Savings and Investments thread

PragueAddick said:

Nothing, on 43k. Right, enough is enough.

Seriously I will have to wind this down, since it seems that the Czech tax office would seek to tax me on winnings above 3k per annum. I'm not giving them a windfall when I finally scoop the big one.

Watch out for that if you are tax resident elsewhere and hold PBs. Each country has a different approach, it seems.

PragueAddick said:

Nothing, on 43k. Right, enough is enough.

Seriously I will have to wind this down, since it seems that the Czech tax office would seek to tax me on winnings above 3k per annum. I'm not giving them a windfall when I finally scoop the big one.

Watch out for that if you are tax resident elsewhere and hold PBs. Each country has a different approach, it seems.

robinofottershaw said:

My wife has decided to dip her toe into investing in crypto trading. Bit of a palaver registering with the Coinbase trading platform requiring you to complete a knowledge test but is now up and running. I haven’t researched this area to the degree she has, but very interesting.

robinofottershaw said:

golfaddick said:

robinofottershaw said:

My wife has decided to dip her toe into investing in crypto trading. Bit of a palaver registering with the Coinbase trading platform requiring you to complete a knowledge test but is now up and running. I haven’t researched this area to the degree she has, but very interesting.

Was the knowledge test like the ones they ask you when signing up to "adult" sites.....

"Are you over 18....

Ha ha. Might just as well be. 

I can’t really get excited about it but she is fortunate to have the money to play around with it and it will be only be up to a maximum of 0.5% of her portfolio, the rest of which is invested in a range of investments in line with advice from her brother who headed up investments at a couple of the big UK institutions. So, she is a traditional conservative investor who just fancies understanding this new vehicle.

robinofottershaw said:

valleynick66 said:

robinofottershaw said:

golfaddick said:

robinofottershaw said:

My wife has decided to dip her toe into investing in crypto trading. Bit of a palaver registering with the Coinbase trading platform requiring you to complete a knowledge test but is now up and running. I haven’t researched this area to the degree she has, but very interesting.

Was the knowledge test like the ones they ask you when signing up to "adult" sites.....

"Are you over 18....

Ha ha. Might just as well be. 

I can’t really get excited about it but she is fortunate to have the money to play around with it and it will be only be up to a maximum of 0.5% of her portfolio, the rest of which is invested in a range of investments in line with advice from her brother who headed up investments at a couple of the big UK institutions. So, she is a traditional conservative investor who just fancies understanding this new vehicle.

That’s the problem I think. No one ‘understands’ it but its advocates make excuses for its volatility and (to date) lack of real world adoption and application. 

It’s a gamble currently and should be treated as such. 

Agree absolutely, and that's exactly the way she is treating it.

Rob7Lee said:

Gilts are in effect due to the budget and change in expectation around likely interest rate drops, last year the markets were pricing in 3 drops, now just 1.
also fears around inflation returning and Trump all leads to doom and gloom for economies.

Covered End said:

Covered End said:

bobmunro said:

Covered End said:

golfaddick said:

Covered End said:

bobmunro said:

Would welcome opinions, please.

My wife and I have both got fixed rate bonds maturing in a week's time (they were at 5.3%!) - have been offered 4.5% by the same provider to fix again for 2 or 3 years, and we are thinking of rolling over one of each, just banking the interest earned. We've got others that mature in 12 months time so it will give us a nice 1,2,3 roll.

I've said before that based on our ages I won't take any undue risk and ISAs are maxed every year so it won't impact on that. Based on this, would you see it as sensible to fix for 2 and 3 years at 4.5% based on expectations of likely interest movements, or would you fix for a shorter period?

It’s a coin toss quite frankly, because rates could go any which way.

Even though inflation had nudged up recently,  interest rates are only coming down. 3 out of the 9 BOE rare setters voted for a 0.25% cut today and more will vote for cuts next year. The markets are expecting 4 x 0.25% reductions next year and the Fed have said they will be doing 2 next year themselves (after cutting rates yesterday).

Take the 4.5% & run. You'll be thankful in 2 & 3 years time.  

I agree that that is the most likely outcome, but it doesn't mean that will happen.
It was only 18 months ago when everyone thought rates had peaked at 4.25% and people were locking in for 1,2,3 years and got caught out as inflation stayed high and rates kept increasing to 5.25%.

My reason for saying they could go either way is, as you say, inflation went up this month and with plenty of companies needing to pass on NI hikes, I think it's feasible inflation could continue to rise, thanks to the budget. If inflation keeps going up it's possible that rates could go up again.

Yes, entirely possible. Prices will definitely rise as a result of the NI increases being passed on to consumers but to a large degree I think that is already factored in to the Monetary Policy Committee's thinking, and I don't believe they will want to heap too much more pressure on mortgage payers who will continue to see shock increases when existing fixed rate deals end (there is still a fair bit of that in the system).

The rapid increases in inflation we saw in 2022 as a result of the Russian invasion of Ukraine pushing up energy prices so dramatically was (hopefully) a one-off and a major Middle East war covering the whole region is the only risk of a repeat. Trump's trade tariff threat will likely not materialise as it would impact the US economy too much. The only other one I can think of is a global war and none of us will have anything to spend money on anyway if that happens!

So I'm guessing on balance that rates will reduce - but I may just fix both at 2 years!

*I'll caveat all of the above with the admission that I aint no economist!

Agreed, (but I and the experts thought rates had peaked 18 months ago and were wrong).

"Fixed rate mortgages look set to rise again after the cost of Government borrowing soared to its highest level for more than a quarter of a century.

Rates had been expected to fall this year due to expectations that the Bank of England will cut the base rate three or four times.

But now, rising gilt yields have thrown mortgage rate reductions into question.  

The yield on 30-year gilts hit 5.4 per cent today, the highest it has been since 1998. Meanwhile, the yield on a 10-year gilt went up to 4.88 per cent - the highest level since the financial crisis.

This has been largely triggered by Labour's Budget plan to borrow and spend more. 

This troubled Government debt markets, sending interest rate expectations and gilt yields higher ever since.

It is also having an impact on Sonia swap rates, which reflect lenders' expectations of future interest rates and play a critical role in how fixed-rate mortgages are priced."

It's not looking as clear cut as most (not referring to anyone on CL) thought last month and as I suggested.

Rob7Lee said:

Huskaris said:

Just got told yesterday that Corporate Services where I work (I'm a director of commercial finance in corporate services) is going to see significant reductions in staff/relocated to cheaper jurisdictions.

The NI increase is going to cost us £900k a year, but there were many discussions before this. The aim is to save $14m a year globally (probably around 2,000 employees). The UK employees are undoubtedly a better target now with the price increases. I wish we had been asked to pay it rather than the company!

Should find out more today, bit pissed off as I left a job in September to join and now we are in a redundancy process! 

Hearing stories like this everywhere at the moment. My boss even told us he's been talking to recruiters etc.

Sorry to hear that, how did it go? Or still in the consultation phase?

Sadly the NI increase will just mean at worst some job losses, at best more stagnant wages, as companies recoup. Without getting political I just don't understand what on earth they were thinking would happen. Whilst bigger business could swallow it (but most won't) it's the smaller businesses that will really struggle. 

Huskaris said:

This whole rising borrowing cost issue is really dominating the headlines. 

Really concerning how high the costs are getting on UK debt (and global debt for that matter).

30 year gilts at 5.446%.... That's surely a great purchase?

There's a lot of good buys around in the bond and gilt market right now. Some shorter treasury paying 5.6%. Some even better PIB's as well. Nationwide one paying 7.7% on current rates.