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VeryMeanReversion

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Everything posted by VeryMeanReversion

  1. If Brexit actually happens, the above appears inevitable. A lower £ and no TC/HB makes the UK so much less attractive for low/medium skilled non-citizens. The high skilled ones won't be getting TC/HB anyway.
  2. Some of us saw this coming and posted about it on here. The £ is looking little better than Farepak tokens. I've been converting my £ to real stuff as fast as I could when opportunities presented themselves. An underpriced house in the 2010 dip (only one I found in 8 years searching), equities in the Jan 2016 dip. Basically anything that has some actual value and legal protection. The central banks want to make their currencies look weak to encourage consumption/exports but for me, all it does it make me want to seek out anything that is likely to maintain some real value, I simply don't want to increase consumption. Work is exchanging time for £. It becomes less and less worth it. If I was single, I would go back to the US to earn 2x UK salary again, worked out well for me in the past.
  3. Thanks SpyGuy for bringing it up. I tried to raise this issue on another thread but no-one picked up on it. It looks obvious to me. If you can pay your way, stay. If you can't, go. TC/HB subsidies low-skill immigration. I'm in favour of high-skill immigration but even then, they shouldn't get TC/HB. One of my staff is non-EU and that's the way it works for them. I worked in the US for a few years in the 90's. The US government never topped up my income with tax credits and I was not entitled to any benefits. It was my decision to work there, the US let me in whilst I was of use to them, then I left before the VISA ran out. I had to pay into the US social security system but would never have been entitled to get anything back.
  4. Do you mean state pension, final salary, DC-based, or all ?
  5. This is a very similar situation to my own. Salary sacrifice is the only reasons I work full-time, otherwise there would be no point. My effective marginal tax rate is 65% and I can reduce this to 15% in the future using pensions. I just won't work at 65% EMTR. The Head of Engineering just retired at 58, just not worth working any more and would rather have time rather than heavily taxed money. He had been putting away close to the maximum into pension via sacrifice for the last 10 years. I've now got his job and am already working out when I can go part time. The Finance Director is already down to 4 days a week, looking to do 3. The next generation will find it much harder if they are carrying huge mortgage debt, no chance to put two fingers up.
  6. There really isn't a big day any more where you have to do anything. At 55, you can access your pension stash from a DC scheme. However, you could carry on working full-time or part-time as you wish. You can still contribute to a pension fund whilst you are in drawdown (£10K annual limit ) or more if you have only taken the 25%. There are some recycling rules to meet. When you buy an annuity, you hand over some amount (doesn't have to be the whole lot). There are various options for getting paid from it e.g. fixed regular sum, escalating RPI-linked, survivor spouse, guaranteed minimum term payout. The insurance company takes on your lifetime risk (at a cost). You can even use the tax-free lump sum to buy an annuity which is paid tax-free. Drawdown is where you keep the investment in your name and take the risk yourself. There used to be limits on what you could take out but not any more, just pay income tax on whatever you take out (after the tax-free 25%). You could use part of your fund to provide the guaranteed annuity and keep the rest of it in drawdown. "Which" do a pensions book, worth a read if its been updated to the latest rules.
  7. This may need a separate thread of its own but I assume Brexit means that non-UK citizens will no longer be entitled to tax credits, housing/child benefits etc. It would mean that the only EU workers that would stay here would be the ones that could pay their way e.g. the higher skilled workers that are not claiming. The others would basically be priced out. BTL'rs like Fergus lose out, house prices down, Government deficit down, NHS bill down. My neighbour has 10-12 EU workers living in caravans. They are all on minimum wage with no council tax getting paid but claiming child benefit and tax credits. As MoneyWeek showed, you can get a £30-40K equivalent gross income doing this.
  8. 1. I expect there to be a state pension with a real value similar to todays. I don't expect the "triple lock" to continue much longer which would have increased the real value. 2. A state pension is worth £200-250K. So each year is worth 1/35th of that, so say £6500. Well worth £700 but only if that is your only way to qualify for a year, maybe you could use a later year? 3. You cannot access state pension early (some professions can access private pensions early) 4. Difficult to answer your pension questions without more info but here goes anyway with my biased opinions 4.1 You need to know how long you are going to live for (!) 4.2 Whilst in good health, live off investments. 4.3 As health fails, go for the certainty of an annuity 4.4. In the long-term, charges are very important, the skimmers will try to get you everywhere. If they say one bit is free, find out where the other charges are. 5. I learnt a lot from the monevator site. Also see WICAO's site (retirementinvestingtoday.com)
  9. HL SIPP - £200/year platform cost. Buy individual stocks in diversified sectors and don't use funds. Pay the one off stamp duty charge 0.5%. Collect transfer-in bonuses (£500 per £125K ) Fund size ~£300K. So first year charges were 0.5% (£1500) + charges (£200) - bonuses (£1000) + trading costs (£300) = £1000 => 0.3% overall. Subsequent annual charges will be £200 = 0.067% Over 10 years => <0.1% average. Edit: Its actually a bit better than this since the bonuses can be taken as cash then put back into the SIPP to claim tax relief, effectively boosting that £1000 to £1666 so first year net costs are only £333 = 0.11%
  10. Its a shame that this thread has disappeared of the main page, it was doing pretty well. Anyway, the main page seems to have turned a bit silly with the brexit/bremainers still fighting it out. Anyway 2.... I saw this on http://simple-living-in-suffolk.co.uk I like these sort of heat maps, it give me a 10,000ft view of a market. Cape is far from perfect but is a useful indicator.
  11. I have considered that. In my view: The housing/land markets are in a bubble The bond markets are in a bubble Equities (outside the US) really don't look to be in a bubble. Earnings are sufficient to justify the prices. Maybe those earnings continue, maybe they won't.... PM's are in a bubble as their prices are above that justified by the industrial uses. I understand that the central bankers want people to spend and get the economy going. I don't understand why UK equities haven't moved into a bubble (yet). I suspect it is fear of volatility but I'm waiting for that to look mild in comparison to the supposedly safe classes above.
  12. It's these kind of stories and insider details from a friend working at one of those type of companies that put me off anything that hasn't got high level of legal protection. Also, the simpler the investment the better. I'm not convinced by ETF/ETCs either, I'm just waiting for excuses like "we didnt bother to buy the underlying investment, it was just a piece of paper, sorry, won't do it again, honest". My own position is : 1. 60% House equity (good UK property law - I'm the owner occupier) 2. 32% FTSE held in SIPP @32% (good laws protecting this - low enough levels of corruption or complete failures but it does happen. Confiscation unlikely) 3. 8% Cash (held in SIPP accounts under protected limits). The older I get, the more I learn that complex investments are used to hide information and create skimming/fraud/high-cost opportunities, all against my interests. It really does make sense why many people went for BTL as a safe pension. They just didn't understand what a risk they were taking with all that leverage. I have a small amount of leverage on my house as my LTV is ~20%.
  13. I've been saying the same on here for a while.... My pension was in cash for a while paying 0% with running costs of 0.6% (discount stakeholder) If I use Treasuries, I can get 0.87% (10yrs) with running costs of 0.5% (not easy to buy directly) If I use equities, I can get 4% with running costs of 0.1% So even if equities are 30% lower after 10 years, they are still the best option for me. I can cope with the volatility. The more they talk about lowering interest rates and QE, the more I feel cash it trash (which is one reasons they talk about it of course). At least with equities, you own something that is difficult to confiscate and FTSE100 companies are good for foreign income. Land/property it the only other thing that qualifies (for me) but as we all know, the prices of them are already crazy.
  14. A single SIPP provider will/should spread their cash deposits across multiple licence holders. HL use 4-5, varies every day. This gives you £300K+ protection. However, using multiple SIPP providers may overlap the licence holders so there may be some extra protection but not as much as you would expect. I've reduced my SIPP cash to stay within the limits.
  15. That is exactly what I want to hear. Unfortunately, when I hear what I want to hear, alarms bells also go off. I don't believe that at a personal level, May wants less immigration or Brexit so it wont actually get done. All the evidence is to the contrary.
  16. I think that is the position I have come to. I employ a non-EU person and still think your proposal is best. The consequence (my favourite word this year) is that only people that pay their way come here. I emmigrated to the US in 1994-7 and that was the conditions that I worked under.
  17. Better to buy when cheap, no matter when that is. That in itself massively increases your chances of FIRE. I bought in 1997 (dark green), sold in 2003 (orange/red), bought in 2010 (yellow). Not perfect but good enough.
  18. The spread between lending and savings rates is currently troughed by the banks. P2P platforms allow savers to keep some of that spread. The platform fees and optional protection funds skim off some of that benefit but overall, the rates are much better than cash interest rates. I was not convinced enough by the safety of Zopa/Ratesetter etc. to try it but HL are a multi-billion company with a very strong reputation to protect.
  19. The bond market is the "bulk-funds" safe haven (gold market tiny in comparison). The 2007/8 financial crisis and demographic changes were a good reason to invest that way but it has just become another bubble. I was 50+% in index-linked bonds until 2015 but sold up completely. Just like a BTL'rs balance sheet, current bond prices only make sense whilst interest rates are at historic lows. Property as a safe haven (safe pension the aim for many) makes sense until everyone is doing it and the price gets too high. Pension funds are effectively forced to buy bonds to match their liabilities. With the new UK pension freedoms and annuity-aversion, I see equities as a better target for boomers than bonds, especially boring divi-payers (3-4%). As annuity rates get even lower, keeping your pension in equities for longer looks far better. If interest rates push up, bond prices get hammered. Even if interest rates stay low, how long will investors put up with zero/negative bond returns when equities produce decent divis. The term "Great Rotation" was popular a few years ago but went nowhere. I think the time is coming. Basically, I'm front-running the demographic rollover As people get older, they will get absolutely desperate for yield.
  20. Any thoughts about P2P within SIPP? Minor providers offer it but HL should be doing it later this year. I'm now 75% equities and 25% cash in SIPP and want a better use for that cash over the long-term. I don't fancy bonds, gold, property. The attractiveness of P2P is decent rates (with risk) and the money stays in the UK but is not going to the banks to be leveraged up into mortgages.
  21. The big expenses in our lives that we have control over are : (ignoring children!) 1. Education. - Don't go to unversity - Go but dodge the debt by moving abroad - Get employer to pay for it 2. Housing - Only buy when prices are low (i.e. not in the last 15+ years), live/workabroad until prices come down - Cheat. e.g. live in mobile transport when young, buy woodland/farmland and occupy, learn the planning system and bend it. Whatever you have to do to avoid buying at high prices or renting long-term. 3. Pension - Make use of salary sacrifice and low-cost SIPP platforms - Buy low, hold long-term, collect divis - Move as much higher-rate income into SIPP as possible - Learn about pension recycling but staying within the rules I went to uni with a company sponsorship many years ago but otherwise, have done all of the above at various times.
  22. With negative rates at European banks, we could offer the Isle of Wight as a vault for all Euro cash.
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