Pete Matthew discusses and explains all aspects of your personal finances in simple, everyday language. Personal finance, investing, insurance, pensions and getting financial advice can all seem daunting, but with the right knowledge and easy-to-follow action steps, Pete will help you to get your money matters in order.
Each show is in two segments: Firstly, everything you need to KNOW, and secondly, everything you need to DO to move forward on the subject of that episode.
This podcast will appeal to listeners of MoneyBox Live, Wake Up To Money, Listen to Lucy, Which? Money and The Property Podcast.
To leave feedback or ask a question, go to http://meaningfulmoney.tv/askpete
Archived episodes can be found at http://meaningfulmoney.tv/mmpodcast
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I'm curious if you have advice, best practice or tools to advise people who have a reasonable rental property portfolio on how to plan for retirement?
I am 55, have taken 50k tax free cash, and 13k a year drawdown, approx 40k left. I have 11 rental properties, but I am still remortgaging and buying more properties. Currently have about 450k available to reinvest into a few more properties, and then probably stop buying.
I'm really struggling to understand how much I can/should have available to spend each month, especially as I'm still reinvesting into properties. I'm sure I should be spending way more than I am, but can't work out how best to put a retirement plan together to show how much I truly afford to spend each month.
Love your content, and thanks for any advice you may be able to give.
Thanks, Paul
09:49 Question 2
Hi Pete and Rog.
Big fan of the podcast, keep up the good work. I am looking at ways to stay under 100k income each year to remain eligible for childcare benefits. I know if I were to make AVC into my work pension this would help to remain below that figure. I would prefer to put this money into a SIPP. My question is if I got paid the money and deposited it into a SIPP instead of my work pension will this reduce my income tax and prevent me from going over 100k and losing childcare benefits.
Kind regards, Joshua
12:33 Question 3
Hello Pete and Roger,
Firstly, thank you so much for such an informative podcast. I don't think I listen to a single episode without taking away something valuable!
My question relates to what I should do to with money as I accumulate it for the next financial year's ISA and SIPP allowance.
For context- I am 39, an NHS doctor with an NHS pension, have a paid off mortgage and have started making SIPP contributions to bring my adjusted net income below the 60% tax threshold. I am in the privileged position to be able to contribute maximum S&S ISA contributions at the beginning of each tax year and already have filled premium bonds allowance as my emergency fund.
Should I put my accumulating savings in a high interest savings account until April, or am I missing out on growth each year and should I be using a GIA with a bed and ISA approach? I appreciate there may be tax on savings interest above £500 or CGT on anything over £3k gains.
I just don't want to be missing out on the best approach for the next 20+ years as I hopefully continue to max out ISA and pension contributions.
Thank you so much in advance and keep up the fantastic work!
Paddy
16:36 Question 4
Dear Pete and Rodge,
I am relatively young (36) and have started listening to your podcast relatively recently (in the last year). What I like about it best is the calming relaxed attitude that money matters are discussed in and the comforting belief that life is more important than money I think shines through.
Comparison is the thief of joy I know but I find it hard to situate myself in relation to where I 'should' be financially. I stayed at university a long time (10years) and so always perceived of myself as 'in debt' and living to the brink of my means, I didn't have a credit card but I would spent all my money and save nothing. When I did eventually get a job it didn't pay much and again it was paycheck to paycheck for many years.
Then came three big changes almost at once. First me and my wife had a baby daughter come along, next the company I worked for went bust and third I found your podcast!
Something about the mix of these three made me sit up, take notice and want to engage with my finances where previously my head had been in the sand. I did very much feel like I was way behind the running. I managed to find a job which paid almost a third as much take home pay again and decided to set up savings for my daughter, set up an emergency fund, increase pensions contributions, open a stocks and shares ISA, all of the good stuff that you guys continually discuss.
However, I still am very much of the opinion that I am way behind the game and starting late which is a shame seeing as time is such a valuable component in investing. My question to you guys is, were you in my position, where would be the first places you would look to educate yourselves on the right things to do next? I feel like I don't know what I don't know and things continually surprise me (for instance I didn't realise that having a car on finance was considered bad debt until the other day). I have this constant nagging doubt that I will be missing something because I haven't started from the beginning. I did consider going back to the start of the podcast when I found it, but Rodge wasn't even around in the first few so I didn't enjoy it as much and also felt like maybe some advice would have gone out of date? Is there a key place for me to start, non-negotiable sources I have to get to grips with in the first place that you can direct me to? What would you do?
Very keen to learn your thoughts and hugely appreciative of all your efforts!
Kind regards, Dan
24:16 Question 5
Hello Pete & Roger
I've gained Incalculable value from listening to you so keep up the amazing work!
I have a DB-DC hybrid scheme and at my target retirement age (64) my projections say I'll have £33K p.a DB income + £345K DC pot. This would give me ~ £86K TFC allowance at the pot.
My plan has been not to take any TFC on the DC pot upfront and to use regular UFPLS withdrawals to reduce income tax over the long term.
However, as this is a hybrid scheme, if I take both DB and DC components at the same time I can keep the DB at £33K p.a. and take £220K TFC upfront.
This has made me question my slow TFC strategy as I can realise far more taking it upfront by leveraging the DB 'value' but only at that point in time.
My thoughts are to then find a way to get this £220K TFC into S&S ISAs where they would be invested in the same way as in my DC pension.
This would allow me to reduce income tax massively over my lifetime. This seems too good to be true! Is it?
Problem will be finding a home for such large amounts of cash
Options
Max mine and wifes ISA allowances (£40K p.a)
£10K p.a. contribution to mine and wifes DC pots (MPAA limited) (£20K p.a.)
Any other options?
Thanks, Duncan
28:46 Question 6
Greetings Pete and Roger,
Speaking as a fellow Gen X gruff Northerner (…Pete!), I'd just like to express my huge gratitude to you both for rescuing me from years of financial ineptitude, misdirection and investing ignorance.
I can only blame myself, but losing a parent in my late teens, then late 20s, and subsequently finding myself on the non-receiving end of 'Sideways disinheritance' (Dad remarried / mirrored will / sold our family home to pay second wife's debts….) didn't help with establishing good long-term financial habits.
Thankfully, the financial clouds parted 21(ish) months ago when I discovered your excellent Youtube videos, first book, and podcast back catalogue, including a tour de force in 'tough love' re: DC pension catch up. Since then, I've been desperately trying to catch up, with a rough target of getting a DC pot to support an UFPLS annual 3.5 - 4% withdrawal of, the magic, £16,760.
Starting from a very low base, I've been using direct payments from my own Limited Company into a Vanguard SIPP, approximately £3k+ per month (yes, I'm living on lentils..) combined with transferring personal contributions of £10k from money sat in a S&S ISA, thereby getting tax relief up to my small wage of £12.5k. Using this mechanism, I've placed £48k into the pension (mindful of the £60k limit – tax relief is added on the 10k personal, but 19% corp. tax is saved on the employer contributions) in the last financial year, but won't be able to sustain this forever.
My question is as follows – provided I still make a net profit after the Employer pension contributions, am I correct in assuming I'm ok re: the 'Wholly and exclusively' HMRC test? The employer pension payments dwarf the remaining net profit, from which I then take a small amount of dividends, and a smaller corporation tax payment is made at 19%.
Also, provided I don't transgress the personal earnings limit (£12,570 for me), is that ok also re: also putting in from the employee side?
Am I missing anything at all? E.g. could you use the 'carry-forward rule' to top up previous years with employer contributions from the Limited company? I'm assuming the answer is 'no', as dividends don't count as earnings / they don't exceed £60k, but thought I'd ask anyway!
Apologies for the 'War and Peace' length question, and thanks again.
Stay intentional, Bill PS: Really like the 'Catching up' section of your, also excellent, second book Pete.
Listener Questions Episode 29 - Retire Soon
Épisode 593
mercredi 15 octobre 2025 • Durée 42:53
In today's Q&A episode, we're answering a bunch of questions from those on the threshold of retirement, getting into the nitty-gritty of age-difference planning, DB scheme reductions and all sorts!
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
07:07 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
Listener Questions Episode 28
Épisode 592
mercredi 8 octobre 2025 • Durée 41:55
It's another mixed-bag of questions this week, covering income protection, the local government pension scheme, avoiding the 60% tax trap and much more besides!
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
11:27 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.
Listener Questions - Episode 27
Épisode 591
mercredi 24 septembre 2025 • Durée 42:35
This week, we have questions about planning property purchases together as a soon-to-be-married couple, investing an inheritance, balancing an age gap between spouses and much more besides!
I've been listening to the show since 2020, and I absolutely love it. It keeps me grounded in a generation that frivolously spends for the sake of Instagram. Thank you for offering such helpful advice for free.
I'm in my early 30s, I have no bad debt, regularly contribute to my workplace pension, and have been saving for a 2–3 bedroom house over the past three years. In 2 months I'll have the 10% deposit (the minimum I want to put down) saved in my LISA. I'm currently renting a really affordable flat with a great landlord.
I started saving when I was single, but I met my lovely boyfriend almost two years ago. We're serious and are planning to get married and move in together in the next 12 to 18 months.
Here's my question: Should I delay buying a house for a year or so until I'm married, or should I buy now and plan to keep it for at least five years—even if, during that time, my boyfriend and I buy a different house and I end up renting this one out?
Many thanks, Leah
07:50 Question 2
Love the Podcast guys
My Question is about what to do with an unexpected inheritance (likely to be around £150,000 from the sale of my late parents' house) a year before remortgaging. For context; both my Wife and I have recently become Additional Rate tax payers with a defined benefit NHS pension. We can max out ISA contributions for a few years (including LISA for the next 6yrs) but with no personal saving allowance and only being able to effectively get savings rates of <3% in GIAs we are drawn to an Offset mortgage (current mortgage 21yrs to run ~£330k remaining LTV 40%) but these don't seem to be popular and don't get mentioned much. I estimate within 5yrs we'd be paying 0% interest and could start drawing down from the offset savings pot. This seems like a hedge against uncertainty (and allows us access to the funds cf to paying off the mortgage) and would be effectively paying us whatever the mortgage rate would be (>4%). Would welcome your thoughts on this
Listener Questions - Episode 26
Épisode 590
mercredi 17 septembre 2025 • Durée 32:44
Some great questions this week about planning for the loss of the personal allowance, investing in GIAs, persuading an aunt to write a will, and much more besides!
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 300k in VCT, 400k in Stocks and share ISA. I also have a healthy DC pension of roughly 700k and DB pension worth around 10k 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 20k in ISA and 50 k in VCT(as unable to go over 10k 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 80k in mortgage and I have the ability to clear it, should I invest that 80k in VCT on top of my regular VCT allocation of 50k 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.
06:25 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
Listener Questions - Episode 25
Épisode 589
mercredi 10 septembre 2025 • Durée 32:59
It's another packed and mixed bag of questions here on Meaningful Money. Today we deal with Seafarer's pension contributions, tax-free cash on DB pension schemes and annual allowance calculations. Plus we give some thought to the evolution of the show…
Many thanks for all that you do. I am a long time podcast listener and happy client of Jacksons.
I am currently playing catch up on the current series and have a couple of thoughts on points raised in two episodes.
In episode 3 - there was a question on pensions and the answer included the point that when making contributions to a scheme they are generally paid net and the scheme reclaims basic rate tax from HMRC. Just to say that this is not always the case. My employer recently moved its scheme to an Aviva master trust. I wanted to make a lump sum co tribute. Ahead of the tax year end. However I found that the scheme could only accept gross contributions and I would have to reclaim the tax myself. As it was quite a decent sum and I preferred not to wait for the tax I made the contribution into a different scheme.
In episode 7 you had a question about moving abroad. The point we made that you can't continue to contribute to UK tax favoured schemes when abroad which is correct. However there is another watch out in that ISAs in particular may be subject to income tax in the new country of residence - as they were when j lived in the US. It is therefore critical to get advice so you can make the right choices when moving abroad
All the best, Richard
05:06 Question 2
I have been listening to your podcast for the last 5 or 6 months. Like so many of your listeners, I have spent many hours catching up on your early episodes, no longer do I watch movies or drama series or wildlife programmes. I listen to Pete. Your advice has been priceless. However, I do have a question that I seemingly cannot find the answer to. Perhaps, I already know the answer, but am putting my head in the sand because I do not like it.
Listener Questions - Episode 24
Épisode 588
mercredi 3 septembre 2025 • Durée 42:55
This week, Pete is rested after his holiday and may even be more tanned than Roger, for once! We answer a mixed bag of questions ranging from financial planning if you're on benefits to tax-free cash recycling and lots besides!
Hi there! I'm one of the very many people who look set to lose disability benefits (PIP and ESA) at the end of next year. I was disabled following an industrial injury 15 years ago and have a lifetime award of Industrial Injuries Disablement Benefit assessed as 70% disabled which currently brings £155/week. It's definitely not enough to live on let alone pay the additional costs of being disabled. (there's no chance of recovery enough to work as I can't access healthcare but that's a long story) I am 50 and conventional life plans involve maintaining saving/investing through midlife on the expectation of reduced income on retirement. But I'm now facing acute poverty for 15 years until I hit the relative luxury of state pension. (Assuming I can find the cash to buy the missing NI years!) I have some assets that are pretty badly managed on account of my being unwell, and in particular a second flat which has £7000pa post-grenfell service charges and so can neither be mortgaged, sold nor rented out until those repairs finally complete-if they ever do! I think I can afford to cover costs from cash savings/investments for maybe 5 years. But after that... Can you speak to the general point of financial planning for people with unconventional life trajectories, particularly disability, and especially what sort of financial information/support resources are available? I'm unsure if you've any specific suggestions for my situation to get me through a decade of sub-living income/cashable assets against potentially sustained high costs? Obvs I love what I can manage to get from the pod and was particularly interested when you've spoken of financial coaching. Cheers! Sam
10:06 Question 2
Hi Pete & Roger
Listener Questions Episode 23 - Inheritance Tax
Épisode 587
mercredi 27 août 2025 • Durée 40:37
This week we have a bunch of questions on the subject of inheritance tax, trusts and estate planning. Fair to say, these stretched us quite a bit and we had some surprises as we researched the answers!
Love the podcast as it has loads of useful information and you make it very simple (as it can be) and clear. Love how you bounce off each other and make it easy to listen to. My question is - I have a reasonably large SIPP that will if added to my house value push me well over the 1 million level. I see a lot of press articles about how it would be good to start reducing estates that are in this position to mitigate possible IHT.
My stance is that I am only 60 married and feel that - 1. It's too early to know what the new rules will look like 2. If I die before 75 and my SIPP goes to my wife she can pull whatever out tax free (currently) and gift some IHT free, as long as she lasts 7 years. 3. If my wife dies first I can do some gifting at that stage to reduce estate / possible house downsize to give large gift again with the 7 year IHT rule.
Why do anything at this stage that would incur a tax charge? Your thoughts on this approach would be very much appreciated.
Kind regards, Jules
07:08 Question 2
Gents,
Outstanding podcast which I have listened to for years from overseas in the Middle East. The thing I like most is your consistent message about simplicity, being intentional and using low cost funds. Every season reinforces financial education and I never tire of listening to you. Thank you.
I have a general question that I thought might possibly apply to other listeners regarding income drawdown ie should I use my pension pot or ISA money first?
Listener Questions Episode 22: Financial Planning for Children
Épisode 586
mercredi 20 août 2025 • Durée 44:49
This week, Pete and Roger answer your questions about investing and planning for children, including trusts, life insurance and how to keep tax low.
A friend recommended your podcast in mid-Dec and have already listened to the Financial Advice Process and Combining Pensions episodes (which were both 100% relevant) and working my way through the Q&A episodes.
I have a question about share trading accounts for my children (14, 13 and 11). They are in a fortunate position where they all have JISA's (held at Hargreaves Lansdown) which I contribute to (max amount) and manage, without their knowledge. My wife and I also hold ISA's at HL as well, which we max out.
I was taught to be a saver as a child, not an investor, and this is something I have learnt more about as I get older. Your recent Q&A podcasts mentioned a couple of times about looking forward and not back - there is nothing I can do about my historic saving, and wish this was invested rather than saved!! However, my children are a lot more savvy about investing, than I ever was at their age. The two oldest children play a game called Business Empire and are multi trillionaires, I'd like to teach them the benefits of investing in the real world, but that it might not be quite as easy as Business Empire!
We have discussed setting up a separate trading accounts for the children, putting some money in (poss £3k / £5k) and the children then managing the investment decisions. I want to keep the accounts separate from their JISA, so they don't get visibility of their JISA. Preferably I own the account and login, and the children can then ask me the value or ask me to execute trades on their behalf, which they request. They will make all the investment decisions. I recognise that they could turn £3k / £5k into zero quite quickly! Let's hope that Business Empire teaches them something.
The only way I have found to be able to set up trading accounts for the children is that I set up a Bear Trust for the children, which seems overly complicated for what I'm trying to achieve. Or I create an account at AJ Bell for one of the children in my name and find 2 other companies to set up trading accounts for the other children in my name. Or I create a SIPP for the children.
Listener Questions, Episode 21
Épisode 585
mercredi 6 août 2025 • Durée 36:14
This week, we're covering redundancy sacrifice into a pension, cash ISA allowance reductions, evening up finances between spouses and much more - it's another MM Q&A!
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).
11:17 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
16:33 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
27:42 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
33:47 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
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
15:56 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
21:58 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.
27:47 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
33:55 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
Gareth + Helen
12:27 Question 3
Hi Pete and Roger,
I've been following your channel for over a year now, and I'm really grateful for the practical insights—wish I'd discovered you years ago! Your guidance has helped me make some much-needed improvements to my financial planning.
My question is: Could you provide any guidance for couples with an age gap on balancing pension contributions and withdrawals, as well as utilising ISAs, to effectively phase-in their retirements together? My Civil Partner and I have an 8-year age gap, which didn't matter in our 20s and 30s, but 20 years later, with some middle-aged aches and pains! We want to align our plans better to enjoy more time together, rather than one of us retiring much later or sooner than the other.
We underutilised pensions, unfortunately, but hold equity in two properties and decent cash savings. We are now mortgage free and plan to boost our pensions. Within 10 years, we might buy a small flat in Malaysia (his home country) and downsize our UK home from Manchester to Scotland (my 'home country'!). We hope to split time between the UK and Malaysia or possibly settle over there, drawn by the affordable living and our fondness for the country.
Best wishes, James
18:53 Question 4
Love the show, you guys accompany me on walks when I have a break from work. I have two questions but this may be a bit much so I have broken them down
I have possibly an easy question for you but one that I can't find the answer to online. My wife is a teacher with a final salary pension estimate of £23.5k p/a. We're unsure whether or not this will provide for a comfortable retirement, so we are considering making additional savings for retirement.
My wife is a basic rate taxpayer and currently 39 so my question is whether it is better to invest the money in a lifetime ISA and effectively get the tax relief through government top up, as when she comes to retirement the additional income that would come from the LISA would be tax-free and not subject to income tax, or invest in a SIPP but this would incur income tax when accessed?
To me it seems a no brainer as the tax benefit on the way in is effectively the same but there is no tax burden on the way out of LISA versus a pension am I being dim or is this the right way to go?
I am a higher rate taxpayer so I know that to get the most tax efficiency it should go in my pension but there's a possibility I would be a higher rate taxpayer in retirement too so not sure it's sensible to have it all in my name (also mindful of lifetime allowance being reinstated)
Other question is more complicated and around planning for me. I'm 38, a higher rate TP recently earning £90k p/a, I currently have c.£215k in a few employer pensions. My current employer pension scheme is based on qualifying earnings only. My employer pays 3% (so <1.5% of my salary ) and I pay 25% (c 11%), I've tried to use some online pension calculators and they vary wildly (from 600k - £1.9m) so I don't really have any idea what I'm likely to be retiring with.
I live a fairly modest lifestyle with my wife and two primary school aged kids with 1 week holiday p/a, I'm worried that I might be scrimping now and over saving rather than enjoying my time with my kids by having more disposable income. Fully understand that you can't give advice now but is there any fairly standard target for the comfortable pension age and reliable calc to figure out what I should do.
Now that inheritance tax is likely to apply to pensions the incentive doesn't seem to be there for me to save as hard, I'm slightly lost. Many thanks, David
30:28 Question 5
Hi Pete, Roger and team, I've been enjoying the question and answer sessions enormously. I have a question regarding pension recycling as the rules are not very clear to me. I am a higher rate tax payer and pay into my workplace pension to keep my taxable income below 100k. I have built up a pot of around £260k in the DC part of my pension. I also have a DB part to my pension which should provide around £34k when I retire. My wife stays at home and therefore doesn't use her personal allowance. Can I gift her my tax free cash so that she can buy a pension product in her name as she gave up the opportunity to grow her own pension by looking after our family. Am I right in thinking this could be a good idea when we retire as it could help us make use of both personal allowances with the added benefit of keeping my income within the basic rate tax bracket? Are there any potential problems with this situation that I haven't considered? Regards to you both Chris
33:21 Question 6
Hi Pete and Roger
Thanks for your informative and thought-provoking podcasts.
My late father's house was valued for IHT following his death last year at £975k and my sister and I are looking to sell it. Since the valuation, planning permission has been achieved for the development of the garage and the estate agent I've spoken to suggests that the property could now achieve £1.15m (either selling as one or separating into 2 lots ie the main house and the plot). Therefore there is likely to be a significant capital gain.
Currently the property is still owned by the estate. My understanding is that it would be more CGT efficient for the house to be transferred to my sister and I and then sold by us rather than being sold within the estate.
I understand transferring to us would allow us to utilise two sets of £3k CGT allowances and benefit from the 18% band available to individuals for the gains within the basic Income Tax band (and then 24% on the excess). Conversely, if the property was sold within the estate, I understand there would only be one £3k allowance available and the CGT rate is a flat 24%.
We are both unmarried so I don't think a Deed of Variation could help us utilise extra CGT allowances. Is the above thinking correct? Is there any downside to transferring ownership to my sister and I before selling? Are incurred costs such as architect fees CGT deductible in both cases? Does it make any difference from a CGT perspective if the house is sold as one or separated?
Keep up the great work! Thanks, Paul
10:43 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
15:50 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
22:55 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.
29:15 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
I know that the pension tax free lump sum is limited to £268,275 and I believe that this applies to the total taken from multiple pensions. I retired from the police in 2013 as a chief inspector. I took the maximum lump sum available at the time which was £206,000. I started a new job with the NHS and am paying into the NHS 2015 scheme. My projection on retirement from the NHS at age 67 suggests that I can expect a lump sum that combined with my police pension lump sum will take me well beyond £268,275.
I have seen some articles on line about lump sum protected allowances, but do not know if this is something I can access. Clearly, if all I can take from my NHS pension is £62,275 I will be paying 40% on a greater proportion of my pension in payment.
I suspect there may be others like me that maxed our their lump sum when first retiring and have gone on to further employment and have built up a tidy pension that has the potential to pay out another handsome lump sum.
Your advice is gratefully appreciated. Kind regards, John
11:25 Question 3
Hi Pete and Rog
Always a delight when a new episode comes out – I hope Rog is getting fairly compensated for his efforts!
I have been a keen listener for a number of years though until recently had lived outside of the UK, so while not everything was applicable (ISAs or pension contribution limits etc), the podcast has always been a valuable tool as I improve my personal finances
I have a question I was hoping you could clarify for me which relates to questions you answered on previous podcast Q&A.
Trying to keep it short but failing:
On a couple of occasions when talking about pensions there seems to be an assumption that your income will fall in retirement and so income tax on the way out of the pension is less relevant.
You recently had a question around moving money from a Lifetime ISA to a SIPP for a higher rate tax payer who was moving abroad and the calculation / discussion went something like:
Invested 4k, got the extra 1k but have to take a 25% penalty when taking the money out so down to 3.75k. Then when investing that back into a SIPP you get tax relief so back up to 4.7k or even 6.25 with higher rate relief.
Then the discussion seemed to suggest in such a case you might even be better off than if you had left it in the LISA. However, doesn't this depend on what your tax rate is on retirement / withdrawal?
Now on to my question:
Similarly, you had someone who had maxed out their annual pension contribution limit and they were trying to decide whether to pay more in to their pension (foregoing the tax relief) or to put it in to a GIA. This is a situation I find myself in and the Q&A discussion seemed to suggest it doesn't make much difference. There were comments that an ISA would be better than a GIA but assuming the ISA allowance was already fully used then there was little difference.
This confused me and brings me to my question. If I overpay into a pension and so get no tax relief, don't I still pay income tax when I withdraw the money from the pension? So for any contribution above the annual limit I receive no tax relief initially (ie I have effectively paid tax) but then future withdraws from a pension are taxable so I pay tax again when I retire. Is this the case or is there some way the pension knows what proportion of the pot received tax relief and what proportion didn't? If no such split exists then surely a GIA is a far better option where I will only pay CGT on any growth in the investment (or income tax on dividends). Imagine a situation where there is no growth or dividends then in a GIA I take the initial money back out with no tax to pay, in the pension I still pay income tax on the withdrawal.
What am I missing here?
Kind regards, Matt
17:02 Question 4
Hi - love the podcast and really enjoying the Q&A series! Keep up the great work!
I was hoping you can assist me. I have a pretty simple salary structure and lucky to earn annually (salary and bonus) around 190k.
I'm looking at what I can add to my pension and very aware of the 60k limit and also the 200k income threshold. Is it as a simple as if my only income stream is from employment, that by definition in the above scenario I'm below the £200k. Or am I missing anything else that feeds into this as a consideration?
Thanks, Steve
20:20 Question 5
Thank you Pete & Roger for an amazingly insightful informative podcast. This has given me a giant springboard to the next level of financial literacy.
My question is:
I am a seafarer and all of my income from it is subject to seafarers earnings deductions (SED). My annual salary is £79,000. How much can I pay into a SIPP claiming the full amount of tax relief given that all of my income is subjected to SED?
Thanks very much for everything you do.
Kind regards, Benjamin
24:00 Question 6
Absolutely love the podcast - always look forward to driving home on a Wednesday so I can listen to it.
I'm 47 and my husband is 55 and we have 2 fabulous children aged 13 & 11. I am an additional rate taxpayer and have a good DB pension for the future (NHS consultant). My husband did the tougher job of being a full time Dad so only has a small SIPP at present worth about £50,000 which we add £2880 to each year. I am hoping to retire early so we are building our Stocks & Shares ISAs each year to bridge the gaps between my retirement and state pension etc although we don't use the full allowance at present although may do in the future as my pay increases.
We just wanted advice about the best way to extract the money from my husbands SIPP. He works a few hours now making approximately £5000 per year so is a non-taxpayer (and all our emergency cash is in his name!). We had planned to start drawing down his pension in a few years once fully retired to try to get it all tax free before his state pension kicks in but we don't actually need the cash and thus it would be reinvested into his ISA.
Is there any reason not just to start that process now so we put the money in the ISA gradually over the next few years (bearing in mind that we may be able to fill our ISAs in the future)? Can we still top up with £2880 each year one this process has started?
Maybe this sounds like an obvious thing to do but just can't work out if its the correct path?
Thanks so much, Ciara Mulligan
30:10 Podcast and Video plans.
Loving the Q&A sessions. Even when topics aren't relevant to me it's still insightful to hear from other people and always educational to listen to your response.
I suspect the answer to my question is simple but have yet to see an answer to it anywhere online!
I have a cash ISA with T212 from 24/25 tax year and will have a new £20,000 to invest come April (cash ISA's are my preferred vehicle - long story!). Can I just add the new 20 to the existing ISA or do I need to take out a new one? And also, do I benefit from compound interest if I leave it all alone?
Regards Maxi
13:06 Question 3
Hello
I am loving the podcast and finding out about situations I would not have considered before listening. I don't know if you can help on this one, it's a bit of a tax question on CGT.
We are a couple both with dual citizenship (Aus/British) and are planning a sabbatical break from working in 2026 for a minimum of 3 months, but this may turn into years.
We have a house purchased in 2003 with no mortgage and want to know our CGT obligations if we were to be non residents when we sell our house? Also is this CGT obligation a tapering obligation like IHT when moving abroad?
Kind regards, Sam
19:42 Question 4
Hello gents,
Enjoying the podcast as always. Especially the Q&E episodes as I like to test myself to see if I would answer the questions the same as yourselves!
My question, I am 20 years old and have recently got my Level 4 diploma with the CISI, and now looking to take the next steps in becoming a planner myself. The obvious route is to stick with the CISI, competing their Level 6 Advanced Financial Planning then the Level 7 Case Study to become CFP. However, just because it's obvious doesn't mean it's right! I seen that the CII's set up is completely different, lots a smaller exams, with the outcome being Chartered (not CFP). Am I overthinking this or are there pros and cons for each exam board. Also what is the different between CFP and Chartered?
Many thanks, Lewis
27:28 Question 5
Hi Pete and Roger, Firstly, thanks for a great podcast - I've been listening for many years and often catch up with the latest episode whilst on the rowing machine at my local gym! I have a question regarding the pension recycling rules.
In Feb 2024, I initiated a DB pension, taking £108,000 lump sum and a yearly amount of £15800. This was to pay off my partners property that we are both about to move into mortgage free. My total contribution was £200k and the remainder of the balance was from my savings. I currently earn £80k salary and have additional rental income from two properties I own of approx 10k net per annum.
I am in the process of selling one of my properties and want to use the proceeds (after CG) to maximise my pension contributions in tax year 25/26. So in total it would be about £66K contributions (as I have carry over allowance from the past three years). Over the past 3 years my pension contributions on average have been approx. 35k per year. I'm likely to retire within the next 18 months hence wanting to maximise my contributions during this time.
However, my question is, would this higher pension contribution likely trigger the pension recycling rules because of the pension lump sum I took in 2024, even though that amount was used solely to pay off a property at the time? Many thanks and keep up the great work. Phil
37:05 Question 6
Hi Pete and Roger
Thank you both for all you do. What do you think about keeping an emergency fund in a money market fund, rather than cash?
Many thanks, Rob
My situation is slightly complicated as my personal allowance will be used up by a DB pension.
I will have a DB pension at age 55 (approx £30k) plus I have a DC pension pot plus an ISA. If I would like a retirement income (pre-tax) of say £60K (ie over the current 40% tax rate threshold), what is the most tax efficient way of drawing the income?
I'm aware that in future my pension will be liable to IHT so in essence could take a 40% hit on death.
Should I take all additional income from my ISA until that runs out or take money from the pension pot up to the 40% tax rate band (approx £50k) and use the ISA thereafter to save me paying 40% tax on any pension pot money?
Are there any online calculators that can help as I guess it's partly just maths?
Many thanks, Ian
13:48 Question 3
Dear Pete and Roger,
My mum passed away over a decade ago and since then my dad has met a new partner. They live together and own their own home, split 60% (my dad), 40% (his partner).
He has said a "trust" has been set up so that should one of them die, the other can live it for as long as they want before it is sold and the money passed to their children.
With some research, I think he might just mean a "declaration of trust" but I am unsure.
I just want to know if there is anything I should be aware in terms of inheritance tax to make sure his (and my mum's) residence nil rate bands are still in place, as I remember you saying on a previous episode of the podcast that if a house is left "in trust", it would wipe out the residents nil rate bands.
The house is valued at approximately £725k and my dad's assets (including his share of the house) would be about £850k.
Thanks for sharing all your knowledge, really enjoy the podcast. Steven
21:40 Question 4
Hello Pete & Roger
Listening to you both has completely turned my future retirement around! My trajectory is now very positive as I'm building a decent DC pot to supplement my DB pension several years before I qualify for state pension. That's not just great financial progress, it's the life enhancement of 4 additional years of retirement at a time when im most likely able to make the most of it! Complete game changer with some knowledge and commitment to build a better future.
Now, a query on the definition of income from the perspective of the gifts from surplus income exemption from IHT……..
Does regular (quarterly) UFPLS withdrawals count as income for these purposes? I know these gifts need to be from income-they can't be from capital withdrawals. However, when I take regular UFPLS withdrawals, am I taking capital withdrawals? I'm effectively selling down assets to get the UFPLS payments so really don't know if this is income or capital withdrawal for gifting purposes.
Keep up the fabulous work.
Thanks, Duncan
24:20 Question 5
Hi There Pete and Rodger,
Long time listener, first time caller - been listening to and recommending your podcast to friends, family and colleagues for some time now! Keep up the great work!
My question relates to Inheritance tax and is a question my mother has been wrestling with for some time.
Long story short, my parents emigrated to south Africa from Scotland in the 80's where I was born - sadly my father past away when I was an infant. My mother remarried a South African gent and we all then came back to the England on a business secondment that never ended. My mother and adoptive father then divorced - over 20 years ago now! (Maybe not so short!)
My mother has been getting her affairs in order (not due ill health - more my nagging after your fine education via the podcast). She discovered that due to the value of her house and savvy savings she may have an IHT issue. (I've told her to spend the lot!)
The question she has been trying to get a straight answer about is whether she would be eligible to transfer the unused portion of my late father's basic threshold to limit her IHT exposure.
Not sure this is in your wheelhouse given the complexities of foreign countries, remarriage etc. but hoped you might be able to point us in the right direction. She is hoping to get something in writing which solicitors seem to be reticent to do.
Thanks again for the sterling work and look forward to many more episodes in the future!
Kind regards, Craig Bell
31:18 Question 6
Hi there, thanks for a great podcast.
I am a 67 yr old single woman with no children. I have 2 DB pensions + state pension, on which I live comfortably and can afford holidays etc.
I have always been an investor and have £270k in stocks & shares ISAs. My house is worth £250k. As there are no direct descendants my estate will be liable for IHT under the new rules. Obviously I'd like to avoid that or reduce the amount payable, if possible.
I have nieces and nephews who are at that stage of life at which a financial helping hand would be a great benefit, so can I do that without falling foul of the taxman?
I do use the £3k gift tax allowance, but (ideally would like to give away £100 k). Is there a tax efficient way of doing that?
Thanks for your help. J Harvey
So the question is, where / how can I set up a trading account for children, so they can get experience of investing and making their own investment decisions.
Love the podcast, keep up the good work
Thanks, Stuart
10:00 Question 2
Hello Pete and Roger,
Really enjoying the podcast. The Q&A shows have been fantastic for hearing about other people's financial conundrums and thinking about how to apply those lessons in my own situation. I have some questions about children's savings that I hope will help others too.
For context, my wife and I have a 12 year old daughter and 8 year old son. My son has a severe learning disability meaning he is unlikely to ever be able to manage his finances independently. I get a good salary from full time employment and pay additional rate tax, while my wife stopped working several years ago to care full time for our son.
Question 1: Can you please interpret the rule: "if, in the tax year, the child gets more than £100 in interest from money given by a parent. The parent will have to pay tax on all the interest if it's above their own Personal Savings Allowance?
Both children get £60 a month paid into children's cash savings accounts since they were babies - half from us and half from grandparents. Last year, my daughter got £300 of interest. My hope/assumption is that the rule applies per parent. Otherwise, given my personal savings allowance is £0 I would potentially owe £135 of tax on my daughter's earnings having only contributed a quarter of the funds over 12 years.
We've now moved the bulk of her savings into a stocks and shares JISA to avoid any tax hassle, but this wouldn't be suitable for my son who will be unable to manage the account when he turns 18. Does it make a difference if the payments come from my wife's solo bank account vs our joint account?
Question 2: Related to the above, where do you start with financial planning for a child with learning disabilities? What are the big things we should consider? Will savings in my son's name affect his entitlement to the benefits and care he will need as an adult? Any advice on finding and vetting a good financial advisor with expertise in this area, as I appreciate specific personal circumstances will have a big effect here?
Thanks,
David, in Leeds
19:52 Question 3
Hi Pete and Roger
Thanks for all the content over the years, so glad I found your podcast in my late twenties so hopefully I can look back in years to come and thank you for helping set me on the right track financially.
My question is a little general in the sense that I don't know what I don't know, but I'm wondering what things I may need to do differently now that my wife and I have our first child on the way (we're both 30 y/o).
We currently save/invest each month in a mix of cash savings and a stocks and shares ISA, have a mortgage of which the payment is about to increase now our 5 year fix from 2020 is ending, and have decreasing life insurance (with critical illness cover). I mention these things specifically because they're the things I'm aware of that we may need to tweak when the baby arrives.
We'd like to start putting money aside for them to use when they're 18 for travelling or a house or whatever they want really, I've heard of junior ISA's, is there an advantage to using these over just keeping a separate pot in our own names? Are there any other child specific options for this purpose?
Do we also need to re-assess the life insurance when we have a child. It's currently set up to cover the mortgage should something happen to one of us, but with a child to think about I'd feel more comfortable knowing my wife wouldn't have the pressure of needing to work in the short-term alongside bringing up a child alone should anything happen to me (and vice-versa).
Are there any other child related things we ought to be thinking about financially speaking? Looking forward to hearing your thoughts and perhaps changes you made when you had children!
Liam
27:15 Question 4
Hi both, thanks for the great content and your dulcet tones.
Please can I ask two quick question?
Q1: I've paid £2880 into my child's (2y.o) Junior SIPP, grossed up to £3600 through tax relief. I am a higher rate tax payer, can I claim the extra 20% tax relief, even though it's not my private pension? If yes, is this just via my self assessment?
Q2: if this £2880 was transferred, via bank transfer, from my parent (I.e. grandparent of my child) to me, then to my child, can it count as gift from the grandparent straight to my child? Or does it count as 2 gifts, a gift from my parent to me, then another gift from me to my child, for IHT purposes.
Loving your work,
Best wishes, Phil
30:10 Question 5
Hello gents.
Firstly, a huge thank you for everything you (all!) do there at Meaningful Money. I'm a LONG time listener, and the help and support I've gleaned from this excellent podcast over the years has been invaluable! Keep up the great work!
My question:
As the parent of a disabled adult (18 years old), do you have any suggestions/recommendations for the things that we should be thinking about and putting in to place when legacy planning. My better half and I are married, with mirror Wills in place to leave to each other, or to both children equally in the event we both die (2nd child is currently 16). However, we are aware that should our disabled 18 year old inherit a pretty reasonable sized share of our estate, this would impact on the support and benefits that they have recently been awarded. This must be a fairly common situation, but we haven't been able to find much clear guidance, so we're hoping you can suggest what the best way(s) to deal with this situation might be so that we know where to look?
We did have a brief look in to trusts, but they seem a bit of a minefield, and we don't want to burden anyone else with what appears can become a sizable task to administer.
Just to also mention, we are hoping that we will be able to get LPA's in place for our disabled child (otherwise apply for deputyship, however LPA is the preference if possible as seems the much easier option…), however we're hoping to be able to manage until our youngest reaches 18, so that they can also be added as an Attorney(/Deputy), for longevity and diversification, rather than having to do it all again in a couple of years. Not sure how relevant that is, but added just in case…
Many thanks again.
Peter.
36:16 Question 6
Hello Pete and Roger,
My question for you is how best to invest a lump sum that you intend to drawn down over a period of time?
I will soon be in the fortunate position to be gifted a significant lump sum which I intend to use to pay school and university fees for the next 15 years that my children will be in full time education.
I could just keep it in cash and a draw it down over time but I would like to invest it to generate a higher return and hopefully still have some left over at the end.
How should I go about investing this money? I have a high risk tolerance but 100% equity doesn't seem sensible if I am drawing down regular amounts.
Also I am an additional rate taxpayer so should I be considering asking for the money to be gifted directly to my children in a bare trust rather than to me?
Keep up the fantastic work.
Best regards, George
Kind regards,
Ross
07:00 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
11:43 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
15:13 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
19:10 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.
23:43 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
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