Only freedom will do

edinburgher

Thank you, both for the interesting insights, but also for the more practical avenues to explore.

I had never considered tracking pension performance using XIRR, but this will be added to my arsenal of data at the earliest opportunity, it is this sort of thing that keeps me sane

Start to ask yourself why you are choosing to pay income tax

I'm not - I blame the gummint! :rotfl:

VCTs, I will need to do more research on. Not that I doubt your input, but because I know nothing about them and I like to understand the basic principles of everywhere I put my money. I will also have a chat with a IFA relative to consider their opinions.

It is particularly interesting to note the differences in our approaches. One of the great things about forums like this one is watching people working towards the same goals, but through very different means.

*Edit: Never mind, it would appear the Albion offer closed on the 2nd of April anyway, one to look out for next year perhaps. I liked aspects of what I read, but the costs were slightly alarming. Am I right in thinking that the costs for year 1 would wipe out much of my returns as a new investor who missed any of the discounts? They appeared to be 6% (3% initial + 3% annual), leaving 2.5% of the projected return of 8.5%? I suppose I would have the upfront tax relief to offset this, but still, steep!

edinburgher

Does anyone else read Retirement Investing Today? Just read a post in which the author says that he earns £90k. Sheesh - some days it feels like you are as poor as a church mouse! :eek:

in_need_of_direction

but a happy one mr ed with toots en route

Karmacat

I died a death on wh :rotfl::rotfl::rotfl:

jamesd

edinburgher wrote: »

I had never considered tracking pension performance using XIRR, but this will be added to my arsenal of data at the earliest opportunity, it is this sort of thing that keeps me sane

If you do that, also record the XIRR regularly so you can see its history. It'll drop during market downturns. You could even do it for each investment you use within the pension if you want to see how you do, though I haven't set that up yet. Maybe sometime...

edinburgher wrote: »

I will also have a chat with a IFA relative to consider their opinions.

It's common to think of just the more extreme high risk VCTs when you mention VCTs. Worth being sure that you tell them about the specific nature of what you've considering. 100% asset-backed - meaning secured lending - is way different from what might come to mind at first.

edinburgher wrote: »

*Edit: Never mind, it would appear the Albion offer closed on the 2nd of April anyway, one to look out for next year perhaps.

As of 13 April it was apparently still open and looking to raise the remaining £8 million, with final closing on 30 September 2015 if not filled before then. There was an allocation event - when shares are issued to applicants since the last one on first come first served basis - on 2 April but that wasn't the final one, just the last in last tax year. There's a free phone number on page 55 of the prospectus so I called and they told me that the next allocation event will be in early June but they haven't decided the date yet. They also told me that all offers currently remain open.

If a person is a PAYE tax payer they can tell HMRC that they have purchased VCTs and how much and HMRC will adjust their tax code to give the tax relief without the need to wait for a tax return at the end of the year.

edinburgher wrote: »

I liked aspects of what I read, but the costs were slightly alarming. Am I right in thinking that the costs for year 1 would wipe out much of my returns as a new investor who missed any of the discounts? They appeared to be 6% (3% initial + 3% annual), leaving 2.5% of the projected return of 8.5%? I suppose I would have the upfront tax relief to offset this, but still, steep!

Right about the 3% initial. The dividend projection is after costs, not before, so you get the full dividend. You can see a summary of the projected dividends for each of the individual VCTs and how they are split between asset-backed or not on page 3 of the Tax Efficient Review description.

I've written more about this in other posts so you might try a search for VCT and poster jamesd to read those.

edinburgher

but a happy one mr ed with toots en route

Absolutely, the thought keeps me going

I died a death on wh

Most people do. The saddest story on the MB was someone who hit the bonus round (where I won £2xx) and he won £0! :eek: :rotfl:

100% asset-backed - meaning secured lending - is way different from what might come to mind at first.

Are you sure? The prospectus suggests 54%, 8% cash, 38% others. For that matter, why don't they call the prospectus a prospectus, that confused me when I was trying to find it earlier on.

Considering the minimum purchase, I think this might be more a next year project than a this year project. Hoping to move house in the next year and don't want to commit to any investments that are locked in for a 5 year period.

No plans to use investments at this point, but want to remain flexible as we'll realistically need £55-60k.

jamesd

edinburgher wrote: »

Are you sure? The prospectus suggests 54%, 8% cash, 38% others. For that matter, why don't they call the prospectus a prospectus, that confused me when I was trying to find it earlier on.

Yes, I'm sure. The linked offer is for six different VCTs and you've quoted the ratios if a person was to invest the same amount into each of them, while I've given the mixture of the specific one of the six that I mentioned. Page 3 of the Tax Efficient Review description gives a brief summary of the mixtures for each of the six VCTs. An investor can choose non-equal mixtures including just one of the six VCTs and I chose a very uneven mixture.

edinburgher wrote: »

Considering the minimum purchase, I think this might be more a next year project than a this year project. Hoping to move house in the next year and don't want to commit to any investments that are locked in for a 5 year period.

Whatever and whenever is appropriate for you. Agreed that it may be best to keep money relatively accessible for now.

edinburgher

Thanks for that :beer:

Alchemilla

Whoop Whoop Ed!!

edinburgher

What is it about an extra day in your house (WFH tomorrow) that makes you feel like it's a weekend? :j

Left work in a grump feeling slothful, have arrived home and:

• Finished two loads of laundry
• Made HM turkey meatballs with black beans in tomato sauce
• Made HM bread
• Hoovered
• Cleaned shoes
• Taken out the rubbish and recycling
• Updated spreadsheets
• Fed the fish

We are getting our loft insulation installed tomorrow, sadly excited about this! Also planning to go see this.