What was in the weekend’s papers? (19/10/2020)

Category: News

Financial times

Wealth tax: FT Money readers are divided

This article found FT readers, normally what you would consider a conservative bunch, are in favour of a wealth tax by a slim majority. We have written previously about what such a tax could entail. What this does show is that having a plan that you review regularly as the landscape changes is key.

The Sunday Times

Back in charge of collapsed firm: the earl who lost millions of savers cash.

This article is about the head of Wellesley Finance. The company ran adverts on TV where viewers were told: ‘If you are not getting much interest on your savings, try the Wellesley way’ and touted returns much higher than those available in the banks or building societies. In the small print, it did admit that capital was at risk and that customers were not covered by the financial services scheme. They loaned money to builders who ran into trouble during the pandemic. Savers stand to lose 99% of what they have put in.

A primary tenet of our investment philosophy is that if it appears too good to be true it probably is. When something offers high returns for little risk. There are often other risks lurking in the background which can present themselves.


Pension fraud ramps up during pandemic as two in three transfers flag scam risk

If you get a phone call or any other form of communication out of the blue offering to review your pension, the best financial decision you maybe ever make would be to put the phone down.

Taking tax-free cash from a pension? Beware the ‘commutation’ trap that could cost you 240k.

When our clients are taking tax-free cash from ‘defined benefit’ or ‘final salary’ pension pots, they have the option of trading in some of their guaranteed income for a higher lump sum. However, we do not recommend the income is forfeited by default. Some schemes offer better terms than others and client circumstances can make certain options more appealing. Running through the numbers is key.

Forget using pensions to buy property, we already have an ISA that does the job.

Lifetime ISAs wee brought in to help young people save for a first home. If you are under 40 you can put £4,000 into one and the Government will give you £1,000. You can use this money to buy your first home (as long as it is mortgaged and below £250k/450k in London) are towards your retirement after 60. For young people, this is a valuable tax break which should be used.

The Observer

Peer-To-Peer lending; ‘I’m 19,050th in the queue to get my savings back.

Peer-to-Peer lending is yet another investment supposedly offering low returns for little risk to clients’ money. However, there are many facets to risk and the one which is presenting itself here is the risk of not being able to get your money out when you want to. We call this liquidity risk. We look to ensure any investments we recommend to clients are as liquid as possible and if they are not, we will explain the trade-offs.

If you want to discuss this, feel free to book in a free chat here.

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