GAR Not wanted

Amolad

Well put DunstonH, as I mentioned in my original post there are going to be many more people in this situation in the coming years as the GAR retirement annuities mature. I'm sure many will be confused by it all and require more informed advice on what they should be doing and welcome the "Full Service" offered by IFA's. But others like me, who are simply trying to carry through financial plans that have been in place for some time, find this regulatory imposition a "tad irritating."


Had I had my wits about me a few years ago I could have followed more what was in the pipeline and transferred the fund before the regulations came into force.

Amolad

Since when is ... errr "that word" swearing?


Oxford dictionary definition --


"A hoofed mammal of the horse family, which is typically smaller than a horse and has longer ears and a braying call"


which is the exact meaning that Mr Bumble intended. I think we should leave the American interpretation of the word behind us!!!

jamesd

It is possible to refer to the ass here but it is a little fiddly and of course you must not use the meanings that the blocking rule is intended to handle. The blocking of the animal is just due to the limitations of the technical tools which don't do semantic analysis to work out what is or isn't the personal attack of calling a human one.

I doubt that the American meaning of ass as an innoffensive word for posterior is an issue either unless you're calling a human one instead of referring to the body part in polite conversation. Similarly the mentioning of a fanny pack in the US context would be fine but it would be better to refer to a bum bag as a British writer in British contexts, particularly if you wished to refer to the difficulties of getting fingers far enough into some small bum bags to extract small objects.

Our host here enjoys word play and indulges in such naughty playing around on Twitter from time to time.

bigadaj

jamesd wrote: »

It is possible to refer to the ass here but it is a little fiddly and of course you must not use the meanings that the blocking rule is intended to handle. The blocking of the animal is just due to the limitations of the technical tools which don't do semantic analysis to work out what is or isn't the personal attack of calling a human one.

I doubt that the American meaning of ass as an innoffensive word for posterior is an issue either unless you're calling a human one instead of referring to the body part in polite conversation. Similarly the mentioning of a fanny pack in the US context would be fine but it would be better to refer to a bum bag as a British writer in British contexts, particularly if you wished to refer to the difficulties of getting fingers far enough into some small bum bags to extract small objects.

Our host here enjoys word play and indulges in such naughty playing around on Twitter from time to time.

Well he can be a bit of an !!! as well.

Malthusian

Amolad wrote: »

Madness?

OK let’s analyse my madness:

If you’re mainly in high-yielding stocks you’re beating the FTSE by, say, 4.5%-5%.

That's not beating the FTSE. The performance of the FTSE includes reinvested income also. It will beat the FTSE in times when high yielding stocks do well and underperform when it turns out these stocks are high yielding for a good reason.

If you can get a further edge by buying low and selling high (what a novel approach!) but seriously it would have been rude not to buy Shell in 2016 at around £13 (today £23.50) or Persimmon (following Brexit) after they’d fallen to under £13 from £22 (today £19.50) and numerous others.

I knew people who thought I was a sissy for not putting all my money into HBOS when it was less than £1 a share.

I agree with the stock phrase “Past performance is no guarantee” which is why I would, of course, adjust income to suit how the overall fund was performing and take no income if there were no growth or loss, after all my pension pot (after taking 25% tax-free) would comprise only about 20% on my investments overall.

If you are comfortable with prolonged periods of being unable to take income - and for plenty of people this is entirely the case - then there's not much wrong with your strategy. However your targets are still out of kilter. You are talking about predictable returns from a strategy that is by its nature highly unpredictable.

Also if this GAR policy forms such a small part of your overall assets then I don't understand why it matters so much to add it to your stockbroking fund as opposed to taking the guaranteed income (with a decreasing term assurance policy if you're worried about the risk of early death to your heirs) knowing that you can afford to take more risks with the share portfolio. Does it matter that much if you use the GAR fund to increase your assets under management by 20% when you'll achieve that with two years of share trading?

Your posts suggest that you think price fluctuations are more important in delivering returns than dividends, that you are basing expectations of future performance on a very short period of historic performance (that doesn't include a proper crash), and that you are overconfident in your ability to predict future share growth better than the aggregate of the millions of investors and institutions that determine the market price. All of these are classic mistakes of the kind that the government thought people should be protected from to avoid pension freedoms turning into the next personal pensions misselling scandal.

Amolad

That's not beating the FTSE. The performance of the FTSE includes reinvested income also. It will beat the FTSE in times when high yielding stocks do well and underperform when it turns out these stocks are high yielding for a good reason.

Bit confused about the point you’re making here. I measure my performance against the FTSE. I allow for dividends and the FTSE movement and the remainder is my relative performance against the FTSE. Whether the FTSE includes or excludes dividends is therefore irrelevant to me.

I knew people who thought I was a sissy for not putting all my money into HBOS when it was less than £1 a share.

Sadly I topped up on HBOS all those years ago not to mention RBS ... but then again I’ve bought Intercontinental Hotels (see the chart) and GWPH plus quite a few others ... well you win a few, you lose a few. Something people can forget is that your maximum loss is 100% ... whereas the maximum gain is a “little more.”

However your targets are still out of kilter. You are talking about predictable returns from a strategy that is by its nature highly unpredictable

I still can’t agree ... over 30 years I’ve made about 9% p.a. and that includes some pretty poor performing funds. Since I’ve move these funds into my SIPP they have done much better (& even with a poor performing FTSE).

Also if this GAR policy forms such a small part of your overall assets then I don't understand why it matters so much to add it to your stockbroking fund as opposed to taking the guaranteed income

It matters because, for a number of years, I have planned that this fund would form part of the 25% tax-free amount to be used to pay off my mortgage. It screws up my plans quite a lot to not have that cash. Because of this I now have to only part-crystalise my SIPP funds (put another way ... WHAT pension freedoms???).

Your posts suggest that you think price fluctuations are more important in delivering returns than dividends, that you are basing expectations of future performance on a very short period of historic performance (that doesn't include a proper crash),

I’ve been in the markets for about 35 years ... and have therefore experienced (& survived) quite a few crashes ... I am confident that should I take serious losses in the future then I will be in the company of many, many others and may, if things get really bad, even resort to becoming an IFA myself (joking of course!)

I still haven’t found an IFA prepared to approve my transfer at an “appropriate” fee and feel increasingly that I am being “held to ransom” by Government regulations and the IFA community. I think I will be taking this a lot further!

hyubh

Amolad wrote: »

It matters because, for a number of years, I have planned that this fund would form part of the 25% tax-free amount to be used to pay off my mortgage. It screws up my plans quite a lot to not have that cash. Because of this I now have to only part-crystalise my SIPP funds

Why are you so keen to pay off your mortgage when you are confident 9%+ returns on stocks and shares at the same time - presumably your mortgage rate is around 3% or less...?

Amolad

Why are you so keen to pay off your mortgage when you are confident 9%+ returns on stocks and shares at the same time - presumably your mortgage rate is around 3% or less...?


For the reasons you highlight I ain't keen to pay off my mortgage. My mortgage rate was less than 2% so I was more than happy to keep it (and make more on the stock market), but my bank, in it's wisdom, has decided I can't afford my mortgage (or even 1/3 of my mortgage) because I no longer have a large earned income. Following the recent pension reforms of course I can take pretty much any income I please but because I haven't started drawing the income, apparently it just doesn't count. Now because I can't "afford" my mortgage the fixed rate has ended and the variable rate is nearly double AND they want it repaid by May ... which I can do ... which means I CAN afford the mortgage ... can you understand my frustration now?


It's really a matter of financial institutions not understanding or taking into account how finances change as you get older.

Malthusian

You haven't said how big the fund is but you should be able to find an IFA willing to sign the "I have received advice" form for at most 2% of the investment amount (less if you shop around).

What's the big deal about a sum of money you'll have made back in share growth within a few months?

The tax free cash is neither here nor there as you can take the tax free cash from the pension and a GAR annuity on the rest.

jamesd

It appears that the mortgage firm are not complying with their obligation to treat you fairly. I suggest that you make a formal complaint and if necessary take the matter to the FOS. As you indicated, they seem not to be properly considering your ability to take whatever income is needed to meet your obligations. They might even have daft rules that they will only consider annuity income even though buying an annuity would roughly halve a person's income.