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Savings and Investments thread
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Had a note from Fidelity (where I hold my main SIPP)Important notice: Increased processing times for tax-free cash (TFC) paymentsDue to increased demand, TFC payments are taking longer than usual to process. To receive payment by 26 November, please submit your instruction by 7 November so we can process it in time. Once you've submitted your TFC withdrawal request, it cannot be cancelled.
So clearly a lot of people taking out their tax free cash amount before the budget! Not sure Rachel from Accounts is really helping matters..........2 -
I’d take mine out if I hadn’t already !,0
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LargeAddick said:I’d take mine out if I hadn’t already !,
So would I if I was 55! Sadly just about to turn 53.......0 -
Not long to go ...Rob7Lee said:LargeAddick said:I’d take mine out if I hadn’t already !,
So would I if I was 55! Sadly just about to turn 53.......0 -
Rob7Lee said:LargeAddick said:I’d take mine out if I hadn’t already !,
So would I if I was 55! Sadly just about to turn 53.......
Do you sneak in at 55 before it rises to 57?0 -
Yes, by a few months!bobmunro said:Rob7Lee said:LargeAddick said:I’d take mine out if I hadn’t already !,
So would I if I was 55! Sadly just about to turn 53.......
Do you sneak in at 55 before it rises to 57?
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My firm's compliance team are all over this & very frowned upon to be taking TFC upon idle speculation.
Fwiw.......my view is that IF there are any changes to the TFC limit in the Budget they wont happen overnight on the 26th & at the very earliest it will from the next tax year (so 6th April 2026).
In addition, past changes to pension allowances ( Lifetime & Annual) have had protections put into place so that current levels would be honoured going forward. So, IF Rachel Reeves decided to reduce the TFC limit to, say, £100k then anyone currently having more than £400k in their pension pot(s) would have the relevant 25% protected. So if you currently have £500k in your pension & could take £125k as a Tax Free lump sum then this would be protected going forward.
That is my view & has been the norm for over 50 years. When Personal Pensions came in in 1988 the TFC limit was 25%. Older Retirement Annuity plans (RAC) had TFC at 33%. These stayed as they were.
I think there will be a lot of "buyers remorse" come Budget Day. Lots of people with thousands of pounds sitting in Cash Deposits being taxed whilst others will have their money in their pensions growing tax-free.3 -
I got £275 off the premium bonds this month.
One more like that could pay for a season ticket.1 -
It's not an American meme stock. It's a real, solid, decent company and as I said I originally bought it as an income stock. Who does not know somebody who is taking Ozempic/Wegovy? FWIW more than half of the analyst consensus on Degiro is Buy or Strong Buy. I'm just holding.Rob7Lee said:
The loss says otherwise....... I always try to remember that you also have money sitting in that share (currently at a loss) that could otherwise potentially be growing elsewhere rather than just waiting to get back what you once invested.PragueAddick said:
The thing is, the reasons why I bought NN still hold good today.Rob7Lee said:You all need to take stop losses and at times sell at a loss. Over 6-7 years I’ve done well on Metro bank. But have twice sold at a loss.
my mate is still holding what he bought when I first did and he’s down about 70%. Sometimes selling is the best, even if a loss.0 -
Do you think it is now wise for me to cash in my £10 post office savings stamps. I stopped paying in 2 bob a week some time ago but wondering what the value would be should I decide to cash them in 🥸1
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Solidgone said:Do you think it is now wise for me to cash in my £10 post office savings stamps. I stopped paying in 2 bob a week some time ago but wondering what the value would be should I decide to cash them in 🥸I've just done a some complicated mathematics, looked at the compound growth since, I've assumed, 1970 as you were investing in shillings (could be longer but have taken 1970 as the benchmark), analysed market trends for the same period (had to guess some as the data available pre-1990 is sketchy), applied inferential and predictive analysis methods and some regression analysis, and also applied a Bayesian statistical approach.The final outcome calculation, with a 95% confidence level, very roughly approximated to £10.1
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golfaddick said:My firm's compliance team are all over this & very frowned upon to be taking TFC upon idle speculation.
Fwiw.......my view is that IF there are any changes to the TFC limit in the Budget they wont happen overnight on the 26th & at the very earliest it will from the next tax year (so 6th April 2026).
In addition, past changes to pension allowances ( Lifetime & Annual) have had protections put into place so that current levels would be honoured going forward. So, IF Rachel Reeves decided to reduce the TFC limit to, say, £100k then anyone currently having more than £400k in their pension pot(s) would have the relevant 25% protected. So if you currently have £500k in your pension & could take £125k as a Tax Free lump sum then this would be protected going forward.
That is my view & has been the norm for over 50 years. When Personal Pensions came in in 1988 the TFC limit was 25%. Older Retirement Annuity plans (RAC) had TFC at 33%. These stayed as they were.
I think there will be a lot of "buyers remorse" come Budget Day. Lots of people with thousands of pounds sitting in Cash Deposits being taxed whilst others will have their money in their pensions growing tax-free.
Thats sort of my point, the fear factor is causing it, but that's human nature and something Rachel from Accounts should have considered.0 -
She/they know what they are doing.Rob7Lee said:golfaddick said:My firm's compliance team are all over this & very frowned upon to be taking TFC upon idle speculation.
Fwiw.......my view is that IF there are any changes to the TFC limit in the Budget they wont happen overnight on the 26th & at the very earliest it will from the next tax year (so 6th April 2026).
In addition, past changes to pension allowances ( Lifetime & Annual) have had protections put into place so that current levels would be honoured going forward. So, IF Rachel Reeves decided to reduce the TFC limit to, say, £100k then anyone currently having more than £400k in their pension pot(s) would have the relevant 25% protected. So if you currently have £500k in your pension & could take £125k as a Tax Free lump sum then this would be protected going forward.
That is my view & has been the norm for over 50 years. When Personal Pensions came in in 1988 the TFC limit was 25%. Older Retirement Annuity plans (RAC) had TFC at 33%. These stayed as they were.
I think there will be a lot of "buyers remorse" come Budget Day. Lots of people with thousands of pounds sitting in Cash Deposits being taxed whilst others will have their money in their pensions growing tax-free.
Thats sort of my point, the fear factor is causing it, but that's human nature and something Rachel from Accounts should have considered.
I presume they are hoping that a fair amount will go into the economy rather than alternative savings/investments.0 -
With her doing her best to stitch up anything remotely entrepreneurial or that works for a living I don't blame anyone for taking a safe option and putting their money in safe boring but non-economy stimulating products to avoid any unpredictability. Regardless of how returns from market investments way out-perform these products the PR of that is non-existent. Plus they seem intent on playing some stupid sleight of hand game, leaking things to test the water as opposed to being decisive and leading.Covered End said:
She/they know what they are doing.Rob7Lee said:golfaddick said:My firm's compliance team are all over this & very frowned upon to be taking TFC upon idle speculation.
Fwiw.......my view is that IF there are any changes to the TFC limit in the Budget they wont happen overnight on the 26th & at the very earliest it will from the next tax year (so 6th April 2026).
In addition, past changes to pension allowances ( Lifetime & Annual) have had protections put into place so that current levels would be honoured going forward. So, IF Rachel Reeves decided to reduce the TFC limit to, say, £100k then anyone currently having more than £400k in their pension pot(s) would have the relevant 25% protected. So if you currently have £500k in your pension & could take £125k as a Tax Free lump sum then this would be protected going forward.
That is my view & has been the norm for over 50 years. When Personal Pensions came in in 1988 the TFC limit was 25%. Older Retirement Annuity plans (RAC) had TFC at 33%. These stayed as they were.
I think there will be a lot of "buyers remorse" come Budget Day. Lots of people with thousands of pounds sitting in Cash Deposits being taxed whilst others will have their money in their pensions growing tax-free.
Thats sort of my point, the fear factor is causing it, but that's human nature and something Rachel from Accounts should have considered.
I presume they are hoping that a fair amount will go into the economy rather than alternative savings/investments.
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IME the money will sit on depoit or at best will be put into PB's or ISA's. Some will get spent on upgrading a car or a holiday.Covered End said:
She/they know what they are doing.Rob7Lee said:golfaddick said:My firm's compliance team are all over this & very frowned upon to be taking TFC upon idle speculation.
Fwiw.......my view is that IF there are any changes to the TFC limit in the Budget they wont happen overnight on the 26th & at the very earliest it will from the next tax year (so 6th April 2026).
In addition, past changes to pension allowances ( Lifetime & Annual) have had protections put into place so that current levels would be honoured going forward. So, IF Rachel Reeves decided to reduce the TFC limit to, say, £100k then anyone currently having more than £400k in their pension pot(s) would have the relevant 25% protected. So if you currently have £500k in your pension & could take £125k as a Tax Free lump sum then this would be protected going forward.
That is my view & has been the norm for over 50 years. When Personal Pensions came in in 1988 the TFC limit was 25%. Older Retirement Annuity plans (RAC) had TFC at 33%. These stayed as they were.
I think there will be a lot of "buyers remorse" come Budget Day. Lots of people with thousands of pounds sitting in Cash Deposits being taxed whilst others will have their money in their pensions growing tax-free.
Thats sort of my point, the fear factor is causing it, but that's human nature and something Rachel from Accounts should have considered.
I presume they are hoping that a fair amount will go into the economy rather than alternative savings/investments.0 -
Agreed some will boost the economy on new cars, holidays, towards helping kids/grand kids with property purchases and in restaurants & entertainment.golfaddick said:
IME the money will sit on depoit or at best will be put into PB's or ISA's. Some will get spent on upgrading a car or a holiday.Covered End said:
She/they know what they are doing.Rob7Lee said:golfaddick said:My firm's compliance team are all over this & very frowned upon to be taking TFC upon idle speculation.
Fwiw.......my view is that IF there are any changes to the TFC limit in the Budget they wont happen overnight on the 26th & at the very earliest it will from the next tax year (so 6th April 2026).
In addition, past changes to pension allowances ( Lifetime & Annual) have had protections put into place so that current levels would be honoured going forward. So, IF Rachel Reeves decided to reduce the TFC limit to, say, £100k then anyone currently having more than £400k in their pension pot(s) would have the relevant 25% protected. So if you currently have £500k in your pension & could take £125k as a Tax Free lump sum then this would be protected going forward.
That is my view & has been the norm for over 50 years. When Personal Pensions came in in 1988 the TFC limit was 25%. Older Retirement Annuity plans (RAC) had TFC at 33%. These stayed as they were.
I think there will be a lot of "buyers remorse" come Budget Day. Lots of people with thousands of pounds sitting in Cash Deposits being taxed whilst others will have their money in their pensions growing tax-free.
Thats sort of my point, the fear factor is causing it, but that's human nature and something Rachel from Accounts should have considered.
I presume they are hoping that a fair amount will go into the economy rather than alternative savings/investments.0 -
My wife has just taken one of her tax free allowance and putting the money into premium bonds in lue of the money being spent on nice holidays over the next 12 months given that its our 40th wedding anniversary next year 😎.golfaddick said:
IME the money will sit on depoit or at best will be put into PB's or ISA's. Some will get spent on upgrading a car or a holiday.Covered End said:
She/they know what they are doing.Rob7Lee said:golfaddick said:My firm's compliance team are all over this & very frowned upon to be taking TFC upon idle speculation.
Fwiw.......my view is that IF there are any changes to the TFC limit in the Budget they wont happen overnight on the 26th & at the very earliest it will from the next tax year (so 6th April 2026).
In addition, past changes to pension allowances ( Lifetime & Annual) have had protections put into place so that current levels would be honoured going forward. So, IF Rachel Reeves decided to reduce the TFC limit to, say, £100k then anyone currently having more than £400k in their pension pot(s) would have the relevant 25% protected. So if you currently have £500k in your pension & could take £125k as a Tax Free lump sum then this would be protected going forward.
That is my view & has been the norm for over 50 years. When Personal Pensions came in in 1988 the TFC limit was 25%. Older Retirement Annuity plans (RAC) had TFC at 33%. These stayed as they were.
I think there will be a lot of "buyers remorse" come Budget Day. Lots of people with thousands of pounds sitting in Cash Deposits being taxed whilst others will have their money in their pensions growing tax-free.
Thats sort of my point, the fear factor is causing it, but that's human nature and something Rachel from Accounts should have considered.
I presume they are hoping that a fair amount will go into the economy rather than alternative savings/investments.2 -
That’s optimistic given the price hikes our owners favour.jose said:I got £275 off the premium bonds this month.
One more like that could pay for a season ticket.You might need the bigger prize !😉😆0 -
Rachel in Accounts is keen to tell us how generous the Government is paying away £27bn in pensions tax relief on contributions. This sound bite is no doubt to justify ending the anomaly of salary sacrifice avoiding NI contributions.But what Rachel and the general public seem uneducated about is that pensions tax relief is tax DEFERRAL. You pay income tax not only on the original contribution but all the investment growth you accrue as well as the invested tax relief - as and when you draw your pot as income in retirement. You can produce numbers showing many will pay more income tax on their pension than received in tax relief.So when you hear the sob story about excessive tax giveaways for pension savers, I suggest you contact Rachel and ask how much tax HMRC collect from pensions in payments. I have been fobbed off in the past when asking this question.
It’s a classic case of Govt misrepresenting the facts and solving short term cash flow problems with decisions that increase today’s tax revenue at the expense of tomorrow’s tax revenue while reducing savings and pensioner prosperity.
Higher rate tax relief on contributions is also not a giveaway for the same reason - the tax relief is invested and taxed when paid out as part of the higher pension it produces. The more the higher paid are encouraged to save the bigger their pensions and more likely to be taxed at the higher rate. The policies of penalising tax relief for higher earners is lunacy in terms of encouraging savings and its wider and long term negative impact.5 -
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Its not truly tax deferral though, You can get the maximum 47% tax relief if salary sacrifice (or indeed if your salary falls into the right bracket it can be 62%), yet you can take 25% of pot (up to a level) tax free, then a further £12,500 ish tax free per annum (before state pension age) and then a further circa 38k per annum at 20%.Dippenhall said:Rachel in Accounts is keen to tell us how generous the Government is paying away £27bn in pensions tax relief on contributions. This sound bite is no doubt to justify ending the anomaly of salary sacrifice avoiding NI contributions.But what Rachel and the general public seem uneducated about is that pensions tax relief is tax DEFERRAL. You pay income tax not only on the original contribution but all the investment growth you accrue as well as the invested tax relief - as and when you draw your pot as income in retirement. You can produce numbers showing many will pay more income tax on their pension than received in tax relief.So when you hear the sob story about excessive tax giveaways for pension savers, I suggest you contact Rachel and ask how much tax HMRC collect from pensions in payments. I have been fobbed off in the past when asking this question.
It’s a classic case of Govt misrepresenting the facts and solving short term cash flow problems with decisions that increase today’s tax revenue at the expense of tomorrow’s tax revenue while reducing savings and pensioner prosperity.
Higher rate tax relief on contributions is also not a giveaway for the same reason - the tax relief is invested and taxed when paid out as part of the higher pension it produces. The more the higher paid are encouraged to save the bigger their pensions and more likely to be taxed at the higher rate. The policies of penalising tax relief for higher earners is lunacy in terms of encouraging savings and its wider and long term negative impact.
So with careful planning your tax bill would be considerably less that the tax relief received let alone growth tax free.
It's the differential which still makes pensions for higher tax payers (if they can) hugely popular. If they changed it to only receiving say 20/25% tax relief I'm not sure I'd bother paying in anymore as realistically anything more coming out is going to be taxed at a minimum of 40%, if I've already paid 20% tax then it's simply not worth it at my age.3 -
Dippenhall said:Rachel in Accounts is keen to tell us how generous the Government is paying away £27bn in pensions tax relief on contributions. This sound bite is no doubt to justify ending the anomaly of salary sacrifice avoiding NI contributions.But what Rachel and the general public seem uneducated about is that pensions tax relief is tax DEFERRAL. You pay income tax not only on the original contribution but all the investment growth you accrue as well as the invested tax relief - as and when you draw your pot as income in retirement. You can produce numbers showing many will pay more income tax on their pension than received in tax relief.So when you hear the sob story about excessive tax giveaways for pension savers, I suggest you contact Rachel and ask how much tax HMRC collect from pensions in payments. I have been fobbed off in the past when asking this question.
It’s a classic case of Govt misrepresenting the facts and solving short term cash flow problems with decisions that increase today’s tax revenue at the expense of tomorrow’s tax revenue while reducing savings and pensioner prosperity.
Higher rate tax relief on contributions is also not a giveaway for the same reason - the tax relief is invested and taxed when paid out as part of the higher pension it produces. The more the higher paid are encouraged to save the bigger their pensions and more likely to be taxed at the higher rate. The policies of penalising tax relief for higher earners is lunacy in terms of encouraging savings and its wider and long term negative impact.Some of that I agree with.However, most 45% tax payers will not max out on pension contributions as in reality with the tapering the max that really high earners can put in now is £10k a year. They will use other financial instruments e.g. they will likely have pretty big investments in ISAs between a couple. In retirement they will draw on those other tax free investments and restrict drawings from DC pensions so that their taxable income in retirement stays below or not much above c£50k and pay tax at 20(22)% or certainly the bulk of it at basic rate, yet all of their pension contributions, especially prior to tapering came in, attracted 45% relief. So not all tax deferral!0 -
I disagree.Dippenhall said:Rachel in Accounts is keen to tell us how generous the Government is paying away £27bn in pensions tax relief on contributions. This sound bite is no doubt to justify ending the anomaly of salary sacrifice avoiding NI contributions.But what Rachel and the general public seem uneducated about is that pensions tax relief is tax DEFERRAL. You pay income tax not only on the original contribution but all the investment growth you accrue as well as the invested tax relief - as and when you draw your pot as income in retirement. You can produce numbers showing many will pay more income tax on their pension than received in tax relief.So when you hear the sob story about excessive tax giveaways for pension savers, I suggest you contact Rachel and ask how much tax HMRC collect from pensions in payments. I have been fobbed off in the past when asking this question.
It’s a classic case of Govt misrepresenting the facts and solving short term cash flow problems with decisions that increase today’s tax revenue at the expense of tomorrow’s tax revenue while reducing savings and pensioner prosperity.
Higher rate tax relief on contributions is also not a giveaway for the same reason - the tax relief is invested and taxed when paid out as part of the higher pension it produces. The more the higher paid are encouraged to save the bigger their pensions and more likely to be taxed at the higher rate. The policies of penalising tax relief for higher earners is lunacy in terms of encouraging savings and its wider and long term negative impact.
Most pensioners (bar those with high DB Pensions) only pay 20% tax on their pensions. If it wasn't for the Personal Allowance being frozen over the last number of years instead of being Index linked then many wouldn't pay tax at all.
I tell my 40% tax payers that they should try to maximise their pension contributions because going in they will get 40% tax relief but on the way out they will very likely only pay 20% tax on it.0 -
I don't know why this got into my head this afternoon, but I decided to ask Claude AI this question:
If a British person aged 70 at the end of 2024, had started smoking aged 18, consistently smoking 20 cigarettes a day, how much would this have cost them overall (calculation adjusted for general inflation over the whole period? And if this person had never started smoking, but instead invested the same amount as the cost of the cigarettes in a general UK equity market fund, how much would his investment be worth today?
Answer:Summary
I've calculated both scenarios for someone born in 1954 who smoked 20 cigarettes daily from age 18 (1972) until age 70 (2024):
Total Cost of Cigarettes (Inflation-Adjusted)
£155,171 in 2024 purchasing power
This is what they actually spent on cigarettes when you adjust all those historical costs for inflation. The nominal amount paid over 52 years was £87,567, but in today's money that represents £155,171.
Value if Invested in UK Equities
£511,596
Had they instead invested that same nominal amount each year into a UK equity market fund (FTSE All-Share with dividends reinvested), their portfolio would be worth approximately £511,596 today.
The Bottom Line
- Lost opportunity: £356,425
- The investment would have grown to 3.3 times the inflation-adjusted cost of smoking
- That's the difference between having spent £155k (in real terms) and having £512k in assets
This calculation includes investing through all the major market crashes (1973-74, 1987, 2000-02, 2008-09, 2020) and uses actual historical UK equity returns with dividends reinvested. The stark reality is that early, consistent investing - even in relatively modest amounts - combined with compound returns over five decades creates substantial wealth.
This analysis doesn't even account for the additional costs of smoking - healthcare expenses, higher insurance premiums, lost income from illness, or reduced life expectancy.
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Possibly I'm being thick here, but wouldn't the lost opportunity be the difference between the positive equity value and the cost (negative) of the cigarettes, or 511,596 PLUS 155,171 so 666,767?
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No, its assumed you got some level of utility from purchasing the cigarettes therefore they are a benefit and on the same side of the scales. The opportunity cost being the difference between that and the greater benefit of investing the cash.IdleHans said:Possibly I'm being thick here, but wouldn't the lost opportunity be the difference between the positive equity value and the cost (negative) of the cigarettes, or 511,596 PLUS 155,171 so 666,767?
Of course to a non-smoker the idea of getting utility from buying cigarettes seems a bit odd!
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Good point. But setting aside the pleasure of smoking, you'd now be £667K better off if you hadn't smoked and had instead invested. And there would surely be some enjoyment derived from watching your investment increase...cantersaddick said:
No, its assumed you got some level of utility from purchasing the cigarettes therefore they are a benefit and on the same side of the scales. The opportunity cost being the difference between that and the greater benefit of investing the cash.IdleHans said:Possibly I'm being thick here, but wouldn't the lost opportunity be the difference between the positive equity value and the cost (negative) of the cigarettes, or 511,596 PLUS 155,171 so 666,767?
Of course to a non-smoker the idea of getting utility from buying cigarettes seems a bit odd! 0 -
Slow news day in the @PragueAddick household ?0
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I must say that that’s what i thought too. I will ask Claude…IdleHans said:
Good point. But setting aside the pleasure of smoking, you'd now be £667K better off if you hadn't smoked and had instead invested. And there would surely be some enjoyment derived from watching your investment increase...cantersaddick said:
No, its assumed you got some level of utility from purchasing the cigarettes therefore they are a benefit and on the same side of the scales. The opportunity cost being the difference between that and the greater benefit of investing the cash.IdleHans said:Possibly I'm being thick here, but wouldn't the lost opportunity be the difference between the positive equity value and the cost (negative) of the cigarettes, or 511,596 PLUS 155,171 so 666,767?
Of course to a non-smoker the idea of getting utility from buying cigarettes seems a bit odd! 0 -
Wish I hadn’t now🤣 Basically he says we are double counting. I think I get it. As a non- smoker I would still have had to find the same amount of money to put into investment as the smoker who does for his fags.PragueAddick said:
I must say that that’s what i thought too. I will ask Claude…IdleHans said:
Good point. But setting aside the pleasure of smoking, you'd now be £667K better off if you hadn't smoked and had instead invested. And there would surely be some enjoyment derived from watching your investment increase...cantersaddick said:
No, its assumed you got some level of utility from purchasing the cigarettes therefore they are a benefit and on the same side of the scales. The opportunity cost being the difference between that and the greater benefit of investing the cash.IdleHans said:Possibly I'm being thick here, but wouldn't the lost opportunity be the difference between the positive equity value and the cost (negative) of the cigarettes, or 511,596 PLUS 155,171 so 666,767?
Of course to a non-smoker the idea of getting utility from buying cigarettes seems a bit odd! 0
