cash alternatives / retirement

pauline115

thanks @Albermarle im doing lots of reading and am searching for an IFA, i only had one reccomendation at unbiased but am going to look at vouched for tonight

dunstonh

pauline115 said:

i went to unbiased for a reccomendation  of an IFA - they sent me a place called the private office but reviews are pretty poor, ill see if any more turn up

Unbiased is no longer an IFA directory.   They have priced the independent IFAs (i.e. small local firms not owned by a big parent) out of the equation.  Now you tend to see FAs rather than IFAs and the national or regional salesforces.

Its not a good place to find an IFA. Vouchedfor and others have similar issues and are best avoided.  I know an adviser that uses one of those directories and anyone coming via that method has higher charges than those contact them directly because of the significant cost of the directory.

@Sam_666 my accountant is terrible. i opened a sipp this week and have put in 30k to start with. as you rightly point out the cash is outside the business, would you reccomend putting this into a fund?

Employer contributions into the SIPP are more tax efficient than employee contributions (from personal funds).    If you have heavier in cash outside of the business than in the business then a key is to reduce your dividends and salary to meet the minimum level for NI and tax efficiency and then pay pension contributions from the business and use savings outside of the business to live on.

pauline115

thanks @dunstonh is there a way to find an IFA that you would recommend?  i was thinking about taking out 20k to put into a stocks ISA especially becuase in this tax year i will be putting in a large SIPP contribution so should mean my corporation tax will be very low. if i put in 50k would i not be incentivised to take dividends in that tax year?

Hoenir

pauline115 said:

@Sam_666 my accountant is terrible. i opened a sipp this week and have put in 30k to start with. as you rightly point out the cash is outside the business, would you reccomend putting this into a fund?

Accountants aren't regulated to provide investment advice. Not their area of expertise. Been this way for a ver long time. 

Hoenir

Albermarle said:

Sam_666 said:

Stargunner said:

pauline115 said:

@Stargunner starting to scale back, fully retire 55-60. i have a source of passive income around 10k per year  so i suppose 15-20k per year would be ideal

Your excess of £500k in cash savings will be generating over £20k a year in interest, so although you currently have no pension you are in a very good position. You also have £200k in your business and when you reach state retirement age you will get your state pension.
Every year that you continue to work will allow you to grow your pot more and it would  be a good idea to start to pay in the maximum contributions that you can into a SIPP. 

I completely disagree with your opinion. Being cash rich only is not good  position to be in long term.
Generating £20k in intrest is waste of time, as inflation eats in most of it.
Wealth  needs to grow from investment, not from "continue to work", as  that is very low floating variable. None knows when you might have to stop work suddenly.

Many good advices in this tread, but some (like this post) forgot that OP is  working for his ltd. He cant just dupm cash in SIPP  from his personal accounts, it will most likely get very few tax credits. Payments in  pension need to come from  ltd in properly setup pension. That was clearly mention in my first advice to OP.
To OP, dont put any  money in SIPP until you first discuss that with good accountant. Suprised your current accountant hasnt already advised you on that subject.

The OP should be aware that accountants are not necessarily very good with personal finance. We see many examples of that cropping up in the forum.

Not accountants role to provide personal finance advice. They are however qualified to provide taxation advice. Spreading misinformation is not helpfull. 

pauline115

@Hoenir im not expecting investment advice , they have been poor in many ways but have found it difficult to extracate myself. time to look for someoe new though. I would ecpect an accountant to help me be tax efficient though,

enthusiasticsaver

I think you need an IFA if you are not knowledgeable enough to be able to research funds and analyse your attitude to risk. The large bank funds are usually pretty expensive and not always good performers so I would not take that route. You could research passive low cost balanced portfolios ( a fund of funds) but you need to do your homework first. 

Albermarle

pauline115 said:

thanks @dunstonh is there a way to find an IFA that you would recommend?  i was thinking about taking out 20k to put into a stocks ISA especially becuase in this tax year i will be putting in a large SIPP contribution so should mean my corporation tax will be very low. if i put in 50k would i not be incentivised to take dividends in that tax year?

The forum tends to avoid things like personal recommendations. In any case it is usually better to find someone local to yourself.
Often you will find a small office of a handful of IFA's working together in your local high st, or nearby.

Sam_666

Hoenir said:

pauline115 said:

@Sam_666 my accountant is terrible. i opened a sipp this week and have put in 30k to start with. as you rightly point out the cash is outside the business, would you reccomend putting this into a fund?

Accountants aren't regulated to provide investment advice. Not their area of expertise. Been this way for a ver long time. 

Very true, but my advice to OP about accountant is to do with tax efficency, not investing.

Brilliant summary posted above by dunstonh. Accountant can give best advice on how to  structure pension  payments from Ltd so it passes hmrc test. Its shame OP has already deposited 30K in pension  with personal money. OP must have equvalent taxable income this year to deposit 30K. Most Ltd pay  themself min wage salary, as tax efficent way to move bussines money to personal money.
Anyway, all this is basic that every accountant should know, but if you pay peanuts you might get...

Sam_666

pauline115 said:

@Sam_666 my accountant is terrible. i opened a sipp this week and have put in 30k to start with. as you rightly point out the cash is outside the business, would you reccomend putting this into a fund?

i do have 10k coming in per year  and the cash in my business could pay my 1250 salary for 10 years, along with the interest from my savings i think i could be ok but at the same time know that i need to make more of the cash ive saved, would you have any reccomendations? ive also thought about buying a property, as it would be mortgage free would be a good source of regular income if i had to stop working

Then get good accountant or you will continue to burn money.

If  you  only earn 12.5k anual salary, you can only put 80% of 12.5K in pension from your personal account, rest must come from bussines account. Its important you get proper accountant asap, before you make financial mistakes. Then get good IFA to plan investment strategy based on your needs.