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Posts posted by VeryMeanReversion

  1. 2 hours ago, The Spaniard said:

    I am not an accountant but I understand that the 25% tax free withdrawal from a SIPP may all be taken 'up front', leaving the remaining 75% of the SIPP liable for tax when it too is later withdrawn. If this is indeed the case and you can also accumulate a SIPP of value £400,000, then the required £100,000 can be withdrawn tax free.

    I'm partly making use of that method. An example to clear £100K I/O mortgage:

    My current effective marginal tax rate is 65%.   Give up £140K net income to get £400K in SIPP (over several years). Use £100K (25%) to pay off mortgage at age 55.  £300K left in pension to withdraw later at <20% average rate - so keep at least £240K of it. Not bad for effectively giving up £40K earlier. (140-100).  Numbers based on 0 inflation, 0 investment returns/overheads to simplify.

    The risk is in the pension rules which can change at any time. That's why I do a repayment but will use the SIPP 25% to clear early, would save my ~10 years on the mortgage.


  2. 26 minutes ago, 10YearLurker said:

    Hello again everyone

    So people wonder why I'd only lurk when I get a series of responses like this for an innocuous post like the one I wrote...

    Ten - actually probably more than ten - years ago, I discovered this site. I know there is no way of verifying this but I bet I've read these forum pages more than any human on earth. No, really. I remember when every other post had Eric's 'Liar Loans' daubed in bright red on it. I remember when Jonathon Davies (sp?) was all over it. I remember when the charts on the front page were actually updated. In short, I remember the good, bad old days. 

    I held off buying a house when I was a poor man, I held off buying a house when I was a rich man. I've essentially changed my entire life because of this site. I have, genuinely lurked for ten years and have 100% supported the cause even though it's probably cost me over the years... 

    I did do a couple of posts as 'bearfacedcheek' or 'barefacedrobbery' or something perhaps ten years ago, but realised posting wasn't for me. It looks like it still isn't. 

    Peter, 42, London.


    Welcome to the forum 10YearLurker. Please keep posting,

  3. 16 hours ago, CunningPlan said:

    The tax trap: why a £70k family isn’t much wealthier than a minimum wage family


    Thanks for posting that, very interesting.  I'm irrationally attracted to articles amount marginal rates.

    So a 70K income person can work just one day a week and get 75% of their net income. (if credits/benefits required you to work X hours, just do the pretend-self-employment trick).

    I turned down an offer of a 25% salary increase this year, a more responsible job and longer commute. It looked good gross but not after net/commuting/time costs.  No point me increasing gross income when my effective marginal rate is 65% and increased commuting cost/time then comes out of the remaining 35%.



  4. I've got a clever 16 year old doing summer work for me.  I just game him a maths/spreadsheet problem at 9.00am this morning, thought it would take him all day.   He did in within half an hour.  The next problem with be a bit harder :)

    I've also recruited a Cambridge  grad with Masters/1st in electronics, incredibly bright. Had to pay good money for him though but well worth it.  I expect to be calling him boss in a few years.

  5. Degree-Apprenticeships look interesting.

    "The government will pay two-thirds of the costs and fees while employers pay trainees' wages and other costs."

    "The government says employers of any size can take part in the scheme."


    I'll be aiming to get my kids on these.  

    Anyone find it odd that the government pays 2/3rds the cost if done this way?

    I wonder if there is a potential loophole where you start a company purely to take on an apprentice to minimise student debt. i.e. You are your own apprentice!

  6. 1 hour ago, scottbeard said:

    My opinion (not advice) would be this:

    Salary sacrifice - this is frankly a loophole and I'd expect it will soon disappear

    Pension tax free lump sum - I'd expect this to be subject to a much lower £ amount limit, rather than 25% of the total eg "25% or £20k if lower" maybe.  It's not even clear to me why this benefit is actually here, and the biggest beneficiaries are the rich, so it's days are numbered.

    State pension - not sure.  It could be means tested - but if we go down the Citizen's Income route then effectively it would be subsumed into that and continue.

    Pension/ISA - pension is great if you're a 40% tax payer and/or your employer pays in.  Otherwise it's less clear, as the money is tied up.

    Salary sacrifice just adds the benefit of NI savings.  In the same way that MPs, doctors, teachers don't pay NI on their employers pension contributions.   I assume they haven't banned salary sacrifice for this reason.

    Tax free lump sum - I can see it going soon, probably after everyone is auto-enrolled.

    State pension - I expect the flat rate to continue for many years, not means tested.

    Pension/ISA - Agree with you


  7. The pension freedoms were a big reason behind me putting every penny I can into a SIPP, then extract it at a much lower marginal rate in future (65% down to 15%).   Before that, flexible drawdown was the best option but it took a big £ pile to get there.  Thank you George.

    It appears that temptation is leading other people to put in a basic rate, then pull out lots in one go at higher rate.. daft.

  8. 1 hour ago, winkie said:

    One of my friends, 25 years srn nurse also specialised in orthopedic, worked in all the top hospitals, left for a few years went into teaching for a while.....looked into going back into nursing and they said she had to do 150 hours on £500 a month to retrain, pay her own training and registration......she told them to forget it......leaving the public sector......;)

    Similar for my wife. Was a E grade nurse running a ward, then had kids and a career break. To get back into nursing, would have to do several months of unpaid retraining, long commute, then 12 hours shifts and parking costs for not much more than minimum wage when finished.  Instead, works at a nursery on minimum wage with minimum commute, flexible hours and lots of holidays.

    Many of her nurse friends are just looking for a way out. Those that can are retiring early.


  9. 7 minutes ago, TheCountOfNowhere said:

    So compared to a 1/2 years ago, we're pretty much at the point of failure.

    Looks like that to me.  The only way they can keep this situation going is with negative interest rates at the same time as high wage inflation.

    I was just reading a post on another forum where someone on £44K has £300K debt (mostly mortgage) with their spouse earning a small amount extra but having two kids to look after.  They have a good mortgage deal but that have bet their lives on the interest rate staying low forever.

    They were given the opportunity to ruin themselves and took full advantage of it.

  10. I live a few miles South of Cambridge and have never understood the attraction of the city and actively avoid it. I used to drive in to work 7.30am-4pm and never found the traffic to be much of a problem, far better than when I used to do the M25 and Hertfordshire traffic.

    I sometimes go up to the Mill Road area with my son and point out the conditions in which some people are prepared to live at great expense.  

    I have a ~220sqm property with big garden probably around £550K so a measly £2500/sqm in comparison.  But it still only takes 15 minutes by bike to get to a mainline station with fast access to London, dedicated cycle path most of the way. My garage is bigger than many of the Cambridge terraces.  I just don't understand why people pay so much to live there.

  11. 9 minutes ago, Locke said:

    Respect is earned. Those old wankers in the courts have abused the citizenry so much for so long, that they no longer can expect to be spared the rope.

    What shade of brown shirt are you going for?

    I've developed a pretty good financial boom/bust sense over the years but my social spidey senses are not so well developed.  However, the tingles have begun and I can see also future unrest.

    The kids sometimes ask me how friends can afford newer cars and more stuff then us, whilst having a lower household income. I point out the existence of debt, tax-credits and lack of planning for their retirement, something that your employer used to take care of (if you were lucky) in the past.   When these people hit the reality wall, they will become angry. Some may say they only brought it on themselves. The vast majority will find someone else to blame.

    I hope to front-run the unrest by getting debt-free, a stash of assets (physical/financial) with a passive income, might work.....





  12. 1 hour ago, TheCountOfNowhere said:

    It amazes me with all that has gone on since 2000 that people think they'll get their pension.


    With an unfunded scheme, I can agree.

    With a defined benefit scheme, I can agree.

    With a state pension, I can agree.

    However, my pension is mostly cash and individual company shares held with within a SIPP.  No fund managers, no assets held by the platform provider, no "with-profits" style promises to other customers to use against me.  Its just about as reliable and under my control as any investment can get with minimum counterparty risk.

    The pension rules can of course be changed (confiscation/reductions/PCLS-removal) but it looks to be as reliable as NS&I. Nothing's perfect.

    I'll use drawdown to get the money out (annuities risky due to the counterparty going under, will leave that until life expectancy is <10 years).

    So I should be one of the last to get screwed if it comes to it.  Once they start confiscating directly owned shares and cash from accounts, its game over for all of us anyway.  If it comes to it, I'll have a rentable outbuilding by then.  I suppose they could take that too, but that is too many "what-ifs" for my little brain today.

  13. 25 minutes ago, TheCountOfNowhere said:

    Why should I go to work and pay taxes for that money to be used to pay for......this list is too long to continue, but you get the idea.

    Why should I go to work and pay taxes at the rate of 60%+ ( real and hidden taxes )

    Working in the UK right now is pointless, what are you working for, to be robbed even more, so someone else can have a better life, for your savings to be eroded, for your spending power to be eroded ?

    Its a lovely day, the sun is shining.

    Working in the UK means you can avoid the high marginal rates by using a SIPP.  I got my employer to introduce salary sacrifice that makes this even more efficient. HMRC approved share schemes are available at  <10% marginal tax rates.

    My UK savings aren't being eroded, they are invested, returning 3-4% divis tax-free. Capital is at risk but I'm up 30-40% so far.

    If you don't use pensions to avoid PAYE, leave savings in cash then I agree, you are stuffed.

    If you use the income to pay a large mortgage, you are stuffed.

    If you "need" the income to pay for lots of consumer tat or maintain an expensive lifestyle, you are stuffed.


    For me, it's all about the marginal rate.  At 30-35%, I don't really mind.  At 40+%, I reduce income and/or make every effort to make use of legal schemes to avoid the tax.


  14. >IRELAND  : Unemployment benefit £160 per week available immediately 


    My sister in law (UK citizen) moved to Ireland.

    - Better unemployment benefits (2x UK)

    - EU grants for various drama projects

    - Student loans for useless courses which will never be repaid


    Only a few more years to drag it out before claiming a pension.



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