ISAs, the Budget, national insurance - and subscription creep
Less than a month till the end of the tax year! How exciting 🥳
I feel as though there are fewer ads for ISAs around this year. Normally there are ads everywhere on the tube for ISA products, and reminders to make any contributions you can before the end of the ISA year.
I think it’s being driven by two things.
Firstly, there’s more competition so companies are choosing not to compete at this time of year and, instead, are vying to get your attention at other times.
A good example of this is Chip (an app-based savings and investment platform). They ran a campaign a few months ago focusing on investments as non-monetary assets. Things like ‘the 59,000 photos on your phone (not yet backed up)’, ‘Granny’s chicken pot pie recipe’, and ‘those rogue voice notes in the family chat.’
I loved the concept, especially the strapline: “You look after your real assets. We’ll look after the money.” (I didn’t love the other copy though… it just didn’t connect as much emotionally for me.)
Secondly, there is generally less money sloshing around, and marketing budgets are usually cut first in a recession. At the same time, consumer acquisition costs are increasing. This is the amount of money you need to spend on marketing in order to get one more customer. Consider all of the companies trying to get your attention both online and offline. It’s a LOT. So the investment being put in is unsurprisingly generating fewer customers.
All of this to say… remember to see if you can put anything more into your ISA before 5 April (and remember that transfers can take a few days, so don’t leave it till the last day!).
1. Key points from the 2024 Budget
The Budget was announced this week. This is a significant date on the UK calendar as it outlines the economic policies the Government is implementing.
Ideally, this would be a series of measures designed to make everyone better off - both in terms of their finances and their quality of life.
But, politics is political. So it’s usually full of measures that are designed gain votes, by appealing to the following:
Party loyalists who they want to keep loyal (typically high earners, for this Government)
Undecided voters who might give them their vote if they perceive they are better off
Demographics who have significant influence over election results because there are a lot of them and they are likely to vote (e.g. pensioners)
Here are the key points:
National insurance contributions are being cut again but income tax thresholds are staying the same (more on that in the next story)
A British ISA of £5,000 for investing in British companies will be coming, in addition to the £20,000 ISA allowance:
This is great because of the additional £5,000 tax free allowance (for people who max out their £20k allowance)
Some argue this is more of a gimmick and… yes, it probably is. But it could be useful to some
The admin fee of £90 for a debt relief order (DRO) is being scrapped:
A DRO means that people with debts where the maths just isn’t maths-ing, and they cannot get out of debt on their current income, can clear their debts. Before, they had to pay £90 to do this - but many don’t have the money to pay this amount.
With more people falling into poverty, this is a small but significant change
But of course doesn’t touch the systemic issues causing this hardship in the first place
The threshold at which small businesses must register to pay VAT has been raised from £85,000 to £90,000:
This £5k could make a difference to small business owners who are just figuring things out
Paying VAT eats into already tight costs, as this threshold applies to turnover, not profit.
If you’re looking for more information, I’d recommend Martin Lewis’1 analysis.
2. The national insurance contribution cut - does this mean you’ll be better off?
Most employees will pay less in national insurance contributions (NICs) from 6 April. What does this mean?
NICs are a tax, that fund the State Pension. It works on the principle that there are enough people working today to fund the people taking the State Pension today. And then, when we get older, the younger workers will do the same for us.
The amount you pay in NICs depends on how much you earn:
If you earn less than £12,750, you don’t pay anything (same as income tax)
If you earn between £12,750 and £50,270, you will pay 8%. This amount is currently 10%, already down from 12% in recent months
If you earn over £50,270, you pay 2%
You can use this calculator to work out your take home pay, and compare with previous years.
3. Spending on accidental subscriptions has doubled since last year
The Guardian
More than a quarter of UK adults have accidentally taken out a subscription in the past 12 months.
This is when they thought they were buying a one-off product or service/signing up to a free trial, but were, in fact, being enrolled into a continuing payment.
Three quarters of those surveyed said they support a ban on automatic subscription renewals without explicit consent from consumers. But I don’t see this changing anytime soon.
So how to minimise the risk of this happening?
When signing up for a free trial, add the end date to your calendar to avoid automatic renewals kicking in (you could also set a reminder for yourself)
Regularly review your bank/credit card statements and check that there isn’t money leaving unexpectedly
If you do find something you didn’t realise you were paying for, get in touch with the company and ask them for a refund. I’ve done this several times, and I’ve pretty much always got money back
Wins of the week
In case you missed it, Money Brunch was featured in the Cheapskate London newsletter on Monday! If you’re looking for great things to do in London, on a shoestring budget, this is the place to go 💸
I started a new SIM only contract this week with O2. Turns out if you’re a customer of both O2 and Virgin Media, you can get double the data and additional broadband speed! I had to go through their very slow customer service channel to get it, but I recommend looking into this.
Also, anytime you sign up for something, explore the other benefits that opens up for you. For example, if you take out insurance via Compare the Market, you can get savings on cinema tickets and dining out via their app
Money Bruncher Lina has recommended cashback sites before, and I finally decided to sign up to Top Cashback2. Every time you make a purchase with a retailer via them, you get rewards. Free money!
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UK consumer champion doing GREAT work to help people survive against the machine.
Disclaimer: If you sign up via this link, I’ll get a £25 referral bonus.