Autumn Budget 2023

Autumn Budget 2023

Autumn Budget Statement 2023

Despite the 110 separate measures proposed by Jeremy Hunt yesterday there were very few surprises amongst them.


The most headline grabbing is clearly the reduction from January 2024 in main rate Class 1 National Insurance from 12% to 10% – for the average employee this would represent a cut in NI of £450 pa.

In addition, there were NI cuts for the Self-Employed, with Class 2 contributions being abolished from April 2024 and Class 4 reducing from 9% to 8% at the same time, benefitting around 2 million individuals. The combination of these cuts would result in a saving of £350 pa for the average self-employed person.

Other individual taxation was left unchanged. Income tax remains the same, with allowances frozen, leading more people to be pushed into higher tax brackets as earnings grow. Capital Gains tax is also unchanged, and allowances will reduce to £3,000 per individual from April 2024 from the current £6,000.

Rumours around Inheritance Tax were rife over the past week, however ultimately no changes materialised. This may be something that is revisited in April 2024.

Savings / Investments

Whilst taxation on savings and investments remained broadly unchanged, there were some announcements around ISAs and Pensions that were of interest.

ISA allowances have remained unchanged across the board for 2024/25, however a series of proposed changes were announced around how they can be utilised:

  • The one ISA of each type rule will be abolished – a saver will now be allowed to subscribe to multiple ISAs of the same type every year from April 2024.
  • The full transfer of current year subscriptions rule will also be abolished – a saver can now partially transfer current year subscriptions in-year between providers from April 2024.
  • Fractional shares will now be permitted investments within an ISA.
  • Adult ISAs will be harmonised so that they are available to age 18 and over. This currently applies to Stocks and Shares ISAs but Cash ISAs will go from 16 years old to 18 from April 2024.


The government confirmed that the lifetime allowance will be abolished by April 2024. This will be replaced by a restriction on lump sums, either to 25% of the latest lifetime allowance figure (£268,275) or 25% of a pension holders ‘protected’ lifetime allowance amount if greater. Anything above this will be taxed at the recipient’s marginal tax rate.

There is also a proposed change to death benefits for pension holders who die before age 75. The amount that can subsequently be drawn tax free by the beneficiary will be limited to the latest lifetime allowance figure (£1,073,100) or the full ‘protected’ amount if greater.

The overall effect of these changes is that lump sums and death benefits are treated broadly similarly to how they were before, however the mechanics have altered somewhat.

Employee Pensions

Mr Hunt spoke about the concept of a ‘Pot for Life’ yesterday, as a means to avoid the issue of employees ending up with multiple small pension funds as they change jobs. This would enable employees to dictate where their pension contributions went, rather than the current system where the employers decide on the scheme. Whilst any steps to simplify pensions for employees is welcome, the government has yet to go through the ‘call for evidence’ process to establish the practicalities of this – it will be interesting to see how this develops.

Other Measures

It was confirmed that the state pension will increase by 8.5% in April, with the ‘triple lock’ being maintained. This will result on the new full state pension being £221.20 per week from April. Benefits for working age people, including universal credit, will increase by 6.7% at the same time.

The National Living Wage (formerly minimum wage) will increase by 9.8% to £11.44 per hour, again from April. The age threshold for this will also reduce from 23 to 21.


With an election looming next year, this was always going to be a budget announcement with measures designed to appeal to the broader public. The headline NI cuts and honouring of full benefit increases are a clear indication of that, however, are offset somewhat by the lack of changes to other tax allowances, especially income tax.

As, please get in touch with your adviser if you have any queries regarding these latest announcements, or any other aspect of your finances at this stage.

Selling Direct Shares – Individual Tax Treatment

Selling Direct Shares – Individual Tax Treatment

A guide to selling direct shares – tax implications

The tax treatment in the UK generally falls under Capital Gains Tax (CGT). Here’s a guide on the tax treatment of selling shares as an individual in the UK:

1. Capital Gains Tax (CGT): Capital Gains Tax is a tax on the profit made when you sell or dispose of an asset that has increased in value. Shares are considered assets for CGT purposes. When you sell shares, you might need to calculate and pay CGT on any gains you’ve made.

2. Basic Calculation: The basic calculation for CGT on the sale of shares involves deducting the original purchase price (cost) from the selling price. The resulting gain is subject to CGT.

3. Annual Exemption: Each individual has an annual tax-free allowance for CGT called the “Annual Exemption.” The current annual exemption is £6,000 (for the tax year 2023/2024). This means that if your total gains from all sources, including share sales, are below this amount, you won’t have to pay CGT.

4. Rates of CGT: The rates of CGT depend on your overall taxable income and the type of asset you’re selling. The current tax rates are as follows:

  • Basic Rate Taxpayer: 10% CGT on gains (18% for residential property).
  • Higher Rate and Additional Rate Taxpayers: 20% CGT on gains (28% for residential property).

5. Reporting and Payment: You need to report any capital gains and calculate your CGT liability in your Self Assessment tax return. If you’re not already within the Self Assessment system (e.g., you’re only selling shares occasionally), you might need to notify HMRC and report the gains separately.

6. Losses and Allowable Costs: If you make a loss on the sale of shares, you can use that loss to offset gains from other assets. Additionally, some costs associated with acquiring and disposing of the shares might be deductible, reducing the overall gain subject to CGT. Please consult with your accountant on this.

7. Inheritance Tax Considerations: If you pass away while holding shares, their value might be subject to Inheritance Tax if your estate’s value exceeds the Inheritance Tax threshold.

Please note that tax laws can change, and it’s crucial to consult the latest information from HMRC or seek advice from a qualified tax professional before making any decisions related to selling shares or managing your tax liabilities.

Building a Diversified Investment Portfolio: A Guide

Building a Diversified Investment Portfolio: A Guide

Investing is a smart way to grow your wealth over time, but it’s important to do so wisely. One key strategy is to create a diversified investment portfolio. This means spreading your investments across different types of assets to reduce risk and enhance potential returns.

Step 1: Set Clear Financial Goals

Before you start investing, identify your financial goals. Are you investing for retirement, buying a home, or achieving other milestones? Your goals will influence your investment choices and the time horizon you’re working with.

Step 2: Understand Risk Tolerance

Understand how comfortable you are with taking risks. Investments come with varying levels of risk, and it’s crucial to choose assets that match your risk tolerance. Younger investors might tolerate more risk as they have time to recover from market downturns, while those closer to retirement may prefer more stability.

Step 3: Choose Asset Classes

Diversification involves investing in different asset classes. Common asset classes include:

  1. Stocks (Equities): Buying shares of companies’ stocks. Stocks have potential for high returns but also come with higher risks.
  2. Bonds: Investing in government or corporate debt. Bonds are generally lower risk but offer lower returns compared to stocks.
  3. Real Estate: Investing in properties or real estate investment trusts (REITs). Real estate can provide stable income and potential appreciation.
  4. Cash and Cash Equivalents: Holding money in savings accounts, certificates of deposit (CDs), or short-term government securities. These are very low risk but offer lower returns.

Step 4: Allocate Your Investments

Allocate your investments across these asset classes based on your goals and risk tolerance.

Step 5: Research and Monitor

Your adviser should regularly monitor your investments’ performance and make adjustments if needed.

Step 6: Rebalance Regularly

Market movements can throw off your initial asset allocation. Rebalance your portfolio periodically – usually once a year – to bring it back in line with your original allocation. This ensures you’re not overly exposed to any one asset class.

Step 7: Stay Invested for the Long Term

Investing is a long-term endeavour. Trying to time the market or making frequent changes can hurt your returns. Stay patient and focused on your goals.


Building a diversified investment portfolio in the UK involves careful planning and thoughtful decision-making. By spreading your investments across different asset classes and regularly monitoring and rebalancing your portfolio, you can manage risk and work towards achieving your financial goals. Remember, it’s important to seek advice from financial professionals if you’re unsure about any aspect of your investment strategy.

Why Prices Are Still Rising Even as Inflation Slows Down

Why Prices Are Still Rising Even as Inflation Slows Down

Understanding the world of economics can sometimes feel like piecing together a puzzle, especially when it comes to concepts like inflation and the cost of living. While it’s commonly believed that falling inflation should lead to lower prices, a curious situation has arisen in recent times: inflation is decreasing, but the prices of everyday essentials continue to climb. Let’s unravel this puzzle and explore why this is happening in the context of the UK.

Decoding Inflation in the UK

Inflation refers to how much prices of goods and services increase over time. Think of it as the gradual rise in the cost of things we regularly buy. In the UK, this is typically measured using the Consumer Price Index (CPI), which helps us understand whether the overall price level is going up or down.

The Intriguing Twist: Falling Inflation, Rising Costs

Even though it might seem counterintuitive, there are several key reasons why prices are still on the rise, even as inflation appears to be easing:

  1. Supply Chain Hiccups: In our global economy, goods often come from various countries. When something disrupts the flow of these goods, such as trade issues or transportation problems, it can lead to shortages. When demand remains strong but supply falters, prices can increase, even if general inflation is slowing down.
  2. Shifting Ways of Doing Things: Changes in technology or shifts in what people want can sometimes cause disruptions in how products are made and sold. While these changes might eventually lower costs, they can be expensive to implement initially. This can result in higher prices for a while, even if inflation is trending lower.
  3. Wage Pressures: When wages rise for people who make or provide goods and services, it’s a positive development. However, if businesses have to pay their employees more, they might raise prices to cover these higher expenses. This can lead to higher costs for consumers, even if overall inflation isn’t surging.
  4. Delayed Effects of Economic Policies: Decisions made by institutions like central banks to control inflation take time to influence the economy. So, even if measures are put in place to reduce inflation, prices might keep climbing for a period until those actions start to take effect.
  5. Impact of Key Resources: Fluctuations in the prices of crucial resources like oil and metals can significantly impact production costs. If these prices rise, it can lead to higher prices for end products, even if general inflation is showing a downward trend.

Summing Up the Puzzle

The scenario of rising prices amid falling inflation may appear perplexing, but it’s like a jigsaw puzzle with different pieces that fit together. It’s essential for economists and experts to consider various factors that influence prices, rather than focusing solely on one indicator. For the general public, understanding that everyday costs can rise due to a variety of factors, even when headlines talk about falling inflation, is key.

Inherently, if inflation is above 0% then the cost of goods are rising. If inflation drops from 10% to 8% then the rate at which the cost of goods are rising has started to slow, however they are still rising by 8% pa. Products will not become cheaper as inflation falls (unless it goes negative), they will just be increasing at a slower rate.

Monthly Market Review – July 2023

Monthly Market Review – July 2023

The underlying tone in global financial markets continued to improve as they began the new quarter on a positive note.

The US dominated headlines once again, with the technology giants driving the equity gains, although Japan’s Nikkei paused for breath after hitting 33-year highs in June. Fixed income was also up generally except for US treasuries.

US recovery gathers momentum

US equities recorded their fifth consecutive month of gains in July, which was their longest monthly winning streak since the summer of 2021. Investors have been encouraged by latest data pointing to falling inflation and an economic recovery gathering momentum. The US economy grew 2.4% on an annualised basis in Q2, beating market expectations for a 1.8% rise, while the personal consumption expenditures (PCE) index fell from 3.8% in May to 3% in June, which was its lowest level since March 2021. The ‘core’ PCE index, which omits food and energy prices, fell to 4.1% from 4.6% in May. Figures from the Q2 earnings season so far showed that although earnings growth was slowing, it was still positive.

The Federal Reserve continued to tighten monetary policy, raising target rates by 25bps to 5.25%-5.5%, the highest level in 22 years. However, optimism was growing that the rise would probably be the Fed’s last hike in its current cycle.

Despite the growing optimism, some fund managers remain cautious, pointing to the still-inverted yield curve. For example, one US equity fund manager said in July: “History argues that a deeply inverted yield curve makes recession difficult to avoid. However, the longer an economic landing is delayed, in the hope that it can be avoided altogether, the harsher the landing is ultimately likely to be. What seems to be underappreciated, in our view, is that we have entered a new investment regime, and there is a great deal that remains uncertain. Adjusting to this new landscape will take time and be potentially uncomfortable along the way.”

Another fund manager said in July: “The US currently faces a recession and whilst value stocks tend to be associated with underperforming in economic downturns, we don’t necessarily believe this will be the case this time around due to the excessive premium that growth stocks currently trade at in the US.”

The mini banking crisis in March appears to have disappeared off investors’ radars, but one fund manager thought there could still be issues: “Could there be more banks under pressure? The answer is yes, partially because of the US commercial real estate exposure, but we do not feel this is the beginning of a 2008-type crisis as such.”

Another fund manager urged caution: “Investors with US exposure should be cautious by positioning themselves in more resilient and less economically sensitive businesses. A way to do so is to look at companies in sectors such as consumer defensive and healthcare. Investors should continue to avoid business that are too cyclical, have high valuations or that are not predictable.”*

Bonds offer diversification benefits

Global fixed income markets generally saw steady gains over July as yields narrowed on growing optimism about the future direction of interest rates. Emerging market (EM) debt was a notable performer. Only US treasuries delivered slightly negative returns, although inflation data reinforced expectations that their yields were set to fall.

One high yield fixed income manager we spoke to in July was optimistic: “The rally we have witnessed so far this year is more than a bounce following a period of poor performance. It has its roots in a reassessment of the economic outlook, prompted mostly by China reopening its economy and European energy prices coming significantly off recent highs. This has led to upward revisions in growth projections for most regions across the world, the first such revisions we have had in several quarters. Consequently, the outlook for defaults and corporate earnings should also improve compared to what was expected only a few months ago.”

Inflation still sticky in Europe

If inflation was looking increasingly tamed in the US, it was still proving to be sticky in Europe. Services inflation hit a record 5.6% in the eurozone in July, while headline inflation fell to 5.3% from 5.5% in June but core inflation remained at 5.5%. The ECB raised rates by another 25bps, taking the main rate to 3.75%. The ECB president Christine Lagarde told a press conference in July: “Inflation continues to decline but it is still expected to remain too high for too long.” Hopes for a soft landing in the eurozone were raised by news that the eurozone economy grew 0.3% in Q2 versus Q1. Despite concerns about Europe, it has been one of the better performing equity regions so far in 2023, behind the US and Japan.

Inflation was failing to fall as quickly as policymakers would like in the UK, too. It fell to a 15-month low of 7.9% in June, which was further than expected and this helped dampen expectations of rate rises, but higher for longer interest rates still looked possible. A UK fund manager said in July: “There is likely to be a period of “disinflation” in the UK when the overall pace of price rises in the economy slows, but prices don’t actually fall. There is also a consensus that UK equities remain a cheap asset class, but now the question mark is around what might be the “catalyst” to cause investors to look more favourably at the asset class.”

Inflationary pressures increase on BoJ

In Japan, inflation has been seen as a positive. New Bank of Japan (BoJ) governor Kazuo Ueda told central bankers at Sintra earlier this year that economic growth and wages were picking up at home after decades of near stagnation. This structural shift in the economy has caught the attention of international investors for several months, helping to drive a rally in Japanese equities. Latest data showed Japan’s inflation rose to 3.3% in June, which was ahead of the US figure for the first time in eight years. It increased pressure on the BoJ to unwind its ultra loose monetary policy, which still has negative interest rates in place.

Fears that China’s post-Covid recovery was running out of steam were compounded by data showing that GDP quarter-on-quarter growth slowed in Q2 to 0.8% versus the 2.2% seen in the previous quarter. The slowdown was due to falling exports, weak retail sales and a weak property sector.

Overall, July was a positive month for global markets. They are still fickle, can over-react to whatever the latest data or news story says, and investor confidence still seems to be less positive than at the beginning of 2023. But the data seems to signify that developed economies are more resilient than perhaps portrayed in the media and the news around inflation is more positive. The uncertainty weighing on market prices could be seen as offering the opportunity for long-term investors to position themselves for the future, for which we believe a tried and tested, disciplined and repeatable process is the optimal approach.

Please remember that past performance is not a guide to future performance and the value of an investment and any income generated from them can fall as well as rise and is not guaranteed, therefore you may not get back the amount originally invested and potentially risk total loss of capital.

This document should not be construed as advice for investment in any product or security mentioned, an offer to buy or sell units/shares of Funds mentioned, or a solicitation to purchase securities in any company or investment product. Examples of stocks are provided for general information only to demonstrate our investment philosophy. It contains information and analysis that is believed to be accurate at the time of publication, but is subject to change without notice.