This week, Pete and Roger answer your questions about investing and planning for children, including trusts, life insurance and how to keep tax low.

Shownotes: https://meaningfulmoney.tv/QA22 

01:35  Question 1

Hi,

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.

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

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!

Shownotes: https://meaningfulmoney.tv/QA21 

00:55  Question 1

Dear Pete & Roger,

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

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

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

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

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

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

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

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

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

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

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

Kind regards,

Ross

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

It’s another full show of questions, ranging from assumed growth rates for investments, to Save As You Earn schemes to retirement cash buffers, and much more besides!

Shownotes: https://meaningfulmoney.tv/QA20 

01:21  Question 1

Hi to you both.

Absolutely love the podcast and Pete's book. The information in both has made a huge difference to my understanding of what to do with my finances.

My question is about expected returns when investing in equities. If often hear people use 5% growth as a estimate to use when predicting possible future values of an investment.

But from what I can see (and I could be wrong!) The global stock market has averaged around 8-9% over the last 20 years. This obviously makes a huge difference to the total expected value when compared to 5%.

I currently have a DB scheme pension through the fire service, so I do my 'extra' investing through a S+S ISA global index fund with 100% equities which has averaged 8.5% over the last 8 years.

I am happy with a higher risk level as I have the DB pension from the Fire Service.

Am I missing something with my numbers?

Thanks again for all the great information. I have recommended you to many of my friends.

Kind Regards

James W

08:22  Question 2

Hi Pete and Roger,

Thank you so much for your contribution to making the world a better place. Your passion for sharing and educating everyone is inspiring.

I have a question about our Save As You Earn Scheme maturing this year. I'm lucky enough that (at the current price) I'll get a total return of > £20k at maturity in November. Not counting my chickens, but I'd like to plan the most tax efficient way of receiving these funds.

The SAYE provider offers a flexible ISA to receive the shares. Could I transfer enough shares for £20k into the ISA, sell and withdraw enough cash to make space to then transfer the rest of the shares to avoid any CGT?

Alternatively, could I exercise the option in March and partially transfer into an ISA across the tax year end?

Are there any other mechanisms I could use to minimise tax?

Thank you again for all of your hard work.

Priten

15:01  Question 3

Hi Team

Long time listener and YouTube viewer, heck I even watched a video when Pete wore a tie!

Your podcasts have made me change my pension default funds, increase my salary sacrifice (really affects take home pay a lot less than people think!) and generally have confidence in my future. Thank you!

Question: When I do finally decide to retire I'm planning a 1-2 year cash buffer for any market disasters that may happen.  But when would you say to use this?  The markets always move up and down a bit but should I use the cash buffer if they drop 3%, 5%, 10%?  And then if I've taken 1 years worth of income from the buffer how do I rebuild the buffer?  For example I'm targeting a pension drawdown of around £45K per year to keep below 40% tax.  But if I've just used up the buffer then I'll be taxed 40% on taking out extra to rebuild it, so why bother as any downturn is very likely to be smaller than 40%!  Wouldn't it just make sense to take out less in a downturn than get taxed 40% to rebuild a buffer?

Thanks for all the podcasts!

Simon Doig Halifax (but was in Cornwall!)

213:33  Question 4

Hi guys

Podcast question for you please:

"I've been a listener for ages, and so I have started to do the good things you suggest. I had a workplace pension (local gov DB) but now I have AVC's, a SIPP, and an S&S ISA, as well as a savings account and life insurance/ critical illness cover. Thank you.

I am making contributions monthly to my pension and ISA but the gist of my question is, is it worth it if I'm only saving small amounts?

This is the most I feel I can save without compromising my lifestyle, but it feels small. I'm 31 and so I'm prioritizing available cash in savings accounts for things like, new cars, boiler breakdowns and hopefully having a baby.

I'm saving £80 a month into my ISA & £60 a month into my pension. Occasionally I did in extra bits when I feel I can afford it. Is this worth it, is it enough? Is it not worth bothering if I'm not saving in bigger chunks?

Thanks so much - from Bianca

25:33  Question 5

Hi Pete & Roger, I have been listening to your podcast for some time and love your chat and sensible and pragmatic “advice” especially when walking my dog. I feel I’m quite knowledgeable but always pick up pearls of wisdom from you both. My wife and I have over £300k in GIAs having maximised our ISAs since around 2009. This is all in Scottish Mortgage (I’m sure you appreciate any withdrawals are 80% gains as we bought around £2). We sold all our Scottish Mortgage in ISAs near the £15 peak which was lucky and allows us to sleep at night as we are more diversified- mainly vanguard index funds. 

You have mentioned taking the CGT hit each year and moving money to ISAs however I’m not convinced that would make sense for us. Assuming we sold around £24k each of our Scottish Mortgage GIA each year that would give us around £20k each to move into our ISAs however we would pay around £4k each in tax (24% CGT rate). My thinking is that it will take a long time to make that up via better tax treatment in an ISA. So far my plan is to hang on until we are retired and can pay a lower rate of CGT on any gains plus there is a chance a future Government (not one I would vote for myself) may increase the £3k tax free allowance. Also if we left it all in the GIA as inheritance to our daughter (as we may not need it ourselves) would she potentially pay IHT on it and no CGT would ever be paid? We are 54 and hope to retire by 56.

Many thanks. Paul

32:05  Question 6

Hello Pete & Roger

Fabulous podcast and I binged Pete’s new book in one sitting-the best investment I'm ever going to make!

I love the concept of the cashflow ladder.

I’m in my early 50’s and in the University hybrid pension scheme with a great DB component and a decent projected DC pot.

I can select appropriate funds for each timeline tranche within my providers system.

When I come to access the DC component (limited to up to 4x UFPLS per year only-no FAD), the provider doesn’t allow the draw from each pot independently so it’s impossible take money only from the fund I’m targeting at that point.

The fees in the current scheme are subsidised to 0% by the scheme.

What kind of broad principles should someone weigh up when thinking about the flexibility advantage vs the cost of transfer to get that flexibility?

Thanks, Duncan

Today I’m joined by my friend Lee Jackson who came to me with a thorny financial/legal problem a few months ago pertaining to Family Protection Trusts. I was able to help him answer one specific question, but the issue he faced is shared by tens of thousands of other people up and down the UK. So, I asked him to come on to the show to discuss it, just in case it would help other in a similar situation. Shownotes: https://meaningfulmoney.tv/session583 

I’m delighted to welcome back repeat guest, and one of the worlds leading lights in the field of behavioural finance - Dr Daniel Crosby. Daniel has a new book out, which I highly recommend, called The Soul of Wealth, and having read and enjoyed it, I asked Daniel to come and talk about it. It’s a deeply practical book - not just theory or stats - and today I’m going to chat to Daniel to walk us through just a few of the concepts he covers.

Shownotes: https://meaningfulmoney.tv/session582

Book: The Soul Of Wealth - Amazon *Affiliate  Formats: Paperback, Kindle, Audiobook

It’s another mixed bag of your questions, taking everything from investing in offshore funds to evening up pension funds between spouses and lots more besides!

Shownotes: https://meaningfulmoney.tv/QA19 

00:57  Question 1

Hello Pete & Roger I am a regular listener to you show, love it and keep up the good work.

My question is…

I have a full 6 months emergency fund, I have no credit card debt or personal loans, I have a mortgage and I have just started investing 5% of my wages every time I get paid into the Vanguard all world tracker fund (keeping it simple)

I have a new car every 4 years on PCP (so I basically lease it) as I always chop in for a new car and never pay the balloon payment at the end, this PCP is at 8%. I would like to hear your thoughts on weather investing is still okay to do along side this, the reason for having a new car is that I use it until the warranty expires and then change due to rising repair costs and hassle free motoring. I have brought older cars outright in the past and always ended up costing me more in repairs over the years. I am planning on leasing my cars for the permanent future so if I do not start investing now I will never have a chance to invest, and I do not see leasing at car as a loan as such, more of a permanent lease. Feel free to shorten my message to suit and excited to hear your thoughts, all the best.

Adam

10:10  Question 2

Hello Pete and Rog!

First of all, a huge thank you for all the valuable content you share – I really appreciate it! Keep up the fantastic work! 

I had a quick question that’s a bit technical (apologies in advance!), but I was wondering if you might be able to cover the topic of UK-registered funds when investing in a GIA on the podcast?

I’ve heard that non-UK registered funds are taxed at the income tax rate rather than the capital gains tax rate. Is the best approach to check the ISIN against the list of UK-registered funds, even if the investment is made through a non-UK exchange (e.g., Amsterdam or Ireland)?

Also, when a new client comes to you with non-UK registered funds, how do you typically address this issue?

Thanks again for all that you do – really appreciate it! 

Best, your #1 Fan!

14:00  Question 3

Hi Pete / Roger Thank you for your great work with your Q&As. Your cashflow ladder idea is great advice but when I look at graphs of cautious, balanced, growth funds they all go up and down at the same time. Over the last 10 yrs every time there has been a big market fall all the funds I looked at (at all risk levels) recovered with 32 months max. If 2-3 years cash is held on the 1st rung of the ladder why shouldn’t I hold the rest in growth/agg funds? The cash rung will ride out the fall / recovery so I may as well put my money in a fund with the most growth potential? What am I missing? Stephen

19:57  Question 4

Hi Pete and Roger,

Thanks for all you do. Your Podcasts and YouTube content has helped me get to retirement early.

I have a number of investments in my Pension which are there to continue to grow hopefully over time. I have a well diversified portfolio mainly using trackers.

I want to try to drop a particular individual investment from my portfolio that forms part of the Magnificent Seven, and is therefore part of a lot of the trackers I have. Unless I buy the FTSE Global index as individual shares can you see a way I cannot be in this one companies shares? Not sure there is an answer.

Much appreciated, Chris

24:11  Question 5

Hello

Love your podcast, I thought I was fairly clued up on pensions/finances but I have learnt so much more from your podcast. I recommend it to everyone! Especially my husband, who has so far failed to do so, he leaves the finances to me (which is probably why we are in this position as he has not addressed his pension). My question is:

Our pension pots are very unequal, we're both 47.  I have 2 DB pots (combined are due to pay out circa 14k from age 65). I am also on track to have around 750k in a private pension by the time I am 57, and am planning to retire at this point.  My husband currently only has around 18k in a private pension, and is retraining as a teacher so he will only have a small DB pension not accessible until 68. He will therefore need to continue working for a few years after I retire.  I will need around a 2k a month in retirement, but I am thinking I can take up to £67k per year from my pension (so to remain in the 20% tax band). Use 24k for myself, and then we pay the remaining 43k into husbands private pension (or however much his earnings allow). If he is a higher rate tax payer by then, he would gain a 40% uplift on this or if not he will still get the 20% uplift back so we aren't losing out.  One of the main reasons for doing it would be to even the pensions out so that we can both withdraw tax efficiently in future, rather than me having to withdraw from my pension for both of us and so paying more tax.

It seems like a no brainer but please let me know if I have missed something really obvious.

Thanks in advance! Sarah

29:02  Question 6

Hello gents,

If you pay a charity and claim gift aid within a given tax year, does that take your income down when calculating benefit calculations?

E.g. if I earn £101k p/a and I give £2k to charity and (gift aid it), does that effectively bring my income below the £100k threshold for child government support like free childcare hours?

Thanks, David

We’ve managed to cobble together another themed Q&A episode, this week dealing with questions around Inheritance Tax, Trusts and Care planning. Lots for Roger and Pete to get stuck into!

Shownotes: https://meaningfulmoney.tv/QA18 

00:48  Question 1

Hi Pete, Hi Rog, Thanks for your ongoing work on the Podcast, I’ve been listening for many years and have learned a great deal from you both. Keep up the good work!

My question is in relation to trusts. My parents, both aged 70, have recently got round to updating their wills, putting POA in place for finance and health and have been in discussion with a solicitor about putting a trust in place, primarily to safeguard their assets from being used up in the event of them having to go into care in later life.

At present I believe their estate to be approximately £600,000 including their house which I would imagine is worth approximately £250,000. The rest is made up of savings. I don’t believe their estate would be subject to inheritance tax so I don’t believe this is the reason for setting up a trust.

I have listened back to your previous episodes on trusts but I was wondering, firstly whether much has changed since these podcasts in relation to the general setting up and management of a trust?

Secondly I wondered if you could explain the negatives to my parents putting the majority of their assets into trust, namely are there any ongoing fees, can my parents take assets out of the trust should they need to and what are the tax implications for the beneficiaries when my parents pass away? Would any of these things change in the period where only one of them has passed away?

I appreciate this is a huge topic and you may not be able to address all of these queries but it appears they have been advised of the positive parts of this process but I would like to ensure we are aware of the potential pitfalls. Thanks once again! Jon

11:10  Question 2

Hi Pete and Roger,

Still loving the show and I'm enjoying the current variation in format - keep up the fantastic work! My question relates to estate planning:

My wife and I own our home (mortgage free) 50/50 as tenants in common. We have up-to-date wills, LPAs, expressions of wishes and "Dead Files" set up. Each half of the house will be left to our daughter as and when, with the appropriate "right to reside" wording in place for the remaining partner. We are both in our late fifties, so hopefully not needed for many years yet.

The IHT side is fine as it's just numbers - allowances and values etc. What I can't quite get my head around is any potential CGT liability for our daughter following the second death. Not so much for the financial impact, as she is already comfortable in her own right (with my and - via the podcast - your encouragement over the years) and will inherit further monies when we pass, but more from a planning perspective.

I have looked online and disappeared down several rabbit holes, but from what I can gather although she inherits half the house on the first death, essentially because the surviving partner continues to live in it and therefore any actual money can't be realised, CGT is only calculated from the date of the second death (assuming she sells the house at that point).

Is this correct, or will her CGT liability on half of the value start on the first death and be based on (half of) the house valuation at that time, as obtained for that probate? Maybe I'm taking the planning a little too far, but I like to be prepared. These circumstances will be more and more relevant to families over time, I'm sure.

Your usual wisdom and common-sense views would be very much appreciated (even if the answer is "...it depends!"). Thank you again for the information and humour the two of you provide each week - long may you continue!

Best wishes, Glen

16:11  Question 3

Hi guys

Thank you both for a great podcast, big shout-out to Rog because he gets missed off sometimes in these testimonials – genuinely wish I had found this podcast years ago. Have made so many past mistakes but now correcting them one by one!

I have a question about care costs which I hope you could answer.

My mum is suffering from late stage dementia and my dad who is her 24/7 carer is struggling to cope (they are both 80yo). I have PoA for my mum and am trying to involve myself more in her care plan going forwards.

Care (in the home initially) is going to be required and I was wondering how this is paid for. My parents worked hard and have reasonably large savings and investments in both their individual names and in joint names and the extent of these means they would have to pay for care.

What we are not clear on is whether money or investments in my mum’s name would ONLY be used to pay for her care or whether jointly held money or investments would be used or whether anything in my father’s name would also be used to pay for care?

I’ve tried to find the answer to this online but cannot find a clear answer so remain confused! Also are there things that we should be doing to manage this better – end of life planning, trusts etc etc?

My dad worked incredibly hard to provide something to his grandchildren and he is actively putting off getting help and harming himself for fear that he won’t be able to pass something down to his grandchildren – this is incredibly sad and feels cruel.

Any advice that you could give would be much appreciated.

Keep up the great work David R

23:30  Question 4

Hello Pete & Roger,

Firstly I want to say thank you so much for all the work you do to teach all us mere mortals how to navigate the world of personal finance.

I have a question: Everyone talks about merging finances with a partner and then having children.

I am in my mid 40s and my children are early 20s. I have a partner and I hope to move in with him one day (he has no children) I might move in with one of mine.

How do I protect what I currently have and ensure that goes to my boys? He has considerably more than I do and I don’t expect him to support or pass anything on to my boys.

I understand I don’t want to do a mirror will but would I do a “prenup”? We aren’t getting married. Is there a cut off point “moving in day” where everything after that is split 50/50 with the new partners? Or am I over thinking this? I have been through one divorce and don’t want to again but I do want to protect what is mine for the sake of my boys.

Any advice would be very welcome.

Thank you and keep up the AMAZING work.

Kind regards, Carla.

28:56  Question 5

Hi Pete, Roger, Nick, Ruth and everyone else in your fantastic team.

I have a few questions around a niche scenario that I can't find answers to online. I'm hoping you can point me in the right direction.

My parents-in-law were convinced to transfer their home into an asset protection trust in the past before I met them (more than 10 years ago, as I think that's relevant). They were told it would help avoid having to pay care costs. They now know this was never going to be suitable for them, and are looking to mitigate the damage. I suspect the names McLures Solicitors, Jones Whyte, Andrey Robertson and Cynthia Duff might be depressingly familiar to you.

The ownership of the house was changed to tenants in common, and each of them transferred their half of the house to a separate trust. So there was the Mr M trust and the Mrs M trust.

The trusts were set up such that Mr M and 2 financial advisers were the trustees of the Mr M trust; Mrs M and the 2 financial advisers were the trustees of the Mrs M trust. The trust deed gave the settlors the right to add or remove trustees during their lives.

When I started to look at this, I felt there were 3 stages to resolve this:

1. Change the trustees to a more sensible arrangement. 2. Update the land registry with the correct trustees. 3. Decide whether to end the trusts.

I knew the first 2 steps were going to need a solicitor, who my parents-in-law found. However, the first 2 stages have now been resolved.

So, they're now looking at the final stage - deciding whether to end the trusts. It's clear their current solicitor isn't going to be right for them for this part.

I think the disadvantages to leaving the trusts in place are:

- If either of them need care in the future, I don't think the trusts will make any difference in the local authority's means assessment. - The property is likely unmortgageable if they should need any kind of equity release in the future, for example to pay for care. - Neither trust has been registered with HMRC due to the original solicitors ceasing trading. There might therefore be a tax charge/penalty charge, and an obligation to file periodic tax returns for the trusts.

Their preference is to wind up the trusts, but are there any pros to leaving them in place? And are there any cons I haven't thought of already?

Knowing that "should" is a dirty word in financial advice, I'm trying to find out whether ending the trusts might have any drawbacks or tax liability.

My understanding is that they each transferred their share of the property to the trust when the house was valued at £X. If the trusts are ended, they'll receive the property back at a value of £Y.

My questions are:

- Is there any tax liability, based on the difference in property value between £X and £Y? - Could they be entitled to any tax reliefs based on their circumstances? - Are there any other drawbacks you can think of that we might not have considered?

I know you can only give general information and guidance, but I couldn't work out an answer to this myself. I couldn't even work out which type of professional they should speak to - a solicitor, accountant or financial adviser. I'd be really grateful if you could point us in the direction to get some personalised help.

Many thanks, Mathew

33:55  Question 6

Hi Pete, Roger,

As a long-time listener and viewer of your channel, I appreciate your insights on keeping costs low, investing in global funds, ensuring tax efficiency, and the benefits of long-term investing.

My wife and I have recently become a grand-aunt and grand-uncle. Rather than giving the usual presents, we’d like to do something more practical by investing regularly (£100/month) for our grandniece—after all, there’s no better time to start long-term investing than from birth. Likewise, we’re comfortable investing 100% in equities, given the long time horizon.

On the surface, I suspect you’d recommend a Junior SIPP or a Junior ISA. However, the challenge is that she (and her parents) are French citizens, living in France and paying taxes there. While I appreciate that you focus on UK matters, are you able to provide any pointers on how we could invest in a low-cost global fund for her under these circumstances?

Many thanks for your time and any guidance you can offer. John

A bit of a themed Q&A this week, with some great questions from folks in their 30’s. We cover share save schemes at work, large inheritances and retirement planning - yes, even in your 30’s!

Shownotes: https://meaningfulmoney.tv/QA17 

01:29  Question 1

Hi Pete and Roger,

First of all I wanted to say I'm a new but avid listener to the MM Podcast, I'm so glad I found it while I'm still (relatively) young,  I'm 39 and after years of making bad financial decisions the MM podcast has turned my attitude to money/investing and pensions on its head.

I now relish the challenge of taking care of my finances rather than what felt like years of fighting against it. I wanted to ask a question regarding selling Investments vs taking a short term loan. I work for a large pharmaceutical company and as a perk of being an employee I pay into 2 share schemes through work.

The one I'm thinking of selling is a plan whereby I'm limited to a certain amount a month I can pay in and whatever I pay in is matched by my employer, so half the shares in this scheme are free. Needles to say I pay the maximum into this to benefit from the BOGOF offer.

I've recently had a large unexpected bill that even my emergency fund can't cover! And I wanted to know if selling the shares would be advisable over getting a 12 month loan?

If I sell the shares the money will be paid to me through my next pay so it will be subject to tax and NI contributions, after a bit of number crunching I've worked out that what I'll pay back on the loan is a lot less than the tax and NI I'll pay on the shares, however it does mean being in debt for 12 months, but I'm reluctant to sell the shares as I'd earmarked it as a supplement to my pension.

If this was cash sitting in an account then it'd be a no brainer but I'm sure that I've heard people advise against selling investments.

Please could you help and offer some advice as I'm really not sure what's best as I do what to avoid debt too. Thanks in advance, Anthony

05:30  Question 2

Hi Pete and Roger

Thank you so much for the podcast and content you put out - for free! - it's incredibly generous and has helped thousands of people including myself.

I appreciate this is not a typical situation, but I am 30 years old and am due to inherit £500,000 (yes, really, though due to unhappy circumstances).

Up until now (in no small part due to your content!) I've been confident managing my finances. I am single, and am just approaching becoming a higher-rate tax-payer as an NHS doctor. It is a stable job with a great pension and guaranteed pay progression. I have a £200,000 mortgage on my house which I am comfortably paying out of my salary. I also have a £10,000 cash emergency fund in place, and no other debt apart from my student loan.

Due to the NHS pension (and the complexity of avoiding annual allowance breaches with a SIPP alongside a DB pension), I have favoured directing all my personal savings into my stocks and shares ISA rather than a SIPP, all in a 100% equities passive global tracker (currently about £60,000).

I don't know what to do with this inheritance.

I will put the first £50,000 in Premium Bonds. After that, I like the simplicity of £20,000 per year into the stocks and shares ISA in a passive global tracker. But in the short-term this still leaves a vast sum in cash. Even if I paid off the mortgage (which I'm unsure about, as I've had plans to spend on house renovations fairly soon), there is still a vast amount of cash left unsheltered. (First-world problems, granted.)

I could pay for advice, but I would rather self-manage as I feel I don't want to do anything too complicated if someone could explain a simple strategy using a GIA.

Option 1: GIA Is it easy to calculate the dividends on an accumulation global tracker fund? Should I ditch the simplicity of global trackers to find dividend-paying funds/investment trusts to try and pay less tax?  Option 2: Cash Option 3: Holding gilts to maturity

Have I missed anything? Does it really matter whether I do Option 1 or 2 in the grand scheme of things? Any thoughts would be much appreciated!

Kind regards, James

14:30  Question 3

Hi Pete (and Roge)

Thanks for all you have done and continue to do on the podcast. I've now read both your books which I would warmly recommend to anyone. I've tried to keep this brief but tricky not missing out key details!

My wife and I are in our mid 30s and have SIPPs invested in passive, 100% global equity, accumulation funds. With a reasonable time horizon, and stomach for volatility, we're very happy with this approach. We would like the option to retire as soon as we reach the Normal Pension Age minus 10years which we assume will be 60 by then if we assume the state pension age will rise to 70.

Given this background, how do I pivot away from 100% equities to a cash flow ladder? My current thinking is to do the following:

- 10 year prior to retirement buy a Gilt with a 10 year maturity - do this for following years working my way up the cashflow ladder - I would need to plan for what I would do if the market was down at any point during this period - perhaps something like - if down by >10% in a given year only sell enough equities to cover minimum expenses for the applicable year and hope for a recovery. This would seem like a reasonable hedge between being prepared and missing out on a recovery.

Does this sound like a reasonable approach? What other approaches could I consider?

I appreciate I wouldn't be acting upon this question til about 2039, ahead of retiring in 2049, but I guess that is a testament to how you have helped me with my financial planning. If you think this is too far out for planning when do you think I should revisit it? Thanks, Dave

21:02  Question 4

Dear Pete and Roger,

I've been a faithful listener for some time and yours is one of the best financial podcasts in the UK. Thank you for all your hard work.

I've recently read Pete's new book. Gosh, it was not a light read but it was extremely valuable to me.

My question is whether it is worth stopping contributions to the NHS pension if the money is needed more now rather than in retirement.

Me (34yo) and my husband (43yo) are in an incredibly privileged position where we have 800k pounds in our ISAs (majority) and SIPPs  and no debt. I love my NHS job and have no plans to leave it any time soon.  My husband couldn't care less for his work. We figured we would like him to retire soon so we can enjoy benefits of having a stay at home dad at home for our child.

The problem is, we cannot live off my salary alone and will have to supplement it. I calculated that if he retired in 3 years we would have 3 years worth of cash to cover the shortfall, 5-6 if I have more take home pay due to not contributing to pension. Basically leaving the NHS pension would give us 2 extra years of not having to draw from our investments but would cost circa 1k of guaranteed annual income in retirement for every year of missed contributions, plus benefits - death in service etc. I just wonder if it is worth it for potential returns which are obviously not guaranteed. 

Based on historical returns, allowing our investments to grow for 8 years will bring us to our FI number (25x annual expense). I feel this would be more valuable then having guaranteed income later in life. To me, being able to take out NHS pension in 34 years is completely abstract.

I know you cannot give specific financial advise but I would love to hear your thoughts. Thank you in advance, Jane.

29:04  Question 5

Hi Roger and Pete,

Love the podcast and have learnt so much! Thank you!

I am 34 and have paid into the teacher's pension (TPS) for the last 8 years. For 5 years, I worked abroad and did not contribute to it. Living back in the UK, I am not sure how much longer I will be a teacher or eventually my school might even withdraw from it and offer a private pension instead. Missing 5 years of my pension whilst away, I did a few years whereby I increased my contributions using faster accrual from 1/57th to 1/45th of my salary, however I wasn't convinced this was actually going to make up for my lost contributions. This tax year, I decided to stop this and have now got back £300 a month into my salary. My question is whether I would be best to pay this £300 into a LISA (already have £1500 in there for my pension) or ditch this and pay it into a SIPP. I want to have access to some money if I retire early before I can access my TPS which I can imagine will be 70 by the time I am older.

Thanks in advance. Rachel

32:07  Question 6

Hi Pete (and the fabulous Rodge)

Me and my husband both listen to your podcast and absolutely love your content. We've gone from not really having a clue to having more than £50k between investments and savings for the first time this month, and we put it all down to you and your excellent advice.

The question I have is about raising our children with good money attitudes. You like to say "your attitudes towards money are set by the time you're 7", and that makes me think about my kids, who are currently 1 and 3. Me and my husband are both second children, and couldn't be more different from our older siblings in terms of money attitudes. Both our older siblings are spenders, and both in significant amounts of bad debt, making what we would consider poor financial choices. On the flip side, we are both savers, sometimes to the point of unhelpfulness, and we've had to do a lot of learning about spending money to enjoy ourselves more in the here and now.

Obviously, we've had functionally identical upbringings to our siblings, so I'm not sure what's made us so different, but certainly I never remember having any direct advice from my parents of money management, investing, budgeting ETC.

What is your advice on imparting finical wisdom to our offspring? How is it different at 3 to aged 7, for example? What about their early/late teenage years and young adulthood?

I haven't told my husband I'm submitting a question, but if he hears this he'll definitely know it was from me so I'll look forward to our conversation later based on your answers!

All our best Hannah

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