As the dust begins to settle after a speculation fueled Autumn Budget, the Firenze team reflect on their key takeaways and why there are reasons to remain optimistic.
Paul Emery, Head of Corporate Finance comments on the potential long-term efficiencies that could arise from the new “mansion tax”.
“Optimists might see the so-called ‘mansion tax’ as the thin end of the wedge in changing the UK obsession with housing wealth. If incrementally extended, whilst stamp duty is gradually erased, economists will hail the tax efficiency that could translate into productivity gains. Meanwhile, it could also lead to higher engagement with financial assets as a store of long-term value, which again could benefit both citizens and the economy.”
Joe Hodgins, Head of Credit postulates that the tax rises could be offset by a reduction in interest rates as costs of living are targeted for reduction.
“After yesterday’s budget, the Mass Affluent and HNW community we service will lik
ely place much scrutiny on the new taxes and levy’s aimed at those with the broader shoulders, but nominally, these measures might not be as “taxing” as first thought.
Markets so far have accepted a mish and mash of fiscal measures to raise capital for the exchequer, rather than using one of the main sources of taxation (Income tax, VAT, NI) to create a buffer and cover the current blackhole. Most of these measures do not come into affect until the later end of the parliamentary cycle which is questionable timing given the parties will be gearing up to go to the polls.
However, the focus on reducing the cost of living and, in turn, the hope this will reduce inflationary pressures, could mean the BofE looking more favorably at an interest rate cut as early as next month which, for borrowers, could mean a greater benefit overall despite the rise in taxes announced yesterday.”
David Newman, Founder & CEO highlights the increased importance for sound financial advice as the economic landscape for individuals becomes ever more complex.
“Today’s budget just goes to show the importance of taking financial advice. With Rachel Reeves’ “smorgasboard” of changes she has just added complexity to the system that makes it harder for people to plan for their future. This only serves to further validate the importance of sound financial advice.
We have lots of incredible financial advisors and wealth managers in the UK, and with changes like the bifurcation of tax rates between income on salary and income on investments and (unnecessarily complex) caps on pension contributions, this means that expert advice should be valued more than ever.”
Details on the policies announced at the dispatch box will undoubtedly become clearer in the coming days and weeks, but what is already abundantly clear is that the scope of financial considerations an individual needs to take into account when planning for the future is only going to expand.
The importance of sound financial advice and access to a variety of investment and liquidity solutions is more important than ever.
Lombard lending can be one of those solutions, offering liquidity in the short-term without disrupting long-term investments. To find out more, download our whitepaper or enquire here.
