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Weekend reading: No credit for switching a bank account

Weekend Reading regular image: a bundle of newspapers

What caught my eye this week.

I used the Current Account Switch Service (CASS) for the first time a few weeks ago.

As the founder of a financial blog, I guess this might make me sound like one of those presenters who sheepishly admits in the middle of a TV makeover show that they’ve never held a paintbrush.

It’s not quite that bad. While I confess I still have my student bank account – for all the good such loyalty did me when I needed a chunky mortgage – I’ve always had a couple of other accounts on the go for their higher rates or perks.

There must have been a dozen since the Egg days. It’s just I’ve always done any switching between them for myself.

I’d read enough to know the CASS would probably work fine. But it was still nice to hear my girlfriend’s confidence as a several times user of the service.

Sure enough, the cash and scheduled payments appeared to be transferred away from my dying Santander 123 Lite account in good time, like those diplomats being airlifted off the roof of the US embassy in Saigon in 1975.

And as best I can tell a month later, they were. Everything seems to have gone super smoothly.

The snag

What was surprising though was to get a ping from Monzo this week saying my credit rating was down with one of the reference agencies.

Quite the plunge, too. From nearly 1000 to a good-for-normies 800.

Huh. Nothing else has changed with my personal finances recently except for this switch. And as I say it wasn’t even from my oldest bank account.

The move did see me close down the account that has handled the lion’s share of my direct debits for years though, due to it once touting excellent cashback. So I presume the agency’s computer was alerted to this and cried “shenanigans!

It’s no biggie. The downgrade doesn’t hurt anything except my sense of perfectionism. The other agencies haven’t raised an eyebrow, and I presume this one will come good soon enough, too.

That said our recent post on stoozing did get me thinking I should ramp up my interest-chasing efforts again, just for the fun of it.

Also now I’ve used the CASS, it’s easy to envisage swapping around a dedicated switching account with a couple of non-core direct debits attached, just to collect the bonuses.

Such cash freebies would be welcome enough. But to be honest they wouldn’t move the dial much at my stage of the game compared to the faff involved.

However this whole episode has been a good reminder of how useful hands-on experience is. I write much more about investing than money matters, but still – perhaps I should keep a toe in these waters? Just like those TV presenters might want to have a bash at doing up their spare room.

Whether the credit agencies would endorse such resurgent vigour is another question!

Have a great weekend.

From Monevator

Low-cost index funds – Monevator

Catastrophe bonds: Getting paid to weather risks – Monevator [Mogul members]

From the archive-ator: Personal time management for fun and profit – Monevator

News

Egg and butter prices are driving up UK inflation – Guardian

UK energy bills to rise by more than expected ahead of winter – BBC

Property tax threat slowing down the housing market [Who knew?]Guardian

Middle-Eastern buyers swoop on cheap prime London property – City AM

Bank shares swoon on fears new windfall taxes to come in the Budget – This Is Money

LSE gets the go-ahead to run new Pisces private stock market – City AM

There are now more ETFs in the US than stocks – Bloomberg via FA Mag

Wall Street ‘mocks’ idea of London listing, says UK fintech boss – City AM

Unemployment will rise to Covid heights, says think tank… – This Is Money

…with half of UK job losses so far in hospitality, say bosses – BBC

Corporate bond investors have a razor-thin safety net [Paywall]Bloomberg

Products and services

Energy bills to rise with Ofgem price cap hike in October – Guardian

Four ways to keep your energy bills down – BBC

Get up to £1,500 cashback when you transfer your cash and/or investments to Charles Stanley Direct through this affiliate link. Terms apply – Charles Stanley

Private medical insurance perks: are they worth it? – Which

‘Rent a room’ scheme: how to earn extra money by getting a lodger – Guardian

How Santander’s new ‘blur app’ feature could save you from scammers – Which

Get up to £100 as a welcome bonus when you open a new account with InvestEngine via our link. (Minimum deposit of £100, T&Cs apply, affiliate link. Capital at risk) – InvestEngine

Apple hikes TV streaming fee – Money Saving Expert

Why travellers are flying abroad… for day trips – BBC

Mid-century homes for sale, in pictures – Guardian

Comment and opinion

Reasons to be bearish about US stocks – Of Dollars and Data

Vanguard defends its controversial 70/30 stocks/bond callMorningstar

Bitcoin is built to fail – The Small-Cap Strategist

Where have all the contrarians gone? – A Wealth of Common Sense

How to [not] beat the market – Humble Dollar

What National Insurance on rental income could mean for BTL – This Is Money

Do you have 600 years for house price growth to deliver? – Propegator

Why wait? Mini retirements and living a big life [Podcast]Boldin Your Money

Return factors for REITs [Research]Alpha Architect

Working late mini-special

Save the UK state pension by taking it away from the under-75s – The Times

Why we’ll all be working into our 70s – This Is Money

Naughty corner: Active antics

Why the bond market is fertile ground for active management – Morningstar

Which bond funds held up the best in the post-pandemic bond rout? – Trustnet

The ‘sell America’ trade was basically only in April – Axios

Yet another look at big tech concentration and valuation – Novel Investor

Strategy’s sagging Bitcoin strategy – FT

Kindle book bargains

Too Big to Fail by Andrew Ross Sorkin – £0.99 on Kindle

50 Economics Ideas by Edmund Conway – £0.99 on Kindle

Mastering the Business Cycle by Howard Marks – £0.99 on Kindle

Or read one of the best investing books written – Monevator shop

Environmental factors

Heat pumps could halve heating bills with energy system reform – Guardian

How to work out whether you should get solar panels – This Is Money

Japan has opened its first osmotic power plant – Guardian

London’s ‘wet wipe island’ just got bulldozed [With video]ABC News

Collapse of critical Atlantic current is no longer ‘low’ likelihood – Guardian

Robot overlord roundup

General Partners: AI investors are navigating ‘peak ambiguity’ – FT

How to argue with an AI booster – Ed Zitron

One in ten UK banking jobs at risk from AI… – City AM

…and more claims AI is taking jobs from young people – Derek Thompson

…though job churn is nothing new – Seth Godin

US Intel – Stratechery

Getting an AI impersonator to teach your own students – The Conversation

Not at the dinner table

Minister takes on Nigel Farage over Brexit deal… – BBC

…but Farage should be held to account for Brexit write large – Guardian

Reform prepared to deport 600,000 under migration plans – BBC

Where are the UK’s asylum seekers coming from? – Sky

Why calling anti-asylum protestors ‘fascist’ doesn’t work – Guardian

Worst economic experiment ever – Daniel Drezner

Off our beat

The electric slide – Not Boring

A case study in how ecological conflict halts new housing [Podcast]A.L.T.I.F.

Blood diamonds and the geographic lottery – Forking Paths

The secrets of lost luggage auctions – Guardian

Advice for the truly productivity-challenged – Raptitude

The happiest place on Earth – Slate

Chickenpox jabs introduced as UK vaccination rates fall below herd immunity levels – Guardian

Why Gen Z has had enough of working from home – Guardian

And finally…

“Choosing individual stocks without any idea of what you’re looking for is like running through a dynamite factory with a burning match. You may live, but you’re still an idiot.”
– Joel Greenblatt, The Little Book that Beats the Market

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{ 29 comments… add one }
  • 1 Frugalist August 30, 2025, 12:26 pm

    I have got used to my scores bouncing all over the place, they seem to have very little correlation to either my actual situation or even my state of indebtedness. The reference agencies love consistency though and as someone always on the lookout for another money-making opportunity, I rarely give them that.

    The bank switches can be very lucrative, if you have the patience for it. I usually have a “burner” account on the go with a couple of small direct debits just in case a new switching opportunity comes up. I expect they’ve closed the loophole now, but at one point it was possible to switch to Natwest, RBS and Ulster Bank at the same time and bag £200 from each (since technically you hadn’t benefitted from a previous offer). That was a good week.

  • 2 xeny August 30, 2025, 12:31 pm

    The Bloomberg Corporate Bond story. There are two yields in a spread, but the article headlines the fall in corporate yields, not the ongoing rise in sovereign yields.

  • 3 Azamino August 30, 2025, 12:32 pm

    You very much should keep a toe in those waters! Stoozing is certainly not for me, nor was matched betting (is that still a thing?) but it does no harm to know how they work.

  • 4 TheFIJourney August 30, 2025, 12:55 pm

    Thanks for the post as always. Some interesting stuff this week. I really like the Bitcoin substack article, what were your thoughts on that? I changed my bank around 3 years ago from Santander as well, was very easy in my experience too, I didn’t get any changes to my scores personally but it definitely shows it can happen.

  • 5 DavidV August 30, 2025, 1:20 pm

    The Raptitude article on productivity resonated. I think I was in the centre of his distribution while I was working, but since retirement have definitely slipped to the left tail!

  • 6 ermine August 30, 2025, 1:35 pm

    > I still have my student bank account

    Yay! Me too 😉 I will wear my TI approved slacker’s badge with honour! They got terrific value out of their effort at Freshers week at Imperial over 40 years ago. Except that they never got to lend me any money after my 20s, so I have probably been deadweight for decades.

  • 7 ZXSpectrum48k August 30, 2025, 1:41 pm

    @TI. To be honest, I much prefer it when you have a rant about Brexit or the US slide into what might be best termed competitive authoritarianism. Activities like stoozing and switching current accounts leave me utterly cold. Perhaps leave that to Martin Lewis or next you’ll be do articles on couponing!

  • 8 Larsen August 30, 2025, 1:46 pm

    The Times article by Tim McPhail is more interesting than the clickbaity title suggests, as a strategy it seems to me to make some sense, especially considering young workers now will benefit from auto enrolment for their working lives. Unfortunately there are no figures provided on the potential effects of this.

    I also enjoyed looking at that house on the Isle of Dogs. I remember surveying sites there pre Canary Wharf being built, it was a desolate place. They must have been very gung-ho to go for that at the time. And you get the impression not much has been done to that house since about 1985.

  • 9 xxd09 August 30, 2025, 3:41 pm

    Thought about a new bank account around imminent Scottish Independence some years ago -I was moving to England
    New bank account was all set up but independence didn’t happen
    I did notice however that my rather large Visa credit limit on my current provider -well over £10000+ would not be available any time soon on the new account and I would need to start from a £3000 base only -a real stopper as all our spending (large -holidays and small-groceries) is on Visa-for safety and the month credit (This is especially useful in retirement)
    No switching in the foreseeable for me
    xxd09

  • 10 Delta Hedge August 30, 2025, 4:45 pm

    In terms of possibilities for writing about switching banks here, I’d guess you’ll be hard-pressed (IMHO) to compete with MSE. They’re sending their weekly email out to something like 10 million people, so 1 in 6 of the adult population.

    Since 2015 I’ve used their bank switching guide to weaponise the process, have done scores of transfers (I’ve lost track), earned somewhere between £3,500 and £5,000 in transfer incentives, and have ended up with 9 current accounts simultaneously on the go now.

    It’s a pain when I have to get all the interest details / certificates together before doing my self assessment and I wake up in a cold sweat sometimes when I think that I can’t remember all the PIN numbers. But eventually they all come back to me.

    Problem is, eventually, you exhaust all the offers you’re eligible for, and then you’ve run out of road for a while.

    You need to plan the minimum outbound Direct Debits carefully (Chip, Moneybox etc let you pay in via DD, so they can be used to manufacture zero net cost DDs), have multiple ‘sacrifice’ accounts eveready from banks which never pay an incentive, but which you’ll use just as the switch in account to move to a bank that does, and have a hub account to bounce the minimum monthly funding requirement for each account back and forth between the different accounts.

    When banks were paying bugger all interest in the 2009-21 period it was the only way to make turn on money on account.

    Did it hit the credit rating? Yeah. A little, and each time, but it went back up within 3 months, and never was like the reduction you’ve just experienced @TI.

    Maybe because you were doing something different to the long established profile the credit agency had for you perhaps (?), whereas if you’re doing a switch every 3 to 6 months the credit rating agencies possibly just get used to it, such that their systems then realise that another switch does not mean anything material in terms of creditworthiness.

    Haven’t tried stoozing yet though.

    Maybe that can be the next project 😉

    If I do it then I’ll approach it like military plan of attack.

  • 11 gadgetmind August 30, 2025, 4:57 pm

    My credit score is also irrelevant as I’m old school so don’t buy things that I can’t afford to buy outright. However I looked out of interest, and having the same bank account for 46 years is a good thing, but only having around £10k credit limit on cards is a bad thing, or so they say. I have all cards on 100% payment by DD, and have had for decades, and would really struggle to rack up more than £10k on them in a month.

    This does mean I need move money to our current account when buying (for example) a car, but just waving my ‘phone at them when I’m asked “How will Sir be paying?” makes it worthwhile.

  • 12 Scott August 30, 2025, 6:18 pm

    Credit scores are irrelevant to lenders. Lenders make their decisions based on the information held on you by credit reference agencies, and every lender will have their own criteria.
    The scores are just an eye-catching metric to persuade people to pay for access to their credit records (albeit, as you’ve pointed out, some banks provide this info for free if they have a tie-up with a specific reference agency.)

  • 13 ermine August 30, 2025, 8:56 pm

    @Delta Hedge #10

    Since 2015 I’ve used their bank switching guide to weaponise the process, have done scores of transfers (I’ve lost track), earned somewhere between £3,500 and £5,000 in transfer incentives, and have ended up with 9 current accounts simultaneously on the go now.

    I just don’t have this gene. But I’m intrigued, you’re running at a return of £500 a year, for a fair amount of make-work. Maybe I’m channelling Linda Evangelista but I struggle to drum up passion for this sort of effort. And I hate filling in forms, and the more institutions have my details the more likely it is for one of them or their outsourced cloud service providers (M&S and Tata, I’m looking at you) to spew them into the black hats.

    On MSE I think some folk get a buzz from socking it to The Man a bit. And there are numerous money wheezes over the years that left me cold but have been all the rage in the personal finance community, matched betting, tried that and it was successful but I came to the conclusion I’d rather go back to work if that is the answer (I didn’t). Surveys – I just said no from the get go, I didn’t buy my own time back from The Man to sell it at that rate. So all in all I am just the laziest bone idle git around for not finessing the odd £500 p.a. Life’s too short IMO.

    But hey, however folk get their kicks, good luck to y’all!

    @gadgetmind #11 with you all the way. A car is a wasting asset. The principle is simple – Buy wasting assets cash, not on credit

  • 14 Delta Hedge August 30, 2025, 9:30 pm

    @ermine #13: The rewards were greatest in the earlier years, when there were more I was eligible for.

    It tails off, and becomes less attractive, as you exhaust the opportunity set.

    Honestly, apart from one F Up with a single transfer (my bad for screwing up the dates); when using the switching service it could scarcely have been any easier. An hour’s effort typically for an interquartile range incentive of £125-£175.

    I view it as a form of guerilla (anti?) capitalism, a la Vietcong style 😉

    Basically banksters have a pot of marketing money to use as account switching bribes. You either claim a share of it before its gone, or you don’t.

    Faffery can become overrated as an obstacle to gain IMHO.

  • 15 dearieme August 31, 2025, 12:15 am

    “I still have my student bank account”

    I don’t: National Commercial Bank of Scotland ceased to be.
    So did my Savings Bank.

    I still have a hundred dollars at ANZ in New Zealand. I call it my “running away money”. I say I still have it: that’s assuming that my records survived the great earthquake on South Island.

  • 16 Alan Stocker August 31, 2025, 8:10 am

    @Larsen (#8)

    I too thought the article ‘Save the UK state pension (SP) by taking it away from the under-75s’ was interesting since it both argued for pushing back the pension (to 75) and increasing the amount.

    Two back of the envelope calculations
    1) The amount saved by starting the SP at 75 without increasing it would be roughly 27% of current costs (ratio of payout rates of single life RPI annuities taken at 67 and 75, i.e., 5.5% and 7.5%, respectively – different life tables, but probably good enough). So the amount it could be increased is relatively limited if the idea is to reduce the costs to government.
    2) Assuming many people would still retire from full time work at 65-67 (depending on their job), the current cost of providing an index linked £12k per year over a 10 year period is roughly £115k (using the calculator at https://lategenxer.streamlit.app/Gilt_Ladder). The problem is that those in the hardest physical jobs (e.g., retail, hospitality, etc.) that might require the earliest retirement are also often poorly paid and therefore may lack the funds to fill the gap between retirement and the SP.

  • 17 Frugalist August 31, 2025, 8:38 am

    @ermine I have gone through a lot of self-reflection on this over the last year or so. Personally, I think the bank switches can be a no-brainer.

    Provided you’re not using your actual main account, but a secondary one, it can be fairly trivial to switch. Grabbing £200 in one go that is non-taxable beats out most alternatives for making some quick cash. Even if it took several hours, and it generally doesn’t. You’re right about “The Man” aspect to it. I tend to look at most of these activities now and ask a) how much did I earn, b) how much time did I spend, c) how much did I enjoy it. Personally I do enjoy some of it, and it’s something I can do at 11pm when everyone is in bed and it’s quiet.

    The surveys though, I totally agree. That was one that I ditched very quickly after trying it from an MSE recommendation, purely because of how soul destroying it was. I don’t think the rate of pay was worth it, but I didn’t even bother trying to calculate it.

  • 18 Andy August 31, 2025, 8:41 am

    I’m up £550 (Lloyds, Nationwide, First Direct) from account switching over last 3 months, should be £725 after Barclays pays me out in a few days. It was easy to do after I set up a spare Chase account (you can have multiple current a/c with them) with a few 50p direct debits (with Stripe), which meant I didn’t actually have to switch my main account at all.

  • 19 far_wide August 31, 2025, 10:15 am

    Re: “bitcoin: built to fail”, it’s an interesting piece. I don’t think it achieves its headline quite though.
    What it does lay out a convincing argument for is that BTC will never be used properly as a currency, and that Strategy (formerly Micro) is a nasty looking piece of financial engineering atop of what is already a speculative investment.

    The thing is though, no-one sane really sees BTC as a possible currency anymore (there are many other reasons aside from those presented) and the only people buying MSTR are gamblers and those forced to to get exposure to BTC.

    So what the article notably omits is any convincing reason as to why BTC itself will fail as an investment. In my view, as someone who really does not like the whole scene at all, I think there are far too many diehards out there for it to fail entirely. It could certainly perform awfully in the short term and relatively badly in the long term, but I don’t see it failing.

    Unless someone somehow hacks it. Which would be completely hilarious. Lmao, lmfao even.

  • 20 The Investor August 31, 2025, 10:24 am

    @all — Thanks for the lively comments all, never can tell what will strike a chord! 🙂 (Fear not @ZXSpectrum48K, I’ve never clipped a coupon in my life, the most I get to is (failing to use) the rewards in the John Lewis app!)

    Good to hear everyone’s perspectives. In my head I’m with @DH and @Frugalist, it seems a very good hourly rate for some do-anytime work. (Much better paid than blogging haha). But at heart I’m a bit more like @ermine, demonstrably so as I’ve never got on with it.

    Perhaps I’ll set a goal such as ‘make £2,000 from switching in a year’. I’d hope I could turn that into near £8K over ten years with my active antics, and there’s still time enough (in theory, touch wood!) for that to matter. 😉

    Re: the state pension at 75-years-old argument, yes the ‘much more but later’ argument is novel (to me) and pretty powerful. I haven’t done the sums but I guess we’d be talking about £20K-25K in today’s money? The question is whether you’d have lots of penurious unable-to-work aged people trying to cling on to 75, though I suppose there’s the conventional benefit system if needed and we already have (I’d say more worryingly, given the old have at least had a chance to gather assets/savings) an underclass of some number of young would-be workers clinging on via benefits. I think the argument is worth more discussion for sure, anyway.

    Re: the Bitcoin article, I only skimmed the maths but thought the general principle re: deflationary monetary bases looked sound. There’s always been several clear apparent flaws in the Bitcoin as money argument though, and personally I haven’t ever put much stock in that even in the early days. I don’t really think the article defeats the ‘Bitcoin as a kind of digital gold’ thinking. I don’t agree the gold market works as the piece describes in terms of supply and demand, and even if it did I don’t think it’d destroy the case for digital gold.

    Ultimately what is a store of value is arbitrary as long as a few important considerations are met, and humans are arbitrary. As I’ve written before everyday Bitcoin is treated as such, I get more confident it will be for longer. But who knows! 🙂

  • 21 platformer August 31, 2025, 11:39 am

    The Current Account Switch Service (CASS) went live in 2013 and had no impact on the percentage of annual switchers which has been stuck at ~2% forever (broadband/mobile is ~15% and utilities ~20%). CASS cost £750m to develop for zero impact (although it was difficult to predict this).

    Average annual value for a current account was £164 back in 2014 (mostly from interest forgone) so a £100-200 switch incentive is high LTV/CAC ratio.

    Balances held in a current account are some of the most valuable to banks as the behavioural life shows they are very sticky.

  • 22 Delta Hedge August 31, 2025, 11:52 am

    @far_wide #19: There’s a recent exchange (27 Aug @#30-32) on that “Built to Fail” piece in the links above in the comments thread to @Finumus’ 21 Nov 2024 Mogul piece riffing off of Victor Niderhoffer’s 1997 ‘Education of a Speculator’.

    In the last couple of days the news that Tether’s USDT, the world’s most dominant Stablecoin, can now operate natively on Bitcoin’s blockchain just *could* (perhaps) (channelling Chris Whitty here in those Downing Street pandemic press conferences) become ‘a game changer’, with the the RGB protocol, operating over the Lightning Network’s proposed upgrade to Bitcoin’s famously slow and low volume on chain validation.

    I still find it very difficult to ever imagine buying a morning mocha with few to a few hundred Satoshis with Bitcoin at $1 mn, $10 mn or $100 mn per coin.

    The biggest threats to BTC it seems me to now are likely one or more of:

    – Stalling out, as not enough incremental buying. This has always been an issue and, given MSTR, ETF and even sovereign interest in BTC nowadays, one might well think that it would be less an issue going forward than it was in the past – but we’re talking about sustaining levels of future demand relative to an exponentially larger market size in fiat terms. Everyone forgets now but the bulk of all BTC’s returns since it was first traded on an exchange in March 2010 came in the period when it was almost unknown from then up to June 2011 (i.e. just the first 15 months of the more than 15 years it’s now has been traded) during which short time (about 450 days) it went from 0.3 cents a coin right up to $30 per coin (before crashing down to $2 later in 2011). That’s 10,000x, or a 1 mn % rise. But, at the time of that 2011 price peak and collapse, there were in total only 6.5 mn coins mined, and, therefore, a theoretical ‘market cap’ (a very misleading term for cryptos) of a mere $200 mn. Now the so called market cap is $2 tn, some 10,000x higher, meaning it takes approx 10,000x the $ value net inflows to keep the price rising compared to mid-2011.

    – A future quantum computer hack of the Blockchain before the highly fractious and distributed BTC validator nodes reach 51% agreement to upgrade the protocol to quantum resistant cryptography. In comparison, for a centralised institution like a bank, it’s trivially easy to move quickly to QRC. I’ve mentioned this on a few other posts on MV concerning BTC.

    – In just 2 halvings (2032) the block reward will be down to 0.78 coins. Miners already struggle with profitability even with the adjusting BTC difficulty algo. Indeed investing in the miners has proved a losing proposition in recent years compared to BTC itself. IMHO one can’t rely too much on the Lindy effect to draw a conclusion that just because validation has worked in the past (and a 51% attack has not been successfully mounted) that will hold true into the indefinite future.

    Full disclosure: I don’t like crypto on principle, so my priors here may be negatively biased.

  • 23 far_wide August 31, 2025, 12:36 pm

    @delta hedge , those arguments seem very reasonable to me. I wasn’t aware of that latest technical advancement, though hitching a country’s financial wagon to USDT seems possibly even more bananas than to Bitcoin to me, but for very different reasons! 🙂

  • 24 Trufflehunt August 31, 2025, 1:27 pm

    > I still have my student bank account

    I don’t. Not certain, but I think it was either the Royal Bank of Scotland, or the British Linen Bank. What I definitely recall is the day near the end of a term, funds low, and the next instalment of my student grant still to arrive, I walked into my local branch in Glasgow.

    “I’d like to withdraw it all.”.
    Teller checks my passbook. “That will be 6/8d .”. ( Six shillings and 8 pence ).
    “Yes.”
    Trace of a smile at the corners of her mouth.
    “How would you like it, sir ? “.

    I had to laugh.

  • 25 Jeep August 31, 2025, 2:12 pm

    I opened a Griffin Saver account in 1984, along with a Barclays Young Saver account on the same day. Back then it was all about the freebies — everyone at my school seemed to have a Griffin Saver sports bag. My grandfather, a former Midland Bank manager, was horrified at the very idea of giving children bank accounts. My Barclays account can trace its lineage all the way back to that junior incarnation, though these days I mostly use HSBC — mainly because it seems to be the only mainstream bank that does multinational banking without getting a nosebleed.

  • 26 dearieme August 31, 2025, 3:06 pm

    “you’d have lots of penurious unable-to-work aged people trying to cling on to 75, though I suppose there’s the conventional benefit system”

    The use of which would presumably much reduce the decrease in the Treasury’s outgoings. Still, this particular variety of socialist government hasn’t yet taken to public use of the phrase “useless eaters” though I dare say the thought is entertained in private.

  • 27 Alan S August 31, 2025, 5:29 pm

    @TI (#20)

    “Re: the state pension at 75-years-old argument, yes the ‘much more but later’ argument is novel (to me) and pretty powerful. I haven’t done the sums but I guess we’d be talking about £20K-25K in today’s money?”

    A look at the ONS life expectancy calculator indicates that a 67yo male has an average life expectancy to 85yo and a median value of 86yo (females around 88yo and 89yo, respectively). In other words pushing the state pension back to 87yo would save about half the amount in payment or allow the amount paid to be doubled for the same overall cost (i.e., £12k to £24k).

    Using the more detailed period life tables https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/lifeexpectancies/datasets/lifetablesprincipalprojectionunitedkingdom), for a 67yo male in 2025, just over 20% of the cohort are dead by 77yo. In other words, that would be the highest potential savings or the increase in amount for the same cost. (i.e., roughly £12k to £14.4k). Useful to note that it is not wildly different to the value of 27% derived from annuity payout rates I mentioned above (#16).

  • 28 ZXSpectrum48k August 31, 2025, 8:56 pm

    Re: Bitcoin. What is interesting right now is how the Treasury operations of major Bitcoin hodlers are trying to generate yield. The likes of MicroStrategy/Strategy, Metaplanet etc are now systemically selling BTC options. They sell puts when BTC rallies and sell calls when it sells off. That is forcing implied volatilty down to low levels. A 1-month straddle struck at around 109k has a breakeven of 104-114k. This is the type of move we often see in a couple of days.

    It makes calls a pretty cheap way to keep BTC exposure. The 1-month call, strike 109, has a breakeven of just 111.5k. Something like a 1 month digital, struck at the recent highs of 124.5k, costs around 7%. So like 14:1. For me this just makes it easier to hold BTC through options than through futures or the actual token.

  • 29 Delta Hedge September 1, 2025, 12:07 pm

    Interesting point @ZX #28: Isn’t just hedging; it’s amplified yield engineering.

    Metaplanet’s put sales scoops more BTC at discounts if exercised, or pocket pure premium profits otherwise.

    Strategy’s convertible notes raise billions at low coupons, convertible to equity during pumps, supercharging treasuries without dilution upfront.

    Metaplanet mirrors this, blending options income with bonds to gun for 1% of BTC supply by 2027.

    Even Semler Scientific and DATCOs are piling in with ATM offerings.

    But leverage cuts both way.

    Naked calls in a surge or debt conversions in a crash could trigger forced sales.

    I’ve had a few thoughts on a thematic linkage between the “Why I’m Bearish on U.S. Stocks (for the Second Time Since 2017)”, “Where Have All the Contrarians Gone?”, “When Markets Concentrate”, and the “U.S. Intel” pieces from Nick Maggiulli, Ben Carlson, Jon from Novel, Ben Thompson and Packy McCormick (with Sam D’Amico) from Not Boring in the above, as always, excellent weekend Monevator links (with thanks for them to @TI).

    Those thoughts also tie in with an earlier comment which I’d done on a piece by The Dutch Investors on the Monevator “First they came for the Call Centres” piece last year, and with this piece over the weekend from the Daily Telegraph (which might come up as pay walled, but which, if it does, is then available freely over at archive.ph):

    https://www.telegraph.co.uk/business/2025/08/29/picking-winners-from-ai-boom-is-easier-said-than-done/

    I’m going to post those thoughts as a comment in the MV ‘Call Centres’ piece thread, as it seems to me to fit better there than either here or in the ‘What to do it your queasy about US valuations’ piece (also on Monevator last year).

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