Lootman wrote:kempiejon wrote:Quite, RE means be definition that you cannot use a pension with its time lock. And the trend is for that time to be pushed further back.
Yes, I have never been a fan of pensions. Too many rules and restrictions. Too much government interference and change. You pay income tax rates on investment income. And the whole idea of my money being fenced off beyond my control and forever subject to the whims of UK laws and taxes just irks me.
My original prejudice against them started in the 1970s and 1980s. Back then pensions were barely portable, and you were forced into annuities. Changing jobs was punished. Things have improved somewhat but even so I always avoided them unless my employer matched my contributions and I could control the investments. I have also deferred receiving any payouts for tax reasons. And I haven't even bothered inquiring about pension entitlements that I might have accrued prior to 1988.
I do not formally subscribe to FIRE but I realise that I followed some of its precepts and have successfully avoided both work and pensions for a quarter century now. And as a result my taxation is quite manageable relative to my financial position.
But having one can make giving away assets to outwit IHT so much simpler, I tend to think they have a place in IHT planning especially in estates that would otherwise hit the £2 million mark. My rule of thumb is 1/3 in house, 1/3 in pensions, 1/3 in Isas etc, at worst with £2m that gives a £1.35m gross estate with tax for a couple at a mere £140k on the excess over £1m, but if all exposed, the whole £2m, that is then possibly circa £540k IHT to pay.
Like all tax planning there is usually no one solution but lots of little bites to reduce HMG's shovel in your stores.