Bumpy year ahead?? but what going to happen

ipri

He predicts a bumpy year ahead...what exactly is going to happen??I'm hoping to retire but may need to stay a bit longer?? Ian

dunstonh

who is predicting a bumpy year ahead and in what context?

ipri

Sorry....! Gordon Brown predicts a difficult year..ian

dunstonh

Reverse spin. Predict an awful year and when its not quite as bad you take credit for it.

jamesd

A bumpy year ahead is likely to mean variations in inflation, interest rates, possibly a small increase in unemployment if there is a recession in the United States. The UK, US and Western European stock markets are likely to see significant up and down moves in the 15-40% range and might see a downward overall trend instead of upward, particularly if the credit problems continue and the US enters a recession. Property prices may be stable or drop by a few percent instead of rising, not good for those planning to sell and downsize to raise money for retirement and not as big a drop as first time buyers would like. So: hard to predict, lots of ups and downs and uncertainty. Not necessarily bad news, more "can't predict" news.

Since retirement for you is apparently in the one to five year range, if you are going to buy an annuity instead of using income drawdown you should look at your pension investments and arrange for them to be invested to reduce the drop in value if there is a significant market drop, even though that is not certain. If there is a drop you could use income drawdown to give time for the markets to recover before buying an annuity. Income drawdown means taking an income while still being invested in the markets, with the usual flexibility in choosing just how much exposure you have to up and down swings.

If this does concern you, how is your pension money currently invested?

EdInvestor

dunstonh wrote: »

Reverse spin. Predict an awful year and when its not quite as bad you take credit for it.

I am inclined to agree with dunstonh on this one, so you know it must be right

ipri

hi..I'm in the nhs superannuation scheme....need to try to get tax down when I retire....dont we all!!...have isas...would making all savings "joint" with wife be the same as opening separate accounts in our own names?? I think I'll be just into 40% bracket so any ideas on reduction welcome. I believe doing this will take us under 40% range..??? Ian

EdInvestor

ipri wrote: »

..would making all savings "joint" with wife be the same as opening separate accounts in our own names??

No - half the income would be hers and half yours under that arrangement.It's sensible to think about not wasting your wife's allowances as the age allowance will be going up to 10k a year from around 2011. Of course the state pension is taxable, which will take up at least part of it for most people, but that's still around 5k of income left , so you could transfer quite a lot over toher name to take advantage. Zero tax is a lot better than 40%.;)

jem16

ipri wrote: »

hi..I'm in the nhs superannuation scheme....need to try to get tax down when I retire....dont we all!!...have isas...would making all savings "joint" with wife be the same as opening separate accounts in our own names?? I think I'll be just into 40% bracket so any ideas on reduction welcome. I believe doing this will take us under 40% range..??? Ian

I did reply to your pm to me on this - did you not get it?

According to the figures you gave me for your own pension you will be a higher rate taxpayer even without savings income.

jamesd

You'd need to put the accounts in her exclusive name to benefit from her tax allowances.

If you're making additional pension contributions above the requirements of the pension scheme you might consider making them into a pension in her name if her own pension arrangements will have her be a basic rate tax payer or pay no tax because of total earnings below the expected future 10,000 personal allowance. If she's not working she can get tax relief on 3600 (after relief) of contributions.

If the NHS scheme allows you to take a lump sum it's possible that taking the lump sum would put your pension payments below the higher tax rate level. You could then invest the lump sum and use both of your ISA allowances to shield that income from tax. The growth parts of the investment would be the last ones to put into the ISA since they benefit from the capital gains tax allowance, while you need the income ones inside the ISA wrapper to make the income tax free.

purch

I'm in the nhs superannuation scheme....

You don't need to worry about the 'bumpy year' then :j