Saving for my retirement...

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Subject: Saving for my retirement...

Hi everyone...

I would like to save towards my future. I have a bank account where I pay a monthly fee and one of the perks is to open a savings account with an interest rate of 8% per year.

The most I can pay in is £250 per month and after the end of the year, the bank will pay me £240 at the end of the year and they will close the savings account. I can easily reopen another one and do the same thing again.

I have heard bad things about pensions. I have heard they are not worth the paper they are written on and you can lose them if the pension company go bust.

I would like to retire earlier than 66... Ideally at 50 or something.

My workplace say I am not eligible for a pension for some reason, I have only been in that job for 8 months, so I do not know if that is the factor.

What are your thoughts?

Thanks for reading x

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okonano
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Subject: Re: Saving for my retirement...

Hi,
You don't mention how old you are, but it sounds like a good amount to be putting away. Pensions have had bad press of late, but banks aren't giving a good return either. Personally, I want to save up enough to buy bricks and mortar and rent it out, having a house pay for itself really appeals to me, but I know it's a risk too - only the future will tell

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MistressAMAD
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Subject: Re: Saving for my retirement...

Hi, we really need to know more about you to know what to suggest. The two most tax-efficient methods of saving for retirement are ISAs and Pensions.

With an ISA, you earn tax-free interest on your savings and can access them any time. You can also take the cash out when you are 50 years old without being taxed on the interest.

With a pension, you effectively get a tax rebate on the cash you save. So, if you save £250 per month and are a lower-rate tax payer, you will actually be putting away £312.50 per month after tax. You will be able to claim back an additional 20% if you are a higher rate taxpayer. You can claim this through your tax-code or on your tax return. Stakeholder pensions have the lowest charges. You will be taxed on your pension when you claim it. This will be from age 55 years though.

Remember that your money is at risk no matter what institution you are with. Whatever happens, whatever age you are - start putting cash away NOW.

The State Pension is pants and the government has already changed the law so that women will now retire at 60, then it will be 65 years old to match the male retirement age. If you are in your 30s, you've got no chance of getting the State Pension because the government, in their wisdom, is retarded and just uses our money to pay current pensions - instead of investing it and then paying the pensions out of the profit.

So, don't rely on the State. Certainly don't rely on a man. Save some money now - maybe some ISAs and some Stakeholder pension.

you can always find me here: www.allmenaredogs.co.uk
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