After an indecisive election campaign, the Prime Minister, despite his previous role as Chancellor of the Exchequer, was surprised to realise that the Conservatives just didn’t have the numbers to form a majority government. In an unexpected turn of events, no other party was able to either, and so Labour were only able to form a minority government. Ramsey Macdonald’s 1924 government, supported by Asquith’s Liberals, only lasted nine months.
So much has happened in 2023 so, as we head into 2024 – an election year, both here in the UK and, of course, the USA – now may be a good time to ensure we plan for every eventuality. While each person will have individual needs and this newsletter is not meant in any way as advice, it would be useful to give consideration to the following areas to ensure they are not forgotten.
Lifetime allowance
In a surprising announcement by Jeremy Hunt, in order to encourage doctors to continue working, in his 2023 budget scrapped the lifetime allowance. Scrapping the limit on how much pension one can build up tax efficiently (currently £1,073,100 and originally meant to rise in line with inflation), potentially means greater planning flexibility not just for doctors but everyone addressing their future retirement. The simultaneous increase in annual allowance from £40,000 per annum to £60,000 has also enabled many to fund more into pensions than they were able to previously. As pension funding sometimes involves using allowances from previous tax years, this is an area to ensure you allow enough time to consider before the tax year end.
Flexible ISAs
Not all ISAs are the same. While everyone is probably aware that they can fund £20,000 into their ISAs, one of the areas we are still surprised by is how many individuals have not got flexible ISAs. A flexible ISA will allow you to withdraw monies from your ISA during a tax year and, provided it is replaced in the ISA within the same tax year, the allowance is protected. Shouldn’t all ISAs be flexible? We would be happy to check if any that we do not look after on your behalf offer this important facility.
Also, if you haven’t funded your ISA this tax year, please do get in touch. This is a ‘use it or lose it’ allowance and so don’t leave it too late.
State pension entitlement
Entitlement to the full State pension is now based on a contribution record of 35 years of qualifying NI payments. If you had a career break or worked abroad you may find that you do not have enough for the full state pension. You are able to buy extra years to close this gap and at present you can go back as far as 2006 to top-up your entitlement in some of those years. However, this is changing from 2025 (from when you will only be able to go back six years) meaning this could be an important time to review your entitlement.
The first step is to check your current entitlement: https://www.gov.uk/check-state-pension
Only top up if you will get more pension. Speak to us if you need any help.
Welcoming new members and wishing adieu to one
It is now four months since we moved into our new office at 90 Basinghall Street. We are already at home here and the coffee machine and water fountain are working hard to keep both clients and staff properly caffeinated and hydrated. It has been wonderful too to welcome new members to the team:
James Hawkes is a welcome new addition to our Investment Committee. He worked with many of the team until 2015 when he joined Coutts, where he is now a Senior Multi-Asset Portfolio Manager. His expertise within asset allocation, portfolio construction and fixed income investing makes him a great fit for our Investment Committee.
We also have a number of new staff on the team:
Judith Parr, Aneeka Patel, and Nader Razak are Financial Planners and bring a wealth of experience to their roles with Raymond James Barbican. With the joining of Khaya Nyathi, our support team have found a wonderful new signing and the fact that he plays football so well is also a boon for our five-a-side team.
Talking of good news, it is lovely to also welcome our newest, in every way, member to the team. Huge congratulations to Harry Robinson and all his family on the arrival of their new baby daughter and sister. We look forward to seeing them in the office soon.
One final thing to share, which is both good and a little sad. Nick Lowy has now retired and we will miss his sunny optimism in the office. We wish him and Alison a wonderful retirement and look forward to seeing them at the summer party and investment lunches.
As always, please do get in touch if there is anything we can help with and do let us know if there are others who you feel we could help. Irrespective of who is in Downing Street, we know that when it comes to our clients, they can count on us to make a difference.
With investing, your capital is at risk. Opinions constitute our judgement as of this date and are subject to change without warning. This article is intended for informational purposes only and no action should be taken or refrained from being taken as a consequence without consulting a suitably qualified and regulated person.