Pension stuff, how's it all looking ? HAve you prepared ?

[Count Steer]

Lopping a chunk off the mortgage makes much sense. (To me anyway). It's effectively taking it out of one appreciating asset and putting it in another, as long as the housing market holds up.

Kind of - but the house you live in isn’t an asset, it’s a liability. It only becomes an asset once you decide to dispose of it, but presumably you need to buy another one and then that becomes a liability.

It was explained to me a long time ago like this…
An asset is something that makes you money, like a rental property. A liability is something that costs you money, like the house you live in.

Our house will be an asset for our kids when we die and leave it to them to sell. At the moment it’s a liability that costs me money to live in.

I regard mine as an illiquid asset. I can turn it into 'cash' but it takes time. A hurried disposal may reduce the amount. It doesn't have to cost me anything in maintenance if I choose to neglect it. Same with vehicles. There are other costs linked to both (depending on use). My liquid assets like shares also cost me money (in account charges) until I turn them into cash but that can be done v quickly.

A business accountant might take a slightly different view, asset values/depreciation/asset disposal rules and all that malarkey but I'm OK with liquid/illiquid.

[MyLittleStudPony]

I too would steer clear of IFAs. They are the pension stealers.

These days products are pretty transparent and you can get good advice from forums such as Money Saving Expert (or here!).

[weeksy]

Depends on your personality, I've never been anything other than relaxed about it

[weeksy]

I don't stress about things I can't affect. The inflation rate, council tax, global warming, the war in Ukraine, etc etc. I ignore them completely.
I've got enough in the world without thinking about things I can't influence

[Count Steer]

I regard mine as an illiquid asset.

As you and Yorick point out there are grey areas, but I feel like the asset/liability thing has a lot of people fooled. They'll tell you that their house is an asset - then I ask them how much it pays into their bank account every month and they suddenly realise that it's not an asset at all, it's just a cost.

I'll just politely disagree. Generally you can raise money against assets. I can borrow based on the property value, see the equity release thread. I can convert it to cash in the bank.

I've never heard of anyone trying to borrow against liabilities.

A revenue stream is an asset but assets don't have to be income generating, just have a realisable 'cash' value.

That's putting aside the actual definition:

asset /as'et/
noun
An item of property
Something advantageous or well worth having
An item of value belonging to a business or organization (categorized for accounting purposes as current assets and fixed assets, which may themselves be intangible, tangible or financial)
(in pl) the property of a deceased or insolvent person, considered as chargeable for all debts, etc
(in pl) the entire property of all sorts belonging to a merchant or to a trading association

[Yorick]

I regard mine as an illiquid asset.

As you and Yorick point out there are grey areas, but I feel like the asset/liability thing has a lot of people fooled. They'll tell you that their house is an asset - then I ask them how much it pays into their bank account every month and they suddenly realise that it's not an asset at all, it's just a cost.

Our properties in UK appreciated massively. Even after CGT we retired on the profits.
They were assets.

[weeksy]

I agree with most of those things, but you can affect whether you pay next months mortgage.

That wasn't what I said, I said I can't affect inflation rates. I can deal with it in a way to pay my mortgage though if it goes up yes. But still, I won't stress about it. I'll just resolve it either by getting a 2nd job or pimping out the wife.

[weeksy]

... or pimping out the wife.

Do you have a rate card?

Only if inflation gets to 9%

[Count Steer]

I'll just politely disagree.

That's fine, I don't want an argument

I threw out a very black and white statement, of course there will be grey areas.

FYI - you can borrow against liabilities, you can borrow even if you don't own the liabilities, I went short on the US dollar even though I didn't own any, my arse was puckering like mad but by crikey I made it big in just a few days on that option

But now we're getting into proper grey areas that people on here won't get.

There are times the house feels like a liability.

(I suppose it's all part of the asset lifecycle - plan, acquire, use, maintain, dispose - and maintain is the and the £ bit).

Anyhoo, regarding the earlier house price discussion, I've had a mooch around the local market and from that deep dive I'd say things appear to be slowing down, particularly with some of the new build and some house types and price brackets. The middle of the market has gone a bit backwards. Whether if will perk up much with the weather is anyone's guess. OTOH the home improvement companies seem to be doing a roaring trade. Can hardly move for trade vans, 2, 3 and more at several places nearby. Nearest couple even have project management vans. There's posh!!

[wheelnut]

Lopping a chunk off the mortgage makes much sense. (To me anyway).

Yeah i hear you. That'll depend on the house move stuff as it could be we dramatically reduce it on the move anyway. But that's all very much an unknown quantity until we find a house we want and get a price for ours.

The biggest issue with the 25% is that you can only take it out once. If your pension pot is (for the sake of round numbers) £300k then you can take out £75k tax free. Wait another 5 years and take the 25% and it might be £100 k or more.

[Yambo]

. . . although in reality inflation in real terms is higher than the fantasy number they're punting out.

So what is the UK inflation rate at the moment?

Officially it's 3.2% according to the people that want you to believe it's 3.2%.
Obviously it depends on how you slice it and what you include and exclude in your calculations, but does anyone really think it's 3.2%?

So the inflation rate is possibly higher than 3.2%.

Iirc you were telling us not long ago that you were happy with a 4.5% interest rate which in reality is currently only a 1.3% interest rate, or worse.

Of course, the BoE may get inflation under control and it may come down but you still won't be getting 4.5% interest.

[Count Steer]

So what is the UK inflation rate at the moment?

Officially it's 3.2% according to the people that want you to believe it's 3.2%.
Obviously it depends on how you slice it and what you include and exclude in your calculations, but does anyone really think it's 3.2%?

So the inflation rate is possibly higher than 3.2%.

Iirc you were telling us not long ago that you were happy with a 4.5% interest rate which in reality is currently only a 1.3% interest rate, or worse.

Of course, the BoE may get inflation under control and it may come down but you still won't be getting 4.5% interest.

It's a fair point. I've always worked on the basis of - if you get anything more than the inflation% on savings etc, you're winning.

(Which is why I didn't particularly go 'Yay!' when interest rates initially went up, because inflation went up more ).

[JackyJoll]

4.5% interest rate which in reality is currently only a 1.3% interest rate, or worse.

And the bastards tax it as 4.5% unearned income.

[Treadeager]

UK State Pension! Back on page 17 , I explained that I was in a long drawn out dispute with the DWP. Pleased to say it has finally been resolved , and I have received a modest back payment to cover 5.5 years of underpayment . ( I believe that in itself is quite unusual ) . In case it may help anyone else...
1) You can buy back missing or incomplete NI years until 5th April 2025 ( costs £800+ per year ) .

2) DO NOT buy back any missing years from HMRC , WITHOUT first checking with the DWP, that it WILL improve your State Pension . ( Depending on your exact circumstances, you may not benefit from voluntarily buying back certain years ).

3) If you were promised a full " new " state pension , and it did not happen , you may be able to get it back-dated , but you almost certainly had to have formally complained at the time ( and be able to prove it ! )

The rules really are incredibly complicated . Most of the DWP staff do not understand them theirselves . Good Luck

[Yorick]

Anybody heard of Premier Miton?

A pal stuck £15k in and just got notice it's gone up by 15% in just 6 months.

Seems too good to be true? Any info?

https://www.premiermiton.com/

[Mr. Dazzle]

Loads of funds and the like have gone up 15% in the last 6 months...some have gone up more than that. Loads have gone down by the same amount or more. That's just the nature of some kinds of funds.

With these ones which show big gains it's very very likely they've had equally big drops in the last year or two. You have to consider decade long timescales.

If you're saying it's gone up 15% and it's guaranteed to stay up there, I would definitely agree that's too good to be true.

[gremlin]

Anybody heard of Premier Miton?

A pal stuck £15k in and just got notice it's gone up by 15% in just 6 months.

Seems too good to be true? Any info?

https://www.premiermiton.com/

I stuck a monkey in Nutmeg just to get £50 of JL vouchers. That's up c. 15%.

Equity and property markets are warming to rate cuts, so no surprise.

[Count Steer]

Their share price has gone up from 53p to 83p over the last few months (PMI on the LSE). I'd say the boat has been missed in investment terms, the general view seems to be that the price exceeds fundamentals ie the company isn't worth what the share price is and it'll come back in line.

However, I haven't looked into why they've outperformed.

I won't be diving in.

[Horse]

the truth is no one can properly time it, so you need to be in a position where you don't need it quickly and you can pick and choose your moment to withdraw it.

If it's for pension provision, much of that timing luxury is taken away.

[Cousin Jack]

the truth is no one can properly time it, so you need to be in a position where you don't need it quickly and you can pick and choose your moment to withdraw it.

If it's for pension provision, much of that timing luxury is taken away.

Any investment that you need to draw down at a specific point is going to be a risk.

Hopefully interest rates stay sensible now and you can draw down and put it in something that might not return as much but be less risky.

That was why the general idea was to move towards Gilts as retirement approached. Gilts are nice stable little earners.
Then someone had the bright idea of outsourcing the Gilt stuff. And then along came Liz Truss.