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I Give Up - Buy To Let Here I Come

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I have been a member of this site for nearly 10 years.I am 44.

Sold in 2005 in London. Bought 2009 in Edinburgh. So for somewhere to live we are in OK shape.

HOWEVER......................................

On the pension front we are shafted:

http://www.guardian.co.uk/money/2013/apr/23/falling-annuity-rates-cost-retirement -> 3% annuity rates mean to get an income of 25k at 65 need to have a £750k pension pot.

Unfortunately I have my own business, should have been a Doctor/Police Man/MP etc etc Wife isnt working but I have told her she can only get a job with a final salary pension! I have used all my money for the last 10 years to try and build the business, pay employers NI and keep people off the dole!

So I can either try and put away say £3k a month for 20 years and end up with about 2k a month income (and lord knows what the annuity rates will be by then). Or get some buy to lets (say £600k worth), subsidise them to say £1k a month, and end up with a £2k a month income in 20 years. BTW I dont have 3k a month to do that anyway!!

I havent done the proper maths on this, and having rental properties is undoubtably a hassle/job etc.

But tell me why I am wrong!!!!!!!!!!!!!!!

QE should be banned.

Public sector jobs should advertise what the annual pension provision is worth along with the salary. ie "this job pays 35k a year and the pension is worth 15k a year".

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I have been a member of this site for nearly 10 years.I am 44.

On the pension front we are shafted:

http://www.guardian.co.uk/money/2013/apr/23/falling-annuity-rates-cost-retirement -> 3% annuity rates mean to get an income of 25k at 65 need to have a £750k pension pot.

Unfortunately I have my own business, should have been a Doctor/Police Man/MP etc etc Wife isnt working but I have told her she can only get a job with a final salary pension! I have used all my money for the last 10 years to try and build the business, pay employers NI and keep people off the dole!

So I can either try and put away say £3k a month for 20 years and end up with about 2k a month income (and lord knows what the annuity rates will be by then). Or get some buy to lets (say £600k worth), subsidise them to say £1k a month, and end up with a £2k a month income in 20 years. BTW I dont have 3k a month to do that anyway!!

I havent done the proper maths on this, and having rental properties is undoubtably a hassle/job etc.

But tell me why I am wrong!!!!!!!!!!!!!!!

QE should be banned.

Public sector jobs should advertise what the annual pension provision is worth along with the salary. ie "this job pays 35k a year and the pension is worth 15k a year".

You don't have to buy an annuity there are other options....income draw down or abandon a pension altogether and pile into ISA's.

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You don't have to buy an annuity there are other options....income draw down or abandon a pension altogether and pile into ISA's.

Ok, good point and thanks for trying to calm me down, however i think unless you are very wealthy they limit incone drawdown to 120% of the equivalent annuity.

Isas are an option i suppose. And then spend the capital slowly!!

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Unfortunately I have my own business, should have been a Doctor/Police Man/MP etc etc Wife isnt working but I have told her she can only get a job with a final salary pension! I have used all my money for the last 10 years to try and build the business, pay employers NI and keep people off the dole!

Sounds familiar, 48 here and running business for 18 years with little to show for it except the house we live in.

I think I am just going to have to continue working until I drop; thankfully I increasingly find what i do interesting and fulfilling, much more so than when it was like shooting fish in a barrel 10 years ago.

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Public sector jobs should advertise what the annual pension provision is worth along with the salary. ie "this job pays 35k a year and the pension is worth 15k a year".

The unfunded pensions being promised to people entering the public sector workforce now are near worthless. They are just a piece of paper from the UK government saying "IOU £15k pa in 40 years' time". The UK government is cruising towards bankruptcy at a rate of £120bn per year and will not be honouring these promises.

Young public sector workers who accept these promises at face value are mugs.

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You are not thw first to think this. Several seasoned HPCers have reluctanty gone over to BTL in the last 6 months.

Anyone who did nit buy prior to about 2000 and/or who does not have a nice public pension - and I suspect that both sums up the majority of people on here - are well and truly shafted.

ZIRP, stagflation, rising food, fuel and house prices are going to continue for years IMPO.

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BTL, in spite of involving leverage to buy a property, IS a financial product, just as any other pension product is.

In other words, it relies on a return from consumers ( ultimately) to provide a profit.

If Pension funds cant do it, then neither will BTL.

They both depend on people spending money.....

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You would make a perfect landlord. Would you like me to introduce you to a mortgage broker?

Thats a bit harsh.

I have been an accidental landlord before, i have a physics degree (so can do sums to a certain degree) and am a Chartered Tax Advisor so have a reasonable knowledge of tax and financial products. I just meant the figures are not exact.

The point is that the government Zirp drives down annuity rates and makes property investment more attractive.

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BTL, in spite of involving leverage to buy a property, IS a financial product, just as any other pension product is.

In other words, it relies on a return from consumers ( ultimately) to provide a profit.

If Pension funds cant do it, then neither will BTL.

They both depend on people spending money.....

Well thats true, but i think what that doesn't take in to accoubt is that the pension funds will pay agents to do the admin, management etc whereas a btl landlord is doing some of that themselves to make the return slightly better.

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Young public sector workers who accept these promises at face value are mugs.

In my year in the public sector I joined and left the public sector pension scheme. Bloody good pension scheme, but I couldn't see how it would be able to remain - funding difficulties, not to mention my effective retirement age jumping 9 years+ in a matter of 2 years and exceeding my personal life expectancy.

I am very fortunate to have been unemployed in my youth and tasted retirement albeit on dole, because it looks like I'll soon be working till death.

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Unfortunately I have my own business, should have been a Doctor/Police Man/MP etc etc Wife isnt working but I have told her she can only get a job with a final salary pension! I have used all my money for the last 10 years to try and build the business, pay employers NI and keep people off the dole!!

Do those jobs really exist any more? Who still offers the final salary scheme to new employees?

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To make this a level playing field.....no job should promise a defined guaranteed inflation proof pension, with some contribution or no contribution.

Everyone, self-employed or not should be responsible for their own pensions....either everyone gets a guarantee or nobody gets a guarantee.......that would force government changes I am sure, people safe with the security have no incentive or reason to change what would directly affect them personally. ;)

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In the staff room recently. Mentioned to other teachers that I am not on the scheme and won't enter it until I am within 20years from retirement, ie 50yrs of age.

The blank faces and puzzled looks were unbelievable. I tried explaining that I didn't trust the gubbermint one iota and that they may keep changing the goalposts in the next 40 years before I retire making my pension worth dogturd.

It was like they either a) were not listening or B) totally disregarded what i said as not being possible.

They get told it's good, believe what they are told without the slightest thought to checking any of the numbers.

If I enter and I get shafted I will spend my retirement bitter and twisted that I had been so stupid to fund someone elses retirement and be another sheep. If I choose not to enter and the scheme carries on as normal and the pension is a good one, i will spend my retirement worse off but content that I had made the decision and so could live with that more easily.

The thing with house prices, taxes, inflation, and all the shizzle we talk about on here isn't just about money, but it is people's lifes in the number of hours spent working when you would rather be doing something else. the more they steal to keep the plates spinning the more hours you have wasted...and life is short. im keeping as many hours as i can for me, i have no responsibility to look after anyone else in this society other than the people i choose to through choice and not force. the people at the bottom of the pile maybe poor financially, but they have 1 thing that 60hour a week slaves do not,- F-R-E-E T-I-M-E

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Do those jobs really exist any more? Who still offers the final salary scheme to new employees?

Civil service? Universities? Nhs

But maybe someone else can confirm so i can tell my wife!!

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Civil service? Universities? Nhs

But maybe someone else can confirm so i can tell my wife!!

Universities have switched to career average, typically accrued at 1/80th.

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In my year in the public sector I joined and left the public sector pension scheme.

This is a common misconception. There are actually many different public sector pension schemes for different parts of the public sector. Some, like the NHS and teachers' pension schemes, are totally unfunded and backed only nice, cheap words. Others, like the Universities Superannuation Scheme for university lecturers, use employee+employer contributions to buy assets for the pension fund.

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I believe that it's common market psychology for people to pile into investment classes when prices have risen and bail out of them when they fall. Many analysts suggest that this is often the completely wrong thing to do. One of the advantages of pensions in my view is that they are reassuringly boring. People are more likely to save consistently over a long timeframe rather than react irrationally to market fluctuations. Wise people may suggest alternative long-term investment vehicles (of which there are many), but 9 times out of 10, when someone dismisses pensions they usually have no alternative plan in place for their retirement...

... well, apart from finding someone who will pay a massively inflated sum for their unremarkable suburban house, so that they can buy a dream cottage in a highly sought-after location at a knock-down price.

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I have been a member of this site for nearly 10 years.I am 44.

Sold in 2005 in London. Bought 2009 in Edinburgh. So for somewhere to live we are in OK shape.

HOWEVER......................................

On the pension front we are shafted:

http://www.guardian.co.uk/money/2013/apr/23/falling-annuity-rates-cost-retirement -> 3% annuity rates mean to get an income of 25k at 65 need to have a £750k pension pot.

Unfortunately I have my own business, should have been a Doctor/Police Man/MP etc etc Wife isnt working but I have told her she can only get a job with a final salary pension! I have used all my money for the last 10 years to try and build the business, pay employers NI and keep people off the dole!

So I can either try and put away say £3k a month for 20 years and end up with about 2k a month income (and lord knows what the annuity rates will be by then). Or get some buy to lets (say £600k worth), subsidise them to say £1k a month, and end up with a £2k a month income in 20 years. BTW I dont have 3k a month to do that anyway!!

I havent done the proper maths on this, and having rental properties is undoubtably a hassle/job etc.

But tell me why I am wrong!!!!!!!!!!!!!!!

I think the obvious thing is - why do you think you'll need an income of £25k a year once you retire? Of course I presume you will no longer have kids to support, no mortgage and no debt, like most (but not all :huh: ) pensioners. Are you projecting what you'll need at 65 or are you using today's figures?

Working on today's costs, as long as you don't want 3 months a year in Florida or 3 x luxury cruises a year, I reckon you can live fairly comfortably on half that. Also presuming we don't have Zimbabwe levels of inflation of course.

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BTL, in spite of involving leverage to buy a property, IS a financial product, just as any other pension product is.

In other words, it relies on a return from consumers ( ultimately) to provide a profit.

If Pension funds cant do it, then neither will BTL.

They both depend on people spending money.....

Yep, people need money to pay rent.

Nothing is certain, interest rates are historically low, govt spending out of control.

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Im 28 and have been paying into my public sector pension for five years (hate working for public sector but thats a different story), however Ive never even looked at what it all means as im used to everyone telling me how great the pension is...

Anyway, the way things are going, im starting to think i'd be better off using the money that I pay into my pension each month to buy PM's instead for the rest of my working days

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You are not thw first to think this. Several seasoned HPCers have reluctanty gone over to BTL in the last 6 months.

Anyone who did nit buy prior to about 2000 and/or who does not have a nice public pension - and I suspect that both sums up the majority of people on here - are well and truly shafted.

ZIRP, stagflation, rising food, fuel and house prices are going to continue for years IMPO.

Really? Who would that be? I can't think of a worse time to go into buy-to-let.

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For leveraged BTL to be viable interest rates have to stay at the current levels for the next 10-15 years, thats pretty unlikley IMO.

havent rates been near 0 in japan for the last 20 years?

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  • 244 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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