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  • Tax

    Pensions don't make money? Think again!

    I think your correct

    JC for some reason thinks property prices can only rise

    I don't think this will be the case in the next 10 years

    Long term I can see it working But at what cost in terms of Taxation & Regulation

    I am very cautious going forward

    BTL is becoming a bit like the Ant Smoking Lobby 15 years ago

    Its becoming more difficult with every budget for Investors to make money from BTL

    And I agree with you 100% if Labour come to power what we have now will look like nothing after they tax BTL even more and Rent Control

    I will continue to spread my risk  


    Learn Change and Adapt ?????

    ``JC for some reason thinks property prices can only rise ``

    Surprisingly I`ve never ever said that DL . The opposite in fact . So you mislead again

    And good  you agree in hindsight  pension rules can also be changed at will by the government

    For better for worse for richer or poorer in sickness or health both BTL and Pensions rules are liable to change

    So 2-0 to me

    I agree spreading risk can be a good idea

    But its the % of your wealth  and breadth of your  spread which is the crucial  judgement call

    Your 150K cash to spread bet  I suspect may be pocket money to you as a % of your wealth

    For others its their life savings and they need to think longer about what they spend their cash on

    What % of your wealth do you put into pension can I ask ?

    Few want to take wealth out of property to invest in a pension

    Many want though to take wealth out of pensions to put into BTL  -

    Yours is more as a back up plan late in the day as the NE has not performed as well as you would have liked

    I still think property not pensions here in the SE

    The difference between the two is the SE is putting its feet up for a tea break before moving on again

    The NE may be a permanent move to a care home hence the deep focus you now have on pensions

    If that is what you have to do because of geography then its the right move for you

    I dont buy fully into the argument that property is not a liquid investment

    You can sell a property in a week if you really need to .

    A small % will ever be in that dire position. The warning signs are usually there long before

    My thoughts on this are  on another thread. Its a red herring argument I feel


    Jonathan Clarke. http://www.buytoletmk.com

    I've got to disagree with your point about property being liquid Jonathan. Even if you sell at an auction, or a quick sale company, or a cash buyer through an agent it's always a slow process taking at least one month, usually two at best - and thats if the sale actually completes. If it doesn't then you've got more months to wait and more expense along the way.

    Shares, bonds or gold can be sold in minutes and the money in your account within an hour. Thats a lot different than two to six months.


    I agree with you I can sell all my Managed funds in an Isa and Have the Cash in the ISA account in very quick time

    and I may add at very little cost and still hold my funds Tax Free within the ISA

    I can do simmer with Pension Funds too

    Its far more liquid than Property I have found


    Learn Change and Adapt ?????

    Pension rules have changed for the better in the past years where BTL has became worse

    I run both Pensions ISA and BTL

    all have a place all have advantages and disadvantages

    I just wont put my shirt on One anymore

    One huge advantage Pensions have over BTL

    Is IHT I can Pass my Pension Fund Tax free If I die before 75 to Children and Grandchildren tax free ie saving 40%

    If I Pass after 75 they  can still have the fund but they would pay tax at there rate at the time

    Pensions also protect cash from financial problems Bankruptcy ect as its ring-fenced

    I can go liquid very quickly if I need too

    and Its all given Tax free when I make contributions

    ISA Income and gross totally tax free too even if I am a 40% Tax payer

    and If I see opportunity in BTL I can take cash Tax free to pick up a BTL

    I believe any investor needs to spread risk and that's what I am doing JC

    I have said this before BTL is a great investment and its only taxation and regulation which is the issue

    But I do get your point If a deal is a good one I would buy BTL again

    But I just don't see the opportunity at present so I am happy cash hording TAX FREE and at 9% and more I am happy



    Learn Change and Adapt ?????

    I have move money in pensions than in property (excluding my home), but I don't consider looking at changes in the price of either on less than a yearly basis makes much sense. They are long term investments, at least until you are drawing a pension. I don't check my ISAs more frequently than that either.

    My properties provide me with an income at a net return of over 7%.

    My ISAs are my emergency funds.

    My pensions are just growing at the moment, though there are only 18 months to go before I plan to start drawing on them. Most of them are older ones with advanatages that make it not worth cnverting to newer ones.


    I manage My ISA just like BTL

    I read and watch fundmanagers  reports

    Its quite Dry Stuff but If you read between the lines Money can be made

    I am switching and buying funds every month India China are the tips at present

    They have said USA has topped out for now

    Europe which was  a surprise to me has done very well too

    As you can see I take great interest in this sector now Its replaced my interest I had once in BTL

    If I can achieve 8% growth a year I know I am making more money in capital value then I ever made in BTL in the past 10 years

    BTL has given me the cash to invest but I will not be purchasing any further property for the foreseeable future Peter

    I like the Tax Free Growth and I like the Tax relief  have on pensions too

    My heart will always be with BTL but my brain is telling me to stay away


    Learn Change and Adapt ?????

    My ISAs made 15% last year with almost no intervention on my part. On average I have made about 5.5% - that is including the crash.

    My flat in Reading has made over 50% in the last 3 years if Zoopla is to be believed. Should be tax free too as it was my home for 18 years (during which time it went up about 150%).


    I have achived more in the past two years then 8% from my ISA but 8% is my bench mark

    The historic capital values are good and most have had a good run since the 1990s

    But I don't see this being repeated in the next 20 years

    If I had confidence in BTL I would invest but I don't

    I feel investment in Pension and ISA has more opportunity for good growth

    The Taxation of Pensions and ISA has to be a big plus

    and I also think more regulation is on its way too

    So I am staying well clear of more BTL


    Learn Change and Adapt ?????

    My point about ISAs was that money can be made in good times even if you don't pay attention.

    I won't be purchasing any more properties this tax year. I doubt I will in the next. The one after is when I will start taking pensions and will sell one property to avoid S24. After that I don't know. I might go for another one in my company.

    I will probably start paying a directors pension to extract money from my company tax effciently.

    I expect letting to provide most of my income for many years, but not BTL as such as I aim to be mortgage free in my own name in a few years.

    I don't expect new regulations to be much of a problem, but if necessary I would sell up.