Apparently IHT on may not be too bad?

Qyburn

Albermarle said:

I can not remember the exact source, but I read that 4% of households currently pay IHT.

It may have been this one, although that's reporting 4.39% of deaths paying IHT so that will include things like the first death from a married couple where IHT doesn’t apply, and also deaths of young people (or even children).

https://www.gov.uk/government/statistics/inheritance-tax-liabilities-statistics/inheritance-tax-liabilities-statistics-commentary

SmokeysTravels

poseidon1 said:

SmokeysTravels said:

I used to work as a Pension Wise Guider and probably did around 2000 appointments- together with my colleagues between us the number would be in the 10000s. The average pot size of the people we saw was around £50000. Most people were going to carry on working until their state pension started and try and live off that. Downsizing and equity release were often also mentioned to try to get by. The level of understanding of pensions was worryingly low. We used to reference the PLSA figures but most wouldn’t have enough to cover the minimum levels. 

I really think there should be much better financial education that starts in schools. Unfortunately, the penny only drops that people didn’t start early enough or pay enough into their pensions when it’s usually too late to do anything about it.

Thankyou,  at last a more realistic perspective of the state of play of pension provision among large segments of  the general population, from someone who worked at the sharp end of guiding such people on pension matters.

This MSE forum tends towards being a bit of an isolationist bubble in this regard and not especially representative of the wider populace.

Notwithstanding auto enrollment, I suspect an ever increasing number of future generations will be  looking squarely at just funding for the bare essentials in their eventual retirement, especially with state pension commencement moving inexorably towards age 70 in years to come. So potential IHT on their pension pots will be the least of their concerns.

Indeed. Most regulars on this forum are well versed in pensions, investments and tax, and as a result many seem to be doing very well. But it doesn’t represent most people from my experience. 50% of the total UK wealth is owned by the richest 10%, and I expect a totally disproportionate number of the regulars on this forum are in that 10%. This is by no means a criticism, more an observation. 

MallyGirl

The fact that people are on here means that they are interested in pensions which is not representative of the UK population before you start looking at wealth

Phossy

Hoenir said:

MarkCarnage said:

QrizB said:

Universidad said:

BikingBud said:

Tell me again how house price inflation was good for us all!

It used to be good when you bought a house at the limit of affordability and over time inflation and wage increases made it a lower and lower proportion. Since salaries stopped keeping up with inflation, its made mortgages for the current generation much more expensive in real terms over time.

I'd rather like to see house prices fall by 50%, despite the fact it would reduce my paper assets by several £100k. But that would be quite the bursting bubble.

Best thing that could happen for this country (and some others) is significant real fall in house prices allowing money to go to more productive areas of the economy. 

Totally agree. We appear to be living in an illusory world. Where money is made , and subsequently spent,  by simply purchasing an "asset" . Watching it inflate in price then selling it on to somebody else who funds this with an ever increasing level of debt. While the number of people actually working productively diminish in number.  

It's a Ponzi scheme

Albermarle

SmokeysTravels said:

poseidon1 said:

SmokeysTravels said:

I used to work as a Pension Wise Guider and probably did around 2000 appointments- together with my colleagues between us the number would be in the 10000s. The average pot size of the people we saw was around £50000. Most people were going to carry on working until their state pension started and try and live off that. Downsizing and equity release were often also mentioned to try to get by. The level of understanding of pensions was worryingly low. We used to reference the PLSA figures but most wouldn’t have enough to cover the minimum levels. 

I really think there should be much better financial education that starts in schools. Unfortunately, the penny only drops that people didn’t start early enough or pay enough into their pensions when it’s usually too late to do anything about it.

Thankyou,  at last a more realistic perspective of the state of play of pension provision among large segments of  the general population, from someone who worked at the sharp end of guiding such people on pension matters.

This MSE forum tends towards being a bit of an isolationist bubble in this regard and not especially representative of the wider populace.

Notwithstanding auto enrollment, I suspect an ever increasing number of future generations will be  looking squarely at just funding for the bare essentials in their eventual retirement, especially with state pension commencement moving inexorably towards age 70 in years to come. So potential IHT on their pension pots will be the least of their concerns.

Indeed. Most regulars on this forum are well versed in pensions, investments and tax, and as a result many seem to be doing very well. But it doesn’t represent most people from my experience. 50% of the total UK wealth is owned by the richest 10%, and I expect a totally disproportionate number of the regulars on this forum are in that 10%. This is by no means a criticism, more an observation. 

I suspect the expression 'mass affluent' would apply to most regular contributors, rather than 'wealthy' .
The latter phrase would in most peoples minds relate to people living a luxury lifestyle, which does not seem to be the case on here. 
Although I think there is a fair smattering of Millionaires, who still go looking for bargains in Lidl 

QrizB

Albermarle said:

I suspect the expression 'mass affluent' would apply to most regular contributors, rather than 'wealthy' .
The latter phrase would in most peoples minds relate to people living a luxury lifestyle, which does not seem to be the case on here. 
Although I think there is a fair smattering of Millionaires, who still go looking for bargains in Lidl 

The difference in financial privelege seen on this board between the Pension forum posters and eg. Debt-Free Wannabe can be quite jarring if you visit both of them!
I'm not judging anyone here, just comparing the user base.

RogerPensionGuy

As has been well mentioned on this thread, assets including housing valuations getting pushed up and up, people who got these for cheap tend to do well, but obviously others need mountains of debts to join this party like first time buyer, helping to buy, part buy part rent, just rent and the sub 40 LISAs invention. 

The wealth devide and inequality is just ramping up and up, I will keep a close eye on the chairs and even closer ear on this long playing record.

A nice informative link below. 

***

https://equalitytrust.org.uk/scale-economic-inequality-uk/

ader42

LHW99 said:

The probelsm is many farmers live on the farm, and even when the children take over most of the heavy work, they will still be helping out at busy times. They will often have nowhere but the farmhouse to live, so if they try to pass it on earlier, unless they have enough income to pay a commercial rent to the children, it will become a gift with reservation.

It is however quite straightforward to split a farm house from the fields, sheds etc. into a separate land registry title and hence a separate “property”.

They can keep the house and gift the rest. 

I know someone who did just this very thing a couple of years ago very easily and cheaply.

I suspect the reason farmers don’t pass on their “wealth” before they die is the same as other persons; self-interest in being a matriarch / patriarch and perhaps fear of needing to fund care. I’m sure we all know single elderly people rattling around in big houses, I do. Old people need to start passing their wealth down the line before they retire imho. better that than giving it to HMRC. 

bjorn_toby_wilde

ader42 said:

LHW99 said:

The probelsm is many farmers live on the farm, and even when the children take over most of the heavy work, they will still be helping out at busy times. They will often have nowhere but the farmhouse to live, so if they try to pass it on earlier, unless they have enough income to pay a commercial rent to the children, it will become a gift with reservation.

It is however quite straightforward to split a farm house from the fields, sheds etc. into a separate land registry title and hence a separate “property”.

They can keep the house and gift the rest. 

I know someone who did just this very thing a couple of years ago very easily and cheaply.

I suspect the reason farmers don’t pass on their “wealth” before they die is the same as other persons; self-interest in being a matriarch / patriarch and perhaps fear of needing to fund care. I’m sure we all know single elderly people rattling around in big houses, I do. Old people need to start passing their wealth down the line before they retire imho. better that than giving it to HMRC. 

We’re a couple doing exactly that. Rattling around in a big house. Our close friends are doing exactly the same.

The problem we face is a lack of anything desirable or aspirational to move into.  I can’t help thinking this is a failure of local (and national) planning. In this country we are beholden to less than 10 development companies who build identikit houses on tightly packed estates with insufficient parking or green space. I would love to move out of my house, but can’t find anything I would want to move into.

My elderly parents want to move back into the town from a nearby village but they need a small bungalow. Of the nearly 1500 new builds near us they haven’t built a single bungalow. The council tried to push the developers to include some on the last new build but in vain.

I nearly choked on my cornflakes when I saw the current government characterise the planning system as being blocked by NIMBYs. Nothing could be further from the truth. From what I’ve seen locally the developers decide what and where they want to build and dare the planning department to stop them. If blocked they appeal to the planning inspectorate who overrule the decision.

Albermarle

ader42 said:

LHW99 said:

The probelsm is many farmers live on the farm, and even when the children take over most of the heavy work, they will still be helping out at busy times. They will often have nowhere but the farmhouse to live, so if they try to pass it on earlier, unless they have enough income to pay a commercial rent to the children, it will become a gift with reservation.

It is however quite straightforward to split a farm house from the fields, sheds etc. into a separate land registry title and hence a separate “property”.

They can keep the house and gift the rest. 

I know someone who did just this very thing a couple of years ago very easily and cheaply.

I suspect the reason farmers don’t pass on their “wealth” before they die is the same as other persons; self-interest in being a matriarch / patriarch and perhaps fear of needing to fund care. I’m sure we all know single elderly people rattling around in big houses, I do. Old people need to start passing their wealth down the line before they retire imho. better that than giving it to HMRC. 

There is a saying that the only people who pay Inheritance tax, are those that dislike their own family more than they dislike HMRC.