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Savings and Investments thread
Comments
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It's the new rules, unless you live in the UK they only put 10% of your bonds in the draw ......PragueAddick said:I got a big fat zero after only getting £50 in Jan. Unless I get a decent one soon there is no way I will get even 4.3% as I got last year.
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Still more chance of winning than I seem to have of getting anything out of my Valley Gold account 🤷🏻♂️😏🥺Rob7Lee said:
It's the new rules, unless you live in the UK they only put 10% of your bonds in the draw ......PragueAddick said:I got a big fat zero after only getting £50 in Jan. Unless I get a decent one soon there is no way I will get even 4.3% as I got last year.2 -
Join the club, I've 3 tickets and never win!TelMc32 said:
Still more chance of winning than I seem to have of getting anything out of my Valley Gold account 🤷🏻♂️😏🥺Rob7Lee said:
It's the new rules, unless you live in the UK they only put 10% of your bonds in the draw ......PragueAddick said:I got a big fat zero after only getting £50 in Jan. Unless I get a decent one soon there is no way I will get even 4.3% as I got last year.1 -
Well the markets continue to perform thankfully, think I'm going to take/bank some profit in my SIPP which is up over 12% since October, crazy times, I've earned more than my net annual salary since October.
How is everyone else doing, banking any profits or letting it ride?2 -
I'm a firm believer of just sticking with it. Take profits when you've made a fair packet, but reinvest immediately into something else. No sitting on the sidelines.Rob7Lee said:Well the markets continue to perform thankfully, think I'm going to take/bank some profit in my SIPP which is up over 12% since October, crazy times, I've earned more than my net annual salary since October.
How is everyone else doing, banking any profits or letting it ride?
FTSE100 been lacklustre since the start of the year. US ahead a bit but no real signs of actual momentum anywhere. I expect markets are waiting on central Banks to be more positive in their rate cutting stance and also political pressures abound with quite a few Elections due this year.0 -
Let it ride!!!Rob7Lee said:Well the markets continue to perform thankfully, think I'm going to take/bank some profit in my SIPP which is up over 12% since October, crazy times, I've earned more than my net annual salary since October.
How is everyone else doing, banking any profits or letting it ride?
Same boat since October, a smidge under 12.5%. Almost 3% in Feb alone.0 -
Always the dilemma as to where to re-invest it. Just having made so much the past 4 months I'm tempted to sell a bit of profit and hold as cash for a short period (The SIPP provider pays interest on cash holdings, about 3% I think).golfaddick said:
I'm a firm believer of just sticking with it. Take profits when you've made a fair packet, but reinvest immediately into something else. No sitting on the sidelines.Rob7Lee said:Well the markets continue to perform thankfully, think I'm going to take/bank some profit in my SIPP which is up over 12% since October, crazy times, I've earned more than my net annual salary since October.
How is everyone else doing, banking any profits or letting it ride?
FTSE100 been lacklustre since the start of the year. US ahead a bit but no real signs of actual momentum anywhere. I expect markets are waiting on central Banks to be more positive in their rate cutting stance and also political pressures abound with quite a few Elections due this year.
hhhmmmmm........... I'll review tomorrow!cafcpolo said:
Let it ride!!!Rob7Lee said:Well the markets continue to perform thankfully, think I'm going to take/bank some profit in my SIPP which is up over 12% since October, crazy times, I've earned more than my net annual salary since October.
How is everyone else doing, banking any profits or letting it ride?
Same boat since October, a smidge under 12.5%. Almost 3% in Feb alone.0 -
Letting it ride for the moment but the US looks a bit frothy now. Finger is moving nearer to the sell button.0
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Got a handful of BP shares that I bought in the COVID dip at just over two quid and think I might offload. Have been buying Ashtead on the dips but they are a way off my target price.
Annoyed with myself for not buying Nvidia last year at about $300, but FOMO has caused me to pay twice that in the last month just so I've got some.
Still got zynex shares which seem to be slowly clawing their way back. One to put away and forget.1 - Sponsored links:
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Hi - sorry for the delay, this job is killing me, lol.Huskaris said:
I'm looking at getting a bit more involved in EIS, what sort of things have you invested in (and how?) if you don't mind me asking?WishIdStayedinthePub said:
I use all of those bar the investment bonds but I also work in the financial services industry, understand the risks and know how to spot the scams. But I understand why people are wary of financial services.golfaddick said:
I dont think you can blame the financial services industry for that. Maybe blame them for various mis-selling scandals that have made the public wary of the different schemes that are available. Funny thing is, since I first bought my first property in 1988 I've seen 3 periods of negative equity in the housing market but still the general public think that property is "as safe as houses".WishIdStayedinthePub said:Rob7Lee said:
Whilst it may not be the recommended asset diversification, you are by no means alone, and if you are comfortable then that's all that matters even if technically it isn't the greatest investment. I'd watch what's coming down the line though, can only think BTL will remain an easy target for any incoming government. You could see rent controls and potentially an even worsening tax position.HardyAddick said:Direct property with rental income. The shares element is in pensions/ISAs and the cash is in ISAs where possible.
The friendly society where I am as a Trustee have done very very well out of property, far exceeded any other share investment by some margin due to in the main capital gain, but we aren't subject to tax (bar stamp duty if buying) which makes a big difference.
I still have found over the past x number of years that my pension is and has been far and away the best investment, on day 1 I'm up 66% compared to any other investment simply due to the tax relief. So every £60 in immediately becomes £100, in fact since I changed job a few years back I'm in effect getting 62% tax relief on most of my contributions so £38 in of my net money becomes £100! It's simply impossible to beat that return.
But it is also a verdict on the financial services industry's long and ignoble track record in conning people that a physical asset seems much more secure to a lot of people.
Just look at the different tax efficient schemes out there -
Pensions
ISA's
Investment Bonds
VCT's
EIS
I'd be very happy to share detailed experiences of individual investments with with everyone but recognise it might not interest most people, so if there's not broader interest, will PM you.
At a summary level, I approached EIS in two ways. The first, was via crowdfunding (Crowdcube). I did it mainly out of professional interest as I'd had a failed attempt at launching a similar market back in the late nineties, backed by the DTI, and wanted to see how crowd funding was working.
I invested a small amount in four companies and learned a lot of basic lessons on how not to invest! Of the four, one went bust, one ran off with my money, one is a zombie and the last fortunately has covered the losses of the other three. I would strongly advise not to use crowdfunding for reasons that will become obvious below.
Since then, I've only invested in companies where (a) I understand the business and (b) I know the people running it. That's been more successful but you need to know people which may not be helpful - but see below! Also, bear in mind that I have had quite a lot of money tied up for over ten years in 5-6 companies - hence why I'm still working! The first investment paid out capital this year, which means I'm in for free on that one but several times I've nearly lost the lot, particularly during the pandemic.
Note that all the companies have tended to come back for more capital, so budget to put in half your risk appetite in the first instance. One was taken over by Elliot Capital and they then threatened the seed investors with dilution - another big risk in private capital - and I was 'lucky enough' to get my money back. The ones that are looking for more capital - the last resort is to go crowdfunding. One recently raised a couple of hundred grand, which then allowed them to raise more from other backers. It's seen as messy, time-consuming and high maintenance but also that the investors are naive and a soft touch as they don;t understand how to price the risk.
If you haven't already used them, I'd be minded to use VCTs before EIS or use one of the vehicles that builds a portfolio of EIS investments. That helps if you don't know people and don't have the time or expertise to use angel investment organisations. Middlemen do skim off a lot in both cases but it's less risky as they do the due diligence, management and spread the risk over multiple companies - like an investment trust of private companies.
Angel investment groups can source and pool investment expertise and lower the risk that way; you are then taking individual risk but you can put up less capital as you are amongst a group that all chip in. From the companies' PoV, these groups are just as time consuming and high maintenance as crowd funders but the investors are far less naive, so tend only to be used by higher risk start ups and early scale-ups.
If you have spare capital to risk (i.e. after you've used your ISAs, maxed your pension, etc.) then the risk is controlled. You get 30% back on the initial investment and if the company goes bust, you can claim the net of tax loss against your income tax bill. So, for £100, your risk is actually 100 x 70% x 55% = £38.50, if you are a higher rate payer). But it's not unlikely to lose the lot. Gains (not dividends) are tax free, if you have held for more than 3 years. VCTs operate similar. Expect to lose half that initial 15% in fees, capital gains and dividends are tax free but there's no loss protection (it is also much less likely they'd go bust).
As Golfie says, not advice, DYOR etc., just sharing my experience!4 -
Absolutely fascinating, thanks.WishIdStayedinthePub said:
Hi - sorry for the delay, this job is killing me, lol.Huskaris said:
I'm looking at getting a bit more involved in EIS, what sort of things have you invested in (and how?) if you don't mind me asking?WishIdStayedinthePub said:
I use all of those bar the investment bonds but I also work in the financial services industry, understand the risks and know how to spot the scams. But I understand why people are wary of financial services.golfaddick said:
I dont think you can blame the financial services industry for that. Maybe blame them for various mis-selling scandals that have made the public wary of the different schemes that are available. Funny thing is, since I first bought my first property in 1988 I've seen 3 periods of negative equity in the housing market but still the general public think that property is "as safe as houses".WishIdStayedinthePub said:Rob7Lee said:
Whilst it may not be the recommended asset diversification, you are by no means alone, and if you are comfortable then that's all that matters even if technically it isn't the greatest investment. I'd watch what's coming down the line though, can only think BTL will remain an easy target for any incoming government. You could see rent controls and potentially an even worsening tax position.HardyAddick said:Direct property with rental income. The shares element is in pensions/ISAs and the cash is in ISAs where possible.
The friendly society where I am as a Trustee have done very very well out of property, far exceeded any other share investment by some margin due to in the main capital gain, but we aren't subject to tax (bar stamp duty if buying) which makes a big difference.
I still have found over the past x number of years that my pension is and has been far and away the best investment, on day 1 I'm up 66% compared to any other investment simply due to the tax relief. So every £60 in immediately becomes £100, in fact since I changed job a few years back I'm in effect getting 62% tax relief on most of my contributions so £38 in of my net money becomes £100! It's simply impossible to beat that return.
But it is also a verdict on the financial services industry's long and ignoble track record in conning people that a physical asset seems much more secure to a lot of people.
Just look at the different tax efficient schemes out there -
Pensions
ISA's
Investment Bonds
VCT's
EIS
I'd be very happy to share detailed experiences of individual investments with with everyone but recognise it might not interest most people, so if there's not broader interest, will PM you.
At a summary level, I approached EIS in two ways. The first, was via crowdfunding (Crowdcube). I did it mainly out of professional interest as I'd had a failed attempt at launching a similar market back in the late nineties, backed by the DTI, and wanted to see how crowd funding was working.
I invested a small amount in four companies and learned a lot of basic lessons on how not to invest! Of the four, one went bust, one ran off with my money, one is a zombie and the last fortunately has covered the losses of the other three. I would strongly advise not to use crowdfunding for reasons that will become obvious below.
Since then, I've only invested in companies where (a) I understand the business and (b) I know the people running it. That's been more successful but you need to know people which may not be helpful - but see below! Also, bear in mind that I have had quite a lot of money tied up for over ten years in 5-6 companies - hence why I'm still working! The first investment paid out capital this year, which means I'm in for free on that one but several times I've nearly lost the lot, particularly during the pandemic.
Note that all the companies have tended to come back for more capital, so budget to put in half your risk appetite in the first instance. One was taken over by Elliot Capital and they then threatened the seed investors with dilution - another big risk in private capital - and I was 'lucky enough' to get my money back. The ones that are looking for more capital - the last resort is to go crowdfunding. One recently raised a couple of hundred grand, which then allowed them to raise more from other backers. It's seen as messy, time-consuming and high maintenance but also that the investors are naive and a soft touch as they don;t understand how to price the risk.
If you haven't already used them, I'd be minded to use VCTs before EIS or use one of the vehicles that builds a portfolio of EIS investments. That helps if you don't know people and don't have the time or expertise to use angel investment organisations. Middlemen do skim off a lot in both cases but it's less risky as they do the due diligence, management and spread the risk over multiple companies - like an investment trust of private companies.
Angel investment groups can source and pool investment expertise and lower the risk that way; you are then taking individual risk but you can put up less capital as you are amongst a group that all chip in. From the companies' PoV, these groups are just as time consuming and high maintenance as crowd funders but the investors are far less naive, so tend only to be used by higher risk start ups and early scale-ups.
If you have spare capital to risk (i.e. after you've used your ISAs, maxed your pension, etc.) then the risk is controlled. You get 30% back on the initial investment and if the company goes bust, you can claim the net of tax loss against your income tax bill. So, for £100, your risk is actually 100 x 70% x 55% = £38.50, if you are a higher rate payer). But it's not unlikely to lose the lot. Gains (not dividends) are tax free, if you have held for more than 3 years. VCTs operate similar. Expect to lose half that initial 15% in fees, capital gains and dividends are tax free but there's no loss protection (it is also much less likely they'd go bust).
As Golfie says, not advice, DYOR etc., just sharing my experience!
I'm currently in a business that has raised cash through EIS, put in a bit myself and I have to say that from everything I've seen when looking at other opportunities, your point around "knowing the people" is something I would thoroughly agree with. It's too risky otherwise.
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Just opened an ISA with InvestEngine.
Seems quite good, can't buy or sell equities, it's all ETFs. Pretty good app and no real costs from what I can see.
Created my first portfolio, and the thing I like the most is that they tell you what regions, sectors and individual equities you are invested in and to what proportion.
You could see for example if by buying too many ETFs with crossovers in them that you were overexposed to, let's say Microsoft/Apple etc, or that you had an overexposure to a specific nation/industry.
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A lot of my SIPP is in ETF's, cost effective way of investing in my view.Huskaris said:Just opened an ISA with InvestEngine.
Seems quite good, can't buy or sell equities, it's all ETFs. Pretty good app and no real costs from what I can see.
Created my first portfolio, and the thing I like the most is that they tell you what regions, sectors and individual equities you are invested in and to what proportion.
You could see for example if by buying too many ETFs with crossovers in them that you were overexposed to, let's say Microsoft/Apple etc, or that you had an overexposure to a specific nation/industry.
My largest holding is in Vanguards S&P500 ETF, ongoing charge of 0.07%.
But more importantly, I'm shocked and in horror to know you've taken until February in the tax year to open an ISA 2 -
Rob7Lee said:
A lot of my SIPP is in ETF's, cost effective way of investing in my view.Huskaris said:Just opened an ISA with InvestEngine.
Seems quite good, can't buy or sell equities, it's all ETFs. Pretty good app and no real costs from what I can see.
Created my first portfolio, and the thing I like the most is that they tell you what regions, sectors and individual equities you are invested in and to what proportion.
You could see for example if by buying too many ETFs with crossovers in them that you were overexposed to, let's say Microsoft/Apple etc, or that you had an overexposure to a specific nation/industry.
My largest holding is in Vanguards S&P500 ETF, ongoing charge of 0.07%.
But more importantly, I'm shocked and in horror to know you've taken until February in the tax year to open an ISA
Better than waiting until 6 April
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Or if he had his money tied up somewhere else and only got it to hand to use in an ISA.0
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Basically this! Had all the cash tied up, but just maxed mine and my wife's ISA.mendonca said:Or if he had his money tied up somewhere else and only got it to hand to use in an ISA.
Premium bonds coming at the end of the month!
Next tax year, I am thinking about taking cash out of premium bonds and maxing out our ISAs straight away and gradually adding back to premium bonds as and when I can...0 -
Yeah ETFs are the best, plus the wife can only invest in ETFs due to compliance rules at work (she works at an investment bank, back office though!).Rob7Lee said:
A lot of my SIPP is in ETF's, cost effective way of investing in my view.Huskaris said:Just opened an ISA with InvestEngine.
Seems quite good, can't buy or sell equities, it's all ETFs. Pretty good app and no real costs from what I can see.
Created my first portfolio, and the thing I like the most is that they tell you what regions, sectors and individual equities you are invested in and to what proportion.
You could see for example if by buying too many ETFs with crossovers in them that you were overexposed to, let's say Microsoft/Apple etc, or that you had an overexposure to a specific nation/industry.
My largest holding is in Vanguards S&P500 ETF, ongoing charge of 0.07%.
But more importantly, I'm shocked and in horror to know you've taken until February in the tax year to open an ISA
I went through SPDR's S&P 500 tracker.... 0.03%
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Hate to say it but most platforms do that. I have clients on Fidelity, Aegon & Quilter and they all produce client reports that show asset split, and breakdown the portfolios showing top 10 holdings & any crossovers.Huskaris said:Just opened an ISA with InvestEngine.
Seems quite good, can't buy or sell equities, it's all ETFs. Pretty good app and no real costs from what I can see.
Created my first portfolio, and the thing I like the most is that they tell you what regions, sectors and individual equities you are invested in and to what proportion.
You could see for example if by buying too many ETFs with crossovers in them that you were overexposed to, let's say Microsoft/Apple etc, or that you had an overexposure to a specific nation/industry.2 -
Came on here to say that lots of lenders are raising their rates. Just today I've had Halifax, Nationwide & Accord all send me emails saying rates increasing as from tomorrow. Average increase is around 0.2% but some going up by 0.35%-0.4%.
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Ah that's good then! I last invested with Vanguard and didn't have that sort of stuff (from memory). It's really good to have that level of info!golfaddick said:
Hate to say it but most platforms do that. I have clients on Fidelity, Aegon & Quilter and they all produce client reports that show asset split, and breakdown the portfolios showing top 10 holdings & any crossovers.Huskaris said:Just opened an ISA with InvestEngine.
Seems quite good, can't buy or sell equities, it's all ETFs. Pretty good app and no real costs from what I can see.
Created my first portfolio, and the thing I like the most is that they tell you what regions, sectors and individual equities you are invested in and to what proportion.
You could see for example if by buying too many ETFs with crossovers in them that you were overexposed to, let's say Microsoft/Apple etc, or that you had an overexposure to a specific nation/industry.0 -
You're forgiven and allowed back on the board thenHuskaris said:
Basically this! Had all the cash tied up, but just maxed mine and my wife's ISA.mendonca said:Or if he had his money tied up somewhere else and only got it to hand to use in an ISA.
Premium bonds coming at the end of the month!
Next tax year, I am thinking about taking cash out of premium bonds and maxing out our ISAs straight away and gradually adding back to premium bonds as and when I can...
I've tried to no avail to get my wife to cash in some premium bonds, not helped when my daughter won £5k, it's now a competition
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Golfie, I haven't taken most of my tax-free element from my pension. Reason is I was advised to live off my other income and savings before drawing this down. Benefit being that it would be protected from inheritance tax whilst in a pension wrapper.golfaddick said:
Please tell me that you've at least taken the Tax-free element from your pension ?HardyAddick said:Everyone takes a different approach. I live comfortably off the rents and not needed to touch the pension. Only issue is the residential houses have been owned for some years. They are not in a Limited Company or in a trust so CGT is an issue if I sell.
Am I missing something stupid?
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Was told something similarredman said:
Golfie, I haven't taken most of my tax-free element from my pension. Reason is I was advised to live off my other income and savings before drawing this down. Benefit being that it would be protected from inheritance tax whilst in a pension wrapper.golfaddick said:
Please tell me that you've at least taken the Tax-free element from your pension ?HardyAddick said:Everyone takes a different approach. I live comfortably off the rents and not needed to touch the pension. Only issue is the residential houses have been owned for some years. They are not in a Limited Company or in a trust so CGT is an issue if I sell.
Am I missing something stupid?0 -
If you die before 75 that is correct, although there are some caveats on LTA but who knows if that'll apply in the future, if over 75 income tax applies, so any large amount drawn by the beneficiaries will likely incur 45% tax.redman said:
Golfie, I haven't taken most of my tax-free element from my pension. Reason is I was advised to live off my other income and savings before drawing this down. Benefit being that it would be protected from inheritance tax whilst in a pension wrapper.golfaddick said:
Please tell me that you've at least taken the Tax-free element from your pension ?HardyAddick said:Everyone takes a different approach. I live comfortably off the rents and not needed to touch the pension. Only issue is the residential houses have been owned for some years. They are not in a Limited Company or in a trust so CGT is an issue if I sell.
Am I missing something stupid?
So it'll depend on your personal circumstances and theirs, and assuming the pot is a DC pot and in flexible drawdown and how large it is.0 -
As always, Financial Advice is personal to you. What might be right for one person might not be for another.Rob7Lee said:
If you die before 75 that is correct, although there are some caveats on LTA but who knows if that'll apply in the future, if over 75 income tax applies, so any large amount drawn by the beneficiaries will likely incur 45% tax.redman said:
Golfie, I haven't taken most of my tax-free element from my pension. Reason is I was advised to live off my other income and savings before drawing this down. Benefit being that it would be protected from inheritance tax whilst in a pension wrapper.golfaddick said:
Please tell me that you've at least taken the Tax-free element from your pension ?HardyAddick said:Everyone takes a different approach. I live comfortably off the rents and not needed to touch the pension. Only issue is the residential houses have been owned for some years. They are not in a Limited Company or in a trust so CGT is an issue if I sell.
Am I missing something stupid?
So it'll depend on your personal circumstances and theirs, and assuming the pot is a DC pot and in flexible drawdown and how large it is.
Yes, money in a pension is more IHT efficient, but that is all depending on your overall IHT position. If you have property, and leaving your Estate to your children, then you will have an IHT allowance of £500k. If you are married & your Estate passes directly to your spouse then there is no IHT to pay, and when your spouse dies their IHT allowance will be 2x£500k (assuming no gifts etc etc).
Again, it all depends on what is more important - more tax efficient income now or leaving more tax -efficient lump sums to your kids.0 -
Isn’t it better to leave your “half” of your home to your kids, so if the remaining parent has to go into care, then the kids have protected their share?golfaddick said:
As always, Financial Advice is personal to you. What might be right for one person might not be for another.Rob7Lee said:
If you die before 75 that is correct, although there are some caveats on LTA but who knows if that'll apply in the future, if over 75 income tax applies, so any large amount drawn by the beneficiaries will likely incur 45% tax.redman said:
Golfie, I haven't taken most of my tax-free element from my pension. Reason is I was advised to live off my other income and savings before drawing this down. Benefit being that it would be protected from inheritance tax whilst in a pension wrapper.golfaddick said:
Please tell me that you've at least taken the Tax-free element from your pension ?HardyAddick said:Everyone takes a different approach. I live comfortably off the rents and not needed to touch the pension. Only issue is the residential houses have been owned for some years. They are not in a Limited Company or in a trust so CGT is an issue if I sell.
Am I missing something stupid?
So it'll depend on your personal circumstances and theirs, and assuming the pot is a DC pot and in flexible drawdown and how large it is.
Yes, money in a pension is more IHT efficient, but that is all depending on your overall IHT position. If you have property, and leaving your Estate to your children, then you will have an IHT allowance of £500k. If you are married & your Estate passes directly to your spouse then there is no IHT to pay, and when your spouse dies their IHT allowance will be 2x£500k (assuming no gifts etc etc).
Again, it all depends on what is more important - more tax efficient income now or leaving more tax -efficient lump sums to your kids.0 -
In principal yes, need to hold as tenants in common prior and whilst I'm a bit out of touch there used to be something around market rental being paid but that's probably if the whole house was gifted.guinnessaddick said:
Isn’t it better to leave your “half” of your home to your kids, so if the remaining parent has to go into care, then the kids have protected their share?golfaddick said:
As always, Financial Advice is personal to you. What might be right for one person might not be for another.Rob7Lee said:
If you die before 75 that is correct, although there are some caveats on LTA but who knows if that'll apply in the future, if over 75 income tax applies, so any large amount drawn by the beneficiaries will likely incur 45% tax.redman said:
Golfie, I haven't taken most of my tax-free element from my pension. Reason is I was advised to live off my other income and savings before drawing this down. Benefit being that it would be protected from inheritance tax whilst in a pension wrapper.golfaddick said:
Please tell me that you've at least taken the Tax-free element from your pension ?HardyAddick said:Everyone takes a different approach. I live comfortably off the rents and not needed to touch the pension. Only issue is the residential houses have been owned for some years. They are not in a Limited Company or in a trust so CGT is an issue if I sell.
Am I missing something stupid?
So it'll depend on your personal circumstances and theirs, and assuming the pot is a DC pot and in flexible drawdown and how large it is.
Yes, money in a pension is more IHT efficient, but that is all depending on your overall IHT position. If you have property, and leaving your Estate to your children, then you will have an IHT allowance of £500k. If you are married & your Estate passes directly to your spouse then there is no IHT to pay, and when your spouse dies their IHT allowance will be 2x£500k (assuming no gifts etc etc).
Again, it all depends on what is more important - more tax efficient income now or leaving more tax -efficient lump sums to your kids.0 -
guinnessaddick said:
Isn’t it better to leave your “half” of your home to your kids, so if the remaining parent has to go into care, then the kids have protected their share?golfaddick said:
As always, Financial Advice is personal to you. What might be right for one person might not be for another.Rob7Lee said:
If you die before 75 that is correct, although there are some caveats on LTA but who knows if that'll apply in the future, if over 75 income tax applies, so any large amount drawn by the beneficiaries will likely incur 45% tax.redman said:
Golfie, I haven't taken most of my tax-free element from my pension. Reason is I was advised to live off my other income and savings before drawing this down. Benefit being that it would be protected from inheritance tax whilst in a pension wrapper.golfaddick said:
Please tell me that you've at least taken the Tax-free element from your pension ?HardyAddick said:Everyone takes a different approach. I live comfortably off the rents and not needed to touch the pension. Only issue is the residential houses have been owned for some years. They are not in a Limited Company or in a trust so CGT is an issue if I sell.
Am I missing something stupid?
So it'll depend on your personal circumstances and theirs, and assuming the pot is a DC pot and in flexible drawdown and how large it is.
Yes, money in a pension is more IHT efficient, but that is all depending on your overall IHT position. If you have property, and leaving your Estate to your children, then you will have an IHT allowance of £500k. If you are married & your Estate passes directly to your spouse then there is no IHT to pay, and when your spouse dies their IHT allowance will be 2x£500k (assuming no gifts etc etc).
Again, it all depends on what is more important - more tax efficient income now or leaving more tax -efficient lump sums to your kids.
Yes - tenants in common as opposed to joint tenants so that the right to survivorship doesn't apply. Make sure your will is very precise because dying intestate as a tenant in common can be a nightmare.
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Again, it all depends on what you are trying to achieve. If your house is valued at over £1m & you are joint tenants with your spouse then your Estate is IHT free. If you are tenants in common & leave 50% to your children then there could be IHT due. Also, what is these likelihood of the surviving spouse having to go into care & the fees eating up the whole Estate ?guinnessaddick said:
Isn’t it better to leave your “half” of your home to your kids, so if the remaining parent has to go into care, then the kids have protected their share?golfaddick said:
As always, Financial Advice is personal to you. What might be right for one person might not be for another.Rob7Lee said:
If you die before 75 that is correct, although there are some caveats on LTA but who knows if that'll apply in the future, if over 75 income tax applies, so any large amount drawn by the beneficiaries will likely incur 45% tax.redman said:
Golfie, I haven't taken most of my tax-free element from my pension. Reason is I was advised to live off my other income and savings before drawing this down. Benefit being that it would be protected from inheritance tax whilst in a pension wrapper.golfaddick said:
Please tell me that you've at least taken the Tax-free element from your pension ?HardyAddick said:Everyone takes a different approach. I live comfortably off the rents and not needed to touch the pension. Only issue is the residential houses have been owned for some years. They are not in a Limited Company or in a trust so CGT is an issue if I sell.
Am I missing something stupid?
So it'll depend on your personal circumstances and theirs, and assuming the pot is a DC pot and in flexible drawdown and how large it is.
Yes, money in a pension is more IHT efficient, but that is all depending on your overall IHT position. If you have property, and leaving your Estate to your children, then you will have an IHT allowance of £500k. If you are married & your Estate passes directly to your spouse then there is no IHT to pay, and when your spouse dies their IHT allowance will be 2x£500k (assuming no gifts etc etc).
Again, it all depends on what is more important - more tax efficient income now or leaving more tax -efficient lump sums to your kids.
You take you chances.....0
