the past with Barclays, in fact they suggested it to me! It wasn't just applied to the money I put in that year. Ensure you request a formal ISA transfer of your old ISA to ensure it keeps its tax free status.

@TROZJAN

10 күн бұрын

@@papiyarussell5630 no I mean if I save 20k in a year at 4% where does that cash pot go to if there 4% interest the following year on the new yearly rates does the 20k I’ve already saved go into a crappy pot with lower interest rates or can I put that 20k into next years 4% and eventually add another 20k for the new year taking me up to 40k on the new interest rates for the year. Or do I have 2 separate pots one for previous saving gaining lower interest and a pot for new years interest rates no bank properly explains it, they do mention after it matures it goes into different isa at lower rate but doesn’t say if I can do anything else with it. If it is stuck in crappy interest pot can I not just transfer to different bank every year with full pot full allowance hopefully free of charge.

Which company is quoting these annuity values they are better than ones offered to me recently

@EdmundBaileyUK

14 күн бұрын

Hi. It’s whole of market and therefore all of the main insurers that you would expect.

Another Mr Pickles Home Run 😊

@EdmundBaileyUK

14 күн бұрын

😀

Not clear on growth rates and inflation. Life strategy 40 averaged 5.6% in 10years. Is this how you’re roughly getting 2-3% above inflation growth ?

@EdmundBaileyUK

15 күн бұрын

Really?! Inflation used is 2.5% and mid rate growth is 5% net (real return of 2.5%) along with a low rate at 2% and high of 6%. Should all be pretty clear in the video.

Why try to preserve a pot till you are 90, most people don’t make it, you need to enjoy retirement through better health th 65-85, instead of saving for a retirement home, sad attitude. £225,000 example at 5% interest would give you £12,000 drawdown on interest only, maintaining your pot, take a bit more for a few luxuries and your pot will still last. Don’t be fooled into an annuity where the finance companies just give you your interest made, and keep the pot when you die. And you still have the 25% Tax free (75,000) in your pocket.

@EdmundBaileyUK

14 күн бұрын

Thanks for the comment. Interestingly most individuals underestimate how long they will live for. If aged 66 now, there is a 1 in 4 chance of living to 92 and 1 in 10 chance of living to 96. The example you give is fine if you are comfortable with c £22.7k pa gross and not adjusting for inflation.

@davedixie57

14 күн бұрын

⁠Another example, you are diagnosed with a terminal illness, you can increase your drawdown ( pot dependent) to pay for private care at home, and compensate any family who help. With annuity you are stuck in a contract at a fixed amount, even if it rises by a paltry amount with inflation built in.

@daveharruk

14 күн бұрын

I agree - assuming a fixed level of expenditure (adjusted for inflation) in retirement is a huge mistake. People should be aiming to spend the majority of their money while they are still most likely to have their health - it makes zero sense to allocate huge amounts of money to later years when there is likely very little benefit to be had and this over cautious approach just serves to unnecessarily delay retirement for many. A realistic model would likely have three phases - go go, go slow then no go.

@chqshaitan1

3 күн бұрын

@@daveharruk Yea, i couldnt agree more, also these days, retirement isnt the cliff edge is used to be. No reason why you cannot be doing something part to bring in 'pocket money' to cover the shortfall between now and when you get the state pension for example

As a real life 61 year old Mr pickles, this video was a bit freaky.........

@EdmundBaileyUK

15 күн бұрын

Really?! That’s amazing! And my apologies,I now need a caveat to state that any references to real persons is purely coincidence. 😀

@Lookup2Wakeup

15 күн бұрын

Why was that, then?

@gbr562

15 күн бұрын

@@EdmundBaileyUK Mrs Pickles found it very pertinent also, however I'm now worried about what will happen to me when I reach 74!!

@EdmundBaileyUK

15 күн бұрын

@gbr562 😂 we have wondered if we might see a statistical spike in deaths just before the 75th birthday!!

What modelling software do you use

@EdmundBaileyUK

13 сағат бұрын

Thanks FE Cashcalc.

Remember to have enough put away for your care home fees !

@EdmundBaileyUK

11 күн бұрын

Oh wow that is an entire subject and area of planning in its own right and incredibly difficult but not impossible to quantify. A primary issue can be allocating significant capital and resources to it in advance they may never be required.

I kind of see the point of all this deep analysis, but surely you just live to your means using common sense. I know its not so common though. If you have a 300k pot, youre not gonna be taking 50k a year. Or Mr Pickle will be in a pickle.

@EdmundBaileyUK

15 күн бұрын

Sure, it’s just as a guide to make as good a judgement call as possible to attempt to avoid that pickle of a situation.

@clew5687

15 күн бұрын

@@EdmundBaileyUK Yea for sure. PS Great video again, love your content. Keep doing what you're doing.

@AgileSnowWeasel

14 күн бұрын

You say that, but some people go a bit bezerk when given access to a drawdown pot, and they end up in a situation most would not relish. IIRC drawdown pot rates were averaging 8%? That means some are taking a lot more.

@clew5687

14 күн бұрын

@@AgileSnowWeasel That doesn't surprise me in the least. Humans never cease to amaze me in the crazy things they do. I know someone who is the exact opposite. He actually won the one million pound UK guaranteed part of Euro millions, he's 62 years old and will not spend a single penny of it. Jeez, the man has even bought a bus pass as taxis are too expensive. He will die with that in the bank , 100%.

Inflation is going to kick Mr Pickles in the backside.

@EdmundBaileyUK

15 күн бұрын

That’s absolutely a possibility for all of us and depends on which strategy Mr Pickles implements to protect himself as much as he can.

Overcomplex. Just buy an annuity for goodness sake!

@EdmundBaileyUK

14 күн бұрын

Thanks for the comment. Unfortunately the annuity has a number of downsides that flexi access drawdown does not, death benefits and flexibility. Annuity will not be appropriate for everyone. But interesting to read a comment that is pro annuity... that is rare!

@tancreddehauteville764

14 күн бұрын

@@EdmundBaileyUK I get what you're saying, but annuity rates have improved recently and many people will have enhanced rates due to health issues. Also the 'death benefit' tax loophole will most likely be closed by the new government from 5 July. In all fairness I think it's a loophole that should be closed - the whole point of a personal pension is to provide a benefit for the 'person' who owns it, not his entire family! The clue is in the name: PERSONAL PENSION.

@EdmundBaileyUK

14 күн бұрын

@@tancreddehauteville764 Its an interesting point of view. Agreed that pensions will be reviewed, as to the outcome its just a complete guessing game of which I have never seen anyone predict accurately. I would say possibly yours is the first comment I have seen that is positive on using an annuity.

@wiganer9912

14 күн бұрын

I have zero interest in annuities. Drawdown is king!

@dontuno

14 күн бұрын

@@tancreddehauteville764 Yes you are right, it's a "personal" pension not a government pension. I'll decide how I spend MY money and not allow some third party to divvy it up as they see fit.

Next time can you do a video on Mr Pickles and his husband , Mr Pickles. I find your videos very binary and out of touch with today's society. :)))). Great info as always.

@EdmundBaileyUK

15 күн бұрын

😀

Reality depressing ey