Conmen have always tried to cheat people out of their money. But investment frauds have become more sophisticated in recent years, and activity has soared ever since the Pension Freedoms of 2015 opened up the potential for criminals to dupe people out of their entire life savings in one swoop. Last year alone, Britons lost almost £200 million to scammers.
The gating of Neil Woodford’s flagship Equity Income fund in early June has alarmed investors. However, Woodford invested the fund in small and unquoted stocks that are difficult to sell quickly, listing some stakes in unquoted companies in Guernsey simply to circumvent the regulator’s rule that caps at 10% of net asset value (NAV) the proportion of unlisted securities an open-ended fund with daily dealing can hold.
Income tax rules
The income tax you must pay varies according to your income in a given tax year, which runs from 6 April to 5 April. Everyone receives a personal allowance – £12,500 for the 2019/20 tax year. You pay no tax on income up to this threshold.
The Japanese stockmarket has underperformed for four years, and was slammed in last autumn’s tech sell-off, which knocked 18% off stocks in sterling terms. While the Topix index is still languishing 40% below its 1991 peak, other major developed markets such as the US have recovered to their all-time highs.
This is the last write-up on the tactical asset allocator portfolio, which has been running since 2013. The investment brief was to be cautious and diversified across asset classes, using exchange traded funds wherever possible, and to avoid being down across all holdings at any one time.
While the portfolio has only doubled in size over the five years since its inception, it has never been down by more than a few percent month on month, although the publication-date constraints of having to deal on one set day per month has limited its agility.
Doctors and other public sector workers such as school heads and top civil servants face punishing tax penalties for inadvertently breaching the legal limit for tax-free annual contributions to their pensions.
The situation is so bad that hospital consultants and GPs, who invariably work extra shifts to cover NHS staff shortfalls, are effectively working for free once their tax penalties have been taken into account.
The S&P 500 index has risen by about 80% over the past decade, but stockmarkets in the rest of the developed world remain 25% below their levels before the financial crisis. Some 15% of that decline has occurred since the peak in January last year. This bifurcation is odd, since the only real economic growth has been generated by emerging powerhouses such as China, whose GDP has grown by nearly 250% over the past decade.
Warren Buffett’s comments in Berkshire Hathaway’s latest annual report reiterate his sage advice that investors should not invest in anything on a time horizon of less than 10 years. That message underscores the attractions not only of nascent sectors such as artificial intelligence, robotics and food tech, but also of the growing emerging economies that will eclipse today’s biggest markets in the not too distant future.
The rally in the first quarter lifted the US and other markets to a six-month high, while sovereign bond prices have mirrored investors’ renewed confidence by tumbling from their recent two-year peak. The uber-pessimism of the fourth quarter of 2018 has turned into fresh hope that gains can be made when trade wars and Brexit have been pushed out of the way.
Around 100,000 final salary pension scheme members traded in a guaranteed income in retirement for a cash lump sum last year, according to the Financial Conduct Authority (FCA).
For many, the motivation is that a transfer out of an employer’s final salary scheme allows them to take advantage of the rule allowing people aged 55 and over to take 25% of the fund tax-free – a tidy sum when the average transfer exceeds £250,000.