Hey Ryan,

Yesterday, the first female chancellor in British history delivered Labour’s first Budget for almost 15 years 💼

There was £70 billion of spending announced and £40 billion in tax rises announced.

These changes will take the tax burden to the highest level since the 1940’s.

But what does this mean for you?

What are the key headlines?

National living wage and national minimum wage increases
Income tax and Employee National Insurance unchanged
However, the personal allowance will continue to be frozen until 2028. This is a ‘stealth tax’ that will continue to linger
Employers National Insurance increased by 1.2% to 15% and the threshold at which this is paid cut from £9,100 to £5,000
Capital gains tax rates increased from 10% and 20% to 18% and 24%. This impacts selling stocks, shares, funds held outside of ISA and pensions, selling crypto, selling property other than your main residence
Stamp duty when buying second homes increased by 2% to 5%
Inheritance tax reform, with the most notable change being that pensions - which were previously not subject to inheritance tax - will be included in estates on death and hence subject to inheritance tax from 2027 onwards
State pension to increase by 4.1%
A lot of investments, primarily into the NHS, but also local transport, education, the roads.

There were also a lot of other changes.

Check out this Instagram post for a more detailed thread that I pulled together.

A few key storylines emerging from this budget that I’ve seen online:

Small businesses will struggle with the employers National Insurance changes (higher tax rate and lower threshold).
Stamp duty increases are effective immediately (the 2% increase), meaning some house sales may fall through if buyers can’t find extra cash that they may need asap.
Farmers may be crippled by the changes to inheritance tax and restricting the business property relief. This could destroy small farmers in the UK.

There was actually a lot to unpack and discuss from the budget, which I’ll be doing on my social media over the next couple weeks.

Including a new post that I will be uploading to my Instagram tomorrow on the direct impact of this budget on long term passive investors.

The main good news though - ISAs were untouched. This was largely as expected.

Pensions were also untouched. The tax relief continues to be the same and the 25% tax free lump sum remains intact, despite rumours that both may change.

This means, for long term stock market investors (like myself), ISAs and pensions are still the best and most tax efficient vehicles to invest.

Of course each individual budget impacts us all differently, depending on our specific individual situation.

This budget may cripple you (although I hope not) or it may be brilliant for you.

Governments are always changing rules, laws, tax rates, allowances, etc.

Each government, each prime minister, each chancellor does something different.

All we can do is make the best decisions today for ourselves based on the current rules and upcoming announced changes. It’s of course impossible to predict the future.

Combining this - making the best decisions today based on current rules - with continuing to invest for the long term, gives us the best chance to build our wealth ultimately to a point where it’s irrelevant what any government does.

That’s the goal. And that wraps up this email on the new budget.

I hope it was helpful and I would love to hear your thoughts. What did you make of yesterday’s budget? Feel free to reply and let me know.

Finally - if you haven’t already, I would love if you could preorder my book Stop Waiting, Start Investing. It’s being released on 26 November 2024 🙏

Stop Waiting, Start Investing will be a physical book, digital book and audiobook.

There will also be some bonuses included with the book, in whatever version you get. In the form of bonus podcast and bonus videos delving even deeper into some of the key investing concepts.

Thanks for reading and enjoy the rest of your week.

All the best,

Ryan