It’s Budget day, siblings, so I won’t keep you too long. In fact – and I don’t know if you know this – I can’t ever keep you. This is just an email; I haven’t got you trussed up in a corner somewhere. You’re free to go. The fact that you don’t is testament to either a) the continuing impact of my beautifully and painstakingly crafted prose or b) the fact nothing much else goes on at mid-day on a Wednesday.
It’s a) isn’t it? That’s the answer.
But on the offchance it isn’t, for once other stuff is of course happening around lunchtime today and so I guess that should be our subject. It’s a funny dynamic, when pretty much the whole Budget announcement has been well leaked in advance and so the exercise of having a statement at all is pretty much pointless. I assume most politicians are show-ponies of one sort or another, and love a bit of theatre. The adrenaline rush of the performance and the oxytocin hit of the warm embrace of your colleagues after (usually just before the knife enters your back). But if everyone knows what you’re going to say before you say it then you’re just a guy in a suit cosplaying parliamentarianism and while I’ll defend to the death people’s right to abuse themselves and their consenting partners in whatever way they see fit, this is a level of niche gratification that I don’t think even I can get behind.
Also: when the revolution comes all Budget announcements are getting moved to Tuesdays.
It looks very likely that by the time you’ve read this we’ll have a more generous Lifetime Allowance to help keep NHS consultants happy, potentially a more generous Annual Allowance to help keep…NHS consultants happy and hopefully a relaxed or removed MPAA, which we (and by ‘we’ I mean ‘I’) wrote about last week. I don’t think the consultants will care so much about that.
It’s been a long time since I did G60 as it then was; that’s back when pensions exams were proper, none of your pantywaist half-a-loaf pinko wokerati modern avocado millennial exams thank you very much. But what I do know is that changes in pensions are never, ever straightforward. As my old touring oppo Steve Bee used to say (and maybe still does): “if it’s fair it can’t be simple and if it’s simple it can’t be fair.” He’s right, but that does infer a guns-and-butter trade-off; it’s perfectly possible for Jeremy Hunt to deliver changes that are neither simple nor fair.
What price prestidigitation? I shall defer here to m’colleague Mr Monkey McPhail:
“Jeremy Hunt has a lean and hungry look: just as all the good news gets leaked in advance, the unkindest cut of all may be an increase to both the state pension age and the minimum age at which private pensions can be drawn upon (Normal Minimum Pension Age). As an outside bet, the government might look at going further on the state pension age and then introducing early access with actuarially neutral reductions. Increasing the state pension age saves the government billions of pounds; if you’re going to do it then it makes sense to tie in some increases in allowances. Any increase to the NMPA could derail savers’ retirement plans.”
He actually does talk like that.
Anyway, this will all keep the geeks dancing for a while, but the real thing here is that people will need help working out what it means for them, and that’s where about 7% of the population is extraordinarily lucky to have access to financial advice. That’s as distinct from financial planning, or wellness coaching or your preferred term. It strikes me that moments such as these, where some of the fundamentals really do change profoundly and quite quickly, are a useful and timely reminder that having a total command of pensions, tax, trusts, investment and the ins and outs of the products that make the most of these obscure issues that resist understanding by all but the most committed nerds is genuinely valuable.
I’m reminded of Victor Sacks’ barnstorming talk at #langcatlive Home Truths the other week, where he argued for financial advice before financial planning. I’m not sure he had the room with him to start with, but he did by the end through sheer force of will. And when we had a wee vote to decide if a new and entirely fictional firm would be advice-centric or planning-centric, advice-centric edged it.
The real answer of course is that both are important, but this week it’s time to celebrate that clients who use your services don’t just have access to a nice person who talks about their goals, but someone who understands this stuff so they don’t have to.
Right, go get the popcorn.
- Kind of interesting that companies interested in making money are backing away from hybrid advice. That’s two biggies…
- We send condolences to our friends at @SIPP on the loss of their chairman Colin Barral.
- And your music choice…well, it’s the Ides of March today. So let’s have, er, The Ides of March by your actual Iron Maiden, with a bit of Another Life tacked on the end. We don’t have nearly enough Maiden on the Update. MOAR MAIDEN.
See you next week