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Pension Or Saving A Deposit?


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I'm 31, and due to a recent jump in my salary and I'm now in a position to save 1000 per month towards a deposit on a house when prices hopefully become more reasonable.

However, I don't currently have a pension of any kind.

Would I be better continuing to save towards a deposit for the next couple of years, or put (say) 300 a month of that into a pension?

Suggestions welcomed. Thanks!

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The upside of putting money in a pension is that it's tax-free.

The downside is that you're relying on the company still being there thirty-five years from now and having maintained the value of your money in real terms.

Personally the company I work for matches contributions up to some percentage, so that's exactly the amount I pay in. Beyond that I don't think the benefit of recovering the tax is worth the risk of never seeing the money again.

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Thanks, Mark.

How about saving for retirement in general, though? Would I be better off doing that asap, or waiting until after I'd bought a house (with a bigger deposit)?

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How about saving for retirement in general, though? Would I be better off doing that asap, or waiting until after I'd bought a house (with a bigger deposit)?

Work out what income you need in retirement. Assume no mortgage and kids (if you succeed in paying off these by retirement). Say it was £15,000 pa in today's money (+ State pension which will be not a lot) that would be £42k pa in 35 years at 3% inflation (multiply by 2.81).

Annuity rate for 65 yr old / spouse / 3% escalation in payment is c. 4% ie you would need a pension fund of - are you ready? : £1.05M

Thus at 6% pa investment growth you need to put in £750 pm

Shall I repeat that because you look stunned!

Does that help answer your question? People just do not realise the cost of retirement. Make your choices well.

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Work out what income you need in retirement.  Assume no mortgage and kids (if you succeed in paying off these by retirement).  Say it was £15,000 pa in today's money (+ State pension which will be not a lot) that would be £42k pa in 35 years at 3% inflation (multiply by 2.81).

Annuity rate for 65 yr old / spouse / 3% escalation in payment is c. 4% ie you would need a pension fund of - are you ready? : £1.05M

Thus at 6% pa investment growth you need to put in £750 pm

Shall I repeat that because you look stunned!

Does that help answer your question?  People just do not realise the cost of retirement.  Make your choices well.

Na! That cant be done :(, and if you try to do it but fail then the government will sh4ft you.

As I think someone else said on a previous thread: Buy gold coins with all your savings so the government thinks you are broke. Then you can go on full benefits including housing and have your gold coins to spend in your twilight years.

You should be able to buy an oz or two these days with the money you save by renting.

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Na! That cant be done :(, and if you try to do it but fail then the government will sh4ft you.

As I think someone else said on a previous thread: Buy gold coins with all your savings so the government thinks you are broke. Then you can go on full benefits including housing and have your gold coins to spend in your twilight years.

You should be able to buy an oz or two these days with the money you save by renting.

Don't know about gold, but diamonds would be an a very dodgy investment, apparently scientists have now found a way of making decent sized diamonds out of any lump of carbon. I assume it's an expensive process, but if they can refine it, then that may mean devaluation in the diamond market within our lifetime.

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Don't know about gold, but diamonds would be an a very dodgy investment, apparently scientists have now found a way of making decent sized diamonds out of any lump of carbon. I assume it's an expensive process, but if they can refine it, then that may mean devaluation in the diamond market within our lifetime.

Gold is made from Gold whereas Diamonds are made from Carbon. Gold is a metal listed on the Chemical periodic table therefore it cannot be made from another compound.

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Gold is made from Gold whereas Diamonds are made from Carbon. Gold is a metal listed on the Chemical periodic table therefore it cannot be made from another compound.

It can be made from other compounds (Gold is not a "compound" but let's forget about that now), it just takes too much energy and there is no profitable known way to do it.

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It can be made from other compounds (Gold is not a "compound" but let's forget about that now), it just takes too much energy and there is no profitable known way to do it.

It seems we are both wrong. :)

"A chemical compound is a chemical substance formed from two or more elements"

Therefore as I have described gold it cannot be a compound.

And as you have described gold [ "It can be made from other compounds (Gold is not a "compound" but let's forget about that now)" ], it must be a compound.

So can you please tell me what is the unprofitable way to make gold. I am no chemistry expert and was trying to make an educated guess in my first statement.

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It seems we are both wrong. :)

"A chemical compound is a chemical substance formed from two or more elements"

Therefore as I have described gold it cannot be a compound.

And as you have described gold [ "It can be made from other compounds (Gold is not a "compound" but let's forget about that now)" ], it must be a compound.

So can you please tell me what is the unprofitable way to make gold. I am no chemistry expert and was trying to make an educated guess in my first statement.

http://www.rexresearch.com/moray/moray.htm

Search for "changed into gold"

There are some processes yielding gold from lead.

On a side note, particle accelerators transmute elements routinely.

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  • 1 month later...

Yeah you get tax relief on the pension contributions but you have to pay income tax on the resultant annuity. Annuities are very low these days. Also pensions are very complicated and are inflexible - there are all sorts of associated rules.

Personally i would just put long term savings (10 years minimum) in a stock market index tracker. You would get more flexibility than a pension - can take as much or as liitle out whenever you like and you are only taxed if you excced the capital gains limit per year (you could use your annual ISA limits to avoid this anyway).

Edited by penbat1
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  • 440 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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