How Silicon Valley enshittified the internet | The Verge

... internet went so wrong ... Things start out good and cheap or even free, then they have to make money so they get worse.

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PCLS Rumours (Should You Take Your 25% Tax-Free Cash Now?)

It’s happening again!

Media speculation is just going crazy about changes that Chancellor of the Exchequer Rachel Reeves is going to have to make in her November Budget to plug a big hole in the public finances .

Of all the possible changes, the one that seems to light people up the most is changes to pensions, and specifically, tax-free cash.

Is this something she’s likely to mess with?

Tom McPhail – I’m a pensions expert and I’m taking my tax-free cash now

If you want to learn how to do that, how to build a portfolio which is simple, low-cost and easy to manage, check out Meaningful Academy Retirement Planning.

Join Mailing List to be kept informed of latest goings on at Meaningful Money & Meaningful Academy, plus the Black Friday 2025 special offer on Meaningful Academy Retirement Planning course.

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The post PCLS Rumours (Should You Take Your 25% Tax-Free Cash Now?) appeared first on Meaningful Money – Making sense of Money with Pete Matthew | Financial FAQ.

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“How to make money with AI” tops Nigeria's rising search trends — Google - Businessamlive

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Listener Questions – Episode 29 – Retire Soon

Questions Asked

• Question 1
  Hi Pete

  I am really enjoying listening to the podcast, thank you. They make what can sometimes be a complicated subject much easier to understand.

  I have a question which I have asked my SIPP provider but even they don't appear to know the answer so here goes:

  If someone has a SIPP valued at say £1.2m and a DB pension valued at say £300k, in order to maximise the favourable annuity provided by the DB pension, is it possible to draw the full LSA (25% tax free cash) from the SIPP? Or is there a requirement to draw the LSA on a pro rata basis from both the SIPP and the DB pension?

  Thank you, AJ

   

• Question 2
  Hi Pete and Roger,

  Thanks to The Meaningful Money Handbook, The Meaningful Money Retirement Guide and listening to all of your podcasts, I’m now in the fortunate position to retire in three years at the age of 55.

  However, I have a couple of questions about building a Cash Flow Ladder:

  Q1 – Should I be moving my investments into the various rungs of the ladder now, or just wait until I retire?

  Q2 – Most of my investments are in a pension, but I also have an ISA for a bit of flexibility. Would it make sense to use the same ladder structure in both the pension and the ISA?

  Thanks for all your good work.
  Tim

   

• Question 3
  Hi guys

  Loving the podcast – helped me through the COVID years and it's been a staple ever since so thank you for that.

  My question is around investing in older age.

  At what point, if any, is it worth cashing out GIA investments if other sources of income such as state pension and DB pensions are more than enough to live off and I have sufficient other capital (cash isas) for those big things still ahead?

  I'm not planning to leave any sort of inheritance (unless I pop my clogs early !) so is there some rule of (age) thumb of when to cash out and spend investments?

  I sort of don't see the point of continuing to invest after a certain age and to spend the money. But I guess it's not easy switching from investing to spending.

  Thanks, Chris

• Question 4
  Hi Pete & Roger,

  Great show gents, always interesting and informative.  I’ve been an avid listener for a couple of years now and have been encouraged to write in on the off-chance that my question may have relevance to others with a similar dilemma. I fear you may feel it’s too niche but here goes:

  I’m 59yrs old and for all intents and purposes retired, in as much as I quit my career in business 18months ago to take on the full-time parental care role of my 6yr old twins which enables my wife (15yrs my junior) to continue in the career she loves. We are fortunate that my wife is an additional higher rate tax payer (as was I before I quit), we live mortgage free in a ~£1.5m family house – all of which means I have no plans to draw a pension until my wife is also ready to retire, which despite her occasional gripe, is not likely to be until our children leave school (by which time we will be ~ 72 and 57 respectively).

  I have a small index-linked Public Sector DB pension that kicks in in a few months time when I hit 60 (£7k per year) and expect to get a full State Pension which should provide me with around £20k p.a. at todays values as a base income when I reach state pension age in 7 years time.

  I also have a Pension pot currently valued at around £1.2m, made up from £1m SIPP and £200k S&S ISA) and my wife’s Pension pot is currently valued at around £520k (£400k SIPP & £120K S&S ISA).  I no longer contribute to my SIPP but my wife invests around £30k Gross in to her SIPP annually and we plan on continuing to fill both ISA allowances each year until she retires.  We are both 100% invested in equities using low-cost Global trackers to maximise their growth potential.

  Here’s my question, I was burnt a few years back (before I started listening to podcast like yours to educate myself on how to manage my finances) when I was persuaded to join SJP and combine all my old workplace pensions into a single pot managed with them.  I even persuaded my wife to join and I opened Junior SIPPs for my twins when they were born (not their advice, my own) which we continue to pay the full amount into monthly to hopefully secure their future retirement. Long and the short of it, the more I learned about investing, the more I regretted my decision to tie myself into SJP and the more I begrudged paying their relatively high fees (for what turned out to be a lower return than much lower cost tracker options could / would have produced over that same time period).

  I eventually sucked up the exit fees and bailed out a few years back, taking my wife and children’s accounts with me and whilst I haven’t looked back, it has made me reluctant to spend money on financial advisors, given the perceived poor advice I felt I received last time. To that end, I’m currently planning on managing mine and my wife’s finances through retirement without recourse to an advisor but have started to have niggling doubts as to the whether I’m being too arrogant in my own abilities.

  In simple terms, our aim to build a combined Pension Pot (incorporating a healthy ISA element to aid in tax-efficient drawdown, allow my wife to retire early(er) if she so desires and to cover one-off expenses that may from time to time will come up) that’s large enough for us to live off comfortably based on a flexible 3-3.5% drawdown rate annually (index-linked).  The plan is also to remain 100% invested in equity throughout retirement with the exception of and maintaining, a 3-5yr cash-like buffer (invested in MM Funds / short term government bonds) from which to take our living expenses.

  My wife and I are not extravagant spenders and can easily cut our cloth according to circumstances, so my feeling is, with a small but decent guaranteed income that we will have as a foundation, when combined with what I hope/expect to be a sizeable joint Pension Pot and a relatively low and sustainable withdrawal rate that should see us right even through the harshest of winters (metaphorically speaking) this should provide all the income we’ll need for a comfortable retirement with a good chance of leaving a fair amount left in the pot for our children at the end, without over complicating our portfolio or expensive management costs.

  The obvious concern I have is around IHT but even there, I feel like that’s a concern to address further down the road once we know we are financially secure and when we know more about the needs of our children as they grow-up and can plan what to do with any excess cash we might have using the rules in place at that time.

  Sounds simple, but is it too simple?  Can you spot any obvious flaws in this plan or reasons why you think seeking professional advice would make sense that may not have considered?

  Thank you and keep up the good work!

  Regards, Aaron

• Question 5
  Hi both

  Love the podcast. I listen regularly and enjoy hearing the banter between the two of you,  as well as providing answers to thought provoking questions.

  As an additional rate taxpayer in Scotland, my marginal income tax rate is an eye watering 48%. So I get significant benefit from tax relief when topping up my pension. It can cost as little as £33,000 to enjoy a full input of £60,000 once I get money back on my tax return.

  I have been diligently stuffing my pension as much as I could afford for years now as it was always the prevailing financial advice. I'm now only a couple of years away from retiring at age 55. I am fortunate enough to be now over the old LTA (which is now of no consequence). However the tax free limit is still set at 25% of that old allowance (£268,273?). Given I am now NOT going to benefit from any further tax free money on the way out, I wonder whether continuing to contribute to my pension is a good idea anymore.

  My choices are either :

  1) Pay into the pension and enjoy tax relief of 48% now, allow the fund to accumulate tax free over the coming years, then pay income tax on the way out at 40%. (I expect to be high rate , not additional or basic rate tax payer in retirement)

  2) Take the tax hit now on income, don’t contribute to pension, put the nett amount into a GIA, and pay 24% CGT on the gain on the way out.

  I did some numbers and while the pension wins out, it's not by much over a 10 year term assuming 5% growth. But tax rates could change, pension rules could change, and inheritance tax changes are pending.

  Can you compare the pros and cons of each approach to help me make a decision, or is there a third option to consider?

  (I hear Roger sometimes suggest a strategy of taking the tax hit now rather than later e.g better the devil you know)

  I hope this makes sense.

  Thanks, Martin

• Question 6
  I became an avid listener of the podcast during the first lockdown and have learned so much in the past 5 years. I really enjoy it and appreciate all the effort you put into it.

  My question is with regard to age gap relationships and planning for retirement. I'm 59 and am currently contributing to the NHS Pension Scheme. Part of my pension can be taken at  age 60, without deduction, and I hope to have an income of £16,000 plus a £50,000 lump sum. The rest of my pension I'll be able to take at age 67 and by the age of 63 I hope to have a further pension of £18,000 without a lump sum. In addition to this, from my career before the NHS, I have a SIPP and the current value is £400,000. 63 is the age by which I hope to have stopped working at my current level but it might be sooner.

  My wife is ten years younger than me and has not been working for most of her adult life. Currently she is paying into a local authority DB scheme but by the time she is 58 her pension entitlement might only be £5,000 per year, but this would need to be discounted by 40%-50% in order to take that income.

  By the time we are eligible I expect both of us to qualify for the full state pension. We have no other cash savings to speak of and our mortgage is due to be paid off next year, when I will be 60.

  My question is what advice do you have for couples who face this age gap issue. The plan is that we want to spend our retirement together while I am fit and active (well fit-ish). Once we both have the state pension, with my NHS Pension, we should have an income of £58,000 at todays values, which will be enough for our needs when I am in my late seventies, but might make me a higher rate taxpayer in requirement. Before then, we'd like to spend a bit more and we are planning to use my SIPP and my wife's DB scheme (when she is 58) to fund our pension, until it is replaced by the second NHS Pension and the state pensions.

  I never realised this would be so complicated to get my head around.

  When the mortgage is paid off, we'll have some money and should we concentrate in paying it into an ISA so that we can get an additional income without me having to pay higher rate tax, or should we set up a SIPP for my wife so that she can build up a pot of money that she can drawdown on from when she is 58. This would be with the aim of her utilising as much of her annual tax free allowance as possible.

  I've assumed there is no way that I can transfer part of my SIPP to her before I die.

  I very much hope that you can help.

  Best wishes, Steve

Send Us Your Listener Question

We’re going to spin out the listener questions into a separate Q&A show which we’ll drop into the feed every 2-3 weeks or so. These will be in addition to the main feed, most likely, but they’re easier for us to produce because they require less writing! Send your questions to hello@meaningfulmoney.tv Subject line: Podcast Question

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Listener Questions – Episode 21

Questions Asked

• Question 1
  Dear Pete & Roger,

  My question regards Redundancy Sacrifice into a personal pension (SIPP).

  In tax year 2024/25, I had “relevant UK earnings” of £44,000.

  I contributed the full amount (inclusive of tax relief) to my SIPP; as a Personal Contribution this used up 100% of my Annual Allowance.

  In addition, I received a £20,000 tax-free lump sum Redundancy Payment.

  Because it was below £30,000, it did not constitute “relevant UK earnings”, as such, I requested it be paid directly into my SIPP via “Redundancy Sacrifice”.

  (My understanding is that it would be treated as an Employer Contribution, not benefit from tax relief and, therefore, not limited by my Annual Allowance – please correct me if wrong).

  However, due to an administrative error, it was paid to me.

  Subsequently, I transferred it to my pension provider, together with the necessary paperwork (completed Employer Contribution form and Settlement Agreement detailing the source of funds).

  My pension provider has rejected the transfer designating it as a Personal Contribution because it was made from my personal bank account.

  Q. Does HMRC require Redundancy Payments be paid from business bank accounts? My understanding is that the rules are different from normal Salary / Bonus Sacrifice.

  (Disclaimer: I understand that in answering my question you are not providing financial advice).

  Kind regards,

  Ross

   

• Question 2
  Hi,

  There’s increasing headlines that Rachel Reeves might be planning reforms to reduce cash ISA allowances from 20k to 4k.

  My understanding is that this will only affect new ISA’s so for me and my wife we can continue to invest 20k per year maximum.

  Is this assumption correct?

  My main question though is planning for my kids.

  If they don’t yet have any ISA open – what is the best way to start them off to hold onto the 20k annual allowance for potentially accessing cash <5 yrs away i.e. for a car etc (so not S&S ISA)? They both have money put away for when they’re 18 but our plan was to encourage them use some of this for a LISA then put some away in the best cash ISA available for short term requirements. Eldest son will be 18 in 1year whilst youngest is 18 in just over 3yrs. Thanks for considering my question. Stuart  

• Question 3
  Hi Pete,

  I found you from the podcast you did with Damien on Making Money. I really enjoyed listing to your view on money.

  My question is: I’m a stay at home Mum (age 42) to my children (12 & 14). I have 20 years NI contributions but have no plans to restart work. I aim to pay volunteer contributions to help build up to a full state pension. I do not have any pension myself.

  My husband is a 40% tax payer and has been paying into his pension for the past 20 years. We want to start saving extra to either have my own pension pot (perhaps save in a S&S isa for the next 20-25yrs) or would we be better off putting more money into my husbands pension? We’re happy to share the pot as it were. Or is there another option I haven’t thought about?

  Many thanks,

  Louise

• Question 4
  Hi both,

  Loving the podcast, only recently came across it but have been an avid watcher of Pete’s YouTube videos for years now.

  I am 33 and a higher rate tax payer. I have spent the last 3 years getting my house in order with my finances and wanted to get your thoughts on what else you think I could be doing to maximise my tax efficient savings. I contribute £1600 to my stocks and shares ISA each month, which I have fortunately been able to max out for the past two years (currently valued at £47k). I have £40k tied up in premium bonds, this is mainly to avoid going over my PSA allowance and also where I am keeping money for a house deposit that I am planning to use in the next 2/3 years.

  I have combined my workplace pensions and contribute 5% through salary sacrifice, with my employer paying in 7%. The pot currently sits at £31k (roughly adding £750 per month), but I feel I could be adding to this more aggressively whilst I don’t have commitments of a mortgage or children. Also if I wanted to consider retiring at 55, realistically how much more do you think I will have to contribute to my pension each month?

  Cheers

  Ryan

• Question 5
  > Hi Pete & Roger,

  Firstly, thank you for all of your fantastic work over the years.  It has completely transformed my financial life.

  I’ve been investigating trusts and have discovered what a wonderful mind-boggling world they are.  I have a number of questions in relation to discretionary trusts and hope that this doesn’t cause other listeners to glaze over.

  Question 1: let’s assume you make an initial transfer into a trust, for say £325k.  If you then survive 7 years, is the full nil-rate band available to your beneficiaries on death (assuming no other PETs during that time)?

  Question 2: If the trust receives dividends from investments (for example from a Vanguard accumulation fund) and these dividends are reinvested, are the dividends taxed at the appropriate rate, or do they dodge the tax bullet as they are reinvested?

  Question 3: Is it sensible to carry out tax harvesting every year to take advantage of the CGT tax exempt amount (even if it is only currently £1,500)?

  I have noted that I should obtain advice if I am to go down the trust road, I just wanted to clarify my understanding first as they seem wonderfully tax-inefficient, despite being peddled on many websites as a fantastic way to avoid IHT. Having done my research, they seem to be a tool of last resort for IHT purposes unless you have a specific reason to use them.

  Thanks, James.

• Question 6
  Dear Pete and Roger,

  I have listened to the podcast for many years and have recommended it to many over the years. I remember working in general practice over 5 years ago and singing its praises to numerous patients who felt stuck financially. Thank you.

  My question is more of a request/suggestion for a whole episode, sorry!

  I moved from being a GP to working in Occupational Health and now I joint own a small OH company based in Plymouth. In the South West we have a lot of manufacturing and this is the core of our client base. This means I am often based in factories seeing people who are on minimum wage and working nights or antisocial hours. Many have very poor education and minimum in way of social support. Although I think your podcast is outstanding, I do suspect its uptake is mainly the motivated middle, even if that isn’t the aim. I think there is real need for an episode aimed at motivating, informing and encouraging the people who are truly living pay check to pay check and who may feel there is no escape.

  Many of the workers I see smoke and go home every day and have 3-4 “tins” to unwind after work. Often on their breaks they reach for a can of “Monster” and a chocolate bar or bag of crisps. Despite, in my opinion, wasting money on energy drinks they often tell me they can’t afford prescriptions or have to work every hour of over time available in order to buy children Christmas gifts.

  It really upsets me how low socioeconomic status has such an impact on so many negative health markers. The National Institute for Health and Care Research found that people living in the most deprived areas may acquire multiple health conditions 10-15years earlier than those in the most affluent. The ONS states that men living in most deprived areas only have 52 years of “generally good health”, vs 70 yrs of “generally good health” for those in the least deprived areas. This impacts children too, with “The Week” recently sharing a stat that in the most deprived areas 30% of children leaving primary school are obese vs <10% in the least deprived areas. Many I try to give advice to don’t see the point in putting a few quid into a savings account because they can’t see the light at the end of the tunnel. They just see working long hours until they get to 67, by which point they accept their health will probably be poor. Lots seem to think its normal by retirement age to just want to sit on the sofa and watch grandkids play football because they are too short of breath to play with them. I want them to be playing football with the grandkids/great grandkids in their 60s and 70s. I want them to realise that saving £2 a day by not buying the energy drink or more by stopping the cigarettes or booze, will add up, compound and could mean they have a deposit for their own flat in 10 years or enough to allow them choices over hours worked in their 60s. With such good access to a large group of people who are living at the lower end of the deprivation scale I feel that I have a responsibility to try and sow the seeds of change, for those who want it. I am therefore putting together some simple free educational resources to share with these employees, via their employers on healthy choices, simple lifestyle measures etc. Financial stability, health and wellbeing are closely interlinked. I am not qualified to give financial guidance and feel my approach of telling everyone to stop wasting money on expensive drinks, cigarettes and booze and instead to invest that money in a globally diversified, passive tracker is condescending, preachy and misses the mark. A doctor telling someone on the breadline that by saving £10 a week, compounding over a 50-year career they could end up with £300,000 giving them huge life options, doesn’t cut the mustard. The message needs to be delivered by someone with financial acumen and a way with words…… Do you think at some point in the future you could put your thoughts to how people could use simple techniques to break out of the cycle of living pay check to pay check? I would love to be able to share an episode targeted at this population either by directing people to the podcast or by convincing employers to play it to employees at lunch breaks. Putting together one 20minute informative, evidence-based session takes me about 5-10 hours. So, I am in awe of the huge amount of time and personal sacrifice you must put into the podcast. I don’t know how you have managed it for so long, but I am sure it has positively impacted many people's lives. Thanks again. Jonny

Send Us Your Listener Question

We’re going to spin out the listener questions into a separate Q&A show which we’ll drop into the feed every 2-3 weeks or so. These will be in addition to the main feed, most likely, but they’re easier for us to produce because they require less writing! Send your questions to hello@meaningfulmoney.tv Subject line: Podcast Question

---

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Lyft's Newest Robotaxis Can Make Money When You're Not Using It

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Listener Questions – Episode 26

Questions Asked

• Question 1
  Dear Roger and Pete, I enjoy listening to your show driving to work. You are both down to earth and humble with your opinions. I read a lot on finance and have been investing in stocks and share ISA since 2004 and VCTs since 2017. I have built a healthy portfolio of nearly 300 k in VCT, 400 K in Stocks and share ISA. I also have a healthy DC pension of roughly 700 k and DB pension worth around 10 k per year from age 60.

  I am approaching 50th birthday this year and so decided to use up some of my cash savings which is in excess of my target investment of 20 k in ISA and 50 k in VCT(as unable to go over 10 k in pension (due to annual allowance threshold). I know I am fortunate and I also live frugally as that's my nature and don't have too many wants.

  The question is if I have roughly 80 k in mortgage and I have the ability to clear it, should I invest that 80 k in VCT on top of my regular VCT allocation of 50 k and get the 30% tax benefit(as I am unable to get much tax benefit from my pension) or clear my mortgage as the mortgage is coming up for renewal and likely interest rate will be ~4-4.5%. I am torn as I understand in my head that 80 k invested is better than clearing the mortgage over a 20-30 year time frame, but as I am going to be 50 and would like to clear the mortgage and have freedom to decide if I want to enter a life of FIRE or have the ability to FIRE if I get bored. However, I have kids in school and so unlikely I will FIRE until they go to university. Sorry about the long question.
  Thank you, Fred.

   

• Question 2
  Hello Pete / Roger,
  Great podcast! I hope karma holds true and all the good you give out back comes back to you both!
  Question: I am a higher rate taxpayer who maximises their pension, stocks & shares ISA and other best tax sheltered places so need to also build wealth in a taxable GIA. What is best strategy for a higher rate tax payer to do this… dividend / income generating stocks or accumulating (non dividend paying) investments and pay CGT at some stage (regularly)?
  Thanks, appreciated as ever and hope may help others
  Ivana

   

• Question 3
  Hi, Nick (who I assume will read this first), Pete and Roger,

  I'm not sure if this is a suitable question for the podcast but here goes.

  How can we persuade an aged aunt that she needs to write a will, as us knowing what her wishes are is not sufficient.

  I have an aunt who has no children but she has said she wants her estate split equally between her 8 nieces and nephews but she refuses to make a will. The problem is that if she dies intestate there is an estranged brother who would be a beneficiary as far as we understand  and so what she wants to happen won't happen.

  Richard J

• Question 4
  Hi Pete and Rog

  My husband and I have been MM diehards for many years. We think It’s a sad reflection of the state of nation when David Beckham gets considered for a gong before Pete does!

  I wanted to ask you about UK T-Bills because they are rarely (if ever) mentioned in your discussion of financial instruments.

  We are at retirement age I have a few DB pensions and a SIPP with Interactive Investor of approx. £300k. About ½ is sitting in Cash (including short term money market funds) because we want to draw out our 25% tax free allowance within the next 2 years and we want to minimise risk until that time arrives. I still want to diversify my low risk investments as much as possible into bonds but my experience of bond funds is that they can also drop significantly with economic conditions whereas we want something to deliver us a (near as possible) guaranteed return.

  Our platform (ii) allows us to purchase bonds on the primary market however they are too long-term for us to see them through to maturity given our timescales.

  The platform has started to release UK T-Bills which seem typically much shorter term (3 or 6 months) and therefore appear to give us what we are looking for (guaranteed rate at a decent %) and very low risk. I know the % return is determined by the ‘auction’ but it currently looks to be around 4.5% on average (especially the 3-month ones).

  We plan to apply the bond ladder concept and buy these T-bills over the next few years on a rolling basis. As they are very short term, if rates drop we can change our strategy mid-plan so I think it also gives us a degree of flexibility too.

  Have we overlooked something obvious as it seems to fit our needs perfectly for the next couple of years? We are very hands-on on the platform so we don’t mind getting stuck into the action process (which looks straightforward).

  I’d be interested if you had any additional insight / comment on T-Bills being used for this or other strategies.

  Regards, Gilly

• Question 5
  Hi Pete, Roger,

  Thank you for the podcast, I always look fw to listening to it on my Wednesday commute.

  I'm trying to figure out when it makes sense to accept paying more income tax versus increasing my pension contributions? My total compensation this tax year is estimated to be £125k meaning I will lose all of my personal allowance with an effective 60% marginal tax rate on the last £25k of my earnings. Part of my compensation is made up of RSUs and very predictable quarterly bonuses. My base salary is approx £85,000.Last year, my total compensation was £105k, with a smaller base salary. My pension contributions kept my taxable income below £100k.

  I do not have any children, so the loss of funded childcare is not a concern. I've been contributing 15% for the last 5 or 6 years, starting when I was earning about half what I earn now. I chose that percentage to bring earnings under the 40% threshold at one point. At the start of this tax year, I increased my pension contributions to 20% because my income increased and I had no immediate need for the extra money. My employer only matches up to 5%.

  I am in my mid 30s and have roughly £140,000 split between my SIPP and my current workplace pension. Both invested in 100% equities in a global fund.

  I am considering increasing my salary sacrifice from 20% to around 30%, to keep my taxable income below 100k to avoid the loss of personal allowance. I'm hesitant because, playing around with the compound interest calculator, starting with a £140,000 balance, contributing £1,700 per month (20% salary sacrifice), and assuming a 7.5% return (which may be slightly optimistic), I would end up with a pension pot of about £1.5 million at age 55. Which might be too much.

  I have ~£80k in my stocks and shares isa, also in global equities and I'm on track contribute 20k this tax year.  I own a flat with a mortgage, fixed at less than 2% for a couple more years with no interest in over paying.

  I'm worried I might end up with too much money left when I (eventually!) die, I have no kids and I am not interested in leaving a legacy.

  Shall I just accept the tax bill and increase my lifestyle today given I'm already saving enough that I know I will be comfortable later in life.

  I read die with zero a year or so ago, and it resonated with me a lot. What else is there to consider?

  Thank you, Mark.

• Question 6
  Dear Pete & Roger,

  I have one question on my financial planning.

  This year I had received extra bonus which lead to my salary at the end of tax year of £123k.

  I have contributed £17k to my pension using employer contributions but remaining £6k is through my company stock which was vested and I got £3.1k income after paying 47% tax.

  My question is as my salary threshold for this tax year crossed £100k, for this additional £6k do I need to submit self assessment and if yes, do I need to declare this £6k full stock amount completely as a separate income even though I already paid tax on it, does this mean I am also liable to pay capital gains tax on this £3.1k?

  I look forward to hearing from you what are my options to submit to HMRC through my self assessment so I can calculate if I owe any additional tax or HMRC will refund me some money due to £17k pension contributions?

  Many thanks, Vai

Send Us Your Listener Question

We’re going to spin out the listener questions into a separate Q&A show which we’ll drop into the feed every 2-3 weeks or so. These will be in addition to the main feed, most likely, but they’re easier for us to produce because they require less writing! Send your questions to hello@meaningfulmoney.tv Subject line: Podcast Question

---

The post Listener Questions – Episode 26 appeared first on Meaningful Money – Making sense of Money with Pete Matthew | Financial FAQ.

* This article was originally published here

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Listener Questions – Episode 28

Questions Asked

• Question 1
  Hello Pete & Rog

  I like to think of you as a couple of great mates offering me life changing information in a relaxed & entertaining fashion.
  When putting income protection in place, how do people/planners typically frame a target?

  Just replacing essential income? Or also replacing large contribution to pensions (including lost employer contributions) and S&S ISAs for long term wealth building?

  Thoughts on how I should frame these questions are very welcome!
  Many thanks, Duncan

   

• Question 2
  Dear Pete and Roger,

  Firstly thank you so much for all the free resources you put out there to try and help make the world more financially literate and astute. I myself started a journey of self awareness a few years ago thanks in no small part to your content.

  I have a question about pension recycling and what is allowable. I've read the rules on the criteria, all of which I think have to be met in order to fall foul of the rules, but am not clear on my wife and my specific situation.

  My wife and I met later in life and have been married for 13 years in a happy and stable relationship. I've just turned 50 but my wife is eight years older. In summary when we came together I brought earning potential but no assets (previous divorce wiped me out!) and she brought assets (house, SIPP pension built up, inheritance) but, through mutual agreement, no earning potential. Fortunately we have a healthy open discussion about money.

  I am an additional rate tax payer and use my £60,000 limit of pension contributions every year. We have paid off our mortgage and we have always lived using my salary for all our outgoings and live within our means with little consumer debt. I max out my ISA allowance too. Essentially I have no more tax breaks we could take advantage of by her giving me money, save for CGT or dividend allowances.

  After thinking about her tax implications I have encouraged my wife in the last couple of years to start to withdraw from her DC pension the maximum amount that would result in no income tax being paid (currently £16,760 of which 25% is tax free). Since we don't need the money for living expenses she tops it up with her savings to £20K and puts it in a S&S ISA so really is just moving investments from a less flexible tax free wrapper to a more flexible one while she pays no income tax. We will do this for the next ten years until she reaches state pension age and I retire myself. She'll still have a sizeable SIPP at this point as this strategy won't deplete all her pension.

  She still has significant other assets that attract tax as she earns more interest than the starter rate for savings allows tax free. She's fully paid up all her NI through additional contributions, has the maximum in premium bonds and I also have started to get her to put £2,880 into a new SIPP in her name every year to get 20% tax relief.

  My question (sorry it took so long to get here) is that now she is drawing an income of sorts from her DC pension could she recycle more than £2,880 into a SIPP? Clearly it fails on the intention front, on the >30% of the tax free cash and the fact she has actually taken tax free cash. But she's not taking in excess of £7,500 of tax free cash in a 12 month period (another one of the criteria) and I'm also not sure if her taxable DC withdrawals (on which she pays no income tax as <£12,570) count as relevant earnings as to how much she could add to a SIPP. Basically could she pay say  £5,000 or £10,000 a year into a SIPP (gross as she has triggered MPAA), gain 20% tax relief on her net contribution and not be falling foul of pension recycling rules? The reality of the situation that the real source of all the contributions is significant savings she has that are now attracting tax and we don't need any of it, nor its growth, for at least ten years. Any advice gratefully received, Tom  

• Question 3
  Dear Pete and the lovely Roger Weeks,

  Hope you are well. Thanks for all the amazing work you are doing to support people to have a better understanding of their personal finances. I have recently bought and read your new book, it’s fantastic. Plus, I have bought several copies of your first book and given them to family and friends as presents. I love a practical gift haha; not sure the recipients feel the same but it’s a gift that will keep giving if they follow your advice.

  Anyway, my question is related to a defined benefits pension.

  Background info, I am 49 (50 in a few weeks) and my husband is 64.

  From 1996 to 2000 I built up benefits within Merseyside Local Government Pension Scheme. I transferred this along with a DC pension from the voluntary sector (at the time I heard this was a good idea, I literally didn’t have a clue about pensions but can’t change that decision now) into my Wiltshire LGPS, which I was in from 2006 until mid 2012.

  After listening to your podcast on the Bill Perkins book Die With Zero, I started to run the numbers on accessing my DB pension scheme at 55, as this would enable me to pay off mortgage earlier and maybe work part time. This is a big consideration for me as my husband is almost 15 years older than me and I want to be able to spend some quality retirement/semi-retirement years with him whilst he is still in his ‘go go years’.

  Wiltshire LGPS has a good portal and all the information states my normal retirement date is July 2040 (65). I know the government is increasing the normal pension retirement age for works pensions in 2028 to 57 years old. However, I recently read this on the LGPS website and wondered if I would have protective rights and would still be able to access my pension at 55.

  https://www.lgpsmember.org/your-pension/planning/taking-your-pension/
  Taking your deferred pension
  If you left the LGPS on or after 1 April 1998
  Your deferred benefits are payable in full from your Normal Pension Age in the LGPS. You do not have to take your deferred benefits at your Normal Pension Age, you can take them at any time between age 55 and 75. If you were a member of the Scheme before and after 1 April 2014, the benefits built up before 1 April 2014 will have a protected Normal Pension Age – usually age 65.
  The Government has announced the earliest age that you can take your deferred pension will increase from age 55 to 57 from 6 April 2028. This will not apply if you apply for your pension early because of your ill health.

  I have emailed Wiltshire LGPS and got a one liner back saying I can’t access my pensions until 57. The limited response makes me wonder if they had considered the dates, I built up my benefits; 1996 to 2012. Or am I just clutching at straws hoping I will have protected rights when I do not.

  I would really appreciate your opinion on this matter, as I am only 5 years and 6 weeks (clinging on to my 40’s LOL), away from 55 and this is not a long time in the world of personal finances to try to get my ducks in a row.

  Thank you sooooo much Liza

• Question 4
  Hello Pete and Roger

  I’ve been a listener for almost 2 years and love the show. It helps that you both make it entertaining and I laugh along whilst I’m walking the dog.

  I’m single, 49 years young and aggressively investing so I can retire early in approximately 5 or 6 years time. I earn £120Kpa, annual bonus of £24K and quarterly bonuses possible but these are erratic. They can vary so I would roughly estimate they could be an additional £20k to £50k per annum.

  I salary sacrifice £60K into my pension in a global index tracker by paying 24% of my monthly salary and 100% of any bonus received. Once I max out the £60K I can stop payments for the remainder of the financial year. I also pay £20k into a stocks and shares ISA effectively maxing both tax advantaged accounts out. I also add £2880 into each of my 2 children’s pensions per annum and some into their JISA’s.

  My question is, how am I best avoiding the 60% tax trap whilst also wanting to make the best use of tax advantaged accounts? I honestly wish everyone had a coup regarding this tax trap. It feels so unfair! First world problems I know.

  I have a fear of my annual earnings falling at £125K after my pension contributions effectively making me pay 60% tax on £25K.

  Any advice would be helpful and appreciated.

  Thank you for the advice and entertainment!
  Hope

• Question 5
  Hi Pete & Roger,

  Love the podcast and have been a frequent listener for a number of years now. I'm in my early 30's and feel that as a family (Wife and 2 kids) we are in a great position to build wealth and a good future retirement due to the knowledge you have shared.

  I have a question with regards to Stocks & Shares ISA's and when is deemed a suitable reason to actually use the money invested in them.

  We have been investing monthly into global index funds as part of ISAs for a few years now without a real planned end goal aside from it being money that we know we didn't need in the immediate future and likely money that would allow us the option of an earlier retirement in the future should we choose. These ISAs are currently sitting at around £25k.

  We budget well, have cash savings for our short term goals plus an emergency fund in place so mentally the money in the Stocks & Shares ISA isn't really allocated.

  We are currently looking at extending our property and are weighing up how best to fund this. The work will cost around £50k and have equity in the house which means we could get this funded via an additional mortgage loan. The other option would be to get a smaller loan and cash in our Stocks & Shares ISA however mentally we are finding it difficult to do this as we see them as long term savings rather than something for now.

  Does it make sense in your opinion to use the money in the ISAs for something like this or would it be best to keep building them as we have been doing for a future early retirement as that is the primary reason I see mentioned as Stocks & Shares ISA funds eventually being used for.

  Thanks, Adam

• Question 6
  Hi, New to the site and finding it a superb resource. My question is about DB stepped pensions.

  I had to stop work due to ill health and am due to take a small DB pension @65. The pension has a stepped option which makes sense for me because my analysis shows taking the stepped option pays the most over 12 years which is probably all I have got.

  The figures:
  Basic pension £5000 p/a or Stepped pension £12000 for 1 year until state pension then £3600 p/a.
  However I have been told this increases my pension input.

  I have been told HMRC assume this 112k is a single contribution in a tax year and as it is a discretionary award it will be tested against the Annual Allowance.

  I have no other income and have been unable to make pension contributions that would allow tax relief (other than the 2.88/3.6k which I have done).

  It seems to me if I took the stepped pension I would have to pay a 25% tax charge on the HMRC perceived £112k pension input. i.e. £28k (112k x 25%) in a pension tax charge, double the first years stepped pension!

  This seems crazy, can you shed any light if this is correct?

  Regards, Ray

Send Us Your Listener Question

We’re going to spin out the listener questions into a separate Q&A show which we’ll drop into the feed every 2-3 weeks or so. These will be in addition to the main feed, most likely, but they’re easier for us to produce because they require less writing! Send your questions to hello@meaningfulmoney.tv Subject line: Podcast Question

---

The post Listener Questions – Episode 28 appeared first on Meaningful Money – Making sense of Money with Pete Matthew | Financial FAQ.

* This article was originally published here

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