Desperate Measures Called For - Ideas Welcomed

jamesd

AuntLily wrote: »

2.89 % on a BTL mortgage which is lower than the rate on the farm. Farm is a residential mortgage currently on SVR because I'm overpaying to be rid of the debt.

Hmm, pretty cheap BTL and it probably has an early repayment penalty. Still, it's worth looking to see what rate you could get if you remortgaged the farm to include the BTL balance and cleared the BTL mortgage, knowing that the BTL interest would still be tax deductible. But not as much scope for this as I see sometimes because of the good BTL rate.

AuntLily wrote: »

I'm thinking it will be lower because I spent many years contracted out whilst only paying a pittance into a private pension (£20 a month) and thinking I would never get old :embarasse

It'll be lower but you will be able to pay self-employer NI to get to the full flat rate probably, since you appear likely to have a sufficient number of years after the flat rate is introduced and before state pension age to get there. After flat rate start it goes up by 1/35th of the flat rate for each year paying in.

Being young is an interesting combination of being immortal but never thinking you might end up growing old. You're in pretty good shape compared to many, though.

jamesd

A new BTL property has the advantage and disadvantage that it's a leveraged investment. That can multiply your buying power and eventual income compared to pension contributions. Whether you want the hassles is really up to you. Just don't go overboard and have almost all of your money in property, diversification is a good thing.

dunstonh

He said that he took that into account and that the figures balanced.

I dont see how it could. Company contribution sees a withdrawal from the company that reduces corp tax and no NI payable. increasing your earned income to then pay into the pension would see you pay NI and tax and only get the tax relief back. Not the NI.