Latest news with #SimonLambert
Daily Mail
4 days ago
- Business
- Daily Mail
How far would you go to avoid your personal tax raid? This is Money Podcast
Tax is an increasingly taxing subject for many people who feel hard done by as Britain's complicated system catches them out. From quirks of the system, such as the 60 per cent tax trap and child benefit removal, to the childcare cliff edge, frozen thresholds, and pensions soon to be dragged into inheritance tax, there's a whole host of things to drive us mad. And, it's getting worse. The Tories and now Labour have both chosen to ratchet up the things that trip people up to raise money, rather than sort out a tax system that most economists say is a total mess. So how far would you go to avoid your personal tax raid? And is tax changing people's behaviour? Lee highlights how. On this podcast, Georgie Frost, Lee Boyce and Simon Lambert dive into how the British tax tail is wagging the dog. Plus, as the Switch 2 arrives and the video game industry goes from strength to strength, should you invest in video game firms? How much do you need for a comfortable retirement – and what does that get you? And finally, you put up an 8 foot fence for privacy, your neighbour has gone from non-plussed to threatening to call the council over a planning breach, what do you do? The team have some answers. And for all the listeners that Simon directed to the gem that is the comments section of the story, here's the link. Listen to the This is Money podcast We publish the podcast every Friday on This is Money and at Apple Podcasts, Spotify, Amazon Music and more. Search for it at your favourite podcast platform. To download Apple Podcasts go to the App store. On Android devices, go to the Google Play store to download the podcast app of your choice. You can press play to listen to this week's full episode on the player above, and wherever you get your podcasts please subscribe and review us if you like the podcast. You can also listen to the latest episode, find the archive and join in the debate in reader comments on the This is Money podcast page.
Daily Mail
6 days ago
- Business
- Daily Mail
Has Nationwide found a winning formula with its cash bonuses? This is Money Podcast
Banks have many tricks up their sleeves to try to attract customers and reward loyalty but Britain's biggest building society Nationwide appears to have hit upon a winning formula. Its Fairer Share payments are back for a third year, with a £100 bonus for qualifying members. That's hot on the heels of a recent £50 Virgin Money takeover payout. Fairer Share has been credited with helping boost Nationwide's already strong position in the current account market. The payments were announced as Nationwide posted bumper pre-tax profits of £2.3billion in the year to April, up from £1.77billion last year, after recording its highest ever year for growth in mortgage lending and current account balances. But not all members are getting a Fairer Share payment and some aren't happy about that. Should they complain? After all, the criteria has been the same for three years now. On this episode of the This is Money Podcast, Georgie Frost, Helen Crane and Simon Lambert discuss Fairer Share and Nationwide's success. Plus, what are rival banks offering customers to tempt them in - and how should you evaluate the perks? How rich would you be if you'd bought Nvidia shares throughout the last two decades - or if you had a Delorean time machine to jump into and go back and buy some. Are we reaching the tail end of the low fixed rate mortage borrowers? And finally, should you let your talkative partner show people round your home for sale... or would it be better to let the estate agent do the job? Listen to the This is Money podcast We publish the podcast every Friday on This is Money and at Apple Podcasts, Spotify, Amazon Music and more. Search for it at your favourite podcast platform. To download Apple Podcasts go to the App store. On Android devices, go to the Google Play store to download the podcast app of your choice. You can press play to listen to this week's full episode on the player above, and wherever you get your podcasts please subscribe and review us if you like the podcast. You can also listen to the latest episode, find the archive and join in the debate in reader comments on the This is Money podcast page.
Daily Mail
03-06-2025
- Business
- Daily Mail
I've had a big pay rise to £125,000 should I salary sacrifice as much as possible into my pension?
I earn £105,000 a year and have just been promoted with a £20,000 annual pay increase from June. I am wondering if I should salary sacrifice as much as possible into my pension in the next few months. My work pension is a salary sacrifice scheme, which helps me save on national insurance and tax and has the double benefit of lowering my income, as I earn above £100,000 and get hit by the 60 per cent tax rate. My promotion and pay increase will fall almost entirely into that 60 per cent bracket and after reading reports this week, I am worried that the government will change the system, and I will lose out. I could theoretically afford salary sacrifice most of my monthly earnings over the next four months into my pension, to get as much in there as possible and reduce my income this tax year. My employer says it will let me do this, but would it work from a tax perspective? Simon Lambert, of This is Money, replies: It's fitting that this question crops up in the week that NatWest, formerly known as RBS, finally fully exited taxpayer ownership. The two may not seem directly related but the 60 per cent tax trap is a financial crisis hangover. Britain's stake in RBS came about due to the exceptional circumstances of the financial crisis. Cast your mind back that far and there were also some stringent tax measures brought in to deal with an urgent need to raise funds. Unfortunately, the one you refer to that creates the 60 per cent tax trap is still with us, long after the emergency passed. In April 2009, Chancellor Alistair Darling announced the personal allowance would start to be removed at a rate of £1 for every £2 earned above £100,000. This created Britain's highest effective official income tax rate of 60 per cent. There are other quirks that can drive up marginal tax rates - the amount you pay on the next pound - but they depend on specific related circumstances, whereas the personal allowance removal is baked into the income tax system. If the £100,000 threshold had moved up in line with RPI inflation, it would now be at £180,000, according to our historic inflation calculator. The only real way to beat the tax trap is to get your income down and salary sacrifice has become a popular way of doing this, with people in the bracket often paying as much as possible into a pension. Reports last week suggested salary sacrifice was in the Treasury's sights, as a way to claw more money in and an official report has been compiled. It remains to be seen whether rumours are true, but you should be careful about making financial decisions based solely on saving tax. We asked an expert about where you stand on salary sacrificing as much as possible of your pension. Anita Wright, chartered financial planner at Bolton James, replies: From a tax perspective, making significant pension contributions via salary sacrifice by the tax year end on 5th April 2026 is likely to be highly beneficial — particularly given your earnings position and the structure of your employer's scheme. Since your new total income for the 2025/26 tax year will be £125,000, you fall squarely within the band where the personal allowance is gradually withdrawn. Between £100,000 and £125,140, your personal allowance (the amount of income you can receive tax-free) is reduced by £1 for every £2 earned above £100,000. This results in a 60 per cent marginal tax rate on income in that range. Once your income exceeds £125,140, you lose the personal allowance entirely. By using salary sacrifice to reduce your gross income below £125,000, you will recover some, or all, of your personal allowance, significantly improving your overall tax position. One of the core tax benefits of your employer's salary sacrifice scheme is that pension contributions are made fully by your employer, meaning they are exempt from both income tax and employee National Insurance (NI) unlike receiving additional salary. This typically results in a more efficient outcome than making contributions from your net pay. In addition, employers also benefit from a reduction in their own NI liability when salary sacrifice is used. Some employers choose to pass part or all of their NI saving into the employee's pension plan, thereby boosting the overall contribution at no additional cost to you. This is worth checking directly with your HR or payroll team, as it depends entirely on your employer's policy. Your ability to do this successfully — and how much you may wish to sacrifice — will depend on several factors: While you note that you can manage without much of your take-home pay, it's important to bear in mind that salary sacrifice will reduce your monthly net income — which would otherwise have been higher had you taken the additional salary instead. Annual Allowance: For most individuals, the pension annual allowance is £60,000 for the 2025/26 tax year. However, this includes both your contributions and those made by your employer. Contributions above this threshold may trigger an annual allowance charge unless unused allowances from previous years can be carried forward. · Impact on Benefits: A reduced gross salary might affect other employment-related benefits. For example, some death in service schemes or income protection policies are based on actual salary. That said, many employers calculate benefits using your notional (pre-sacrifice) salary, but this should be confirmed. Borrowing capacity: Mortgage lenders and other credit providers often assess affordability based on income and expenditure. A lower reported income due to salary sacrifice could impact your borrowing potential, depending on the lender. A salary sacrifice arrangement can be put into place at any point, but must meet the following criteria: A formal written arrangement must be in place. This must be in place before the salary is actually reduced. The arrangement must not take your salaried remuneration below minimum wage with regards to the hours worked. You also must not also be able to demand a switch back to full salary, otherwise HMRC may contend that a valid exchange has not taken place and implement the appropriate tax treatment that you may receive less take home pay. Should you worry about salary sacrifice being cut? Finally, while current pension legislation offers significant tax incentives, your concerns about potential future changes are entirely understandable. Although no formal announcements have been made, it is natural for higher earners to consider acting sooner rather than later to optimise the available reliefs under current rules. It is widely understood that the previous government commissioned a detailed report on salary sacrifice, examining its cost to the Treasury and exploring ways to potentially limit its use. In parallel, HMRC has recently been modelling hypothetical scenarios to assess how much additional revenue could be raised through reform. This suggests that salary sacrifice is firmly on the policy radar — and may well be considered by the current Chancellor as part of a broader effort to increase tax revenues. While no decisions have been made, the direction of research implies a growing likelihood that changes could be introduced in the next Budget.
Daily Mail
26-05-2025
- Business
- Daily Mail
How to invest in Asia's long-term growth story: INVESTING SHOW
The case for backing Asia has been made to investors for many years, but getting things right can be tricky. Asia's well-educated and increasingly middle-class populations lie behind its long-term growth promise, but investors find themselves at the mercy of global sentiment, which can swing around dramatically. World-class companies and favourable demographics should drive Asia forwards, but concerns over China also dominate thinking. Donald Trump's US tariffs, on pause until summer, have further muddied the waters and rattled investors. So, how can investors navigate their way through. Ryan Lightfoot-Aminoff, of Kepler, talks to Simon Lambert on this episode of the Investing Show. He highlights the best investment trusts that invest in Asia, including those that avoid and back China, and discusses the merits of trusts that seek to profit from the region as a whole or individual countries, such as Vietnam.
Daily Mail
17-05-2025
- Business
- Daily Mail
What red flags do you need to spot before you buy a home? This is Money podcast
How long did you take looking round your home before you put an offer in for it? The average prospective buyer spends just 43 minutes. Surprise, surprise, research suggests that it pays to take your time. This is week, Georgie Frost, Simon Lambert and Lee Boyce talk about what should be on your checklist before you take the plunge and buy a property. Should you go by vibes alone, or do you really need to kick the tyres? And when you do buy, what happens if the seller leaves junk like a mouldy fridge, grimy washing machine and a stained sofa? We reveal all. Buy-to-let has taken a battering in recent years – but there are still pockets of Britain where investors are finding a decent yield. Cash Isas are back in the spotlight with a review likely to come in July – how likely is it that they will be tinkered with? And with news defunct furniture brand MFI will return after 20 years, what stores would you like to see make a comeback? Listen to the This is Money podcast We publish the podcast every Friday on This is Money and at Apple Podcasts, Spotify, Amazon Music and more. Search for it at your favourite podcast platform. To download Apple Podcasts go to the App store. On Android devices, go to the Google Play store to download the podcast app of your choice. You can press play to listen to this week's full episode on the player above, and wherever you get your podcasts please subscribe and review us if you like the podcast. You can also listen to the latest episode, find the archive and join in the debate in reader comments on the This is Money podcast page.
