Latest news with #JasonHollands
Daily Record
5 days ago
- Business
- Daily Record
HMRC issues warning as thousands urged to 'withdraw' pension after new rule change
The rule change has prompted many savers to reconsider their withdrawal strategies. Under current rules, once people hit the age of 55, they're entitled to take out 25 per cent of their pot tax-free UK households are currently grappling with soaring living costs and political instability. meaning many are left increasingly tapping into their pension savings ahead of time. It comes as figures from HMRC have revealed that a staggering £2.2billion was withdrawn last year. The data shows a notable rise in activity among those aged 55 to 56, with 120,000 making taxable withdrawals in 2023-24. This equates to an 18 per cent rise over the last five years. Under the existing regulations, individuals can access 25 per cent of their pension pot tax-free once they reach 55, up to a maximum of £268,275. Withdrawals above this limit are taxed as income, as reported by the Mirror. Jason Hollands of Bestinvest weighed in on the situation, noting: "Demographic patterns will be a factor. But other possible influences are a rise in business exits and second property disposals ahead of the election enabling more people to take early retirement." Daniel Hough from RBC Brewin Dolphin, looking at it from a wealth management angle, remarked: "Retirement is lasting longer for people – by accessing their pensions at 55, there will be more pressure on providing a sustainable income throughout retirement, however long it may last." Experts warn of risks as numerous savers tap into pensions before retirement, with Andrew Tricker of Lubbock Fine Wealth Management stating, "The large number of savers withdrawing from their pensions before actually retiring is very concerning. Many of them are withdrawing too much – and too early." Financial specialists caution that savers might overspend to avoid inheritance tax due to new Labour Party regulations. Kate Smith of Aegon said, "The expectation is that those individuals with large estates will access their pensions earlier to avoid inheritance tax, and later life tax planning will become increasingly important." The plans have caused "concern and some confusion" for those nearing retirement, according to Mr Hough. Chancellor Rachel Reeves had announced the end of inheritance tax reliefs on pension savings by 2027, prompting many to reassess their pension drawdown strategies, as Britons can currently pass on pension wealth tax-free. How can I find out how much State Pension I could get? You can get a State Pension forecast online from the Check your State Pension service here. This provides personalised information, including your State Pension age, an estimate of how much State Pension you may get at that point and if you can increase this amount. It also allows you to view your National Insurance contribution history. More information about deferring your State Pension can be found on the website here.
Daily Mirror
5 days ago
- Business
- Daily Mirror
Thousands urged to 'withdraw' pension cash after new HMRC rule change
The rule change has prompted many savers to reconsider their withdrawal strategies. Under current rules, once people hit the age of 55, they're entitled to take out 25 per cent of their pot tax-free Amidst rising living costs and political uncertainty, UK households are in a rush to dip into their pension pots early, with hundreds of thousands withdrawing a whopping £2.2bn last year. Official HMRC figures have highlighted a significant surge, showing that 120,000 people between the ages of 55 and 56 made taxable withdrawals from their pensions in 2023 - 24, marking an 18 per cent increase over the past five years. Under current rules, once people hit the age of 55, they're entitled to take out 25 per cent of their pension pot tax-free, subject to a ceiling of £268,275. Beyond this threshold, any further withdrawals incur taxation as income. READ MORE: Simple airport duty free trick to bag cheaper beauty and alcohol before arriving Investment expert Jason Hollands from Bestinvest commented on the trend, suggesting: "Demographic patterns will be a factor. But other possible influences are a rise in business exits and second property disposals ahead of the election enabling more people to take early retirement." From the perspective of wealth management, Daniel Hough of RBC Brewin Dolphin pointed out: "Retirement is lasting longer for people – by accessing their pensions at 55, there will be more pressure on providing a sustainable income throughout retirement, however long it may last." Highlighting potential risks associated with this behaviour, Andrew Tricker from Lubbock Fine Wealth Management, who procured the data, saod: "The large number of savers withdrawing from their pensions before actually retiring is very concerning. Many of them are withdrawing too much – and too early." Financial specialists also cautioned that savers might feel impelled to overspend from their pension funds to sidestep inheritance tax charges stemming from new regulations introduced by the Labour Party government. Kate Smith from the pensions outfit Aegon commented: "The expectation is that those individuals with large estates will access their pensions earlier to avoid inheritance tax, and later life tax planning will become increasingly important." Mr Hough expressed that the proposals sparked "concern and some confusion" for those approaching retirement age, reports Birmingham Live. Chancellor Rachel Reeves had previously broadcast the discontinuation of inheritance tax reliefs on pension savings come 2027. At present, Britons are at liberty to bequeath their pension wealth devoid of tax, yet this policy alteration has incited many to revisit their strategies for drawing down their pensions.
The Independent
16-05-2025
- Business
- The Independent
3 financial experts outline the money tips they want you to know
Money can be an ongoing stress for many people, particularly in today's economy with a cost-of-living crisis, inflation and rising bills. There can also be a lack of education when it comes to making your finances work best for you, from knowing how to budget, understanding which is the best savings account to open, and knowing how to invest. We spoke to the head of personal finance at Moneybox, Brian Byrnes, the managing director at Evelyn Partners, Jason Hollands, and the director of financial support at Santander, Mark Weston, about their best and most important money tips that people should know. Set some money aside for emergency funds New research by Santander, carried out in April by IPSOS with members of the UK public, shows that one in five (20%) respondents do not save anything from their personal income across the year. However, Weston says saving is important. 'We do recognise that the cost of living and inflation over the last few years has made it much more difficult for people to save,' says Weston. 'However if people do have the ability to save a little, it is a real benefit for things such as rainy day funds or for the future. This means if you have an unexpected expense, having those savings takes pressure off.' Make sure you've got the best value financial deals When it comes to household finances, investments or utility bills, Weston says keeping on top of the best deals out there is crucial. 'Whether the deals are for your energy costs or anything else for that matter – make sure you've got the best value for money for the service that is needed,' Weston says. 'Also make sure you keep an eye on all those expenses and don't just let them roll over every month.' Do a household budget 'It's important to understand and make sure that your outgoings aren't greater than your income or you're going to end up with a problem and possibly in debt,' Hollands says. 'It can be very easy to build up added costs, such as subscriptions that you don't actually use, so it's important to be aware of those things through a budget. 'When designing a budget for yourself, think about the things you know are essential. This would be the cost of your housing and groceries for example. Then you have your wants, which are the luxuries and nice things to have that you could live without for a period of time. Prioritise what you need most and keep the other things to the end of your budget.' Clear up debts 'It's really important to try and clear any debts, particularly those with high servicing costs like credit cards. People of course have mortgages and other things for a longer term that they aren't going to clear right away,' Hollands says. 'However, if you're paying high levels of interest on a loan or credit cards, you really need to get those under control before starting to put money aside for the future.' Byrnes says that rounding up spare change and using it to invest could be done rather than saving this money. 'The reason that works is because investing tends to concern or scare people,' he says. Byrnes explains that the initial step of putting money into investments or the stock market can feel risky. 'However we found over the years with clients that the spare change which feels less like real money is easier rather than a big lump sum. It can also break down the barrier to investing and as time goes on, they will start to see the benefit of it without having to necessarily take a big leap with larger sums.' Automate finances in the summer months 'We have found with customers that it's actually easier to save during the winter where there is less social pressures to go out,' Brynes says. 'When we get into the summer months and various social invites such as weddings tend to pop up more – it is important to automate your finances and pay yourself first. 'This should happen on your pay date,' he says. 'Put money into your emergency fund, your savings account, your investment accounts and ensure they come out automatically on the first day you get paid. This is more successful for savings in comparison to doing it at the end of the month – especially at this time of year.'
The National
07-05-2025
- Business
- The National
It might be time for investors to look past the US stock market
After years of dominating global markets, the US stock market has suddenly gone haywire. The S&P 500 index returned more than 20 per cent in each of the past two years and some kind of slowdown was inevitable, but not like this. The sell-off began in earnest on April 2, when US President Donald Trump unleashed his 'Liberation Day' trade tariff blitz and wiped 20 per cent off US share values. His 90-day pause on April 9 triggered a relief rally, reducing this year's S&P 500 losses to only 5 per cent, but it's been a bruising experience and given Mr Trump's haphazard strategy, investors don't know what to expect next. Many investors will have outsize exposure to the country's fortunes after its stellar run of the past 15 years, but is it finally time to look past America? Others may be wondering whether now is a good time to pick up US shares at a reduced point but here's a word of warning. They're still not cheap, with the S&P 500 trading at about 20 times forecast earnings, a premium to the MSCI All Country World Index at 16 times. Like many, Jason Hollands, managing director at investment platform Bestinvest by Evelyn Partners, is wary of the US. While some of the 'valuation froth' has been removed, Wall Street is still far from cheap and is 'lurching from day to day'. Company earnings forecasts have yet to catch up with the likely impact of tariffs, he adds. 'Even with baseline tariffs of 10 per cent, there is going to be some form of negative impact. Despite the talk, no deals have been announced.' The trade war threatens to disrupt supply chains, while freight disruption could fuel inflation, and Mr Trump is still talking tough on China. Investors should brace themselves for a volatile summer, Mr Hollands says. 'It is way too soon to assume the current de-escalation rally is an all-clear for US markets.' Instead, he recommends diversifying. 'The waning of the 'American exceptionalism' theme may provide an opportunity for a more balanced approach to global investing. Europe is now back on my radar,' Mr Hollands says. Tony Hallside, chief executive at Dubai-based investment brokers STP Partners, says the US is in a spot but hasn't lost its way entirely. 'Unemployment is still near historic lows and corporate balance sheets are broadly strong.' Yet he's also wary, given 'elevated valuations, geopolitical frictions and an increasingly complex monetary policy path', as Mr Trump pressures the US Federal Reserve to cut its funds rate from today's 4.5 per cent. Mr Hallside also says the S&P 500 suffers from 'concentration risk'. 'The Magnificent Seven tech stocks account for more than 30 per cent of the index, skewing valuations and masking broader market softness. 'The US is not broken but it may not be where value lies today.' Instead, he sees opportunities in Europe, where inflation is cooling and the European Central Bank (ECB) has cut rates to only 2.25 per cent. 'That's supportive for equities, particularly cyclicals and small caps,' Mr Hallside says. Japan also looks compelling as corporate reforms drive shareholder value. Emerging markets could shine if the dollar weakens, he adds. Paul Jackson, global head of asset allocation research at fund manager Invesco, is now underweight US stocks as valuations still look stretched and a recession potentially looms. 'There are better opportunities elsewhere, notably China and Europe.' Europe could benefit from the ECB's easier monetary stance. 'The ECB is well ahead of the Fed on rate cuts, which could boost asset prices,' he says, but adds there's a risk that US tariffs could still export inflation back to Europe. Mr Jackson also sees promise in the UK, where valuations are closer to historical norms. 'The UK stock market has outperformed the US so far during 2025,' he says. UK interest rates are relatively high at 4.5 per cent but with Mr Trump going relatively easy on UK tariffs, the Bank of England may be able to cut rates more aggressively without triggering inflation, he says. Mr Jackson flags the Japanese yen as 'extremely cheap at the moment'. 'That's good news for overseas investors but brings the risk that stock prices will underperform as the yen recovers.' The S&P 500 has clawed its way back from its post-Liberation Day lows but market jitters will remain, says Vijay Valecha, chief investment officer at Century Financial. Europe is benefitting from monetary easing and valuations are attractive, but the continent still faces tariff risks. 'Key export sectors like industrials, cars and luxury goods could face serious earnings pressure if Trump does introduce 20 per cent tariffs on the EU.' The UK stands out for its dividend income. 'The FTSE 100 is expected to return £83 billion [$110.46 billion] to shareholders in 2025, with a total cash yield of 5.2 per cent, including share buy-backs. UK markets are less vulnerable to tariffs and could benefit from more interest rate cuts,' Mr Valecha says. He highlights the relative value of Japan, South Korea and India. Japan trades at a trailing P/E of only 17.8, below its three-year average, while Korea and India are also attractively valued and delivering positive returns. 'All three are proving resilient,' he says. Mr Valecha sees long-term promise in emerging markets, driven by dollar weakness and global capital rotation. 'In the coming years, a significant shift in global economic momentum away from the US and towards Asia and Europe can be expected.' However, Chris Beauchamp, chief market analyst at trading platform IG, believes it's too early to write off the US. Yes, it may look expensive, but there's a reason for that. 'This reflects the fact that companies generate higher earnings, so their shares cost more as a result.' The US has delivered spectacular returns and corrections are part of the deal. 'If you want to benefit from those gains, you also have to accept what we are going through today,' Mr Beauchamp says. A recession is possible, although Mr Beauchamp suggests it may be more like the brief Covid-triggered downturn of 2020 than the deep crash of 2008. 'If US share values fall, inflation is driven out and public sector spending is cut, that could drive flows into the private sector and unleash the next rebound. It's a process the US has been through again and again.' Mr Beauchamp notes that after the election, markets priced in post-Trump euphoria. Today, it's apocalypse. Investors need to keep their nerve both through the ups and the downs. 'The US commands 70 per cent of global market capitalisation, so you can't just ignore it. Ultimately, there is no safe-haven in equities. Investors just have to stick it out,' he says.
The Independent
30-04-2025
- Business
- The Independent
Four ways to invest in property without becoming a landlord
SPONSORED BY TRADING 212 The Independent Money channel is brought to you by Trading 212. The appeal of managing your own buy-to-let portfolio has been hit in recent years with increased taxes and restrictions on reliefs that have dented landlord profits, as well as increased regulations. The Renters' Rights Bill currently going through Parliament will also introduce tougher requirements to evict renters and limit mid-contract rent rises. All this is driving many landlords to exit buy-to-let. But the returns from property can still be attractive, especially compared with volatile stock markets. Luckily, there are ways to invest in property without the added responsibilities and headaches of being a landlord. Here is what you need to know - with plenty of options to start smaller than having enough for a full house deposit. From housebuilders such as Persimmon to property websites such as Rightmove, there are plenty of listed companies on the London Stock Exchange in the housing sector that you could put money into. You would then share in their success if the share price grows and if they pay dividends. Of course, you will also lose money if their share price drops. There are extra responsibilities with shares though. You will need to build a diversified portfolio across different sectors so that you don't lose all your money if the property sector crashes. There may also be fees to pay for holding your shares on an investment platform, which can eat into your returns. Property funds If you don't have the time or confidence to research shares, you can get exposure to the property market through property funds. These are run by fund managers who will build a diversified portfolio typically invested in commercial properties such as offices, warehouses, industrial units or shopping centres – rather than housing. Some will either invest across a mix of property sectors, others special in a narrow part of the market or a particular region. Jason Hollands, managing director of investment platform Bestinvest, said: 'Physical property funds offer investors diversification beyond equities and bonds and a stream of rental income can be useful for those who are retired. 'With many people already having significant exposure to residential property through their own home and mortgage, investing in a commercial property funds provides a slightly different dimension. Here they can benefit from the security of long leases by business tenants and accompanying rental income.' When choosing a property fund, Hollands said the quality of the tenants and the length of their unexpired leases - the longer the better - low vacancy rates and the exposure to attractive locations are important considerations over portfolio resilience. One big risk though is that property is an illiquid asset so you cannot sell in a hurry in the way you could decide to ditch some shares. Hollands added: 'A fund can't part-sell an office block or warehouse it owns and in times of uncertainty this may be difficult to achieve at a reasonable price. Open ended property funds have therefore experienced periods in the past when they have had to suspend dealing – the ability for investors to take their cash out – when large numbers of investors want to take their cash out at the same time. 'Even in stable times, such funds have to hold significant cash balances to address day to day demands for possible withdrawals which can water down returns.' There are also investment funds and exchange traded funds that invest in property stocks. Both types of property fund will have manager and platform fees to consider. An alternative to property funds are real estate investment trusts (REITs). This is a type of investment trust - backing a mix of commercial properties - that is listed on a stock exchange. Rather than your money going directly into properties, you are purchasing a share in the trust and share in the ups - as well as the downs - of its share price and market performance. Many REITs also pay regular and attractive dividends, often quarterly. Nick Britton, research director of the Association of Investment Companies (AIC), said: 'Being a landlord isn't for passive income – you will find yourself running a property business, grappling with complex tax, legal and regulatory requirements. By contrast, investing in a REIT is as easy as buying any other share. 'A particular perk is that REITs are very tax-efficient – there is no tax to be paid by the REIT itself, so if you hold REIT shares in an ISA or pension you'll effectively receive rental profits tax-free. 'Although you can sell the shares at any time, REITs should still be seen as a long-term investment. Their share prices will fluctuate and when the property market is in the doldrums, this will be reflected in the prices. You need to be patient and ideally take a five to 10 year view.' Property funds and shares can be held in an ISA, so any returns can be taken tax-free, unlike direct rental income. Peer-to-peer lending You could also fund buy-to-let or development loans directly through peer-to-peer lending platforms such as Kuflink and LandlordInvest. These can offer double digit returns for funding landlords or developers directly. However it can also be more risky and you need to check the P2P lending platform is regulated by the Financial Conduct Authority (FCA). Risks include borrowers falling into arrears and even defaulting, potentially leaving you with nothing. There is also no Financial Compensation Scheme (FSCS) protection if a platform goes bust. There are also platforms such as TAB Property that provide fractional ownership of assets such as hotels and office spaces, as well as residential property. Any returns earned from a property's income will be paid in proportion to your stake. Duncan Kreeger, chief executive of TAB Property, said: 'Fractional ownership now allows investors to enter high-grade real estate markets without the usual high minimum investment thresholds. This approach diversifies exposure and mitigates the risk of putting all your eggs in one basket. 'For anyone considering this type of diversification, my advice is to start with a clear investment plan. Determine your investment horizon and desired returns. Look for platforms offering access to diverse asset classes and conduct thorough research on each opportunity. 'Understand the terms, risks, and potential rewards associated with your chosen investments.' When investing, your capital is at risk and you may get back less than invested. Past performance doesn't guarantee future results.
