Loss and Manchester by the Sea

Solomons-financial-advisor-wimbledon-blogger

Loss

Coming to terms with loss is perhaps one of the more significant aspects of the human condition. As a financial planner, loss is normally thought of in terms of the value of investments falling and how much money is ‘lost’. However, financial planning isn’t really just about money, its about planning your life (as far as one can) and then building financial architecture to deliver the plan.

A financial planner will also reflect on your loss and the impact that this would have on your financial plan and those that you leave behind. A really good financial planner will also help you think beyond your own family. How would your children be cared for if both parents are no longer alive? What are the practical implications for those appointed as Guardians or Trustees?

A Deep, Dark Sea of Despair

Manchester by the Sea is a film that has been short-listed (amidst some controversy) for a lot of awards . Its well acted, but its grim. Little good happens and worse still, the main character (Lee Chandler played by Casey Affleck) doesn’t seem to find any real sense of resolution. The traumas experienced are raw and undeniably bleak, yet there is no sense, or perhaps, I had no sense that the lead character was ever going to be able to process what happened with any degree of resolution. Admittedly he faces horrendous set-backs (understatement) which would always be very difficult to overcome, they are life-changing.

I couldn’t do without…

It is still a surprise to me that so few people have a Will – something that every adult really needs. Most do not have adequate levels of financial protection in place. You are your biggest asset, yet many people are more likely to have insurance on their drains, pets, smartphone or washing machine than on their own life, or a lifetime of income… the very thing that pays for the drains, pets, smartphone and washing machine.

The Predictability of Loss

We all know that we will experience loss again in our lives, it is a regular feature and one for which we can prepare to some extent. So why not ensure that if you have agreed to be a Guardian or Trustee, that you know what to expect. Similarly have you discussed with your appointed Guardians or Trustees some of the key concerns you might have? The how, why, what and when of your Will and the implications for how your family are cared for.

It is my hope that you never need to claim on your financial protection. Doing so implies that personal tragedy has occurred. There is the rather strange dynamic where I hope you never need what we arrange. If it is needed, then at least the comfort is that you had prepared as well as you could for those that are truly important to you.

So if you are now suitably prompted to rethink your value, please get in touch. If you’d like to know what to avoid with some better communication, here’s the trailer for Manchester by the Sea.

Dominic Thomas
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 [email protected]

Loss and Manchester by the SeaDominic2025-01-23T10:55:44+00:00

Delicious

I wonder if you have seen a new Sky 4-part mini series starring Dawn French, Emilia Fox and Iain Glen called “Delicious”. I don’t think I’m giving too much away by saying that it is the story of an apparently successful, once divorced remarried chef, who has an affair with his first wife, who it turns out is the real culinary genius.

Like most good stories, the drama of ordinary lives holds our attention when under the scrutiny of dramatic pressures. The series exposes the problems beneath a beautiful façade of a middle-class life. Set on the idyllic banks of the Tamar river, an entrepreneurial temple of hotelier cuisine is the bling that diverts the eye from seeing what needs to be seen.

Just below the surface

There is an understandable and customary dig at middle-aged men but with a twist on the usual, predictable affair with a younger model, with Leo attempting to have his cake and eat it. A setting of fine dining, lends itself to the customary style over substance debate and of course the market price of every thing.

Wood for the trees

From a financial planning point of view there are numerous warnings that I would hope business owners can heed. One of the problems that business owners, or indeed anyone has, is that they are often too close to the problems to be able to see them clearly, let alone any workable solutions. It is certainly hard to fathom how any decent financial planner could not draw attention to what is revealed within the plot (which I shall not spoil).

Virtually reality?

One of the most popular criticisms of social medial is that it has encouraged us to live false lives, like those contained within magazines, or indeed within television or film. Whilst I’m sure this has some truth and resonance, this all rather depends upon each of our ability to be truthful, yet mindful of impact, timing and social etiquette. There is nothing new about attempting to be something you are not, which is perhaps one of the oldest dramatic tools.

The truth can be painful

Of course, not everyone wants to see or hear the truth, particularly when it is going to require some change. I sometimes wonder if this is what puts most of population off from seeking financial advice. Deep down most of us know that we need to master our money lest it master us. A financial plan is designed based around your values, grounded in truth and enables you to see ahead to any potential “surprises”. In essence making sure your plans for style have substance.

Here’s the trailer for the series on Sky.

Dominic Thomas
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 [email protected]

DeliciousDominic2025-01-27T16:08:29+00:00

A Monster Calls

Perhaps it is just me, but I seem to be a little (more than usually) morbid at the start of the year. On Saturday I went to see the movie “A Monster Calls”. This seemed to coincide with my reaction to the lengthy list of people that died in 2016 and the natural sense of turning a new leaf with the start of a new year… a time to get a little more organised, better prepared for what may lie ahead.

The movie relates the tale of a young boy who lives with his mother and it becomes apparent that she has cancer. The movie itself is visually beautiful, fusing art, film and masterful story-telling. It captures the painful struggle of a young boy called Conor who, like many children is living with the hope of recovery and the reality of uncertainty. He escapes into the invisible world of monsters which merely highlights the tension of his real world where he is largely invisible, with nobody noticing his struggle other than those most alert to vulnerability – the bully.

Complexity lurking in the shadows

There are some delightful lines and insights and it is a film that has continued to gnaw at the corners of my mind. Whilst in many respects this might be promoted as a children’s story, it has far more to offer adults and those caring for or working with children with insights and reminders about just how vital our communication with children really is. Indeed, the tales within the story remind us that we are all rather more complex that “good” or “bad” perhaps this awakening normally comes in childhood, but certainly is a timely reminder as we survey a complex world with some notable players, who invariably appear monstrous.

The monsters we don’t call for

We all have monsters that we fear may come calling, one of the more obvious ones is the monster called Cancer. You may have seen some poignant TV adverts entitled “Cancer is happening right now” and of course for those of you that have experienced such visits or are currently doing so, there is a very real sense of an alternative universe, drawing family and friends into an epic, often weary struggle for survival and many will relate to the fourth tale offered up to the monster.

The limitations of financial comfort

Of course, in the financial planning world there are policies designed to provide financial assistance. Nobody is under any illusion that these will cure, heal or even soothe the pain of a serious or critical illness. They “merely” enable focus to be kept on relationships, care and hopefully successful treatment, rather than anxiety about cost, albeit purely the financial one. This is not a pleasant subject. It is the nightmare that I hope you never must endure, but the sad reality is that we cannot control our nightmares, we can respond to them and make allowances, whilst attempting to understand and have greater empathy for those that have, are and will.

I can thoroughly recommend the movie, but it comes with a warning, not a child-like story, but there are many children like this (and many grown-ups that feel the same way). Here is the trailer.

Dominic Thomas
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 [email protected]

A Monster CallsDominic2025-01-21T15:41:33+00:00

Start with the end in mind

I think it was Stephen Covey that coined the phrase “start with the end in mind”, I’m sure others thought of it before, but he certainly used it successfully. When it comes to financial planning, it is where most good financial planners begin.. but being British, it’s arguably one of our last taboos… how we think of death.

For many, the last year (2016) was full of high profile celebrity deaths. Hardly any of us actually knew these people, but we probably saw some of their work with varying degrees of impact.

At the end of the year Carrie Fisher died rather unexpectedly, followed 24 hours later by her grieving mother Debbie Reynolds. It was, and is, a poignant moment. One of the questions that I didn’t expect to ask myself was “what happened to the estate?” (as of now, I don’t know). If the estate was set up like most, the children are normally the beneficiaries… so I wondered what happened to Carrie’s estate which was then presumably a recipient of her mother’s – at least in part. An interesting case for the lawyers and an eager death duty office.

Lessons Learned from 2016?

Despite all the outpouring on social media and around dining tables about the sadness at the loss of X, Y or Z, there was no evidence that anyone prepared their own ending any more thoughtfully. There was no sudden demand for Wills or life assurance, or end of life plans.

According to ABI data, the UK is the fourth largest market for insurance. In 2015 129,000 families or individuals received a payment from protection products. Now I’m guessing that those that have some cover, probably have more than one policy. So there may be some doubling up with the data, but in any event the ONS reported 529,655 deaths for England and Wales in 2015 (up 5.6% on 2014 and the largest increase since 1968). So whilst clearly not everyone dies with dependents or liabilities, a significant number had no cover at all.

Most people do not have enough cover

Despite the warnings all around, that death eventually comes to us all, some much sooner than expected, most of us do not really give it too much thought. Its one of the easiest things to put off. Sadly I have seen the results of unexpected and early deaths and the impacts on families and whilst money would never replace a person, it would certainly have provided a very different future for the family left behind.

Don’t ignore the signs. Start with the end in mind.

Dominic Thomas
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 [email protected]

Start with the end in mindDominic2025-01-21T15:41:33+00:00

I, Daniel Blake

The new Ken Loach movie “ I, Daniel Blake” has created something of a ruckus. It would seem that if you hold entrenched political views, then probably you would learn nothing new. If you are a little more willing to be informed or at the very least, challenged, then this film has something to offer.

You might wonder why a financial planner is writing about a story, essentially about poverty and the UK benefits system. After all, our clients don’t draw benefits and are clearly not poor, by most normal definitions. My reasoning is that human dignity is simply a human issue for us all, and of course should disaster strike, any one of us could be left at the mercy of the State system – one that we all contribute towards and reflects our wider collective values.

Daniel Blake is one of those typical, gritty, grim and grey British films, that in truth you probably have to be in the mood for. It isn’t “entertainment” and it isn’t a documentary. However in the days of food banks and some fairly vile tabloid newspapers, it’s a film that needs to be seen, rather like the truthfulness of your own finances.

Passive? moi?

Perhaps like you, I am occasionally found shouting at the TV or radio as something rattles my cage, yet it is not often that I do so in a cinema. Yet, that’s what I was doing within about 15 minutes, exasperated by the ludicrous treatment of someone by box-ticking automatons. I won’t ruin your experience of it by giving away the story, but it resonated with similar experiences that most of us will have had at some point when dealing with some organizations, particularly Governmental ones.

A curriculum vitae…

The story of Daniel, a carpenter in his late 50s or perhaps early 60s suffers a heart attack, signed off work by those professionally qualified to do so (his doctors) and then assessed by a “professional health worker” (as if) that he is not sick enough to be off work… and so the story ensues with an exploration into the penalty system introduced by a man who was actually found to mislead within his CV (according to BBC News night) one Mr. Iain Duncan-Smith.

You cannot be serious..

I know many of you are medical professionals – proper ones, not deemed so by a job title that reflects the ability to read a questionnaire containing medical terminology. So I am sure that some of you will have had experience of being confronted by those less qualified, purporting to know better…. which these days seems to be most people in political office.

Clearly none of us want a society where it is easier and more rewarding to “do nothing” than to provide something of value to others. We don’t want to encourage a culture of benefit vultures or tourists. However this is loaded with political sentiment and bias. One might make the case that a rich businessman that pays no taxes is also a benefit scrounger, not “paying their way” for all the things that the rest of us mere mortals believe important for the wider society.

It seems to me that “the system” simply isn’t very good and attempts to make it work rather better because of bile generated from supposed “journalists” have failed spectacularly.

There’s something very wrong with this isn’t there?

My own former MP was at a hustings and said he was “proud that we have a food bank here” which is hardly something to be proud of, merely reflecting the failure of our “first world” social system and is actually a reflection that the local people believe that this is very wrong, and respond to a very real, very human problem.

Planning upon uncertainty

As for your financial plan… well at the heart of this is the ability to do your sums. To live within your means… which is a lot easier when you are healthy and let’s be honest, wealthy (by comparison). However when health becomes an issue, you have probably ensured that you have savings and insurance to cover certain eventualities (well if you took my advice you did). So it will always appear easier to cope than it is in practice, because you and I are fortunate enough to have enough to plan and think ahead, even thinking about the bleak, improbable and perhaps unlikely. Part of my job is to reduce reliance on the State system by creating independence of it, self-sufficiency. This is not the same as being disconnected or unconcerned, which is the general line taken by those who have chosen to “critique” the film for being an extreme example….

Ok, there will always be some people that want to do nothing and expect something, but I struggle to believe that is how most of us behave. Most want a better life, not a benefits life. When I talk of lifestyle financial planning I am not advocating one of selfish disconnection, but of self-direction.

Anyway, wherever you are on the political spectrum (and I find myself finding some merit in most arguments from all sides) here is the trailer for a truly valuable film.

Dominic Thomas
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 [email protected]

I, Daniel BlakeDominic2025-01-21T15:43:59+00:00

Your call is being recorded…

Your call is being recorded..

One of the many things that regulation is meant to provide is a high degree of security for investors and clients. In the main, the regulator exists to keep markets fair and ensure that people are not ripped off. You may have a view about their success over the years… then again perhaps things would have been worse without them – one of those conundrums.

From time to time (for which read – with great frequency) the regulator issues Consultation Papers, in theory to outline an issue, propose some remedial solutions for comment. Today’s 500+ page (CP16/29) latest idea is for all advisers to record telephone calls with clients. This, they believe, will help reduce problems as many people cite that they were told something over the phone, upon which they acted.

1973 movie poster The Conversation starring Gene Hackman

Are you being served?

To provide some context, to buy any regulated financial product, you have to have a “Reason Why Letter” – which can take a variety of forms, but in essence is an explanation of why you have been advised to implement a product. If you have been a client of ours for anything more than five minutes you will have had this from us.

So I wonder what your thoughts are if we are to record your phone calls with us. We have nothing to hide and are in the process of installing VOIP telecoms anyway, which would enable us to do this (though our motivation was for a better and more cost effective telecom system and the fact that BT are gradually moving everyone in this direction). However, does it actually provide you with any more protection?

As you may also know, we have been using software that enables us to hold meetings over the internet – such as gotomeeting or Skype (and others). Of course we may have called you from a mobile phone at some point too, so presumably these ought to be recorded too (if the logic applies). Then perhaps meetings (in person) should be recorded or indeed any interaction between us.

Anything you say may be used in evidence against you…

You may have a view on such an approach – all the data would be stored for at least 5 years (which is of course cyberspace that needs to be rented) – so there is a cost financially, but I also wonder how it might impact our relationship. For example, when I am on hold to a big company and they are recording the call, I’m minded to make statements like – why don’t you hire more people to answer the phones if you are so busy? Why have you outsourced the call handling around the world, where my personal data is now viewed?… or how on earth do you guys sleep at night with such a rubbish service? (but I have, to date, not said this aloud).

Its my belief that a crook, or someone that wants to take your money away from you by selling you something that simply isn’t real or realistic will find a way to do so… and not recording the call or then editing the data file would be obvious to anyone. Anyway I thought that as I’m being asked for my views, the best ones are probably yours, so email me your thoughts. I need to feedback thoughts by the end of the year… not long now!

How is your paranoia? here’s the trailer to a film on the subject… Paranoia

Dominic Thomas
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 [email protected]

Your call is being recorded…Dominic2025-01-23T10:56:03+00:00

Take Five…. for fraud

Take Five

Not to be confused with Jazz musician Dave Brubeck, “Take Five” is a new initiative to counter-act financial fraud, which is increasing at an alarming rate. According to the latest UK financial crime statistics over a million financial fraud crimes were committed in the first 6 months of 2016. As we live in an online, 24/7 culture, that equates to about one every 15 seconds.

You will have certainly had various emails, which look rather obviously like a scam, but increasingly there are emails from businesses and organizations that you probably recognize, often attaching a document, invoice or receipt. In many instances these are viruses, some more harmful than others. Of course if you aren’t expecting an invoice, you might be concerned that you are being sent one erroneously and wishing to correct the matter, but alas, this is part of the scam.

Many email and internet scams, try to imbed a “Trojan Horse” within your computer, which gathers data about what you look at and your keystrokes. This is an attempt to gather access to your contacts (more punters to try) and of course your own personal information so that money can be spent, stolen or extorted.

Pause for thought

The new campaign “Take Five” is essentially an call to pause, to think carefully before you act – take five seconds to pause. This is because much of the fraud that occurs could be prevented with this very simple strategy. Research has shown that 26% of people continue to provide personal bank details even though they suspect that they should not. 43% said that they shared their details because they felt the person seemed genuine, and 39% said it was because they felt pressured.

Catching you off guard

A staggering 38% of people report that they were busy and wanted to get them off the phone quickly. Of course, the fraudster is also very convincing. Surprisingly, about 37% of people thought they were being scammed during the conversation but still continued with the transaction and almost a quarter (23%) realised after the conversation had finished.

Fear and greed

Most things financial work around two basic dynamics, fear and greed. Fraud is no different; invariably the fraud appears to be helping you, perhaps providing protection for your computer or your bank account. The standard “confidence trick” in all its guises also reveals itself. Some frauds even dupe people into believing that they are assisting with catching a fraudster – playing on your goodwill and sense of social responsibility.

For more information on the Take Five campaign and various frauds please check this website. For music by Dave Brubeck, well…

Dominic Thomas
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 [email protected]

Take Five…. for fraudDominic2025-01-21T15:43:59+00:00

This is Your Life

You may remember the TV show “This is Your Life” – the big red book of a lifetime of memories.As a child, it often seemed to me at the time, many of the celebrities were not very old, so had not actually had much “life” yet. Yet today I find myself rethinking my position.

Over the last few weeks I have been house-hunting and after what feels like a trial of will over energy, tomorrow I finally move house. This is not something that I have done often, indeed the entire process of buying and selling houses does make me wonder why anyone would wish to move regularly or indeed be a landlord.

As we all know, everything has its time. The memories created in our current home, seeing the children grow up, being part of the community, having lots of wonderful parties – these are not sold off in the process, but of course they can and do fade over time. To me it has always been important to have some form of record of those memories

Planning an ending

The advantage of moving home is that to some extent it is possible to plan a clear “ending” and say goodbye. On Sunday night, we had a small goodbye party with our neighbours. Life itself rarely gives many people this opportunity. Sudden death is precisely that – sudden and unexpected.

Of course we will all experience loss, some will be expected and some something of a shock. Irrespective of when or how, there are things that we can all do to help prepare others and ourselves. The most obvious aspect of any funeral and mourning period is the recounting of stories. These are naturally far more revealing of who the real person is or was. Yet often these tales rely upon the memories and survival of others.

I encourage clients to design their own “life book” full of pictures, quotes, memories, stories, some basic factual stuff and a load of thoughts about “how I was shaped”. These days it is relatively easy to get a book printed for a very small sum. This makes a great document which you can keep up to date, but importantly an opportunity to tell your own story, in your own way, in your own words. Why not give some thought to what you would like to say – not as important as a Will or adequate financial protection, but far more enjoyable. Of course I might suggest that this can act as a catalyst for the life you still have left, to reflect on making your time count – whatever that means for you.

Dominic Thomas
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 [email protected]

This is Your LifeDominic2025-01-27T16:08:47+00:00

More thoughts on Brexit

I have spoken to a number of clients, all of whom expressed great sadness at the outcome of the EU referendum. I’m sure that some of our clients voted to leave for very good reasons (such as the EU being a huge bureaucracy that seems unwilling to change its ways). If you could cut through the bile of the media and politicians, then there was a debate to be had. Sadly, many are ill-informed about the actual issues, facts, experts, historical context and any sense of idea about what the impact really might be.

Many are still deeply distressed about the result, because it feels wrong. It feels as though something has been stolen from us all. Our nation, which is one of the most tolerant and safest places for anyone to live, has appeared to give the impression that we simply don’t care about others any more. We have had enough… “we want to take our country back”.

I am one of those that is deeply angry. At times, I have lost the internal conflict and said some things which probably doesn’t help. I apologise. I have been fed up that most of the commentary within my sector is written by white men, who are fairly wealthy and have little experience of racism in person and because they don’t see it, assume its not very bad.

Another stereotype – give me a badge

I am deeply concerned about the way that the far right appear to have been given permission to behave in a manner which feels like a threat to the core of this country, or what I think this country is. I have watched and read in dismay at stories and videos of some horrible incidents. There is an air of menace, interrogation and intimidation. As a large, bald, white male, sadly I appear to match the general stereotype of a thug. I feel the need to wear a badge that says the equivalent of “I didn’t vote for this, I don’t want you to leave, you are safe with me”. What I still fail to understand is why so few seem so unwilling to recognise that this was always the likely outcome. People that I respect and admire greatly, of all creeds and ethnicity.

I know full well that Westminster has condemned racist acts in the past, and did so again yesterday (Monday) but to be blunt, lots of white middle class men (largely) invariably move their lips to a soundtrack that seems at odds with their actions. However “good” a Prime Minister David Cameron has been (which is of course subjective) he was the one that agreed to run the referendum and its result has created this deep state of unease.

We have clients from all backgrounds. We have friends, colleagues and neighbours. Many are deeply worried for their future because of the newfound “courage” that fascists have been handed with a vote to “leave” for which they read – tell everyone to go (it seems). We have to stand up against this, not afterwards, but in the moment, during. If that is a frightening prospect, well that’s the practice of standing in another’s shoes and what it means to stand against racism.

Yes there is a reason…

I understand that most of these people are poor, often poorly educated, a product of their circumstances and if they are constantly told that they are worthless they tend to believe that lie until someone else, proclaiming nationalistic values, provides a form of antidote with a sense of identity. However this is no excuse, just an explanation.

So however you voted, the reasons why those of us that voted “remain” were invariably beyond the mere numbers of costs, economics and bureaucracy. We know that immigration needs careful controlling, we know that integration could and should be far better than it is. But we also know that we are all lucky to be born here, which is all it is, a random roll of the dice.

Business is more than money, its also community

Perhaps this is not the place to talk about “my feelings” after all, I run a business designed to serve you to make better financial decisions. However to be candid again, the financial planning I do, that works best is all about personal values – yours (and mine) and invariably the money is the least important bit. If my job is simply to protect your wealth, then frankly this is also a part of that.

and here is an oldie… The Power of One.

Dominic Thomas
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 [email protected]

More thoughts on BrexitDominic2025-01-21T15:43:59+00:00

Brexit – Some Thoughts

I am conscious that this is a highly sensitive subject. I have to acknowledge that 52% of voters that voted, elected to leave the EU – at least that is what is being claimed. I am rather less inclined to believe this to be a thorough explanation.

I will declare that I voted to remain, not because I think the EU is perfect, but to use a metaphor, if I’m not entirely happy about what happens in my street, leaving it solves my experience but not the problem and should I want to discuss access to the road again, I don’t really expect much of a welcome, in fact they are likely to make it a toll road and my choice will forever be yes or no, but never “what if we did it this way…”

As we all know, there was and continues to be a lot of heated exchange. It is certainly possible that the UK can exist outside of the EU and trade as “normal”. However many seem to have forgotten that the UK, (if indeed it can still be called that within a few months) has a population problem, but not the one being discussed. The problem is longevity.

Thankfully due to our rather excellent health service, most of us are living longer. This is a good thing, reflecting our progress as a society. Of course this also means that more people are alive to draw a State pension and are alive longer to draw on support from family and State. The demographics of the nation by all calculations mean that there is more pressure on the State to find the money for this ongoing “support”. Unfortunately, the ratio of people in retirement to those not yet retired is shifting, considerably. The bulk of pensioners do not have high incomes and the State pension is effectively tax free due to the personal allowance.

Its not enough…

In practice those pensions are paid for by current taxation, not historic taxation, which was merely the “membership fee”. The bulk of tax is paid from income tax raised each year. We need more people to earn money to pay tax to provide for the “system”. Indeed HMRC collected £533bn in taxes of all types for 2015/16. The highest amount ever, yet still not enough. For the record about 54% is from income tax, 19% from VAT (that nasty European idea) and 11% from corporation. In short 84% from direct taxes. If you wish to see the latest HMRC report spanning back to 1980 click here.

Not enough being born

The UK birth rate is in decline. It has fallen from 2.93 per woman in 1963 to about 1.90. This is historically how we have sustained the nation. Tracking this forwards, combined with people living longer merely confirms what I have stated. There are fewer people of working age to provide for those that are not. (click here for evidence).

Not enough jobs, yet low unemployment…

Those wanting jobs now have to compete in an increasingly global economy, unless of course it is something very bespoke or crafted locally. The technological revolution has barely started, more service and manufacturing jobs are being “automated”… whether it’s the booking of flights, paying for your groceries, renewing your tax disc, banking or calling to complain. Certainly there are new jobs and roles, but in a world where tax rates and regimes vary, we clearly value convenience and low prices over jobs and “fair” (please let’s just call it “appropriate”) taxes – I’m thinking Amazon. Ironically, the UK has just recorded its lowest level of unemployment for some time at 5.1%, the lowest since the credit crunch, which in turn was the lowest since about 1977. Click here for evidence.

All creatures great and small…

On Thursday the UK voted to end its relationship with its main and nearest trading partner. The equivalent of all those market towns that used to have an exchange, now amalgamated in London. The world is a big place, but just as we like the convenience of Amazon, so do nations like the certainty of trade agreements and low prices. The advantage of the EU is that trade prices are thought of collectively, negotiating as a block for a better deal, not the cheapest deal.

You may disagree with me, you may find many faults with the EU (who doesn’t) but what is clear is that few people really voted from a position of knowledge, but rather prejudice (anti- big brother) or simply feeling disconnected with the establishment, on the wrong end of every “good deal” and clearly do not believe that we are all in it together. I understand this to be more of a protest vote against cuts and austerity, which I fear politicians will continue to ignore the cries of people that have become so desperate that they voted for the equivalent of selling your home, buying another without first reading the contract or having a survey done – let alone agreeing the mortgage. Buyer’s remorse is inevitable.

A problem aired is a problem shared?

Yes we could simply “get on with it” but as yet nobody wishes to be remembered as the person that took the action that is likely to result in not simply the severance from the EU but also the end of the United Kingdom. There is another alternative – that of acknowledging that both sides are actually “right” or at least make some fair points. So perhaps, there is an opportunity to get all these frustrations (not just British ones) out on the table, to properly reform, thoughtfully and respectfully. I admit this is a more unlikely scenario as I attempt to find a silver-lining and a ray of hopefulness.

Of course the EU isn’t perfect – neither is Westminster

I’m sure there are lots of examples of bad EU laws, but I am not informed enough to know them all – are you? I, like many others did sign up for and support Hugh’s Fish Fight. I do know there are plenty of sensible ones. I do know that simply counting laws is no fair or sensible way to assess them. The House of Commons Library attempted to do so and found that between 1993 and 2014 about 13% of laws relate to EU obligations or implementation of them. Again, unclear about whether they are good or “bad”.

I can’t see you….. really?

Yet here we are. A nation now blaming each other and looking terribly unfriendly to anyone that isn’t white “or from these parts”. Yes I know not all Brexit voters are racist, I doubt many are, (not all are white either) but whether you like it or not, we need “new blood” to help our economy by running services, building businesses, creating jobs and paying taxes. Sadly, no, alarmingly the result of this vote has emboldened those with racist views, which we must now all face down in person, not merely in words. The degree of tension is palpable and this is not the Britain that any of us wanted. I hope.

Lasting security is not a high wire fence

However, all these problems are not exclusive to the UK. Indeed most of the EU has precisely the same problems of longevity and poor levels of saving with high dependence on the State. Arguably they have worse problems and likely to merely exaggerate problems. However the way to reduce envy and create greater security is to help your neighbour prosper, not collapse.

Of course, Mr Shakespeare would have seen this as very good material….. oh he did.

Dominic Thomas
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 [email protected]

Brexit – Some ThoughtsDominic2025-01-21T15:33:08+00:00