Here's How I Hope To Retire

Got to say Roland this reflects my position as well. Got a 7 year pension from a permi job (frozen) and have been contracting for the last 6 years. I have a stocks and shares ISA (decided against a SIPP for the same reasons you quote above) which I intend to max each year over the next 25 years (plus reinvested divs) and then to hopefully have a lump sum from the limited company I operate at retirement. Not sure what I'll do with this lump sum but gives me options at retirement.

Hope both our plans work out.

Oh well... Please do bestow your wisdom on full proof 'plan' oh wise one

"I invest the ... minority of my portfolio in a small number of value or growth shares that I hope will deliver capital gains over the medium term."

If I were to try that game I' know I'd find myself breaking Warren Buffet's Rule Number Two.
Wish you luck on that one.

Otherwise I'm with you all the way.

I stopped paying into a personal pension at age 36 when the government destroyed pensions credability by retrospectively increasing the earliest retirement age. Pension rules are at the mercy of unscrupulous politicians, therefore pensions cannot be trusted.

Easy, lads, easy.

The Motley Fool shine is on this, to be sure, but the basic point is about taking charge of your own future.

I look at my income pf and don't honestly think I'm doing very much different from most financial product providers, but at least I'm effectively paying myself the management fee.

I wouldn't discout pensions completely. The tax benefits of pensions mean they are a no-brainer for any income taxed @ 40%. You can also put money (up to a limit) into a SIPP for a (non-working) spouse or kids and get the govt to pay 25% on top. Also, if you do your sums and make sure you pension payout is within your future income tax allowance you win (on tax) at both ends (in and out).

http://www.the-diy-income-investor.com/2012/03/sipp-vs-isa-optimise-tax-savings-uk.html

I would also 'stabilise' the share HYP with some high yield bonds/preference shares/PIBS.

Nobody ever mentions the impact of a divorce on pensions. As you move through your 40's into your early 50's if you are unfortunate enough to find yourself in this position you probably don't have enough time left to recover financialy.....any thoughts?

I agree with not depending totally on a pension for the reasons given but I like to have eggs in different baskets so have a pension and also invest regularly in an ISA.

Is it a bit risky though having a portfolio of shares that are never planned to sell. Could end up with another Northen Rock, RBS, Marconi, etc.etc.?

My long term ISA is a tracker for FTSE all share which hopefully will minimise future risk of "negative black swans" and keep fees down to a minimum.

I'm fortunate that I retired in 1989 with a company pension albeit not index linked like some at that time. Took max cash from pension which did not compromise my wife's pension on my death.
Had another employment for 6 years as a result of a secondment, used max pension contributions into Equitable Life , got out before the big crash.
Now have 80K in ISA Investment trusts plus 30K in highest interest paying accounts I can find.
Income is well above average from my pensions and those of my wife.
Count myself lucky that I was a pre WWII child.

I favour the ISA route over pension only because I can't get my hands on the pension lump sum (apart from 25%). Whether it is in a SIPP or final salary or whatever the basic stumbling block for me is the fact that I will no longer own the capital. In an ISA (or whatever takes its place) I own the capital. Therefore I can decide whether to pay myself a large sum or a small sum each year. This flexibility is far more important than getting a fixed income each year!

Just for Goodlifer - sorry but I agree with you again!

Your country needs YOU!
(Do your bit for 'Good old blighty' save in an ISA)

I used to think of my earnings as something the Chancellor was entitled to dip into before I got my cut. After being fleeced royally, I have changed my attitude. Now I see it as war! It's my money and I'm going to fight tooth and nail to keep it.
Put it in an ISA and the Chancellor gets his up front, you pay tax first. In a pension you get the full benefit of interest on ALL of YOUR money.

The Chancellor kindly invites me to pay 40% tax each year, alternatively I can put it in a SIPP until I retire into the 20% tax band. Fortunately I already have a pension that pays the magic £20K per annum, which means I can draw down as much as I like from my SIPP. My intention is to draw the maximum each year whilst staying (just) within the 20% band.
From the SIPP I can draw 25% of the total as a tax free lump sum afterwhich I will only be paying 20% tax on the remaining 75%. This averages out at 15%...., instead of the original 40% had I invested in an ISA.
Meanwhile, because my household income has been depleted through pension contributions, my family become entitled to some of the benefits that my taxes pay for, which would otherwise be reserved for those who have no intention of working!
I can only estimate that including benefits into the calculation, my tax rate drops from 40% to about 5%.
Please visit the HMRC website, it's difficult to believe that by saving into a pension you can become able to claim, but in this case believe me the old adage, "If it looks too good to be true..," is not accurate.
It's your money, stop fooling around with it. Fight for it!!!
Of course if you still want to save into an ISA make sure you don't loose your job, because you'll have to live off your ISA.
YOU won't be entitled to the benefits your extra tax is so kindly paying for. Whilst in a pension it remains inviolable!

Relying on an Isa portfolio for pensions is fine unless a cash strapped incoming government spots a soft target for revenue raising . A think tank called the Social Market Foundation has recently published a paper suggesting how the goverment could raise £20 billion to be spent on infrastructure. Along with halving higher rate tax relief on pension contributions the other major suggestion is capping maximumum ISA holdings at £15000. While I doubt whether any incoming administration would risk the backlash of this low a level I can well imagine a Labour or Lab/Lib goverment capping it at £50000 or £100,000

That is a good tip taken2often, I shall be having words with the useless lump that comes in once a year to do my books. Another one for the SIPP route is if your company pays a sum direct to it thus avoiding both tax and that other tax called NI.

As LeedsChris says, don't stick to one route as it usually leads to disappointment.

RomfordDOC: Hopefully your useless lump will point out that for your company purchase of own shares to qualify for capital treatment, amongst other things, the purchase must benefit the trade of the company and leave you unconnected (<30% shareholding) with your company.

A good lesson in not being too quick to judge without knowing all the facts licoricel and one I momentarily forgot, the unfairly christened 'useless lump' would have been privy to that information and may explain his silence.

A useful tip nonetheless and something I'll explore further.