Rate my SIPP - ITV high conviction

Juno_Moneta

ooSTEVEoo said:

Hi Juno. You’re a very brave man! I also hold ITV. I have 538,849 shares spread across my SIPP, ISA and a dealing account. I first traded ITV post Covid and made a good profit holding from 70p to 120. I then started buying back in after the big fall Feb 2022. I thought I’d make a quick profit as it bounced back to 100+. That’s obviously not been the case and 3 years later after many top ups I also hold this uncomfortably large position. I am in profit. Just. Plus the dividends. But I’m really bored of holding them now. I do for the same reasons as you. I believe there’s huge potential with studios and believe fair value is around 120. I’d take 90p right now though as it’s time to move on. For me my ITV holding is around 20% of my portfolio. I still find this a little uncomfortable. I think there’s a great chance you’ll do well with ITV but it’s bloody brave.
im fully ready for disappointment and a drop next week on results as the Dame will no doubt put a negative slant on results but more takeover or merger speculation will hopefully fix that. Good luck!

Hi Steve - it's great to hear from another ITV position holder - and also one with significant "skin in the game", well done on sticking with your half a million + shares, and I also wish you the best of luck not just with the results next week but longer term - as ITV Studios must surely reveal its true value. And you're raking in £27k a year in dividends (not guaranteed!) while you wait...

Juno_Moneta

If anyone else reading this is holding ITV shares - please shout - would love to read your reasons and your expectations!

penners324

I believe the current share price includes the perceived value of itv studios. 

PropertyGuru_Wannabe

I have no problems in investing in individual stocks and I think ITV is a buy from these prices.  I personally buy a number of individual stocks and have invested 50% of my wealth in one bank stock at the start of the year as I have a DB pension that would allow me to retire comfortably in later life.  However you are standing on thin ice if all your money is in one stock with no guaranteed annuity or money that you can fall back on.  No one gets every single stock investment right, not even Warren Buffett, and losing a significant sum of money may take years to get back in investment returns.

What I want to ask is if you had thought about how to get your money out of the SIPP as tax efficiently as possible as you are nearing the Lifetime Allowance limit of £1,073,100 so anything above this amount will incur income taxes when you drawdown.  Is there any need for you to risk so much of your money which was at £814k to obtain another £259k?  You can probably reach that amount in a global index fund in a period of 4 to 5 years.  I just don't see why you want to risk your retirement life for more wealth when the wealth you currently have is more than likely sufficient to keep you happy for the rest of your life.  Let me know what you are thinking.

Juno_Moneta

“as you are nearing the Lifetime Allowance limit of £1,073,100 so anything above this amount will incur income taxes when you drawdown”

I suggest you research a little more, especially about recent changes to LTA. 

https://www.vanguardinvestor.co.uk/articles/latest-thoughts/retirement/what-does-the-lifetime-allowance-abolition-mean-for-me

PropertyGuru_Wannabe

You haven't answered my question?

You don't get it do you, I suggest you read this part:

This doesn’t mean you can enjoy a bigger tax-free lump sum. Previously, you could take up to 25% of your pension as tax-free cash, but this has been capped at £268,275 across all your pensions. So even if you build up, say, £2 million in pension savings, you’ll typically only be able to take £268,275 as tax-free cash, not £500,000. 

Juno_Moneta

No need to be rude - I do understand it fully. 

Even before the LTA changes the max TFLS was 25% of the LTA. 

And I’m fine with that amount. 

Your post implied that there is no incentive to build a SIPP above £1073100 - which seems to be based on the prior rules. It is still beneficial to keep saving and growing a SIPP beyond this amount - so no I’m not constrained to only “obtain another £259k”.

Is your own pension strategy to reach the prior LTA cap then stop investing and only hold cash? That would seem unnecessary. 

PropertyGuru_Wannabe

Yet you do not factor tax efficiency and risk into your investment decisions and seem to place all your eggs in one basket?  Good thinking!

And no I will never stop investing and only hold cash as you assume.  I am already contributing the max to my wife's SIPP as well as maximising our Stocks and Shares ISA's which has done extremely well in the past three years.

Juno_Moneta

I’m not sure how you can conclude I don’t do tax planning based just on what I’ve said about my SIPP, having no knowledge of the rest of my assets. 

I’m not here to argue with people and unfortunately you come across as passive aggressive so I won’t be replying to you again but I wish you well with your SIPPs. 

DT2001

Wow, just seen this thread as an irregular on this site. Quite different from the norm. I worked for Barclays in the 80’s and 90’s and was fortunate enough to be enlightened to the benefits of SAYE and taking profit sharing in shares. When I left the bank I had £28,000 of shares (cost about 8/10k) no other equities and was able to bed and breakfast (as you could then) to utilise the CGT reliefs at that time. I was lucky that I started selling about 4 years later using both my and OH’s allowances to help with a property project. I missed the top of the market by about 30% (realising £80k) but avoided the subsequent crash. Ever since I have diversified making steady returns. I think the key is knowing the end goal. When I left the bank I didn’t have one (small but adequate property, cash reserve and a deferred pension) however marrying and becoming a parent changed my outlook/goals completely. Being all in on one share didn’t bother me at the beginning. 

There is little other detail about the OP’s circumstances to either reassure or frighten the more conservative majority.

Good luck