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mfcrocker posted:I'll be honest, this seems like a terrible idea but I'm not you and I don't know your circumstances. spincube posted:How do you plan on explaining this to your daughter?
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Feb 26, 2024 18:57
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sebzilla posted:Yep, just me. The money landed in my account this morning. I don't know how much your daughter is 'promised' but I just did some quick numbers: If you have a £3k base already, and want her to have £10k in March 2033 and are able to get 4% p.a. interest net of tax or in an ISA (accrued monthly) then you would need a steady £44pm every month for 9 years to get there. If the amount you need to have for her is £20k then on the same interest you would need a steady £120pm every month to get there. And obviously if it's more than that even more monthly. Are the potential savings on your mortgage enough to cover the figure you may need? The problem with investing it is volatility, the whole lot could become almost worthless the day before you need it if there's a crash so you would need to consider profiling from the potential gains of investing in the first few years to moving to more reliable interest later. Only you know your daughter and how much she understands about money, but even though she's only 9 she might be mature enough to be worth talking to her about it?
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Feb 26, 2024 18:58
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I'd say give her the £10k now and let us know how she decides to spend it.
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Feb 26, 2024 19:22
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What is the 'pressing short-term need'? Why will the mortgage suddenly become unaffordable shortly after this windfall? e: in any case, if it really is in your daughter's best interest to spend her half of the inheritance on the mortgage (let's say she'd be homeless otherwise, or have to go through a disruptive move), she should get equity in return, not an IOU Cassian of Imola fucked around with this message at 20:29 on Feb 26, 2024 |
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Feb 26, 2024 20:25
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What are the "few nice things too" that you're gonna spend her money on?
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Feb 26, 2024 20:37
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sebzilla posted:Yep, just me. The money landed in my account this morning. just put her money in a savings account in her name that you’re not allowed to withdraw from, you prick
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Feb 26, 2024 20:50
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Crespolini posted:What are the "few nice things too" that you're gonna spend her money on? There's these... apes. And they're, y'know, bored.
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Feb 26, 2024 21:18
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Few nice things = New car?
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Feb 27, 2024 00:52
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Just to break the dogpile a bit, I don’t know the particulars of the mortgage rate you have and how it’s increasing, but I can understand that there might be a trade off between immediate cash flow and future gains, and that’s hard to cost in without knowing the details. Maybe it is the case that paying off a chunk of your mortgage now will enable you to remortgage to a better rate due to that dropping you to a lower LTV band, and maybe that gives your more monthly money for food or whatever until rates drop further. Really don’t have enough info for decent advice here, so hard to say. That aside, if you do take the money and put it in a Junior ISA for her, you really should just whack it into a basic index fund rather than a savings account or something like that. I don’t know how old your daughter is, but if we’re talking about a 10 year horizon before she gets access to it, then that can grow quite a bit. And if there’s a market downturn when she gets access, she can always wait a bit. If it’s not money that you might need for immediate access, then any savings interest rate just pales in comparison to investments, even with the current savings rates. If it’s like £9000, which is what the Junior ISA annual allowance is, leaving that for 10 years with historic gains would average to £24k total. 15 years would hit an average of £41k total. That’s much more long term than anything the mortgage early repayment would give financially, but you can’t really put a financial figure on a less stressed home environment due to less short term financial pressure.
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Feb 27, 2024 01:18
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 That's a lot of replies. To try to provide some explanation: our fixed rate mortgage runs out next month and, as you might have noticed, rates are quite a bit higher than they were five years ago. So the plan, once I first learned I was in line to inherit a lump of cash, was to pay down the capital as much as possible to keep the payments at or below what we're currently paying, because the prospect of trying to find several hundred pounds extra per month is... not enticing. Essentially we don't have it. We've spent ten years together worrying about money, borrowing from parents to fill the gaps when any significant expense appears (leaky roof, dead car, etc.) So the prospect of being able to sleep a little easier and actually build some savings is one that would provide significant mental health benefits to us all. We also are in need of a new roof (patching patches at this point) and ideally a new boiler (bring down those energy bills), so there's quite a lot of capital expenditure that's been looming for a few years, and without being in a position to move to a larger house (our original plan before The Liz Truss Event) we can't just gently caress off and leave them to be someone else's problem. However, having actually looked at some numbers last night, it seems we might be able to cover most of what we need without dipping into the second half of the inheritance too much, if at all. Rates have recovered somewhat from when I was last planning this all out, which makes a big difference. It'll mean our outgoings are pretty much where they are now, rather than being a net win, but since the majority of what we'd saved would have been going straight into savings to pay back the borrowed chunk anyway it's probably better this way in the long run. Just means less flexibility if/when the next unexpected hit comes. There's also part of me that wants some control over where the money goes in the long term which is why I'm shying away a bit from an account that automatically goes to her at 18. Standard parental thoughts like "spend it on university or a house deposit" stuff. Or at least most of it. If we do manage to invest all of what she's been given now and leave it alone for nine years it's going to be something like £80k or more which is... a lot (to my mind.) Although if I think about what I'd have done with that money it would probably have been very sensible and boring anyway so as long as she turns out like me it'll all be fine. Having watched Sad Panda's video I might go for a mixed bag of ISA and SIPP so that she ends up with some money as a young adult and some for long (long!) in the future. Saros posted:Few nice things = New car? More like "going on her first holiday that's not camping in Wales" sort of thing. Who the gently caress buys new cars?
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Feb 27, 2024 12:12
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sebzilla posted:There's also part of me that wants some control over where the money goes in the long term which is why I'm shying away a bit from an account that automatically goes to her at 18. Standard parental thoughts like "spend it on university or a house deposit" stuff. Or at least most of it. This is probably best handled by giving her a good financial education. She'll likely still want to do the odd dumb thing at 18 with a huge lump sum of money but hey, that's her prerogative, and hopefully it won't be the whole lot on something dumb 
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Feb 27, 2024 14:07
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mfcrocker posted:This is probably best handled by giving her a good financial education. She'll likely still want to do the odd dumb thing at 18 with a huge lump sum of money but hey, that's her prerogative, and hopefully it won't be the whole lot on something dumb I'll say it: 18-year-olds are dumb as rocks and it would be silly to decide, nine years in advance, to simply cut your teenage kid a check for £80k. Wanting her to use a life-changing amount of money in a way that actually changes her life is a reasonable impulse. Maybe a trust is the way to go?
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Feb 27, 2024 17:00
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I think it's legitimate to be concerned about how an 18 year old would handle an £80k windfall, and in your shoes I would keep it in my own name until she is ready for it.
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Feb 27, 2024 18:24
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sebzilla posted:More like "going on her first holiday that's not camping in Wales" sort of thing. Who the gently caress buys new cars? The kind of person who hears 'your daughter is entitled to an inheritance from your grandparents' and then begins drawing up an IOU, presumably.
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Feb 27, 2024 20:07
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so I could say that I finally figured out what this god damned cube is doing. Get well Lowtax.
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If any of you have kids approx 14-16 years old, Martin Lewis produced a text book on Financial Education designed for that age group which you can get access to here: https://www.moneysavingexpert.com/news/2021/10/first-ever-financial-education-textbook-arrives-in-welsh-schools/ (NB links to England, Scotland, Wales (and one in Welsh too), Northern Ireland versions all on that page). A form pops up for you to fill in but if you just copy the download link I think you can by-pass that. It downloads a zip file. (I think quite a few adults would find it useful to!)
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Feb 28, 2024 17:09
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evil
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Feb 29, 2024 08:13
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If you worry that she'll fritter it away when she's 18, don't tell her about it. I was 24 when I found out I'd been left some money by a grandparent. It was in an account in my name which nobody else could access, and eventually became part of the deposit on my house, as had been my parents' plan. To go back to pensions, my workplace pension has reduced member contributions by over a third. I've since opted to pay in an additional 1%, which was the only choice available, but realistically will barely make a difference. I have another workplace pension from my previous job in local government, but have no informartion about it other than it exists. Is it worth me trying to get the two amalgamated? Should I keep them separate in case I go back to working for the council because the pension was started under the older, more favourable terms that no longer exist? At the moment, the projection is that my main workplace pension will be worth less than working full time on the minimum wage, and that's if I work until my late sixties. Neither of those appeal.
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Mar 8, 2024 23:25
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If your council pension defined benefit? Many are especially if it's an "older better" scheme. If so it doesn't really combine with your current defined contribution scheme. (The difference is in a defined benefit scheme what you get at the end is defined (the benefit), in the defined contribution what the company puts in is defined (the contribution)) A defined benefit pension with a decent number of years can be really nice, you should be able to get some info, even if you have to contact your old employer.
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Mar 8, 2024 23:39
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It is defined benefit, but I only paid into it for about 4 years. By itself, it's probably not worth much. However, if they do raise the state pension age to 71, there's another 30 years of work ahead of me. That's plenty of time for me to end up back at the council. Hopefully they've kept better records than I have!
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Mar 8, 2024 23:47
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Lady Demelza posted:It is defined benefit, but I only paid into it for about 4 years. By itself, it's probably not worth much. However, if they do raise the state pension age to 71, there's another 30 years of work ahead of me. That's plenty of time for me to end up back at the council. I too have a defined benefit scheme which I paid into for about four years, and it's due to pay me a modest annual income at the age of 65 even though the state pension age has increased. The state pension age doesn't make a difference. Yours may not work the same way but it might be worth checking.
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Mar 9, 2024 00:07
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Lady Demelza posted:It is defined benefit, but I only paid into it for about 4 years. By itself, it's probably not worth much. However, if they do raise the state pension age to 71, there's another 30 years of work ahead of me. That's plenty of time for me to end up back at the council. They will have, it's probably 4/80ths or if you're lucky 4/60ths of either average or final salary (indexed for inflation). The shorthand way of getting an idea is whatever you earned divided by 80 (or 60) times 4 and assume it's about the same purchasing power for when you retire. You'll get that each year. Won't be much after 4 years but at least it's locked in. For your current stuff, sucks your company is being lovely but remember you have 30 years of compounding interest to add on to that.
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Mar 9, 2024 00:08
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Cast_No_Shadow posted:The shorthand way of getting an idea is whatever you earned divided by 80 (or 60) times 4 and assume it's about the same purchasing power for when you retire. You'll get that each year. About a grand, then. Better than a poke in the eye with a sharp stick. Thank you!
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Mar 9, 2024 01:00
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Lady Demelza posted:About a grand, then. Better than a poke in the eye with a sharp stick. No problem, retirement planning is important. Also remember while you probably won't have as much income as when you're working you probably will have lower costs too.
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Mar 9, 2024 01:06
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Hi, not quite UK specific but Europe so I'm hoping this makes more sense than in a US based thread. My partner and I own our home, don't have any crazy fixed expenses, and don't have any kids at this stage. We're fairly responsible on spending and I'm now at the point I have excess money at the end of the month, and I would like to put it somewhere useful. I have a few long term stocks I've managed not to touch for ~10 years, but nothing life changing. If I disregard those, most of my saving went into purchasing the house and I'm essentially starting from scratch. I'm currently on a weird tax regime as an expat in an EU country, which is overall beneficial but also means most of the tax-advantaged retirement things don't really apply to me. I've been working through the "If you can" book linked in the OP, and I'm thinking of setting up something simple like that recommends. My questions are: The book recommends a mix of 1/3 US stocks, 1/3 US bonds, 1/3 international stocks. As someone not in the US, is there a good way to adapt that? 1/3 US stocks, 1/3 EU stocks and 1/3 EU bonds? I don't know much about the difference between EU/US/UK bond markets and whether I should read them as equivalent. (Also taking US as "international" mean cutting out Asia and I guess the UK, is that something to think about?) My bank doesn't offer Vanguard mutual funds, I can buy into their ETFs though. Vanguard have their own comparison, and as I understand it the thing most likely to be annoying is that it's difficult to set up automatic transactions. Are there other things I should be aware of there? Is it likely I'd be able to find Vanguard as a mutual fund option if I look at other local European banks, or am I misunderstanding how that works?
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Mar 9, 2024 11:46
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Destroyenator posted:Hi, not quite UK specific but Europe so I'm hoping this makes more sense than in a US based thread. here is a good article about asset allocation. For equities I wouldn’t bother thinking about US vs elsewhere. You can buy Vanguards VWRP ETF which tries to allocate based off global stock market values. That’s inherently skewed towards the US but you get other markets too. For bonds you could pick an EU bond ETF. Looks like Vanguard might have one.
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Mar 9, 2024 13:44
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Pantsmaster Bill posted:here is a good article about asset allocation. One thing I'm not sure about is that in my bank I can see the Vanguard LifeStrategy 60 and 80 but listed in different exchanges. So the 60% can be had as V60A on Xetra or Amsterdam, or the 80% as V80A on Xetra or VNGA80 in Milan. There are some minute difference in the price and variation that I would believe is just this platform, the total assets under management are exactly the same. I don't live in any of those countries, but I am in the EU. Do you know if there is any difference between them?
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Mar 9, 2024 15:17
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Destroyenator posted:Thanks, that article makes a lot of sense. I had also found the Vanguard LifeStrategy funds it mentions in my banks platform and was looking into them. A pre-built blend of international equity and bonds seems like it could be a good solution for now. i’m sure there are lots of details i’m missing but as far as i understand it the retirement / life strategies are “rip offs” in that they are products designed to warrant a 2-3% management fee rather than the 0.1% fee that made trackers so popular and cheap over their life time to run (ie 100s in fees rather than 1000s) the location probably means there’s an office where some guy tweaks your portfolio for you rather than the vanguard head office, but really you can do this yourself with a simple asset allocation modification as you get older, for example heavy stock exposure while young then 10 years before your retire move 10% of your portfolio bonds and some into cash and proceed from there, so when you retire most of your assets are locked into “safer” things
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Mar 9, 2024 20:52
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I don't know about those specific ones, but the regular Vanguard Life Strategy 20/40/60/80/100 doesn't have very high fees. Slightly higher than a simple global tracker but definitely not a couple of percent. I think in the UK with Vanguard it's around 0.25%
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Mar 9, 2024 21:14
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Sad Panda posted:I don't know about those specific ones, but the regular Vanguard Life Strategy 20/40/60/80/100 doesn't have very high fees. Slightly higher than a simple global tracker but definitely not a couple of percent. I think in the UK with Vanguard it's around 0.25% yeah that’s more reasonable, still its one of those thing where if you’re already switched on enough to invest in these products it’s only a bit more effort to save hundreds of pounds than the convenience of some swiss guy doing it for you
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Mar 9, 2024 22:11
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The latest annual report for the uk lifestrategy 100, for example, says it's invested in 10 underlying trackers with a charge of 0.22%. The S&P 500 UCITS it invests in is a charge of 0.07%. Let's say the same is true of all underlying funds (which is generous - the emerging markets fund it invests in is actually @ 0.23%). So that's a difference of 0.15%, or 150 quid per year on £100,000 invested. It's also now your responsibility to rebalance - how often are you doing that, and how long does that take you for 10 funds?
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Mar 10, 2024 08:50
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Definitely. My understanding of it is basically it depends how comfortable with it you are. Easiest option - pay a financial advisor, accept 2-3% fees and know that they probably won't be as good as the market. Strong option - pick a fund like that which tracks the market with a balance you're happy with based on your risk profile. Has 0.25% fees Most involved option - buy the component parts of a fund you like and manually rebalance it. InvestEngine and a couple of other platforms have a tool that let you come up with a balance of investments and then it autobalances for you.
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Mar 10, 2024 09:27
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Yeah kind of playing devil's advocate. If you want more control / actually enjoy the process of picking etc. then it totally makes sense. Plus you don't have to be overweight UK, which all of the GBP lifestrategy are (never quite understood this - reduces your CCY risk assuming you're saving for UK retirement??). But you really get a lot of value for minimal input with those funds, particularly if you make sure the platform fee is low too. I see that provider you mention is cheap, hadn't heard of them.
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Mar 10, 2024 09:46
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I’ve always felt like the lifestrategy funds are in a bit of a weird place. If you want hands off why not just go with the target retirement funds which are literally just set and forget?
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Mar 10, 2024 11:56
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Destroyenator posted:I'm currently on a weird tax regime as an expat in an EU country, which is overall beneficial but also means most of the tax-advantaged retirement things don't really apply to me. It seems weird that you could be unable to access tax advantaged accounts in both your home country (UK?) and the place you're living. As soon as I moved to Switzerland I was able to access the normal retirement accounts here. I still have my UK SIPP and an ISA, even though I can't contribute to them. Even if you're not staying long I think it would be worthwhile using anything that will give you a tax break.
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Mar 10, 2024 12:01
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While I’m here, looking to open a SIPP and potentially a LISA before the end of the tax year. Do Vanguard or HL ever do introductory offers?
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Mar 10, 2024 12:03
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Pantsmaster Bill posted:While I’m here, looking to open a SIPP and potentially a LISA before the end of the tax year. Do Vanguard or HL ever do introductory offers? nope and why would you when you get a huge lump sum anyway
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Mar 10, 2024 12:57
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I just set up a Limited company - to offer freelance services and do independent game development. I'd like to claim VAT back on some stuff, mainly my PC that I use for all my work, what do I need to do? Will I be able to submit accounts and claim it back? I worked as a contractor previously but used an accountant. Having no turnover yet I've not registered for VAT, do I need to do so to claim? What about self-assessment, do I need to set up with that as well? Or is that only if I start drawing dividends?
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Mar 19, 2024 20:42
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I have a couple of quick questions about financial stuff. I recently started work at a call centre for specifically finance related matters. Me and my fiancée are both saving up for a house and, fortunately, are in the North East meaning that we can put down a far smaller deposit than we normally would have to. Our work is also giving all of us a slight upgrade in terms of pay and a bonus every April if we hit certain criteria. Currently we're on a combined income of about £33,000 between the two of us, with potential for me to go and get a CEMAP and potentially start working to become a mortgage consultant in a year or so. It means that we are generally in a very good position fiscally, better than either of us have been in for our entire lives, but I don't know too much about how to do savings and general usage of funds. We always pay back any credit card debts at the end of the month, have a fully paid for car and only a student loan (type 1 as it happens so jack and poo poo is going to happen with it and it gets written off once I hit 51) on my side, plus a pension of around £30,000 (approx) from my previous job. I was wondering if this is fiscally "okay" as it were, mainly because the saving for a house has meant that we are both about £500 down per month and, although that has meant we are in a good position for getting a mortgage, it can leave us a bit too reliant on credit cards to do some stuff. We never go above 15% on the cards as well, just for clarity. Do folks think that sounds healthy, or if there is anything we are doing "wrong" or particularly egregiously silly? Josef bugman fucked around with this message at 22:50 on Mar 19, 2024 |
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Mar 19, 2024 22:35
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BizarroAzrael posted:I just set up a Limited company - to offer freelance services and do independent game development. I'd like to claim VAT back on some stuff, mainly my PC that I use for all my work, what do I need to do? Will I be able to submit accounts and claim it back? I worked as a contractor previously but used an accountant.
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Mar 19, 2024 23:21
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Josef bugman posted:I have a couple of quick questions about financial stuff.
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Mar 19, 2024 23:25
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