House Sale - Lump Sum Dilemma

Keith_Clunk

xylophone wrote: »

Have you checked on your state pension situation?

Yes. At the time, 2011/12 I exceeded the 30 year requirement, but as the requirment has since risen to 35 years I am now half a year short and believe that not to be a year I am able to top-up as it pre-dates the cut-off. However, it is a very valid consideration and worthy of mention.

As soon as I step foot back in the UK for the long term I will sign-up for JSA as soon as possible to get that ball rolling as it pays the NI stamp, at least for a while, then top-up that year, if necessary, the following year. There'll likely be further reductions of full years due to currently unknown/unconfirmed years due to contracting out of SERPS in the 80's, I can't remember when exactly, but I do know it happened. In 10 year's time I expect to receive a more accurate state pension assessment and will consider buying a number of years then, if need be.

I tend to look at the state pension as being more of a cherry on the top, rather than forming the cornerstone of my retirement funds. Even so, it is well worth having and topping-up if still in decent health.

Brynsam

Keith_Clunk wrote: »

As soon as I step foot back in the UK for the long term I will sign-up for JSA as soon as possible to get that ball rolling as it pays the NI stamp, at least for a while, then top-up that year, if necessary, the following year.

You won't be able to sign up for JSA at all unless you've been an employee and paid Class 1 NI contributions in the last 2 to 3 years. Getting a job will pay the NI 'stamp'.

You do sound pretty out of touch with the system as it now is...

Keith_Clunk

Linton wrote: »

Your pension contribution in a year (if it is to benefit from tax relief) is limited to your earned income. It would appear you have none. Not getting tax relief makes it pointless since you could well be taxed when you withdraw the money. There is the additional option of contributing £3600 =£2880 net into a pension if you are not a tax payer. However this is trivial compared with your cash assets.

Investing £390K in a diversified portfolio of funds could sustainably generate say £12K-15K/year gross inflation linked.

That is correct, I have zero earned income, even though I am a UK taxpayer because I pay tax on rental income if it exceeds my personal allowance.

Albermarle wrote: »

A question from me , but also the answer could be of interest to the OP.
If you invest in funds, shares, ETF's , IT's etc outside of a pension or ISA , does this not make your tax situation more complicated , especially if it is a significant amount ? This is due to CGT, dividend tax etc
How difficult is this to manage ? Would you normally be better to have an accountant deal with it ?

I agree that opening a regular investing / fund trading account, probably with the same provided as my SIPP, was a thought that crossed my mind. Providing I know and understand what's required in terms of the elements taxed I would be quite happy to keep records myself. I haven't done it yet, but research is something I quite enjoy and it helps keep the mind active.

Brynsam wrote: »

Presumably using your UK house as the correspondence address...?

Buy yourself some proper financial advice before it's too late. There is nowhere near enough information in your question for anyone here to give meaningful help (are you a UK taxpayer??), other than to point out the law relating to contributions to a UK pension (clear explanation here: link-removed), or remind you that if you are not a UK taxpayer it's unlikely an ISA will be of any special benefit to you..

No, my rented property is not my UK correspondence address and I am a UK tax payer because I am paid rental income, albeit 'unearned'.

In relative terms it was not long ago I became aware that rental income is labelled as 'unearned' and thereofr falls outside of income considered for potential personal pension contributions. I think this was the primary aspect which prompted my initial question, which subsequently grew into more.

In terms of a Financial Advisor, that is most likely the last thing I would ever do. But I suppose it should be a never say never, however unlikely. To be honest, saying ".. get a financial advisor" could be the response to pretty much every question ever asked on this forum.

I appreciate your link, but I had to remove it in order to post.

Keith_Clunk

Brynsam wrote: »

You do sound pretty out of touch with the system as it now is...

Yes, I most likely am. That's what retiring at 49 and spending 8 years in tropical climes does for you.

I do wonder about my LTA, though. With the SIPP currently more than the value of my property I wonder if beginning drawdown to release some cash next year may be preferable. My hope was to defer triggering MPAA for as long as possible, but I suppose it doesn't matter if pension contributions, plus the hoped for bump from the HMRC, are not on the cards due to only 'unearned' income which subsequently snubs out hopes of any carry-forward either, then this all may now be a mute point.

However, I have learned from the many responses here in this thread and it's got me thinking in other directions, which was the intention of asking the question on the first place. All without rewarding any IFAs

Thank you for your input.

xylophone

At 6.4.16, two calculations were done

Old Rules

NI years/30 x £119.35 + (Additional State Pension - deduction for contracting out)

New rules

NI years/35 x £155.65 - Contracted Out Pension Equivalent

Your "starting amount" was the higher of the two.

Re NI and voluntary contributions, see

https://www.royallondon.com/siteassets/site-docs/media-centre/good-with-your-money-guides/topping-up-your-state-pension-guide.pdf

Keith_Clunk

xylophone wrote: »

At 6.4.16, two calculations were done

Old Rules

NI years/30 x £119.35 + (Additional State Pension - deduction for contracting out)

New rules

NI years/35 x £155.65 - Contracted Out Pension Equivalent

Your "starting amount" was the higher of the two.

Re NI and voluntary contributions, see
link removed

Thank you for the above link.

I look forward to reading it, but the website is currently 'Under Maintenence', which is rather apt

dmelife

Don’t want financial advice, unless it’s free, and isn’t actually ‘advice’ but continues to misunderstand the system and makes mistakes including declaring himself as a UK resident. Good job!

Keith_Clunk

dmelife wrote: »

Don’t want financial advice, unless it’s free, and isn’t actually ‘advice’ but continues to misunderstand the system and makes mistakes including declaring himself as a UK resident. Good job!

Thank you for your ... 'help', very kind.

The fact a few here have become noticibly disgruntled by my situation does put a smile on my face, how so I'm uncertain. Jealousy, jobsworths, delicate, grumpy? .. I have no idea.

Everywhere in the world there are both friendly people and unfriendly people. Those who wish to help and those who do not. Those who's contributions are helpful and those who only criticise. Pleasing to know the UK still contains mostly the friendly and more pleasant variety and it is to them I offer my sincere smiles of gratitude for having genuinely tried to help and assist in educating me, because they have, and I appreciate it :cool:

Now it's back to the grindstone, retirement can be such a beach.

dmelife

It’s nothing to do with your situation. Very happy for you, but when you clearly have no idea what you are doing, but think it’s ok to have a dig at IFAs, when there are lots on here trying to ‘help’, I suddenly lose my desire to give friendly guidance and instead just make a grumpy comment pointing out one of your many mistakes. Enjoy your smug retirement!

Keith_Clunk

dmelife wrote: »

I suddenly lose my desire to give friendly guidance and instead just make a grumpy comment pointing out one of your many mistakes. Enjoy your smug retirement!

Some people take a chance from time to time, sometimes they fail, sometimes everything works out fine. If you never make mistakes, you never learn. A person needs to strive and to be challenged.

You confuse smugness with confidence and the ability to take a chance, make a few mistakes, yet learn and succeed. Try not to be so hard on yourself for your own failings by taking it out on others, it is not their fault. If someone lets you down then you made a poor choice in relying on the wrong person in the first place and failed with your own due diligence.

Learning never ends. Don't be afraid.

..