The Budget in brief

Just to make things simple for you all.

The budget kicked off with news that The Office of Budget Responsibility (OBR) has upgraded its forecast of UK gross domestic product (GDP) growth in 2014 to 2.7%.

This is faster than the OBR's previous for previous forecast of 2.4% economic growth in 2014. Osborne said that this was the biggest upward revision to growth for at least 30 years.

George Osborne then announced he will cut the income required for flexible drawdown from £20,000 to £12,000.

He also announced changes to the trivial commutation rules meaning that small pots (Pension) up to a total of £30,000 can be cashed in.

By abolishing a 55% tax charge on full pension fund withdrawals, together with the reforms to drawdown, the chancellor announced that he had effectively abolished the requirement to buy an annuity.

The government said it would abolish a current 55% tax on withdrawals from pension funds. From April next year, people will be able to access pension savings as they wish at the point of retirement, subject to their marginal rate of income tax, rather than the current 55% charge for full withdrawal.

This news left a rather large hole in the pockets of some insurers.

Shares of specialist annuity providers Partnership and Just Retirement took a beating directly after the announcement of the pensions overhaul, plummeting 56% and 42% respectively.

Other insurers left to examine their wounds were Legal and General and Friends Life.

The new ISA, unveiled today, will merge stocks and shares ISAs with their cash equivalents to create a new, super ISA.

It will have a limit of £15,000.

Every person at retirement will now have access to free, impartial advice under new rules.

The chancellor guarantees face to face advice for anyone in a defined contribution (DC) and private sector defined benefit (DB) scheme, in an initiative that will be developed using £20 million of government money over the next two years.

The government has increased the personal allowance to £10,500.

The amount an individual can have without it being taxed will be increased to £10,500 next year,according to new rules.

Among moves to aid savings, Osborne also introduced a pensioner bond to help retired people suffering from low interest rates.

The new pensioner bond, launched by National Savings and Investment (NS&I), will be available from 1 January 2015 and be available to everyone over 65.

The exact rates will be set in the autumn to 'ensure the best possible offer,' Osborne said. It would be something like 2.8% for a one-year bond and 4% on a three-year, he said.

The government will be raising the higher rate trigger for 2015/16 by 1% to £42,285 next year.

The move follows calls for Osborne to increase the higher rate trigger from £41,865 so fewer people with modest incomes fall into the bracket.

The government is set to stop public sector pension scheme members transferring into defined contribution (DC) pensions, and is considering a ban on private sector defined benefit (DB) members too.

Transfers will only be allowed in 'exceptional circumstances,' it said. 

The taxman has been granted more powers to help it fight the battle against pension liberation fraud.

Under the new rules, HMRC will be able to refuse to register a scheme, or de-register an existing scheme as well as enter business premises to inspect documents, if it so wishes. 

The government announced it was getting even tougher on tax avoidance schemes, and aimed to bring in £4 billion in tax receipts from individuals who have used them.

Individuals will have to come forward and pay taxes upfront and claim relief later, Osborne announced.

The government is to also investigate abuses of tax-efficient venture capital trusts (VCTs) and Enterprise Investment Schemes (EISs),

And in other news, Brits will have a new pound in 2017.

The coin, also unveiled today, has 12 sides and has been developed specifically to guard against fraud.

The great bank robbery

I said in a previous blog that I would tell you about the day I was held up in a bank, so here it goes.

It must be ten years ago now when I was working as a not so young mortgage broker at the now defunct Bradford & Bingley bank. I say not so young but I did have more hair covering my birds nest at that time, and before you say it, no it was not a comb over! It was doing the best it could do at the time; poor hairdresser.

I was usually stuck in my office at the back when I was feeling the walls closing in on me so I decided to go into the banking hall. The world decided that it was time that I was robbed at gun point just to remind me that I was working in a bank and not in a shoe shop; to be fair it's normally knives in that part of Hull or baseball bats so it's nice to have a change. I was sat chatting to my friend Ross who at that time was doing his apprenticeship before his real job as a Santander bank manager in later life, when a gun appeared over the counter pointing at Ross. As always he was in full flow telling me about this and that oblivious to his manager prodding his shoulder and my mouth slowing becoming slack while at the same time trying to mouth the word gun!

Very slowly it dawned on him that something was happening in front of him and he looked up to see the muzzle of the gun. This sight made him jerk back in shock and when the holdall came flying over the counter with the usual warning of fill it or I'll kill you all he proceeded to fill it up with everything in the till.

Fair doos to Ross, he may have been in shock and a bit terrified to the point of a bowel movement but he managed to double bag the guy. Now this has nothing to do with melvins or grundy pulls (depends which part of the country you're from or what you call underpants) but the tills were filled with exploding powder bombs cunningly disguised as bags of money. If you put them to your ear you could hear them tick! That's not a joke they actually ticked!

This mad man swung his bag back over the counter and pointed his gun at everyone saying if we followed him he would shoot us all. The branch manager ran as fast as her sensible heels would carry her towards the door with her keys making an odd clip clop as she picked up pace and with one quick twist she locked the door!

Now at this point I really should finish the story, what happened when he left the branch holding the bomb, did he get caught, did he do it again, etc etc. I will complete it but another day as it's very late and I need some kip, so watch the blog and I will tell the end of the tale blood, tears and all in part two of the great bank robbery.

Is this the Hitler for the 21st Century?

I've had a very busy day today reducing the Equity content for all of my clients with the on-going threat of a full scale Russian invasion of Ukraine. It's a hell of a lot of work and that's just the selling let alone the number of switching letters that I'm going to have to write over this week for every client. 

A lot of advisers will be telling their clients to hold on to their shares and sit it through, however this is such an obvious risk that they should be looking to reduce clients risk all round. So if your Financial Adviser hasn't sent you a message you might need to give me a call instead!

I've been watching the events unfold over the weekend and to me it's clear that Putin needs room to breath! He feels the need to expand in to all countries that might have had something to do with Russia at some time. The next thing you will see is the UN handing him Poland to keep him quite, it would be peace in our time you will hear.

He was after all elected via his thugs in controlled elections and his Hitler youth, I mean Putin youth bullied all that opposed him. If you might pose a threat you ended up in prison until you agreed with him, lucky really it could have been a radio active substance in your tea. 

Bullies understand one thing and one thing alone, the guy who's bigger and tougher than him. That should be the USA but since they have had so many wars recently they are a little fatigued. Lessons of history are screaming at us all and if the world doesn't show Putin that they will fight him and he will lose badly then what's stopping him marching across Europe?

Some people will say that I'm taking it out of context and that we can talk to the prime minister, oh I mean President, oh I mean Dictator. This is a man out of control and it's partly our fault. When you allow a man to murder someone on your soil in cold blood and you don't realise that he's now quite mad then you shouldn't be surprised when he rolls tanks down your street. This is Ego gone mad and only US forces on the ground will stop him, he may be mad but he's not stupid the Americans would teach him all about Modern Warfare in the first real shooting war; the Russians wouldn't last very long.

Sometimes you need to take it to the brink and bring the fleet along for a chat before the bully gets the message, otherwise we will have a slow trot to a real world war where no-one wins. 

Feel free to comment, it may be your last chance at free speech before your tea is poisoned!

Blankety Bank

So the Royal Bank of Scotland are about to pay out £576 million in bonuses while nursing a loss of 8.2 Billion pounds. This has really caused a lot of heated debate and I will try to be non biased as I usually try to be. 

They have made a profit of more than 2 Billion pounds but due to bad debt, fines for dodgy bank issues and poor governance in the past they have had to write off a great deal of money. 

Lets put to one side that they are a bank because that will just wind us all up, and Barclays and now RBS realise that estate agents are more trusted than them and that's fatal when you deal in peoples money where they have to trust you. Lets instead look at them as a normal global business that has contracts with employees at all levels where they pay bonuses if their department or bit of individual work beats expectations. 

We tend to focus on the big fund managers who get paid by beating bench marks instead of looking at the majority of their staff who are branch managers, counter staff etc. They work hard under great pressure and earn far less than you can imagine; I understand that the average bank manager will be paid around £25 to £30k depending on the branch size and will be reliant on a bonus to improve their lives a bit. I know a bank manager from a different bank and they have made it very difficult for him to get a bonus at all and they have not increased his pay.

This was the same bank manager who was a simple bank clerk working in Hull was confronted with an armed robber who crashed in to the branch and shoved a pistol to his face. He didn't notice the gun for a while as he was talking to poor old me who out of the office and in the banking hall (yes I worked for a bank that is now defunct). I nodded vigorously towards the man with the gun and he continued to talk about his day, finally he noticed and pulled back in horror as he saw the gun! He handed the money over from all the tills and in to the assailants bag who then bolted out of the door. Now do you think he deserved a bonus that day?

I will blog about that armed robbery in detail another day because I know you will want to know all sorts of things about what happened afterwards.

I think the banks need to pay the normal staff a higher wage to start with a do away with bonuses and this will remove public ire and improve the lives of their staff. This has happened in Financial Adviser businesses because the regulator has made it so. Now they are paying the sort of wages that the advisers are worth but without the bonuses added and so the pressure has been relaxed to just sell a product and now Financial Advisers are free to look at their clients finances as a whole rather than just looking for a commission driven product that will fit. 

In conclusion don't mix up the real people at the banks with the very small number of top executives, most of the bonuses will go to thousands of the staff who they should have paid a better wage to in the first place. You may in the future see the fixed cost wage bill increase and fewer bonuses and that will be a good thing.