Ian Cowie

Thursday

12 Feb 2015
Ian Cowie

Five questions to help you take control of your pension

If you want something done properly, it often pays to do it yourself. So it must be good news that as of 6 April, when George Osborne’s pension reforms take effect, it will be easier than ever to run your own pension fund, because you won’t be forced to retire as an investor when you cease to work for a living. Instead, everyone — not just the rich — will be allowed to retain ownership of their life savings and try to live off them by means of what is known in the jargon as ‘income drawdown’. But is a DIY pension right for you? Institutional funds are buying government bonds with both hands — despite prices hitting record highs and yields falling to historic lows. This could be a recipe for future disappointment for individual savers, depending on what happens next.

Five questions to help you take control of your pension

Thursday

24 Apr 2014
Ian Cowie

Investment special: How to come out top in the pensions revolution

Three years after The Spectator called on the Chancellor to ‘stop treating pensioners like babies’, his Budget this year gave everyone greater choice about how we enjoy our life savings. While more column inches have been expended on the outside chance that some pensioners might blow the lot on a Lamborghini, less has been said about our exciting freedom to retain control of the biggest fund most of us will ever acquire and to remain active investors after we retire. Contrary to what some commentators seem to imagine, George Osborne did not abolish the legal compulsion to spend most of our pension savings on an annuity or guaranteed income for life last month. He began that process in his 2011 Budget, when he scrapped the requirement to use at least three quarters of the pension fund to buy a guaranteed income for life.

Investment special: How to come out top in the pensions revolution

Thursday

7 Mar 2013
Ian Cowie

Investment special: Tax allowances - use them or lose them

As if to demonstrate that every silver lining has a grey cloud, next month’s top-rate tax cut also means there will be less help in future from HM Revenue and Customs to boost high earners’ retirement funds. So there are just a few weeks left in which people fortunate enough to be able to write a cheque for up to £200,000 can get £100,000 of it back, risk-free, from the kindly taxman. Such eye-stretching figures demonstrate why it really can be worth the bother of getting to grips with tax planning ahead of the 5 April fiscal year-end. Incentives to wrestle with the detail of annual tax allowances and exemptions extend right down the income scale. But ignorance can prove an expensive mistake when dealing with HMRC.

Investment special: Tax allowances - use them or lose them

Thursday

21 Feb 2013
Ian Cowie

Investment: Will bonds crash as shares rise?

Tim Price: In a normal market, maybe. But not in this one UK base rate squats at 0.5 per cent, its lowest level in history — or since the formation of the Bank of England in 1694, which is much the same thing. With sporadic signs of inflation and patchy evidence of recovery, plus a new broom at the Bank of England who is expected to be boldly interventionist, the financial chatterati are transfixed by the prospect of the ‘Great Rotation’. This much-anticipated shift out of UK government gilts, and bonds more generally, back into equities reflects expectations that bond prices are due for a fall because interest rates must inevitably rise, while shares are overdue for an upswing. There’s only one problem with this thesis.

Investment: Will bonds crash as shares rise?

Saturday

21 May 2011
Ian Cowie

INVESTMENT SPECIAL: Grey rights

Like sinister Siamese twins, the words ‘pension’ and ‘scandal’ seem to have become joined at the hip. So perhaps it is no surprise that some very good news — perhaps the coalition’s most important extension of choice during its first year — was largely ignored by the media last month.Most people these days are deeply suspicious of all forms of pension scheme — and rightly so. Traditional insurance company funds have a reputation for high costs and low returns, with far too much of savers’ money sticking to the salesman’s shovel. Company schemes are being slashed as firms concentrate on surviving rather than worrying about their former employees’ old age.At the same time, the great Ponzi schemes of unfunded state and public-sector pensions are unravelling, as politicians seek to reduce the cost to taxpayers by raising retirement ages and changing the way indexation is calculated.

INVESTMENT SPECIAL: Grey rights

Saturday

16 Oct 2010
Ian Cowie

Look for the silver lining

Outsourcing firms and insurers may find opportunity in the government’s fiscal crisisIt’s an ill wind that blows no good and, counterintuitively, some companies could benefit from next week’s government belt-tightening. Despite fears that spending cuts may stall fragile economic recovery, firms which provide services more cheaply than the public sector may enjoy increased turnover and profits.Outsourcing companies ensure that light bulbs are replaced and loo rolls supplied, among a wide range of other ‘facilities management’ services, without the need to provide expensive final salary-based pensions and other benefits for staff. Whatever you think of the ethics involved, it’s no wonder a report by DeAnne Julius, a former member of the Bank of England’s Monetary Policy Committee, found that outsourcing could deliver vital services for 30 per cent less than public sector employees can.

Look for the silver lining

Saturday

13 Mar 2010
Ian Cowie

Blue-chip opportunities despite euro turmoil

Ian Cowie says some of the Continent’s best companies are offering mouthwatering dividend yields these daysPity the poor estate agents. Now there’s a phrase you don’t see very often. Barely had they begun to market Spanish villas and French gîtes as bargains because of the weak euro, than the pound began its precipitous decline.Sterling-denominated investors may be tempted to keep their cash close to home until exchange-rate fluctuations become much less exciting. In the case of continental real estate, that would seem wise — especially when the Economist calculates that house prices in Spain remain 60 per cent higher than they should be relative to long-term average rental yields. For comparison, on the same basis, British housing appears only 25 per cent overpriced.

Blue-chip opportunities despite euro turmoil

Wednesday

8 Oct 2008
Ian Cowie

Time to bet against excessive pessimism

Just as directors’ dealings often reveal more about the immediate outlook for their companies’ shares than can be gleaned from annual reports, it often makes sense to follow what fund managers do, rather than what they say. So it was a pleasant surprise over lunch the other day to find myself in step with one of the most successful investors alive in Britain today. Anthony Bolton, president of investments at Fidelity, the biggest unit trust manager in the world, is buying shares again, two years after he called the top of the bull market.This should give comfort — and pause for thought — to the herd who are dumping stocks and share-based funds in favour of cash or guaranteed returns. Rattled by the collapse of banks and equity indices on both sides of the Atlantic, the risk-averse are seeking security at almost any price, pushing bond yields even lower and causing the most competitive deposit offerings to be withdrawn or curtailed.

Wednesday

12 Mar 2008
Ian Cowie

Do it yourself: the joy of SIPPs

If you think pensions are boring, how exciting do you think poverty in old age will be? I only ask because conventional attitudes to this problematic topic are not just dangerous but also out of date. Most people know that failing to save will not prevent them growing old. Fewer realise how recent rule changes have removed many of the more rational excuses for shunning pensions.First among these is distrust of insurance companies. The age of deference ended long ago and one unexpected casualty was the with-profits fund. People are no longer willing to buy financial products they do not understand simply because a man in a suit says it will be good for them.If a clever salesman does succeed in clinching such a deal, consumers are more likely to seek compensation than sit back and hope for the best.

Wednesday

13 Feb 2008
Ian Cowie

The East powers ahead while America stumbles

Ian Cowie asks whether high-growth economies such as China’s are a safer bet than those of the debt-laden WestEmerging markets have been the most profitable game in town for several years now, even after the setbacks some suffered toward the end of 2007. True, the bears enjoyed a bit of a picnic when China funds — easily the biggest single country segment of the emerging markets sector — fell by about a fifth of their value in January. Now the big question for investors is whether the bull is dead or merely pausing for breath.Wiseacres have been calling the top of these markets all the way up, but relative returns since 2003 have called into question conventional assumptions about risk. While developed countries’ stock markets have been hit hard by the credit crunch, emerging economies have powered ahead.

Saturday

13 Oct 2007
Ian Cowie

Don’t put your money under the mattress

Extreme stock market volatility and the crisis at Northern Rock have prompted some crass comment about how to look after savings in uncertain times like these. Probably the worst is the glib recommendation, so often trotted out during a panic, that you might as well keep your money under the mattress. But the only people to benefit from financial advice like that are burglars.Quite contrary to what pessimists might have you believe, anyone can still enjoy risk-free, tax-free returns comfortably ahead of inflation. Meanwhile, the more adventurous may seek to profit from setbacks suffered by others.Long before the Chancellor, Alistair Darling, hurriedly announced that taxpayers would provide an unlimited underwriting facility for Northern Rock, the government had guaranteed deposits with another retail bank: National Savings & Investments.

Don’t put your money under the mattress

Saturday

14 Oct 2006
Ian Cowie

Don’t leave it all to Gordon by mistake

Ian Cowie says the simplest ways of avoiding inheritance tax are the best — especially when the law keeps changingIf there is one thing worse than paying inheritance tax, it is discovering at the graveside that an expensive IHT-avoidance scheme has proved a waste of money, in addition to what you are going to have to pay HM Revenue & Customs anyway.A family friend had that infuriating experience recently, and many more widows — for it is usually the wife who is left to pick up the pieces — will suffer a similar fate in future. The reason is that Gordon Brown has become increasingly cavalier in making retrospective changes to legislation in ways many busy families fail to notice until it is too late.For example, the imposition of a pre-owned assets tax (POAT) in April 2005 substantially tightened rules against gifts ‘with reservation’ — that is, where donors retain some benefit from the family home or other assets.

Commercial
More from The Spectator
About us
Subscribe
Commercial
About us
More from The Spectator
Subscribe