An interesting perspective on pensions from Ian Botham (who admits in the same interview that he knows nothing about money!):
"What's the point [in pensions] these days? Have you not seen the state that the funds are in and how our savings are being eroded? The Government on the one hand is telling us to keep sight of our old age and how we'll manage, but then is making it damn near impossible to build it up, by taxing us left, right and centre. It's utterly bizarre. Property is my pension."
From http://www.telegraph.co.uk/finance/pers ... money.html
Jeff
Pensions
IMHO there is little point in pensions, a lot of the tax benefits have been removed and will continue to be removed and that has devalued the deal significantly. I have a SIPP which did well but thanks to changes in legislation I stopped putting money into it and it will probably be over taxable lifetime limit now when it matures any how.
The biggest blow to pensions was the abolition of ACT. The biggest and one of the most unfair tax raids in history but it went pretty much unnoticed by Joe Public. It will kill pension returns forever and made them much less viable as a medium to save for your retirement.
The biggest blow to pensions was the abolition of ACT. The biggest and one of the most unfair tax raids in history but it went pretty much unnoticed by Joe Public. It will kill pension returns forever and made them much less viable as a medium to save for your retirement.
The situation is far from ideal.Euler wrote:IMHO there is little point in pensions, a lot of the tax benefits have been removed and will continue to be removed and that has devalued the deal significantly.
But I'm not sure what the alternative is. Surely, for most people, the only other options are to rely on a meager state pension (assuming it's still being paid in decades to come), or to work till you drop.
It's not much of a choice, but arguably paying money into a pension fund is the least of the evils...
It's been estimated that this has cost pensions over £100 billion (http://www.ifaonline.co.uk/ifaonline/ne ... s-gbp100bn).Euler wrote:The biggest blow to pensions was the abolition of ACT.
Jeff
If you've got money then I think putting it into property is the way to go (i.e. paying off mortgage asap and living rent free plus if you can invest it in well chosen holiday homes that produce a good income.) At least that way if you have kids you can pass whatever you have on, anything you invest in pensions will disappear as soon as you croak it
To clarify, are pension contributions not redeemable by your estate, even in part?
Personally, I wouldn't touch property (at least in the UK) at present, as I think house prices still have some way to fall.
Also, I'm not sure how profitable buying to let is, once you've paid all your bills. As an aside, my landlord is pulling his hair out as he thinks that my use of an electric heater means that he's not making any profit! In an attempt to get rid of me, he actually tried (and failed) to persuade one of my housemates (a former thug who looks like Raoul Moat) to beat me up! But I digress!
Jeff
Personally, I wouldn't touch property (at least in the UK) at present, as I think house prices still have some way to fall.
Also, I'm not sure how profitable buying to let is, once you've paid all your bills. As an aside, my landlord is pulling his hair out as he thinks that my use of an electric heater means that he's not making any profit! In an attempt to get rid of me, he actually tried (and failed) to persuade one of my housemates (a former thug who looks like Raoul Moat) to beat me up! But I digress!
Jeff
hgodden wrote:If you've got money then I think putting it into property is the way to go (i.e. paying off mortgage asap and living rent free plus if you can invest it in well chosen holiday homes that produce a good income.) At least that way if you have kids you can pass whatever you have on, anything you invest in pensions will disappear as soon as you croak it
I don't know.
Perhaps the pension funds make their money by being able to keep all the premiums people have paid in over the years when they die. I just wondered whether it was like a savings account, where you retained ownership of the money you paid in.
Jeff
Perhaps the pension funds make their money by being able to keep all the premiums people have paid in over the years when they die. I just wondered whether it was like a savings account, where you retained ownership of the money you paid in.
Jeff
hgodden wrote:I didnt think pension contributions could be taken back by relatives after your death?
Where are you referring to hgodden?hgodden wrote:I was thinking outside the UK, if you're choosy there are some fantastic opportunities available IMO.
The UK looks good in terms of yields for buy to let at the moment if you look at the cheaper areas like the NE or West Midlands.
Hi Sweetybt
I would say that house prices have some way to fall yet, so personally I'd hold fire.
A rise interest rates could be the tipping point that causes the housing bubble to burst.
Also, from what I hear, banks aren't too keen to offer buy to let mortgages these days.
Jeff
I would say that house prices have some way to fall yet, so personally I'd hold fire.
A rise interest rates could be the tipping point that causes the housing bubble to burst.
Also, from what I hear, banks aren't too keen to offer buy to let mortgages these days.
Jeff
sweetybt wrote:
The UK looks good in terms of yields for buy to let at the moment if you look at the cheaper areas like the NE or West Midlands.
Absolutely.
I'd be wary of where in the country I purchased a property, though. Areas that are heavily dependent on the civil service could be hit hard in years to come, when you take into account the impact on the local economy of redundancies.
Jeff
I'd be wary of where in the country I purchased a property, though. Areas that are heavily dependent on the civil service could be hit hard in years to come, when you take into account the impact on the local economy of redundancies.
Jeff
sweetybt wrote:Perhaps, but it could be a golden opportunity for cash buyers to accumulate properties over the next 3-5 years.
While waiting for the market to recover you can sit back and collect 7-9 % rental yield.