income on £170,000

dunstonh

rfv750 wrote: »

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

Depends on risk profile and timescale. The longer the term, the more favourable investing is to saving when providing an income. Mainly due to the effects of inflation on the savings account.

merlinthehappypig

Interestingly, or perhaps scarily, the question of this 10% band on savings came up on Working Lunch yesterday. Someone had written in asking about this saying that they remembered from the budget that the 10% band was going, but staying for savers.

The guest 'expert' on the programme looked perplexed and said that this was definitely not the case and all savings, as well as earnings, would be taxed at the new 20% rate from next year. Definitely no 10% savings band, according to her. You would think that these answers would be checked first.

Steve_xx

Yes, it seems that the 10% rate will continue for savings as stated in Table A6 on Page 8 of the attached link:

http://www.hm-treasury.gov.uk/media/D/0/bud07_chaptera_235.pdf

Steve_xx

Got me thinking. If the 10% band is to remain for savings then how will that be administered? The banks always take 20% and if you pay higher rate tax then you declare it and cough up to the revenue.

As I see it this could mean that everyone with a bank account/s will have to request a rebate?

ManAtHome

rfv750 wrote: »

I have been trying to do some sums.

Only snag is that you'd get the interest at the end of the year. You can get fixed rates paying interest monthly, but rates likely to be quarter percent (ish) lower.

merlinthehappypig

Steve_xx wrote: »

Got me thinking. If the 10% band is to remain for savings then how will that be administered? The banks always take 20% and if you pay higher rate tax then you declare it and cough up to the revenue.

As I see it this could mean that everyone with a bank account/s will have to request a rebate?

From the document link earlier in the thread, from 6 April 2008, the 10 pence starting rate will be removed for earned income, but will continue to be available for savings income and capital gains. I'm taking this to mean that the only people who will benefit are those whose sole income is from savings, who would normally have their interest paid gross anyway, but I could be wrong.

Steve_xx

merlinthehappypig wrote: »

From the document link earlier in the thread, from 6 April 2008, the 10 pence starting rate will be removed for earned income, but will continue to be available for savings income and capital gains. I'm taking this to mean that the only people who will benefit are those whose sole income is from savings, who would normally have their interest paid gross anyway, but I could be wrong.

Oh yes, I see what you mean. Maybe that's how it will be.

jamesd

rfv, 12-15% on average is probably achievable over the long term. Assuming 5-6% after inflation is reasonable. It depends how much up and down variation in the capital value you're prepared to accept during the year and from year to year. The more variation you accept, the greater the average return is likely to be. About 255 is a fairly decent starting point that won't handicap your income too much.

Inflation will use 4-5% of your interest so you'll only be able to use 1-2% of savings account interest to live on after leaving the part to cover inflation in the account. Don't do that and you end up getting poorer over the years as inflation reduces the value of money. Big difference between the savings account certainty but only 1-2% after inflation and the ups and downs of capital value but 5-6% after inflation from investments.

An IFA would set up a mixture of investments to do the job. Perhaps 10-15 different unit trusts and OEICs (like unit trusts, just technical differences).

KingKenny

A.10

From 6 April 2008, the 10 pence starting rate will be removed for earned income but will continue to be available for savings income and capital gains. (15)

So, if your sole income is from savings interest, then, if and when you claim you tax paid on savings interest back at the end of the tax year, you should in theory, recieve, an extra £220.00 odd quid? On top of the 20% of the allowance made personally to you.

malcolmwilliamson wrote: »

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

Is this true regarding savings interest, links?

Is this just for 2008-2009 season, or will it continue on to the season after and indefinately, until Panda Eyes decides he wants to rape and pillage the pensioners aswell as the working man?