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  • Tax

    Pensions don't make money? Think again!

    I like a number of other Landlords have had to arrange our business due to the Taxation changes

    One of my plans was to invest in Pensions and a great number of folk have said its not the place to invest

    So I have been carefully looking at the performance of pension funds and reporting back my own experience

    This is my Data not a Pension Co Data its fact not Fantasy fig

    1 September                 Starting Fund  £148,638

    Extra Contribution's this month                £5,000 gross

    as of last night my fund stood at          £154,690

                                            Profit           £1052 this month Tax Free

    That is a yield of just less than .75%  which gross is around 9%

    This has been the poorest performing period of the year so far but I am happy with 9% per year tax free.

    My ISA Funds have followed a very similar Patten and its all tax free

    as a higher rate tax payer this is quite rewarding No Repairs No Arrears No Govt changing the rules at will


    Learn Change and Adapt ?????

    2010 I swapped what there was of my state pension 14k into a SIPP and chose the Greater China Growth Fund, as I didn't care if I lost the money or not.

    2017 a few days ago, its at 51k.


    That's a great return

    and Tax free too and If you want to you can leave it to your family IHT free too

    I just don't get it when investors say you cant make money from pensions

    You can You and I have proved the fact


    Learn Change and Adapt ?????

    China Has had a good run again this month Happy Days


    Learn Change and Adapt ?????

    £14k to £51k in 7 years without doing anything for it, I agree thats a really fantastic return!

    Wonder if anyone has had the same return by putting £14k into property in 2010........?


    I am not sure if they have or have not

    Its a good performance and Tax free which is a huge point

    I was always 100% for BTL and Pensions and I have little time

    Until S24 came along

    I know use personal pensions to claim back the Extra Tax I am paying from next year due to s24

    I have managed my own funds and I have been happy with the performance so far I made 3% this past month which is better than BTL

    But my own bench mark is 8% If I achieve 8% I am making more pound for pound than I would in BTL

    anything above 8% is welcome of course

    Changing times changing strategy



    Learn Change and Adapt ?????

    I invested in a  BTL in 2010  using  circa £18K and turned it  into circa 100K when I sold it in 2016


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

    Yes your right But its not going to happen going forward JC

    I did similar in NE from 2001 to 2006

    Past performance is no Guarantee

    its what an investment today which counts if I put 18K into property today it would not grow in the same way

    2017 to 2027 will be very different

    and even with the Fund Value this chap has from his 14K he can take Taxfree cash  he can pass it on to his family Tax free up to age 75

    and IF he passes away without touching the fund he can pass it IHT free

    and If he really wanted to he could cash the lot an pay 40% tax

    If he puts into a Sass he can buy investment property Offices ect

    You have your profit tied up you can only get the profit if you sell which has costs

    Agents Solicitors and then CGT

    You will find it hard to remortgage out unless its in a company

    and if it is in a company its not straight forward  more tax payable and possible NI if its taken as salarty

    Pensions and BTL to day are equal when investing cash


    Learn Change and Adapt ?????

    ``Past performance is no Guarantee``

    Agreed -  pensions do suffer from this so beware

    I`m glad I invested in property 2001 and I will glad I still have property in 2027

    Someone who buys in 2017 will be glad in 2027 that  they entered today

    Buy @ 100K @ 80% LTV  for yield and get £400 pcm cash flow they will have made 48K  by then

    So your 20K makes 240%  gross just on cash flow in that 10 years .

    Not bad even in the unlikely event CG is  zero in that 10 years


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

    see you are wrong again a pension can be guaranteed

    You can invest in funds that Guarantee an income with out risk

    Most Pension investors as they approach retirement move there funds from high equity exposure to more conservative funds

    and the funds will give you more than BTL will give over the next 10 years that's for sure in capital values

    Granted they can not touch high yield but its the High Yield cash is now funding my pension

    They still have all the benefits of avoiding Tax they are still IHT free

    There are no Guarantees  with BTL

    You should bring yourself up to speed with the power of pensions

    Learn what's new and what the  advantages are JC

    Directors Pensions are strong

    and you know what it My BTL went belly up a creditor can not touch my pension

    BTL is exposed and venerable to Govt change Pension funds are not

    ISA to has huge tax advantages

    Open your eyes JC BTL is half what it was I am sad to say


    Learn Change and Adapt ?????

    They can be guaranteed but that doesn't guarantee them

    Check out Philip Green and what he did  . If the money isnt there to pay you you dont get paid


    But I was really talking more about the government changing the rules

    They may do the sec 24 equivalent to pensions as they did to BTL

    They may change the rules about creditors going after pensions

    Or the  pension company  may try what the BOI  tried to do with regards of twisting the tracker rates

    Check your small print  -  nothing is guaranteed

    No one thought in 2014 that I wouldn't be able to offset my mortgage costs today

    They would be saying - Don`t be crazy no Tory government would ever do that - But they did

    It was a first  for  the accounting world ... Everyone was stunned

    But the JR failed . I will go to jail if I dont pay my taxes

    Pensions may be next on the list . Theve hit them before

    If a pension firms collapses  the  guarantees can become worthless .

    Its happened before - people have lost thousands . Beware

    At least I will have a physical property. Much more comforting than an IOU


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