pension plan cashing in

yes

there's companies begging to buy your pension from you - they advertise this need about every 4 minutes on TV

isnt this just for over 50s???

You can't access the cash within a Personal Pension (or stakeholder pension) until you are at least 50 years old - which will rise to 55 by

You can transfer it to another pension, but if you are relatively young, you would be able to get your hands on this for some time. The point is that you have been given tax relief on the contributions, so the funds must be used to provide pension benefits.

Some Occupational Schemes provide a return of premiums (minus tax) if you have been a member for less than two years, but I doubt if your scheme falls into this category.

Rgds Neil.

Financial Calculators & Tools

Beno,

Do you care to share a bit about the plan you have for buying property to fund your retirement? Do you have any specific targets (x times income, Y properties) that you have calculated to fund the retirement?

I am not really asking about the merits of property as an alternative to a pension. Just how you thought through the numbers to arrive at a target.

It might be useful to start a separate thread but I will let you make that decision.

John

plan is straightforward own 2 properties one to live in and one to rent out,already some of the way there cant see it being a problem

might sound silly but i just dont want to keep receiving mail from standard life regarding this pension plan that has hardly anything in it

id rather forget about the whole thing, this does not seem possible ? / ? ? ?

Beno,

I think you will need more than 1 other property (1 beyond your residence) to make a meaningful pension alternative. The math just does not support owning only 2 unless you have an extremely low income need or you have lots of other pension income.

I would have expected you to take you income presently (assuming your present lifestyle is all you need), multiply it by 20 and that would be the amount of total value you need in property beyond your home. The magic about the 20 is it assumes a 5% gross yield from the property in terms of rental income. No debt on the property. No real budget for repairs. Equity in the property is trapped or otherwise not something you access.

There are other ways to run the math. You could build a portfolio which you sell at retirement. Then the value of the property is more important than the income the property might produce. You would need to take the profits, pay the tax and then do something to generate an income. Or you could just live off the principal if you think you can time it right.

Why do you think one home to live and one to produce an income will largely replace the need for a pension? I am not a big believe in pensions so I am not trying to make that case. Just that you likely need more than 1 extra property.

John

Remember that if you are treating rental properties as a business, then the costs of running this business could be up to 40% of your rental income (i.e. cost of acquiring property, repairs, periods where the property remains unlet, costs of a letting agent if you go down that route). Also, interest rates may change if you have a mortgage on a second property.

It is not without risks.

Personally, I just could'nt be bothered with this at the moment, and I think to some degree that market for buy-to-let is already getting a bit saturated and oversold. Getting in five years ago was OK, but could be a bit iffy now.

I'd rather stick money in Commercial Property funds than hold property directly.

Just my opinion - but back to your First point - you are probably stuck with your Standard Life pension.

Good point about concerning budgeting for running costs. 40% is a reasonable target when you really look into all the running costs. (ignoring the cost of acquisition).

BTL (Buy To Let) in the residential sector is a bit odd in that there really was no sector for 25 years ending in 1996. Eviction and lending changes brought the BTL market to life in 1996. Hence I would speculate that the BTL market is looking for a level that is sustainable rather than saying it is saturated. As there is still a housing shortage and a certain percentage of the population will be renters (temporary life requirements or more of a long term lifestyle) there is room for further BTL expansion. The style of BTL property and the locations are important so there can be a glut in 2 bedroom city-center flats while still a shortage of BTL housing overall.

John

so there is nothing i can do , i will keep in receiving mail for the next 35 years regarding this plan which i dont want? surely there is a way to just get rid of it ?

It isn't possible to cash it in, but you could transfer it to another provider. Whether or not it is worth your while doing that is another matter.