Just a quickie

Just a quickie this week, as the actress said to the bishop, as I am off for a long weekend in a futile quest for some sun.

This week we saw a massive tech sell-off on Wednesday. The tech-heavy index in the US – the Nasdaq – had its worst day of 2024 after Tesla and Google’s results disappointed the markets. Tesla’s shares went into second gear, falling 12% in a day.

There's a lot of spending going on in the AI ‘space race’, which of course jacks up costs and eats into profits, and Musk’s robotaxis are taking time and money. When the shares are as expensive as they are, no-one’s very patient. Traders are getting into a tizzy about impending falling interest rates and cooling inflation, which presents opportunities in other sectors which have been relatively unloved and are cheaper. Their reaction is a bit like buying a very expensive Dyson hoover, which then doesn’t pick up one stray dog hair, and you get grumpy and wish you’d stuck with a Henry!

As I type this and pack my bag with about 12 minutes to spare before I run out of the house and have the inevitable panic attack about whether I did indeed shut the front door, I’ll point to three articles on Boring Money this week which you might find helpful.

• This piece from BlackRock takes a look at the UK market (a Henry, not a Dyson) and considers how investors can get an income from their investments – the FTSE 100 had a ‘dividend yield’ of 3.8% in May. In other words, on today’s values, you could take out £3.80 in income every year for £100 invested here.

• I like this new article which lists all manner of tools and calculators available to help you work out those pressing money matters, and put some numbers in the frame instead of a big fat“dunno!”. There’s help on loads of things from tax, to how much you can ‘drawdown’ from your pension and not run out, or how much you need for a decent retirement; there’s an inheritance tax calculator, a benefits calculator, a budget planner and more. Just imagine how much fun you can have from your sunbed, as you work out every inch of your financial life!

• Finally, with rumours rumbling that tax relief for higher-rate taxpayers paying into a pension could be set to fall to 30% (I should emphasise these are rumours only, and we have to wait for the Budget for facts), potential change means it’s time for less organised higher-rate taxpayers to really get their act together and make a pension plan. We can help you to start here.

Any such change would reduce the tax relief available to higher-rate taxpayers (making pensions a little less juicy), but at the same time it would also mean that the vast majority of workers would see their tax relief on pension contributions increase from 20% to 30% (making pensions a bit more juicy for basic rate taxpayers).

If you want to get your head around how paying into a pension can cut your tax bill, this piece will help.

Over and out for this week folks, have a lovely weekend. If you are off on hols, don’t forget to shut the front door and don’t change money at the airport. Get a decent card without punitive fees and rates (I use Chase), I tend to pay in the local currency and not let the hotel/restaurant convert to £s, or pre-order cash from a bureau to be delivered – Tesco Bank or Sainsburys are typically decent.

Holly

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