UK interest rates quadruple in two months

Government bond interest rates quadruple in January and February.

The UK base rate may be stuck at 0.1%, but there is interest rate movement elsewhere. The Bank of England has kept its base rate below 1% for over 12 years now. The rate first dropped to 0.5% on 5 March 2009, during the financial crisis. It did briefly rise to the dizzying heights of…

CPI – Inflation at a turning point?

Inflation measured by the CPI may be set to return

We could see a jump in inflation soon. The pandemic has posed problems for the Office for National Statistics (ONS) when it comes to calculating the rate of inflation. For example: How do you measure the price of an item or service when a lockdown means it is not for sale? Two good examples are the…

Pensions lifetime allowance devaluation continues

The The Budget announced a five-year freeze to the standard lifetime allowance or SLA

The Budget announced a five-year freeze to the standard lifetime allowance for pensions. The standard lifetime allowance (SLA) is an important pensions number. It effectively sets the maximum tax efficient value of all your retirement benefits, in the absence of any legislative protections (of which there are many). To the extent that the SLA is…

The spring 2021 Budget

The 2021 Budget represented a tightening of the screw from a tax perspective

A quiet turning of the tax screw. Just before the Budget arrived on March 3, it seemed as if the Chancellor would have nothing to say that was not already public knowledge. However, while some of the many leaks were confirmed, none of the pre-Budget pundits correctly predicted the Chancellor’s strategy. Instead of cutting borrowing,…

Interest rates double since March 2020

No, the headline is not wrong… Interest rates matter. At the personal finance end of the spectrum, they determine what you earn from bank deposits (virtually nothing at present) and what interest you pay on your mortgage (about 4.4% if you are paying the average standard variable rate (SVR), but much less for most other…

Tax planning: Prepare for the new tax year

Taking some time to start planning for 2021/22 now can be worthwhile. While there is often a focus on planning for the end of the tax year, much less attention is paid to the start of the tax year. The lack of an obvious deadline is probably one reason – deadlines tend to concentrate the…

Four financial lessons from the Covid-19 pandemic

Investors have key lessons to learn after the Covid-19 pandemic

As the pandemic enters its second year, what have we learned? The World Health Organisation declared Covid-19 a pandemic on 11 March 2020, coincidentally the day that Chancellor Rishi Sunak presented his first Budget. At the time, the Chancellor announced a £12bn stimulus to counter the impact of the pandemic. By November, the Office of…

First-time buyer deposits rise after Covid-19 property boom

The average deposit paid by first-time homebuyers jumped by £10,000 in 2020. When the pandemic took hold in the first half of last year, it looked as if the housing market was headed for a fall, if not something more dramatic. There were problems about viewing properties, arranging surveys, organising removals – you name it,…

UK dividends: A bad 2020, but a better 2021?

New data show how far UK dividends fell last year, but projections for 2021 suggest the declines are nearly over. In January 2021, Link Asset Services published its latest UK Dividend Monitor covering the final quarter of 2020 and the year as a whole. The headline figure was that total dividends fell by 44% over…

State pensions: the triple lock marches on…

The pension triple lock will deliver a 2.5% increase in April

The main state pensions will rise by 2.5% in April. The absence of an autumn Budget in 2020 meant that there was no formal announcement of the level of state pensions from April 2021. The numbers eventually emerged on 8 December in a press release from the Department for Work and Pensions: The new state pension,…