Pension Tax-Free Cash
A new study from Hargreaves Lansdown has revealed that 38% of over 55’s have no plans for the tax-free cash portion of their pension. The research further indicated that 14% of the people surveyed said that they planned to put the funds into cash savings. This could be potentially harmful to long-term retirement outcomes as the funds would no longer be invested and as such be eroded by the effect of inflation.
Many modern pensions allow for phased drawdown which means that you have the ability to take portions of your tax-free cash as and when needed or as a regular income which can be useful if the whole amount is not immediately required. This is tax-efficient and allows time for further retirement planning.
At present pensions are outside of the estate for inheritance tax (IHT) purposes but will be included from April 2027. This means that consideration can be given to using the tax-free cash element from your pension in order to reduce your IHT liability. One way of achieving this would be to invest this into a business relief qualifying investment service. Please see below for an example of this:
*The above example only considers the IHT due on the unspent pension and not any other assets that may form part of the estate.
The above is an example only and does not constitute advice which would have to be based on individual circumstances and objectives. If you would like to discuss further, please contact the office.
Darren Fuller – Clear Senior Paraplanner
Football & sticker crazy!
So
WORLD CUP FEVER is sweeping many offices!
There are Sweepstakes, wall charts, rivalry between England and Scottish offices, it’s all kicking off!
But, what has REALLY got some teams going, is this year’s Panini sticker album:
Source:Panini UK
Time spent hunting for rare opportunities, trading with other teams (or children), plus the nostalgia factor for a team who had spent their youth sticking, rather than kicking!
As this is thrilling and the chase is real, an interesting analysis can be done.
The 2026 Panini FIFA World Cup sticker album is the biggest in history. The album includes a whopping 980 stickers, representing the 48 teams that will be playing.
Now, how much might it cost you to complete the sticker book? In an ideal world, you’d buy 140 packs, with 7 stickers to a pack, and without duplicates – it would cost £175.
However, there is a reason that Panini can double it’s annual sales in a World Cup year, it’s on course to make $1.5 billion from sales this summer, and that’s just on the stickers.
The numbers are in Panini’s favour:
Source: 7IM
After buying 700 stickers, you’re around 50% complete. But now it gets harder, not because of bad luck, but because of basic maths;
The Law of Diminishing Returns:
Stage 1. Early packs deliver rapid progress – almost every sticker is new.
Stage 2. Each new pack has a few stickers you’ve already got. You start seeing familiar faces e.g. Jeremy Doku and Declan Rice.
Stage 3. You should stop buying packs once you’re around 90% complete (around 300 packs, so £375 spent). If you need 50 stickers to complete the book, you’d have to buy 600 packs of stickers. Time to start swapping!
There is, of course, an investment analogy here:
Some investors think that continually adding stocks or funds to their portfolios increases diversification. But there is a sweet spot, like sticker collecting. For a given allocation (say, UK Equity), once you’ve got 4 funds, adding any more doesn’t help. Risk doesn’t reduce, and returns don’t increase.
Changing the portfolio requires swapping, not buying (although less frequently than with stickers!
Source:7IM
Household spending sentiment worsens as job security deteriorates.
S&P Global Consumer Sentiment Index (CSI) survey has collected monthly data since 2009. It is based on a panel of 1500 UK households. The headline index is a combination of gauges tracking household financial wellbeing, labour market conditions, household spending, savings and debt.
The index held steady in June with readings similar to those seen in April and May, it rounded off the second quarter as the most downbeat since Q3 in 2023. The latest data was collected between 4th and 8th June.
Source: S&P Global.
An Englishman’s home is his castle.
Source:Reddit
The saying has been around for centuries, but, unfortunately, quite a lot of the homes we have are centuries old too, although not castles!
38% of the UK’s housing stock was built before 1946 – in Europe it’s under 20%.
Amongst the variety of reasons for why we are on our seventh PM in a decade, the core problem remains unchanged:
Growth.
Homes are part of the problem, but could also be the solution.
Building new homes creates lots of jobs in planning, materials and construction – as well as all the secondary industries (transport/cafes/hotels) around it. It also makes an economy more flexible, allowing people to move around.
On the other hand, repairing doesn’t have the same effect. If you have a decorator around the benefits do not go further than you having an updated living room. The UK has gone down the repairs route for the past decade spending 40% more on repairs and maintenance than in 2016. This has become more acute since Covid. The spend on new builds is the same as ten years ago.
UK spending on housing (public and private)
Source: ONS
In the UK it’s almost a 50/50 split between new and old spending. For comparison, in Europe it’s 60/40 in favour of new builds, in the US it’s 70/30, and in most Emerging Markets, it’s 80/20.
We appear to be fixing castles and not building them.
But by trying to shift that percentage just a few points in the right direction could help the growth problem.
Some of this is down to rising interest rates. New buyers are unable to get the mortgages they could when rates were at zero. Making matters worse is the stamp duty, which is a tax seen as a disincentive, leading to the question-
“Why don’t we save the stamp duty and the stress and just repaint/renovate/do an extension?”
It’s anybody’s guess what decisions the new PM, Andy Burnham, will prioritise, but generating growth must be high on the agenda. Targeting stamp duty would be obvious no matter what rates do.
Build more castles …
Source:7IM
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