Unofficial end of stakeholder pensions? RU64 being withdrawn.

EdInvestor

dunstonh wrote:

A level annuity will pay more than an increasing one for around 7 to 13 years. It can then take another 7-13 years to make up the difference. Many people may feel that having an increasing annuity that could take 14-20 years or so to break even is not worth it.

I quite agree that a level annuity is a better deal than an index-linked one. They are both substandard products IMHO for diffierent reasons.

The only way they wont pay income tax is if they are making a loss (or break even). If they are not making any profit out of it and are on interest only basis, you have to question if it is really a suitable investment.

Indeed so Very few experienced letting property investors have bought anything in recent years because the yields are rubbish and even longer-term capital growth doesn't look very attractive any more compared with equities. Commercial property (funds) are a better, more stable investment in general now IMHO.Though one should stress that all property is local and there is probably some money still to be made in BTL - though certainly not in new build flats.That glut has been very obvious for some time now.

Pal

EdInvestor wrote:

The semi permanent nature of the "low interest rate/ low inflation" environment is pretty well accepted, especially in the financial services industry, wouldn't you agree?

Actually I don't agree with this. I agree that we are probably in a low inflation environment for the next few years. However just because we are in a low inflation environment does not mean that interest rates will necessarily stay low. Interest rates may well have to rise in order to keep inflation low.

A return to double digit inflation is very unlikely. But a return to 7%+ interest rates is relatively certain at some point in the future. The question is not "if" but "when". 5 years? 10 years? 15 years?

Of course, if we join the Euro high inflation and low interest rates are a possibility. Look at what happened in Ireland.

EdInvestor

Of course, if we join the Euro high inflation and low interest rates are a possibility. Look at what happened in Ireland.

Indeed so, all my European friends were furious about the shocking rise in prices when the Euro was introduced, absolutely everybody takes advantage :mad:I'm just about old enough to remember when the UK switched from pounds shillings and pence to the decimal system and it was exactly the same

ReportInvestor

Mars Bars went up from 6d to 3p .

Pal

Is that a big increase?

EdInvestor

20% is pretty big IMHO.

Mind you those were inflationary days.

Pal

20%? Don't you mean 1/5th? I thought you old timers didn't like the metric system?