Saturday, 2 May 2015

April 2015 Update

Portfolio update here.

There's been a bit of choppy water this month with a small lurch downwards in the last few days. The outcome is that my portfolio has dropped around 1.5% from where it was in the middle of April. However performance is currently looking like this  - which I'm more than happy with.

of total
As ISA16£50,917.2922.37-0.40%12.80%17.00%
Js ISA6£19,028.828.36-0.30%7.40%16.50%
Sipp Pension7£34,525.2615.170.60%7.60%10.90%

We haven't added much to our investments this month due to the fact that I "borrowed" from our cash reserves in the Santander account in order to boost my Sipp at the end of March and we have also spent £4,000 on a new "to us" car from the same account. My priority at the moment is therefore to rebuild our cash. This will continue next month, although I have got my eye on the Big60Million Investment Bonds which are paying 6% and look very interesting. The closure date for applications is the 27th May so I need to get my skates on if I'm going to take the plunge.

You may have noticed that I have moved the target on my Sipp tracker on the right down from £50,000 to £35,000. This is because I have decided to take my LGPS defined benefit pension at 60/61 rather than hang on till 65. So, I am virtually at target with both ISA's and SIPP. From that point of view the job is done. The only piece of the picture that is missing is the increase in my pension I gain by going to work every day. I need to work for two more years in order to add another £1,000 onto my annual pension. Because the LGPS is now a "career average" pension we earn 1/49th of our salary in pension each year so I am adding around £530 for every extra year that I work. It feels very generous (and I'm sure it is compared to how much someone would have to put into a DC pension in order to generate this amount especially as it is index linked).

I have been thinking about all this in relation to a comment ermine made on my last post about time having a "different sort of cost" and how it's a struggle to balance things up. Breaking the calculation down shows me that for every month I continue to work I am being paid, not just my salary, but £45 extra per year for every year I live after retirement. It doesn't sound a lot, and maybe it isn't. Some days it doesn't feel like it is worth it and I start to think about rerunning the figures and going earlier, especially as I am currently suffering quite badly with a trapped nerve in my neck which (according to my physio)  is due to sitting at a desk using a PC for far too many years. The physical pain of sitting at my desk is wearing me down at the moment, and that is even before I have to sit and see first hand what the next round of spending cuts will do to the service I help to provide. A prospect which wasn't made any easier by reading Paul Krugman on The Austerity Delusion.

But for the moment it's business as usual and the end of March 2017 remains the date I am heading for, I can't deny that the temptation to cut and run sooner is definitely there though :-)


  1. So £530 in income for an additional years work, or £45 in income for a months? It is weird how £45 for a month sounds pretty poor, but an extra £1,000 for a year starts to sound worth it. I suppose it's like work, if someone offered you £40 to sit at your computer for a couple of hours it doesn't sound great. But aggregated to an annual salary and it starts to look alright.

    The Big60 bonds look interesting. Couldn't find too much on how the bonds are actually structured though, some more research. Thanks for the link :)

    Mr Z

    1. Yes, £45 per year extra pension sounds pretty rubbish for a month's work - but it is on top of the month's wage and could amount to £1,350 if I live till 90 - not so shoddy then. :-)

      If you find anything more detailed about the bonds please let me know. I think I might put about £1,500 in. It means taking some cash out of my ISA which is just sitting there waiting for me to find something to buy with it, so although I'll be moving it into a taxable asset at least it would be earning something.

  2. Hi Cerridwen
    Lots of green numbers in your portfolio, looking good!

    I had a look at Big60million but I don't think I will be investing on this occasion. However, I will at some point be investing in Baillie Gifford Shin Nippon IT which I know you're invested in as I realise that I no longer have any investments in Japan so need to diversify. It's trading at a premium at the moment, so I'll just keep an eye on it for now, perhaps later in the year.

    I'm sorry to hear that you have been suffering from a trapped nerve in your neck and hope it's something that your physio can help you with. It's not long til March 2017, I hope the pain eases so your journey to D-Day will not be such an endurance but my thought is that the £45 per month will be worth it.

    Perhaps I need to take note as I sit at the pc at work all day (often not moving for hours at a time (except to nip to the loo!) and then come home and sit at the pc all evening, although since my shoulder injury, my posture is a lot better these days.

    1. Hi weenie, yes do look after your back/neck.

      The physio tells me that it's sitting with the head forward that causes the issue and puts strain on the spine. I also had two PCs on my desk for many years as I needed to shift between different systems on different networks so I was twisting all the time and not positioning myself square in front of either. I'm paying for it now. Hopefully it will start to feel better soon. :-)

  3. Oh don't worry about Krugman: he's a former economist who has converted himself into a partisan hack. I don't know what he has to say in his book; I do know that when he first started blasting "austerity" in the UK, he hadn't taken the least trouble to establish the facts.

  4. I had a spell of back trouble at work. I first put a small drawing board on top of a filing cabinet so that I could do paperwork standing up. Then I put a laptop there so I could do computer stuff too. It was a great help.

    The other thing: I got a kitchen timer and set it to ring every 20 minutes that I'd been at my desk, so that I would spring up and walk up and down a corridor, or run an errand of some sort, or swap to the filing cabinet top. "Elf and Safety" I could mutter; it was up to me because our occupational health people were pathetic.

    1. Good advice there about taking a regular break.

      I have started to raise my keyboard by putting it on top of some boxes as I don't think continually bending my neck to look down to type is helping at all. (I never learnt to touch type which I regret).

      Apparently there is such a thing as a "standing desk" now which would suit me down to the ground. Maybe I should push to be supplied with one on doctor's orders - they might decide I'm too much trouble and offer me redundancy :-)

    2. I'd recommend working in a standing position. I work from home and have been using a standing desk for a few years, with my work PC at the standing desk where I spend most but not all of my office hours, and my home PC at the sitting desk. This way I have to move between the two as I flit from work to distraction and back again (which is better than standing all the time). The benefits are a steadier body weight, slightly better fitness, better posture, and it is easier to remember the recommended eye-breaks each 20 minutes. More recently I've added a twenty minute walk everyday (on top of my other fitness regime). Early retirement will be nothing if you're not fit enough to benefit from it!

      Good luck with the portfolio, it looks as if you are doing well!

    3. Many thanks Ric. I really will have to investigate how to spend more time standing whilst working as, at the moment, sitting for any length of time is very painful.

      Quite true - physical fitness is very important for a happy retirement so it's worth spending some time and thought in making sure it is a priority.

      Thanks again for the advice and encouragement. Much appreciated. :-)

  5. Here's a chap making an argument that might encourage you to bolt early: he says that people tend to reduce their spending through retirement.

    Which is all very well but how about "care" costs, which are uncertain in incidence and duration but horrible in magnitude? The rational solution is obviously to insure against them, but the firms that offered such insurance found they couldn't make a living from it.

    1. Care costs are absolutely terrifying despite the fact that apparently the majority of people don't ever need to go into a home and those who do only need to be in there short-term. However, we all know people who've been in care for many years. It's a big worry.

    2. Thanks for the link btw - very interesting. I've passed it over to Dividend Drive for his list of suggested articles.

    3. Thanks for suggesting this, dearieme and Cerridwen. I have updated my weekly list to include it! Very interesting. Maybe we are all closer to our goal than we originally thought!

  6. Nice to see someone blogging with from a public sector perspective. There do not seem to be many PS employees aiming for FIRE. Unless I have misunderstood the LGPS, pension accrued since 2014 will be subject to reductions if claimed early. I am aware that protections were put in place for those who turn 60 before April 16 ( I think). But as I understand it the protections only ensure that retirees are are no worse off than if the 08 changes had not happened. As the accrual rate was then 1/80 it implies that, if you are fortunate enough to receive those protections, the accrual will be less than the £530 that you are projecting.

    Whilst I will not qualify my partner turned 60 a few months back so I'm interested in your interpretation.

    I've enjoyed reading your blog and I hope it shows a few of the disgruntled PS employee's that there is a way out before 65/66/67 70?


  7. Hi Fatlaksh,

    You are quite right, the LGPS is subject to reductions if taken early and ,as I do not satisfy the rule of 85 unless I work way past 58, I will be taking a hit on this - a 24% reduction if I take the pension at 60 rather than defer it till 65. I've done the maths and made that decision.

    Your partner may very well be covered by protection so that they are guaranteed at least as much pension as they would have received under the old rules, but I don't think that this will affect the level of pension earned going forward. My understanding is that pension accrued post March 2014 will still be assessed on a 1/49th career average basis. But the rules are complex and so much depends on individual circumstances. Your best bet is to have your partner's case looked at by your pension section - mine has always been very helpful.

    Thank you for your kind comments on the blog. I think it's quite important that people with public sector DB pensions realise that they too can take advantage of the new pension flexibility in order to help them retire early. Things aren't going to get any better out there - job satisfaction is diminishing rapidly due to the low value put on public services and the reduction in funding for local government. I know that we are already having problems recruiting skilled people in my own field (IT) due to low salaries and poor job security. I feel like I'm deserting a sinking ship and it does make me very sad (and mad) to see how things have turned out. Services have now been lost that will never be built up again. Retiring early means that I don't have to see all this any more but it doesn't mean I can forget about it, I'll just have to find other ways to have a positive input. :-)

  8. Here's one of those articles that might be worth chewing over.

  9. Under Health & Safety guidelines, you should have a workstation assessment and the employer should get someone to carry this out and identify what is required to make the workstation acceptable. Whether that be a new chair, foot rest, wrist rests, screen, etc...
    See the link:

    I had to carry out assessments at one of my old workplaces, it was a manager's responsibility. At another place, one of the guysI worked with had quite bad back problems and had lots of visits to the doctors and physio and the company had to carry out a workstation assessment and bought him a special chair to enable him to work without pain.

    1. Thanks sparklebeeblog, I'me fortunate enough to have an employer who takes all this very seriously so I have had a workplace assessment along with a session with an advisor setting up my chair and desk etc. As things didn't improve after this my boss has now told me that he will arrange a special chair for me. At the moment I cannot sit for any length of time without significant pain in my neck, shoulder and arm. In fact I went to the doctor's again today and the next step is an MRI and yet more (but different) painkillers. :-(