Autumn Budget 2026: Post-Budget webinar

00:09:32:17 - 00:10:00:09
Unknown
Good afternoon, and welcome to our Post-budget webinar. The Chancellor has now delivered his 2026 Autumn budget. The big question is what the announcements could mean for your everyday finances, savings, investments and plans for the future. Unlike last year, the run up to the budget so far less speculation, but there is still plenty for us to cover today that could affect your household finances and plans for the future.

00:10:00:11 - 00:10:27:04
Unknown
There are details to explore on savings and investment, housing pay and the cost of living, as well as announcements from previous budgets that are coming into force soon. Well, joining me are three specialists who will bring different perspectives to the discussion. Jason Holland's, managing director of corporate affairs, Sam Tam financial planning coach, and Sebastian Burnside, chief economist. Welcome and thank you for being here.

00:10:27:06 - 00:10:48:02
Unknown
At the end of the session, we will be taking questions from you. If you have a question you'd like to ask any of our three panelists, then please scan the QR code somewhere on the screen and follow the prompts and we will try to answer as many of those questions as we can in the time that we have.

00:10:48:04 - 00:11:12:21
Unknown
So thank you guys. As always, with a budget, there is an awful lot to absorb, and often it takes a few days for all announcements to really filter through. What, though, is this sort of your first message, Sam, that you would give the people at home thinking about their financial plans? What's the first thing you would say to this?

00:11:12:21 - 00:11:33:17
Unknown
Is you. Oh, this is what you do every day. You help people with their financial futures. What would you be saying to the people listening in? Watching and the people that you that you look after? Yes. I think this has been a quieter budget than previous budgets. No massive headline grabbers, perhaps. But there's been an awful lot of different individual changes.

00:11:33:22 - 00:11:59:19
Unknown
98, I believe. 98 yeah. So, you know, take some time, have a look, and see how each of the measures affects you. It's quite a bit about ISAs, for example, which is lots of people, use. Okay. What about you, Jason? What should customers, what should people be thinking about in terms of their money?

00:11:59:21 - 00:12:19:18
Unknown
Well, for me, the two, perhaps the two most relevant or standout things announced in the budget yesterday. On the one hand, there's this U-turn on plans to cut the cash ISA. People under 65, which had been previously announced, was going to come in next April. So obviously there'll be people who will be pleased about that.

00:12:19:20 - 00:12:53:24
Unknown
That was going to be cut from 20,000 to 12,000 specifically for people under 65. And that would have made, you know, ISAs more complex about listing. And of course, this was actually briefed to the press before the budget. So there were some sort of positive headlines about that at the start of the day. But then in the budget, we then the, the there was a stinging the tell is that from next April, actually the tax rates charged on savings outside of ISAs are to be increased by a further two percentage points, on top of increases that Rachel Reeves had announced would be coming in in April.

00:12:54:01 - 00:13:14:13
Unknown
So this will mean from the next tax year, if you've got cash savings that are not in ISAs, and you exceed your annual personal savings allowance. And just as a reminder, the personal savings allowance is if you're a basic rate taxpayer, you can earn up to 1,000 pounds of interest tax free, if you're a higher rate taxpayer.

00:13:14:15 - 00:13:36:05
Unknown
That allowance is 500 pounds. And if you're a higher earner, paying the 45% additional rate tax, you don't get a personal savings allowance. Now, effectively, what will happen from next April is if if you exceed those allowances, and you've got cash savings outside of ISAs, a basic rate taxpayer will be paying 24% tax on any savings interest.

00:13:36:07 - 00:14:02:15
Unknown
A higher rate taxpayer will be paying 44%. And if you're subject to the additional rate of tax, if you're higher, earning over 125,140 pounds, you'll be paying 49% tax on the savings interest. So that is quite a you know, that is quite a big hike on the, the taxation of savings interest. So a reminder to really be looking at your tax wrappers, your tax efficient vehicles.

00:14:02:15 - 00:14:19:17
Unknown
And the good news, the cash. I say you can now put 20 grand, as you understand, 6520. You can still put 20 grand a year into it. Yes. And of course, there's also been changes that came in already this year. So a bit higher tax on dividends higher capital gains tax. So whether you're a saver or an investor ISAs are really important.

00:14:19:17 - 00:14:42:01
Unknown
Make as much use of those as you possibly can if it's sensible for you to do so. But also actually this much higher taxation on savings should make people think. Actually, first of all, have are you holding too much cash versus investments? Because having having you know, a cash rainy day fund is really, really important because life is full of emergencies and you need cash for short term needs.

00:14:42:01 - 00:15:16:08
Unknown
But there are quite a lot of people who perhaps hold too much cash for long periods of time that they don't need access to for several years. And this should just really sort of prompt them to have a look and consider, is the toe into the stock market? They be investing some of that money. And you know, so that that I think is the first consideration, use this as a prompt to have I got the balance right, between, you know, longer term investments and the cash savings you might need to call in the short term, as well as actually what opportunities are there to hold your cash or investments in a very tax

00:15:16:08 - 00:15:40:02
Unknown
efficient way. So this is an opportunity, given the changes in the budget, to stop that, step back and look at your how much do I have holding in cash? How much do I have vested in this. This is kind of a a prompt your once a year on your to do list to do something. Sebastian, what sort of stands out to you from this perspective of the sort of the economy and investors?

00:15:40:04 - 00:16:03:23
Unknown
So as you mentioned, there's a lot of detail in this budget. There's a lot of individual measures. Yeah. But the fascinating thing to me is the judgment of the Chancellor. Because you, me, the new prime minister as well may go into this, which is to largely let us all out, because at a macro level, economists have been spoiled recently, we've had blockbuster budgets and all been entailed, over recent years.

00:16:04:00 - 00:16:28:04
Unknown
This one is, much, much, much more modest size on some barely a 10th of the scale of what Rich was announced, for example. Yeah. Well, I was looking, so I'm sure you look at them, the tables at the end of the Treasury documents at the end of these 100 or pages and it says, you know, what is the overall taxation increase, overall spending increase, and the numbers were very small, very small.

00:16:28:09 - 00:16:56:24
Unknown
Now, that's not to say we haven't seen shifts in the environment. You know, there is going to be more borrowing, happening this year and next year and the year after. But and the Chancellor has largely made the decision to let the headroom take the strain, if you like. And where there have been new measures that have cost money, he's largely gone out and found other areas of the economy normally quite narrow, to raise revenue to match those demands.

00:16:57:01 - 00:17:13:14
Unknown
In, in the grand scheme of things. So let's just talk a little bit then about, the economy with you, Sebastian, because that has big implications for ordinary people, whether they have jobs or whether they can get, you know, a pay rise, whether whether their mortgage is going to cost more. So let's just talk a little bit about the economy, first of all.

00:17:13:17 - 00:17:37:05
Unknown
And as soon as the Chancellor sits down, the Treasury releases all the pieces of paper. And the Office of Budget Responsibility also really releases their analysis of the budget. And that includes the Office of Budget Responsibility's forecasts for the UK economy. So what what was the sort of message from that in terms of the economy going forward? Yeah.

00:17:37:05 - 00:18:08:23
Unknown
So the big story here in those forecasting documents is one that starts with inflation. The previous fiscal event we had back in March was just in the very early days of the Iran war, and the energy shock which came off the back of that. And what we see today when we compare those sets of forecasts is clearly, a situation where everyone's going to be paying much more for energy, whether you're a household, whether you're a business, whether you're importing it as a country or not.

00:18:09:00 - 00:18:33:16
Unknown
And that's had an understandable effect on principally inflation. So we've got energy costs higher. We've got inflation across the economy being higher. And we'll find out a bit more detail next week when the Bank of England meets. But we've got markets have raised their interest rate expectations and most market rates of interest have risen as well.

00:18:33:18 - 00:18:57:22
Unknown
Most of that is normally couched as a bad thing because that's what's done the damage to the fiscal headroom, clearly. But I do want to give one sort of nod to the fact that despite all that, actually, growth, kind of good old fashioned GDP growth has beaten the Office of Budget Responsibilities forecast back in March, not by a phenomenal amount.

00:18:57:24 - 00:19:18:17
Unknown
But on the latest data, we are up about 2% on where we were this time last year. So there is a phenomenal resilience in the UK economy in spite of all the headwinds that are being thrown at it. Now, you alluded that to the Bank of England meeting next week. So before, Iran interest rates had actually been expected to be cut.

00:19:18:19 - 00:19:46:24
Unknown
Now markets are looking at a rate rise next week. Yeah. So 3.75 to 4 and then potentially at least another three. So inflation interest rates government borrowing and sterling. Are they sort of independent to what's going on to the budget. They're very much part of the same story. This this wasn't a budget which in itself changed the dynamic for those factors that it's it's reinforced.

00:19:46:24 - 00:20:09:15
Unknown
It if you like. Because there was nothing in the budget which dramatically changes the outlook for inflation. The government hasn't just yet. It has made some, some measures to give breathing space here with that, but it's not directly intervened in a kind of Covid style spectacular way. So we are we have seen inflation go up to about 3.5%.

00:20:09:15 - 00:20:47:03
Unknown
We are expecting it to go up further. No one knows exactly where that is going to, top out at because it depends on the US. And interestingly, last time we had an oil crISAs, Putin invaded Ukraine. If I can remind everybody, inflation got to double digits. Absolutely. And that's not what we're expecting. This time. It's not but I think you're looking at the latest, as in the last couple of weeks worth of energy market data, you're now much more likely to see people forecasting peaks of 4% heading towards 5% inflation for inflation than you were, a couple of months earlier.

00:20:47:05 - 00:21:08:23
Unknown
Now, we'll learn a lot when we hear what the Bank of England says about that. Like you mentioned, markets are expecting a rate rise next week. That's what we expect to see. But there's still a lot of uncertainty about what happens after that. And in general you've got a situation where markets are currently pricing in. On average I see more rate rises than necessarily the average forecast that you can find.

00:21:09:04 - 00:21:28:09
Unknown
So there is a lot of uncertainty over exactly the appropriate, interest rate response to this shock. And we will talk about the impact of mortgages later. If you look at the market reaction. So sterling in the foreign exchange markets, gilts, which is government borrowing, how much it cost the government to borrow and the stock market's pretty muted yesterday.

00:21:28:09 - 00:21:48:14
Unknown
What does that tell us. So I'd say that much of this was anticipated in terms of direction. So we have seen an increase in gilt rates, the cost of government, rising money in the market, interest rates for the government. And that filters through to every other interest rate in the economy by hook or by crook. We're not alone in that.

00:21:48:16 - 00:22:11:02
Unknown
The US has seen that many countries in Europe have seen that, but we have I think it's fair to say, you know, you can look at the numbers, I think like this phrase, the swathe of kind of interest rates or if you compare rates to other G7 nations, we've definitely drifted towards the higher end of that swathe, a bit more than we were necessarily a few years ago, cost us more to borrow than most other developed countries.

00:22:11:06 - 00:22:32:20
Unknown
More, more deterioration. And, we're still in the pack, but more so. So that is an increasing factor in, in this fiscal calculus, how much is available in the future. And remember, I think the in terms of debt interest, it cost the government 110 billion a year. If I reset interest alone. So this is when we talk about interest rates.

00:22:32:20 - 00:22:54:05
Unknown
This is not an insignificant amount. What do you think the overall budget tells us about the government priorities and trade offs? What's the sort of well then getting down to little weeds, let's, let's what do you think it tells us about? Because this is new Prime Minister, new charts. What does it tell us? We had a lot up.

00:22:54:05 - 00:23:15:09
Unknown
A lot up for, up for grabs here. Yeah. Decision number one. Stick with the same fiscal rules. Yeah, that was a big conversation. Ahead of Burnham's premiership. But John Healy, has, very deliberately stuck to, the, the the current form of fiscal mandate. That's a mandate itself, which has evolved over the years.

00:23:15:10 - 00:23:47:08
Unknown
So some like responsible tax and spending. Yeah, that's that's how we could call fiscal policy. I am responsible tax. And spender. The critique that you'd see offered at the moment is, yes, that works in the spreadsheet. But the implied spending cuts you need to deliver in real terms to unprotected departments. So those outside health and education and defense, they start to look pretty tough to deliver in year two, three and four of the forecast.

00:23:47:10 - 00:24:08:04
Unknown
So just at the time of a general election, yes, we've got a plan for that responsibility, but we've done a better job at saying we've got a plan for it than we have delivering it. Yeah, for all sorts of very valid reasons in recent years. But there is a, there is that, discontinuity, if you like, which which is certainly something that markets are very interested in.

00:24:08:06 - 00:24:37:18
Unknown
Okay. Well, that's a good scene setter before we go into people's personal finances. So let's now move away from the big macro picture into personal finances, savings and investment income. So Jason, you said earlier the the thing that was sort of, a bit of a surprise, this additional tax on savings, and property income. Can you just again recap it and then and then what are you thinking on it.

00:24:37:18 - 00:24:57:08
Unknown
Yeah. So obviously you as I said, the thing in the tail is that whilst the cash ISA that had been baked in is not going to happen, is, the Chancellor is actually going to increase the rates of tax on the both savings income and property income, by to let investors by to let investors and landlords.

00:24:57:10 - 00:25:19:08
Unknown
And I guess it's quite unusual to raise a tax that's a, that's baked in for already baked in for a tax rise that hasn't yet been implemented. Oh, I see, yes. So essentially, Rachel raises announced that from next April, tax rates on property income and cash savings would increase by two percentage points. That is now going to go up by four percentage points.

00:25:19:08 - 00:25:45:03
Unknown
So that's that's quite a big rise. And if you are a higher rate taxpayer effectively the government will be taking away half your interest a year. Correct 49%. Yes. And that kind of means that you actually might not even be keeping up with inflation, because this key thing about cash savings is it's not what percentage you get, it's whether that percentage is above inflation.

00:25:45:03 - 00:26:05:09
Unknown
Otherwise the value of your money is eroding. Exactly like it's like the first place you need to get to to hold the real spending power of money after inflation is you got to deliver return at least in line with inflation and obviously post tax and a post tax return. So yes. So the value over time that spending power gets reduced.

00:26:05:11 - 00:26:32:11
Unknown
So this this could be significant Sam. So for higher tax for this higher tax on savings and property, how is this going to cause change. People's financial plan. And particularly as we said, that if you are a higher rate taxpayer, then half half of it's, you know, half of it's going to the government, right? So, so how do you how do you when you sit down with somebody in this position, what conversations do you have.

00:26:32:13 - 00:27:02:07
Unknown
Yes, I think you know, as much as taxes, you know, designed to bring some money in for the Chancellor, they also at the same time are designed to, perhaps incentivize other things. So tax behavior. Yeah. Yes. The tax break raises money, but it also alters people's behavior. Exactly that. So, you know, I think those that have got savings, which are outside of the ISAs or pensions, and they will be obviously, taxed increasingly.

00:27:02:09 - 00:27:25:16
Unknown
It's a good time to have a look and make sure you are using those, wrappers. As Jason was saying earlier, make sure you're using your eyes for allowances. Make sure it's you're using your pension allowances where possible as well. Obviously if you've got if your spouse has, we'll have that and allows allowance as well. So if you're not normally maximizing that, that's something worth looking at as well.

00:27:25:20 - 00:27:53:03
Unknown
And families again really echoing Jason earlier is can if you've got lots of cash actually can some of that be invested to create a greater return and therefore increasing your chance that you're going to beat inflation and fight inflation? So, Jason also mentioned that the cash ISA limit is not going to be reduced. 12,000 of the cash ISA limit will remain at 20,000.

00:27:53:08 - 00:28:25:16
Unknown
But we've had a number of changes on ISAs. We've got quite a few announcements. Can you just talk them through please. Yeah. So I mean the big one was on the cash ISA. Yeah. The cash analysis that that's, that's taken the, taken the big headlines. We also had a, first time, buyer ISA announced, this essentially replaced will replace would say, the, the lifetime ISA, lifetime ISA has been with us about just under ten years now.

00:28:25:18 - 00:28:41:10
Unknown
It was probably always a bit of a complicated products, and it was sort like a bit of a pension and a bit of a way to buy a house. Yeah. And, you know, you could only have it up to a certain age. And then if you broke the rules, there was, a tax charge on it. So it was, it was it was always quite complicated.

00:28:41:10 - 00:29:03:10
Unknown
And there's been an increasing number of people, who receive that tax charge, which sort of suggests it's not. It's working as intended because, because essentially, if you put your money into the like, lesser lifetime ISA, and then you wanted to buy a house more than 440, 450,000 pounds, you wouldn't you wouldn't get your money back. But that's now changed.

00:29:03:10 - 00:29:25:21
Unknown
The government is going to change that. Yeah. That's right. So, if you have properties above 450,000 pounds, you'll no longer, receive that tax charge. So what you'll at least get, at least won't be negative. Which, you know, I think is probably a nice thing for people not to lose money in this product. So, so that's the good thing about the lifetime.

00:29:25:23 - 00:29:48:19
Unknown
ISA but, you know, more generally, the first time buyer I sell, is there to correct some of the things that, perhaps, ones are great about the lifetime ISA. So, for example, is only at the, consultation stage at the moment. But some of the things, that they're looking at is that, for example, not being a an age limit to it.

00:29:49:00 - 00:30:07:07
Unknown
Okay. And another thing is essentially that you get the bonus at the end when you take it out rather than at the start. So if you do not if you don't use it for that or you don't meet the qualification, you don't get penalized as you know, you're not going backwards essentially, but you do not get the bonus.

00:30:07:09 - 00:30:26:18
Unknown
There are a couple of things, you know, to bear in mind is so there's a lot it addressed it the first time buyer also addresses this problem with the lifetime ISA, which had this sort of exit penalty. If you want to take the money out early because it pays the bonus at the end. But there is an absolute cap on the on the amount of bonus, which is 20,000 pounds.

00:30:26:18 - 00:30:52:19
Unknown
So essentially, because the bonus at 25% of the rate of the value of the account, it means that once once you've accumulated both through contributions and through investment, growth or or interest 80,000 pounds, you'll get them the maximum bonus of 20,000 pounds. But you know that not having the exit penalty certainly addresses one of the one of the perceived problems of the lifetime ISA.

00:30:52:21 - 00:31:15:10
Unknown
However, it's kept this 450,000 pounds cap on the value of properties you can buy, using, the account. And, you know, one of the perceived problems with the lifetime ISA had been, of course, 450,000 pounds could buy you a quite handsome property in certain parts of the country, but actually is problematic in, you know, parts of, in London and parts of the South East.

00:31:15:10 - 00:31:39:06
Unknown
And so obviously, you know, with the with the new scheme envISAging keeping a 450,000 pound cap is arguably, you know, not dealing with that particular problem. Do we know. And there's also a and I said to encourage people to invest but we don't have much information on that either. So when are these new products coming out. Are they in consultation.

00:31:39:12 - 00:32:03:14
Unknown
All they actually committed to. Like if people are listening to this and said, I didn't like the list because I thought it was pension and purchasing a property, I like the sound of this. When are the actual key dates? How much information do we have? Are we consulting or what actually happening? So both both the the first time buyer ISA, which is the housing that's for housing and the starter, I still new to the stock market.

00:32:03:14 - 00:32:28:13
Unknown
That's right. Yep. They're both in by both in consultation stage. I've seen some information that said might be 2029 for the first time buyer. I still wasn't allowed to say there's absolutely no detail on the, the Delta ISA, as yet, but, you've got, you can still keep using the lifetime ISA, up to the point where the first time buyer ISA starts essentially.

00:32:28:15 - 00:32:44:16
Unknown
And then Jason, the people sitting at home thinking, well, I've got these tax wrappers that I can use, I can use my pension or I can use my ISA, and I've got all these plethora of ISA options. How do you go about deciding, well, do I put it in the pension? Do I put it in an ISA?

00:32:44:18 - 00:33:04:17
Unknown
How would you like how how would you help people to think about that as a decision? I mean, it's a really good point to make. And I think ultimately comes down to thinking about, well, what what might I use this money for eventually? I mean, the two single most important long term tax efficient savings wrappers available in the UK are ices and pensions.

00:33:04:17 - 00:33:29:11
Unknown
And pensions have the most generous tax perks because when you subscribe to a pension, you get essentially tax relief that your marginal right. And so particularly if you're one of the ballooning number of people who are paying tax at a higher rate tax, it's very generous. But the quid pro quo is they are designed for retirement and therefore you can't currently access a pension until age 55.

00:33:29:11 - 00:33:55:23
Unknown
And that is due to go up to age 57, in 2027. So obviously, you know, you get very generous tax treatment on the way in, but it is there to help you say specifically for retirement, ISAs, essentially, you're not getting any upfront tax relief, but all returns within an Ice. Whether it's interest on cash, whether it's dividend income shares or gains made on investments is tax free.

00:33:55:23 - 00:34:18:13
Unknown
And you can take your money out at any point in time. So what they offer is greater flexibility. So it really depends about thinking actually a bit of both really. Well this is the answer actually it isn't really. You know either it shouldn't be an either or. Obviously, most people these days will get a pension through their workplace because they're automatically rolled into one.

00:34:18:15 - 00:34:42:23
Unknown
But, you know, if you're thinking, well, actually, I might want to build up some money to have a dream holiday in ten years time or to pay off a mortgage. And I guess there's likely to be more flexible way of doing achieving that. And so doing a little bit of both can make sense. I think sometimes, you know, I often find speaking to friends, they get very fixated on, I need to put as much as possible into my pension.

00:34:43:00 - 00:35:09:06
Unknown
And, you know, it really does make sense to diversify how you hold money in the investment world. We talk a lot about diversify, diversify. Don't have all your assets and eggs in one basket. Make sure that you haven't got all your money in the UK or the US sell or shares, but that in some ways also applies to tax wrappers, because we've actually seen a lot of changes to the tax treatment in pensions over many years.

00:35:09:08 - 00:35:34:12
Unknown
Thankfully nothing to major in this particular budget. And that is another reason why perhaps you should, you know, have a mixture of tax wrappers. Absolutely. So now we're talking about people's sort of income and their personal monthly finances. Now, very importantly, Labor's 2022 election manifesto promise not to increase National Insurance income tax or VAT for working people.

00:35:34:12 - 00:36:01:19
Unknown
Now, obviously, Prime Minister wasn't an MP at the time that manifesto commitment was made. However, he has sort of inherited it. And that's why we didn't see any of those changes in the budget yesterday. But hidden behind that headline is something called fiscal drag. Now, what that means is that the threshold at which you move into higher tax brackets are frozen.

00:36:01:21 - 00:36:30:15
Unknown
And that means as you get your pay weight, your you'll you'll you'll pay increase year by year. You slowly get dragged into higher and higher. And that has a significant impact on people's finances, what they take home at the end of the month. And, and, and the scale of the impact is shown in the, in the tables at the end of all these documents that we look at and that I know you think that's really important and that's what people should be aware of.

00:36:30:17 - 00:36:51:18
Unknown
Exactly. So I think actually, whilst we discuss some of the measures that were announced in this particular budget yesterday, actually people should bear in mind changes that were made in previous budgets that will continue to have an effect over a number of years. And this issue of frozen allowances and thresholds, which actually began under the last government. Okay.

00:36:51:20 - 00:37:14:13
Unknown
So and have been were extended by Rachel Rees out until April 2031. That's a long period of time. And when did they start? If I'm allowed to pause, I can't remember the 22. So a long time is a long time. And there many other tax allowances like the threshold for inheritance tax, the personal savings allowance that, you know, haven't been touched for years and years.

00:37:14:13 - 00:37:37:20
Unknown
So you know that the real value of those thresholds is, is, is actually declining when you factor in inflation. So, you know, what this means is it is, you know, many more people are getting dragged into those higher rates of tax or finding that more of their overall income is falling within those higher, higher rates of tax. And so, you know, it's a it's a slow burn.

00:37:37:20 - 00:38:00:12
Unknown
But you know, effectively it means the tax burden is set to rise. You know, many households steadily over the coming years, even without further tax raising measures because of these frozen allowances. And if I can add to that, that's particularly acute in the kind of inflationary environment that we've seen. So that was always forecast to be the case.

00:38:00:12 - 00:38:19:18
Unknown
But the fact that we've had and is shock after energy shock, which has pushed up prices, which have pushed up wages, means that that's actually an even more valuable trick for governments to, to deploy. And it's even more meaningful for, for people on the receiving end. Absolutely. You know, it's kind of hidden, right, because most people don't feel it until they've gone through five years ago.

00:38:19:20 - 00:38:44:08
Unknown
Exactly. You don't necessarily see a higher rate. You won't see a higher percentage of tax, or change in your, your payslip. But it, it's, it has this sort of slow effect over time. And in fact just to pick up on Sebastian's point, there is the Office of Budget Budget Responsibility, whose duty is to sort of produce independent forecasts based on, the government's budget plans.

00:38:44:10 - 00:39:04:18
Unknown
It updated updated its forecasts yesterday in line with the budget. And even since their forecasts in March, you know, there's quite a significant increase over those years and the amount of tax they expect to get raise for the very reasons is, you know, more inflation creates demands for higher wages just to compensate for that.

00:39:04:20 - 00:39:29:01
Unknown
But, you know, if you're getting a little bit of a pay bump every year, more of your money is going to fall into these higher tax bands or indeed more people potentially getting exposed to income tax at the first time. So so that's in terms of your monthly wage, energy bills. That was a that was probably the most the biggest policy change that the Chancellor announced yesterday is help with energy bills.

00:39:29:06 - 00:39:57:08
Unknown
How much of a difference is that going to make to households. So it's a reasonably big headline number, per household. If you fall into A2D expansive HS2. Thank you. Then we're talking about a 100 pounds payment. So all right. That will be very welcome. To many people that receive it. I think the government would not claim that that is in itself on its own, going to offset the increase that we're likely to see.

00:39:57:10 - 00:40:29:01
Unknown
We still don't have the, the next price cap set yet of them all will be out with that in a matter of weeks. But judging by what's happening in markets at the moment, the chances are that will get swallowed up pretty quickly. So, helpful, but it's very much part of, what, the government is kind of branding its breathing room, approach of trying to do, a collection of individually relatively small things.

00:40:29:03 - 00:40:44:05
Unknown
To help people out on a, on a kind of day to day basis. So, so we have PR, we have energy costs. And then the next one obviously is going to be mortgages, because that for many people at home, that will be a big thing. And we talked about, you know, you've talked about inflation and interest rates.

00:40:44:07 - 00:41:13:05
Unknown
And that that for those who are on standard variable rates, this will you know, the mortgage costs will be going up. Absolutely. So the thing where we're where, particularly nice thing at the moment is, you know, the some of the most common periods for fixed and that rates and, mortgages in the UK are two and five years and, and that we are seeing, that if you cash your mind back to five years ago, you get mortgage rates that started with a one, without too much, too much trouble.

00:41:13:07 - 00:41:45:03
Unknown
So those are, being refinanced up very considerably higher and higher rates. Now, most people that we've, that we've seen have seen income gains over that period. So it's not causing a huge amount of stress in the market, but it is prompting people to, take that decision very carefully, have a look around, reassess their circumstances, and and, choose between whether you make take options about how long to fix or, and what their sort of appropriate product is, whether it's fixed or floating or what have you.

00:41:45:09 - 00:42:03:22
Unknown
But I think we'll continue to see that being a real focus for people, and getting a lot of attention rightly, because it's a big, big swing factor for a lot of people's finance. It's worth adding. Actually, I mentioned earlier that if you all sat on a large amount of cash savings outside of ISAs that you should festival think about as the balance right between that and investments.

00:42:03:24 - 00:42:24:20
Unknown
If you're bout to roll off a five year fixed rate that was really cheap, facing potentially much higher, mortgage refinance costs. One thing you also might want to consider is actually, shall I use some of my cash pile to, you know, pay down the mortgage in whole or in part, depending on your circumstances. So that can be, an important thing to consider as well.

00:42:24:24 - 00:42:44:20
Unknown
So some financial planning. So we've got some, some, some stresses in the system PR, energy costs. Mortgage costs. What would you be. What would you be advising people? I think in the first instance it's understand where, where you are. So as Sebastian said, people are really good when it comes to their mortgages going out into the market.

00:42:44:20 - 00:43:11:23
Unknown
And finding, you know, the cheapest mortgage. But find that people are less good at keeping track of some of the other bills that they've got, whether it's gas, electricity, or, you know, the food bill. So actually, I think there's lots of people and we find there's lots of people that are, perhaps more concerned. And then when you actually break it down and have a bit of a budget planner and see where you are, you're actually may well be in a better position than than you think you are.

00:43:12:00 - 00:43:38:02
Unknown
But until you have that information, you just won't know. So you need to do your budget planning and your living costs in order to have some money that you can invest and save away. Well, at least this is what you do. At least to know. I mean, it's the first instance. You can't say whether you can or you, you know, you may well not be able to say whether you can save or invest, or consistently at least, if you don't, if you don't know where you are, you'd just be a guess.

00:43:38:04 - 00:44:00:11
Unknown
So I think whilst it's not necessarily the most fun way you might spend an afternoon, it is something that's well worth while doing because once you have that, then you know, and then you know what you've got to work with, when it comes to investing as well. And when we talk about, you know, I just mentioned earlier about ISAs and pensions, pensions typically are normally invested.

00:44:00:11 - 00:44:22:20
Unknown
So that's the standard you've got a decision to make when it comes to ISAs. And I guess how comfortable you are and how long term you want that saving to be. Also an influential decision, whether it's a cash ISA which should be a stocks and shares I myself okay. Actually investing regularly is a really good discipline. And one of the reasons why perhaps some people are nervous about taking the step up from being a saved investor.

00:44:22:20 - 00:44:40:24
Unknown
They worry about what the time the timing is. Right. Is the stock market going to crash? You know, and no one likes the idea of putting a, you know, a big sum in and then a week later it's gone down in value. But that's actually a really good way to get around that mindset is just investing regularly a little and often, you know, you can do it on a direct debit.

00:44:41:03 - 00:45:00:06
Unknown
And yes, of course, anyway, some months you'll be buying when, you know, share prices are down, other months when they're up a bit and it kind of smooths out some of the sort of volatility that people puts people off investing. And it's just a great discipline. I always think it's like we don't consciously think, shall I clean my teeth today?

00:45:00:10 - 00:45:21:09
Unknown
Just something you do. So investing regularly through a monthly direct debit is a really good way of just making it, you know, just something easy. Make it easy in the way that most people do with, with a, you know, with, with a workplace pensions. It just happens. Make it easy. Absolutely. In the same way it was to say pay yourself first so you know, full pay yourself first.

00:45:21:09 - 00:45:36:15
Unknown
Yeah. So you know pay pays off in the future first at least. So but you know set that direct debit up. If you know, you've, you've done your budget planner, you know you can afford it. Set that direct debit up the pay the day after you get paid and then it's gone. You can't spend it on, set going out.

00:45:36:15 - 00:45:54:15
Unknown
So what I've tried I said you might have you may appreciate this or not, Sam, but I'm trying to explain to my daughter. Is you. You save first and you spend what you have left rather than spend first. And save how you will how much you have left. I'm trying to say 22. You know, good luck. Right? Okay.

00:45:54:15 - 00:46:15:21
Unknown
Property, we've talked about inflation, interest rates. Sebastian. Again. So a pension could be a large asset for most people, but so can property be. Yeah. So given the OBR forecast what we got yesterday from the budget, your thoughts on the UK property market. Yeah. So what we're seeing at the moment is it's a fairly sluggish market out there.

00:46:15:23 - 00:46:38:12
Unknown
The big rise in interest rates and the higher customer rates that people are paying is meaning that we're seeing that constraint really bind on price growth. And depending on exactly which measure you pick from the various indices it makes reporting the nation that, that, house prices across the UK are rising, but on average somewhere between 1 and 2%.

00:46:38:12 - 00:47:07:19
Unknown
It's very, very small. What we're seeing interesting I think underneath that is quite a split around where you are in the UK. So at the moment it's London in the southeast that's actually under more pressure, in particular because of the propensity for flats. And so the difficulties we've had with those markets, and at this point in time, it's some of the more northern regions, which, yeah, generally have lower levels of borrowing, associated with supporting their prices.

00:47:07:22 - 00:47:36:05
Unknown
So less impacted by interest rates got exactly that. And so we've seen in the North West in particular, house prices up about 4%, and over the last year, so reasonably big, big difference. I think what happens from here, is that with the inflationary sort of surge that we're seeing and the expectation that interest rates are certainly going to go up before they go down, it's going to be hard for that market to radically turn around.

00:47:36:07 - 00:47:53:07
Unknown
So we're expecting another couple of sluggish years. It's a really interesting side point to that, because we mentioned earlier that alongside the increase in tax on savings interest, there was going to be there's going to be an increase in tax on on property income impacting landlords. Yeah. And of course you might think well I don't own any properties.

00:47:53:07 - 00:48:16:00
Unknown
I'm not you know so it doesn't impact me. But actually the OBR, it was interesting in the forecast. They didn't quantify the number. But they did say they expect this measure. And I guess it comes alongside other things that have made life a bit of a headwind for, landlords, notably higher refinancing costs. If there's a, if there's a mortgage, the renters.

00:48:16:00 - 00:48:45:01
Unknown
Right tax has actually, you know, calls more red tape, for landlords, but they essentially, have suggested that they would expect, there to be, a squeeze on supply of rental accommodation because some landlords may just failed, you know. Well, this is this is not worth it. And sell up. And, or indeed they might try and, pass on the, the impact of the tax rises to tenants.

00:48:45:01 - 00:49:04:01
Unknown
So, so they have kind of warned that, you know, this could see higher rents as a result. And that's not a theoretical concern. Like we've seen rental increases actually be really strong over the last few years, helped by strong wages. But precisely showing up those points, I said that least the market is rebalancing around that. So it's just worth bearing in mind.

00:49:04:01 - 00:49:26:16
Unknown
This is one of those examples where you might think, well, that that tax rise won't directly affect me, but that can be second order effects. Well, it could affect your children if they're renting for example, for example, and the mansion tax as well. There had been speculation before the budget that the 2 million threshold might be lowered to 1.5 million.

00:49:26:18 - 00:49:54:10
Unknown
Didn't happen. That didn't happen. Did we get more detail, though? One got a little bit more detail. Essentially the high value property surcharge. Okay. So this is this is a this is a Treasury term that's called a mansion tax. Yes. Call it but just not fuzzy. So they didn't drop the threshold, which I think would potentially cause a political headache because it would have impacted a lot of flats and, parts of London where, there are, you know, many labor constituencies.

00:49:54:12 - 00:50:18:03
Unknown
But, you know, essentially this is a this is a fee that you will pay on top of council tax. It applies. They confirm that this will come into effect in England in 2028. And it will apply to properties worth over 2 million pounds. It's it's kind of, tiered. So, between 2 and 2.5 million.

00:50:18:06 - 00:50:45:04
Unknown
It's a 2500 pound additional fee once you're up, above 5 million pound property, it's a 7,000 pounds rate. Now, some of the things that they, so they sort of confirm that that will be going ahead. But they also alluded to or indicated that they will bring full measures to, for people to be able to defer payment of if they were struggling to be able to make those payments, that there will be certain exemptions or discounts.

00:50:45:06 - 00:51:12:10
Unknown
But the other thing they said is that if a property, is vacant, for 12 months or more, there would be 100% surcharge on that. So in other words, if you had a 5 million house plus house, that was, you know, left empty for over a year, and instead of paying the 7,000 pounds, you'd be paying 14,000 pounds surcharge on top of, normal council tax might be an issue for people with estates with elderly relatives who've died.

00:51:12:10 - 00:51:49:12
Unknown
And they it takes forever to get an estate through HMRC. Yeah. So that might be an issue. So we've got some more detail from yesterday. You got a little bit more detail on it. So obviously you know this this this will have a you know an impact on, on people directly who have high value properties. I think, it'll be perhaps potentially be less about, you know, can they afford a 2500 pounds or whatever it might be, but actually what it does to the property market, because does it mean that if you're trying to sell your house to perhaps downsize in retirement, you know, are people trying to going to be trying to knock,

00:51:49:14 - 00:52:12:21
Unknown
you know, hundreds of thousand pounds off the value because to get it below these thresholds. So, you know, it could potentially gum up the high end of the property market. And these things can have a knock on impact elsewhere. In the same way the, you know, if we do see buy to let landlords selling up, you know, could that mean actually a lot more flats come on the market to purchase.

00:52:12:21 - 00:52:32:24
Unknown
And what what might that do to prices. So, you know, these things can have quite a lot of distortions. And then finally we've gone from property which can be a very large asset to pensions, which can also be a very large asset. And unlike previous budgets, this this budget almost included no changes to pensions. But I imagine, Sam, you're quite delighted about.

00:52:33:01 - 00:52:50:23
Unknown
Yes. Given we've still got some previous budget. Yes changes. So let's unpack that. Yes. So yeah. So so they did announce yesterday something called the two year rule. So that was probably the only thing that was announced yesterday. So can you just explain a little bit about that before we go to the the bigger change that was announced last year.

00:52:51:00 - 00:53:11:18
Unknown
Yes. So if, if you have a relative who it passes away below the age of 75, the funds come to you, come to you income tax free provided that the estate and they're claimed within two years. However, as you just mentioned, it can take quite a long time. It's not infrequent that it does take over two years.

00:53:11:20 - 00:53:38:16
Unknown
And people are being sort of caught out and penalized just simply because the process is taking far too long. And so that that two year rule is being, abolished. Because obviously it's not necessarily your fault if solicitors or estates, etc.. So that's, that's one thing that probably makes it fairer for, for people. You know, something's not that's always I say, okay, so, so if it takes longer.

00:53:38:16 - 00:53:56:20
Unknown
So if somebody dies on to 75 and it takes longer than two years for you to get the hands on the money, you're not going to be penalized by tax essentially. So that was that was it for pensions yesterday. Fantastic. But what was the big change that's coming in in April 2027. Because that's the biggie. And that was announced last year.

00:53:56:23 - 00:54:23:16
Unknown
It was announced last year wasn't it. I think yeah. So basically you're currently, pensions, if you have residual funds in a, in a pension, they are passed on to your beneficiaries, free of inheritance tax. So they're outside your estate. What that meant was, is that traditionally we would say, you know, so within reason, put it in much money into your pension as you can.

00:54:23:22 - 00:54:45:13
Unknown
It's a good inheritance tax tool. And similarly, conversely, the other way around, when, when it comes to taking money, which they use ISA funds, normally anyone would use those funds. Firstly that last. However now from April next year, this will now form part of your state. So, you know, people can have very sizable pensions. We mentioned fiscal drag earlier.

00:54:45:13 - 00:55:09:21
Unknown
That's something that's really affected. Inheritance tax. And with property prices rising over time, plus now you've got this big lump, potentially hundreds of thousands of pounds coming into the estate. It might mean the change could be massive. It could easily be tens if not hundreds of thousands of pounds. Now, you'd be liable for inheritance tax if you were to pass away.

00:55:10:02 - 00:55:33:09
Unknown
And this is in addition to the tax we were talking about earlier, where whereby if you pass away over 75, it gets the, the funds get charged income tax to your beneficiaries. Right. So their marginal rate as well. So you could be double taxed essentially. On that. So it's, it's really quite significant. And that's changing A4.

00:55:33:12 - 00:55:57:22
Unknown
So people should go away and do some research on that and look at maybe the information that we send them at the At after this web of this webinar. Yeah, absolutely. I mean, it is quite a complicated, piece is dependent on, for example, the, the tax rate of your beneficiary, your tax rate as to whether you now say, should I take pension money first or should I continue to take some money first?

00:55:57:24 - 00:56:20:05
Unknown
So it is a bit of a Neil, that nuanced piece. Also some of the, some of the, things which you can do to so to mitigate that, can be, can be a bit more complicated and, and can be worth seeking financial planning for. Because, yeah, it takes a bit more, a bit more of a time and, concise effort.

00:56:20:07 - 00:56:42:01
Unknown
I agree. I mean, it's really important not to get fixated on, one pot of assets, but to consider your estate planning or just holistically across because there are lots of things you can do. You can reduce the liability by gifting money away, but don't give money away unless you're really confident you won't need it to fund your retirement or fund care costs.

00:56:42:06 - 00:57:10:00
Unknown
So you know, good financial planning well will typically involve actually doing what we call a cash flow model, kind of projecting, you know, what assets and savings you've got across different pots, what kind of lifestyle you want to leave and, and trying to sort of project that into the future. And that can give people a bit of line of sight as to, you know, can I comfortably give some money to my kids or grandkids now, rather than wait till I'm deceased?

00:57:10:02 - 00:57:37:15
Unknown
Without, you know, potentially jeopardizing your own retirement. So it's really important, I think, for people to, you know, get some proper advice on this because then you can sort of plan, can I afford it? Can I not afford it? Because if pensions are coming into inheritance tax, then you, you know, you do not want to be facing, the full bill for the inheritance tax plus the, you know, the marginal rate of income tax for each person, because at that point your pension is getting taxed at like 60, 70%.

00:57:37:15 - 00:57:53:22
Unknown
Right. And that's not what you want to do when you. And if you've got anything left when you retire. Yeah, exactly. I mean I think a really good point with regards, to the cash flow planning. And you know, earlier I mentioned when we're talking about day to day, you know, a budget planner or actually this is your budget planner for, for your life and inheritance tax.

00:57:53:22 - 00:58:16:07
Unknown
You know, you wouldn't actually know. You know, there's only a certain amount of certainty you can have because we can't see into the future. But you have no idea. You know, there's so many different variables, whether it be with inflation, etc., markets, markets. So this is how it gives you some confidence though, because you build the assumptions in but just to give you an idea, you know, close idea of what what they are also the possibility.

00:58:16:08 - 00:58:38:05
Unknown
So so a plan is sort of does like a monthly budgeting kind of analysis. And then the long term plan pretty much. Yeah. Yeah. And it it will forecast it. And and then yeah just show and demonstrate what you know is where you fall. So, so that's we do have some questions. And this they're challenging questions.

00:58:38:05 - 00:58:59:00
Unknown
So fantastic. Thank you audience for such challenging questions. I'm not sure I'm going to find anyone who wants to answer this one, but we'll give it a go. What should I do with my spare cash? I have throughout the year? Overpay my mortgage, pay down debt, savings or investment? Oh my word. Fantastic question. Not sure any of them going to want to answer it.

00:58:59:02 - 00:59:18:16
Unknown
Hey, who wants to nominate who to answer that question? I think it should be Sam. Yeah. So really that's the reason that question is so difficult is because it's so broad. Well, there's no answer, right? That there's not a specific answer, not without. So when when, you know, if I did great questions, by the way, if I decline, you ask that question.

00:59:18:16 - 00:59:37:03
Unknown
The first question is I need more detail. You know, what case of what's your income, what's your expenditure? What's your risk tolerance. Because I it could mathematically work out better to invest. But actually you might not want to take that level of risk. And you might, you might, prefer to pay off the mortgage because that's more certain, right?

00:59:37:03 - 01:00:01:14
Unknown
You got you can kind of say and some people, I think, you know, British people in general, more comfortable with, with the mortgage type things. So again, it's kind of comes back that also those basics of like kind of the budget planner and and seeing where you are, what you're most comfortable. Do you feel like a psychologist sometimes when people come to you with their money because people are very emotional about money.

01:00:01:16 - 01:00:17:24
Unknown
Yeah, absolutely. I mean, the most interesting part of the job, especially when you come to risk and talk about risk, you know, you get some people that have their we got lots of headroom to take a lot of risk, but just don't feel comfortable doing so. Okay. No, I don't I don't think I can give this all to Sam, to be honest.

01:00:17:24 - 01:00:39:05
Unknown
I think you're gonna have to get involved. I think that I mean, Sam is absolutely right. There's not enough information to go on. But as a general rule, if you if you've got large amounts of very expensive debt to service or you're running with a surplus on your credit cards where you're paying, you know, high rates of interest on that clearing those really should be a priority before you start investing in the stock market.

01:00:39:07 - 01:01:04:00
Unknown
Equally, you know, don't leave yourself in a position where you have no emergency cash savings. You know, generally, it's wise to have a pot of money that, you know, if if you weren't able to, you could. Well, we've got that question next. Right. So again, challenging credible, great questions. What is too much cash. How many months expenses should your emergency fund cover?

01:01:04:02 - 01:01:28:03
Unknown
I'm like, no, you can't, you can't. You know you can't do that. Jason. You guess it's time for you both to have a question. Answer it. It depends. I would say at least six months. That money that could keep you, going if you suddenly you weren't able to work. But actually, you know, might, you know, other people might want to keep enough money to, to, to survive off for a couple of years.

01:01:28:05 - 01:01:51:04
Unknown
Yeah. I don't it's a Sebastian's. I'm take that lightly. I just think. Yeah. Go for it. Generally we should say the 6 to 12 months sort of region. But exactly as Jason says, if you've no you've got, you know, your income is a bit less stable or, you know, maybe if you're, using sort of retirement funds, you might want to keep a couple of years.

01:01:51:06 - 01:02:12:06
Unknown
So it's again, dependent on your situation and one reason to quit. Now, we know we've got we've got loads of questions. We quickfire round. We've got a minute on each answer. I'm not letting you get away with it. I'm sorry. How have the budget announcements affected investments stock market this year? So this has been a strong year of returns for investments.

01:02:12:06 - 01:02:32:10
Unknown
And across global stock markets this year. Footsie is part of that story. It's not the it's not the highest returning, but it's been a really good return. And so, this budget itself, that hasn't derailed, that I'm very pleased to say follow up question why should a small private investor put money into UK equities rather than us?

01:02:32:12 - 01:02:59:05
Unknown
Ooh, after this budget, what does actually change to make Britain a more attractive investment destination? So I'm going to preach on diversification, first of all, which is that's a bit of a swerve. Everyone's priority. But I think in terms of how the UK positions itself is being open for investment, one of the interesting things that we've been talking about with our commercial customers is, the introduction of, Founders relief.

01:02:59:07 - 01:03:18:06
Unknown
To that, try and set up a part of tax system where, people who create wealth keep a slightly higher proportion of it. Can I just add one thing to that is people often assume the stock market and the economy are one and the same thing. Now, of course, there are businesses on the London Stock Exchange that are quite domestically focused housebuilders, for example.

01:03:18:11 - 01:03:43:03
Unknown
But actually overall the UK stock market is very international in nature. Firstly, hundred about 70% plus of its earnings are actually made overseas. You know, if you're a big energy company, you're not really a play on the UK economy. So don't confuse what's happening domestically in the UK and the returns on the UK stock market. But see is up about 11% so far this year.

01:03:43:05 - 01:04:06:01
Unknown
In total return terms. So pretty good. I'm at the beginning of my career, not me. I'm clearly not at the beginning of my career, but this is a question the beginning of, career falling into the 62% tax trap. What should I do with any earnings over the next 100 K threshold? What are my options to reduce tax liability?

01:04:06:03 - 01:04:25:17
Unknown
If he wants a pension, put it into a pension. That obviously comes out of basically you get the tax relief back essentially. So because of that and you'll also get your personal allowance back, should you put it into a pension. So it kind of takes that problem away providing you can afford it. Can you just explain the power of compounding as well?

01:04:25:22 - 01:04:46:18
Unknown
So with pensions and with the stock market, the earlier you start significantly less you have to save. I was trying to explain compounding to my daughter, who was not great at maths, so it has taken quite some time. I'm still not sure she's got it. But the thing about investing is the earlier you start, the less you have to sell.

01:04:46:18 - 01:05:04:24
Unknown
The first pound you invest is always going to be the most valuable. Because compounding simply means you're not just making a return on the original sum invested, but as as it accrues in value, you're also making return on on the gains you're making on the way. And Albert Einstein called it the eighth wonder of the universe, I think.

01:05:05:01 - 01:05:22:22
Unknown
So, you know, it's it's that power of actually making returns on returns. I think I was a statistic about Warren Buffett, and I think he made like 90% of his money in the last ten years. And this and so what it is when you start investing is the first 10 or 15 years, you won't feel the benefits.

01:05:23:03 - 01:05:39:12
Unknown
And then by the time you've actually got a chunk of money, you suddenly it's like an exponential light. So if you want 62 grand a year, whoever you are on 62 grand a year, you've got to be good at maths or I'm hoping you are. So go and have a look at compounding and exponential graphs, because that's the basics of why you should invest for the long term.

01:05:39:17 - 01:06:08:10
Unknown
Absolutely. One final question. It's good job we got four minutes because it's not an easy question. Can you go into more detail about pension coming into inheritance tax and how it's double taxed, and where can I read up about it more? I think this is a Jason question. And Sam and Sebastian, if you feel you wish to add in, we have a little typo in a nutshell, current rules are that a pensions don't form part of your estate for inheritance tax purposes.

01:06:08:10 - 01:06:41:15
Unknown
So inheritance tax isn't your pension, IT assets aren't included in an IHT calculation. However, the tax treatment is if you leave the house. By the way, relate to money purchase pensions. So where you've actually got to investment pot, some pension pot and so forth, and a pension based on your salary. Exactly. A pension pot. So, the current rule is that, whoever you leave your pension to, if you die, if there's any assets left, left, if you die before age 75, they can inherit and draw upon that, that pension pot, entirely tax free.

01:06:41:17 - 01:07:03:17
Unknown
If you die after age 75, the the person or persons you leave it to when they take money out, that will pay income tax on it, and that could be at 45%. Could be at 40%, could be at the basic rate of tax, depending on their tax circumstances. What will happen next April is your pension pot could potentially be clobbered by inheritance tax at 40%.

01:07:03:19 - 01:07:31:12
Unknown
If your state is above the minimum thresholds, and then if you're over 75 when you die and whoever inherits it could then also pay income tax on what's left so the tax treatment will become particularly punitive. Whereas obviously under the existing rules, it's quite a so let's just do the maths. So 1,000 pound pension, that comes into your inheritance tax, and that is taxed at 40%.

01:07:31:12 - 01:07:55:21
Unknown
So 1,000 pounds in the pension gets taken down to 600 because 40% goes in tax. If you have an inheritance pot and then people, then then people, then you're paying the people are taking money out, are taking an income tax at their marginal rate. So you could look up to 70% of your unused pension pot goes back to the government, correct.

01:07:55:23 - 01:08:13:07
Unknown
I now look at you for the solution. So I mean, you know, going back has to be quite a quick solution. I've only got a minute. So one of the things I said earlier was about, incentives. So this is kind of designed to incentivize cruise shipping for people in that as they get older. Yeah. That's the first thing that's about.

01:08:13:09 - 01:08:33:00
Unknown
Spend it. Spend it first if you can. Next thing is, gifting. So if you know you've got more than you need, look at look at gifting. And that could be through trusts or it could just be direct gifting. And then after that it starts to be a bit of mitigation. So it's okay. Look, you need the rest.

01:08:33:00 - 01:09:00:16
Unknown
What's the best way we can get you the lowest tax rate we can achieve? On, on this. I don't I don't know that a financial planner is telling me to go and spend my money. Fantastic. Another option that some people consider. So, you know, there were various gifting allowances. But ultimately, under current rules, if you make a gift to someone, if they if you live for at least seven more years afterwards, it'll be exempt from or potentially exempt from from inheritance tax.

01:09:00:16 - 01:09:27:19
Unknown
But another thing that you know, we're seeing some people do is actually, take money out of their pension to, to buy essentially a whole of life insurance policy and trust that will basically pay the tax bill on your death so that your beneficiaries don't have to worry about coping with a big tax bill. It's really important to remember that the tax will be paid by whoever you leave those assets to.

01:09:27:21 - 01:09:47:14
Unknown
And they may not be rich people. Your grandchildren may not be wealthy. So yeah. So there are various things to consider there. Well, thank you to Jason, Sam and Sebastian for sharing their perspectives. And thank you also to everyone who joined us and sent in a question we appreciate. There's an awful lot to absorb after a budget.

01:09:47:16 - 01:10:09:11
Unknown
The announcements affect people in different ways, and over the coming days, we will be sharing more information on those key announcements and how they could affect your everyday finances, savings and investments. So if you are an existing customer and would like to discuss your savings or investments, you can contact the team through the usual channels. And thank you again for joining us.

01:10:09:11 - 01:10:13:05
Unknown
Fantastic questions. So goodbye.

01:10:50:22 - 01:11:09:24
Unknown
To you.

01:11:10:01 - 01:11:14:10
Unknown
For.