Savings and Investments thread

cantersaddick said:

Rob7Lee said:

Covered End said:

A quick win could be for the government to set up & "advertise" a simple online system where all the people that want to pay more tax can do so in a matter of clicks.

Presumably there is a reason why I've never heard it even suggested?

Whilst it couldn't cause an issue that I can see It’d raise very little, I’m sure I’m not the only one that could and do find 101 other places to give money that would be better used than letting government waste even more! 

cantersaddick said:

Rob7Lee said:

cantersaddick said:

Rob7Lee said:

cantersaddick said:

red10 said:

cantersaddick said:

I was more talking about the frankly ridiculous notion that someone might "never have claimed a penny in their life" when reality is that everyone benefits directly and indirectly. 

I wasn't really talking about the rights and wrongs of IHT specifically. I understand your point of view here. Its not one I agree with, but I see where it comes from. 

Fiscal drag is a huge huge issue (don't get me started) but IHT is one where the thresholds have actually moved (not enough) since 2010. Most haven't at all.

As in I have never been on benefits and have paid in a significant of money into the system, so basically I have paid my dues. 

But you have taken from the system in countless other ways as we all have. And will continue to do so at an increasing rate until you die. The focus on benefits is all wrong. That's just one small way that people take from the system over a lifetime. 

"I've paid my dues" comes across as a pretty entitled way of thinking about it. And i thought it was us millennials who were meant to be the entitled ones.

People (and government!) will focus on any element they think has become unfair or out of control. The benefit bill has become unmanageable in size and is set to even grow considerably more. It's also partly back to what we were saying the other day, 1 in 5 people of working age are not in (paid) work. Even after WWII and almost every year up until about 7 years ago it was about 4-5%.

It's like Motorbility where thats running into issues (I have to be careful what I say on that as under an NDA), did you know that scheme buys almost 25% of ALL new cars sold in the UK?

Yes, that's the perception. And I get why people are inclined to look below them and blame people who are having a harder life than them therefore may take more. But people are massively undervaluing what they themselves take to make themselves feel better about it. If you've had 2+ kids and live to old age your NHS costs will likely be larger than their benefit bill. If a loved one has had cancer treatment (or major op, or even a hip replacement) it'll dwarf it. Many people who think they are net contributors because they only think about cash payments are not. They are net takers. Yes some may be net takers by more but the entitlement of "I've paid in my whole life" is just wrong.

I don't think it's perception about the size of the benefit costs and how it's increased over the last few years, over 300bn (now roughly running at 10%+ of GDP and a quarter of all government expenditure), we've all seen the latest in parliament on this, perception it is not.

Nearly 4m working age people receive health related benefits, up from 1.2m 5 years ago. Thats a huge increase and isn't a perception, it's fact.
The rise in economic inactivity in 18-24 year olds since the pandemic, is not perception, nor is the 18-64 year olds increase since 2019 (now over 11m in the band are not in paid work, over 9.5m are not unemployed, they are not looking for work or available to start any work).

The 'bill' as it stands will only get bigger especially as we live longer and expect there to be many more pensioners in the next 5-10 years (sadly in this country we have always funded state pension each year with that years income, there is no historic built up pot to use).

It's not about 'look below' as you put it, or who is or isn't a net contributor or taker (there will always be both, for a multitude of reasons and it can't work any other way). I'm 100% sure my wife is a net 'taker' based on the fact she pays almost no income tax, i'm not looking down on her! I'd envisage i'm a net contributor and she's certainly not looking up on me I can tell you! :-)

We've been here earlier this week, but if government spending has increased from broadly 700m to 1.3trn in recent years, something has to give as it's not as if anyone feels their lives are particularly better, there's still holes in the road, waiting lists, lack of availability for GP/Dentist etc.

Anyone who doesn't think we have a completely broken system from left to right and top to bottom needs to give their head a rather serious wobble.

Again, not my point which was that the attitude of "I've paid therefore I am entitled to my pension and use of the NHS and all other services for the rest of my life" and using others take more as a justification to take what you need and moan about tax. I just think that entire attitude is wrong and the cost of those services show it to be bullshit irrelevant of what others use. 

To address your other points:
I don't disagree that the welfare bill is a lot and soon to be unsustainable. We have to look at the causes of this rather than thinking we can simply cut our way out of it. PIP was brought in as a cut compared to the old system (DLA). Its been cut 3 or 4 times at least since then. Each time it hasn't saved as much as they were hoping and the bill has continued to rise. We have to solve the structural issues in our society and economy if we want to reduce this. We have to bring back prevention and early intervention into health, education, crime drivers etc. solve the low pay issue, invest in making society function again and then we can start to reduce spend on these things, or rather it will naturally happen. We cant force it to happen when the conditions are so hostile.

We've cut our way into this situation thanks to 15 years of Austerity (sure start for example would have massively reduced this reliance). There is no way we are going to cut our way out of it. 

The language used in the press, in government and evidenced on this thread (not you) is very much along the lines of looking below.

I agree with most you say there (especially sure start, glad it's not only me that recognizes this). however where I disagree quite considerably is "the welfare bill is a lot and soon to be unsustainable". Government spending which will include the welfare bill became unsustainable probably 15 years ago. There's a reason debt interest is now over 10% of tax receipts and despite a near doubling of expenditure almost nothing has improved. Cuts didn't solely lead us here, that path was already laid and the 2010 government doubled down and sped that up.

And that for me is the conundrum, I agree about what we need to invest in, but we aren't even remotely close to balancing current expenditure, let alone everything that needs more money or even new money. We are already in that viscous circle downwards and no amount of extra tax is going to fix that, back to where I started over a week ago, unless you fix the economy and growth, we will continue a downward spiral on all levels for the rest of my lifetime. Or you make some extremely tough and unpopular decisions which government won't as they'd be out next time around.

As for looking below, probably agree with some press, although there's plenty of others that are looking in the opposite direction (wealth tax) - it cuts both ways, almost everyone feels aggrieved by something!

I get what you are saying but maintain we aren't going to fix the economy or get growth until we fix the structural economic and societal problems.

If we look post WW2 when the debt to GDP ratio was much much worse than it is now (Peak 270% now ~90's ish). Despite the level of debt and fiscal situation there was massive investment into solving the issues facing society at the time. Massive levels of house building, large employment schemes (public works etc.) massive infrastructure building investment, massive investments in education, set up the NHS and the welfare state and much much more. These were enablers to growth. And over time they were able to unwind some of the public cost of them and then reduce the size of the state. What they didn't do was say " we cant solve any of these problems until we get growth to pay for it". 

Yes Growth is what fixed the debt-GDP ratio but that was only possible by solving the structural problems and making strides for society. You have to set the foundation for growth or you will forever be stuck in this cycle. 

Treat COVID, the financial crisis and Austerity as a war debt. Invest in the foundations for a productive economy and a functioning society and the growth will come. Anything other than that is a continuation of managed decline (whilst hoping a genie will pull some growth out their arse with nothing to actually enable it). 

cantersaddick said:

Rob7Lee said:

cantersaddick said:

Rob7Lee said:

Covered End said:

A quick win could be for the government to set up & "advertise" a simple online system where all the people that want to pay more tax can do so in a matter of clicks.

Presumably there is a reason why I've never heard it even suggested?

Whilst it couldn't cause an issue that I can see It’d raise very little, I’m sure I’m not the only one that could and do find 101 other places to give money that would be better used than letting government waste even more! 

cantersaddick said:

Rob7Lee said:

cantersaddick said:

Rob7Lee said:

cantersaddick said:

red10 said:

cantersaddick said:

I was more talking about the frankly ridiculous notion that someone might "never have claimed a penny in their life" when reality is that everyone benefits directly and indirectly. 

I wasn't really talking about the rights and wrongs of IHT specifically. I understand your point of view here. Its not one I agree with, but I see where it comes from. 

Fiscal drag is a huge huge issue (don't get me started) but IHT is one where the thresholds have actually moved (not enough) since 2010. Most haven't at all.

As in I have never been on benefits and have paid in a significant of money into the system, so basically I have paid my dues. 

But you have taken from the system in countless other ways as we all have. And will continue to do so at an increasing rate until you die. The focus on benefits is all wrong. That's just one small way that people take from the system over a lifetime. 

"I've paid my dues" comes across as a pretty entitled way of thinking about it. And i thought it was us millennials who were meant to be the entitled ones.

People (and government!) will focus on any element they think has become unfair or out of control. The benefit bill has become unmanageable in size and is set to even grow considerably more. It's also partly back to what we were saying the other day, 1 in 5 people of working age are not in (paid) work. Even after WWII and almost every year up until about 7 years ago it was about 4-5%.

It's like Motorbility where thats running into issues (I have to be careful what I say on that as under an NDA), did you know that scheme buys almost 25% of ALL new cars sold in the UK?

Yes, that's the perception. And I get why people are inclined to look below them and blame people who are having a harder life than them therefore may take more. But people are massively undervaluing what they themselves take to make themselves feel better about it. If you've had 2+ kids and live to old age your NHS costs will likely be larger than their benefit bill. If a loved one has had cancer treatment (or major op, or even a hip replacement) it'll dwarf it. Many people who think they are net contributors because they only think about cash payments are not. They are net takers. Yes some may be net takers by more but the entitlement of "I've paid in my whole life" is just wrong.

I don't think it's perception about the size of the benefit costs and how it's increased over the last few years, over 300bn (now roughly running at 10%+ of GDP and a quarter of all government expenditure), we've all seen the latest in parliament on this, perception it is not.

Nearly 4m working age people receive health related benefits, up from 1.2m 5 years ago. Thats a huge increase and isn't a perception, it's fact.
The rise in economic inactivity in 18-24 year olds since the pandemic, is not perception, nor is the 18-64 year olds increase since 2019 (now over 11m in the band are not in paid work, over 9.5m are not unemployed, they are not looking for work or available to start any work).

The 'bill' as it stands will only get bigger especially as we live longer and expect there to be many more pensioners in the next 5-10 years (sadly in this country we have always funded state pension each year with that years income, there is no historic built up pot to use).

It's not about 'look below' as you put it, or who is or isn't a net contributor or taker (there will always be both, for a multitude of reasons and it can't work any other way). I'm 100% sure my wife is a net 'taker' based on the fact she pays almost no income tax, i'm not looking down on her! I'd envisage i'm a net contributor and she's certainly not looking up on me I can tell you! :-)

We've been here earlier this week, but if government spending has increased from broadly 700m to 1.3trn in recent years, something has to give as it's not as if anyone feels their lives are particularly better, there's still holes in the road, waiting lists, lack of availability for GP/Dentist etc.

Anyone who doesn't think we have a completely broken system from left to right and top to bottom needs to give their head a rather serious wobble.

Again, not my point which was that the attitude of "I've paid therefore I am entitled to my pension and use of the NHS and all other services for the rest of my life" and using others take more as a justification to take what you need and moan about tax. I just think that entire attitude is wrong and the cost of those services show it to be bullshit irrelevant of what others use. 

To address your other points:
I don't disagree that the welfare bill is a lot and soon to be unsustainable. We have to look at the causes of this rather than thinking we can simply cut our way out of it. PIP was brought in as a cut compared to the old system (DLA). Its been cut 3 or 4 times at least since then. Each time it hasn't saved as much as they were hoping and the bill has continued to rise. We have to solve the structural issues in our society and economy if we want to reduce this. We have to bring back prevention and early intervention into health, education, crime drivers etc. solve the low pay issue, invest in making society function again and then we can start to reduce spend on these things, or rather it will naturally happen. We cant force it to happen when the conditions are so hostile.

We've cut our way into this situation thanks to 15 years of Austerity (sure start for example would have massively reduced this reliance). There is no way we are going to cut our way out of it. 

The language used in the press, in government and evidenced on this thread (not you) is very much along the lines of looking below.

I agree with most you say there (especially sure start, glad it's not only me that recognizes this). however where I disagree quite considerably is "the welfare bill is a lot and soon to be unsustainable". Government spending which will include the welfare bill became unsustainable probably 15 years ago. There's a reason debt interest is now over 10% of tax receipts and despite a near doubling of expenditure almost nothing has improved. Cuts didn't solely lead us here, that path was already laid and the 2010 government doubled down and sped that up.

And that for me is the conundrum, I agree about what we need to invest in, but we aren't even remotely close to balancing current expenditure, let alone everything that needs more money or even new money. We are already in that viscous circle downwards and no amount of extra tax is going to fix that, back to where I started over a week ago, unless you fix the economy and growth, we will continue a downward spiral on all levels for the rest of my lifetime. Or you make some extremely tough and unpopular decisions which government won't as they'd be out next time around.

As for looking below, probably agree with some press, although there's plenty of others that are looking in the opposite direction (wealth tax) - it cuts both ways, almost everyone feels aggrieved by something!

I get what you are saying but maintain we aren't going to fix the economy or get growth until we fix the structural economic and societal problems.

If we look post WW2 when the debt to GDP ratio was much much worse than it is now (Peak 270% now ~90's ish). Despite the level of debt and fiscal situation there was massive investment into solving the issues facing society at the time. Massive levels of house building, large employment schemes (public works etc.) massive infrastructure building investment, massive investments in education, set up the NHS and the welfare state and much much more. These were enablers to growth. And over time they were able to unwind some of the public cost of them and then reduce the size of the state. What they didn't do was say " we cant solve any of these problems until we get growth to pay for it". 

Yes Growth is what fixed the debt-GDP ratio but that was only possible by solving the structural problems and making strides for society. You have to set the foundation for growth or you will forever be stuck in this cycle. 

Treat COVID, the financial crisis and Austerity as a war debt. Invest in the foundations for a productive economy and a functioning society and the growth will come. Anything other than that is a continuation of managed decline (whilst hoping a genie will pull some growth out their arse with nothing to actually enable it). 

I don’t think in the main we are disagreeing, but unlike post WW2 I don’t see loans coming from the US, Canada and elsewhere or zillions in free grants as per The Marshall Plan, and I don’t think your suggesting post war income taxation at 95% or IHT at 85%!

If we want to do that and raise a trillion then it can happen, but there will be a public revolt if the government dare to increase taxation even by a small amount, look at the winter fuel allowance debacle, suggesting a change/cut in benefit etc.

Either the country as a whole agrees to baton down and pay an awful lot more (and we'll all be worse off for a fairlyl ong period) into the government or.......

I'm not actually against IHT rises tbh and I say that as someone with a lot to lose. I really think inheritance is the enemy of social mobility. I've had some friends (who's parents are much richer than mine) argue we should have 95% IHT on anything other than the family home. Even that is in the grand scheme of things still not great for social mobility. I'm not actually saying we should do it but I don't think societally its a bad thing. 

We could of course tax those large corporations and the very richest in society who don't pay their fair share

We will obviously need some borrowing which is why we should follow the Japanese model of national debt. Will require a huge restructure but will be massively futureproof.

Huskaris said:

My portfolio has just today got back to where it was in February following the EU trade deal announcement!

Rob7Lee said:

Huskaris said:

My portfolio has just today got back to where it was in February following the EU trade deal announcement!

I’m up 14% since April, helped by the fact I sold to cash 6 weeks before (moved platform), still have half in cash now.

golfaddick said:

It's very difficult to compare peoples portfolios because everyone has a different risk strategy and therefore (should have) a different asset split. Anyone too heavy in US equities would have lost more and not made it all up and those more in UK & Europe would have lost less. 

My Sipp is 4% above where it was in mid Feb (I reckon the 18th was around the high point for US indices back then) and most of my clients portfolios are up between 2% and 5% since then.  I am around a 70/30 split between Equities and Bonds (inc property & cash) and most of my clients are split somewhere between 40/60 and 70/30. 

golfaddick said:

valleynick66 said:

golfaddick said:

It's very difficult to compare peoples portfolios because everyone has a different risk strategy and therefore (should have) a different asset split. Anyone too heavy in US equities would have lost more and not made it all up and those more in UK & Europe would have lost less. 

My Sipp is 4% above where it was in mid Feb (I reckon the 18th was around the high point for US indices back then) and most of my clients portfolios are up between 2% and 5% since then.  I am around a 70/30 split between Equities and Bonds (inc property & cash) and most of my clients are split somewhere between 40/60 and 70/30. 

So what’s your realistic typical annual target to achieve - 7/8% perhaps?

Again, very hard to say due to asset allocations etc etc. But I would usually say, on average for a 60/40 portfolio, between 6%-8% pa over a 5 -10 year period. 

Last 5 years have seen some extraordinary events. First Covid/lockdown in Spring 2020 - that saw a 20%-25% sell off in March & April.......and a bounce back in late summer that led all through into 2021 as countries cut interest rates to near zero. The US then kept going but UK & Europe took a dive due to the war in Ukraine and the subsequent Cost of Living crisis. And then there was "Truss-onomics" that led to panic in the Bond markets (Gilts fell 25% in late 2022) and interest rates going up quicker than BOE wanted just to stabilise the £. Then in 2024 we had General Elections everywhere and finally Trumps "Liberation Day" in April. 

Quite some 5 years.