ISAs are being ”Simplified”

Dominic Thomas
April 2024 • 5 min read

ISAs are being ”Simplified”

I don’t like sounding (or being) cynical (there’s a but coming isn’t there!) … but – when a Government or HMRC use the word “simplification” they seem to merely describe their own thought process and nothing else. The intention is usually good, the real-world working, well … not so much.

There are some rule changes, announced by the Chancellor in the Autumn statement, that are designed to simplify the scheme and encourage more people to invest tax-free, allowing for a more ‘balanced’ investment portfolio. There are too many ISAs being used as cash deposit accounts by ‘nervous’ investors. Our clients tend not to fall into this trap, but of course millions of people do. Inflation is best beaten over time by investment into assets that grow (holdings in companies listed on the world stock markets). Cash is simply giving banks your money so that they can invest it for their benefit.

Here are the six reforms from HMRC:

The Government announced a package of ISA reforms and will make these changes to ISAs from 6 April 2024:

Increase the age for opening Cash ISAs from 16 to 18 and over. This is consistent with the age requirement already in place for opening Stocks and Shares, Innovative Finance and Lifetime ISAs.
Allow subscriptions to multiple ISAs of the same type, with the exception of Lifetime ISA, within the tax year, removing the limit on subscribing to one ISA of each type per year. All subscriptions must remain within the overall ISA limit of £20,000.
Remove the requirement for an investor to make a fresh ISA application where an existing ISA account has received no subscription in the previous tax year.
Allow Long-Term Asset Funds to be permitted investments in an Innovative Finance ISA, which does not require access to funds within 30 days.
Allow open-ended property funds with extended notice periods to be permitted investments in an Innovative Finance ISA.
Allow partial transfers of current year ISA subscriptions between ISA managers.

The government also plans to hold discussions with industry on allowing certain fractions of shares to become permitted ISA investments.

Most of this will not impact you, everything we do here at Solomon’s is flexible and one of the benefits of regular reviews is that we can assess and check ongoing suitability of the financial products we have arranged for you and the portfolio being used.

If you have any questions at all, please get in touch. If you need a review sooner than normal or feel one may be overdue, please drop us a line.

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ISAs are being ”Simplified”Jemima Thomas2024-04-17T16:48:07+01:00

The Autumn Statement – the Ghost of Christmas Past

Dominic Thomas
Nov 2023 • 2 min read

The Autumn Statement – the Ghost of Christmas Past

We are in the closing weeks of the year. Our thoughts turn to Christmas celebrations and perhaps looking ahead to the New Year. The familiarity of our traditions poses a challenge to attempts to change them, yet even the harshest of men, Mr Scrooge, managed to pay attention to what is important and change his behaviour.

I don’t think it is contentious to say that the Conservatives are a party of tax cutting and yet we currently have one of the highest rates of personal taxes in the main economies. Few of us enjoy paying taxes, perhaps because often it seems that our hard-earned money is wasted on expensive ideas and ‘kit’ that doesn’t work very well at all … anyone tried the NHS IT system or indeed any ‘converting to digital’ Governmental system, let alone the military’s ability to spend a fortune on malfunctioning weaponry to cite just a couple of examples. We all have opinions. (As an aside the Power of Attorney system is going digital in 2024, so I urge you to sort yours before they muck it up and make the backlog even longer).

The Conservatives came to power in May 2010, admittedly with the assistance of the LibDems, but then we have had an entire mess of Government ever since.

According to Jeremy Paxton in 2018, David Cameron was the worst Prime Minister since Eden:

“[He] got to the top of a tree in order to set it on fire and cleared off, put the interests of his party before the country and decided to have this referendum, believed one thing was the only right outcome for the country, didn’t campaign for it, got the opposite outcome and XXX off. It doesn’t seem like leadership to me”.

Given the PMs we have had since 2018, Cameron might actually look a lot better, the bar seems woefully low, anyway, for now Cameron is back, this time as Foreign Secretary.

The backdrop of a Covid enquiry which merely proves what most of us thought, that Mr Johnson is an unreliable character (I am being polite), we have the prospect of an election looming by the end of January 2025. The Labour party seems set on sabotage and the plethora of political open goals being squandered is lamentable. The traditional approach of appealing to the notion “everyone has their price” is in the hands of the Chancellor, who is being tempted to cut taxes now that inflation appears to be returning to a more comfortable figure (4.7% October 2023 ONS).

Which of us doesn’t want to pay less tax? In an environment of rising prices, seeing your net pay remain pitifully stagnant is irksome. Yet we also know that tax pays to keep society running in some vaguely civil way. We can all find things to disagree with, it’s almost a rite of passage into a fifth decade. It’s clear that ‘the system’ doesn’t work for all, and indeed seems to generally work best for the few. The sadness is that there seems to be so few alternatives to the binary choices we have here in the UK; stuck in traditions that don’t work for the good of the country. Creativity and visionary leadership remain sadly elusive.

There was a time when the economy was thought about as a way of serving society, yet here in 2023 we are evidently a society that is serving the economy. There is no good reason why this cannot change, and despite experience, I remain an optimist in a sufficient number of decent people.

For the record, I have no intention of offending your political beliefs, but I do think we all deserve rather better than we have had. On 22 November 2023 we shall get further notice …

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The Autumn Statement – the Ghost of Christmas PastJemima Thomas2023-12-01T12:12:26+00:00

The Bogus ‘Financial Adviser’

Dominic Thomas
Sept 2023 • 4 min read

The Bogus ‘Financial Adviser’

There are some lessons to be gleaned from a recent sorry tale about Peter Holbrook who posed as a financial adviser. As often is the case, his focus was on fairly vulnerable people who were recently bereaved.

Holbrook was recently sentenced to prison for five years and three months, so in theory he will be held at his Majesty’s pleasure until he turns eighty. This is for conning seven people out of £850,000 which he used to fund his gambling habit.

The scam lasted 10 years and seems to have involved persuading his victims to allow him to handle Probate and reinvest the proceeds of the estate. His fraud involved forging letters from investment companies and writing Wills, for which I understand he had no formal qualifications or training.

Obviously being conned out of your own money can have devastating consequences. Families are left with a lack of resources in a world which we all know is quick to consume them. Not having enough is pressure enough, let alone having it stolen. Holbrook, like many people, formed a gambling habit. All gambling is based on the erroneous belief that the system can be beaten, the constant winning and losing inevitably leads to a deficit on the balance sheet, the pressure can in turn cause addicts to make decisions that they would be unlikely to make had they not gambled in the first place.

I don’t gamble and if I’m being candid, I don’t believe it’s a good idea. That said, I don’t really think there is anything particularly wrong with the occasional bet for a ‘bit of fun’, but in all honesty I can find more interesting things to do with money. However, in a culture in which many football teams (eight of the 20 [40%] current Premier League teams), or sports teams in general, are sponsored by gambling companies; clearly it will take the usual required will power to go against the crowd. Many have a story about ‘a win’ that they had, but few relay tales of loss.

Sadly, investing is often compared to gambling, which is a failure of education. The association is one of loss. Companies can and do go bust, regularly. If all your money is in one or very few shares, then frankly that is very like gambling (though you are holding real shares in the assets of those companies). Anyone holding shares in Enron will corroborate this. However proper investing is buying shares in a globally diversified portfolio of companies around the world. All working to improve products and services and design new ones. This is how commerce works. It isn’t a perfect system, but it has a long pedigree of success.

We all know that there are some difficult realities of life. We all will die, nobody escapes mortality. Money pays bills, it provides choice, but it needs looking after and getting one’s affairs in order is often tedious and other than peace of mind, provides little ‘buzz’; certainly you are unlikely to get a giddy feeling of anything resembling that of having won the lottery! Investing should be dull; it should be boring. If it isn’t, you are probably holding the wrong cards or playing the wrong game. Finding someone to trust in a world that seems deliberately set up to confuse with jargon and costs isn’t easy. There are only around 28,000 financial advisers in the whole of the UK. That’s not many for a population of 66million.

Nobody wants to be the victim of a fraud or scam, please check with those you care about that they have a bona fide adviser.

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The Bogus ‘Financial Adviser’Jemima Thomas2023-12-01T12:12:28+00:00

Learning about Finance in Schools

Guest blogger – Jodie Harris
June 2023 • 2 min read

Learning about Finance in Schools

For the past week we’ve had an extra helping hand at Solomon’s headquarters, due to college student Jodie, who has been doing her work experience with us. During her time with us, she has been creating market research for both her college (and us!), by gathering data on what adults (with financial experience) wish they had been taught in schools. Our working assumption is that things like borrowing, interest rates, pensions and budgeting are likely to be the top-of-mind topics, but of course we may be surprised by the responses… Over to Jodie –

I have been assigned a really interesting project to research and evaluate how people feel about ‘learning about finance’ whilst at school.

We have put together a questionnaire to get opinions around this and following the analysis of the data we collect, we intend to report the results on the Solomon’s website and send a copy to local schools and the media, and potentially our MP and the Department of Education.

Please could I ask you to give up two minutes of your time to answer the short questionnaire for me so that this project is meaningful and worthwhile – I would be very grateful for this!

Thanks, Jodie

CLICK FOR EDUCATIONAL SURVEY

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Learning about Finance in SchoolsJemima Thomas2023-12-01T12:12:31+00:00

How are you spending your time?

Jemima Thomas
April 2023 • 3 min read

How are you spending your time?

We always want our clients to be able to prioritise what enriches them in life. We hone your financial plan to suit your needs, with an eye on making sure that your spare time is spent doing what you love with ‘financial comfort’ making that possible. With a fair few bank holidays on the horizon, we hope that you have been able to set some time aside to spend it doing the things that bring you joy.

We’d love to hear how you are spending your long weekends in May. Will you be surrounded by loved ones? Engaging in a favourite hobby? Travelling somewhere? Or simply taking time to relax and breathe? Whatever you have planned we hope it’s thoroughly enjoyable and gives you the opportunity to rest and recharge.

Spotlight (our client magazine) is due to be in your hands very soon, and as usual we’ve had a number of clients who have contributed. It’s always lovely to be able to present real examples in Spotlight of lives well lived – which is why we do what we do here at Solomon’s; Time well spent deserves to be celebrated and your story shared.

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How are you spending your time?Jemima Thomas2023-12-01T12:12:34+00:00

UTILITIES BILL: WATT SHOULD I DO?

TODAY’S BLOG

WATT SHOULD I DO…

As I’m sure you’re aware, energy prices have gone through the (hopefully insulated) roof. Let’s dive into the details as to why this is, and the action being taken to mitigate the problem. First things first, gas prices have skyrocketed as a consequence of huge demand outstripping supply. With 85% of UK households using gas boilers it’s no surprise that the UK has been heavily impacted. However, increasing demand is not the sole factor in this equation. With the outbreak of conflict in eastern Europe, the UK and much of the EU has lost one of its gas suppliers in Russia, which made up 10% of the UK’s natural gas imports. While this might not seem to be a massive amount, other European nations are considerably more dependent on Russia and its exports.

In hopes of mitigating the steep rise in energy prices, the British government has offered grants of up to £350 to millions of households across the country to alleviate pressure on the purse strings. They have also invested considerably in renewable energy over the past decade, totalling around £90 billion. Key areas of investment include a handful of nuclear power plants and tripling the UK’s already world-leading offshore wind power figures.

The trouble is that developing a well-diversified power network takes time. These are long-term projects that won’t be complete for several years and they are EXPENSIVE. Which begs the question, is enough being done in the short-term? Is there even anything else that can be done? Especially since we haven’t seen the worst of it yet. Various predictions assert that we could see the price cap rise another 26% this coming winter, and with 30% of people reporting that their energy bill direct debits have doubled since the increase earlier this year (according to a survey conducted by moneysavingexpert.com), there should be a very real fear about the ramifications of two large energy price cap increases in the same year.

Finally, what options do we have to best protect ourselves and save our money? The general consensus is to stay put for now, especially if you have a fixed contract with your energy supplier. Regardless, it may still be worth remaining vigilant for better deals as always (although they are pretty scarce at the moment). Ultimately, these are turbulent times and the dynamic nature of this sector makes it difficult to say anything with certainty. Just keep an ion things!

Since writing this piece, more updates and projections have been released by Ofgem. They are warning of further price cap increases this October by an average of £800. That’s roughly a 40% increase. Consequently many experts are changing their tune slightly, and are now saying it may be worth switching if you can get a fixed rate of 35-40%. If you’d like to do some further reading on the subject I have a few links to some articles I think you may find interesting:

Sam Harris
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

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Email – info@solomonsifa.co.uk
Call – 020 8542 8084

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GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

Take Survey

PRIVACY POLICY | DATA PROTECTION

UTILITIES BILL: WATT SHOULD I DO?Jemima Thomas2023-12-01T12:12:49+00:00

The UK General Election

Solomons-financial-advisor-wimbledon-blogger

The UK General Election

Over the long run, the market has provided substantial returns regardless of who lives at Number 10. This is not a piece that I wrote, but it is worth sharing as it makes a very useful point. Think and act long term.

Next month’s snap election is the first national vote in the UK since the EU referendum. While the election’s outcome and overall impact are unknown, there is no shortage of speculation about how the election will impact the stock market. Below, we explain why investors would be well-served avoiding the temptation to make significant changes to a long-term investment plan based upon these sorts of predictions.

Here’s a chart to consider – Growth of £1 invested into the Dimensional UK Market Index between January 1956 – December 2016…. some 60 years, which is rather like investing at 30 and living until 90.

Note smallprint:

For illustrative purposes only. Past performance is not a guarantee of future results. Index is not available for direct investment, therefore, their performance does not reflect the expenses associated with the management of an actual fund. Dimensional indices use CRSP and Compustat data. See “Index Descriptions” in the appendix for descriptions of index data.

In plain English – this is really an example to demonstrate the wisdom of long-term thinking (and investing) rather than the constant short-term anxiety and to be blunt “mucking about”.

Investing is not meant to be gambling

Trying to outguess the market is often a losing game. Current market prices offer an up-to-the-minute snapshot of the aggregate expectations of market participants— including expectations about the outcome and impact of elections. While unanticipated future events (genuine surprises) may trigger price changes in the future, the nature of these events cannot be known by investors today. As a result, it is difficult, if not impossible, to systematically benefit from trying to identify mispriced securities. So it is unlikely that investors can gain an edge by attempting to predict what will happen to the stock market after a general election.

The focus of this election is Britain’s exit from the EU. But, as is often the case, predictions about the outcome and its effect on the stock market focus on which party will be “better for the market” over the long run. Exhibit 1 shows the growth of £ 1 invested in the UK market over more than 60 years and 12 prime ministers (from Anthony Eden to Theresa May).

Markets and 10 Downing Street

This exhibit does not suggest an obvious pattern of long-term stock market performance based upon which party has the majority in the Commons. What it shows is that over the long run, the market has provided substantial returns regardless of who lives at Number 10.

Equity markets can help investors grow their assets, but investing is a long-term endeavour. Trying to make investment decisions based upon the outcome of elections is unlikely to result in reliable excess returns for investors. At best, any positive outcome based on such a strategy will likely result from random luck. At worst, such a strategy can lead to costly mistakes. Accordingly, there is a strong case for investors to rely on patience and portfolio structure, rather than trying to outguess the market, in order to pursue investment returns.

INDEX DESCRIPTIONS

Dimensional UK Market Index: Compiled by Dimensional from Bloomberg securities data. Market capitalisation-weighted index of all securities in the United Kingdom. Exclusions: REITs and investment companies. The index has been retroactively calculated by Dimensional and did not exist prior to April 2008.

Investments involve risks. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.

Past performance is not a guarantee of future results. There is no guarantee strategies will be successful. The information in this material is provided for background information only. It does not constitute investment advice, recommendation or an offer of any services or products for sale and is not intended to provide a sufficient basis on which to make an investment decision.

Dominic Thomas
Solomons IFA

Email me to get in touch

The UK General ElectionDominic2023-12-01T12:18:32+00:00

Those overpaid teachers….

Those overpaid teachers…

This is an item I came across online that amused me and felt it should be reproduced. I imagine and hope that all of us can remember at least one inspirational teacher, probably rather more. As in all things, people are people and some are far better at their work than others. No single profession or group are all good or all bad. However I have come to deeply respect teachers over the years and they have had more than their fair share of mountains to climb. So here is a piece that I am reposting in response to criticism that is seriously misplaced.

Are you sick of highly paid teachers?

Teachers’ hefty salaries are driving up taxes, and they only work 9 or 10 months a year! It’s time we put things in perspective and pay them for what they do -babysit! We can get that for less than minimum wage. That’s right. Let’s give them £5.93 an hour and only the hours they work; not any of that silly planning time, or any time they spend before or after school. That would be £41.51 a day (8.30 am to 3:30 PM with 30 min. off for lunch and play –that equals 7 1/2 hours).

Babysitting Service

Each parent could pay £41.51 a day for these teachers to babysit their children. Now how many children do they teach in a day…32? So that’s £41.51 x 32 = £1328.32 a day. However, remember they only work 180 days a year!!! I am not going to pay them for any holidays .LET’S SEE…. That’s £1328.32 X 180= £239,097.60 per year.

Hold on! My calculator needs new batteries. What about those special education teachers and the ones with Master’s degrees? Well, we could pay them minimum wage (£6.90), and just to be fair, round it off to £7.00 an hour. That would be £7.00 X 7 1/2 hours X 32 children X 180 days = £302,400.00 per year. Wait a minute –there’s something wrong here! There sure is! The average teacher’s salary (nationwide) is £25,000.00/180 days = £138.90 per day/ 32 children = £4.34 / 7 1/2 hours = £0.58 per hour per student–a very inexpensive babysitter and they even EDUCATE your kids!) WHAT A DEAL!!!!

(from a post online)

In support of teachers

Whilst it is true that teachers have half-term and end of term breaks. It is grossly unfair and misleading to assume that they have lots of time off. The increased testing and micro management implemented over the years by successive “we know best” Governments has essentially replaced a lot of teaching with a lot of form filling. Something that the bueracrats are attempting to introduce everywhere with their obsession about “outcomes”.

The reposted story above assumes a very unusual day. I am unhappy to report that I know a great many teachers who work at least 12 hours a day often 6 days a week. They are exhausted. This is the experience from top to bottom across the age spectrum.

I appreciate that the reposted story is only one way of considering the numbers. There are many costs in running a school, not simply the cost of each teacher.

Let me pose a question. If we actually believe the experts who tell us that the formative years are the most important to “personhood” which has a life-long impact on citizenship, the ability to be part of a community that thinks and acts beyond self; shouldn’t we be investing in children and those that inspire and encourage them for the greater good. After all, these children will grow up to one day govern, pose and vote on laws about social policy, including whether you are cared for or dispatched early to make way for the new (which makes more “economic sense”).

Of course the same could be said of many aspects of our “State employees” – doctors, nurses, firemen, police and so on. The constant undervaluing and bogus attempts to apply market values to everything is utterly flawed.

Dominic Thomas
Solomons IFA

Those overpaid teachers….Dominic2023-12-01T12:19:20+00:00

Are You Safely Connected?

You are online and connected, so in the interests of providing you with some useful information about the online world, I thought I’d share a podcast (and video) that I listened to recently. This is taken from a really useful free resource website called “I Love Marketing” which is run by Joe Polish and Dean Jackson. I know that marketing isn’t everyone’s thing… but don’t forget that I run a small business and also work with many clients that run small (and large) businesses… and these guys have some really good ways of helping understand marketing, so that we all waste less time wasting each other’s time and get to what we all actually want (or need). As someone that did a Business Studies Degree with a specialism in Marketing, albeit many years ago, I can genuinely say that these guys provide information that can be implemented – its practical and it works.

Anyway, episode 189 of the I Love Marketing podcast or the video (here) is really worth spending your time. I tend to listen to podcasts at 1.5x speed, which saves some time and remains clear. Joe interviews Marc Goodman, a guy with a new book (yes ok, something to promote) all about the near future of technology. We think we’ve seen an explosion of things to save time, learn and so on… online, but he argues its nothing to what is coming… and with it there is a price – the need for much better understanding of security and the possible flaws in your own technology at home or work, which are exposing you to possible crime. The podcast or video is a reasonable length, but well worth your time.

Of course if you run a business or are in a marketing role, then I’d certainly suggest you check out Joe and Dean’s website and podcasts. They are an engaging pair with a wealth of great ideas and invaluable experience. The podcast can be found on itunes here. I’ve been listening to I Love Marketing for some time and hope that by sharing this you, if you are a marketeer or business owner, also get some really useful ideas from it. You can check out Joe’s bio page here and Dean Jackson here.

Dominic Thomas

Are You Safely Connected?Dominic2023-12-01T12:40:06+00:00

How Was Your Last Quarter?

You may have seen the news that the Apple corporation have just posted the largest profits for Q4 in history. Apple is an enormous company, worth around $640 billion. At the end of 2013 Apple had a market capitalisation value (the value of the company based on the price of issued shares) of £302 billion…which at the time was about 2.2% of the total US market (£13,304 billion)… or to put it another way 14.6% of the UK market (then worth £2,057 billion)…. to give this some context the market capitalisation of Greece was £20 billion…. so back in 2013 Apple was worth 15 times more than Greece.

The results of Apple for the last quarter of 2014 saw profit of £11.8 billion. That’s profit. So one has to ask, what does Apple do that others don’t either as corporations or nations?…. and hence the obsession that many have with Steve Jobs. Much of the profit was due to the sales of the iphone – all 74.5million of them sold in the last quarter!… good to feel unique eh?

Many businesses will look at Apple with considerable envy, the more thoughtful will reflect on what they do to create such loyal customers…. perhaps a few lessons for the politicians too.

Dominic Thomas

How Was Your Last Quarter?Dominic2023-12-01T12:39:55+00:00

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