Selling a house and buying two houses to fund a pension

The_J

That's great advice, invest in cash while the UK Government and BOE have implicitly suggested they will inflate their way out of debt.

brit1234

The_J wrote: »

That's great advice, invest in cash while the UK Government and BOE have implicitly suggested they will inflate their way out of debt.

J if you bothered to read my reply I suggested a range of investments and yes having a proportion in cash. You will also be able to read that I said to go to a good independent financial advisor with the money split in different banks under the £85k limit and they can help the poster spread the investment in a number of different pots such as share ISA, bonds, cash increased pension contributions and even property.

The key though is to go to a good independant financial advisor rather than someone called J posing as one trolling internet forums.

googler

keith2012 wrote: »

Living in Cornwall there are lots of opportunities for holiday lets and leaving a large sum in the bank seems a sure way to losr out with inflation running high comnpared to investment. How else would people invest 150-200k?

Neither of these strike me as 'investing', more as hands-on business start-ups.....

Thrugelmir

keith2012 wrote: »

This sounds like good advice - it will cetainly be worth considering all options. The only thing is at least with bricks and mortar there is a definite object you own rather than the vagaries of the money market which seems to be totally unfathomable to me.

Does anyone understand the residential property market now? As the rules of the game are still being rewritten. Until we finally reach a financial stable position. There's no certainty as to the outcome.

zappahey

keith2012 wrote: »

Selling a house and buying two houses to fund a pension

As Googler says, you're not funding a pension, you're starting a business. Is that really what you want to do at this stage in life?

Wobblydeb

keith2012 wrote: »

Living in Cornwall there are lots of opportunities for holiday lets and leaving a large sum in the bank seems a sure way to losr out with inflation running high comnpared to investment. How else would people invest 150-200k?

Some in income focused funds, some in bonds & gilts, and a small amount in gold, cash and fine wines.

I've been a landlady, and couldn't be doing with the hassle in my 30s, never mind when I retire. But this is very much a case of each to their own. You might enjoy it, or you could always pay an agent to manage the property for you, and accept a lower return.

holly_hobby

Your investments will depend very much on your attitude to risk and any existing portfolio.

All balanced portfolios should have a mix of low, medium and high risk products - via a considered mix of cash based and different asset backed mediums (providing sufficient diversification with an aim for each class to balance out a blip in the other). With desired sustained performance (return will be relevant to exposure) and of course capital security via the cash based mediums. However consider it would be poor financial management to place all your capital into low risk cash based deposits (where you will be over exposed to inflation erosion), similarly to be over exposed to risk - when losses may not be readily recouped (ie - in your circs consider retirment, which ordinarilly brings a fixed income during that period).

The overall balance held between the different classes will be will primarily based on your ATR and mitigating tax exposure, with your capacity and/or desire to exposure and the amount of potential loss that can be absorbed, also playing a very important part of the considration. (whilst of course retaining a capital sum back on instant access for emergencies)

With the best will in the world, a free forum (access to all) is not the place to obtain advice for a 200k portfolio - although floating it on here for ideas can be considered a start. Here I have tried to give you a taster of how you (and an adviser) will begin to look at your investment stratergy and factors to consider - and as a layman I would highly stress the important of disucssing this with a qualified practitioner in your area.

Investing in property to effectively fund a pension is not necessarily a wholly bad idea, a holiday let in Cornwall may be though - as rental income will be largely subject to the holiday season (although of course some regions benefit from yearr round tourism such as capital cities etc). The comments re devaluation and your overall exposure, may be mitigated by the choice and considered location of the 2nd property (within reasonable travelling distance to home if no management agency is used), in essence to spread and mitigate the risk & exposure to devaluation in any one area/region if you will.

You also need to consider the fact that property can be an ill liquid investment (i.e - you're dependant on finding a buyer, and reducing the price may be the only quick way to do so), in such a case how you will manage the situation if you need your investment out quickly ? How much loss of investment could you (or are you) prepared to whether to dispose of the asset ?

My advice would be, if you are unable to absorb any, or little loss of capital following the investment into property (which is not a risk free investment), or will be highly dependant upon generated rental income (which generally speaking is not a gte'd return), that you take a backwards step and re-think your stratergy. A proficient IFA will be worth his/her weight in gold in providing constructive and qualified advice in the matter (inc general taxation, CGT and estate planning), with on going support as required.

Hope this helps ... don't rush this ... as monetary mistakes at this point of life aren't easily rectified !

I wish you well ...

Holly x

Davesnave

As you are in an agricultural county, you could also look at the option of making productive or sporting land part of your portfolio.

Small amounts of land are probably not worth bothering with, but unlike houses, if you do need to sell at some future date, it is usually possible to sell off part of the acreage. With land you will own something tangible, which is something that seems important to you.

PS. Some of you lot on here have old fashioned ideas about retirement!

ognum

I do not see anything wrong with having property in a balanced pension fund, capital returns may not be as they were but there is an adequate return on some rental property.

Just balance your assets.

Bufger

Firstly if you're nearing retirement i'd gift whatever inheritence you plan passing on now so most of your life earnings dont end up with your income tax paying for rich council housed tennants on a right to buy 'outright' scheme.

Whats important to you in retirement? what do you plan on doing? do you want to sit on a mountain of gold or do you plan on spending it?

I've already worked out my retirement plan and i'm 28. If I had 200K saved i'd spend it at a ratio of age vs amount. At 65 I hope i'd still be relatively active so I could enjoy 20k in a year (plus pension!), when im 80 i'll be less mobile so I hope i would have used up most of that nest egg by then.

Putting it into another perspective: my grandparents hoarded loads of assets/cash but never spent it. Now they're both in permanent care at the cost of £800 per week each until their money runs out and then its free. If they had £10k or £400k it wouldnt matter at this point as all of it will go into their care. My grandad who still has a bit of his mind left greatly regrets not passing on inheritence that he saved for his sons before this point. (they dont care as long as their parents are cared for but my grandad is now depressed that his whole life of scrimping has come to nothing!)