SillyBilly Posted March 16, 2016 Share Posted March 16, 2016 Well the Fed didn't raise rates as I expected (so looks like it'll just be 1 hike before end of June 2016), gold has responded by just pulling off one of its biggest gap ups inside a few minutes, up over $30 an ounce in the blink of an eye. This is painful for me to watch at the moment but hey ho can't call them all! Osborne introduced the new lifetime ISA today which on the face of it looks a decent investment vehicle. It certainly makes pensions less attractive IMO with the constantly changing rules. Personal income allowance increasing to £11500 by April 17, and 40% tax bracket threshold rising to £45,000. New sugar tax (nanny state tax) as well. OBR reporting a massive black hole already. Osborne issuing warnings about global economy and future weakness... Link to comment Share on other sites More sharing options...
Stive Pesley Posted March 17, 2016 Share Posted March 17, 2016 Difficult to see how Osbourne can defend this budget without admitting that austerity is a con. He said we needed drastic austerity to balance the books and now he's admitting that it's failed miserably. Now his mantra is "securing our economy for future generations" which essentially means I'm going to screw you all now. How can anyone trust his economic credibility? And there doesn't seem to be a lot of reporting on his "all schools must become academies" for what it is. Privatisation of the school system. All these schools, buildings and land that WE own and paid for via our taxes now being gifted to the private sector Link to comment Share on other sites More sharing options...
LesterRam Posted March 17, 2016 Share Posted March 17, 2016 we are supporting more people, we will need to make more provisions for migrants, elderly and disabled in the coming years. regarding the schools, yeah I was thinking the same thing Link to comment Share on other sites More sharing options...
Animal is a Ram Posted March 17, 2016 Share Posted March 17, 2016 What a surprise, now schools are in the privatisation tracks. One less thing for the gov't to be accountable for. And yet they want the education system to catch up with China? Not a chance. Link to comment Share on other sites More sharing options...
LesterRam Posted March 17, 2016 Share Posted March 17, 2016 yes my missus is having to teach longer hours for the same pay and increase the amount of lessons taught, so basically your teaching for 45 minutes per lesson with the disruption of changing classes, Link to comment Share on other sites More sharing options...
SillyBilly Posted March 17, 2016 Share Posted March 17, 2016 Land Registry supposedly going to be privatised (seem to have read that somewhere recently?). The numbers won't add up (budget expenditure now factors in future growth projections) - unless we go on a record breaking positive expansion (we're 7 years and the record is 9), recession will be coming and they never account for this in the figures. I expect the growth figures to be revised down (again) this year and almost certainly negative quarters in 2017. I am pretty worried we are still running one of the largest deficits in the developed world (probably the largest to my knowledge?) and have doubled our debt in less than a decade. One would think the country has been involved in a massive war the last decade as that is the only comparison with regards to historical debt increases at such pace. Link to comment Share on other sites More sharing options...
Ramarena Posted March 17, 2016 Share Posted March 17, 2016 16 hours ago, SillyBilly said: Well the Fed didn't raise rates as I expected (so looks like it'll just be 1 hike before end of June 2016), gold has responded by just pulling off one of its biggest gap ups inside a few minutes, up over $30 an ounce in the blink of an eye. This is painful for me to watch at the moment but hey ho can't call them all! Osborne introduced the new lifetime ISA today which on the face of it looks a decent investment vehicle. It certainly makes pensions less attractive IMO with the constantly changing rules. Personal income allowance increasing to £11500 by April 17, and 40% tax bracket threshold rising to £45,000. New sugar tax (nanny state tax) as well. OBR reporting a massive black hole already. Osborne issuing warnings about global economy and future weakness... On the face of it yes it looks a decent investment vehicle. However your money is trapped with this and future governments, with no way of getting your money out without a 5% capital hit. What happens if GO or a future chancellor changes the rules and people can't get out? Could it possible be even used to bail out banks if they go down? Link to comment Share on other sites More sharing options...
Stive Pesley Posted March 17, 2016 Share Posted March 17, 2016 2 hours ago, SillyBilly said: Land Registry supposedly going to be privatised (seem to have read that somewhere recently?). The numbers won't add up (budget expenditure now factors in future growth projections) - unless we go on a record breaking positive expansion (we're 7 years and the record is 9), recession will be coming and they never account for this in the figures. I expect the growth figures to be revised down (again) this year and almost certainly negative quarters in 2017. I am pretty worried we are still running one of the largest deficits in the developed world (probably the largest to my knowledge?) and have doubled our debt in less than a decade. One would think the country has been involved in a massive war the last decade as that is the only comparison with regards to historical debt increases at such pace. Yep - so what effect has austerity had? Apart from it being an excuse to flog as much publicly owned stuff to the private sector as possible? Link to comment Share on other sites More sharing options...
Ramarena Posted March 17, 2016 Share Posted March 17, 2016 1 hour ago, Ramarena said: On the face of it yes it looks a decent investment vehicle. However your money is trapped with this and future governments, with no way of getting your money out without a 5% capital hit. What happens if GO or a future chancellor changes the rules and people can't get out? Could it possible be even used to bail out banks if they go down? Another quick thought on the ISA is it tied to inflation? It doesn't look like it from what I've seen, so it may not be worth that much if inflation eventually comes back. Link to comment Share on other sites More sharing options...
Shang Posted March 17, 2016 Share Posted March 17, 2016 Isn't the ISA a way to get people to put money into the banks to help defer the crash? It feels like a way to get the already shrinking middle class to move their savings into a long term commitment for a "large" return but is fundamentally trapping them into the banking system. Link to comment Share on other sites More sharing options...
SillyBilly Posted March 17, 2016 Share Posted March 17, 2016 32 minutes ago, Shang said: Isn't the ISA a way to get people to put money into the banks to help defer the crash? It feels like a way to get the already shrinking middle class to move their savings into a long term commitment for a "large" return but is fundamentally trapping them into the banking system. I would confidently estimate it is designed primarily as an upfront tax intake boost to the exchequer. The cynic in me also thinks it is another construct to support the housing bubble in yet another variation of the taxpayer funded ponzi scheme (in this case direct taxpayer contributions to the deposit!). A prop to support a price level which can't be supported (out of earned income) without more financial gimmicks. Make of that what you will. Overall though it basically makes pensions less favourable. As you'll know pensions are a deferred tax vehicle, your relief on tax is given on the way in (at cost to government) and then collected again years later on the way out when the pension is drawn. With an ISA, you contribute into it with taxed income and in reward get a tax shelter (no tax on the way out). With the ISA, tax intake is front-loaded (good for the treasury short term) and not back loaded for the exchequer (a deferred income for the treasury). All things being equal, most people would favour a pension as the compound interest effect on your tax relief can turn into a very substantial amount of money over 30-40 years (even accounting for 20% or even 40% tax on the way out). However, as people now realise the government can't be trusted to not mess around with pensions, people (like me) hedge their bets and split money across ISAs (more control over capital) and pensions (better for long term wealth creation). This lifetime ISA actually would elevate the ISA to not far off having the same level of wealth creation (I have ran the calcs in various scenarios) as a pension. It is sort of an ISA/pension hybrid, not quite one or the other. On balance I would say the political uncertainty with an ISA is less than that of a pension and a capital consideration should always be given to uncertainty. You are right when saying it ties down capital into the banking system long term, until you mentioned it I hadn't actually considered it...good point. Link to comment Share on other sites More sharing options...
Zag zig Posted March 17, 2016 Share Posted March 17, 2016 59 minutes ago, Shang said: Isn't the ISA a way to get people to put money into the banks to help defer the crash? It feels like a way to get the already shrinking middle class to move their savings into a long term commitment for a "large" return but is fundamentally trapping them into the banking system. The other thing to remember with an ISA if it's within the banking system what's to stop the rules being changed overnight? Highly unlikely under normal circumstances as it would be massively unpopular but in the event of some form of crash reset, ISA savings would be such an easy target, even more the ordainary cash saver tied into multi year ISA bonds to get slightly better savings rates; trapped no idea where to go, oh yes please do hit me with that currency revaluation or ISA withdrawal tax. All very easy. Link to comment Share on other sites More sharing options...
SillyBilly Posted March 17, 2016 Share Posted March 17, 2016 3 hours ago, Ramarena said: Another quick thought on the ISA is it tied to inflation? It doesn't look like it from what I've seen, so it may not be worth that much if inflation eventually comes back. So far as I have read, qualifying investments in the lifetime ISA are equivalent to those of Cash and Stocks and Shares ISAs. So you can invest the money in stocks and shares as you would do a normal ISA after getting your 25% government top up on the £4k investment. I am sure this was correct? Depending on the duration to which you could contribute, with compound interest this represents a large difference in the pot value between a standard stocks and share ISA and the lifetime ISA (assuming same rate of stock market return for both ISAs each year). If you went for the full 32 years, you'd have the "free" £32k gov contribution plus the compound interest generated on it (each £1k/year generating less as time goes on) - it wouldn't be unrealistic to expect a difference of £80-100k+ between the two come the end of the term. Even adjusted for inflation, might be an extra £50k or so in your pocket. It depends on the stock market return obviously, I created a quick excel sheet last night to cover various scenarios of returns/inflation and for an 18 year old I'd be snapping this ISA up I have to say! I modeled it against pensions and ordinary ISAs too which it comes off favourably against. Pensions (SIPP) still win but I'd pay a slight premium for this. FWIW I still like the humble stocks and shares ISA as I like the idea of bailing out quickly and I am quite willing to pay a large premium for it. As ever its the balance of risk, all 3 types is sensible (pension, S&S ISA, lifetime ISA). Link to comment Share on other sites More sharing options...
SillyBilly Posted March 17, 2016 Share Posted March 17, 2016 32 minutes ago, Zag zig said: The other thing to remember with an ISA if it's within the banking system what's to stop the rules being changed overnight? Highly unlikely under normal circumstances as it would be massively unpopular but in the event of some form of crash reset, ISA savings would be such an easy target, even more the ordainary cash saver tied into multi year ISA bonds to get slightly better savings rates; trapped no idea where to go, oh yes please do hit me with that currency revaluation or ISA withdrawal tax. All very easy. Indeed, I don't trust anything and therefore I plan for all eventualities. The 55 to 58 increase in age for private pension withdrawal was the ultimate loss of trust for me in pensions (not to mention 68+ state retirement). I was planning on drawing at 55 so now it means the ISAs have to bridge that 3 year gap (and rising, who knows?). I have no confidence the 58 will be honoured, no idea what the ceiling will be, or whether the 25% tax free lump sum will still be there or not, what my tax rate will be on the way out...it is a total joke and they encourage people to save their entire lives into these? I do NOT anywhere in my pension planning account for receipt of a state pension. That is like a bonus, my NI contributions are a write off as far as I see it. I encourage others to look at in the same way, prepare for the worst. Government needs to come clean there is no pension pot that is paid into (the pension commitments are in fact an unfunded liability that gets every bigger). NI is just general taxation that is spent away as soon as it comes in. In deficit actually, let alone building a pot for the ever growing pension blackhole. Kick the can down the road.. Link to comment Share on other sites More sharing options...
SillyBilly Posted March 17, 2016 Share Posted March 17, 2016 5 hours ago, StivePesley said: Yep - so what effect has austerity had? Apart from it being an excuse to flog as much publicly owned stuff to the private sector as possible? Could call it socialism too. Socialism for the banks, big government and big business (this is why I am anti EU incidentally as I want Britain to lead the world in kicking this cartel back in to touch). The debt increase is as much down to the socialization of bank losses in 2008/09 (private debt transferred to the public balance sheet). And we have manipulated our economies ever since as we simply won't allow the toxic debt these institutions hold to go bad (and the reset we desperately need), we'll socialise all their losses before we allow that to happen! Crony capitalism with a capital "C". Link to comment Share on other sites More sharing options...
ketteringram Posted March 17, 2016 Share Posted March 17, 2016 Very different times, but this new isa thing, reminds me of what the Irish government did years ago. I was living there at the time. Economy was booming. Too much. To try and stop people spending, the government introduced a 'special savings scheme'. Think you could pay in 250 a month, and they added 1 for every four you paid in. Think it ran for three years, maybe four. Everyone and his dog had one. Link to comment Share on other sites More sharing options...
ketteringram Posted March 17, 2016 Share Posted March 17, 2016 1 hour ago, SillyBilly said: Indeed, I don't trust anything and therefore I plan for all eventualities. The 55 to 58 increase in age for private pension withdrawal was the ultimate loss of trust for me in pensions (not to mention 68+ state retirement). I was planning on drawing at 55 so now it means the ISAs have to bridge that 3 year gap (and rising, who knows?). I have no confidence the 58 will be honoured, no idea what the ceiling will be, or whether the 25% tax free lump sum will still be there or not, what my tax rate will be on the way out...it is a total joke and they encourage people to save their entire lives into these? I do NOT anywhere in my pension planning account for receipt of a state pension. That is like a bonus, my NI contributions are a write off as far as I see it. I encourage others to look at in the same way, prepare for the worst. Government needs to come clean there is no pension pot that is paid into (the pension commitments are in fact an unfunded liability that gets every bigger). NI is just general taxation that is spent away as soon as it comes in. In deficit actually, let alone building a pot for the ever growing pension blackhole. Kick the can down the road.. No idea what age you are. Sorry if I missed it! I'm 56, and I think my state pension is meant to start at 66. Is that likely to change, or would future changes only effect younger people? Link to comment Share on other sites More sharing options...
SillyBilly Posted March 17, 2016 Share Posted March 17, 2016 39 minutes ago, ketteringram said: No idea what age you are. Sorry if I missed it! I'm 56, and I think my state pension is meant to start at 66. Is that likely to change, or would future changes only effect younger people? Yes, 66 for you, you missed the cut for 65, need to have been retiring before 2020 for 65. Anybody under 53 now (whatever sex) will have to wait until age 66 at least. Retire after 2026 and it will be 67. Coalition set out plans, yet to be ratified, to raise retirement age to 68 for those who won't retire before 2036. And that includes me! Link to comment Share on other sites More sharing options...
Zag zig Posted April 8, 2016 Share Posted April 8, 2016 Mike gives a easy to understand charting lesson on why the stock market is over valued. Explains the Buffet indicator, why the S&P 500 is so cycle primed for a crash, the inverse relationship to returns, why the p.e.ratio should see a massive reverse at some point given 100 odd years stats and how that next cycle move is well overdue. Mike no doubt thinks you should keep stacking. Good charts mind. Link to comment Share on other sites More sharing options...
alexxxxx Posted April 10, 2016 Share Posted April 10, 2016 due to the political turmoil currently in the UK and the knock on effect of a more likely leave vote - is there an oppurtunity to make some money by buying USD/CHF/CAD/AUD and selling in June/July? Or is the risk essentially priced in? Link to comment Share on other sites More sharing options...
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