A friend of mine recently moved to Madeira and was a strong advocate for retirement.
There's two different aspects to the Portuguese system. One is the residency side, with a minimum EUR 250k investment (which doesn't have to be property, can be financial, business, charity). I think the 'minimum' bit depends on where you put the money (and some property locations have been excluded due to over-heating). You then need to spend a minimum of 14 days per two years and either apply for citizenship after five years or re-apply.
The other is tax residency, which you can only get after residency and under certain qualifications, which has low, flat rate tax rates: 10% on pension income and 20% other income plus social security. You need to stay 183 days per year, though apparently this isn't strictly monitored.
As has been attributed to a few people from Nostradamus to Logi Berra, forecasting is very difficult, particularly when it's about the future. I just happen to think the stopped clock might be right this time. If - a big if, and we'll get a view on Friday from Jackson Hole - central banks hold their nerve, there's a lot of money that's going to be sucked out of the system over the next year and that has to depress asset prices."
Jackson Hole last Friday confirmed that we are in a bear market. There will be some bounces but the general direction is down for a while. Which makes sense when you see employment still rising in the States at the same time as businesses here are dealing with 8x rises in energy costs. Long way to go before rates stop rising.
As has been attributed to a few people from Nostradamus to Logi Berra, forecasting is very difficult, particularly when it's about the future. I just happen to think the stopped clock might be right this time. If - a big if, and we'll get a view on Friday from Jackson Hole - central banks hold their nerve, there's a lot of money that's going to be sucked out of the system over the next year and that has to depress asset prices."
Jackson Hole last Friday confirmed that we are in a bear market. There will be some bounces but the general direction is down for a while. Which makes sense when you see employment still rising in the States at the same time as businesses here are dealing with 8x rises in energy costs. Long way to go before rates stop rising.
I see that Charter Savings Bank now offer a one year fixed rate of 3.25%. For a senior person that starts to look like an attractive alternative to the fund portfolio. The question raised by your last sentence though, is whether there will soon be an even better offer. And at the same time, if you are right about the direction of markets then there's probably a 50 % chance that in a year's time the average portfolio won't be more than 3.25% higher than now...
I have little idea what Im talking about when it comes to economics, but wouldnt shares perhaps track inflation to a certain extent, at least to a greater extent than interest rates, which arent going to get close to the forecast 12-15-18% inflation figures being bandied about?
I see that Charter Savings Bank now offer a one year fixed rate of 3.25%. For a senior person that starts to look like an attractive alternative to the fund portfolio. The question raised by your last sentence though, is whether there will soon be an even better offer. And at the same time, if you are right about the direction of markets then there's probably a 50 % chance that in a year's time the average portfolio won't be more than 3.25% higher than now...
Rates are still going up on savings products. You can get 3.5% fix for 1 year via certain platforms that off a bonus. Base rate may hit 2.5% next year, possibly 3%. Saving rates will follow. I am starting to get automatic interest rate increases on products that never used to offer them. Chase at 1.5% starting to look average.
At the moment it's interesting that the 2/3/5 year fixes aren't really any better than the 1 years (only marginally). With the best 5 year about 3.6%.
the one years at 3.5% are tempting, although with inflation you're effectively still losing money in real terms.
I think rates will continue to rise but in very small increments and more likely as a base rate increases the lower paying accounts will start to catch up with the top payers.
For any serious amounts you still have the tax issue, as ISA cash accounts are still poor.
Any of you know of any decent ISAS/savings accounts/children trust type investments?
My boy arrives in Dec and would like to start one, but this isn’t an area I know anything about
A word of warning. If you set up a junior ISA then it becomes theirs by right when they turn 18. No ifs or buts. So if you are happy letting your 18 your old child have access to thousands of pounds to do what they like then that's fine.
Otherwise you could simply open an ISA in your name (you have a £20k per annum allowance) and then when they are 18 you can give them as much or as little as you like. No need to have special accounts in their names if you think that they might blow it all within months.
Bank Base Rate meeting tomorrow, with forecasts saying 0.5 or even a 0.75% increase to 2.25 or 2.5%. This could push 1 year bonds to 3.5% …. Is now the time to go in…..
Bank Base Rate meeting tomorrow, with forecasts saying 0.5 or even a 0.75% increase to 2.25 or 2.5%. This could push 1 year bonds to 3.5% …. Is now the time to go in…..
Go in where ?? Bonds ? Equities ?
if its equities then you might be missing the boat. FTSE up 0.8% this morning. Unless you are a trader on the floor then its never wise to try to time the markets.
Golfie, go into one year bond, wasn’t clear in my comment… ? I have a £70,000 bond maturing early next month at 1.6%. Thinking half in after this rate rise, and hold half for the next …. ?
I would agree - you can get close to 3.5% now on a 1 year deal - come early next year that is likely to be 5-6%.
Yes, but say Feb I can get 5% that’s me out of the high rate of 3.5% for 5 or 6 months waiting for 5%. So need to look at the balance between them. If I keep in Easy access I’m likely to be 1.5% lower over those months.
Still nice problem to have for a change, instead of scratching round for 0.5%.
Comments
There's two different aspects to the Portuguese system. One is the residency side, with a minimum EUR 250k investment (which doesn't have to be property, can be financial, business, charity). I think the 'minimum' bit depends on where you put the money (and some property locations have been excluded due to over-heating). You then need to spend a minimum of 14 days per two years and either apply for citizenship after five years or re-apply.
The other is tax residency, which you can only get after residency and under certain qualifications, which has low, flat rate tax rates: 10% on pension income and 20% other income plus social security. You need to stay 183 days per year, though apparently this isn't strictly monitored.
I'll be selling the majority of mine this month I think so unlikely to win going forward.
Jackson Hole last Friday confirmed that we are in a bear market. There will be some bounces but the general direction is down for a while. Which makes sense when you see employment still rising in the States at the same time as businesses here are dealing with 8x rises in energy costs. Long way to go before rates stop rising.
You have nicked it all 😁
Not bad but as another Lifer posted, we'll be looking at 1 yr fixed rate deals for at least half of our PBs.
the one years at 3.5% are tempting, although with inflation you're effectively still losing money in real terms.
I think rates will continue to rise but in very small increments and more likely as a base rate increases the lower paying accounts will start to catch up with the top payers.
For any serious amounts you still have the tax issue, as ISA cash accounts are still poor.
My boy arrives in Dec and would like to start one, but this isn’t an area I know anything about
https://www.onefamily.com/junior-bond/
You've also got the junior ISA's, personally if you are doing for them until 18 I'd go a Junior Stocks & shares ISA.
PS, if he's born 6th December you'll have to name him R7L.....
Otherwise you could simply open an ISA in your name (you have a £20k per annum allowance) and then when they are 18 you can give them as much or as little as you like. No need to have special accounts in their names if you think that they might blow it all within months.
if its equities then you might be missing the boat. FTSE up 0.8% this morning. Unless you are a trader on the floor then its never wise to try to time the markets.
https://www.thetimes.co.uk/money-mentor/article/interest-rates-rise/