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Help to protect my future!

Stocks and Shares ISA , Choosing funds for ISA's, risk factors for funds etc
Investment strategy discussions not dealt with elsewhere.
RajK
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Help to protect my future!

#398384

Postby RajK » March 23rd, 2021, 6:35 pm

Hello

Firstly thankyou to anyone that responds, i really appreciate being able to post for some help on my situation.

i am 43 years old now and have had to basically give up my employed work 11 years ago due to an undiagnosed condition (only got diagnosed 3 weeks ago) which has taken a total of 27 years to diagnose. After giving up my employed work i had to survive by trying to make some income through property i had invested in and continue doing that at the moment with extreme difficulty. My current net worth is spread across the following.

Cash in Bank - Very low at £2000
Equity in Buy to Let Properties (5 properties) £1,010,000 (4 with mortgages, 1 no mortgage - 44% LTV across all properties)
Residential Main Home £475,000 No Mortgage
investments
- Stocks and Shares ISA £265,000 (95% equities, 5% property)
- General Accounts £34,000
- SIPP £17,500
- Other investments £2,000

DB Pension (Transfer Value when i last enquired) £153,000

My current income source is from the 5 Buy to Let properties which last year gave me gross £43,000 but this is the most its ever been and i expect it to be significantly lower in 20/21 tax return

I have kept up with my national insurance contributions so i should get the full state pension whatever that may be in 25 years if its still there.

My DB Pension should give me 11,000 per year if i do not transfer out (see below)


Note:

- It doesn't look i will be able to keep on doing what i have been doing to survive going forward. I will need a lot of rest to give any chance of improving my life in years to come. The medical profession has no answers from my condition and i am unlikley to get any support to keep my income sustained. Such is life lol

- The property i live in all though it is techinically in my name and i am the legal owner, i will at some point give it to my brother who was jointly on the property deeds many years ago but had to be taken of due to his wrecless behaviour with money. Please note his debt has been paid and there was no capital gains tax at that point becuase his share fell under personal private residence relief when he transferred it to me.

What i need to do, at least what i think is the following.

1) I need to improve my cash position to at least give me a buffer of £30,000 . To do that i will halt investing in equities or only put £500 a month in my ISA. i had been agressively investing up to this point to provide some security for my future as it is now very uncertain and i have known this for years.

2) Life Insurance - I think i will be liable for inheritance tax if something should happen to me. As some of these assets (the residentital home is his 50%) are my brothers, could i get a fixed term insurance product that will pay any inheritance liability if something would happen to me. My brother and my parents could then have the assets to keep them going for their remaining lives? It can be written in trust so that it does not form part of my estate?

3) I will contact my SIPP provider to tell them who should get my SIPP if something were to happen to me. I will name my brother. Am i correct in saying this has to be done regardless of what is written in my will. Please note i only put in 2880 every year in my SIPP as i was told that my income is classified as investment income and mean i will not get any tax relief is i put more than this in.

4) Get a will made - Who is the right person to do this? Is it a solicitor or a tax accountant?

5) My DB Pension - I want to get this transferred into my SIPP and the reasons are then i will have the cash sum and it will carry on being invested and will also survive me if something were ever to happen to me. Will they consider this, i think that they will only sanction it if i go to a finaincial advisor but as i have a lot of other assets they should not be worried about me squandering the money etc. I have investing exprience for nearly 13 years now.

Sorry if my typing is not coherent, it is difficult for me to type.

Thankyou

RajK

1nvest
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Re: Help to protect my future!

#398448

Postby 1nvest » March 23rd, 2021, 9:20 pm

Back of napkin, 1 million of liquid wealth, plus a home. Spending 30K/year out of that where there's a 2% real (after inflation) uplift (portfolio gain) and the money would last 50+ years i.e. likely outlive you.

A relatively safe/conservative/diverse asset allocation might be employed for that purpose.

Permanent Portfolio (25% in each of stocks, gold, cash, 20 year gilt)
Golden Butterfly (80% Permanent Portfolio, 20% small cap value - which the FT250 (in US scale) fits).
Larry Portfolio (30% small cap value, 70% bonds)
Or even just a straight 50/50 global stock/bonds.

Retain ownership of your home, as that can serve as late life care funding.

Hariseldon58
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Re: Help to protect my future!

#398493

Postby Hariseldon58 » March 23rd, 2021, 11:01 pm

1invest makes a great point, you likely have enough.

The rest is details, I would agree a cushion of cash removes stress and allows you to retain faith in investments that have volatile values.

I would not worry about inheritance tax unduly and life insurance, it’s an attempt to pay the tax early by a fairly inefficient means, not your problem.

Buy to let can be rather stressful these days and your health conditions might do well without less stress.

My personal preference would be the investment route, diversify, low cost, mainstream investments, job done. It need not require much effort on your part, arguably benign neglect improves returns !!!

monabri
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Re: Help to protect my future!

#398552

Postby monabri » March 24th, 2021, 9:01 am

4) ( get a will).

I'd advocate using a solicitor.

everhopeful
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Re: Help to protect my future!

#398570

Postby everhopeful » March 24th, 2021, 9:37 am

1nvest wrote:Back of napkin, 1 million of liquid wealth, plus a home. Spending 30K/year out of that where there's a 2% real (after inflation) uplift (portfolio gain) and the money would last 50+ years i.e. likely outlive you.

I cannot see where the 1 million of liquid wealth comes from. Even if the properties were sold, which I would think sensible, and the money used for investment in income producing shares and fixed interest it still doesn't seem to get to 1 million.
Last edited by tjh290633 on March 24th, 2021, 10:44 pm, edited 1 time in total.
Reason: Tag corrected - TJH

PinkDalek
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Re: Help to protect my future!

#398574

Postby PinkDalek » March 24th, 2021, 9:46 am

everhopeful wrote:I cannot see where the 1 million of liquid wealth comes from. ...


Equity in Buy to Let Properties (5 properties) £1,010,000 alone exceeds £1million.

RajK
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Re: Help to protect my future!

#398580

Postby RajK » March 24th, 2021, 10:07 am

Thankyou all for your responses so far, much appreciated.

To clarify my 5 buy to let properties are valued at £1,810,000 and have oustanding morgages of approx £800,000 across the board hence the remaining 1,010,000 in equity. Of course selling them will initiate capital gains tax payments.

everhopeful
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Re: Help to protect my future!

#398639

Postby everhopeful » March 24th, 2021, 12:58 pm

Do we consider property to be a liquid asset then?

Hariseldon58
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Re: Help to protect my future!

#398676

Postby Hariseldon58 » March 24th, 2021, 4:22 pm

@everhopeful

I think the thought process was that liquidating the property portfolio, possibly over time, is an option...

merluzzo
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Re: Help to protect my future!

#398695

Postby merluzzo » March 24th, 2021, 5:53 pm

What kind of yield are you getting from the rented properties?

This is an important consideration when deciding what to do.


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