Pension Drawdown – H.J.Scott & Co

21/09/202621/09/2026

Capitalism

“The problem with socialism is that you eventually run out of other people’s money” – Margaret Thatcher

We have yet another budget looming over us, scheduled for 28th October, unless local boy Andy calls a General Election beforehand. So with that in mind I want to announce my undying dedication to capitalism and my complete opposition to the theory of socialism.

The Early Years

I have worked hard since I was 15 to better my lot. I’ve collected driving range golf balls, worked weekend shifts at a petrol station and out of term jobs through 3 years of university in a record store. I’ve even dug ponds. I am authentic working class, with a blue collar, shop-steward father and a shorthand typist mother. The families wealth today has been created by turning up everyday for almost 50 years so far, increasing my business and invest knowledge and taking risks. I’ve paid higher rates of tax along the way and have never been in a position where income tax was avoidable by receiving undeclared cash. UK financial services regulations ensure I cannot handle cash.

Creeping Unfairness

I continue to pay my UK dues. I’ve contributed to HMRC more than most. I’ve been proud to do so. I know many of our clients have similar back stories. However the UK is being turned into a country where working hard is becoming a mugs game. Those who have saved hard and retired with independent means are progressively being unfairly targeted. I wrote about the announced changes to Individual Savings Accounts in my last blog.

Capitalism in the UK is under threat.

11/11/202405/01/2025

Slack News Fortnight

Obviously It’s been anything but a slack fortnight at the office. With 5 major events occurring, which have repercussions for investors, I thought it would be best to wait until all 5 unknowns were in before I commented. Individually, each of these domestic and international geo-political events will shape how we manage our investment portfolios and how we help clients plan their finances, both now and into the future.

Plan | Save | Grow | Spend | Gift | Pass

But firstly I would like to extend our condolences to the families of the two clients we suddenly lost this week. After almost 38 years building long-term client relationships it’s inevitable that some must come to an end. Currently we are helping the families of 8 of our clients who have passed away in recent months.

Hopefully our previous financial planning and long-term client relationships will help at this difficult time.

The 5 known unknowns

“There are known knowns, things we know that we know; and there are known unknowns, things that we know we don’t know. But there are also unknown unknowns, things we do not know we don’t know.”

Donald Rumsfeld – United States Secretary of Defense.

Two weeks ago we knew there was a UK budget to come, a new Conservative leader to be chosen, a new President of the US, a further interest rate decision to be made in the US and also an interest rate decision due from the Bank of England. All those changes would move both domestic and global shares in some way. Some outcomes were expected, some were binary decisions which were too close to call and some were just plain unexpected.

23/09/202405/01/2025

Pension Theft

With the first Labour budget a little over a month away we can now begin to see the public relations playbook hasn’t changed much with the new administration. Why would it? Much of the Socialist Civil Service remains in place. Ideas are leaked to assess the likely response of the middle class. The “painful” budget that Rachel ~~Thieves~~ Reeves is likely to deliver will undoubtedly affect the attractiveness of pensions as a tax efficient savings vehicle, both now and into the future.

Luxury Beliefs

A luxury belief is an idea or opinion that confers status on members of the upper class at little cost, while inflicting costs on persons in lower classes. The term is often applied to privileged individuals who are seen as disconnected from the lived experiences of impoverished and marginalised people. – Wikipedia

Ms Reeves was born in 1979, which means she is at least 12 years away from being able to access the sort of pension savings we all hold, even if she had some herself. This Labour administration is about to plunder a rich seam of savings that won’t affect them. Many “hard-working families” (sounding like a politician myself now) have spent decades building up this form of life savings and will rely on these savings for the rest of their lives. With a quick scan of Wikipedia I can also deduce that she can afford to make sweeping changes to defined-contribution pensions (the type we have) because she is unlikely to have anything but defined-benefit pensions herself. Neither is her Civil Service husband likely to be affected.

Sir Keir Starmer has also faced criticism for benefiting from a special pension scheme during his time as Director of Public Prosecutions (DPP) from 2008 to 2013. His pension is “tax-unregistered,” meaning that it is not subject to the Lifetime Allowance (LTA) cap, which normally limits the amount one can save in a pension without facing additional tax charges. This scheme was introduced by the government and mirrors arrangements available to judges, intended to prevent an exodus of senior public figures from the judiciary.

One rule for us, one rule for the elite. Luxury beliefs.