The Meaningful Money Personal Finance Podcast

It’s time for another Listener Questions session! This week we cover commercial property in pensions, ethical investing, inherited pensions and so much more. Shownotes: https://meaningfulmoney.tv/QA16    01:02  Question 1 Hi Peter / Roger, Many thanks for all the wisdom plus superb book, you two really make my week with the banter. I always hear about DB and DC pensions but wondered if you’d ever cover the following: Many business owners like myself own buildings outright (as a pension) within a Commercial Sipp and then loop back into this rental payments. Also, within this using a GIA for diversified investments including cash lump sums for tax relief when possible. I’m heading North of sixty soon and feel its time to start thinking of the exit plus implications. It would be fantastic to hear your advice on these in the future. Best Regards, Steve 05:47  Question 2 Hello Pete Can ethical investing beat inflation? Myself and my husband are both 63.  We retired at the end of last year, having sold the business we have run for the majority of our working lives. We have some small DC pensions and a SSAS which includes a commercial property.  We both have cash ISAs. I've done some research, helped massively by your podcasts and YouTube videos, so thank you so much for these. From what I have learned I understand that  we need to invest the cash from the business sale in Global Equities.  We also need to look at the investments within the SSAS which, up to now, the SSAS provider has managed.  Cash in the SSAS also needs to be invested. Is there a way of picking a Global Index Tracker which is ethical and will beat inflation and that requires minimal management to keep fees low?  I realise that we need to look at our cash accounts too with this in mind. Many thanks for all your excellent resources and advice, the fog of financial planning is starting to clear and I'm feeling less panicked about being able to manage the money for our future. Kind regards, Rachel 12:52  Question 3 Dear Pete and Rog, Your podcasts have been a real source of steadiness for me over the past few years - a pair of reliable voices amidst the wider financial chaos. I’m writing with a question about nominee (beneficiary) pensions. Sadly, my father passed away recently, and I’ve inherited half of his private pension pot - around £70k from a total of £140k. It’s been set up as a nominee pension, which I understand allows the money to remain invested and grow tax-free, with flexible access at any age. This has been a significant and unexpected legacy, and it’s opened up the possibility of scaling back to part-time work well before the official retirement age. (I’m in my late 30s, so there’s still a way to go, but it’s a big deal for me and brings more options for me) I don’t plan to draw from the pot for many years. My intention is to let it grow. The catch, however, is that the provider, without naming names, (let’s just say three letters, last one P), is expensive compared to what I’m used to (I invest monthly in a Vanguard LifeStrategy ISA). When I’ve done some projections I can see that if leave the money where it is indefinitely, the fees will quietly erode a decent chunk of the long-term gains. There’s a 6-year early exit charge, so for now I’m content to leave it be. I’m still dealing with bereavement and all the admin of being an executor, so pressing pause on any big financial decisions feels like the right call at this early stage. But when that 6-year period ends, I’ll be weighing up whether to stick or twist. My question is: can nominee pensions be transferred to another provider without losing the key benefits, like the tax-free growth and the ability to access the funds flexibly before retirement age? I’ve looked into alternatives- transferring into my ISA would take years due to the annual limit; a general investment account loses the tax perks; and a conventional pension would lock the funds away until age 55+, which undermines the very flexibility that makes this pot so helpful for future semi-retirement plans. I’d be really grateful for any ideas or thoughts you might have on this. All the best, Alan 19:29  Question 4 Hi guys, I am 31 years old and currently investing 15% of my gross income into my retirement. 6.8% via my employer's DB CARE scheme, and the other 8.2% into my SIPP. My wife and I also contribute £200pm  into a S&S ISA for our son. We hope by the time he is 18 (3 months old now) this fund could pay for university, travel, driving - whatever he wants to do (within reason!). By age 60, I would like to be in a position to retire, whether I do that or not is another question, but I would at least like the option to. I often see YouTube videos titled "SIPP vs ISA which is better?" but I don't see much about how to use them in tandem. Do you have any advice on the optimal weighting between an ISA and SIPP given I'd like to retire before State/DB pension age and therefore, should I be splitting the 8.2% with a S&S ISA too? Thank you! John 24:08  Question 5 Hi Pete & Roger, I’m a big fan of the podcast, it’s been a great source of advice for me - thanks for that. I’m currently 55 and probably not looking to draw down anything from my pension until I’m 60 at the earliest. I hadn’t paid into my pension for a number of years and now trying to contribute as much as I can to catch up a bit. My main SIPP is £130,000 with Vanguard in a FTSE Global All Cap Index Accumulation Fund and is 100% equity as I’m looking for as much growth as possible over the next 5-10 years and beyond. I also have £25k in another SIPP, a small NEST workplace pension and approximately £60k in a Stocks & Shares ISA, all of which are in various global tracker funds. My main question is, is it a good idea to have everything in global index funds because of the heavy weighting to the USA, especially in tech stocks? I had considered changing my Vanguard fund to their LifeStrategy 100 fund which has a bit more of a UK weighting. I know you probably can’t suggest specific products, but I wondered what your general advice would be on this, especially with all the uncertainty in the USA under the Trump administration? Thanks in advance, Alex Wilson 30:29  Question 6 Hi Pete and Rog, Love the podcast and I've been listening for a good few years now, so I thought I'd throw my hat into the ring with a question. I was hoping you could give a quick overview of Qualifying Corporate Bonds, what characteristics the bonds need to have to qualify, what the tax treatment is and where to invest etc. I'm in the fortunate position of having made my contributions in full to my ISAs and Pensions and I'm looking for a tax efficient way to invest an extra few £s. I've heard that they are effectively treated like Gilts but was hoping you could illuminate. Thanka, Adam from Skipton, North Yorkshire

Another mixed bag of questions this week, including pension tax free cash, salary sacrifice for electric cars, de-risking a pension and buying gilts! Join us as we answer your most pressing questions! Shownotes: https://meaningfulmoney.tv/QA15  01:05  Question 1 Love the show, and whilst not all relevant to my own circumstances, find it all very interesting and enjoyable. Question :-You regularly discuss taking the 25% tax free and what to do with the rest (annuity or drawdown) but need advice as I have 4 different pension pots, 3 frozen and 1 existing employer. I am looking to take the 25% from one of the frozen ones to pay off mortgage but not clear on the below: - Can I keep the remaining 75% in the pension scheme and not take either drawdown or annuity until a later date (when I take early retirement)? - More importantly, I am sure I have read that once you start to take your pension, the amount you can contribute is capped.  How does this work if it is a frozen pension I am taking the 25% out of and would this impact on my current employer pension contributions? Thanks as always Paul 05:19  Question 2 Hi Pete and Roger, Absolutely love the show, after listening to yourself for a number of years, I'm 30 and would even go to say I'm financially savvy as a result of everything I've learned over the years I'm wondering if you could help me with a question? My retired dad was looking for an electric car and as I've got a salary sacrifice scheme with work it seemed the best way to get an electric car for him. My father said that he would give me the equivalent of the total rental amount in cash as I pay for the car via Salary sacrifice on a monthly basis. I'm obviously the policy holder, with the responsibility for it but my father would be named as a driver (unsure if this is relevant). This amount is around £35k, and I'm wondering if the worst was to happen (father kicking the bucket under 7 years) how would this be treated for tax purposes? As the money is in effect to pay for a good or service, would drawing up a contract or something of the like allow it to not be treated as a gift and exempt from the estate upon death, the same as if you send a family member money for a holiday or other purchases? Thanks so much for your help! Ruben 10:37  Question 3 Hi guys, love the podcast! I have a workplace pension that’s currently invested in a fairly basic fund, and I’m looking to take more control over it by choosing my own investments. I’m 38, so I still have time before I need to think about de-risking. My plan is to allocate 80% to a global equity fund, 10% to the S&P 500, and 10% to global bonds. I don’t have a huge amount invested, but it’s enough to make me consider whether I should be a bit tactical with my approach. With global index funds near all-time highs, should I wait for a slight market dip before making these changes, or just go ahead and make the move now? Steve. 13:59  Question 4 Hi Pete, Great idea to pause the “new material” and focus on questions. I was thinking that there are only so many ways to skin a cat/re-frame a concept! I would very much like to hear a little more around the concept of a bond or gilt ladders as one approaches/reaches retirement. Despite being a Chartered Accountant and working in financial services, I’m embarrassed to admit that I become flummoxed when thinking about how to set such up. I understand gilts can be purchased individually and held to maturity (as opposed to gilt or bond funds), but where and how do we buy them if our retirement savings are tied up in our employer’s pension scheme - and they certainly don’t offer such! I dare say that the demographic of your listeners/viewers are “of a certain age” where this sort of subject would be of interest. Thanks and all the best Avid listener Peter Coleman 22:22  Question 5 Love your podcast, it's been really helpful since setting up our business. Got a question for you, my wife and I set up the business 3 years ago and it's gone incredibly well so far. After pension contributions at £60k each and paying ourselves a salary/dividend equal to £100k each per year, the business continues to accumulate money. We currently have £750k spread across multiple business savings accounts. However, is there a better way to manage this money? We have considered setting up a housing rental company but we have not looked into this in detail. We have a financial advisor who seems to focus heavily on pensions rather than what we can do with the surplus money. Thanks, Mark C 28:25  Question 6 Hi there, I’ve invested in vanguard index funds for over a decade and have recently begun to actually think what goes on behind the scenes? When we invest in passive funds, like S&P 500, does that money blindly go into the businesses that make up that fund - ie just giving money to them, not knowing how good they are as companies, just because they happen to be part of an index, they get the investor's cash? I read somewhere, for example, there’s billions of dollars invested in Amazon from index funds yet all that money was given by people like me who have no idea about these businesses?  I feel like I’ve totally misunderstood how it works so interested to hear. Thanks, Marc  

In this engaging Q&A, the hosts tackle the merits of the 50-30-20 budgeting rule, examining its relevance today. They delve into the psychology of spending, addressing the difference between true happiness and frivolous spending. The discussion shifts to pension contributions, clarifying tax relief nuances. Listeners also explore the balance between faith and finance, and ethical investing. Practical advice is shared on managing finances for aging parents, navigating scams, and securing assets against fraud.

The discussion highlights the necessity of maintaining an emergency fund during retirement, especially with varying pension incomes. One listener shares her late-career financial struggles after years of opting out of pensions, sparking a conversation on the importance of early and consistent saving. The hosts address unique challenges women face in retirement planning, emphasizing the need for enhanced financial literacy. Finally, strategies for property investment, mortgage management, and the implications of inheritance tax are shared, offering actionable insights for financial stability.

Join a dynamic conversation about the launch of a new retirement guide, filled with insights on the writing journey and challenges faced by the author. The hosts explore the nuances of simplifying financial concepts and the notion of 'soft retirement.' Discover how the book stands out against free online resources and the importance of structured learning. Personal stories highlight the critical need for financial education in schools, ensuring future generations are better equipped for their financial journeys.

This discussion dives deep into the world of pensions, particularly for those eyeing early retirement. The hosts clarify tax-free cash withdrawal rules and dissect the differences between defined benefit and defined contribution schemes. Listeners learn about the intricacies of NHS pensions, misconceptions about valuations, and the impact of changes coming in 2028. Practical advice on employer contributions and the importance of proactive choices blends seamlessly with individual listener experiences, making complex topics more accessible.

This week we answer questions on the loose theme of capital gains tax and investing via General Investment Accounts (GIAs). Spoiler alert - nothing’s as simple as it might seem! Shownotes: https://meaningfulmoney.tv/QA11    01:06  Question 1 Whenever a question comes up in our Facebook group about Capital Gains and GIAs (General Investment Accounts) I get a sinking feeling as I do not know much about that type of account, and I don’t have one myself.  I am not alone. I have gathered questions from our listeners about capital gains, so in this episode Pete & Roger can tell us all about Capital Gains, Dividends, and anything else we need to know about using a GIA, and other situations which involve capital gains tax. 19:03  Question 2 Hi both, I've recently discovered your podcast and have thoroughly enjoyed my commutes listening to you. Personable and informative. I have a question about selling my buy-to-let property that is in my personal name. My mortgage term is ending in June 2026 and I'd like to sell it for one of better quality that has less issues. I'm currently a higher-rate taxpayer but we're planning to start a family in the next year, meaning I'll be on maternity leave for 12 months which will push my salary down to basic-rate. Impossible to plan when I'll get pregnant but it would be useful to know how HMRC calculates my salary (and over what time period) so that I pay basic-rate CGT when selling my buy-to-let? Apologies for a very wordy question! Thanks a lot and best wishes, Winnie 22:17  Question 3 Hi Pete, I hope you're doing well! I’ve been really enjoying the Meaningful Money podcast and had a question I’d love to hear your thoughts on the show: In a general investment account (GIA), is it's better to use an income fund to avoid triggering CGT if income is needed (assuming the dividends covers the needs in the short term)? Thanks so much for your wisdom! And keep up the great work on the podcast! :) Best regards, Chloe 26:53  Question 4 Hi Pete, Roger (and Nick who I assume is reading this :-)) I have a question I'd be grateful if you could answer which is around capital gains tax on any shares or funds held outside an ISA/pension. To use an example with higher numbers so that the allowance is used for simplicity: - You have £100k in a GIA - it increases by £10k a year for the first two years; - it's then down £2k in the third - the total value is now £118k - You then want to draw out £10k - How do you work out what capital gains the tax is to be paid on i.e. is the full £10k considered a gain? - Is the withdrawal from the original £100k or from the increase in value i.e. gain? - Would you be better to withdraw up the annual allowance every year and then put it back in to reduce the gain, considering there's no allowance for the impact of inflation? Love the show, keep up the good work in whatever format you decide going forwards - you've made real differences to the way I've managed my investments over the years, especially at scary times like Covid and your book and courses have given my kids the education they need for their long investing lives. Thanks, Dino 36:39  Question 5 Hi Pete & Rodger, I started a deep dive into our overall finances over the Christmas period, to set the picture I am 47, my wife’s 42 and we have two children a boy 5 & a girl 3. I received a diagnosis last year which will have a long term impact on my ability to sustain my current level of income & type of work I do. We have a 154k mortgage with 19 years left on the term, with the uncertainty around my health I have decided to target maximum overpayments on the mortgage, this year we can pay 18k extra. My questions are: 1. I plan to save circa 1k per month salary to put into the overpayment pot, I am hopeful that the HL shares will meet past highs and I can use some of that money to top up the salary savings and hit our target. Do I pay tax on the profit I make from selling shares? If it’s no more than 3k? I was hopeful I could sell shares annually and withdraw the gains annually, then reinvest in same stock when they dip. I realise that past performance isn’t always guaranteed but monitoring since covid the stocks I am invested in are fluctuating from a £15 low to £20 high annually. So looking to sell at £19.5. Is this the best way to use the extra cash at present given the plan to access quickly at times. I have maxed out isa allowance for current FY (2024/25) but will probably pay the 1k per month into an isa in new FY. 2. I am planning to do lump sum overpayment rather than setup monthly, just to give easy access to funds should they be required. I plan to cash in some company SIPPS annually when they aren’t taxable (after 5 years) that sum will be on average 1k per year. Will the SIPPS cashed in and gains from HL sales leave me vulnerable to paying capital gains tax? If all goes to plan we could be mortgage free by 2033 approximately and there would be less of a dependency on my salary. Deep down I just want us to be setup financially as best we can with the uncertainty around my health. I would really appreciate your views, love the podcast and it’s been a real source of knowledge to me. Best Regards Lee 43:52  Question 6 Hi Pete & Roger, I found your YouTube channel last year and through that the Podcast – both are absolutely fantastic and have helped me and my family so much with many aspects of managing our money and planning our finances. My question relates to if and to what extent capital gains tax can be offset by making SIPP contributions. My wife and I jointly own a buy to let property that we are selling in the new financial year (25/26).  When the sale completes, we expect to each have a taxable capital gain of around £30,000.  My wife earns around £10k a year from a part time job, therefore most of her gain will be taxable at the lower rate of 18%.  For the last couple of years, she has made annual gross SIPP contributions 100% of her earnings (£10,000) which is the maximum gross contribution she can receive basic rate tax relief on. This year, as well as contributing the usual £10,000 gross, (100% of earned income), can she also contribute up to a further £30,000 gross and receive basic rate tax relief on this additional contribution, thus offsetting the CGT paid on the gain from the property sale?  If so, with CGT payable at 18% and basic rate tax relief of 20%, contributing the full £30,000 would actually more than offset the CGT (which I fear is too good to be true). If this is the case, is there any other strategy we should be considering to achieve the same or similar outcome?  I have really struggled to find definitive guidance around this, so any clarity you can provide will be much appreciated. Many thanks and keep up the great work. Steve

Market volatility can stir up anxiety, but maintaining a long-term perspective is key. Historical context reveals that downturns are common, and patience pays off. The concentration of U.S. markets is scrutinized, particularly the influence of major tech companies. Interestingly, older investors highlight the importance of time in the market for financial recovery. Ultimately, avoiding impulsive decisions during turbulence is crucial, as sentiment often overshadows fundamental factors. Calm and measured strategies lead to better outcomes.

Listeners dive into intricate financial topics, like maximizing pension contributions and navigating tax implications. The hosts discuss private health insurance options amidst NHS delays, weighing pros and cons. They also tackle Lifetime ISAs for property purchases, emphasizing tailored strategies based on personal situations. The conversation extends to the complexities of SIPs and ISAs, touching on inheritance tax and withdrawal strategies. Lastly, insights on employer-defined contributions help clarify long-term investment decisions, ensuring financial security.

This insightful discussion dives into the complexities of pensions, specifically defined benefit schemes and how they relate to tax-free cash options. The hosts also explore strategies for retirement planning, weighing the pros and cons of annuities versus drawdown methods. Valuable tips for balancing buy-to-let mortgages with investment opportunities are shared, alongside advice on managing financial portfolios and maximizing contributions. Listeners learn about navigating wealth transfer and the nuances of tax implications, all aimed at optimizing financial strategies for a secure future.