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CliveV is incorrect. The first part of the removal of the tax benefit on dividends for pension funds had occured prior to the election of New Labour.
It was not a special charge but the removal of a tax avoidance privilege that pension schemes enjoyed compared with the ordinary investor.
As someone with Trustee responsibilities in a major UK pension scheme I am only too familiar with the pressure some schemes have come under as a result of the difficult time in the equity market but it must be remembered that the changed tax regime did not stop many employers grabbing the then surpluses when the heady days of equity prices were hapenning.
It was not a special charge but the removal of a tax avoidance privilege that pension schemes enjoyed compared with the ordinary investor.
As someone with Trustee responsibilities in a major UK pension scheme I am only too familiar with the pressure some schemes have come under as a result of the difficult time in the equity market but it must be remembered that the changed tax regime did not stop many employers grabbing the then surpluses when the heady days of equity prices were hapenning.
I am not "incorrect" Alun - the removal of ACTR was never on the agenda of the previous Government to New Labour. The removal of ACTR was brought in at Gordon Browns very first budget.
As for ACTR being a Tax Avoidance privilege - what nonsense!.
The reason why pension schemes enjoyed this was because pensions were always classified as deferred income. You gave up having income now by saving in a pension scheme so that your fund could grow and you then took the income that is taxed.
So it was hardly tax avoidance! What happened prior to Gordon Browns pension tax raid was your earnt a
As for ACTR being a Tax Avoidance privilege - what nonsense!.
The reason why pension schemes enjoyed this was because pensions were always classified as deferred income. You gave up having income now by saving in a pension scheme so that your fund could grow and you then took the income that is taxed.
So it was hardly tax avoidance! What happened prior to Gordon Browns pension tax raid was your earnt a
Morning Clive, I have to say you're dedicated to your job. You shouldn't even be talking about it on a Friday night, let alone a Saturday morning !
I take on board all you say and agree to a certain extent. I guess everyone takes a view according to their own circumstances. I used my voluntary pension scheme to avoid moving into the 40% tax bracket so that was a major plus for me.I took a 4% annuity with a 3% rise every year. built in. I was just 54, my wife 39. No one knows how long they will last on this earth but I aim to be around for the average which should give me 30 more years, my wife should benefit for nearly 50.
I retired 13 months ago. If I had waited another 6 months the new pension laws would have allowed me to get my hands on the whole of my voluntary pension pot. Guess what, I decided it didn't matter then and I stick by that decision.The reasons are twofold
1) I have had an extra 6 months of freedom. The gift of life and time to do what I want when I want. I have already stated in a previous post, this freedom comes at a price but it's worth every penny. I think far too many people hang on to the concept that money is everything. However, you may have to sacrifice what may have seemed important in the past.When you close your eyes to sleep you are not aware of the fact your van is old, when you look out of the window you get the same view as everyone else but you also have the time to enjoy it more often. I am positive that when I get to 80( and I'm confident my new lifestyle will help get me there) there will be only one thing I will really want and that is a few more years like the ones I'm enjoying right now.It's also worth noting not many people die totally broke.
2)The lump sum I took out is really just more worry. Initially I invested it in the stock market and saw dramatic rises, it then slumped again and I withdrew most ( breaking even)and it now sits in a building society account.The stock market has continued to grow but I no longer worry about loosing my hard earned. I don't look at the markets 5 times a day. I am happy in the knowledge that as my wife is a non tax payer we can earn 5.2% net which keeps it's value ahead of inflation. I don't intend spending any of it for the time being. I have budgeted against my guaranteed pension for life and I'm happy that although I will never ever be as prosperous as I once appeared to be, I am blissfully happy.
As for loosing our pension fund when we both die so what. I keep on paying car insurance , house insurance you name it insurance and the only people claiming it are strangers to me.My 2 children will just have to make their own provision, and as previously stated, very few die totally broke so there should be something left for them.
I know you will counter, as a financial adviser, my money could be doing better than a building society but who knows what will happen with other investments. I have experienced loosing a chunk of my pension fund with Equitable Life, I have an endowment policy with Standard Life which is seriously under performing. Fortunately it is no longer needed to pay off a mortgage.
No the most important thing is a stress free, contented life. I have joined the TOG's and lie in bed listening to the radio until it's light and bright enough to get up.I have a sly grin on my face when I listen to the traffic reports as I contemplate how to spend my day for me.
By the sound of things Clive, you need to get out of the rat race too !
Good luck.
I take on board all you say and agree to a certain extent. I guess everyone takes a view according to their own circumstances. I used my voluntary pension scheme to avoid moving into the 40% tax bracket so that was a major plus for me.I took a 4% annuity with a 3% rise every year. built in. I was just 54, my wife 39. No one knows how long they will last on this earth but I aim to be around for the average which should give me 30 more years, my wife should benefit for nearly 50.
I retired 13 months ago. If I had waited another 6 months the new pension laws would have allowed me to get my hands on the whole of my voluntary pension pot. Guess what, I decided it didn't matter then and I stick by that decision.The reasons are twofold
1) I have had an extra 6 months of freedom. The gift of life and time to do what I want when I want. I have already stated in a previous post, this freedom comes at a price but it's worth every penny. I think far too many people hang on to the concept that money is everything. However, you may have to sacrifice what may have seemed important in the past.When you close your eyes to sleep you are not aware of the fact your van is old, when you look out of the window you get the same view as everyone else but you also have the time to enjoy it more often. I am positive that when I get to 80( and I'm confident my new lifestyle will help get me there) there will be only one thing I will really want and that is a few more years like the ones I'm enjoying right now.It's also worth noting not many people die totally broke.
2)The lump sum I took out is really just more worry. Initially I invested it in the stock market and saw dramatic rises, it then slumped again and I withdrew most ( breaking even)and it now sits in a building society account.The stock market has continued to grow but I no longer worry about loosing my hard earned. I don't look at the markets 5 times a day. I am happy in the knowledge that as my wife is a non tax payer we can earn 5.2% net which keeps it's value ahead of inflation. I don't intend spending any of it for the time being. I have budgeted against my guaranteed pension for life and I'm happy that although I will never ever be as prosperous as I once appeared to be, I am blissfully happy.
As for loosing our pension fund when we both die so what. I keep on paying car insurance , house insurance you name it insurance and the only people claiming it are strangers to me.My 2 children will just have to make their own provision, and as previously stated, very few die totally broke so there should be something left for them.
I know you will counter, as a financial adviser, my money could be doing better than a building society but who knows what will happen with other investments. I have experienced loosing a chunk of my pension fund with Equitable Life, I have an endowment policy with Standard Life which is seriously under performing. Fortunately it is no longer needed to pay off a mortgage.
No the most important thing is a stress free, contented life. I have joined the TOG's and lie in bed listening to the radio until it's light and bright enough to get up.I have a sly grin on my face when I listen to the traffic reports as I contemplate how to spend my day for me.
By the sound of things Clive, you need to get out of the rat race too !
Good luck.
Hi Clive/Rioja/Scotch Lad,
I have read this thread with great interest thank you all.
As Rioja says it's all a matter of what risk you are now prepaired to take. All the issues surrounding pensions have gone for at least three of us ( being already retired ). Nothing wrong with the building society for your hard earned as long as you are keeping an eye on the rates you are receiving. One of the most difficult thing I find about being retired is I still want to save,or rather I have difficulty in spending the hard earned.
Good thread
Frank & Val
I have read this thread with great interest thank you all.
As Rioja says it's all a matter of what risk you are now prepaired to take. All the issues surrounding pensions have gone for at least three of us ( being already retired ). Nothing wrong with the building society for your hard earned as long as you are keeping an eye on the rates you are receiving. One of the most difficult thing I find about being retired is I still want to save,or rather I have difficulty in spending the hard earned.
Good thread
Frank & Val
Morning - back at my desk - God I love my job!
Thanks for your concern Rioja!! - I do switch off at the w/e - but just occaisionaly the hipocrasy of Government (dosen't matter which one) gets me all fired up.
The Treasury refusing to release papers showing Gordon Browns "thinking" at the time in 1997, despite the Information Commissioner demanding that the Treasury does so under the Data protection Act, is more akin to the way the old Eastern Bloc countries used to act rather than a supposedly "free democracy".
Anyway - Rioja - a couple of points if I may:-
You strike me from your posts that you are a "cautious" individual. Franks assessment of "Risk" is spot on. The most imprtant thing I do before anything else is to assess the individuals attitude to risk. We then classifiy on a scale of 1 to 10 where 1 is low risk (Cash) and 10 high risk (shares)
So I would say you are probabaly arround "2"
So what in earth were you doing investing in the stock market where the risk profile is "8" and above????
We work on a rule of thum that for your age each individual should have that percentage in safe secure low risk investments.
So if you are 25 the 25% should be low risk.
When you are 60 then 60% should be low risk. It is a simple "rule" but like most simple things - it works.
As for money on deposit being "safe" - are you aware that only
Thanks for your concern Rioja!! - I do switch off at the w/e - but just occaisionaly the hipocrasy of Government (dosen't matter which one) gets me all fired up.
The Treasury refusing to release papers showing Gordon Browns "thinking" at the time in 1997, despite the Information Commissioner demanding that the Treasury does so under the Data protection Act, is more akin to the way the old Eastern Bloc countries used to act rather than a supposedly "free democracy".
Anyway - Rioja - a couple of points if I may:-
You strike me from your posts that you are a "cautious" individual. Franks assessment of "Risk" is spot on. The most imprtant thing I do before anything else is to assess the individuals attitude to risk. We then classifiy on a scale of 1 to 10 where 1 is low risk (Cash) and 10 high risk (shares)
So I would say you are probabaly arround "2"
So what in earth were you doing investing in the stock market where the risk profile is "8" and above????
We work on a rule of thum that for your age each individual should have that percentage in safe secure low risk investments.
So if you are 25 the 25% should be low risk.
When you are 60 then 60% should be low risk. It is a simple "rule" but like most simple things - it works.
As for money on deposit being "safe" - are you aware that only
Woops - took a call and pressed the wrong key!
Appologies
OK - so first fund is an equity fund - high risk @ "10" !!! but can give excellent returns - look at the data - 50% growth last year but can give some negatives.
The second is a Deposit based fund (note the interest is after tax) - low risk @ "1" and low performance as well.
Then we have the third - Norwich Unions Property Fund (No specific recommendation - just used as an example) it has the same risk score as Money on deposit but far greater performance. Most Fund Supermarkets carry the 5 or six main Praperty funds.
Have a look:-
Equity
http://www.skandia.co.uk/funds/fundinfo/GetFactsheet.asp?FundID=12041&Company=MFUND&Class=UT&Language=ENG&Series=1&FileType=PDF
Cash
http://www.skandia.co.uk/funds/fundinfo/GetFactsheet.asp?FundID=88072&Company=MFUND&Class=UT&Language=ENG&Series=1&FileType=PDF
Property
http://www.skandia.co.uk/funds/fundinfo/GetFactsheet.asp?FundID=33100&Company=MFUND&Class=UT&Language=ENG&Series=1&FileType=PDF
Other low risk funds are available as well such as "Fixed Interest" and "Gilt" based funds.
If you as a cautious investor went into the Stock Market I would suggest you were either badly advised (It is one of the FSA "cardinal sins" to get a clients risk profile wrong - and quite rightly so!) or you did it yourself and you did not know what you were doing.
If we had advised you as a cautious invester - and most of our clients are! a proportion of your capital would be in a couple of property funds that averaged circa 18% (net of tax) over the last 12 months - (look at the ten year performance as well as this was not a "flash in the pan"!)
Also sone Gilts and Fixed Interst at about 7% to 8% net of tax plus some money on deposit.
Not having all your eggs in one basket is the key.
Appologies
OK - so first fund is an equity fund - high risk @ "10" !!! but can give excellent returns - look at the data - 50% growth last year but can give some negatives.
The second is a Deposit based fund (note the interest is after tax) - low risk @ "1" and low performance as well.
Then we have the third - Norwich Unions Property Fund (No specific recommendation - just used as an example) it has the same risk score as Money on deposit but far greater performance. Most Fund Supermarkets carry the 5 or six main Praperty funds.
Have a look:-
Equity
http://www.skandia.co.uk/funds/fundinfo/GetFactsheet.asp?FundID=12041&Company=MFUND&Class=UT&Language=ENG&Series=1&FileType=PDF
Cash
http://www.skandia.co.uk/funds/fundinfo/GetFactsheet.asp?FundID=88072&Company=MFUND&Class=UT&Language=ENG&Series=1&FileType=PDF
Property
http://www.skandia.co.uk/funds/fundinfo/GetFactsheet.asp?FundID=33100&Company=MFUND&Class=UT&Language=ENG&Series=1&FileType=PDF
Other low risk funds are available as well such as "Fixed Interest" and "Gilt" based funds.
If you as a cautious investor went into the Stock Market I would suggest you were either badly advised (It is one of the FSA "cardinal sins" to get a clients risk profile wrong - and quite rightly so!) or you did it yourself and you did not know what you were doing.
If we had advised you as a cautious invester - and most of our clients are! a proportion of your capital would be in a couple of property funds that averaged circa 18% (net of tax) over the last 12 months - (look at the ten year performance as well as this was not a "flash in the pan"!)
Also sone Gilts and Fixed Interst at about 7% to 8% net of tax plus some money on deposit.
Not having all your eggs in one basket is the key.
Morning - back at my desk - God I love my job!
Thanks for your concern Rioja!! - I do switch off at the w/e - but just occaisionaly the hipocrasy of Government (dosen't matter which one) gets me all fired up.
The Treasury refusing to release papers showing Gordon Browns "thinking" at the time in 1997, despite the Information Commissioner demanding that the Treasury does so under the Data protection Act, is more akin to the way the old Eastern Bloc countries used to act rather than a supposedly "free democracy".
Anyway - Rioja - a couple of points if I may:-
You strike me from your posts that you are a "cautious" individual. Franks assessment of "Risk" is spot on. The most imprtant thing I do before anything else is to assess the individuals attitude to risk. We then classifiy on a scale of 1 to 10 where 1 is low risk (Cash) and 10 high risk (shares)
So I would say you are probabaly arround "2"
So what in earth were you doing investing in the stock market where the risk profile is "8" and above????
We work on a rule of thum that for your age each individual should have that percentage in safe secure low risk investments.
So if you are 25 the 25% should be low risk.
When you are 60 then 60% should be low risk. It is a simple "rule" but like most simple things - it works.
As for money on deposit being "safe" - are you aware that only
Morning - back at my desk - God I love my job!
Thanks for your concern Rioja!! - I do switch off at the w/e - but just occaisionaly the hipocrasy of Government (dosen't matter which one) gets me all fired up.
The Treasury refusing to release papers showing Gordon Browns "thinking" at the time in 1997, despite the Information Commissioner demanding that the Treasury does so under the Data protection Act, is more akin to the way the old Eastern Bloc countries used to act rather than a supposedly "free democracy".
Anyway - Rioja - a couple of points if I may:-
You strike me from your posts that you are a "cautious" individual. Franks assessment of "Risk" is spot on. The most imprtant thing I do before anything else is to assess the individuals attitude to risk. We then classifiy on a scale of 1 to 10 where 1 is low risk (Cash) and 10 high risk (shares)
So I would say you are probabaly arround "2"
So what in earth were you doing investing in the stock market where the risk profile is "8" and above????
We work on a rule of thum that for your age each individual should have that percentage in safe secure low risk investments.
So if you are 25 the 25% should be low risk.
When you are 60 then 60% should be low risk. It is a simple "rule" but like most simple things - it works.
As for money on deposit being "safe" - are you aware that only
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