Nine out of 10 young savers would be better off investing in a Lifetime Isa (Lisa) rather than a pension, according to a former adviser to David Cameron. Michael Johnson, of Barnett Waddingham, a pension company, argued that employers should offer staff the option of workplace Lisas. Around 14 million “millennials”, roughly defined as those aged 18-40, live in Britain. Lisas, launched in 2017, are designed for this cohort. Over-18s can open one before they turn 40, to save for a first home or retirement. A 25pc government top-up is worth up to £33,000. Mr Johnson found that, given their earning expectations and the government bonus, for most under-40s, the Lisa will produce a larger return in later life than a pension. He said: “For the majority of millennials, the Lisa is better. The pensions industry knows this, and is terrified. The next generation of self-invested personal pension buyers, for example, is likely to be very thin.” Specific financial … [Read more...] about Millennials ‘better off’ getting their boss to back a Lifetime Isa than a pension
Tax free lump sum final salary pension
Answer: Given the housing situation at the moment choosing to take in a lodger or student could be a smart move. In terms of tax relief, there is a scheme designed especially for this avenue of income - it's called rent-a-room relief, according to Eileen Devereux, commercial director at Taxback.com. The scheme enables you to earn up to €14,000 gross income before paying any tax on income received for the room in your home. The gross income is the total income before you deduct expenses, which may include money spent on the maintenance of the room, as well as any permissible capital allowances due on fixtures and fittings. Mortgage interest relief is not affected by the receipt of income exempted from tax under the rent-a-room relief scheme, Ms Devereux added. There are some important conditions. The home must be your primary and sole residence during the year of assessment. You also cannot let the room to direct family, or a partner, or to an employee or employer under the … [Read more...] about Your Questions: Is there any tax relief available if I rent a room to a student?
Savers attempting to cash in their “final salary” pensions are losing out by as much as 55pc on the fair value of their transfer. More than a quarter of a million people have swapped final salary pensions – which pay a guaranteed income for life – for more flexible and tax-efficient modern pensions. A £30,000-a-year final salary pension may be transferred for £1m, sometimes more. These transfer values have increased in recent years, encouraging growing numbers of savers to ditch company schemes. Once moved, the pension can be taken as a single lump sum or in a series of withdrawals under pension freedom rules. Transfer values constantly shift and depend on a number of factors – such as the age... To continue reading this article Start your free trial of Premium Access all Premium articles Subscriber-only events Cancel any time Free for 30 days then only £2 per week Try Premium Access one Premium … [Read more...] about How British companies are shaving up to 55pc off the value of ‘final salary’ pension transfers
Answer: While you have given concise details in your question here, it is noticeable that you have given the information only through the prism of immediate cash flow. There are many possible reasons for this - the most obvious one being a negative equity position, but it is important to get a wider picture than just the current position. A clear picture has been shown of your current costings with the net effect being that your investment property is costing you €4,800 each year after all bills have been paid. You reference this as a 'loss', but it must be examined further to understand defining this as a loss. The cost of running your investment each year is €16,800 - made up of the mortgage payment of €13,200, mortgage protection of €800, management fees of €2,000 and the property tax of €800. Rental income after tax is covering €12,000 of this €16,800 for you. This €4,800 cost to you is effectively your annualised investment … [Read more...] about Should I hold on to investment property?
More than a million savers have embraced their new pension freedoms, accessing over £23 billion-worth of savings, figures from HM Revenue and Customs show. Launched in April 2015, the reforms mean people are no longer required to use their pension pots to buy an annuity as an income when they retire. Instead, over-55s have more flexibility over how they access their pots, being able to withdraw some or all of the money, subject to tax. Before the freedoms were introduced, most savers who did not purchase an annuity faced a 55% tax charge on lump sum withdrawals, the Treasury said. Now, savers can choose from a range of options, including income drawdown products, or they can take the whole amount out as a lump sum, paying no tax on the first 25%. It's your money - do what you like John Glen, Economic Secretary to the Treasury, said: "Pensioners should be able to control what they do with their own hard-earned pension savings, and that's exactly what the pension freedoms reforms … [Read more...] about A million people cashing in pensions worth staggering £23,000 each