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If you're lucky enough to have any?
I'm putting money away every week into a savings account, with the rough idea of buying another house which can serve as a pension being that neither I or my partner are likely to have one. But I'm not sure anymore whether I should be doing anything better with it. Going to see a financial advisor soon but there's usually good advice on here as well, and I'm curious what other people do with the future in mind
With no interest rates it’s hardly worth putting cash in a bank account at the moment. Anything with decent rate like a bond is risky. Maybe lump as much into an isa as possible, maybe in 10 years the rates will have gone back to 5% and you won’t pay much tax either. If you can save a lot quickly all good but if not houses could potentially go up 10 k a year so you might be treading water so to speak....Originally Posted by delmbox
I have some shares in the Hong Kong stock exchange, and trying to save up enough to invest in some property here
Switching banks regularly brings in more money rewards than savings accounts
Look at Martin Lewis website for tips.
Last few years I've done this
Co op to Halifax £100
Few months later halifax to first direct £125
First direct to nationwide £100
Nationwide to Nat West £125
Free money pays for season ticket
Other than than this
Santander 123 account let's you open
a savings account 200 quid at month 5%
interest
Also use top cashback UK
for deals on utilities insurance etc
I don't know how old you are (age would make a huge difference) but I would have thought paying into a private pension scheme would be the most cost-effective, considering the tax relief you would get on the payments (i.e. an instant 20% growth). I would opt for an income drawdown scheme rather than an annuity. What would you do with the second house - I presume rent it out rather than rely on its resale value?
36 and probably rent this one out and move in to that one
OK, 36, so you have another 30 years or so to pay into a pension scheme. I would definitely recommend an income drawdown scheme but also definitely find a truly independent financial adviser as there are plenty of companies out there ready to take your cash. I have one and he has been very good, tailoring my pension portfolio to my "cautious approach" needs. This is a long term process though as the stock markets can be very volatile, particularly at the moment. It only takes Trump or Carney to make some pessimistic forecast and my pension pot can suddenly dip in value by thousands over night! Conversely if they say something optimistic the reverse can happen. The whole stock market business runs on rumour and fear it seems to me! However long term it has proved to be the best bet, hence a lot (most?) pension schemes buy into it.
BTW I am not looking to make a profit out of my portfolio, just enough growth to balance what I take out every month.
I have a couple of endowments that are beyond maturity date but I let them run as I didn't need them to pay off the balance of my mortgage, which was their original purpose. However, won't I have to pay tax if I simply transfer them to a drawdown scheme?
Drawdown is for pensions only. The endowments would mature and be totally free of tax in your hands.
Good lord. Many thanks, old fruit.
No, I don't see any reason why you should pay tax on these. Just cash them in and start a pension fund. See my reply to Delmbox as above.
Is a pension fund the best thing if I am already 63 and semi-retired?
You still could do one, but it's designed for medium to long term savings, still more tax efficient than a S&S ISA. If your in receipt of a pension you are limited to 100% of your income or £4K per tax year whichever is lower. You would still qualify for tax relief.
My advice is don't commit yourself to anything with a financial advisor. Many are tied to poor performing companies offering products that are either totally unsuitable for your needs or are not the best performers. If you are saving to buy another house that is probably the best investment you can make combined with safety. In other words your tenant pays the mortgage and you benefit from house inflation although if you sell at a huge profit you will pay capital gains tax (CGT) on the profit. Buying jointly will save tax as you will both get a CGT allowance before tax is due.
Much depends, however, on what precisely are your plans; a pension is as good a savings scheme as you can get. Invest through an execution only broker and you will save yourself a fortune if you eventually decide a pension or other non cash savings happen to be your investment of choice.
If you really want to buy a second property, and will require cash for a deposit within the next 5 years, sadly the best way forward is to save in bank/building society accounts which pay pitiful rates of interest.
I have invested in the stock market and property for nearly 30 years but that was with a long time horizon. Never get into the stock market or stock market related investments if you need money in the short term especially at the current time when BREXIT could result in rapid fluctuations in value. Sods law will determine that when you need the money prices will fall and you could end up losing money especially when your financial advisors commission (if you use one) is taken into account.
Under the bed
Best pay off your mortgage if you have one? Interest rates on your mortgage almost certainly higher than you can get with savings scheme.
Dont run away with the idea that property is guaranteed to increase in value.
Regular saver - renewed every year.
Premium Savings Bonds - yet again we both had two numbers come up this month.
Invest it in malt whisky. Bound to make a decent profit in 25/30 yrs time.
Actually, Lego is a good investment.
Paid off my mortgage as soon as possible now bought four other properties that are rented as something we can pass onto the kids or let them live there when paid off.
TIL everybody on ccmb is either already a landlord or aspires to be one.
https://www.bbc.co.uk/news/business-48637484
Buy-to-let has ****ed up this country.
The government are already finding ways to make buy to let less attractive, I think they will continue down that line.
If you are insistent on this route, how much equity do you have on your current house?
If it's a fair bit you could remortgage and take the deposit from your existing house, that will be much quicker, as people say house prices are rising quicker than people can build up the deposits, but could be risky in a downturn or recession.
I think if either of you are working for an employer, they will have to provide a scheme, join that they will usually pay a contribution in for you (typically 4% to10%, and you will also get tax relief from the government at your highest tax rate, if you are self-employed the contribution would count as a business expense so save you paying tax and taking the money as pension.
When you need to take it out 25% will be tax-free and the rest taxable depending on your income and tax allowance.
Take your time, and make sure you've considered both, maybe do a pension now and buy an extra property in the future, so you end up with the best of both?
With a pension you have a greater benefit the younger you take one out, they say for every five years you leave it you have to pay in double the amount to get the same benefit, I don't think thats exactly right, but the principle is.
I'm not fixed on a second property at all, just wondering what other people do to make the most of their money. That was the most obvious one but I'm looking at an investment portfolio as well
No worries, a Pension or ISA is just a wrapper to determine the tax status, inside the Stocks and Shares ISA or Pension, you could invest in individual shares or funds would be the best option to start, spread the risk over many different companies, asset types and regions around the World, Global and technology funds are doing well at the moment, but things change quickly, diversification is the key!
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