Tag: BCE 5A

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What? No LTA?

Well, yesterday’s budget is a surprise. Anyone can put 10k gross into their pension. And the LTA is gone. Wow. This is of course a total gift for billionaires – for anyone earning over 100k really – and tax top-ups and self-assessment credits could cost HMRC a lot. But from my perspective I can stop worrying about whether I’ll go over the LTA at age 60, and stop calculating carefully for BCE5A at age 75, and start editing this website! Maybe wait a couple of weeks to be sure it’s really true, and save the deleted pages for when the LTA is reintroduced.

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Trust charges and some consolidation

After a few months of having Investment Trust rather than Funds, I can clearly see the effect on charges with Hargreaves Lansdown. I’m now paying £3.75×12 = £45 per year for my ISA and £16.66×12 = £199.92 per year for my SIPP/Drawdown, plus any dealing charges which are usually somewhere around £10 each time. Those annual charges are capped at those levels. That makes me very happy. (And it means that for someone holding over £10,000 in an ISA there are lower charges to hold 100% ITs than to hold 100% Funds.)

Previously I’d planned to shift to Interactive Investor, mainly to reduce charges. But with the charges above I can get low charges from HL. I far prefer using HL’s customer service versus ii’s, plus HL have been error free with me (unlike ii). I find the HL interface easier, and perhaps because of that my overall investment return has been a few percentage points higher on both my HL ISA and my HL SIPP. I’ll also have my “pots” of SIPP crystallisations in one place so it will be easier to keep them roughly in proportion in advance of BCE5A at age 75. So I’m in the process of consolidating with HL. The ISA consolidation was quick. The SIPP consolidation is taking weeks, with multiple forms to fill – I think driven by ii protecting themselves from transfers out to bad pension schemes – and the effect is that my impression of ii deteriorates by the week. Ah well, not long now.

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Anticipating tax with a revised planning model

After a fairly good investment return this year, I thought I’d better look ahead at what prolonged good return might mean for taxes.  At the same time I’ve adjusted how I plan ahead, which has barely changed the pension that I allow myself, but which gives me a better view of tax implications.  It all means that Lifetime Allowance BCE 5A needs thinking about.  I have a plan for now, and couple of options for a few years’ time.  I’ve written a page on this.