Mil Pension question

[Al R]

Drugs dont..: .. the last time i checked, 5 years was not a very long time to plan ahead re pensions and future options. Quite the opposite. So previous? No.

Very true Drugs.. even so, 5 years is still possibly borderline too short, but its certainly better than the 12 months or so which most people tend to work to (and which I did). 5 years will give you the chance to put into place a strategy to build up some liquidity, to plan ahead to mitigate as much tax as possible and to take a proper strategic view of where you want to be in 10 and 25 years time. The chances are you're not yet 'middle aged' and have a different perspective of life. Once you cross that intangible line and stray into your mid/late 40s other pressures and perspectives kick in. If you plan ahead though, you can plan for the future and not even miss a beat when other pressures kick in.

5 years will give most people time to evaluate whether or not they will need to establish funds to pay for University and to ensure children will be leaving it debt free. Also, you’ll be able to establish a portfolio and invest in equities and various funds (there are some real bargains about at the moment), to capitalise on current savings rates to die for - if you're a higher rate tax payer, the chances are that the real value of your savings in the local bank was slaughtered by inflation long ago because of the 40% you're paying on the interest you're 'earning' (ha) and if AVCs aren’t your bag - to establish a private pension fund. The g'ment is currently giving you 20% in top of anything you chuck into a private pension - and if the other half doesn't work, they can get tax relief up to £3600 pa as well.

And when you're in the final few months of your career, you're too busy looking for a job, so you'll probably just do the first thing thats suggested by the yoof in the lilac nylon shirt at the bank. You’re invariably a little like a rabbit caught in headlamps, and it’s a hassle you’re quite happy to offload onto someone else, to your detriment possibly. If you'd like any free advice on long term planning, so that you can take a measured and insightful perspective - then don't hesitate to pm me.

Finally, Lurking is correct with his concise analysis. But one size doesn't fit all - no two people are the same. If you're going to do not a lot with the (tax free) big lump sum anyway apart from get a warm fuzzy glow when the chap at the bank doffs his cap, it might be worthwhile to settle for a smaller amount upfront and opt for a larger monthly pension that tax has been applied to at source. The reasons are many, just as each of our circumstances are equally as infitessimally different. Again, starting early (5 years) is going to give you an idea how you want your pension to work for you, and not vice versa.