Episode 2 - Understanding UK Tax Allowances

In this episode of the Azalea Wealth Podcast, Harrison and Andrew of Azalea Wealth Management break down the essentials of UK tax allowances and what they mean for your financial future.

From understanding how pension contributions benefit from tax relief, to making the most of your ISA allowance and minimising your income tax bill, this episode is packed with practical insights designed to help you keep more of your money working for you.

Whether you’re planning for retirement, building your investments, or simply looking to become more tax-efficient, Harrison and Andrew share clear explanations, real-world examples, and smart strategies you can apply right away.

Tune in to learn how to navigate the UK tax landscape with confidence—and make informed decisions that support your long-term financial goals.

Brought to you by Azalea Wealth Management, and hosted by its two directors, this is your go-to podcast for straightforward, expert-led financial guidance.

Transcript

SPEAKER_00 0:15

Right. Welcome to episode two of the Azalea Wealth podcast. Um this is the second in our series of podcasts. Uh if you haven't uh checked out the first one, I would recommend going back and looking at that because that gives you a bit of a background of what we're about, what we're gonna be talking about in these podcasts. Today we wanted to touch on something a little bit more specific. Um we wanted to get into the actual the j the jargon that's always spoken about the words that people use with within financial management and just try and break that down for people just so it's easier to understand. Um it's a lot some of it's gonna sound basic to some people, other other people it won't do, but we just wanted to give a broad range of of what these what these things mean and what they're about. Um so I think first things first we'll probably want to um we want to talk about taxes based on.

SPEAKER_01 1:04

I keep telling you off a banging them and I just keep doing it myself.

SPEAKER_00 1:10

Actually been quite good, I haven't I haven't touched it as yet as of yet in the first minute and a half. Um but yeah, I think we wanted we wanted to touch on a few things, didn't we? Um I mean like you say from anything as basic as to pensions to ICEs, but we really wanted to sort of delve into the allowances and things like that. But we'll probably start by talking about what actually is income tax and what the allowances are for people's income because people tend to obviously sort of more talking about people who aren't self-employed, they get the pace up at the end of the week, they pay the tax, and that's that, and they don't actually understand what's going in, what's going out, what they're entitled to. Yeah, so we'll probably just delve in and start with that, really.

SPEAKER_01 1:50

Yeah, absolutely. Um yeah, uh it as you said, I don't think there's probably enough emphasis on understanding those things, and it's a question I get a you know asked a lot in meetings, particularly with business owners when they're trying to do their own income strategy, you know, kind of understanding where the thresholds are and and where to stop. Um but at the very, very basic level, um, we'll start at the at the at the at the bottom, I suppose. Um, you know, everyone in the UK is entitled to to something called a personal allowance, um, which is basically they can earn the first £12,570 tax-free. Yeah. Well, I say tax-free, it's technically taxed, but it's taxed at 0%. Yeah. Yeah. Um so that accounts for the first 12,570 of anybody's earnings. Then the first income tax threshold where you're paying tax is 20%, called the basic rate of tax, and that is from 12,570 all the way up to 5270. So effectively, the first you know, 37,700 after your 12,570 personal allowance is taxed at 20%. Okay. Uh, after that, you then got what's called the higher rate tax threshold. Um, high rate tax is taxed at 40%, uh, and that's taxed from 52.70 all the way up to 125.140. Yeah. And then finally, the last tax threshold you've got when it comes to income tax is the additional rate of tax, uh, and that's from 125.140 onwards. Yeah. So basically, once you've hit that number, if you're lucky enough to do so, after that, everything's taxed at 45%. Now, what a lot of people talk about occasionally is particularly those higher earners, is something called the 60% tax trap. Um, so in theory, there is another tax band, but it's not an official one. Um once your earnings cross over £100,000, from £100,000 to £125,000, you lose your personal allowance at a rate of um £1 for every two. So, in essence, once you get to £125,140 from £100,000, you've lost all of your personal allowance. So not only are you getting taxed on that money at 40%. Exactly that. So it's called the 60% tax trap. But yeah, those are the the the four official and the fifth unofficial.

SPEAKER_00 4:05

I think what I wanted to mention was because what I think what a big misconception is with tax bans is people think once they get into a threshold, their full salary is then taxed at that. I've heard that so many times. People say, Oh, I don't want to go into the 40% because I'll be losing 10 grand a year.

SPEAKER_01 4:24

No, as you say, like so as a very, very basic example, we've just said that the the the 20% rate ends at 50,270. Yeah. If your salary is fifty thousand two hundred and seventy-one, you will be taxed on one pound at 40%. And it's the same with all of those bands.

SPEAKER_00 4:39

There is there is other implications with being in that higher tax bracket for that certain amount, isn't there? It's not it's not just to do with salary, is it?

SPEAKER_01 4:48

So there'll be other Yeah, so everything goes into it from an income tax perspective, you know, overtimes, commissions, those sorts of things. Um which sometimes people can forget about.

SPEAKER_00 4:57

Rental income, things like that. Yes, yes, absolutely. Because these things, but if you If owned personally, yeah. For example, if you've moved in with a partner or something like that, and you're taking even if it's something like 400 quid a month, that is that is income, isn't it?

SPEAKER_01 5:09

Yeah, exactly. That all gets factored into the calculation. Yeah, you're absolutely right. Yeah.

SPEAKER_00 5:13

Um yeah, I think you've covered that. I think you've covered that really well. Um I think you've brought that down, and hopefully that helps people understand because even though it does sound quite basic, um there'll be a lot of things in there that people won't have agree on it. You're absolutely right. And you might some people think, oh well, yeah, but that'll never affect Mayan and 60,000. But will you be surprised? Because another thing that I've probably wanted to touch on is I can't remember exactly the the amount of years, but the rates haven't increased with inflation.

SPEAKER_01 5:39

No, they haven't, and that's you know, that's been a big talking point of the last couple of. Yeah, that's been the last higher bracket. That's been a talking point of the last few budgets that on the face of things, for you know, if you were to look at that and see that thresholds are frozen, that can almost potentially buy governments be spent as a positive. Yeah. Because they're not effectively reducing them. But the reality is that as we know, as as you know, pay rises happen every single year, as you know, you are going to earn more.

SPEAKER_00 6:06

The combination of inflation going up and then rates not going up, more it's being a higher tax higher taxpayer, it's not going to be it's not the top people, it's it's going to be more and more people. It's becoming the more common, you know, the more common issue. Absolutely. Absolutely, mate. Um so I suppose with because we've touched on allowances, it probably makes sense to then go on to next onto pensions because that's uh a pension. Well, obviously, people think they know what a pension is, but I suppose I wanted you to give us a rundown of exactly what a pension is and how you can use a pension within your your salary and how that how your pension comes off before salary and can affect your final tax packets and things like that.

SPEAKER_01 6:48

Yeah, absolutely. Um you know a pension really is is it's a vehicle for investments, is probably the is probably the easiest way to put it. It's most closely associated with retirement because obviously pensions do have age restrictions. At the moment, the earliest you can access your private pension is 55. Uh that will be going to 57 from 2028. Um sometimes people get that confused in terms of the earliest age you can access a private pension versus your state pension age. Yeah. The two very different things. Your state pension age is when you're entitled to your state pension from the UK government, depending on your national insurance contributions over the years. Your private pension age is exactly that when you can start to access your private pension. Now, pensions do have an allowance, as you said, it's it's it's called the annual allowance. Um and typically there is there is caveats to this, um, depending on your earnings and and and and what and so forth. But the typical annual allowance is £60,000. Now one of the caveats that I kind of do have to explain with that is that the actual allowance is in terms of being specific to you, is is actually limited to how much you earn a salary. So for argument's sake, the annual allowance, as I said, is £60,000 in its most basic form. However, if you're a salaried employee on £40,000 a year, your annual allowance for you is £40,000. Okay. And that's where I think sometimes it can get a little bit of a few.

SPEAKER_00 8:15

You could include more than your salary.

SPEAKER_01 8:18

No, that's that's the idea. Yeah, because obviously that would That's the idea, yeah. Because as you say, well, that well, there's not many situations where it would be rare, wouldn't it?

SPEAKER_00 8:28

Because it's stopping people taking advantage of that who who could.

SPEAKER_01 8:31

Yeah, exactly exactly that. It's just you know, it's having that balance as you say. Now the other thing that is also available with pensions is you've got something called the carry forward allowance. So if you have pension allowance that you haven't used over the last three tax years prior to this tax year, that is available for you to put in as a lump sum in this tax year.

SPEAKER_00 8:51

Oh right. Effectively does carry over from Yeah, yeah.

SPEAKER_01 8:54

Um now with carry forward, it's only available if you have paid into a registered pension scheme at some point in your life. So for argument's sake, let's I don't know, I'll make up a fic fictitious example. I'm 30, I've never paid into a pension ever, never owned one. Now I'm gonna start to pay into one. I wouldn't have any carry forward available.

SPEAKER_00 9:15

You have to have even if it's a minimal amount. Absolutely.

SPEAKER_01 9:19

Yeah, so even let's use the same example, me, you know, nearly 30, I'm not quite 30, but um I paid into a pension when I was 18 years of age, so I do have a private pension with X, Y, and Z. Yeah. I've not paid into it since. I'm now starting a new one. Carry forward would be available.

SPEAKER_00 9:36

I suppose with auto-enrolment now most younger people would will have been, I suppose.

SPEAKER_01 9:40

Yeah. Yeah, that that's the whole point of auto enrollment. Really, it's just to encourage more people to you know to think more proactively about their own retirement. Um because really that's you know, that's what pensions are for. Um, you know, we are they are focused on retirement, hence the age restrictions.

SPEAKER_00 9:55

I suppose it might be worth touching on auto enrolment actually, um, because there's there's obviously a lot of within pensions, yeah the regulation came and I can't remember exactly when it was it, um, which made it a legal obligation for companies to offer a pension. Um but what tends to happen is they'll majority not all companies, but the majority of companies will then put you in a basic government-ran pension fund. Yeah, exactly.

SPEAKER_01 10:21

So um not not necessarily, um just the the the the the the idea behind auto enrollment is that exactly as you say for qualifying um employees of companies is that if they meet certain thresholds they have to be offered legally a a pension scheme. Now that doesn't have to be government sponsored scheme that they're allowed to choose within reason anything as long as it's auto-enrolment. Um you know it it's it meets the auto enrolment requirements. Um but yeah, I mean for me auto enrolment's been a fantastic thing. Yeah, I agree. Yeah, 100%.

SPEAKER_00 10:54

You know, I I do I probably wouldn't have a pension myself without it.

SPEAKER_01 10:58

No, I and I think it's it's it's as you say, it's it's it's allowed people to think more proactively about their own retirement, which I don't think anyone's you know of course people have done it previously, but now I think it's brought it to the forefront of you know, particularly our generation, you know. How many conversations do we have? Well that's it, yeah, exactly. And you know, with friends and whatever else where it's just it's not even a consideration.

SPEAKER_00 11:19

If you it's quite I mean it's quite a common thing for people to say in this industry, but if if you start a pension when you're 20, yeah, your your regular contributions can be halved by the time you're 30. If you start when you're 30, you're gonna have to put twice the amount in to catch up from when you were 20. Well, exactly that, yeah. You have the compound interest of being of having that 10-year head start. Yeah. Um and that I think Roman has done that.

SPEAKER_01 11:47

Get myself in a right old tangle here, I have to say. Right, there we go. Uh yeah, no, you're absolutely right. Um, you know, we're obviously always going to be big advocates of pensions given given what we do for a living, but um, you know, the other side of things that people don't fully understand, and to be honest, this is probably a completely separate topic and probably something else we can talk about at a different time, but you know, is the tax relief that comes with with with pension contributions. Um, you know, I think if people better understood the benefits of of that side of pensions, they'd probably be a little bit keener to use them. But again, that's what we're opening up for different kinds of worms there.

SPEAKER_00 12:23

Yeah, well, I mean I I had a conversation with somebody a couple of years ago, and he was sort of saying now he was worried he was doing a lot of over. I mean he was worried about getting into that higher tax bracket. And I said, Well, how much are you putting in your pension? And he said, Oh, just the minimum. And I said, Well, put an extra per cent in your pension because that's gonna bring your salary down, and then that's that's not only giving you those those tax breaks with the pension, yeah, it's stopping you from going into that higher tax break. Well, that guy was in his this guy was in his late 40s, so it wasn't like he wasn't gonna have access to that money. It's in five years' time, that's going to be his money. I can see why somebody in their twenties would wouldn't be as keen on that, but I would advise on that for anybody, sort of a day.

SPEAKER_01 13:01

100% I mean, you know, like I said, it it it probably is a separate topic altogether because it's such a it's such a mammoth, and to be honest, it's a you know, as you know, it's a big part of what we do. Yeah, uh, we don't want to get too far into it because that's for another day, isn't it?

SPEAKER_00 13:12

But um yeah, we don't want to steal all the good content. No, exactly, exactly. Um but now again I think we've sort of touched on that. I say most people know what a pension is, they just don't know the ins and outs. We probably will do a full episode on the ins and outs of pensions at some point, yeah. Um depending on what pencil that in. 100%. But what we'll do is we'll get some feedback on what people sort of want uh because we like you say, being in the industry, it's quite hard to know exactly what people what people do and don't know.

SPEAKER_01 13:38

We we've said it before a million times, you know, it's weakish, you can be quite blaser because we talk about it every day. Whereas, you know, even when we were planning this podcast, some of the things we said we need to talk about and don't need to talk about it's like how how far do we take it?

SPEAKER_00 13:50

I think sometimes you're better off just covering everything and then you've you've done it then, haven't you? If people know it, then know it, but every not everyone's going to know about it. Um so there is certain I mean that there is other ways um in regards to saving away from um away away from pensions, I suppose, um, which is an ISA. So I sort of wanted to sort of you can touch because everyone hears the word ICE, it's all it's all over the place. I'll put that in an ICE, but I would I would guess over 90% of people don't actually know what know what one is unless you've worked in a bank or in the in this industry. No, no, and is it so just one sort of just give us a little what what is what is an ISA? First of all, what does it stand for?

SPEAKER_01 14:29

Well I was gonna say that I'd I'd like to know if most people knew it was an acronym to be fair.

SPEAKER_00 14:33

Um yeah, so ISA's not it's not I C E R is it?

SPEAKER_01 14:36

No, it's not these aren't involved at all. So uh so ICE ISA stands for individual savings account. Um at the very, very kind of you know, from a very high level, an ICE is is a tax wrapper, basically. You know, you can put a certain asset into that tax wrapper, and once it's in that tax wrapper, it's allowed to grow free of income tax. Well, any tax for that matter. Um so the most typical example that people will be familiar with, I would imagine, is a cash ICE, um, which exactly as it says in the tin, um, you know, it's an ICE which holds just cash. So you can typically get those at your bank or your building society or um, you know, those sorts of places. Um now something that most people won't be familiar with, or may or may not be, is is a different form of ICE. It's called a stocks and shares ICE. Um now the title suggests that it's for stocks and shares specifically, but no, it's not. The idea is it's for it's for investments, it's an investment ICE. Um now within that you can hold, you know, within reason, most investment types stocks and shares, fixed interest bonds, you know, uh OEICs and commercial property, um, you know, alternative investment, you know, group funds, a million and one different things. Now, the burn the the benefits of an ISA, as I say, that once the money goes in, it's allowed to grow free of tax effectively. Um, you know, some of the other allowances that people might not be familiar with, but I'll quickly touch upon, for example, is the savings allowance. Yeah. Um now, if you've got savings in the bank and it goes above certain thresholds, um, you're liable for income tax on that interest.

SPEAKER_00 16:12

Um, I suppose that touches on what we're on about earlier, extra income when we're on about rental income, things like that. That's that's the version of interest income is another version that is part of your income, that's one of you would make it on top of your your your allowances, yeah. And you'll be, like you say, as you were as you were saying, you'll you'll be liable for any tax over a certain amount.

SPEAKER_01 16:30

Yeah. Now the main thing to kind of know with ICEs, as I think this is what most people will know about them, is that the limit is £20,000 per year. Um per individual, yeah. You can't have joint ICEs, as the title now suggests, everyone now knows, individual savings account. Um now, in addition to your ISO allowance of £20,000, you also have a junior ISO allowance if you want to make contributions for a child, for example. Um now that's an extra £9,000. So in essence, if someone wanted to put their full ISO allowance in plus put some money away for their for their for their child or their grandchild, it would be $29,000 a year.

SPEAKER_00 17:06

Yep. And the junior ICEs from an access point of view, is that then the child's money? Or no. If the parent needed that money, could they in essence?

SPEAKER_01 17:18

No, it's because yes and no is the simple answer. Um once the money goes in, yes, it's it's it's in the child's name. That the account is held in the child's name. Um, they're not allowed to access it until the age of 18.

SPEAKER_02 17:30

Yeah.

SPEAKER_01 17:30

From 18, it's it's their money, it's their account. They can decide to do whatever they want with it. At 16, they take control of it, they're not allowed to access it yet, but they're allowed to kind of dictate what happens with it. Um, but yeah, what really needs to be kind of understood with that is, and I get a lot of parents asking me about this, you know, it's once it's in that account, really it's it's it's their money.

SPEAKER_00 17:50

It's not to be used as an extra allowance for the adult. No, exactly. Because otherwise, you had four kids as an extra 40 grand. Yeah, yeah.

SPEAKER_01 17:55

It's not and and just by the way, just for clarity, that extra 9,000 is not per child, it's just for that person.

SPEAKER_00 18:03

Right, right. So if you have ten kids, it doesn't matter.

SPEAKER_01 18:06

No. Yeah. Still nine thousand. Yeah. Um so yeah, in a in a very roundabout way, you know, the the beauty of ISES is that tax-free environment, you know, that's why so many people use them. Yeah. Um, you know, there's a million and one different ways of investing in holding investments. We've touched upon probably the the two most popular. I mean, I think, again, personal opinion, I think ISES hopefully are going to become more popular following last autumn's budget.

SPEAKER_00 18:27

Yeah, I mean we'll touch on that because there was some slight changes coming in twent in April 27, is that right?

SPEAKER_01 18:32

I believe so, yeah. Yeah. And I mean, again, we won't go into it in infinite detail because for another day, isn't it? Yeah, there's and there's a lot of you know ratification processes to go between now and then. Um, you know, there's there's other allowances I'm sure we could talk about today, you know, dividend allowances, savings allowances.

SPEAKER_00 18:48

And I mean, and as we know with governments, these things can change again and again. Like I said, I wouldn't rest on your lows that they're going to um stick stick the plans. Yeah.

SPEAKER_01 18:57

Um so uh Yeah, and I think that you know, like I say, there's other things we definitely could touch upon in this area, but at the end of the day, you know, finance and and is such a vast area. What we can only do is, you know, we want to make these podcast episodes, you know, quick hits of of of important information. Yeah. You know, uh pension annual allowances and and dividends and and you know, even inheritance tax is a massive thing at the moment that people want to hear about, but it's not something we can do in the next you know, next minute it deserves its own its own stage. Yeah.

SPEAKER_00 19:30

Um so uh yeah, I think it was like you'll say I touched on ICE as there. There's like I say you could speak all day about I mean I was like I say got sort of opinions on the stocks and shares ones. I don't think we invest enough in this country. I think we should probably be better at it. It's just not the culture. No, exactly the countries. I mean, America's a big one. Everyone, everyone's involved in investments, and there just needs to be more understanding on it's not got it it's there's not there's not risk. The risks obviously are there. Um but like you said, it's called a stocks and shares ICE, but that's not necessarily that doesn't mean you're picking and chosen stocks and shares. There's there's funds available for people, so I just think um more education on that in this country would be.

SPEAKER_01 20:06

And hopefully we can do our little bit on that.

SPEAKER_00 20:08

Yeah, well that's it, that's it, isn't it? Like I said, I think I think it is worth doing a full sort of podcast on that at some point. So 100%. Couldn't agree, more for that. Um so any other sort of allowances? Um obviously we've touched on pensions, ICEs, things like that. Um certain things people are going to do. Is there anything else that we need to be aware of?

SPEAKER_01 20:24

I think for the time being, you know, the personal we've talked about the tax allowances, which are important for people to understand. You know, we've spoken about pension allowances, we've spoken about ISO allowances, I've touched upon some of the others, you know, dividend allowances, you're allowed to take up the £500 of dividends paid tax year without without paying it. Dividend tax, again, that's a different animal order, kind of dividend tax. Uh, capital gains allowances, you know, you're allowed to make a profit on the sale of an asset up to £3,000 a year without paying tax. Um savings allowances for most people. Well, for basic rate taxpayers, they're allowed to earn a thousand pounds in interest before they start paying tax. That's different for higher rate, different for additional. It's £500 for higher rate, zero for additional.

SPEAKER_00 21:04

It is constantly changing, as we said. This is the thing, yeah. The goalposts are constantly changing. So unfortunately, it is one of those things that you do sort of need to keep on top of.

SPEAKER_01 21:12

Well, that's the beauty of our job, mate.

SPEAKER_00 21:14

You know, for a lot of our clients, it's our job to keep on top of it. Um this is this is why, however complex your situation is really, you you will you want to have you want to have some sort of guide on somebody to help you throw it. It is complicated, even if it's a bit as basic as they say, being a basic rare taxpayer and just wanting to put a bit of money away, it it can can change, and the government are always trying to drag that little bit extra out of you, so we just need to um Yeah, we need to be careful how we take this, don't we?

SPEAKER_01 21:43

Yeah, yeah. Podcast could be done after two episodes, and we're not careful. Be wrote off.

SPEAKER_00 21:47

Be after Reeves, like we'll get libelled off Reeves, like.

SPEAKER_01 21:51

Speaking of which, has there been anything interesting else that we should talk about, you reckon?

SPEAKER_00 21:54

Yeah, so I I mean we we want I wanted to start sort of making these a little bit topical. I mean, I I know People won't be listening to these, might be listening to these in a big bulk. You might be six months, nine months down the line. Yeah. So, but I sort of wanted to talk about sort of a couple of bits that have been in the news. Um, and there's been obviously but there's been a been a lot on interest rates probably for the last five years. I mean, we had stagnant interest rates, didn't we, for 15-20 years before COVID?

SPEAKER_01 22:20

Honestly, I I mean I've I've been speaking to a client about this morning, you know. As you say, I mean, interest rates went down to zero effectively when COVID came up. No, this is exactly the conversation I've had. You know, these clients who came in this morning were kind of mid-50s. Yeah. You know, we were we were on about interest rates, um completely different, you know, topic why we were talking about them, but anyway, um and you know, and they're talking about how kind of when they were, you know, first with mortgages and and in you know, similar age to us, you're talking like 10-11%.

SPEAKER_00 22:51

Yeah, yeah.

SPEAKER_01 22:51

Can you imagine like some of our friends and like people we know?

SPEAKER_00 22:55

Isn't it? Because it's quite interesting because I think it'll be in the next year or so, people who had five year sort of fixed-rate mortgage data, they'll be coming out of them and it's gonna be a big shock to a lot of people. Yeah, it is. So I think I mean so so that's been in the news a bit. Um, and obviously, more recently you've had the inflation, and inflation's been a big thing because I think this government's been uh harping on about how they're gonna tackle inflation, and it actually says every government for the last five years. Um obviously it became it became a big deal, didn't it, um, during COVID with the.

SPEAKER_01 23:24

I think to be honest, that's one of the you know, one of the very few positives of of the last couple of years in finance that that that actually came to the fore. That you know, I think inflation has so heavily been overlooked in years previous, particularly with what we do. Like a big thing what we talk about when it comes to investing is is you know trying to match the power of inflation, you know, in a very basic form. 20 grand ten years ago is not 20 grand today.

SPEAKER_00 23:47

That's it. I mean, because the fact of the matter is if you're putting if you've got 20 grand sat in a bank and you haven't touched it in ten years, brilliant. But if that's making one per cent, you've actually lost money. Yeah. And I don't realise that you lose you lose the big money.

SPEAKER_01 24:00

That's the thing. I don't think people truly understood that concept till kind of the last couple of years. And that's so you know, it's it's it's now it's a hot it's always been a hot topic, but now it's just kind of, you know.

SPEAKER_00 24:10

Yeah, yeah.

SPEAKER_01 24:11

People are actually interested for the inflation rates.

SPEAKER_00 24:13

Yeah, I mean, and obviously that so it's inflation ties in with um with interest rates, and what got reported, and they mean the t the report the report on this every month, um consumer price inflation, and basically what they do is they'll compile all the goods that people will typically buy. So it'll be it'll be fuel, it'll be food, etc. And it's worked on a percentage of who uses it, and it's all averaged out.

SPEAKER_01 24:37

I think it wasn't one of the big things this on this inflation report, because I I know you're gonna come on to it, but wasn't it transport?

SPEAKER_00 24:42

Yeah, could it be it could be?

SPEAKER_01 24:44

I think it was a massive thing that the the price of plane tickets.

SPEAKER_00 24:46

Right, yeah. Because it's things yeah, it could well have been it's everything, it's literally everything that people use. It's not necessarily things that people need, yeah. It's it's sort of everything that people spend money on. Um if it's like I don't want to I don't want to get too far into listen, but um so that basically went down to 3.3% in January, that was reported for January. Yeah. And obviously we've got another um Bank of England um rate meeting. Yeah, which is next month. Which is coming next month in March. And basically it's it it's expected, we don't want to make predictions, but it's expected that if inflation stays like this, which which obviously it has, um they'll probably drop the interest rates, and that's going to be a big a big shaker for people who are investing in cash ices in bank investors. Yeah, absolutely. What the bank because the banks are very, very slow to put the in the interest rates up, yeah, but they're very quick to put them down. Yeah. One thing I noticed was that when the rates were going up, it probably took them about nine months to put your interest rate up in your savings account. Yeah. But when when the Bank of England announces a rate, it's literally the next day you've got an email off your bank saying your interest rates are changing. Yeah. So I suppose with with that being in the news, I suppose we probably just wanted to touch on why that makes it even more important to think about moving some of that fashion.

SPEAKER_01 26:01

I I think you know what, again, I'm trying to keep it short and sweet and and try and keep it interesting.

SPEAKER_00 26:07

It's just so hard though, isn't it? Because you know, there's so much more intelligent.

SPEAKER_01 26:10

I know, I know. But what I think what I would take from that is that you know, if the interest rates do come down, there's there's you know, there's obviously two sides to that. First of all, there's the the people in who have debt who are gonna be quite happy to see it come down because chances are it's gonna alleviate a little bit of the you know the I suppose the the debt problem that they may have.

SPEAKER_00 26:29

That's it. There's advantages and disadvantages with yeah, that's it.

SPEAKER_01 26:32

You know, when people think of interest, that they very often are quick to think about the savings side, but don't think about the debt side.

SPEAKER_00 26:37

Because the big one's mortgages, isn't it? The mortgages are gonna be massively effective, and we've touched on that. Yeah.

SPEAKER_01 26:42

Um then, you know, as you say, I mean, again, conversations with clients this week where you know we've had conversations the last couple of years about you know kind of the the good old days being back of high interest rates, and like the reality of you know, of potentially, as you say, it's 3.75 at the moment. The Bank of England base rate, will they drop it more than a quarter of a percent? Probably not, but does that make a big difference on savings? Absolutely, it does. 100% because what the banks and building societies are doing is you know, they're factoring in future changes as well, um, alongside that, you know, alongside that base rate. No one's you know, the Bank of England doesn't go to the banks and say you have to do this. Yeah, they've got a level of flexibility that goes with that. So it'll be interesting to kind of see what the next month or so brings, um, you know, on both sides. Um I'm interested to see what the banks do.

SPEAKER_00 27:29

Yeah, yeah, 100%. So am I? I mean, and there's a lot, I mean, there's a lot coming up, isn't there? I mean, you've got the spring statement, the third of March. I mean, that she I mean she said that that's not going to be anything major after the last one. No. You really never know because things be seen. So that's going to affect things. Um you've got the they say the interest rate change. Well, I say change, it might not be a change. We don't know, yeah. You've got a lot in the next four weeks that um could change. So we'll I mean we'll definitely be touching on that next time. No, absolutely that report on. And then you've obviously got the tax um end of the tax, yeah, beginning of April. So we're a busy couple of weeks, haven't we? Really, really busy for us, yeah. Yeah. Just what we want. Definitely No, there'll be there'll be plenty out there, but uh, but honestly, for people who are listening to this, um really appreciate any feedback onto what you would what you would like to like to know about. Because like you say, we don't we don't know exactly what people want, what people need. Um we're just trying to sort of provide that bit of a service for people.

SPEAKER_01 28:23

So yeah, we're just trying to cover as much as we possibly can, but if there is specific area, you know, we do want to tailor things as much as we can, uh, you know, whether that's to specific industries or you know, to business owners potentially, or you know, the the more like anything, if you get any feedback, it just it directs you from moving forward, doesn't it? It's a massive help. It's a massive help.

SPEAKER_00 28:43

Right, that's a good half an hour there. So if you haven't already turned it off, um fair play. Um that's that's probably that's probably it for us. You've probably heard enough. Um but if you do want to leave any uh comments on the socials or anything, ask us any questions, we'll be uh we'll be happy to reply to any of them.

SPEAKER_01 29:00

Yeah, we can have that as a nice little segment next time if we do. We might get one question.

SPEAKER_00 29:04

Yeah, if we get if we can get any questions, we can do a bit of a QA at the end. We do want to we do want to start getting some specialist guests in as well later in the year. So if anybody wants to come on, give us a shout. And we'll uh if you're an expert and you failed, we'll be able to uh have a bit of a QA. Happy days. Sorted. Lovely stuff. Well, thank you very much, Matt.

SPEAKER_01 29:21

Yep, and you the value of an investment with St. James's Place will be directly linked to the performance of the funds you select, and the value can therefore go down as well as up. The levels and basis of taxation and reliefs from taxation can change at any time. The value of any tax relief is generally dependent on individual circumstances. Auto enrollment products are not regulated by the Financial Conduct Authority. Azale Wealth Management Limited is an appointed representative and represents only St. James's Place Wealth Management PLC, which is authorised and regulated by the Financial Conduct Authority for the purpose of advising solely on the group's wealth management products and services, more details of which are set out on the group's website at www.sjp.co.uk forward slash products. SJP approved twenty zero three twenty twenty six.