Pension stuff, how's it all looking ? HAve you prepared ?

[Pirahna]

IFAs, how do you find/pick one ? Are they actually worth having ?

I use a crowd called Wealth at Work, the setup fees weren't cheap but they've paid it back many times over. For me they've definitely been worth it.

And how did you find them and decide they were a good option ?

They deal mainly with corporate clients and were founded my people who had previously worked at JP Morgan (same as wifey). They were engaged by JP Morgan to offer pension services within the bank. They came highly recommended from people within the bank. Wifey and I are not pension fund managers so it made sense to engage someone to do it for us.

[weeksy]

I wasn't thinking of taking it out to 'invest' as such. The 55 @25% will go towards finishing mortgage and potentially going racing. That'll also involve a house move and lower value but bigger house... So assuming there's some money left from it, it'll be more a case of where it'll go to maintain value which seems to be Premium Bonds or some of the other things Potter talks about. We're not talking hundreds of thousands, but we are potetnially talking a LOT more money than i've had lying round before now

[Count Steer]

Lopping a chunk off the mortgage makes much sense. (To me anyway). It's effectively taking it out of one appreciating asset and putting it in another, as long as the housing market holds up. Look out for charges on the mortgage if you pay it off early.

You don't have to take the 25% in one go either. AFAIK you could take a slice one year, let the rest grow and take another slice - or not if anything has changed. I guess that's where having a plan/target and some informed advice comes in.

(There aren't any obvious signs that the 25% tax free is going to change, but never say never).

[weeksy]

Lopping a chunk off the mortgage makes much sense. (To me anyway).

Yeah i hear you. That'll depend on the house move stuff as it could be we dramatically reduce it on the move anyway. But that's all very much an unknown quantity until we find a house we want and get a price for ours.

[Yambo]

. . . although in reality inflation in real terms is higher than the fantasy number they're punting out.

So what is the UK inflation rate at the moment?

[Yorick]

[

It was explained to me a long time ago like this…
An asset is something that makes you money, like a rental property. A liability is something that costs you money, like the house you live in.

Our villa is paid for. We rent out the basement apartment.

Where's this fit in the plan ?

[Count Steer]

Lopping a chunk off the mortgage makes much sense. (To me anyway). It's effectively taking it out of one appreciating asset and putting it in another, as long as the housing market holds up.

Kind of - but the house you live in isn’t an asset, it’s a liability. It only becomes an asset once you decide to dispose of it, but presumably you need to buy another one and then that becomes a liability.

It was explained to me a long time ago like this…
An asset is something that makes you money, like a rental property. A liability is something that costs you money, like the house you live in.

Our house will be an asset for our kids when we die and leave it to them to sell. At the moment it’s a liability that costs me money to live in.

I regard mine as an illiquid asset. I can turn it into 'cash' but it takes time. A hurried disposal may reduce the amount. It doesn't have to cost me anything in maintenance if I choose to neglect it. Same with vehicles. There are other costs linked to both (depending on use). My liquid assets like shares also cost me money (in account charges) until I turn them into cash but that can be done v quickly.

A business accountant might take a slightly different view, asset values/depreciation/asset disposal rules and all that malarkey but I'm OK with liquid/illiquid.

[MyLittleStudPony]

I too would steer clear of IFAs. They are the pension stealers.

These days products are pretty transparent and you can get good advice from forums such as Money Saving Expert (or here!).

[weeksy]

Depends on your personality, I've never been anything other than relaxed about it

[weeksy]

I don't stress about things I can't affect. The inflation rate, council tax, global warming, the war in Ukraine, etc etc. I ignore them completely.
I've got enough in the world without thinking about things I can't influence

[Count Steer]

I regard mine as an illiquid asset.

As you and Yorick point out there are grey areas, but I feel like the asset/liability thing has a lot of people fooled. They'll tell you that their house is an asset - then I ask them how much it pays into their bank account every month and they suddenly realise that it's not an asset at all, it's just a cost.

I'll just politely disagree. Generally you can raise money against assets. I can borrow based on the property value, see the equity release thread. I can convert it to cash in the bank.

I've never heard of anyone trying to borrow against liabilities.

A revenue stream is an asset but assets don't have to be income generating, just have a realisable 'cash' value.

That's putting aside the actual definition:

asset /as'et/
noun
An item of property
Something advantageous or well worth having
An item of value belonging to a business or organization (categorized for accounting purposes as current assets and fixed assets, which may themselves be intangible, tangible or financial)
(in pl) the property of a deceased or insolvent person, considered as chargeable for all debts, etc
(in pl) the entire property of all sorts belonging to a merchant or to a trading association

[Yorick]

I regard mine as an illiquid asset.

As you and Yorick point out there are grey areas, but I feel like the asset/liability thing has a lot of people fooled. They'll tell you that their house is an asset - then I ask them how much it pays into their bank account every month and they suddenly realise that it's not an asset at all, it's just a cost.

Our properties in UK appreciated massively. Even after CGT we retired on the profits.
They were assets.

[weeksy]

I agree with most of those things, but you can affect whether you pay next months mortgage.

That wasn't what I said, I said I can't affect inflation rates. I can deal with it in a way to pay my mortgage though if it goes up yes. But still, I won't stress about it. I'll just resolve it either by getting a 2nd job or pimping out the wife.

[weeksy]

... or pimping out the wife.

Do you have a rate card?

Only if inflation gets to 9%

[Count Steer]

I'll just politely disagree.

That's fine, I don't want an argument

I threw out a very black and white statement, of course there will be grey areas.

FYI - you can borrow against liabilities, you can borrow even if you don't own the liabilities, I went short on the US dollar even though I didn't own any, my arse was puckering like mad but by crikey I made it big in just a few days on that option

But now we're getting into proper grey areas that people on here won't get.

There are times the house feels like a liability.

(I suppose it's all part of the asset lifecycle - plan, acquire, use, maintain, dispose - and maintain is the and the £ bit).

Anyhoo, regarding the earlier house price discussion, I've had a mooch around the local market and from that deep dive I'd say things appear to be slowing down, particularly with some of the new build and some house types and price brackets. The middle of the market has gone a bit backwards. Whether if will perk up much with the weather is anyone's guess. OTOH the home improvement companies seem to be doing a roaring trade. Can hardly move for trade vans, 2, 3 and more at several places nearby. Nearest couple even have project management vans. There's posh!!

[wheelnut]

Lopping a chunk off the mortgage makes much sense. (To me anyway).

Yeah i hear you. That'll depend on the house move stuff as it could be we dramatically reduce it on the move anyway. But that's all very much an unknown quantity until we find a house we want and get a price for ours.

The biggest issue with the 25% is that you can only take it out once. If your pension pot is (for the sake of round numbers) £300k then you can take out £75k tax free. Wait another 5 years and take the 25% and it might be £100 k or more.

[Yambo]

. . . although in reality inflation in real terms is higher than the fantasy number they're punting out.

So what is the UK inflation rate at the moment?

Officially it's 3.2% according to the people that want you to believe it's 3.2%.
Obviously it depends on how you slice it and what you include and exclude in your calculations, but does anyone really think it's 3.2%?

So the inflation rate is possibly higher than 3.2%.

Iirc you were telling us not long ago that you were happy with a 4.5% interest rate which in reality is currently only a 1.3% interest rate, or worse.

Of course, the BoE may get inflation under control and it may come down but you still won't be getting 4.5% interest.

[Count Steer]

So what is the UK inflation rate at the moment?

Officially it's 3.2% according to the people that want you to believe it's 3.2%.
Obviously it depends on how you slice it and what you include and exclude in your calculations, but does anyone really think it's 3.2%?

So the inflation rate is possibly higher than 3.2%.

Iirc you were telling us not long ago that you were happy with a 4.5% interest rate which in reality is currently only a 1.3% interest rate, or worse.

Of course, the BoE may get inflation under control and it may come down but you still won't be getting 4.5% interest.

It's a fair point. I've always worked on the basis of - if you get anything more than the inflation% on savings etc, you're winning.

(Which is why I didn't particularly go 'Yay!' when interest rates initially went up, because inflation went up more ).

[JackyJoll]

4.5% interest rate which in reality is currently only a 1.3% interest rate, or worse.

And the bastards tax it as 4.5% unearned income.

[Treadeager]

UK State Pension! Back on page 17 , I explained that I was in a long drawn out dispute with the DWP. Pleased to say it has finally been resolved , and I have received a modest back payment to cover 5.5 years of underpayment . ( I believe that in itself is quite unusual ) . In case it may help anyone else...
1) You can buy back missing or incomplete NI years until 5th April 2025 ( costs £800+ per year ) .

2) DO NOT buy back any missing years from HMRC , WITHOUT first checking with the DWP, that it WILL improve your State Pension . ( Depending on your exact circumstances, you may not benefit from voluntarily buying back certain years ).

3) If you were promised a full " new " state pension , and it did not happen , you may be able to get it back-dated , but you almost certainly had to have formally complained at the time ( and be able to prove it ! )

The rules really are incredibly complicated . Most of the DWP staff do not understand them theirselves . Good Luck