In need of advice

mgdavid

Hooloovoo wrote: »

..........
Anyway, back on topic - £1100 per month. That's presumably the desired amount after any relevant taxes, so equivalent to approximately £18k gross salary. A lot of people don't even get that when they are working and have a mortgage to pay, never mind retired.

With only £100k left in the pot for producing income you need a 13% return after any tax to get the desired income.........

I think you forgot to take the spousal maintenance into account; 1100-475 is 625. Then knock off the rent which stops when the house is bought, we're down to 325. I make that around 4.2% return before tax - which might be do-able, no?

atush

Glen_Clark wrote: »

So whats the point of getting married?

Tax and inheritance?

How about better life expectancy?

sleepless_saver

rebeccatom wrote: »

I am asking on behalf of my mother. Her situation is she is 55 and recently seperated from her husband. She has sold the family home and now has that money to buy a new house and live on until retirement. She is currently suffering from stress due to the breakdown of her marriage so is unable to work. She has nothing in the way of personal pension so the money will need fund retirement in 8.5 years

If she's 55 now, then she won't get her state pension until she's 66, not 8.5 years time. https://www.gov.uk/state-pension-statement.

If she hasn't worked for a while she could start off doing some voluntary work to build up her confidence and give her some relevant experience before trying to get some part time work. Maybe do some relevant courses as well. She's probably not able to do any of that yet, but when the time comes it will be an easier way back into work - I'm assuming she hasn't worked for quite a while.

Hooloovoo

gadgetmind wrote: »

For me it was the tax advantages.

Are there any tax advantages, these days?

mgdavid wrote: »

I think you forgot to take the spousal maintenance into account; 1100-475 is 625. Then knock off the rent which stops when the house is bought, we're down to 325. I make that around 4.2% return before tax - which might be do-able, no?

I didn't forget. I deliberately ignored it. It's only going to run for five years which is nothing assuming she is planning on living for the next 30+ years. No point relying on something you know is going to stop. Better to change her lifestyle now and get used to the lower income.

gadgetmind

Hooloovoo wrote: »

Are there any tax advantages, these days?

Yup.

Two (usually) personal allowances and two basic rate bands let you use interest and dividend income effectively, and two CGT allowances and transfers between spouses being CGT exempt allow lots of efficiency in that area.

gadgetmind

mgdavid wrote: »

I make that around 4.2% return before tax - which might be do-able, no?

She should be able to completely avoid tax without having to try particularly hard.

It won't take long to move everything into ISAs and in the mean time the interest and dividend income won't be enough to attract tax. By the time state pension arrives, everything could be sheltered.

Glen_Clark

gadgetmind wrote: »

For me (getting married) was the tax advantages.

Thats a contrast with the benefits forum, where couples live apart to get extra benefits.

Hooloovoo

gadgetmind wrote: »

Two (usually) personal allowances and two basic rate bands let you use interest and dividend income effectively,

Surely being married or not makes no difference to that?

and two CGT allowances and transfers between spouses being CGT exempt allow lots of efficiency in that area.

Didn't know that. Thanks. I don't have enough money to worry or benefit from that though.

So as I thought, being married has no benefit at least from my perspective.

Maybe if they eventually combined the tax allowances so one person could use both income tax allowances. Or bring back the married couples tax allowance. Even then I'd think twice about getting married lol.

gadgetmind

Hooloovoo wrote: »

Surely being married or not makes no difference to that?

It means you can keep investments in the name of the partner that pays the least tax. In my case my wife doesn't work, so she gets all of our unwrapped savings and investments.

Would I do this if we weren't married? Probably not!

Maybe if they eventually combined the tax allowances so one person could use both income tax allowances. Or bring back the married couples tax allowance. Even then I'd think twice about getting married lol.

Lots of our taxation is heavily stacked against couples where there is income asymmetry: going into higher tax bands is just on one income, ditto losing your personal allowance and family allowance.

However, taxation as a couple is *very* difficult to implement and would lose HMG a lot of income.

grey_gym_sock

also, 100% inheritance tax exemption on everything left to a spouse, and carry-over of the basic exempt amount, so the survivor has a double exemption.

it's almost as if the tax and benefit system is designed to encourage richer ppl to get married and poorer ppl to stay single.