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  • Tax

    Better off with pension than property?

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    Learn Change and Adapt ?????

    Interesting article but the figures don't add up. 

    It claims they used 4.5% annual HPI but using that the gain on property is £272,643 before CGT.  Even if they remove the personal allowance and charge CGT at 28% the net gain is still £193,587 which is a 324.27% gain.  Add to that the rental profits over 20 years and it still outperforms shares due to gearing.

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    I suspect they are also allowing the pension to compound (as they should), but not allowing for the rents being reinvested.

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    Even without allowing for rents being re-invested and growing with inflation their figures are still incorrect though as they state the property gain is only 237% in 20 years.

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    The great thing about Pension is your taking very little risk

    pensions don't have the drawbacks of BTL and that's the Human Element of a Customer who is not paying ect ect

    and the other major plus is all growth is Tax Free

    I think there is a place for Both BTL and Pension

    With S24 Pensions can extend your Tax free limits

    I could list such a lot of other pluses in pension planning its a powerful tool to fight the Tax Man

    so Grab it now before its changed nothing good lasts for ever just look at BTL


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    Learn Change and Adapt ?????


    Growth for a pension is tax free until you try to withdraw more than 25% of it. Then it is changed at income tax rates.

    Growth for a property is tax free until you sell, when it is tax at CGT rates, which may be lower. Or you can extract it by remortgaging and pay tax on the interest instead.

    Pensions don't have a clear win there. It is the tax relief on paying in where they have an edge, and that is limited. Without that ISAs are better - tax free growth and tax free when you take the money out - but are also limited.

    Currently I lack qualyfying income so could only invest £2,880 into a pension in person. My company has a higher limit, but having used its profits towards buying a second property there isn't much to invest currently. I am going to check on my situation in March and decide whether to put more into a pension. I also look at how much I could put into an ISA at that time. In the meantime I hope to spend a bit on my house and myself for a change. I have just booked my first proper holiday since I lost my job, and I am looking at getting the bathroom in my home refurbished.

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    In todays market I think they all have a place

    before pension freedom and S24  I never invested in pensions I much preferred  BTL

    I never dreamed in a month of Sundays I would invest in pensions at 59

    Its belt and braces for me now and my goal is to build an income away from BTL just to be safe

    If BTL turns the corner which I think it will My Pension will be a plus  along with my ISA income


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    Learn Change and Adapt ?????