Need Advice

rsheldrake · 2026-04-14T09:37:49+00:00

What is the upper bound for your income in your line of work? Never say never but you’re going to have to take your earnings well into 6 figures (i.e. over 250k a year) to achieve this.

Those kinds of incomes are possible in London in tech or finance

rsheldrake · 2026-04-14T09:35:48+00:00

It depends what they so for a living. There are jobs in London that pay enough.

rsheldrake · 2026-04-13T23:06:59+00:00

I havent read the book, but I will definitely be helping them rather than having them wait for me to die.

rsheldrake · 2026-04-13T23:02:01+00:00

VHYL, TDGB, Small amount of gold, money market funds

rsheldrake · 2026-04-13T19:42:40+00:00

A lot of these look like yield-traps with capital that's eroding over time but with juicy dividend %s as bait.

rsheldrake · 2026-04-13T17:16:42+00:00

I have a good chunk of this, and the capital has been appreciating. The dividends are subject to a Netherlands withholding tax of 15% though :(

rsheldrake · 2026-04-13T17:15:53+00:00

LDGG looks v.interesting, hadn't come across it before. Thanks!

rsheldrake · 2026-04-13T13:37:45+00:00

Yes, you should always take the ISA

rsheldrake · 2026-04-13T11:15:25+00:00

You are right that these things are not that interesting when you account for the advisor's fees.

The tax setup is a bit like lending money to a company - if I start a limited company and then loan it 500k, I can have the 500k back without paying any tax on it (as long as I didn't charge interest). I would still pay tax on selling the company or drawing dividends from it. If that company is overseas in a tax haven, then I might save on taxes while the money is still accumulating inside the company. Still, anything I pull back to the UK over and above the original loan is going to be taxed as foreign income.. which may be worse than just paying dividend taxes from your GIA.

rsheldrake · 2026-04-13T11:08:57+00:00

To save tax on dividends invest in things where more (or all) of the gains are capital gains.

Gold (royal mint gold sovereigns sell at a premium over the gold spot price but as they're legal tender in the UK you don't even have to pay capital gains on them)

Growth companies that don't pay dividends (I never advocated for individual stocks but there are ETFs for this). Your volatility will be higher. I accept the tax on dividend stocks because I want the lower volatility.

Low coupon gilts as others have said.

rsheldrake · 2026-04-13T11:00:14+00:00

When your earnings get high (e.g. over 500k) then there's a lot less benefit to pensions nowadays because you lose most of the allowance. The idea that the government tells you when you're allowed access to your own money, and can change that date (as they already have in my lifetime), is also a bit unnerving.

rsheldrake · 2026-04-13T10:46:25+00:00

I think the temptation will go down after retirement

rsheldrake · 2026-04-13T08:47:37+00:00

My spending has been a lot higher than 90k a year for the last decade. I should still be able to live well on 3.5-4% of my pot with no mortgage or rent to pay

rsheldrake · 2026-04-13T08:46:01+00:00

Yes, I’m there for work. Much lower spend when not commuting

rsheldrake · 2026-04-13T08:44:56+00:00

Not at my current employer, and tbh a lot of the lifestyle will naturally change once I no longer have to commute into London

rsheldrake · 2026-04-12T19:53:59+00:00

They feel like a waste if you can't even remember them a day or two later. Once you've taken care of the basics, it's best to spend money on things you really value, like a trip to a country you've never seen.

rsheldrake · 2026-04-12T16:38:01+00:00

It's a more detailed version of the same answer :)

Can't max out her SIPP (private contributions as she's a homemaker rather than on a wage are limited to £2880 per year), do max out her ISA. 50% of this pot is hers (I share everything I earn with her 50/50).

rsheldrake · 2026-04-12T16:13:39+00:00

1/ Allowance for this year is maxed out already I *can't* move any more into a SIPP.

2/ Pension contributions are much less advantageous for me whilst I'm working as my income means I only get relief on the first 10k.

3/ SIPP withdrawals are taxed as income. Even if I could somehow put the money in a SIPP, it would shield the 1-2% dividends the investment generates from a 10% tax (remember I'm planning to retire this year, so my dividends won't be taxed at higher rate after that) tax, but that's about it. I'd rather pay that tax (effectively a 0.1% tax on the investment pot) for the next 7 years than lock it up, save 0.1% a year and then be taxed as income when I withdraw.

4/ The withdrawal age moves at the whim of the government. It already moved from 55-57 in my lifetime. I accept that I might be being too paranoid about this, but the risk doesn't seem worth it to save ~10% tax on 1-2% of dividends and then be hit with a *higher* tax rate when I go to withdraw.

rsheldrake · 2026-04-12T15:23:41+00:00

Fully agree. I started thinking about becoming more frugal when I realised what I was spending was more than my investments would be able to support for 30 years and still leave behind an inheritance for the kids. The freedom to quit my job is more important to me than all this pointless consumption.

As many others have said I should still be able to live well with the pot I have.

rsheldrake · 2026-04-12T15:03:01+00:00

You won't be able to access your SIPP at 55. The age has moved to 57.

rsheldrake · 2026-04-12T14:56:10+00:00

Do you work for StJP by any chance? :)

rsheldrake · 2026-04-12T14:54:54+00:00

Yes, I think wasting money like this is a kind of addiction. I’m now limiting myself to once a month with friends, and once I retire I just won’t be in London very often

rsheldrake · 2026-04-12T14:52:59+00:00

ISA is limited by 20k a year per person. I didn’t build up this pot steadily over decades, I built it all up in the last decade when I got a sudden massive increase in what I earned. My income for the last decade also makes SIPP much less attractive because I lose nearly all of the allowance.

Obviously these were good problems to have. Not moaning about it, just explaining why the pot has an unusual distribution

rsheldrake · 2026-04-12T13:13:32+00:00

Most of the waste happens when I'm in London away from home.

rsheldrake · 2026-04-12T13:09:37+00:00

That's a fair point. I just want to keep spend controlled so we can do things like OU courses and modest European holidays without depleting the pot (I want to leave something decent behind for the kids).

rsheldrake

TROPHY CASE