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Weekend reading: Britain gets the Budget it deserves

Weekend reading: Britain gets the Budget it deserves post image

What caught my eye this week.

Now it seems like we were dreaming. The huge tax cuts. The dash for growth. The chancellor telling Laura there was more to come.

That strange Push-Me-Pull-You Mini Budget that blew up the gilt market, threatened pensions and banks, and sank yet another Tory prime minister.

Was it really only two months ago? Have we all done a Bobby Ewing?

Because if you happened to emerge from an all-consuming illness on a hospital ward this week to tune into the latest chancellor’s Autumn Statement, there wasn’t a whiff of any of it now.

Instead of tax cuts, the UK faces the highest tax burden (at just over 37% of GDP) since World War 2.

And about the only thing forecast to grow is the length of a recession that’s already underway.

Tax and don’t spend

Anyone who is interested will have heard the main points from Jeremy Hunt’s Statement by now.

More people paying the highest-rate taxes on more of their money. Frozen income tax thresholds that will mean all of us will pay a higher share of our income as tax, even as our wages are inflated by inflation. An axe taken to capital gains and dividend tax allowances. The pension triple-lock held.

Just in case you did sleep through it though, the main points from a personal finance perspective:

  • The Autumn Statement: item by item – This Is Money
  • Autumn Statement: What it means for your money [Search result]FT
  • How the Autumn Statement will affect various households – Guardian
  • What you need to know about the Autumn Statement [Podcast]Which

There was also the usual hodgepodge of measures to do with business, regulation, and investment. They amount to fiddling at the edges.

The result makes grim reading. Real incomes per person are forecast to fall 7% over the next two years – the biggest decline on record.

And then just when we’re dusting ourselves down, Hunt’s planned spending cuts will start to starve State spending.

Those cuts don’t kick in until 2024, either to give the Conservatives a chance in the General Election that year, or else because if they were front-loaded along with the tax cuts – and in the midst of a recession – then the economy might really fall off a cliff.

Probably a bit of both.

More pain, no gain

The only good news is the market is calm. Gilt yields have come down since Hunt took the reigns, and fixed-rate mortgage rates are following.

And I can entirely understand the logic of this Autumn Statement, especially in the light of what we went through under Liz Truss and Kwasi Kwarteng.

They showed the UK cannot afford to be reckless when it comes to market confidence. We’ve borrowed far too much for that, with our economy too dependent on the kindness of strangers.

Yet as I pointed out at the time, Truss and Kwarteng also correctly identified the UK economy is going nowhere as things stand, with stagnant real wages, no productivity gains, and barely-there economic growth.

Even with Hunt’s fiscal retrenchment – worth about £50bn, or about 2% of GDP – the Government’s payments on debt interest are still forecast to be £100bn a year by the end of the forecast period.

That’s more than we spend on any single public service except the NHS, says the IFS.

It adds that by the end of the period we’ll still be borrowing about £69bn a year.

Remember, that is additional debt, on top of a tally already sat at c. £2,500 billion.

If this is Austerity 2.0 then it’s worse than the original. At least George Osborne told us his cuts would be worth it to move the UK back into balance.

It all adds up

Indeed it’s hard to find any reasons for optimism about Britain for the next few years. Hunt is like a 19th Century doctor who promises he can save your life, then reveals the bone saw he’s going to use to cut off your leg.

Yet does he have any choice?

If the energy crisis hadn’t blown up and inflation hadn’t skyrocketed then things wouldn’t be so bleak. Obviously the vast spending during Covid to pay people to stay at home didn’t help either.

And if Truss and Kwarteng hadn’t frightened the horses then we wouldn’t now need to be trying to gee them back through flapping stable doors.

Oh, and there’s obviously the small matter of Brexit permanently impairing our economy. That hit is likely worth about £40bn a year to state funding – around the size of the hole Hunt is aiming to fill.

At least we voted for that one.

Things can only get better worse

Some readers hate gloomy posts. You come to an investing blog to be inspired, not dispirited. I can understand that.

But the best I can suggest is you continue to read us and pay even more attention to your finances. If anything, it’s more crucial than ever. Look after the pennies, and invest for the future because on the face of it the economy isn’t going to make it easy for you.

The only inspirational call here must be to control what you can, not be knocked off-course by what you can’t.

Who knows? Maybe Putin will look at his kids one morning and decide to pull out of Ukraine. That would be helpful.

But as things stand, there’s no getting around it. Britain is an impaired asset. It is run by old managers who triple-lock their incomes and shout at the telly while sat in properties inflated by vast windfall gains and collectively voting to make things worse for their grandchildren.

The country thinks it is richer than it is, confused by the reality of a successful top-tier (which includes the average Monevator reader, to be clear) and ancient visions of Empire.

In 2016 it decided to make things even worse on the back of a hissy fit. There was no upside.

And I’m truly sorry, but now we have to suck it up.

Enjoy the weekend regardless.

From Monevator

Nominee accounts: what you need to know – Monevator

If 2022 taught you never to own bonds, you learned the wrong lesson  – Monevator

From the archive-ator: The cautionary tale – Monevator


Note: Some links are Google search results – in PC/desktop view click through to read the article. Try privacy/incognito mode to avoid cookies. Consider subscribing to sites you visit a lot.

House prices expected to fall for the next two years – BBC

UK economy “permanently damaged by Brexit” says ex-BOE policymaker – Yahoo Finance

Hunt acknowledges Brexit effect on UK trade but says barriers can be lifted [Search result]FT

London loses crown of Europe’s biggest stock market to Paris – Bloomberg via Yahoo

Fans paid to attend World Cup by Qatar have daily allowance cancelled – Guardian

The record proportion of people who pay higher-rate income tax will rise further  – IFS

Products and services

Fixed mortgage rates are falling… – This Is Money

…and unsurprisingly fixed-rate savings rates might have peaked, too – This Is Money

ASDA launches new credit card that can help you boost your credit score – Which

Open a SIPP with Interactive Investor and pay no SIPP fee for six months. Terms apply – Interactive Investor

Beware removal firms that offer unusually low prices – Guardian

Premium Bond conspiracy theories investigated – This Is Money

Five things you need to know about how to store and find a will – Which

Urban loft-style homes for sale, in pictures – Guardian

Get a job mini-special

Proof of work – Of Dollars and Data

“Nothing good happens after midnight”MoonTower Weekly

Comment and opinion

Invest like a pigeon – Fortunes & Frictions

Sneaking a peek at your battered portfolio – Humble Dollar

Feeling of wealth – Indeedably

Four steps to overcome your spending habit – Morningstar

How people have been hit by the rising cost of mortgages – Guardian

Investment bubbles and fraud have a lot in common – Behaviourial Investment

How to lose money, and cope with it – Impersonal Finances

Boring is beautiful in investing – A Wealth of Common Sense

Eugene Fama: a life in finance [Podcast]The Meb Faber Show

A kick in the cryptos

Glamour – The Reformed Broker

The casino and the genie – The Generalist

Magic Internet money… – Young Money

…versus taking a long-term view of Web3 – Fred Wilson

How did so much ‘smart money’ get tangled up in FTX? – Institutional Investor

Reasonable FOMO – Dror Poleg

Naughty corner: Active antics

Discounting belief – Not Normal

When to change your investment process – Validea

Mistakes have been Made [.com]The Motley Fool

It’s hard to get excited about investing in TrustpilotShareScope

What about digital infrastructure investment trusts? – Interactive Investor

Kindle book bargains

No Rules: Netflix and the Culture of Reinvention by Reed Hastings – £1.99 on Kindle

How Will You Measure Your Life? by Clayton Christensen – £0.99 on Kindle

Why the Germans Do it Better: Notes From a Grown-up Country by John Kampfner – £1.19 on Kindle

Your Next Five Moves: Master the Art of Business Strategy by Patrick Bet-David – £0.99 on Kindle

Getting things done mini-special

When procrastination turns into regret – Darius Foroux

Distractions – Spilled Coffee

Off our beat

I remember the bookstore – Longreads

Maybe Trump was right to want to ban TikTokVox

Festival of Brexit: less dismal than expected [I guess pics don’t do it justice]SLIS

Twitter ‘closes offices’ after Elon Musk’s loyalty oath sparks more resignations… – Guardian

…and these tech lay-offs teach us a lesson about the war for talent [Search result]FT

Using Airpods as hearing aids [Research]iScience [h/t Abnormal Returns]

And finally…

“The more wonderful the means of communication, the more trivial, tawdry, or depressing its contents seemed to be.”
– Arthur C. Clarke, 2001: A Space Odyssey

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{ 77 comments… add one }
  • 1 PC November 19, 2022, 10:56 am

    Thanks and I come here regularly to learn something, and I always do ..

    “You come to an investing blog to be inspired, not dispirited. I can understand that.”

  • 2 Jim brown November 19, 2022, 11:08 am

    I remembered you saying some years back that brexit is the greatest act of national self arm since the 100 years war. You were correct then and even more so now.

    Its not the sole cause of all our problems but it exacerbate those problems.

  • 3 Neverland November 19, 2022, 11:12 am

    I don’t see much to be unhappy about tbh.

    CGT and dividend tax rates remain low. ISAs still 20k. IHT limit 1mil. 40% tax relief on SIPPs. No NICs on pensions or investment income.

    By comparison I read that in Ireland if you hold an ETF for 8 years you have to pay deemed CGT @40% whether you sell it or not…

    … be thankful for what you have while it’s still there

  • 4 xxd09 November 19, 2022, 11:59 am

    Hits the spot as usual-well done
    However -“self flagellation and sighing doesn’t butter any parsnips”-sorry about that-too many mixed metaphors!
    We do need to start being a lot more positive to get out of this rather large hole we have dug for our selves
    Having travelled widely for over the last 20 years since retiring -coming back to this country lifts my spirits every time -how lucky we are to live where we do
    Our problems are serious but we have the wherewithal to solve the problems unlike many interesting exciting to visit other countries that still have such a long way to travel to approach anything like our basic benefits
    No doubt our current crop of “peacetime” duds that head up our institutions will be winnowed out by the current crisis and I am sure new competent ones will emerge in due course
    Recovery has happened many times before-unfortunately usually involving a war -hopefully not this time though an actual war is not very far away as I speak
    That’s enough ranting from me!

  • 5 BBlimp November 19, 2022, 12:14 pm

    @Jim Brown…inflation and interest rates are higher or comparable in the US and eurozone as here, only the most ridiculous remainernomics would think that had we remained in the eu we’d be the only country to avoid it.

    @TI you appear to blame pensioners, and ignore the fact we’re rising benefits at over 10pc whilst private sector wages are increasing by 7pc and public sector by 5pc. This despite there being a labour shortage. As I sit in my home, heating firmly off, I wonder how fair it is I have such broad shoulders with which to pay heating bills for people who will only work 16 hours a week or fund an NHS that has more staff and real terms funding than in 2019 but performs less work.

    There will be readers who don’t own their own homes, with such supremely broad shoulders they have to pay a marginal rate of 60pc. I wonder how long it’ll be before 15pc of taxpayers are in this trap, surely within my working life.

    Higher taxes to fund higher benefits…Will a political party spring up to capture the disgruntled soaked? If they do, they’ll get my vote.

  • 6 John Kingham November 19, 2022, 12:45 pm

    “Britain is an impaired asset. It is run by old managers who triple-lock their incomes and shout at the telly while sat in properties inflated by vast windfall gains and collectively voting to make things worse for their grandchildren.”

    There is an inherent trend towards the conservatism and the political right as people get older, for fairly obvious evolutionary reasons (e.g. redistribution seems like a good idea when you’re younger and poorer, not so much when you’re older and richer).

    Also, some of this has to do with the size of the boomer cohort. When one age cohort is materially larger than others, its voting power skews politics and policies in its favour.

    But Boomers are in decline as they walk off the end of the conveyor belt of life, so it will be interesting to see if that has any impact on the next couple of general elections. Millenials are about as numerous as Gen X, so perhaps these two younger and more left-leaning generations will put Labour in power for a decade or two.

  • 7 Ducknald Don November 19, 2022, 1:01 pm

    >Will a political party spring up to capture the disgruntled soaked?

    It’s hard to see that happening when the cohort that votes the most is in and out of the health service on a weekly basis.

    Maybe once they have all fallen off their perch but most of the younger generations seem to be pretty pissed off with the right wing politics of the UK (especially Brexit).

  • 8 JP November 19, 2022, 1:16 pm

    Enjoyed the premium bond article. It made me laugh. I suspect Im not alone is succumbing to irrational thoughts on occaision about the system being rigged!

  • 9 BBlimp November 19, 2022, 1:30 pm

    I don’t know ducknold, I think more and more peoples eyes are opening to the NHS… It performs less care now than it did with less real money in 2019… if people are using the nhs regularly they’ll surely want it to stop buying fax paper and start treating more patients quicker and cheaper (as they do in virtually every other developed country on the planet)

  • 10 The Investor November 19, 2022, 1:47 pm

    I’m not blaming every pensioner, per se. Plenty voted for parties other the current crop of Tories and plenty didn’t vote for Brexit. And even those who did had their reasons.

    Rather, I’m just describing the situation as it is today. We have not been making economically optimal decisions since at least 2016 in the UK. That’s definitely not the only reason for our woes — I list them all above — but it has made things worse, and as the BoE chap admitted this week we wouldn’t be having an austerity budget if we didn’t have a Brexit anti-dividend to pay for.

    I agree obviously we could do with lower taxes and better public services. We shouldn’t have voted for Brexit if that was what we wanted. We should have stayed in the EU, raised minimum wages, and continued to work in partnership with the the continent. Over time the undoubted real pressures from immigration would have settled down (versus the bogus fantasy problems caused by immigration, which I guess would have escalated in the imagination for those that ran that way.)

    Cameron and Osborne were centrist Tories that perhaps in the very long-run were still on a path of managed decline, but it was better than the accelerated decrepitude that we’ve jolted ourselves into.

    It’s not the end of anything, but it’s even more so not the beginning of anything either.

    Just muddling along, getting more universally disgruntled.

    At least Hunt and to a lesser extent Sunak have dialed down some of the lunatic rhetoric and culture war stuff. If that has passed its crescendo than it’ll be something at least.

    Investing wise I agree we still have ISAs and SIPPS and reasonably non-punitive capital gains. If I didn’t write Monevator, I’d subscribe to the site and keep looking for opportunities to improve my lot.

    But that’s a separate matter from the direction of travel of the country as a whole, which I judge as having at least come off the nightmare bender, but very much waking up to the hangover.

  • 11 Jonno November 19, 2022, 1:54 pm

    We need to exploit north sea oil and gas urgently. It will help (a little) with the supply and demand equation for the global markets and significantly help our balance of trade (which is currently looking very bad because we insist on importing an expensive commodity we already have plenty of). It won’t make a jot of difference to global warming as it’s not changing demand, just the geography of the supply.

  • 12 Brod November 19, 2022, 2:15 pm

    @BBlimp – w.r.t. the NHS, could you list those developed countries which perform more with less? Can we please exclude those which don’t require the patient to contribute.

    And, which you’re at it, can you define doing less with more real terms money since 2019?

    Citations for both please.

  • 13 BBlimp November 19, 2022, 2:23 pm

    @Brod – happy to – more people realise pumping money into nhs isn’t getting better outcomes the better

    From the telegraph
    ‘The NAO cites an internal review by NHS England (NHSE), which found that the NHS was around 16 per cent less productive in 2021 than it was in 2019, as a result of reduced output and higher costs. “This is a major problem, and NHSE believes that reduced productivity has continued in 2022-23,”’

    And here’s the link to the national audit office article;


    I’m not entirely sure why Id cite anything about non-contributory systems ? You may prefer non-contributory systems, but, I most certainly prefer good outcomes.

  • 14 Jonathan B November 19, 2022, 2:32 pm

    There is effectively a contract we have with the government, they provide public services we all benefit from and we pay our taxes according to a formula which is meant to be fair. It is a pooling of risk, we don’t individually benefit from all those services all of the time but we do when needed (e.g. times of illness, or when our children need educating).

    The Conservatives have managed the trick of taking the relatively functional public services they inherited from the previous regime and making those services worse while at the same time demanding more tax. It doesn’t look as if they are much good at managing their side of the contract.

    (I think what @BBlimp has observed is that suffering multiple re-organisations doesn’t make the NHS more efficient, quite the opposite, it sucks out money unproductively. And I am not sure it actually performs less work, but it certainly is falling further behind demand for its services).

  • 15 The Investor November 19, 2022, 2:38 pm

    The NHS is far from perfect and I wouldn’t be against more reforms. But I support it as by far one of the best uses for universal taxation and the de facto redistribution, and because the potential for economies of scale seem reasonable (albeit diminishing perhaps as future healthcare becomes more personalized).

    I’ve had a lot of contact with both the NHS and private medicine. The latter is undoubtedly more pleasant. Appointments when you need them. Soothing waiting rooms with attentive and pleasant receptionists. All kinds of successful looking people sitting in there with you, waiting for only a short time to be seen.

    All very nice versus an NHS A&E which invariably resembles a bus station in the provinces after closing time and after a couple of buses were cancelled.

    And of course you can also spend money to jump long waiting lists.

    However 90% of the time, it’s the same treatment and the same staff. The waiting times matter. The fragrant receptionists do not.

    Something needs to be done, but I won’t pretend to know what. Twice now I’ve steered relatives through stays in hospital that seem to be held together with sellotape, guesswork and good intentions. Stuff written and lost on paper that would have seemed antiquated in 1950. A system that has never heard of an iPad.

    However let’s not pretend that is the whole story. The NHS is underfunded relative to what we expect from it, as has been shown in repeated studies.

    To pick just a recent one:

    The UK has spent about 20 per cent less per person on health each year than similar European countries over the past decade, according to new research that shows how the NHS has been consistently starved of funding.

    The data from the Health Foundation, which was shared with the Financial Times, found that health spending in the UK would have needed to rise by an average of £40bn per year in the past decade to match per capita health spending across 14 EU countries.


    I guess I’d come down in favour of an Australian system with some element of personally-paid in insurance and charging, followed by claw back. That would at least introduce incentives for efficiency for patients, if not practitioners.

    Without an NHS (and having the tax money instead) I’m sure I would be better off and get better outcomes overall with private health insurance. But I’m still young-ish and fortunately have no long-term health issues (touch wood).

    I am definitely not sure that would be true of the country if you equated every life equally though. In fact I strongly suspect not, looking at the US as a comparison.

  • 16 BBlimp November 19, 2022, 2:45 pm

    @Jonathan B – I think you’re right – with amendments. Yes they have broken functioning public services and demanded more tax – because they have to borrow less. This is down to furlough and lockdowns and all sorts of things both parties would have done.

    And this is the problem for supporters of the nhs – people might have been happy to spend bucketloads on a failing health system when the money was being stolen from future generations in form of borrowing… but now it comes out of their wages, their dividends, their capital gains… well let’s hope increasingly people are looking up and wondering if it should be organised better so as to provide outcomes that people in similarly rich countries expect.

  • 17 green_as_grass November 19, 2022, 3:01 pm

    People have been talking here about public services and the NHS, and as someone who has worked in the public sector for over 30 years (not in the NHS) I can tell you the major problem is the basic work culture of people in the public sector. They are all good people, but their attitude to change of any sort is unbelievably negative, especially if that change is considered to have anything to do with the tories. I’ve seen it over and over again. Making things work better is not their priority. Their priority is covering their arses. That is not just their main priority but their only priority. Better outcomes are regarded as a rather quaint idea that they have no interest in trying to make happen. That’s just a fact of the work culture. This may not be an opinion that is popular, but it is nonetheless true.

  • 18 Bobby November 19, 2022, 3:31 pm

    The Vox article is right on point! Tik Tok is an evil app. It’s doing the work of Chinas intelligence and its so easy. Its just going to get worse.

  • 19 Grumpy Tortoise November 19, 2022, 3:34 pm

    It’s no surprise that the NHS is ‘less productive in 2021 than it was in 2019, as a result of reduced output and higher costs’.

    Latest figures suggest that the service has 132,139 vacancies – almost 10% of its planned workforce, a good number of these are having to be covered using expensive agency staff.

    The NHS has experienced a decade of underfunding since 2010, despite cash boosts in 2018 and 2019. Between 2009-2019 the NHS budgets rose on average just 1.4% per year, compared to 3.7% average rises since the NHS was established.

    We currently spend one of the lowest proportions of out GDP on health amongst G7 countries.

  • 20 PI November 19, 2022, 3:54 pm

    Only France, Germany, and US are above the UK in spending. The monolithic, free at the point of entry, unionised staff, GP as gatekeeper model is broken. I don’t expect to see any change in my lifetime. But surely people will look back and wonder why the UK hung on so long to a system that had inferior outcomes to the government underwritten, insurance based, mixed private / public model that other countries ran for years?


  • 21 BBlimp November 19, 2022, 4:07 pm

    @Grumpy Tortoise

    Simply not correct about it having less staff, it has more, but they do less


    The highest spender in the G7 ? The US. I presume you don’t want the outcomes the US provides so let’s ask if we can get better results for the money we do pump in hand over fist. Presumably the ADDITIONAL £ 7bn from the autumn statement will go on more faxes, more fax paper, more ambulances to sit in ambulance bays waiting to hand patients over, more pay for three day a week gps, and outcomes will continue along the same trajectory as all the extra funding and people since 2019 ?

    Used to be only the Telegraph was picking up on this, but now the Times is too. Won’t be long before something has to be done. Foreign Aid Spending was once thought worthy and immutable… not so much when people realise they have to pay for it

  • 22 Sara November 19, 2022, 4:33 pm

    Re NHS – because the privately funded social care system is doing so well isn’t it? You really want to copy that? – (facepalm). It’s also the main reason why NHS is in such a state. Plus a mixed system won’t magically grow qualified staff in 5 minutes either.
    By the way – if you have a heart attack and have to wait 12 hours for an ambulance, you are going to be dead whether you are a pauper or a billionaire. Taxes are actually for something!
    I also seem to remember some vague thing called Covid which was still a big deal in 2021………

  • 23 Ericp November 19, 2022, 5:00 pm

    Still seems to be no hope of fixing brexit. Until we get a leader who understands the need to do so we’re doomed. Though the IMF may force the issue.

    Most commenters re the NHS have never worked in medicine.

  • 24 Sara November 19, 2022, 5:05 pm
  • 25 Neverland November 19, 2022, 5:48 pm


    “As I sit in my home, heating firmly off, I wonder how fair it is I have such broad shoulders”

    You voted for brexit. You won. Now, when you just have pay for your share of the mess you made, you cry.

    Many us saw the car crash coming, voted against and pay way way more than you

    Priceless. Would you like some cheese with your w(h)ine?

  • 26 BBlimp November 19, 2022, 6:03 pm

    @Neverland – so if the U.K. remained in the eu we wouldn’t have high inflation or high interest rates ? Despite them being experienced by the US and the eurozone ?

    Hard to argue with that.

  • 27 Ducknald Don November 19, 2022, 6:07 pm

    @bblimp I don’t know why you keep banging on about fax machines, their use has fallen from 9,000 four years ago to about 800 now. They will all be gone within a couple more years.

  • 28 BBlimp November 19, 2022, 6:12 pm

    @Ducknold – when did your workplace stop using them ?

  • 29 Griff November 19, 2022, 8:06 pm

    Re NHS all I know is my wife worked through covid as an NHS drone along with the other 25 in her communal office. For a third of my pay.
    That’s the real issue, overworked and underpaid.
    For years I have been asking her to leave but she wouldn’t have it, she wanted to help people. It sickens me to hear people calling them who have no idea but just jump on the bandwagon. Sickening. Anybody can drag a link from the Telegraph or the Dmail and then assume they are informed usually rubbish pandering click bait.
    Monevator is a great financial website but it does attract the odd knowall.

  • 30 SLG November 19, 2022, 8:15 pm

    Oh, thank God and congratulations.
    “now we have to suck it up.”
    That really sounds like you are hitting that final uphill on the change curve! Lets suck it up, find a way to address the shortcomings, solve the problems and move on as a country with everyone moving in the same direction.

  • 31 Mr G November 19, 2022, 8:51 pm

    @BBlimp. I don’t think anybody is arguing that we wouldn’t have high inflation or interest rates if we had remained in the EU. You’re setting up a straw man. The situation has undoubtedly been made worse by the 4% reduction in GDP since Brexit.

  • 32 BBBobbins November 20, 2022, 2:20 am

    Agree totally on the mad path the referendum sent us on and the lack of grown ups at the helm since.

    One specific think that has miffed me a bit is the slashing of CGT thresholds. My previous plan had included a chunk of taking TFLS at 55 then recyling it into ISA each year and GIA. Figured that wouldn’t sting too bad and at £12.3k gains PA could probably get a fair cash draw without tax bothering me. At £3k seems even modest rebalances or ISA top ups might end up taxable if the GIA performs remotely near inflation. Guess I should be grateful for the lower rates still on CGT ( though old indexing would no doubt have been better).

    On the use it or lose it part of the existing thresholds anyone got the definitive answer on whether it is better to realise gains on £123k bases standing at a 10% gain or 12.3k base standing at a 100% gain. Rebasing the lower gain stuff feels intuitively better because you have more cash accessible immediately without tax penalty but what really matters is what you put it into if you’re not going to draw soon. Welcome thoughts from people who’ve done the logic before. Example obviously just convenient numbers not my real situation.

  • 33 Martin T November 20, 2022, 7:01 am

    I can’t believe I haven’t heard more anger about the CGT changes. Gordon Brown’s removal of indexation was always the real travesty – the £12300 allowance was just a sop to soften that pill – now that is going. I shall face a tax liability on any gain in excess of 0.3% compound annual growth on a modest BTL I’ve owned for 27 years! How can that be fair?

  • 34 Jim McG November 20, 2022, 8:46 am

    It’s a shame that the country is so divided – every debate now seems to be binary. You’re for Brexit or against it; for lockdowns or against them; for vaccines or not; you believe in climate change or you don’t. Instead of arguing with the other side you just slag it off. Meanwhile money continues to rule the roost, while other values are sidelined as irrelevant. I’m increasingly exhausted by it all, where being dispirited trumps being inspired at every turn.

  • 35 Seeking Fire November 20, 2022, 8:49 am

    Love it. Britain is going to take a good kick in the balls in the future. The only question is how long it’s going to take to realise that collectively as a society it’s our fault and we’re the ones doing the kicking to ourselves.

    I cannot imagine under any circumstances voting for the conservatives at the next election. There is no point to them. My main issue is their (and frankly all parties) lack of honestly to the electorate that fundamentally we spend far more than we earn and we’ve been doing that since 2008 and arguably since the end of WW2. Vote Labour / Liberal who are equally shambolic but are at least in favour or proportionate representation and perhaps new parties will spring up who might start being a bit more honest.

    Lot of people talking about public services. Got news for you, when you owe £2.45 trillion, you, the NHS, schools and everyone is in the country isn’t that important. The bond market is the most important person as has been amply demonstrated this month. The main driver now of govt policy, is not you, the general electorate, or government – it’s the people we owe money too. That’s how much weaker the UK is compared to 15 years ago. And it’s going to get worse as we’re not even trying to balance the budget – have a look at some eastern european , south american countries as too where this could potentially get to particularly if we’re faced with another materially negative fiscal event (e.g. war).

    We could solve this problem in probably a couple of decades if we wanted to but would have to admit we have a problem. Truss etc had a go and got booted out in a month. The policies were a disaster but at least they recognised that if you want to pay for public services you need to grow the cake not fight over it.

    BBLIMP – Sorry to disappoint you but, I strongly suspect, the UK is going to slowly go cap in hand back to the EU over the next decade and ask if there’s any chance we can get access to the customs union & single market. The economics will demand it. EU will gleefully say, of course, only thing old boy, is that you’ll have to abide by the rules, which we set. Then we’ll will be exactly the same position as 2015 except oh yeah up until then we had the opportunity to influence the rules.

    Brexit is a failure of UK politicians over the past 30 years to be honest with the electorate and say that the EEC, EU and its previous incarnation is about a union of the people – it’s on the front cover of the treaty of Rome! It was never just about the economics, which all politicians in the UK of all colours were untruthful about. If we want the benefit of the economics we have to suck up the costs. If we don’t, fine, but then we need to radically reshape the economy and public spending – I’m up for that but I’m in a minority. Jeremy Hunt said Brexit is an opportunity as well, we have to see it in the round and I’ll be talking about some of those opportunities at the budget – what did he announce. nothing. Face it, we’re a mid sized European economy with a population that’s addicted to benefits. No different to France. The idea that we’d be up for shifting to a Singapore or even US style system was and is laughable.

    There is another option – that’s checking out. If you are highly skilled and young in particular (which is not many people in the UK), look at your options. Think about financial services in the middle east – tax free, or indeed the US (standard of living is around 30% higher than the UK). Germany offers a higher standard of living than the UK. Or Portgual, Italy, Greece for the tax breaks. The option won’t be for the majority. Everyone else will need to suck it up, because it would appear that it’s going to get a lot worse.

  • 36 Always Late November 20, 2022, 9:28 am

    Well, if we are going to be this self pitying… Exactly when did we think ignoring energy and food security was civilised? Was it about the same time we decided that money would have value instead of being a token of value? Perhaps it was also then we agreed that growth could be infinite with finite resources.

    When did we start talking about the government’s money as if it was not our money? Was that globalisation? When did we decide that it was more important to blame than to fix? When did we give up on education through media? When did we allow ourselves to become so myopic?

    The powerful used to have slaves. They revolted. Then they had oil. Now that is revolting.

  • 37 Always Late November 20, 2022, 9:33 am

    Spot on. And when was it we decided to let our lives and conversation be run by extremist media corporations?

  • 38 Wephway November 20, 2022, 9:56 am

    The Torygraph and Daily Fail were both moaning about the budget which suggests Hunt and Sunak probably got things about right, given the circumstances. The circumstances being a massive deficit left by Brexit and the Mini Budget. Yes of course there are global factors as well but while the British economy is still smaller than it was pre-pandemic, the Eurozone is over 2% bigger and the US is over 4% bigger.

    This is Osborne’s Emergency Brexit Budget, about six years late admittedly but there it is. So many Brexiters said after the Referendum there was lying on both sides of the campaign, and they pointed to Osborne’s budget as a prime example, but looking back now it seems quite prescient.

    Current polling on Brexit suggests there would be a massive victory for Remain if the Referendum were held again today, the least we should do on that basis is consider rejoining the Single Market, that would also be the quickest way to boost growth.

  • 39 G November 20, 2022, 10:16 am

    @BB our company stopped using fax machines about a decade ago. We still get the occasional request for a fax – usually from US companies(!) It’s fast and meets their compliance procedures for a signature on an exact physical copy of a contract.

    Companies of all kinds and sizes use antiquated technology – because it works for a particular process and the cost of replacement is high (cf Y2K). Plenty of companies are still using communications and computing tech from the 90s, 80s and even 70s. Some space tech still relies on tech from the 1960s, in some cases actually built in the 60s.

  • 40 Neverland November 20, 2022, 10:28 am


    There is a point to the conservatives – the preservation of the status quo and the feathering of the nests of their voting base

    Obvious point – state pensions went up by inflation, nearly twice earnings

    Less noticed – anyone earning over £180,000 is getting a pay rise because of the national insurance cut

  • 41 Pinkney November 20, 2022, 10:51 am

    Well no surprise finally the reality of the situation has ground down the optimism of a hard brexit. The language will I suggest change to give us at least a pragmatic brexit. The cost of paying for the black hole of 40bn a year eventually grinds down the most stoic of pit ponies. I expect terms like working with our eu partners to become a bit more acceptable to those currently in power.

  • 42 andy November 20, 2022, 12:13 pm

    @TI – can I suggest you implement a system that auto hides any comment that mentions “Brexit”, whether positive or negative. These comment sections are becoming an awful bore, full of the same old tropes and platitudes, arguing the never-ending argument.

  • 43 The Investor November 20, 2022, 1:28 pm

    @all — Pretty constructive discussion so far with a bit of edge on some of the NHS/Brexit comments from regulars. Appreciate it’s a frustrating argument, but please keep it civil and focus on the facts.

    @Martin T — The CGT changes are annoying but as has been said they only affect a tiny minority of people. I’m relieved I finally got rid of my taxable timebombs with my Amazon/tech sales in early 2021, as discussed the other day, but this would ‘only’ have made a difference of a few grand to those sales, versus paying the mooted income tax rates on capital gains. So in that sense a bullet dodged. ‘Fairness’ is always in the eye of the afflicted I think. Something has to be taxed, and at the moment we’re also dodging a wealth tax. But yes, all these goalposts changing are frustrating as ever. When I began investing there were plenty of old wealthy types with high six-figure unsheltered portfolios of dividend paying stocks, living off effectively tax-free income. All that’s gone, which looks ‘fair’ in the sense it’s not worked-for income, but ‘unfair’ in the sense that they arranged their affairs for rules that were subsequently changed. In as much as I think the UK’s biggest problems are at the income-earning low-asset end of the spectrum vs the asset rich, unproductive (or even very high-earning) end I can’t really argue with Hunt’s decisions, given the £50bn shortfall and the need to raise money from somewhere. 😐

    @andy — I don’t think I can really veto constructive (if repetitive) Brexit arguments when I myself am raising the issue in the article. (If they were happening on articles about Nominee Accounts, say, that’d be different). The reason I have kept bringing it up from time to time are (a) my well-repeated problems with it (b) the gap between the reality of Brexit and the media and even more so political discussion. Finally there’s a sign of movement on the latter, which is something, albeit immediately denied by Downing Street. (I suspect a kite-flying exercise https://www.thetimes.co.uk/article/britain-mulls-swiss-style-ties-with-brussels-nr0f7fw2k)

    With all that said if we can go without any more new chancellors or budgets for a few months we can hopefully have a break from Brexit in the posts! 🙂

  • 44 Factor November 20, 2022, 1:42 pm

    I shall cope with the current economic situation in the same way that I happily cope with everything that life sends in my direction, by being ever adaptive; by changing to suit changing conditions.

  • 45 Jonathan B November 20, 2022, 4:36 pm

    @Seeking Fire, there is a sense that talking about £2.45 trillion debt is scaremongering. While the market’s confidence in the pound sterling is important, it isn’t as if there is a loan shark out there asking for the money to be paid in full tomorrow.

    By the nature of balance sheets, the notional debt is balanced by money deposited with the government. What in a different context we call savings, or investments. For example:
    (1) Individual retail savings, like Premium Bonds and National Savings Certificates. Only a small fraction are sold on a daily basis, though that may increase if people need to use savings to pay household costs due to inflation and recession.
    (2) The cash in your pocket. Honestly – it is surprising but that is what it means by “I promise to pay the bearer on demand …” on a five pound note. While it is in your pocket you don’t have the use of the money, it is effectively loaned to the government.
    (3) Government bonds. That is what you are thinking of I suspect, but remember that around a third of the figure you quote has been bought back by the Bank of England through quantitative easing so is not really a debt. The rest of it has expiry dates stretching decades into the future, so only a very small fraction needs repaying in the short term. However it has been normal practice for years (maybe centuries) that governments fund bond repayments in part by issuing new bonds, and the problem is simply what the going rate is for doing that. There is always going to be a market for new bonds, pension funds and life assurance companies have no alternative but to buy government bonds to meet the risk requirements of their portfolios; and of course there is a pool of dutiful Monevator readers including bonds in their balanced investments.

    So the debt itself is not a huge problem. Even the associated interest payments are not as bad as they sound, most bonds are fixed interest so government costs don’t change except with new issues. And while the rise in interest payments on inflation-linked bonds sounds scary, from the government point of view that same inflation will be increasing tax receipts by the same amount (and in fact more when they freeze thresholds).

    The only real problem is the cost of issuing new bonds, i.e. the interest offered which to be attractive to those buying them has to match the market’s view of inflation over the bond’s lifetime. As Truss and Kwarteng found that is all about government looking as if it is competent at running the economy, and a lot of the recent Hunt budget has been about sending the right signals – and if you are cynical you might think it is also about over-doing the pain so there is scope for giveaways before the next election.

  • 46 Seeking Fire November 20, 2022, 6:27 pm

    @45 Jonathan – All good points that you have made and I don’t disagree with them.

    But I would say that £120 billion of interest payments this year or around 4% of GDP is quite something. Put it another way, that’s more than the entire defence and education budget for this year and closing in on the entire NHS budget.



    Every year, we borrow more than we spend, we pull forward future wealth into the present leaving less money for future public services and making the situation worse.

    Growth is the only way out of this. Of which the budget offered absolutely nothing according to the CBI.


    I figure you know all this probably…..

  • 47 An Admirer November 20, 2022, 6:44 pm

    Tax increases for the poorest is bad news socially because it discourages working in favour of staying on benefits for low earners. So this is setting up higher unemployment in the future as well as more polarising rhetoric about benefit scroungers. Not good.

    Several years ago the IFS noted how higher earners disproportionately pay more tax and suggested the government needed to even things out. Well I’d say Hunt has solved that.

    The NHS is still the elephant in the room. It’s simultaneously a giant money black hole at £170bn yet chronically at breaking point – and apparently this isn’t paradox to anyone except me. That’s twice the welfare budget. It employs 1 million (tax paying people). It is too big to fail.

    The comment above on BTL made me scoff. Having enjoyed huge tax breaks, low rates and underwriting of the property market for 25 years, some people gripe they have to pay some more tax on it. Wait while I fetch my tiny violin!

    Tax on electric vehicles helps support big oil by slowing adoption. I don’t own one fwiw. It puts the 2030 target into question and discourages progress. This could have waited at least a year or two with no real financial impact. This is sending a message.

    As-is telling everyone they need to work the same or more for less. People work for themselves not the taxman and there is no way telling people they get less money makes them more motivated. This has to have an effect upon the country’s competitiveness across all industries over the next few years at least.

    It seems like a good time to retire and stop working if you can. (Got your 10%). Or perhaps leave for greener pastures if you’re young enough.

    Finally tax relief on pension contributions is the last free lunch. Doubly so for 60% marginal payers. This escaped despite other smaller grabs being made as it’s a subsidy to the investment industry. But who knows how long that’ll last especially once the claims on it shoot up over the next few years. Surely the writing’s on the wall now….?

  • 48 Martin T November 20, 2022, 11:00 pm

    @ An Admirer I don’t think it unreasonable to complain at being retrospectively taxed on capital appreciation above 1/10th of average inflation. Perhaps if CGT was extended to residential property gains vastly in excess of inflation we might hear the pips squeak.

    Low rates and underwriting of the property market are functions of governmental policy and the macroeconomic climate, enjoyed by all, while any ‘huge tax breaks’ have been well and truly eroded by successive governments sticking the boot in. Residential landlords are not even allowed to offset finance costs any more – unlike any other business.

    Clearly you’ve never been called out to a blocked sink on a Saturday night only to discover the source of the blockage to be beard shavings. The joys of unearned income!

  • 49 Grumpy Tortoise November 21, 2022, 8:41 am

    @BB – you seem to be falling into the trap of quoting the Telegraph as ‘evidence’ when it merely promotes the right-wing bias of its tax-dodging owners.
    The question is not whether the NHS has more staff but whether it has sufficient staff. When you are treating ever more patients you need more staff in order to ensure that clinical staff are not working unsafe hours and that nurse:patient ratio are also safe.

  • 50 old_eyes November 21, 2022, 12:43 pm

    Late to the discussion, but a couple of thoughts.

    I was disappointed in the budget, because I could not see any plan to improve productivity, or to deal with the permanently dampening effects of Brexit. It may be correct that the Sunak/Hunt team had first to stabilise the situation and show that ‘adults’ were back in charge. However, pretending that this Government is completely new and has no connection with the Tory Governments of the last 12 years is odd. After all, we have seen many of the same ministers playing musical chairs with the major roles; particularly post the referendum.

    Second, the deliberate placing of the major cuts after the next election looks like cynically putting a landmine on the road of the next Government – whoever it turns out to be. So I have doubts about the good faith of this new leadership.

    An opportunity was also missed to simplify an income tax anomaly. The current system of losing the personal allowance progressively as your income rises over £100k is bonkers. Where is the logic in having a broadly progressive income tax policy if the rate in one zone jumps from 40% to 60% and back to 40% or 45%? Why did they not bring the 45% starting threshold all the way down to£100k instead of £125k? If that was unacceptable because of lost taxes, increase the rate. The current model is mad, and if they were going to tinker, why not remove the anomaly.

    My other point is in defence of the public sector. I have held (moderately) senior roles in both private and public sector organisations and continue to consult for both. Yes, there is a tendency for the public sector to be more cautious and less adventurous. There is a simple reason for that, it is us, the public.

    When I was getting my initial training for the public sector role, we were shown horrific videos of public sector leaders in front of the Public Accounts Committee. Watching those poor sods being ritually humiliated and destroyed by politicians (often with a specific agenda about the existence of the organisation, rather than how it worked) was disturbing. It was intended to frighten, and it did. So “don’t do anything that might land you in front of the Public Accounts Committee” was drilled into us. Even if we could see a better way of doing things, it was a fight.

    The other mantra, when a new idea was discussed, was “what would it look like on the front page of the Daily Mail”. The gleeful way in which the tabloids trawled for anything they could spin as corruption, waste or incompetence, was sickening. We were trying to find ways to improve the UK economy, but the red-tops didn’t care. The public sector is bad was the start and end of their analysis.

    So, it was a fight to do new things. To experiment. We tried, and we sometimes succeeded, because the staff believed in trying to help the economy, but it was tough, and the pressure came from the politicians we elect.

    To give a specific example, we were in the business of providing matched-funding grants to businesses trying to innovate. Our financial targets were – we were allowed to underspend by 1% of our budget in any fiscal year, and not allowed to overspend by a single £. These rules were set by ministers with absolutely no understanding of the process of business innovation. That projects lasting often 3-5 years stumble and stutter, suffer delays or may be abandoned. That projects may have a spend profile that differs from the one on the application form submitted two years before the project starts (particularly hard for SMEs with less cash flow to manage things).

    As a result, an immense amount of effort went into massaging the figures. Flogging the people we were supposed to be helping to speed up or slow down spending in ways that had nothing to do with our mission or their innovation projects. And when we inevitably failed there was a lot of work for quite senior civil servants massaging their budgets and swapping things from one column to another, just to make the numbers look right. All of it pointless wheel-spinning and a distraction from the job we were supposed to be doing.

    Believe me, in my direct experience, shareholders and corporate owners are pussycats compared to ministers, the treasury and the tabloids.

    The public sector may be less innovative and more ass-covering than we would like, but we made them that way.

  • 51 Jonathan B November 21, 2022, 1:35 pm

    Fascinating analysis @Old Eyes.

    In terms of the budget delay of hurt until after the election date, I wonder how much of that is posturing. I have seen it pointed out that the “black hole” in the economy was calculated using new fiscal rules invented by Hunt – apparently if the previous rules used by Sunak were still in operation the shortfall would be much less. I tend to be cynical about politics, and wonder whether once the markets are assured that no one is going to do anything crazy they are planning to relax a bit to create some feelgood give-aways leading in to the election.

  • 52 Naeclue November 21, 2022, 1:36 pm

    It is irksome for those of us that knew leaving the EU was a stupid thing to do end up having to pay for it, but that is democracy I suppose. On the whole though I think those of us living off accumulated savings and investments have got off quite lightly so far. Reduction in the Capital Gains Annual Exempt Amount is probably the biggest headache for us, but not unexpected ever since that OTS report on CGT showed how investors were milking it.

    What to do about the lower AEA is less clear. I have been extracting the income produced in our tax shelters by selling ETFs outside tax shelters and buying them back inside, as well as adding to ISAs each year in a similar way. That was becoming hard to do anyway without paying CGT and it will now become impossible. The question then is what to do about it. Carry on moving investments into tax shelters and paying CGT, or withdraw the income from tax shelters?

    A back of the envelope calculation suggests the answer is not clear cut. For example, £20k worth of ETFs, with a £10k capital gain. Selling and buying back in an ISA will cost £1k in CGT at basic rate, plus trade costs. But once in the ISA the ETFs will produce tax free income and no further CGT. If the dividend yield was 2%, that is £400 per year and roughly £40 saved income tax. So of the order of 25 years before the lost CGT is clawed back.

    For US investments we have large positions in a US listed ETF (VTI) for which we get a 15% tax credit on dividend payments. This completely offsets the (basic rate) income tax paid on the dividends, so the only saving on transferring to an ISA would be on future CGT. The current price of VTI is about triple our average price as well, so selling only £4.5k of it would fully use up the £3k AEA.

    I need to give this some more thought, but it looks as though running down our ISAs is likely to be the most tax efficient way forward.

  • 53 xxd09 November 21, 2022, 1:38 pm

    Good points “old_eyes” and couldn’t agree more -have 3 children in public sector jobs-teaching ,medicine and prisons-experiencing all that you have so aptly described
    As this is a nominally financial blog it struck me that the Public Sector was the Bond part of the country’s portfolio and the Private Sector was the Equity portion
    Asset Allocation as in investing is the real critical move for any investor /country
    Does the country need more Bonds and less Equities or vice versa ?

  • 54 BBBobbins November 21, 2022, 1:43 pm


    I would say less we made them this way but the UK political system made them this way.

    The timeframe that politicians have in mind for “wins” only lasts as long as the next election and thus seems destined to create failure through early scrapping or things done only for the “optics”. Plus there is perpetual new broom syndrome where the last inhabitants work in office must be undone to an extent. Behind all the risible claims of we’re doing X to boost the economy etc etc the most effective policy in my view is one of stability. Decide what you want to incentivise, make it fraud proof and stick to it. And in general recognise that business and the economy does best when it isn’t constantly distracted by a changing political playing field. Of course no credible political party would adopt a raison d’etre to to feck up the regional playing field your businesses have played on for over 30 years……oh

  • 55 xxd09 November 21, 2022, 1:50 pm

    While I am at it-you can tell who is retired here with plenty of time!
    I think a poster “Andy” made the point a while back in this thread re banning the Brexit word
    I must take my hat off to the”Investor” who in spite of his obvious Brexit/Guardian opinions (it’s his Blog) allows untrammelled expression of opposing views
    This makes for a interesting discussion and is very rare in the blogosphere
    It probably is about time posters stopped shouting at each other and appreciated different and opposing views to their own deeply held beliefs
    No one person has possession of the “Holy Grail”
    Monevator leads the way in informed debate and is a example that hopefully we will see being followed more and more!

  • 56 BBBobbins November 21, 2022, 2:22 pm


    You articulate what I’ve been trying to get straight in my mind. I guess I’m blessed with a more modest unsheltered GIA than you. But if I take PCTFLS as soon as I hit age in order to manage LTA i’m likely to have a decent GIA pot.

    If I say I have max gains in my GIA of 100% then to put 20k into ISA each year I’m looking at a max tax penalty of 700/1400 (ignoring the gross up maths for clarity) depending on my marginal rate of tax. In reality I can probably blend that down a bit by liquidating less starry bits of the portfolio.

    I could take the view that that up to £700 would take a long time to recoup in dividends or an alternate view that it wouldn’t take long before I get the 3.5% capital growth in the ISA to recoup it. So I think that points to continuing to fund ISA from GIA, particularly if I were to fear that because so many levers have been pulled in personal taxation that the next one might be to align CGT rates with IT. That latter fear might even point one toward defusing/rebasing GIAs while it is “cheap” at 10%.

    It’s here and using up the £12.3k allowance for this year that I get a bit stuck. All things being equal am I better to rebase holdings at low gains so I have a greater balance sitting at nil gain or the holdings sitting at higher gains? Suspect if you don’t have the immediate cash draw needs it all might be quite neutral but welcome views on it.

  • 57 BBBobbins November 21, 2022, 2:38 pm

    Ahh the perils of no edit button when I’ve posted junk.

    In the post above obviously the £700 growth does not recoup the tax, the same capital in the same funds would be growing at the same rate just being subject to tax when realised. And the drag of a 7% reduction in value doesn’t ever get recouped vs a 10% tax hit on realisation until you hit higher levels of compound returns (roughly 8% pa for years per my crude working)

  • 58 Naeclue November 21, 2022, 2:55 pm

    @BBBobbins, there is certainly a risk that both the dividend and capital gains tax rates could rise to income tax rates in future. There are sound reasons for them to be lower, but that could easily get pushed to one side in the politics. +1 for suffering CGT to get investments into tax shelters.

    Against that there is the risk that tax shelters themselves get targeted. The question “Why should the rich pay no tax on their ISA/SIPP investment income and gains?” is not one I have much of an answer to.

    For those crystallising their pensions the higher taxes makes the option of not taking the PCLS in one go more attractive, but for some that may lead to unwanted LTA issues.

  • 59 Neverland November 21, 2022, 2:58 pm


    Its really simple for anyone with a decent sized GIA:
    a) you’re going to pay income tax on your dividends
    b) anytime you sell non-trivial amounts you are going to be paying CGT

    Compared to other countries tax systems (e.g. the Dutch box 3 wealth tax) or Ireland’s deemed disposal CGT its still pretty lightweight

    Given the growing numbers of people with seven figure ISAs (at least a dozen Monevator readers self outed the last time we went through this), the idea that ISAs aren’t going to be further rationed either in terms of input or size of fund is fanciful

    Personally I’ll be stuffing mine 6 April every year while I still can …

    You can call it your Brexit bonus

  • 60 Naeclue November 21, 2022, 3:03 pm

    @BBBobbins, it is I think worth remembering that when we die capital gains are wiped out and gain a new starting point. For now that is the rule anyway, although this has been discussed in OTS papers.

    In many cases it would be a total nightmare for executers to calculate capital gains when someone dies though, with original asset purchase prices, corporate actions, etc. long gone, So hopefully this rule will be kept.

  • 61 BBBobbins November 21, 2022, 3:45 pm

    Good point on the wipeout of CGT on death which mitigates against the logic of completely stuffing ISAs at CGT cost if you’re hoping to leave inheritance behind. ISAs are ultimately for living off yourself – there’s no tax benefit to them if you’re going to outlive them and pre 75, there’s no point taking from pension to fund them (unless for LTA reasons) because of the tax advantages to heirs of taking over the pension pot as is.

  • 62 Al Cam November 21, 2022, 4:31 pm

    @BBBobins (#61):
    There is currently, at least, this notable exception re ISA’s, from GOV.UK:
    “If your spouse or civil partner dies you can inherit their ISA allowance. As well as your normal ISA allowance you can add a tax-free amount up to either: the value they held in their ISA when they died. the value of their ISA when it’s closed.”

  • 63 Naeclue November 21, 2022, 4:56 pm

    @Al Cam, the interesting thing about that legislation is that it is the value of the ISA when the person died, so if the ISA drops in value during the period of administration, before being handed over to the spouse, the spouse is allowed to top it up!

    I am handling probate for a relative at the moment and that tip came from the HL bereavement team.

  • 64 old_eyes November 21, 2022, 5:07 pm


    “I would say less we made them this way but the UK political system made them this way.”

    I agree, but reflect on where the UK political system comes from. I think it is disingenuous for us to abdicate all responsibility. However imperfectly, our parliament reflects opinion in the country. It is not a system I would design (FPTP and political appointments in the Lords for example), but we can’t say it is all ‘them’ and not ‘us’. Just as Brexit is with us with all its consequences because a bare majority of voters decided they wanted a simple answer to a complex problem, we have politicians who want simple answers and immediate actions because we think that is decisive and action-oriented.

    Yes, I can point the finger at lobbyists and venal parliamentarians, and SPADs, and foreign owned newspapers, but ultimately we give them the power to act this way. I don’t know how you get to a better place from here, but while we support them in their current way of working, they ain’t going to change.

    People want simple answers, and they want someone to blame. Politicians merely give them what they want.

  • 65 Al Cam November 21, 2022, 6:54 pm

    @Naeclue (#63):
    Good tip, thanks very much.
    And, in the event of the ISA increasing in value during the period of administration, I assume the spouse (or civil partner) relies on the second GOV.UK clause, namely: “the value of their [the deceased’s] ISA when it’s closed.”

  • 66 BBBobbins November 21, 2022, 7:43 pm

    Thanks #62 #63. I too am helping out with probate for a family member now and was aware of the ISA carry over but it has also led me to reflect its value is rather more in how much the spouse can spend before their own demise.

    I guess there is a tax optimisation extreme world where the widowed party looks to get married to a younger spouse/greater life expectancy and starts a chain whereby ISA capacity is extended indefinitely until a surviving spouse blows it all.

    #64 Agreed – if the referendum taught me anything it’s that we aren’t mature enough as a country to make serious decisions and trade offs and “it’s all too boring” or “they are all as bad as each other” are not good enough reasons to avoid engaging with politics, notwithstanding the self serving narcissism of a number of politicians. They’ll willingly pander to the “let’s make it simple for you” audience because frankly it’s a lot easier than having to make nuanced decisions on evidence and explaining them.

  • 67 xeny November 21, 2022, 9:58 pm

    @66, is it just me that has wondered about a prenup and marriage, divorce (or death), marriage (or civil partnership) sequence to tax efficiently move assets down a generation?

  • 68 Grumpy Tortoise November 22, 2022, 8:14 am

    @old_eyes – some great posts there. Your experinece of the public sector exactly echoes mine. People in the sector tend to be risk averse because of the fact that they are mindful that they are using taxpayers money. In addition, as you point out, one cannot underestimate the power of the red-tops and how issues will be played back to their audience.

  • 69 Naeclue November 22, 2022, 9:34 am

    @Al Cam, yes you get the maximum of the 2. Value at death or value when closed. I don’t know whether all brokers allow it, but HL allow the securities to be transferred to the spouse’s ISA, so no need to sell and transfer as cash.

  • 70 Gizzard November 22, 2022, 10:55 am

    “Obvious point – state pensions went up by inflation, nearly twice earnings.”
    That was a manifesto promise. A promise that is only going to be kept when it’s easy to do so isn’t much of a promise in my opinion.

  • 71 Al Cam November 22, 2022, 11:23 am

    @Naeclue (#69):
    Thanks again – and you read my mind re the method of transfer.
    OOI, did the surviving spouse (or civil partner) in this scenario already have an appropriate HL ISA or could they have opened it from scratch?

    Perhaps other readers who have experience of this scenario with other platforms/vendors (e.g. Vanguard, etc) might have points they could share?

    Lastly, would this make a good topic for a MONEVATOR post? Apologies if you have already covered this topic but I cannot recall reading about it.

  • 72 BBBobbins November 22, 2022, 12:13 pm


    I’ve talked to Vanguard who will do transfer in specie to surviving spouse (presumably if the spouse opened a new VG account pre release of the deceased’s ISA it would also work – not need in my case). Others seem to need to be cashed out but presumably the ISA provider then provides a certificate for the Additional Permitted Subscription (APS) to enable the new subscription to be made for the cash proceeds.

    This from Barclays (not promoting them just first thing on a google) explains a bit more https://www.barclays.co.uk/help/content/obtaining-additional-isa-allowances-following-the-death-of-your-spouse-or-civil-partner.pdf

  • 73 Boltt November 22, 2022, 12:48 pm


    I think there are some “iffy” things that could be done with civil partnership – there was a request for siblings to be added to the list of potential civil partnerships, if they’d lived together for 12+ Years (consummation is not required for CP).

    Inheritance of DB pensions via CP creates some incentive for “iffy” CP eg step-children (not to mention ISAs)

  • 74 Naeclue November 22, 2022, 6:49 pm

    @Al Cam, the spouse already has a Hargreaves Lansdown ISA. I would assume that they would allow one to be opened if not. The HL bereavement pack is top notch by the way and they were very quick in delivering the valuation report. One of the few organisations I have been able to get through to easily on the phone and able to give sensible answers to all my questions. Very impressive, especially compared to everywhere else. Banks, building societies, HMRC, local authorities, utility companies, etc. all an absolute pain.

    Much of this is still in progress as we are still in the administration period – I have been filling in the IHT400 forms today! They are a pain as well.

  • 75 Al Cam November 22, 2022, 8:30 pm

    Thanks for the additional info.
    I feel your pain. And whilst it is no comfort, I cannot recommend doing an equivalent exercise across different countries – especially when key overseas authorities seemingly never answer the phone and/or reply to any letters – even when called/posted locally too! Ho hum …..

  • 76 Roberto November 23, 2022, 2:39 pm

    Thank you for the content. I just wanted to highlight the usefulness of the article about the use of Airpods pro as useful substitute hearing aids. It can be a very useful tool if right. Also , I am grateful about the barrage of articles about the latest crypto scam. I was opposed to crypto since I heard from it but recent developments have increased my suspicion of this being just an elaborate ripoff. It is sad that supposedly serious financial institutions have been dragged into this cesspit of lies and corruption , but that is the 21st century for you.
    Thank you for all the great job you do.

  • 77 BBlimp November 25, 2022, 3:48 pm

    Tortoise worth looking at National Audit Office figures again – the NHS is working on LESS patients, not more.

    More money, more staff and less work taking place. I assume the National Audit Office isn’t swayed by the owners of the telegraph ?

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