I’ve whinged about the NHS Pension situation before, so this week I’ve been following Dr Kate Lovett’s threads on Twitter with interest. The Dean of the Royal College of Psychiatrists, this year she was the recipient of an incremental increase in salary due to experience and an excellence in practice award. This has resulted in a tax bill 120% of her annual salary. How?
As an unfunded DC scheme that has been raided multiple times by the Government, the whole situation is ludicrously punitive. There is no pot of cash which grows, it is all dependent on the pension scheme remaining the same by the time you retire, plus the calculations for tax being correct (1). If you’ve ever dealt with public sector HR you’ll have your own thoughts about this. The taper cap doesn’t work when applied to DC schemes, and in the medical profession it’s demoralising. There’s a whiff that the intention was to drive people out of the NHS scheme and into SIPPs or similar. A drive for a smaller government.
These pushes towards self-invested pensions are important for the self-employed. Despite continuous suggestions and prompting, most self-employed people are not paying into a pension (2). In previous times, a decent state pension could cover you, however our state pension has fallen to one of the lowest in Europe, again evidence of a smaller government dogma. Couple this with the expectation from some parties that the state pension/ national insurance should operate like a DC pension, not an insurance policy, and we see how people have become more ‘me first’ (3). I can understand the drive for a small government, but there will always be some who slip through the cracks or don’t understand. Encouraging everyone just to think about themselves risks leaving those individuals behind. How long can the state pension last in the face of dogma?
Have a great week,
The Shrink
Other News
- The £ has been all over the place with all the Brexit noise, and there’s a fair summary of it here in the Independent (4)
- Meanwhile house prices continue to grow very slowly, a loss relative to inflation (5)
- Norwich council houses have won an architecture prize, in a move back towards traditional layouts (6)
- The Guardian publishes the 20 firms behind a third of all pollution. Few surprises (7)
- And how the asset managers stack up in their investments (8)
- The UK somehow managed to avoid a recession, although we’re really just oscillating around the 0 mark (9)
- Coventry BS have released some Marcus beating bank accounts but with limited access (10)
- In a nice bit of non-finance news the UK is sending a robot to the Moon (11)
- A summary in Bloomberg of the current global financial worries (12)
- Renewable production overtakes fossil fuels for the first time in the UK (13)
- Mark Carney warns firms not to ignore the climate crisis (14)
- Despite the recent flops, the tech startup bandwagon rolls on (15)
- The FCA is cracking down on car financing, as the PPI firms sniff for the next mis-selling scandal (16)
- The Woodford zombie empire finally collapses (17)
- The IMF is warning about the state of corporate debt (18)
- A fund manager has to resign due to undisclosed conflict of interests (19)
- Tesla reports profits for Q3, surprising most observers (20)
- And the BIG news for passive investors, as Vanguard cuts it’s prices (21)
Opinion/ blogs:
- The BBC on the fall of Woodford (22)
- A glut of FIRE articles in the news this month, this from the NY Post, “rich millenial cheapskates” (23)
- And a derogatory nothing article from Fox (24)
- and a slightly more balanced article on someone who retired at 30 (25)
- And another negative(ish) spin from Forbes (26)
- A great little summary of cognitive biases (27)
- Should hospitals make their own medication to avoid drug firm price hikes? (28)
- More speculation at Moneyweek about October market crashes (29)
- How a guy on reddit turned $766 to $107,758 in two trades (30)
- Are budgeting apps any good? (31)
- UKVI on the Woodford Closure and FTSE100 valuations (32)
- And explaining ways to measure your portfolios returns (33)
- Monevator has been running a 10-year retrospective on asset classes. This article is on commodities (34)
- I usually dislike guest posts, but this on TEA about living a more natural life is really good (35)
- Weenie updates her dogs of the FTSE (36)
- Firevlondon continues his look at Angel Investing (37)
- I’ve had little time to collate three weeks worth of posts, so I’d recommend checking out u/reckless-saving’s weekly reddit post of FIRE blog posts (38)
The kitchen garden:
- I tried my hand at green tomato chutney this year, but this is a much better recipe (39)
- The Agents of Field have an Autumn special (40)
What I’m reading:
Food Of The Gods: The Search for the Original Tree of Knowledge: A Radical History of Plants, Drugs and Human Evolution – Terence McKenna – An ethnobotanist explores humanitys’ fascination with hallucinogenics, and the role of altered states of consciousness on the development of human society.
References:
- https://www.hsj.co.uk/workforce/top-doctor-reveals-huge-tax-bill/7026227.article
- https://www.thisismoney.co.uk/money/pensions/article-7554943/Self-employed-nudged-save-2-50-day-pensions.html
- https://www.thisismoney.co.uk/money/pensions/article-7538347/Im-terminally-ill-60-state-pension-just-lost.html
- https://www.independent.co.uk/voices/brexit-pound-sterling-fall-no-deal-boris-johnson-trade-a9145701.html
- https://www.bbc.co.uk/news/business-49959237
- https://www.theguardian.com/artanddesign/2019/oct/08/stirling-prize-architecture-goldsmith-street-norwich-council-houses
- https://www.theguardian.com/environment/2019/oct/09/revealed-20-firms-third-carbon-emissions
- https://www.theguardian.com/environment/2019/oct/12/top-three-asset-managers-fossil-fuel-investments
- https://www.bbc.co.uk/news/business-49998074
- https://www.thisismoney.co.uk/money/saving/article-7558523/Three-quirky-savings-accounts-better-rate.html
- https://www.independent.co.uk/life-style/gadgets-and-tech/news/spider-robot-moon-uk-lunar-mission-space-spacebit-nasa-a9150641.html
- https://www.bloomberg.com/news/articles/2019-10-12/is-the-world-economy-sliding-into-first-recession-since-2009
- https://www.theguardian.com/business/2019/oct/14/renewable-electricity-overtakes-fossil-fuels-in-uk-for-first-time
- https://www.theguardian.com/environment/2019/oct/13/firms-ignoring-climate-crisis-bankrupt-mark-carney-bank-england-governor
- https://www.theguardian.com/business/2019/oct/13/entrepreneurs-seek-venture-capital-despite-high-profile-tech-flops
- https://www.bbc.co.uk/news/business-50052375
- https://www.thisismoney.co.uk/money/news/article-7578721/Woodfords-empire-collapses-loses-three-funds-shuts-firm.html
- https://www.theguardian.com/business/2019/oct/16/global-economy-faces-19tn-corporate-debt-timebomb-warns-imf
- https://www.bbc.co.uk/news/business-50089887
- https://www.theguardian.com/technology/2019/oct/23/tesla-q3-earnings-elon-musk
- https://www.vanguardinvestor.co.uk/articles/latest-thoughts/investing-success/fee-cuts-show-vanguard-commitment?cmpgn=ET1019UKPALBR0001
- https://www.bbc.co.uk/news/business-50094982
- https://nypost.com/2019/10/08/inside-the-strange-secretive-lives-of-rich-millennial-cheapskates/
- https://www.foxbusiness.com/personal-finance/millennials-fire-saving-retirement
- https://www.foxbusiness.com/money/millennial-millionaire-retired-30
- https://www.forbes.com/sites/ryanderousseau/2019/10/22/why-happiness-grew-after-abandoned-early-retirement/
- https://www.lifehack.org/340263/aware-these-cognitive-biases-and-youll-much-more-successful
- https://www.theguardian.com/science/2019/oct/15/diy-drugs-should-hospitals-make-their-own-medicine
- https://moneyweek.com/516430/another-october-stockmarket-crash/
- https://www.bloomberg.com/news/articles/2019-10-17/a-guy-on-reddit-turns-766-into-107-758-on-two-options-trades
- https://www.ft.com/content/6dff9670-cf26-11e9-b018-ca4456540ea6?shareType=nongift
- https://www.ukvalueinvestor.com/2019/10/woodford-closure-ftse-100.html/
- https://www.ukvalueinvestor.com/2019/10/how-to-measure-your-portfolios-returns.html/
- https://monevator.com/10-year-retrospective-commodities-the-lost-asset-class/
- https://theescapeartist.me/2019/10/18/the-inestimable-advantages-of-living-a-more-natural-life-part-2/
- http://quietlysaving.co.uk/2019/10/24/dogs-nightmare-and-random-shares-update/
- https://firevlondon.com/2019/10/24/angel-investing-2-what-happens-next/
- https://www.reddit.com/r/FIREUK/comments/dn3opn/weekly_fireuk_blog_posts/
- https://lovelygreens.com/spicy-green-tomato-chutney/
- https://agentsoffield.com/2019/10/13/an-autumn-special/