Novacyt nearing £12 per share - 18000% rise over last year. Amazing.
Anybody manage to make/fluke/mastermind some serious money from a punt?
£1k will have earnt £180k, but that's through graphical and wishful post-event analysis.
A winner in these bloody awful Covid times, there are other pharma’s and data analytical outfits out there ready to push on SP wise, if you manage to get in early a very decent profit can be made. Unfortunately as people & businesses suffer there are always winners and losers. Even that shower Serco has seen a nice SP rise & they have totally ****ed up.
Interesting case I have on the go atm & thought I'd share just a snippet (have to be careful due to client confidentiality) as I wondered what the general consensus on here would be as I know what I would do but everyone has different circumstances.
I have a client who is looking to take her pension early as she is needing to give up work to care for her mother. Just turned 56 and has a number of pensions, some DB & some DC. She is an only child so care has fallen onto her. She is single & has no children herself. Long & short of it is that her DB schemes at 60 would give her approx £18k pa (plus a small lump sum) & her DC schemes are worth c£320k. Not great sums but taking the tax-free lump sum from her DC scheme would mean she could pay her mortgage off & have enough to live on for a couple of years before looking at taking any more money.
Just getting updated info on the DB scheme & 1 in particular has made me think......and change my advice if I was in her shoes. Last time she got figures for this pension scheme they were giving her £1250pa for life.....and the transfer value was £51k. Now they are saying they would pay her £1750pa.......and the transfer value is now £104k.
So, should she exchange a guaranteed £1750pa (if she takes it at 60 more likely to be £1850 pa) index linked (max 10% paperwork shows but currently at CPi) for £104k that could go into her DC scheme ? She could take a lump sum of £8k & a reduced pension £1500 pa - but she could take £26k lump sum in a DC scheme. Question the FCA would ask is - how long would the £104k last & would want comparison figures with CPI increases built in. Am I mad in thinking that even if she took £26k as a tax free lump sum the remaining £78k would last long enough to give her £1500 pa for life. In simple terms she would have to live another 50 years before it ran out. Factor in inflation probably more like 30 years.
Going against her (or should I say, the cons would outweigh the pro's according to the FCA) is that she can't say that she wants to be able to leave the fund to a spouse or children, rather than the pension dying with her.
Then there is the cost of advice. Contingent charging has now been banned, so I can't say that the cost of the advice would only be paid should she transfer the pension. A fee would have to charged no matter what the specialised report said she should do. This fee would be a minimum of £3k......more likely £4k but 5k tops.
I had no thought of even talking to her about transferring any of her DB schemes.......always said that they would be the basic, guaranteed element of her retirement & her DC would be the flexible part. 1 of her other DB schemes is the NHS Pension Scheme so cant be transferred no matter what - this will give her around £8k pa at age 60.
But surely, £104k against an income for life of £1850 pa is just a no brainer......or am I just a greedy pension salesman ??
Thats a seriously good multiplier at best part of 60x. Can't see a reason NOT to transfer as long as you keep it invested to protect against inflation. She could start drawing £1750 if she wanted to straight away and that'd last her until she's over 100.......
Even if she increased the withdrawal amount by 3% per annum it's last until she is 90 assuming the fund didn't grow,
On a slightly different income tack, if caring for her mother, she should check on attendance allowance / carers allowance. Age Concern will advise and help her through the process. My mum’s attendance allowance is about £340pm (tax free).
Agree, the multiple is attractive and another reflection of bond markets and the ongoing deflationary pressure. But a Biden win, weaker dollar, long term rates already rising in the US, could this finally be the bottom of cheap money? Doubt it, as governments are hooked on it but it might be good timing.
A major factor for me would be how comfortable she is managing her own money versus the relative safety of the annuity guarantee. For me it would be a no-brainer, take the money but I'm not her.
Second the attendance allowance - that's exactly what it's there for, situations like this.
For balance, and having consulted my better half, who used to sell pensions and train IFAs before becoming a mis-selling investigator, she's pointing out that your client could live a good 40 years and that inflation protection would add up even in a low inflationary environment. Even 1% annualised gives 48%. So would at least want to look at her health.
Some great comments and thoughts on this thread. Prompted me to have a look at my own NI contributions and they show that I have 38 full years and qualify for the full state pension...but not until my 67th birthday in 13 years. Odd thing is that I believe that I should only have 35 years as I joined the bank in July 1985. It looks like they have included a part-time, weekend job that I had for a couple of years whilst doing my A-Levels, when I worked for LBC, who also got me to do the odd week here and there during holidays, but all on the books with proper pay-slips.
My DB bank scheme closed some time ago, leaving me with 24 years on that and then the last 11 years on our DC scheme. A number of my colleagues, all married with kids, have withdrawn theirs over the last few years. My position is different, not being married, and I would begrudge seeing my pension going back to the bank when I pass. Likelihood is that I will also withdraw my pension and invest to allow me to leave in my will to family. With the current transfer values being offered it would probably be daft not to. Some serious thinking to do over the next few months.
Interesting case I have on the go atm & thought I'd share just a snippet (have to be careful due to client confidentiality) as I wondered what the general consensus on here would be as I know what I would do but everyone has different circumstances.
I have a client who is looking to take her pension early as she is needing to give up work to care for her mother. Just turned 56 and has a number of pensions, some DB & some DC. She is an only child so care has fallen onto her. She is single & has no children herself. Long & short of it is that her DB schemes at 60 would give her approx £18k pa (plus a small lump sum) & her DC schemes are worth c£320k. Not great sums but taking the tax-free lump sum from her DC scheme would mean she could pay her mortgage off & have enough to live on for a couple of years before looking at taking any more money.
Just getting updated info on the DB scheme & 1 in particular has made me think......and change my advice if I was in her shoes. Last time she got figures for this pension scheme they were giving her £1250pa for life.....and the transfer value was £51k. Now they are saying they would pay her £1750pa.......and the transfer value is now £104k.
So, should she exchange a guaranteed £1750pa (if she takes it at 60 more likely to be £1850 pa) index linked (max 10% paperwork shows but currently at CPi) for £104k that could go into her DC scheme ? She could take a lump sum of £8k & a reduced pension £1500 pa - but she could take £26k lump sum in a DC scheme. Question the FCA would ask is - how long would the £104k last & would want comparison figures with CPI increases built in. Am I mad in thinking that even if she took £26k as a tax free lump sum the remaining £78k would last long enough to give her £1500 pa for life. In simple terms she would have to live another 50 years before it ran out. Factor in inflation probably more like 30 years.
Going against her (or should I say, the cons would outweigh the pro's according to the FCA) is that she can't say that she wants to be able to leave the fund to a spouse or children, rather than the pension dying with her.
Then there is the cost of advice. Contingent charging has now been banned, so I can't say that the cost of the advice would only be paid should she transfer the pension. A fee would have to charged no matter what the specialised report said she should do. This fee would be a minimum of £3k......more likely £4k but 5k tops.
I had no thought of even talking to her about transferring any of her DB schemes.......always said that they would be the basic, guaranteed element of her retirement & her DC would be the flexible part. 1 of her other DB schemes is the NHS Pension Scheme so cant be transferred no matter what - this will give her around £8k pa at age 60.
But surely, £104k against an income for life of £1850 pa is just a no brainer......or am I just a greedy pension salesman ??
Commuting £1000 of pension for £56,000 cash transfer does sound like a very good deal. When I had this option in 2017 Lloyds Bank offered me a out £31000 per £1000. I refused that but would have gone for a x 56 multiple.
Another consideration (well was for me) when considering cashing the DB to DC is how long you’ve got to go. Did mine roughly in 2014 when I still had 23 years until 65 and was confident I could beat inflation with the return over that period.
Mine was from memory just under 40x but with what I’ve grown that to and allowing for what the DB would have grown to with the inflation/index I’m currently sitting at around 75x as I’ve doubled the pot value.
Hi all. Looking for a opinion pls regarding a buy to let. Im lucky to be in a position to get a buy2let but worrid about tax due as im just below 40% tax rate on my paye job. If i do get a property with say 10k yearly rent will i be paying 4k ish tax minus a few costs ? I sent my accountant a email and he did reply but he confuses me in his reply. Im starting to think buy2let is not such a good option now . Any advice be greatful. Cheers
Hi all. Looking for a opinion pls regarding a buy to let. Im lucky to be in a position to get a buy2let but worrid about tax due as im just below 40% tax rate on my paye job. If i do get a property with say 10k yearly rent will i be paying 4k ish tax minus a few costs ? I sent my accountant a email and he did reply but he confuses me in his reply. Im starting to think buy2let is not such a good option now . Any advice be greatful. Cheers
If you are buying as an individual then yes, any profit will be taxed at your highest rate, so 40% if thats where it takes you. Are you taking a loan? Mortgage interest tax relief has added to the burden as an individual/higher rate tax payer.
You might want to look at owning within a company, you can offset fully the interest costs and other expenses, potentially take out £2k per annum tax free as a dividend (assuming you get no other dividends) - you could have your spouse/partner as a shareholder and they too can take out dividends.
It's not a simple answer without knowing fully your circumstances. And thats before the potential tenant headaches!
Happy to answer any questions, message me if easier.
Thanks rob. I would be paying a 25% deposit of a 240k property. Im only really doing this to help a family member . I would be borrowing extra 50k on my home aswel to help raise deposit. I wish i never offered to help now. Your post is much more clear the my accountant who i know likes to talk clever to confuse me ( not hard ) Thanks again
Thanks rob. I would be paying a 25% deposit of a 240k property. Im only really doing this to help a family member . I would be borrowing extra 50k on my home aswel to help raise deposit. I wish i never offered to help now. Your post is much more clear the my accountant who i know likes to talk clever to confuse me ( not hard ) Thanks again
So if I understand right;
1. £60k deposit, of which you are using £10k savings and £50k borrowed against your own home, 2. £180k BTL mortgage plus the other £50k.
You need a rethink, this will likely cost you money each year;
For arguments sake lets assume the average interest rate across the 2 mortgages is 3% (and that they are interest only), you can flex these numbers as you wish;
Assume Net Rental received PA £10k (after all allowable costs except mortgage Interest) Interest Charge £6,900 (£230k @ 3%)
You can improve that if held in a company as you could fully offset the £6,900 against the £10k rent, also by the time you add other allowances you will almost certainly pay zero tax. If you are going to do it, speak to your accountant, set up an SPV and use all the possible allowances and it'll look a little better but still tight (you may need to do your own accounts!).
That said, for me, the numbers don't stack, we haven't even got into repairs, maintenance etc etc, the only way it works is if you are expecting a huge gain on the house purchase price, which I wouldn't! It's going to cost you over £10k to buy it (Stamp, fee's etc).
Wow thanks. You have given me more advice than my accountant did. Im going with my gut feeling and give this a miss. The agro really not worth it. I think i knew from research anyway but nice to get another opinion. Thanks again
Wow thanks. You have given me more advice than my accountant did. Im going with my gut feeling and give this a miss. The agro really not worth it. I think i knew from research anyway but nice to get another opinion. Thanks again
Very wise, I was just about to send you a private message to say don't do it, you'll lose money!
PS, if in one post I gave you more advice than your accountant, i'd be looking at changing your accountant!
When you say you are helping out a family member do you mean a relative will be living in the property & paying you rent ?
Most mortgage lenders will not lend if the tenant is a relative. Can't remember how far down the line it goes but certainly children, parents, grandparents & siblings would be on the list.
When you say you are helping out a family member do you mean a relative will be living in the property & paying you rent ?
Most mortgage lenders will not lend if the tenant is a relative. Can't remember how far down the line it goes but certainly children, parents, grandparents & siblings would be on the list.
It's normally immediate, so sibling, child or parent. There are some lenders who will entertain it (Vida from memory) but they charge a higher rate and you'd still have to have an AST.
Hi golf. It would be my aunt. I would be more confident if i wasnt borrowing extra on my house. Dont think i can take the risk .
Probably better borrowing on your own property. Better deals.....better interest rate.....less restrictions. Only problem is that you probably cant get an interest only loan on your residential property. It can be done, but usually have to earn over £75k pa and have some other hoops to jump through as well.
Hi golf. It would be my aunt. I would be more confident if i wasnt borrowing extra on my house. Dont think i can take the risk .
I think you'd be better helping her with her rent (elsewhere) if it came to it. If you had 40% deposit laying around earning nothing in the bank it may make more sense, but BTL isn't the passive investment many go into it thinking it is, and i'd never advise doing a BTL unless you have other investments/cash etc, i.e. making the BTL just a part (sub 25%) of an overall investment portfolio.
Some become accidental landlords through inheritance or when couples get together who both had their own homes previously, but generally those have decent equity or full equity so the risk is lessened. You were in effect going to have zero equity after costs to purchase.
For every 10 successful BTL landlord's there are a few failures. My wife's friend moved to America with her husbands job, they rented out their house in the UK. 18 months on, having received I think only one months rent and then costs to get the tenant out in excess of £10k they got their house back and a further £10k to repair the damage caused, cost them in total probably £30k+ (all the time still having to pay the mortgage).
Please can someone 'ITK' (Golfie?) answer the following questions for me:
1. State Pension: despite having made pension contributions for more than 38 years without a break, my state pension forecast is still saying that I need to contribute for another 4 years to gain the maximum pension of (currently) £175.20. I think it said the same thing a year ago. I work for the NHS as a senior manager and pay the usual tax/NI every month so the lack of progress is worrying with just 6 years until my intended retirement age of 60. Could it be because I am contracted out of SERPS within my NHS pension scheme? If so, is there anything I could/should do about this?
2. I have had a 'frozen' NatWest pension since leaving them 17 years ago. I check the pension updates every year and see that the fund is actually reducing or at best staying still every year? Is that right when I am reading on here that others have pension pots growing at great rates. I thought that Bank pensions were highly thought of but mine looks dismal after 19 years of service contributions. Should I consider moving my fund away from NatWest - noting my intention to withdraw maximum cash for retirement in only 6 years' time?
Hope you can help as all of the messages on here indicating huge growth in pensions is leaving me more than a little concerned that my funds are not 'performing' as they might be.
Cheers
You can get a year by year breakdown of your NI record on the HMRC site. This might tell you the reason why the are saying you still need another 4 years. I don't think its because you have been in contracted out schemes as that usually takes care of itself by the amount you get at retirement ......which might not be the standard pension figures for the new State Pension. I would imagine yours will be around £30 pw less because of this.
Ok, just re-checked the HMRC website regarding my state pension query. On my National insurance record, it says "You have 38 years of full contributions" and "13 years to contribute before 5 April 2033" and "You do not have any gaps in your record". On that basis, I can't understand why it also says "You need to contribute for 4 more years" to achieve the maximum state pension of £175.20 per week.
Do I need to phone HMRC to query it then?
Ok here's the update: I called HMRC (03002003300) to query my NI/State Pension position. They put me through to the 'Contracted Out Pensions' department who told me that I have been contracted out of SERPS for the 19 years I worked for NatWest and 13 of the 16 full years I have worked for the NHS. In other words, I have only been in SERPS for 3 full years so far! Despite that, my NI records show 38 'full years' of contributions. They seemed surprised that my NI contribution was saying 38 years but stopped short of actually expressing surprise and said I need to contact the DWP Future Pensions Centre on 0800 731 0175 who, they said, would be able to explain where I stand. That department is not accepting any non-urgent queries during the current pandemic period.
Given that I have been contracted-out for so long, I guess it may well explain why I still have 4 years of contribution still to make although it is rather misleading to state that I have made 38 'Full' years of NI contribution if, as it seems, the reduced sums I have been paying do not really represent 'full' contributions due to my contracted-out status.
In theory, the count of '4' should reduce to '3' this time next year. If so, then I guess I will be ok to achieve a full state pension as I plan to work for 5 more years until I reach age 60. If it doesn't reduce, then I will need to query this further with HMRC/DWP FPC to ensure that their records are accurate AND to consider whether or not I should do anything in my final years of working to maximise my pension income.
At least, having made some enquiries, I know my contracted-out position now and how that, clearly, has impacted on my state pension 'pot'. Thanks to Golfie, Bob, Rob and others for the feedback and words of wisdom. It sounds like my situation, experience and queries may be relevant to many others too.
Please can someone 'ITK' (Golfie?) answer the following questions for me:
1. State Pension: despite having made pension contributions for more than 38 years without a break, my state pension forecast is still saying that I need to contribute for another 4 years to gain the maximum pension of (currently) £175.20. I think it said the same thing a year ago. I work for the NHS as a senior manager and pay the usual tax/NI every month so the lack of progress is worrying with just 6 years until my intended retirement age of 60. Could it be because I am contracted out of SERPS within my NHS pension scheme? If so, is there anything I could/should do about this?
2. I have had a 'frozen' NatWest pension since leaving them 17 years ago. I check the pension updates every year and see that the fund is actually reducing or at best staying still every year? Is that right when I am reading on here that others have pension pots growing at great rates. I thought that Bank pensions were highly thought of but mine looks dismal after 19 years of service contributions. Should I consider moving my fund away from NatWest - noting my intention to withdraw maximum cash for retirement in only 6 years' time?
Hope you can help as all of the messages on here indicating huge growth in pensions is leaving me more than a little concerned that my funds are not 'performing' as they might be.
Cheers
You can get a year by year breakdown of your NI record on the HMRC site. This might tell you the reason why the are saying you still need another 4 years. I don't think its because you have been in contracted out schemes as that usually takes care of itself by the amount you get at retirement ......which might not be the standard pension figures for the new State Pension. I would imagine yours will be around £30 pw less because of this.
Ok, just re-checked the HMRC website regarding my state pension query. On my National insurance record, it says "You have 38 years of full contributions" and "13 years to contribute before 5 April 2033" and "You do not have any gaps in your record". On that basis, I can't understand why it also says "You need to contribute for 4 more years" to achieve the maximum state pension of £175.20 per week.
Do I need to phone HMRC to query it then?
Ok here's the update: I called HMRC (03002003300) to query my NI/State Pension position. They put me through to the 'Contracted Out Pensions' department who told me that I have been contracted out of SERPS for the 19 years I worked for NatWest and 13 of the 16 full years I have worked for the NHS. In other words, I have only been in SERPS for 3 full years so far! Despite that, my NI records show 38 'full years' of contributions. They seemed surprised that my NI contribution was saying 38 years but stopped short of actually expressing surprise and said I need to contact the DWP Future Pensions Centre on 0800 731 0175 who, they said, would be able to explain where I stand. That department is not accepting any non-urgent queries during the current pandemic period.
Given that I have been contracted-out for so long, I guess it may well explain why I still have 4 years of contribution still to make although it is rather misleading to state that I have made 38 'Full' years of NI contribution if, as it seems, the reduced sums I have been paying do not really represent 'full' contributions due to my contracted-out status.
In theory, the count of '4' should reduce to '3' this time next year. If so, then I guess I will be ok to achieve a full state pension as I plan to work for 5 more years until I reach age 60. If it doesn't reduce, then I will need to query this further with HMRC/DWP FPC to ensure that their records are accurate AND to consider whether or not I should do anything in my final years of working to maximise my pension income.
At least, having made some enquiries, I know my contracted-out position now and how that, clearly, has impacted on my state pension 'pot'. Thanks to Golfie, Bob, Rob and others for the feedback and words of wisdom. It sounds like my situation, experience and queries may be relevant to many others too.
I think there are 2 issues at stake here. Firstly the amount of years you need to qualify for the "full" state pension. Anyone starting work now that is 35 years. For many of us on here we will do 40+ but will really only need 35 years.
However.......the 2nd issue is being contracted out or contracted in. If you are or have been contracted out for a number of years HMRC will deduct an amount from your State pension at retirement equivalent to the reduced NI that you have been paying during your contracted out years. I don't expect this figure is taken into account or even calculated until you retire.
So my assumption us that "the computer" will assess hiw'many years you need to "qualify" for the State pension, although this might not mean that you will actually receive the "full" £185 pw when you hit state pension age.
I have seen a few state pension forecasts & a few actual figures when a person hits state pension age. Those that have been contracted out (NHS pension) show a deduction of around £35 pw when they get their first statement from HMRC, even though forecasts have said that they have qualified for the full state pension.
I see that Zynex will be hosting their 3Q results this evening at 20:15 EST, so I suspect that Thomas may not catch the end of the game! Given the missed expectations in 2Q, its an important update.
Please can someone 'ITK' (Golfie?) answer the following questions for me:
1. State Pension: despite having made pension contributions for more than 38 years without a break, my state pension forecast is still saying that I need to contribute for another 4 years to gain the maximum pension of (currently) £175.20. I think it said the same thing a year ago. I work for the NHS as a senior manager and pay the usual tax/NI every month so the lack of progress is worrying with just 6 years until my intended retirement age of 60. Could it be because I am contracted out of SERPS within my NHS pension scheme? If so, is there anything I could/should do about this?
2. I have had a 'frozen' NatWest pension since leaving them 17 years ago. I check the pension updates every year and see that the fund is actually reducing or at best staying still every year? Is that right when I am reading on here that others have pension pots growing at great rates. I thought that Bank pensions were highly thought of but mine looks dismal after 19 years of service contributions. Should I consider moving my fund away from NatWest - noting my intention to withdraw maximum cash for retirement in only 6 years' time?
Hope you can help as all of the messages on here indicating huge growth in pensions is leaving me more than a little concerned that my funds are not 'performing' as they might be.
Cheers
You can get a year by year breakdown of your NI record on the HMRC site. This might tell you the reason why the are saying you still need another 4 years. I don't think its because you have been in contracted out schemes as that usually takes care of itself by the amount you get at retirement ......which might not be the standard pension figures for the new State Pension. I would imagine yours will be around £30 pw less because of this.
Ok, just re-checked the HMRC website regarding my state pension query. On my National insurance record, it says "You have 38 years of full contributions" and "13 years to contribute before 5 April 2033" and "You do not have any gaps in your record". On that basis, I can't understand why it also says "You need to contribute for 4 more years" to achieve the maximum state pension of £175.20 per week.
Do I need to phone HMRC to query it then?
Ok here's the update: I called HMRC (03002003300) to query my NI/State Pension position. They put me through to the 'Contracted Out Pensions' department who told me that I have been contracted out of SERPS for the 19 years I worked for NatWest and 13 of the 16 full years I have worked for the NHS. In other words, I have only been in SERPS for 3 full years so far! Despite that, my NI records show 38 'full years' of contributions. They seemed surprised that my NI contribution was saying 38 years but stopped short of actually expressing surprise and said I need to contact the DWP Future Pensions Centre on 0800 731 0175 who, they said, would be able to explain where I stand. That department is not accepting any non-urgent queries during the current pandemic period.
Given that I have been contracted-out for so long, I guess it may well explain why I still have 4 years of contribution still to make although it is rather misleading to state that I have made 38 'Full' years of NI contribution if, as it seems, the reduced sums I have been paying do not really represent 'full' contributions due to my contracted-out status.
In theory, the count of '4' should reduce to '3' this time next year. If so, then I guess I will be ok to achieve a full state pension as I plan to work for 5 more years until I reach age 60. If it doesn't reduce, then I will need to query this further with HMRC/DWP FPC to ensure that their records are accurate AND to consider whether or not I should do anything in my final years of working to maximise my pension income.
At least, having made some enquiries, I know my contracted-out position now and how that, clearly, has impacted on my state pension 'pot'. Thanks to Golfie, Bob, Rob and others for the feedback and words of wisdom. It sounds like my situation, experience and queries may be relevant to many others too.
Ok here's the update: I called HMRC (03002003300) to query my NI/State Pension position. They put me through to the 'Contracted Out Pensions' department who told me that I have been contracted out of SERPS for the 19 years I worked for NatWest and 13 of the 16 full years I have worked for the NHS. In other words, I have only been in SERPS for 3 full years so far! Despite that, my NI records show 38 'full years' of contributions. They seemed surprised that my NI contribution was saying 38 years but stopped short of actually expressing surprise and said I need to contact the DWP Future Pensions Centre on 0800 731 0175 who, they said, would be able to explain where I stand. That department is not accepting any non-urgent queries during the current pandemic period.
Given that I have been contracted-out for so long, I guess it may well explain why I still have 4 years of contribution still to make although it is rather misleading to state that I have made 38 'Full' years of NI contribution if, as it seems, the reduced sums I have been paying do not really represent 'full' contributions due to my contracted-out status.
In theory, the count of '4' should reduce to '3' this time next year. If so, then I guess I will be ok to achieve a full state pension as I plan to work for 5 more years until I reach age 60. If it doesn't reduce, then I will need to query this further with HMRC/DWP FPC to ensure that their records are accurate AND to consider whether or not I should do anything in my final years of working to maximise my pension income.
At least, having made some enquiries, I know my contracted-out position now and how that, clearly, has impacted on my state pension 'pot'. Thanks to Golfie, Bob, Rob and others for the feedback and words of wisdom. It sounds like my situation, experience and queries may be relevant to many others too.
As said before, I worked for Lloyds Bank at the start of my career and was contracted out. Lloyds started paying part of my pension early due to my having to stop work early due to ill health. Lloyds cannot though start paying the contracted out part of my pension until I am 66, ie normal retirement age.
My NI chart received showed I had done sufficient years for a full pension, less an amount for when I was contracted out. I think it showed I have 4 years contributions to make but I am not sure that if I make them my pension will increase. I seem to recall this is what HMRC told me. I could be wrong but be careful. The Government could still of course change the rules again!
Stock markets looking like a potential blood bath to me. Going to profit take a bit more than I did last week (luckily enough) as the US lack of stimulus package, alongside election aswell as European lockdown measures will ruin the gains from past few months.
Stock markets looking like a potential blood bath to me. Going to profit take a bit more than I did last week (luckily enough) as the US lack of stimulus package, alongside election aswell as European lockdown measures will ruin the gains from past few months.
Yes, this week has seen most markets fall by 6% -7%. Not sure where it will end, but if you hold your nerve then things will look better soon.
Comments
£1k will have earnt £180k, but that's through graphical and wishful post-event analysis.
I have a client who is looking to take her pension early as she is needing to give up work to care for her mother. Just turned 56 and has a number of pensions, some DB & some DC. She is an only child so care has fallen onto her. She is single & has no children herself. Long & short of it is that her DB schemes at 60 would give her approx £18k pa (plus a small lump sum) & her DC schemes are worth c£320k. Not great sums but taking the tax-free lump sum from her DC scheme would mean she could pay her mortgage off & have enough to live on for a couple of years before looking at taking any more money.
Just getting updated info on the DB scheme & 1 in particular has made me think......and change my advice if I was in her shoes. Last time she got figures for this pension scheme they were giving her £1250pa for life.....and the transfer value was £51k. Now they are saying they would pay her £1750pa.......and the transfer value is now £104k.
So, should she exchange a guaranteed £1750pa (if she takes it at 60 more likely to be £1850 pa) index linked (max 10% paperwork shows but currently at CPi) for £104k that could go into her DC scheme ? She could take a lump sum of £8k & a reduced pension £1500 pa - but she could take £26k lump sum in a DC scheme. Question the FCA would ask is - how long would the £104k last & would want comparison figures with CPI increases built in. Am I mad in thinking that even if she took £26k as a tax free lump sum the remaining £78k would last long enough to give her £1500 pa for life. In simple terms she would have to live another 50 years before it ran out. Factor in inflation probably more like 30 years.
Going against her (or should I say, the cons would outweigh the pro's according to the FCA) is that she can't say that she wants to be able to leave the fund to a spouse or children, rather than the pension dying with her.
Then there is the cost of advice. Contingent charging has now been banned, so I can't say that the cost of the advice would only be paid should she transfer the pension. A fee would have to charged no matter what the specialised report said she should do. This fee would be a minimum of £3k......more likely £4k but 5k tops.
I had no thought of even talking to her about transferring any of her DB schemes.......always said that they would be the basic, guaranteed element of her retirement & her DC would be the flexible part. 1 of her other DB schemes is the NHS Pension Scheme so cant be transferred no matter what - this will give her around £8k pa at age 60.
But surely, £104k against an income for life of £1850 pa is just a no brainer......or am I just a greedy pension salesman ??
Even if she increased the withdrawal amount by 3% per annum it's last until she is 90 assuming the fund didn't grow,
So as I started, I agree, it's a no brainer.....
A major factor for me would be how comfortable she is managing her own money versus the relative safety of the annuity guarantee. For me it would be a no-brainer, take the money but I'm not her.
Second the attendance allowance - that's exactly what it's there for, situations like this.
My DB bank scheme closed some time ago, leaving me with 24 years on that and then the last 11 years on our DC scheme. A number of my colleagues, all married with kids, have withdrawn theirs over the last few years. My position is different, not being married, and I would begrudge seeing my pension going back to the bank when I pass. Likelihood is that I will also withdraw my pension and invest to allow me to leave in my will to family. With the current transfer values being offered it would probably be daft not to. Some serious thinking to do over the next few months.
Im starting to think buy2let is not such a good option now . Any advice be greatful. Cheers
You might want to look at owning within a company, you can offset fully the interest costs and other expenses, potentially take out £2k per annum tax free as a dividend (assuming you get no other dividends) - you could have your spouse/partner as a shareholder and they too can take out dividends.
It's not a simple answer without knowing fully your circumstances. And thats before the potential tenant headaches!
Happy to answer any questions, message me if easier.
Your post is much more clear the my accountant who i know likes to talk clever to confuse me ( not hard )
Thanks again
1. £60k deposit, of which you are using £10k savings and £50k borrowed against your own home,
2. £180k BTL mortgage plus the other £50k.
You need a rethink, this will likely cost you money each year;
For arguments sake lets assume the average interest rate across the 2 mortgages is 3% (and that they are interest only), you can flex these numbers as you wish;
Assume Net Rental received PA £10k (after all allowable costs except mortgage Interest)
Interest Charge £6,900 (£230k @ 3%)
Tax payable on £10k = £4k (@40%)
Allowable tax relief @ 20% = £1,380
Tax therefore Payable £2,620
Interest Payable £6,900
You'll make a profit of around £480 per annum!
You can improve that if held in a company as you could fully offset the £6,900 against the £10k rent, also by the time you add other allowances you will almost certainly pay zero tax. If you are going to do it, speak to your accountant, set up an SPV and use all the possible allowances and it'll look a little better but still tight (you may need to do your own accounts!).
That said, for me, the numbers don't stack, we haven't even got into repairs, maintenance etc etc, the only way it works is if you are expecting a huge gain on the house purchase price, which I wouldn't! It's going to cost you over £10k to buy it (Stamp, fee's etc).
PS, if in one post I gave you more advice than your accountant, i'd be looking at changing your accountant!
Most mortgage lenders will not lend if the tenant is a relative. Can't remember how far down the line it goes but certainly children, parents, grandparents & siblings would be on the list.
I would be more confident if i wasnt borrowing extra on my house. Dont think i can take the risk .
Some become accidental landlords through inheritance or when couples get together who both had their own homes previously, but generally those have decent equity or full equity so the risk is lessened. You were in effect going to have zero equity after costs to purchase.
For every 10 successful BTL landlord's there are a few failures. My wife's friend moved to America with her husbands job, they rented out their house in the UK. 18 months on, having received I think only one months rent and then costs to get the tenant out in excess of £10k they got their house back and a further £10k to repair the damage caused, cost them in total probably £30k+ (all the time still having to pay the mortgage).
Ok here's the update: I called HMRC (03002003300) to query my NI/State Pension position. They put me through to the 'Contracted Out Pensions' department who told me that I have been contracted out of SERPS for the 19 years I worked for NatWest and 13 of the 16 full years I have worked for the NHS. In other words, I have only been in SERPS for 3 full years so far! Despite that, my NI records show 38 'full years' of contributions. They seemed surprised that my NI contribution was saying 38 years but stopped short of actually expressing surprise and said I need to contact the DWP Future Pensions Centre on 0800 731 0175 who, they said, would be able to explain where I stand. That department is not accepting any non-urgent queries during the current pandemic period.
Given that I have been contracted-out for so long, I guess it may well explain why I still have 4 years of contribution still to make although it is rather misleading to state that I have made 38 'Full' years of NI contribution if, as it seems, the reduced sums I have been paying do not really represent 'full' contributions due to my contracted-out status.
In theory, the count of '4' should reduce to '3' this time next year. If so, then I guess I will be ok to achieve a full state pension as I plan to work for 5 more years until I reach age 60. If it doesn't reduce, then I will need to query this further with HMRC/DWP FPC to ensure that their records are accurate AND to consider whether or not I should do anything in my final years of working to maximise my pension income.
At least, having made some enquiries, I know my contracted-out position now and how that, clearly, has impacted on my state pension 'pot'. Thanks to Golfie, Bob, Rob and others for the feedback and words of wisdom. It sounds like my situation, experience and queries may be relevant to many others too.
However.......the 2nd issue is being contracted out or contracted in. If you are or have been contracted out for a number of years HMRC will deduct an amount from your State pension at retirement equivalent to the reduced NI that you have been paying during your contracted out years. I don't expect this figure is taken into account or even calculated until you retire.
So my assumption us that "the computer" will assess hiw'many years you need to "qualify" for the State pension, although this might not mean that you will actually receive the "full" £185 pw when you hit state pension age.
I have seen a few state pension forecasts & a few actual figures when a person hits state pension age. Those that have been contracted out (NHS pension) show a deduction of around £35 pw when they get their first statement from HMRC, even though forecasts have said that they have qualified for the full state pension.