5 Property And Pension Things To Know About

5 Property And Pension Things To Know About
Underwater by Andy Deitsch. Why?

Some SIPPclub Members invest in property for their retirement, others prefer to fund a SIPP or a SSAS, and many do both, so here’s a roundup of recent property and pension news you may have missed

Property Is Not A Safe Pension

Back at the height of the last property boom, pension mortgages were touted as the next big thing. Fortunately they were not.  I was reminded of this by a new study by the Pensions and Lifetime Savings Association, which found that 47 per cent of 35 to 54-year-olds (8.3m people) were planning to use property to help finance their retirement.  If this is not a sign of both desperation and huge disenchantment with the pensions sector, I do not know what is.

Property And Pension News

The Pensions System Is Like A Giant Ponzi Scheme

The largest pensions scandal in history will become apparent over the next few decades, as successive governments are proven to have not taken any effective action to correct the funding crisis of state and public sector pensions.  The current deficit for public sector pensions alone is £1.2trn.  These pensions have been mis-managed by governments of both of the main parties for years and years, and the extent of their liabilities has been hidden.

Property And Pension News

How To Prevent Property Pitfalls In Pensions

Any property investment can be attractive but advisers need to know the restrictions and tax liabilities that might arise if clients wish to put property into a pension, a specialist has warned.  According to Robert Graves, pensions technical specialist for Rowanmoor, he said the firm had seen "quite an attraction" for people to use a pension to invest in commercial properties.  "A real attraction we have seen is where small business owners are wanting to put their own commercial property into a pension, and there are some significant tax advantages to this".

Property And Pension News

800,000 Risk Being Overtaxed On Pensions

Hundreds of thousands of people receiving company and personal pensions risk being overtaxed due to being given the wrong tax code and so should check it as a matter of urgency, Royal London has warned.  The group, which has published a new guide ‘Decoding our tax code’ estimates some 800,000 people under state pension age are receiving pensions but should be non-taxpayers because their total income is below the personal allowance (£11,500 in 2017/18).

Property And Pension News

Pension Freedoms Step Up A Gear

The retirement revolution is revving up.  Early this year HM Revenue & Customs revealed the number of retirees accessing their newfound flexibilities had almost trebled since the first quarter of the pension freedoms back in 2015.  But there is a fine balancing act that needs to be struck when it comes to pension freedoms.  On the one hand, people have greater power to take their retirement cash to suit their lifestyles and goals and furthermore may not find the option of securing annuities attractive, especially as rates are near historic lows.

Property And Pension News

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AJ Bell Is Often The Best Value SIPP For Stockmarket Assets

That's our opinion.  Not just because AJ Bell was the first company to offer an online SIPP.  Nor that it's received many prestigious awards.  And not even because the wife of SIPPclub's Founder has an AJ Bell SIPP.  It's because it's one of the most competitive stockmarket SIPPs on the market. 

Over time, charges can wipe out a huge part of your fund.  We like AJ Bell because there are no set-up costs.  If you hold passive funds, which is our preference, or shares, investment trusts, EFTs, gilts or bonds, you pay one small fixed fee no matter how large your fund.  And when you come to draw your benefits either as occasional drawdown or UFPLS payments, there's a small charge for the whole year no matter how many times you access your money (many SIPP and SSAS providers charge more than this for each payment).  However, you should always compare charges in detail, because AJ Bell could be more expensive than other providers, depending on the type of stockmarket assets you hold.

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