I am impressed with your update on investments, I am looking for tax efficient way to rebalance my 7-figure dividend portfolio without triggering capital gain tax. what asset allocation strategies should i use?
The best strategy depends on your financial situation, account types, tax bracket, and investment goals. Consult an advisor or tax professional to tailor these strategies for maximum tax efficiency.
I’m currently working towards financial freedom with a focus on dividends & growth investing. Since 2014, I’ve built a portfolio made up of 30% NVDA, 25% SCHD and over 40% in digital and alternative assets, thanks to my CFA. This strategy has helped me earn 56,000 a year in dividends. Back in 2014, I only earned $21 in dividends.
@@PatrickLloyd- Oh I've heard similar things about hiring an advisor. It's hard to choose one that's very good though. Could you make some useful recommendations?
My CFA SOPHIE LYNN CARRABUS a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market..
I did some fairly extensive work on the subject of tax in the UK. Using a model of an average salary, average house average behaviour etc. it showed that 54% of your salary goes back to the government in one way or another. (This was a while ago, that figure will be higher now with the latest budget changes). I did not include Inheritance Tax. The figure itself did not surprise me I guessed it would be around half, what grinds my gears is how little we get in return.
I claim 40p per mile for work when using my own car then you do not need to pay tax on the 5p difference but you do need business insurance for your car. R&D can be preparing accounts, audits, operating procedures, health and safety, training courses, customer inductions, equipment sourcing and review. I claim 1 day a week for this. You can also claim a reasonable allowance for refreshments especially if you need to leave early for work if working away from your main office / site. You are required to take breaks so have to use local shops or service stations. Coffee or water costs as well as food so a reasonable claim of £10 a day is quite acceptable. If you have to stay away overnight claim for all food, drink etc. Claim everything no matter how small including postage, paper, pens, PPE, overalls if not supplied by your employer or contract company.
60 years being the minimum withdrawal age is too high, sometimes I don't think I will even reach that age. Lower it to 50 and I might consider using it along with the S&S ISA.
I have a 10% matched pension contribution from my employer, a SIPP and a S&S ISA. The majority of my savings plan goes into the SIPP for the tax savings going in and the ability to manage my own investments. I use the S&S ISA for liquidity, instead of overpaying my mortgage.
Trouble is you are planning for 30 years into the future based on a system that changes every 5 years or so... If something is encouraging you to to avoid tax by investing a certain way now it will be a target for the taxman in the future when it's actually worth something . Becoming a landlord was the dream until gov decided to screw them over, savings was encouraged right up until rates were dropped to nothing and the after they came back up gov reduced the tax free you could earn, capital gains went the same way, I am willing to bet the same will happen to pensions and ISAs. Problem is youngsters are being screwed so hard too that they have nothing left to invest so what will happen to markets in the future when the boomers all retire properly and stop investing and draw down their investments??
If you're traveling for work, for example you're a sales person or a mobile engineer you can claim back sustenance you bought while on the go, ie. whatever you spend on food, drinks, etc, so not just milage. You just have to fill a P87 form or if you do a self assessment you have to do it there. I learned this last year, kept my receipts from July that year, filled the P87 form and got a few hundreds back (although HMRC challenged me first, but after a bit of back and forth they acknowledged I'm entitled to the relief).
I've got no clue. What's weird is that as a mobile engineer I could claim back some spending on tools, they didn't challenge that part of the form, only the sustenance part. I had to point to the section in their own guidance notes (available online) that even has an example that describes my situation and daily work activities. Then crickets for around 6 months and then got a message on the HMRC app that I've gotten some tax return. 🤷♂️
Consider diversifying your portfolio with a mix of stocks and stable assets. Seeking professional advice now could provide valuable insights and strategies to navigate market uncertainties and protect your investments.
Financial planning and retirement strategies are crucial, especially in today's economic climate. With global economic fluctuations and uncertainties, it's essential to have a solid plan in place to protect your financial future.
the strategies are quite rigorous for the regular-Joe. As a matter of fact, they are mostly successfully carried out by pros who have had a great deal of skills and knowledge
Agreed, I've always delegated my excesses to an advisor, since suffering major portfolio loss early 2020, amid covid outbreak. I'm now semi-retired and only work 7.5 hours a week, with barely 25% short of my $1m retirement goal after subsequent investments to date.
I’ve been trying to tell my siblings about investing in a S&S LISA as a retirement vehicle alongside others. I’ve put in £4K in the last 4 years. Today it’s worth £27k (all in S&P 500). Just another tool for retirement
You can gift from income if it comes from income ie wage or pension income. This has to be a regular gift such as say £300 a month to your daughter for nursery fees. You have to make it clear this is a payment from income not savings. It would be best to record this in a letter to your daughter and retain a copy. This is as well as the other yearly gifts up to £3000.
Chris, there isn't any cheap stocks and shares lisa are out there. The fees alone on these Lisa's will kill any sort of gain, so the comparison you make against a standard ISA isn't really a true reflection of the difference in gains
I think investors should always put their cash to work, especially in this fourth quarter of 2024, we'll start to see more market diversification. I’m up 87% last year with a 7 figure portfolio well positioned with good blue chip companies and I have stop losses in place, Personally with insights from my FA Susan Kay Mack I prefer to invest in large cap companies which have economic moats, large cash flows and strong balance sheets. Some of which are AAPL, MSCI, IUKD, VHYL, SCHD, NVDA and Barclays.
8:20 Salary Sacrifice (SS) can only be applied to earnings above the National Minimum Wage (NMW). If your annual income is £17,570, it is likely that you are earning at or near the minimum wage. By law, this means Salary Sacrifice cannot be used for your contributions.
Hello Chris, could you please do a video on Vanguards new fees. Only been putting into a Vanguard Sipp for about a year! Don't know what to do? Is it time to move to a different provider? Thanks.
In addition to Premium Bonds also consider Gilts for tax efficiency. And for one off large lump sums Offshore Bonds can help with deferring capital gains.
Great idea, some countries you don't pay any tax at all. My friend lives in Saudi Arabia and keeps everything he makes, they pay for his kids schooling too. There is practically no crime either
@@kaxar6954because if you use a Lisa to save to buy a home after 40 by the time you get enough together to get a mortgage you’ll be too old for the banks to lend it’s not ageism it’s there to stop you doing something that won’t work due to your age
Hi Chris. Thanks a lot for this great video. What I don't understand is which is the purpose of the government with these ISA accounts. Why they don't make us pay taxes if we open them?
Pleased to hear the first thing you mentioned in the video was the lifetime ISA - I have had one for about 8 years now and am making sure I hit the £4k pay in every year
I’m pretty sure if you go over your personal savings allowance your tax code just changes and then you get taxed automatically in your payslip. Can someone correct me if this is wrong?
Your tax code should still be 1257L Meaning you get £12,570 of PAYE income tax free A calculation is performed by your employer and if you go over that £12,570 tax free allowance, you start paying income tax at 20%. This is calculated on a monthly basis. You get 1/12th of your tax free personal allowance of £12,570 every month. So in the first month of the tax year you have 1/12th, month two 2/12ths ect etc … Hope this helps!
What about dividends earned through your SIPP? Like your stocks/REITS pay you a dividend before you retire, is that taxed? Do you think it's a viable strategy to replace work income by investing in dividend stocks and REITS through LISA, Stocks and shares ISA and SIPP?
No it wouldn't be taxed as it'd be inside the wrapper for you :) Maybe in retirement, but I still don't think it stands up vs accumulation index funds. To be honest if you compare dividend vs index funds, index funds tend to win (as fun as I think dividends are)
Thanks Chris for the info much appreciated. I became disabled and unable to work again many years ago due to health problems. Living on basic DWP benefits. I am now 64 yrs old. What advice do you have for the likes of us many mere mortals! I have a small ISA and a state retirement age of 66.6 yrs.
If you’re a higher rate tax payer SIPP is far better than LISA for returns and ISA is better for flexibility so I don’t really understand why you would use a LISA unless you’ve maxed out contributions on the rest
I choose Lisa as I can get 25% of pension tax free, this withdrawal reduces the monthly payment. That monthly payment I modelled to be 20 years. So by taking the Lisa you can leave the full pension amount invested, higher monthly payment. You just have to think will you survive for the length of time to make that decision worth it.
also, means testing will come in for pensions, and labour are notorious for low values, so the numbers being bounded are £30k, if you have a £30k PA pension then you won't get the state pension, so you have to as with everything have your eggs in many baskets.
If your employer already has a workplace pension scheme set up, can you get them to pay it into your SIPP instead? is it something you'll need to get lucky with that your employer agrees with?
Oh wow, this has been enlightening! Currently I pay into a Workplace Pension via salary sacrifice (8%), but I also contribute to a SIPP to total 20% altogether. However, would it be more tax efficient for me to contribute all via salary sacrifice and then transfer out of that to my SIPP once or twice a year? That way I would get my NI saving as well as income tax. Would I lose any of the tax reliefs by transferring out (from Scottish Widows to Vanguard)? Thank you so much!
S&S LISA doesn’t work for everyone. In my situation, it’s simply not needed or worthwhile when you consider the tax relief on SIPPs for higher rate tax payers. Especially when you can max out the 20k limit in a normal S&S ISA and have the flexibility to access it whenever you want, ie for early retirement well before 60. Hell, the 25% tax free SIPP amount coming in at 57 will be way more than any figures accrued in a LISA by 60, for those as fortunate as myself. My situation only, not applicable for everyone.
Hi Chris, who is the best providers of a S&S LISA in the UK? I currently have one with AJ Bell…but see when I come to use it for a property (which I have planned) does this get automatically closed? As I’d still like to invest into a S&S LISA up until I’m 50 years old. Would I need to reopen a new account prior to turning 40 elsewhere? Thanks
13:15 won how much? With £21,000 invested the Median Annual Winnings would be £700, which would be a median interest rate of 3.30%. But that’s the median, you could still not win anything while someone else could be winning double the median. You cannot say “you pretty much would win every time”, what do you mean, £1, £200, £1,000…?
Hi John I am a younger viewer and I hope to not only survive this useless system but break free of its hold saving family friends and some strangers along the way through sharing knowledge and tactics. If you fancy speading your bets on someone, charity or otherwise doing something useful with your estate I would be happy to take on part of that challenge.
I think you were a bit light touch on the net benefit of salary sac. You chose a strange number of £17k as an example as this will be close to min wage and thus not able to Sal sac.
Could you possibly do a video explaining the tax relief on wages when your self employed and what it actually means? And how to claim the extra back if you’re a higher rate earner etc. Thanks Chris
The amount of pension contributions you make extends your basic rate tax band. Therefore, your 40% employment or self-employment income would be taxed at 20% rather than 40% or the amount of pension contributions.
@@SimonMisiewiczsExpatTaxTips Thank you Simon, much appreciated. I have that rough idea in my head, I always wonder if I've got it exactly right or if I'm missing anything. Really appreciate your reply though.
Brother, much obliged for the info. Been wondering about hmrc for awhile now. Made some gains in crypto (cycle not over yet). Took the initial value out, and just have the gains invested. Every country has their hamster wheel...Uk included. Obviously, if you made, over the cycles, 100.000s in crypto, ill wager an off shore account with no ties to the uk might be an idea (not my case).
Great video, really informative! Will be putting more into my SIPP as a higher rate payer. Will be doing my first self assessment form *gulp* I work fully remote at home, do you know if i can claim for stationary, and small electricals as it's so buraecratic to just get a second monitor and a new mouse sent out
I'm favoured, Getting my own Truck has always been my Dream for my business. I just acquired 2 recently, earning $32K weekly has been really helpful. I can now give back to the locals in my community and also support Charity Organizations.
Yes! I'm celebrating £32K stock portfolio today... Started this journey with £3K.... I've invested no time and also with the right terms, now I have time for my family an…
when someone is straight forward and good at what she does best. People will always speak for them. For me I can would say give Mrs Jenna Brooklyn of finance education a try and you be happy you did
chris is it true you cAN CLAIM the 45p per mile allowance is available to temporary placeS of work to travel from home eg on construction project's that last less than two years
I didn’t really understood the expenses one I pay for lot of courses myself that are my work related I didn’t think you could claim them if you’re an employee right? I think if you could that would be amazing.
just found your site and its really useful, thanks for the video. I will look through your other ones. Im off to China for work so I am looking for video on paying pension & national insurance contributions as an expat. Thanks Rich
It really depends when you want to buy. Personally I'd max the Lifetime ISA - you've done a great job so far. Long run - you've likely got a workplace pension? So I'd keep that up, make sure you maximise the contributions and then you can shift more in to the SIPP once you've got the house sorted. You've got time on your side too. It is a hard balance though, I still battle with it now (if that helps!)
@@JevansUK that is available for some work place pensions, sipp you do yourself and get 25 percent uplift so get 100 for each 80 invested to counter the 20 percent off 100 taken at source. Ni paid already at this point and you lose this. Sipps are different to work place pensions
I got a letter this week from HMRC telling me I’ve not paid enough tax this year. It’s because I’ve exceeded my personal allowance on savings interest. I might look at moving some savings to Premium Bonds.
Looking at the state of the economy god only knows what the govt is going to do in the future to people who have savings, ISA, pensions, home ownership etc.
My first baby is due this Friday, and this is my plan, open the ISA and automate contributions, hoping he'll be able to retire much earlier than I'll be able to 🤞
I have considered a lifetime ISA but never got round to opening one, what is the best option, I see HL and moneybox seem to be not popular but fees seem high. Is there any better options?
Another suggestion....Contribute to your workplace pension, you and your employer both pay in, however leave your contributions as cash in your pension, every so often withdraw the cash into your own SIPP. This way you get the employer contributions.
people are slowly stopping working and opting out the job markket and i'm not surprised, it's starting off in the US but will make it's way over here no doubt.
What the point of the Lisa Vs pension, surely you get more in the pension because of the tax back, the benefit of the ISA is you can take it out whenever to bridge the gap till you get your pension. Seems pointless
The government adds 25% to your LISA contribution just like they do for SIPP pension contribution, so they are the same in that respect. But you can access the LISA a bit earlier and it's completely tax-free, unlike SIPP which is taxed at your tax rate apart from 25% tax-free lump sum.
Why not do both? It doesn’t have to be one or the other. I use LISA and put into S&P 500. But I like the idea that if I had to I’ve got access to it now which I wouldn’t with a pension (yes knowing there is a 25% tax charge prior to 60). I like the fact that you got a 25% uplift guaranteed and also liquid in a worse case scenario (I do have an emergency fund but having extra to more is never a bad thing)
4:26: I wont be shocked if the UK implements an exit tax, so that by the time you’re 60 and decide to live in Spain, Goa, Bahamas or Thailand you’ll need to pay a tax to exit British residency.
I don't agree with the statement that the system is built to take from you as much as possible, I think it's built the way it is to reduce the ways in which people can avoid paying tax. The reality is if less people avoided/evaded taxes, the complicated tax system wouldn't be required. We have more taxes because people are dishonest.
Every successful trader started as a beginner who chose to learn before earning. Protect your capital, study relentlessly, and remember the market isn't going anywhere. Build your strategy before testing your luck.
The lifetime isa should and could be technically illegal since it discriminates on the grounds of age. The fact that the government adds £1k in for free and as an over 50 year old it’s a bit galling that tax payers pay every year and we are excluded.
This is the b.est video of this tyype I have seen on youtube, however I knew most of what was in it and because you cover such a lot in detail and at great speed you might want to consider breaking it up into shorter sections. I am certainly going to encourage the youngish adults I know to watch this video
from what i've learned, you can just use the same LISA for both a house and for savings. open one LISA, use it to buy a house, then keep saving into it until you are 50.
Another few that can help with tax: - You don’t pay CGT on U.K. GILTS (bonds) - There are some very interesting tax options available with onshore and offshore bonds, especially because you can gift to children and grandchildren and then they take on the tax liability and can pay for certain things eg school/uni fees etc - VCT, EIS and SEIS all offer tax incentive though they carry risk and liquidity issues
I thought I replied but my comment seems to not be here :/ no not yet but plan to utilise onshore or offshore bond probably in 3 years time when I remortgage. I semi regularly pull capital from my personal home and then invest and am comfortable doing so. We should catch up some time chat life/RUclips!
Add to your list of expenses…. Uniform cleaning allowance - needs to be logo’d uniform which you launder yourself. A P87 form if you are employed ( or you can work out the actual cost ) and receipts/estimate if you are self employed
8:38 this is wrong. Some workplace pensions like mine are shit and come out after tax and NI, so it doesn't make any difference. However I do get a match of 7.5%.
@@chrispalmer24correct, his pension will be credited 20% tax as a minimum, however if he is a higher rate tax payer then the extra 20% is not credited and he has to apply to HMRC for the extra amount. My employer did have this at one point but moved to a salary sacrifice later on.
I completely agree that AI stocks are set to dominate in 2024-2025. What sets NVIDIA apart for me is their strong position for sustained long-term growth, as well as their ability to support other AI companies on their platform. In fact, I know someone who saw over 200% returns from NVIDIA last year, which really speaks to its potential.
Would be nice if the max age of starting a LISA moved upwards to match the increasing pension age... Aged 43, who didn't get serious about saving in his 30s...
100% - they are presuming everyone over 40 doesn't need help with retirement?? Crazy. Good news is honestly, their is a big debate between LISA and SIPP anyway - it's very close, almost minimal difference, when you factor in NI
Yes and the U.K. economy is in a rut, along with most other European countries. We are in a new age of digital currency, in the USA it seems Bitcoin for example is becoming a very important asset, countries are adopting it like El Salvador and Bhutan. In the U.K. for example we can’t even buy an ETF legally 😢
UK is starting to feel very anti innovation and investments. UK stock returns have underperformed massively, even if compared to emerging markets… the government should address this and promote business instead of taxing our future prosperity out of existence
Worry about pensions is that government keep pushing the age back, used to be 50 and now scheduled to be 57....only one trend and could easily get pushed back in line with state pension age by this current government
@ There are plenty of reputable exchanges but always take it off them and store yourself on a hardware wallet. To verify it yourself you will need to run a node with bitcoin core & link your wallet this way you 100% now your bitcoin is legit.
Question, what happens if your WPP is classed as Sal sac but you’re still pay full tax and NI…are the company in the wrong for not passing on the savings in tax/ni?
Good question hope someone replies. I assume with salary sacrifice the amount comes out before tax and there’s no tax relief, but what about the 8% discount and national insurance?
I used the LISA for our first home, but have ever since not funded it. I find the SIPP much more powerful as it allows for greater contributions and tax reductions. There are perhaps 1 or maybe 2 benefits to a LISA over a SIPP. The LISA is tax-free and bulk which can be great, but not something I personally was aiming for and the SIPP gives me a tax reduction now levelling the 2 benefits out more or less. The one I am not sure about is inheritance tax. Now that the current (communist) government has included SIPP in the worth of estate, they can grave rob my savings aimed to my loved once. I think this won't be different for the LISA, but please correct me if LISA's are IHT free as that could really peak my interest.
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I am impressed with your update on investments, I am looking for tax efficient way to rebalance my 7-figure dividend portfolio without triggering capital gain tax. what asset allocation strategies should i use?
The best strategy depends on your financial situation, account types, tax bracket, and investment goals. Consult an advisor or tax professional to tailor these strategies for maximum tax efficiency.
I’m currently working towards financial freedom with a focus on dividends & growth investing. Since 2014, I’ve built a portfolio made up of 30% NVDA, 25% SCHD and over 40% in digital and alternative assets, thanks to my CFA. This strategy has helped me earn 56,000 a year in dividends. Back in 2014, I only earned $21 in dividends.
@@PatrickLloyd- Oh I've heard similar things about hiring an advisor. It's hard to choose one that's very good though. Could you make some useful recommendations?
My CFA SOPHIE LYNN CARRABUS a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market..
Thanks a lot for this suggestion. I needed this myself, I looked her up, and I have sent her an email. I hope she gets back to me soon.
I did some fairly extensive work on the subject of tax in the UK. Using a model of an average salary, average house average behaviour etc. it showed that 54% of your salary goes back to the government in one way or another. (This was a while ago, that figure will be higher now with the latest budget changes). I did not include Inheritance Tax. The figure itself did not surprise me I guessed it would be around half, what grinds my gears is how little we get in return.
@ Ralph2 Thank you for all the hard work you put into this. I guessed that we were paying over 50% of our earning in tax. 👏👏👏
I claim 40p per mile for work when using my own car then you do not need to pay tax on the 5p difference but you do need business insurance for your car. R&D can be preparing accounts, audits, operating procedures, health and safety, training courses, customer inductions, equipment sourcing and review. I claim 1 day a week for this. You can also claim a reasonable allowance for refreshments especially if you need to leave early for work if working away from your main office / site. You are required to take breaks so have to use local shops or service stations. Coffee or water costs as well as food so a reasonable claim of £10 a day is quite acceptable. If you have to stay away overnight claim for all food, drink etc. Claim everything no matter how small including postage, paper, pens, PPE, overalls if not supplied by your employer or contract company.
60 years being the minimum withdrawal age is too high, sometimes I don't think I will even reach that age. Lower it to 50 and I might consider using it along with the S&S ISA.
Agreed, I invest in an ISA to bridge the gap between 50 and drawing the pension.... LISA offers me no benefit
Same, many want to leave the UK now between 50 and their mid to later 50's, so the ISA still feels like the best bet for now.
I have a 10% matched pension contribution from my employer, a SIPP and a S&S ISA. The majority of my savings plan goes into the SIPP for the tax savings going in and the ability to manage my own investments. I use the S&S ISA for liquidity, instead of overpaying my mortgage.
Trouble is you are planning for 30 years into the future based on a system that changes every 5 years or so...
If something is encouraging you to to avoid tax by investing a certain way now it will be a target for the taxman in the future when it's actually worth something .
Becoming a landlord was the dream until gov decided to screw them over, savings was encouraged right up until rates were dropped to nothing and the after they came back up gov reduced the tax free you could earn, capital gains went the same way, I am willing to bet the same will happen to pensions and ISAs.
Problem is youngsters are being screwed so hard too that they have nothing left to invest so what will happen to markets in the future when the boomers all retire properly and stop investing and draw down their investments??
You are 💯% Right, bitter truth. I am so confused 😕🤔 don't understand what to do.
Especially, younger and R drownings in tution fee and rent ,bill loans with 6.9% interest charges for Lifetime
If you're traveling for work, for example you're a sales person or a mobile engineer you can claim back sustenance you bought while on the go, ie. whatever you spend on food, drinks, etc, so not just milage. You just have to fill a P87 form or if you do a self assessment you have to do it there. I learned this last year, kept my receipts from July that year, filled the P87 form and got a few hundreds back (although HMRC challenged me first, but after a bit of back and forth they acknowledged I'm entitled to the relief).
how can HMRC challenge you on a relief sanctioned by governent? that's like the police pulling you over for driving at the speed limit...
I've got no clue. What's weird is that as a mobile engineer I could claim back some spending on tools, they didn't challenge that part of the form, only the sustenance part. I had to point to the section in their own guidance notes (available online) that even has an example that describes my situation and daily work activities. Then crickets for around 6 months and then got a message on the HMRC app that I've gotten some tax return. 🤷♂️
That's only for self employed work. Pretty sure you can't do that if you are employed
@tomatomb8704 You can in certain conditions. Just google 'P87 form'.
Wear a supplied uniform from work - eg a T-shirt can claim flat rate expense of £60pa towards cleaning it! Can back date it if you have missed it too!
Claim from your employer?
Consider diversifying your portfolio with a mix of stocks and stable assets. Seeking professional advice now could provide valuable insights and strategies to navigate market uncertainties and protect your investments.
Financial planning and retirement strategies are crucial, especially in today's economic climate. With global economic fluctuations and uncertainties, it's essential to have a solid plan in place to protect your financial future.
the strategies are quite rigorous for the regular-Joe. As a matter of fact, they are mostly successfully carried out by pros who have had a great deal of skills and knowledge
Consulting with a financial professional can provide personalized insights and help align your investment strategy with your retirement goals.
Agreed, I've always delegated my excesses to an advisor, since suffering major portfolio loss early 2020, amid covid outbreak. I'm now semi-retired and only work 7.5 hours a week, with barely 25% short of my $1m retirement goal after subsequent investments to date.
Working with professionals who have expertise and experience in the market can provide valuable insights and guidance to navigate volatile times.
I too had missed the point of a LISA till now. Thanks for educating!
I’ve been trying to tell my siblings about investing in a S&S LISA as a retirement vehicle alongside others. I’ve put in £4K in the last 4 years. Today it’s worth £27k (all in S&P 500). Just another tool for retirement
LISA's are the best, I just hope labour doesn't go after them.
@@kjeksklaus7944 I'd be more worried about trump threatening to crash the global economy and the potential impact that could have on a S&S (L)ISA IMO.
What platform do you use for your LISA? Thanks
@@StyneJr7 HL but only because of a lack of options. This year a few more players have come to market so will be looking to move in Apr25
@@StyneJr7 moneybox, great app
You can gift from income if it comes from income ie wage or pension income. This has to be a regular gift such as say £300 a month to your daughter for nursery fees. You have to make it clear this is a payment from income not savings. It would be best to record this in a letter to your daughter and retain a copy. This is as well as the other yearly gifts up to £3000.
Chris, there isn't any cheap stocks and shares lisa are out there. The fees alone on these Lisa's will kill any sort of gain, so the comparison you make against a standard ISA isn't really a true reflection of the difference in gains
It also doesn’t take inflation into account
I think investors should always put their cash to work, especially in this fourth quarter of 2024, we'll start to see more market diversification. I’m up 87% last year with a 7 figure portfolio well positioned with good blue chip companies and I have stop losses in place, Personally with insights from my FA Susan Kay Mack I prefer to invest in large cap companies which have economic moats, large cash flows and strong balance sheets. Some of which are AAPL, MSCI, IUKD, VHYL, SCHD, NVDA and Barclays.
invest in stable stocks, my rule: if you previously liked the stock, then you should love it at a discounted price.
Nice, interesting picks.
She appears to be well-educated and well-read. I did a search on her name and came across her web, thank you for sharing
I did read about Susan Kay Mack on the web., quite a great resume she has
8:20 Salary Sacrifice (SS) can only be applied to earnings above the National Minimum Wage (NMW). If your annual income is £17,570, it is likely that you are earning at or near the minimum wage. By law, this means Salary Sacrifice cannot be used for your contributions.
Hello Chris, could you please do a video on Vanguards new fees. Only been putting into a Vanguard Sipp for about a year! Don't know what to do? Is it time to move to a different provider? Thanks.
I guess the question of LISA vs ISA, is comparing it to also just adding more into your pension? Isn't pension just better given its pre tax?
In addition to Premium Bonds also consider Gilts for tax efficiency.
And for one off large lump sums Offshore Bonds can help with deferring capital gains.
Move overseas. Perhaps a light-hearted comment but well, it does make one think.
Yes, indeed that is why I am now in Spain
Great idea, some countries you don't pay any tax at all. My friend lives in Saudi Arabia and keeps everything he makes, they pay for his kids schooling too. There is practically no crime either
@@keithchegwin1222 how’s Orville?
@@Marco65730 Very well thank you
@@keithchegwin1222 Living in a Westfields 💀
Don't simply retire from something; have something to retire to. Start saving, keep saving, and stick to investments.
I'm in a similar situation where should I look to increase income? Do you have any advice? What did you do? Thank you
It's great to see you guys talking about Ricky Wen, This man changed the game for me. Good Man❤️
he's mostly on Telegrams, using the user-name
Rickywen3 💯..that's it
Thanks for the info. I'll reach out to him immediately
I was 41 when the Lisa was introduced so the government screwed me with its ageism
I always wondered why no-one tried to sue for ageism. Many people over 40 never owned a home.
@@kaxar6954because if you use a Lisa to save to buy a home after 40 by the time you get enough together to get a mortgage you’ll be too old for the banks to lend it’s not ageism it’s there to stop you doing something that won’t work due to your age
Hi Chris. Thanks a lot for this great video. What I don't understand is which is the purpose of the government with these ISA accounts. Why they don't make us pay taxes if we open them?
What about JSIPP?
Can you please cover the topic of financial repression thay Russell Napier has put forward, this being why I do not trust pensions
Pleased to hear the first thing you mentioned in the video was the lifetime ISA - I have had one for about 8 years now and am making sure I hit the £4k pay in every year
I’m pretty sure if you go over your personal savings allowance your tax code just changes and then you get taxed automatically in your payslip. Can someone correct me if this is wrong?
Your tax code should still be 1257L
Meaning you get £12,570 of PAYE income tax free
A calculation is performed by your employer and if you go over that £12,570 tax free allowance, you start paying income tax at 20%.
This is calculated on a monthly basis. You get 1/12th of your tax free personal allowance of £12,570 every month. So in the first month of the tax year you have 1/12th, month two 2/12ths ect etc …
Hope this helps!
What about dividends earned through your SIPP? Like your stocks/REITS pay you a dividend before you retire, is that taxed? Do you think it's a viable strategy to replace work income by investing in dividend stocks and REITS through LISA, Stocks and shares ISA and SIPP?
No it wouldn't be taxed as it'd be inside the wrapper for you :) Maybe in retirement, but I still don't think it stands up vs accumulation index funds. To be honest if you compare dividend vs index funds, index funds tend to win (as fun as I think dividends are)
Thanks Chris for the info much appreciated. I became disabled and unable to work again many years ago due to health problems. Living on basic DWP benefits. I am now 64 yrs old. What advice do you have for the likes of us many mere mortals! I have a small ISA and a state retirement age of 66.6 yrs.
Tax Free Lump Sum (25%) £583,266.46 I am not sure your spreadsheet is correct when the maximum payMENT for 25% is £268,000
If you’re a higher rate tax payer SIPP is far better than LISA for returns and ISA is better for flexibility so I don’t really understand why you would use a LISA unless you’ve maxed out contributions on the rest
I agree. SIPP over LISA for higher rate 100%.
I choose Lisa as I can get 25% of pension tax free, this withdrawal reduces the monthly payment. That monthly payment I modelled to be 20 years. So by taking the Lisa you can leave the full pension amount invested, higher monthly payment. You just have to think will you survive for the length of time to make that decision worth it.
also, means testing will come in for pensions, and labour are notorious for low values, so the numbers being bounded are £30k, if you have a £30k PA pension then you won't get the state pension, so you have to as with everything have your eggs in many baskets.
How about PROs for SIPP if our age hits 54?
If your employer already has a workplace pension scheme set up, can you get them to pay it into your SIPP instead? is it something you'll need to get lucky with that your employer agrees with?
Oh wow, this has been enlightening! Currently I pay into a Workplace Pension via salary sacrifice (8%), but I also contribute to a SIPP to total 20% altogether. However, would it be more tax efficient for me to contribute all via salary sacrifice and then transfer out of that to my SIPP once or twice a year? That way I would get my NI saving as well as income tax. Would I lose any of the tax reliefs by transferring out (from Scottish Widows to Vanguard)? Thank you so much!
Definitely do it via salary sacrifice to save the NI 😊 you shouldn’t lose your bonus transferring but I’d definitely double check
@@chrispalmer24 Does the pension earning threshold of £6,240 affect SS vs. SIPP contributions?
S&S LISA doesn’t work for everyone. In my situation, it’s simply not needed or worthwhile when you consider the tax relief on SIPPs for higher rate tax payers.
Especially when you can max out the 20k limit in a normal S&S ISA and have the flexibility to access it whenever you want, ie for early retirement well before 60.
Hell, the 25% tax free SIPP amount coming in at 57 will be way more than any figures accrued in a LISA by 60, for those as fortunate as myself.
My situation only, not applicable for everyone.
Hi Chris, who is the best providers of a S&S LISA in the UK? I currently have one with AJ Bell…but see when I come to use it for a property (which I have planned) does this get automatically closed? As I’d still like to invest into a S&S LISA up until I’m 50 years old. Would I need to reopen a new account prior to turning 40 elsewhere? Thanks
13:15 won how much? With £21,000 invested the Median Annual Winnings would be £700, which would be a median interest rate of 3.30%. But that’s the median, you could still not win anything while someone else could be winning double the median. You cannot say “you pretty much would win every time”, what do you mean, £1, £200, £1,000…?
So glad I'm single and have no plans or interest in bringing anymore people into this world. I'll be gifting my estate to charity.
No family or friends to leave it to?
That should help your chosen Charity's CEO continue to earn a cushy £120k plus benefits.
Hi John I am a younger viewer and I hope to not only survive this useless system but break free of its hold saving family friends and some strangers along the way through sharing knowledge and tactics. If you fancy speading your bets on someone, charity or otherwise doing something useful with your estate I would be happy to take on part of that challenge.
Is it worth having a sipp if working in the nhs and having a defined benefits scheme?
You mention the LISA is great if you’re a basic rate payer. Is there a different rate or other considerations for the higher tax rate.
With any higher rate income makes sense to prioritise the SIPP to save 40% tax 😊
I think you were a bit light touch on the net benefit of salary sac. You chose a strange number of £17k as an example as this will be close to min wage and thus not able to Sal sac.
Could you possibly do a video explaining the tax relief on wages when your self employed and what it actually means? And how to claim the extra back if you’re a higher rate earner etc. Thanks Chris
The amount of pension contributions you make extends your basic rate tax band. Therefore, your 40% employment or self-employment income would be taxed at 20% rather than 40% or the amount of pension contributions.
@@SimonMisiewiczsExpatTaxTips Thank you Simon, much appreciated. I have that rough idea in my head, I always wonder if I've got it exactly right or if I'm missing anything. Really appreciate your reply though.
What’s the difference between SIPP and employer pension who offers 5% contributions?
Great video, really helpful thanks a lot for the video
Great video, really helpful ... thanks
Gifts from surplus income can also be useful to reduce IHT.
Brother, much obliged for the info. Been wondering about hmrc for awhile now. Made some gains in crypto (cycle not over yet). Took the initial value out, and just have the gains invested. Every country has their hamster wheel...Uk included. Obviously, if you made, over the cycles, 100.000s in crypto, ill wager an off shore account with no ties to the uk might be an idea (not my case).
5:13 - coul you inflation-adjust that, to get an estimate of the real-terms difference?
Great video, really informative! Will be putting more into my SIPP as a higher rate payer. Will be doing my first self assessment form *gulp*
I work fully remote at home, do you know if i can claim for stationary, and small electricals as it's so buraecratic to just get a second monitor and a new mouse sent out
I'm favoured, Getting my own Truck has always been my Dream for my business. I just acquired 2 recently, earning $32K weekly has been really helpful. I can now give back to the locals in my community and also support Charity Organizations.
As a beginner what do I need to do? How can I invest, on which platform? If you know any please share.
Yes! I'm celebrating £32K stock portfolio today...
Started this journey with £3K.... I've invested no time and also with the right terms, now I have time for my family an…
when someone is straight forward and good at what she does best. People will always speak for them. For me I can would say give Mrs Jenna Brooklyn of finance education a try and you be happy you did
I'm glad to write her tay I do hope she will help handle my paycheck properly☺️☺️☺️
Can I start with as low as $1,000?
Please who is this Mrs Jenna
This sounds so good andI would like to
be a party to this, is there any wayl can
speak with her?
The LISA is not a good investment vehicle for retirement, you are better off just increasing your pension contributions.
chris is it true you cAN CLAIM the 45p per mile allowance is available to temporary placeS of work to travel from home eg on construction project's that last less than two years
I didn’t really understood the expenses one I pay for lot of courses myself that are my work related I didn’t think you could claim them if you’re an employee right? I think if you could that would be amazing.
The early 2 min of the video is not the full picture on the purpose of tax.
So how does ISA compare if paying into a sipp with no employer contributions
just found your site and its really useful, thanks for the video. I will look through your other ones. Im off to China for work so I am looking for video on paying pension & national insurance contributions as an expat. Thanks Rich
HMRC website is very informative, and their staff are helpful on the phone too
12:20 yes , they got me. I had to pay a few hundred for savings in bank.
Premium bonds can really help, I think loads will fall victim to this this year!
All you need is a Stocks ISA and that’s it.
Hi Chris
Is the retirement calculator free?
Yeah 😊
@chrispalmer24 .. how do I access it, I cannot find it in linksbin the description?
Any advice on maximising saving for a house vs investing for long term? (26, 25kpa, 30k in a LISA / Cash ISA)
It really depends when you want to buy. Personally I'd max the Lifetime ISA - you've done a great job so far. Long run - you've likely got a workplace pension? So I'd keep that up, make sure you maximise the contributions and then you can shift more in to the SIPP once you've got the house sorted. You've got time on your side too. It is a hard balance though, I still battle with it now (if that helps!)
Thanks useful info.
Can you show me how you worked or came about these amounts of the example UK someone at the age of 34. Thanks
i think you do lose ni cost when investing in a sipp?
Not if you have salary sacrifice.
@@JevansUK that is available for some work place pensions, sipp you do yourself and get 25 percent uplift so get 100 for each 80 invested to counter the 20 percent off 100 taken at source. Ni paid already at this point and you lose this. Sipps are different to work place pensions
Amazing video! X
I got a letter this week from HMRC telling me I’ve not paid enough tax this year. It’s because I’ve exceeded my personal allowance on savings interest. I might look at moving some savings to Premium Bonds.
100%, honestly premium bonds are very fun lol. I miss having them
Looking at the state of the economy god only knows what the govt is going to do in the future to people who have savings, ISA, pensions, home ownership etc.
Another very good informative video
Create an ISA when they are born and invest a little each month to make them millionaires by the age of 40.
My first baby is due this Friday, and this is my plan, open the ISA and automate contributions, hoping he'll be able to retire much earlier than I'll be able to 🤞
@@butlerl Very smart 🙌
@@UK-Property-Tax-Accountants My baby is up 14% already on the max allowance. Boom!
@@m3ntalist That is very impressive to say the least 🤑
Can you open an S&S ISA for the little ones? Or just regular ISA?
I have considered a lifetime ISA but never got round to opening one, what is the best option, I see HL and moneybox seem to be not popular but fees seem high. Is there any better options?
AJ Bell is cheaper.
HL with regular investing in to one single index fund or dodl :)
Dodl is the best option for you
@@chrispalmer24 thanks
I moved to AJBell Dodle from OneFamily. Costs are so much less
Another suggestion....Contribute to your workplace pension, you and your employer both pay in, however leave your contributions as cash in your pension, every so often withdraw the cash into your own SIPP. This way you get the employer contributions.
VCT, EIS and SEIS investments are more risky but are extremely tax efficient
people are slowly stopping working and opting out the job markket and i'm not surprised, it's starting off in the US but will make it's way over here no doubt.
Nice summary Chris! Some options I hadn't heard of before towards the end of the video - really want to rent out the spare room now! 😅
Me too 😆
Good job
What's the info on the PC please? It looks unreal! 😍
Thank you 🧡it's all here: www.amazon.co.uk/shop/chrispalmer/list/1HT8G4TJXTA32
What the point of the Lisa Vs pension, surely you get more in the pension because of the tax back, the benefit of the ISA is you can take it out whenever to bridge the gap till you get your pension. Seems pointless
I think you can get at the LISA at age 60, so that's 7 years of bridging the gap until retirement at age 67
The government adds 25% to your LISA contribution just like they do for SIPP pension contribution, so they are the same in that respect. But you can access the LISA a bit earlier and it's completely tax-free, unlike SIPP which is taxed at your tax rate apart from 25% tax-free lump sum.
Why not do both? It doesn’t have to be one or the other. I use LISA and put into S&P 500. But I like the idea that if I had to I’ve got access to it now which I wouldn’t with a pension (yes knowing there is a 25% tax charge prior to 60). I like the fact that you got a 25% uplift guaranteed and also liquid in a worse case scenario (I do have an emergency fund but having extra to more is never a bad thing)
4:26: I wont be shocked if the UK implements an exit tax, so that by the time you’re 60 and decide to live in Spain, Goa, Bahamas or Thailand you’ll need to pay a tax to exit British residency.
Don’t give them any ideas! Lol
Physical gold is practically untraceable.
I don't agree with the statement that the system is built to take from you as much as possible, I think it's built the way it is to reduce the ways in which people can avoid paying tax. The reality is if less people avoided/evaded taxes, the complicated tax system wouldn't be required. We have more taxes because people are dishonest.
Lock your camera's focus mate, it's distracting on anything larger than a phone screen
Every successful trader started as a beginner who chose to learn before earning. Protect your capital, study relentlessly, and remember the market isn't going anywhere. Build your strategy before testing your luck.
The lifetime isa should and could be technically illegal since it discriminates on the grounds of age.
The fact that the government adds £1k in for free and as an over 50 year old it’s a bit galling that tax payers pay every year and we are excluded.
I agree. Pay into a pension instead and get the 20/40% tax relief, pretty much the same incentive if makes you feel any better that's what I do
Was just my luck the the lifetime ISA came into existence just after I turned 40 so I was ineligible…
This is the b.est video of this tyype I have seen on youtube, however I knew most of what was in it and because you cover such a lot in detail and at great speed you might want to consider breaking it up into shorter sections. I am certainly going to encourage the youngish adults I know to watch this video
3:36 can you open 2 Lisa accounts at the same time? Or just open another account after using the first for buying your first property? Thank you
from what i've learned, you can just use the same LISA for both a house and for savings. open one LISA, use it to buy a house, then keep saving into it until you are 50.
You can open another after you've used it towards a house (most people don't need this)
@@chrispalmer24 but it's unnecessary right? as the same LISA can just be used for both a house and long term savings.
Another few that can help with tax:
- You don’t pay CGT on U.K. GILTS (bonds)
- There are some very interesting tax options available with onshore and offshore bonds, especially because you can gift to children and grandchildren and then they take on the tax liability and can pay for certain things eg school/uni fees etc
- VCT, EIS and SEIS all offer tax incentive though they carry risk and liquidity issues
Brilliant, thanks for adding! Have you utilised any of these?
I thought I replied but my comment seems to not be here :/ no not yet but plan to utilise onshore or offshore bond probably in 3 years time when I remortgage. I semi regularly pull capital from my personal home and then invest and am comfortable doing so. We should catch up some time chat life/RUclips!
Oh and I just found out cask whiskey apparently carries no CGT who knew 😂
Good advice
can they up the LISA withdrawal age?
Add to your list of expenses…. Uniform cleaning allowance - needs to be logo’d uniform which you launder yourself. A P87 form if you are employed ( or you can work out the actual cost ) and receipts/estimate if you are self employed
*puts little logos on to every item of clothing I own* 😂
Am I right in saying you can't claim Trading Allowance 'and' CGT Allowance at the same time, you can only claim one of these two each year?
I wish I could understand one iota of what you are talking about. My old brain isn't computing!
Sorry! I’ll try to make some of it easier next time 😊 it’s a hard balance
Do you think I should buy bitcoin
Wheres the free download!??
Nice PC
Thanks Walter
8:38 this is wrong. Some workplace pensions like mine are shit and come out after tax and NI, so it doesn't make any difference. However I do get a match of 7.5%.
Surely you can fill in a self assessment and claim your tax back on your work pension contributions then?
@foyzo3673 your provider will normally auto claim 20% back, if you pay higher tax you need to do a tax return. But you don't get NI back
Really? I've never heard of this happening before. You should be getting the tax back as minimum? It's a government bonus?
@@chrispalmer24correct, his pension will be credited 20% tax as a minimum, however if he is a higher rate tax payer then the extra 20% is not credited and he has to apply to HMRC for the extra amount. My employer did have this at one point but moved to a salary sacrifice later on.
I completely agree that AI stocks are set to dominate in 2024-2025. What sets NVIDIA apart for me is their strong position for sustained long-term growth, as well as their ability to support other AI companies on their platform. In fact, I know someone who saw over 200% returns from NVIDIA last year, which really speaks to its potential.
Would be nice if the max age of starting a LISA moved upwards to match the increasing pension age... Aged 43, who didn't get serious about saving in his 30s...
The age limit should be removed. Always thought that the LISA was cash only, would love to open a s&s version, I’m too old.
100% - they are presuming everyone over 40 doesn't need help with retirement?? Crazy. Good news is honestly, their is a big debate between LISA and SIPP anyway - it's very close, almost minimal difference, when you factor in NI
@ along with my DC workplace pension, I wanted a fund incase of any changes in my health before 57 and reduce my working hours.
@@chrispalmer24 when did the LISA come in? I’m 44 never heard about it before.
I know I'm gutted. I have an idea but not lifetime as I'm too old. Damn
Yes and the U.K. economy is in a rut, along with most other European countries. We are in a new age of digital currency, in the USA it seems Bitcoin for example is becoming a very important asset, countries are adopting it like El Salvador and Bhutan. In the U.K. for example we can’t even buy an ETF legally 😢
UK is starting to feel very anti innovation and investments. UK stock returns have underperformed massively, even if compared to emerging markets… the government should address this and promote business instead of taxing our future prosperity out of existence
What stops them raising the age like they do with a pension, where all of us at 30 cant touch it until we are basically dead
Worry about pensions is that government keep pushing the age back, used to be 50 and now scheduled to be 57....only one trend and could easily get pushed back in line with state pension age by this current government
There’s this thing called bitcoin it’s a new technology the government can’t debase its the best savings technology
How do you know you are buying something real rather than a con?
@ There are plenty of reputable exchanges but always take it off them and store yourself on a hardware wallet. To verify it yourself you will need to run a node with bitcoin core & link your wallet this way you 100% now your bitcoin is legit.
Question, what happens if your WPP is classed as Sal sac but you’re still pay full tax and NI…are the company in the wrong for not passing on the savings in tax/ni?
Good question hope someone replies. I assume with salary sacrifice the amount comes out before tax and there’s no tax relief, but what about the 8% discount and national insurance?
I used the LISA for our first home, but have ever since not funded it. I find the SIPP much more powerful as it allows for greater contributions and tax reductions. There are perhaps 1 or maybe 2 benefits to a LISA over a SIPP. The LISA is tax-free and bulk which can be great, but not something I personally was aiming for and the SIPP gives me a tax reduction now levelling the 2 benefits out more or less. The one I am not sure about is inheritance tax. Now that the current (communist) government has included SIPP in the worth of estate, they can grave rob my savings aimed to my loved once. I think this won't be different for the LISA, but please correct me if LISA's are IHT free as that could really peak my interest.