- Location
- Lincolnshire
Shortage means you pay more, be it labour or widgets
Pension or property
- Thread starter Grassman
- Start date
- Location
- Hereford
Have acquired 2 properties in the last 3 yrs . Both have increased in value and both brining in good rents . Previous properties acquired in Barking 20 yrs ago have more than doubled in value and bring in significant rent . Got houses bought in Ross On Wye and Newent about 9 yrs ago around 90 grand now worth 140 to 150 ....no pension will match that .
- Location
- Bay of Plenty NZ
Are you sure it is only worth £300k? I took one out in the late 70s (78 I think) only put £100 per year in, cashed it out last year at £82k if yours is a similar timescale then it should be worth around £800k
With low annuity rates the pensions with a guaranteed return are worth a lot to cash in. With an annuity the fund dies with you, therefore with a 2% annuity rate you have to live at least 50 years just to get your money back, the insurance companies are on to a winner!
- Location
- Scottish Highlands
So £1250 income at marginal rate, giving £750 after tax, or £9k a year (but probably other costs too?). I’m guessing you have £100k of equity in one, giving sub-10% ROI, with plenty of hassle potential.
It’s not for me, I’m afraid. For one thing I don’t see why you’d want income at your stage (and the fact you’re paying off the mortgages suggests you don’t really need it either).
- Location
- Scottish Highlands
Too right - wouldn’t expect a pension would be that poor !
- Location
- Lincolnshire
9 years of rental will have just about paid off the purchase price remember.
- Location
- Hereford
Wasn't going to waste my time pointing that out ......
- Location
- Scottish Highlands
For balance, my pension has returned a consistent 10% after all costs - so £90k and 9 years would now be £236k. And I didn’t need to repaint between tenants, etc.
Possibly, but it is also taxable at marginal rate - whereas my pension isn’t.
Possibly, but it is also taxable at marginal rate - whereas my pension isn’t.
- Location
- Lincolnshire
It is when you get it paid out.
- Location
- Hereford
Never worry about paying tax ....it mean your doing something right
- Location
- Scottish Highlands
Wasn't going to waste my time pointing that out ......
So what was your actual investment then? Presumably not the purchase price but some lower deposit. To get ROI you should work on that basis.
- Location
- East Sussex
It is worth almost double but I plan to take the lump sum of almost 50% which will leave a guaranteed annuity of 7% on the residue of £300k.
- Location
- Hereford
Paid for outright .
- Location
- Scottish Highlands
Yes and no. I’ll get a quarter out without any tax, then take what I want at marginal rate (and since I’ll be retired that will be lower than now) and if I die before 75 then what’s left will be free of inheritance tax.
- Location
- Scottish Highlands
So you paid out £90k nine years ago and it’s only worth £150? Ouch! That £90k would have cost about £150 to get into you hand back then, as it was presumably from taxed income.
puntabrava
Member
- Location
- Wiltshire
Lot of excellent free advice from Mr Mike Butler
I don't think that is correct but your employer has to give you the option
- Location
- Lincolnshire
No real need to though. Buy, rent, forget about. Once paid for its just free money until you die. Pass them on to the children early and get them to "help you out". No need to liquidate. "Transaction costs" kill most investments. Very few reasons to sell. Unless you want to move to the Bahamas.