Welcome back to the Money Gains podcast.

We had probably one of the most spiciest autumn budgets of all time this week.

I think it's been labelled as the biggest press budget ever on record.

There was media circus, there was leaks, which we're going to get into with Andrew Craig, best-selling author, and Brian Burns from Money Box.

How are you doing, gents?

You well?

Good, good.

Great to be back.

Yeah, yeah.

We've had you both on the podcast before, but I think you two are very well placed to talk us through what the hell happened in this budget and its effect on the British people as well.

So we're going to get into the first part, which was something relatively hilarious, which happened pre-budget.

Yeah.

And it was the OBR leak.

I'd love to ask you, Brian, first whether you felt like that was actually a leak on purpose and the rumors associated with that.

I think on days like yesterday, you do have to find the humor wherever you can get it.

And that was genuinely quite funny.

Although we were watching it and you could see on things like BBC that they were just getting very angry with the fact that people were dissecting the budget before the Chancellor had even stood up.

It's pure gossip and speculation, but the gossip and speculation was that it was not an intentional leak.

It was potentially somebody working abroad and getting the time zones wrong in terms of BST.

That is pure, pure gossip and speculation, but enjoyable gossip and speculation.

Yeah.

I mean it had its effects.

Like I looked on social media, there was people coming out saying, like, I am the Chancellor and delivering the budget speech like before she even delivered it.

Well, done by AI.

No, no, no.

Just like actual people on Instagram basically making a video being like, This is what's going on in the budget, and it's before the Chancellor had even spoken, which was just absolutely nuts.

Well, I mean I've seen a lot of stuff overnight saying that it was absolutely briefed.

It was without question, it was leaked and it was shared.

Now, again, you can't that's conjecture and gossip and speculation, but feels like it is.

And if it is, it's just to me, it's just egregious.

That is absolutely not how things should be done.

Yeah.

It's so bad for the economy.

Trevor Burrus, Jr.

But we have seen it uh for years and years.

And like it does feel like maybe it's just us getting older, but it does feel like it's getting worse.

And then as you go through uh the process, you've got the Speaker of the House of Commons standing up and rapping people on the knuckles and saying that the House of Commons should be the first ones to hear about this sort of thing.

But like there never actually seems to be any kind of repercussions about the fact that everything that was in yesterday's was and more was was leaked, kites were flown for the last six months.

Well, we were six months, really.

Um yeah, it was just an incredibly long lead-in to yesterday.

Trevor Burrus, Jr.

And the changes obviously income tax, like there was pivots, which were spoken about in the press beforehand.

Yeah, like what was that two weeks ago?

She did the press conference three weeks ago.

Trevor Burrus, Jr.

She did that and then she came out a few days later and said that, well, in the press that things were changing and it was just a circus.

And so for one, I'm actually quite glad it's a relatively like past us now.

Obviously, we have the repercussions of what it is, but like at least this pre-budget sort of circus is out of the way.

The only good thing that could be said about it to my mind is that it wasn't anywhere near as bad as I feared it could have been.

But do you think that's my over But obviously they I think that's stage managed.

That's like companies making sure that their earnings and you know estimates in the market are they're gonna they're gonna beat them or hit them or beat them.

Trevor Burrus, Jr.

But do you not think that's what they're aiming for these days is that they put out all of these kites, they relentless speculation, relentless leaks, so that when it does come around, people say, oh, it wasn't as bad as it could have been.

Trevor Burrus, Jr.

Yeah, it it's we should be aiming for better things that are.

But except that that was what I So So all everybody I know in the city who'd had face-to-face meetings with Rachel Rees before they were elected in, and uh, you know, there was this consensus uh amongst you know senior city people that, wow, this she's actually pretty sensible and she's actually listening and she's engaging in dialogue.

And then the first budget last year, you know, the the basic sense was it's it can't it's not gonna be that bad, it'll all be fine.

You know, she's been listening, she's been engaging in dialogue, and it was an absolute abject disaster.

You know, the national insurance, the impact that's had on unemployment, on everything, right?

And I think uh and people were just that actually last year was the other way around.

I think there's certainly the consensus from sort of you know financial services professionals was it was far worse than we imagined it could possibly be.

Um, and then this year, happily a bit of a relief compared to what we feared it might be.

Yeah, definitely.

And you know, I think we're sort of we discussed this this morning actually in an event that me and Brian were at that you know the NIFX on businesses is now being passed down to the consumer through food price increases as why we see food inflation jump up in the recent CPI.

And then we've got other like areas of you know hiring freezes and well the worst the worst um graduate recruitment uh and then it's easier to point at AI.

But you know, I'm I mean I I've got friends whose kids are put doing putting in hundreds of job applications.

There's nothing there.

Yeah.

There are no jobs for graduates.

Because if you know, if you if you tax the arse out of something, you get much less of it.

It's like just mind-blowing that we haven't worked that out after 200 years of knowing that that's how it works.

I think the big one to get right into this is obviously around this income tax uh threshold sort of freeze as well towards 2031.

Um that's been regarded as a stealth tax or something which is you know more known in the uh financial institutions as fiscal drag.

Can we get into the specifics of that and and you know what you're seeing on that front, Brian?

Let's start with yourself.

Yeah, I think look, it used to be referred to as a stealth tax, but maybe this is just like the echo chamber that we live in from a kind of personal finance perspective, but it does not feel very stealthy anymore.

I think people are very aware of what they're doing.

Um, you see all sorts of calculators out there before and after budget of what the impact will be uh on you in your pocket.

Yes, it may not be this month's paycheck goes down, which would have been the impact of an actual income tax rate hike, um, but it's really not very stealthy anymore.

And it will impact more and more and more people going forwards.

I think I heard this morning that something was at one in four people will be a higher rate uh taxpayer by the end of this parliament.

And you could see in the OBR documents that were leaked uh beforehand, this by itself raises £12 billion, which plugs one hell of a black hole.

So you can see why it's appealing to them, but it's a problem for all of us because it really does start to mitigate the motivation for people to work and um and work harder.

So if you do manage to get a pay rise over the coming years, a lot of it is gonna go in excess tax, and the rest of it is gonna go on cost of living and inflation pressures.

So yeah, the It's it's still a tax, even if it's allegedly a stealth tax.

Very much so, yeah.

Yeah.

Andrew, what do you think about that as well?

Yeah, I mean, I I with all of this, I just constantly want to take a step back and sort of zoom out and look a bit bigger picture.

I made a comment on LinkedIn the other day that I tend not to try and I mean I've I'm here today, for which many thanks, but I tend to try not to sort of get too focused on events like budgets, because I've tried to try and to zoom out and distill down what works for people in terms of personal finance over many decades.

But but there does come a point where you just have to look at all the major national KPIs of our economy.

And the fact that at the end of the day, if you if you put tax rates up to these sort of levels, um even however that is, you know, whatever that happens, but if if the aggregate effect is that the state gets these sort of levels, it massively crowds out the private sector.

And you know, you and I have talked about this before, but we've lost half of our stock market listed companies in the last generation.

You know, this year, year to date this year, the LSE has raised £200 million, right?

Twenty years ago, there were years where we raised tens of billions of pounds, and there are hundreds of IPOs.

These are all, to me, these are actually rather more important issues than what may or may not have happened to a specific tax yesterday, but it's all just symptomatic of this big picture problem.

That the this belief that, you know, that we're not grappling with the issues around why do we have to have so high such high taxes?

And we're and we were joking before you clicked record about me being criticised as being Tory boy.

You know, I've criticized the Tories for 15 years.

I thought they were absolutely awful.

You know, there's there hasn't been a small government fiscally responsible, you know, it's probably since the 80s, right?

Or maybe John Major.

But actually, one thing I will say, the one you know, indulge me for making a party political point.

I thought one of the best things about yesterday was Kim Kemi Badenok's response.

Yeah, which was which which was super controversial and fruity and stuff, but I've but I I think when when the incompetence and the dishonesty being displayed, which is you know, I'm sorry, but the those two things are well, you started by talking about the league, right?

Incompetence and dishonesty exhibited by Rachel Reeves yesterday as a statement of unimpeachable fact, not opinion.

I think we've got to the point where for the for the for the benefit of this country and millions of people, somebody has to bloody call it out.

So sorry, that's a slightly long and rambly answer, but I think you're right to question it.

I mean, like this stealth tax is going to impact people's pockets, right?

It's the British public that are then paying for potentially what could be perceived as their mistakes, you know, over this like last sort of 18-month period.

They haven't delivered on growth.

In fact, growth forecasts were reduced.

Trevor Burrus, Jr.: But every single one of these policies is inimicable to growth.

And like anybody who with a vague understanding of uh economics and how economics works, and particularly how company economics works, knows that.

So it's it's literally Kafka-esque, it's Byzantine, it's Wellian that they can constantly go, oh well, we're completely focused on growth.

And every single policy is inimical to growth.

Trevor Burrus, Jr.: Well, that that fell off over the course of the last kind of three or four months.

And I put I leveled a different potential criticism at their door uh uh yesterday on the big picture stuff and also some of the more personal finance stuff that we'll get on to talk about.

And it's just where is the overall strategy?

So it was for quite a long time about growth, growth, growth.

In the OBR documents that came out yesterday, growth forecasts were basically kind of falling off a cliff, and then they start talking about other things.

So I I from a politics perspective, I think you can disagree with people making decisions that you don't like if you can see the path and the route that we're on.

And I think that's part of the issue that we have at the moment is it's very unclear the path that we're on, or the path that we're on, is not particularly appealing.

We were chatting this morning that the Chancellor had three audiences yesterday, effectively.

She had the markets, who she seems to have been able to appease.

She had her own MPs who she was able to uh appease as well with the two-child benefit cap uh cut.

But then she had the general public as well.

And if you just look at the front pages of the newspapers, even the more kind of moderate centrist ones, 24 hours later, this does not look like it's been particularly well received.

And from a financial perspective, we are all going to feel this in our pocket for the next kind of three to five years.

We are gonna feel it with our savings, we are gonna feel it with our investments.

People trying to get onto a property ladder have got a s uh a setback yesterday, and people saving for retirement as well.

And all of that without an overall strategy that we can at least try and buy into, that I think makes it very, very difficult to do.

And it to my mind, it's almost certain that all the KPIs are gonna be far worse than the current forecasts.

Yeah.

Because it because all of these policies retard growth.

You know, they slow down capital investment, they stop foreign direct investment, they send wealthy people abroad, you know, and and so uh it to me it's just it's absolutely nonsensical.

To your point about sort of company management, right?

Like raise uh so far Labour has raised spending by 96 billion, uh so 2.7% of GDP, and has raised tax take of 79 billion, um, so 2.2% per year.

So that's a deficit, and it'll that will that's what it will be by the end of the parliament.

So that's but that's on the current estimates.

Exactly.

But that doesn't that doesn't discount the likelihood, the very high likelihood in my view, that the the GDP growth will be worse, unemployment's gonna be higher, welfare roles can increase even more.

You know, clearly, that's what's happened in the last year, it's gonna carry on happening.

Yeah, uh you know, uh one of the sort of Kemi's big response was around getting Britain working again and and the issues of the like welfare system growing.

Obviously, that was impacted by the two child cap benefit system, and I don't we know that that like there's benefici there's beneficiaries of that.

Obviously, there's the government have said 450,000 people will be pulled out of poverty.

That's fantastic, but there's also the issues of um you know the extra three billion quid that's gonna add to uh taxpayers having to fet fork out and pay, which is largely gonna come from some of this stuff tax.

So it's a big problem.

Um and I just don't see how they're going to manage to get out of this one, especially Rachel.

It's just made me even more like just despondent about a Labour government being in power at this time.

And I know that's very like bold to say, but it's just it doesn't seem to be getting any better when that's what they keep promising us.

So yeah, I think just one point on that is um all of us around this table know that economic growth is important, right?

You need the economy to be growing because the other options are inflation or the economy is not growing, et cetera, et cetera.

But having that as your key metric that you go out and talk to people about and saying things like we've got the highest GDP growth in the G7, like that means nothing to 99% of the people.

They want to have money in their pocket, they want good jobs, they want secure houses, they want a decent retirement.

Those are the things that we need to be talking to people about, and that I feel that this government should be talking to people about rather than nominal or real GDP growth, which, as I say, we know is important, but like nobody thinks like that in general day-to-day.

100%.

So let's move on to one of the more like personal finance aspects of this.

And I think both of you will have some uh juicy points, and that was obviously the reduction in cash ISA uh allowances per year to £12,000.

Um that's a big move from ICES.

Um Andrew, I'll start with yourself.

What do you think of that?

This is such a misunderstood topic, right?

But I think I I I think you know this.

I did a post about Paul Lewis um a few months ago on LinkedIn, you know, the BBC journalist, who had literally written an article, I don't know, it was in the telegraph.

What I was about to say front page of the telegraph, I doubt it was front page, but it was in the telegraph, you know, saying how he would never invest in the stock market.

Like the the the arguably one of the highest profile lead financial journalists of the last 30 years at the national broadcaster is on record saying I would never invest in the stock market.

And it just it's I think that's a national scandal, and it's it's a level of ineptitude and ignorance about what creates wealth.

And I'll just take a step back.

So the average Australian today has between five and seven times more when they retire than the average Brit, right?

And the reason for that is almost entirely because of the difference between their deployment of uh pension assets in their domestic equity market and equities, and the fact that we, through a series of ridiculous policy and regulatory decisions over 30 years slow-motion car crash, have driven one and a half trillion quid or more out of equities and into fixed income and and indeed into overseas shares and primarily US shares and primarily through passive products.

And this this is incredibly poorly understood.

And to me, actually, anything that redresses that, you know, we've got to think bigger picture.

It's not just 20,000, oh, now people have to be pushed into the stock market.

It's like what that means for the economy and for the real economy, for maybe like Main Street, that we have the ability for British companies to raise money on the stock market.

The whole UK smaller company uh ecosystem is dead.

You know, we we've raised 200 million quid year to date, as I said a minute ago.

You easyJet raised 200 million quid to buy 737s in November 2000, right?

I I was on the team that did the deal.

You couldn't spill you couldn't start an airline company today in in London, right?

So, but what I would do, and I'll just finish off on this point though.

I still think it's stinking around the edges.

It's de minimis, it's a drop in the ocean.

It's kind of annoying for people who want who are particularly risk-averse and want to keep their money in cash.

I think the carve-out for older, you know, for pensioners to still be able to but put the full amount in cash, I believe, was the the the change.

It's probably a good thing on that basis.

But yeah, we we we we just have to think so much bigger picture about rescuing this terrible situation that we're just exporting all of our capital, putting all in fixed income and impoverishing millions of British people as they reach retirement.

Yeah, yeah.

Uh you know, I think you hit the eye on the head, but uh yeah, I would touch on this slightly and I'll pass it over to you, Brian, is that Plum did a study, and the Hampshire Trust Bank did a study, and it was between 9 and 11% of people would move money into the stocks and shares ISO, which is the exact amount uh reason for them wanting to make this change.

And so and Yeah, but most of them, you remember I cited that study last time we spoke.

Most of them, uh a frightening number of them will put that money into two tech stocks.

Yeah.

Yeah.

You know, that's why we think we need to think a bit bigger picture.

You're exactly right.

Like if you look at an average portfolio, depending on where you're looking, it can be as low as seven to nine percent in UK equities, sometimes even nothing or less, right?

So it depends on obviously that person and how they've put that portfolio.

But that's worrying, right?

So even if there is inflows there, it's going to have such a tiny difference into such a small amount of companies, largely those sitting within the FTSE index, um, which is obviously not where a large part of that capital really needs to be, which is in small and medium-sized businesses to help you know move that economy.

But to to just round off this point, 56% of people um would move money into a regular savings account as well.

So not into a out of an ISA, into a regular savings account, which could be earning uh less interest or no interest if it if they put it in one of the high street banks' the easy access accounts, which are offering 0.1%.

Um Brian, your thoughts on this?

Yeah, where to start on this one?

Well, I think the first place that I'll start is I would say that MoneyBox has both a cash ISA and a stocks and shares ISA, right?

And we have relatively equal numbers of customers in each.

I feel like that should be something that people will have to come out and say before they express their opinions on this topic, because you often see, oh, we should cut the cash ISA says investment only platform.

It's like there's a lot of vested interests in this debate.

If I was speaking completely selfishly from a Money Box commercial perspective, um, we will want we want more people to move over towards investing.

We need to drive more of a culture uh of retail investing in this country, as Andrew has referenced some of the international comparisons.

So if this was going to work, we would support it, but it will not work.

I was a financial advisor for a decade before joining uh Money Box.

Uh the second half of that was in a digital platform, basically, where you would just speak to 40 or 50 customers a week.

Like nothing that happened yesterday would incentivize or support any of those people to take the leap from cash to investing.

The reason that people don't invest in this country is very complex, it's very long-term, it's cultural, it's behavioral.

A short-term fix, such as cutting the cash ISA allowance to 12K, is not going to create the confidence for anybody to start uh investing.

So the issue is it won't work.

If you do speak to some of those vested interests on the other side of the debate, when they're being honest, they will say, yeah, this is not going to create a retail investing culture by itself, but it's part of the puzzle.

I would argue that it is a negative part of the puzzle and actually will incentivize the wrong behavior.

12,000 pounds is still a lot of money to most people in this country, right?

There are not that many people that actually max out the full 20,000 pound ISA allowance.

I have never done it.

I will never even get close to it.

Yeah.

Having said that, people do not like things being taken away from them, even if they're not going to use it at some stage in the future.

One of the classic examples of that that we've seen over the last couple of years is inheritance tax on pensions, which people have gotten very, very angry about.

People that I've spoken to that I know will never be impacted on this because of nail-route bans and all that sort of stuff.

But people don't like options being taken off the table from them.

The Cash ISA is the most popular and most loved financial product in the UK.

And this is the politics of pissing people off.

And if you piss people off, they're not going to do what you want them to do.

And we want to create the confidence for them to start investing.

And I fear this is going to have the opposite effect.

Yeah, I completely agree.

And we spoke about this before, but I think education around ISO is just mad.

And so like it's already really tough to explain the the differences between a cash ICER and a stocks and shares ISO and a lifetime ISO.

Like trying to get somebody to understand that and then having different thresholds, like it was hard enough when it was 20,000 across cash and stocks and shares.

Yeah, yeah.

And then we've got to be able to do it.

Now it's tiered and banded and even more complicated.

Now it's 4, 12, 20.

And it's just it adds another layer of complexity to try and educate people around this topic, which as we know is just so important for most people, is that have at least one of these accounts open.

That leads me on to my next point quite nicely.

And I know you you know lifetime ICEs are a big part of MoneyBox's accounts and what you do.

And I know you have some big thoughts around the changes that were muted there as well.

Yeah, I think look, judging by what I said on the previous my own standards on the previous uh answer, I'll come out and say uh we have the largest community of aspiring first-time buyers in the UK.

We believe we are the largest provider of lifetime ISAs in the UK.

So we obviously have a vested interest in this conversation.

Having said that, in all of my interactions with the government over the course of the last kind of two and a half years, and for some reason I am now involved in uh public policy, it's why I'm going gray rapidly.

Um but we engage with the Treasury Select Committee's inquiry on Lifetime ISA and we called Outlook our vested interest here.

But basically all we did with that was we showed them the data.

We showed them the data of who is using this product, how they're using this product, how much they love this product, and how many its people people it's helped get onto the property ladder.

So 250,000 people so far have bought a home because of the Lifetime ISA.

The other unseen bit with the Lifetime ISA is gotten people into incredibly positive saving and investing habits that will stick with them for life.

84% of people who use the Lifetime ISA say their savings habits have uh gotten better since they've opened the product.

Because one of the things with the Lifetime ISA from a behavioral perspective, the monthly bonus is incredibly strong.

So you put your money in, you get your bonus like 28 days later, you log into the app, you top up, you keep going.

It is a brilliant behavioral product.

Yeah.

Um so it is creating these incredible saving and investing habits for a generation.

Now, what the government has said yesterday is that they are going to launch a consultation next year on the lifetime ISA and also potentially a replacement product for the lifetime ISA, which I just feel is completely unnecessary and creates massive unnecessary uncertainty for people already trying to get onto the property ladder in a very uncertain environment.

And I feel like they've opened up a lot of different avenues of uncertainty across cash savings, retirement, which we'll get on to from salary sacrifice, uh, investing, and aspiring first-time buyers.

There was a very long lead up to this budget with a lot of speculation.

And I don't feel like, from a personal finance perspective, much, if any of that was put to bed yesterday.

I feel like more uncertainty has opened up for people.

Oh, yeah, for sure.

And it's like, you know, it works.

Why are you changing it?

So but that that you know, the the guy Richard Tarlow came up with the idea of nudge, nudging policy, which I think might have won a Nobel Prize for Economics.

I can't remember.

Anyway, don't quote me.

But it's really interesting to hear your point you were just making about the behavioural adjustments.

But I guess what I wanted to come back to, could kind of given what we were just talking about in terms of stocks and shares ISES, is if if we can get that strong a result from the behavioural nudge with the lifetime ISA, the engenders of savings habits, got people on the property ladder.

Why can't we do it for stocks and shares so we can reinvigorate the British economy and get companies and entrepreneurs able to raise capital in the London stock market again, not have a dead London stock market?

Aaron Powell So it is happening within the stocks and shares lifetime ISA, but um it's relatively small at the moment.

So the stocks and shares lifetime ISA is mostly used for the retirement purpose, which um most people use the lifetime ISA right now for the home buying purpose.

Yeah, but just but just quickly though, that but any capital that isn't going into the home buying purpose goes into what?

Goes into a cash sorry, you've basically got the cash lifetime ISA and you've got the stocks and shares lifetime ISA.

The next question though is what do those investment solutions look like?

And I think that's a slightly different question because even if the cash ISA uh cut did work and you did get more people investing, they're gonna go into a stocks and shares ISA where if they are choosing individual stocks, most likely they're gonna be American stocks, realistically, or then they're going to go into some global tracker or maybe even a UK kind of tracker fund.

So I do not believe, even if that did work, that we would see much benefit in UKPs.

But this is right in the middle of doing a five or six or seven video series on passive versus active and the dark side of passive, this is incredibly poorly understood.

And it's this point that if if money goes into UK trackers, it does not go into IPOs of smaller companies that could be the next EasyJet or the next last minute.com or the next.

And this is and this is one of the big challenges we have is that if the if a tidal wave of cash just goes unthinkingly without regard to valuation, without regard to anything, into megacap US, as it has been for the last 30 years.

One rung down from that, and with new incentives, it might go into UK, uh, you know, the existing FTSE 100 or dare we hope FITC350, that does not change.

The underlying problem we have in this country is that 30 years ago we were doing hundreds of businesses who were raising tens or even hundreds of millions of pounds every year to start new businesses, create jobs, create wealth, pay tax, grow and become bigger businesses.

That's the big missing link at the moment.

And we need to, I think we really need to solve that problem.

Well, I think you're getting to the crux of the matter, which is where is the overall strategy?

What are you trying to achieve with retail savings and investing, right?

Because you could be trying to do one of two things.

You could be trying to get normal people to invest, generally speaking, because it's better for their uh wealth creation over time.

We all know it better protects against inflation, et cetera, et cetera.

For people moving from cash into investing, I would argue that a diversified portfolio of passive tracker funds does a decent job for them and their wealth creation.

It does not do what you were articulating there, which is supporting UK PLC, supporting small and medium enterprises, supporting growth, all that sort of stuff.

I don't think you can necessarily do both of those with retail saving and investing strategy.

And it feels like that's what they're trying to do right now.

You used to be able to, because so so so Jupiter, Bailey Gifford, Aviva, uh BlackRock, Invesco, 91 Asset Management, and a couple of others have all closed their UK smaller companies acquisitive investment fund in the last few years.

And for people, I start ranting on the people's like, oh what does that matter?

Like what that means is that there are there are now and the remaining smaller company funds in the UK now have you know 30 million quid instead of six hundred million quid in they had thirty years ago.

We we've got to solve that problem because in future there will be no large stocks to go into big uh um passive funds if we don't this is a pr this is I mean it sounds hyperbolic, but this is a genuine problem for capitalism and for for our species.

And you know, I I'm slightly going off piece, but I I am because I'm I I think it's really important.

And I I literally don't think I don't think people in in government in Westminster even understand these issues.

And this is a genuine question of those funds closing.

Do you think that that is a demand issue as in people are just not about or a supply issue of those companies coming up to grow into be invested in with those?

It's because all of the capital hundreds and hundreds of billions of capital, whether it's institutional capital from you know from from family offices or from all it is going into cheap ETFs.

And it's the and it's the biggest dark side of passive that like 99.9 you know financial analysts don't understand this stuff.

There's so few people understand this, unless you've been involved with the smaller company ecosystem.

But what it does is it stores up a problem 20 years from now where there are no new companies.

You know, Tesla's on 300 times earnings and valued at three two trillion dollars and and smaller companies can't raise money.

And actually we need I I know this might be a bit tangential and random, but I I talk about it because it's we we have got to solve this problem because the reason that a huge part of the reason the British economy is screwed is because and and it's another reason that wealthy people are leaving, by the way.

It's not just because they're greedy and they want to pay tax, it's because you cannot physically raise any money to do anything anymore in a way that you used to be able to.

And this is where it comes back to the overall strategy point of like, are we saying that that is what we should be using normal people's stocks and shares ISA funds for?

And I think there is a very strong argument that yes, it should be.

Well, there's no or no or no, it shouldn't be.

Well, because it's too late.

Smaller companies return 16% per annum from 1955 till 2021.

Right?

Wouldn't that be nice?

You know, or and even if we get anywhere near that, because that's where Games Workshop comes from.

Or you know, they like it's what it smaller companies generally grow at a higher rate than larger companies, and they're also responsible for 60% of turnover and 50% of employment.

And part of the reason the UK economy is in such a pickle is because we don't have any smaller companies, you know, they're dying.

Yeah, I I'd love to know your thoughts on you know, obviously, stocks and shares ICEs are a tax you know, advantage account that which you can uh just put your money to work and take it out tax-free.

And like that's the large benefit of having a stocks and shares ISA.

But there doesn't seem to be much benefit or education around putting money into UK products or they've obviously muted that the you know the the British ISA and that fell very well.

Everybody hated it.

Everybody hated it.

But because it's not sexy and it's not Apple and it's not Tesla and it's not, you know, these AI companies which are uh are fast and you know potentially like Live changing returns for a lot of people as well.

Or down 50% two years from now, quite poorly.

Exactly.

Exactly.

But there's risk associated to that too.

There's a massive risk associated to that.

But there this is where the education piece comes in.

I'd love to know, like, obviously, you guys have been thinking about this a lot.

Like, what if you were given the keys, say, tomorrow, as the Chancellor of the Exchequer, and you could reform ISIS in a way that helped British companies, like what would you do, Andrew?

Do you think?

Well, I uh I uh front and centre, and I I so do you still want to sort of deal with a you know something that gets thrown at you all the time is American companies are better and passive funds are better than active funds, right?

Okay, though that's totally failing to understand the counterfactual, which is okay, but i if a one and a half trillion quid of our of our own pension money hadn't flown out of UK equities in the last thirty years because of structural changes and regulation and policy decisions, maybe British shares wouldn't you know, maybe British shares would have actually been a lot better in terms of performance because it's very hard for shares to perform when one and a half trillion quid is flowing away from them, right?

Actually, British shares have performed remarkably well, notwithstanding the fact that all this money has gone out.

And I and I and you know, and by the way, there's another general comment, you c passive funds technically can't support IPOs, basically.

There's no mechanism because these companies are not yet big enough to go into an index, and you know, you can't automatically build a book for a 200 million pound IPO to buy a load of airliners or whatever you might want to do with passive funds.

There's you're never gonna be able to do an IPO.

So I would genuinely argue that what we what we used to have was a system that functioned really well.

It delivered double it delivered mid-teens annual returns, right?

And it delivered loads of um thriving ecosystem and entrepreneurs being able to raise money and new company formation and great new companies and uh and employment and tax revenues and everything else.

So why not just have we we used to have dozens of active uh smaller company funds that did an incredibly good job and had very, very good long-run returns.

Rather than the Manchenhouse Accord giving it all to the VC and PE community who've still got to solve the problem of how on earth they exit all of their positions, give it to active smaller company fund managers.

That would be or at least give a very large amount because a relatively small amount of capital.

Yeah, the Manchinhouser Court should absolutely be looking at um addressing the smaller company London ecosystem for the benefit of all of us.

And and stocks and shares ICEs, would you do anything with those?

Yeah, and and that's what so if you're gonna have a British ISA, don't just spoon it all into AstraZeneca and Shell, is the point I'm making, because that doesn't help anyone.

Yeah.

I think on this one, if I answer it more from a kind of personal finance or people's individual saving and investing um side of things, you said if you're the kind of keys to the Chancellor's office.

I firmly believe that this is not a a product-based problem, like tweaks to the cash ISA, tweaks to stocks and shares ISA, British ISA, etc., lifetime ISA.

That's not going to solve the issue here of getting more people investing.

It is very much a support uh problem.

And that comes from financial education in schools up to financial guidance and the lack of accessibility of financial advice.

When I was a financial advisor, I started off in kind of high net worth private banking.

I was looking after 50 or 60 individuals and families.

I then moved into a more digital environment, and this is still kind of five, six, seven years ago.

And I was able to comfortably look after a thousand individuals basically, where they could pick up the phone, they could speak to me, they could pop me emails answering questions about their worries, their fears, what they should use, all that sort of stuff.

We are now like the technology is obviously just rapidly, rapidly expanding.

We now have AI, ChatGPT, people turning to that for financial advice, which we can and we should talk about.

But that is the problem that I would rather be trying to solve.

How do we support people to make these financial decisions, to move from cash to investing, to save for their retirement, to consolidate their pensions, or not, as the case may be?

I would prefer to be solving those problems than doing consultation after consultation of what the individual products should look like.

And tiny and tiny tweaks to them.

Because all the products are there.

Yes, some of them, in my opinion, have gotten a little bit worse after yesterday.

But all the products are still there for people to be able to hit their financial goals, invest tax-free, all that sort of stuff.

Where that money then goes to support UK PLC, Andrew is far more qualified than I am to answer that question.

But I would pref I would have preferred to have been working on that support problem, things like advice guidance, boundary review, targeted support, financial advice for more than just 8% of the population.

That's what I want to be working on.

That's how you crack this problem from a personal finance perspective, rather than fiddling with ISO rules.

Because over time that has a massive difference, as we know, but it's very difficult for a politician to agree that that's going to be something which is going to impact them in this parliament.

Yeah, that's it.

That's right.

But then then again, we talked about this last time.

I mean, I always get this slightly cheesy point I make is you know, 42 million British adults have a driving licence, right?

And if 42 million British adults had spent as many, however many tens of hours it takes to get a driving licence on learning about finance, everything would be different.

Now, surely that's not that you know, if if a government took the ball by the horns and tried to do that and said, right, we're gonna have a national PR compan campaign about the important why look at all the rich countries in the world with the highest GDP per capita, what do they all have in common?

They're really good at investing, right?

Their pension systems are much better than ours, that far more people invest.

You know, so why don't we have a proper government-funded PR campaign to engender that level of knowledge and basically insist that you know anyone who anyone who thinks it's okay to get their driving license should spend exactly the same amount of time on getting their learning about finance license.

It would be revolutionary.

And and if you pitched it right, I think people would respond really well to that.

In our um line of work, I'm sure you guys get this uh as well.

People asking for tips and hacks and what should I invest in, how should I save money.

Like my answer to that is always disappointing to them, I think, but it is practical in that it's 30 minutes a week.

You need to be spending a minimum of 30 minutes a week on your personal finances.

And that can be shopping around for a savings account.

I always think people should have a notes app on their phone that says, okay, this is a finance term that I don't understand, that I've heard this week, whatever it might be, ISA's salary sacrifice.

You spend your 30 minutes figuring out what that is.

26 hours over the course of a year, you'll be amazed about how much more financially confident that you uh that you uh feel at the end of that.

We now have 1.5 million customers, and basically part of my job is setting them a little bit of homework on a weekly or monthly basis, saying this is the sort of things that you should be learning about.

And the irritating thing about uh this this budget is I might be wildly optimistic, but I do feel in some of these areas that we are making progress.

Like you have seen this from your channel growth over the course of the last couple of years.

The appetite is there.

Yeah, people want to be better with money, um, and they want to tune into hopefully things like this, but like communities like yours.

The FinFluencer community is massive and shows the appetite that is there for people to learn about this stuff.

We did an investing webinar not that long ago, and we got 13,000 people on a Tuesday morning turning in, tuning in, learning how to invest, which is me droning on for 45 minutes, talking about what is a stocks and shares ISA, how do you use it, all that sort of stuff.

So the appetite is there, which is why yesterday to me feels like a little bit of a of a setback, but I will remain optimistic.

Yeah, well, we have to.

This is what we do.

I think we'd all be pretty bored if we can talk about this in some capacity.

So you know, I think we we jobs perhaps made a touch harder to explain this.

Um and you're right, like you know, that that piece of being taken away from you and changing it, it just makes it like even more people are just gonna be like, well, and bury your head in the sand, and as we know, that's the problem.

I think uh sorry just very quickly, a very important thing is like I don't think anything from a personal finance perspective actually changed yesterday.

A lot of these changes are gonna take quite some time to come through.

So the cash ISA stuff isn't until April 2027.

The lifetime ISA stuff may be April 2028 before something replacement comes along, and then the salary sacrifice like 2029.

We have already had questions in from customers in the last 24 hours being like, oh, what should I do with my savings?

What do I need to do at my lifetime ISA?

What do I need to do with my cash ISA?

You don't need to do anything right now.

Nothing is changing immediately.

There is plenty of time to react to the changes that were announced before they're implemented in at least a couple of years' time.

Yes, yes.

And the way a lot of uh you know press and online content which come has come out, which has been frustrating for me.

Like we make a like at literal point about not covering it.

Um we cover it on the podcast today because it's a more like longer, nuanced piece of like content for someone to consume with a lot more context.

Whereas a 50-second Instagram saying what's happened in the budget just scares people, and so I've always stayed away from that, and I think it's really important.

Um but there was I just another big change for us was the savings tax and a two percent basis points there.

You know, obviously we've we've we've discussed around the 56% would move money into a regular savings account, so that's gonna tip a lot of people over the edge.

Then we have this stealth tax of people moving up the thresholds.

So actually, this 2% basis points uh increase in in savings tax is gonna be a big problem for a lot more people than I think we foresee.

Um, and that's another angle of them sort of grabbing from us without necessarily saying we're putting up your wage pack, you know?

Even more important that people learn about stock stock market investment, right?

Yeah.

Because you've got to beat inflation and you've got to beat tax, and you know, now you I mean, but look, if if if you if you contend as I as I do, sort of f f philosophically, that basically inflation is M2 money supply, actually, monetary debasement, you know, real inflation rather than the nonsense numbers produced by the BLS and the ONS and whoever else is the the actual experience of people's increase in the cost of living, you know, is probably closer to M2 or even the gold price.

Although it's a bit punched.

What does that mean if for there's someone that's listening to this?

So M2 is a measure of the aggregate money s money in the economy.

So if we're we're you know, so that's deposit bank deposits, um, cash in circulation, etc.

etc.

So it basically I you know I've said this on podcasts with you before, but if the supplies of money is one and the supply of real tangible stuff like timber, crops, metal, cars, whatever is one, if the supply of money is now two and we haven't got any more stuff because people haven't had time to manufacture things or grow crops or whatever, the price is now two.

And that is a that is a vignette of what's happened in the in the the whole of the world economy in the last 40 years, which is why we have a cost of living crisis and more than anything else.

And I and so if you believe that you have to run faster than that to be wealthy and to build real wealth in your life, whacking another tax on on the inch on what you're gonna be able to earn in terms of on on your savings makes that even harder.

So people are basically you're you're basically guaranteed to be underperforming real inflation, real world, your real world experience of the increase in the cost of your living, pints and pasta and eggs and milk and bloody everything, and cars and everything, and energy, thanks to the other egregious incompetent policies this government has.

We can get into that in a minute.

But like, you know, so so that so that so so so you it's a it's a much hefty it's a much heftier tax than it appears to be in terms of how how it impacts people's ability to become wealthy.

Trevor Burrus, Jr.

Inflation plus savings tax.

Yeah, correct.

Um First of all, thank you for not asking me to explain M2 money supply.

I had massive flashbacks of economics lectures there, which I did not do particularly.

Well to be honest, I couldn't quite remember what exactly goes into M2.

It's like cash on it is cash on deposit, cash in the banking system, blah, blah.

It goes all the way up to like M6 or M7, which is credit card debt and blah blah blah, and whatever.

Trevor Burrus, Jr.: But uh on your question of the savings tax, dividend tax also went up by two basis points and property tax as well.

I was quite surprised in the OBR documents about how much they're forecasting that will raise.

I can't remember the exact amounts, but it was more than I thought it was going to be.

And they won't.

Well, they won't raise it.

But they just won't.

They never do.

Every time corporation tax goes up five, six, seven percent, the tax take goes down.

It's called the laugh curve.

You know, I mean like the government doesn't have any un seems to understand these basic things that have been around for 200 years.

Trevor Burrus, Jr.

One of the best things about the ISA environment that we have had over the last 25 years has been relatively simple.

It's been easy to be able to do that.

And relatively stable.

Especially like the cash ISA.

You can basically tell people, look, a cash ISO is a really good thing.

Yeah.

Pop your money into it, you won't have to pay tax, you won't have to worry about any of this kind of savings interest tax, your personal allowance.

And you still can.

You still can, but just all of these little tweaks, and especially now having different allowances for the cash ISA and the stocks and shares ISA, that's going to be kind of a bit complex.

Like what happens with transfers between the two of those products?

Like we'll probably find that out over the course of the next 12 or 18 months.

But one of the major benefits of ICEs has been how relatively easy they have been to explain to people when you are doing kind of financial education.

And every little tweak like this just makes that job a little bit harder.

Yeah.

Yeah.

And the dividend tax is a tough one for me as a business owner, because you know, we're I'm already paying corp tax VAT.

And then if I want to actually take any of that money out and use it, well then I've got a dividend tax on top.

So for every hundred pounds that business earns, if I wanted to take that out, you know, I've taken £25, 30 pounds of it if I'm lucky.

Which is just wild.

And how many thousands of people who could be building businesses in the UK are going to say, I'm going to go and do it in Cyprus or Malta or wherever, right?

Yeah.

And every one of them it matters, despite what people like to think.

Yeah, absolutely.

Well, you you mentioned something there, Brian, um, mansion tax, um, property tax.

That was a big part of this budget.

Um, properties over two million pounds and scaling upwards in terms of the amount that would be collected via council tax, um, which is a very interesting move.

Uh, I think you know, it was heavily documented in the press about a wealth tax and how they would do that.

I think that's your answer in conjunction to a wealth tax.

Um and again pissing off probably more millionaires than they needed to.

Um and and old old an elderly couple who live in a house they bought in 1987 that ostensibly is worth two and a half million quid, of which there are tens of thousands throughout the home counties in London, right?

Whose income is actually bugger all because they're retired and they're on, you know, maybe maybe they've got a crap pension that's not even they don't want to sell up the house, you know.

I mean, th that that's the problem with these things.

And also, I don't know whether you whether you saw this in any of the output yesterday, but what's the valuation metric to decide whether a house is worth two million quid or not?

Well, this is another area where they've just created uncertainty because they said they're gonna consult on the details.

So they said that they're gonna consult on people also who are asset rich but income poor.

So they have a two million pound house, but they have no mechanism of paying these additional kind of council tax bills.

So they said we're gonna consult on measures that will help them.

Which will be a huge chunk.

Yeah.

Like a really meaningful percentage of people who own a two million pound house will be elderly and with very low income.

Yeah.

And one of the one of the potential kind of speculative uh policies has been that the council tax bill will roll up until they sell uh or until they pass away.

And that's going to have a distortive impact.

Well, and then the buyer pays it.

Yeah.

Well, who pays it?

So nobody buys the property.

So the pro I mean, it's just nuts, isn't it?

But that's it.

That's what they're saying.

Every every if you own a two million and fifty grand house right now, it isn't any more.

It's a 1.995 million pound house.

How many people's equity has been wiped out?

Yeah.

So you're wiping equity out.

Because actually, even if you're probably at 25, 3mm, you're like, well, actually, I'll take the 1.9 because you know I'm no one else is going to be able to do that.

Well, and then you've also got a mark to market to show your house is worth less than one two million, therefore you shouldn't pay the tax each year.

Exactly.

But then how long does that last for?

Because as we know, property prices increase.

So then how many properties then go into that threshold while that price is going up?

So And this is what I mean.

Like we had such a long lead into the budget, and people are saying, Oh, well, thank God it's kind of been and gone.

But there are so many areas where they've just created more uncertainty as to say this is just another one where there's a consultation of like how this will actually be implemented.

It's the same with Cash ISA, which we're not going to know how that's going to be implemented for a while.

I I I predict that work that the costs of working all of this out will probably exceed the tax take they'll get from it.

Exactly.

That is my genuine belief.

I was making this point too much.

If they're honest.

That is definitely the case in my view as well with the lifetime ISA side of things.

So creating a new product from scratch when you could put minor tweaks to improve the product that is already there is just a false economy.

The communication alone between all of you is just would be nuts.

And uh, you know, then you've got the property tax thing, and it's just like, what why are you spending all of this money on this for such a small outcome and actually the only thing you're doing is annoying people?

Um because it's it's entirely point scoring party political, isn't it?

It's because horrible rich people who own two million pound houses.

Your base, your electoral base, wants them vilified and boo wants them to be boogeymen.

It's not actually about raising proper amounts of money for the economy or improving the British economy.

I would argue if you be a cynic, but I think that's probably true, right?

No, I agreed.

Uh and I would actually argue a large portion of the wealthier individuals in this country are okay with paying tax as long as their tax is being used like efficiently on the things which actually make a real benefit to the working people of this country.

But as we know, you know, we've seen the government logo redesigned recently for a ridiculous sum of money, then the number escapes me.

And there's consultation fees, like even the Australian government as well.

They just spent a hundred on a website which uh, you know, a teenager could have vibe coded.

Yeah, that was Daniel Priestley, wasn't it?

Yeah, exactly.

So there's there's all of this going on, there's gross mismanagement of what's being spent already, and there's a large part of looking at that.

But it's not it, I don't think that's just wealthy people.

I think that's all of us.

And I think you you mentioned in terms of how much tax has been raised by these kind of two budgets, um, and it's a fair frankly ridiculous uh sum.

But I don't think people would disagree with that too much if they could see the impact of where that is going.

Um and I think with the amount of tax that has been raised via different mechanisms over the course of the last two budgets, people are gonna want to see results pretty quickly in terms of things like public services.

Like where is this money going?

Yeah.

Or else I do think this is probably one of the few kind of political things I will say today is that I do think they will be in trouble if people don't start to see an impact of where all of these tax risers are going and real tangible differences and improvements in day-to-day life.

Yeah, no, absolutely.

Um I want to touch on salary sacrifice because it's a big deal for a lot of people.

And it it it it this one wound me up a touch because there are if you look at the data of people earning £100,000 with children and they get to that point, the data shows that they s either stay at exactly that salary or they they don't take salary increases because of the like the amount of money which they receive from child benefit.

And that is just nuts.

And then if they are on £110,000, will they salary sacrifice down to allow themselves to be under those thresholds and still be able to, you know, run a family household, which we know is extremely difficult for people uh uh at all levels of uh uh of salary, but there is this real like cliff edge already in place, and then they've now just made that a lot harder for people as well.

With £2,000 you can take in salary sacrifice um without paying NI.

And this is from 2029 though, which is a long way from now, but even so, it's a big, big change for a lot of people.

What are you seeing now yourselves?

Well, I mean anything that disintensitize one of our biggest problems as a country is the you know the average person's getting to retirement with uh it depends on whose data you're looking at, but somewhere between thirty and fifty or sixty thousand pounds a year, right?

Which is peanuts and basically promises you an impoverished retirement.

Um the average amount is between sixty-eight and seventy-five, depending on who you're gonna be.

Exactly.

It depends on which dates are huge.

And it's and it's men have far more than women, and exactly right.

And you know, anything that disincentivizes say people sorting their pensions out.

And as I said a minute ago, and I'm you know, I'll say it again because it is so eye-opening, you know, the average Australian, and we're not talking about rich Australians, we're talking about working-class blue coll-collar ute driving Australians, they have five to seven times more in their pension fund at retire than we do, because of the the how cl enlightened the super funds uh infrastructure they put in in the 80s has been, and ever since.

It's they have great policy.

We go in the opposite direction.

So you know, if we want our pensioners like not literally being utterly impoverished and living on cat food, these are the right sorts of policies.

Yeah.

That's really depressing.

Brian, what do you think about the salary sacrifice changes?

I mean, you said it wound you up a bit.

It wound me up a lot.

I was being very angry about this one.

Like I think with some of the other stuff that kind of came out yesterday, you can kind of squint and you can see the logic.

This one I just cannot see the logic at all.

We have a massive retirement crisis in this country.

All of the metrics that Andrew said, we've got 15 million people under saving for retirement, and it is very much a ticking time bomb.

So anything that disincentivizes people for saving for their pensions is just nonsense in my view.

Um, it doesn't come in for kind of three or four years.

I think a couple of the knock-on implications of this is one, it's effectively another tax on business.

So for people that are contributing and go over this £2,000 uh limit, they'll probably pay either 8% or 2% national insurance contributions, but businesses will pay what is it, 15%?

So it's effectively it's another tax on business.

The administration's gonna be a nightmare from a business perspective as well.

Even minor, even minor things like 2,000 does not divide by 12 easily on a monthly basis.

So trying to work out that for a business perspective of what national insurance is is due is gonna be a nightmare.

And then also like it's just the narrative on this stuff.

So again, I revert back.

People don't like things being kind of taken away from them.

And especially when you talk to people about pensions, the narrative is that pensions are getting less and less and less appealing.

And yes, little tweaks like this do not help, but pensions are still an absolutely fantastic product, they're the best product that we have to help people save for their retirement.

And even with these tweaks, they're still incredibly tax efficient and they are the best way to save for your retirement.

And little things like this just make people throw their hands up and say, I'm not gonna bother.

And maybe they'll save into a cash savings account, or maybe they'll put it into a stocks and shares ISA if we're lucky.

Realistically, they're just not gonna save for their retirement at all.

It's a massive, massive narrative problem that they've got here.

And I think this one just looks to me like I cannot, I can't even squint and see the logic.

Well, pensions like for me as a branding issue anyway.

We should call it a future fund.

That's what I owner Bain calls it.

I think it's a great call.

Yeah, no, I agree.

Uh actually on that one completely.

And you know, there was um I actually I love Rory Savilland.

I think he's just such an absolute gent.

And I think but he was saying it would be really interesting if there's because there's a lot of money locked up in people's pensions and they're in their 30s and they're struggling to get on the housing ladder.

So could there be a mechanism where some of it could be released or some of your tax relief could be released to help you towards your home buying?

And I thought that was a really good idea because it would then incentivize younger people to get involved way earlier because they know that that money's coming across into their pension could potentially be able to do that.

Although it would it would be nicer.

But it would look nicer.

It is, it is, but it's well that's got different tax benefit on the way in, right?

But it would also be a one-off exogenous shot to the UK property market, which would just rift UK house prices all in a big one, and all that house prices would go up in the road, the advantage.

Which is what pretty much every policy is done in the last thirty years to pr to in Britain, right?

That's a very thing that's gone up is house prices, because if you make it easy to buy houses, everyone's obsessed with property in the UK and only invests in property and cash, and it just makes house prices egregiously expensive.

But including smaller stock will mean higher prices too.

So you'd like it's a it's a lose-lose.

And that was uh um Kemi's points yesterday about their um Yeah, the targets they're on that, and but Rachel Reese basically said we're we're we're on track, we're on targets.

But they but those targets were always complete bullshit, right?

One to five million homes.

Yeah, but every single person involved in the house building industry in the UK, all the big listed hospitals said there aren't enough plumbers or electricians, or there aren't sparkies, there aren't, you know, we we that's just physically impossible.

Yeah.

Unless we import tens of thousands of plasterers from wherever we can find them, which we're not gonna be able to do.

It's just like back on back on your pensions branding point, I do completely agree with you on that.

Because if you can capture people's attention long enough to talk to them about pensions and their eyes don't glaze over completely, you can pretty much convince them of how good pensions are within about kind of five minutes, really.

Yeah, exactly.

I think when people don't think about it or haven't had the financial education or whatever it might be, people think about pensions as a trade-off between £100 now from your paycheck and £100 30 years and it's not a good thing.

Yeah, it's not £115,000.

Yeah, or £15,000.

The only logical thing to do in that trade is take the £100, right?

But when you explain to them, look, you've got your tax relief.

So it's actually not £100 now, it's either £80, £60, or £55 if you're in additional rank.

So that's what goes in.

You then get the tax relief, which tops it back up to effectively £100.

You then get your employer contributions if you're if you're in salaried employment, and then hopefully you get tax-free investment growth for the next 25 or 30 years.

So it's a trade-off if you're a higher rate taxpayer between 60 quid now and I don't know, guess kind of four or five hundred quid 30 years into the future.

At 80% is 1500.

Which like people are just okay.

That that makes a lot more sense, but it comes back to that kind of financial education and branding point.

Because as soon as you start to talk to people about pensions, you're just like eyes closed.

But by the way, the only silver lining on to your point about this not coming until 2029, anyway.

I mean, the the silver lining on the cloud yesterday, and again, I I I really genuinely hate the fact that this has all become so party political.

I basically my hand has been forced, right?

Because I I because I'm a Benthamite, I've said it to you before, I care about the best possible outcome for the biggest number of people.

And if I see a government doing something that's really, really prejudicial to the life experience of millions of people, I I can't resist talking about it, you know, and I have a view on it.

But I think that where we're at now, and you know, there's a long a week is a long time in politics, right?

So who knows where we're gonna be with the next general election?

But will this ever really see the light of day?

I mean, if this comes in in 29 and Kimmy Ben Badenok keeps performing like she did yesterday, um, and people are as pissed because because this is my contention.

All of the KPIs are gonna get worse.

We're gonna raise less tax, growth is gonna be worse, unemployment's gonna be higher, but overseas investments can gonna disappear, the stock market's gonna get worse, the headline performance of the stock market might actually be quite good because there are loads of footy two fit companies which will get acquired by the Americans, not because of the strength of the UK domestic economy, um, which is another point that people who don't understand these things don't understand.

But like I think it's the correlation between markets and the economy are not.

It's negligible, exactly.

But but but I do think that you know so many millions of people are gonna have such a bad experience in the next three or four years that the one saving grace is well that this policy, this this change to the pension policy will never see the light of day because it'll be a new somebody else with a better policy, I hope.

Yeah, yeah, either a change there or or a complete change in government, like it's a good thing.

Well, yeah, even the Labour might have made a decision to change it by the time it gets to 29, right?

So exactly.

Yeah, and yeah, that's like with the stealth tax thing, it's like it's gonna raise this amount and it's gonna raise growth and do all of these things until 2031, but there's a general election that has to happen in 2029.

Yeah, like it has to happen.

So uh you uh you we've seen the polls, doesn't it look like they're gonna be in power?

Well, yeah, but then it's a point of you know, weeks a long time in politics, right?

That can change very quickly.

We've seen so many times.

Absolutely.

And you know, we could have another pandemic, another crisis, another thing where Labour managed to extend that and it's happened before and could happen again.

So I think you know that we've got to take these things with a pinch of salt for now.

But it was worrying for me on salary sacrifice and and you know the uh those pension um assets as well.

Well I d I did say I'd stick to the personal finance side of things uh rather than the politics uh side of this, because as I say, I'm uh You're doing a good job on that.

I wish I could.

I'm so angry.

I just can't anymore.

I'm from Ireland.

I came from I came over kind of twelve years ago, so I don't have any kind of party political kind of bias.

But it does concern me that a government of any colour that got in 18 months ago with a massive majority is not being more ambitious with a more clearly defined strategy over the next kind of three, three and a half years.

Because we talk about polls as if there's an election in six months' time that they're preparing for.

There isn't.

But they need to show with all of these tax risers and the announce that they're making that they will be able to stand up in 28, 29 and make a reasonable case of what they've done over the last five years.

Which could be broken, but they've broken all their manifesto promises.

That's the other point.

Like I've never known anything like it.

I mean, we all know that we all have misgivings about politics, but this is the first time in my adult life that I've seen a party go, we will absolutely not do this, we will absolutely not do that, we'll absolutely not do that, we're gonna go for growth.

As I said earlier, Rachel Reeves was going around the city seeing everybody who was willing to meet her in the city talking a really big game, and people were relieved thinking, actually, maybe we can trust Labour this time.

Maybe they won't completely blow up the economy and destroy, you know, and supercharge unemployment and make it impossible for anybody to get a job and drive thousands of people offshore and have all our companies fall on their arse, which by the way is absolutely what is happening.

And then they came in and absolutely did a vault fast and one-eighty'd on all of the things, which is you know, that's for me, that's unforgivable.

That's why I care.

No, I agree.

I I do agree with you there.

I that the the break of the manifesto was one step too far for myself.

Again and again and again and again.

No, I want to just to be clear I think we all want like a positive outcome.

And it just frustrates me when you have like cabinet ministers which have never run a business making business decisions, chancellors that have, you know, became an MP at thirty one years old.

Exactly.

So I think we should have a rule you should have thirty five years of front office.

Experience in a major capital market to roll before you become Chancellor.

But I don't know you can't you can't legislate for stuff like that.

But that that should be a it should be a convention, if not a rule, right?

Aaron Ross Powell Yeah, or at least uh an ab outstanding track record at doing good things to be able to do this.

And like that's why I struggle with this a touch.

And uh you know I think that that that's only been exacerbated over this past two budgets, really.

I'm gonna talk about one positive.

Go for it.

I've got a couple of positive things.

I was gonna start with them, but we went in there.

It's help to save on your list.

This is something that more people do need to know about.

And if you're looking for some sort of I'm not gonna say it's a silver lining from yesterday, but they have expanded the help to save scheme and more people will be eligible.

Because it was only eligible for universal credit.

Yeah, and they've expanded it now to a different range of benefits.

It is an absolutely brilliant scheme.

If people don't know what it is, you can save 600 pounds a year into it, and the government will top it up by 50%.

So you get an extra 300 pounds and that runs for four years.

You don't get that return on your savings elsewhere.

And it is generally people on universal uh credit and other different types of benefits that need help with their savings.

It's a brilliant scheme.

Not enough people know about it, but yesterday they said they were going to make it permanent and they said they were gonna expand the eligibility for it.

So as you say, if we're looking for little bits of positives here and there, help to save, more people need to know about it.

Tell tell everyone you know that could be eligible to check their eligibility.

Well, that that's the marketing campaign for it.

Yeah, don't get your legs broken if you're not gonna get it.

You know, or coral or somewhere like you know, uh there's there's those uh Well that's the other one, isn't it?

The betting uh changes like one and a half million people are addicted to gambling in the UK.

I didn't realise that.

Yeah, it's very high, and so there's gonna be changes to that too, which has who's welcomed, uh, you know, vapes, all of these things.

Um I think is you know obvious and fair game.

Go after the things that are fair game, just not our savings and our pensions and our assets, please.

Like that would be great.

Um there is one another one I'm gonna just bring up, but um one that uh frustrated me a touch was the EV changes.

Um and you know, right now you can charge your EV if you're smart about it, and you can get a timer, you can charge it for a few quid, and that's gonna get you 300 odd miles.

And you know, obviously there was um tax breaks on on um on your on your road taxes, etc.

And all of these things which have been really beneficial to get an electric vehicle, which as we know is important, obviously the infrastructure spend on that and getting more and and they're pumping money into EVs, the two, but um charging points and stations.

But there's now a threep per mile for electric vehicles and a 1.5 pence per mile for hybrids, which if you equate that to so it's a three pounds for every hundred miles you drive, if you're a long-range driver, then that's you know, delivering parcels, doing you know work, it's uh vans, it's it's so many aspects of this, it's an enormo it affects an enormous amount of people.

Um so would you still go electric at this point?

I was never gonna go electric.

It's not actually I there's quite a lot of work that says that if you fully do the whole supply chain of, you know, 12-year-olds in Congo digging out the cobalt and and that yeah.

I mean, like what if you really, really fully interrogate the supply chain and also things like transit if you use fossil fuels and transmission lines where you lose like 12 or 15% of the electricity of the power on the transition line to finally get to the EV, it's absolutely not a clear-cut thing that EVs are better for the environment than than than efficient petrol or diesel cars.

Like, I mean, and that's a fairly controversial thing to say.

I'm not saying it's definitely true, but there are big question marks about that.

And actually the other one that often doesn't get talked about is EVs, because of the weight of the batteries, are structurally much heavier than a light-for-like normal car, normal car, old school car.

That's doing enormous damage to our roads, so that's got to be costed all the asphalt replacement, all the you know, redoing the roads.

And it's also really bad for the most polluting thing in on in an automobile, which is tires.

So EVs run through tires far more quickly than a light for like normal car.

So I've never actually been I've always thought, look, I think one day the direction of travel is really encouraging.

I think one day, you know, China's fairly inspiring on that front, but then how many coal-power fired power stations has China got that are supplying uh the electricity that drives all those EVs?

Again, it's kind of a nonsense, right?

But but what I would say as well is uh and you know, having never owned one, um correct me if I'm wrong, but it haven't EV drivers had a massive advantage over conventional car drivers of late because they're not making the same contribution to like tax.

Yeah, the roads, right?

Yeah.

I mean, at all.

So I do think I mean my next one neighbor will kill me because she she was talking about this this morning, but um, you know, I think harmonising that at least, not least given EVs destroy roads faster than normal cars.

Yeah.

Yeah, I think it was more the framing of it, I suppose, and like it just felt like another like we're taking doing this, whereas it would be like, hang on, let's treat everything like that.

Well, it's also a vault fast, right?

Because it is, you know, this is the government of net zero.

And it's like, well, actually, if you've been a good actor and you you believe and that's one of the reasons you drive a Tesla, now you're getting screwed.

That's that's the point, right?

It's actually very similar to the salary sacrifice conversation of what behaviours are you trying to incentivize?

Like, and what coherent policy do you have to drive people towards those behaviors?

I did think that the government wanted to move us all towards electrification, but just judging by that policy yesterday, that doesn't look particularly kind of coherent to me.

So, as I say, what behaviours are you trying to incentivize and therefore incentivize them rather than tax them?

Yeah, it just seemed odd because they said, Oh, we're going to invest loads into charging stations and ports across all the motorways and like across the whole UK.

But also, if you do drive it, we're going to also make you pay for it more.

And uh it's like a lot of countries have been doing this as well.

They've been like getting rid of the tax reforms around you know tax breaks or you know, and advantages to owning an electric vehicle when it was posed as this like if you want to go conspiracy theory on it, is it because they've woken up to the fact that AI and everything else are gonna hoover up so much legiticity, we need to get all these electric cars off the grid as quickly as possible, or we're not gonna have AI.

Unless we have like 50 new nuclear power stations in in Western Europe and America, which is the other option.

Yeah.

I saw a tweet about this about nuclear power and it not being addressed in the budget, and there was a lot of people quite annoyed about that and online, which actually I don't think we've come onto this at all, but power generally.

So there's this brilliant um I was reading a piece recently about how basically uh for the last two centuries the closest correlate to prosperity in any economy is is is power, is power prices.

You know, the whole industrial revolution was a complete shift in how we interact with fossil fuels and we go through coal and steam and then we moved on to electricity and uranium, blah blah blah, and and or basically the British Empire was built on coal, the American Empire per se was built on oil and on and on.

Um and everything we're doing in terms of policy is having no effect whatsoever.

To make the best progress for the environment, you need to burn a hell of a lot of fossil fuels to fund and deliver, like industrially, all of the renewable stuff, and also smart stuff from AI and new materials science, everything else.

So the m the way that we solve all of these problems, big picture in the long term, is actually by using a shitload of fossil fuels.

And China knows that and that's what they're doing, right?

So little old UK, which is like to the square root of something I say the square root of fuck all um to global emissions, like wearing a hair shirt and destroying our North Sea oil um industry is absolutely the ridiculous policy and and and is part of another reason why Britain is in the pickle it's in.

Because the we're not impacting the environment, we're retarding our ability to do a better job for the environment further down the road because we're we're unable to move as fast as China is at the moment.

Um and and we're in the meantime, we're making life we're making you know, basically most of look at Ineos, you know, most of Britain's heavy industrial businesses, look at British steel, are completely fucked.

And they're and you know they've said energy prices are gonna roughly fall by £150 per year, but then the energy price cap increases.

Well, they should do given the given that gas uh wholesale prices have fallen massively, and Ed Miliban keeps trolling out the absolute, absolute outright lie that British energy prices are high because of global fossil fuel markets.

Complete bullshit.

Demonstrably complete bullshit.

I mean, this is what this is why I get agitated and I'm getting all party political in this conversation because I've never seen such dishonesty.

Outright lying straight to camera dishonesty from the leading politicians of of this government.

Yeah, just nuts.

And it it's safe to say that Kemi did call a lot of that out yesterday.

She blatantly said, Here is your statement from this time, here is your second statement from this time, and here is what you're doing now.

So did Beth Rigby, right?

Loads this week.

Actually, can sorry, can I pose a question to us, which is like because my wife made the point to me this morning, said my god, if Kemi Badenok, if you if somebody spoke to, if a professional woman spoke to another professional woman in a bit you know, in a law firm or a bank or a on a construction site, and what in a normal business setting, the way that Kemi Badenock just spoke to Rachel Reese yesterday, I mean that surely that would be like a sackable offence, right?

Or yeah, very aged architect.

It was truly extraordinary.

I think it was absolutely merited, and I support it because it's it's that bad.

They've been that dishonest.

They have to be called out for being that dishonest, is my view.

But but I'm interested in your views because I thought it was pretty I think it's unprecedented.

I don't think it's ever been that aggressive at this fact.

I think it was uh at some points definitely were very contentious.

But the mocking her voice.

Yeah, and and you know, put the few personal claims in there and things like that.

I didn't agree necessarily with that, but it was heated and it was she was going.

And like so yeah, I've thought largely 90%, 95% of her argument was was bang on and because she was just calling bullshit.

Yeah, good.

Um if any normal person tunes into BBC Parliament or realistically they do it on a day like yesterday, just generally it is so dispiriting of how we do politics and policy in this country.

The whole WhatsApp group was like, these are kids.

It's so adversarial.

It is theatre, exactly as you say.

There is a distinct lack of seriousness in my opinion.

And I get the whole idea behind opposition politics is you've got to pick holes, and you guys are saying Kemi did a very good job of doing that kind of yesterday, but it just does not feel like a grown-up mature race to arrive at to arrive at policies that will help this country.

It's so funny you say that because I've been saying that for years, right?

How it's the thing, but but yesterday was the first time I just thought, no, this somebody's got to somebody has to be that aggressive with these people because of the level the unbelievable breathtaking level of dishonesty.

And I found it really refreshing.

But there's an interesting point.

So my first ever job was that I was a I was an intern on the hill in Washington, DC.

And the US Congress and the US Senate are both circular, so is the European Parliament, so is the French.

Basically, almost every parliament in the whole world is circular to engender consensus and non-confrontational politics.

Yeah.

The the Commons has two, I think they are they're either green or red lines, which are a sword's length apart on either side because of because they literally traditionally can stab someone by Britain's always been like that.

But yeah, yes, I would tend to agree we want consensual politics, we want we want the best possible policy for the largest percentage of the population.

100%.

Look, I uh we've you know we could probably carry on talking about this for a while, but we we're coming to a close here.

So I think what I would love to know uh from you guys is like what's what's big on your agenda for now and like how are you going to move forward from this, especially from a money box perspective and and and eagerly as well yourself, Andrew, from a content perspective.

I'll go quickly.

I think um given the jobs that we do, we are cursed to have to pay attention to this stuff, right?

The the man and the woman on the street generally doesn't pay attention to politics, and I would argue they're probably happier uh because of that.

Now, there is obviously questions about the long-term direction of this country and the policies that um are being undertaken at the moment, but what I will be doing with Moneybox, our customers with the content that we create, is trying to remind people that they can still hit their financial objectives, they can still buy a house, they can still retire.

It is crucial that people don't just throw up their hands and give up because of the narrative that is out there at the moment.

I did an internal financial education uh session with the Money Box uh employees last week.

Um, I have a secret goal that I want us to be the most financially confident workforce in the UK so that we can go out there and spread the word.

Um and one of the things I said is because of the job that I do, I've got to pay attention to this stuff, but you don't.

The politics and the policies will either be a headwind or they will be a tailwind, and it will be five or 10% in either direction.

The most important thing is what you do with your finances, that you are consistent with your savings, you are consistent with your investing, you are consistent with your pensions.

You do hear, especially when it comes to pension policy, I mentioned it earlier, people just saying, it's too complicated, I'm not going to bother.

It's getting worse and worse in terms of the benefits of saving into a pension.

Even if it gets slightly worse, the far bigger impact is you giving up and not trying on this sort of thing.

So what I will be doing, as I say, for the weeks, months, and kind of years to come is reminding people that all of the tools are still there for you to hit your financial goals.

And if at all possible, if you can ignore the politics and the policies of this, um, please do, because you'll probably be happier.

Yeah, absolutely.

I think that's brilliant.

And I would totally agree philosophically.

I mean, I this is what we always say, and I think I said it right at the beginning.

I go back to I try to do evergreen content, I try to talk about stuff that's worked since capital markets were invented, right?

And to your your plus or minus five percent point is really well made.

Said against that, um I you know, we have a sort of cheesy Californian stated company mission, which is to improve the financial affairs of as many people as possible.

That is our stated explicit goal as a business.

And in an environment where policy decisions aren't being made that are massively prejudicial to people's abilities to do that, to improve, like there's still going to be a way, but it's a hell of a lot harder if you've just lost your job.

It's a hell of a harder if your eldest child just graduated from university and has sent out 2,000 job applications and cannot find a job.

That's a real life example.

Like I know people who've hundreds and hundreds and there just are no jobs.

You know, it's if it's really hard if you're not particularly wealthy and you struggle enough to do a pension and certainly not as stocks and shares I sir, yeah, if your electricity bill is now too high, or if you're rattling around in a big old house that you bought, like I say, in the 80s, and your kids have fled the coop, and you've you and your husband, you know, your husband's got dementia and you've got you don't have a big income and now you have all these more this mansion tax to pay or whatever else.

So I totally agree with you.

I think I think notwithstanding all of that, everyone should do their absolute utmost to grasp the nettle and and understand this thing they have to sort out.

Because that's the other big thing, is that we have a real tenancy in this country, just think, oh no, that's all right, the government will just pay for me.

And they just can't afford to structurally.

And that's it.

What I was getting at is that we, as in, around those tables, should be trying to engage with the government on politics and policies to make these things better.

The normal kind of person on the street, as I say, the crucial thing is that you keep trying, you keep saying, keep doing your best with the policies and the products that are already there because it is still possible, despite the narrative out there, to hit your financial goals and achievements.

Yeah.

Wicked Dents, I've loved this.

Thank you so much.

And um, yeah, we'll see you again soon.

Thanks for having us.

Thanks a lot.