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Big_Al

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About Big_Al

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  1. Have I missed the conversation around the Monday press release? I backtracked through the topics but couldn't find anything. I was genuinely surprised that the index has gone up, what about everyone else? AL
  2. Pension mortgages were quite popular in the late 80s and early 90s because of the tax relief. I remember working for a life office at the time and we used to churn out quotes by the bucketload. In my opinion I wouldn't use them because: 1. the tax free lump sum is restricted to 25% of the fund value. 2. because of 1. above the contributions will be high 3. I'd like to use the tax free cash for something else e.g. holiday 4. It's cheaper to do a repayment mortgage i.e no charges to pay for the pension - admin, fund management etc. 5. Although you get tax relief on the way in your pension
  3. I totally agree with this and I think this was what I was trying to show in my original post. Even though interest rates are lower now, having to repay a larger amount of capital is a greater burden for people and lower interest rates has not negated this problem.
  4. I've amended the title of this post to clarify where I was going with this. Padders, I don't agree with your method of calculating a repayment mortgage as the interest payable reduces as the capital reduces on a monthly basis - although the payment itself stays the same (assuming IRs don't move). I do agree that payments become easier if there is wage inflation but as RFD pointed out this has been low these past few years so payments stay high and the capital amount also stays high. IMP, couldn't read the graph that well, could you perhaps explain. AL
  5. I've noticed that bulls have used the rationale that lower interest rates means mortgages are more affordable and therefore a crash is less likely. I've been pondering this one for a while and decided to run some figures just to see how true this is and came up with some interesting results. average property = £180,248 (at the end of 2004, ODPM figures for 2005 not published yet). Repayment = £951.78 (assuming 5% deposit is paid, using current base rate of 4.5%) Looking back to when average prices were half as much... average property = £81,774 (end of 1998 according to ODPM)
  6. The compensation scheme you refer to is the PPF (pension protection fund). However, the level of security will depend will depend on your status (active, deferred or pensioner member) and your salary. The maximum level of benefit is £25,000pa - this should cover the majority of members. If you are not a pensioner member though you will only get 90% of what you would have got if things hadn't gone wrong. Low annuity rates by themselves do not mean low pension. If you have a large fund then this would compensate. In today's finanical climate annuity rates are low compared to historical rates bu
  7. Hmm, I've been hearing that argument for many years and I pity the poor employees who have been told that just as they were about to retire and suddenly find themselves with little to live on in their twilight years. I don't see employers using that argument with DC schemes so why should it be used for DB? The pensions regulator is taking a much more hard stance on this and is saying that underfunding a scheme is effectively a loan to the company. Hard to swallow for employers but I know which side of thefence I'll sit on being a member of several DB schemes
  8. Not sure whether I qualify as a "true" STR as I was relocating due to new job but we decided to rent for a few reasons: 1. to get a feel for the area before committing to buy; 2. to be in a good bargaining position when we decide to buy; 3. I expect/hope that prices will drop as area we have moved to is more expensive than where we moved from. AL
  9. Tax on divis came about in 1997 long before simplification was a twinkle in GB's eye. I can't see GB giving up £5b per year now that he's used to having it, even if it would help pension savers. I've had a read of the Telegraph article (and the Revenue rules) and I think that if the member pays rent on art or jewellery then a tax charge will not apply. The article doesn't really cover this point. Isn't some food and clothing vat free - is that more favourable. Even if property is one of the most favourably taxed, so what and why not? I don't really understand your point about british busin
  10. 1. GB's easy way to rob £5b per year from pension schemes under the guise that it would encourage companies to reinvest income instead of paying it out in divis. 2. Tax has to come from someone to pay for all these wonderful NL initiatives. Tax credits on divis is just yet another source for GB. A bit like the increase in stamp duty from the original 1% to the current bands we have now. 3. Not really, I have no idea but surely you have to compare the whole tax system and not just one area. We may be taxed more lightly in other areas than in the US. 4. I don't believe in the govt propping up
  11. I think there's a distinct sniff of paranoia here. The tax charge that the Revenue appy is the standard calculation for benefits in kind if "market rent" is not paid. The example given is where someone doesn't pay market rent for the "use" of the jewellery. If they did a BIK charge may not apply (to be fair I'm not sure of exact rules!). It's the same with property. Pay market rent and no tax charge applies, if you don't then you will be taxed on it. Bearing in mind these new rules were published several years ago I doubt the intention was purely to "shore up the sagging property market" bu
  12. Good article. When we originally put the property on the market I thought that the £250k threshold would give us problems so always had in my mind to accept offers at £250k. Although demand in my area has been slow I think this has been a factor in low amount of viewings.
  13. No, not using the equity but the interest that it generates. Ignoring today's rate drop I can get about 5% gross. Putting it in my wife's name (non earner) means that most of this is tax free. We've a fair amount of equity so the interest generated is quite high.
  14. I've mainly been lurking on this site since the tail end of last year when I decided to take a new job which involved relocation. I have found this forum at times interesting and thought provoking and at other times I have found some of the comments both childish and ignorant! Anyway, i thought I'd share my actual experience and decisions made in the hope of generating some interesting comments. First off, as we were looking to buy a more expensive property, I was hoping for a house price crash/reduction. I know my eventual equity would have been lower but if prices reduceed across the boa
  15. As much as I'd like to deny it, I hang my head in shame and will flagellate myself with a wet copy of the Sun for my sins
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