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Savings and Investments thread
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Nothing for me, but I've reduced my holding to £5k - £150 for the missus on max.0
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Zero on £20k0
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So here is what I have learnt (or think I have) last night about the new IHT rules as they affect those of us who live, or decide to live abroad.
First the good news: the test for whether we were subject to IHT was whether HMRC deemed us to be still "domiciled" in the UK. This concept was a disgrace because it was not something defined in law or anywhere else, it was whatever HMRC thought it could get away with. See the Richard Burton case. But maybe don't bother because this Government has quietly done away with it. The test is now based on whether you are resident in the UK. Hats off to them for this return to rationality.
Ah, but wait...whereas previously if HMRC couldn't do a Burton on you, you escaped the IHT grip, now they have brought some grip back. If you are non-resident but still have "UK -situs assets" those assets will be deemed to be IHT-able. And it turns out that "assets" include UK bank savings, and investments in stocks and funds via a UK platform such as H-L or AJ Bell. And there's worse. It seems that from April 2027, personal pension pots, previously exempt, will now be included in the IHT-able net.
The £325k exemption still applies, and I think will apply to the spouse too if they are also UK citizens. But my spouse is not, so anything I hold based in the UK above 325k, HMRC can levy 40% on. So now, I have to focus on actively moving savings investments out of UK banks, and H-L. Not sure how that helps the country, and for sure I won't be happy doing it, because retail banking and investment platforms is a sector where we are best in Europe. One interesting exemption is gilts. They are generally exempt, and I suppose could be a safe alternative to money market funds and high interest savings accounts. But NS&I products are not exempt. I don't know why, if gilts are. Some twat in the Treasury could doubtless tell us...
All thoughts on this admittedly niche topic would be very welcome. Those of you thinking of clearing off certainly need to be aware of these new rules.0 -
The IHT on pensions is a scandal anyway. Why? Because many of us put money into private pensions exactly because they were not included in IHT. After years of saving suddenly pension withdrawals are not only subject to income tax, but also IHT, meaning the tax burden for your children in inherited pensions could be in some cases nearly 80 percent.
Whether or not pensions should be taxed is neither here nor there. It is the fact we were told they would not be that makes it so wicked.
Had I known this would be the case I would have done something else with my money. Probably spent it. Now I know it is going to go to our profligate state I will be moving abroad before April 2027 and taking it with me. Net loss for the state.4 -
I was aware the rules had changed, so yes if I clear off as you put it, you don't want to be leaving more than £325k in the UK (or up to the £1m depending on property, spouse, children etc). I'm OK with that, feels a little unfair to want the benefit of investing in the UK but not the taxation but take your point, if you move it all out now hardly helps the UK.PragueAddick said:So here is what I have learnt (or think I have) last night about the new IHT rules as they affect those of us who live, or decide to live abroad.
First the good news: the test for whether we were subject to IHT was whether HMRC deemed us to be still "domiciled" in the UK. This concept was a disgrace because it was not something defined in law or anywhere else, it was whatever HMRC thought it could get away with. See the Richard Burton case. But maybe don't bother because this Government has quietly done away with it. The test is now based on whether you are resident in the UK. Hats off to them for this return to rationality.
Ah, but wait...whereas previously if HMRC couldn't do a Burton on you, you escaped the IHT grip, now they have brought some grip back. If you are non-resident but still have "UK -situs assets" those assets will be deemed to be IHT-able. And it turns out that "assets" include UK bank savings, and investments in stocks and funds via a UK platform such as H-L or AJ Bell. And there's worse. It seems that from April 2027, personal pension pots, previously exempt, will now be included in the IHT-able net.
The £325k exemption still applies, and I think will apply to the spouse too if they are also UK citizens. But my spouse is not, so anything I hold based in the UK above 325k, HMRC can levy 40% on. So now, I have to focus on actively moving savings investments out of UK banks, and H-L. Not sure how that helps the country, and for sure I won't be happy doing it, because retail banking and investment platforms is a sector where we are best in Europe. One interesting exemption is gilts. They are generally exempt, and I suppose could be a safe alternative to money market funds and high interest savings accounts. But NS&I products are not exempt. I don't know why, if gilts are. Some twat in the Treasury could doubtless tell us...
All thoughts on this admittedly niche topic would be very welcome. Those of you thinking of clearing off certainly need to be aware of these new rules.
I'm not sure why if you left the UK a long time ago you want to still keep investments here? Doesn't that add other complexity/challenges such as exchange rate?
If we're honest it was a massive loop hole. Whilst it annoys me, as I was also using it as part of my IHT planning, it probably is the right thing to do.Southbank said:The IHT on pensions is a scandal anyway. Why? Because many of us put money into private pensions exactly because they were not included in IHT. After years of saving suddenly pension withdrawals are not only subject to income tax, but also IHT, meaning the tax burden for your children in inherited pensions could be in some cases nearly 80 percent.
Whether or not pensions should be taxed is neither here nor there. It is the fact we were told they would not be that makes it so wicked.
Had I known this would be the case I would have done something else with my money. Probably spent it. Now I know it is going to go to our profligate state I will be moving abroad before April 2027 and taking it with me. Net loss for the state.
If you would have spent it, you can still do that now?2 -
£150 on half and £100 for ‘Er indoors’ on similar.0
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@Rob7Lee i have been paying UK income tax on dividend and interest on those investments continuously since I left in 1993 for exactly 30 years. Furthermore 60% of my investment pot is from my only house, which I sold in 2022. I had to pay CGT on it unlike residents who sell their main UK property. I think the tax I have paid while not being there all that time leaves the country in net profit! But my main objection to IHT is that it is a cumbersome tax which puts unfair stress on people who have just suffered a bereavement. Very few other civilised European countries have an IHT like ours, and certainly not at 40%. People are aghast when I tell them about it.I have wanted for some time to reduce my reliance on UK retail finance, and have discussed the options on here a few times. The trouble is, as I said, it is too good compared with what is available to me on the continent. I have not been too bothered by currency fluctuations, because I havent needed to buy anything big ticket locally in the last 10 years, just a car and more recently converting to solar and heat pump.. The current weakness of the dollar was harming my investments significantly which is why I already got shot of a lot of US stuff.I do not understand why there is an exemption for gilts, but not for NS&I bonds. Surely they broadly benefit the country in the same way?0
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I might look into your last point but it might be as simple a fact that Gilts are tradable & are a risk whereas NS&I Bonds are not.PragueAddick said:@Rob7Lee i have been paying UK income tax on dividend and interest on those investments continuously since I left in 1993 for exactly 30 years. Furthermore 60% of my investment pot is from my only house, which I sold in 2022. I had to pay CGT on it unlike residents who sell their main UK property. I think the tax I have paid while not being there all that time leaves the country in net profit! But my main objection to IHT is that it is a cumbersome tax which puts unfair stress on people who have just suffered a bereavement. Very few other civilised European countries have an IHT like ours, and certainly not at 40%. People are aghast when I tell them about it.I have wanted for some time to reduce my reliance on UK retail finance, and have discussed the options on here a few times. The trouble is, as I said, it is too good compared with what is available to me on the continent. I have not been too bothered by currency fluctuations, because I havent needed to buy anything big ticket locally in the last 10 years, just a car and more recently converting to solar and heat pump.. The current weakness of the dollar was harming my investments significantly which is why I already got shot of a lot of US stuff.I do not understand why there is an exemption for gilts, but not for NS&I bonds. Surely they broadly benefit the country in the same way?0 -
I'm with you to a certain extent, don't like IHT as a tax, I think we should tax people through their lives, not upon death.PragueAddick said:@Rob7Lee i have been paying UK income tax on dividend and interest on those investments continuously since I left in 1993 for exactly 30 years. Furthermore 60% of my investment pot is from my only house, which I sold in 2022. I had to pay CGT on it unlike residents who sell their main UK property. I think the tax I have paid while not being there all that time leaves the country in net profit! But my main objection to IHT is that it is a cumbersome tax which puts unfair stress on people who have just suffered a bereavement. Very few other civilised European countries have an IHT like ours, and certainly not at 40%. People are aghast when I tell them about it.I have wanted for some time to reduce my reliance on UK retail finance, and have discussed the options on here a few times. The trouble is, as I said, it is too good compared with what is available to me on the continent. I have not been too bothered by currency fluctuations, because I havent needed to buy anything big ticket locally in the last 10 years, just a car and more recently converting to solar and heat pump.. The current weakness of the dollar was harming my investments significantly which is why I already got shot of a lot of US stuff.I do not understand why there is an exemption for gilts, but not for NS&I bonds. Surely they broadly benefit the country in the same way?
Why did you pay CGT etc, was that because you were still UK tax resident?0 -
Rob7Lee said:
I'm with you to a certain extent, don't like IHT as a tax, I think we should tax people through their lives, not upon death.PragueAddick said:@Rob7Lee i have been paying UK income tax on dividend and interest on those investments continuously since I left in 1993 for exactly 30 years. Furthermore 60% of my investment pot is from my only house, which I sold in 2022. I had to pay CGT on it unlike residents who sell their main UK property. I think the tax I have paid while not being there all that time leaves the country in net profit! But my main objection to IHT is that it is a cumbersome tax which puts unfair stress on people who have just suffered a bereavement. Very few other civilised European countries have an IHT like ours, and certainly not at 40%. People are aghast when I tell them about it.I have wanted for some time to reduce my reliance on UK retail finance, and have discussed the options on here a few times. The trouble is, as I said, it is too good compared with what is available to me on the continent. I have not been too bothered by currency fluctuations, because I havent needed to buy anything big ticket locally in the last 10 years, just a car and more recently converting to solar and heat pump.. The current weakness of the dollar was harming my investments significantly which is why I already got shot of a lot of US stuff.I do not understand why there is an exemption for gilts, but not for NS&I bonds. Surely they broadly benefit the country in the same way?
Why did you pay CGT etc, was that because you were still UK tax resident?For non UK tax residents there is no CGT to pay on for example UK stocks and shares - but CGT on property/land is an exception to that.The lesson there - if moving abroad, make sure you sell your main UK residence before losing UK tax status.3 -
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Best PSB month for ages: £275 for me and £175 for Margaret (Total £450) on 2x max holdings. Annualised, that equates to a (theoretical) 5.4% net return. Of course, the inevitable ‘f@ck all’ next month will blow the theory but let’s wallow in the glory whilst it’s here. Based on other posts on here this month, looks like I’ve done better than the average.3
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Correct of course. Furthermore I had to pay UK income tax on the rental income even though they accepted me as non-resident from around 1996 ( a fact they currently pretend to have forgotten as I try to get a simple confirmation from them so that I can access my SIPP gross of withholding tax.). Again, there is no obvious reason why such an exemption should exist, and the Czechs ( and many other countries) could feel pissed off about that and wonder whether the UK is serious about double taxation treaties). But since it was unavoidable my accountant proposed that we might as well report all UK income such as dividends and interest, which was also subject to withholding tax until fairly recently. So a decent amount of tax paid each year, virtually nothing back in return, and they even tried to take my vote away, only to sheepishly give it back again ( well done, Sunak, you surprised me there). And the irony is that I never said to myself “ I want to leave Britain”, not for tax or any other reason. I left because there was somewhere else where things were happening that excited me and I fancied being part of it. I think that’s an important element of a successful transfer abroad - having a positive motivation to be in the other place, rather than it just having more sunshine or lower taxes. Then again I was much younger then, priorities were different.bobmunro said:Rob7Lee said:
I'm with you to a certain extent, don't like IHT as a tax, I think we should tax people through their lives, not upon death.PragueAddick said:@Rob7Lee i have been paying UK income tax on dividend and interest on those investments continuously since I left in 1993 for exactly 30 years. Furthermore 60% of my investment pot is from my only house, which I sold in 2022. I had to pay CGT on it unlike residents who sell their main UK property. I think the tax I have paid while not being there all that time leaves the country in net profit! But my main objection to IHT is that it is a cumbersome tax which puts unfair stress on people who have just suffered a bereavement. Very few other civilised European countries have an IHT like ours, and certainly not at 40%. People are aghast when I tell them about it.I have wanted for some time to reduce my reliance on UK retail finance, and have discussed the options on here a few times. The trouble is, as I said, it is too good compared with what is available to me on the continent. I have not been too bothered by currency fluctuations, because I havent needed to buy anything big ticket locally in the last 10 years, just a car and more recently converting to solar and heat pump.. The current weakness of the dollar was harming my investments significantly which is why I already got shot of a lot of US stuff.I do not understand why there is an exemption for gilts, but not for NS&I bonds. Surely they broadly benefit the country in the same way?
Why did you pay CGT etc, was that because you were still UK tax resident?For non UK tax residents there is no CGT to pay on for example UK stocks and shares - but CGT on property/land is an exception to that.The lesson there - if moving abroad, make sure you sell your main UK residence before losing UK tax status.
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I'm obviously not sure of your personal circumstances. However do you realise payouts from your pension scheme upon death are totally free of all tax irrespective of beneficiary. Therefore it can be advisable to prepare your "expression of wish form" (or whatever your pension scheme now calls it) to pay the sums (or part of it) to your children rather all to your spouse. The benefit of this is your children get it tax free. If it all goes to your spouse it is likely to come into her IHT calculations upon her death.Southbank said:The IHT on pensions is a scandal anyway. Why? Because many of us put money into private pensions exactly because they were not included in IHT. After years of saving suddenly pension withdrawals are not only subject to income tax, but also IHT, meaning the tax burden for your children in inherited pensions could be in some cases nearly 80 percent.
Whether or not pensions should be taxed is neither here nor there. It is the fact we were told they would not be that makes it so wicked.
Had I known this would be the case I would have done something else with my money. Probably spent it. Now I know it is going to go to our profligate state I will be moving abroad before April 2027 and taking it with me. Net loss for the state.0 -
Not from April 2027. From that date unused pension funds become part of the estate and therefore within the scope of inheritance tax.redman said:
I'm obviously not sure of your personal circumstances. However do you realise payouts from your pension scheme upon death are totally free of all tax irrespective of beneficiary. Therefore it can be advisable to prepare your "expression of wish form" (or whatever your pension scheme now calls it) to pay the sums (or part of it) to your children rather all to your spouse. The benefit of this is your children get it tax free. If it all goes to your spouse it is likely to come into her IHT calculations upon her death.Southbank said:The IHT on pensions is a scandal anyway. Why? Because many of us put money into private pensions exactly because they were not included in IHT. After years of saving suddenly pension withdrawals are not only subject to income tax, but also IHT, meaning the tax burden for your children in inherited pensions could be in some cases nearly 80 percent.
Whether or not pensions should be taxed is neither here nor there. It is the fact we were told they would not be that makes it so wicked.
Had I known this would be the case I would have done something else with my money. Probably spent it. Now I know it is going to go to our profligate state I will be moving abroad before April 2027 and taking it with me. Net loss for the state.
I think also what @Southbank is saying is that in theory after April 2027, if you die over aged 75 and you have enough cash that IHT is due (i.e. 40%) the fund when drawn by the beneficiaries will also attract tax at their marginal rate, which could be 45%, so say a pot is £1m and that is all taxed by IHT leaves £600k to the beneficiary. Then if they draw on that pension they could lose a further 270k leaving £330k of the original £1m. But I believe that income tax can be claimed back against the IHT.
It's why pensions were often the last to be used, now it'll be the first! And I intend to spend mine! (and likely not in the UK!)1 -
Correct. I should have made clear I was talking before April 2027. However you can then change your expression of wish again so that it to your spouse. She can then "gift" more to the children and hope she lives a further 7 years. This assumes you have more than you are likely to spend.Rob7Lee said:
Not from April 2027. From that date unused pension funds become part of the estate and therefore within the scope of inheritance tax.redman said:
I'm obviously not sure of your personal circumstances. However do you realise payouts from your pension scheme upon death are totally free of all tax irrespective of beneficiary. Therefore it can be advisable to prepare your "expression of wish form" (or whatever your pension scheme now calls it) to pay the sums (or part of it) to your children rather all to your spouse. The benefit of this is your children get it tax free. If it all goes to your spouse it is likely to come into her IHT calculations upon her death.Southbank said:The IHT on pensions is a scandal anyway. Why? Because many of us put money into private pensions exactly because they were not included in IHT. After years of saving suddenly pension withdrawals are not only subject to income tax, but also IHT, meaning the tax burden for your children in inherited pensions could be in some cases nearly 80 percent.
Whether or not pensions should be taxed is neither here nor there. It is the fact we were told they would not be that makes it so wicked.
Had I known this would be the case I would have done something else with my money. Probably spent it. Now I know it is going to go to our profligate state I will be moving abroad before April 2027 and taking it with me. Net loss for the state.
I think also what @Southbank is saying is that in theory after April 2027, if you die over aged 75 and you have enough cash that IHT is due (i.e. 40%) the fund when drawn by the beneficiaries will also attract tax at their marginal rate, which could be 45%, so say a pot is £1m and that is all taxed by IHT leaves £600k to the beneficiary. Then if they draw on that pension they could lose a further 270k leaving £330k of the original £1m. But I believe that income tax can be claimed back against the IHT.
It's why pensions were often the last to be used, now it'll be the first! And I intend to spend mine! (and likely not in the UK!)0 -
So, back to markets, and what might happen in the coming year. I highly recommend y’all to give this podcast a listen. It is Michael Burry, of “The Big Short” infamy, talking to Michael Lewis. Two people who know more than I will ever begin to learn about financial bubbles and what and who cause them.
https://www.pushkin.fm/podcasts/against-the-rules/michael-burry-speaks
then some of you at least might join me in suddenly developing an enthusiasm for gilts 😂 ( which I also need to learn more about)
Really, stick this on your headset, it is a great listen. Burry has the knack for framing big issues in a way that mug punters like me can understand.1 -
Burry is unfortunately a grifter. He’s successfully predicted 20 of the last 2 recessions. A perma bear whose company actually folded a couple of months ago because it performed so badly.PragueAddick said:So, back to markets, and what might happen in the coming year. I highly recommend y’all to give this podcast a listen. It is Michael Burry, of “The Big Short” infamy, talking to Michael Lewis. Two people who know more than I will ever begin to learn about financial bubbles and what and who cause them.
https://www.pushkin.fm/podcasts/against-the-rules/michael-burry-speaks
then some of you at least might join me in suddenly developing an enthusiasm for gilts 😂 ( which I also need to learn more about)
Really, stick this on your headset, it is a great listen. Burry has the knack for framing big issues in a way that mug punters like me can understand.0 -
That is not correct. As he discusses in the podcast. Link to my check with Perplexity here.Diebythesword said:
Burry is unfortunately a grifter. He’s successfully predicted 20 of the last 2 recessions. A perma bear whose company actually folded a couple of months ago because it performed so badly.PragueAddick said:So, back to markets, and what might happen in the coming year. I highly recommend y’all to give this podcast a listen. It is Michael Burry, of “The Big Short” infamy, talking to Michael Lewis. Two people who know more than I will ever begin to learn about financial bubbles and what and who cause them.
https://www.pushkin.fm/podcasts/against-the-rules/michael-burry-speaks
then some of you at least might join me in suddenly developing an enthusiasm for gilts 😂 ( which I also need to learn more about)
Really, stick this on your headset, it is a great listen. Burry has the knack for framing big issues in a way that mug punters like me can understand.
Actually if there is one contributor to the thread whose rebuttal of his main points I'd like to hear, it's you.0 -
Sweet FA on the premium bonds this month on £40k.
Need to find £35,000 in cash from my investments. Current thinking is approx £10,000 each from cash ISA, stocks and shares ISA and premium bonds and withdraw the entire £5000 amount from the regular building society savings account.
Also considering taking the £30,000 from the premium bonds but really not sure what the markets are going to do this coming year with uncertainty everywhere.
What would the expert Lifers do?0 -
Bangkokaddick said:Sweet FA on the premium bonds this month on £40k.
Need to find £35,000 in cash from my investments. Current thinking is approx £10,000 each from cash ISA, stocks and shares ISA and premium bonds and withdraw the entire £5000 amount from the regular building society savings account.
Also considering taking the £30,000 from the premium bonds but really not sure what the markets are going to do this coming year with uncertainty everywhere.
What would the expert Lifers do?I would take it from PBs (and the BS account).Yes PB prizes are tax free but you don't lose the ability to put it back at a later date. Taking money out of an ISA when there are other options is to be avoided as you lose the tax-free element of earnings on the bit you take out - and can never get it back!10 -
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This. ISA's should be the last to be touched.bobmunro said:Bangkokaddick said:Sweet FA on the premium bonds this month on £40k.
Need to find £35,000 in cash from my investments. Current thinking is approx £10,000 each from cash ISA, stocks and shares ISA and premium bonds and withdraw the entire £5000 amount from the regular building society savings account.
Also considering taking the £30,000 from the premium bonds but really not sure what the markets are going to do this coming year with uncertainty everywhere.
What would the expert Lifers do?I would take it from PBs (and the BS account).Yes PB prizes are tax free but you don't lose the ability to put it back at a later date. Taking money out of an ISA when there are other options is to be avoided as you lose the tax-free element of earnings on the bit you take out - and can never get it back!3 -
I fully agree with the above comments. The only thing I would add is that if part of your motivation for cashing in stocks and shares ISA was to reduce risk you could transfer it to a less risky fund within your ISA eg bonds0
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Good rise in the FTSE100 today, especially for a non "event" day......unless Trump running Venezuela is good for UK stocks (I expect @PragueAddick knows which companies will benefit most 😉).
Up 1.2% and well above the 10,000 barrier at 10,120. Also good gains in Japan & Singapore too.
Might make predicting the level of the index at June 30th tricky.
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11,000.golfaddick said:Good rise in the FTSE100 today, especially for a non "event" day......unless Trump running Venezuela is good for UK stocks (I expect @PragueAddick knows which companies will benefit most 😉).
Up 1.2% and well above the 10,000 barrier at 10,120. Also good gains in Japan & Singapore too.
Might make predicting the level of the index at June 30th tricky.
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Sovereigns a good shout, some physical gold I would like to add, I'd go that way too. Better than tied up in a smaller number of gold Britannias. Silver Britannias are CGT free too, but the VAT on purchase means adding more now is a no-go.Rob7Lee said:
I have a relatively small amount of silver compared to gold.Er_Be_Ab_Pl_Wo_Wo_Ch said:Not sure if silver is followed with interest on here. I've been a long-term follower and after years of not very much happening, it's rocketing.
Prices have been on the rise all year up over 150%. In the last week it's up 18%, which isn't out of the ordinary for this year. But the $5 daily rise yesterday caught my attention.
I'm expecting it to go much higher in the long term, but not enough to pick up more SSLN without a big correction first. I've nothing in miners. Britannias remain a rainy day fund - the cost of buying back after selling is prohibitive.
Any views on silver on here?
My preference is more for gold as certain coins are CGT free, Sovereigns have topped £800 now, I can remember it wasn't so long ago they were sub £200.
Since I last posted silver has seen lots of ups and downs, rarely a day goes by without 2, 3, 4 or more % movement in one direction or another. More ups, currently trading at $85, up over 10% in two weeks. I bought more SSLN during a still-very-high dip, picked up some miners too last week.
Target price $120 before considering exiting all interests, mind you I thought I'd be doing that when it would get to $50. If we see a big drop it's a long-term hold and buy more miners. A volatile ride, but a market I find enjoyable.
Edit - none of the above is investment advice, DYOR etc..0 -
Sorry been a bit quiet on here, my boss decided to resign 10am new years day so work has got a bit hectic!!
So time to start the FTSE100 competition as to where you think it'll end 30.6.2026.
To help me manage it as I may not be on here that regular in the next week or so, can people send me a PM with their prediction, otherwise I'll likely miss the posts on the thread.
Thanks.4 -
Looking for advice / opinions on drawdown methods on a pension pot.
She has a full state pension and small DB pension currently being paid. So all personal allowance is being utilised.
i have a friend who has a £200,000 Uncrystalised Pot invested via Quilter. Currently they are drawing £600 a month Tax Free from the pot. The method they are using is that each month Quilter draw £2400 from the pot, they pay £600 into her bank account. A the other £1800 is moved across, into a Crystalised pot. So Annually £28,800 being removed from the Uncrystalised
Am I right in saying once the Uncrystalised pot is emptied then, payments would be taken from the Crystalised pot each month. Therefore £750 a month being withdrawn, with £600 going to her and £150 to HMRC for 20% Tax.
I am aware that she could completely Crystalise the account and take £50,000 out up front and then invest (ISA ETC) and pay herself monthly from the money.
Question:
Is this the standard way a drawdown would operate ?Would taking the 25% all upfront and investing be a better option.0 -
Yes, that's how a standard Drawdown facility works.RaplhMilne said:Looking for advice / opinions on drawdown methods on a pension pot.
She has a full state pension and small DB pension currently being paid. So all personal allowance is being utilised.
i have a friend who has a £200,000 Uncrystalised Pot invested via Quilter. Currently they are drawing £600 a month Tax Free from the pot. The method they are using is that each month Quilter draw £2400 from the pot, they pay £600 into her bank account. A the other £1800 is moved across, into a Crystalised pot. So Annually £28,800 being removed from the Uncrystalised
Am I right in saying once the Uncrystalised pot is emptied then, payments would be taken from the Crystalised pot each month. Therefore £750 a month being withdrawn, with £600 going to her and £150 to HMRC for 20% Tax.
I am aware that she could completely Crystalise the account and take £50,000 out up front and then invest (ISA ETC) and pay herself monthly from the money.
Question:
Is this the standard way a drawdown would operate ?Would taking the 25% all upfront and investing be a better option.
I would usually advise to leave the money in the pension & carry on doing Drawdown rather than taking out the TFC and re-investing it. Your friend could take out £40k and do an ISA for this tax year & then one in April (if she hasn't already used this year's ISA allowance) but what's the point ? The money could be invested in the same funds for her pension as the ISA. And no point investing anywhere else as nothing really beats the tax efficiencies as a pension or ISA.
The only thing to think about would be fees. How does the Quilter platform fee compare to the ISA fee ?. If it's with Quilter again (and why not if she has a pension with them... thats what a platform is for) then there is no point.1 -
I'd be interested to hear what the wise sages and others who have a dog in the fight think about these leveraged or covered-call products that seem invreasingly popular.
I've been looking at them mainly JEQP from JP Morgan
I'm dubious when anything appears too good to be true especially with things like this. Its hard to do unbiased, objective research as people either think they are hokum or the best and only thing to be invested in. No in-between
So I've pulled a few into a pie and put a small amount in that pie to see what happens.
I have almost exclusively learned from mistakes as opposed to wins regarding investing and if I lose every penny on these I'm no worse off for the lesson.
I would be really interested to hear what our proper experts think about though
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Way above my pay grade, and certainly my risk profile, however I know a bloke who may be able to help you..Carter said:I'd be interested to hear what the wise sages and others who have a dog in the fight think about these leveraged or covered-call products that seem invreasingly popular.
I've been looking at them mainly JEQP from JP Morgan
I'm dubious when anything appears too good to be true especially with things like this. Its hard to do unbiased, objective research as people either think they are hokum or the best and only thing to be invested in. No in-between
So I've pulled a few into a pie and put a small amount in that pie to see what happens.
I have almost exclusively learned from mistakes as opposed to wins regarding investing and if I lose every penny on these I'm no worse off for the lesson.
I would be really interested to hear what our proper experts think about though
But first I want to say that the way you are already going about it seems excellent to me, using these "pies".
Anyway , until a couple of days ago I would also have had to say that gilts are above my pay grade too. But I needed a crash course; I could have asked here, and some people would have tried to help, but I'd have had to come back and ask about things I don't understand, which would be tedious for everyone else to read. Or I could ask a professional but then I would need to pay for it.
So instead I went to Claude AI, and got one of the best responses so far from one of these platforms. I asked for a beginners guide, then homed in on my specific situation. "He" even gave me his picks from the range of gilts on the H-L platform. Then I went back and asked him to explain why he chose those over some others that I picked out - that answer was really instructive.
So if you are using any of these AI platforms, why not run it past them (maybe more than one). Then if something in the answer looks not quite right, you can ask on here but from a position of more knowledge. I have to say that when I asked Claude about replacing some of my equity funds with EU based equivalents his answers were far weaker. I could see that straight away, others with less experience might have been misled. But explaining the general nature of investment vehicles and their use in your personal case (so long as you brief them) is something they seem to do very well.
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