Autumn Statement – 3rd December 2014

So the Chancellor has delivered his Autumn statement, most of which was leaked in the media or announced in his radical budget (well radical for financial planners). The main points of the budget that we didnt know already is the provision to pass ISA allowances between spouses on death. This will certainly please married couples with large ISA funds. Prior to this, upon death an ISA becomes part of the estate, unless it has been held in specific AIM listed holdings for at least 2 years thereby benefitting from an IHT exemption, but invariably increasing the degree of investment risk (p56 of statement). The ISA limit will increase for 2015/16 to £15,240 from £15,000 as it is today.

Stamp Duty

A signficant change to Stamp Duty on property was announced, which mirrors the system used for income tax rates, that is, the more you earn, the more you pay, but only over certain thresholds – higher rates are only applied once thresholds are reached and nor applied to the full amount. Stamp Duty has now adopted this approach, some will be better off at the lower end of the property price range, some will be considerably worse off. The aim probably being twofold, to increase and encourage first time buyers and be more of a help to people trying to get onto the property ladder, whilst also attempting to dampen price increases at the top end. You can see a helpful chart on the impact of these changes on pages 53-54 of the Statement.

On a similar theme, the higher rate (40%) threshold has been increased marginally more than previously announced (by £100). We will have to wait until 12 December to find out what the interest rates will be on the new NS&I Fixed Rate Pensioner Bond (only for those age 65+). No doubt the free newspaper you pick up this evening or the TV and radio coverage will have pundits discussing the changes. You might want to look at the figures towards the back of the report, (page 100) which essentially show the UK’s income and expenditure. All the talk of austerity (which is certainly more real for some than others) has still resulted in national overspending and this looks likely to continue until 2016/17 with lots of “if’s, but’s and maybe’s”. If you do have any questions about your own situtation and how it might be effected by today’s Autumn Statement, do get in touch.

Dominic Thomas

What makes some great?

What Makes Some Great?

What makes some great? genius? or at least excellent? What is it that makes some people memorable or even iconic within our culture? There are a spate of films* that seek to pose this question and one that I saw last night was “Whiplash“. This explores the notion of what contributes to genius and why most of us aren’t. The premise is of Andrew Nieman (Miles Teller) a highly talented jazz drummer who studies at the Shaffer Conservatory, one of the world’s top music schools (don’t most academic institutions make similar claims?) whether it is or isnt is part of the story that we tell ourselves about our place in the world, deserved or otherwise. He is ambitious and highly dedicated to becoming the best, though it isnt always clear if this is meant to be his best or “simply” one of the greats.

He and his mentor/teacher/bully both live with the hope and belief that genius or greatness is sparked into being by being “challenged” beyond the norms of what others think is a “good job”. Indeed the mentor Terrance Fletcher, (played by J K Simmons) says that these are the two most harmful words in the English language. It would certainly seem anecdotally true to say that adversity can lead people to find strength, stamina, courage and perhaps greatness, however is it a requirement?

The film holds few punches, delivering a barage of insults, mirroring the sweat and blood drenched beaten snare drum. This is one of those more gritty, bloody tales, that suggests you leave part of yourself in your work or perhaps become the work… rather like a line from the 1980 movie and TV spin off “Fame”. The premise is impossible to test. The common myth that binds master and student is that of Charlie Parker, who was humilated for playing out of tune, by having a cymbal hurled at him by Jo Jones, narrowly avoiding serious injury. This we are told, motivated Charlie to practice and be reborn as “great”.

I won’t spoil the plot, I really enjoyed the film – one of the best films about musicians that I have seen. However whilst there are incidents of greatest created from strife, there are countless others that have huge disadvantage and struggles yet never become great or even “known”. The myth itself is an unrealistic portrayal of real life experience, which inexplicably sees different results for different people. Some will argue that this sort of toil and dedication is deserving of fame and success, yet this too is failing to acknowledge that there are countless masses that toil hard for little discernable difference.

So what has this to do with financial planning? well, certainly getting one’s finances in order can feel like an ordeal and a regular request for updates or documents, to some will sound like a demand. However, here we are not trying to create famously successful investors. We are attempting to make your finances work for you, to serve your lifestyle – which implies having a sense of life and style by design rather than by accident. I act as a form or coach or mentor, but certainly not a bully (I hope)… but one that enables clients to make informed decisions and then take action, having got a real sense of what purpose your finances has to fulfil.

* Mr Turner, Wild, The Imitation Game, Nightcrawler and Foxcatcher to name just five. I’m told that Whiplash has a UK release date of Friday 16th January 2015, Oscar season…

Dominic Thomas