Good reads from around the Web.
The Budget was kinder to the typical Monevator reader than might have been expected, though you probably wouldn’t guess it from the frosty reception some of you have given to Lifetime ISAs…
But remember what we dreaded? The end of pension tax relief as we know it. Higher capital gains taxes. Maybe even lifetime restrictions for ISAs!
Then consider what we got.
For starters those pension reforms have been postponed again, and for now we have a carrot instead with Lifetime ISAs for the under-40s. (Surely not a coincidence?)
Meanwhile capital gains tax rates are to be cut, not raised, and everyone’s ISA allowance is headed up to £20,000.
It could have been a lot worse (and it was for some unfortunate people, as we’re seeing reflected in Cabinet rows this weekend).
Certainly there was nothing as horrific for me as the upcoming increase in dividend tax rates, which will likely cost me six-figures over the rest of my working life.
Lifetime ISAs – the missing link?
Treasury documents state the Lifetime ISA is still being finalized in conjunction with industry feedback, and to be honest I’m not surprised.
To me the Lifetime ISA looks like something that was left on the chopping block after the Chancellor threw away his more ambitious recipe for a radical overhaul of the pension system.
The 5% charge on taking money out before 60 – unless you use it to buy a house – is a big departure from the normal ease-of-access ISA ethos, and it smacks of a legacy of some sort of Pension ISA plan.
As for buying a home with the Lifetime ISA, that’s great – but it does make the Help to Buy ISA seem a bit redundant, since when you buy you can only put money from one of the two Government top-up ISA schemes to work.
Given the Help to Buy ISA has a maximum and fixed Government bonus – and it’s only received at the end, on buying – I’m surprised at this additional complication, versus just letting the two bonuses from each ISA scheme be lumped together.
The government could have reduce the maximum annual Lifetime ISA bonus to say £800 if allowing both together was really not affordable.
Then again, the writing is probably already on the wall for the Help to Buy ISA.
There will be a one-year window from 2017-2018 in which savers can move their Help to Buy ISA money into their Lifetime ISAs, which I imagine many people will want to do.
And by 2019 Help to Buy ISAs could be gone, anyway, as that was the furthest out the commitment to making them available was made.
Tallying the Budget
Perhaps the mixed reception is reflective of how fiddly the whole system has become. It’s hard to know if you’re a winner or a loser until you’ve spent a few hours studying the detail.
That’s hardly tax simplification, let alone socially cohesive policy making.
I remember when Budgets were boring, but in recent years they’ve had the same “It could be you!” drama of the National Lottery draw on a Saturday night.
Were you a winner? Here’s a roundup of the roundups:
- Budget 2016: How it affects you – Telegraph
- What the 2016 Budget means for you – Guardian
- How to benefit from the Budget changes – Telegraph
- BBC budget calculator – BBC
- Lifetime ISA: Four pros and two cons – Guardian
- Pension reform by carrot and stick – FIRE v London
- Budget tax implications for the very wealthy [Search result] – FT
- Merryin S-W: Wider benefits of lower CGT rates [Search result] – FT
- New £1,000 allowance for online entrepreneurs – This Is Money
- Web traders tax breaks explained – BBC
- As I’ve said before, personally I agree with I.D.S. on disability cuts – BBC
- In-depth analysis of the budget by tax experts, with comments [PDF] – CBW
If you think we’ve missed out any important Budget news, please share your thoughts in the comments below.
From the blogs
Making good use of the things that we find…
- Would it help? – A Wealth of Common Sense
- Interview with Vanguard’s Jack Bogle [Podcast] – Barry Ritholtz
- We have organic food. We need organic finance – T.E.B.I.
- Passive investing – I doth protest too much – Pragmatic Capitalism
- Why BP’s dividend remains highly uncertain – UK Value Investor
- The poor odds of investing in Unicorns – The Value Perspective
- Paralysis by analysis – The Irrelevant Investor
- Thoughts on crafting your investment policy – Abnormal Returns
- The traitorous eight and the birth of Silicon Valley – Investing Caffeine
- Building an IKEA portfolio – The Psy-fi blog
- Is there Life on Mars? Life after retiring – SexHealthMoneyDeath
- Interview with Mother Earth on climate change – Mr Money Mustache
- Negative rates: Impossible, unnatural, or just unusual? – M.o.M.
- Big media is running out of time – REDEF
Product of the week: The Telegraph weighs up the pros and cons of Santander’s new 5% regular savings account. It’s not the highest interest rate in the category – that’s 6% – but if you’ve already got the required Santander current account and you have an extra £200 a month to put away, it looks an easy way to increase your savings. (Although weirdly, you can only apply via phone or in person, not online.)
Mainstream media money
Some links are Google search results – in PC/desktop view these enable you to click through to read the piece without being a paid subscriber of that site.1
- How the US government launched the ETF industry – Bloomberg
- ETF performance tool [US but interesting] – Morningstar
- Some ethical investment ideas – Guardian
- The case for being an angel investor – Forbes
- The DIY quants who ditched Wall Street for the desert – Bloomberg
- Bill Ackman has blown up a hedge fund before – Business Insider
A word from a broker
- The most popular tracker funds in February – Hargreaves Lansdown
- From Monday: London Stock Exchange intra-day auctions – TD Direct
Other stuff worth reading
- Care about your returns, not some benchmark – Motley Fool (US)
- Exploitation, Exploitation, Exploitation [Satirical video] – Guardian
- …it’s enough to turn the young healthy! – Guardian
- Is Blairs’ £27m property empire relevant to the crisis? – Guardian
- Landlords threaten to raise rents [Er, it’s a market guys] – Telegraph
- Pizza delivery: The robots are coming – Mashable
Book of the week: There are countless start-ups seeking funding to achieve their modest aims of ruining the billion pound banks and revolutionizing finance. Well, why not? Seems as good a time as any – everyone but bankers still hate the banks, and mobile phones and other technologies are providing plenty of ammunition. But I’ve found it hard to pump in any of my pennies, as every potential winner I’ve looked at seems as much a nailed-on loser. Perhaps I need The Fintech Book. Out in April, its authors are active in FinTech worldwide. Although, books date and the whole point is the sector is a tumult? Maybe it should have been an app.
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- Note some articles can only be accessed through the search results if you’re using PC/desktop view (from mobile/tablet view they bring up the firewall/subscription page). To circumvent, switch your mobile browser to use the desktop view. On Chrome for Android: press the menu button followed by “Request Desktop Site”. [↩]