What does the Chancellors pension revolution mean for us?

mgdavid

ognum wrote: »

Interesting response, I to have investment properties, it is because of my investment properties that I can give myself priority.

I have good letting agents (tax deductable) who handle my properties well. I am out of the Uk for a good bit of the year, they deal with all the issues but do refer to me.

We also have good pensions and other investments but I would not say having property is any kind of problem.

and therein lies the answer; your BTL is 'cream on the cake' whereas others seem to be planning to depend exclusively on it. As atush said, madness.

billozz

gadgetmind wrote: »

30-40 years after state pension kicks in? Isn't that a trifle ambitious?

i didnt say that "atush"did

and i repeat, is £18000 going to get me much of an annuity, i only pay about £30 month into it as i cant afford more so its not going to grow very much

atush

mgdavid wrote: »

and therein lies the answer; your BTL is 'cream on the cake' whereas others seem to be planning to depend exclusively on it. As atush said, madness.

Exactly.

I am not off BTL in general and have 3 properties one of which I live in. I think of buying more for diversification once i have downsized my larger than needed home.

what I do know is owning multiple homes and renting some of them is work, sometimes hard work. And comes with risk and cost. Something the poster here is probably not equipped to handle.

Not liking the plan

atush

billozz wrote: »

i didnt say that "atush"did

and i repeat, is £18000 going to get me much of an annuity, i only pay about £30 month into it as i cant afford more so its not going to grow very much

I said that as it is true- what is your plan now till SP?

yes 18K wont get much of an annuity (not that you have to buy one was was pointed out to you). you can use the funds to poveide a TF LS and or an income.

If you pay peanuts, you get peanuts back. But if you can afford to keep paying in 30 pm/ 37.50 after TR x 10 years that will be an extra 4500 plus investment growth over 10 years Lets say a conservative 3% a year with no compounding that will be another 6K approx. So that 6K+ will cost you only 3600- a profit w/o any investment growth which there will be of 2.4K

so that extra 2.4K (ok for easy math lets call it 3K as there will be some interest lol) will provide an extra 150+ per year for 20-40 years? surely you could do with that extra money in retirement to fund some small luxuries like a trip tp the pub or a day out?

Whats not to like?

gadgetmind

billozz wrote: »

i didnt say that "atush"did

I quoted your words. Atush was referring to the period from age 55 to death, you mentioned "hoping" to get some state pension.

Anyway, to answer your question, any income you can get from that money is better than blowing it as soon as you can get your sticky hands on it, but ultimately the choice is yours. Choose wisely, and ask for advice if you really want to hear it, but I suspect you don't.

Thrugelmir

billozz wrote: »

and i repeat, is £18000 going to get me much of an annuity, i only pay about £30 month into it as i cant afford more so its not going to grow very much

If you understand the concept of compounding it's later years that add the real value. There's far too much focus on short term rather than long term objectives. What will really hurt you is inflation once you've retired.

chucknorris

atush wrote: »

Exactly.

I am not off BTL in general and have 3 properties one of which I live in. I think of buying more for diversification once i have downsized my larger than needed home.

what I do know is owning multiple homes and renting some of them is work, sometimes hard work. And comes with risk and cost. Something the poster here is probably not equipped to handle.

Not liking the plan

I agree, it is definitely work (of a sort), I will be far happier when our property equity is transferred to a less 'hands on' investment.

xylophone

well im hoping to get a bit of a state pension,

It will be under the single tier arrangements. The legislation has been passed.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181237/single-tier-pension-fact-sheet.pdf

https://www.gov.uk/new-state-pension

jamesd

Fast_Muchly wrote: »

I will prob have around 150'000 come retirement maybe more. ... But surely a plan of taking 25% free of tax and then as much as you need to buy a modest house to rent out. ... The poorest house round here get rented for £400 a month and thats not far off annuity rates for 100'000,with the added incentive off when i die the money will go to my daughter instead of the company keeping it.And yes the tax man will get a bite.....but the point is my daughter gets the biggest bite and a helping hand in life. ... Tell me where im going wrong please with this idea.

Too little diversification with only one property. If you're going to do it you should use one or more mortgages to get three or more properties so that losing a tenant or having a property wrecked won't cost you all of your rental income.

Mortgage interest for this is deductible from rental income for income tax, for borrowing up to the value of the property at the time it entered the letting business.

The cheapest loans are ones secured on your own home, not the properties that are being let. This makes no difference to the tax treatment, it just saves you money.

If you want to give your daughter a helping hand in life it may be best to help sooner rather than when you die. Depends on her needs. If she's relatively young and doesn't own a home, helping out with that might be useful. One advantage of the while you're still alive things is that you get to enjoy seeing the results.

Fast_Muchly

atush wrote: »

TBH it sounds a bit thick.

You have a 150K pot. Only 37500 is tax free. then other 112500 is taxable as income. strip out your PA and you have 102K taxable. 32K at basic rate, 70K will be taxed at 40%- that is a loss of pension money of 28K on just the 70K Absolute madness.

Then you are talking have all your cash tied up in a property which could be damaged by tenants, the tenants could stop paying their rent- sure you can evict them but it could take 3 months and some money. In the mean time, what money is coming in?

Instead you could be looking at in income of abt 6% or so (depending on if you will run the pot down slightly over time) so abt 9K which is under your personal allowance.

Or you could take the tax free LS and put in a S&S isa and then live off the 112K and take your full PA each year tax free.

O.k


When im wrong im wrong.

This does sound like a very good idea.