The BofE has been talking to Banks about negative interest rates for over 6 months & this is one if the reasons why - making sure that they have the systems in place to cope with it.
FWIW, I don't think negative rates will come in - certainly not for retail customers. The BofE don't want to see people pulling money out of "safe havens" and having to find somewhere else to put it. Would be like having a run on a bank & would cause unease & even panic for some people.
Too late - I've already hollowed out a mattress in anticipation!
I was still getting over 1% at Charter Savings Bank but that's all ending. I had a pot of cash in a fixed rate 1 year bond, which is maturing. The new rate they offer is 0.55%. I keep this cash pot as a separate stash for healthcare needs (paid into this instead of paying the exorbitant premiums that expats pay to BUPA or PPP, and it has handsomely paid off so far because thankfully nothing happened to call on the cash).
But I think I will now have to put this into a low cost, low risk tracker portfolio. I'm pretty sure I can beat half a percent this year.
I wish I'd self-insured with my critical illness cover.
Perhaps @golfaddick could explain but I never did understand (the salesman's schtick) that buying the cover when I was young would make it cheaper later on. It doesn't appear to build up units (at least, there's very little cash-in value in any given year) and the annual re-rating seems to track the market. I think he saw me coming. Very happy I've never had to claim on it, saying that.
As for health cover, I was recently introduced to a new market entrant to the UK, a US mutual that blew away my current cover for much less than the renewal (WPA Health). Aviva were pretty clearly charging me a base 'membership fee' and then recovering any claims in later years, so it makes sense the mutual approach could offer more for less.
Finally, for 1 year bonds, do track these guys for when they open shop again ... https://smartsavebank.co.uk. They are usually very slightly above the best rate, when they are 'open'. As they are a new, growing bank (but with a BoE deposit license, so FSCS protected), and given the current Covid risks on the other credit of their balance sheet, they're having to grow slowly at the moment.
I was still getting over 1% at Charter Savings Bank but that's all ending. I had a pot of cash in a fixed rate 1 year bond, which is maturing. The new rate they offer is 0.55%. I keep this cash pot as a separate stash for healthcare needs (paid into this instead of paying the exorbitant premiums that expats pay to BUPA or PPP, and it has handsomely paid off so far because thankfully nothing happened to call on the cash).
But I think I will now have to put this into a low cost, low risk tracker portfolio. I'm pretty sure I can beat half a percent this year.
Even Vanguard's 20% equity fund would give you 5% pa.
I was still getting over 1% at Charter Savings Bank but that's all ending. I had a pot of cash in a fixed rate 1 year bond, which is maturing. The new rate they offer is 0.55%. I keep this cash pot as a separate stash for healthcare needs (paid into this instead of paying the exorbitant premiums that expats pay to BUPA or PPP, and it has handsomely paid off so far because thankfully nothing happened to call on the cash).
But I think I will now have to put this into a low cost, low risk tracker portfolio. I'm pretty sure I can beat half a percent this year.
Even Vanguard's 20% equity fund would give you 5% pa.
Yes, I have a fair bit of it, its a cornerstone of my SIPP as I reduce risk there. Way to go, I guess
I was still getting over 1% at Charter Savings Bank but that's all ending. I had a pot of cash in a fixed rate 1 year bond, which is maturing. The new rate they offer is 0.55%. I keep this cash pot as a separate stash for healthcare needs (paid into this instead of paying the exorbitant premiums that expats pay to BUPA or PPP, and it has handsomely paid off so far because thankfully nothing happened to call on the cash).
But I think I will now have to put this into a low cost, low risk tracker portfolio. I'm pretty sure I can beat half a percent this year.
I wish I'd self-insured with my critical illness cover.
Perhaps @golfaddick could explain but I never did understand (the salesman's schtick) that buying the cover when I was young would make it cheaper later on. It doesn't appear to build up units (at least, there's very little cash-in value in any given year) and the annual re-rating seems to track the market. I think he saw me coming. Very happy I've never had to claim on it, saying that.
As for health cover, I was recently introduced to a new market entrant to the UK, a US mutual that blew away my current cover for much less than the renewal (WPA Health). Aviva were pretty clearly charging me a base 'membership fee' and then recovering any claims in later years, so it makes sense the mutual approach could offer more for less.
Finally, for 1 year bonds, do track these guys for when they open shop again ... https://smartsavebank.co.uk. They are usually very slightly above the best rate, when they are 'open'. As they are a new, growing bank (but with a BoE deposit license, so FSCS protected), and given the current Covid risks on the other credit of their balance sheet, they're having to grow slowly at the moment.
Depends on what type of CI cover you have. I'm assuming it's a Whole of Life plan rather than a term policy. WOL will be unitised & have some form of investment element, but to get any meaningful return /no uplift of premiums you will need Standard or Full cover. Lots were sold on a Maximum cover /minimum premium basis which meant that after 10 years or so the premiums would be reviewed which invariably meant the cost would go up.
Been a long time since I sold any WOL but I do have clients with those types of plans.....but at the time working for the BMA we always tried to sell on a Standard Cover basis so if any premium adjustments took place they would be minimal.
I was still getting over 1% at Charter Savings Bank but that's all ending. I had a pot of cash in a fixed rate 1 year bond, which is maturing. The new rate they offer is 0.55%. I keep this cash pot as a separate stash for healthcare needs (paid into this instead of paying the exorbitant premiums that expats pay to BUPA or PPP, and it has handsomely paid off so far because thankfully nothing happened to call on the cash).
But I think I will now have to put this into a low cost, low risk tracker portfolio. I'm pretty sure I can beat half a percent this year.
I wish I'd self-insured with my critical illness cover.
Perhaps @golfaddick could explain but I never did understand (the salesman's schtick) that buying the cover when I was young would make it cheaper later on. It doesn't appear to build up units (at least, there's very little cash-in value in any given year) and the annual re-rating seems to track the market. I think he saw me coming. Very happy I've never had to claim on it, saying that.
As for health cover, I was recently introduced to a new market entrant to the UK, a US mutual that blew away my current cover for much less than the renewal (WPA Health). Aviva were pretty clearly charging me a base 'membership fee' and then recovering any claims in later years, so it makes sense the mutual approach could offer more for less.
Finally, for 1 year bonds, do track these guys for when they open shop again ... https://smartsavebank.co.uk. They are usually very slightly above the best rate, when they are 'open'. As they are a new, growing bank (but with a BoE deposit license, so FSCS protected), and given the current Covid risks on the other credit of their balance sheet, they're having to grow slowly at the moment.
Depends on what type of CI cover you have. I'm assuming it's a Whole of Life plan rather than a term policy. WOL will be unitised & have some form of investment element, but to get any meaningful return /no uplift of premiums you will need Standard or Full cover. Lots were sold on a Maximum cover /minimum premium basis which meant that after 10 years or so the premiums would be reviewed which invariably meant the cost would go up.
Been a long time since I sold any WOL but I do have clients with those types of plans.....but at the time working for the BMA we always tried to sell on a Standard Cover basis so if any premium adjustments took place they would be minimal.
Thanks, very helpful.
Took this out about 25 years ago after a health scare. It covers life and critical illness and can pay out on critical illness and life; pretty sure it's WOL.
I suspect it is then max cover/min premium as it seems to go up every year and then significantly every five years. The last time I spoke to anyone at the insurance co, they said that they don't sell these policies any more and the inference was they weren't good value. Time for a review!
I was still getting over 1% at Charter Savings Bank but that's all ending. I had a pot of cash in a fixed rate 1 year bond, which is maturing. The new rate they offer is 0.55%. I keep this cash pot as a separate stash for healthcare needs (paid into this instead of paying the exorbitant premiums that expats pay to BUPA or PPP, and it has handsomely paid off so far because thankfully nothing happened to call on the cash).
But I think I will now have to put this into a low cost, low risk tracker portfolio. I'm pretty sure I can beat half a percent this year.
I wish I'd self-insured with my critical illness cover.
Perhaps @golfaddick could explain but I never did understand (the salesman's schtick) that buying the cover when I was young would make it cheaper later on. It doesn't appear to build up units (at least, there's very little cash-in value in any given year) and the annual re-rating seems to track the market. I think he saw me coming. Very happy I've never had to claim on it, saying that.
As for health cover, I was recently introduced to a new market entrant to the UK, a US mutual that blew away my current cover for much less than the renewal (WPA Health). Aviva were pretty clearly charging me a base 'membership fee' and then recovering any claims in later years, so it makes sense the mutual approach could offer more for less.
Finally, for 1 year bonds, do track these guys for when they open shop again ... https://smartsavebank.co.uk. They are usually very slightly above the best rate, when they are 'open'. As they are a new, growing bank (but with a BoE deposit license, so FSCS protected), and given the current Covid risks on the other credit of their balance sheet, they're having to grow slowly at the moment.
Depends on what type of CI cover you have. I'm assuming it's a Whole of Life plan rather than a term policy. WOL will be unitised & have some form of investment element, but to get any meaningful return /no uplift of premiums you will need Standard or Full cover. Lots were sold on a Maximum cover /minimum premium basis which meant that after 10 years or so the premiums would be reviewed which invariably meant the cost would go up.
Been a long time since I sold any WOL but I do have clients with those types of plans.....but at the time working for the BMA we always tried to sell on a Standard Cover basis so if any premium adjustments took place they would be minimal.
Thanks, very helpful.
Took this out about 25 years ago after a health scare. It covers life and critical illness and can pay out on critical illness and life; pretty sure it's WOL.
I suspect it is then max cover/min premium as it seems to go up every year and then significantly every five years. The last time I spoke to anyone at the insurance co, they said that they don't sell these policies any more and the inference was they weren't good value. Time for a review!
Problem is, because you are now that much older, I doubt you will get anything much cheaper.
The other thing to bear in mind is that it HAS been good value because you've been covered over that time for a (relatively) small premium. If you had been offered Standard cover at the time you would probably have baulked at the cost & maybe not taken out any cover at all.
I'll just have to settle for only doubling my money on Go Ahead and a bit better on Metro Bank. Just need Tullow to pick up a bit more and Capita to keep moving on up and to do better on Premium bonds .
Musk and Tesla is interesting, surely he's playing the market, buy some, tell everyone he has and the price goes up 10-20%.
I'll just have to settle for only doubling my money on Go Ahead and a bit better on Metro Bank. Just need Tullow to pick up a bit more and Capita to keep moving on up and to do better on Premium bonds .
Musk and Tesla is interesting, surely he's playing the market, buy some, tell everyone he has and the price goes up 10-20%.
Don't forget CGT on those returns......or as its "hidden money" do you think many people wont bother telling the taxman.
Which leads me to an interesting thought. I spoke to a client today who wants to "sell" her daughter 50% of one of her BTL's. Client has 8 altogether (all mortgaged) & being 75 is looking at her overall situation. She rang me as she has a mortgage on said BTL and lender has says that the mortgage would have to change because of the new ownership. Client thinks she can just give her daughter 50% of the property just like that. I said as a minimum she would need to transfer the equity, pay stamp duty & have it all done legally.
I asked for the reason for all this & she said she was worried about IHT. At the last count her net worth (property values less mortgages) would be close to £2.5m, which also includes her residential property.
I said it might be best just to sell the property to her daughter (as she had done with 1 other BTL that she had) and the proceeds pay off her existing mortgage. Her daughter would get a BTL to service this. She is contemplating that but she then said that the "purchase price" would have to be around £450-475k. Zoopla estimates property to be worth £730k. Problems are many, mains one being that the outstanding mortgage is £380k & any new lender would only lend on the "purchase price" rather than the actual value. Problem then being max LTV would be 80% and therefore daughter could only raise £350k so not even enough to clear existing mortgage, let alone give her mum some money to help pay the CGT bill.
All this comes down to the fact my client doesn't want to sell normally & incur a very large CGT bill. She paid £225k for the property 20 years ago, so thats 28% on a gain of c£500k. Ouch !!
Which really led me to believe that my general advice on buying property over other investments (especially collective & ISA's) is rather sound. Not sure if an ISA portfolio over 20 years would have turned £225k into £735k, but it would all be tax free- and the £735k is in reality a net £600k. Ok, my client had also received (taxable) income on the rental property (£2k per month) but I'm not sure all the hassle is really worth it. As @rob7lee has commented before, BTL can be lucrative because of the gearing involved, but unless you have an exit strategy & happy with the tax implications when you start to unwind your position, I'm still not sure if it is really worth it.
I'll just have to settle for only doubling my money on Go Ahead and a bit better on Metro Bank. Just need Tullow to pick up a bit more and Capita to keep moving on up and to do better on Premium bonds .
Musk and Tesla is interesting, surely he's playing the market, buy some, tell everyone he has and the price goes up 10-20%.
Don't forget CGT on those returns......or as its "hidden money" do you think many people wont bother telling the taxman.
Which leads me to an interesting thought. I spoke to a client today who wants to "sell" her daughter 50% of one of her BTL's. Client has 8 altogether (all mortgaged) & being 75 is looking at her overall situation. She rang me as she has a mortgage on said BTL and lender has says that the mortgage would have to change because of the new ownership. Client thinks she can just give her daughter 50% of the property just like that. I said as a minimum she would need to transfer the equity, pay stamp duty & have it all done legally.
I asked for the reason for all this & she said she was worried about IHT. At the last count her net worth (property values less mortgages) would be close to £2.5m, which also includes her residential property.
I said it might be best just to sell the property to her daughter (as she had done with 1 other BTL that she had) and the proceeds pay off her existing mortgage. Her daughter would get a BTL to service this. She is contemplating that but she then said that the "purchase price" would have to be around £450-475k. Zoopla estimates property to be worth £730k. Problems are many, mains one being that the outstanding mortgage is £380k & any new lender would only lend on the "purchase price" rather than the actual value. Problem then being max LTV would be 80% and therefore daughter could only raise £350k so not even enough to clear existing mortgage, let alone give her mum some money to help pay the CGT bill.
All this comes down to the fact my client doesn't want to sell normally & incur a very large CGT bill. She paid £225k for the property 20 years ago, so thats 28% on a gain of c£500k. Ouch !!
Which really led me to believe that my general advice on buying property over other investments (especially collective & ISA's) is rather sound. Not sure if an ISA portfolio over 20 years would have turned £225k into £735k, but it would all be tax free- and the £735k is in reality a net £600k. Ok, my client had also received (taxable) income on the rental property (£2k per month) but I'm not sure all the hassle is really worth it. As @rob7lee has commented before, BTL can be lucrative because of the gearing involved, but unless you have an exit strategy & happy with the tax implications when you start to unwind your position, I'm still not sure if it is really worth it.
Her mistake was holding these individually, as soon as she had more than one she should have held them as a company and could have added her daughter as a director and share holder, would have been very very effective in passing it on upon her death.
Too late unfortunately and probably too costly now as she'd have to sell them to the Ltd Company although it may help in the longer run with IHT the costs may well outweigh the benefit.
COVID stocks moving nicely upwards and as for Bitcoin...................... just don’t get it, shows how influential Mr Musk is, and Mode a bloody Bitcoin buying App soaring ahead.
COVID stocks moving nicely upwards and as for Bitcoin...................... just don’t get it, shows how influential Mr Musk is, and Mode a bloody Bitcoin buying App soaring ahead.
The influence of Musk is rather worrying - people will buy anything if he tells them to. Long term investment has been replaced by speculation.
Any thoughts on the future of technology funds, many of which has done incredibly well over the last 12-18 months?
They don't show many signs of dropping. I'd hold for now.
After my sale of the America's and some of Baillie Gifford I'm at an all time high in My SIPP after a short dip a week or so ago.
Same here.
I track my funds daily & over the past week all my equity funds apart from Japan have been moving up & my bond funds going sideways - with my Vanguard gilt fund actually falling over that time.
Any thoughts on the future of technology funds, many of which has done incredibly well over the last 12-18 months?
They don't show many signs of dropping. I'd hold for now.
After my sale of the America's and some of Baillie Gifford I'm at an all time high in My SIPP after a short dip a week or so ago.
Same here.
I track my funds daily & over the past week all my equity funds apart from Japan have been moving up & my bond funds going sideways - with my Vanguard gilt fund actually falling over that time.
My two funds that are down since July last year are one Gold & One Bond fund, gold down 3.6% and the Bond 1.4% so no big shakes and sub 4% of the overall portfolio anyway.
One downside I've found with Interactive Investor, it only shows (live) the profit of what investments you currently hold rather than overall performance, no big shakes though as I know what's gone in so an easy calculation and it does show on the 1/4 statements.
I must be very old fashioned. I leave anything that looks like a bubble well alone, and if I dont understand it I also leave it well alone.
One of my best investments was Caffe Nero. I worked in Covent Garden at that point, and noticed how busy these places were, whether big or small, all day long. Once it was clear they had an all day offering, big margins on their main sale item and were constantly going, it made sense to buy some shares. Turned into a ten fold return in less than five years, and I only sold when they were taken private because the stock market didnt appreciate their true value, or some such.
I must be very old fashioned. I leave anything that looks like a bubble well alone, and if I dont understand it I also leave it well alone.
One of my best investments was Caffe Nero. I worked in Covent Garden at that point, and noticed how busy these places were, whether big or small, all day long. Once it was clear they had an all day offering, big margins on their main sale item and were constantly going, it made sense to buy some shares. Turned into a ten fold return in less than five years, and I only sold when they were taken private because the stock market didnt appreciate their true value, or some such.
Wish Nero could do more with Harris and Hoole when things come back to a more normal place
Any thoughts on the future of technology funds, many of which has done incredibly well over the last 12-18 months?
They don't show many signs of dropping. I'd hold for now.
After my sale of the America's and some of Baillie Gifford I'm at an all time high in My SIPP after a short dip a week or so ago.
Same here.
I track my funds daily & over the past week all my equity funds apart from Japan have been moving up & my bond funds going sideways - with my Vanguard gilt fund actually falling over that time.
Definitely one occasion you should follow your own advice about how good the Baillie Gifford funds are.
My holding in BG Japanese Fund is up by 7.25% since the first of this month.
Any thoughts on the future of technology funds, many of which has done incredibly well over the last 12-18 months?
They don't show many signs of dropping. I'd hold for now.
After my sale of the America's and some of Baillie Gifford I'm at an all time high in My SIPP after a short dip a week or so ago.
Same here.
I track my funds daily & over the past week all my equity funds apart from Japan have been moving up & my bond funds going sideways - with my Vanguard gilt fund actually falling over that time.
Definitely one occasion you should follow your own advice about how good the Baillie Gifford funds are.
My holding in BG Japanese Fund is up by 7.25% since the first of this month.
I've got some of that fund, it had a big dip at the end of Jan but has since risen nicely.
Any thoughts on the future of technology funds, many of which has done incredibly well over the last 12-18 months?
They don't show many signs of dropping. I'd hold for now.
After my sale of the America's and some of Baillie Gifford I'm at an all time high in My SIPP after a short dip a week or so ago.
Same here.
I track my funds daily & over the past week all my equity funds apart from Japan have been moving up & my bond funds going sideways - with my Vanguard gilt fund actually falling over that time.
Definitely one occasion you should follow your own advice about how good the Baillie Gifford funds are.
My holding in BG Japanese Fund is up by 7.25% since the first of this month.
I've got some of that fund, it had a big dip at the end of Jan but has since risen nicely.
Yep the BG funds have been a great shout, im up nearly 10% in BG America, more than 10% in BG Global Discovery, and nearly 5% in BG Japanese. That's in exactly a month since I started my S&S isa.
Comments
Perhaps @golfaddick could explain but I never did understand (the salesman's schtick) that buying the cover when I was young would make it cheaper later on. It doesn't appear to build up units (at least, there's very little cash-in value in any given year) and the annual re-rating seems to track the market. I think he saw me coming. Very happy I've never had to claim on it, saying that.
As for health cover, I was recently introduced to a new market entrant to the UK, a US mutual that blew away my current cover for much less than the renewal (WPA Health). Aviva were pretty clearly charging me a base 'membership fee' and then recovering any claims in later years, so it makes sense the mutual approach could offer more for less.
Finally, for 1 year bonds, do track these guys for when they open shop again ... https://smartsavebank.co.uk. They are usually very slightly above the best rate, when they are 'open'. As they are a new, growing bank (but with a BoE deposit license, so FSCS protected), and given the current Covid risks on the other credit of their balance sheet, they're having to grow slowly at the moment.
Been a long time since I sold any WOL but I do have clients with those types of plans.....but at the time working for the BMA we always tried to sell on a Standard Cover basis so if any premium adjustments took place they would be minimal.
Took this out about 25 years ago after a health scare. It covers life and critical illness and can pay out on critical illness and life; pretty sure it's WOL.
I suspect it is then max cover/min premium as it seems to go up every year and then significantly every five years. The last time I spoke to anyone at the insurance co, they said that they don't sell these policies any more and the inference was they weren't good value. Time for a review!
The other thing to bear in mind is that it HAS been good value because you've been covered over that time for a (relatively) small premium. If you had been offered Standard cover at the time you would probably have baulked at the cost & maybe not taken out any cover at all.
You can buy a Mercedes with a Ford budget.
https://www.ft.com/content/5e83f15e-ea2c-4d2f-8ae8-bf72fc5effd0
I'll just have to settle for only doubling my money on Go Ahead and a bit better on Metro Bank. Just need Tullow to pick up a bit more and Capita to keep moving on up and to do better on Premium bonds
Musk and Tesla is interesting, surely he's playing the market, buy some, tell everyone he has and the price goes up 10-20%.
as for current accounts, I'm with a digital bank, but depends on your needs
Which leads me to an interesting thought. I spoke to a client today who wants to "sell" her daughter 50% of one of her BTL's. Client has 8 altogether (all mortgaged) & being 75 is looking at her overall situation. She rang me as she has a mortgage on said BTL and lender has says that the mortgage would have to change because of the new ownership. Client thinks she can just give her daughter 50% of the property just like that. I said as a minimum she would need to transfer the equity, pay stamp duty & have it all done legally.
I asked for the reason for all this & she said she was worried about IHT. At the last count her net worth (property values less mortgages) would be close to £2.5m, which also includes her residential property.
I said it might be best just to sell the property to her daughter (as she had done with 1 other BTL that she had) and the proceeds pay off her existing mortgage. Her daughter would get a BTL to service this. She is contemplating that but she then said that the "purchase price" would have to be around £450-475k. Zoopla estimates property to be worth £730k. Problems are many, mains one being that the outstanding mortgage is £380k & any new lender would only lend on the "purchase price" rather than the actual value. Problem then being max LTV would be 80% and therefore daughter could only raise £350k so not even enough to clear existing mortgage, let alone give her mum some money to help pay the CGT bill.
All this comes down to the fact my client doesn't want to sell normally & incur a very large CGT bill. She paid £225k for the property 20 years ago, so thats 28% on a gain of c£500k. Ouch !!
Which really led me to believe that my general advice on buying property over other investments (especially collective & ISA's) is rather sound. Not sure if an ISA portfolio over 20 years would have turned £225k into £735k, but it would all be tax free- and the £735k is in reality a net £600k. Ok, my client had also received (taxable) income on the rental property (£2k per month) but I'm not sure all the hassle is really worth it. As @rob7lee has commented before, BTL can be lucrative because of the gearing involved, but unless you have an exit strategy & happy with the tax implications when you start to unwind your position, I'm still not sure if it is really worth it.
Too late unfortunately and probably too costly now as she'd have to sell them to the Ltd Company although it may help in the longer run with IHT the costs may well outweigh the benefit.
After my sale of the America's and some of Baillie Gifford I'm at an all time high in My SIPP after a short dip a week or so ago.
Plenty of bubbles out there at present.
I track my funds daily & over the past week all my equity funds apart from Japan have been moving up & my bond funds going sideways - with my Vanguard gilt fund actually falling over that time.
One downside I've found with Interactive Investor, it only shows (live) the profit of what investments you currently hold rather than overall performance, no big shakes though as I know what's gone in so an easy calculation and it does show on the 1/4 statements.
My holding in BG Japanese Fund is up by 7.25% since the first of this month.
Thanks for the tips Golfie