Reply to: Have you got a pension?

[kaiser78]

Only have pension from permie dom although about £60k pot.

Rest is in cash ISAs which is offsetting my mortgage, stock/shares ISAs and second property (non-BTL).

[lukemg]

Calm down dear, it's only your financial future.
I am using ISA's and a SIPP (v.useful for getting money out of the Ltd co). I wont touch BTL, too much grief, too illiquid, too little diversification BUT best of luck to all on this one.
I am in wide-ranging investments to reduce impact if one area struggles. I have personal property which is enough in that area but would use a REIT or comm property trust if I wanted more and stocks + funds across the globe + HYP of individual uk shares.
I really need to increase bond exposure, sort out my rebalancing and switch to more index based, regular contribution, low-fee funds +/or investment trusts.

[rootsnall]

No, pension pot is a much easier target. You cannot do anything even if the govt said "we are stealing all the money in 12 months time".

2nd, BTL has proved itself bullet proof in boom and bust years. 3rdly it's very difficult to "hurt" the BTL brigade without hitting normal home owners and the renters at the same time.

And capital gains (if you ever sell) is easy to mitigate, ask all the MP's flipping houses back and forth!

Oh and another thing about pensions. Very likely that everyone will be paying 40% tax by the time you retire, so the money out will be taxed in the same way as the money in, mark my words.

I've had various BTLs and got one now, so I'm not anti but just for the sake of debate here goes,

1. Govt can just as easily say "we are taking your BTLs off you in 12 months time", so thats a tulip argument. If "we are stealing all the money in 12 months time" happens then it's bunkers and beans time anyway and all bets are off.

2. Bollards, if we hadn't had money printing BTL would of been battered, and still may ( very likely will ) be if interest rates start rising. BTL for the masses and rising interest rates has never been tested due to money printing.

3. It's very easy to differentiate between home owners and BTL properties

4. Capital gains isn't easy to mitigate if you hold the BTL long term, not with the current rules.

5. If its 40% then it'll be tax neutral which is tulip but the non pension funded investment will have paid the extra up front tax anyway

[sasguru]

However, if all the money is your hard earned, then the situation needs a little more thinking about. .

This is doogie we're talking about

[DimPrawn]

The tax advantages of a pension are big if you are a higher rate tax payer. The nasty bit about having to pay tax when you take out the income also applies to BTL, and you've also got capital gains to think about with the BTL option. BTL is also a potential govt grab target in the future, I'd say probably a more vunerable target than raiding personal pension funds.

Diversify !

No, pension pot is a much easier target. You cannot do anything even if the govt said "we are stealing all the money in 12 months time".

2nd, BTL has proved itself bullet proof in boom and bust years. 3rdly it's very difficult to "hurt" the BTL brigade without hitting normal home owners and the renters at the same time.

And capital gains (if you ever sell) is easy to mitigate, ask all the MP's flipping houses back and forth!

Oh and another thing about pensions. Very likely that everyone will be paying 40% tax by the time you retire, so the money out will be taxed in the same way as the money in, mark my words.

[rootsnall]

You are basically trading some tax advantages (small) for a great number of unknowns, risk and inflexibility on what and when you get your hands on the money.

Just worth thinking about carefully.

The tax advantages of a pension are big if you are a higher rate tax payer. The nasty bit about having to pay tax when you take out the income also applies to BTL, and you've also got capital gains to think about with the BTL option. BTL is also a potential govt grab target in the future, I'd say probably a more vunerable target than raiding personal pension funds.

Diversify !

[DimPrawn]

You'd be an idiot not to diversify your investments.

Hang on let me amend that. You ARE an idiot.

Nothing wrong with that.

I can see why a pension makes sense when it's someone else's money. So if it's bundled into your permie package, or your employer puts money in if you do, it's some "free" money you wouldn't otherwise get, albeit you wait a long time to get your hands on it.

However, if all the money is your hard earned, then the situation needs a little more thinking about. Yes, there are some tax advantages, but it is deferred tax saving at best, as apart from the lump sum (if you take it), it is taxed on the way out.

If you are a 40% or 50% taxpayer and in retirement you will be in a lower tax band, then again, you are making some tax gain. However, fees and charges can eat up this gain over a long period.

So in essence, given the uncertainty and the fact that you cannot get your money out or stop fund managers and govts from stealing part or all of it at some future point, it is really the best place to ensure an income when you "retire"?

You are basically trading some tax advantages (small) for a great number of unknowns, risk and inflexibility on what and when you get your hands on the money.

Just worth thinking about carefully.

[d000hg]

You'd be an idiot not to diversify your investments.

Hang on let me amend that. You ARE an idiot.

[sasguru]

Anyone here got a pension pot of £1.44m yet?

No but doogie's started.

[DimPrawn]

Good news!

MPs will escape George Osborne’s pensions tax raid - Telegraph

s

According to calculations by Hargreaves Lansdown, a financial services company, a male worker in the private sector would have to save £1.44  million to receive a £43,387 pension at current annuity rates.

Anyone here got a pension pot of £1.44m yet?

[d000hg]

Tell you what. You sink your money into a pension every month.
And don't forget to put your two snow tyres on this winter.

At least I'm not too scared to drive my car.

And why would I contribute monthly - oh right you're a permie.

[sasguru]

Oh dear Sas, you can barely keep up when a discussion is directly with you; what makes you think you can follow a discussion between two people? The whooshing is definitely coming from your direction.

Tell you what. You sink your money into a pension every month.
And don't forget to put your two snow tyres on this winter.

[LatteLiberal]

and lumber him with a massive gift tax - The tax people aren't _that_ stupid.

There are a few ideas here

Thanks for the link, however it talks about IRS etc and dollar signs everywhere lead me to believe it might be US based advice.

[OwlHoot]

I can sell it to them while still alive for a massive discount

and lumber him with a massive gift tax - The tax people aren't _that_ stupid.

There are a few ideas here

[LatteLiberal]

They'll be so glad when they get the deeds and a massive tax bill.

I can sell it to them while still alive for a massive discount