In line with our risk management framework, today we published our Q4 2019 performance update.
The Budget 2015: What should you expect?
As all eyes fall on George Osborne for Wednesday’s delivery of the Budget, we wanted to share our thoughts with you as to what might be in store. We’ve come a long way since 1853, when a no-doubt tetchy audience yawned on as William Gladstone rambled on for 285 minutes in his Budget speech. Had said audience been around to see Gordon Brown’s rendition in 2000, it would have felt like a whirlwind by comparison as he clocked in at just over 50 minutes.
Perhaps it was Gladstone’s lengthy soliloquy that inspired the tradition of the Chancellor indulging in an alcoholic beverage while speaking, and it’s one the likes of Ken Clarke (whisky) and Benjamin Disraeli (brandy and water) willingly took advantage of.
Osborne, who usually opts for the water, might go for something stronger this time around given the added significance of May’s General Election. Although spending plans have already been announced for 2015/16, pandering to public demand will always be the temptation with voters heading to the ballot boxes in just over seven weeks.
So what can we expect?
2015 is one of the tougher Budgets to predict, given how few details have been leaked. The Chancellor has already announced that personal tax allowances will be increasing from £10,000 to £10,600 this Budget, but the possibility of further increasing this threshold remains; if not now, then perhaps a promise to increase it over the life of the next Parliament might be the result.
The higher-rate tax threshold may also rise. The level at which this tax applies has been out of sync with inflation levels, thus resulting in more and more people falling into this bracket. Addressing such an imbalance would surely win a vote or two.
For soon-to-be pensioners, the incoming reforms are now well documented, and the Budget itself will likely serve simply as a reminder of this. However, for existing pensioners locked into annuities and feeling as though they’ve missed the boat, the idea of selling an annuity for cash has been mooted, and it seems probable that the wheels for this will be put in motion on Wednesday.
Are we going to get squeezed?
The bold announcement that the national deficit will be eliminated by 2017/18 leaves precious little wiggle room for any pre-election freebies, especially with the current deficit sitting at 88% of last year’s GDP. Some £30bn would need to be generated in the next few years, either from spending cuts or tax increases.
One means of sparing consumers and businesses the burden is by clamping down on tax avoidance and evasion. There have already been hints from Osborne that a HMRC crackdown could be upon us, and it seems a likely course of action in the wake of recent corporate scandals. In addition, Capital Gains Tax for non-residents on any gain in the value of property will be kicking in from 6th April, which will also take some of the strain off the general public.
What about Lending ISAs?
The date of announcement for the decision on ISAs has remained a well-kept secret. Even if it isn’t made during the Budget speech itself, the expectation is that the decision will be made public before the end of the month.
Last year’s Budget represented a landmark day for the peer-to-peer lending sector, as Osborne announced that people would be able to hold P2P loans within an ISA. What remains to be seen is whether these loans will now be included within the Stocks & Shares wrapper, or if a separate ISA will be created. For Lending Works and other P2P lending platforms, the latter would be considerably more favourable in terms of clarity of the unique risk profile of this asset class, and research by the Peer-to-Peer Finance Association showed that 74% of consumers favoured the introduction of separate ISAs too.
Given the air of unpredictability - and Osborne’s knack for causing a surprise or two - it promises to be an interesting week. Yet should the Conservatives be ousted in the General Election, the likelihood is that Shadow Chancellor Ed Balls will deliver another Budget later this year, rendering some of Wednesday’s plans null and void.
However, the inclusion of P2P lending within ISAs will be here to stay regardless, and next week could mark the beginning of a new era for the industry – one that we at Lending Works are very excited about!
Related articles:
Our website offers information about saving, investing, tax and other financial matters, but not personal advice. If you're not sure whether peer-to-peer lending is right for you, please seek independent financial advice, and if you decide to invest with Lending Works, please read our Key Lender Information PDF first.
As with all investments, your capital is at risk.
As a platform, we take great pride in all that we've achieved since opening our doors for business nearly six years ago. We’ve
Since opening our doors back in 2014, we’ve always prided ourselves on living and breathing two key principles at Lending Works: innovation, and putting the customer first in everything we do.
With the retail sector enduring its fair share of challenges, companies are looking at new ways to attract customers, and drive conversion. In an overcrowded, dog-eat-dog marketplace, with behemoths such as Amazon flexing their muscle, it’s easier said than done.
On 4 June 2019, the Financial Conduct Authority (FCA) released its new regulatory framework for peer-to-peer lending (P2P); a Policy Statement known as PS19/14. As you might imagine, it's a document which, following a three-month consultation, is a hefty read of no fewer than 102 pages.
When it comes to investing, there are numerous questions that need to be asked, and lots of things which need to be properly understood before committing your hard-earned money
Featured
In a difficult climate, customer acquisition and lead generation present stern challenges for UK retailers, and a great deal of marketing spend invariably gets directed towards getting feet through the door.
There is a variety of literature and research illustrating the importance of building brand loyalty, albeit with some degree of variance.
Over the last decade, there can be little dispute that the reputation of mainstream banks – and particularly the so-called ‘Big Four’ (HSBC, Barclays, Lloyds and RBS) – is at its lowest ebb.
The idea of peer-to-peer (P2P) lending is a simple one; you lend money to those who wish to borrow, with a view to receiving a great return for doing so.
The peer-to-peer (P2P) lending industry is now regulated by the Financial Conduct Authority (FCA). The regulatory framework has been designed to protect customers and promote effective competition.
Most popular
In a decade of slow recovery, the rapid rise in asset prices has been the standout. But how sustainable has price growth been, and could we be in the midst of a bubble?
- Summary of a post.
Most people consider income tax to be a given, but in the UK it is barely two centuries old. In this article, we look at how this tax has developed over the years, and also why it is set to remain at the core of our tax system for many decades to come.
Open banking celebrated its second birthday last month, but has the ‘revolution for financial services’ that was promised actually come to pass? In this article, we look at the progress the initiative has made so far, and what the future holds in the face of high levels of scepticism.
On the face of it, a 'broken' energy market needed fixing, and the price caps introduced in early 2019 were heralded as the solution. But, one year later, have they actually helped consumers save?
Last week, the Office for National Statistics surprised economists by announcing that the Consumer Price Index (CPI) had sunk to 1.3 per cent for December – a full 20 basis points lower than City expectations, and also the November equivalent.
Recent
The Lending Works Shield does not give you a right to a payment so you may not receive a pay-out even if you suffer loss. The Lending Works Trustee has absolute discretion as to the amount that may be paid, including making no payment at all. Therefore, investors should not rely on possible pay-outs from the Lending Works Shield when considering whether or how much to invest. For more information click here.