Personal finance

Lucy Warwick-Ching

We have launched a brand new interactive personal finance page, where you can find top tips, beginners’ guides and advice across the whole sector. From tips on the best way to sell your home, to guides to help you check and improve your credit scores, Money Matters will cover the topics from your perspective.

We’ll also have live Q&As with experts and audio interview podcasts linked to the latest news stories.

You can read and comment on the latest Money Matters blog posts, and we are also adding the newspaper columns to this page so you can also comment on these columns each week. Don’t worry – you will still be able to view or search for previous posts on this page.

Alice Ross

The next government had better prepare itself for some heavy lobbying from some of my breakfast companions this morning.

I went along to discuss the future of pension saving with some well-known people in the business, including Maggie Craig, director of life and savings at the Association of British Insurers, Tom McPhail, head of pensions policy at Hargreaves Lansdown and Laurie Edmans – who’s just been appointed one of the people who will run the government’s new national pension saving scheme, Nest.

One of the topics that got people most excited – after we had discussed the problem of people not saving enough for retirement, and not being aware of their options when they do retire – was Tom’s notion that the next government should appoint a minister for savings. Such a person, he argued, would focus purely on making sure people understood how to save their money – both for retirement and for other things, like putting down a deposit on a house.

Everyone around the breakfast table nodded agreement and said we should all start lobbying straight away – or, in Tom’s words, “kick the door down in Whitehall and get them to make changes”. “I wish I’d thought of it myself,” said Laurie.

It doesn’t sound like a bad idea – especially when you consider that people failing to save their money means they have to rely on the state in retirement, and that a lack of savings means reliance on credit card bills and potential bankruptcies – contributing to the state our economy is now in. After all, we have a minister for housing, a minister for investment and a minister for pensions. Why not one for savings too?

Tanya Powley

Forget the Bank of Mum and Dad. First-time buyers have found a new way to raise the extra money they need to finance the deposit for their first home: selling make-up from cosmetics company Avon.

The door-to-door makeup sales firm, for whom Hollywood actress Reese Witherspoon advertises their products, says it has seen a “huge growth” of new recruits who cite saving for their first property as a reason to join Avon and supplement their income.

Matthew Vincent

Does the general public care about huge levels of unsustainable debt? Not if it’s the government’s, apparently. As my colleagues wrote in this morning’s FT:

Ten leading investment funds all told the FT that a hung Parliament, potentially delaying action to tackle the UK’s £167bn deficit, was the biggest threat to the market… But Sunday’s polls suggest the public does not share market concerns about a hung parliament. In polls by ComRes and YouGov, they said that would be their preferred outcome. More…

Are Britain’s consumers so intoxicated, or numbed, from their 13-year credit binge that they no longer think of debt as a problem? Not so, claimed Sainsbury’s Finance – arguably the ultimate “off-the-shelf” lender – this morning:

Ellen Kelleher

John Maynard Keynes once compared the exercise of picking stocks to a beauty contest. The relative attractions of both stocks and catwalk models are subjective, he argued, but to a degree, their value is determined by their popularity with the audience.

Here, Andrew Bell, chief executive of the investment trust Witan, offers an analysis of how Keynsian theories apply to today’s markets. Here’s an extract from his blog.

The process of abstraction can go on and on, as the selection moves further away from making your own judgments of beauty towards an assessment of popular fashion or psychology. In the process, your face would lose its sun tan.

Alice Ross

The Financial Services Authority said today that commission on financial advice will be banned – again. It has been saying this for quite some time and set out proposals telling everyone what it was going to do last summer so I’m not sure why people seem so surprised.

Ok – so it’s a confirmation of the proposals. And it’s a good thing that commission is getting scrapped – in principle. But read a little behind the lines and I’m not sure how much effect this will all really have.

Matthew Vincent

A reduction in capital gains tax (CGT)! Who’d have thought it?

By announcing an extension of the CGT entrepreneur relief, from £1m to £2m, the chancellor has not just cut the tax bills of business owners looking to sell up and retire – he has also allowed investors with a stake of 5 per cent of more in a company to enjoy a lower rate on their profits.

Damien Crossley, corporate tax partner at Macfarlanes, the City law firm said:

“The extension of entrepreneur relief from £1m to £2m is good news for owner managers of businesses who will now pay the lower 10 per cent capital gains tax rate on up to £2m of gains over their lifetime.”

Frank Nash, Blick Rothenberg, saw it as compensation for losing so much pension tax relief:

“The doubling of the capital gains tax entrepreneurs’ relief limit to £2 million will be a welcome move for retiring business owners particularly as the Chancellor has hit their pension funds so harshly with recent tax changes.”

But don’t be fooled. Capital gains tax will inevitably be raised for everyone before long – probably after the election. In an ironic inversion of New Labour’s 1997 election slogan, Louise Somerset of RBC Wealth management warned:

Wealthy taxpayers are unlikely to look at this Budget as being as bad as it gets, and I expect clients wanting to… lock in current tax rates before things possibly get worse.”

She, and others, point out that the difference between income tax rates of up to 50 per cent and CGT at 18 per cent is now so significant that many people will be putting a great deal of energy into ensuring they realise capital gains rather than income. No government is likely to allow that to happen for too long.

Steve Folkard, AXA Life’s head of pensions and savings policy, said: “It surely hasn’t escaped the chancellor that this is a massive difference, but closing the gap will not be a quick measure as it would be entirely unfair to make a change effective prior to the next tax year.”

A new chancellor may be less concerned about fairness.

Alice Ross

The chancellor said nothing new about pensions today. But he did confirm that the fiendishly complex rules on pension savings introduced in last year’s Budget and December’s pre-Budget report are here to stay.

Not only does this ignore the advice of most of the pensions industry, who’ve been submitting pretty annoyed responses to the ideas over the past month or so. It also flies in the face of pensions simplification, which was introduced in 2006 and was supposed to make saving into a pension easier for most of us.

There are now a mindboggling number of rules on whether you can get pension tax relief.

Ellen Kelleher

This will “hit the rich quite hard” is how Andrew Tailby-Faulkes, partner with Ernst & Young, put it when he called to offer his thoughts on Mr Darling’s address.

But those who are not wealthy also have cause for concern. The combined effects of the government’s move to encourage home ownership and keep the inheritance tax threshold at £325,000 for a further four years means that more of us are likely to draw inheritance tax charges.

As John Richardson, head of Advice Policy at Towry Law explains:

“Freezing the inheritance tax threshold for 4 years will mean more families will be caught by this tax and will therefore need to consider estate planning opportunities by maximising reliefs and exemptions.

“Trustees of discretionary trusts will need to consider more tax efficient investment structures to minimise 10 year anniversary charges,” he adds.

Taulby-Faulkes had predicted that Mr Darling might introduce a higher IHT rate for large estates. But this prophecy has not come to pass.

The rules are the same. After the first £325,000 “nil-rate” band is reached, the remainder of an estate is taxed at 40 per cent. Married couples and civil partners are able to use any unused portion of their partners’ nil-rate band upon their death.

Tanya Powley

Reward schemes have proved to be increasingly popular with consumers, from gaining additional points at your weekly supermarket shop to cashback offers from the credit card you use to buy your shopping.

But a new first has happened in the rewards scheme market. Consumers can now accrue points when they buy a new mortgage or insurance policy after Countrywide, the property services group, today launched the industry’s first rewards scheme for mortgage customers.

The FT’s Money blog is a forum for the latest news and insights from the UK’s personal finance scene. Matthew Vincent, the editor of FT Money and his team of reporters will upload their views and insights on what’s happening in the industry and how this affects people’s finances.

This blog is no longer active but it remains open as an archive.

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About our bloggers

Lucy Warwick-Ching is the FT’s new Money Online Editor and has been a UK Companies reporter covering tobacco, pubs and leisure companies as well as the deputy editor on House and Home.

Matthew Vincent is the FT’s Personal Finance Editor and was previously the editor of Investors Chronicle, where he also devised the award-winning online video The Market Programme, and produced the BBC-FT standalone magazine ‘How to be Better Off’. He presents the weekly FT Money Show audio podcast, and previously worked on the BBC TV programmes Short Change and Pound for Pound.

Alice Ross is deputy personal finance editor of FT Money. She specialises in pensions, investments and investment trusts. Alice joined FT Money in April 2008 - prior to that she was deputy editor at Money Management magazine.

Ellen Kelleher has been a personal finance reporter in the UK for close to four years. Before arriving in London, she worked in the FT's New York bureau where she covered the insurance sector.

Steve Lodge is a personal finance reporter on FT Money specialising in savings.

Josephine Cumbo has written about all aspects of personal finance but currently specialises in insurance. She also covered company news for Prior to working at the FT she was a news reporter for the ABC.

Tanya Powley is a personal finance reporter on FT Money specialising in mortgages and the housing market. Tanya joined FT Money in November 2009 after working in Australia covering personal finance for the Australian Financial Review and its sister magazine Asset. Prior to that, Tanya wrote about mortgages for UK trade newspaper Money Marketing.

Jonathan Eley is editor of Investors Chronicle, and has been with the title for ten years. Before that he worked for newswires and trade journals in London, New York and Hong Kong.