Mother's Pension Pot

dunstonh

My mother is elf-employed but has been making drawings of £1500pm. Ho much do you think she would be allowed to make in a one off pension contribution before the business is sold?

If she is self employed she doesnt have drawings as such. She is the business. So what was her income declared to HMRC on the last tax return and is this tax year looking similar? When it s a limited company it works differently to self employment.

kidmugsy

I saw some advice on an American site once that fascinated me. It advocated buying an annuity that paid in Swiss Francs. I've no idea how easy that would be in Britain, but the idea of a guaranteed income that won't lose purchasing power if the pound sinks might be appealing.

Jegersmart

kidmugsy wrote: »

I saw some advice on an American site once that fascinated me. It advocated buying an annuity that paid in Swiss Francs. I've no idea how easy that would be in Britain, but the idea of a guaranteed income that won't lose purchasing power if the pound sinks might be appealing.

what? You think the Swissy is immune to exchange rate fluctuations? Don't do it.

imho

J

bowlhead99

kidmugsy wrote: »

I saw some advice on an American site once that fascinated me. It advocated buying an annuity that paid in Swiss Francs. I've no idea how easy that would be in Britain, but the idea of a guaranteed income that won't lose purchasing power if the pound sinks might be appealing.

That could have been good advice ten years ago when a Swiss franc only cost $0.70. Every one of those Francs returned to the American now gives him $1.09

Of course if the advice was last July during a short term spike,he would have paid almost $1.40 for every Franc of investment cost - but every Franc coming back now is only worth $1.09.

So from the American's perspective, his franc income stream is worth either a lot more dollars or a lot less dollars than on day one, depending when exactly he decided it was a good idea.

For UK investors a franc has been worth over 83p and under 45p at different points in the last 10 years.

Basically if you buy a franc annuity you get a guaranteed franc income stream. Due to inflation and exchange rates being unpredictable, you can't predict how many loaves of bread the franc income stream will buy in Basel, or how many loaves of bread that franc income stream converted to pounds will buy you in Bristol.

As there is a risk that the UK will not fare as well as other countries over the next X years, it's sensible as others have said to have exposure to assets in lots of global countries within your portfolio. I would personally do this with generally equity and bond fund exposure rather than locking into a low interest annuity from a single country.