Will your income be cut by the new dividend tax?

Interest rates finally rose above 0.5 per cent in August – almost a decade after the emergency cut to that level. The Bank of England’s MPC voted to raise rates to 0.75 per cent on 2^nd August, casting aside worries over a no-deal Brexit, as it said that low unemployment merited a hike to keep inflation on target.

The 9-0 vote to raise rates was accompanied by a quarterly Inflation Report, which showed that, despite August’s hike, the market outlook was for rates to go up more slowly over the next three years than previously expected and that no further move is expected until at least the middle of next year. The recent rate rise was widely expected as the Bank had not sent out any signals to dampen forecasts of a hike, unlike in the run-up to the May decision when a move up failed to happen. The question now is whether this is a one-off hike, or the start of a slow but steady rise in interest rates. A lot will depend on how the British economy fares over the rest of this year and into 2019, before the UK’s exit from the EU. If there is a marked slowdown then it is likely that rates will stall again. Even worse, a recession would most likely see a further interest rate cut. 

Expat pension needs are one of the major reasons behind the £15.3 billion the Financial Conduct Authority (FCA) say was was taken from pensions during 2016/17.

The high level of withdrawals is no doubt attributable to the increased flexibility afforded UK pension savers by the introduction of landmark reforms over the past few years.

The £15.3 billion figure was disclosed following a Freedom Of Information request to the Financial Conduct Authority (FCA) and is a massive 173% increase on the £5.6bn that was withdrawn in 2012/13.

In fact, the second quarter of 2017 saw the highest quarterly level of pension withdrawals in five years – no doubt including many expat pensions withdrawals – with more than 40,000 people withdrawing £4.3bn from their pensions.