It might be time for some people to reasses why they have PB's and are they still worth holding....
Well I've maxed out on ISAs, don't have a mortgage and am retired taking my pension (so can only contribute a minimum to an existing SIPP not in drawdown) then PB's are not great but at least Rachel from Accounts can't take 40% of any winnings unlike the interest paid on my other savings/investments! And there always the outside chance of a big win...
Financial advisors telling their clients to invest most of their wealth in single assets is wild. IMHO would be classed as criminal today. Also a cautionary tale for people who were posting on here to lump their pensions on single stocks.
It might be time for some people to reasses why they have PB's and are they still worth holding....
Well I've maxed out on ISAs, don't have a mortgage and am retired taking my pension (so can only contribute a minimum to an existing SIPP not in drawdown) then PB's are not great but at least Rachel from Accounts can't take 40% of any winnings unlike the interest paid on my other savings/investments! And there always the outside chance of a big win...
There are other investments other than ISA's and Pensions.
Financial advisors telling their clients to invest most of their wealth in single assets is wild. IMHO would be classed as criminal today. Also a cautionary tale for people who were posting on here to lump their pensions on single stocks.
I also read that some of them borrowed money to invest - remortgage their houses!
Madness.
I wont be watching the programme tonight as there is a 3 part documentary on Peter Sellers on BBC 4.
It might be time for some people to reasses why they have PB's and are they still worth holding....
Well I've maxed out on ISAs, don't have a mortgage and am retired taking my pension (so can only contribute a minimum to an existing SIPP not in drawdown) then PB's are not great but at least Rachel from Accounts can't take 40% of any winnings unlike the interest paid on my other savings/investments! And there always the outside chance of a big win...
There are other investments other than ISA's and Pensions.
Are you able to indulge on here?
My ISA was maxed last month and i guess putting money into a 4% bank account isn't the usage.
Regarding Premium bonds. I have 22k in premium bonds.
2 years ago I won £1150 which I was quite happy with. Last year I won £475 this was a poor return and I considered transferring them to something else. But so far this year I have won.
It might be time for some people to reasses why they have PB's and are they still worth holding....
Well I've maxed out on ISAs, don't have a mortgage and am retired taking my pension (so can only contribute a minimum to an existing SIPP not in drawdown) then PB's are not great but at least Rachel from Accounts can't take 40% of any winnings unlike the interest paid on my other savings/investments! And there always the outside chance of a big win...
There are other investments other than ISA's and Pensions.
Are you able to indulge on here?
My ISA was maxed last month and i guess putting money into a 4% bank account isn't the usage.
An Investment Bond. Originally designed as a with-profits investment but over the years has developed into a vehicle that can invest in all the usual funds that ISA's & Pensions can.
Special tax treatment means that you can withdraw up to 5%pa tax "deferred". In reality, if you are a basic rate taxpayer upon full encashment you will pay no tax. If you are a higher rate tax payer there will a liability to tax (probably 20%), but only when you fully cash-in your investment.
The 5% annual tax "deferred" allowance can be rolled over to future years, up to a max of 20 years. Basically you can get your initial contribution back tax free (5x20=100).
Very useful for those seeking income in retirement & can also be held on a platform.
In essence - stick £100k in and take 5% (less any adviser charge 🙄) out every year. A reasonable investment strategy should return you 6%-8%pa, meaning over time your capital will grow & you get £5k in tax free payments. Or roll them up & take ad-hoc lump sums in the future. Tax free.
There. Free advice.
Edit.
I should also add that Investment Bonds are one of the very few investments that have been left alone by various Governments over the years. There are no investment limits & there has not been a change in their tax status since the 1970's.
Also, Investment Bonds are disregarded as an asset when it comes to care fees, esp if no income is being taken.
Financial advisors telling their clients to invest most of their wealth in single assets is wild. IMHO would be classed as criminal today. Also a cautionary tale for people who were posting on here to lump their pensions on single stocks.
I also read that some of them borrowed money to invest - remortgage their houses!
Madness.
I wont be watching the programme tonight as there is a 3 part documentary on Peter Sellers on BBC 4.
It might be time for some people to reasses why they have PB's and are they still worth holding....
Well I've maxed out on ISAs, don't have a mortgage and am retired taking my pension (so can only contribute a minimum to an existing SIPP not in drawdown) then PB's are not great but at least Rachel from Accounts can't take 40% of any winnings unlike the interest paid on my other savings/investments! And there always the outside chance of a big win...
There are other investments other than ISA's and Pensions.
Premium bonds? 😂
jokes aside, I probably do have too much in PB’s. But that is pretty much my only cash and represents a small ish % of my overall (if you include pensions and house it’s a very small %).
Plus if I do become an ex pat they may come in handy!!
As I have mentioned, we crystallised ours, took the 25% and invested in property as stocks and shares can take a hit. Obviously the 90s had a major house down turn but been pretty much OK since then. People do need somewhere to live after all.
The complex nature of investment bonds (onshore or offshore) makes for a financial institution/advisor/wealth manager's dream sale!
The only complex nature is the tax upon encashment if you've held it a long time and are a high rate taxpayer. Other than that they are quite a simple investment vehicle. Nowdays you can hold them on a platform and invest in the funds as your ISA's and Pensions.
I remember helping a family member exit an offshore investment bond. Some aspects of the product weren’t initially transparent:
- Up to 5% of the amount invested can be withdrawn each policy year without triggering a 'chargeable event'. Depending on fees, this typically works out to around 4–4.5%.
- If a chargeable event does occur, the income tax calculations can get quite messy. The use of multiple clusters and surrender value calculations isn’t particularly transparent.
- It’s the policyholder’s responsibility to report this to HMRC and pay any tax due. In some cases, you may end up overpaying and then have to wait for a refund.
I wouldn’t walk into this product willy-nilly, but it can be advantageous in specific circumstances.
It might be time for some people to reasses why they have PB's and are they still worth holding....
Well I've maxed out on ISAs, don't have a mortgage and am retired taking my pension (so can only contribute a minimum to an existing SIPP not in drawdown) then PB's are not great but at least Rachel from Accounts can't take 40% of any winnings unlike the interest paid on my other savings/investments! And there always the outside chance of a big win...
There are other investments other than ISA's and Pensions.
Are you able to indulge on here?
My ISA was maxed last month and i guess putting money into a 4% bank account isn't the usage.
An Investment Bond. Originally designed as a with-profits investment but over the years has developed into a vehicle that can invest in all the usual funds that ISA's & Pensions can.
Special tax treatment means that you can withdraw up to 5%pa tax "deferred". In reality, if you are a basic rate taxpayer upon full encashment you will pay no tax. If you are a higher rate tax payer there will a liability to tax (probably 20%), but only when you fully cash-in your investment.
The 5% annual tax "deferred" allowance can be rolled over to future years, up to a max of 20 years. Basically you can get your initial contribution back tax free (5x20=100).
Very useful for those seeking income in retirement & can also be held on a platform.
In essence - stick £100k in and take 5% (less any adviser charge 🙄) out every year. A reasonable investment strategy should return you 6%-8%pa, meaning over time your capital will grow & you get £5k in tax free payments. Or roll them up & take ad-hoc lump sums in the future. Tax free.
There. Free advice.
Edit.
I should also add that Investment Bonds are one of the very few investments that have been left alone by various Governments over the years. There are no investment limits & there has not been a change in their tax status since the 1970's.
Also, Investment Bonds are disregarded as an asset when it comes to care fees, esp if no income is being taken.
I remember helping a family member exit an offshore investment bond. Some aspects of the product weren’t initially transparent:
- Up to 5% of the amount invested can be withdrawn each policy year without triggering a 'chargeable event'. Depending on fees, this typically works out to around 4–4.5%.
- If a chargeable event does occur, the income tax calculations can get quite messy. The use of multiple clusters and surrender value calculations isn’t particularly transparent.
- It’s the policyholder’s responsibility to report this to HMRC and pay any tax due. In some cases, you may end up overpaying and then have to wait for a refund.
I wouldn’t walk into this product willy-nilly, but it can be advantageous in specific circumstances.
Admit I've not looked at these bonds for some years, but I thought that the fund has to pay tax (a form of Corporation tax?) on the gain? So you are in effect paying basic rate income tax (on the gain) although it may not feel like it. Or has that now changed?
Comments
None of us will win big but over time we'll all do OK. Which is more than you can say about any lottery.
Not happy with the prizes being rubbed. I can promise any reading employee at the treasury. I spend what I win
It might be time for some people to reasses why they have PB's and are they still worth holding....(expats like @PragueAddick aside)
I moved from 50k to 20k earlier this year in order to make a pension contribution.
Now I’m looking at that 20k and thinking it would just be better off in a general investment account (I’ve already maxed the Stocks ISA for the year)
Takes us just over £4K winnings combined for the year so far.
Madness.
I wont be watching the programme tonight as there is a 3 part documentary on Peter Sellers on BBC 4.
My ISA was maxed last month and i guess putting money into a 4% bank account isn't the usage.
I have 22k in premium bonds.
2 years ago I won £1150 which I was quite happy with.
Last year I won £475 this was a poor return and I considered transferring them to something else.
But so far this year I have won.
January. £50
February. £50
March.£125
April. Nothing
May.£25
June. £75
July.£200
August. £700
September..£100.
So that's £1325 so far with 3 months to go.
Glad I kept them now as that's a better return than what I could have got elsewhere.
Special tax treatment means that you can withdraw up to 5%pa tax "deferred". In reality, if you are a basic rate taxpayer upon full encashment you will pay no tax. If you are a higher rate tax payer there will a liability to tax (probably 20%), but only when you fully cash-in your investment.
The 5% annual tax "deferred" allowance can be rolled over to future years, up to a max of 20 years. Basically you can get your initial contribution back tax free (5x20=100).
Very useful for those seeking income in retirement & can also be held on a platform.
In essence - stick £100k in and take 5% (less any adviser charge 🙄) out every year. A reasonable investment strategy should return you 6%-8%pa, meaning over time your capital will grow & you get £5k in tax free payments. Or roll them up & take ad-hoc lump sums in the future. Tax free.
There. Free advice.
Edit.
I should also add that Investment Bonds are one of the very few investments that have been left alone by various Governments over the years. There are no investment limits & there has not been a change in their tax status since the 1970's.
Also, Investment Bonds are disregarded as an asset when it comes to care fees, esp if no income is being taken.
jokes aside, I probably do have too much in PB’s. But that is pretty much my only cash and represents a small ish % of my overall (if you include pensions and house it’s a very small %).
Plus if I do become an ex pat they may come in handy!!
- Up to 5% of the amount invested can be withdrawn each policy year without triggering a 'chargeable event'. Depending on fees, this typically works out to around 4–4.5%.