What caught my eye this week.
Twas the night before the budget – give or take – and nothing was stirring, not even a mouse to move a pointer over the button to CALCULATE whether you’d be a winner or loser from the forecast tax changes to come on 26 November.
Everyone was exhausted from months of animal-spirits-sapping speculation. So they tried to rest before the shouting began.
Only Tiny Accumulator was awake. He sat by the empty fireplace in his insulated fat-suit, singing a lament:
“On the fifth day before the budget, the chancellor gave to me…
12. Salary sacrifice curbed.
11. Council tax hiked.
10. Will-she-won’t-she income tax rises.
9. Stamp duty changes.
8. A cut to the cash ISA allowance.
7. No more tax relief for bicycles.
6. Slashed tax-free pension lump sums.
5. Investors thwacked with capital gains and dividend tax rises.
4. NI on pensioner and landlord income.
3. Deeper income tax threshold freezes.
2. A mansion tax.
1. And a black hole for all to see.”
Of course nobody expected to get everything that they didn’t want in the budget. Experts had vied for months on exactly which proposals would make it.
There had been nothing else to do except to prevaricate, to cut spending, hiring, or moving house, and to generally hunker down until the faff-fest passed.
TA knew there’d be business measures in the budget too – bank levies and the like, hopefully offset by more growth initiatives for housebuilding and corporate investment – but all that was above his head.
So he just quietly said again a prayer for his tax-free pension lump sum and for a drawdown unmolested by national insurance charges.
A lump of coal
The truth was even chancellor Rachel Reeves’ own backbenchers wouldn’t be satisfied come budget day. That’s because the pips were already squeezed and squeaking:
Source: Financial Times
Of course there were two ways to read this graph. One, that the rich were hard-suffering in the UK. Another, that the average person wasn’t making enough money to move the dial anymore.
Only one thing was certain: nobody would be very happy on Thursday morning.
At best you’d be relieved. At worst relieved of more of your hard-earned.
Have a great weekend!
From Monevator
Derisking your portfolio on the run into retirement – Monevator
Using a flexible ISA as a bridging loan – Monevator
From the archive-ator: how portfolio diversification performed when Covid struck – Monevator
News
FSCS bank deposit compensation limit will rise to £120,000 from 1 December – Bank of England
UK inflation fell to 3.6% in October – BBC
Rent controls have backfired in Scotland – Property Industry Eye
Play the Chancellor on Budget day with this new interactive game – Guardian
The energy price cap will rise by 0.2% from January – Ofgem
One million relying solely on the state pension face a £1,400 shortfall – MoneyWeek
New homes earmarked near train stations to get ‘default yes’ from planners – Sky
Home repossessions are rising – BBC
Britain’s top 50 burglary hotspots revealed – This Is Money
Number of Britons leaving the UK higher than previously thought – Sky
Will your pay peak at 47? – This Is Money
Products and services
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Why your home insurance could leave you out in the cold this winter – Which
Mortgage rate war heats up – This Is Money
Which shops charge people to send things back – Be Clever With Your Cash
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
How to save money on energy bills – Guardian
Three things to know before getting over-50s life insurance – Which
Zopa gets into the investment platform business – Zopa
Get up to £200 cashback when you open or switch to an Interactive Investor SIPP. Terms and fees apply, affiliate link. – Interactive Investor
How to get the cheapest Advance train tickets – Be Clever With Your Cash
The top-rated solar panel fitters in the UK – Independent
Mews-style homes for sale, in pictures – Guardian
Comment and opinion
DFA’s active value ETFs now trading in London – DFA [More on small cap value]
Julian Richter: why you should acknowledge your own good fortune – Guardian
Why pay more? – The Falling Knife
Freedom, democracy, and long-term returns – Abnormal Returns
The people behind Warren Buffett – Flyover Stocks
Retirement is a sprint, not a marathon – The Retirement Manifesto
The absurdity of bankers’ retirement fund targets [Paywall] – FT
Hard-working families are ‘being destroyed’ to pay for the benefits class [Not for the rhetoric, but for the eye-opening graph] – Telegraph
You have to own illiquid stuff to understand the downsides – Of Dollars and Data
Simple Living in Suffolk again, for a couple of weeks – Simple Living in Somerset
Ten lessons from Warren Buffett – Morningstar
Naughty corner: Active antics
Jeff Gundlach says almost all assets are overvalued [Podcast] – OddLots
Merger of HICL and TRIG to create largest infrastructure trust – Interactive Investor
A deep dive into the ‘total portfolio approach’ [Paywalled, free to register] – FT
Ball: the king of cans – Quartr
Kindle book bargains
Poor Charlie’s Almanack by Charlie Munger – £0.99 on Kindle
The Man Who Solved the Market by Gregory Zuckerman – £0.99 on Kindle
Chip War by Chris Miller – £0.99 on Kindle
Meltdown: The Collapse of Credit Suisse by Duncan Mavin – £0.99 on Kindle
Or pick up one of the all-time great investing classics – Monevator shop
Environmental factors
China races ahead on renewables amid a green tech boom – Observer
Trump moves to strip endangered species of automatic protections – CNN
Flooded and forgotten: the UK’s waters are rising – Guardian
Future solar power capacity by country [Infographic] – Visual Capitalist
Two-thirds of corals surveyed at Ningaloo Reef are dead, say scientists – Guardian
Brazil ‘surprised’ UK is not investing in new rainforest fund it helped design – Sky
The race to remove millions of plastic beads from Camber Sands – Guardian
Robot overlord roundup
The AI bubble that isn’t there – Forbes
Google boss says $1tn AI investment boom has ‘elements of irrationality’ – BBC
Wall Street blows past AI bubble worries – Wall Street Journal
More than half of novelists believe AI will replace their work – Guardian
Not at the dinner table
Reform plans to strip EU citizens of benefits rights – BBC
Trump’s biggest tell is the trade policy he doesn’t talk about – The Argument
Plans to remove more families from UK in asylum shakeup… – Guardian
…including potentially paying failed asylum seekers more money to leave – BBC
Off our beat
Lost Vegas – Slate
Brains that mistake strangers for friends – Guardian
Our phosphorescent world – Aeon
Ultra-processed foods linked to harm in every organ, study finds – Guardian
Nine questions towards understanding life’s great mystery: you – The Root of All
China’s people are on a treadmill – Noahpinion
Patience – We Are Gonna Get Those Bastards
And finally…
“Sometimes I lie awake at night, or I wander in the field behind my house, or I walk down the street in our local town and think I can see it all around me: the Grid. The veins and sinews of the Machine that surrounds us and pins us and provides for us and defines us now.”
– Paul Kingsnorth, Against the Machine
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> Will your pay peak at 47?
I was that guy. Well, technically a little later when I retired at the high-water mark of my earning power. Some interesting factoids for aspiring FI/RE-tards – there really aren’t that many of y’all.
The peak isn’t due to people being paid less as they age, but the higher pay end of the working population walking off the job. I had expected this effect to be higher, also because I saw early infirmity/mortality start to knock people out of the workforce in their 50s.
Many thanks for the link to my Suffolk post!
Kingsnorth’s book reminds me of a tale along similar lines, EM Forster’s The Machine Stops, surprisingly ahead of its time given it was written a little before WW1
I thought the comments section under that FT piece on retirement targets was better than the article itself. They kept me entertained on Monday, especially the one about “under-promise and deliver.” A classic.
There was one commenter, a guy in his 20s, an expat in Dubai, asking for advice. A few of the grizzled regulars tried to steer him straight. But one exchange hit a little too close to home. Someone warned him that £100k–£150k was an “income death-trap territory”, both too much and not enough. And the kid replied, more or less: don’t worry, it’ll double soon, I’m only in my 20s.
Christ. The naivety. It’s basically a time machine.
The thing is, the earnings curve in financial services in your 20s is a steep convex, and there are few things more dangerous than assuming it continues like that forever. But everyone — genuinely everyone — falls for it. The real curve, for the overwhelming majority, is convex early on but turns concave somewhere in your mid-to-late 30s. There’s an inflection point that blindsides you, and then you panic and start shovelling money into the retirement fund, wishing you’d started earlier.
I wish someone had told me that when I was 26. Then again, maybe they did and I just didn’t listen. I can’t remember.
It’s been interesting to watch Kingsnorth’s movement from green activist to a kind of ultra-conservative christian nationalist right-wing position over the past couple of decades. I view him as a more erudite version of David Icke.