Thanks Terry. Basically what she said to me, but some of the knowledgeable people on here have got me wearing brown trousers and I know whatever I do will be wrong. I'm still sitting tight atm.
The only downsides (I can see) of taking cash lump sum now is, 1. what to do with it as it'll no longer be in a tax free wrapper. 2. if they increased the amount you can take tax free other than for those who already have (2. to me seems highly unlikely). Have I missed something else?
It's currently outside IHT in a SIPP.
Ah yes, fingers crossed it stays that way.
I'm pretty sure thats one of the things that will happen. No reason not to. Why should pension funds be outside your Estate when nothing else is ? Even the home you live in is part of your Estate. So why not your pension ?
Also it really only affects people in DC scheme so publuc sector workers are protected.
I would have thought it would affect DB schemes too where the pension transfers to the spouse or children in the event of the pension holders death.
But there is no "pot" to transfer. On death spouse and/or children get a continuing monthly payment.
Thanks Terry. Basically what she said to me, but some of the knowledgeable people on here have got me wearing brown trousers and I know whatever I do will be wrong. I'm still sitting tight atm.
The only downsides (I can see) of taking cash lump sum now is, 1. what to do with it as it'll no longer be in a tax free wrapper. 2. if they increased the amount you can take tax free other than for those who already have (2. to me seems highly unlikely). Have I missed something else?
It's currently outside IHT in a SIPP.
Ah yes, fingers crossed it stays that way.
I'm pretty sure thats one of the things that will happen. No reason not to. Why should pension funds be outside your Estate when nothing else is ? Even the home you live in is part of your Estate. So why not your pension ?
Also it really only affects people in DC scheme so publuc sector workers are protected.
I would have thought it would affect DB schemes too where the pension transfers to the spouse or children in the event of the pension holders death.
But there is no "pot" to transfer. On death spouse and/or children get a continuing monthly payment.
Isn't that sort of the point. Just because you are in draw down it might become taxable, but buy an annuity with 100% spouse pension and all of a sudden it isn't (or with a DB the usual 50% spouse pension). Seems like different rules were that to be the case.
1. Would I be right to assume any CGT increase is likely to be delayed. Would make sense to me in that it encourages people to sell lots now and hence a big immediate jump in CGT receipts immediately.
1. Would I be right to assume any CGT increase is likely to be delayed. Would make sense to me in that it encourages people to sell lots now and hence a big immediate jump in CGT receipts immediately.
2. IFA fees. Is 1% pa management fee reasonable?
Ta
1. Historically tax changes like rates etc tend to happen at the start of the next tax year, as otherwise it's very difficult to manage mid year. So my assumption would be any change to CGT happens from 6th April 2025.
2. Seems steep to me, but does depend on what they are doing for that and what they are managing (and more importantly the amount). If they are managing your SIPP with £25k in it then £250 probably doesn't cut it. It they are managing £1m in a SIPP then £10k sounds a bit steep. Most rebate to a degree for the larger sums.
1. Would I be right to assume any CGT increase is likely to be delayed. Would make sense to me in that it encourages people to sell lots now and hence a big immediate jump in CGT receipts immediately.
2. IFA fees. Is 1% pa management fee reasonable?
Ta
As @Rob7Lee says re CGT. The allowance is on a tax year to tax year basis so changing anything mid term would be very very messy.
As for IFA fees. Some of us charge 0.5%pa and might discount it for large sums 😉.
After working for almost 40 years, I took my work pension at 55, wife did the same a bit later on as I was always concerned that government would go after pots of money rightfully earned over time as an easy win. Never had a penny from the state but they would like to take as many penny's from me that they can get away with.
- reducing tax free lump sum, as it's easy and can be spun to only affect the 'rich' - pensions brought within IHT - again, can be said to only affect the rich - however, the flat rate idea is running into issues for the same reason as re-introducing the LTA: it will generate material tax bills for all those public employees in DB pensions who are being paid much more than 50k/year; so probably needs more work - therefore maybe instead removing employers' NI from tax deduction on pensions (as it's immediate and the government can pick up the bill for its own employees ) - kicking VAT on private school fees down the road a bit, as they've just worked out it will cost billions (the OBR has said the transfer into the state sector will be net negative on its own and now they've realised that the rich schools will be able to go back ten years to claim back VAT on investments)
How, then, to bridge the gap: - they're back to PFI 2.0, so will try to borrow a lot more but keep it off balance sheet by saying it's investment in infra (therefore saying it is asset/liability neutral) - working assumption of 10% budget cuts to many departments, which will be presented/solved as productivity improvements in government spending and by attacking suppliers who deliver poor value
Note, these are rumours. These sources don't know all this, but they are one below perm sec level, so they hear things.
As for the timing, I'm taking no chances and have requested the full lump sum to pay off the mortgage and re-invest what I don't need for that.
Other impacts of the budget - friends and business contacts are: making redundancies now, while they still can; selling businesses to avoid capital gains; not buying businesses or making investments due to potential changes in capital gains tax and employment laws; actively looking to move abroad. That might all quieten down after 30th October, if it's not as bad as feared.
Interesting, Any rumours about anything affecting ISAs?
I haven't heard anything specific - just the same that everyone has heard about an LTA-type cap at 100k. I would have thought it fairer to just reduce the amount you can put in per year but I think the original idea of putting the limits up was to move people from pensions to ISA savings.
I e mailed my IFA re my SIPP tax free lump sum before I transferred it out. She was extremely confident that any possible reduction in the tax free lump sum would not be with immediate effect. I can no longer find the e mail, but she was pretty convincing. Anyway, I’m keeping my fingers crossed that she is correct.
I messaged her as well. For those interested, this was the response
“We have spoken with the Abrdn technical area, and I’ve set out some commentary we received back from the Pensions Technical Manager there, and her comments are very interesting. I think they provide some reassurance that the general feel from industry is they are unlikely to attack Tax Free Cash, but obviously no one knows for certain:
The sunset clause within Lifetime Allowance legislation, grants any Government the power to change any or all the regulations relating to the lifetime allowance abolition, without the need to consult or go through normal parliamentary process. The intent was, as we understand it, to allow for future changes in the annual allowance (possibly both up and down) and in the new allowances (the inference being for them to increase) but the wording is wide enough that it covers everything contained in the 2023 and 2024 Finance Acts and associated SIs that relate to LTA abolition. Therefore technically they could choose to reduce the LSA (also known as Tax Free Cash) if they wished as that forms part of these.
However, to make such a change overnight without any consultation or transitional rules would be if you excuse my expression 'political suicide'. Looking back at all the big pension changes made over the past 20+ years, the Government of the day has acknowledged that individuals have made payments in good faith based on the rule in force at the time and, where a change has reduced a benefit, they have introduced transitional rules to protect most of those. There have been some occasions where anti-forestalling was introduced such as the introduction of tapering which prevented post 8 July salary sacrifice from being used to meet the threshold requirement, but these have been aimed at high earners/company owners and didn’t impact on the average pension scheme member.
To simply reduce the LSA to say £100K as has been mooted without any form of transitional rights for those who have built up beyond would impact individuals much lower down the pension value chain – many people do still use their TFC to help pay off their mortgage and will have been contributing over the years with that aim in mind. Also it will change peoples’ behaviour and drive more to potentially opt out at a much earlier stage in their career which will affect the amount of pension money available to invest in productive finance and could push more people onto the State in later life once their much smaller pension pot has been exhausted – these are the behaviours Labour don’t want with their key focus on unlocking pension investment and encouraging people to be self-reliant.
We do still anticipate that the LSA will simply not be increased in the future even where the LSDBA is increased. And we do still expect Labour to make any changes in full consultation with the industry giving advisers and clients time to review and amend their strategy.”
Hope that’s of interest to those looking at what to do with their pensions/cash free lump sums.
I agree with the logic but look at all the other decisions that clearly wouldn't work (ie raise money), like VAT on school fees, non-docs and the private equity carry trade.
It's outrageous that people are being left guessing about decisions that have been made over decades. But the chancellor hasn't come out and closed anything down - no doubt because she's already boxed herself in on so many other things to get over the line in the election. The pension and asset managers have been making a lot of noise and have told her how much is being drawn out, so presumably it was being considered seriously at some point; maybe she's backed off.
There's a lot more talk recently about borrowing and the civil service fears of cuts have been rising, presumably in an attempt to square the circle. So, maybe tax rises are being watered down a bit.
For me, cashing in is a decision that works in my personal circumstances. There's no downside doing it but quite a bit of downside risk if I don't.
I get rid of a loan at 5.5%, so can just trade for the equivalent investments in my pension that have a similar, low return, low risk profile. The rest I can put in other wrappers (ISAs over a couple of years or even VCTs, which have been protected for the next ten years).
It reduces my monthly out-goings by a significant amount, which has allowed me to turn down corporate jobs that were driving me nuts and look at lower cash/higher equity opportunities. I can still contribute to my and my wife's pension as before, as MPAA rules don't kick in if I just take the lump sum. Ironically, that includes the potential to take an index-linked DB pension from the civil service ....
- reducing tax free lump sum, as it's easy and can be spun to only affect the 'rich' - pensions brought within IHT - again, can be said to only affect the rich - however, the flat rate idea is running into issues for the same reason as re-introducing the LTA: it will generate material tax bills for all those public employees in DB pensions who are being paid much more than 50k/year; so probably needs more work - therefore maybe instead removing employers' NI from tax deduction on pensions (as it's immediate and the government can pick up the bill for its own employees ) - kicking VAT on private school fees down the road a bit, as they've just worked out it will cost billions (the OBR has said the transfer into the state sector will be net negative on its own and now they've realised that the rich schools will be able to go back ten years to claim back VAT on investments)
How, then, to bridge the gap: - they're back to PFI 2.0, so will try to borrow a lot more but keep it off balance sheet by saying it's investment in infra (therefore saying it is asset/liability neutral) - working assumption of 10% budget cuts to many departments, which will be presented/solved as productivity improvements in government spending and by attacking suppliers who deliver poor value
Note, these are rumours. These sources don't know all this, but they are one below perm sec level, so they hear things.
As for the timing, I'm taking no chances and have requested the full lump sum to pay off the mortgage and re-invest what I don't need for that.
Other impacts of the budget - friends and business contacts are: making redundancies now, while they still can; selling businesses to avoid capital gains; not buying businesses or making investments due to potential changes in capital gains tax and employment laws; actively looking to move abroad. That might all quieten down after 30th October, if it's not as bad as feared.
Interesting, Any rumours about anything affecting ISAs?
I haven't heard anything specific - just the same that everyone has heard about an LTA-type cap at 100k. I would have thought it fairer to just reduce the amount you can put in per year but I think the original idea of putting the limits up was to move people from pensions to ISA savings.
A total cap to me seems illogical in that it goes the other way to pensions, where there is is no LTA but annual allowance. It also would presumably need some fairly complicated transitional arrangements as there will be many people who have more than £100k in ISA's. They can have been built up since 1990's (originally as PEP's)
- reducing tax free lump sum, as it's easy and can be spun to only affect the 'rich' - pensions brought within IHT - again, can be said to only affect the rich - however, the flat rate idea is running into issues for the same reason as re-introducing the LTA: it will generate material tax bills for all those public employees in DB pensions who are being paid much more than 50k/year; so probably needs more work - therefore maybe instead removing employers' NI from tax deduction on pensions (as it's immediate and the government can pick up the bill for its own employees ) - kicking VAT on private school fees down the road a bit, as they've just worked out it will cost billions (the OBR has said the transfer into the state sector will be net negative on its own and now they've realised that the rich schools will be able to go back ten years to claim back VAT on investments)
How, then, to bridge the gap: - they're back to PFI 2.0, so will try to borrow a lot more but keep it off balance sheet by saying it's investment in infra (therefore saying it is asset/liability neutral) - working assumption of 10% budget cuts to many departments, which will be presented/solved as productivity improvements in government spending and by attacking suppliers who deliver poor value
Note, these are rumours. These sources don't know all this, but they are one below perm sec level, so they hear things.
As for the timing, I'm taking no chances and have requested the full lump sum to pay off the mortgage and re-invest what I don't need for that.
Other impacts of the budget - friends and business contacts are: making redundancies now, while they still can; selling businesses to avoid capital gains; not buying businesses or making investments due to potential changes in capital gains tax and employment laws; actively looking to move abroad. That might all quieten down after 30th October, if it's not as bad as feared.
Interesting, Any rumours about anything affecting ISAs?
I haven't heard anything specific - just the same that everyone has heard about an LTA-type cap at 100k. I would have thought it fairer to just reduce the amount you can put in per year but I think the original idea of putting the limits up was to move people from pensions to ISA savings.
A total cap to me seems illogical in that it goes the other way to pensions, where there is is no LTA but annual allowance. It also would presumably need some fairly complicated transitional arrangements as there will be many people who have more than £100k in ISA's. They can have been built up since 1990's (originally as PEP's)
I guess they would introduce it the way they did with LTAs - anyone above the limit would get a bye and it would only affect all the poor sods that haven't yet reached it - yet another transfer of wealth from the young to the old.
It is illogical - but then so were the LTAs, which were in place for many years and only very recently removed. They punished people who had invested well at higher risk. It was only because it also affected government employees on very lucrative DB schemes that they were done away with at all (and why no-one is hearing that they're coming back).
We need some stability in savings incentives. Gordon Brown broke the seal when he taxed dividends in pensions and chancellors have been milking us ever since. Last I saw that dividend move alone has skimmed 268 billion from pensions over 20 years and chancellors saw that he pretty much got away with it, politically.
On a different topic, but one we have discussed before...Revolut. BBC Panorama has taken a look at it. Anyone else seen it, what do you think? Looked pretty watertight -and worrying - to me- but Panorama isn't what it was, so maybe some of you closer to the sector have some insights.
On a different topic, but one we have discussed before...Revolut. BBC Panorama has taken a look at it. Anyone else seen it, what do you think? Looked pretty watertight -and worrying - to me- but Panorama isn't what it was, so maybe some of you closer to the sector have some insights.
On a different topic, but one we have discussed before...Revolut. BBC Panorama has taken a look at it. Anyone else seen it, what do you think? Looked pretty watertight -and worrying - to me- but Panorama isn't what it was, so maybe some of you closer to the sector have some insights.
I wouldn't touch revolut with a bargepole and have said this to people for years since auditors first delayed, and then put so many stipulations in the signoff of the accounts it was staggering.
It all reminded me of the Wirecard scandal which was basically very very dodgy (illegal) balance sheet accounting to inflate revenue by falsely reporting purchases values and therefore asset values of subsidiaries.
They finally got their banking licence a few months ago, after a lot of delay.
A long lost uncle leaves you some money, putting aside all the usual sensible stuff. Pay off mortgage, get a new V8 throttle monster, go on a nice holiday and consider sacking off work. Then reality bites and that 1k is going to be better off invested in the stock market.
Taking whatever factors you want to take in we are looking to make money short or long term. Pick 5 places to put your money. Take into account high price but guaranteed dividends, false low prices looking for a spike, arsehole companies that are probably on my c*nt list that continue to increase in value.
My 5
1) Amazon. High price, a seemingly endless space for growth 2) Tesla. They will take over the world one day, market leader in a growth market. Pushing every other EV manufacturer along and will be the ones who find a gamechanger of a range and charging solution 3) BAE, not on the list for a nice reason. Loads of conflict worldwide and these guys lead the market in researching, developing and manufacturing different ways for paying customers to vaporise enemy combatants and selling them these bits of kit. 4) BT Group, on here purely for guaranteed dividends. I reckon near enough every pension fund has exposure to this mob of charlatans currently recovering and rallying a mini revival of the share price by laying of staff in Openreach and looking to pursue a contractor workforce. Which is shit for the employees but the city seems to like inhuman practices like that. 5) something I've noticed since tinkering and looking at stocks and shares etc is the biggest conglomerates are quite good at being massive shareholder driven options so it's a coin toss between BAT and BP. Decide which kills more people later and choosing based purely on potential growth and dividend compounding. I'm saying BP, we all need fuel in our cars whether we smoke or not
A long lost uncle leaves you some money, putting aside all the usual sensible stuff. Pay off mortgage, get a new V8 throttle monster, go on a nice holiday and consider sacking off work. Then reality bites and that 1k is going to be better off invested in the stock market.
Taking whatever factors you want to take in we are looking to make money short or long term. Pick 5 places to put your money. Take into account high price but guaranteed dividends, false low prices looking for a spike, arsehole companies that are probably on my c*nt list that continue to increase in value.
My 5
1) Amazon. High price, a seemingly endless space for growth 2) Tesla. They will take over the world one day, market leader in a growth market. Pushing every other EV manufacturer along and will be the ones who find a gamechanger of a range and charging solution 3) BAE, not on the list for a nice reason. Loads of conflict worldwide and these guys lead the market in researching, developing and manufacturing different ways for paying customers to vaporise enemy combatants and selling them these bits of kit. 4) BT Group, on here purely for guaranteed dividends. I reckon near enough every pension fund has exposure to this mob of charlatans currently recovering and rallying a mini revival of the share price by laying of staff in Openreach and looking to pursue a contractor workforce. Which is shit for the employees but the city seems to like inhuman practices like that. 5) something I've noticed since tinkering and looking at stocks and shares etc is the biggest conglomerates are quite good at being massive shareholder driven options so it's a coin toss between BAT and BP. Decide which kills more people later and choosing based purely on potential growth and dividend compounding. I'm saying BP, we all need fuel in our cars whether we smoke or not
Depends on what your portfolio currently looks like, but in reality rather than try and be too clever, just stick it in an S&P500 or FTSE 100/250 ETF. Depending on the sum trickle it in over time.
I do that in my main pension, but also have a smaller one where I trade shares to try and beat the markets, currently just about winning on that, but partly due to a big spike recently on SAGA shares (up 27% when I sold).
Which (Consumers Association) has strongly backed Panorama, and actually has done quite a lot of work on Revolut over the last few years.
I did smile at this:
"Customers seem happy with its service overall – indeed some are almost evangelical – but here at Which?, we can’t recommend putting significant sums in a Revolut account. "
Which (Consumers Association) has strongly backed Panorama, and actually has done quite a lot of work on Revolut over the last few years.
I did smile at this:
"Customers seem happy with its service overall – indeed some are almost evangelical – but here at Which?, we can’t recommend putting significant sums in a Revolut account. "
That'll be the crypto bros, then😉
It's become a verb in Ireland, as in, "I"ll Revolut you fifty euro". The local Irish banks (AIB, BOI) are finally waking up to the threat, as they've typically been protected from competition to date.
Meanwhile, there's a reason why Revolut doesn't yet have a license but it does seem like the FSA is starting to wobble.
Which (Consumers Association) has strongly backed Panorama, and actually has done quite a lot of work on Revolut over the last few years.
I did smile at this:
"Customers seem happy with its service overall – indeed some are almost evangelical – but here at Which?, we can’t recommend putting significant sums in a Revolut account. "
That'll be the crypto bros, then😉
It's become a verb in Ireland, as in, "I"ll Revolut you fifty euro". The local Irish banks (AIB, BOI) are finally waking up to the threat, as they've typically been protected from competition to date.
Meanwhile, there's a reason why Revolut doesn't yet have a license but it does seem like the FSA is starting to wobble.
Revolut is very popular in Ireland, when I was living in Northern Ireland it was really useful as it had good FX rates and I was near the border for when I was going back and forth, now I just use it when I go on holiday and use it for card payments etc. Was also easy to split bills or transfer between mates as you've said.
I wouldn't keep large sums in it at all, just spending money, but I know some do.
I’ve used Revolut for quite a few years now, but only when abroad on holiday. I don’t keep money on there, except when I travel, and their FX rates have always been excellent. I simply switch my GBP over as needed and then use the card/virtual card when out. It’s usually also cheaper if I want to withdraw actual cash too. Never caused me an issue and I suspect their move to a full banking licence will help to drive better behaviours as well in other areas.
A long lost uncle leaves you some money, putting aside all the usual sensible stuff. Pay off mortgage, get a new V8 throttle monster, go on a nice holiday and consider sacking off work. Then reality bites and that 1k is going to be better off invested in the stock market.
Taking whatever factors you want to take in we are looking to make money short or long term. Pick 5 places to put your money. Take into account high price but guaranteed dividends, false low prices looking for a spike, arsehole companies that are probably on my c*nt list that continue to increase in value.
My 5
1) Amazon. High price, a seemingly endless space for growth 2) Tesla. They will take over the world one day, market leader in a growth market. Pushing every other EV manufacturer along and will be the ones who find a gamechanger of a range and charging solution 3) BAE, not on the list for a nice reason. Loads of conflict worldwide and these guys lead the market in researching, developing and manufacturing different ways for paying customers to vaporise enemy combatants and selling them these bits of kit. 4) BT Group, on here purely for guaranteed dividends. I reckon near enough every pension fund has exposure to this mob of charlatans currently recovering and rallying a mini revival of the share price by laying of staff in Openreach and looking to pursue a contractor workforce. Which is shit for the employees but the city seems to like inhuman practices like that. 5) something I've noticed since tinkering and looking at stocks and shares etc is the biggest conglomerates are quite good at being massive shareholder driven options so it's a coin toss between BAT and BP. Decide which kills more people later and choosing based purely on potential growth and dividend compounding. I'm saying BP, we all need fuel in our cars whether we smoke or not
Amazon - probably worth it just for AWS and their cloud computing alone
I just don't understand Tesla. Why would I buy shares in a company which has 1 product, incredible competition and whose shares are unbelievably expensive? What is Tesla's moat? Forget Musk and the cult of personality, but viewing it as a company - it produces fairly unimpressive, expensive cars which BYD, for example, can produce for a fraction of the cost with better range. Toyota posts 3X profit compared to Tesla and yet has a PE of around 10 against Tesla's 60. Toyota, like most Japanese companies, a whole plethora of other business activities. Plus, they're constantly spending on technological advancements in areas such as synthetic fuels and hydrogen. They also sell petrol, hybrid and EVs - it is not a given that EVs will dominate in 30 years time - companies like Toyota will be able to pivot. Just look at how the European car manufacturers have suffered from going all in on EVs. Buying shares in Tesla, in my opinion, is big risk. I can see the counter argument, however, and would like to hear some opinions!
BAE - good stock, great buy in 2021
BT - huge pension fund liability.
BP - Would be silly to bet against oil with whats going on in Middle East. Also if people ignore these companies because of sustainability - I guarantee in 100 years time Shell and BP will still exist, even if they've moved away from oil. They're in the best position to gain from the energy transition.
A long lost uncle leaves you some money, putting aside all the usual sensible stuff. Pay off mortgage, get a new V8 throttle monster, go on a nice holiday and consider sacking off work. Then reality bites and that 1k is going to be better off invested in the stock market.
Taking whatever factors you want to take in we are looking to make money short or long term. Pick 5 places to put your money. Take into account high price but guaranteed dividends, false low prices looking for a spike, arsehole companies that are probably on my c*nt list that continue to increase in value.
My 5
1) Amazon. High price, a seemingly endless space for growth 2) Tesla. They will take over the world one day, market leader in a growth market. Pushing every other EV manufacturer along and will be the ones who find a gamechanger of a range and charging solution 3) BAE, not on the list for a nice reason. Loads of conflict worldwide and these guys lead the market in researching, developing and manufacturing different ways for paying customers to vaporise enemy combatants and selling them these bits of kit. 4) BT Group, on here purely for guaranteed dividends. I reckon near enough every pension fund has exposure to this mob of charlatans currently recovering and rallying a mini revival of the share price by laying of staff in Openreach and looking to pursue a contractor workforce. Which is shit for the employees but the city seems to like inhuman practices like that. 5) something I've noticed since tinkering and looking at stocks and shares etc is the biggest conglomerates are quite good at being massive shareholder driven options so it's a coin toss between BAT and BP. Decide which kills more people later and choosing based purely on potential growth and dividend compounding. I'm saying BP, we all need fuel in our cars whether we smoke or not
Depends on what your portfolio currently looks like, but in reality rather than try and be too clever, just stick it in an S&P500 or FTSE 100/250 ETF. Depending on the sum trickle it in over time.
I do that in my main pension, but also have a smaller one where I trade shares to try and beat the markets, currently just about winning on that, but partly due to a big spike recently on SAGA shares (up 27% when I sold).
I think it would be unwise to completely ignore Asia, a region which is not suffering from declining birth rates. US market is far too concentrated as well. Diversification is important - recency bias has led investors to believe that you must invest in the US to get returns. History tells us this is not true.
Which (Consumers Association) has strongly backed Panorama, and actually has done quite a lot of work on Revolut over the last few years.
I did smile at this:
"Customers seem happy with its service overall – indeed some are almost evangelical – but here at Which?, we can’t recommend putting significant sums in a Revolut account. "
That'll be the crypto bros, then😉
Crypto via Revolut is very poor, high fees, slow processing to buy / sell crypto. Same for stocks, avoid. The only reason to use Revolut for Crypto is to take £ / $ to transfer to a decent exchange, as most high street banks in the UK block transfers of funds or payments on debit cards to Crypto exchanges. This seems illogical to me as I should have choice in where my money is spent.
On the other side of the coin..............mortgages.
With the inflation numbers out yesterday the commentary is all about rate cuts in November & December - most likely 0.25% at a time.
Had emails from lenders since raising their rates. These are from Halifax, Barclays and now Accord. Both 2 year & 5 year fixes. Increases of between 0.15% to 0.25%.
Just a thought on looking shares offering a good dividend. Any increase in NICs for companies, as expected in the next budget, is going to impact costs and potentially reduce their scope for divi payments going forward. They may increase cost of goods or adjust in other ways to combat the increased cost, but easy to imagine payouts will reduce.
Comments
1. Would I be right to assume any CGT increase is likely to be delayed. Would make sense to me in that it encourages people to sell lots now and hence a big immediate jump in CGT receipts immediately.
2. IFA fees. Is 1% pa management fee reasonable?
Ta
2. Seems steep to me, but does depend on what they are doing for that and what they are managing (and more importantly the amount). If they are managing your SIPP with £25k in it then £250 probably doesn't cut it. It they are managing £1m in a SIPP then £10k sounds a bit steep. Most rebate to a degree for the larger sums.
As for IFA fees. Some of us charge 0.5%pa and might discount it for large sums 😉.
It's outrageous that people are being left guessing about decisions that have been made over decades. But the chancellor hasn't come out and closed anything down - no doubt because she's already boxed herself in on so many other things to get over the line in the election. The pension and asset managers have been making a lot of noise and have told her how much is being drawn out, so presumably it was being considered seriously at some point; maybe she's backed off.
There's a lot more talk recently about borrowing and the civil service fears of cuts have been rising, presumably in an attempt to square the circle. So, maybe tax rises are being watered down a bit.
For me, cashing in is a decision that works in my personal circumstances. There's no downside doing it but quite a bit of downside risk if I don't.
I get rid of a loan at 5.5%, so can just trade for the equivalent investments in my pension that have a similar, low return, low risk profile. The rest I can put in other wrappers (ISAs over a couple of years or even VCTs, which have been protected for the next ten years).
It reduces my monthly out-goings by a significant amount, which has allowed me to turn down corporate jobs that were driving me nuts and look at lower cash/higher equity opportunities. I can still contribute to my and my wife's pension as before, as MPAA rules don't kick in if I just take the lump sum. Ironically, that includes the potential to take an index-linked DB pension from the civil service ....
It is illogical - but then so were the LTAs, which were in place for many years and only very recently removed. They punished people who had invested well at higher risk. It was only because it also affected government employees on very lucrative DB schemes that they were done away with at all (and why no-one is hearing that they're coming back).
We need some stability in savings incentives. Gordon Brown broke the seal when he taxed dividends in pensions and chancellors have been milking us ever since. Last I saw that dividend move alone has skimmed 268 billion from pensions over 20 years and chancellors saw that he pretty much got away with it, politically.
https://www.bbc.co.uk/iplayer/episode/m00226h0/panorama-britains-newest-bank-how-safe-is-your-money
https://www.telegraph.co.uk/technology/2019/02/28/revolut-failed-block-suspicious-transactions/
And more recently, fines and staff issues:
https://amp.theguardian.com/business/2023/feb/20/revolut-can-the-chancellors-fintech-favourite-fix-its-image-problem
It's one of the reasons I've stuck with Monzo.
It all reminded me of the Wirecard scandal which was basically very very dodgy (illegal) balance sheet accounting to inflate revenue by falsely reporting purchases values and therefore asset values of subsidiaries.
They finally got their banking licence a few months ago, after a lot of delay.
A long lost uncle leaves you some money, putting aside all the usual sensible stuff. Pay off mortgage, get a new V8 throttle monster, go on a nice holiday and consider sacking off work. Then reality bites and that 1k is going to be better off invested in the stock market.
Taking whatever factors you want to take in we are looking to make money short or long term. Pick 5 places to put your money. Take into account high price but guaranteed dividends, false low prices looking for a spike, arsehole companies that are probably on my c*nt list that continue to increase in value.
My 5
1) Amazon. High price, a seemingly endless space for growth
2) Tesla. They will take over the world one day, market leader in a growth market. Pushing every other EV manufacturer along and will be the ones who find a gamechanger of a range and charging solution
3) BAE, not on the list for a nice reason. Loads of conflict worldwide and these guys lead the market in researching, developing and manufacturing different ways for paying customers to vaporise enemy combatants and selling them these bits of kit.
4) BT Group, on here purely for guaranteed dividends. I reckon near enough every pension fund has exposure to this mob of charlatans currently recovering and rallying a mini revival of the share price by laying of staff in Openreach and looking to pursue a contractor workforce. Which is shit for the employees but the city seems to like inhuman practices like that.
5) something I've noticed since tinkering and looking at stocks and shares etc is the biggest conglomerates are quite good at being massive shareholder driven options so it's a coin toss between BAT and BP. Decide which kills more people later and choosing based purely on potential growth and dividend compounding. I'm saying BP, we all need fuel in our cars whether we smoke or not
I do that in my main pension, but also have a smaller one where I trade shares to try and beat the markets, currently just about winning on that, but partly due to a big spike recently on SAGA shares (up 27% when I sold).
I did smile at this:
"Customers seem happy with its service overall – indeed some are almost evangelical – but here at Which?, we can’t recommend putting significant sums in a Revolut account. "
That'll be the crypto bros, then😉
Meanwhile, there's a reason why Revolut doesn't yet have a license but it does seem like the FSA is starting to wobble.
I wouldn't keep large sums in it at all, just spending money, but I know some do.
I just don't understand Tesla. Why would I buy shares in a company which has 1 product, incredible competition and whose shares are unbelievably expensive? What is Tesla's moat? Forget Musk and the cult of personality, but viewing it as a company - it produces fairly unimpressive, expensive cars which BYD, for example, can produce for a fraction of the cost with better range. Toyota posts 3X profit compared to Tesla and yet has a PE of around 10 against Tesla's 60. Toyota, like most Japanese companies, a whole plethora of other business activities. Plus, they're constantly spending on technological advancements in areas such as synthetic fuels and hydrogen. They also sell petrol, hybrid and EVs - it is not a given that EVs will dominate in 30 years time - companies like Toyota will be able to pivot. Just look at how the European car manufacturers have suffered from going all in on EVs. Buying shares in Tesla, in my opinion, is big risk. I can see the counter argument, however, and would like to hear some opinions!
BAE - good stock, great buy in 2021
BP - Would be silly to bet against oil with whats going on in Middle East. Also if people ignore these companies because of sustainability - I guarantee in 100 years time Shell and BP will still exist, even if they've moved away from oil. They're in the best position to gain from the energy transition.
With the inflation numbers out yesterday the commentary is all about rate cuts in November & December - most likely 0.25% at a time.
Had emails from lenders since raising their rates. These are from Halifax, Barclays and now Accord. Both 2 year & 5 year fixes. Increases of between 0.15% to 0.25%.