income on £170,000

rfv750

What sort of income could I except to get from £170000
I may soon be unemployed and so will not be paying standard tax rates ?.
My house is paid for and I have no debts.
I can not draw my pension for at least 11 years.

am i better just putting it into a high interest account or seeing a IFA
for suggestions.

merlinthehappypig

You will get plenty of advice on here, but be prepared for it all to be different!

You aren't going to want to risk losing any of the money so, personally, in your situation, I'd see a decent IFA. How you find who is and isn't any good is another matter and hopefully someone will give you a pointer.

I'm getting approximately 6.9% on a similar sum by putting it in fixed rate BS accounts which is about £980 a month before tax on £170000 (you will pay some tax as the interest will exceed your personal allowance), but these rates are likely to be lower late next year when the fixed rates end (could be substantially lower)

CLAPTON

what are your circumstances?
what other income will you have ... will you get a new job, JSA or will you be living only on the interest?

what will you pension be when you come to retire

how much do you need to live on?

how much do you want to live on?

dunstonh

IFAs are investment advisers not savings account advisers.

What you should do will depend on a lot of things. If you are going to have to live off the income then some investment risk may be required otherwise you risk losing money in real terms (which means a real terms reduction not just in capital but income). So, taking on a small investment risk with some of the money may make sense.

However, it really depends on your circumstances and what you want to achieve.

rfv750

CLAPTON wrote: »

what are your circumstances?
what other income will you have ... will you get a new job, JSA or will you be living only on the interest?


No other income
may get a part time job. .
do not think i can claim jsa with money in bank ?

what will you pension be when you come to retire

not much ?
been in company scheme for 20 years.

how much do you need to live on?
I could get by on £10000 a year but would like more.
is £15000 possible.

how much do you want to live on?

thanking you rfv750

McSaver

You should get in the region of £8,500 after tax on interest per year depending on where you place the cash.

rfv750

I have been trying to do some sums.
Have I got this right

£170,000
in a bond at 6.8%
pays £11560 per year before tax.
so take out £5225 tax allowance = £ 6335
Then 10% tax on £2230 = £223 deducted.
Then 20% tax on £4105 = £821 deducted ..

So that should be £11560
Tax - £ 1044
Leaving £10516 Per year

merlinthehappypig

I think there are some changes planned to the tax coding next year. Basic rate is being cut to 20%, but the 10% band is going, so, in theory, you will be slightly worse off, as will I (anyone earning less than £17000 I think). Some details here, but this is for salaries. I vaguely recall hearing that the 10% was still there for savings income, but can't find anything about it. Your basic allowance will rise a little from next April, but I wouldn't get too worked up about it!
Some information here:

http://www.bytestart.co.uk/content/taxlegal/9_15/2008-9-rates-announced.shtml

oldfella

if you have no other income then the current 10% savings band still applies

malcolmwilliamson

For clarification this is the current Taxable Bands table

Taxable Bands Allowances

2007-08 (£)
Starting rate 10%

0 - 2,230
Basic rate 22%

2,231 - 34,600
Higher rate 40%

over 34,600


The starting rate disappears for earned income from April 2008 when the new tax year begins, however the 10% starting rate will be retained for savings income. The basic rate for all income will at that same time be lowered to 20%. Any changes in income range for each band will not be announced until the 2008 Budget in March. This all makes it difficult to estimate the income on an invested £170,000.

The 10% starting rate goes from April 2009 when the basic rate becomes 20%

rfv750

So what sort of return on £170000
would be possible from a good portfolio from an IFA.