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The Windfall Diary
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We got written details of the products/splits our IFA is recommending:
1) Pension
Because hubby hasn't made contributions in last few years he could do lump sum contributions of £60,000 this year; £40,000 next tax year.
TOTAL: £100,000
We got cold feet about this over the weekend. Will post thoughts separately.
2) ISAs
Hubby already has Skandia ISA (similar funds to pension) & he has been putting in £300/month. We're going to top this up, open one for me & put the full amount in. Plus keep £11,280 x 2 on deposit ready for April.
TOTAL: £40,920
3) Barclays Defined Return Plan - Dual Index - Annual Kick Out
Potential return 12.5%, dependent on FTSE & US S&P. Start date Feb 15th.
Returns from this deemed to be CGT rather than income so would be in my name to take advantage of my allowance.
TOTAL: £50,000
4) L&G Structured Investment Plan
Similar to above but annual return 11%. Start date March 15th. Again, in my name.
TOTAL: £50,000.
5) Standard Life Investment Bond
Having considered VCTs & Offshore Investing, IFA believes they are not for us, so has come up with this.
Tax at BR - again, in my name - is taken care of at source.
TOTAL: £50,000
Not sure what the potential return on this product is so need more details.
Total to be invested based on these recommendations: £290,920.0 -
Doing a bit of research into investing in stocks & shares. Have read some of the forums on here & Motley Fool website. Just downloaded 14-day free subscription to FT onto my Kindle!
Will see how far I get before I get 'blinded by science'!0 -
Spent most of the weekend debating how much (if any) we should put into hubby's pension.
This is nothing to do with the pension per se, but rather what we can do with the 'pension pot' in years to come.
Having looked at the best available annuity rates in this weekend's papers it seems that we're not going to get as much income as we could from, say, a structured investment plan.
Really dithering & not sure whether we'll be signing up to this aspect of it when the IFA returns today...0 -
I realise that it is a secure feeling when the right pension is bought but it still seems ...... "it's gone" when an annuity is bought.
A bit of work, worry and time but how about a run down property that you can together "do up" then let. When the problems get to the stage that it isn't worth it, you could sell and draw an income from the interest bearing pot .... maybe better annuity rates by then!!
My IFA is due to report as welll .... quite excited!0 -
WindfallWinnie wrote: »Having looked at the best available annuity rates in this weekend's papers it seems that we're not going to get as much income as we could from, say, a structured investment plan.
How large will the total pot be? Drawdown is your other major option, and this has the advantage (and disadvantage!) that you can remain invested so the pot can continue to grow.
I wouldn't touch annuities right now.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
gadgetmind wrote: »How large will the total pot be? Drawdown is your other major option, and this has the advantage (and disadvantage!) that you can remain invested so the pot can continue to grow.
I wouldn't touch annuities right now.
I've just spent the last hour reading the ISAs vs Pensions debate on that forum....
Hubby was convinced he had to take an annuity; I thought the rules had changed, so thats good to know.
Current value of the pot: £175k. If we go with IFAs recommendations we will be adding £60k this tax year & £40k next tax year which will take it to £300k by April 2012.
Hubby is 65 in March 2018 and I suppose there is an option for making further contributions in the intervening years...0 -
WindfallWinnie wrote: »Spent most of the weekend debating how much (if any) we should put into hubby's pension.
This is nothing to do with the pension per se, but rather what we can do with the 'pension pot' in years to come.
Having looked at the best available annuity rates in this weekend's papers it seems that we're not going to get as much income as we could from, say, a structured investment plan.
Really dithering & not sure whether we'll be signing up to this aspect of it when the IFA returns today...
REthink the pension as he is a HRT payer and you get a lot of relief on this. Plus you don't ever have to buy an annuity if you dont want to. Dont let that cloud your judgment. You can take 25% tax free, then you can use (or not) the rest for drawdown. Or you can buy an anuity if rates improve at any time.
The savingon tax alone will creat a buffer so that if investmens don't perform over the short term you are still better off having done it.0 -
WindfallWinnie wrote: »Hubby was convinced he had to take an annuity; I thought the rules had changed, so thats good to know.
Annuities are still good for some people, but rates are pitiful right now.
There are two types of drawdown, either capped or flexible. With capped, you're limited to what you can take out per year, but still benefit from investment growth, and will hopefully also benefit as annuity rates rise. With flexible drawdown, you need income of £20kpa from other pensions (including state) but can take as much as you like from the pension whenever you like.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
Still with pensions in mind, is there any advantage to putting a lump sum into my pension? I haven't actively contributed to it for about 15yrs (since I had children & changed to PT work)...
The amount I've earned has reduced considerably so in tax year ending 2009 it was £11k, 2010 £10.5k, 2011 £7k and this year only £2k.
Could/should I use the 3 year carry forward rule & make pension contributions for those years?0 -
Yes, it is worth paying onto one for you as well. Less tax relief, but still some. And always a good idea as not all marriages last sogood to have some in your name. Use the one you have, or open a new one.
You could even dare I say, combine this with your share dealing idea and open a Sipp? You could contribute 3.6k plus your income I think (as even non earners can put up to 3.6K in). I think you can use the 3 past years if you didn't contribute then, yes.0
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