Pension Fund

[ChimpMaster]

<snip>
With life expectancy expected to rise over the coming decades, the annuity rates will probably also continue to fall, so that the expected income of £60K from a £1million pot, may only produce say £30-40K in 20 years time.

Thanks NW. So the question arises again - why bother with a pension plan?

[ChimpMaster]

But if you used a SIPP ( self invested pension plan ) to hold these you would obtain tax relief when making contributions. You can still decide what to invest in, it is just a tax efficent way of doing so, it can also serve to protect the assets as pensions are often excluded from creditor attacks or bankruptcy.

But I can't put a BTL property in a SIPP. You can have commercial property, property funds, exchange traded funds, shares etc but not a residential BTL.

Residential BTL will be the core of my investment.

Also, what happens when I die of old age? With a SIPP it is taxed heavily (55%) and so the wealth is destroyed. With my own investments I can hand them down in a number of ways before I die and avoid any charges or IHT.

Pensions and SIPPs are useful for some some people: those who have no interest in financial management and are happy to wait until a pre-defined age to retire. I'd much rather create my own path.

[geoff from contracta IOM]

But I can't put a BTL property in a SIPP. You can have commercial property, property funds, exchange traded funds, shares etc but not a residential BTL.

Residential BTL will be the core of my investment.

Also, what happens when I die of old age? With a SIPP it is taxed heavily (55%) and so the wealth is destroyed. With my own investments I can hand them down in a number of ways before I die and avoid any charges or IHT.

Pensions and SIPPs are useful for some some people: those who have no interest in financial management and are happy to wait until a pre-defined age to retire. I'd much rather create my own path.

I wasn't suggesting they are the be all and end all merely that they may have a place in retirement planning , if you are going to buy equitites as part of a long term value investing strategy then a SIPP is one way to increase your investment by using tax free contributions.
One of the reasons that res BTL's are excluded is that it tends to be much more cyclical and could therefore cause a problem at anuity time if it has dropped by 50% in 3 years as we have seen recently thus potentially delaying your retirement date.
If you are going to be balanced in investing and retirement planning then I believe you should be truely balanced.

[ChimpMaster]

I wasn't suggesting they are the be all and end all merely that they may have a place in retirement planning , <snip>.

Geoff, appreciate your view but at the centre of my argument are 2 main points:-

1. Managing your own destiny and retirement date. I work hard now so that I can choose to part-retire early.

2. Wealth destruction on death. I work hard so that I can build wealth for my family, for my children. I do not want it to disappear in a purchase annuity or in a 55% tax raid on my death. I want to pass on my hard earned wealth to my children.

I might be missing a valuable point on SIPPs, but this is my current understanding.