Both interesting reads. Should note they were published before today's surprising US job data, but that wont be enough to change the sentiment of those commenting.
FTSE now at 6468. @golfaddick will become quite impossible
Not knocking it, but a bit perplexed. How can I be back above the March crash, when the main indices are still about 15% off? It can't all be the Big Tech boys, although they are a big part of it. What else is out-performing, Golfie? any ideas?
FTSE now at 6468. @golfaddick will become quite impossible
Not knocking it, but a bit perplexed. How can I be back above the March crash, when the main indices are still about 15% off? It can't all be the Big Tech boys, although they are a big part of it. What else is out-performing, Golfie? any ideas?
Well as I said previously at its Feb high my Share/Fund portfolio was at £170,000. I currently stand at £142,000, so your all doing well to be back where you started, or even in front.
Holding me back are my large drops on individual holdings in.
Lloyds Banking Group HSBC Standard Charter BP Shell Easyjet IAG G4S SSE Centrica Vodafone Rank Associated Brit Foods
Thats the danger of holding individual shares you may well outperform, you may well underperform against any given index, I really think you need to start slowly offloading them and reinvesting elsewhere.
How much have you got in each (%) and is this your complete holding or is this a small percentage of the overall? I often trade shares individually in my SIPP, but in reality i've never more than about 5% of the total in individual shares.
FTSE now at 6468. @golfaddick will become quite impossible
Not knocking it, but a bit perplexed. How can I be back above the March crash, when the main indices are still about 15% off? It can't all be the Big Tech boys, although they are a big part of it. What else is out-performing, Golfie? any ideas?
Well as I said previously at its Feb high my Share/Fund portfolio was at £170,000. I currently stand at £142,000, so your all doing well to be back where you started, or even in front.
Holding me back are my large drops on individual holdings in.
Lloyds Banking Group HSBC Standard Charter BP Shell Easyjet IAG G4S SSE Centrica Vodafone Rank Associated Brit Foods
Proof that you should be holding shares in a collective & not as individual shares. Looking at my clients portfolios most are now around where they were in Feb. A few are still lower than they were at the start of the year but no more than 3%-4%. Client rang me yesterday worried about a few of her investments. A recent statement showed her ISA at £109k when she had transferred £124k just 2 years ago. I gladly updated her with the fact it was now standing at £121k.....and she had been withdrawing £400 pm out of it since last year.
FTSE100 finished at 6484. All European markets up between 2%-3.5%. Dow currently up over 3% as well.
I'm not going to gloat as there is still 2 months until the final reckoning & there could be a 2nd wave or some other nasty news. I'm.hoping the FTSE can get close above 6500 & close to 7000 by August as I have clients in some Structured Products that mature then & I could do with going to see them with some double digit gains, considering they've been holding them for 5 years.
If the FTSE gets back to 7000 by August gloat all you like!
Markets had a great day but most of my funds in negative (eg Fundsmith equity)....I guess these are a reflection of yesterday?
Its takes at least an overnight valuation before you'll see any change in the value of your funds. Some even 2 days depending on where the funds are invested & the platform you are on.
I use Trustnet to keep track of my non - SIPP stuff, and in the analytics section I played around with using different indices as a benchmark. Turns out that the source of my puzzlement may well be FTSE 100 itself, looks like it has been underperforming the rest of the world in coming back from its lows. My portfolio seemed to avoid the second dip, probably all the cautious Vanguard stuff, and from then on shows the same trajectory as FTSE World ex UK, albeit my portfolio's line has satisfying space between it and the index.
I use Trustnet to keep track of my non - SIPP stuff, and in the analytics section I played around with using different indices as a benchmark. Turns out that the source of my puzzlement may well be FTSE 100 itself, looks like it has been underperforming the rest of the world in coming back from its lows. My portfolio seemed to avoid the second dip, probably all the cautious Vanguard stuff, and from then on shows the same trajectory as FTSE World ex UK, albeit my portfolio's line has satisfying space between it and the index.
I don't generally measure portfolios against an index as most are well diversified it's hard to find one to track against.
FWIW, for a medium risk portfolio I would normally have the following %
Equities
UK - 21% US - 18% Europe - 8% Far East - 8%
Fixed Interest
Corporate Bonds - 25% Gilts - 10%
Property - 10%
All the above are +/- 2%. A more Cautious portfolio would reduce equity content by 10% & an increase the same % into fixed interest.
Again, they are just a rough guide to start. Over the past 12-18 months I've been adding Absolute Return funds & Commodities.
Thanks @golfaddick. I would like to show the split of my current portfolio but I need first to check if Trustnet includes all the cash holdings I have listed in the same portfolio, because if so, it will distort the % split. Do you happen to know? I can drop them a line.
Just looked back at my 13th March share tip's......
1. Go-Ahead Group - 1,016 now 1,115 - up 9.75% 2. BAT 2,678 now 3,201 - up 19.5% 3. Lloyds Bank 37.89 now 31.92 - down 15.76% 4. PMO (if they drop back to sub 15p, risky though) 16.01 now 30.57 - up 90.9% 5. Tullow Oil (if you wish to potentially lose everything or double your money) 10.92 now 24.58 - up 125% 6. Greggs (everyone loves a sausage roll) 1,660 now 1,826 - up 10%
So 5 out of 6 not bad.....
Lloyds bank almost even now at 36.54
Tullow oil flying at 36.47, is that about 350% up? PMO also now 47.35 Go Ahead 1,240
Sorry If I may a quick question on a pension. I understand when you drawdown on a pension pot the initial 25% is tax free. So for example if I had a pot of 400,000 I would get 100,000 tax free. If then the following year I withdrew 11,000 which is under the personal tax threshold would I have to pay any tax on this?
I realise things can change tax rules thresholds etc but was having a chat with a friend yesterday and we had differing opinions.
If someone could confirm would be greatly appreciated thanks
Sorry If I may a quick question on a pension. I understand when you drawdown on a pension pot the initial 25% is tax free. So for example if I had a pot of 400,000 I would get 100,000 tax free. If then the following year I withdrew 11,000 which is under the personal tax threshold would I have to pay any tax on this?
I realise things can change tax rules thresholds etc but was having a chat with a friend yesterday and we had differing opinions.
If someone could confirm would be greatly appreciated thanks
You would not pay tax on the £11,000 either as long as you had no other income (including State Pension).
Sorry If I may a quick question on a pension. I understand when you drawdown on a pension pot the initial 25% is tax free. So for example if I had a pot of 400,000 I would get 100,000 tax free. If then the following year I withdrew 11,000 which is under the personal tax threshold would I have to pay any tax on this?
I realise things can change tax rules thresholds etc but was having a chat with a friend yesterday and we had differing opinions.
If someone could confirm would be greatly appreciated thanks
You would not pay tax on the £11,000 either as long as you had no other income (including State Pension).
Thanks I am guessing above the personal Allowance you would pay at the tax rate.
Sorry If I may a quick question on a pension. I understand when you drawdown on a pension pot the initial 25% is tax free. So for example if I had a pot of 400,000 I would get 100,000 tax free. If then the following year I withdrew 11,000 which is under the personal tax threshold would I have to pay any tax on this?
I realise things can change tax rules thresholds etc but was having a chat with a friend yesterday and we had differing opinions.
If someone could confirm would be greatly appreciated thanks
You would not pay tax on the £11,000 either as long as you had no other income (including State Pension).
Thanks I am guessing above the personal Allowance you would pay at the tax rate.
I would also add that just because you can take 25% out tax-free the question is should you, especially if it's all in one go. Obviously if you have big debts or an interest only mortgage then it probably makes sense, but not just to leave it sitting in a deposit account.
Also, even if you take out less than the PA you might be deducted tax on it from the Pension provider. They won't know what other income you have (unless they have details of your tax code)& so by law they have to deduct basic rate tax at source. You will then have to claim the tax back by your annual Self Assesment.
Sorry If I may a quick question on a pension. I understand when you drawdown on a pension pot the initial 25% is tax free. So for example if I had a pot of 400,000 I would get 100,000 tax free. If then the following year I withdrew 11,000 which is under the personal tax threshold would I have to pay any tax on this?
I realise things can change tax rules thresholds etc but was having a chat with a friend yesterday and we had differing opinions.
If someone could confirm would be greatly appreciated thanks
It may be taxed at source, but you just claim it back from the IR. My aim is to withdraw all my wife's Stakeholder pension without paying any tax. We're half way there.
If you draw down less than 25% and live of that for a few years. What can you take out at a later date? Just the balance of 25% of the original amount? Or, if your pot has grown, or shrunk, in that time, is it of the new balance?
If you draw down less than 25% and live of that for a few years. What can you take out at a later date? Just the balance of 25% of the original amount? Or, if your pot has grown, or shrunk, in that time, is it of the new balance?
It is based on your pension pot at that time. So, as I alluded to earlier, if you don't need the full 25% then it's best to leave it & (hopefully) it will grow a bit more until you do need full access of the 25%. Obviously it could fall during that time, but all things being equal, over a period of say 3-5 years it should grow. I've got clients where their pension pot is more than it was at first crystallisation, and they have taken out around 15%-20%.......all tax free.
just so I have understood this correctly. my pot is say 400k so I draw down 25% (100k) leaving 300k. six years later my pot is worth 450k so I can draw down a further 25% of 50k?
I don't think it quite works like that or as straight forward, but Golfie will confirm. i think you have move it to an uncrystalised account whereby each withdrawal you receive 25% tax free.
An added potential problem of taking the 25% if you aren't going to spend it is of course IHT as it would form part of your overall estate.
I will be interested in Golfies reply. My understanding is if you took the £100,000 from your £400,000 pot that is it you have had 25%, and can not return to the pot for another go, even if Remaining Pot value increases.
However, if you took 12.5% as first withdrawal from your £400,000 you’d get £50,000. If you came back 5 years later and asked for the other 12.5% if your pot had increased to £600,000. You’d get £75,000 being 12.5% of the pot.
So doesn’t matter about pot value, it’s the percentage which can not ever exceed 25%. It’s for this reason that people take an annual drawdown amount, with only 25% of that annual sum being taken tax free. Thereby increasing their final Tax Free amount to being Potentially being greater than 25% of their original pension pot.
I will be interested in Golfies reply. My understanding is if you took the £100,000 from your £400,000 pot that is it you have had 25%, and can not return to the pot for another go, even if Remaining Pot value increases.
However, if you took 12.5% as first withdrawal from your £400,000 you’d get £50,000. If you came back 5 years later and asked for the other 12.5% if your pot had increased to £600,000. You’d get £75,000 being 12.5% of the pot.
So doesn’t matter about pot value, it’s the percentage which can not ever exceed 25%. It’s for this reason that people take an annual drawdown amount, with only 25% of that annual sum being taken tax free. Thereby increasing their final Tax Free amount to being Potentially being greater than 25% of their original pension pot.
IS THIS CORRECT ?
Yep, that's about right. It's a bit more technical should your pot be above the Lifetime Allowance as you can only draw 25% tax free of the LA & not your 25% of your whole pot.
@Rob7Lee is correct in saying that to take any of the tax free element then 4x that amount needs to go into a separate "account". So in the example of a £400k pot, if you wanted to take out £50k tax free( ie, half of your 25% allowance) then £200k would be crystallised. The remaining £200k would be left uncrystalised & if this grew to £300k over the next few years & you then wanted to take the remaining half of your TFC allowance then you would be able to take £75k.
just so I have understood this correctly. my pot is say 400k so I draw down 25% (100k) leaving 300k. six years later my pot is worth 450k so I can draw down a further 25% of 50k?
No. Once you've taken the full 25% you can't take anymore. Hence why I said up thread that if you dont need the full 25% then dont take it all in one go as if you leave the money still in the pension then you potentially have access to a greater tax free lump sum later.
I have been putting into a pension for a while and whilst I have a few years to go it’s not that many. I was talking to a friend and he told me that he had been told he would need to pay tax on it all after the 25% I didn’t think this was the case but I wasn’t sure.
I have a while to go but appreciate the knowledge GA.
I have been putting into a pension for a while and whilst I have a few years to go it’s not that many. I was talking to a friend and he told me that he had been told he would need to pay tax on it all after the 25% I didn’t think this was the case but I wasn’t sure.
I have a while to go but appreciate the knowledge GA.
It may well be terminology, after the 25% it all becomes taxable when you draw it, subject to the personal allowance so depends on other income and what the prevailing personal allowance is at any given tax year. I can see the personal allowance drifting backwards, it's already gone for the higher earners.
With the state pension being over 9k now it doesn't leave much of any private pension that will remain tax free upon state pension age anyway.
Comments
https://seekingalpha.com/article/4352015-hedge-funds-brace-for-second-stock-market-plunge
Both interesting reads. Should note they were published before today's surprising US job data, but that wont be enough to change the sentiment of those commenting.
Thats the danger of holding individual shares you may well outperform, you may well underperform against any given index, I really think you need to start slowly offloading them and reinvesting elsewhere.
How much have you got in each (%) and is this your complete holding or is this a small percentage of the overall? I often trade shares individually in my SIPP, but in reality i've never more than about 5% of the total in individual shares.
FWIW, for a medium risk portfolio I would normally have the following %
Equities
UK - 21%
US - 18%
Europe - 8%
Far East - 8%
Fixed Interest
Corporate Bonds - 25%
Gilts - 10%
Property - 10%
All the above are +/- 2%. A more Cautious portfolio would reduce equity content by 10% & an increase the same % into fixed interest.
Again, they are just a rough guide to start. Over the past 12-18 months I've been adding Absolute Return funds & Commodities.
Stocks 54.44%
Bonds 32.92%
Cash 5.81%
Other 6.83%
Country Exposure;
United Kingdom 39.95%
United States 29.77%
Japan 8.26%
Canada 2.54%
Switzerland 2.50%
France 1.89%
Hong Kong 1.80%
China 1.67%
Australia 1.59%
Netherlands 1.26%
Tullow oil flying at 36.47, is that about 350% up?
PMO also now 47.35
Go Ahead 1,240
thanks
You would not pay tax on the £11,000 either as long as you had no other income (including State Pension).
I would also add that just because you can take 25% out tax-free the question is should you, especially if it's all in one go. Obviously if you have big debts or an interest only mortgage then it probably makes sense, but not just to leave it sitting in a deposit account.
Also, even if you take out less than the PA you might be deducted tax on it from the Pension provider. They won't know what other income you have (unless they have details of your tax code)& so by law they have to deduct basic rate tax at source. You will then have to claim the tax back by your annual Self Assesment.
My aim is to withdraw all my wife's Stakeholder pension without paying any tax.
We're half way there.
An added potential problem of taking the 25% if you aren't going to spend it is of course IHT as it would form part of your overall estate.
However, if you took 12.5% as first withdrawal from your £400,000 you’d get £50,000. If you came back 5 years later and asked for the other 12.5% if your pot had increased to £600,000. You’d get £75,000 being 12.5% of the pot.
And why do you spell Ralph, Raplh?
In essence I think you are right, if you don't take the full 25% up front cash free then it is 25% of every draw down that is tax free.
What I don't think you can do is keep taking lump sums regardless of keeping within 25% of your pot and it all being tax free, it'll be 25/75.
@Rob7Lee is correct in saying that to take any of the tax free element then 4x that amount needs to go into a separate "account". So in the example of a £400k pot, if you wanted to take out £50k tax free( ie, half of your 25% allowance) then £200k would be crystallised. The remaining £200k would be left uncrystalised & if this grew to £300k over the next few years & you then wanted to take the remaining half of your TFC allowance then you would be able to take £75k.
I have a while to go but appreciate the knowledge GA.
With the state pension being over 9k now it doesn't leave much of any private pension that will remain tax free upon state pension age anyway.