Fantastic Chris. Great to see you back. This is great information. I'm not retiring for another 8-10 years depending on my investments and life itself, but it's great to see how you can reduce tax in retirement by thinking out the box. Love it.
Great video Chris 👍. I’m 54 and planning on working for another 4yrs. The period from 58-67 I was thinking about relying mostly on tax free lump sum from my pension. Never thought about drawing the tax free allowance £12.5k for those years to pay no tax!
It’s a failing of the education system. Sure, I learned about the use of looms in the Industrial Revolution, read Lord of the Flies and how volcanoes work… But sod all about finances, tax, mortgages, investing. career choice, how to set up a business, how to write a CV or anything else that you need to progress in actual life
Hi all. Small error spotted at 1:53 - I should have said the lower of your gross earnings or £60,000. Also, I’ve been asked to pin the link for my courses in the comments… here it is: voyant-masterclass.mykajabi.com
I like this channel. I like it a lot! - Glad you're back, Chris. Just one thing.. I thought rental income was classed as UNearned income, which makes a big difference on how much I can pay into my SIPP.
Hi Keith. Thank you! It is in the sense of pension contributions unfortunately, but is taxed before savings, dividends, life policy gains and capital gains in the taxation order.
Some bond wrappers can be expensive, but there are platform based options which can be lower cost than some pension products. The model assumes equal growth on all wrappers so that only tax efficiency is being compared, but it is possible to alter these things in forecasts.
I’m glad you’re back Chris! I am just about to sign up to one of your courses. I know you offer 121 for a fee but I just wondered how I will be guided through the courses. Will there be tutorial videos for each segment or a bit of reading and figuring it out for yourself etc. I just want to make sure it suits my learning style. Many thanks
Excellent to see you back! Great video. I'll check out your course, as I'm frantically checking and double checking that my investments add up and I can retire as soon as I'm confident I haven't messed up my maths. Around 1:53 you say the upper limit for pension contributions is the higher of gross salary and £60,000, isn't it the lower of the two?
Great information Chris. Good insight for planning. One comment though, is it really a fair comparison to do £1m in pension vs £400k, 2x £100k, £300k and 2X £50k in different vehicles? The former attracts up to 40% tax relief on £1m (£400,000) when putting it into the pension and the latter only gets up to 40% on £400k (£160,000). That's a potential maximum difference of £240,000 in reduced total pot available in retirement (aprox, clearly not all of the money in the investments will be from income directly). Surely a pot of £760,000 would have been a better comparison to the £1m pension example?
Thank you. The above is why I created the follow up video, which you may wish to view next. I allude to it at the end of this video of course, but the next one is titled ‘This Retirement Account Obliterates All Others’.
Fabulous video. Iam No where near my Pension age, But been paying into my Pension since I was 18 , iam now 44 this year . Been Maxing out my Pension and ISA for many years and was getting a Bit Worried as I have almost reached my Pension allowance this year and had Planned to stop paying into my Pension. Then the Government moved the goal post's and I couldn't believe what I was hearing and my luck . I can continue to pay into my Pension . Max out the £60K towards my Pension and £20K in my ISA on April 6th . Will do the same next April 2024 . Unfortunately when Labour gets in , in a few years , I wont be so fortunate 🤦♂️🤦♂️🤦♂️ Keep the good work up . Learnt loads from you .. Thank you very much 🎉🎉🎉🎉🎉
That’s very kind Lawrence. It was certainly a very helpful announcement for many people in the fortunate position of being able to build retirement wealth in pensions! Fingers crossed it doesn’t get reversed 🤞🏼
I like this guys content. I did get in touch with him for financial advice on my investments but never got a reply. I guess he's a very busy man these days with everything. Keep the vids coming
Useful information, particularly the £5000/yr savings allowance which I wasnt aware of beforehand, thank you. If I understand correctly, if pension income is limited to say the personal allowance (£12570/yr) then outside of an ISA upto £6000/yr interest can be earned free of tax from a GIA ? If so this would be a useful tactic to employ to minimise tax on interest in the event of receiving a fairly large sum of monies say from inheritance assuming pension income could be reduced to the personal allowance limit.
Wouldn't you need to measure the amount of tax paid while accumulating the investments across these accounts and tax paid out to have a true comparison? As a high rate tax payer you would be being taxed 40% on the money earned before putting it in an ISA or other non pension account. With growth on that it would be good to see the overall amount needed to be earned, taxed and invested for both scenarios.
Great video as always Chris. I currently take £9.6k from my DC pension. So my question is how much savings interest can I have before having to pay tax. Thanks.
Thank you. You should be able to earn £8,970 based on the figure you’ve provided and assuming there is no other income at all. That would be the remainder of the Personal Allowance, plus the Personal Savings Allowance and the Starter Rate Band.
Interesting video, thanks. Looks like Millie could transfer some of her personal allowance to Billy to allow him to take a bigger tax free amount from his pension.
Thanks Chris, excellent video (as always), great to see you back. This has triggered a thought process about using salary sacrifice AVC pension (in addition to a LGPS CARE pension contribution), to the maximum limit to reduce earned income under £12,570 and then qualify for £5K of starter rate band at 0% tax rate, £1K interest personal savings allowance at 0% tax rate, £1k dividends in a GIA eg. money market fund income at 0% tax rate, plus up to £6K if there was growth on the GIA in addition to the dividend income. All done at low risk. Your thoughts on using salary sacrifice AVCs in this way to reduce earned income as low as possible and below the relevant thresholds? I work part-time 18.5 hours per week.
@MulberryEllie I'm semi-retired doing 18.5 hours per week so wonder if it might work. Thanks for your comment though. Using your calculation minimum wage would be £10,024.04 for me, so would come in at under the £12,570 threshold.
I found this really useful since I had not appreciated the potential benefits of using an offshore investment bond as a tactic to make the most of £5k starter savings bracket, if you can keep your other income low enough. But I think I might be a bit confused about the comparison to pensions in your example. The two scenarios you compare in voyant seem to have the same amount of money in them. But for the same amount earned if you put it into a pension you wouldn't you have at least 25% more than if you put it into an offshore investment bond? (More than that if you are a higher rate tax payer?) You do mention that pensions are likely to accumulate more due to tax benefits, but then show a comparison with only 10% more in the pension, when I was expecting it would need to be 25% more (or more if higher rate tax payer, which is likely the case if you've accumalted a £1m pension pot?) I'm wondering whether I'm missing something in my understanding?
Hi Alex. The pot would be 25% higher at least if you could put all of your money into a pension, but contribution restrictions often mean you can’t. The final example isn’t an exact illustration of the different amounts you could build up, just a comparison of how tax treatment can make a smaller pot still end up higher through tax efficiency. The main purpose of the video is to show that tax efficiency is still possible even if you can’t contribute to a pension.
Agree with your comments, this video is not really comparing apples with apples. It is very unlikely that Billy would have have the same £1M pot if he hadn’t got the tax benefits of putting his money into his pension pot. It would be great to see how this would stack up if some of the investment had not been put into his pension, so comparing his £1M pension with a lower amount. Still like your videos though, keep up the good work 👍
@@chrisbourne-retirementplanner That makes sense to me, and was the way in which I found the video useful. There is a risk that some people might not get that and will mistakenly think paying into an offshore bond rather than a pension (even when they have the option of tax efficiently paying into the pension) is going to work out better for them. Maybe a comparison of maxed out pension (same size in both scenarios) with GIA vs GIA + offshore bond might have made that more clear? But I get that there's only so much you can do in a video and you often have to simplify to make it easier to digest. Just my thoughts, anyway. Thanks again for all the content you produce.
Chris, great content and love the Cashflow scenario. With regards to order of taxation and using allowances, can you include the 1k of dividend allowance with the personal allowance and 6k savers allowance to enable £19,570 of tax free income? Cheers.
Very informative 👍👍. One doubt though. I believe the starting value of scenario B shd be lower than that of scenario A due to the tax relief top up by hmrc. Ex - if i want to substitute 100k pension pot with an ISA, ISA pot would only value 80k as it would be from my net income (assuming basic rate tax)
Thanks for your comments. It is definitely the case that you will build up more capital in a pension as stated at 14.33. It isn't always possible to fund a pension to the extent that one would like of course, particularly if capital is received in lump sum form (equity sale, inheritance etc). I am planning a follow up video to this one though which focuses more on the points you've mentioned above.
Good to see you back Chris. If you get a DB pension that uses up the annual tax free allowance, is it a lot harder to take advantage of these tax loopholes?
Hi Rob. If it swallows the first 3 allowances mentioned then yes, it does make it a bit harder to be tax efficient in the same way. That is where you often look to use a spouse’s allowances if possible though.
Nice video. Paying tax in retirement is a minefield tbh, although it’s a way off for me it’s good to plan. Surely though the bonds are only for very high earners or if you get some inheritance? Otherwise £60k year pension and £20k a year ISA would need to be paid into first …?
Hi Chris. Yes, pensions and ISAs should be funded as much as possible first. As explained though, that’s not always possible, so you have to utilise other wrappers to be efficient.
This video focuses on tax savings over the course of retirement. It does not consider the tax paid up front when accumulating capital - any amounts available to be paid into ISAs / bonds will have already been taxed (probably at 40% if we have managed to save £1m). £1m pensions savings would not likely covert to £1m blended savings due to this fact (pensions savings would be much higher due to tax relief). I haven't crunched the numbers, but this would likely close the gap between the total tax paid in your 2 scenarios. Thoughts welcomed.
Correct Josh. I mention that at 14.34. The idea is to illustrate though that people who can’t contribute into a pension to the extent they would like can still be tax efficient. I am planning a follow up video to illustrate your example though.
Many thanks Chris, but there is a big question - how one could get an On/Off-shore bond without access to financial adviser (and therefore without paying at least 2% of capital in fees)? All other vehicles are readily available, often on the same platform, but On/Off-shore bonds are a different story. Or there is a secret hack, how its possible to obtain one without financial adviser?
Hi Dmitry. Providers don’t allow investment bonds to be accessed directly. There are too many tax traps and mistakes that can be made, and they therefore require advice.
Chris ... I have a tax question worth looking at for a video. Let's assume you have the perfect pension pot ... £1.3million. You take your tax free £268,000 and then take 5% of the rest for the rest of forever ... £50,270 a year. If I do this, the instant I have any income from anywhere ... even a part time job in a shop, I get hit with 40% tax. How can I avoid painting myself into a corner where no matter what I do, HMRC holds its hand out for 40%? Is the only answer have a smaller pension pot? I have ltd company that I could keep ... I just don't see how I could earn anything that wasn't gobbled by the government. I imagine this is why doctors aren't returning to work despite the LTA being removed ... there is a new artificial limit of £1.3m.
Hi bob. The thing with tax is that you only pay it when you receive the income. You could take less pension if you wanted to, and preserve more for your later years or to pass onto your family. But remember that even if you receive 60% of what your earn net, that’s still better than not earning in the first place and receiving 0%. Or to put it another way, 60% of something is always better than 100% of nothing.
@@chrisbourne-retirementplanner ... except I'd have to pay 13% national insurance and 9% student loan on top. So I'd actually be paying an effective rate of 62% the instant I got a job. I wouldn't want to get out of bed for 38%. I think what I'm saying is the moment I crystalise that pension, I lose most of the ways that I shield money from HMRC. But thank you for taking the time to respond.
Great, now I just need to make that sort of money in order to take advantage of the system haha. Seriously I really wish I had this advice years ago when I was self employed a doing very well, but I didnt trust pensions etc as I saw a lot of people complaining about how they didnt even get back what they put into the pensions so just saved cash until I had enough to buy a second house to rent out, That worked out ok for 10 years until the tax system changed and tenants destroyed my house lol. Now I'm sitting on cash from the sale and figuring out where to put it to grow tax efficiently, I have no income so cannot put it into pensions, max the isa between my wife and I and use general accounts for the rest, will take a few years to get it all into isas but IF I manage to get back to working ( I'm nearly 60 ) I could do more with the pensions I guess?
Hi Nigel. Yes, if you do return to work, pensions would certainly provide advantages. Some guidance may be helpful to you. If you prefer to do your own planning, you may find it useful to have access to cashflow modelling software to help you plan ahead with more confidence. If that’s the case, check out my Voyant Masterclass courses in the video description.
Hi Chris. It is for interest or taxable gains withdrawn from an offshore bond. You only receive it if you are a low earner though (or you can control your income sources completely).
That's right, you can't. The example is to demonstrate how you can still build a tax efficient withdrawal pot if pensions aren't an option (i.e. if you receive large lump sums of cash later in life, or you earn too much to continue funding a pension).
In some specific situations it is possible to draw out of one client’s pension and pay it back into another and ending up in a tax neutral position. This could then open up the opportunity to utilise the second client’s personal allowance in retirement and be tax efficient. It is only possible though if the second client earns enough to substantiate the contribution in the first place.
Do you not expect thresholds to increase? The tax forecasts are just that - they won’t be exact, but we are looking at ‘themes’. The assumptions are the same in all scenarios, so what we are ascertaining is which scenario gives the best tax result. The numbers are irrelevant.
Hi. Really useful videos! Just a quick question - you use 4.5% net growth in your example as an estimate. An IFA I spoke to used a very similar % during my chat with him. Many funds - trackers and others- have returned circa 6%. Why do you use 4.5% thanks
Hi Tanya. Because it’s best to be cautious about long term growth. What has been achieved is no guarantee of what will be achieved. We can’t be certain of what the future holds.
Now we want a version of this where the pension owner is already in the pensions phase (older than 67!) How can ££ in a pension pot leap over to another investment, without suffering tax??
Chris amazing information thanks ! If I decide to withdraw my tax free lum sum first 5k at a time...is there timescale to withdraw all of the tax free lump sum before I start with drawing the rest of the pot which will be taxed?
No Steven, you can draw tax free lump at any time without limit, as long as the pension scheme allows it. Some schemes still require all tax free lump sum to be accessed before age 75.
Hi Chris , Great content, clearly explained as usual. Very thought provoking. I’ve got 5-10 years to work so am really interested in using your modelling software. Please can you pin the link to your Cashflow Modelling courses to the top of the comments… can’t seem to find it. Thanks!
I am looking for a new finance company, mine is useless and the advisor does nothing, any suggestions. I have spent hours looking but most look the same
I think all you can do is speak to different advisers and find out what their process is and how they go about the job. If they’re very product focused, they’re probably not what you’re looking for. A good adviser should make the strategy itself the product, rather than the investment wrappers that simply get you from A to B.
Chris. This £5000 tax free savings interest allowance is only for when you retire, is that correct? The £1000 personal allowance on savings interest is the only allowance we’re allowed when we’re still working? Am I correct in thinking that’s what you’re saying here?
Hi there. No the £5,000 is available to everyone, but whether you qualify for it depends on your income. If you earn more than the personal allowance, you start to lose it.
Hi Chris. Very interesting video thank you. Could you reference where HMRC say offshore investment bonds are taxed as savings income? I can’t find any information. Also, would you recommend having onshore bonds too to use another 0% allowance?
Hi Andy. I’m not sure where that would be referenced on the HMRC site - much of my learning on the subject comes from CPD seminars etc. I couldn’t recommend any wrapper specifically without understanding someone’s position, but onshore bonds can certainly play their part. Depending on your circumstances, they can be more efficient that offshore bonds.
@@chrisbourne-retirementplanner Thanks! I got this document link from a tax expert, in case you are interested www.gov.uk/government/publications/offshore-funds-self-assessment-helpsheet-hs265/hs265-offshore-funds
If your SIPP has cash only and you are over retired (aged 62- no state pension yet until 67), can one get a pay out of £1000/month and re-contribute back of £3600 to benefit from 25% tax free?
Hmm, somewhat confused by the video if I’m honest as it appears to give conflicting advice. On the one hand the main message is, “look at the tax savings you can make if you withdraw funds from non-pension assets in retirement”. But then concludes with the advice that pensions provide the best vehicle for building wealth for retirement. 😕
Hi there. The main purpose is to show that it is possible to be tax efficient even if pension contributions are not possible (at least not to the extent one might hope). That is often the case for very high earners or people who receive large lump sums of capital which cannot be paid straight into a pension.
Yeah I guess my issue is that the video doesn’t show “how to slash tax by 5k a year”. It’s simply showing how two couples with very different assets pay different levels of tax. You don’t show how someone with all/most of their savings in a pension (scenario 1, and your recommendation) can save any tax. I mean, why continually compare tax paid between the two scenarios? You’re not recommending option 2 over option 1 as a retirement saving strategy (I assume) so I just don’t see the point. Sorry Chris, video was a complete miss for me.
@@ksherratt6657 That’s fair enough, I suppose not everything hits the mark for every person. The method laid out though would still work if you built other wrappers in addition to pensions, with the money that can’t be placed into pensions going into other wrappers. It is surely worth understanding a sound methodology for withdrawal?
Absolutely, but the title of the video is effectively “how to save 5k a year in tax” and the vehicle for that illustration is to compare the strategy savings against a pure-pension scenario. As if there is a choice to be made between the two, but that’s just not the case. It would be more realistic and useful to use the same scenario (pension assets) and compare different withdrawal strategies.
@Chris Bourne - Tax Free Investing Expert hi yes I thought so, I've looked at my teachers pension online and they said I'm able to take so much lump sum and so much monthly payments.
Question: If you earn £5000 a year salary but get £5000 a year in dividends. Do I still get taxed on the dividends! Great channel and very informative!
@@chrisbourne-retirementplanner great, I really appreciate your response. How about if you live and work abroad (Asia), earning more than the personal allowance? Kind regards Bill.
Chris. If you have got the majority of your retirement pot in a drawdown pension and with one partner, i didnt think you can tranfer funds to GIAs or Overseas bonds without paying tax so is your second scenario correct?
Hi Craig. No you can’t move from a pension into all of the wrappers mentioned. That’s not what the video is saying though… You can choose where you place your investments in the first instance. A pension will generally provide the best result due to the upfront tax advantages, but it’s not always possible to fund a pension to the extent that you would like.
Wow! Do I need to find a husband to mitigate tax…how can I maximise/mitigate tax using my daughter when she’s 18 (16 now)… I have properties and a well paid full time job so mega rate tax payer 😮 Oh and 55 and want to retire and just do property in next 2 years.
Hi Celia. Haha no I'm sure you can still be efficient without having to lumber yourself with a husband. To be honest though, it is the net result of how much you end up with that is more important than how much tax you pay. It can be difficult to avoid income and capital gains taxes when investing in property, but that shouldn't stop you pursuing it as an investment strategy if that's what you'd like to do. Other forms of investment can still enhance the overall strategy and improve diversification.
@@Lord-Brett-Sinclair Why? Because private sector retirement is weighted heavily in favour of the richest in society. A state system, on the other hand, ensures equal treatment for all.
Hi Chris, I work overseas, and was wondering do I need to be UK tax resident to be able to pay in £60k into a pension and get the tax relief? I do have other earned income in UK from property - would that allow me to take out and pay into a UK pension with tax relief? Or am I not eligible whilst overseas?
Hi there. You may be able to pay into a UK pension with tax relief based on the below, but it is likely this will only be at a max of £3,600 gross contribution because your property rental income won’t qualify you for pension contributions. To get tax relief on contributions: you have relevant UK earnings chargeable to UK Income Tax for that tax year you’re resident in the UK, or you were resident in the UK in one of the previous five tax years and, at the time you were resident ,you became a member of a UK registered pension scheme, or you’re a Crown Servant - or a spouse/civil partner of a Crown Servant - and have earnings subject to UK tax.
Trust me, anybody in a position to effect a strategy such as this will usually have paid many, many thousands of pounds more in taxes than those who complain that others should be paying more taxes.
Hello, what a bloody excellent video. I'm a simple lad, but this morning I have tried to understand the entire video and by George I just may 'get it'. Only expand this comment if you want a brain-puzzler, possibly from a lad who has got some of his maths wrong! >>> I've tried to simplify it to my circumstances to see if worthwhile to roll with the GIA VERSUS just banging everything into the pension. For simplicity, I'm thinking of myself as a single man .. As a higher tax rate earner (but below £100,000) who puts £40,000 into his pension each year personally, I get an extra £16,000 'free' per year if I go the 100% pension route. Now, in the name of simplification I'm also removing the annual £12570 from the equation altogether as I get that whatever I choose. Let's put the 25% pension tax-free (when I take it out) to one side for a minute .. I'm also going to assume the GIA and the pension grow at the same % rate because my goodness I gotta simplify this down a bit .. So it's the £6000 TAX FREE CASH ('savers allowance' or whatever it was called) per year I am really chasing with this alternative-to-pension option (from the Offshore bond). Is it worth the cost of LOSING the 40% (£16,000) 'gift' I get on pension contributions. When I retire I plan to live within the 20% tax bracket. The tax savings on the £6000 bit each year will be therefore be 20% which is £1200 a year. So I THINK I'm measuring £1200 a year tax saved, VERSUS £16,000 one-off payment of which 75% will be taxed at 20% whenever I take it out (£2400), so really I'm measuring £1200 a year SAVING TAX VERSUS a one-off payment of £13,600 after tax paid. So it sounds to me like ALL-IN-ALL it will take about 11.3 years for me to hit profit with this system, but after that, I'll continue to hit profit for as long as my GIA lasts (years it will last = GIA / £6000). SO if doesn't run out, my GIA would have to be up to BEAR MIMIMUM £67,800 all together (including investment payments) before I retired, for it to all be worthwhile - any less than that and I could run out of £6000 lumps to take out each year! So if I want some decent profit > 'bung all into pension' I probably want at least £100,000 in there. But this seems like NO BIG DEAL if I am putting in £40,000 a year. THEREFORE whilst obviously 11.3 years is a long time for this to all 'reach equilibrium and start moving into profit', it sounds WORTH DOING IT to me, I could be retired for 40 years!? I even get more liquidity, should I need it, with a GIA. This all seems to good to be true and a wise man with a wise beard once told me if something sounds too good to be true ... So, anyone (who is still here!) - how is my maths stacking up? :)
Hi Dave. There’s a lot of info to work through there. I think these types of scenarios have to be worked out with the assistance of cash flow modelling tools, because there are too many overlapping variables to consider without the use of calculation software.
Fantastic Chris. Great to see you back. This is great information. I'm not retiring for another 8-10 years depending on my investments and life itself, but it's great to see how you can reduce tax in retirement by thinking out the box. Love it.
Thanks very much Pat. Really hope it proves useful for your forward planning.
@@chrisbourne-retirementplannerCan you please do a video on SEIS?
Great video Chris 👍. I’m 54 and planning on working for another 4yrs. The period from 58-67 I was thinking about relying mostly on tax free lump sum from my pension. Never thought about drawing the tax free allowance £12.5k for those years to pay no tax!
Top tip that one
Really pleased the content’s useful.
Yay!!! Great to see you back Chris. Hope you’re well
Thanks Chris! I’m glad to be back.
Good to see you back Chris 👍
Good to be back Ben
Welcome back Chris. With I had this education at school….all those decades ago!
Thank you! I wish I did too tbh… I haven’t used what I learned in art and geography very much 😆
It’s a failing of the education system.
Sure, I learned about the use of looms in the Industrial Revolution, read Lord of the Flies and how volcanoes work…
But sod all about finances, tax, mortgages, investing. career choice, how to set up a business, how to write a CV or anything else that you need to progress in actual life
Good to see you back Chris
Thanks very much I’m glad to be back at it 😊
Chris I have learned more from you in this video than from all the financial advice and books i have read , thank you so so much !
Thanks so much for your comment Pam. I’m really glad it has helped you.
Great to see you back Chris. Missed your videos.
Thank you it’s good to be back!
Good to see you back, and with a great video.
Thanks so much Steve, it’s good to be back 👍🏼
Hope all's well ?
Glad to see you back 🥰🥰👍🥳
I’m pleased to be back at it Lawrence. Thanks for your comment 👍🏼
great to see you back
Thank you 😂
Good to see you back. Many thanks for a great video and great looking tools.
Thank you very much John 👍🏼
Hi all. Small error spotted at 1:53 - I should have said the lower of your gross earnings or £60,000. Also, I’ve been asked to pin the link for my courses in the comments… here it is:
voyant-masterclass.mykajabi.com
Great to see you back. Top quality content as always. Thanks.
I appreciate that thank you 😊
I like this channel. I like it a lot! - Glad you're back, Chris. Just one thing.. I thought rental income was classed as UNearned income, which makes a big difference on how much I can pay into my SIPP.
Hi Keith. Thank you! It is in the sense of pension contributions unfortunately, but is taxed before savings, dividends, life policy gains and capital gains in the taxation order.
Very good thought provoking video
Thank you - many thanks for watching.
Welcome back buddy.........missed that wee face lol........great video
Haha thank you it’s good to be back 😊
I missed your videos!! Welcome back 🙂
Thanks Chris! Glad to be back at it 😀
Wow ...good to see u back ..
Thank you. Good to be back.
Simply amazing content and love it ❤
Thank you very much. I’m so glad it’s useful.
Glad you’re back! I thought you had creator burnout 😅
Thank you. Tbh it’s been a hectic year in more ways than one, but I’m glad to be back!
Is there a tab that shows fees based on the two plans? Offshore bonds seem to have very high and opaque fees. Great video, thanks
Some bond wrappers can be expensive, but there are platform based options which can be lower cost than some pension products. The model assumes equal growth on all wrappers so that only tax efficiency is being compared, but it is possible to alter these things in forecasts.
I’m glad you’re back Chris!
I am just about to sign up to one of your courses. I know you offer 121 for a fee but I just wondered how I will be guided through the courses. Will there be tutorial videos for each segment or a bit of reading and figuring it out for yourself etc. I just want to make sure it suits my learning style. Many thanks
Hi there. It is a fully guided video tutorial course. There are some written resources to assist with certain parts of your planning too.
Excellent to see you back! Great video.
I'll check out your course, as I'm frantically checking and double checking that my investments add up and I can retire as soon as I'm confident I haven't messed up my maths.
Around 1:53 you say the upper limit for pension contributions is the higher of gross salary and £60,000, isn't it the lower of the two?
Yes well spotted - I should have said the lower of your gross earnings or £60,000.
@@chrisbourne-retirementplanner We listen very attentively to your advice 😉
you've got me building spreadsheet models again😂
Haha. Why not use Voyant and then you won't need to do all the spreadsheet work!
Great information Chris. Good insight for planning. One comment though, is it really a fair comparison to do £1m in pension vs £400k, 2x £100k, £300k and 2X £50k in different vehicles? The former attracts up to 40% tax relief on £1m (£400,000) when putting it into the pension and the latter only gets up to 40% on £400k (£160,000). That's a potential maximum difference of £240,000 in reduced total pot available in retirement (aprox, clearly not all of the money in the investments will be from income directly). Surely a pot of £760,000 would have been a better comparison to the £1m pension example?
Thank you. The above is why I created the follow up video, which you may wish to view next. I allude to it at the end of this video of course, but the next one is titled ‘This Retirement Account Obliterates All Others’.
My company, all the owners/partners wife’s have non jobs with huge salaries.
Same here. They need a divorce at some point to shuffle around the pension pot.
Fabulous video.
Iam No where near my Pension age, But been paying into my Pension since I was 18 , iam now 44 this year .
Been Maxing out my Pension and ISA for many years and was getting a Bit Worried as I have almost reached my Pension allowance this year and had Planned to stop paying into my Pension.
Then the Government moved the goal post's and I couldn't believe what I was hearing and my luck .
I can continue to pay into my Pension .
Max out the £60K towards my Pension and £20K in my ISA on April 6th .
Will do the same next April 2024 .
Unfortunately when Labour gets in , in a few years , I wont be so fortunate 🤦♂️🤦♂️🤦♂️
Keep the good work up .
Learnt loads from you ..
Thank you very much 🎉🎉🎉🎉🎉
That’s very kind Lawrence. It was certainly a very helpful announcement for many people in the fortunate position of being able to build retirement wealth in pensions! Fingers crossed it doesn’t get reversed 🤞🏼
I like this guys content. I did get in touch with him for financial advice on my investments but never got a reply. I guess he's a very busy man these days with everything. Keep the vids coming
Hi Mark. I don’t think that enquiry could have been received? All enquiries will receive a reply. Send to enquiries@virtualfinancialclinic.co.uk.
Useful information, particularly the £5000/yr savings allowance which I wasnt aware of beforehand, thank you.
If I understand correctly, if pension income is limited to say the personal allowance (£12570/yr) then outside of an ISA upto £6000/yr interest can be earned free of tax from a GIA ?
If so this would be a useful tactic to employ to minimise tax on interest in the event of receiving a fairly large sum of monies say from inheritance assuming pension income could be reduced to the personal allowance limit.
Yes, as long as the assets held in the GIA were interest bearing (bonds) as opposed to dividend yielding (equities).
Wouldn't you need to measure the amount of tax paid while accumulating the investments across these accounts and tax paid out to have a true comparison? As a high rate tax payer you would be being taxed 40% on the money earned before putting it in an ISA or other non pension account. With growth on that it would be good to see the overall amount needed to be earned, taxed and invested for both scenarios.
Great video as always Chris. I currently take £9.6k from my DC pension. So my question is how much savings interest can I have before having to pay tax. Thanks.
Thank you. You should be able to earn £8,970 based on the figure you’ve provided and assuming there is no other income at all. That would be the remainder of the Personal Allowance, plus the Personal Savings Allowance and the Starter Rate Band.
Interesting video, thanks. Looks like Millie could transfer some of her personal allowance to Billy to allow him to take a bigger tax free amount from his pension.
Quite right... always a sensible bit of planning.
Thanks Chris, excellent video (as always), great to see you back. This has triggered a thought process about using salary sacrifice AVC pension (in addition to a LGPS CARE pension contribution), to the maximum limit to reduce earned income under £12,570 and then qualify for £5K of starter rate band at 0% tax rate, £1K interest personal savings allowance at 0% tax rate, £1k dividends in a GIA eg. money market fund income at 0% tax rate, plus up to £6K if there was growth on the GIA in addition to the dividend income. All done at low risk. Your thoughts on using salary sacrifice AVCs in this way to reduce earned income as low as possible and below the relevant thresholds? I work part-time 18.5 hours per week.
@MulberryEllie I'm semi-retired doing 18.5 hours per week so wonder if it might work. Thanks for your comment though. Using your calculation minimum wage would be £10,024.04 for me, so would come in at under the £12,570 threshold.
Hi there. Yes I’d say it’s possible for that to work based on your part time hours.
I found this really useful since I had not appreciated the potential benefits of using an offshore investment bond as a tactic to make the most of £5k starter savings bracket, if you can keep your other income low enough. But I think I might be a bit confused about the comparison to pensions in your example. The two scenarios you compare in voyant seem to have the same amount of money in them. But for the same amount earned if you put it into a pension you wouldn't you have at least 25% more than if you put it into an offshore investment bond? (More than that if you are a higher rate tax payer?) You do mention that pensions are likely to accumulate more due to tax benefits, but then show a comparison with only 10% more in the pension, when I was expecting it would need to be 25% more (or more if higher rate tax payer, which is likely the case if you've accumalted a £1m pension pot?) I'm wondering whether I'm missing something in my understanding?
Hi Alex. The pot would be 25% higher at least if you could put all of your money into a pension, but contribution restrictions often mean you can’t. The final example isn’t an exact illustration of the different amounts you could build up, just a comparison of how tax treatment can make a smaller pot still end up higher through tax efficiency. The main purpose of the video is to show that tax efficiency is still possible even if you can’t contribute to a pension.
Agree with your comments, this video is not really comparing apples with apples. It is very unlikely that Billy would have have the same £1M pot if he hadn’t got the tax benefits of putting his money into his pension pot.
It would be great to see how this would stack up if some of the investment had not been put into his pension, so comparing his £1M pension with a lower amount.
Still like your videos though, keep up the good work 👍
@@chrisbourne-retirementplanner That makes sense to me, and was the way in which I found the video useful. There is a risk that some people might not get that and will mistakenly think paying into an offshore bond rather than a pension (even when they have the option of tax efficiently paying into the pension) is going to work out better for them. Maybe a comparison of maxed out pension (same size in both scenarios) with GIA vs GIA + offshore bond might have made that more clear? But I get that there's only so much you can do in a video and you often have to simplify to make it easier to digest. Just my thoughts, anyway. Thanks again for all the content you produce.
Chris, great content and love the Cashflow scenario. With regards to order of taxation and using allowances, can you include the 1k of dividend allowance with the personal allowance and 6k savers allowance to enable £19,570 of tax free income? Cheers.
Hi Lewis. Yes, the dividend allowance does indeed add another £1,000 tax free into the calculation.
Very informative 👍👍.
One doubt though.
I believe the starting value of scenario B shd be lower than that of scenario A due to the tax relief top up by hmrc.
Ex - if i want to substitute 100k pension pot with an ISA, ISA pot would only value 80k as it would be from my net income (assuming basic rate tax)
Exactly my thought too, the two starting pots should be different due to the increased income tax liability by not putting it into the pension.
Thanks for your comments. It is definitely the case that you will build up more capital in a pension as stated at 14.33. It isn't always possible to fund a pension to the extent that one would like of course, particularly if capital is received in lump sum form (equity sale, inheritance etc). I am planning a follow up video to this one though which focuses more on the points you've mentioned above.
Thanks Chris. Love the channel! And thanks very much for all the seriously hard work that goes into it!
Good to see you back Chris. If you get a DB pension that uses up the annual tax free allowance, is it a lot harder to take advantage of these tax loopholes?
Hi Rob. If it swallows the first 3 allowances mentioned then yes, it does make it a bit harder to be tax efficient in the same way. That is where you often look to use a spouse’s allowances if possible though.
I'm considering retiring to a lower tax country. Maybe I don't have to.
Hi Chris. Very useful. Does the Voyant software you offer with your courses go into this level of analysis detail? Thanks
Hi Jason. Yes, it teaches you how to create plans for yourself using the software.
Nice video. Paying tax in retirement is a minefield tbh, although it’s a way off for me it’s good to plan. Surely though the bonds are only for very high earners or if you get some inheritance? Otherwise £60k year pension and £20k a year ISA would need to be paid into first …?
Hi Chris. Yes, pensions and ISAs should be funded as much as possible first. As explained though, that’s not always possible, so you have to utilise other wrappers to be efficient.
This video focuses on tax savings over the course of retirement. It does not consider the tax paid up front when accumulating capital - any amounts available to be paid into ISAs / bonds will have already been taxed (probably at 40% if we have managed to save £1m). £1m pensions savings would not likely covert to £1m blended savings due to this fact (pensions savings would be much higher due to tax relief). I haven't crunched the numbers, but this would likely close the gap between the total tax paid in your 2 scenarios. Thoughts welcomed.
Correct Josh. I mention that at 14.34. The idea is to illustrate though that people who can’t contribute into a pension to the extent they would like can still be tax efficient. I am planning a follow up video to illustrate your example though.
Thanks, Chris, and thank you for sharing your knowledge with us all. Much appreciated.
Many thanks Chris, but there is a big question - how one could get an On/Off-shore bond without access to financial adviser (and therefore without paying at least 2% of capital in fees)? All other vehicles are readily available, often on the same platform, but On/Off-shore bonds are a different story. Or there is a secret hack, how its possible to obtain one without financial adviser?
Hi Dmitry. Providers don’t allow investment bonds to be accessed directly. There are too many tax traps and mistakes that can be made, and they therefore require advice.
FUCKER YOU SHILL FOR OFFSHORE BONDS TO GET THISE SWEET FEES BUT INVESTORS END UP AS SUCKER. TO ME INVESTMENT ISA BEATS ALL INCLUDING DC PENSION.
Chris ... I have a tax question worth looking at for a video. Let's assume you have the perfect pension pot ... £1.3million. You take your tax free £268,000 and then take 5% of the rest for the rest of forever ... £50,270 a year. If I do this, the instant I have any income from anywhere ... even a part time job in a shop, I get hit with 40% tax. How can I avoid painting myself into a corner where no matter what I do, HMRC holds its hand out for 40%? Is the only answer have a smaller pension pot? I have ltd company that I could keep ... I just don't see how I could earn anything that wasn't gobbled by the government. I imagine this is why doctors aren't returning to work despite the LTA being removed ... there is a new artificial limit of £1.3m.
Hi bob. The thing with tax is that you only pay it when you receive the income. You could take less pension if you wanted to, and preserve more for your later years or to pass onto your family. But remember that even if you receive 60% of what your earn net, that’s still better than not earning in the first place and receiving 0%. Or to put it another way, 60% of something is always better than 100% of nothing.
@@chrisbourne-retirementplanner ... except I'd have to pay 13% national insurance and 9% student loan on top. So I'd actually be paying an effective rate of 62% the instant I got a job. I wouldn't want to get out of bed for 38%. I think what I'm saying is the moment I crystalise that pension, I lose most of the ways that I shield money from HMRC. But thank you for taking the time to respond.
Great, now I just need to make that sort of money in order to take advantage of the system haha.
Seriously I really wish I had this advice years ago when I was self employed a doing very well, but I didnt trust pensions etc as I saw a lot of people complaining about how they didnt even get back what they put into the pensions so just saved cash until I had enough to buy a second house to rent out, That worked out ok for 10 years until the tax system changed and tenants destroyed my house lol. Now I'm sitting on cash from the sale and figuring out where to put it to grow tax efficiently, I have no income so cannot put it into pensions, max the isa between my wife and I and use general accounts for the rest, will take a few years to get it all into isas but IF I manage to get back to working ( I'm nearly 60 ) I could do more with the pensions I guess?
Hi Nigel. Yes, if you do return to work, pensions would certainly provide advantages. Some guidance may be helpful to you. If you prefer to do your own planning, you may find it useful to have access to cashflow modelling software to help you plan ahead with more confidence. If that’s the case, check out my Voyant Masterclass courses in the video description.
Hi chris great video. But where does the £5000 come from for the starter rate band. Just savings in a bank account
Hi Chris. It is for interest or taxable gains withdrawn from an offshore bond. You only receive it if you are a low earner though (or you can control your income sources completely).
@@chrisbourne-retirementplanner that’s great many thanks
But once the moneys in Billys pension, you cant get it out to move it into the Offshore Bond & the GIA's without paying tax on the pension withdrawl.
That's right, you can't. The example is to demonstrate how you can still build a tax efficient withdrawal pot if pensions aren't an option (i.e. if you receive large lump sums of cash later in life, or you earn too much to continue funding a pension).
Please can you do a vid on SEIS?
Hi Chris, i assume then that the base plan example has no means of redistributing the pension pot to gain any of the 2nd plan advantages?
In some specific situations it is possible to draw out of one client’s pension and pay it back into another and ending up in a tax neutral position. This could then open up the opportunity to utilise the second client’s personal allowance in retirement and be tax efficient. It is only possible though if the second client earns enough to substantiate the contribution in the first place.
"Let's check the tax paid with the expectation that the threshold has increased in line with inflation" 😂
Do you not expect thresholds to increase? The tax forecasts are just that - they won’t be exact, but we are looking at ‘themes’. The assumptions are the same in all scenarios, so what we are ascertaining is which scenario gives the best tax result. The numbers are irrelevant.
So which Tax covers MoneyMarket funds held within a GIA? CGT ?
Hi. Really useful videos! Just a quick question - you use 4.5% net growth in your example as an estimate. An IFA I spoke to used a very similar % during my chat with him. Many funds - trackers and others- have returned circa 6%. Why do you use 4.5% thanks
Hi Tanya. Because it’s best to be cautious about long term growth. What has been achieved is no guarantee of what will be achieved. We can’t be certain of what the future holds.
Great content! Just wondering why the total needed income in 2045 is different in each scenario? (13:36)
Good question… it’s because in the original scenario, more tax is paid, so you ‘need’ to draw more gross income from your plan.
Now we want a version of this where the pension owner is already in the pensions phase (older than 67!) How can ££ in a pension pot leap over to another investment, without suffering tax??
Chris amazing information thanks !
If I decide to withdraw my tax free lum sum first 5k at a time...is there timescale to withdraw all of the tax free lump sum
before I start with drawing the rest of the pot which will be taxed?
No Steven, you can draw tax free lump at any time without limit, as long as the pension scheme allows it. Some schemes still require all tax free lump sum to be accessed before age 75.
@@chrisbourne-retirementplanner Thanks again for the valuable information Chris..keep the videos coming !!!!
Hi Chris , Great content, clearly explained as usual. Very thought provoking. I’ve got 5-10 years to work so am really interested in using your modelling software. Please can you pin the link to your Cashflow Modelling courses to the top of the comments… can’t seem to find it. Thanks!
Thanks Mike glad it’s useful. I will do that now. I’ll tag it in a separate reply comment below as well.
Link to courses as requested:
voyant-masterclass.mykajabi.com
I am looking for a new finance company, mine is useless and the advisor does nothing, any suggestions. I have spent hours looking but most look the same
I think all you can do is speak to different advisers and find out what their process is and how they go about the job. If they’re very product focused, they’re probably not what you’re looking for. A good adviser should make the strategy itself the product, rather than the investment wrappers that simply get you from A to B.
Chris. This £5000 tax free savings interest allowance is only for when you retire, is that correct? The £1000 personal allowance on savings interest is the only allowance we’re allowed when we’re still working? Am I correct in thinking that’s what you’re saying here?
Hi there. No the £5,000 is available to everyone, but whether you qualify for it depends on your income. If you earn more than the personal allowance, you start to lose it.
hi chris this starter rate for savings states on hmrc website that it can be used for annuitys too .Is this correct ?
Probably only if they’re purchased life annuties - these are non-pension annuities bought with savings.
Hi Chris. Very interesting video thank you. Could you reference where HMRC say offshore investment bonds are taxed as savings income? I can’t find any information.
Also, would you recommend having onshore bonds too to use another 0% allowance?
Hi Andy. I’m not sure where that would be referenced on the HMRC site - much of my learning on the subject comes from CPD seminars etc.
I couldn’t recommend any wrapper specifically without understanding someone’s position, but onshore bonds can certainly play their part. Depending on your circumstances, they can be more efficient that offshore bonds.
@@chrisbourne-retirementplanner Thanks! I got this document link from a tax expert, in case you are interested
www.gov.uk/government/publications/offshore-funds-self-assessment-helpsheet-hs265/hs265-offshore-funds
If your SIPP has cash only and you are over retired (aged 62- no state pension yet until 67), can one get a pay out of £1000/month and re-contribute back of £3600 to benefit from 25% tax free?
Yes that is possible.
Hmm, somewhat confused by the video if I’m honest as it appears to give conflicting advice.
On the one hand the main message is, “look at the tax savings you can make if you withdraw funds from non-pension assets in retirement”. But then concludes with the advice that pensions provide the best vehicle for building wealth for retirement. 😕
Hi there. The main purpose is to show that it is possible to be tax efficient even if pension contributions are not possible (at least not to the extent one might hope). That is often the case for very high earners or people who receive large lump sums of capital which cannot be paid straight into a pension.
Yeah I guess my issue is that the video doesn’t show “how to slash tax by 5k a year”. It’s simply showing how two couples with very different assets pay different levels of tax. You don’t show how someone with all/most of their savings in a pension (scenario 1, and your recommendation) can save any tax.
I mean, why continually compare tax paid between the two scenarios? You’re not recommending option 2 over option 1 as a retirement saving strategy (I assume) so I just don’t see the point.
Sorry Chris, video was a complete miss for me.
@@ksherratt6657 That’s fair enough, I suppose not everything hits the mark for every person. The method laid out though would still work if you built other wrappers in addition to pensions, with the money that can’t be placed into pensions going into other wrappers. It is surely worth understanding a sound methodology for withdrawal?
Absolutely, but the title of the video is effectively “how to save 5k a year in tax” and the vehicle for that illustration is to compare the strategy savings against a pure-pension scenario. As if there is a choice to be made between the two, but that’s just not the case. It would be more realistic and useful to use the same scenario (pension assets) and compare different withdrawal strategies.
How useful. I've had a teachers pension for 20+ years and looking to take semi retirement next year 2024. Can I take part of it as a lump Sum?
@@RS-cp5wc really ? I'm sure part of my payout is a lump sum plus monthly payment !!
Hi Darren. Many thanks. Yes you should be entitled to a tax free lump sum. Taking a lump sum will reduce the pension you can take.
No you are able to commute income for tax free lump sum in Teachers Pension.
@Chris Bourne - Tax Free Investing Expert hi yes I thought so, I've looked at my teachers pension online and they said I'm able to take so much lump sum and so much monthly payments.
Question: If you earn £5000 a year salary but get £5000 a year in dividends. Do I still get taxed on the dividends! Great channel and very informative!
Hi Bill. Thank you! No you wouldn’t because your personal allowance would cover those.
@@chrisbourne-retirementplanner great, I really appreciate your response. How about if you live and work abroad (Asia), earning more than the personal allowance? Kind regards Bill.
Chris. If you have got the majority of your retirement pot in a drawdown pension and with one partner, i didnt think you can tranfer funds to GIAs or Overseas bonds without paying tax so is your second scenario correct?
Hi Craig. No you can’t move from a pension into all of the wrappers mentioned. That’s not what the video is saying though… You can choose where you place your investments in the first instance. A pension will generally provide the best result due to the upfront tax advantages, but it’s not always possible to fund a pension to the extent that you would like.
CGT is only paid on gains taken as income though? Not on the gain that sits in an untouched account?
That's correct. There's no CGT in the models shown.
Hi Chris, what growth assumptions do you put into Voyant ?
Hi Darren. The model assumes 4.5% net growth on asset back investments.
Wow! Do I need to find a husband to mitigate tax…how can I maximise/mitigate tax using my daughter when she’s 18 (16 now)… I have properties and a well paid full time job so mega rate tax payer 😮
Oh and 55 and want to retire and just do property in next 2 years.
Hi Celia. Haha no I'm sure you can still be efficient without having to lumber yourself with a husband. To be honest though, it is the net result of how much you end up with that is more important than how much tax you pay. It can be difficult to avoid income and capital gains taxes when investing in property, but that shouldn't stop you pursuing it as an investment strategy if that's what you'd like to do. Other forms of investment can still enhance the overall strategy and improve diversification.
Thanks for clarifying the tax loopholes that Labour should close! All clearer now!! LOL!! 😆😅🤣
Why would self sufficient retirement be a problem for any government ? Should be a priority .
@@Lord-Brett-Sinclair Why? Because private sector retirement is weighted heavily in favour of the richest in society. A state system, on the other hand, ensures equal treatment for all.
Hi Chris, I work overseas, and was wondering do I need to be UK tax resident to be able to pay in £60k into a pension and get the tax relief? I do have other earned income in UK from property - would that allow me to take out and pay into a UK pension with tax relief? Or am I not eligible whilst overseas?
Hi there. You may be able to pay into a UK pension with tax relief based on the below, but it is likely this will only be at a max of £3,600 gross contribution because your property rental income won’t qualify you for pension contributions.
To get tax relief on contributions:
you have relevant UK earnings chargeable to UK Income Tax for that tax year
you’re resident in the UK, or
you were resident in the UK in one of the previous five tax years and, at the time you were resident ,you became a member of a UK registered pension scheme, or
you’re a Crown Servant - or a spouse/civil partner of a Crown Servant - and have earnings subject to UK tax.
Thanks Chris, it’s as I expected then.
Blimey, I was days away from unsubscribing because I thought you had given up!
Glad you stuck around John!
A pretty scummy goal. Tax keeps the country finances afloat. Tax avoidance harms society. You guys are running us into the ground.
Trust me, anybody in a position to effect a strategy such as this will usually have paid many, many thousands of pounds more in taxes than those who complain that others should be paying more taxes.
I trust you don't have an ISA or a SIPP then, @noizydan ? That'd be awfully hypocritical of you.
Hello, what a bloody excellent video. I'm a simple lad, but this morning I have tried to understand the entire video and by George I just may 'get it'. Only expand this comment if you want a brain-puzzler, possibly from a lad who has got some of his maths wrong! >>>
I've tried to simplify it to my circumstances to see if worthwhile to roll with the GIA VERSUS just banging everything into the pension.
For simplicity, I'm thinking of myself as a single man ..
As a higher tax rate earner (but below £100,000) who puts £40,000 into his pension each year personally, I get an extra £16,000 'free' per year if I go the 100% pension route.
Now, in the name of simplification I'm also removing the annual £12570 from the equation altogether as I get that whatever I choose. Let's put the 25% pension tax-free (when I take it out) to one side for a minute .. I'm also going to assume the GIA and the pension grow at the same % rate because my goodness I gotta simplify this down a bit ..
So it's the £6000 TAX FREE CASH ('savers allowance' or whatever it was called) per year I am really chasing with this alternative-to-pension option (from the Offshore bond). Is it worth the cost of LOSING the 40% (£16,000) 'gift' I get on pension contributions.
When I retire I plan to live within the 20% tax bracket. The tax savings on the £6000 bit each year will be therefore be 20% which is £1200 a year.
So I THINK I'm measuring £1200 a year tax saved, VERSUS £16,000 one-off payment of which 75% will be taxed at 20% whenever I take it out (£2400), so really I'm measuring £1200 a year SAVING TAX VERSUS a one-off payment of £13,600 after tax paid.
So it sounds to me like ALL-IN-ALL it will take about 11.3 years for me to hit profit with this system, but after that, I'll continue to hit profit for as long as my GIA lasts (years it will last = GIA / £6000).
SO if doesn't run out, my GIA would have to be up to BEAR MIMIMUM £67,800 all together (including investment payments) before I retired, for it to all be worthwhile - any less than that and I could run out of £6000 lumps to take out each year! So if I want some decent profit > 'bung all into pension' I probably want at least £100,000 in there. But this seems like NO BIG DEAL if I am putting in £40,000 a year.
THEREFORE whilst obviously 11.3 years is a long time for this to all 'reach equilibrium and start moving into profit', it sounds WORTH DOING IT to me, I could be retired for 40 years!? I even get more liquidity, should I need it, with a GIA.
This all seems to good to be true and a wise man with a wise beard once told me if something sounds too good to be true ...
So, anyone (who is still here!) - how is my maths stacking up? :)
Hi Dave. There’s a lot of info to work through there. I think these types of scenarios have to be worked out with the assistance of cash flow modelling tools, because there are too many overlapping variables to consider without the use of calculation software.