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Pension or property?


T J

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based on what?

there are so many factors & variables, to how many folks that have or don't have works pensions,  private pensions, savings/ISA accounts, to those especially living week to week and/or have health issues.

was the sun piece tailored towards the middle class rich?

how many post age 66 have or need investment income or who in doing so want to risk that pot of pennies?

for seniors with a mortgage free property, should they consider taking out equity to use in retirement to using that equity to further invest in something? 

take a senior couple that are recently on state pension, maybe they each get £168.25/wk or £336.50/wk =  £17,498/yr, are either renting or are mortgage free. Are they richer than they think, above the sun piece minimum?

in the nanny state, worse case, a senior couple outside London will get the guaranteed minimum (pension credit) of £255.25/wk + housing benefit if they are renting, along with zero council tax payable.

can a retired senior couple with zero savings, zero pension pot, zero income tax, are they able to live/survive on the minimum guaranteed amount of £13, 273/yr?

are most seniors using their bus pass or still keep up the expense of a vehicle?

post age 66 state pension age, how many seniors are up to travelling & if they do - till what age?

opinion:

based on the sun piece, me thinks one doesn't need a pension pot or investment properties - just basic living from what is (rightfully yours) available from the nanny state in state pension/pension credit or other add-on's, that'll put you somewhere between minimum to moderate lifestyle

 

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Based on taking out an annuity. How much do you need if you just stuff it in your mattress?

Another nonsense article on pensions. And if we need £47k after tax, that's a lot of BTL as well - maybe spending less than £100/month on clothes would help (does anyone really spend that much?)

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  • 1 month later...
Guest Omar Khan

Pension is considered a safer bet but for how long will it last?With a property you can easily rent it out and gain some profits, sure the process maybe slower but it could be better in a long term basis

Real Estate is booming at the moment and I personally feel a property is better than a pension

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  • 4 weeks later...
Guest Cyprian Njamma

Why not have both? The tax treatment of pension is so good that it would be a waste not to take advantage especially if your employer is also contributing.

Your contribution + your employer contribution + tax rebate gives you a decent start before allowing for financial markets. In a way you are getting free leverage.

property is also brilliant over the long term as you are exposure to a leverage, appreciating and inflation linked asset...

Always good to diversify anyway. 
 

That’s why I’m here and ready to learn from you all on the property bit. Thanks

 

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On 12/29/2019 at 8:15 PM, Guest Cyprian Njamma said:

Why not have both? The tax treatment of pension is so good that it would be a waste not to take advantage especially if your employer is also contributing.

Your contribution + your employer contribution + tax rebate gives you a decent start before allowing for financial markets. In a way you are getting free leverage.

property is also brilliant over the long term as you are exposure to a leverage, appreciating and inflation linked asset...

Always good to diversify anyway. 
 

That’s why I’m here and ready to learn from you all on the property bit. Thanks

 

Totally agree with this. There are some great tax benefits to a pension, plus you can also invest it in Commercial property of your choosing at a later date if want to combine the two. 
 

Having a rental portfolio as well though is an important diversification. A number of companies have scrapped their dividends which is a vital income stream for many people. If you have tenanted property the cash will keep on coming. 

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I own commercial property in my pension. This can be done with a SIPP or a SSAS structure. So you can combine the two strategies

_______________________________________________________________________________________________________________________________
Vin Gupta
Property Investor and Developer
UK Property Blog: https://evolutionblogger.com/article/uk-property-articles
Travel Blog: https://soulfultravelguy.com/

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I think the answer is that you need to have both. Pensions have massive tax benefits, including a tax rebate. I wrote an article on the tax advantages of pensions, and also other tax efficient investments in the UK.

Investing in property has advantages, as you can use leverage. There is also a very good track record for property in the UK

 

 

 

_______________________________________________________________________________________________________________________________
Vin Gupta
Property Investor and Developer
UK Property Blog: https://evolutionblogger.com/article/uk-property-articles
Travel Blog: https://soulfultravelguy.com/

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  • 2 weeks later...
On 1/2/2021 at 4:35 PM, EvolutionBlogger said:

I think the answer is that you need to have both. Pensions have massive tax benefits, including a tax rebate. I wrote an article on the tax advantages of pensions, and also other tax efficient investments in the UK.

Investing in property has advantages, as you can use leverage. There is also a very good track record for property in the UK

 

 

 

I agree. I view my pension as a 'hedge'. I hope I won't have to rely on it solely, but if the absolute worst case scenario happens I will be able to. In the meantime I will continue to invest in property and my personal stock portfolio. I wish I'd started thinking about this all sooner, but don't we all. The best time to plant a tree was a year ago, the second best time is today!

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Both Investing in a pension and property investing can compliment each other well:

The property investor who invests in their own name can use pension contributions to offset some of the impact of Section 24, if they are a higher rate (or additional rate) taxpayer. If the investor has a PAYE salary then they have a window of opportunity between receipt of March pay statements (which will tell you how much taxable salary you have earned that tax year) and the end of the tax year to top up a private pension, such as a SIPP. They can cross reference their salary with rental accounts for that tax year and pay an optimum amount into their pension, which can offset some of the impact of section 24. This is achieved through pension tax relief.

The limited company property investor can have the company make pension contributions as a pre-tax allowable expense.

 

 

David M Slater ACMA 

Accufy Accounting  - Proactive accounting for property investors 

0208 242 4926    info@accufy.uk

 

 

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  • 2 months later...

I believe that a property is better. In 2007 before the mortgage crisis, I decided to apply for a business loan and buy a beachfront condo in Costa Rica, at that time I paid approximately $350K.

As an investment, it was not the best decision. Since when buying a property within a condo complex, everything is decided based on the HOA, for example, if I wanted to change the color of the door, it had to be approved by the Homeowner Association (HOA)

On the other hand, I had placed my condo for rent and what it generated was not enough, every month I paid $1000 in maintenance.

In the end I decided to sell the condo for the same $350K and with that money build 5 small apartments, which generate me a higher profit margin and with fewer problems.

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