Podcast Summary
Exploring Financial Resolutions and Trends: Consider investing for better returns than savings, stay informed about financial products, and prioritize strong passwords for online banking.
As the new tax year begins, people are looking for ways to improve their finances, with many considering shifting their savings into investments due to low savings rates. The discussion on the podcast covers various topics, including changes to the state pension, controversial advertising of ISA rates, digital banking, and scams. Rachel's New Year financial resolution is to invest, while Lee's is to remember strong passwords for online banking. The team also mentions an Open University course called "Managing My Money" to help people learn about financial management while enjoying satirical songs and sketches on Share Radio. Overall, the podcast emphasizes the importance of being financially savvy and staying informed about various financial products and trends.
New tax year brings changes to personal savings: Basic rate taxpayers can earn £1,000 in interest tax-free, while higher rate taxpayers can earn £500. The new personal savings allowance could impact the popularity of cash ISAs and introduce the Innovative Finance ISA for tax-free peer-to-peer lending investments.
The UK tax year has begun, and with it come significant changes to personal finances. One of the most notable changes is the introduction of a new personal savings allowance, which allows basic rate taxpayers to earn up to £1,000 in interest tax-free on their savings accounts or current accounts. Higher taxpayers can earn up to £500 tax-free. This could potentially impact the popularity of cash ISAs, but they are not dead yet. Another change is the introduction of the Innovative Finance ISA, which allows individuals to invest in peer-to-peer lending platforms tax-free. However, not all peer-to-peer platforms are eligible for this ISA yet. These are just a few of the changes that could impact your personal finances this tax year. It's important to stay informed and consider seeking advice from a financial advisor to make the most of these changes.
Delay in IFISA launch for P2P platforms due to regulatory issues: Despite regulatory hurdles, optimism remains for the launch of IFISAs for P2P lending platforms due to competitive savings rates and growing acceptance of P2P as an investment option, but proper regulatory oversight is necessary.
The introduction of Innovative Finance ISAs (IFISAs) for peer-to-peer (P2P) lending platforms has been delayed due to regulatory approval issues and paperwork backlog at the Financial Conduct Authority (FCA). This has left companies like Zopa and Funding Circle in a holding pattern, unable to offer ISA-eligible accounts to their customers. The rapid implementation of various financial changes, including pension freedoms and the personal savings allowance, might have contributed to the FCA's workload, leading to concerns about the chancellor's tendency to introduce changes too quickly. Despite the delay, there is optimism that IFISAs will be popular once launched due to their competitive savings rates and growing acceptance of P2P lending as an alternative investment option. However, it's crucial to ensure proper regulatory oversight to prevent potential issues and maintain investor confidence.
Changes to UK Tax System: Savings, Dividends, and Property: Basic rate taxpayers face new dividend tax rules, higher and additional rate taxpayers bear the brunt. Innovative finance ISAs bring uncertainty and risk. Personal allowance increases, but tax thresholds change. Marriage allowance rises, but landlord expenses and second home stamp duty add costs.
There have been significant changes to the UK tax system, particularly in the areas of savings and investing, dividend taxation, and property tax. The introduction of the innovative finance ISA brings uncertainty and potentially more risk than traditional ISAs. Basic rate taxpayers will be affected by the new dividend tax rules, while higher and additional rate taxpayers will bear the brunt of the changes. The tax-free personal allowance has increased, but there are also changes to the higher rate threshold. Marriage allowance has also seen an increase, but the new requirement for landlords to provide receipts for wear and tear expenses, as well as the additional 3% stamp duty on second homes, may cause frustration. Overall, taxpayers should be prepared for more complexities and potential increases in their tax liabilities.
Budget brings changes to taxes for individuals and businesses: Capital gains tax cut for some, IPT increase, ISAs remain valuable for tax-efficient savings
The recent budget brought significant changes to various taxes, affecting both individuals and businesses in different ways. Capital gains tax, for instance, was cut for some, but not for buy-to-let landlords. Additionally, insurance premiums saw a slight increase, which could lead to higher costs for policyholders. The chancellor, in search of additional revenue, introduced the Insurance Premium Tax (IPT) increase, which has been criticized for being under the radar. Meanwhile, ISAs continue to be a valuable tool for tax-efficient savings, especially with the introduction of the personal savings allowance. Overall, the budget brought a mix of positive and negative changes, and individuals should consider their financial situations carefully to make the most of the new tax rules.
Maximize long-term savings with Cash ISAs: Shop around for the best Cash ISA deals, consider new personal savings allowance, weigh pros and cons, stay informed, and explore stocks and shares ISAs
Cash ISAs still have their value, especially for those looking to protect their money for the long term with more flexibility and potentially better rates than ordinary savings accounts. However, it's crucial to shop around for the best deals and avoid being shifted to poor ones by some lenders. With the new personal savings allowance, it's essential to consider the sums and weigh the pros and cons for new savers. Despite the low-interest rates, cash ISAs might still be worth it due to potential future changes in tax rules. Additionally, considering stocks and shares ISAs could also be an option for those willing to take on more risk. Overall, it's essential to stay informed and proactive in managing your savings to maximize returns.
Stay informed on savings rates and switch for better returns: Inform yourself on the best savings rates and don't hesitate to switch accounts for better returns. The process is easy, but remember not to withdraw funds before transferring them.
Switching savings accounts to secure better rates is a relatively straightforward process, but the current savings rates in the UK are among the highest in Europe, making it seem like a poor deal compared to other countries. The low savings rates in the UK are due to a lack of demand for savers' money as banks have access to cheap funds from the Bank of England. Despite this, it's essential to stay informed on the best rates and not be afraid to switch to secure better returns. The process of switching has become easier over time, and it's important to note that you should not withdraw your money before transferring it to the new account. Additionally, providers may be reluctant to advertise their pitiful rates, making it essential to do your research and compare offers.
New Digital-Only Banks Offer Competitive Savings Rates: Atom Bank, a new digital-only bank, offers a leading 1-year fix at 2.2%. BBVA invests £45M, believing in the UK market and the bank's tech-focused business model. More online banks may attract tech-savvy customers, but not everyone can access these offerings.
While some banks offer disappointing savings rates, others are stepping up to attract customers with competitive offers. Atom Bank, a new digital-only bank, currently leads the pack with a 1-year fix at 2.2%, but it's only available to those with an iPhone or an iPad. The bank's ambitious plan includes offering a current account, instant access savings, overdrafts, debit card, and a credit card, all with a strong focus on technology. BBVA, a Spanish banking giant, has invested £45,000,000 in Atom Bank, believing in the UK market and the bank's business model. As more online banks emerge, those comfortable using technology for banking may find Atom Bank an attractive option. However, not everyone may be able to take advantage of these offerings, and it remains to be seen if this is a lasting trend or just a flash in the pan.
New State Pension: Winners and Losers: Existing pensioners gain £3.35 weekly, but new retirees only receive a third of promised flat rate. Complex system impacts awareness, and final salary pension holders face increased employer contributions.
The new state pension brings both winners and losers. The winners include existing pensioners who will receive an additional £3.35 a week due to the triple lock. However, for those retiring under the new system, only a third will receive the promised flat rate of £155. The system is complex, and many people are unaware of its intricacies, including the implications of contracting out for lower National Insurance payments. The losers include those with final salary pensions, who will see their employers' contributions increase significantly, with some employers passing these costs onto employees. Overall, the new state pension brings significant changes that will impact different groups in various ways.
Pension changes leave many young people confused and vulnerable to scams: Young people need to be cautious with their pensions, maximize contributions, and verify schemes with the FCA to avoid scams.
The recent pension changes have left many people, particularly those in their twenties and thirties, potentially worse off than they thought. The state pension is now smaller than expected, and the complexity of pension policies can make it difficult for individuals to understand their options fully. This confusion has led to an increase in pension scams, which can be hard to spot even for those who think they are savvy. With the large sums of money now accessible through pension freedoms, fraudsters are targeting unsuspecting individuals more than ever. It's crucial for everyone, especially the younger generation, to maximize their private pension contributions and be cautious when dealing with pension schemes. Remember, if an offer seems too good to be true, it probably is. Always double-check and verify the legitimacy of any pension scheme with the Financial Conduct Authority.
Stay vigilant against suspicious job offers: Always verify the authenticity of unexpected job offers and consult with trusted sources before taking any action to avoid falling victim to fraud.
Being vigilant is crucial when dealing with unexpected job offers, especially if they seem too good to be true. A voice over artist, Fenella, shared her experience of receiving a seemingly legitimate offer for a game show voice over job. However, the request for payment in traveler's checks and the lack of proper documentation raised red flags. Despite the initial entertainment of the emails, Fenella trusted her instincts and checked with her bank and the police. The traveler's checks were found to be fraudulent. This incident highlights how targeted fraudsters are becoming, even in specific industries like voice over. If you receive an offer that seems suspicious, don't hesitate to verify its authenticity and consult with a trusted source before taking any action. Remember, if it's too good to be true, it probably is.
Difficulties for young people in achieving homeownership: Rising house prices and buy-to-let landlords make it challenging for young people to save for a house deposit, even during a house price correction. Additionally, increased rents and inheritance tax liability may further hinder their ability to afford a home.
The dream of homeownership for young people is becoming increasingly difficult due to rising house prices and the prevalence of buy-to-let landlords. According to official data, the number of under-thirties with a mortgage has dropped significantly, with many instead opting to rent privately. This trend is attributed to the financial crisis, which led to low savings rates and a desire for assets, causing an increase in buy-to-let properties. However, even if there is a house price correction, young people may still struggle to save for a deposit due to increased rents from landlords. Furthermore, the rising house prices also mean that more homes are becoming liable for inheritance tax, which may not be fully offset by the upcoming IHT allowance increases. Additionally, people are becoming more nosy about house prices, with 40% of us checking up on the properties of neighbors, families, and even ex-lovers. This trend is exacerbated by the ease of access to house price information online. Overall, the combination of these factors is making it increasingly difficult for young people to achieve homeownership.
Exploring Property Values with 'X-Ray Vision': Online property websites allow easy access to home valuations, but remember, these estimates may not be entirely accurate and should be used responsibly.
People find it intriguing and satisfying to look up the value of their old homes or even the homes of others using online property websites. This practice, often done out of curiosity, has become easier with the internet and can be seen as a form of "x-ray vision" into people's properties. However, it's important to remember that these valuations may not be entirely accurate. Additionally, there's a potential for this behavior to cross boundaries and invade privacy when used to check on love interests. Overall, the internet has made it simple to explore property values, but it's crucial to use this information responsibly.
