SIPP & Investments

My DC pensions have now been transferred to my SIPP. Yay!

The downside has been the drop in fund prices so my transfer has already resulted in a loss of value of approx £2k – so disheartening. That’s the issue with a transfer and immediate investment – you take the hit based on the timing. My timing was off 😦

I cannot touch it for another 5 years so they have some time to recover. It’s not worth much and really needs to grow considerably to make it a viable income source at 55. That just leaves my DB pension which I am not touching (and can’t touch until SPA) and my current employer DC pension. I will just keep pushing money into the SIPP and employer pension and try to pick up the tax relief advantages while they last.

With the budget on Monday, the scaremongers are out pushing rumours of pensions being the target area and get top-ups in now while you can. If you haven’t used up your previous year’s allowances you can use that to top up so surely that’s not a big issue for some.

Once I leave my current employer I will transfer that pension into my SIPP too. Which is getting close just because of the stress – mainly due to the ‘sh*’ I have to put up with. It’s a bit toxic to say the least and the bullying nature of the management has surfaced again recently – wonder if they all suffer from SAD as it seems to get worse at this time of year. I got the ‘you are incompetent’, ‘how can I trust you’ type barrage of abuse the other day. I had to sit in a meeting and put up with the venting aggression from the senior management, I wasn’t the only one on the receiving end but after a while you just get sick of it. I can completely appreciate the current media coverage on NDAs and their use to pay people to leave rather than tackle the issue of bullying/harassment in a business. My employer has no HR department so you have nowhere to go other than just resign. Sounds a bit like Westminster. Plus how do you tackle bullying when its the senior managers in the chair? (Its unprofessional and I am getting sick of it – I have never worked anywhere like it. Its seen as ‘the-norm’ and accepted practice, fear prevails).

I have another meeting next week which contains bad news. I am expecting another barrage of abuse. I am considering just getting up and walking out saying ‘If I am so bad sack me, I will go and clear my desk and leave now’ – the positive – it would mean I wouldn’t be held to doing 3 months notice.

How do you stand contract-wise/legally if you have to give 3 months notice but want to leave immediately? Its laughable but then you feel they have brought it on themselves and deserve it. What’s the point of ‘FU money’ if you don’t use it to escape a bad situation.

I have watched my investments going down as the markets react to the global instability. I keep investing but with talk of a crash it makes you feel nervous of investing and seeing your account balances drop each time rather than grow or remain level. My accounts were all red when the last crash happened, I was working so just didn’t worry and just kept thinking, I’m investing for the long-term, they will recover. It’s a slightly different feeling when you may be about to pull the plug and rely on your funds to support you just as they plummet into the red. I am trying to diversify but it doesn’t seem to be enough at the moment to balance the roller coaster ride.

I need to have a really good look at my finances, if I do leave my age will prevent me getting another job. It shouldn’t be but it is, ditto looking of a part-time role. They just don’t exist as quoted in the Guardian article : Stress/Part-time working.

I know I sound ‘doom and gloom’ its just the time of year with the clocks changing and the SAD environment. I just feel like hibernating…..

Tax Return

I’ve just completed my tax return – pretty good for me – I have managed to complete and send it off a whole month earlier than last year!

I have managed to stay under the taxable dividend threshold for the year, by a few pounds but will have tax to pay on my savings which are over the threshold.

I am now looking at moving my savings into tax-free accounts to stay below the thresholds. With savings rates dropping they are not keeping pace with inflation so need to move them to somewhere that will!  More payments into my SIPP I think, although I then cannot access the cash until I reach 55.

I intend to fully utilise my ISA allowance this year now its up to £20k, I phase the money in monthly so doing well and on track.

While I am working – another reason to keep going at the moment –  is that I can contribute more into my pension/SIPP, I can contribute up to £40k which gives me space and capacity to move savings/taxable shares into a pension account while I can.

I am trying to hold out in a job until my BTL fixed rate mortgage term lapses so I can re-mortgage – something that’s easier to do while I have a salaried job. I am slowly reducing the mortgage to compensate for the new tax rules which will phase in over the next few years. It will be interesting to see how they have affected my tax treatment this year. I await my final statement.

May Progress

After my last post, I have had another check on progress and updated my accounts. I am still saving 60% of my income but it isn’t making much of a dent on my net worth, this still remains flat.

When I first started off on this path, the growth was rapid and a lot of that was down to making changes to behaviour and spending that meant that I made quite big impacts on my net worth. These have now tailed off.

I hit a wall 2 years ago when I was made redundant for the second time. I took the first (and only job) offered so I could retain an income stream. Everyone else was getting a job and it would have looked bad if I hadn’t had something when we all ended our redundancy notice. It was a bad mistake, the place didn’t fit and I suffered it for 6 months to see if it would change but it didn’t so I just left. I had no job but felt better than sitting in a horrid work environment. I decided to have an ‘FI holiday’ and took 6 months off (3 months off as FI + 3 months actively job-seeking) before I was back in employment.

My net worth did drop a bit during my ‘FI holiday’ as I used my funds to live.  (Well, my dividends were used as income! I did not use any capital). When I eventually found a job and starting earning again, my fund had lost some value but now was the time to grow it again.

Over the past year I have seen that my net worth has fluctuated. After the drop, I expected it to pick up but the external factors of Brexit and economic instability mean that my fund has not grown at the same rate that it once did. My dividend yields have dropped this year. Dividends within my ISA and SIPP are automatically re-invested but I am not making the same gains as I once was.

I am investing into my ISA, SIPP & pensions to use tax free allowances on a monthly basis and then any surplus into cash savings. I am considering pumping all the surplus cash into my SIPP and pensions but it means I cannot access this until I am 55.

My SIPP is currently recording a loss. I had opened the account by transferring two very small company pension funds (less than £2.5k each) into this account to consolidate them, then did a bulk buy to get the money back into the market, just as their prices dropped. I can see that the account is still in the red but this loss is reducing each week so it should move into profit by the end of the year. I am now topping up this SIPP account. While I have an income I will push money into saving hard.

The path seems to be faltering but I will try to continue to aim for the line. It seems so close and yet so far away too.

I am looking at side hustles and other income stream opportunities so I can move away from working for ‘The Man’ and working for myself with the support of an FI fund.

I am looking at any options so if anyone has any suggestions let me know…

 

 

SIPP Transfer

I have taken the plunge and opened a SIPP after procrastinating for a while.

I have now filled in the online forms to get two old company  DC pensions transferred into it so these can form the basis of my new plan. One has already transferred and is about to be invested so only out of the market for a very short time, a matter of a few days in fact, pretty impressive.

A monthly regular payment has also been setup so that I can pump money into these as other tax efficient paths are now full. The SIPP can be accessed from age 55 so this means that I can access the old DC funds at an earlier age than originally permitted.

I have picked some funds and will use these as a basic selection for my DCs with another set of funds used for my regular monthly contributions. My intention is to add occasional additional payments (I don’t get bonuses like I use to – in fact what is a bonus?) and either buy shares or funds to balance the portfolio.

I have also been focused by listening to Tim Ferriss podcasts as he interviewed Mr MM and it was great to be reminded of what I am aiming to achieve, choices!

I now need to re-organise my spreadsheets and get focused on FI savings as my HP fund is unbalanced and hit hard by the market fluctuations. I am running at a -4% drop as I hold too many old employer shares which have dropped since Jan due to market sector downgrades. I should have sold some last year and moved this cash into other shares. My bad!