Legal & General Share Discussion Threads

[spud] 05/2/2024 08:24

Set up for these very discussions:



spud

[jubberjim] 05/2/2024 07:46

Morning

Thought the weekend discussion was quite informative

Parts of it gave me food for thought although a lot of it made my brain hurt.(did'nt understand a lot) ? No matter

What I did take from it is that more and more investors are looking to buy trackers as opposed to individual shares due to the paucity current prevalent in the markets.

Don t see the situation improving in the near future so that is the direction I will be heading.

The insurance companies and the like have made a rod for their own back

Will be keeping a modest amount back to invest as and when but WHEN? is a moot point

Have a good week everyone

[cwa1] 05/2/2024 07:19

Morning All

As interesting as the discussion over the past couple of days was, the weekend's over now and it's back to the day job of discussing LGEN on here please :-)

Thanks

[ramellous] 05/2/2024 04:43

I’m wondering if some of you are missing a trick. I’m under state pension age but living of investments. I use ufpls from my sipp and I’ve been putting 3200 back in a year and getting 800 tax relief making 4000 back in the sipp annually. I take out 16880 this way I pay no tax but stil generate a p60 thus allowing the 3.2k contribution back in the sipp.

[pj84] 05/2/2024 00:30

Just to add to the above, you can take out a very large tax free amount from a pension depending on your circumstances, currently over £250k (£268kish) in one go from age 55 but if you then wanted to reinvest a significant part in a tax free wrapper at £20k a year, it would take several years (again depending on your circumstances and priorities, so if you wanted to buy a supercar you might not be bothered about an ISA) but like Warren Buffet, who whilst being one of the richest men in the world, he never liked the depreciation of buying a new car and has owned very few cars and always kept them for a long time and I won't be buying a supercar!

[roghart1] 04/2/2024 19:12

Enjoyed the recent posts whilst lurking in the shadows. Given me a few things to consider. Thank you.

[woodhawk] 04/2/2024 18:03

marktime,

The only reason I am no longer availing myself of the £720 p.a. is NOT that I don't want it, it is I think that my ISA option will be MORE lucrative over time once (future) taxation & charges (or not) are taken into account.

At the end of the day, however, each must make their own choice which they feel best suits their individual circumstances.

Excellent discussion!

[mcunliffe1] 04/2/2024 17:00

markt and all other - really good discussion on here - this weekend

And that's the key - the dull, winter weekends (when not walking the dogs to the pub) are ideal for discussions such as these.

Thanks all.

[marktime1231] 04/2/2024 16:27

Some good points well made. However, you need to refresh your thinking about taking the £720 from HMRC. You do not pay tax on that capital gain. You only pay tax on your pension if you draw down income above the £12,700 pa threshold (adjusted upwards for uncrystallised funds). Imagine leaving it on account, or further underpinning the ability of your pot to generate future drawdown income, if undrawn an accumulation alongside all other residual capital in your SIPP. Do not pass it up on the premise that there might be tax to pay at some point, or because it is not worth the effort. No-one is that rich. If you need to shell some out "tax-free" the local foodbank or CAB would value every penny.

And yes CWA we really do need to get back on topic which is the prospect of LGEN continuing to improve in to the reporting and big dividend season. 6 Mar counting down on punters screens.

[tuftymatt] 04/2/2024 15:33

I have an ISA and a SIPP but always make sure I max out my ISA as I do like the ability to be able to access it if necessary.

That said the tax relief via my SIPP at 40% is not to be sniffed at and as I can access that now in 3 years, should I need to, it makes sense to use it.

My personal view is whatever works for you / makes you feel comfortable and sleep easy at night is the right answer. It's the same debate in many ways as paying off your mortgage early or investing. Both have their pro's and con's but both are smart things to do.

Good luck all 👍🏻

[tornado12] 04/2/2024 15:29

I find the latest discussion on ISA vs SIPP interesting on this board. From My side I have still 5 yrs before I plan to retire and have both a company DC pension and my ISA investment which are a similar pot size. I pay over 45% tax and I also add AVCs to my pension to try and reduce the tax deduction at this level. So in my case makes sense to play both options and I am very lucky to afford it. I also have 2 frozen DB pensions and not sure yet whether to transfer or receive retirement income, but have these 5 yrs to think about it. What is important is the mindset to manage carefully your savings / investments and I see a lot of people here seem to do that pretty well 👍 GLA

[zac0_4] 04/2/2024 14:16

You don't need to pay a provider to manage a SIPP even when in drawdown. It's no different to managing an ISA.

Here's a real life example of the benefits of investing in a SIPP vs an ISA.

£2,880 put into an ISA annually over a 5 year period, investing in LGEN shares (I've assumed share price remains static) with dividends re-invested and a 5% dividend growth pa will provide you with a nett profit of £4,480 +31% at the end of the 5 year period.

The same scenario using a SIPP results in a nett profit (after tax) of £5,660 +39% return.

That's a 26% improvement over the ISA return! I'd advise anyone to at least look at the maths.

[woodhawk] 04/2/2024 13:00

"and you make more money via the pension route even after paying tax!"

But you also have to pay a provider to manage your SIPP and - possibly - your drawdown too. There is also the scenario where you pay in - and get relief - at basic rate but when you drawn down that could push your then income into higher tax bands (more so if your investments have done well).

I'll stick to my shares ISAs which I can manage myself at no cost apart from trading/stamp duty and no tax whatsoever.

[zac0_4] 04/2/2024 12:45

Just my views on a couple of interesting comments people have made –

“ . . . that's 40% gone in inheritance tax as things currently stand . . . “ inheritance tax is only levied on asset value over £1m (for couples assuming you own a property). Anything held in a pension sits outside your estate so is safe from inheritance tax

“ . . . So the issue is whether you’re ok with that or whether you’d rather have an ISA where you can invest in income shares and also draw cash . . . “ you can do exactly the same with a pension, assuming you’re 55+. There is no requirement to purchase an annuity and you make more money via the pension route even after paying tax!

[p0pper] 04/2/2024 11:31

chief, as with all gov and council rules and regs, once was talking to a planning officer and he said that his book of rules is written so loosely and is so complicated that it could be read and interpreted in many different ways,

[netcurtains] 04/2/2024 11:18

chiefbrody: You can write simple laws but the lawyers will soon make it complex.... I can already hear lawyers say "When you say black and white does that include include white with hints of other colours and pastels, and dark greys?"

[chiefbrody] 04/2/2024 11:13

We just need someone with balls (and brains) to simplify the tax system. So much of it is pure nonsense.

[mcunliffe1] 04/2/2024 11:02

I know Pierre's views on pensions - he much prefers ISA's and before that, Tessa's and PEP's so I'll not make any attempt to change his mind - I have some agreement with his stance.

However, yump's view that the government encourage people to have a (private) pension is interesting. I agree, they do.

But, wouldn't it be helpful to the people who bought into that hope by increasing the amount that can be taken out before tax is applied.

In 2020 the personal allowance was £12,500. It then rose to £12,570 in 2021 and has not changed since then, nor will it change before 2027/28. Unless Labour change it when they take power this year.

Given the rise in state pension from 674.40 every 4 weeks in 2019 to £815 in this ending tax year, and rising to £884.80 in April this year, there's very little gap between the pension and the tax allowance.

So, anyone drawing down will pay tax if they draw-down more than about £1430.

One quarter is tax free but the other three quarters uses up your spare allowance.

There is a golden opportunity here for the government to help the pensioners on that edge of existance. The loss of the tax take at these relatively low levels is minor and given that most of the money so reaped will be spent by the pensioners attracting vat and generally benefitting the economy.

For example, allow the first £4000 a year drawn-down from a pension to be tax-free. Thereafter, the current rules apply with one-qurter tax-free etc.

There is of course the current possibility - if married or in a civil partnership - to transfer £1260 of allowance from the lesser to the higher earner. So, man has pension, wife doesn't but both on the full state pension. She transfers £1260 allowance to him and her allowance is now £11,310. Her state pension in April this year will be £11,502 and she immediately needs to complete a self-assessment with all the complexity that brings - never having to complete one in the years prior.

So, now the marriage transfer facility is a trap rather than an encouragement to become married.


We need a far more intelligent class of person in the next government because we certainly haven't enjoyed such in the past and present govt.'s.

I'm not holding my breath.

[lippy4] 04/2/2024 10:54

talking about pensions the australians as i remember pay tax on putting money into a pension but pay no tax on recieving an income from it on retirement,that makes more sense to me as your needs are greater when retired ..

[yump] 04/2/2024 10:32

I think you should read up about pensions.

Very briefly…

The gov want you encourage people to have a personal pension. So you get 25% from them when you put money in.

Because its a pension, you’re not supposed to use it to go spendy-happy before or when you retire.

So you can only cash in a % of it, without being taxed. The rest has to give you income from an investment (eg annuity, that you can’t cash in)

So the issue is whether you’re ok with that or whether you’d rather have an ISA where you can invest in income shares and also draw cash.

[pierre oreilly] 04/2/2024 10:13

I don't follow anything about pensions, but when I reads 'you I vest 2.8k and it becomes 3.5k instantly due to tax, I always think that can't be the full story. And the bits which aren't the full story often makes the hassle not worth it. I like liquidity, which I guess I wouldn't have with a new pension(?). I agree with spending it, after allowing provision for kids and wife. Although even that is difficult with a big isa pot, the divis roll in at a high rate. Ok when I kick the bucket and no inheritance tax when it goes to wife, when she goes that's 40% gone in inheritance tax as things currently stand. We have no will, preferring the new intestate rules - I'm used to people reacting in horror to the way I do things, but that seems the most sensible way to me.

[netcurtains] 04/2/2024 10:09

wells777: You should note all the above trackers India, Japan, Germany, USA, Philippines, Mexico are also in ISAs. So, if for example, you sell RR. (Rolls Royce), with this cash you can buy (for example) this German fund "Amundi Etf AMUNDI ETF DAX UCITS ETF DR" - and its still in your ISA - tax free!!!!

You get these brilliant German assets:

SAP SE 10.75Siemens AG 10.10Allianz SE 7.98Airbus SE 7.12Deutsche Telekom AG 6.46Munchener Ruckversicherungs-Gesellschaft AG 4.37Mercedes-Benz Group AG 4.00Infineon Technologies AG 3.62DHL Group 3.40Basf SE 3.27



The same for India USA etc....
There is no need to be stuck in a mode of only thinking UK ISA - we have the entire globe tax free.....

That being said - LGEN - GLOBALLY has been a big winner for me..

[wells777] 04/2/2024 09:45

che7win & lippy4. Thanks for your replies. Appreciated.

[netcurtains] 04/2/2024 08:43

Apart from LGEN this article roughly matches what I have done....
(the article is 22 hours old but of course I've been moving money out of UK investments into India, Japan, USA, Mexico, Germany even Philippines - all year - all in my ISA - mainly tracker funds)