| Non-motoring > Pension Panic | Miscellaneous |
| Thread Author: Runfer D'Hills | Replies: 177 |
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New Sat 21 Jan 12 18:25
Pension Panic - Runfer D'Hills
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There will be those here who either have or will have a reasonable pension. Well good luck to them, I'm genuinely pleased for them. Fair play. However, as is well publicised there are plenty who don't or won't either through their own bad planning or indeed circumstances and events beyond their control. Let's not dwell too much on the "what you should have done" bit and look at the "what can you do" element. Whatever the reasons, what advice does the panel give to those who have an income and maybe 15 years of potential working life left to try to make at least some provision? |
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New Sat 21 Jan 12 18:35
Pension Panic - Zero
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15 years is not long. Certainly not long enough for a normal annuity or pension pot to provide anything worth a jot unless you can shove a considerable sum into it. Property is the way to go in my opinion. I would be buying buy to let properties, where the rent covers the mortgage payments, with a view to liquidating them into cash come retirement day. I would also be considering buying a place near to London, so that you can live there mid week, and then sell come retirement day. 15 years in the property market is long enough to see a profit. |
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New Sat 21 Jan 12 19:03
Pension Panic - R.P.
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| I was just thinking the same - A lot of the people I "deal" with in the CAB seem to live in very expensive private rentals rent paid by Housing Benefit - a risky but in all likelyhood the most profitable end of the market, buy cheap, spend a bit on the basics and rent out. Lot of these in the South Wales Valleys - old terraced houses I imagine. Dunno what's likely to happen to HB in the short term though....but private rental seems to be the way ahead. |
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New Sat 21 Jan 12 20:10
Pension Panic - Falkirk Bairn
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Local rental company boss. Buy cheap, minimum costs in making it habitable. Rent to the council for their most difficult tenants with the council bearing the refurb costs after it is trashed being met by the council. Next best was semis and end terraces 20-50 yr old properties Avoid new build flats, 4 bed detacheds etc etc |
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New Sat 21 Jan 12 20:41
Pension Panic - Stuu
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+1 on property I put some money in Australian property a decade ago and the returns have so far been good, with the mining boom working for anyone investing in those areas of the country. Helps if you have trusted relatives to operate your investments there though. Quick selling turnaround makes it fairly easy to jump area with your portfolio too. Wherever you buy, know the area and look for local development, always helps as do new industries. www.news.com.au/money/property/no-room-as-australias-mining-boom-turns-to-rental-squeeze/story-e6frfmd0-1226204655246 Last edited by: FoR on Sat 21 Jan 12 at 20:43
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New Sat 21 Jan 12 20:50
Pension Panic - Bromptonaut
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>> Dunno what's likely to happen >> to HB in the short term though....but private rental seems to be the way ahead. May be the $50m question for those letting in that area. HB needs to be seen in context of all the other stuff in the Welfare Reform Bill. IIRC rents will be tied to lowest quartile. But in the London area the £25k overall household benefit cap might bite hard. On the other hand, the inherent incentive to split larger households may create even more demand. Not convinced coalition has thought through the intended consequences of these changes nver mind the unintended. Last edited by: Bromptonaut on Sat 21 Jan 12 at 20:51
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New Sat 21 Jan 12 20:57
Pension Panic - Zero
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HMO, (home of multiple occupancy) is the way to go in that case. Charge rent, by room, per week. Location near near Universities and Hospitals, student lets and single doctors / nurses. That will fall outside the welfare reform bill. |
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New Sat 21 Jan 12 21:03
Pension Panic - Bromptonaut
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>> HMO, (home of multiple occupancy) is the way to go in that case. Charge rent, >> by room, per week. Location near near Universities and Hospitals, student lets and single doctors >> / nurses. Meant to add that point, Professionals sharing may be the way particularly in London and other well chosen sites. Research Asst at work has a monthly rent for a room not far short of my mortgage. Ok, I'm well over half way through my 25y term and on a relatively low LTV but it makes you think a bit. And rents Miss B is quoted for next year at Uni are eye watering too. |
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New Sat 21 Jan 12 21:15
Pension Panic - Zero
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>> Meant to add that point, Professionals sharing may be the way particularly in London and >> other well chosen sites. Now there is a plan. Humph could buy a place suitable for London professionals location wise, occupy one of the rooms during the week, and rent out the others to offset the mortgage costs. Come retirement, sell said property. Last edited by: Zero on Sat 21 Jan 12 at 21:16
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New Sat 21 Jan 12 21:02
Pension Panic - CGNorwich
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When you retire you need to avoid "falling off a cliff" as far as income is concerned. You don't want to go from 100% to 40% say overnight. Therefore it make sense to reduce your expendable income now by saving a substantial proportion of it, say 25% if you can manage it. This has the effect of 1 Giving you a good sum to invest and thus increasing your retirement income 2 Reducing your income to something nearer what you will be living on when you retire thus smoothing the transition. I would personally invest the maximum I could each year in share ISAs 15 years is long enough to smooth out the ups and down in the market. If we are still in a recession in 15 years God help us all! |
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New Sat 21 Jan 12 21:04
Pension Panic - R.P.
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| I almost fell into the income trap - but survived - really cut back on stuff like a full Sky package I never used ! |
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New Sat 21 Jan 12 21:13
Pension Panic - Zero
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I had planned the income/expenditure retirement balance some 10 - 15 years back, and had planned to retire at about now anyway, went a little earlier due to proposed changes to my pension plan. part of your planning should include the very reduced tax burden, and the need not to pay NI contributions, plus of course no pension payments to make. And there was a hidden cost to employment I hadn't taken into account. Travel to work, new suits and shirts, lunch, 15 gallons of coffee a day, etc etc. |
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New Sat 21 Jan 12 21:18
Pension Panic - Stuu
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Reducing expenditure now when times are harder is a good idea as its much harder when money is flowing easily to train your behaviour. Read a few articles on how the elderly try to survive on very low incomes, its quite motivating aswell as sad. |
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New Sat 21 Jan 12 21:20
Pension Panic - R.P.
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I'm around 700 quid a month down on my old job - have re-invented the way I fund stuff - very tax efficient now, still arguing with HMRC over 09/10 and 10/11 - but that's another story. My little jobs pay for the extras without stressing myself - 90% of capital either in tax free investments or very nice little "wrappers"
Last edited by: R.P. on Sat 21 Jan 12 at 21:21
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New Sat 21 Jan 12 21:32
Pension Panic - Iffy
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The property investment plan will fail for one or more of the following reasons: 1. Buy-to-let mortgages demand higher deposits and carry higher rates, so Humph will need to have £30K or £40K - more to buy in London - burning a hole in his pocket. 2. How long is this mortgage going to last? Humph has 15 years of earning potential, the repayments on a 15 year mortgage will exceed any rent. If that hasn't blown the plan out of the water, few local authorities now rent houses directly, it's mostly housing associations and there are plenty of stories of housing associations not being responsible for damage. One tenant from hell, or even a few void months, and Humph will find himself thousands behind on the mortgage with the only way of making it up from his own resources. Then there's the extra work of administering the buy-to-let. Using an agency will only further erode the costings which are already far too tight. |
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New Sat 21 Jan 12 21:41
Pension Panic - Zero
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>> 1. Buy-to-let mortgages demand higher deposits and carry higher rates, so Humph will need to >> have £30K or £40K - more to buy in London - burning a hole in >> his pocket. The rental yields are priced against buy to let mortgages. >> 2. How long is this mortgage going to last? Humph has 15 years of earning >> potential, the repayments on a 15 year mortgage will exceed any rent. One can mortgage for 25 years and then sell after 15, taking (especially in London) 15 years of price gains. >> If that hasn't blown the plan out of the water, few local authorities now rent >> houses directly, it's mostly housing associations and there are plenty of stories of housing associations >> not being responsible for damage>> far far more of good tenants and responsible housing associations. >> One tenant from hell, or even a few void months, and Humph will find himself >> thousands behind on the mortgage with the only way of making it up from his >> own resources. >> Then there's the extra work of administering the buy-to-let. >> Using an agency will only further erode the costings which are already far too tight. If you go for HMO margins (yeilds) of 10-12% are there for the taking. >> The property investment plan will fail Its is the fastest growing vehicle for pension provision in the UK. |
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New Sat 21 Jan 12 21:46
Pension Panic - Iffy
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...The rental yields are priced against buy to let mortgages... Meaningless statement - the rent is determined by the local rental market, it matters not if the property is mortgaged or owned outright. Put another way, if I own outright the identical house next to Humph's mortgaged one, we will both get the same rent. ...One can mortgage for 25 years and then sell after 15, taking (especially in London) 15 years of price gains... One will struggle to mortgage for 25 years when one is over 50. |
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New Sat 21 Jan 12 21:50
Pension Panic - Zero
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>> ...The rental yields are priced against buy to let mortgages... >> >> Meaningless statement - the rent is determined by the local rental market, it matters not >> if the property is mortgaged or owned outright. The local rental market is determined by the cost of housing in the local market, where the hell do you think the landlords get the houses, They buy them they dont fall out the sky. In the same way, the rental yields set the price of purchasing buy to let properties. > One will struggle to mortgage for 25 years when one is over 50. Its not a problem, if it was people would stop moving after the age of 50 and the market would fall to bits. Last edited by: VxFan on Sun 29 Jan 12 at 03:22
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New Sat 21 Jan 12 21:58
Pension Panic - Bromptonaut
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>> The local rental market is determined by the cost of housing in the local market, The local rental market is determined by the demand for rented housing in the local market. Likely to bear a close relationship to the capital/loan cost of freeholds/leaseholds but not guaranteed to do so. |
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New Sat 21 Jan 12 22:02
Pension Panic - Zero
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>> Likely to bear a close relationship to the capital/loan cost of freeholds/leaseholds but not guaranteed >> to do so. More or less is, or there would not be any private landlords, they don't do it for charity. |
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New Sat 21 Jan 12 22:02
Pension Panic - Iffy
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...Its not a problem, if it was people would stop moving after the age of 50 and the market would fall to bits... www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/8964810/Mortgage-curbs-mean-fewer-loans-for-the-over-50s.html |
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New Sat 21 Jan 12 22:02
Pension Panic - legacylad
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I am not sure of current pension tax relief, but self funding a personal pension seems a complete waste of time. I began paying in small amounts to a private pension in my mid 20's and was promised the earth. I stopped paying in (luckily) 15/20 years ago because its value went up less each year than I was paying in, so I spent my 'monthly pension payments' on a larger mortgage, which is now, in effect, my pension. As my sole residence, tax free as well. After a health issue, and having to sell my business, I had to completely re-evaluate my finances. This confirmed I was best not paying into a pp.Maximise your tax free cash Isa's...compound interest adds up under a tax free umbrella, and if you want to treat yourself or your loved ones without incurring debt, then do so! I now earn the minimum hourly wage, have no commuting costs, yet feel richer in a non financial way than I have ever done.I am probably 10 years from full time retirement and live life to the full whilst I have my health. Saving for old age is vastly over rated! |
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New Sat 21 Jan 12 22:17
Pension Panic - Old Navy
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>> When you retire you need to avoid "falling off a cliff" as far as income >> is concerned. You don't want to go from 100% to 40% say overnight. >> And make sure you are absolutely debt free. |
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New Sat 21 Jan 12 21:50
Pension Panic - Dave_
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| Believe it or not, I didn't actually understand how private pensions, annuities etc worked until my dad had to deal with his recently. He's saved, on average, £250 a month over his whole working life, but I've never earned enough to have any kind of surplus. Whilst I've got, ooh, 23 years earning potential with the goalposts where they are at the moment, I can't see that situation changing until all the nippers are legally grown up (13 years' time for the youngest). I'm not going to save much in that final 10 years, am I? |
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New Sat 21 Jan 12 21:57
Pension Panic - bathtub tom
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| I know a few people that are sweating over Lakenheath way. They bought buy-to-let on the basis of American airman renting. The American's are now being encouraged to live on site in the many vacant properties. |
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New Sat 21 Jan 12 22:03
Pension Panic - Zero
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>> I know a few people that are sweating over Lakenheath way. They bought buy-to-let on >> the basis of American airman renting. The American's are now being encouraged to live on >> site in the many vacant properties. Yes that is a local issue, far too many US air bases that way became ex US airbases. |
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New Sat 21 Jan 12 22:06
Pension Panic - Iffy
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...I'm not going to save much in that final 10 years, am I?... No, but being debt-free you are in a better position than many of a similar age to yourself. |
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New Sat 21 Jan 12 22:16
Pension Panic - Dave_
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>> No, but being debt-free you are in a better position than many of a similar age to yourself. Good point, but I will most likely do the same as a few colleagues past and present (and my dad!) and keep on working for as long as it makes sense to. I'm lucky in that I enjoy my job I suppose. Last edited by: Dave_TDCi on Sat 21 Jan 12 at 22:17
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New Sat 21 Jan 12 22:18
Pension Panic - Westpig
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Buy to lets are subject to capital gains tax on any eventual profit; you are taxed on any income in the meantime; get a dodgy tenant and the odds are in their favour; factor in the costs when tenants change i.e. re-decorate new carpets, etc, it all adds up; agent's fees or manage yourself (who fixes the leaking boiler and/or takes the midnight call about the leaking boiler). There's enough people doing it to suggest there must be positives..but we've had all of the above on the house that we own and let out...inc tenants not paying for 3 months and the cheeky ******** had two horses in livery. |
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New Sat 21 Jan 12 22:24
Pension Panic - Zero
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>> There's enough people doing it to suggest there must be positives..but we've had all of >> the above on the house that we own and let out...inc tenants not paying for >> 3 months and the cheeky ******** had two horses in livery. As a source of income it does not make sense as a longer term investment vehicle it does, |
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New Sat 21 Jan 12 22:26
Pension Panic - R.P.
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| We were looking at letting one property last year, we're both cautious people and we really know what we're doing (between the two of us) - there were options to consider, one was to be arm's length and let an agent do it, the other was to do it ourselves. Both have advantages and both have dis-advantages, there is a Special Forces training base within an easy commute of the property and I had contact with someone who recommended dealing with the base as they were always after good quality lets for their staff- added to cast iron backing from the services (discipline etc etc) - but there are real tales of woe - (there was a thread on here from the victim of crap tenants/agents last year ?) - we were really pondering it when the property magically sold very suddenly....I think we'd be sitting here worrying about it now if was a rental. |
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New Sun 22 Jan 12 07:40
Pension Panic - Clk Sec
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Property is the best bet in my opinion. Look at buying within easy reach of a university to let to post-graduate couples and staff, and be within a couple of miles or so of a city or town centre to appeal to shop, office workers, etc. Manage the property yourself to maximise profits, spend as much time as you possibly can talking to prospective tenants, carry out full on-line tenant checks and spend some time googling to see what that reveals. Letting to a local authority is not necessarily an easy option, and HMOs are only for the brave! Last edited by: Clk Sec on Sun 22 Jan 12 at 07:42
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New Sat 21 Jan 12 22:28
Pension Panic - Fullchat
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In my organisation we have an outfit known as the Police Mutual Assurance Society. It does all the finance and insurance stuff. Not that competitive but does offer 10 year savings plans with the money being taken directly from salary. Many have taken out 10 year policies which to all intents and purposes are endowments. So if you take something similar out every year for 10 years in 10 years time you get a lump sum payout every year for a further 10 years to subside other income. I know someone who cannot get a full pension and undertook this. Makes sort of sense to me. I suppose you could do it with ISAs every year. |
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New Sat 21 Jan 12 22:23
Pension Panic - -
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If i may make a suggestion Dave, seeing as you have found your way into car carriers, could you fund getting your HGV1 in due course even if you don't use it straight away. You must have noticed just how many of the current capable transporter drivers are to be frank getting a bit long in the truth, i predict there being an even worse shortage of skilled capable (not everyone can do it) chaps in the game in 10 years than there already is. I expect the good times could come again in your industry on the big stuff. Just a thought, my lad is stopping on it earns over 38 for a 5 day week, get on the right job and some serious wonga can be earned, especially by someone like yourself not afraid of a bit of muck and bullets, lots of wimps around who can't face a bit of cold or muck or hard work and i don't see the new blood doing it. Iffy's right, better to be starting afresh from a flat start than some who have multi thousands of debt at middle age. |
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New Sat 21 Jan 12 22:28
Pension Panic - Zero
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| I saw that Eddie Stobart is offering HGV class 1 franchise deals in the Midlands now. You pay 12k up front, they lease you a fully expensed vehicle (inc secure parking) and guaranteed loads. |
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New Sat 21 Jan 12 22:37
Pension Panic - -
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>> I saw that Eddie Stobart is offering HGV class 1 franchise deals in the Midlands >> now. You pay 12k up front, they lease you a fully expensed vehicle (inc secure >> parking) and guaranteed loads. He's been shutting depots and making trampers redundant so somethings odd. One of my previous employers tried to cajole us into leasing his transporters, he was a natural politician who missed his true vocation and painted a rosy glowing picture of his vision, we didn't fall for the scam. No work guarantees, no empty running costs, they still route and load you and dictate the rate and you could not fill in the empty spaces with your own loads. |
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New Sun 22 Jan 12 05:20
Pension Panic - Pat
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Apparently those who have been made redundant have been made this offer and almost without exception haven't taken it up. That should tell us something GB;) Also he chose to advertise in the Sun, but no adverts have appeared in the industry press. It would seem the advert is designed to appear tp people who don't realise the pitfalls and believe the blurb. Pat |
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New Sun 22 Jan 12 12:51
Pension Panic - -
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>> Apparently those who have been made redundant have been made this offer >> Also he chose to advertise in the Sun, but no adverts have appeared in the >> industry press. Only just seen your post Pat. Indeed if the regulars don't want to know speaks volumes. Advert in the Sun only...that tells me all i need to know too, OD's who are not really ODs will be useful for sweeping up the dregs. Last edited by: gordonbennet on Sun 22 Jan 12 at 12:53
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New Sat 21 Jan 12 23:08
Pension Panic - Dave_
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>> If i may make a suggestion Dave, seeing as you have found your way into car carriers, could you fund >> getting your HGV1 in due course I can't go any bigger than 7.5t because I have a lazy eye - I can't pass the medical as I can only do the numberplate test with my right eye*. The prestige side of this job looks promising though, after all it's not often you're going to carry more than one £100k+ car at a time. >> many of the current capable transporter drivers are to be frank getting a bit long in the tooth There's already a noticeable upturn in demand for 7.5t drivers for the simplest of jobs, as no-one younger than their mid-30s has automatic C1 entitlement on their licence. Traditionally the 25-year-old warehouse lad would have been thrown the keys for the easy runs, but now it falls to someone my age. And most drivers my age have continued up to class II and I and don't want to lower themselves to 7.5t work. Hey, it's a niche :) I reckon the available pool of drivers will also drop by a significant amount in Sept '14 when a DCPC card becomes mandatory - many semi-casual drivers (especially those near to retirement) will shy away from keeping current with their training, which means more work for those of us who're up to date. *I sometimes quote the fact that I've driven over a million miles without driving into anything I didn't see... Last edited by: Dave_TDCi on Sat 21 Jan 12 at 23:11
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New Sat 21 Jan 12 23:11
Pension Panic - Iffy
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...when a DCPC card becomes... Eh? Another entry for the jargon/acronym thread. |
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New Sat 21 Jan 12 23:23
Pension Panic - Dave_
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>> Eh? Driver's Certificate Of Professional Competence :) www.direct.gov.uk/en/Motoring/DriverLicensing/CaravansTrailersCommercialVehicles/DG_171186 Essentially Iffy, starting from September 2009 every vocational bus, coach and lorry driver must undertake 35 hours' training every 5 years* in order to be permitted to drive their class of vehicle in the course of their work. So come September 2014 those who haven't done any training will be unable to work in the industry. Ask Pat, she knows more on this subject than anyone here ever will do :) *5x 7-hour days, conveniently spaced a year apart, usually Last edited by: Dave_TDCi on Sat 21 Jan 12 at 23:25
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New Sun 22 Jan 12 05:21
Pension Panic - Pat
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It means that after 7 hours a year locked in a room with me, you get a certificate to prove it:) Pat |
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New Sun 22 Jan 12 08:44
Pension Panic - legacylad
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As mentioned above, I think property will give a better return than funding a pp over the longer term, say 10+ years. Fair dos to those with the time & ability to buy cheap, renovate & sell on at a profit.However, some people forget to take into consideration auction fees, inflated costs when employing various trades, selling fees and the tax considerations when sold at a profit. I have two friends, older than me, with large property portfolios (20+) and they have been incredibly successful in the past 35 years. Other friends less so...holding down a full time job and dealing with rubbish tenants, whom initially seemed A1.Recently I heard that a friends tenant had accidentally broken expensive sanitary ware and had no contents insurance. In addition there were burst pipes last winter and the tenant is in rent arrears.The house was originally lived in by my friend until he bought another with his new partner, and the situation is driving him to distraction. Not good for your health or finances. Another friend is renting out his deceased mothers house and has had lots of trouble with tenants...rent arrears again, damages, and having finally removed the tenants is struggling to find a new one. This lark is not all its cracked up to be. |
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New Sun 22 Jan 12 08:53
Pension Panic - sherlock47
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>>accidentally broken expensive sanitary ware<< Buildings insurance ( it is a fixture, hence not contents?) and normally taken out by landlord? Mine is covered by the freeholder policy I think on my BTL flat. |
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New Sun 22 Jan 12 09:25
Pension Panic - Stuu
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Get a sizable deposit, helped with my nans house. There were a few issues which required fixing after a year long tenancy but the letting agent simply deducted the costs from the £900 deposit they were holding and sent the remainder to the tenant when they had left. Of course, getting the right agent is key because if you build a good relationship with them, they will help in securing 'the right tenant'. When my nans turned up in a Maserati, we knew we were prob ok. |
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New Sun 22 Jan 12 10:17
Pension Panic - henry k
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>>Of course, getting the right agent is key because if you build a good relationship with them, they will help in securing 'the right tenant'. >> My daughters flat has been let via an agent of a large chain and the tenants seem very good, fortunately. A large company was contracted by the agent to inspect and report prior to letting. The expensive report was large, fixed poor format and difficult to read in places.It was riddled with errors and omissions but of course lots of pretty photos. One photo had no explaination. I created a big list of errors etc and gave it back to the agent. I got an arrogant response from the survey company together with a sheet with a few corrections and told it was my responsibility to give this to the tenants. I have visited the flat a few times ( fridge freezer and washing machine both failed) and I am confident the place will be in good shape at the end. We interviewd several agent prior to letting and chose the one we liked the best but do beware of poor condition reports. |
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New Sun 22 Jan 12 09:38
Pension Panic - CGNorwich
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Opposite me is a house bought to let 3 years ago. They paid £210,000 3 years ago and receive a rental of £795 per month. That's £9,540 per year. They have 3 different tenants in that period and has been empty for 6 month during that time. They pay I believe 15% to an agent so thats a total net income of 19,699 or 3.1% per annum. I estimate the value of the house is now £190,000 so their investment to date has resulted in a net loss of £400. Well actually its probably a lot worse if you take into account the property acquisition costs and maintenance of the property Might as well stuck the money in a savings bond at 3.5% which would have at least paid them £19,500 gross in interest and no worries. Buying to let is a very tricky business |
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New Sun 22 Jan 12 09:40
Pension Panic - R.P.
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| Humph's not commented but I guess his busy work-life might be a stumbling block to managing property |
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New Sun 22 Jan 12 09:44
Pension Panic - Clk Sec
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>> Might as well stuck the money in a savings bond at 3.5% >> Buying to let is a very tricky business Buying a house to let to tenants has to be viewed as a long-term investment. |
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New Sun 22 Jan 12 09:50
Pension Panic - CGNorwich
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Well yes but the first 3 years don't look too good do they and I don't see provincial house prices rising anytime soon. I suspect you can make money at it if you understand the rental market and find a niche like student lets but for the uninitiated you are more likely to lose money than make it |
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New Sun 22 Jan 12 09:57
Pension Panic - R.P.
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At the moment the only sure-fire way to make money on BTL is buy cheap, spend minimal in a re-furb, put HB tenants in. Expect high turnover. Take big deposit. I know of one chap who identifies mortgage defaulters, settles the mortgage for them - keeps them in as tenants. Not at all ethical but everybody is happy. |
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New Sun 22 Jan 12 10:04
Pension Panic - Clk Sec
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>>and I don't see provincial house prices rising anytime soon. I think the market is improving slightly, at least it seems so in my neck of the woods. Someone I know has just offered the full asking price for a house (for themselves), and several properties within walking distance of mine have sold within weeks rather than months. |
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New Sun 22 Jan 12 10:13
Pension Panic - Bromptonaut
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>>and I don't see provincial house prices rising anytime soon. Very variable by region and even by district in towns. House over road sold before Xmas. No sign went up, agent had buyers waiting. That's a 4 bed detached in a commuter village with highly regarded schools. Suspect story would be different for a 3 bed ex LA terrace in Northampton's suburbs. |
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New Sun 22 Jan 12 10:17
Pension Panic - Iffy
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...At the moment the only sure-fire way to make money on BTL is buy cheap, spend minimal in a re-furb, put HB tenants in. Expect high turnover... I live in one of he cheapest areas of the country where it's still possible to buy a little house for around £100K. Humph would need a mortgage of about £80K to buy such a property. Repayments would be around £600 a month, but rents in this area start at under £400. Buying a wreck and doing it up would reduce the initial outlay, and Humph might get £500 a month, but the costings would still be very tight. Everyone recommending property is recommending a high risk investment, which is not the level of risk appropriate for a pension. And buying one house from scratch is the riskiest of all, because all the risk is vested in one place. www.bbc.co.uk/homes/property/mortgagecalculator.shtml |
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New Sun 22 Jan 12 10:25
Pension Panic - -
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One of my self employed mates has just bought another BTL, end of terrace at £66k. Sure it will want some work but putting 15k in will see a nice sturdy little place that will rent easily. |
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New Sun 22 Jan 12 10:27
Pension Panic - MD
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| Where is that GB for that price? |
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New Sun 22 Jan 12 10:39
Pension Panic - -
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>> Where is that GB for that price? >> Wellingborough, within half a mile of the train station there are hundreds of two and three bedroom terraced, some for sale as we speak. |
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New Sun 22 Jan 12 20:49
Pension Panic - MD
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>> Wellingborough, within half a mile of the train station. How firm is the rental market there then and at what price? |
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New Sun 22 Jan 12 10:35
Pension Panic - Iffy
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...One of my self employed mates has just bought another BTL,... And therein hangs another tale. Most professional landlords have their pet estate agents, so someone new to the market will only be offered the crap which those in the know have already rejected. A friend of mine had a substantial amount to invest in commercial property, but found he could not break into the magic circle. Another friend has about 80 commercial properties and confirmed to me the circle exists - he should know, he's a member. The professional ethics of such arrangements are questionable, but they make breaking into the property rental market as a new landlord difficult to do in a cost-effective way. |
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New Sun 22 Jan 12 10:44
Pension Panic - Zero
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> >> Another friend has about 80 commercial properties and confirmed to me the circle exists - >> he should know, he's a member. >> No-one has mentioned investing in commercial property, this requires substantial funds and development knowledge, skills and contacts to gain a foothold. Throwing this in just muddies the waters, it is in no way related to buy to let housing stock. |
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New Sun 22 Jan 12 10:51
Pension Panic - Iffy
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...it is in no way related to buy to let housing stock... Happens in domestic property as well. Bromp posted earlier about a desirable house near him which was sold without apparently being publicly marketed. Of course, the agent may have obtained the best possible price by offering the house to his 'waiting buyer'. But then again.... |
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New Sun 22 Jan 12 19:49
Pension Panic - Bromptonaut
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>> Bromp posted earlier about a desirable house near him which was sold without apparently being >> publicly marketed. >> >> Of course, the agent may have obtained the best possible price by offering the house >> to his 'waiting buyer'. Thinking about it there will probably be a list of 'waiting buyers' competing. Village was vastly expanded in seventies when the family home standard seemed to be 3 bed.. Later developments in nineties partly redressed balance (though not all fourth rooms are big enough for a standard bed!). The most recent new builds have been small clusters of mini mansions - well over £500K. Affordable 4 beds not that common on market. |
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New Sun 22 Jan 12 20:51
Pension Panic - MD
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>> > >> >> Another friend has about 80 commercial properties and confirmed to me the circle exists >> - >> >> he should know, he's a member. >> >> >> >> No-one has mentioned investing in commercial property, this requires substantial funds and development knowledge, skills >> and contacts to gain a foothold. Throwing this in just muddies the waters, it is >> in no way related to buy to let housing stock. >> Not quite true Zeddo. I did it with a mix of comm' and domestic within the same building. Worked for me. |
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New Sun 22 Jan 12 10:39
Pension Panic - Zero
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>> Everyone recommending property is recommending a high risk investment, which is not the level of >> risk appropriate for a pension. You are still blathering on about income. This is for investment, its not HIGH RISK its LOW RISK. Why is that? a: you are getting someone else to pay for your investment (note the word INVESTMENT not INCOME) through rent. b: You will not not loose money, the property will not be worth LESS than you paid for it in 15 /20 years time, you are not left with negative equity. c: there is nowhere else to earn sufficient interest on money to fund a pension and earn more than you would by investing in buy to let property. You claim "round my way the rents do not cover the mortgage" The answer is then to "not buy round your way, because there are plenty of other places where it does " |
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New Sun 22 Jan 12 10:47
Pension Panic - Iffy
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...its not HIGH RISK its LOW RISK.... BOLD and FOOLISH statement. Humph's not been back with any figures, but it looks like he will be highly-geared, which in itself makes the risk high. Add the other risk factors, of which there are many, and this investment plan is anything but low risk. |
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New Sun 22 Jan 12 10:48
Pension Panic - Zero
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>> ...its not HIGH RISK its LOW RISK.... >> >> BOLD and FOOLISH statement. Where is it wrong? |
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New Sun 22 Jan 12 10:58
Pension Panic - Clk Sec
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>> >> ...its not HIGH RISK its LOW RISK.... >> Where is it wrong? It isn't. It's the Lowest Risk investment that I can think of that is likely to fund a reasonable pension. You are in an unusually pessimistic mood this morning, Iffy. |
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New Sun 22 Jan 12 11:06
Pension Panic - Iffy
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...You are in an unusually pessimistic mood this morning, Iffy... I've seen too many people who've got into a terrible mess by doing just as is being suggested. Equally, there are those who have done well, but the hey-day of buy-to-lets is long gone. Those who are already established may continue to prosper, but starting from scratch with little money and even less experience is, to me, risky bordering on the foolish. Several posters on here think it's a licence to print money. Fair enough, but none of us will be taking the risk, whatever that is, so it's up to Humph to decide. |
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New Sun 22 Jan 12 11:15
Pension Panic - Clk Sec
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...And, if I was a couple of decades younger I would become a residential letting agent, that's for sure. Anyone who thinks that their 10 - 15% fees, plus VAT, is all they are going to have to part with, is in for a considerable shock. As always, read the small print. |
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New Sun 22 Jan 12 11:16
Pension Panic - R.P.
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In fairness Zero I think that iffy has a point, the markets in the North are very different to the South. I believe the risks are less in the South. Anglesey should be a hotspot for Humph. When the Nuclear power station build goes ahead it's estimated that the island is 3000 homes short for the people that need to be here in the build phase....rubbing hands eh ! Of course, the agent may have obtained the best possible price by offering the house to his 'waiting buyer'. Top tip - deal with the buyer direct, negotiate a price directly with them if you can, just present it to the agent direct. Easily done if you're a nice person. You have something they want etc... You can tell the Agent that you'll only deal directly with the vendor/seller at this point in the game. |
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New Sun 22 Jan 12 11:22
Pension Panic - Iffy
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...Anglesey should be a hotspot for Humph... He could buy the house next to you - assuming it's still empty - and you could manage it for him. |
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New Sun 22 Jan 12 11:35
Pension Panic - R.P.
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Two empty ones iffy, although there is talk that one is going for rental (Developer would be the landlord) I'd happily do that for one percent less than the going rate ! The affordable house is nearing being roofed, the builder (and the owner) has worked on it all last week so his work must be slow (he's a bricky) his partner is a bit of a celebrity in Wales. Hopefully they'll be in before the summer. www.youtube.com/watch?v=JjP2ueNI66g She starts singing at 2.25mins. Last edited by: R.P. on Sun 22 Jan 12 at 11:37
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New Sun 22 Jan 12 11:49
Pension Panic - zippy
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I am annoyed with my pension scheme through work. I got a valuation in 2007 and it was £60k. I got a valuation this year and it was £60k. In the meantime, I have invested £16k and my employer about £20k. Money totally down the drain! |
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New Sun 22 Jan 12 12:44
Pension Panic - Runfer D'Hills
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Wow ! thanks for all the replies. You spend the morning at the under-12s rugby and look what happens ! OK, well, as it happens, we already own a renter, a local 3 bed semi (outright thank goodness) and our own mortgage is manageable now but it'll be a while before we can clear it. Thought occurs to try to afford a second renter but that would indeed have to be mainly mortgage funded which I'd really only want to commit to for a maximum of ten years so it'd not be cheap. I suppose our own residence could be sold and two cheaper houses funded from that, one to live in and one to rent. Not sure if that's a good idea or not? Consensus does though seem to be to forget PP and and concentrate on bricks and mortar? Sort of confirms my suspicions, thanks. I'm rubbish at this sort of thing to be honest. You have helped. Thank you. Suspect I'll just have to go and work in B&Q or somewhere until I drop ! :-) |
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New Sun 22 Jan 12 12:57
Pension Panic - -
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>> OK, well, as it happens, we already own a renter, a local 3 bed semi >> (outright thank goodness) Farmer in a previous life?..:-) Your probably better off already than most then H. |
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New Sun 22 Jan 12 13:00
Pension Panic - Clk Sec
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>> Your probably better off already than most then H. He's well heeled, we already know that! |
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New Sun 22 Jan 12 13:05
Pension Panic - Iffy
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...I'm rubbish at this sort of thing... You have a good excuse to be - it's not your area of expertise. The fund managers are also rubbish at it - see Zippy's post above. Although in some ways they are quite good at it, because they manage to hoover up lots of other peoples' money without getting their collars felt. The expertise you've gained with your existing rental property would be put to very good use should you decide to expand the portfolio. |
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New Sun 22 Jan 12 13:07
Pension Panic - zippy
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>>>>Fund managers >>>>Although in some ways they are quite good at it, because they manage to hoover up lots of other peoples' money without getting their collars felt. First up against the wall come the revolution! ;-) |
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New Sun 22 Jan 12 13:11
Pension Panic - Iffy
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Look on the bright side, Zippy. If that extra £36K had not gone in, your fund would currently be worth about ten bob. |
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New Sun 22 Jan 12 13:31
Pension Panic - -
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>> If that extra £36K had not gone in, your fund would currently be worth about >> ten bob. Trouble is there's no guarantee it won't be worth 10 bob in 15 years time anyway if he puts another £36k in. I think our middle aged generation mght have got the crappy end of the stick at both ends in many cases (though some like Z have done well and retired early and good luck to them), we left school comparitively young and had to go out and get jobs, we got married bought our houses and lived on second hand furniture till we could afford better. We worked all hours God sent to pay our mortgages and then we had children and then worked even more hours because we had to raise our own families (pride might come into this too) without the state. Then as we are drawing closer to our pensions we are told there is no money left and we have nothing to look forward to, except having to work more years....because we haven't saved enough apparently...grrr. |
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New Sun 22 Jan 12 13:34
Pension Panic - Clk Sec
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>>I suppose our own residence could be sold and two cheaper houses funded from that, one to live in and one to rent. Not sure if that's a good idea or not?<< That isn’t something I would do, Humph. What with estate agents' fees for selling yours, stamp duty, etc, when buying two cheaper houses and , of course, CGT when you eventually sell the tenanted property. Surely better to keep your existing house and downsize if and when you eventually need just a cosy wee cottage, or additional funds. Last edited by: Clk Sec on Sun 22 Jan 12 at 13:36
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New Sun 22 Jan 12 13:53
Pension Panic - Runfer D'Hills
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Aye true, you're probably right CS. There are new build flats near here where you can get a low deposit deal and a short mortgage "holiday" if you buy one. Some friends have bought one and had it rented before they had to pay anything. They're not making a great deal on it as a renter because the mortgage takes most of the income from the property but at least they might have a property investment in the long term. Hmmm... |
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New Sun 22 Jan 12 14:07
Pension Panic - -
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but at least they might have a property investment in the long term. Hmmm... >> Not too sure about new build flats, ex warehouse/factory conversions yes. My son has lived in both types at one time, one bought and one rented, the ex shoe factory conversion was superb, quiet and substantial building with thick concrete floors and solid walls, it will be there for ever, he bought and sold that one. The rented new build was a cardboard shell, you could punch your way through every wall in the building, and hear every word or click of a switch from next door or the flat above or below, carp. If that new build is still standing in 30 years i'll eat my hat. |
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New Sun 22 Jan 12 14:16
Pension Panic - Runfer D'Hills
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30 years'd probably do me GB ! :-) |
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New Sun 22 Jan 12 14:06
Pension Panic - Zero
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>> I think our middle aged generation mght have got the crappy end of the stick >> at both ends in many cases (though some like Z have done well and retired >> early and good luck to them), we left school comparitively young and had to go >> out and get jobs, we got married bought our houses and lived on second hand >> furniture till we could afford better. I am lucky, I am on the last drip of the "job for life good pension"* generation, and got it and got out by the skin of my teeth. That's a concept that's gone, long gone. My son will be the last of the inheritance generation as well, where you inherit the capital left in your parents property. *unless of course you are in the civil service. |
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New Sun 22 Jan 12 14:16
Pension Panic - -
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>> I am lucky, I am on the last drip of the "job for life good >> pension"* generation, and got it and got out by the skin of my teeth. Well said Z, and i meant what i said good luck to you, you are man enough to say you were lucky to have got in and out, though you did the work and paid your dues so deserve the rewards. Hopefully our children will get a decent inheritance too, we don't waste it and have every intention of caring for our own if we should fall ill as best we can. The only thing i'm a little concerened/paranoid about is that our current house is probably in the eyes of some too big for two, i wonder how long it will be before some apparatchik comes up with some allocated space allowance above which is forfiet...yes it might be an amusing thought, but i wouldn't put it past the blighters especially if the loony left gets control in another 20 years time when the population will be sinking the island. |
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New Sun 22 Jan 12 14:35
Pension Panic - Dutchie
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Children can fight over property or wish parents gone.I know we have made out a will which evrybody should do to prevents this. I love my kids and we have done everything for them but I am not sure leaving them property.Rather give them some money before we pop our clogs Might buy a posh campervan and travel.>:) The looney right is in control now Gordon are they any better than the previous lot? |
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New Sun 22 Jan 12 15:00
Pension Panic - -
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>> The looney right is in control now Gordon are they any better than the previous >> lot? About centre i'd have said Dutchie, we don't have a right wing any more, unwanted and unrepresented they drifted to other parties, i among them. Better than the last lot?, well considering they've had to compromise with the candle in the wind libs snapping at their heels like a rabid three legged poodle i have to say that they are at least trying to sort the mess out. They haven't made anywhere near enough cuts though, and have failed dismally to stem the flow inwards of uneconomic migrants and immigrants of which far too many are spongers and criminals, there i've said it on my head be it. They failed to show leadership during the recent riots when the old bill lacked decisive leadership who should have nipped it in the bud (imagine the coppers at the front were itching to sort the scum out but managment says no), and still spend billions in foreign aid and following the lead of the US as they work round the middle east changing regimes as they see fit. Trying to please too many people at the same time and ending up cheesing everyone off, too many knee jerk decisions being reversed later when the foolhardy original was ridiculous, lack of good leadership. However they are infinitely preferable to another loony left term or three God help us, the left are still stocked with those who believe money grows on the trees in Croydon, and that bankers are a charity.. They would sell our childrens soul for another crack at power, they'll sell out to the EU worse than this lot if they get back in again. The EU might IMO finally be on the table for discussion at long last, as above i believe unless the tories pull back from the brink (he's made a start with Euro mess i give him that) they will never again from a majority government, there are many (like me) who will only vote for a party not in the EU's pocket, Cameron knows this better than anyone. |
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New Sun 22 Jan 12 15:45
Pension Panic - henry k
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>>we left school comparitively young and had to go out and get jobs, we got married >>bought our houses and lived on second hand furniture till we could afford better. >> We too >>I am lucky, I am on the last drip of the "job for life good pension"* generation, >> and got it and got out by the skin of my teeth. That's a concept that's gone, long gone. >>My son will be the last of the inheritance generation as well, where you inherit the capital left in your parents property. >> >> Me too.- so very fortunate. I put a lot of ££s in my pension and then was paid some more to fibble off ( earlier than ideal) but hey a bird in the hand. We have more spending power in retirement than when I was employed and both my offspring have properties and very good jobs so they do not need their inheritance. I feel really sorry for all those out there struggling today. We struggled when first married but it appears to be far worse today sometimes because expectations also seem so much higher. I continue to pay my taxes and am spending much more in real terms than I have ever done on goods and services. |
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New Mon 23 Jan 12 02:01
Pension Panic - AnotherJohnH
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>> OK, well, as it happens, we already own a renter, a local 3 bed semi (outright thank goodness) >> and our own mortgage is manageable now but it'll be a while before we can clear it. Don't panic - it'll just shorten your life expectancy. IMHO: continue to pay off all your debts, hopefully finish some time before you intend to retire, and then save a bit to add to your "fund". At retirement, sell "humpd hall" - that's the rest of your pension fund. Your new abode is the local 3 bed semi renter - (once the tennant is out) - you can move without capital gains tax on the sale of your primary residence, AFAIK. If you were to try savings plans, be it ISA or pension, they mostly have their tax advantage eaten up by the provider - see this recent article in the Terrorflag: tinyurl.com/6rke5jp |
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New Sun 22 Jan 12 14:01
Pension Panic - Zero
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>> In fairness Zero I think that iffy has a point, the markets in the North >> are very different to the South. I believe the risks are less in the South. Actually it works better in most parts of the north than in the south east. Renting your home is more accepted there, places are cheap and the rental to purchase yields can be a point or two higher. Your investment return on resale after 15 years is lower tho, there your strategy could change and use the income from rental to fund your retirement. |
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New Sun 22 Jan 12 14:47
Pension Panic - Westpig
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>> Several posters on here think it's a licence to print money. I can guarantee it is not. When I met my wife 7 years ago, we kept her 3 bed house going and rented it out, for a long term investment. Short term it makes virtually nothing. Even though the interest rates are so low and the rent being paid is noticably more, when you factor in the costs e.g. when the single glazed wooden windows badly needed a re-paint, I swapped them for double glazing...£2,500 instead of £1,000..but more sensible long term...trouble is my builder mate then found rotten wood at roof level, sofits (spelling) etc, which cost be another £2.5K.....the hot water tank cost £400......it costs £3K every time a tenant moves on (carpets and paint) and that's happened twice... garden fence when the wind blew it all over £650...just had seals in Velux type windows attended to (again) and a door re-affixed in the kitchen £40 Work that needs doing or will need doing = wooden door from garden in to garage is in poor condition, cooker is dated and has had an inner glass pane smash (removed), carpets again, up and over garage door has amazed me it's lasted as long as it has. When we were earning top rent...the tenants cost more in repairs etc.....now that a family member's in there long term, the rent is 30% down...but they look after it as if it's their own and it's a long term deal. We won't be millionaire's next year though Rodney. |
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New Sun 22 Jan 12 14:50
Pension Panic - Zero
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| No-one has suggested its a license to print money, and no-one has said its a good source of income, merely that it is a good way to invest in residential property for the medium to long term. |
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New Sun 22 Jan 12 15:56
Pension Panic - Clk Sec
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>>.it costs £3K every time a tenant moves on (carpets and paint) Strewth, WP. That's a lot to spend between tenancies. Last edited by: Clk Sec on Sun 22 Jan 12 at 15:57
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New Sun 22 Jan 12 16:01
Pension Panic - Stuu
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| If money isnt prolific, how about buying a row or two of garages that can be rented out or for a little more cash, a workshop. Just a thought. |
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New Sun 22 Jan 12 16:10
Pension Panic - Clk Sec
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| A workshop is a possibility, but lock-up garages can be a nightmare. If the beggars can't get in through the up and over doors, they knock a hole in the roof. |
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New Sun 22 Jan 12 17:00
Pension Panic - Westpig
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>> Strewth, WP. That's a lot to spend between tenancies. >> The last bloke I had paint it, was a bit on the bodge side of things...and it still cost me £1,200. The people recommended wanted £2K. You can't do the carpets for much less than £1K. Chuck in the odd door handle or similar and £3K isn't that far away. I could scrimp on the carpets and have the real cheap and nasty stuff, instead of low middle stuff..but..we were expecting top dollar rent, as it's quite a nice place in a nice part of the world. |
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New Sun 22 Jan 12 17:05
Pension Panic - Lygonos
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Get a public sector job - you'll retire in 5 years on 90% of your final income. |
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New Sun 22 Jan 12 17:12
Pension Panic - Zero
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| So if Humph has 15 years he would get 270% of final income? |
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New Sun 22 Jan 12 17:17
Pension Panic - Runfer D'Hills
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I might apply to be a bin man. The actual activity isn't so different to what I do now when it comes down to it....Y'know, taking a load of crap from other people, having to get up early, company vehicle, never a word of thanks etc... :-)) |
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New Sun 22 Jan 12 17:28
Pension Panic - Zero
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>> I might apply to be a bin man. The actual activity isn't so different to >> what I do now when it comes down to it....Y'know, taking a load of crap >> from other people, having to get up early, company vehicle, never a word of thanks >> etc... >> >> :-)) And you get your revenge is so many subtle ways... |
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New Sun 22 Jan 12 17:48
Pension Panic - CGNorwich
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"The last bloke I had paint it, was a bit on the bodge side of things." The property opposite me is between lets. A van arrived two weeks back from property maintenance company. It bore the tag line "the professional property people". Two lads emerged with pots of paint and proceeded to paint the front front door one on the inside and one on the out. No attempt was made to wash the door let alone remove the door furniture. The door was painted whilst closed so the outside now has an unpainted border round the edge. Took about half an hour. Dread to think what they charged the owners. |
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New Sun 22 Jan 12 17:20
Pension Panic - Manatee
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In 2009-10 and 2010-11 I put 60k net, 100K gross into a SIPP as a top up for various other bits of pension I have scattered about that won't add up to enough if I have to, or want to, retire in the next year or two at 59-60. The really frightening fact is that if you have £100k in a pension pot, and you want to buy an annuity at 60 with some inflation protection (up to 5% say) and a 50% spouse's pension, you'll be lucky to see £2500 a year, which will of course be taxable when you receive it. Unless you have enough years to get some decent growth, without 40% tax relief it isn't even worth considering. With 40% relief, and under current rules that will allow up to 25% of the value back in tax free cash, it's a bit better - for my 60k net, with no growth I could get £25k tax free cash and a pension of say £1800 a year with increases and some spouse pension, at a net effective cost of 35k for the pension part. Alternatively, if you have guaranteed minimum from elsewhere, you could use it for income drawdown instead of buying an annuity. The rules could change though, and I need to hedge my bets. Boy and his girlfriend are about to rent a one bed flat for £650 a month. I'm seriously considering buying a £100k-£120k house in a cheaper but reasonable area about 8 miles away. In round numbers, I could rent that to him for say £500 a month (better place, less cost to him, reliable tenant and no agency fees for me) see 6% return (better than cash deposits and much less risky than shares) and any capital growth would be bunce. Better return than an annuity, inflation protected if rents keep pace, and doesn't die with me - widow would continue to receive income, and when we have both snuffed it we will leave two houses to the children. What have I missed? Seems relatively foolproof apart from absorbing the cash if we buy outright. A refinement to this plan which introduces some risk would be to use our cash as deposits and buy two or three, renting the extra one or two in the usual way. Comments from wiser heads welcome. |
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New Sun 22 Jan 12 17:28
Pension Panic - Zero
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> >> Comments from wiser heads welcome. Seems wise enough to me. |
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New Sun 22 Jan 12 18:13
Pension Panic - R.P.
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Remember ti make a will and consider your risk with inheritence tax. |
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New Sun 22 Jan 12 19:47
Pension Panic - Lygonos
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Awesome idea except..... Interest rates can only go up, wages will not, public wages will go down, unemployment will probably go up, banks will not be anywhere near ready to give 95% mortgages for 4-5 years, etc etc. HOUSE PRICES ARE COMING DOWN MARK MY WORDS! Wait 2-3 yrs befoe buying. |
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New Sun 22 Jan 12 19:49
Pension Panic - smokie
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"HOUSE PRICES ARE COMING DOWN MARK MY WORDS!" Glad someone shares the same view as me. |
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New Sun 22 Jan 12 20:02
Pension Panic - madf
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"HOUSE PRICES ARE COMING DOWN MARK MY WORDS!" Course they are. 3 x average salary will but a house under £150k so a LONG way to fall. But when the next boom comes along, - and it will - they will shoot back up again. 260k a year NET immigration , no social housing and new house build under 120k a year mean houses are in short supply. In the meantime, no wage growth and inflation means house prices fall.. Until c 2017 ,, I guess. As for fund managers ? Most are overpaid incompetents who would do better by being blindfold and throwing darts at the FT - through their legs. Hope none or you are into ETFs? Next scandal to blow up in next two years. |
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New Sun 22 Jan 12 19:56
Pension Panic - Old Navy
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>> Awesome idea except..... >> >> There are plenty here how have seen all that before. If you think it is tough now....................... |
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New Sun 22 Jan 12 20:09
Pension Panic - madf
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>> >> Awesome idea except..... >> >> >> >> >> >> There are plenty here how have seen all that before. If you think it is >> tough now....................... >> Yes: the moronic LDs who object to restricting benefit to £26k per household obviously want to encourage out of work benefits claimants to be paid by taxes on those earning £20k - and paying tax. I expect we will need to cut our Government spending by another £100b a year.. and the only obvious savings areas are: foreign aid, and the two big spenders: NHS and benefits. (there is likely to be little GDP real growth from 2007 to 2017). But most politicians have as much foresight as Chris Huhne who - it is alleged - conspired with his wife to pervert justice and then dumped her. Last edited by: madf on Sun 22 Jan 12 at 20:10
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New Sun 22 Jan 12 20:03
Pension Panic - Zero
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>> >> HOUSE PRICES ARE COMING DOWN MARK MY WORDS! >> >> Wait 2-3 yrs befoe buying. >> Listen to me YOU ARE TOO LATE THEY ARE DOWN AND SCRAPING ALONG THE BOTTOM |
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New Sun 22 Jan 12 20:09
Pension Panic - Stuu
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| My house sold for £183,000 in 2005, I paid £130,000 in 2009. Bargin. An almost identical house is up for £135,000 on the same estate so not much of a change despite the current climate. |
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New Sun 22 Jan 12 20:27
Pension Panic - Runfer D'Hills
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Er, um, confused now... :-( |
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New Sun 22 Jan 12 20:28
Pension Panic - henry k
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>>Listen to me YOU ARE TOO LATE THEY ARE DOWN AND SCRAPING ALONG THE BOTTOM >> I have not noticed much down in this part of Surrey / Kingston area but suspect out of the south east things are not so good. Known actual prices that houses have sold in my immediate area indicates some prices are going up. Latest local development of 150 houses are selling well so someone is buying. The price of my daughters flat appears to have returned to the price prior to the dip three years ago. The price dropped about 15% so she bought well. |
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New Sun 22 Jan 12 20:37
Pension Panic - Old Navy
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How many have stretched their finances to the limit to buy property and will still manage OK if (when) there is a modest bank rate increase to say 5% or even 15%? I had a mortgage at that rate.
Last edited by: Old Navy on Sun 22 Jan 12 at 20:39
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New Sun 22 Jan 12 20:49
Pension Panic - henry k
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>>if (when) there is a modest bank rate increase to say 5% or even 15%? I had a mortgage at that rate. >> Oh yes a frightening thought. Twas 15.5% when we committed, flattened all our funds and moved. Wage rises were expected in those days so things would be even blacker if those sort of rates return. |
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New Sun 22 Jan 12 20:43
Pension Panic - Lygonos
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My mistake guys... here's me thinking a double dip recession was on the cards and that houseprices trebling in the 12yrs up to 2008 was anomalous or largely due to insane lending practices*. That's me put in my place. Not. *or idiotic TV like Sarah Beeny's thingy and Location, Location. Last edited by: Lygonos on Sun 22 Jan 12 at 20:44
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New Sun 22 Jan 12 20:49
Pension Panic - madf
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| All we need is a mansion Tax on houses over £2million and house prices of £1-£2million will double in price:-) |
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New Sun 22 Jan 12 20:51
Pension Panic - Old Navy
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>> That's me put in my place. >> >> Not. The South East is "Never never happen here land". They will be in for a massive shock one day, probably soon. |
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New Sun 22 Jan 12 20:57
Pension Panic - Lygonos
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If I was in the position of going for a first home right now I'd be renting. Why have an albatross of a mortgage round your neck paying mostly interest and risking negative equity? Why take on the risk of maintenance issues? The days of being able to buy for less thatn you'd rent are long gone (at least in Scotland) - renting a decent 2-bed flat in Edinburgh would be around £600/mth with freedom to move without waiting for someone to take on your tenancy; buying would be £150k (say £30k of savings down and £500-600/mth interest + capital repayment). Buying makes little sense to me right now. |
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New Sun 22 Jan 12 21:00
Pension Panic - MD
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| Concur. I think that the dark beige 'stuff' may be about to hit the fan. As for Buying to let now I wouldn't bother except in exceptional circumstances. (DON'T borrow). I think that all us normal folk can do is to batten down the hatches and 'keep yer powder dry'. |
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New Sun 22 Jan 12 21:40
Pension Panic - rtj70
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I can it will be tricky for buyers when the bottom of the market is. I'd not buy/sell at the moment. We had planned to downsize for ages and as soon as we could we did. We thought in 2009 the market might not have been at it's highest but that 'dark beige stuff' could still hit the fan. It hasn't quite yet but with Spain and Italy asking for more money, Greece not agreed.... things have time to get a lot worse. And I think some of what has gone before has not impacted us all yet. I know our current house is not worth what we paid. That's clear and obvious. But neither is the one we sold worth what we got. Prices will recover eventually... well maybe... but the transaction was about removing the mortgage. We have other plans too for the savings. Back to Humph's question.... I don't think a lot of out pensions are what they were when we first got them. My work one over 16 years ago was final salary but they closed it. Goodness knows how much/little I'd get from that in future. The replacement pension means my employer pays in an additional 10% again on top of my 5% and their default 10% (so 25% goes to the pension). But how little will this all be worth in say 25 years? Naff all probably. We have spare cash to 'invest' each month. Apart from ISAs promising 4% at the moment I don't know what else I'd have done this last financial year. And I went for cash ISA as I don't want to risk stock at the moment. Premium bonds aren't paying out much for us either. Lottery scratch cards next.... |
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New Sun 22 Jan 12 21:46
Pension Panic - Zero
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>> My mistake guys... here's me thinking a double dip recession was on the cards and >> that houseprices trebling in the 12yrs up to 2008 was anomalous or largely due to >> insane lending practices*. No-one has suggest that house prices will treble in the next 12 years. Prices peaked in 2007, Average being 184k Between then and now we have bumped up and down, the average in 2011 is 165k Expect prices to rise 15% to 2017, Average price will be 189k. Past that who knows but 4% for the following 10 years is on the cards. So come resale in 15 years you will make 90k on each unit, without any outlay because your renters have been paying that. Now you will say, brave words you cant back them up. Quite right - except ask yourself these questions. Will the population of the UK fall in the next 15 years Will we have a glut of houses in 15 years time If you think the answer to both is NO, then consider if that is sufficient back up. No figures have been adjusted for inflation. |
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New Sun 22 Jan 12 21:50
Pension Panic - rtj70
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Part of our plan (if Europe sorts finances and is credible) is: - Buy something in Europe, e.g. Greece (might get a bargain) - Rent UK home out as partial income (no debt on it) - Eventually sell UK home and spend it! |
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New Sun 22 Jan 12 21:51
Pension Panic - R.P.
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| Buy Greece I think ! |
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New Sun 22 Jan 12 21:54
Pension Panic - Old Navy
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| Before or after the collapse of the Euro? |
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New Sun 22 Jan 12 21:56
Pension Panic - rtj70
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ON, we'll hold off for the Euro to collapse first or be properly fixed. It is doomed for failure at the moment. We've got a few years before some other investments mature anyway. |
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New Sun 22 Jan 12 21:56
Pension Panic - rtj70
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>> Buy Greece I think ! If Greece sold some long term leases for some islands they could raise a lot of money! |
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New Sun 22 Jan 12 22:28
Pension Panic - Manatee
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I think part of the answer to the house price conundrum is that markets are local. Some areas will have the potential to fall materially from here. others are less likely to. There are pockets where prices have been rising. Still, I'm not an expert on that so there's risk. I've never been a great borrower, so if we do buy something it will be with a large deposit or cash - makes no sense not to leverage if you are looking for capital growth, but to paraphrase Warren Buffett, you have to be unusually incompetent to go bust if you have no borrowings. For an example of how far house prices can fall, look at Ireland, though they had a bigger boom. I recall being driven round Dublin during the boom years and being shown houses worth €300k that had been pocket money only a few years earlier. Since then some areas have gone back 70% I am told. There are allegedly some 2,000 unfinished housing estates in Ireland. If even half of that happens here, there will be a lot of hard hit private landlords. |
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New Sun 22 Jan 12 22:58
Pension Panic - rtj70
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| If house prices deflation is measured on sales, then in a lot of areas there will be no sales. People don't sell/move in a market like this. Unless of course you have no option. |
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New Sun 22 Jan 12 23:03
Pension Panic - R.P.
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| Or you make a good profit on something you bought a long time ago and get a hefty chunk off the price of something new of course. |
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New Sun 22 Jan 12 23:13
Pension Panic - CGNorwich
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| I'm considering moving at the moment. It seems to me it matter not a lot whether you are buying and selling in a rising falling or static market as we are in now |
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New Sun 22 Jan 12 23:35
Pension Panic - Zero
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Its all relative. |
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New Sun 22 Jan 12 23:49
Pension Panic - rtj70
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Zero it is all relative. Our last house was bought for about £130k and sold for £360k (excluding fees). New house about £270k (plus costs and stamp study on top as well). But end result no mortgage and a bit of money. The buyer of our house is apparently off on a contract to Kazakhstan for 12 months on the house is up to let! Who'd go there.... I assume the contract is going to pay a lot of money! |
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New Mon 23 Jan 12 07:37
Pension Panic - sooty123
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>> The buyer of our house is apparently off on a contract to Kazakhstan for 12 >> months on the house is up to let! Who'd go there.... I assume the contract >> is going to pay a lot of money! >> Probably an oil and gas contract, plenty of money I'm sure |
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New Mon 23 Jan 12 10:13
Pension Panic - rtj70
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>> Probably an oil and gas contract, plenty of money I'm sure Sure to be related to that - but he's a corporate lawyer. So big money I am sure. Must be to leave a UK law firm where he was a partner. |
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New Mon 23 Jan 12 01:58
Pension Panic - Lygonos
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>>Prices peaked in 2007, Average being 184k - Between then and now we have bumped up and down, the average in 2011 is 165k Super - and adjust down a bit more since entry-level properties aren't selling - that 165k average is a greater portion of mid-to-high price properties than 2007's 184k. >>Expect prices to rise 15% to 2017, Average price will be 189k. Super - a little under 3% per annum if you're right - almost as good as keeping your cash and not risking further price crashes..... ;-) >>Past that who knows but 4% for the following 10 years is on the cards. Super - presumably as that's when you expect the economy to enter recovery. With interest rates likely to be a few % higher by then cash may still be paying better. Supply and demand of houses takes second fiddle behind the supply and demand of cash/lending. Maybe the era of 20-year olds buying houses is gone, Zero? |
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New Mon 23 Jan 12 07:54
Pension Panic - Zero
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>> >>Prices peaked in 2007, Average being 184k - Between then and now we have bumped >> up and down, the average in 2011 is 165k >> >> Super - and adjust down a bit more since entry-level properties aren't selling - that >> 165k average is a greater portion of mid-to-high price properties than 2007's 184k. No - adjust nothing anywhere, that's the average price, what price band isn't selling has nothing to do with it - stop flannelling and flustering about. >> >>Expect prices to rise 15% to 2017, Average price will be 189k. >> >> Super - a little under 3% per annum if you're right - almost as good >> as keeping your cash and not risking further price crashes..... ;-) No again wrong, inflation is at 4-5% currently keeping your cash in the bank and not getting 3& is a 7%-8% shortfall. >> >> >>Past that who knows but 4% for the following 10 years is on the cards. >> >> Super - presumably as that's when you expect the economy to enter recovery. With interest >> rates likely to be a few % higher by then cash may still be paying >> better. It may or it may not, if cash is paying better at that point you can be sure as night follows day that house prices will be better than cash interest. >> >> Supply and demand of houses takes second fiddle behind the supply and demand of cash/lending. There you go you see it doesn't, because if it did you wouldn't be able to walk along the street without falling over homeless people. >> >> Maybe the era of 20-year olds buying houses is gone, Zero? What's that got to do with the price of eggs? We are talking a rental market here. |
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New Mon 23 Jan 12 08:09
Pension Panic - Manatee
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It's difficult to see rents going down in real terms unless house prices go down, a lot - more than 10% or even 20%. There's a housing shortage - unless there are a lot of houses built, a reversal of net immigration or a disastrous further collapse of the economy (the least unlikely of the three in my opinion), hard to see that too. FWIW, Interest rates are headed down in the short term according the the (market driven) yield curve which suggests a low in about 6 months, but still a lower level than now in 12 months (too short an horizon for taking a big morgtage, I agree). The BoE forecast for inflation is low for some time. What worries me about that is that we would have the first government in history NOT to inflate its way out of a debt problem. Inflation is a killer for people on pensions with RPI caps (the private sector - many in the public sector are fireproof) but a buy-to let would actually hedge against that. I'm coming to the view that at least buying something that Boy could rent at this stage is a sound idea, provided there's not too big a proportion of borrowing involved. The only downside is the hassle but if I'm retired I'll have time to cope with that. |
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New Mon 23 Jan 12 08:19
Pension Panic - Zero
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>> I'm coming to the view that at least buying something that Boy could rent at >> this stage is a sound idea, provided there's not too big a proportion of borrowing >> involved. The only downside is the hassle but if I'm retired I'll have time to >> cope with that. I am pondering the same thought as well, might as well pay a fair rent to me as a landlord, rather than an inflated rent to some unknown Jo. The only problem I see, is if he gets into financial trouble (ie redundant etc) would I have the heart to evict him if he does not pay rent.... |
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New Mon 23 Jan 12 08:29
Pension Panic - smokie
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I'm of the opinion that wherever we think we happen to be in the economic downturn, the full effects have not yet been felt by the general public. There have been massive job losses, and are still many to come especially in the public sector. Those people have been getting by on savings and redundancy payouts, which will eventually run out, or second incomes, which may be in jeopardy. So the full effect on many peoples income and standard of living hasn't yet been felt, and will take some time to come through. Once it does, people will no longer be able to afford to pay current rental prices and this will cause a big drop in rentals and therefore house prices ( as well as many other essentials). (EDIT: I do also think the South East and London in particular are somewhat protected from this) Last edited by: smokie on Mon 23 Jan 12 at 08:31
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New Mon 23 Jan 12 08:41
Pension Panic - Manatee
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I agree there's still more than 'normal' risk around with not just UK but many of its markets in recession or close to it, every European country loaded with debt, a constipated banking system and the euro crisis dragging on. For individuals, confidence is the main problem. Most civil servants won't lose their jobs (less risk than in the private sector, truth to tell - I think I'm 6-4 on to go this year) but they all think they might - a big contrast to the "jobs for life" mentality many might have had. |
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New Mon 23 Jan 12 09:12
Pension Panic - Clk Sec
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>>What have I missed? Very little as far as I can tell, and if I was in your shoes I would be looking to buy now rather than next year or the year after. You already have a good tenant lined up, so that's the difficult part out of the way. And, at the moment, I would feel much more at ease with spare cash tied up in property, than in a bank or building society. |
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New Mon 23 Jan 12 10:04
Pension Panic - PeterS
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>> I am pondering the same thought as well, might as well pay a fair rent >> to me as a landlord, rather than an inflated rent to some unknown Jo. >> >> The only problem I see, is if he gets into financial trouble (ie redundant etc) >> would I have the heart to evict him if he does not pay rent.... >> The other thing to be aware of is that not all mortgage companies are prepared to lend on a BTL basis where the tennant is a relative (for exactly the reason that Z highlights above - would you really evict a relative for non payment). More of a problem on re-mortage I'd assume, on the basis that for first mortgage advance there is no tennant in place |
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New Mon 23 Jan 12 16:23
Pension Panic - Old Navy
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Another scare story. :-) tinyurl.com/7cc84tc (Daily Mail) |
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New Mon 23 Jan 12 17:05
Pension Panic - Clk Sec
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>>Another scare story. :-) ON The end of the world is nigh! tinyurl.com/4adr5na (Independent) |
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New Mon 23 Jan 12 17:14
Pension Panic - Old Navy
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>> The end of the world is nigh! >> >> tinyurl.com/4adr5na (Independent) >> I didn't read all the link. Is there anything in there about donating all your assets to his outfit before the end of it all? |
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New Mon 23 Jan 12 17:41
Pension Panic - CGNorwich
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| No - its says we're all going to be ruptured. Knowing that's just as if a heavy weight has been lifted. |
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New Mon 23 Jan 12 16:35
Pension Panic - Bromptonaut
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>> The other thing to be aware of is that not all mortgage companies are prepared >> to lend on a BTL basis where the tennant is a relative (for exactly the >> reason that Z highlights above - would you really evict a relative for non payment). >> More of a problem on re-mortage I'd assume, on the basis that for first mortgage >> advance there is no tennant in place If it's a problem then there's likley to be a covenant against it whether re-mortgaging or starting out. |
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New Mon 23 Jan 12 19:12
Pension Panic - mikeyb
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>> The only problem I see, is if he gets into financial trouble (ie redundant etc) >> would I have the heart to evict him if he does not pay rent.... >> I think you would find it in your heart to evict him :-) |
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New Mon 23 Jan 12 19:35
Pension Panic - mikeyb
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I think BTL is a good vehicle if you work it right. I bought a house 8 years ago for this purpose, and to be fair I have been lucky in that I have a very good tenant who lives alone in a family size house so the wear and tear element has been small. I bought the house as a new build, and despite peoples opinions on new builds they are pretty maintenance free - lots of UPVC! Plus builders are business men so they are less emotive about pricing. I got a good deal because it was Late November and I agreed to a very good deal on the provision that the deal was complete by 31st Dec - their year end. The heating system has played up a bit, so I have a British gas contract - tenant calls them direct when there is a problem, and BG do the safety check and provide the gas cert to me each year with no intervention on my part. Found a good local odd job man who has done a few bits for me like change washers in taps, fixed a fence panel and replaced the kitchen flooring. Probably spent no more than £500 in 8 years. Downside is that I didn't quite buy in quite the right area, so the rents are not as high as they could be, and property has only gone up by about 25% (South Wales) - I should have bought closer to home in Bristol, but the yields didn't add up at time. I think one of the pitfalls people get into is chosing an area near their home because its "close" or a "nice area". Think with you head and go where the rents are high and there is potential for growth |
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New Mon 23 Jan 12 20:12
Pension Panic - Lygonos
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>> Supply and demand of houses takes second fiddle behind the supply and demand of cash/lending. There you go you see it doesn't, because if it did you wouldn't be able to walk along the street without falling over homeless people. >> Maybe the era of 20-year olds buying houses is gone, Zero? What's that got to do with the price of eggs? We are talking a rental market here. The point you are missing/ignoring is how many 20-25 year olds are currently buying houses compared to 10 years ago? Demand is down - demand isn't a direct relation to population - most 20-25 (or older) still have a stay-at-home/stay-with-friends option. The confidence that you can buy at any price 'knowing' you'll be in profit in 3-4 years has evaporated. I think your estimate of 15% over the next 5 years on top of inflation followed by RPI+4% for the years after that is being a tad optimisitic although obviously not impossible in the South East where the bubble is doing well. If the cap on benefits actually happens will we see benefits migrants moving out of the SE to more affordable areas, lowering landlords take on housing benefit? It's going to be a very interesting decade economically (although rather unpleasant for many financially and socially). |
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New Tue 24 Jan 12 23:04
Pension Panic - Manatee
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Short article on buy to let. goo.gl/0dKLZ Apparently lenders are becoming more enthusiastic about it. |
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New Wed 25 Jan 12 00:13
Pension Panic - Lygonos
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Of course they are - 'normal' buyers aren't out there so they've got to take whoever they can. www.lovemoney.com/news/property-and-mortgages/buying-and-selling-property/14022/hidden-icebergs-set-to-harm-homeowners |
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New Wed 25 Jan 12 08:26
Pension Panic - Manatee
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>> Of course they are - 'normal' buyers aren't out there so they've got to take >> whoever they can. I don't think it's just that. I spend much of my time with banks and they are risk averse beyond reason just now, as they have been for some time. They are turning down classic working capital applications from good companies with full order books every day, unless they can get security. These are applications they would have jumped at, not just in the recent barmy boom period, but for most of the preceding century. Someone I know very well has used the same bank for his small business for 30 years. He has always given them the full story and management accounts. They have been pushing to take security for the facilities he has had for years - this means putting his house on the line. If they withdraw the facilities, his profitable business could go bust for lack of working capital. If he gives security, he has no guarantee that they won't reduce or remove his limit and sink him anyway, and he will lose house and business. This is a very typical story just now according the the bank lending manager I was talking to before Christmas. Banks are getting cash in from wherever they can, and in many cases that means the good customers because they can't get it back from the bad ones. This is almost certainly caused by the lack of confidence banks have in each other. Instead of interbank borrowing and lending, they are borrowing for liquidity as necessary more expensively from central banks. They can reduce that cost, and improve their capital ratios which they are mandated to do, by reducing assets - i.e. getting the loans back from wherever they can, only re-lending when secured. Sure, they have security on mortgages - and that will be a factor - but 20% deposit is a much lower margin than they have been looking for on commercial property recently. I think it's fair to say that the ones that are stepping up their marketing and offers for BTL are at least reasonably confident of the health of the rental market. |
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New Wed 25 Jan 12 10:00
Pension Panic - Mapmaker
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>>I think your estimate of 15% over the next 5 years on top of inflation followed by >>RPI+4% for the years after that is being a tad optimisitic although obviously not >>impossible in the South East where the bubble is doing well. Prices are reportedly 50% off 2007 prices already in the depressed rural ex-industrial regions. Most other prices are at best flat since then. Add in the 16% RPI increase and even somewhere that is flat has lost 16% of value. Prime and superprime London have certainly done very well since then, with some stratospheric increases. As for the future: who knows. If 2m Poles go back home then that will make a big difference. |
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New Wed 25 Jan 12 10:02
Pension Panic - Mapmaker
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And as for OP's question: 1. Stop spending money and start saving. Hard. Every penny you spend you have to ask yourself whether it is worthwhile. 2. Expect to retire in 25 years, not 15. Job done. |
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New Wed 25 Jan 12 10:04
Pension Panic - Zero
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>> And as for OP's question: >> >> 1. Stop spending money and start saving. Hard. Every penny you spend you have to >> ask yourself whether it is worthwhile. >> 2. Expect to retire in 25 years, not 15. >> >> Job done. yes that obvious, the question he is asking is >1. Stop spending money and start saving Where? |
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New Wed 25 Jan 12 10:41
Pension Panic - sherlock47
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This video makes interesting viewing for anybody investing in the property market! news.bbc.co.uk/1/hi/world/europe/8653238.stm |
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New Wed 25 Jan 12 11:18
Pension Panic - Lygonos
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If house prices do fall some more, the guys who opted for 3-3.5% in their ISAs will be sitting quite smugly. Buying property is not a quick buck maker as the costs associated with buying and then selling the property amount to 2-3% of value (depending upon Stamp Duty obviously). If you can buy a property at a knock down price and then get it let successfully there will be a small margin to make but the risk level is not negligible, especially as we can't forecast interest rates in 3-4 years time (I'd guess they'll stay flat for most of the next 10 yrs personally - this may help to cause house price inflation, I mean 'boost the housing market' of course). An empty rental property will rapidly eat up previous margins so, like any business plan, you should only consider it if you are ready to commit to it 100%. Last edited by: Lygonos on Wed 25 Jan 12 at 11:19
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New Wed 25 Jan 12 11:22
Pension Panic - Mapmaker
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>> An empty rental property will rapidly eat up previous margins so, like any business plan, >> you should only consider it if you are ready to commit to it 100%. i.e. accept that it might be empty for months and you will have to be paying the mortgage etc. on it whilst watching the value decline by up to 50%... Friends of mine have just got married and so have two flats in central London. Letting the spare one has taken months. This is central London where we are told there is a shortage. |
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New Wed 25 Jan 12 11:30
Pension Panic - Lygonos
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Indeed. By 'commit to it 100%' I mean accepting tenants you might not want to live next door to yourself, be prepared to put in effort advertising/chasing rent/doing your own repairs, etc. Like all investments it must be seen as a gamble. I used to love seeing the guys on TV with their 'property portfolios' worth several million pounds - I bet their actually equity component would be a few percent of that, if it was even positive. Maybe Humph (the OP) should make sure he is making full use of tax-free/tax-efficient savings as the first line. |
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New Wed 25 Jan 12 11:46
Pension Panic - Manatee
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>> Maybe Humph (the OP) should make sure he is making full use of tax-free/tax-efficient savings >> as the first line. Easy to say if you are already confident of a decent retirement income, and certainly good advice if you have. But if you have a deficit in pension provision, you are in a cleft stick. Safety won't get you enough growth. Risk (for the prospect of better returns)could leave you worse off if it goes wrong. It's no different for pension schemes - the now closed DB scheme I am largely reliant on has a deficit of c. 30%. The trustee's options range from "put it all into bonds to protect the capital" to "maintain a high proportion of risk assets to improve returns over the long term". One thing is for sure - if the trustee goes for cash/bonds to reduce risk, the projected deficit doubles. |
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New Wed 25 Jan 12 13:39
Pension Panic - Clk Sec
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>>An empty property will rapidly eat up previous margins A good clean, well maintained property in a decent area, with a realistic rent, will not be empty for very long. >>By 'commit to it 100%' I mean accepting tenants you might not want to live next door to yourself, Perhaps an agent will accept tenants that he might not want to live next door to himself, as long as they meet his criteria in terms of references, etc, but a landlord who values his property, in my opinion, will not. |
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New Wed 25 Jan 12 12:02
Pension Panic - John H
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Humph already has a rental property, and it may be that his wife has a pension in which he has an interest. >> >>>1. Stop spending money and start saving >> Where? I didn't see Humph's OP asking for advice on where to save. As Mapmaker says, just stopping spending and saving - in any account - is a good start. Early this month: si.wsj.net/public/resources/images/MI-BM990_EUBOND_NS_20120109180003.jpg Investors paid to lend Germany a combined 3.9 billion euros for six months on Monday, reflecting a renewed flight to safety on fears over the euro zone debt crisis. While yields on the bonds of peripheral euro zone countries have hit record highs in recent months on concerns about the debt crisis, Germany's yields have fallen to record lows. On Monday they went negative for the first time at a regular auction, sliding to -0.0122 percent compared with a positive return of 0.001 percent at a similar auction in December. "In such uncertain times, return of money beats return on money," said Unicredit analyst Kornelius Purps. Demand at Monday's auction was solid, with the sale drawing bids worth 1.8 times the amount on offer, Bundesbank data showed. "It's all part and parcel of this potentially dangerous environment where cash is being parked in Germany, and that's deemed to be the safest place to have cash within the euro zone context at the moment," said Padhraic Garvey, a strategist at ING in Amsterdam. "It's symptomatic of the environment we're currently in where two-year paper is trading at pretty close to 15 basis points. Bills have traded negative and now for the first time they've come negative at actual auction."" |
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New Wed 25 Jan 12 12:09
Pension Panic - L'escargot
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>> >1. Stop spending money and start saving >> >> Where? >> Go back to the days of my childhood/youth when we lived in a terraced house with walls which didn't have a cavity, outside toilet, no television, no computer, no camera, no telephone, no car, no central heating, no fridge, no freezer, no foreign holidays, no meals out, linoleum on the floors, pegged rugs in front of the coal fire (which was the only means of heating in the whole house) in the living room, etc etc and you'd soon save money. |
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New Wed 25 Jan 12 13:18
Pension Panic - Old Navy
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>> etc etc and you'd soon save money. >> The current generation would not be able to hack it. The only essentials are food water and shelter. |
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New Wed 25 Jan 12 13:54
Pension Panic - Stuu
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>>The current generation would not be able to hack it. The only essentials are food water and shelter.<< Umm, excuse me :-) Current generation here, wearing clothes with holes in them, boots which when the soles wore through filled in the holes with bathroom sealant. I havent bought clothes for several years and then they were under £5. I go food shopping with £40 cash and a list, my aim to get it for £30 which I usually do. I dont smoke, drink nor do I go out socially. We consider that an internet connection and SKY TV is enough entertainment and its a contained, budgeted cost. Im not perfect, but MY generation IS capable of living within their means. My wife and I save around 30% of our income each month as a minimum. Im inspired by both the asian attitudes to saving/spending and my grandfather who started with just the clothes on his back in this country and till the day he died, always worried it would all run out ( it never did but no amount of money would convince him ). I am generally disgusted with how many younger people behave with regards to money and seeing how they waste it, I reserve little sympathy for them when they end up penniless. |
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New Wed 25 Jan 12 15:28
Pension Panic - Old Navy
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>> >>The current generation would not be able to hack it. The only essentials are food >> water and shelter.<< >> >> Umm, excuse me :-) >> Nothing personal, there are always exceptions to generalisations. :-) Someone must have run up the colossal personal debt there is in the UK. The payday loan outfits seem to be doing well. It only takes a big mortgage, car loan, a few credit cards getting topped up and it does not take much to tip people into trouble. |
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New Wed 25 Jan 12 15:58
Pension Panic - Stuu
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I dont think its age so much as some social classes within certain demographics. A 'guy I know' thinks very little of a CCJ and his answer to finance/money is to have a handful of children, then leave the wife, continue to pay that morgage, then find another woman, buy a car on finance ( with her - nice and complicated then ) at high rates due to credit history despite having a perfectly serviceable small car. He doesnt pay his debts, yet he seems to spend alot on alcohol and 'doing things'. He thought £4000 was ok to spend on a family holiday. He capped off his wise decisions by quitting his job earning £25k to one on just above minimum wage. Now he moans he has no money and thinks getting yet another loan with which to take on a pub lease, in a recession, when pubs are closing faster than you can finish your pint. He is far from unique and all I can think is that he, like many, think there will always be a safetynet so being reckless is no big deal. |
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New Wed 25 Jan 12 17:30
Pension Panic - Mapmaker
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FoR>> I don't... That sounds fun. |
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New Wed 25 Jan 12 13:19
Pension Panic - Zero
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>> no telephone, no car, = No work. You'll have nothing to save. |
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New Wed 25 Jan 12 13:36
Pension Panic - Clk Sec
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>>linoleum on the floors It might have been worse, L'escargot. You could have had congoleum! |
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New Wed 25 Jan 12 13:40
Pension Panic - Zero
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| I dont even have lino, bare floorboards here. |
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New Wed 25 Jan 12 13:43
Pension Panic - Clk Sec
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| You poor sole. Another echo chamber... |
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New Wed 25 Jan 12 14:27
Pension Panic - Roger.
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>> You poor sole. Another echo chamber... He'll flounder about trying to keep warm. |
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New Wed 25 Jan 12 14:57
Pension Panic - Clk Sec
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| He's not biting today... |
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New Wed 25 Jan 12 15:00
Pension Panic - Zero
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| Stop fishing |
Forum Version 3.0 - By Khoosys
Car4play Forum
