2024 E01 - The New British ISA: What you need to know

peter (: 00:01

All right, we're back. I've been on an hiatus. And the last time I posted for the podcast was December the 11th, 2023. And we're in 2024 now, it's already March and nothing so far. For those of you who are eagle-eyed and been paying attention, the name of the podcast changed across all of the podcast outlets a couple of months ago from Conversation of Money to the Money and More podcast.

And so in this very first episode under this new format, I want to explain what the new format is, what's going to change, what you can still depend upon being delivered to you based on the conversation of money podcasts of old and just what I hope will pivot and allow us to be different to other podcasts that are currently out there. But first,

So I started this podcast in: 2020

e a stream of its own. And in: 2020

t and the YouTube channel. In: 2022

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something that will be different to hopefully push the numbers up and the reality is with these things you just don't know until you actually find out by doing it and I'm one to follow my gut, one to follow my heart and so when I uploaded on December the 11th knowing that I was going to take a break over the Christmas period because I needed to and I was I was just knackered I knew that it was going to be an opportunity for me to really explore what the new podcast would look like and so the new podcast

and its new format is gonna have some of the old things that you've always enjoyed. So let's start there first. So we're still going to be talking about money. I mean, it's called Money and More. Money is at the forefront of the show. So we're still gonna be talking about investments. We're still gonna be talking about money tips, guidance, advice. We'll still do all of that stuff. We'll still do investment analysis, budget analysis. We'll still talk about all of those core things that you've always enjoyed. But what I want to do is also bring in

a new thing. So for example, one of the things that I'm really passionate about right now, and this is speaking more to the more side of the title of the podcast, is bringing more around behavioral psychology, because behavioral psychology and our psychology, how we view money, our money scripts have a huge part to do with the decision that we make when it comes to our finances. In fact,

20% of what we do with our finances is down to the fact that you listen to any advice that I've given here on this show or any financial tips that you're going to pick up across social media. That's just the 20%. 80% is what's in your head up here psychologically. I'm also passionate about mental health, particularly mental health in men. And so I want to talk a little bit more about that. I want to bring to life real stories, real stories of people who have against the odds.

got on the property ladder, who were against the odds of, you know, managed to conquer their debt, conquer their financial woes. I want to delve into those stories. Because I think that those stories are truly inspiring when you can see that these are just ordinary people. There are way too many podcasts that have come up over the past two years, that have millionaires and billionaires on and I get approached by them all the time. This person has done X amount in billions and blah, and all this kind of stuff. And it's like, well,

peter (: 04:42

That's all very well and good, but I struggle to find credibility in a lot of what they say they do when I really dig deep. And we will have some successful people on here for sure, but when I know for a fact that they are legitimate and they're trustworthy and they're someone that I actually would want to have a conversation with myself, I don't take for granted in any way, shape or form the fact that you listen to my show and that is 20, 25 minutes a week.

and issue attention and that means a lot to me. So I wanna make sure when I present a guest, they're credible. The other thing I'm gonna be introducing, which is gonna be a new thing, which I think will set us apart in the podcast space here in the UK is a mailbag segment. Now the mailbag segment each episode is going to be dedicated to your questions. And the idea behind this is that I get a lot of questions anyway. I can give you a few minutes of my time to really explain.

dig deep into those questions and give you an answer that you can actually act upon without being worried that you're going to necessarily be sold a product or be sent to a provider. I'll give you my honest opinion. I will tell you what you need to hear, not what you want to hear. And it may be the case that some episodes will be dedicated purely to your questions. But in my research, there aren't really any podcasts that are doing.

visual audio podcast. Through: 2021

that we get the podcast channel up to really good numbers, but it will now be a visual audio podcast. And the reason for that is in mail back section, for example, I will scribe, I will describe, I will show you and walk you through the logic of the answers that I provide you as well. The episodes will be between 20, 25, 30 minutes max, unless I have a guest on where what they're just saying is just so valuable that we have to continue the conversation. But that's what the new format

peter (: 07:06

is going to be. That's what I'm going to deliver to you in 2024. I hope you're going to enjoy it. I'm sure that you will and are we open to receive your feedback as well? Is there anything that you would love to see on the show? Please do let me know. But there is a topic that I do want to talk about and delve into slightly this week and that is the creation of the new British ISA.

peter (: 07:32

So this is something that has actually been floated around now for quite some time. It should have been announced in the budget last year, the back end of last year when he originally gave us that two percentage point reduction on that insurance contributions. Surprisingly, he brought it in, in the budget last week. So what I wanna do is I just wanna share with you what this is, how it works, and I'm gonna do it in the visual spectrum. So you can kind of...

visualize the explanation that I'm giving to you as well. So let's jump over to my pad.

peter (: 08:23

So by now, you know how the ISA allowance works. Every single tax year between April the 6th and April the 5th, you have an allowance of 20,000 pounds. April the 5th, April the 6th is essentially the tax year. Can't make it simple in doing it January to January, they just don't. April the 5th, April the 6th. Now typically speaking, within your ISA allowance of 20,000 pounds, you can put that money across

three different types of accounts. The first one is a cash ISA. This will be with your building society, your bank, and it will probably offer you a lower rate of interest, although the interest rates have been better now because of the Bank of England base rate, thanks to inflation. But this is generally speaking, an internet access account or a notice account, or you might even get a fixed term account of maybe one or two years where you're getting a decent rate of return. You also have your lifetime ISA. Now this is great for first time buyers. You get some free money from the government to help you towards your deposit.

You can also use it to help plan for retirement as well. So it can also generate you an income that will be tax-free in the future. Then the third one, which is probably one of the most popular ones is a stocks and shares ISA. This is where the money is invested in the stock market. You choose where it's invested and the growth that you receive whilst it's invested is completely tax-free. There is a fourth one called an innovative finance ISA, but to be honest, it is a peer-to-peer kind of structure.

where you're lending to new businesses, can be a little high risk, but it's not very popular at all. So I'm not gonna talk about that specifically. What you need to know for the purpose of the British ISA is that it's tied to your stocks and shares ISA specifically. Now, the British ISA, what has Jeremy Hunt announced? So it's an additional 5,000 pounds that you can add onto the 20,000 pound ISA allowance that you already have.

again to be used between April the 6th and April the 5th, the tax year. But this £5,000 can only be used within a stocks and shares ISA and only to invest in UK equities. So in other words, indices like the FTSE 100, FTSE 250, FTSE All Share or any other UK indices that you can find. Now it's actually quite clever what Joeme Hunt

peter (: 10:47

did here and that's because, well, if you've been paying attention, we are in a recession and they've used all kinds of terms to kind of trivialize the fact that we're in a bit of a recession. They've used the word technical recession or a shallow recession, but we're in a recession nonetheless and the official definition of a recession is when you have GDP, gross domestic products, so how much money the country generates, you have that four over two or three quarters and that's essentially what's happened.

And this is really, really clever with the British ISA because they're giving you an additional £5,000 allowance into your ISAs that you can use, but only when you invest in UK companies. What this will do is it will stimulate the UK economy, get more money in the UK stock market. So it's kind of, you know, a bit of a gift in one hand, but there is an underlying...

question around well, how good is the UK right now for investments? I think we have our troubles, our challenges when it comes to Brexit. That has definitely dented our economy. The UK has not performed as well as other markets, certainly nowhere near as well as the US. And if you've been investing you have maybe the S&P 500 or you have a global index fund, if you compare that to the UK, the performance

it's probably a little lackluster, certainly against the S&P 500 and some of the other US based indices that you have. We've not been performing well at all. So the issue that I can see with this is, yes, it's great that we've got an additional £5,000. Yes, it's great that it's there to kind of help prop up and boost the UK economy and the UK market, but is it really going to be attractive enough for those people who would actually use it? But in a nutshell, this means that your ISO allowance come this new tax year.

is pretty much going to go from 25,000 to 25,000 pounds per tax year. And I think that is ultimately good news. What we don't yet know is whether or not the British ISA is going to be run by a specific organization that is going to be created specifically for this. We don't know how it's going to feed into providers. It may just be that they work with existing providers. We don't just know that information yet, but rest assured, as and when we

peter (: 13:08

I'll update this episode with a further explanation to guide you in the right direction. But that's the British ISA and everything you need to know based on all the information that we have right now. If you do have questions, then feel free to either pop them in the comment section on YouTube, or you can message me on Instagram if you're listening to this on Spotify and not in the visual medium. That brings us very nicely to our next segment.

Mail back.

peter (: 13:55

So on this episode, I wanna highlight a question that I received from Jay on Instagram. So Jay writes, hi Peter, stumbled upon your YouTube channel a few days ago. It has really educated me into the financial realm of investing and saving. Two questions, can I have a cash ISA, lifetime ISA, any stocks and shares ISA all at once and pay into each one throughout a tax year? And also is now...

and the next tax year a good time to invest in a stock to shares ISA. You put in brackets here using Moneybox with Vanguard to manage my investing. Kind regards, Jay. Thanks for the question, Jay. Right. Let's let's tackle two questions in two parts. The first question, can you have a cash ISA, lifetime ISA and a stock to shares ISA all at once and pay into each throughout a tax year? The answer to that is simply yes, you can.

So you've got a £20,000 allowance every single tax year. And the idea is that you can pay into all of those different forms of an ISA, but the key thing you have to make sure you don't do is pay over above the subscription limit, which is currently £20,000 until the new British ISA kicks in. So yes, you can. There is a caveat though, which I want you to be aware of. And that is that, you know, under the rules as they currently are right now,

If you have a cash ISA with NatWest and a cash ISA with say Barclays, you can't pay into both in the same taxes. You have to kind of pick your provider. The same thing is true for your lifetime ISA, the same thing is true for your structure shares ISA. So if you're looking at Moneybox and then you may discover that, okay, you've got, I don't know, Moneypharma, Wealthify as an alternative and you might like something about them, you then can't just stop paying into your Moneybox and pay into the new provider. So you have to be careful, you have to select your provider. But yes, you can have all three.

you can pay into all three during the same tax year. The second part of your question is now and the new tax year, a good time to invest in stocks or shares, ISA. The answer to that is, well, it really depends. There is a saying that it's always a good time to invest, but there are a few underlying things that you need to be aware of. The first one is the risk that you're taking. So when you're investing,

peter (: 16:15

there is a risk, the markets will go up and down as they always do, we can guarantee that they will go up and they will go down and you have to be okay with that. And so what's really important is to try and understand what your natural appetite for risk is, how much are you willing to take naturally. And you also need to balance that with something called capacity for loss, which is the risk that you're able to take based on your circumstances. So in other words,

you may be willing to be very adventurous in your investments. However, if you haven't got a stronghold over your finances, so for example, if you're still a little rusty on the budget, or maybe if you haven't got like a set of, a pool of money set aside so that, you know, if an emergency arises, you can dip into that money and not have to rely on the money that you're investing, then that will suggest that you probably should be a little bit more cautious with your investment because it will go up and down. The last thing you want is to...

have your money invested, something happens and you need to dip into that money, but when you need to dip into it, it's down. It can potentially dent your confidence and start you off on the wrong foot. And that's the last thing that you want. You want to be able to invest with full confidence that you're not going to need to touch that money for the longterm. So understanding the risk is very, very important in trying to answer that question. Now, there are a couple of things you can do. I have built a risk profile assessment and I've also built a capacity for loss assessment.

This will kind of give you an idea of your natural risk profile. So how much risk are you naturally willing to take? And then the capacity for loss will give you a gauge on your personal finance as to whether or not you should be taking that level of risk that you're naturally willing to take. I'll link both of those in the show notes on Spotify and all the good podcast outlets. I'll also put it in the description on YouTube for this video. So go take those two assessments, it's worthwhile.

If you're still struggling with, you know, understanding exactly how investments are built, there's lots of content on the YouTube channel that you can go and check out. You can also check out my investment course as well, which will give you all the basics and the fundamental information that you need. But that's really the answer to the question. Thank you so much for that. And I hope that has been helpful. If you do have a question you're watching or listening to this and you wanna get my opinion, then feel free to jump into my DMs and...

peter (: 18:37

Yes, we'll select you for a future episode on the podcast.

peter (: 19:03

Another thing that is worthwhile mentioning Jay, and you put this in brackets on your question, you know, you talked about using Moneybox with Vanguard to manage my investments. So what I'm assuming you're doing there is you're picking Moneybox and you know that they're buying a Vanguard fund like a lot of these guys will. I think it might be worthwhile just maybe considering that with Moneybox, they're buying a Vanguard fund. And whilst you may not be confident to go and pick your own Vanguard fund.

you're paying extra to Moneybox for them doing that for you. Now you probably need to know what you're doing in order to pick the Vanguard funds that are right for you but maybe just maybe it might be worth checking out Vanguard because if you're paying 1% or so to Moneybox for example and they're buying the S&P 500 from Vanguard you can get the S&P 500 that same fund.

with Vanguard for 0.07%. So if you're paying 1%, there is a huge price disparity, but you kind of need to know what you're doing if you were to purchase something directly from Vanguard because there is a host of options, ETFs, index funds that are available. And if you don't know what an ETF or an index fund is and you find that a little confusing, it can be a little overwhelming. So just a consideration, you may be at that place where

it is appropriate and it's the right thing for you to use Moneybox right now because they're going to do all of the heavy lifting for you. You don't have to worry about it, but just something I thought I'd mention just in case. But if you do want to get a bit more of an understanding of how investment actually built, you can also take my investment course, which gives you the full structure of how someone like Moneybox would have built the thing that you're going to invest in, which would include that Vanguard fund.

peter (: 21:06

All right, so that's the money bag section of the show.

peter (: 21:16

All right, so this is the first episode. This is the new format. I hope you've enjoyed it so far. A couple of things I wanna end this episode on. And this is something that is gonna be sponsored by me. And I just want to shout out really quickly, this year I started a book club. So my book came out last year in March, and I've had a lot of feedback from people saying that there's lots of practical things in your book. It would be great if you had a book club where you could walk people through the practical exercises in the book so it will.

help them take.

peter (: 21:51

Before we conclude this episode, this, before we conclude this first episode in the new format, I just wanted to share with you the fact that I have now started a book club. It is six weeks. My book came out last year in March and... Uh, uh, uh. Ahem.

peter (: 22:16

We're almost at the end of the first episode in the new format. But before we conclude, I just want to share with you that I've started a book club, it's six weeks, and it is designed to help people go through the practical elements that are inside my book so that you can put them into practice. You understand how to put them into practice and move you closer to becoming your own financial hero. And I started this book club because of all of the amazing feedback that I've had from people who read the book in the past year. The book is actually.

a year old this week. It's really, really bizarre, quite hard to believe. But there was a lot of feedback saying there's lots of practical stuff. It would be great if you had a forum where you could actually guide people through all of them and show them how to put the into practice, how to knit everything together into an actionable plan. And that's what I've done. It's a six-week book club. It's filled with obviously the exercises that are inside the book, but also we have behavioral assessments to help you understand

How do you approach money? What are your money beliefs? How does that impact your decisions? How does it interact with how you budget, how you have your financial controls, how you interact with debt, how you invest, all of those things, and it's been quite insightful. The feedback has been absolutely amazing. So if you do wanna join, the next cohort is going to start on the eighth of April. It's six weeks.

By the way, we're not meeting up every week and just reading through the book. No, we're doing exercises. So every single week, you have to have at least two hours per week to dedicate to your finances. We meet on a Sunday evening for an hour and a half. I walk you through the week's exercises, walk you through the exercises, talk you through how you actually apply it practically. Everyone has a freebie. You get access to my investment course for free. You're also gonna get access to a popular app, 12 months for free as well.

And you also get a free 30 minute session with me as well during that six week. It is jam packed. It's just amazing. The transformations we've had in the first cohort are great. I'm going to link down below in the show notes and in the description for you to join. Go check it out. We have a limited space of 20 and 20 only. I don't want to run a book club with 50, 60 people. Keep it fairly intimate.

peter (: 24:40

so I can dedicate the time that we need. But there we go, go check out the book club, it will be linked down below. But thank you so much for watching and listening to this first episode in the new format. I appreciate you. Until the next time, send me your messages and let me help, cheers.

Until next time, take care.