Pension Contributions

[Jockman]

superlightr said:

I know we have different views on this.

Property prices if sensible are pretty solid in certain areas of the SE as are rental prices. Yes maintenance has to be planned. You still have your asset whereas if you have an annuity you have either fek all of £0 when you die or a massively reduced income for spouse etc for a small amount of time.

Sidicks I would genuinely be interested in what would be viewed as a 'normal' annuity situation when the main person dies. Is my view that the either it would end or be massively reduced outdated?

You're painting this as an either/or scenario. We all know the answer is Both.

With that in mind we then look at the most tax efficient way of arriving at the same desired goal.

[sidicks]

superlightr said:

I know we have different views on this.

Property prices if sensible are pretty solid in certain areas of the SE as are rental prices. Yes maintenance has to be planned. You still have your asset whereas if you have an annuity you have either fek all of £0 when you die or a massively reduced income for spouse etc for a small amount of time.

Sidicks I would genuinely be interested in what would be viewed as a 'normal' annuity situation when the main person dies. Is my view that the either it would end or be massively reduced outdated?

An annuity pays you an income until you die - if you have a guaranteed period and die before it ends, then there may be a residual payment to your estate.

A spouse's pension of 50% of the full amount, reduces the main pension by around 10%, depending on age of spouse.

Horses for courses , but one route provides guaranteed income for life and one doesn't...!! Clearly there is a price to be paid for this guarantee and some people would prefer to take the risk to achieve a higher income.

Some people would choose a combination of both!

[superlightr]

sidicks said:

Some people would choose a combination of both!

ah yes im sure you are correct in spreading the bets. The issue I have and perhaps others have is that be spreading you dont do really well in either. But then perhaps you dont bomb out either !

Im working on just property + with a small pension which ive stopped paying into. So putting all of my eggs in one basket. I struggle to see how it can go wrong when the income will develop to what I want it to be (as and when mortgages are paid off) and I hold the assets to do with as I wish until I die.
Yes interest rates can/will rise/maintenance/ etc but its all under my own control/planning. Background own a letting agency so comfortable with properties.

[Jockman]

superlightr said:

ah yes im sure you are correct in spreading the bets. The issue I have and perhaps others have is that be spreading you dont do really well in either. But then perhaps you dont bomb out either !

Im working on just property + with a small pension which ive stopped paying into. So putting all of my eggs in one basket. I struggle to see how it can go wrong when the income will develop to what I want it to be (as and when mortgages are paid off) and I hold the assets to do with as I wish until I die.
Yes interest rates can/will rise/maintenance/ etc but its all under my own control/planning. Background own a letting agency so comfortable with properties.

I'm not completely clear. Wherever possible, why don't you hold your properties in a pension? Are you happy paying tax on the rent?

You're comparing property with a pension?

[superlightr]

on the rent we receive yes we pay tax on it. It gets added to our self assessments via our accountants. Is there a better way of doing it/different way of doing it? (self employed)

Im happy to learn and correct errors and views I may hold.

[Jockman]

superlightr said:

on the rent we receive yes we pay tax on it. It gets added to our self assessments via our accountants. Is there a better way of doing it/different way of doing it? (self employed)

Im happy to learn and correct errors and views I may hold.

Sounds like you've done alright tbh. Well done.

Over 80% of my Pension is Commercial Property (I'm investing heavily to reduce this %) so I just don't want you to see them as mutually exclusive.

I also hold residential property outside of a pension.

[drainbrain]

superlightr said:

...Im working on just property + with a small pension which ive stopped paying into...

Right now I've just had an enforced 6 months off and the wife's keen for me to make it permanent. I'm the same as you and property has formed the background plan for my 'retirement' funding - that plus a small amount of long discontinued pension contribution. Plus of course the state pension.

Over the last 25 years I've not really taken much out of the properties, preferring to allow it to expand via ploughing back profit and leverage. Having just paid off 90% of the outstanding loan debt by selling stock and thinking about paying off the last 10% as well, I am really delighted with what's left and what it'll produce as nett income, which I can calculate pretty accurately using 25 years of past performance as the likely projection.

I am sure there are people who can make pension contributions of one kind or another work for them. But like most people, I'm not amongst them and I'm very glad to have made the choice I did. Property is pretty simple, pensions aren't. That's probably at the centre of my choice.