Will the OAP exist for me?

[PurpleTurtle]

sidicks said:

PurpleTurtle said:

As a 44yo bloke I'm of the view that:

1) State pension is a Ponzi scheme
2) I fully expect pension age to be moved out to (at least) 70 for people of my age. Average life expectancy is 83 for British males, so I've got 13 years to fund.

No, average life expectancy is not the same as 70 plus expected future lifetime at age 70!

I think you'll find current population life expectancy for a 70-year old is 85 and higher than that for those with private pensions, due to selection effects.

Without getting into a detailed actuarial spat, the general point I was trying to make is that (PH Euromillions wins/major business successses aside) I expect I've probably got 26 years working left, during which time I've got to fund an approximate 13 years post-retirement.... maybe it'll be more/maybe less it is impossible to accurately predict on an individual basis.

My Grandparents all died of 'natural causes' at ages 40, 73, 94 and 102. Frankly I wouldn't want the quality of life that those who lived beyond 80 had. No real point trying to second guess when it's going to happen though, I'm just working on the basis of saving as best I can and hoping it's enough. I'm saving £20k per annum into my pension. How much does a 90yo living by modest means need to live on? Rhetorical question but I'm hoping I've got enough.

Frankly my greater concern by then is that I won't need to go into care at great expense, needing to sell our home to fund it, to the detriment of our son inheriting it, because he'll be part of a generation that largely won't be able to afford their own homes due to massive increases in property prices fuelled by low interest rates and the BTL-as-pension explosion of this generation.

[33q]

sideways sid said:

Taking my tin hat off now, this appears to be a fantastic investment - c.30% yield, and risk-free to the extent that it is government-backed!

Edited by sideways sid on Tuesday 7th March 13:08

In itself it is a good investment....however under pre 2016 rules I didn't need to pay anything.

I am thinking of paying it in but it grates I have to.

[markcoznottz]

NickCQ said:

markcoznottz said:

whilst Cameron's father hides his money offshore

Off topic, but this is not really a fair summary of what the Panama Papers revealed. Most investors (even us ISA heroes) will have money in funky jurisdictions without realising it to avoid double tax.

Granted, I was just showing the disconnection between the elite and the voting public, not that it needs much repeating given recent events. The very fact that Cameron initially denied that his family offshored £££££ suggests it is evasion, people don't generally deny owning an isa do they. I was just illustrating that if there is a tax on assets these people will hide wealth, and the middle class will get soaked.

[NickCQ]

markcoznottz said:

NickCQ said:

markcoznottz said:

whilst Cameron's father hides his money offshore

Off topic, but this is not really a fair summary of what the Panama Papers revealed. Most investors (even us ISA heroes) will have money in funky jurisdictions without realising it to avoid double tax.

Granted, I was just showing the disconnection between the elite and the voting public, not that it needs much repeating given recent events. The very fact that Cameron initially denied that his family offshored £££££ suggests it is evasion, people don't generally deny owning an isa do they. I was just illustrating that if there is a tax on assets these people will hide wealth, and the middle class will get soaked.

You're not wrong there
Remind me how much inheritance tax the new Duke of Westminster paid on his £9 billion haul? I think it was zero!

[sidicks]

NickCQ said:

You're not wrong there
Remind me how much inheritance tax the new Duke of Westminster paid on his £9 billion haul? I think it was zero!

Nothing was inherited, hence no inheritance tax was due. HTH

[NickCQ]

sidicks said:

NickCQ said:

You're not wrong there
Remind me how much inheritance tax the new Duke of Westminster paid on his £9 billion haul? I think it was zero!

Nothing was inherited, hence no inheritance tax was due. HTH

I'm not questioning the legality. But it makes a mockery of us poor saps that will end up paying it when vastly wealthy people can avail of trust structures (I assume in this case) to transfer the economic benefit of assets (albeit with restrictions) across generations, which runs counter to the intent of inheritance tax (which was introduced partly to attempt to dismantle the class system and equalise this country's wealth distribution).

[Jockman]

NickCQ said:

sidicks said:

NickCQ said:

You're not wrong there
Remind me how much inheritance tax the new Duke of Westminster paid on his £9 billion haul? I think it was zero!

Nothing was inherited, hence no inheritance tax was due. HTH

I'm not questioning the legality. But it makes a mockery of us poor saps that will end up paying it when vastly wealthy people can avail of trust structures (I assume in this case) to transfer the economic benefit of assets (albeit with restrictions) across generations, which runs counter to the intent of inheritance tax (which was introduced partly to attempt to dismantle the class system and equalise this country's wealth distribution).

You could look at it another way. The guy rented for a large part of his life.

Were there any structures he used that we cannot use?

[T5SOR]

Shnozz said:

I plan on semi-retirement well ahead of that in any event as I have modest needs.

How is the Aston and the playboy lifestyle doing?

[NickCQ]

Jockman said:

You could look at it another way. The guy rented for a large part of his life.

Were there any structures he used that we cannot use?

We would only be precluded on cost grounds - cost to set up trusts is essentially fixed, but the benefit scales up linearly with the amount of assets you are going to put in it.

I remember hearing one opinion that the 'break even' between increased costs and reduced tax was at estates over around £5 million.

[Shnozz]

T5SOR said:

Shnozz said:

I plan on semi-retirement well ahead of that in any event as I have modest needs.

How is the Aston and the playboy lifestyle doing?

All part of my financial planning.

I've got enough money banked to live the rest of my life comfortably without working.

So long as I die by next Wednesday.

[GT03ROB]

NickCQ said:

sidicks said:

NickCQ said:

You're not wrong there
Remind me how much inheritance tax the new Duke of Westminster paid on his £9 billion haul? I think it was zero!

Nothing was inherited, hence no inheritance tax was due. HTH

I'm not questioning the legality. But it makes a mockery of us poor saps that will end up paying it when vastly wealthy people can avail of trust structures (I assume in this case) to transfer the economic benefit of assets (albeit with restrictions) across generations, which runs counter to the intent of inheritance tax (which was introduced partly to attempt to dismantle the class system and equalise this country's wealth distribution).

Same as those paying income tax via PAYE, virtually no way to avoid paying your share, whereas others can avoid picking up there share on some flakey excuse about being high risk taking contractors when they are actually employees in all bar name. It's legal, but.....

[T5SOR]

Shnozz said:

T5SOR said:

Shnozz said:

I plan on semi-retirement well ahead of that in any event as I have modest needs.

How is the Aston and the playboy lifestyle doing?

All part of my financial planning.

I've got enough money banked to live the rest of my life comfortably without working.

So long as I die by next Wednesday.

I just need my shares in the Wifi Coffin Company to come good.

[Shnozz]

T5SOR said:

I just need my shares in the Wifi Coffin Company to come good.

The way I live any money invested in any product not claimable until I am 60+ must be rubbing their hands with glee.

[PurpleTurtle]

GT03ROB said:

NickCQ said:

sidicks said:

NickCQ said:

You're not wrong there
Remind me how much inheritance tax the new Duke of Westminster paid on his £9 billion haul? I think it was zero!

Nothing was inherited, hence no inheritance tax was due. HTH

I'm not questioning the legality. But it makes a mockery of us poor saps that will end up paying it when vastly wealthy people can avail of trust structures (I assume in this case) to transfer the economic benefit of assets (albeit with restrictions) across generations, which runs counter to the intent of inheritance tax (which was introduced partly to attempt to dismantle the class system and equalise this country's wealth distribution).

Same as those paying income tax via PAYE, virtually no way to avoid paying your share, whereas others can avoid picking up there share on some flakey excuse about being high risk taking contractors when they are actually employees in all bar name. It's legal, but.....

Yeah, legal but ...

... they don't get any paid holiday
... they don't get any sick pay
... they have to fund their own training
... they can be fired on a whim
... they don't get any redundancy pay
... they can't claim Jobseekers when they are fired, if they are seeking work in their field and their PSC happens to have a few quid in its coffers (probably earmarked for VAT or Corp Tax), despite contributing the full whack in NI (if inside IR35, like me)

So yeah, "some flakey excuse about risk".

Frankly a bit of a pension perk is the only thing I have to compensate for that risk.

[GT03ROB]

PurpleTurtle said:

Yeah, legal but ...

... they don't get any paid holiday
... they don't get any sick pay
... they have to fund their own training
... they can be fired on a whim
... they don't get any redundancy pay
... they can't claim Jobseekers when they are fired, if they are seeking work in their field and their PSC happens to have a few quid in its coffers (probably earmarked for VAT or Corp Tax), despite contributing the full whack in NI (if inside IR35, like me)

So yeah, "some flakey excuse about risk".

Frankly a bit of a pension perk is the only thing I have to compensate for that risk.

paid holiday...... it's in your rate
sick pay ..... it's in your rate
training .... it's in your rate
fired on a whim ...... redundancy it's in your rate

get the pattern?

[TwigtheWonderkid]

Shnozz said:

All part of my financial planning.

I've got enough money banked to live the rest of my life comfortably without working.

So long as I die by next Wednesday.

My granddad smoked 60 a day, drunk a bottle of whisky every night, and was a notorious womaniser, and he never had a days illness in his entire life. Mind you, he died when he was 22.

[ymwoods]

Me and friends have had the same discussion.

It's my view that the Goverments moves to have all employed workers in a company funded/run/operated pension scheme is the start of the end for the state pension. To that end im working under the assumption that I won't get one when I retire (currently 27) and am planning to that scenario.

Once they get to the point of this generation of workers that have all had the automatic enrollment getting to retirement age I think they will scrap the state pension citing that its not required due to the automatic enrollment.

I know of friends that first of all refused the automatic enrollment as they wanted the extra money now and they have since come to realise that the above is probably the scenario that will unfold and so have since enrolled.

I'm not employed but I have my own private pension that I pay a reasonable (maybe smaller than I should be) amount into and then I am shoving money away for investment opportunities within business that I hope will then return once I am older.

[Ginge R]

NickCQ said:

I'm not questioning the legality. But it makes a mockery of us poor saps that will end up paying it when vastly wealthy people can avail of trust structures (I assume in this case) to transfer the economic benefit of assets (albeit with restrictions) across generations, which runs counter to the intent of inheritance tax (which was introduced partly to attempt to dismantle the class system and equalise this country's wealth distribution).

Establishing a trust is not a fixed cost because there is an element of percentages, going in. But I take your point about professional services. On a wider point, it doesn't cost a bean to start addressing estate planning. Transferring assets with a huge CGT liability to a spouse who is terminally ill can help. CGT vanishes on death, so assets may then be bequeathed back with CGT scrubbed clean. Granted, that might then create a larger IHT liability, but that too, is just the next step to be addressed - and it can be. Foundation succession or estate planning need not be costly, if approached early enough and logically.

[PurpleTurtle]

GT03ROB said:

PurpleTurtle said:

Yeah, legal but ...

... they don't get any paid holiday
... they don't get any sick pay
... they have to fund their own training
... they can be fired on a whim
... they don't get any redundancy pay
... they can't claim Jobseekers when they are fired, if they are seeking work in their field and their PSC happens to have a few quid in its coffers (probably earmarked for VAT or Corp Tax), despite contributing the full whack in NI (if inside IR35, like me)

So yeah, "some flakey excuse about risk".

Frankly a bit of a pension perk is the only thing I have to compensate for that risk.

paid holiday...... it's in your rate
sick pay ..... it's in your rate
training .... it's in your rate
fired on a whim ...... redundancy it's in your rate

get the pattern?

All of which in my higher compensatory rate is taxed at 40% (plus 13.8% Employer NI) natch.

So yeah, once all of that it taken into account, the risk is hardly 'flakey'.

Get the pattern?

[eltax91]

PurpleTurtle said:

GT03ROB said:

PurpleTurtle said:

Yeah, legal but ...

... they don't get any paid holiday
... they don't get any sick pay
... they have to fund their own training
... they can be fired on a whim
... they don't get any redundancy pay
... they can't claim Jobseekers when they are fired, if they are seeking work in their field and their PSC happens to have a few quid in its coffers (probably earmarked for VAT or Corp Tax), despite contributing the full whack in NI (if inside IR35, like me)

So yeah, "some flakey excuse about risk".

Frankly a bit of a pension perk is the only thing I have to compensate for that risk.

paid holiday...... it's in your rate
sick pay ..... it's in your rate
training .... it's in your rate
fired on a whim ...... redundancy it's in your rate

get the pattern?

All of which in my higher compensatory rate is taxed at 40% (plus 13.8% Employer NI) natch.

So yeah, once all of that it taken into account, the risk is hardly 'flakey'.

Get the pattern?

Time to get a PAYE job then, you know since contracting pays so terribly.