Any other UK residents here?
I don't receive any benefits so I don't have to worry there, I'm a basic rate taxpayer so I'm not facing a massive rate hikes.
Job wise I'm currently working for a manufacturing firm which is far from secure at the moment.
I will benefit from the extra ISA allowance, & I hope for but certainly don't anticipate ever seeing the £10,000 personal allowance increase.
I will lose big time from the change to the state pension being calculated using CPI instead of RPI (did I get that the right way round? Yes I did!) seeing as the state pension age for me is 37 years away. Private pensions will undoubtedly follow suit. I find it really frustrating that the goal posts keep moving, how are you supposed to plan for retirement if they keep changing the pension age?
Has anyone noticed any potential loop holes to use?
UK Spending Review changes
Hi Orinoko
I'm from the UK too, but from Scotland, so the spending review affected us slightly differently in certain respects.
Job-wise I work in a publicly-funded institution (post-16 education) so we are facing 25% cuts and I have concerns about my job security. Either way, we are definitely facing pay freezes or seriously below inflation pay rises for the lifetime of this parliament. Our public pensions are also about to change for the worse: I will need to pay in more money to get less out at the end.
Like you, I am facing an increased state pension age (I think the current prediction is age 68, so another 34 years). I never include the state pension in my retirement calculations: I just assume it won't exist by the time I reach that age.
I currently use my full ISA allowance each year, so have benefited from the increased allowance. I don't manage to save a huge amount over that allowance, and have too much in cash but am reluctant to tie it up just now.
I'm from the UK too, but from Scotland, so the spending review affected us slightly differently in certain respects.
Job-wise I work in a publicly-funded institution (post-16 education) so we are facing 25% cuts and I have concerns about my job security. Either way, we are definitely facing pay freezes or seriously below inflation pay rises for the lifetime of this parliament. Our public pensions are also about to change for the worse: I will need to pay in more money to get less out at the end.
Like you, I am facing an increased state pension age (I think the current prediction is age 68, so another 34 years). I never include the state pension in my retirement calculations: I just assume it won't exist by the time I reach that age.
I currently use my full ISA allowance each year, so have benefited from the increased allowance. I don't manage to save a huge amount over that allowance, and have too much in cash but am reluctant to tie it up just now.
Hi Shandi
Yeah, I'm also coming round to the conclusion that a state pension should not be assumed.
I hope your fears for your job come to nothing. It turned out that I received my 1 month's notice a couple of weeks after I started this thread which although not a shock was still very unpleasant. Fortunately I managed to find another job starting straight after the other finished, although with a painful drop in salary. For all the doom in the news I think there are lots of jobs out there, but a lot of companies can't afford to advertise or use agencies so make sure you're talking to anyone & everyone for any opportunities. I found a dozen worthwhile jobs to go for within 3 days of being given the boot, less than a quarter were advertised.
Most people expect the spending cuts to result in mass job losses, but I don't think this is the case. Both public & private companies are still expected to provide the same services, so the jobs are still there, it's just the salaries are being slashed.
When you say you are using your full ISA allowance do you mean just the cash side or the stocks & shares half as well (I assume by your 'too much in cash' comment that you don't use the whole lot for stocks & shares)? Currently I have about 80% of my savings in cash, I'm in no rush to buy shares at the moment, when the FTSE is over 6000 they cost more than I'm willing to pay!
Are you a higher rate taxpayer? If not, be wary of sticking all your cash in an ISA. All the 'financial experts' in the news seem to recommend ISAs above everything else. But the top ISA at the moment is paying all of 3% interest. I've got quite a bit of cash in a 2 year fixed account at 4.35%. 80% of 4.35% is more than all of 3%. Unless you are a higher rate tax payer ISAs aren't as great as they are made out to be.
Yeah, I'm also coming round to the conclusion that a state pension should not be assumed.
I hope your fears for your job come to nothing. It turned out that I received my 1 month's notice a couple of weeks after I started this thread which although not a shock was still very unpleasant. Fortunately I managed to find another job starting straight after the other finished, although with a painful drop in salary. For all the doom in the news I think there are lots of jobs out there, but a lot of companies can't afford to advertise or use agencies so make sure you're talking to anyone & everyone for any opportunities. I found a dozen worthwhile jobs to go for within 3 days of being given the boot, less than a quarter were advertised.
Most people expect the spending cuts to result in mass job losses, but I don't think this is the case. Both public & private companies are still expected to provide the same services, so the jobs are still there, it's just the salaries are being slashed.
When you say you are using your full ISA allowance do you mean just the cash side or the stocks & shares half as well (I assume by your 'too much in cash' comment that you don't use the whole lot for stocks & shares)? Currently I have about 80% of my savings in cash, I'm in no rush to buy shares at the moment, when the FTSE is over 6000 they cost more than I'm willing to pay!
Are you a higher rate taxpayer? If not, be wary of sticking all your cash in an ISA. All the 'financial experts' in the news seem to recommend ISAs above everything else. But the top ISA at the moment is paying all of 3% interest. I've got quite a bit of cash in a 2 year fixed account at 4.35%. 80% of 4.35% is more than all of 3%. Unless you are a higher rate tax payer ISAs aren't as great as they are made out to be.
Sorry to hear about your job loss, but also encouraged to hear that there are jobs out there. I think you are right about the services still needing to be provided, and there is a very strong "do more with less" agenda at the moment. I think there will definitely be some job cuts, with additional responsibilities and workload for no extra money for those remaining.
I put the full £10.2K into a stocks and shares ISA (£7.2K until this year). I used to use Cash ISAs but haven't added to them since 2008, and transferred 4 years worth of Cash ISAs to a stocks and shares ISA about 18 months ago when the market was lower. The reason I have too much cash is because I used to be a landlady but took the profits and ran a few years ago, just as the property market here was beginning to stall. I'm not a higher rate taxpayer, so I think I get a better deal from the Stocks and Shares ISA.
I've also got a bit of cash in ZOPA, lent out to several people on either 3 year or 5 year terms. They get loans cheaper than from a bank, and the interest is much better than savings accounts, but it depends on the % of bad debt.
I put the full £10.2K into a stocks and shares ISA (£7.2K until this year). I used to use Cash ISAs but haven't added to them since 2008, and transferred 4 years worth of Cash ISAs to a stocks and shares ISA about 18 months ago when the market was lower. The reason I have too much cash is because I used to be a landlady but took the profits and ran a few years ago, just as the property market here was beginning to stall. I'm not a higher rate taxpayer, so I think I get a better deal from the Stocks and Shares ISA.
I've also got a bit of cash in ZOPA, lent out to several people on either 3 year or 5 year terms. They get loans cheaper than from a bank, and the interest is much better than savings accounts, but it depends on the % of bad debt.
hmm, I didn't realise you could transfer cash to stocks & shares, that will be a useful option for me in the future.
I've also got some money in Zopa, but am currently in the process of cashing out. I've had good returns & only one loan go bad, but I think the future (next couple of years at least) will be poorer than the present so don't want to continue the risk.
I must say I'm impressed with your market timing, sounds like you got out of property/into the stock market at almost optimal times. Do you have any secret techniques or was it down to a bit of luck?
I've also got some money in Zopa, but am currently in the process of cashing out. I've had good returns & only one loan go bad, but I think the future (next couple of years at least) will be poorer than the present so don't want to continue the risk.
I must say I'm impressed with your market timing, sounds like you got out of property/into the stock market at almost optimal times. Do you have any secret techniques or was it down to a bit of luck?
I would definitely recommend transferring cash ISAs to Stocks and Shares. I had to pay a transaction fee to do so, which was 1% of the amount. Can you recommend a good Cash ISA? I just got a statement for one of my Cash ISAs and it paid less than 1% interest this year! It was paying much more than that last year and they never informed me of the rate change.
I'm happy to keep some money in Zopa because it is a small amount compared to other investments (about £5K). I consider it an experiment and am prepared for the possible downside as well as upside.
My market timing involved a lot of luck. I'm afraid I don't have any secret techniques. I bought the flat in 2001 very cheaply (£23.5K)as soon as I had a permanent job that paid enough to get a large enough mortgage to buy a place. In 2001 the housing market in that part of Scotland was still very much a buyers market: it didn't really take off until 2005.
People warned me not to buy, because the market was so bad and the city population was falling and I was buying all I could afford, which was a 1 bed flat in a bad part of town which they thought I might never be able to re-sell. My argument was that a) I was going to be there at least 3 years b) the mortgage was 30% cheaper than renting a comparable place, and was even slightly cheaper than getting a room in a shared house and c) even if the market never recovered, if I was moving it would be because I had a much better job offer in another part of the country, or had paid off the mortgage, so either way I could rent it out for below market rate and it would not cost me anything.
5 years later I had to move to a different city for work, and the market in the old city was just starting to take off. I had also paid off most of the mortgage, and the new city was so much more expensive that selling the flat would make little difference to how much house I could afford there, so I kept the flat and rented it out.
My tenant was okay at first but then his income became more precarious (he was self-employed) and he was often very late paying the rent, so I decided not to give him a new contract after the 2nd year and sell the flat instead, in order to avoid Capital Gains Tax, which would have kicked in if I rented it for a further year before selling. I also realised that the capital appreciation over those 2 years was unsustainable and my luck was likely to run out sooner rather than later.
I did think the housing market was stalling, and actually it was pretty bad by the time I put my flat on the market, but I got lucky and managed to sell quickly (2 weeks) and had 2 interested parties which pushed the price up to what I wanted.
I've not been so lucky with my current house. It is worth what I paid for it, but no appreciation in 5 years (actually it appreciated 25% then deflated back to the price I paid for it). The mortgage is cheaper than private rents though, so it isn't a disaster.
In terms of the stock market, I tend to start buying when the FTSE has dropped below 4,500 and colleagues are telling me "Never catch a falling knife". The market then drops further and they say "I told you so." But then it rebounds back much higher, and stop commenting. I'm not sure which way it is going to go next, but I'm investing about half my stocks and shares allowance in timber, natural resources and green energy funds, as well as trackers for China, Brazil and India, so half of it is not on the FTSE.
I'm still buying stocks, but am trying to work out when the best time is to stop buying (or at least reduce the amount I am buying) and start stockpiling cash to buy another flat to rent out. Market timing seems to be much more important with property than with the stock market because you can drip feed money into the stock market but you can't do that with property, unless you are so rich that you can afford to buy several properties.
I'm happy to keep some money in Zopa because it is a small amount compared to other investments (about £5K). I consider it an experiment and am prepared for the possible downside as well as upside.
My market timing involved a lot of luck. I'm afraid I don't have any secret techniques. I bought the flat in 2001 very cheaply (£23.5K)as soon as I had a permanent job that paid enough to get a large enough mortgage to buy a place. In 2001 the housing market in that part of Scotland was still very much a buyers market: it didn't really take off until 2005.
People warned me not to buy, because the market was so bad and the city population was falling and I was buying all I could afford, which was a 1 bed flat in a bad part of town which they thought I might never be able to re-sell. My argument was that a) I was going to be there at least 3 years b) the mortgage was 30% cheaper than renting a comparable place, and was even slightly cheaper than getting a room in a shared house and c) even if the market never recovered, if I was moving it would be because I had a much better job offer in another part of the country, or had paid off the mortgage, so either way I could rent it out for below market rate and it would not cost me anything.
5 years later I had to move to a different city for work, and the market in the old city was just starting to take off. I had also paid off most of the mortgage, and the new city was so much more expensive that selling the flat would make little difference to how much house I could afford there, so I kept the flat and rented it out.
My tenant was okay at first but then his income became more precarious (he was self-employed) and he was often very late paying the rent, so I decided not to give him a new contract after the 2nd year and sell the flat instead, in order to avoid Capital Gains Tax, which would have kicked in if I rented it for a further year before selling. I also realised that the capital appreciation over those 2 years was unsustainable and my luck was likely to run out sooner rather than later.
I did think the housing market was stalling, and actually it was pretty bad by the time I put my flat on the market, but I got lucky and managed to sell quickly (2 weeks) and had 2 interested parties which pushed the price up to what I wanted.
I've not been so lucky with my current house. It is worth what I paid for it, but no appreciation in 5 years (actually it appreciated 25% then deflated back to the price I paid for it). The mortgage is cheaper than private rents though, so it isn't a disaster.
In terms of the stock market, I tend to start buying when the FTSE has dropped below 4,500 and colleagues are telling me "Never catch a falling knife". The market then drops further and they say "I told you so." But then it rebounds back much higher, and stop commenting. I'm not sure which way it is going to go next, but I'm investing about half my stocks and shares allowance in timber, natural resources and green energy funds, as well as trackers for China, Brazil and India, so half of it is not on the FTSE.
I'm still buying stocks, but am trying to work out when the best time is to stop buying (or at least reduce the amount I am buying) and start stockpiling cash to buy another flat to rent out. Market timing seems to be much more important with property than with the stock market because you can drip feed money into the stock market but you can't do that with property, unless you are so rich that you can afford to buy several properties.
All ISAs are rubbish 
Mine is currently with Santander which was at 3%, but the bonus rate has now ended & has now dropped to less than 1% so am transferring to the Halifax which pays 2.8% if you have a current account with them (get the reward account, they pay you £5 every month that you pay in £1000+, so pay in your salary, collect the fiver & transfer your cash into an account with interest to collect that as well). You have to switch your ISA every year or you end up with a really poor rate. As I said though, many standard fixed rate accounts pay more after tax than the top ISAs dish out tax free.
Mine is currently with Santander which was at 3%, but the bonus rate has now ended & has now dropped to less than 1% so am transferring to the Halifax which pays 2.8% if you have a current account with them (get the reward account, they pay you £5 every month that you pay in £1000+, so pay in your salary, collect the fiver & transfer your cash into an account with interest to collect that as well). You have to switch your ISA every year or you end up with a really poor rate. As I said though, many standard fixed rate accounts pay more after tax than the top ISAs dish out tax free.
Thanks for the advice 
I have now transferred my cash ISA to the Halifax since I have a current account with them anyway.
I really need to look into moving my non-ISA cash too, but we have just entered a 4 month redundancy consultation at work so I am reluctant to tie anything up in fixed term accounts that I may need to access within 6 months.
I have now transferred my cash ISA to the Halifax since I have a current account with them anyway.I really need to look into moving my non-ISA cash too, but we have just entered a 4 month redundancy consultation at work so I am reluctant to tie anything up in fixed term accounts that I may need to access within 6 months.