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Savings and Investments thread
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I’ve just been robbed.
Description - straight brown hair, navy blue suit, lipstick.
Last seen in Westminster.4 -
NB I was willing to pay more to help the NHS (and everything), but I didn’t expect to have to pay for a new hospital wing
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Only that interest rates might not fall as quick as was anticipated. Prior thinking was that there will be 0.25% cuts in both November & December and over the next 18-24 months the base rate should settle around 3.5%.meldrew66 said:
....good for savers then?!golfaddick said:
The OBR have been quite strong on their thoughts. Less growth, higher inflation than the BOE forecast & subsequently slower cutting of interest rates.Hartleypete said:A budget to kill growth.
Maybe rates will have to stay higher for longer. Heard that somewhere before.0 -
‘e.g.’ I think you mean and not ‘I.e.’ 😉😉😀Rob7Lee said:
As it stood, were you to die before 75, your pension pot (i.e. SIPP, not and DB scheme) passed to your survivors tax free. Now it will simply form part of your estate and be added to the overall estate.meldrew66 said:
Can someone explain what this means/how this actually works please?Covered End said:Pensions falling into IHT from 2027
I.E. if you were single and had a home worth £400k and £100k in the bank your estate would not pay IHT as at the £500k limit. Now if you have to include say a £350k of pension pot on top you are now £350k over the limit and the estate would pay £140k in IHT.
Sorry a pet hate for me when these aren’t used as I understand the grammar should be.But I make you right it’s more logical to spend the pension pot or gift early to your beneficiaries than let it be swallowed in tax.0 -
My current thoughts are to limit IHT…… mortgage my main home up to the hilt and gift to children to buy both a property each and cross everything I live 7 years. That way takes the most part property out of my estate (as will be mostly debt).valleynick66 said:
‘e.g.’ I think you mean and not ‘I.e.’ 😉😉😀Rob7Lee said:
As it stood, were you to die before 75, your pension pot (i.e. SIPP, not and DB scheme) passed to your survivors tax free. Now it will simply form part of your estate and be added to the overall estate.meldrew66 said:
Can someone explain what this means/how this actually works please?Covered End said:Pensions falling into IHT from 2027
I.E. if you were single and had a home worth £400k and £100k in the bank your estate would not pay IHT as at the £500k limit. Now if you have to include say a £350k of pension pot on top you are now £350k over the limit and the estate would pay £140k in IHT.
Sorry a pet hate for me when these aren’t used as I understand the grammar should be.But I make you right it’s more logical to spend the pension pot or gift early to your beneficiaries than let it be swallowed in tax.
what could possibly go wrong…..😑0 -
Unless I've misunderstood this the Stamp Duty on second homes has gone up from 2% to 5%. That's £7.5k on a modest £250k property. It doesn't feel like a deal breaker to me.golfaddick said:The 2nd property Stamp duty increase was a big'un. Again comes in immediately.
Imagine that might be adding to people's costs who are moving this Friday.1 -
There's always next year, when they will have to raise (even) more moneygolfaddick said:Does surprise me that there were NO changes to Pensions apart from now being part of your Estate.
Tax free lump sum untouched
Tax relief untouched.
Lifetime & Annual allowances untouched0 -
You sound niceCovered End said:I’ve just been robbed.
Description - straight brown hair, navy blue suit, lipstick.
Last seen in Westminster.4 -
Whoosh.Southbank said:
You sound niceCovered End said:I’ve just been robbed.
Description - straight brown hair, navy blue suit, lipstick.
Last seen in Westminster.0 -
Be very (VERY) modest anywhere round here for £250,000.SantaClaus said:l
Unless I've misunderstood this the Stamp Duty on second homes has gone up from 2% to 5%. That's £7.5k on a modest £250k property. It doesn't feel like a deal breaker to me.golfaddick said:The 2nd property Stamp duty increase was a big'un. Again comes in immediately.
Imagine that might be adding to people's costs who are moving this Friday.0 -
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Have you found many houses in SE London for £250k ?SantaClaus said:
Unless I've misunderstood this the Stamp Duty on second homes has gone up from 2% to 5%. That's £7.5k on a modest £250k property. It doesn't feel like a deal breaker to me.golfaddick said:The 2nd property Stamp duty increase was a big'un. Again comes in immediately.
Imagine that might be adding to people's costs who are moving this Friday.
This doesn't just affect BTL properties. People buying jointly who currently own a property each & dont want to sell one (or both). I believe you can claim back the extra Stamp Duty if you sell the other property within 3 years......but maybe that has been scrapped in the small print.0 -
The additional amount has gone from 3-5% immediately. So that’s in addition to the standard rates of SDLT. In an already dying BTL market that will deter some investors from buying and a few tears for those about to complete.SantaClaus said:
Unless I've misunderstood this the Stamp Duty on second homes has gone up from 2% to 5%. That's £7.5k on a modest £250k property. It doesn't feel like a deal breaker to me.golfaddick said:The 2nd property Stamp duty increase was a big'un. Again comes in immediately.
Imagine that might be adding to people's costs who are moving this Friday.
theres a storm brewing for renters, i think the fact there’s been no change to CGT for property will see far more exit the market than enter. Good if your a FTB but bad if a renter as I can only see rents increasing further.1 -
Rob7Lee said:
I agree, just changes my IHT planning. Will likely mean I retire earlier to give me a chance to spend it! Every cloud……bobmunro said:Rob7Lee said:
Looks like we'll have to spend spend spend!Covered End said:Pensions falling into IHT from 2027Was always my plan anyway, so nothing changes.I have absolutely no issue in pension being included in an estate, it's an asset and no different to savings or property or shares. It's the change from not being included to being included that smarts.Just spend it ffs!
You've got until April 2027 to make any changes to your IHT planning.
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But many wont. The problem being that pensions are there to provide an income in retirement. I do have a couple of clients who are 65+ who dont need to take any income from their private pensions but the vast majority of people do.....I mean, that's what they are there for.bobmunro said:Rob7Lee said:
I agree, just changes my IHT planning. Will likely mean I retire earlier to give me a chance to spend it! Every cloud……bobmunro said:Rob7Lee said:
Looks like we'll have to spend spend spend!Covered End said:Pensions falling into IHT from 2027Was always my plan anyway, so nothing changes.I have absolutely no issue in pension being included in an estate, it's an asset and no different to savings or property or shares. It's the change from not being included to being included that smarts.Just spend it ffs!
You've got until April 2027 to make any changes to your IHT planning.
I can't see too many people drawing down their pension fund just because they dont want it subject to IHT when they die (which could be 20 -30 years later). I expect many private pension "pots" to carry on as before and people will just accept that there will be IHT levied on it after 2027.
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Golfie, you’re very right. At age 67 I spend more time tinkering with my savings and investments to earn more money, than I do spending it. It’s almost unnatural to just start spending money in an attempt to run down your pension / savings.golfaddick said:
But many wont. The problem being that pensions are there to provide an income in retirement. I do have a couple of clients who are 65+ who dont need to take any income from their private pensions but the vast majority of people do.....I mean, that's what they are there for.bobmunro said:Rob7Lee said:
I agree, just changes my IHT planning. Will likely mean I retire earlier to give me a chance to spend it! Every cloud……bobmunro said:Rob7Lee said:
Looks like we'll have to spend spend spend!Covered End said:Pensions falling into IHT from 2027Was always my plan anyway, so nothing changes.I have absolutely no issue in pension being included in an estate, it's an asset and no different to savings or property or shares. It's the change from not being included to being included that smarts.Just spend it ffs!
You've got until April 2027 to make any changes to your IHT planning.
I can't see too many people drawing down their pension fund just because they dont want it subject to IHT when they die (which could be 20 -30 years later). I expect many private pension "pots" to carry on as before and people will just accept that there will be IHT levied on it after 2027.8 -
This is where we are. I am 67 and retired with a few bob behind me. My Mrs is bringing in a six figure salary and we get £2k in state pensions between us per month.golfaddick said:
But many wont. The problem being that pensions are there to provide an income in retirement. I do have a couple of clients who are 65+ who dont need to take any income from their private pensions but the vast majority of people do.....I mean, that's what they are there for.bobmunro said:Rob7Lee said:
I agree, just changes my IHT planning. Will likely mean I retire earlier to give me a chance to spend it! Every cloud……bobmunro said:Rob7Lee said:
Looks like we'll have to spend spend spend!Covered End said:Pensions falling into IHT from 2027Was always my plan anyway, so nothing changes.I have absolutely no issue in pension being included in an estate, it's an asset and no different to savings or property or shares. It's the change from not being included to being included that smarts.Just spend it ffs!
You've got until April 2027 to make any changes to your IHT planning.
I can't see too many people drawing down their pension fund just because they dont want it subject to IHT when they die (which could be 20 -30 years later). I expect many private pension "pots" to carry on as before and people will just accept that there will be IHT levied on it after 2027.
There simply is no need for us to start dipping into our private pensions yet0 -
So, once you have turned your pension pot into an annuity and getting a monthly pension is the value of the pot still included? The original pot is now under the ownership of the annuity provider....... anybody got any insight on this?
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No, don’t think so, once you have an annuity it dies with you (or if taken a spouse section when the last of you dies). It only affects those with a ‘pot’ at death. They won’t meddle with that type of pension (or DB).red10 said:So, once you have turned your pension pot into an annuity and getting a monthly pension is the value of the pot still included? The original pot is now under the ownership of the annuity provider....... anybody got any insight on this?Very few though buy an annuity these days.0 -
@red10 if you use all of your pension pot to buy an annuity you then have no pension pot as you have bought an insurance product that will either pay you a monthly amount for a fixed amount of time or until you die. They normally offer options to pay your spouse after you death etc
if you are single or have taken a single life product and you die say 12 months after you take out the annuity then in most cases the insurance company keeps the rest of your money
if you might want to look at the other options available by flexible pension schemes like flexible draw down or cash lump sums as these leave money in your pension pot which will be payable to your beneficiaries upon your death0 -
Most people who are investing in a rental property will do so at the bottom end of the market and in places far cheaper than SE London but even if you're looking at something twice as expensive it's still only £15k, that's peanuts over say a 20 year investment timescale.0
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I assume the second home/stamp duty increase applies to holiday homes as well, not just BTL0
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Think you’d be surprised, once you take into account all buying fees including stamp duty, most BTL is simply not worth doing. You take all the downside risk but not the upside. Also as CGT doesn’t account for inflation you take all that hit as well. If a house price simply increase with inflation your taxed on that whole ‘gain’ amount when in reality the gain is zero.SantaClaus said:Most people who are investing in a rental property will do so at the bottom end of the market and in places far cheaper than SE London but even if you're looking at something twice as expensive it's still only £15k, that's peanuts over say a 20 year investment timescale.
add in borrowing cost and it’s a dead duck/gamble no longer worth considering.
Any second property, regardless of the usage.eaststandmike said:I assume the second home/stamp duty increase applies to holiday homes as well, not just BTL3 -
If owned outright I still think it's a reasonable investment. Any gain even if taxed is a gain after all and it's good to not have easy access to the money or I would be at the nearest Ferrari dealership !!!
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I'd go further to say that if you buy an annuity you can build in certain guarantees that means the annuity payments (usually monthly) can continue after your death. Similar to a DB scheme you can build in a spouse's pension so that 50% can continue until their death or a simple guarantee that continues to pay out for a set number of years (say 10 years). Remembering that this income is taxable and seeing as very soon the State Pension itself will take you into being a 20% taxpayer.SE9toDA2 said:@red10 if you use all of your pension pot to buy an annuity you then have no pension pot as you have bought an insurance product that will either pay you a monthly amount for a fixed amount of time or until you die. They normally offer options to pay your spouse after you death etc
if you are single or have taken a single life product and you die say 12 months after you take out the annuity then in most cases the insurance company keeps the rest of your money
if you might want to look at the other options available by flexible pension schemes like flexible draw down or cash lump sums as these leave money in your pension pot which will be payable to your beneficiaries upon your death
So it all depends if you are looking for a guaranteed income for life or flexibility that a Drawdown Pension gives you, knowing that when you die your pension will be subject to IHT.1 -
I don’t understand the logic of taking a penny ‘off’ a pint.The government gets less revenue but the ‘saving’ isn’t going to change any drinkers behaviour / volume consumed.Seems counter productive to me.Am I missing something?4
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A gimmick.valleynick66 said:I don’t understand the logic of taking a penny ‘off’ a pint.The government gets less revenue but the ‘saving’ isn’t going to change any drinkers behaviour / volume consumed.Seems counter productive to me.Am I missing something?
Just to show that someone, somewhere is going to be better off.
Most likely the publican as I cant see them reducing a £6 pint down to £5.99. Easier to absorb the cost.0 -
Maybe it is that simple. But spending so much time telling us how bad the finances are why deny sone income when the gimmick really won’t work / be noticed after today?golfaddick said:
A gimmick.valleynick66 said:I don’t understand the logic of taking a penny ‘off’ a pint.The government gets less revenue but the ‘saving’ isn’t going to change any drinkers behaviour / volume consumed.Seems counter productive to me.Am I missing something?
Just to show that someone, somewhere is going to be better off.
Most likely the publican as I cant see them reducing a £6 pint down to £5.99. Easier to absorb the cost.
Looks incompetent to me.1 -
@Golfie, thanks, all of our pensions are already in flight, most have spouse to spouse benefits. Figured they might be tinkered with by future governments so banked them when we could to keep them out of risk. No kids so didn't need to worry about any residual pot to distribute.
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Think you miss the point, there is no consideration of inflation when we consider CGT. You are taxed on the inflationary element as well as any true gain (if indeed there is any).red10 said:If owned outright I still think it's a reasonable investment. Any gain even if taxed is a gain after all and it's good to not have easy access to the money or I would be at the nearest Ferrari dealership !!!
As an example:
2024 buy a few bars of gold for £100k
2034 That gold is now worth £140k. However inflation means your £100k should now be in 2034 terms £160k.
So in reality you have lost £20k, however you'll be taxed on the £40k 'gain' @24% reducing your holding to just over £130k, so you've lost in real terms £30k yet HMRC have had nearly £10k from you to worsen your loss when the reality is no gain has been made.
I'd be all for CGT being at a higher rate but only taxing true gains.
On property specifically, take it from me a a Trustee of a friendly society with over 50 properties it's simply not worth it. The only reason it broadly washes its face for us is Friendly societies don't have to pay most taxes! So all rents received are tax free and no CGT if we sell. However even for us it's got to the point where the returns elsewhere are much better, we will likely sell most over the next few years (may keep some of the more modern one's).3
