Will Releasing Pensions lead to a lot more BTL

CLAPTON

bigheadxx wrote: »

Yes the grey vote no longer refers to war heroes and will nor be bought off with 'winter fuel allowance' and free TV licences. The new grey vote are the boomer generation and they will do very well out of this.


http://www.bubblews.com/news/2691454-budget-surprise-is-not-surprising

well the oldest boomer were born in 1945/6

now I know that maths teaching has collapsed in state schools but even so, that shows the oldest boomers are only 69


more advanced maths shows that whilst not actual war heroes, anyone 70 or over maybe grey but are not boomers

also, further research shows that many younger boomers dye their hair as befits the generation that invented sex.

Andy_L

TheFactory wrote: »

Well that depends on where in the country you invest, I get 30% gross ROI after mortgage costs, up north......

Nice, but what's your net profit after all the other expenses?

ruggedtoast

bigheadxx wrote: »

Yes the grey vote no longer refers to war heroes and will nor be bought off with 'winter fuel allowance' and free TV licences. The new grey vote are the boomer generation and they will do very well out of this.


http://www.bubblews.com/news/2691454-budget-surprise-is-not-surprising

This says it all.

The post war promise that each generation will be wealthier than the last has been pushed to the limit. !Generation X will not be richer than their parents. !A careful dismantling of welfare also reduces costs to the state so it will not be in the present situation, high liabilities and falling consumption, after the next baby boom. !Gen X will have to rely on themselves for their twilight years, don't expect a funded NHS by then either.

A shot in the arm for the boomers is a shot in the head for everyone else.

The young can only look on in despair as the boomer's coffers are filled to overflowing.

bigheadxx

CLAPTON wrote: »

well the oldest boomer were born in 1945/6

now I know that maths teaching has collapsed in state schools but even so, that shows the oldest boomers are only 69


more advanced maths shows that whilst not actual war heroes, anyone 70 or over maybe grey but are not boomers

also, further research shows that many younger boomers dye their hair as befits the generation that invented sex.

No idea what point you are making but my point is that twenty or thirty years ago the over sixty fives or retired had far simpler needs and less expectation. Many were also state pensioners with no other income. Today's retirees are harder to satisfy that a few hundred quid a year and free TV licence.

Yesterdays pensioners got a fairly raw deal despite the fact that they lived through the war. What have we got the bb to thank for?

Thrugelmir

bigheadxx wrote: »

No idea what point you are making but my point is that twenty or thirty years ago the over sixty fives or retired had far simpler needs and less expectation.

Also far lower life expectancy.

grizzly1911

QUOTE=Thrugelmir;65044561]That's on the assumption that the new rules don't restrict the rate or level at which the money can be withdrawn.

Something I feel is getting overlooked in the excitement of the announcement.[/QUOTE]

Agree detail is yet to come out but the drawdown sustainable income level has been reduced by nearly 50% so gives an idea the direction they will follow.

scaredofdebt

Would you suggest that the government's motivation for doing this so they can get more tax revenues?

If the average annuity returns 5% annually and the average BTL is 7% (I am not sure what the figures are so please enlighten me) then even with tax it should be fairly attractive to go down the BTL route with the higher return and the benefit of being able to get your cash (or some of it) back by selling up.

However, according to BBC news the average pension pot is well under £20k so not many BTLs will be done with that kind of money.

You've also got the extra hassle of managing the property with a BTL, or paying someone to do it, risk of tenants not paying, maintenance costs etc etc.

In theory it could push house prices up and rents could fall until it becomes less attractive and then things would stabilise.

Devils in the detail, do we know for sure what the tax rates will be yet?

Would investing in shares with high dividends be a better option? Again, not sure what a good dividend rate is these days. (Edit, 4% plus is achievable, 6% plus for a few shares and the best is 8% but you'd do well to forecast which shares will produce such yields)

I'm 45 so in theory under current rules I could access my pension pot in 10 years time, or have they changed that?

Thrugelmir

scaredofdebt wrote: »

If the average annuity returns 3% annually and the average BTL is 7% (I am not sure what the figures are so please enlighten me) then even with tax it should be a no-brainer to go down the BTL route.

What are you basing your 3% and 7% on?

Thrugelmir

grizzly1911 wrote: »

Agree detail is yet to come out but the drawdown sustainable income level has been reduced by nearly 50% so gives an idea the direction they will follow.

Flexible drawdown from a SIPP still requires a guaranteed income of £12k. So a pot of £100k elsewhere.

Far above the average value of pension pots. So of benefit to relatively few.

scaredofdebt

Thrugelmir wrote: »

What are you basing your 3% and 7% on?

The 3% is out of date info, just checked and it's more like 5% so I've edited my post. The BTL return is what my step father gets from his property portfolio, not sure if he factors in costs such as maintenance/upkeep etc though.

So it's not quite as attractive as I initially though to go down the BTL route but you can always get some money back by selling the property.

Regards dividend yields, not so great, a few over 6%

http://www.topyields.nl/Top-dividend-yields-of-FTSE100.php

Could be attractive if you can find highish yielding stocks with growth potential but that's not going to be easy and the risks are relatively high.