Savings and Investments thread

Jon_CAFC_ said:

golfaddick said:

Arthur_Trudgill said:

Huskaris said:

mendonca said:

Are you thinking of BTL as an additional investment after using your £20k ISA allowance, or instead? 

It would be taking the cash out of ISAs and going down that route instead. 

In answer to @golfaddick's question, not really interested in an income, would probably just use the cash to buy more BTLs. I've watched lots of the bad tenant programmes!!!

The aim would be capital growth in the long term, I understand it's all illiquid, but illiquid assets should come with a premium as a consequence. 

And thanks @Rob7Lee I think you've probably all managed to talk me out of it. 

Probably one for consideration once all other tax efficient schemes have been rinsed through, and definitely not worth pulling cash out of an ISA to do this with. 

Annoyingly I've also seen that the entire rental income counts as contributing to your income, meaning I would step over into the dreaded 60% marginal tax bracket. 

I wouldn't rule out buy-to-let, as it diversifies your investments, but I wouldn't do it by taking money from my ISA.

Someone mentioned charging fair rent. Your tenants, if chosen well, will appreciate it. This is my experience anyway. But I agree one bad tenant could wipe out months of income. Ask for a good deposit that covers at least six weeks, ideally three months worth of rent, as it may take you that long to kick them out.

If you like DIY and know good trades people for stuff you can't do, it's a big advantage.

I wouldn't start with three houses, buy only one to test it out. I would buy somewhere I would like to live myself, rather than second guess what tenants would like, but that's just my preference.

Finally, at some point you could sell your main residence tax free, move to your rental property, note the capital appreciation at that point, and take the leverage from then on. 

I hope you're not a landlord as your "advice" breaches a couple of laws for starters.

You cant take 3 months rent upfront as a deposit - I think the max is 5 or 6 weeks. And it then has to go into a recognised Deposit Scheme which is controlled when & how it is returned to the tenant upon leaving. And you cant "kick them out" - you have to apply for a Section 21 if they dont leave when asked & that might take 6 months before it goes before the Court. The only legal way a tenant has to move out is by a baliff. 

And you cant move into your rental property & start the Residential Nil Rate band from that point. Upon selling a property that has been rented out a calculation is made based on the number of months it has been rented to the number of months you've lived there, minus the last 9 months. 

Relative lived in uk, but Irish roots and his investments included share holdings in bank of Ireland priced in euros. But UK for tax purposes.

Rob - solicitors keep saying it’s a complex case and to wait - distributions have been in dribs and drabs over the five years to myself and two other recipients- have never been able to get clear picture of what’s left to distribute or a realistic timeline to conclude 

since of course August 2019 when distributions there’s been numerous market impacts potentially impacting share price - although seemingly learned from here that share prices would have been value as at date of probate 

Unsure where to go next - executor isn’t approachable, solicitors seem indifferent, had perhaps thought would all been done and dusted by now 

Southendaddick said:

I’ve watched this thread with interest but also with trepidation 

I’ve done pretty well money wise through the job the last couple of years but genuinely I wouldn’t have a clue how to invest properly or do  a proper tax return (other than p60)

Lots of really good advice but im a safe investor would love some advice as to how to possibly be a bit more risk taking 

Do people get accountant to do a tax return?

Who are the best financial advisers?

Southendaddick said:

I’ve watched this thread with interest but also with trepidation 

I’ve done pretty well money wise through the job the last couple of years but genuinely I wouldn’t have a clue how to invest properly or do  a proper tax return (other than p60)

Lots of really good advice but im a safe investor would love some advice as to how to possibly be a bit more risk taking 

Do people get accountant to do a tax return?

Who are the best financial advisers?

Covered End said:

I don’t pay tax on any of my savings either.
Tax free, not subject to tax (PSBs) or in wife’s name who has no income so can earn £6K pa in interest tax free.

bobmunro said:

Would welcome opinions, please.

My wife and I have both got fixed rate bonds maturing in a week's time (they were at 5.3%!) - have been offered 4.5% by the same provider to fix again for 2 or 3 years, and we are thinking of rolling over one of each, just banking the interest earned. We've got others that mature in 12 months time so it will give us a nice 1,2,3 roll.

I've said before that based on our ages I won't take any undue risk and ISAs are maxed every year so it won't impact on that. Based on this, would you see it as sensible to fix for 2 and 3 years at 4.5% based on expectations of likely interest movements, or would you fix for a shorter period?

Southendaddick said:

Thanks for the advice

I have done my own tax return for the last few years but have literally just used the numbers from my P60

I was thinking about things like tax on savings dividends etc which are one of the questions on the form and I’ve never put anything in for that

As for my comment on higher risk strategy I have various stocks and shares ISA’s via Hargreaves Lansdown but am in a position to possibly do higher risk investments for a hopefully better return just don’t know what sectors to invest in

Im also unsure of tax implications on my pension as I’m sure I’m now paying enough into one via work pension that’s probably costing me and does that need to go on the tax return

Time to get some proper professional advice i think 

Covered End said:

bobmunro said:

Would welcome opinions, please.

My wife and I have both got fixed rate bonds maturing in a week's time (they were at 5.3%!) - have been offered 4.5% by the same provider to fix again for 2 or 3 years, and we are thinking of rolling over one of each, just banking the interest earned. We've got others that mature in 12 months time so it will give us a nice 1,2,3 roll.

I've said before that based on our ages I won't take any undue risk and ISAs are maxed every year so it won't impact on that. Based on this, would you see it as sensible to fix for 2 and 3 years at 4.5% based on expectations of likely interest movements, or would you fix for a shorter period?

It’s a coin toss quite frankly, because rates could go any which way.

Covered End said:

golfaddick said:

Covered End said:

bobmunro said:

Would welcome opinions, please.

My wife and I have both got fixed rate bonds maturing in a week's time (they were at 5.3%!) - have been offered 4.5% by the same provider to fix again for 2 or 3 years, and we are thinking of rolling over one of each, just banking the interest earned. We've got others that mature in 12 months time so it will give us a nice 1,2,3 roll.

I've said before that based on our ages I won't take any undue risk and ISAs are maxed every year so it won't impact on that. Based on this, would you see it as sensible to fix for 2 and 3 years at 4.5% based on expectations of likely interest movements, or would you fix for a shorter period?

It’s a coin toss quite frankly, because rates could go any which way.

Even though inflation had nudged up recently,  interest rates are only coming down. 3 out of the 9 BOE rare setters voted for a 0.25% cut today and more will vote for cuts next year. The markets are expecting 4 x 0.25% reductions next year and the Fed have said they will be doing 2 next year themselves (after cutting rates yesterday).

Take the 4.5% & run. You'll be thankful in 2 & 3 years time.  

I agree that that is the most likely outcome, but it doesn't mean that will happen.
It was only 18 months ago when everyone thought rates had peaked at 4.25% and people were locking in for 1,2,3 years and got caught out as inflation stayed high and rates kept increasing to 5.25%.

My reason for saying they could go either way is, as you say, inflation went up this month and with plenty of companies needing to pass on NI hikes, I think it's feasible inflation could continue to rise, thanks to the budget. If inflation keeps going up it's possible that rates could go up again.

Covered End said:

golfaddick said:

Covered End said:

bobmunro said:

Would welcome opinions, please.

My wife and I have both got fixed rate bonds maturing in a week's time (they were at 5.3%!) - have been offered 4.5% by the same provider to fix again for 2 or 3 years, and we are thinking of rolling over one of each, just banking the interest earned. We've got others that mature in 12 months time so it will give us a nice 1,2,3 roll.

I've said before that based on our ages I won't take any undue risk and ISAs are maxed every year so it won't impact on that. Based on this, would you see it as sensible to fix for 2 and 3 years at 4.5% based on expectations of likely interest movements, or would you fix for a shorter period?

It’s a coin toss quite frankly, because rates could go any which way.

Even though inflation had nudged up recently,  interest rates are only coming down. 3 out of the 9 BOE rare setters voted for a 0.25% cut today and more will vote for cuts next year. The markets are expecting 4 x 0.25% reductions next year and the Fed have said they will be doing 2 next year themselves (after cutting rates yesterday).

Take the 4.5% & run. You'll be thankful in 2 & 3 years time.  

I agree that that is the most likely outcome, but it doesn't mean that will happen.
It was only 18 months ago when everyone thought rates had peaked at 4.25% and people were locking in for 1,2,3 years and got caught out as inflation stayed high and rates kept increasing to 5.25%.

My reason for saying they could go either way is, as you say, inflation went up this month and with plenty of companies needing to pass on NI hikes, I think it's feasible inflation could continue to rise, thanks to the budget. If inflation keeps going up it's possible that rates could go up again.