Pension or BTL

Kobi11

smerch1468 wrote: »

This is exactly the point. If interest rates no let me rephrase that when interest rates return to normality it will make BTL as a viable investment obsolete from both an income and capital growth perspective.

Yes stock markets will also be hit, BUT if you have the option to join a pension where as Dunston has pointed out the employer contribution is in excess of 15-20% AND your pension is not linked to Stock Market performance (it's underwritten by the taxpayer) why oh why would you even consider BTL.

Let's just put it this way not joining the pension scheme is like taking a pay cut of 15-20% pa, would you honestly be happy with that?

You hit the nail right on the head! Once interest rates starts to rise, BTL as an investment will become less viable. Food for thought

Kobi11

kidmugsy wrote: »

As a taxpayer I urge you to abandon the pension and plunge everything into the BTL. It would be entirely to my advantage.

I'm not that selfless:eek:

atush

dunstonh wrote: »

most people here are pro-common sense and do not have a bias.

if this was an individual pension with no employer contributions then a good argument could be made for property. However, to get the benefits of the NHS pension, then OP would have to spend around 25-30% of their income to match it. It is that valuable.

The tax offset of having the mortgage will still exist for basic rate payers. The interest rates are low. So, there is no compelling reason to leave the NHS scheme. Not unless you want to pay more tax and get less back in retirement.

I completely agree with this. WE have property, cash and equities (in pensions and outside).

I would NEVER advocate going for one or even 2 of these options. You really need all 3.

chucknorris

HappyMJ wrote: »

It's a risk you have to consider and take yourself. You've posted on the pension board. Most people here a pro-pension. I am not. I prefer property and cash savings despite the potentially lower returns. I don't think I would have anywhere near what I have made had I made higher pension contributions.

We certainly wouldn't have what we have now (in fact, we would have over £4m less) if we had invested in pension instead of investment property. But that was then, and this is now, and right now I think the OP would have to be completely bonkers to prioritise their BTL investment over their NHS pension, they should consider buying additional pension within that scheme, never mind thinking about not paying into it (I'm assuming that you can do that, similar to other public sector pensions).

Mr_Costcutter

chucknorris wrote: »

We certainly wouldn't have what we have now (in fact, we would have over £4m less) if we had invested in pension instead of investment property. But that was then, and this is now, and right now I think the OP would have to be completely bonkers to prioritise their BTL investment over their NHS pension, they should consider buying additional pension within that scheme, never mind thinking about not paying into it (I'm assuming that you can do that, similar to other public sector pensions).

Absolutely agree with you - very sound advice.

We also made signifcant sums through investing in property, but those days have gone.

Thrugelmir

HappyMJ wrote: »

Is it worth taking any of it?

Give up £1 of annual taxable pension for a £12 tax free lump sum.

There's automatically a tax free lump sum in the NHS scheme. Nothing to do with commutation.

hyubh

Thrugelmir wrote: »

There's automatically a tax free lump sum in the NHS scheme. Nothing to do with commutation.

Not in the 2008 and 2015 schemes.

HappyMJ

Thrugelmir wrote: »

There's automatically a tax free lump sum in the NHS scheme. Nothing to do with commutation.

As OP has only been in employment for less than one year wouldn't they be in the 2015 scheme.

Isn't it just the 1995 scheme that gives the automatic lump sum accrued up until 2008 when it was removed.

Andy_L

HappyMJ wrote: »

Isn't it just the 1995 scheme that gives the automatic lump sum accrued up until 2008 when it was removed.

yes, although the 2008 scheme accrued at a faster 1/60ths instead of 1/80ths. As well as higher contribution rates & retirement ages

HappyMJ

Andy_L wrote: »

yes, although the 2008 scheme accrued at a faster 1/60ths instead of 1/80ths. As well as higher contribution rates & retirement ages

The 2015 scheme accrues at 1/54th's using Career Average Earnings instead of averaging the last few years of employment so is that still a good scheme?

The 2015 requires two years to qualify so if the OP leaves the scheme in the first two years as they said they assumed they would then what do they get?

So assuming I left the NHS in a year, and joined another provider (albeit with a less competitive package – no final salary scheme). Would pension still win over BTL?