The end of tax free savings as we know it
HTML-код
- Опубликовано: 22 сен 2023
- Here's the link to the FT article; give the comments section a read - always a laugh!
www.ft.com/content/5849ad2e-2...
Financial Planning
I am a Chartered Wealth Manager and Partner in a financial planning practice based in the UK. If you would like to find out more about our services, please follow this link: go.novawm.com/getintouch
DISCLAIMER:
This channel is for education purposes only and does not constitute financial advice. Any opinions or assessments expressed are James’ own opinions or assessments, which are not affiliated with any third party. Any representations stated as facts or views based on such facts are relevant to circumstances applicable at the time of publication. This information should never be relied solely upon to make decisions, and James accepts no liability for any investment actions undertaken by viewers. Please seek regulated financial advice or an advisor if you require assistance. The value of an investment and the income from it can go down as well as up and investors may not get back the amount invested.
James Shack™ property of James Shackell
Copyright © James Shackell 2023. All rights reserved.
The author asserts their moral right under the Copyright, Designs and Patents Act 1988 to be identified as the author of this channel and any video published on it.
What do you think about these proposed changes?
Cash and Stocks should be merged. No reason not to, it would also put investments into the eyes of people who never looked into investing.
Teach it in school rather than endless lessons about religion.
@@travellingtom6091 Agreed, should definately be taught in schols along side religion. No need to include/exclude one over the other
@@usefulrandom1855 I agree on the merge, but don't believe it will encourage many more people into the stock market, because most people will probably pay money into that single account with the intention to invest, but never get round to making that leap and end up just staying in cash anyway.
Here are my ISA proposals...
1. Allow existing Help to Buy ISAs to be converted to Lifetime ISAs.
2. Abolish the 5% penalty on the Lifetime ISA when cash is withdrawn other than to buy a first home (or before age 60) - it just acts a deterrent from saving money.
My daughter had a Help to Buy ISA, but had to cash it all in to pay a year's rent up front, because she was two weeks away from having her work status being changed to permanent at the time of the referencing to rent a new flat. As it was a Help to Buy ISA, there was no penalty.
3. Rename the Cash ISA to "Cash destroyed by inflation with some tax back account" 🤣 Seriously stop calling it an ISA. - maybe call it a TESSA? BUT KEEP IT SEPARATE from Stocks and Shares ISAs - Building Societies and Credit Unions etc must not be forced to offer stocks and Shares.
4. Rename the Stocks and Shares ISA to just "ISA" or "Beat inflation in the long term ISA". Definitely allow all contributions to be allocated into worldwide/ global / foreign countries without restriction.
5. Do NOT put a cap on the maximum that can be held in an ISA - some of us cannot put more than £3,600 (gross) a year into our pensions.
6. Keep Innovative Finance ISAs but remove the word "ISA" from them - eg call them high risk loan investment account (or perhaps "Casino account" for short).
Government policy: "We want you to be self reliant, but we also want to tax you on absolutely everything. We will gradually erode services and never restore them. A small handful of people will get rich in the process. Simply, we want your cake and we want to eat it."
WEF spokesman recently admitted earth needs a 7 bill population reduction. He "hopes" its carried out peacefully. But its got to happen. Governments are heeding.
Capitalism in a nutshell, it's self destructible.
We already invest in UK portfolio's in our defined contribution pension. Asking us to take more risk to assist the Treasury is unfair and immoral. Our free choice is being compromised at every stage!
Forced to invest in shares until greedy bankers crash the market and wipe out people's savings. Then the greedy sods can buy up more shares and turn a huge profit when the markets recover
@splottcardiff3993
You are absolutely right, most of the default funds are way overexposed to the UK stock market, on average about 22% UK equity exposure. I don't think the tories have really been helping ordinary people to learn about investing and better financial decision making. Also the UK has been a terrible place to invest since 2010 and the tories ruining our country. They are trying to get more money into UK companies to help line their own pockets and make up for their abysmal running of our country and its economy. I wouldn't really want to much exposure to the UK, and it's now easy to get cheap exposure to the rest of the world with very low cost index or etf funds.
The sanest move for anyone that wants a stable future seems more and more to be leaving the UK
Well I don't if my other in-law related country will be good or not.They have just announced tax changes, that could be very awkward. But I can understand why young teachers and doctors feel it is better to spend time overseas working.
My thoughts. We are being eaten alive.
Already done that this year. I grew tired of it.
Yeah I want to move to America just need to figure out best way for me to do that
@@thebeast9869That’s ridiculous!!!!! America is Trillions in debt.
I've a better idea. Stop taxing us to death so we actually have some money to invest !
They're literally taxing the air we breathe now...that old joke has come true
The problem is the balance of tax.
Last year Rishi Sunak earned £5M but because £4M of this was "Capital Gains" he only paid 23% tax.
23% tax is the same rate as someone on £37,000.
So the best way to "Stop taxing us to death" is to cut "our" taxes and increase the taxes on people who earn £5M.
@@MartynThomas1 I don't know the details..so he sold assets to make that money? If they've just increased 'on paper' that should abosutely NOT be taxed.
@@MartynThomas1
How can you be on this channel and be a socialist? And then write this comment one minute after watching a video about a new policy we're all going to hate?
A flat tax rate is the only fair system (the lesser of all evils) because it treats all UK residents equally.
Tax wealth, not income.
If the cap of 100K is introduced I’d go apoplectic!
We are taxed to death as it is and one of the few ways we can grow wealth would now be taken away.
I agree. Although I think this is the least likely thing they’ll implement.
i bet isas will be nerfed within the next 20 years.
@@JamesShack You could've put more focus on the unlikelyhood of that 🙃
@@samx463 they cant afford to if they want to wean the UK off the social security addiction weve got - not to mention the massive (and fast growing) national pension deficit... which is predicted to get worse with an ageing population.
How would that work for people already over that limit ? It would force people to sell off.
I suspect the changes are less about making them easier for people to understand, and more about lowering the taxation threshold so more people have to pay tax on their savings.
yep
It's that & the banning of cash. I'm staggered folks aren't beamed in to that ultimate WEF dictate.
And also to funnel even more finance into the city, like they've done with compulsory pension schemes.
What is difficult about an ISA? People claim they don't understand them because they do not want to understand them.
@@kevinsyd2012 apart from property and a savings account, oh and premium bonds, bless, brits understand nothing about investing.
Absolutely spot on, James. People don't trust the Government and by extension the financial system and by extension the stock market. Simplifying ISAs while not addressing peoples' inherently negative perceptions of investing will not change anything.
Probably the worse government in terms of financial competence we have ever had.
In terms of ANY competence more like.
Ever? Really 😆
The Labour governments of the 1970s would like a word.
@@adz_b I don't think that is unreasonable. Sunak while Chancellor oversaw the expansion of the money supply by 500% Now they pretend that inflation was a surprise. Sunak is now Prime minister, the financial crisis is entirely his doing!
@@DrFod I imagine they would say why have you fools voted for the con-servative party yet again, voting against your own best interests and that of our country
When I worked in Financial services 25 years ago there was talk of having "financial" lessons at school, so all kids left with a basic understanding of how things work. This of course never happened. Possibly the most important lesson (for life) they could ever of had? Oh well.
I find it crazy that they don't teach finance and school. It's such an important thing compare to some of the stuff they teach,
We had these classes in Slovakia, and most kids loved them. It's something you can actually use in the real world.
That along with general life lessons would have been very valuable.
When we were young we were taught, don't spend money, save it. We were not told a thing about inflation, that currents accounts are not standing still but losing money, that saving accounts are not growing your money but just losing it more slowly. The one thing, the only thing that needs to be taught if just one thing, savings accounts are not enough.
Rule number 1, never trust the goverment.
Rule number 2: Do not ever forget rule number 1
You are one of the most knowledgeable and talented RUclipsr/content creators I follow, and undoubtedly the best in finance. I appreciate all your content. Thank you very much, sending love from Chicago.
As a newbie about to invest, you must have three things in mind:
1. Have a long term mindset.
2. Be willing to take risk.
3. Be careful on money usage, if you're not spending to earn back, then stop spending.
4. Never claim to know - Ask questions and it's best you work with a financial advisor. I want to thank you Eric Thomas Witt For being my source of crypto education, as I am comfortably making 15.7 BTC.
Working with a financial expert can genuinely help you prepare for life's financial challenges. I'm glad I could reach out to my coach, Eric Thomas Witt, as I was actively selling off my portfolio and ultimately generated over $370,000 in just the first quarter, while others were concerned about the market downturn earlier this year.
With the assistance of Eric Thomas Witt, my investment has performed quite well. However, the amount of capital you invest ultimately determines everything. With a substantial starting budget, you may have the potential to earn more.
I've been struggling with finances for months after my divorce, and I just discovered his exceptional resume when I Googled his name. I consider myself lucky today.
I couldn't agree more. As a teacher, I run an exam by the LIBF which teaches 14-16 year olds about financial education. Unfortunately, the exam board, LIBF, have decided to withdraw the qualification. There isn't anything else like it.
I’ve no kids so I’m not an authority on this…. But it should be obvious that a number of basic life skills should be taught at some point in schools. Simple stuff, how to cook, how and why saving is a smart move…. Building on these basic principles year on year must surely impact on quality of life…. My niece is in her 30’s and wasn’t taught any of these real world issues.
Today there’s more emphasis on how X & Y chromosomes can generate 100+ genders… (rant over)
Does this teach kids about taxes, thresholds and how to file self assessments? Its crazy to think HMRC doesn't make this part of the curriculum
They don't want people knowing this stuff, you might end up with too many people financially independent of the state.
my maths teacher got our school to do that qualification and its what sparked my interest in finance and really helped me understand how taxes and finances etc worked
Martin Lewis/MSE! All the articles and advice they need - I'd recommend it to them! He's doing Gods work 😂
I have loved ISAs and they are the basis of my planning for my old age. I would be incredibly upset if after years of building and investing sensibly they change the rules so that the pot I have built up is re-exposed to tax. I also think that doing anything to impose limits on the regions you can invest in would be a very retrograde step. Diversification is so important and if he wants people to invest in the UK, maybe run the country a little better.
This would upset me too. The little guy gets ahead and the rich mess it up again, Im sure that this move is to cover a rich persons ar*se who has F*ucked up.
If they start taxing ISAs then that's the final straw for me and I'm leaving the uk. I'm also using my isa for my retirement but I also want free and easy access to it just incase I need it. I've built up a substantial amount in there and fill it up straight away every year and will continue to do so but I only do that because it's shielding it from taxes. They shouldn't be allowed to change the terms that I signed up for just like they shouldn't be allowed to change the pension age once you start paying into it. Some people will never get a pension if they keep raising it every 5 years. They just keep robbing from the poor and giving to the rich time and time again.
You have a good point. For various personal reasons I had not chance to build a pension but with a good ISA I can fund myself and not be reliant on the state at all. Just let us manage our own money! @@reggie5495
It's a cunning tax raising scheme. Get more people investing to inflate share prices then tax the increased values. I do think more people should be investing though. Jobs are being lost to AI and automation so the way to make money is to draw dividends, not try to compete in the workplace against robots. They're shuffling the tax burden from salary to dividends because wages are supressed and companies are profiting from decreased labour costs. It's a sensible way to balance the books when the tax burden from in-work benefits keeps increasing.
"Run the county better". You absolutely nailed it with this one sentence.
The idea of £100K limit on ISA investments is nuts. They want you to invest for the future. You can invest up to £20K per year. Presumably after five years of full investment it's game over for investments then? What about those who already have more than that invested in ISAs? All this does is sow uncertainty.
Absolutely agree, thoguht exactly the same points!
We need to get rid of these selfish, greedy, dishonest and corrupt tory arseholes before they totally destroy our country. I think we will get an election soon, then we need to kick the tories out. They are just screwing us all. I can honestly say they haven't done anything since 2010 that actually benefits me in anyway shape or form, they haven't done anything since 2010 that's really benefits our country as a whole. They have broken our country
Reducing allowance to £100000 is a dumb idea and I don't believe Hunt will implement it. I also don't think the incoming Labour Government will implement it, too. But It might be a good idea to have some tax free allowance, on top of your £20000 SS Isa allowance, to invest in UK companies only.
What a great idea.
I thought the allowance was 20K so to 'reduce' it to 100K would be fantastic 😊
@@richardwhite1120 20k is your yearly allowance. Some people suggested to change it with a 100k lifetime allowance, maximum money you can put into your ISA. They are irrelevant.
This is why the correct use of grammar is so important
You never know, if they think a dumb idea will win them votes then they might just do it (parties of all sides) even if it means hurting the country for the next 50 years.
When are you going to make us a cookery video with that huge kitchen behind you?
Interesting, a number of the most eminent markets experts have been expressing their views on the severity of the impending economic downturn and the extent to which equities might plummet. This is because the economy is heading towards a recession and inflation is persistently above the federal reserve’s 2% target. As I’m aiming to create a portfolio worth not less than $1million before I turn 60, I would appreciate any advice on potential investments.
There are many other interesting stocks in many industries that you might follow. You don’t have to act on every forecast, so I’ll suggest that you work with a financial advisor who can help you choose the best to purchase and sell the shares or ETF’s you want to acquire.
Thanks for the information! I just discovered his exceptional resume when I made a google research of his full names online. he appears knowledgeable and well accredited I drop him a message and book a call session with him!
Absolutely! A financial advisor can help you create a tailored investment plan that aligns with your unique financial situation and goals.
Amazing I know John Desmond Heppolette, glad I found this recommendation earlier on. I have made some pretty impressive gains, I closed last year with my investment portfolio at $650k. I love his insights and innovative approach to how his ETF’s are run so different from the stale methods of managers I’ve work with in the past.
Personally I'm keeping a chunk of money out of the mkts at the mo as I think a crash is due. Hopefully to invest that money incrementally when the mkt is lower. Maybe put some in an easy access account or ISA for now while rates are 4-5%.
Love the governments desperation to get us to invest in UK businesses. Are they trying to sink the crew with the ship? I hope the captain is invested there too, but i doubt it.
"governments desperation to get us to invest in UK businesses."
Here is the problem, the British government have made energy more expensive, and that underpins all economic activity. Raising costs in the UK compared to our competitors. Putting your money in an economic sector that is at a competitive disadvantage to its competitors is a recipe to lose money.
@@apflewis Excellent point.
Moving the deckchairs on the Titanic. If he wants to win an election he needs to bend his mind to tax simplification. I have spent 2 days trying to understand how to fill in an IHT form so I don’t leave my executors with a mess. It’s been an eye opening experience. How many mutually exclusive gift allowances do we really need?
A cap would be a disaster. Had no idea that was on the cards.
73% fall below a financial literacy benchmark. This government doesn’t want anyone off the treadmill.
Probably a similar figure in most countries tbf
@@TomsPersonalFinance exactly
When 51% of the UK think Boris Johnson would have been a good primeminister what chance does a majority nation of complete morons stand!
~25% of the uk adult population have a reading age of 9yrs. They are not equipped to fully access the GCSE curriculum, never mind consider financial education. We need to properly equip primary schools who in turn are expected to pick up the slack from incapable parents.
This includes hunt and snack then as they keep trying mislead the general public of inflation falls then they have more money in their pocket not point out prices just rise more slowly and are least 6.8% more expensive than previous year.
Most peoples mortgage increase might exceed inflation rises of other bills/ outgoings
Making ISA's (and indeed any government approved tax-free savings or investment vehicle) free from inheritance tax would definitely make them more attractive!
Under some circumstances Pension funds can be free of IHT
Couldn't agree more, I've pretty much self-taught myself over the last 3 years to become more financially literate using various resources including this channel. A lot of my friends/family circles tend to opt for the savings or property investment route and have no idea about the stock market. Financial literacy needs to start in school IMO.
This video is a game changer, I have been looking for the best way to increase my income and start up my retirement, but I really do not know much about investments and trading stocks. I keep postponing every single day that passes, but I want to begin now. How should I start? What do I need to know?
I know I can't do any investment by myself, because last time I tried, I lost all my money. I am serious and interested but also scared of losing money now. What can I do not to end up with same result as last time.
I have done some research, and what I need is an excellent financial advisor to assist me with what I want to do. A good recommendation will do. Thanks.
If you UK government got it's actually together and started creating positive growth, then people would naturally invest more into it.
Agree, the financial literacy of most people in UK is shocking. I really don’t understand why they don’t teach kids about these things at school.
You know why
@tf2368 You think it a conspiracy, when, in fact, incompetence and lethargy are the only explanation necessary.
They'll need to teach the teachers first. Most of them won't have a clue either
@@TomsPersonalFinance Sadly true 😂
This needs to be a mandatory part of the curriculum. What is given up tonight accommodate I don’t know. We can’t rely on parents to advise / teach their kids when quite clearly the parents are as confused by this and have never had any of the same education.
Anybody know how to use these "offshore banks" every politician has?
Poor man's version: Move offshore. 😂
@@mehfoos looking like the far superior option! 😂
James did a video on off shore bonds, if that's any help. 🙂
Step 1 for ISA simplification: get rid of Hunt and Sunak.
Step 2: see above.
@bigdawg1353: Clearly a comment from one of the many financially illiterate people
Be careful what you wish for!
Fantastic will send link to my MP . Won't do any good as is only interested in lining his own pocket before he is out of power. My MP is Jeremy Hunt. Lol
This was inevitable James , the capital gains allowance and dividend allowances are being reduce savagely this and next year
CGA. £12.3k > £6k > 3k
Dividends 2k > 1k > £0.5k
And when they’ve drove us all into ISA’s ( investment variety ) they come to cap the ISA allowance … it was so transparent, people with a healthy stock portfolio could previously take £12.3k CGA. £2k dividends and £12.47k earnings and £2k savings interest ~ £28k with not a penny paid in tax , not to mention those who were astute enough to max out their pensions , so for our sound financial planning and not wanting to be a burden on the welfare state he wants to attack the only remaining area for efficient tax management !!!
vultures/parasites is what they are. i never vote as i hate them all.
Its discusting. Tory's need to go.
Yes, it's a paradox. They want you to invest more, but then reduce CGT allowance.
Why screw around with something that is fine as it is! Raise the £20k limit or leave it alone.
No chance they raise it. They wanna cap it so you pay tax earning anything more then 100k.
Financial education should soo take place in schools...would have helped me a hell of a lot more than Pythagoras theorem ever did back in the day
I taught Maths in a secondary school. It is absolutely shocking how many young people have no idea about things like inflation, ISAs, pensions, or even interest rates! AND we're not allowed to teach most of this, because we have to stick to the nation curriculum, so uhhh, here's how to find the area of a triangle...
can they not be used as examples for different maths problems? I remember doing APR as part of percentages in Maths, we also did compound interest but not sure if our teacher just went rouge lol
They are generating tax payers in secondary schools so wouldn’t be in the national curriculum imho.
@@munaali840: Exactly, you can teach them different examples. And then state that it can be applied to different scenarios. That is how I was taught statistics. Via an example on TV screen time. Averages. Mean, median. More. Apr can be applied via an applied mechanical problem. And it is better to reach kids when young because it will seed their brains. The fact that I'm in my 40s and could still remember this as an old memory speaks volume, right ?
If they cut the 20k a year stocks&shares allowance, and change it to a 100k max tax free..that changes everything - especially for my own personal plans. It's devastating. Those dividends over the decades enable financially literate ppl to retire.
Yep - you, me and I’m sure thousands of others. Just another way to fuck my generation. In the back of my mind - I knew it was coming unfortunately. I hope the ‘reforms’ aren’t as bad as I’m expecting!
I actually think that Martin Lewis is part of the problem. He is by far the most trusted voice on personal finance, but completely steers clear of talking about stocks and shares, contributing to our national aversion to investment. I had to “graduate” from his advice to that of bloggers, RUclipsrs and Reddit to round out my education.
Because if he did, thousands more people would invest in the stock market, and the second those people see a significant loss in their money, panic would ensue and he would get all of the blame for it. Even if it he explained everything as clearly as possible, some people will only hear what they want to hear and ignore the potential (and temporary) downsides to investing and wake up one day to find themselves at a loss, panic, withdraw all of their money at a loss and blame him for it.
Damned if he does, damned if he doesn't.
Financial education is the key. People have to accept that most investments only go up about a 1/3rd of the time, which means that 2/3rds of the time they are falling or recovering. But the magic happens in the 1/3rd of the time we see true growth.
Good luck when the share price crashes. Martin Lewis only endorses rock solid investments as most people who watch his programme do not have the means to risk money. Every investment has a warning, Your Capital is at risk with this investment. Most people’s risky investment is their home.
@@FISHGOMOO4321I totally agree with you. A close relative had some cash in an Icelandic bank when it crashed. He had seen it on MSE best buy table and even though he got all his money back, and there was a disclaimer on the site and there was a couple of stable banks from India offering better interest rates (that he decided not to trust), he still to this day will not trust Martin Lewis and subscribes to Which! to get any financial advice etc.
100k cap on ISAs is laughable... "we want you to save and invest, but not too much."
An ISA for Investing in UK companies is also a joke, how about the government stops the silly culture wars and actually runs the country well - that will make the country a great place to invest with no token gestures required.
And stop printing money....
Three years ago, nobody could have foreseen the current state of the U.S. dollar. The U.S. continues to repeat the same mistakes that have led to the dollar's current situation. As a result, there's no guarantee that the dollar's future will be as bright as it's hoped to be.
Government policies have jeopardised the future for many years, and consequences are approaching. I anticipate an 75% decline in the stock market, causing investors to shift toward real estate. Traditional banking may become less reliable, so it's essential to develop a survival strategy.
These are the conditions in which life-changing money is made by those who remain calm, patients, and take controlled risks. Volatility goes both ways, the bigger the red candles, the bigger the green ones.
That’s why I make it a point to speak with a financial advisor before choosing any investments. I’ve been using one since the pandemic, using profits oriented tactics and minimizing risks as a buffer against inevitable downtrends. In addition they have access to insider knowledge and analysis, making failure virtually impossible for them. I’ve made about millions working with my advisor for over three years now.
Well said, Mate. Really worried about the government's interest in pensions and ISAs. The issue is that why invest in the UK, when you can invest globally. And global is better. More UK companies are going to relocate to the US for a listing - and that goes for the whole of Europe.
First time visitor here. I like the tone and the content of this and I am in strong agreement with the need to educate young people about money matters; especially the stealth tax of inflation and how it actually operates. I'm old and I spent the whole of my youth without paying enough respect as to where my money went - as a tradesman my focus was on the job at hand; I worked, paid my tax and mortgage, and just bumped along.
I don't have the knowledge required to give my children advice in any positive sense, so my comments are restricted to warnings and 'beware ofs'. The first of these is Martin Lewis's quip (I'm not entirely won over by his general, recent advice, I have to say) that " all banks are the enemy".
Another is an old favourite of mine from Viz magazine that I quote to people only in half jest: "Teach your children how the tax system works - steal all their sweets, then when they start crying, tell them to fuck off"
Liked and subscribed so that I might even now, buck-up.
£100k limit on a stocks and shares ISA is insane.- a family saving a small amount monthly will hit the limit after 20 years, and the government will tax it or stop it? What's the point of saving?
There has been a squeeze on the middle class for the last decade. Look at inflation vs. wage growth. Not to meantion stealth tax by not updating tax brackets accordingly. UK has potential, but taking out the middle class isn't the way.
There are too many people in this government who seem to know nothing about any of this and then make bad decisions that affect us all in the long term.
We need people like you to advise them James.
Please please stop listening or relying on politicians. The game is far far beyond that now.
100% correct. There should be tax breaks for everyone to invest in UK companies. Same thing happens in Australia.
I wouldnt invest in a UK company if you put a gun to my head. Majority of FTSE 100 companies compared to Sap or nasdaq companies are garbage, low growth slugs. Not a penny of my money would they get.
I think that James is making the opposite point. Encouraging UK investors to invest in UK stocks is a bit like encouraging Enron employees to buy Enron shares. Not saying the UK will go bust in such spectacular fashion, far from it, but it's sensible to spread your cash around the globe rather than plonk it all into one small corner of the world.
These days there's seems to be no safe way to invest. Inflation is rampant, stock markets are overpriced, property is overpriced and interest rates too high to btl
And then in the possible future if you did make a profit oh look the government now wants %25 of that so now it's even harder
Yup it's a right old mess
@bluegtturbo: if you think that then you are clearly one of the many financially uneducated individuals.
Only way to make money on investments is to be lending your money, but no one has enough capital to legally lend
I think it should be down to the individual where their money goes in the stocks and shares market.
I don't want my investment money going anywhere near the FTSE or start up companies here.
It's why lots of people are losing tens of thousands in their work pensions.
Sounds like the government want more control on us peasants.
I have both "Stocks and Shares" and "Innovative Finance" ISA's. I wouldn't snub IFISA's. The one I use has returned >7.5% per annum since I opened it (outstripping the S&S ISA's) and has great risk mitigation against it.
With the expense of life in the UK, most people have precious little left over at the end of every month / year.
An extra allowance for UK comps would be good. I could then invest in a global ex UK fund in my main ISA and a UK fund in that ISA 😂
I somehow suspect it wouldn't be an extra allowance. If it ever happened I wouldn't be surprised to see it structured as something like the current £20K allowance being cut to £15K but you could also invest an "additional" £5K in a UK-company-only ISA to bring the total back up to what it was before just with some government imposed restrictions on your asset allocation. That £15K/£5K split is totally plucked out of the air BTW simply for illustration, and maybe the overall £20K total might end up lower as well. With the chancellor struggling to bring in money I personally don't see any changes in allowances increasing the overall total.
They need to get coordinated thinking around both pensions and ISAs at the same time.
Any limit on pensions is madness but the limitation of the tax free element to £268,275 is worse as this fixed amount will be whittled away by inflation.
ISA limits should be raised to the same as the pension limits giving people a choice of paying tax now and getting proceeds tax free in the future or getting tax relief now and paying tax on withdrawals later.
Or doing both.
The fact is that while the poor and loony left will say that this is just for rich people, the populations of the future will not be able to support a double generation of people who made no provision and who want free NHS, free pensions and top ups from benefits. That maths simply does not work.
So to get people to save, there needs to be a bigger incentive than now.
Didn't they remove limit pensions last budget but screwed over those paying defined contributions in workplace pensions investing 10% in risky UK tech startups.
As well as that increase in age can access private pension
Most people don't have any money left to save thanks to our tory government since 2010. The majority of people in the UK have been getting poorer since 2010 in real terms adjusted for inflation. There was plenty of money for properly funding all of our public services including the NHS. But the tories decided to slash funding for all public services since 2010 to the bare bones to the lowest inflation adjusted levels in well over 40 yrs, even lower than the last tory government in the 1980's. And instead since 2010 they've been giving big tax cuts for big corporate businesses and the wealthy and higher at our expense. And no it hasn't boosted our economy, the tories record on the economy is abysmal. Even the United Nations condemned our country for its high levels of poverty, homelessness and inequality etc since 2010. They said it was caused by our conservative governments austerity policies since 2010 and it absolutely wasn't necessary it was purely a political decision, that's what the UN said after sending a special envoy to the UK in 2015. And they said the problem started under the last con-servative government in the 1980's. We should adjust the rate of tax relief on pension contributions, at the moment basic rate tax payers get 25% back on pension contributions into defined benefit schemes, & 40% tax payers get back 66.7%, and 45% tax payers get even more back. We need to stop that and give a flat rate the same for everyone, say 43% cfor everyone. Because it's totally unfair the people on lower incomes and minimum wage need more help & won't be able to retire but the rich are getting richer, inequality is rising at an alarming rate since 2010, it's disgusting. And they should implement a wealth tax like in France and put the 45% tax band down to say £100000 gross per annum. The tories policies don't work on any level they aren't sustainable, especially in the longer term. If they remain in power things can only get worse for the vast majority of people in the UK
The £100k limit on ISAs is a concerning proposal and a case of extreme short sightedness. A large part of the reason many people invest is to make the most of their ISA allowance so they can grow lifetime savings in a tax efficient way. In an aging society and the age of gold plated pension schemes being a thing of the past this is really important economically for the government to promote and support personal saving for the long term. I can see how they would gain from additional tax receipts but this is incredibly short sighted. In the long term as the next generation reach retirement they will be left with little savings, probable debt and the Government will have a much greater fiscal challenge on their hands!
So instead of dealing with the underlying issues as to why people don't invest in UK companies as much, he's going to Shanghai us into doing it by changing the law?
Awful awful government.
I have an ISA account and have an investment fund as part of that... it seemed a good idea and has, over the past few years realised a gain of 24% with 5 other lots of shares within the ISA 'envelope'. The investment fund is doing far better than the other stocks, all British, but I'm sure that this will change in future. The range of yields is between 2.85% to 8.98% with growth potential in the lower ones. My ordinary share portfolio is showing a loss of 6.94% but the range of dividends is good throughout the year, and all with UK registered companies so I'm not unhappy about that. My biggest 2 share losses are currently 57% and 44% one of which isn't paying dividends - but I will ride it out and hope that the losses will lessen. I was 'taught' by my late husband.
Speaking for myself, having grown up in a poor household and as stated education on finances and investment is poor in the UK. I have been able to grow my wealth but still fear investing it as it might all dissolve. So that is also something to consider it’s not trust of the stock market it’s the risk of not being able to recover
But thats never happened before, over a reasonable time span, in the past. Ever. So why fear it?
@@IverKnackerovits what we are programmed to do 😂 fear everything all our lives and die .. now that is scary
@@IverKnackerov in my case I have children. So it’s the fear of impacting them such as paying for University or losing all/some of the money and from age 40-60 not recovering it all. James made the point that 5% interest is perceived as better than in stocks. People say the same about pensions but I put slot into the pension to ensure my retirement is mine to own.
@@IverKnackerovagain investment in equities only works over a very long time period. The FT100 broke 7000 in 2000 then again in 2018 and hasn’t kept up with inflation. Add CGT and dividend tax it’s not worth the risk of hard earned money. Property has more than trembled in the same period and you actually get to live ( or rent out) the asset., even if it falls it still has a utility value. Well done if you have beaten the system, that’s probably more to do with good timing when you entered the market.
@@GrooveTasticThang yes your right in the uk property is king . Yes you can get it wrong ie wrong part of county or lease hold but other wise not . Thanks for reminding me why I am probably wasting my time with a sipp in equitys. 😅
Ways to improve ISAs
1. Lift or better still, remove annual capital limits
2. Make cash and shares ISAs the same so capital can be deployed as investor sees fit
3. Allow borrowings and return of capital back to ISA accounts
4. Allow a small percentage of capital (e.g.
Interesting as always. I have about £400K sitting in my business account (after VAT / corp tax etc being taken into account). I finally found these videos and others - scary at 53 years of age. So bunged 60K in a Directors pension current tax year, and ready to do the same post April 6th, 2024. But I need to put this other cash somewhere (minus a float I will always need for a business rainy day). Thanks for all this resource. Mark.
They just need to inovate by incentive, like offering an extra 10K stocks and share ISA ( off uk Funds only) added onto the standard 20K S/S ISA, giving you a potential 30K Isa wrapper.
Remember we also have the pension allowances.
I have people i work with, paying up to £300 per month, from their workers auto enrolled pension, and they are trying to "opt out" with the employer, because they think the government is taking money from their wage, and they think saving is pointless, as you cant get rich quick enough
It is all about the education, but, the incentives might encourage more innovation from a better mis-understood population.
Its really quite sad to see a friend of mine, take his entire pension in one lump, at age 55, to go on cruise with his wife and then buy a new car, on whatever is left after the cruise, they just cant understand.
The 100k limit is a seriously scary thought! It would totally destroy my financial plans. I'm pretty sure I'd be looking into leaving the UK asap if that ever happened and I bet I'm not the only one.
Same for me, it would permanently end the option of having the UK as a base for FIRE.
You are right, I have sold all my shares and moving money to Asia where I shall be moving very soon. The UK government dream up mechanisms to embezzle our money time after time. HS2, Cov, Test n Trace and so on...
We are already leaving in the summer next year. It's not because of ISAs just simply the overwhelming and repressive tax burden we face here. The pension benefits here are so good though which we max out every year other than that it's a dreadful place for people to build wealth.
What country would you go to? As far as I know ISA is very generous tax wrapper in comparison to other countries.
@@pistopit7142 Very true but if it is limited to a 100K, might as well go to Bulgaria and pay a flat 10-15% on everything or any of the 0% digital nomad hubs.
Government ministers are too arrogant to listen to people. They will push ahead with their half baked ideas and make it worse for everyone except their mates.
The single biggest barrier on ISA I feel is the limit of having only 1 of each type a year. You can't switch easily, which inhibits competition.
Well said James,. Basic finances should mandatory at school.
I watch your channel from Australia. I would say what the UK is missing out on is a separate compulsory superannuation system to build wealth for retirement. The system works in Australia to the point that the state pension is now just a safety net not the principle retirement income. Because there is a minimum compulsory contribution and the money by default has to go into a balanced fund, unless otherwise chosen people don’t have to understand the stock market. 20 year growth has been 8-9%. The Australian superannuation system should be understood as a benchmark.
Big fan of this. Australia is way ahead of us. People talk about money in a more productive open way. I can remember being over there at a BBQ and people just casually started chatting about their SUPAs.
In the Uk we have a default 8% contribution but this should be increased to 15%. Again it’s optimal not default on is best.
Ironically the best investment decision I ever made was going for an ex-UK fund. 😂
There is nothing known to man that Politicians cant make worse !
Whichever option that enables bankers to get their hand's on naive people's money is the policy the government will come up with. Who do you think is advising and writing these policies....it is certainly not your local MP.
One aspect that is rarely if ever mentioned when shares are being recommended is that timing is also crucial. Yes, statistically the longer you have shares the better the return but if there is a crash when you need the money then things can be much different. You can ‘lose’ thousands which can take years ( if ever) to recoup, years that you might not have. Also at the age of 73 I still have ‘advisors’ suggesting shares to me. As far as money in no or low interest accounts is concerned, I keep several thousand in the former and much more in the latter because at my age, it’s for spending. I am fortunate in having much more in longer (1-3 years) term investments but tying money up too much is not necessarily beneficial when you are older. I know what I’m saying might be obvious but my point is that most general advice might be appropriate for younger people but that is often, even usually not made clear.
Most rich people stay rich by spending like the poor and investing without stopping then most poor people stay poor by spending like the rich yet not investing like the rich but impressing them
Buy Bitcoin now 💯
HOW! I would really appreciate if you show me how to go about it. Please can you list the platforms?
I will drop his tel in bits cos of RUclips rules⏬⏬
十𝟒𝟒𝟕𝟒𝟖𝟎𝟔𝟓𝟕𝟐𝟏𝟗🇬🇧👍🏻👍🏻👍🏻👍🏻👍🏻👍🏻👍🏻👍🏻👍🏻👍🏻👍🏻✅__________👍🏻👍🏻👍🏻👍🏻.....„ „
My friends in the UK tried her it all went successfully
Brilliant. Damien and Martin in the same list 🎉 all 3 of you are wonderful for making this understandable and relatable
If they put a cap on ISA's I'm going to be verryy annoyed. JAMES SHACK FOR CHANCELLOR!
Doesn’t Hunt also want to use a % of pension pots to invest in Uk businesses. It seems this man is after people’s hard earned money in any way shape or form.
Yes, you hit the nail on the head!
He wanted to allow them to invest, some are falling over themselves from what I've read to risk...I mean invest pension pots
Great video James. Really enjoy all of your content and completely agree with the shocking lack of Financial education which is provided to UK citizens (which reaches across the whole age spectrum).
Teach it in schools! It’s massively important and very few take an interest in it.
Agree on the education. It is crucial to provide more education to people. Unfortunately, some country leader decide to keep a cap on education, because too educated citizen could challenge the current elites.
exactly. God forbid we all get too clever for the government 🙃
Maybe if financial advisors didnt charge so much commissions and thereby create a kind of suspiciousness around investing, more people would invest with them and trust investing as a great tool to help with wealth growth
Yes they should study for years be regulated and pay for the privilege and do it for free.
why would you use a financial advisor to open an ISA - got to be a mug punter to do that
You are confusing planning with products @@crispyduck1706
I disagree, ISA's are simple tools, if children were educated in financial matters at school then ISA's would be very simple when they reach adulthood
Perhaps parents should teach their children, if it isn’t taught at school?
I used to play the stock market in the late 90's and early naughties, and retired early from work in 2005 bcos I'd have more time to buy and sell, and I thought you couldn't go wrong. Then came 2008 and lost nearly ⅔ of my wealth.
My Dad lost his entire wealth gambling on the stock market. Im now having to support him through his old age. The idea that the stock market is some magic tool to grow wealth is nonsense. It is gambling. Some people win certainly, others lose.
And then what happened? Post 2008 the stock market crept back up again.
I think if everybody starts investing the world will be dramaticly different.
Most of my investments were in bank shares, then 2008 and lost a huge amount over that, never invested again since.
Massive thank you James, you've taught me a lot about investing, before I found you I used premium bonds solely, now I'm set up a stocks and shares ISA :)
100k cap would be a game over for anyone that can actually use the 20k limit. What would happen to those already over?
UK extra tier... no problem with that, as long as its choice.
Combined stock and cash isas... this feels like we are being restricted to one isa account. (Im assuming you can currently have 1 cash and 1 stock isa).
Agree with your tax idea. Id even go as far to say it should be rev share in as much as they take your twx, invest it and if iy goes beyond the value you paid, you take the profit.
Managing money is different from accumulating wealth, and the lack of investment education in schools may explain why people struggle to maintain their financial gains. The examples you provided are relevant, and I personally benefited from the market crisis, as I embrace challenging times while others tend to avoid them. Well, at least my advisor does too, jokingly.
This is superb! Information, as a noob it gets quite difficult to handle all of this, and staying informed is a major cause, how do you go about this are you a pro investor?
Through closely monitoring the performance of my portfolio, I have witnessed a remarkable growth of $485k in just the past two quarters. This experience has shed light on why experienced traders can generate substantial returns even in lesser-known markets. It is safe to say that this bold decision has been one of the most impactful choices I have made recently.
The adviser I'm in touch with is 'Jihan Wu' He works with Merrill, Pierce, Smith incorporated and interviewed on CNBC Television. You can use something else, for me his strategy works hence my result. He provides entry and exit points for the securities I focus on.
十𝟴𝟱𝟮𝟲𝟱𝟰𝟵𝟭𝟲𝟴𝟯🇭🇰👍🏻👍🏻👍🏻👍🏻👍🏻👍🏻👍🏻👍🏻👍🏻👍🏻👍🏻✅_______👍🏻👍🏻👍🏻👍🏻.....„„
He's always active on Whats~App....
Firstly, I would like to say thank you for what you do because it helps so many people in a myriad of ways.
Secondly, what Martin and MSE have shared on the Lifetime ISA limit is exactly right. It is completely preposterous that the limit and withdrawal terms have stayed the same. This is especially apparent in the SE England and London areas. The system should be scrapped and the cap should be nationally indexed based on purchase location.
Clearly a buyer's pound sterling is not equal across the country when it comes to housing. So why has the government actively trapped people by the hundreds of thousands in LISA's by deliberate inaction?
The message currently being sent to the FTB LISA community by our Government is that of punishment. The situation is made even more abhorrent when you realise those affected are primarily people who were trying to actively make good financial decisions. This encourages mistrust in government support products and ISA's.
I am fully behind all the comments from the MSE team and yourself. If you want support for a petition or otherwise let us know!
Thank you. Now these news makes me very worried after half a life of saving.
In your view, what would be the best option right now:
A) to cash in 1/3 of my ISA to purchase a house
or
B) use instead the mortgage offer I managed to secure (60% LTV) at 2.75% fixed for 5 years then variable +1.70%.
I can afford the 5 year fixed rate mortgage payments easily. So I was planning to save up and invest in my ISA during these next 5 years, then if interest rates are too high after my fixed mortgage period is over, I will have enough savings to pay off the remainder of the mortgage with zero exit fees.
The date of the purchase of the property is the 3rd Nov.
Only considering the options above please.
A limit on ISA's contributions makes no sense at all. A lot of people who are self employed use ISA's for a pension as they are so liquid.
The problem with the average Joe's saving strategy is hinted by what you said at 1:58, they put what money is left into savings at the end of the month or spend it. We all know what isn't allocated, gets spent. So they never save as much as they think they would. I was in that trap until I was well into my 30s. Only when people realise that, are they ready to learn to invest. Otherwise, they'd just be putting in £20 here and £10 there at the end of the month.
Jokes on them, they can't tax me if I don't make a profit.
But do you use public services? If so, then you should expect to pay towards it through taxation.
OK son, I will pay your way then shall I?
I bet you pay VAT and council tax and probably fuel duty and insurance premium =m tax etc etc.
I just found your channel and I found this video to be interesting.
You are completely right. I had money in a current account for at least 5 years. Not earning interest because i did not even know that you could do that by opening a savings account. I am also trying to educate myself on how to start investments, but with no previous knowledge nor exposure I really have no idea of where to start from.
It is really overwhelming. I know this can help my financial stability but there is so much information out there, that you don’t know what to believe.
Most of the people even want to charge you for providing you with this “guru” information.
I hope one day I am able to understand everything properly and can educate other people without charging anything… I mean, if people are making good money with the knowledge they have by investing, why then ask for more money to educate people? It is just greedy.
I know everyone needs to paid back for their time, but sometimes helping out without expecting anything in return is the best feeling you can ever get to experience since you are really contributing towards positive change in society.
James. Nice video. You are right about education. This has to be alongside transparency from Fund Managers, Platforms and Pension providers as this is the biggest barrier. This all equates to trust. Whilst Platform providers and Pension/ISA scheme providers take hefty profits from holding simple ledgers in funds that they don't provide, and fund managers take huge GUARANTEED incomes from failing funds and investors are paying way over the top for the value of shares - that trust will not change. On top of all that Pension providers also provide very poor customer service. The whole system needs a shake up (also remove the taxing of the funds and its lack of transparency). UK PLC does not provide a good base for safe investing. Agree with the statement around global diversity.
Great video. Yes, you are right. The ISA framework is easy enough to understand. But you forgot to mention one point: the British obsession with investing in property.
How is that connected?
I already have £250k in my stocks and shares ISA, a £100k limit would be disastrous for me.
It would not be retrospective. If you have > 100k in an ISA then you can't add more, but you will not be required to take out the surplus to maintain 100k.
I think that would be the Cash ISA limit.
@@derricksmyththey want to tax (cash) savings to stop people saving in cash. It'll force people to put their money into the stock market and many will lose their savings and pay high fees to incompetent advisers. However that keeps the financial wheels turnings which is what they want.
@@kevinsyd2012 I'm not so sure.. have you got a link to back this up?
@@derricksmythas in Annual limit?
It boils my blood that in school it isn't mandatory to have 'life lesson classes'... How things that effect your life day to day work: how to save, what is apr, how a mortgage works, what is LTV, what are stocks and shares, how does a pension work, how to manage bills and find better deals, how does missing a payment effect your credit, what is a credit score and so on
Instead you learn about an old king and all his wives etc
No wonder the country economy is on its arse
I was reading that one of the ideas floated was a single ISA that AJ Bell have proposed that sounds like it nukes the LISA proposing the bonus can only be used on a large purchase at the point of purchase.
There is a big warning on any savings involving stocks and shares that says your value can go up as well as down. That's an instant feeling of my money isn't safe. Whereas a savings account or ISA doesn't have that. It's only a benefit with no real risk of loss. When people are struggling financially it's not a risk they can afford to take I guess.
It can be scary to some but that's how the stock market works. If you invest in an s&p 500 fund instead of picking stocks yourself then that's grown on average 10+% over the years without fail though nothing is guaranteed and they legally have to warn you of this. You might invest in one year where its down but then it will be up the next and so on but over a 5 year period it's always a decent return and is pretty much the only way you can get a decent compounded growth. Right now though I would just advise people to take advantage of the 5-6% interest you can get and lock your money away for as long as possible if you can to take advantage cos those rates will quickly dissappear.
A lifetime cap of £100k on ISAs - how ridiculous. That will give a prudent withdrawal rate of… about £3k - 3.5K per annum. Whoop-de-woo.
To be honest J Hunt knew zero about the actual working of his health portfolio when he had it and he’s just proved he is a financial ignoramus too.
Well said James. The government telling us where to invest our money for their own benefit - how typical! Like you say there is no education about managing our finances, investing and saving. It should be taught at school.
Speaking of financial literacy, I was surprised that a rich country such as UK does not have "financial classes" in schools, I mean mandatory classes for all students. Is it because its assumed that citizens of a wealthy country know these things or it is because the wealthy benefit from poorer people not knowing how the system works and it's all deliberate?
I went to school in Slovakia, and there is a subject called "The Economy" in every secondary school (usually twice a week) where they taught us how the financial system works. All about banks, mortgages, debt, GDP, currencies, word economy, how to start a business but also how to apply for jobs, how to write a good CV, how to hire/fire people, regulations, pension system, tax system, welfare system (and why it's better to avoid it unless you absolutely need it), accounting, how to file your taxes when you are self employed etc. They even taught us little things like how to finance a car and what options you have. It's very practical.
Everyone loves that subject because it's something you need in the real world.
+ we had to spend a week or two in a bank/local council/lawyer's office/job centre etc to see how they do things we've been learning about.
Fun fact, credit card debt is almost nonexistent in Slovakia, and the country has the smallest wealth gap in Europe.
When someone gets in financial trouble, they can't say " l didn't know/I wasn't taught this in school"...
You knew and you've decided to do the wrong thing 🤷♂️
Why do they do this? I want to save up for a house
“You will own nothing, you will rent everything, you will be happy” That’s why.
The problem with cash is that you should have a cash reserve, just in case. Whether that is 3 months of cash from employment (salary) or a greater value, that can impact interest that is not subject to tax (up to that £500 or £1k limits, and therefore with interest rates moving, then Cash ISAs can be a part of that mix.
Absolutely, everyone should have a cash buffer before they start investing.
I've twice had my fingers burned by clever investment instruments, lesson learned.
Investment failed to pay off my mortgage it was 4yrs of scrimping saving and overtime that did the job.
My private pension alone isnt paying for my retirement. Government policies have seen to that. No, again it's down to frugality and consistent saving.
Your investments can and absolutely will go down ss well as up.
It will be interesting to see what count as a UK equity in the UK ISA that Rishi is talking about as many UK based companies have major international investments? Also what ETFs will qualify?
Is Jeremy Hunt the latest addition to the Cockney Rhyming slang dictionary?
Yes, he’s replaced The original James.
Constructive feedback on the channel as someone coming across your channel the first time via the algo, I'd really have appreciated chapters added for the video to help me get to the part of the video that drew me in (I thought there was new news about ISA changes), because of that I kept skipping manually and then came to the conclusion that there was no actual new info but you were providing info and your own insights into that. I thought that was misleading but I appreciate the effort you put in, you come across well and speak very clearly. Please consider adding chapters to the video so that people that value specific parts of a video can still get value without giving up their time, they will like your vids and subscribe even for that small portion of the video :)
Just come across your channel, very informative and just subscribed. Thank you
What's the point of a 100K lifetime limit?
Raise more taxes.