It would be so much easier for everyone if they just said...."sorry, we really do need to fill this black hole & the simplest & fairest way to do it will be to raise Income tax by 1% on basic rate taxpayers & 2% on high rate tax payers"
Eliviate some of the pain by raising the personal allowance to £13k (or even £13.5k) and increase VAT to 22.5%. Then start reducing theses axes over the last couple of years of Parliament.
Wouldn't 22.5% VAT deter people further from spending, especially on large items.
It would be so much easier for everyone if they just said...."sorry, we really do need to fill this black hole & the simplest & fairest way to do it will be to raise Income tax by 1% on basic rate taxpayers & 2% on high rate tax payers"
Eliviate some of the pain by raising the personal allowance to £13k (or even £13.5k) and increase VAT to 22.5%. Then start reducing theses axes over the last couple of years of Parliament.
Wouldn't 22.5% VAT deter people further from spending, especially on large items.
It didn’t seem to when it went from 15 to 17.5 and then to 20 (with a brief stint back at 15 for a year).
It would be so much easier for everyone if they just said...."sorry, we really do need to fill this black hole & the simplest & fairest way to do it will be to raise Income tax by 1% on basic rate taxpayers & 2% on high rate tax payers"
Eliviate some of the pain by raising the personal allowance to £13k (or even £13.5k) and increase VAT to 22.5%. Then start reducing theses axes over the last couple of years of Parliament.
Wouldn't 22.5% VAT deter people further from spending, especially on large items.
It didn’t seem to when it went from 15 to 17.5 and then to 20 (with a brief stint back at 15 for a year).
Maybe sellers of major products at those times were doing major deals behind the counter as the only way to shift their products.
The point is though Reeves wants or at least has said she wants growth then starts countering it by ridiculous stealth taxes.
I do agree with Golfies stance on income tax. Idiot of politicians have been screwing us all for the last 5 decades with stealth taxes.
I also agree with your point re stamp duty etc. All she will do is kill the hen that lays the golden egg.
The adverts suggesting you hand over your savings to some stranger to ‘invest’ for you on an elaborate promise tell you ‘your capital is at risk’. Surely that alone is a reason to be risk averse?
Yeah I’d be wary of lumping your pensions in any active funds, they don’t tend to outperform the markets and even if they do, they tend to get eaten away by fees. Although, ironically, we might be entering a period where active funds might actually be a decent option.
Groups have to say “your capital is at risk” - it’s a rule by the FCA, because it literally is.
As someone who reviews funds on a daily basis I can categorically say that there are hundreds of funds that outperform tracker/passive funds. And the "fees" for an active fund is usually around 0.8% compared to say 0.1% or 0.2% for a passive one. The extra 0.6% is well worth the difference in growth that you can achieve.
Interesting, any resources where I can see this over the long term? Maybe it’s just the boglehead in me, but I’m suspicious of active funds. The reason being I found that the majority of active funds underperform passive over the long term. Would be interested to see data to the contrary and I can change my opinion (and perhaps investing habits).
Trustnet.
You bring up all the funds & categorise them under their respective sectors. Then you can then list them in % order over YTD, I year, 3 years etc.
The adverts suggesting you hand over your savings to some stranger to ‘invest’ for you on an elaborate promise tell you ‘your capital is at risk’. Surely that alone is a reason to be risk averse?
Yeah I’d be wary of lumping your pensions in any active funds, they don’t tend to outperform the markets and even if they do, they tend to get eaten away by fees. Although, ironically, we might be entering a period where active funds might actually be a decent option.
Groups have to say “your capital is at risk” - it’s a rule by the FCA, because it literally is.
As someone who reviews funds on a daily basis I can categorically say that there are hundreds of funds that outperform tracker/passive funds. And the "fees" for an active fund is usually around 0.8% compared to say 0.1% or 0.2% for a passive one. The extra 0.6% is well worth the difference in growth that you can achieve.
The difficulty though is for the average person who doesn’t employ an FA and maybe just puts a few hundred a month into an ISA or pension…… they are likely better in a tracker than trying to pick the right managed fund.
Yes maybe. But that's why there are IFA's. If you don't want to pay one then do it yourself. It has been shown that using an IFA to advise on where to put your money gives you a greater return over the long run than doing it yourself.
You pays your money.....
Edit.
Just realised I didnt really read your reply properly. Yes, the average Joe who just wants to save a few hundred a month into an ISA might be better off with a tracker than going for a managed fund. As they say, a tracker fund does what it says on the tin. However.....what tracker do you go fo ?? I often see on other forums people advocating the S&P500, which is obviously all US equities. MSCI World wouldn't be a bad shout but I'd prefer a better mix & more diversity.
I see there is once again an article on the front of the Telegraph saying that the tax free element from pensions could be lowered. However does then seem to say unlikely! Still may not want to take chances.
It is currently £268,275. Last year is was mooted that they were looking to lower it to £100k. I probably wouldnt have a problem with it being lowered to £200k.....£150k absolute minimum.
Most people it affects are those on Defined Benefit (final salary) schemes. I was speaking to a GP who retired in 2013. LTA then was £1.5m. He increased his lump sum to £375k and had a reduced pension of £56k pa. Was still 105% of the LTA and had to pay an excess tax charge.
Currently dealing with a Hospital Consultant who is looking to take his pension a year early at age 59. Advised him to take the max lump sum & reduced pension. This will give him £54k pa plus £268k TFC.
Why do you think that most people it affects are on DB schemes? Affects those in DC schemes as well. In fact I would have thought that on retirement, most people in DB schemes would take their tax free at that point, whereas those in DC schemes often leave in there.
I see there is once again an article on the front of the Telegraph saying that the tax free element from pensions could be lowered. However does then seem to say unlikely! Still may not want to take chances.
It is currently £268,275. Last year is was mooted that they were looking to lower it to £100k. I probably wouldnt have a problem with it being lowered to £200k.....£150k absolute minimum.
Most people it affects are those on Defined Benefit (final salary) schemes. I was speaking to a GP who retired in 2013. LTA then was £1.5m. He increased his lump sum to £375k and had a reduced pension of £56k pa. Was still 105% of the LTA and had to pay an excess tax charge.
Currently dealing with a Hospital Consultant who is looking to take his pension a year early at age 59. Advised him to take the max lump sum & reduced pension. This will give him £54k pa plus £268k TFC.
Why do you think that most people it affects are on DB schemes? Affects those in DC schemes as well. In fact I would have thought that on retirement, most people in DB schemes would take their tax free at that point, whereas those in DC schemes often leave in there.
I and pretty much all the colleagues I know left our tax free element alone and left it invested. I moved my DB (24 years) and DC (12 years) to a SIPP and now draw an income which minimises my tax, by dripping the tax free element in until the next tax event (age 75).
I’m now “taking home” the same monthly amount I did whilst I was working, but paying about £45k a year less tax.
Comments
The point is though Reeves wants or at least has said she wants growth then starts countering it by ridiculous stealth taxes.
I do agree with Golfies stance on income tax. Idiot of politicians have been screwing us all for the last 5 decades with stealth taxes.
I also agree with your point re stamp duty etc. All she will do is kill the hen that lays the golden egg.
You bring up all the funds & categorise them under their respective sectors. Then you can then list them in % order over YTD, I year, 3 years etc.
You pays your money.....
Edit.
Just realised I didnt really read your reply properly. Yes, the average Joe who just wants to save a few hundred a month into an ISA might be better off with a tracker than going for a managed fund. As they say, a tracker fund does what it says on the tin. However.....what tracker do you go fo ?? I often see on other forums people advocating the S&P500, which is obviously all US equities. MSCI World wouldn't be a bad shout but I'd prefer a better mix & more diversity.