Savings and Investments thread

addickson said:

I’d appreciate some advice please. I’ve got several small pension plans. Got a statement for one today saying that its current value is 115k. The future premiums will add up to 20k over the next 7 years until I reach 65, but they state that the estimated value will then be 70k, i.e. they’ll lose my future premiums and 45k in value in next 7 years! What am I missing here?

You must be reading this wrong. Why would anybody forecast losing the sums you have mentioned. I’d get a mate with some financial knowledge to take a read. There has to be a reasonable explanation. 

addickson said:

I’d appreciate some advice please. I’ve got several small pension plans. Got a statement for one today saying that its current value is 115k. The future premiums will add up to 20k over the next 7 years until I reach 65, but they state that the estimated value will then be 70k, i.e. they’ll lose my future premiums and 45k in value in next 7 years! What am I missing here?

CafcWest said:

blackpool72 said:

I currently have 15k sitting in a Barclays account earning zilch.

Any advice where it can earn a bit of interest without risk 
Ta. 

@Blackpool72 Open a Chase Account (if you have a smart phone).  Their saver is paying 1.5%.  Their current is paying 1% cashback on most everyday purchases (there are exceptions).

Cheers. 
Will look into it.

golfaddick said:

addickson said:

Thanks for the replies! The bulk of it seems to be invested in the Sun Life of Canada managed 2 account A102A and that seems to show general growth but with some ups and downs. I’ll give them a call.

I was wondering though, if pension plans are generally tailored to the length of the payment period?  I had an endowment mortgage over a 25 year period and it was always forecasted for a shortfall but in the last 3 years it came good, would a pension plan be like that or is it just luck?

You really need to take advice.

A pension (assuming its not invested in a with profits fund) will not alter greatly at the end. The shortfall you had on your endowment was probably made up at the end with a terminal bonus (if with profits) but without the full details no-one can comment.

Your pension statement might be forecasting on a low growth rate if the fund invests in a lot of bonds or cash. Then combined with future inflation it might come out as a negative, but I've never seen a pension statement showing that much of a drop. 

By all means DM me with a copy if the statement and I'll see if I can help. 

Thanks @golfaddick , contacted them and the customer service guy said it was an obvious mistake and they would send out a new statement. Doesn’t give me much confidence though!  Interesting about the terminal bonus on the endowment and that makes sense. Thanks all for your help, this forum is great 👍 

kentaddick said:

seriously considering putting everything into cash now i think we've come to the end of the rally. What say the hivemind?

I read that Michael Burry (he of the Big Short) has sold his entire portfolio apart from just 1 stock. He feels that a crash is just around the corner. He wasn't wrong in 2008/09 although he was a few months premature if the film is to be believed. 

Looking to buy a holiday home in Spain, Portugal or France as an investment. Does anyone here have any tips on good agents to use? 

kentaddick said:

seriously considering putting everything into cash now i think we've come to the end of the rally. What say the hivemind?

It is tempting, when I look at my pension that I transferred in late June;

June down just under £6k
July up just over £31k
August to date up just under £19k

So cumulatively up around £45k

kentaddick said:

golfaddick said:

jamescafc said:

Looking to buy a holiday home in Spain, Portugal or France as an investment. Does anyone here have any tips on good agents to use? 

Sorry, no knowledge or tips on agents etc but interested in hearing why do you feel it's a good investment to buy property abroad ?  

Have you already maxed out your Pension & your ISA's. Do you already live abroad or in one of those countries ? If not, what do you know about the tax on income & capital gains both in that country & in the UK (if you are a UK tax payer)

In Spain if you spend 500k on a property you basically get the right to live and travel in Schengen. For some that in itself is worth it  

golfaddick said:

jamescafc said:

Looking to buy a holiday home in Spain, Portugal or France as an investment. Does anyone here have any tips on good agents to use? 

Sorry, no knowledge or tips on agents etc but interested in hearing why do you feel it's a good investment to buy property abroad ?  

Have you already maxed out your Pension & your ISA's. Do you already live abroad or in one of those countries ? If not, what do you know about the tax on income & capital gains both in that country & in the UK (if you are a UK tax payer)

Few things for us:

- Live and work in Asia. Plan to retire in Spain or Portugal. Possibly France but unlikely. 

Referring to the notion that there may be a big crash Id like peoples thoughts on the following .......

If ( as is so ) my pension is all tied up in one place. ie Being invested on my behalf in a SIPP fund. And if my strategy is to be in it for the very long haul i.e. until I pop my mortal clogs. What point is there me getting agitated about the highs and lows of the market. Unless I or someone I trust is going to very actively move money from investments to cash at the correct time ( I know I am not going to do that) then surely I just have to trust those who manage my portfolio to get it right over the long term. 

The firm I use have averaged net 10% annual growth after fees over the last 25 years so I cant see dropping in and out of the market will really help. 

Any wiser heads want to comment 

I'm not a wiser head, but I'd say your conclusion is the right one. If you have a good time to go before retirement then leave it. When you say 'out of the market' I assume you mean selling equities/funds for either bonds or  cash on deposit. With inflation where it is, thats a pretty good way of guaranteeing a real-terms loss, and how do you know when its a good time to get back in? Trying to time the markets is an impossible task. I'd ride out any bumps - look to long term returns as you have done and sit tight. As you say, your firm has averaged 10% and i bet they've had some bad years as well as some good ones. Sounds to me that they have an idea what they are doing.

holyjo said:

Referring to the notion that there may be a big crash Id like peoples thoughts on the following .......

If ( as is so ) my pension is all tied up in one place. ie Being invested on my behalf in a SIPP fund. And if my strategy is to be in it for the very long haul i.e. until I pop my mortal clogs. What point is there me getting agitated about the highs and lows of the market. Unless I or someone I trust is going to very actively move money from investments to cash at the correct time ( I know I am not going to do that) then surely I just have to trust those who manage my portfolio to get it right over the long term. 

The firm I use have averaged net 10% annual growth after fees over the last 25 years so I cant see dropping in and out of the market will really help. 

Any wiser heads want to comment 

Assuming you don't wish to start drawing anytime soon and are still contributing then yes probably best to just leave it.

I'll try to dig out the graph that shows all the predictions of crashes since 2009 as it's illuminating.  

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.

I personally think ending cheap money is a good thing, albeit that it's been so long coming it could be very painful unless done very slowly.  But cheap money is behind many of the evils in our modern world, including unaffordable house prices, piss-poor pension income, and massive misallocation of capital to low-risk, unproductive uses, such as share buy-backs, management share options and leveraged asset stripping of utilities.  

If I were to guess, central banks will lose their nerve, not least because none of them have really ever had their so-called independence tested.  But I think they will start out with the right intentions, so it's worth having a bit of cash on the sidelines to pick up bargains.  

But I wouldn't sell everything - the supply chain will get fixed and commodity prices will fall, China has a Covid climb-down option in October, even the Ukraine war might come to some conclusion.   All that will be priced forward by markets: as a friend recently pointed out, the lowest day in the market during the pandemic was the day that the government announced the FIRST lockdown.  Things got much worse after that but the market never went lower.

Rob7Lee said:

jamescafc said:

Looking to buy a holiday home in Spain, Portugal or France as an investment. Does anyone here have any tips on good agents to use? 

Personally having seen many people buy (predominantly in Spain but also Portugal) they've not been great investments, most have lost money.

One of my mates just bought a beautiful place in Spain, off out there in early September, can ask him who he used, but it was £1.5m and not so much a financial investment but a holiday home that he's renting out to try and cover as many costs as possible, but still unlikely to make any money in the short or long term.

kentaddick said:

golfaddick said:

jamescafc said:

Looking to buy a holiday home in Spain, Portugal or France as an investment. Does anyone here have any tips on good agents to use? 

Sorry, no knowledge or tips on agents etc but interested in hearing why do you feel it's a good investment to buy property abroad ?  

Have you already maxed out your Pension & your ISA's. Do you already live abroad or in one of those countries ? If not, what do you know about the tax on income & capital gains both in that country & in the UK (if you are a UK tax payer)

In Spain if you spend 500k on a property you basically get the right to live and travel in Schengen. For some that in itself is worth it  

Thats not entirely correct, although it gives you unrestricted access to Spain as long as you spend one day there a year, any other Schengen country you are still restricted to the 90 in 180 days.

That's not right AFAIK. The Golden visa allows you to stay as much as you want,  but if you stay over 182 days in any year then you must become a tax resident and pay taxes in Spain on all your worldwide earnings.

Important to note that with the Spanish Golden visa if you wish to obtain it via a property purchase > €500k that property must be in the name of the person applying not joint ownership (not sure what happens when it's €1 million plus). Once granted the person who applies for the visa can bring family members with them though. 

Also remember that you are likely to pay around another 10% on top of purchase price in taxes and fees. 

Edit: just reread you post and I realised I misread it so you may be right.  I'll check.

Yep,  you're correct,  apologies.  I didn't realise the 90 in 180 days you were referring to was in the Schengen zone and not just Spain itself. What I wrote above applies to Spain only. 

Rob7Lee said:

jamescafc said:

Looking to buy a holiday home in Spain, Portugal or France as an investment. Does anyone here have any tips on good agents to use? 

Personally having seen many people buy (predominantly in Spain but also Portugal) they've not been great investments, most have lost money.

One of my mates just bought a beautiful place in Spain, off out there in early September, can ask him who he used, but it was £1.5m and not so much a financial investment but a holiday home that he's renting out to try and cover as many costs as possible, but still unlikely to make any money in the short or long term.

kentaddick said:

golfaddick said:

jamescafc said:

Looking to buy a holiday home in Spain, Portugal or France as an investment. Does anyone here have any tips on good agents to use? 

Sorry, no knowledge or tips on agents etc but interested in hearing why do you feel it's a good investment to buy property abroad ?  

Have you already maxed out your Pension & your ISA's. Do you already live abroad or in one of those countries ? If not, what do you know about the tax on income & capital gains both in that country & in the UK (if you are a UK tax payer)

In Spain if you spend 500k on a property you basically get the right to live and travel in Schengen. For some that in itself is worth it  

Thats not entirely correct, although it gives you unrestricted access to Spain as long as you spend one day there a year, any other Schengen country you are still restricted to the 90 in 180 days.