The age pension

[drspock]

Move to a smaller home say £150k in Euroland .. Place the residual £150k in high interest account (needs to be risk free, may be all there is !). .. Paying, say 4.3% net of 20% savings tax.
Draw this lot down, monthly, like a reversed mortgage... rough measure, but not far out. 0.043 x £150k = £6450 half of this is £3225 (being average int over the whole 15yr period).
Let us draw down the cap plus int over 15 yrs £150k + (£3225 x 15) = tot amount to draw of £198k, divide by 15 x 12 = 180 = £1100 per month. tax already paid. (The precise amount by calc is £1126 pm)

Not to sure about your maths on this empip, you will be having a reduced income year on year if you are drawing of the capital, at a time when the cost of living is rising. And anyway Brown will still take it from you when you come back to the uk
Furthermore who the hell wants to live in romania or bulgaria, those are about the only places where you will a decent house for that price.
And the winters, brr
My idea , get as much as you can now from one of these schemes, and either give to your kids as deposits for a house or whatever, no kids then spend it on holidays , or anything you always wanted, better than it all or most going to the state when you've lost the plot.
Another advantage of my way is that you avoid inheritance tax.

 

[empip]

I am risk averse in during these advancing years.

 

[masona]

My idea , get as much as you can now from one of these schemes, and either give to your kids as deposits for a house or whatever, no kids then spend it on holidays , or anything you always wanted, better than it all or most going to the state when you've lost the plot.
Another advantage of my way is that you avoid inheritance tax.

The trouble is, there's a limit of how much you can give away per year.

Who would know anyhow? Does the taxman look at our account?

 

[empip]

I am risk averse during these advancing years.

 

[txdmy1]

2 things
KISS principle - keep it stupid, simpleton - works always
plan for your retirement

 

[drspock]

2 things
KISS principle - keep it stupid, simpleton - works always
plan for your retirement

Point taken, but you don't plan for when you have departed this planet.
This is where HMG steps in and you are in no position to do anything about it if they decide to move the goal posts.
It is enivitable that the government will have to raise more money to care for an increasing elderly population and this is one of the easier options.
Less likely to affect share of votes whatever party is in power.
PS I thought KISS meant , keep it SIMPLE SIMON

 

[2scoops0406]

Here is a plan... If one has no business aspirations, no inheritance on the horizon and sfa pension. BUT hopefully long time owner occupier having a house 'standing one in' for say £300k.

Move to a smaller home say £150k in Euroland .. Place the residual £150k in high interest account (needs to be risk free, may be all there is !)

You forgot CGT.

 

[JohnD]

No CGT on sale of your own main home.

BTL and investment properties however are subject to CGT.


BTW I wouldn't go for the "deposit account" option but if you wanted to, you could get a Purchased Life Annuity which will (1) pay out more (2) be more tax efficient (3) not run out if you live longer than anticipated.

If you are a UK resident and a taxpayer, contributions to a (low cost) pension plan are an unbeatable investment, since you receive back the tax on the income you made your contributions out of.

E.g. you pay 22% tax. You contribute £78 out of your pocket and your pension scheme receives £100.
You pay £40% tax. You contribute £60 out of your pocket and your pension scheme receives £100.
You have your own company. Instead of paying you £100 gross (£60 net) and paying £13 Employers NI (total cost £113, net amount in your pocket £60) it contributes £113 to your pension plan, and your pocket is only down £60... a real bargain

 

[empip]

No CGT on sale of your own main home.

BTL and investment properties however are subject to CGT.


BTW I wouldn't go for the "deposit account" option but if you wanted to, you could get a Purchased Life Annuity which will (1) pay out more (2) be more tax efficient (3) not run out if you live longer than anticipated.

If you are a UK resident and a taxpayer, contributions to a (low cost) pension plan are an unbeatable investment, since you receive back the tax on the income you made your contributions out of.

E.g. you pay 22% tax. You contribute £78 out of your pocket and your pension scheme receives £100.
You pay £40% tax. You contribute £60 out of your pocket and your pension scheme receives £100.
You have your own company. Instead of paying you £100 gross (£60 net) and paying £13 Employers NI (total cost £113, net amount in your pocket £60) it contributes £113 to your pension plan, and your pocket is only down £60... a real bargain

I was not offering an alternative to a proper pension plan, I know about them I had one... (final salary - the best)
Just a different idea for supplementing a pension whilst retaining full control of the dosh.

I quoted the best offer I could find on purchased annuity plans. For a one off purchase, they are poor payers.
How more tax efficient? The income is taxable above personal allowance level.
Not run out? They will wither on the vine of inflation - But, if you choose index linked, fine, but they just start from a lower level and the RPI isn't offering too much protection these days.

 

[2scoops0406]

No CGT on sale of your own main home.

If you use the proceeds to buy another home, if you have cash left over..... CGT.

 

[JohnD]

No CGT on sale of your own main home.

It's true!
And what you spend the money on is your own affair.


http://www.hmrc.gov.uk/leaflets/cgtfs1.htm#b10