HAVE YOUR BOG OFF FUND

TODAY’S BLOG

HAVE YOUR BOG OFF FUND

One of the things that continues to surprise me is when a new potential client answers questions about retirement. Most, when asked, regularly tell me that they want to retire at 65 or whatever their State Pension Age is. It’s odd, because such a date is rather random and set by Government. My view is that your retirement should always be when you want to stop going to work for money.

Of course, not everyone enjoys their work, for a great number, work is merely a way to pay bills and support their lifestyle. Having a fund of money so that you can leave a job or perhaps a partner is a sensible strategy. Money provides choice and sometimes that choice is to escape from a bad situation.

Bombshell

This week, a court found Harvey Weinstein guilty (anyone actually surprised?)… It will also be of no surprise to anyone that follows my social media, that I am no fan of Donald Trump or Fox News. Both are bereft of any integrity. A cursory glance at Fox news will serve no purpose other than to confirm that there is a worrying lack of intelligent news or comment from the paranoid at Fox.

So, it was some degree of interest that I watched the movie Bombshell. This is a true story about the abuse of power and in particular the sexual harassment of many of the women that work at Fox News. Many of the women felt that they were in a trap – unable to whistle blow if they wish to retain a career shaped by the very few. I wonder if some may have been spared had they consulted a good financial planner to help plan and establish a suitable fund.

Fox “News”

The story begins with Megyn (ah America) Kelly one of the main anchors for Fox. She dared to question Donald Trump’s views about women and was met with his typical petulance that only such an infantile buffoon can get away with. His misogyny is amplified by his equally demented followers and a constant sexist diatribe. We also see how Gretchen Carlson is harassed and effectively forced out of her job due to her unwillingness to comply with varying demands from the then CEO Roger Ailes. I won’t spoil the factual story, other than to say Fox, Trump and Giuliani all come out much as you would expect. Yet this and many other forms of harassment continue all over the world.

Financial Empowerment

It’s a classic, money, sex and power thing… but it’s really disappointing that rather than this being the exception, under the likes of Trump and his hypocritical cronies, the majority either don’t or won’t care. Social media is no place to take the temperature of humanity, there are lots of awful things said by lots of awful people. Yet any attempt to convey ideas about justice are invariably met with perhaps the most stupid comments, predominantly from men. Financial abuse may be a new term, but its certainly an old form of abuse. Any understanding of history will quickly reveal how badly women have been treated by men where finance and financial independence are concerned.

We all need financial independence and the ability to walk (or run) from toxic relationships without losing everything in the process. Hardly a bombshell – to me that’s just fair and common sense. Have your own “bog off” fund.

Here’s the trailer for the movie Bombshell – a much better movie than I expected. 7/10

BOMBSHELL THE MOVIE

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 info@solomonsifa.co.uk

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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

Pensions: Lifetime Allowance and Mad Max

You have probably heard of Mad Max – its latest incarnation is currently in UK cinemas. You may have heard about the Lifetime Allowance – which has been part of the pension vocabulary since 2006 or “A-Day”. Suffice to say that I believe that the Lifetime Allowance is rather mad.

In the event that you are a politician and reading this, may I ask why you think pensions are important? To my mind, pensions should be encouraged. The end result of a pension should be that people living in the UK are able to provide for themselves above the State Pension, so support their lifestyle. This has several obvious benefits – creating financially independent adults, not requiring State support. Having income means that income tax can be levied and collected to help pay for our society. Let’s also not forget that income is there for using (spending) which enables trade to occur and wealth to be created and so on.

A World of Plenty?

It would seem that politicians generally think not having a rising burden on the State is a good thing. Indeed encouraging pensions with tax relief is the “sweetener” or “bait”. Much like the film Mad Max, we probably don’t want to create a society reliant upon the occassional benevolence of the prevailing “Lord”. Surely we would like a society where all prosper? OK we know the UK has limited resources, so adjust the tax relief, but don’t make it hard or even pointless to save. Even the current regime isn’t tempting enough for millions of people that don’t or cannot save for their future.

Scarcity

At present pension contributions are restricted, which seems fair enough, but the amount that the pension pot grows to is also restricted by the Lifetime Allowance. This is currently £1.25million, which sounds like a reasonable sum, but in practice isn’t as much as you’d like to think, given that it has to last for the remainder of your life. The Lifetime Allowance has already reduced over the years from £1.8m and if the Chancellor does what he suggested he would in the last Budget, it is likely to shrink to £1.0m next April. In other words £250,000 of the Lifetime Allowance will be lost – or more accurately invoke a tax penalty of £137,500.

Mad Max and Excess Tax

If the Lifetime Allowance is exceeded, there is a tax charge of 55% on the excess. OK there are some ways that you can protect your higher pre-legislation allowance, but these are designed by bureacrats and “problematic” to say the least. Essentially this excess tax charge punishes those that save or get good investment results…. let’s not forget that the income from pensions is subject to income tax anyway. So I fail to understand why we don’t simply abolish the Lifetime Allowance and all the protections that have surrounded it. Your pension fund should be just that – a pot that you can actually use with confidence.

Mad Max – Fury Road is currently in UK cinemas, starring Charlize Theron, Tom Hardy and Nicholas Hoult. The Chancellor, George Osborne has his next Budget on 8th July 2015…

Dominic Thomas