Pension help needed please

Will they tax my lump? or will this have been accounted for when doing the plan estimate?

 

I didn't pay tax on my lump, only on the interest it attracted.

https://www.gov.uk/tax-on-pension

£6,000 p.a. doesn't seem enough to live on.

 

No wonder peeps get confused . So if you get less than 10k...no tax, but if you get a lump of say 30k....no tax? I am not complaining by the way

Is 6k not enough even for a single man living a simple life? No extravangances etc.
Obviously I would like a savings pot too, as I say. The 6k was just a stray figure for illustration purposes anyway The plan estimate shows higher than that anyway

 

I have considered all of those
The money advice service added an important one for me...health insurance ! (but you did say insurance )

 

Good point. But the capital gains tax is only calculated on any profit from the house. It would be fair to assume there would be a profit of course, simply due to inflation, but I guess you could keep that under control with some careful planning as to when to sell and buy properties. Some careful thought required I guess.

As for the tax on rent income, again I have no doubt you're right, but my mate rents his house out because he works away. He just lets the letting agency deal with everything for him. He gets a monthly payment off them which is what's left of his rent after tax, agency fees, maintenance budget etc. He says it barely covers the mortgage, but at least the house is still his, and in effect someone else is paying for it for him. I must admit I have some moral opinions on renting, but my mate must be one of a rare breed of fair landlords. Before renting his house, he researched the going rate, decided that was simply too much and nobody should have to pay that, and then told the letting agency to cap the rent at a maximum rate that is about £200 per month less than what the agency said he should charge. My mate doesn't even have to fix anything, the agency sorts all that and just recoups its costs from a fixed monthly amount that comes out of the rent.

 

Before I went out to Oz I inherited some money. I went to a friends dad for advice about buying a house to rent out as he was an estate agent before he retired. He offered me a share of a company he was setting up to develop properties - 5 equal partners investing £30000 for a ten year period. I won't bore you with the details, but here is the important point. You need to set things up so that one of the others cannot risk your investment through their personal debt, fallings out and so on. You need a watertight agreement so that they cannot force an early sale, use their stake as security for loans or expose you to their debt in any way at all.
Following these rules we had a business that ran its ten year life without a cross word and rewarded us handsomely. I was very lucky to have had the opportunity and it allowed me the finances to build for my retirement by building up a portfolio of my own since then.
I have a pension plan which frankly is not worth a light so this is how I'm achieving my aims.

Another point. You need to remember that when you have tenants you have obligations;
1] fast and effective repairs when required. So need funds in reserve (or at least, guaranteed access to funds) for major repairs at the drop of a hat.
2] you have a duty not to risk the roof over their heads by overstretching yourself financially.

Not forgetting that you need tenants. So will either handle it yourself (solicitors cost money, empty properties etc.) and require extra accounting for the deposits held, or use an agency who charge, but who also may guarantee rents.

One final thing to consider - what are your long term aims? Do you
a] want to hang on to the property and supplement a pension with the rental income from a paid off asset? You will still have the maintenance obligations when you're retired.
or
b] be financially (and commitment) independent for the last 20/30 years of your life by selling up. If so you will need more than the one property. A portfolio will cost you money to build up above and beyond the rental that comes in. I know - a large chunk of my wage from my day to day job is lent to my property company. It's cheaper than the banks and I get it back in the end.

So those are my thoughts.

 

There appears to lots of stuff missing from their budget calculator. Mrs Scrungee used to do that sort of thing for a living, helping people in financial trouble, negotiating with creditors and representing them in court, and she reckoned that none of them include everything, look at all of them and keeping adding stuff they've missed.

+ Newspapers, magazines, books, etc.
+ Dentist + Optician + Prescription charges (free for over 60's) & Haircuts
+ Hobbies, subscriptions, etc.
+ Holidays (incl. passport renewals) and days out
+ Computer replacement, anti-virus & software
+ Xmas & birthday presents & cards, Valentines flowers, etc.
etc.
+ Potting compost, seeds, plants, fertilizer, pesticides, etc.

If your pension is index linked you may find that if taking voluntary redundancy that the index linking may not then apply until you reach state retirement age - something to check.

Another thing about early retirement is that you will not be paying NI contributions on your pension, so you be missing 6 or 7 years? of contributions that could reduce your state pension unless you pay for them - another thing to check.

 

Jeez, no wonder I never understand it's so complex
I get free eye tests (but not glasses), free prescriptions, I don't read, don't subscribe, don't holiday, don't hobby, don't valentine, don't buy presents, but I do compute

I have no intentions of being skint, but I just won't be loaded like some. I am very simple.

 

I can't rightly remember now, but I think as long as you've paid in for 35 years (might be 40), you get the full state pension.

 

Yes, a relatively recent change and it's now only 30 years https://www.gov.uk/state-pension/eligibility unfortunately Mrs Scrungee only worked for 13 years (before joining me in retirement), far less than the time she was at school/uni, and 5 years of those 13 years was 50% FTE job share, and another 3 was only 4 days a week when she was studying for her second degree. Crikey, that's only 9.9 years FTE working life, she got off very lightly! (but we both had highly paid jobs, worked hard and saved hard so we could quit early)