June 2024 news from Christina Clegg your pension financial advisor:
- It’s election season, so expect to see lots of promises from politicians this month. The first has come from the Conservatives who have promised to increase personal allowances for pensioners by 2.5% a year as well as maintaining the triple lock. This would prevent more pensioners having to pay tax, which would make your pension financial advisor happy! No doubt labour will have something similar up their sleeve.
- Maintaining the triple lock seems to be a must for any party wanting to secure power. According to a pension financial advisor at My Pension Expert, over 50% of over 40’s will only vote for a party who maintains the triple lock commitment. Almost 60% say its vital top their retirement plans.
- However, the Institute for Fiscal Studies (IFS) has said that the next government will face the hardest financial future of any government since the war. With taxes running at 37% of income but debt payments set to rise to 40%, there will have to be either big spending cuts or big tax rises just to standstill. You don’t need to be a financial expert to take most of what is being promised by politicians with a pinch of salt. Things are only going to get worse.
- Back on the triple lock point, only 25% of people think that the guarantee is a burden on state finances. Expectations and reality are going to collide pretty soon.
- Labour has announced that it will re-introduce the pensions lifetime allowance if it wins the election.
- £11.7 billion was deposited into cash ISAs in April. A record amount. In addition, £8.4 billion was deposited into bank and building society accounts. That’s almost £20 billion in cash. Makes you wonder where that money has been.
- Sir Keir Starmer has said that Labour would close the inheritance tax loopholes which he claims have allowed the biggest estates in the UK to avoid nearly £2 billion in tax last year.
- St James Place has dropped out of the FTSE 100 as a result of its share price dropping by nearly 60% in the last 12 months.
- Fund Manager Lindsell Train has been targeted by a bogus WhatsApp Group claiming to be providing investment tips.
- A new industry led action group has been set up. FLAG (Fix LoA (Letters of Authority) Action Group) will lobby the pensions industry to improve the time taken to process transactions due to delays with Letters of Authority. We fully support their goals. Providers spend far too long delaying the release of information by blaming the need for signed Letters of Authority. It’s time to go digital.
- Labour has now confirmed that it won’t re-introduce the Lifetime Allowance if it wins the election, good news if you’re a pension financial advisor.
- The government achieved its 2.0% inflation target in May, just in time for the general election. The rate fell from 2.3% in April. This is now the lowest level of inflation for 3 years.
- The Bank of England has held base rate at 5.25%.
- An estimated and extra 2.5 million pensioners will pay income tax after the latest triple lock rise. That’s 20% of all pensioners.
- Almost £1.5 billion in Inheritance Tax was collected by HMRC in April and May, that’s £200 million more than the same period last year. Overall, the treasury collected a staggering £132 billion in taxes over the two-month period.
- Research by IPSOS ahead of the election found that 40% of people would be happy to pay higher taxes in order to spend more on public services. 27% would prefer tax cuts even if that meant spending less on public services.