2022 How much retirement income from £100,000 after tax free cash?

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Chartered Financial Planner based in the UK.
Contact: edmund@featherstonepartners.co.uk
Or you can book an initial call via: featherstonepa...
How much retirement income can you get from £100,000 after the tax free cash has been taken.
We assume a Personal Pension plan valued at £133,333 where 25% of the tax free cash is taken, which would be £33,333, leaving you with a residual taxable pension plan of £100,000.
We look at various real examples of how much income that £100,000 would buy you in your retirement and some of the retirement planning areas that you would need to consider.
Link to the Government Money Helper Website:
www.moneyhelpe...
Contact me directly at:
edmund@featherstonepartners.co.uk
featherstonepa...
🗒 Please note:
The information provided is based on the current understanding of the relevant legislation and regulations and may be subject to alteration as a result of changes in legislation or practice. Also it may not reflect the options available under a specific product which may not be as wide as legislations and regulations allow.
All references to taxation are based on my understanding of current taxation law and practice and may be affected by future changes in legislation and the individual circumstances.
This channel is for information and education purposes only. Any information or guidance given does not act as financial advice. Please consult a financial adviser if you are unsure in anyway.
Keep in mind that the value of your investments can go down as well as up, so you could get back less than you invest.
⭐ My aim is to provide education and guidance to help individuals understand pensions, investments and protection.
#pension #retirementplanning #financialplanninguk

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12 сен 2024

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Комментарии : 195

@EdmundBaileyUK 2 года назад

Thanks so much for watching and I hope you found it useful! 😀

@precociousdeathdealer202 2 года назад

Bro I have found the best way to draw pension income tax free. You should know and tell your viewers about combining UFPLS and 25% pcls and keep the remaining 75% taxable income in drawdown pot

@EdmundBaileyUK 2 года назад

Thanks!! Drawback to drawdown is not knowing that your pot will last you for your whole retirement alongside other risks including volatility and real capital losses.

@meenalimbu2553 2 года назад

@@EdmundBaileyUK what precocious saying is true. There is a RU-vid video of tax free pension income drawdown where tax free UFPLS is combines with another pcls and 75% is kept in drawdown account. Granted you ideally need close to million in pension value for it to be sustainable.

@EdmundBaileyUK 2 года назад

Thanks Meena. I agree but we are talking about very different degrees of risk. A drawdown contract is not a guaranteed level of income for the rest of your life, it’s based on increasing stock market values and volatility is a fundamental issue for drawdown. Perhaps the video wasn’t very clear on what I was attempting to show.

@jackpilkington6770 2 года назад

@@EdmundBaileyUK think this video effectively shows what circa 133k can provide in income in retirement 😉

@porschecarreras992cabriole8 Год назад

Annuity is so poor value for money! Fixed term annuity makes more sense. But drawdown is ultimately where you want to be

@jonny7491 Год назад

I watch a few of these type of videos, and this channel is the first one I’ve came across that actually refers to the ordinary man or woman. What I mean is someone who is not a high earner works in a factory hasn’t got pots of savings or share portfolios. Thanks Edmund.

@glennbraiden8333 2 года назад

Brilliant. I've a £180k retirement pot at present, I'm 60 and this just clarified a few things in a plain and simple manner. Thanks a lot

@EdmundBaileyUK 2 года назад

Thanks so much Glenn!

@x1rap 2 года назад

This is a brilliant video. Shows how dealing with a qualified, professional Financial Adviser can help you understand. I have been advising for over 40yrs and any regulated Adviser should be able to give this type of presentation. DIY advice is not the way forward when planning for retirement. It can prove far too costly in the long run.

@EdmundBaileyUK 2 года назад

Thanks so much Roger!! Really appreciate that comment! Means a lot.🙏🙏

@argonaut6386 2 года назад

Thanks so much for making these videos. I've learnt more watching this one video than I've learnt in years. This key and information seems so hard to come by. Really appreciated.

@EdmundBaileyUK 2 года назад

Wow! Thank you so much for that kind comment! Very much appreciated. 👍👍

@nightowl8352 2 года назад

Well done,pretty good video. We need more of this type scenarios and how to improve our pension in the future.Many thanks

@EdmundBaileyUK 2 года назад

Thanks Night Owl! Pretty good works for me!

@Tensquaremetreworkshop 2 года назад

Inflation. More complex than many understand. Most think it is the increase in the cost of living- it is actually the increase in the standard of living. In other words, it includes the increase, over time, of the average earnings. If you doubt this, think- the 'basket of goods' used for the calculation is what people are buying- including the extra money they are now getting. If it did not, it would rapidly get out of step with what people buy, and be useless. This means an 'inflation linked' income means you get better off over time. Nice. However, in retirement, you tend to start buying less. For example, clothes; you have lots and go out less, so you wear things longer and care less (if at all) about fashion. Things are cheaper (bus pass, senior rates at places from the Cinema to the chip shop) and you can go places at cheaper times. So, do not expect to need a fully inflation protected pension, and remember that the state part is already linked. (88% of my partner and my state pensions used to cover our basic living costs, after 11 years it now takes only 56%!) Consider a split annuity - part inflation linked and part level. Remember, you will want your 'big holidays' at the beginning of your retirement. You will be fitter, and you will have the memories (all that lasts of a holiday) for longer.

@EdmundBaileyUK 2 года назад

Thank you Mike, really interesting to read of your own position and take on this area! Thanks for the comment.

@andyscholefield3804 2 года назад

Thanks Edmund, Really clear and concise explanation for those of us who don’t fully understand/appreciate the technicalities of our pensions and how inflation can affect purchasing power in the future Great to find a reliable independent source of information, like yourself.

@EdmundBaileyUK 2 года назад

Thanks, really appreciate that Andy!! Means alot. 🙏

@MarkKeating 2 года назад

Thanks for that explanation, it really helped to clarify annuities for me.

@EdmundBaileyUK 2 года назад

Thanks so much Mark! Appreciate that.

@boyasaka 2 года назад

I've never understood these normal annuities ( where in the past was the only option to buy a annuity ) So sometime retires at 66 They have 133k in there pot They take 33k tax free And give a company their 100k to buy a annuity The company invests this 100k and gives you say 5k a year Wether u die at 72 or 92 the company still has your 100k pot and they keep it ?? They don't hand it over to your children Yea cheers I'll be taking every penny out of my pot as quick as possible paying no or little tax as possible and I will invest it myself in some kind of investment bond or stocks and shares ISA etc so give me 6 7 8 or 9 percent a year interest on my money and when I die my money then goes to my kids

@aces-ww8zl 2 года назад

Me too. It's a bit of a con if you ask me.

@adrianevans9575 2 года назад

@Lookup2Wakeup Rules of 4% 10000= 4000 a year. Your pot of 10000 should never run out.

@EdmundBaileyUK 2 года назад

Thanks Chris. The relevance of the annuity is certainty of income. Drawdown is a fantastic product however its major downside is volatility and risk (clearly dependent on where you invest), risk to capital and the unknown that you could outlive your money, for some people the volatility and risk is just something that they do not want to have to contend with/be concerned about. I was working at Close Brothers back in 2008/2009 and the impact of the declining markets and assets had on some people was significant in terms of having to take reductions in their retirement incomes. That's never much fun. All we need is a period of stagnant to slowly declining stock markets/asset prices and the impact on portfolios is significant, effectively compounding in reverse. I would say there is strong case for securing some income to at least cover off essential bills where the pension fund value allows or where someone really cannot afford to see a drop in their retirement income. Although you mention taking your pension out as quickly as possible which doesn't make much logical sense as you should have access to the same investments that you would have in an ISA/Bond etc?

@presterjohn71 2 года назад

Glad to see you back.

@EdmundBaileyUK 2 года назад

Thanks so much for noticing!! 😀 Combination of work and COVID factors transpired against me! Managed to find some time to record and edit something... thanks again.

@Benzknees 2 года назад

Wow, those are absolute rubbish returns. I could buy a fund or investment trust and get a 5% return pa whilst retaining all my capital, and having it grow with the stock market. Anyone taking out an annuity is nuts.

@EdmundBaileyUK 2 года назад

Thanks for the comment. But your 5% is volatile and not guaranteed. Even Bill Bengen the author of the 4% rule is an advocate for locking in guaranteed secure income through the use of annuities.

@Benzknees 2 года назад

@@EdmundBaileyUK - True, but not surrendering all or some of your capital to the annuity provider, and having some (non-penalised) hedge against inflation for that capital, are massive plus points. And if safety is paramount, that capital can be allocated to relatively safe large cap focussed funds or trusts. Bengen apparently used a mix of large, mid & small caps. And having looked further into Bengen's research, it seems his 'safemax' proposal suggested a safe withdrawal rate of between 4.5% and 13% p.a. depending on the Shiller CAPE ratio and current deflationary/inflationary environment. At the moment it'd be 4.5%, but that's still a huge advantage compared to annuities, where your capital is likely keeping up with inflation over the economic cycle plus earning a decent yield.

@boyasaka 2 года назад

Double think Totally agree with you 100 percent Out of the 100s of investment trusts / stocks and shares isa , etc over the last ten years non have averaged less than 5 percent a year more up in thr 6 8 8s and 9s Anyone imo who hands over there pot to a annuity company who is gonna give you 4 or 5 percent a year until you die , then they keep your 100k is absolutely round the bend Split it up , if you want safety , put 10k in 10 different investment funds and use the interest to live on And when you die The 100k goes to your kids Not into the pocket of the annuity provider

@RetirementVille 2 года назад

Shame you can't just put the £100k in equities and take an income from it. Annuities never feel like they're giving good value...except for the provider. Good video to explain the products.

@ScatewaveEliot 2 года назад

You can do that if you want to: via Drawdown (Flexible Pension Withdrawals).

@boyasaka 2 года назад

I can't get head around why anyone reagrdless of there situation would buy a normal annuity with there pension pot Basically giving there life savings to a company

@ScatewaveEliot 2 года назад

@@boyasaka It’s not that cut and dry. I’ll try and give a balanced view. The principle behind an annuity is not giving up money to an insurance company (although they obviously build in a profit) it’s about cross subsidy where those living the longer than average are subsidised by those who died earlier. Another way of looking at it is an insurance for living longer than expected. It makes sense as, if you were to set up your own withdrawal based on a fixed return, you would run out of money at a certain point. The cross subsidy avoids this worry. As with any insurance there will be winners and losers but since the losers are dead and there and no pockets in shrouds, it is not actually something that bothers them. They can build in their own guarantees to cover payment after death, but that obviously reduces the income The problem with guaranteed annuities is that, in order to fix a no-risk guarantee over a very long time, the only investments that really fit are Government Gilts. These are at historical lows so once costs are covered, there isn’t a lot of 'meat' left. It could be argued that, even when interest rates were higher, the returns would not have been as much as investing in other assets like the stock market for such a long time, but that is the price of having a guarantee A better situation might be annuity products that provided the sweet spot between investment and cross-subsidy, but most of these third-way products have always come and gone because they were flawed and/or failed to capture a wide enough market to work. Also, those wanting a hybrid solution may prefer just to purchase their own combination of annuities (to cover a foundation income) and income drawdown.

@boyasaka 2 года назад

@@ScatewaveEliot thanks for taking time to reply , Much appreciated My theory has always been the older you get the less money you need My gran only has state pension And at 88 she is in sheltered accommodation, and says she has to much money and keeps giving it to her grand kids My father before he died only had state pension and his house was paid for and he was never skint If I retire at 63 like I plan to for the first few years I’ll be having lots of holidays ect But think once I get into my 70s that’s if I do , I’ll manage My mortage is paid off now I’m 50 year old Get about 2500 a month wages and can live easy on 1500 a month that includes payment for car and 3 holidays abroad a year I certainly won’t need 20k a year pension when I retire

@ScatewaveEliot 2 года назад

le@@boyasaka Totally agree. Most in their 60s would be doing more 'stuff' more than those in their 80s. It;s also worth noting If you stop at 63 you'd also want more income until you get your State Pension at 67. The only caveat to decreasing is that at some point in old age, the needs can rise as more assistance might be needed when elderly (whether it is full care or just needing people in to help out with the garden or cleaning etc). That's what some call a u-shaped retirement curve potentially more at both ends.

@michaelbarton8379 2 года назад

Brilliant clarity as always Edmund 👍

@EdmundBaileyUK 2 года назад

Thanks so much Michael!!

@ianlewis2813 2 года назад

Minus £100,000 which you never see again = 20 years at £5,000 with no interest.. You would be better buying shares and getting a dividend....

@EdmundBaileyUK 2 года назад

Thanks Ian, yes, a 100% portfolio of dividend paying stocks/shares could work, but it also might not and isn't guaranteed and will come with significant volatility which can be an issue if drawing an income. The primary issue with a 100% share exposure will be the volatility the next issue is the uncertainty around real capital losses and the fund not lasting your whole retirement. If you have sufficient capital and assets then this isn't an issue, but if you don't, then clearly it is.

@KMartha22 2 года назад

As someone in their 30s who will probably never receive any state pension these figures are really worrying!

@EdmundBaileyUK 2 года назад

Thanks, I feel for you as I'd agree, its super important to engage with this stuff early on to give yourself a really good chance of accumulating a decent size pot!

@davidpearson243 2 года назад

Really interesting I thought you were using my pot as the numbers are very similar I’m 56 I also have 7k a year in final salary if I take it in April So with my 130 k pot I’m going to drawdown I’m not worried if it gets used up as the index linked 7k will inflation prove to some degree I’m going to take 450 per month to use my Income tax band then if we need more take it out and pay the tax !!!! Also my wife has an NHS pension paying £14600 index linked when she is 55 (next week) and is going back part time that helps a bit !!!!!! I’m still working at the moment but not for too much longer but still a big decision after 37 years with the same company

@piperwarrior5705 11 дней назад

Never do annuity..do drawdown...if you only live a month you die the rest of your pension gets taken by the pension provider..

@EdmundBaileyUK 10 дней назад

Thanks for the comment. Although your example is only relevant if you take a single life annuity with no guarantees.

@StupidIsTheNorm 2 года назад

I would buy 4 properties with that money giving me £1600pm in rent AFTER mortgage and management fees, but excluding maintenance

@EdmundBaileyUK 2 года назад

Thank you for the comment Perry! I've enjoyed your videos! That's one chunky yield and what mortgage term/basis would that be on? Be interested to see you run some examples in a video and break the risks down as well? Have you seen a significant move up in your rental income?

@StupidIsTheNorm 2 года назад

@@EdmundBaileyUK my mortgage term ends at 80 Edmund. Hopefully I last that long. I’ve done a video on each of my 3 purchases. I recently put up a rent by £50pm. If I’m honest, I think the rent is a product of how good the letting agent is

@StupidIsTheNorm 2 года назад

@@EdmundBaileyUK I forgot to mention I enjoy your videos too. In a past life I’ve been a financial advisor/mortgage advisor/wealth manager. I failed at all of them. Whilst I was enthused by the principal of wealth creation, I was less enamoured by the products. I was even less enthused with most of my colleagues. I’m glad you’re one of the good guys Edmund

@Bustergonad9649 6 месяцев назад

Don't forget to take your tax off, and a maintenance and repair fund, a fund for void periods, fees for landlord licencing schemes, gas safety tests, electrical safety tests, carbon reduction improvements, insurance, EPCs, etc. I've been renting property for 30 years and it's nowhere near as easy or lucrative as it once was. And now I am looking to retire I have a massive capitals gains liability issue. Not saying its not worthwhile doing but it's a little more complex than you make out and if you have property, you never retire !!

@StupidIsTheNorm 6 месяцев назад

@@Bustergonad9649 that post was a year ago. Saving for my fifth house now. Refinanced the first 3 taking £38k out. It’s not as bad as you make it sound Buster

@andycoomber6159 2 года назад

Great video, can't understand why anyone would want an annuity that would pay out (in theory) for ever. Most people won't live much past 85 so if you retire at 65 then in twenty years you should be skint or pretty close. So given that how does the 100k example look if you intend it to run out after 20yrs?

@EdmundBaileyUK 2 года назад

Thanks for the kind words Andy! And yes fair point although for a 66 year old male there is a 1 in 4 chance of living to 92 and a 1 in 10 chance of living to 96… the problem is we don’t know, we can make assumptions but we just don’t know and for some people knowing that the income will be paid regardless is preferential to it running out… you can heck out the stats here… www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthandlifeexpectancies/articles/lifeexpectancycalculator/2019-06-07

@br5380 2 года назад

@@EdmundBaileyUK based on my parents & inlaws, once they get to their mid-late 70's they start to spend a lot less (own houses etc), consequently better to use more cash earlier.

@EdmundBaileyUK 2 года назад

Thanks for the comment. We tend to see it as a U shaped spending pattern, higher immediately into retirement then a decline and then an increase in much later life with care needs.

@br5380 2 года назад

@@EdmundBaileyUK true, but if you ain’t got it, they can’t take it off you 😀 Also remember that Scotland has different rules to England.

@fionnaduncan8735 2 года назад

My Dad bought an annuity when he retired at 60 from his Civil Service job after 40 + years service (including national service). He's 91 now. Winner 🙂

@stephenhedges7115 2 года назад

Great content once again - thanks Edmund

@EdmundBaileyUK 2 года назад

Thanks Stephen!

@williamtaylor874 2 года назад

so easy to understand edmund , thankyou !

@EdmundBaileyUK 2 года назад

Thanks so much William!! 👍👍

@johntheaccountant5594 2 года назад

Don't forget that £5,000 pension is taxable. Therefore if you only have the basic sate pension of £180 per week x 52 => £9,360. ((£9,360 + £5,515) - £12,500) x 20% => £475 tax means the £5,515 will give you £5,040 net only. By the way; if you take the £100,000 / £5,515 => 18 years plus to get your annuity back, so in this example 84 years old when average age for UK citizen is 82 years old.

@davidanderson7093 Год назад

Edmund, I’ve never really understood why people try to calculate how much a certain amount would last before it is completely depleted, when the sum they have available, say the £100k you are using in this example, would be able to be used to purchase a small commercial property. The property (where I live) would achieve a 7-8% return via the rental payments, therefore the individual (or couple) could theoretically live off the rent (which is a lot more than the average returns any other way) and STILL have the actual asset, being the property, which will also rise in value, if purchased in a good bankable location. Why would anyone go any other route? Purchasing and subsequently renting a commercial property seems a much better way to maximise returns, unless you can enlighten me and offer an argument against purchasing commercial properties to provide income in retirement?

@blackmarbles1047 2 года назад

Excellent video as always Edmund , and very much appreciated, as to the average layman like myself ,pensions can be extremely complicated. A lot of people in the comments seem anti annuity , but I suppose a lot depends on your own particular circumstances. Obviously no one can forsee how long we will live but if you are in good health and lucky enough to have a final salary or guaranteed pension pot do you agree they can still be a good option ?. I retire in January 2024.

@EdmundBaileyUK 2 года назад

Thanks so much for the kind comment! Certainly i understand the aversion to annuities, however i would say in my own position i can see how using some of my pension to secure a guaranteed income for life makes an awful lot of sense and then use drawdown in a more flexible way going forward. I think if you have any form of guaranteed pension or final salary then i would be less inclined towards an annuity. But it really does come down to the indvidual and what they can stomach in terms of volatility and risk.

@michaeli160954 2 года назад

Interesting video. I’m 68 in a few months. I have a £500,000 pension pot untouched, no partner and 2 children. My main goal is to keep the pension pot intact , so it can be passed down to my children and also avoid any IHT on my estate. Im going to spend my savings, and when that’s gone , draw equity from my house and equity from my rental property. Securing most of my assets out of reach of this profligate government is another key goal

@EdmundBaileyUK 2 года назад

Thanks Michael! Yes the pension as long as it’s held in a plan that allows beneficiaries drawdown is probably the best IHT vehicle available to pass on wealth to beneficiaries. We’ve worked with a number of individuals in using equity release and other assets for retirement income and leaving the pension in place to be passed on outside of the estate and free from IHT.

@paulthorpe766 2 года назад

Equity release from house is great but for most will decrease the amount you want to leave. Why !? With Equity release mortgages the sum you take out roughly doubles every 14 yrs in interest eg if you have house valued at say £300k and take £100,000 equity out now, in 2036 you'll owe £200,000 and should you live to 2048 you'll owe £400,000 (though your house will have more doubled in value granted to say £700,000 but you've £400,000 to deduct in interest leaving inheritance of just £300,000 ). Alternatively, If you don't take equity release and take say a lump sum and then £15,000 a year from your pension pot you'll pay next to no tax leave the house inheritance fund untouched - food for thought !

@boyasaka 2 года назад

@@paulthorpe766 well said My uncle took out a equity release thing without his family knowing He took 20k then 20k few years later ( family has no idea why ) 20 years later he dies ,house is valued at 250k . This equity company then wants 150 k 40k plus interest So 2 kids thought they were gonna get 125k each . Got 50k each

@tbip2001 2 года назад

I'm very inexperienced with this kind of thing. If you already had the pension pot of 133k , would it be you having to make these decisions at retirement? I mean, I would have to go look for an annuity after taking my 33k? What would my pension be doing if i didn't? Would i just be drawing down on the 100k until its gone?? Such great content, and as another commenter says, I really wish this was taught in schools from a young age

@EdmundBaileyUK 2 года назад

Thanks so much for the really kind comment!! It’s sometimes hard to know how to pitch these videos and whether people find them useful or not. So nice to read you find them useful. 🙏

@SmileyEmoji42 Год назад

As far as I can see, if you have savings and investments then burn through those first, especially anything that isn't protected from tax. Only then do you want to start taking pensions. In the meantime the pension will build but they do automatically switch you into low risk, low return funds when you get near retirement age so you may want to override that if your savings will last many years. (Not a expert)

@Wiltshire-observer 2 года назад

Like many video’d examples, this bases retirement on one fixed age. The annuity scenario is a poor choice still, unless you decide to retire near to 70 years old and need a guaranteed income for a fairly short time. It would also be your only income other than the state pension. Annuities are still a very poor solution for income, the returns are just too low at present to be worth considering at all.

@EdmundBaileyUK 2 года назад

Thanks Ian, an interesting perspective and thanks for sharing. Clearly providing examples from a wider variation of ages becomes trickier given the length of a typical video, it’s meant as an example and indication and clearly rates will be lower the younger someone is and higher the older someone is. I’m still curious as to why a lot of individuals consider a guaranteed and secure income poor value when compared to drawdown as this comes down to not just hard numbers but peace of mind. The volatility and uncertainty around market risk is very real and something a lot of people in reality cannot stomach when market downturns occur and they will occur.

@nonflyingdutchman9573 2 года назад

As always, it comes down to risk versus reward. Annuities are lowest risk and lowest reward; you pay for the insurance company to take the risk. If you're prepared to take the risk on investing for company dividends or draw down and not running out then you can get a bigger return but at the risk of losing capital or running out

@mickeychilds9946 2 года назад

Great stuff. Thanks for the clear examples.

@EdmundBaileyUK 2 года назад

Thanks Mickey!! Really appreciate that. 👍

@mk1photography62 2 года назад

Really excellent video many thanks. I am 60 and have a £250k pot so hoping it grows to just under £300k so it really helps

@EdmundBaileyUK 2 года назад

Thanks so much Mark, really appreciate that!

@GRACEORT 2 года назад

Makes better sense to take the FULL pension fund. 25% tax free immediately, ‘spend it in first year so you have nothing in the bank. No job either so no income. Then your 75% balance being in the holding account you take this amount in full. The tax allowance for the individual is deducted and then you pay tax on the remaining amount. That way you are GUARANTEED to have the majority of your money in full within two years, not drip fed with a strong risk of the majority going to a stranger

@batheyedoc 2 года назад

Thank you - very clearly explained.

@EdmundBaileyUK 2 года назад

Thanks Jon! 🙏

@InnocentMan99 2 года назад

Very clear video information

@EdmundBaileyUK 2 года назад

Thanks Clive 🙏

@argonaut6386 2 года назад

I've been wondering what happens when people make the wrong choices or arent responsible and end up running out of a pension fund? I can see lots of people taking out huge cash lump sums and blowing it. Will the state then end up looking after them like they do with people with no savings or private homes that have to go into care. It's just for those of us that are responsible we always seem to loose out.

@EdmundBaileyUK 2 года назад

Oh it’s a huge challenge and one I can’t decide on what the answer is! And yes unfortunately for various reasons I do come across people that are facing a cliff edge in terms of their standard of living in retirement… it’s a huge shift to go from defined benefit/final salary pension schemes with a known level of income for the rest of your life to having to take and understand the risk yourself and build a personal pension plan!! Like you say how much should or shouldn’t the state be involved in this process? 🤔

@nonflyingdutchman9573 2 года назад

Well the state does step in but only with enough to barely survive, it won't offer you any kind of life style so it's not much of a win.

@edinthephilippines 2 года назад

Thanks Edmund, much appreciate your advice 👍

@EdmundBaileyUK 2 года назад

Thanks Edmund!! 👍👍

@leemason5953 2 года назад

Got an nhs pension and will be eligible for full state pension,but even with these I won't be able to afford rent when I retire,I'm 52 now been employed since I left school,can't even get a mortgage(can afford the repayments)but can't afford the deposit. Also been told I'm not a good investment because of my age as I will most probably be dead before its paid off. So im basically screwed,most probably have to stay working until I'm in my 70's or until I'm forced to retire.very informative video ,just wish I understood it all,lol.

@boyasaka 2 года назад

Out of interest , why haven’t you bought a house and paid it off by now and be mortgage free ? I bought first house in 1999 aged 27 for 50k I had been working for 10 years at this point and had saved 25k to got 25k mortgage Mortgage was 200 a month ( back in 1999) I was earning 1300 a month so I paid 400 a month mortgage Plus any extra I could Paid mortage off in 8 years (2007) Got divorced in 2008 sold house for 140k Halved it with ex wife 70k each In 2008 bought a house for 120k 70k deposit 50k mortage Again made over payments on mortage Paid that 50k mortage off in 12 years 2020 mortage free for second time Sold that house in 2021 for 160k and bought new house for 180k Using savings to make up 20 k difference Now aged 49 Mortage free Living in nice 3 bed semi worth about 190k

@johnson2joy Год назад

@@boyasaka Good for you and well done, but please be mindful not everyone has the same circumstances and in life the unexpected often throws up "bell curves", the most important thing is to acknowledge "health is your wealth" and IF the gentleman at only aged 52 is in good health he can still put something in place...it is certainly not too late. Maybe when he was younger he had other priorities than home ownership who knows? .....

@GWAYGWAY1 2 года назад

My annuity was going to start at £76000 the AXA one was paying me £ 1036 per YEAR but I refused that and used me medical history as a booster but stiil it was £3600 per year , they must have really thought that I would be long lasting. Had i been able have the total amount I would have been a lot better off

@M8d9R Год назад

Never knew annuities can potentially pay 5% plus. I'd always dismissed the idea of an annuity before. Is this typical?

@PUBLICSECTORJOBSWORTHS 2 года назад

What you need to be showing is where you can get a guaranteed 10% on your money. Other that that buy assets throughout your working life then slowly sell them off. You could also claim benefits your entire life work on the side and spend as you earn, this way you'll have nothing for the state to take and the state will pay for your care fees. In my mothers case she worked her entire life, and when she contracted dementia the state wanted to take everything she had worked for, she was murdered on the Liverpool Care Pathway. Me, because I am fearful of getting old or ill in this country, I'm fucking off to the far east where my money will go much further and they look after their elderly not murder them.

@nonflyingdutchman9573 2 года назад

I think we'd all like to know where you can get a guaranteed 10% return....

@vinchenzo678 Год назад

Can you decide how much your spouce gets 50% or 100%. Or is it set at the start of a Pension plan. The reason I ask is I've just looked at my work pension and private pension today and both said 50%. I'm getting Married so I want to know my wife would benefit from the hard earned cash I worked for 35 + years.

@larnygreen1364 2 года назад

Hi I'm pilipina married British.. my husband died last yr..5 months now. We legally married. Here in Philippines.. bfr we get married we been British embassy here.. Hw can I get my husband pention as . survival spouse.. pls help.. need ur help

@Englishman2031 2 года назад

Thank you for another Very informative video .

@EdmundBaileyUK 2 года назад

Thanks David! 👍

@nickelroof6727 2 года назад

I found this video really, really useful.

@EdmundBaileyUK 2 года назад

Thanks so much Nickel!!! 🙏🙏

@jackpilkington6770 2 года назад

Hey Edmund, great video. Suprised you didn't talk about drawdown much! Would be interesting to hear how that £100,000 pot would go if it provided and income with drawdown and how that'd work. Considering growth, safe withdrawal rate and whatever else! Thanks!

@EdmundBaileyUK 2 года назад

Thanks Jack! Yes absolutely I’d agree, I will balance it out more next time with a greater emphasis on DD!

@jackpilkington6770 2 года назад

@@EdmundBaileyUK in all fairness, think you've done a great job. People tend to jump to conclusions and fob off annuities at the moment. The way you've outlined it would make them reconsider annuities an option.

@EdmundBaileyUK 2 года назад

Thanks, oh absolutely it should all be in the table and considered… you only need to see the current investment environment to see how uncomfortable DD can be (depending on the underlying investment returns) whilst also drawing an income. It simply isn’t appropriate for everyone.

@tonykelpie 2 года назад

The words ‘tax efficient’ in the same sentence as drawdown will mislead some people. Worth emphasising the need to calculate everything very carefully when taking money by drawdown.

@EdmundBaileyUK 2 года назад

Thanks Dan.

@SniemGoogle 2 года назад

Thank you for your detailed video. I sent the link to many people. If I had a pot of say £300k or £700k, can I just multiply your example by 3 or 7 (approximately)?

@EdmundBaileyUK 2 года назад

Thanks so much for sharing and for the kind comment!! Yes you can, however i would say that with larger pension funds brings far greater flexibility to combine drawdown with annuities, with fixed term annuities etc to provide a good combination of security and flexibility. Rather than just going all in. It really does come down to the individuals approach to risk and capacity for loss.

@darrenboblowe5252 2 года назад

thanks for the information please do talk on flexible draw down 👍

@jagman999 2 года назад

Great video, thanks for posting

@EdmundBaileyUK 2 года назад

Thanks Jagman! 👍

@verdw6587 2 года назад

Must useful, thanks 👍👍👍👍👍👍👍👍👍👍👍👍👍👍👍👍👍👍👍👍👍👍👍👍

@EdmundBaileyUK 2 года назад

Wow thanks Verd!! 😊😊😊😊😊😊

@timpettis9895 2 года назад

Useful info. I wondered if Financial Advisors are actually regulated under UK law? I ask as I'm very sceptical given that my late father was ripped off by a rogue advisor so I'm now hesitant about doing anything with my money, perhaps just leaving it as it is.

@EdmundBaileyUK 2 года назад

Thanks Tim. They are regulated by the FCA although it would be the Financial Ombudsman Service (FOS) that would act to settle disputes.

@boogboog8097 2 года назад

Why is a pension usually not an inheritable investment?

@EdmundBaileyUK 2 года назад

Thanks Boog Boog. It is, if you remain in drawdown then it can be passed on outside of your estate as a beneficiaries drawdown.

@frederickwoof5785 2 года назад

Great video. Similar to my situation. I had a guaranteed pension annuity of approx 40000, which pays 2000 per annum. I'm working till 67 and will retire this July. I have other pots of approx 96k, which I've got to decide to do with.

@EdmundBaileyUK 2 года назад

Thanks Frederick! 🙏 That’s an excellent level of secure income, it’s so valuable to have that without the concerns around markets and risk of running out of money in retirement etc!! 👍👍

@kevinharrold7053 2 года назад

Excellent presentation, thank you.

@EdmundBaileyUK 2 года назад

Thanks Kevin!! 🙏🙏

@johnristheanswer 2 года назад

Very interesting. What about a range of income generating trusts in a SIPP ? Eg City of London which pays around 5% and has increased divis for 50 years or more. Others available for diversity. Clearly this can be passed on too. That's what I've done anyway. In my 50s and annuity rates were no better than ~3%.

@EdmundBaileyUK 2 года назад

Thanks!! 🙏 Yes the underlying investment when in drawdown is going to be absolutely crucial to the ability to take a sustainable income! The issue unfortunately with equity based investments isn’t just risk but volatility, which can be hard to manage when drawing on a pension. Thanks to the comment!

@Rajantuber 2 года назад

I have a choice of £5100 pension and increase with RPIi.....OR 30K lumpsum and £4700 pension without RPI....I am not decided PLEASE lhelp

@u3vs62cja 2 года назад

I'm 24 but I think I'm just gonna use drawdown. Annuities just sound like a bad deal

@EdmundBaileyUK 2 года назад

Thanks for the comment Matt! Interesting perspective, I would say it depends on the individual for example some people really cannot stomach risk, volatility and uncertainty and we are largely defined by our history, meaning that a secure, known and guaranteed income for life for someone offers a high level of value for someone especially when they have no margin for absorbing capital losses in the form of stock market and bond losses. But for someone with significant assets and low withdrawal rates, then yes an annuity will look poor value. I try to approach things by not discrediting them completely until you have considered the options. Thanks again for the comment!

@terryhannis2500 2 года назад

I took a drawdown 6 years ago best thing I ever did get £100 a month more ,enough left to last till I am 90+ and if I die before I am 85 my family get what is left in my pot tax free seems annuities keep your pot topped up so when you pop your clogs they benefit your total original investment +they have your fees over the years

@boyasaka 2 года назад

@@terryhannis2500 you you did exactly what I'm planning on doing These loons who buy annuities Hand over there life savings pot to a company who invest YOUR money and give you some of the interest Your pot grows You die They keep your pot of money Yea cheers I don't don't so No way is any company getting my pot

@simony2801 Год назад

How much of the investment pot goes in annuity fees as a%, are they one off or recurring,

@rnsc8342 2 года назад

I have avoided annuities. In the worse case you die early . It also costs to guard against inflation which reduces the annual pension near to what you would get from many investments with growth potential. .And in most cases the money dies with you or the second death.Stick it in a drawdown pension pot. Find some good equity income unit trusts. Get about 3.5 percent income on it. Or put some growth unit trusts into the mix and trade some current income for more capital to provide income later. Over time capital and income should grow even after the inevitable less good years, and may match inflation or better.. When you expire you can now pass the pension pot to a loved one, or, after tax, to your estate , if you didnt organise the loved one bit.. Obviusly details are more complex on issues like tax and estate duty and fees, and may change , and you may find market conditions are less favourable at the very moment you want to set it up or take more income out, so it needs advice and research.

@oliverdesvaux 2 года назад

So does this mean with a pension at that amount when someone retires, they can only draw out and live on £4K a year? Seems LOW

@EdmundBaileyUK 2 года назад

Thanks Oliver, yes someone buying an annuity on the basis as described in the video at age 66 would get those levels of income. I suppose its interesting that 4-5% is broadly where people tend to sit their drawdowns so again a sustainable level of income would broadly be considered to be around that 4-5% mark. Alot of other factors involved here as we are talking very generally.

@Jamcam99 2 года назад

Very useful video thanks.

@EdmundBaileyUK 2 года назад

Thanks so much Michael! 👍

@charlieboyvespa8610 2 года назад

Like to see more on a draw down please

@EdmundBaileyUK 2 года назад

Thanks Charlie. 👍

@luckydesilva6733 Год назад

Thank you so much .

@shaungregory1789 2 года назад

We were getting 18% on our low risk Sipp, 18p for every pound until Putin started his war against the Sovereign Ukraine. Bless him. Still 10% though.

@EdmundBaileyUK 2 года назад

Yes, it certainly feels and looks like quite a different environment to the one we entered pre the pandemic. Certainly a significant rotation from certain asset classes and always a potential downside to equities is the volatility that inevitably will be experienced from time to time.

@swmcyanwong410 2 года назад

Edmund Bailey , can you tell me can the stats Pension transfers to wife or husband after the death?

@jackcro8825 2 года назад

Hello Sir, What about a SIPP compared to any other products.

@EdmundBaileyUK 2 года назад

Thanks Jack! SIPPs are great but it’s simply a tax wrapper and the return is going to be largely driven by the underlying investment.

@robbiegerard7857 2 года назад

Terrible advice, transfer the pension (£133,333) into a defined contributions pension, then when needed, drawdown on the unchrystalised pension, so if you draw down £5000, 25% will be tax free, the remainder will be added to your state pension with your annual allowance (HMRC) deducted before you are charged any tax, the remainder of your pot (£128,000 or so) can then carry one making money with the pension company, PLUS, if you die the remaining pot can be passed on to your decendants and not taken by the pension company.

@EdmundBaileyUK 2 года назад

I appreciate the comment Robbie. You seem to have missed the point of the video. This is to show the various income options available. It’s showing some of the options that available on the open market and and of course I mention drawdown at the end where you have full control on the income level you take. Bear in mind that drawdown isn’t going to be appropriate to everyone as the income isn’t guaranteed or secure and the capital can be lost and therefore could run out in retirement. To assume drawdown is right for everyone is completely wrong.

@boyasaka 2 года назад

@@EdmundBaileyUK who is drawdown not suitable for ? I can’t think of anyone Yes the pot may rise and fall slightly Even if there was the biggest stock market crash is history and your pot lost 40 percent of its value It would gain the loses plus more within a few years , like it always does 2008 crash The covid crash The Ukraine blip All recovered I have a defined contributions pension My pot dropped from 80k to 65k Within a few weeks of covid lockdown when stock market dropped drastically But within 6 months my pot had re gained the 15 grand loss and was back up up 80k A year on its 86k

@tamar5261 2 года назад

What if your spouse is 20 years younger than you?

@nearlyretired7005 2 года назад

£100,000 pension pot.Thats bugger all!

@EdmundBaileyUK 2 года назад

The average at retirement in the UK is less than £100k.

@johnson2joy Год назад

@@EdmundBaileyUK You are 100% correct!!! Much less and love your advice, thank you for sharing!

@salamander5703 2 года назад

I'd be interested in your thoughts on taking the level annuity but only spending at the rate of the index linked version and saving the rest?

@EdmundBaileyUK 2 года назад

Interesting, I'd have to run the numbers on that.

@grahamsummers6344 2 года назад

Just to clarify, on a 100k pot I can withdraw today 25k untaxed? I wrongly assumed each drawdown had a 25% tax free amount

@EdmundBaileyUK 2 года назад

Thanks Graham, the example in the video is £133k and so 25% of that is £33k leavings £100k pot. I thought it makes a good round number to show the income figures. And so yes you are correct, a £100k pension pot would give you £25k of tax free cash leaving a residual fund of £75k that could then draw an income from that. Hope that makes sense.

@robertjones7526 2 года назад

Im looking at using my drawdown from 62 to 67 at 12kk per yr am I correct in thinking it is taxed at source but because my income below my allowance I can claim that one back

@garethjones2125 2 года назад

Yes, it will all fall within your personal allowance and be taxed at 0%

@boyasaka 2 года назад

That's what I'm planning on doing And invest it myself No way I'm I handing over 100k to a annuity provider who will invest MY money ,give me the interest they get on MY money And say 8 years later I die They keep MY money Errrr no ta

@robertjones7526 2 года назад

@@boyasaka mine in drawdown happy to leave it all there been getting reasonable growth but don't want to pay tax on it

@charlieross5588 2 года назад

Excellent

@EdmundBaileyUK 2 года назад

Thanks Charlie! 🙏

@mikesymike 2 года назад

Great video, thanks. Are there 10 year fixed term annuities available (your example showed 5 year one)?

@EdmundBaileyUK 2 года назад

Thanks 🙏 yes there are a number of terms available up to a max of 25 years.

@prodavnicayugo 2 года назад

Really Interesting and useful, thanks Edmund. I'm trying to persuade someone to stop paying into cash child ISAs for her children aged 9 and 12 and switch to equities - could you do a presentation on this, or recommend one?

@EdmundBaileyUK 2 года назад

Thanks so much Alex and great idea for a video. And I totally agree with you its really hard to argue the case to go into cash for a childs ISA at that age... it reall will be hit hard by inflation.

@johnwilliams2877 2 года назад

On a 48K pension I lost almost 15k in less than 2 years, 8k the day covid kicked of and another 7k when 1st bullet fired in Ukraine. Pension companies are a business to make money out of you. Oh by the way it cost me another 1200 for the priviledge.

@EdmundBaileyUK 2 года назад

Sorry to read that John!! The volatility in the markets can be hard to stomach.

@boyasaka 2 года назад

But the market recovered very quick after covid Yes for example Barclays shares fell from 1.80 to 90 p Lloyds fell from 55p to 25 p And my pension dropped in value by 10 k . But within 6 months my pot was back up by 10k Yes when Russia invaded Ukraine Stock market dropped again Again I'll use Lloyds It fell from 55p to 40p But less than a month into the war it was back up to 49 p So at present slightly down but it will go back up

@terrypressdee4508 2 года назад

You didnt do the draw down option. Im 55 soon and have a simular pot id like to draw down till i get my pension at 66/67. What might i be able to do. Cash upfront then equal payments for 11/12 years. ??

@EdmundBaileyUK 2 года назад

Drawdown is more complex in that it depends on a number of different factors, the underlying investment return, how long you want the pot to last, do you want to pass it onto your beneficiaries/spouse etc.

@terrypressdee4508 2 года назад

@@EdmundBaileyUK thanks. been watching some of your other videos which help too.

@Keith-HK-brooks 2 года назад

Thank you I’ve got 25 billion million thousand to Invest any sharks know what to do with it

@EdmundBaileyUK 2 года назад

Thanks Keith and congrats on the 25 billion million thousand. 👍

@PDCRed 2 года назад

Annuities are garbage, imo. Drawdown makes far more sense for just about everyone. Do your own research.

@EdmundBaileyUK 2 года назад

Definitely do your research and be aware of all of the options. Drawdown is definitely very good but not at all appropriate to everyone. Be aware of drawdowns limitations.

@johnhicks8772 2 года назад

Never trust smooth talking little boys in shirts with your money

@EdmundBaileyUK 2 года назад

Interesting logic John Hicks, what’s the relevance of the sex, size and dress code relative to the trust you place in someone?

@UncleMort 2 года назад

Looking at the fixed term 5 year annuity at age 66 = £4,638 annual income & £85,797 guaranteed maturity value option. At todays quotes and now being 5 years older at age 71 what would £85,797 get me in the way of a 5 year fixed term annuity?

@Chris-bx6ur 2 года назад

Or put £133k in the bank and take the interest each year. Then if you die 4 years after retirement your family get some money. Not the nightclub nigel pension guy

@ant270 2 года назад

Quite possibly THE WORST thing to do. You'd pay tax on 133k for a start (as over 25% withdrawn) then, the amount of interest from the bank would be negligible. The value of the money would also be eroded by inflation and the money would be liable for inheritance tax. Taking the 33k tax free is also a bad idea unless using it to pay off a high interest loan or something that must be paid on retirement, better to leave it in the pension to acrue.

@garethjones2125 2 года назад

Chris. This is very poor advice and shows a complete lack of understanding.

@nearlyretired7005 2 года назад

To be blunt,sorry,Only a fool would do this.The worst thing you could do. You will spend your life in poverty!

@john00123 2 года назад

I am retired and currently focused on stock investment. I'm not an expert at stock though, but I became a millionaire investing in it a beginner, from what I've witnessed it all comes down to having good financial expert trader handle your trades...thanks to Lanngel mark, I will be counting my second million this year.

@jessicaknoll4700 2 года назад

Sounds Great I just turned 43, and I've decided to Invest, I have over $300k ready to invest, I need tips on how to grow that to $1.5million in two years and retire at 45. How do I reach your broker?

@john00123 2 года назад

My broker is well known as Lanngel Mark, you can look him up online, you should me able to find his websites

@jessicaknoll4700 2 года назад

Oh he is very remarkable, I found his website. Didn’t know he is this popular.

@chen3956 2 года назад

I have heard of this smart man Lanngel Mark, a friend of mine in Australia told me about him. He manages a portfolio for her, she put in a startup capital of 120k AUD and he turned out over 850K AUD in few months. She got a new house that year.

@Jim-ku9tr 2 года назад

A friend of mine in Iceland told me of this smart gentle man Lanngel Mark, he manages a portfolio for him … he put in $100k and in few months he turned out $900k , he got a new house that year.