What caught my eye this week.
Just 26 sleeps to go until the new government’s first Budget on Wednesday 30 October. And I cannot recall there ever being so much pre-match jitters.
I could have filled the links below with forecasts, evasive action tips, and threats to emigrate. Hardly what anyone would call a honeymoon period, let alone the good vibes of Tony Blair’s 1997 win.
Even those who didn’t vote for Blair admitted the national mood music went up a level overnight. This time the change has been more like somebody coming in, turning the music off and the lights on, and telling everyone to sod off home.
And I say that as someone who has more sympathy than most with the view that the State’s finances are atypically feeble.
There have been worse economic periods, for sure. Seldom did they unfold though while so many in power gaslighted us with tall tales about how great things were – and millions believed them.
(In short: where did you spend your ‘Brexit dividend’, eh?)
Black rod
With that said, Labour made a rod for its own back by waiting so long to hold the Budget.
It’s like sitting outside the headmasters’ office all day before you’re seen. Almost as bad as the punishment!
For my part I haven’t much to add beyond what I wrote in my articles on the potential capital gains tax (CGT) hike and whether CGT fears could be presenting us with opportunities.
Monevator readers added tons of value in the comments to both articles, incidentally. Go read them if you haven’t.
I would also note that in less than four week’s time the picture will be clear.
ISAs
If you plan to fill your ISA, I say get on with it ASAP. It’s hard to see a downside, given the risk of a cut to the annual allowance.
In practice I suspect any new ISA rules would begin from April next year. Still, why risk it?
However I certainly wouldn’t take out ISA money fearing withdrawals could be taxed in the future. I wouldn’t risk shrinking my ISA tax shield on the very unlikely odds of retrospective taxation.
(Exception: if you have a flexible ISA and if you can definitely put the money back in post-Budget Day if required, different story…)
Pensions
Pensions are trickier. There are reports of people cashing in their tax-free lump sums now or maximising their contributions, in case the rules change.
Yet the former might not be tax optimal for you if nothing changes (depending on wildly varying personal circumstances) while if you’re stretching yourself to load up your pension, you could face other day-to-day spending difficulties. Remember, pension money is locked away for the long-term.
This is not to go into the myriad edge cases that dance around on the threshold of pension drawdown and the like. Take care whatever you do.
Calm before the storm-let
Finally beware of excessive panic due to someone else’s political agenda.
The right-wing papers are having a field day – and worries around pensions and the like are a pre-Budget staple anyway.
But usually not too much happens in practice.
Personally I do expect some things to change but not everything. And I’m not going to do anything hugely radical on the back of that.
Have a great weekend.
From Monevator
The Slow and Steady passive portfolio update: Q3 2024 – Monevator
From the archive-ator: Fixing your financial posture – Monevator
News
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Huge shift in interest rate predictions as BoE chief says cuts could be more ‘aggressive’ – Sky
The US added 250,000 jobs in September, defying fears of a slowdown… – Guardian
…but UK economic growth was slower than thought in spring – BBC
New HMRC figures show £1.4bn sits unclaimed in Child Trust Funds – Which
Reeves urged to end panic over pension tax raid… – Telegraph via Yahoo Finance
…while chancellor vows to “Invest, invest, invest” [Search result] – FT
OpenAI raises $6.6bn in largest venture capital round ever – Axios
Record quarterly global ETF flows just topped half a trillion dollars – FT
England urged to bring in minimum price on alcohol – Guardian
The listed companies still adding Bitcoin to their balance sheet – BlockWorks
The Chinese market has suddenly gone vertical – Axios
Products and services
Five big banks cut their mortgage rates – This Is Money
Lloyds Bank offering a £200 switching bonus – Which
Get £100-£2,000 cashback when you open a SIPP with Interactive Investor (T&Cs apply. Capital at risk) – Interactive Investor
How to get a mortgage if you’re self-employed – This Is Money
Supermarket Christmas delivery slots – Be Clever With Your Cash
Nearly one in three who check their credit report find mistakes – Which
Open an account with low-cost platform InvestEngine via our link and get up to £50 when you invest at least £100 (T&Cs apply. Capital at risk) – InvestEngine
eBay scraps fees for most sellers – This Is Money
How to get a free will this month – Which
Homes for sale close to British woodland, in pictures – Guardian
Comment and opinion
Single people feel penalised on prices – Guardian
Bill Bengen: 4% and beyond! [Podcast] – Humans vs Retirement
Perfection versus greatness – Root of All
The S&P 500 is having its best year of the 21st Century so far – Sherwood
As withdrawals surge, five questions to ask before accessing your pension – Which
Retiring smarter – Humble Dollar
Does the bucket approach to retirement income work in practice? – Morningstar
Once again: imports do not subtract from GDP – Noahpinion
Artificial advisor mini-special
Can A.I. turn you into Warren Buffett? – The Hungarian Contrarian
Your next financial advisor will be on an app – Bloomberg via W.M.
Naughty corner: Active antics
New titans of Wall Street: How trading firms stole a march on big banks [Search result] – FT
The beginning’s of a private equity ‘super-cycle’? [PDF] – Dawson
How Manchester United loses money – Sherwood
Even enemies of the US hold dollar reserves – Klement on Investing
A majority of US active bond managers beat the market – II
Kindle book bargains
Failed State: Why Nothing Works and How to Fix It by Sam Freedman – £0.99 on Kindle
Technofeudalism: What Killed Capitalism by Yanis Varoufakis – £0.99 on Kindle
Bad Blood: Elizabeth Holmes and the Theranos Scandal by John Carreyrou – £0.99 on Kindle
Casino: The Rise and Fall of the Mob in Las Vegas by Nicholas Pileggi – £0.99 on Kindle
Environmental factors
Solar boom in China turns energy prices negative – Semafor
UK to finish with coal power after 142 years – BBC
The poachers who could save Mexico’s mini-porpoises – Hakai
Robot overlord roundup
Ray Ozzie on the future of intelligent machines [Podcast] – I.L.T.B.
Chatbots might ease the loneliness epidemic – Freethink
A.I. put my dad out of a job and I’m worried – Financial Samurai
A day in the life of a food delivery robot – Sherwood
The Contentapocalypse is coming – Epsilon Theory
The US dockers strike is a microcosm of Us vs The Machines – Kyla Scanlon
How the steam engine can help us make sense of AI – Morningstar
Off our beat
Even Americans think their anachronistic democracy needs reform – Pew Research
Can liberals be trusted with liberalism? [Search result] – FT
The Gambler’s (non) Fallacy – The Leap
How bad is inflammation, really? – Vox
Evidence of ‘negative time’ found in physics experiment – Scientifica American
What Wall Street’s pioneering women put up with – WSJ [h/t Abnormal Returns]
Living in a material world [Podcast] – A Long Time in Finance
A brief history of Lebanon – Uncharted Territories
Growth means choosing a different kind of pain – Raptitude
And finally…
“If he had learned anything from his parents, he learned that business was a matter of relationships.”
– T.J. Stiles, The First Tycoon: The Epic Life of Cornelius Vanderbilt
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