Property vs pension
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  1. #71

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    Quote Originally Posted by b0redom View Post
    OP, I've got an ISA and a B2L property in W. London but no SIPP. I did similar number crunching to you and worked out that I'd have to live for ~ 20 years before I'd exhausted the principle in a SIPP, never mind the compound interest. Then what happens if you shuffle off this mortal coil after 5 years? Nothing to give to the kids.

    I reckon I'll continue to try and max out the ISA, then pay off the residential mortgage (just about to remortgage with an offset mortgage). Once that's done I'll start to look at a SIPP.
    If you shuffle off this mortal coil after 5 years your SIPP would be passed on to your chosen beneficiaries. If you're considerate enough to die before you're 75, it would be tax-free. (https://www.youinvest.co.uk/pensions...ipps-and-death). Anyway, you should probably be buying life insurance if you're worried about the kids.

    Because of the tax breaks it's more efficient to pay into a SIPP than to pay off a mortgage. It depends on your mortgage rate but with the current level of pension tax relief it would take a pretty high mortgage rate for the opposite to be true. I stopped overpaying my mortgage a while ago because of this. That's true even for a basic rate permie. If you're a higher rate taxpayer (or would be if you took all your profits), the pension payment is even more efficient.

    Of course, going the B2L and ISA way you have access to leverage on a mortgage and liquidity and certainty that a future government aren't going to change the pension rules.

    But B2L landlords are an even more popular target for governments who see lots of voters angry about not being able to afford a house. House prices are at such an insane high that 40% of Brits are thinking of voting for a man who thinks Venezuela is a good economic example to follow.

    If you're buying to let now you're going to pay a higher rate of stamp duty and, assuming you're not a cash buyer, soon you're not going to be able to get tax relief on interest payments. Moneyweek reckon the game is over: https://moneyweek.com/the-buy-to-let...t-happens-now/
    Last edited by BlandResponsibleName; 14th November 2017 at 17:59.

  2. #72

    More time posting than coding

    wantacontract is too good to be a permie


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    Quote Originally Posted by WTFH View Post
    My point being, while mortgage rates are still low, that's when you should be clearing that debt, rather than paying more when the rates rise. Some people seem to think that low rates means borrow more, but really it's the best time to clear your debts. Once you're debt free then you can look at taking riskier investments and you can put your money into savings (with the likely increase in interest rates).

    If your life insurance is 10 a month and covers 500k, then go for it. If it's closer to 50 a month, then I'd say use some of your cash to clear your mortgage, then you don't need as much life cover and with the mortgage gone you can invest more.
    interesting viewpoint, depends on your attitude to risk I suppose. I plonk in 40 a month, and that gets me health and life insurance, cover 250k.....i think it's more than reasonable......the health insurance covers the kids too....

  3. #73

    Prof Cunning @ Oxford Uni

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    Quote Originally Posted by wantacontract View Post
    interesting viewpoint, depends on your attitude to risk I suppose. I plonk in 40 a month, and that gets me health and life insurance, cover 250k.....i think it's more than reasonable......the health insurance covers the kids too....
    I changed my strategy after having friends die in their early 50s and saw what happened to their family finances.
    Strong and Stable Moderation

  4. #74

    Still gathering requirements...

    contractorinatractor is a permanent contractor


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    Quote Originally Posted by vwdan View Post
    Good evening!

    My plan is to get a 25 year mortgage and aim to break even on the property over that time. The theory being that in 25 years time I then have a fully paid for asset, which I can then do as I please with. I've not looked at proper proper figures, but it should be pretty much doable.
    Good evening! Exclamation!

    You need to do the calculations yourself - but it is often advised to ignore the 25 years default offered by the banks. There's a reason why they default to this! Interest is exponential.

    Try to stick to 20 years, base your calculations on this, see how much extra you would save in interest payments. It could be more worthwhile for a cheaper property.

  5. #75

    Richer than sasguru

    DimPrawn is a fount of knowledge

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    Quote Originally Posted by scooterscot View Post
    I'd buy 20k of Zencash. Do it soon. You'll have 500k+ before the end of next year.
    Zencash is a fork from Zclassic, which was a fork from Zcash.

    And look at Zcash.

    https://coinmarketcap.com/currencies/zcash/

    So when they get bored of Zencash, and create Zencrap as the next iteration, what do you think will happen to Zencash?

    \_(ツ)_/

  6. #76

    More fingers than teeth

    scooterscot - scorchio!

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    Quote Originally Posted by DimPrawn View Post
    Zencash is a fork from Zclassic, which was a fork from Zcash.

    And look at Zcash.

    https://coinmarketcap.com/currencies/zcash/

    So when they get bored of Zencash, and create Zencrap as the next iteration, what do you think will happen to Zencash?

    The only way you can improve a blockchain is the fork it, well expect for Tezos and BOS.

    People said the same thing about Stellar after it forked from Ripple, now Stellar has gone from .02c to .09 in a month or so, albeit with much help from BTC.

    I buy into projects / people, I don't speculate on currencies. For this reason Zencash will be a success.

    Now if you want to get rich quick (clearly you do, you sound so bitter messing around with BTLs - money down a black hole), buy marijuana stocks (I can tell you exactly which ones) before California makes the industry legal on January 1st.
    We've always defined ourselves by the ability to overcome the impossible. And we count these moments. These moments when we dare to aim higher, to break barriers, to reach for the stars, to make the unknown known. We count these moments as our proudest achievements. But we lost all that. Or perhaps we've just forgotten that we are still pioneers. And we've barely begun. And that our greatest accomplishments cannot be behind us, because our destiny lies above us.

  7. #77

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    the BTL tax incentives are still in place for those purchased via a company. It's probably not worth doing unless you looking at a HMO either. I've recently purchased my first HMO to rent out to contractors, it's up north so house prices haven't really rocketed and are not likely to dramatically collapse either.

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