So I’m in the public service and will receive a decent pension at 65 if I complete 40 years service.
I’m on the old, better scheme where you also get 1.5 times final salary via tax free lump sum.
However, I hope to retire at 55. To do that I must either
a) take a massively reduced pension
b) resign and live off my own savings from 55-65 then draw down my pension
By going early I won’t have used all my tax free lump sum amount. I’ll therefore have c. 40K which I could take out tax free via an AVC.
I’ve can set an AVC up with Cornmarket (who have a deal with our union) to do just that. Hoping to put in say 25-30K over 20 years and see it grow to the 40K to max the tax free element.
Next question is should I save cash for the 10 years 55-65 or buy a BTL for long term cash flow?
I’m on track to be mortgage free in 5 years. That would allow me build up a deposit for a BTL with say a 15 year mortgage. Goal would be to break even on rental income less taxes and mortgage for those 15 years, giving me an asset at the end and then a rental stream into early retirement to help fund 55-65.
Is this far too optimistic? Do people recommend the BTL landlord life or all use management companies (to reduce hassle)?