I have no pension and am self employed earning between 50 & 80k per year. My aim was to save 300k for retirement and live of the interest at about 15k. However, this does not factor in inflation. What would be the minimum amount I would need to save in this way if I want to achieve a 15k income on retirement? I am wary of pensions and am 38 years of age.

I would urge you to take a more multi-faceted approach to retirement planning. There is a general misconception that retirement planning means paying into a pension but in reality, paying down debts or a mortgage or paying into ISAs and other “non pension” savings are equally valid ways of saving for retirement.

As a higher rate taxpayer there is a big advantage in paying into pensions though, as you would benefit from 40% tax relief. Wouldn’t it be great to get higher rate tax relief on all of the money that you put into pensions and only pay basic rate tax when you draw your pension?

The big problem with pensions is that the money is tied up for a long time. This lack of accessibility needs to be weighed up against the tax breaks.

Although I think it is misleading to look at pensions in isolation, there are some useful calculators on our website (www.evolvefp.com) if you look under Planning Tools / calculators. That way you can play around with the numbers. A lot will depend on what growth rate you assume.

Feel free to give me a bell on 020 7956 2070 and I’ll happily run through some ideas with you.

About our Resident Financial Expert

Jason Witcombe (pictured) APFS, CFPCM is a Chartered Financial Planner at Evolve Financial Planning. He has been awarded prestigious Chartered Financial Planner status, a qualification that only around 900 of the UK’s 65,000 qualified advisers have attained. He is also a Certified Financial Planner and is an Associate of the Personal Finance Society www.evolvefp.com

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