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Financial Planning
I am a Chartered Wealth Manager and Partner in a financial planning practice based in the UK. If you would like to find out more about our services, please follow this link:
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What to Invest in
(Ignore the fact this is vanguard-centric)
(Ignore the fact this is vanguard-centric)
Using a pension to maximise tax relief and reclaim benefits
Investing vs re-paying mortgage
Investing for your kids
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This channel is for education purposes only and does not constitute financial advice. Any opinions or assessments expressed are James’ own opinions or assessments, which are not affiliated with any third party. Any representations stated as facts or views based on such facts are relevant to circumstances applicable at the time of publication. This information should never be relied solely upon to make decisions, and James accepts no liability for any investment actions undertaken by viewers. Please seek regulated financial advice or an advisor if you require assistance. The value of an investment and the income from it can go down as well as up and investors may not get back the amount invested.
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00:00 Intro
01:29 Emergency Fund
03:02 Insurance
04:33 Pension Contribution Match
05:09 Paying Off High-Interest Debt
05:42 Pension & ISA
08:14 Overpay Mortgage
08:50 General Investment Account
09:48 Junior ISA & Junior SIPP
10:02 Residential & Commercial Property
10:39 Venture Capital Trust, EIS & SEIS
13:24 Final Tier
Would you change this order based on your personal circumstances? Let me know how and why.
Great video James 👍
Where would a student loan fit into this? Would it be possible to do an analysis of when/if it’s worth overpaying or clearing a UK student loan?
James, I have no debts. A few k's in ETF and Private pension that are both growing at a massive percentage since I started investing (with your help) 😊.
Should I slow down my investments and save for an emergency fund?
My normal salary is £43K but last year I was put onto overtime work and it was only in January I realised that I was going to go over the £50K threshold and start paying 40% tax and halve my savings allowance. Belatedly I asked payroll to pay my overtime directly into my company pension. However, I was still going to go over and so made a voluntary contribution based on the overtime money I had made, I plan to cover this in a self assessment tax form to reduce my tax in this financial year. I wish I had been sharp enough to have spotted this last year and had my overtime put straight into my pension back then. Hope this helps others.
It simple. You need to pay off all your debts (including car and mortgage) before you start investing. I was lucky enough to pay all my debts by age 35 which enabled me to invest and still have a good lifestyle on one income although that's mostly not possible for people today. Never need life insurance if you don't have debts.
Hi James, I've been paying into a S&S LISA for retirement purposes, as a lower rate tax payer, for the last few years. However, I'll soon be a higher rate tax payer. Would the advice now be to leave the LISA to grow and open a SIPP and pay into that instead?
Very good video. First time I have seen all the options and some logic put on one page. Thank you.
I have always pushed ‘emergency fund’ down my investing agenda simply because of the psychological idea that I’m delaying saving for my retirement.
However, our neighbour’s oil tank has just leaked 3000L into the ground and contaminated the surrounding area. Our insurers have decided that we are under-insured (lesson: get a rebuild valuation survey on your house every 5 years). Now we could find ourselves having to fork out £00,000s (doesn’t matter that the neighbour is liable).
Luckily, I received some inheritance which could hopefully JUST about cover this liability. However, it’s made me seriously understand the value of an emergency fund, and its priority in investing. I never would have thought we would be at risk of such a cost.
7:53 First time I’m hearing about the pension allowance taper, which is going to impact me in a few years
Hi James, amazing video as always. I send these to my 16 yr old brother immediately after watching so that he learns a lot earlier than i did (i started at 30) about personal finance.
I was wondering if you would ever do any videos related to UK nationals that are currently expats in another country? I appreciate it may only be a very small part of your audience but would love to hear your thoughts on how to efficiently transfer current tax-free savings/investments back to the UK when the time comes to return.
Thanks!
I have quite small amount of debt and pretty much all my cash is invested, I think 3-9 months of cash is too much. If you have assets, you can easily sell the assets if you have an emergency
Can someone explain why financial advisors just ignore the need for a deposit for a mortgage? It is like they assume we are born with a mortgage. For many people, getting away from rent is a massive saver
Guys, just Google Eledator and thank me later.
I don't get the point of discussing ICOs or cryptocurrency arbitrage when there's an opportunity to invest in the copy trading with Eledator!
This video could not have been timed better. Thank you, James.
I'll stop you 3 seconds in. Tesla. With a long term investment horizon (like you would have for the s+p 500 or anything else), Tesla will outperform massively.
This is such a well put together video. Thank you !
Brilliant video, so informative. Thankyou James! 🫡
Another quality post by JS – this guy funds! 👏
Why is the LISA not as beneficial for people paid over £50,000 on higher tax rates?
You should make a similar video for an Australian perspective. Would be amazing. Thanks for the info!
Thanks, James. Great stuff as always
Hi James. Would really appreciate you re-visiting student loans and where you think they fit in this table (for parents) given they now fall into the high debt box in tier 2. I've done my own analysis, and am now taking steps to mitigate the risk to my children that i see, but welcome a fresh professional view (not least because your own last video on this thorny issue is over 3 years old). Many thanks.
Great video and I love the visualisation of the process being a visual learner. One question though, you omitted to mention about investing in Gilts in the GIA as a way of investing once maxed out on ISA and Pension. I am planning to sell my main residence and move back in to my rented house then sell the rented house once established as our main residence. The profits to then be invested in gilts amongst other things as they are free of capital gains. Is there a problem with this plan?
Fantastic flowchart.
I'd personally put the Overpayment Mortgage as optional in Tier 4 (make sure I do a bit of GIA first)
Hi James, great video as always! Just wondering where your figure of 200k for the GIA comes from? Is this just where CGT really starts to build up, or any other considerations? Thanks!
Here's where I get stuck should I leave my SL because if I where to lose my job I wouldn't have to pay it but I would have to pay down my mortgage still
I'm interested in your thoughts on the cashing in the ISA? as that to me seems to give up the flexibility of having two pots one that everything taken from is taxed and one that is not. It seems to me that its does not seem to mak sense to cash in an ISA and then pile it into the pension as then everything is behind the must be taxed wall? so if your pension was paying you 50K and you throw in a load from an is a that you were going to take say 10K a year tax free from now that 10K taken back out via the pension is going to get stung for 40% Tax?
Around Tier 3 / Tier 4 (and after maxing out ISA and pension), might you prioritise maxing out Premium Bonds (£50k per person) before moving to next step? I'm planning to do that, before paying off mortgage and investing in GIA, given that Premium Bonds wins are tax-free. Obviously this depends on your mortgage rates, and how much profit you expect from GIA.
At 9:00 you mention that one might want to stop contributing additional money to the pension when “it’s already too big”. Could someone explain the rationale behind this note? Is it because of the maximum size of £1m, where all money added thereafter will be taxed heavily?
Sound advice as usual and a good time of year to give it. When I was young there were no people like you around. I learned gradually. I was always a saver, good habit from my parents. My first monthly pay as a trainee was £39.50 per month, that was back in 1973. I joined the pension fund immediately.
I’ve raised two children and put them through university. Yes for all the younger boys and girls watching you will have to change your plans at some stage. You will need all those insurances. However I follow the advice given to me by Scott Taylor on Cryptocurrencies and i'm glad to know i'd be “comfortable” in retirement. He enlightens you about the ongoing Bitcoin upward trend. Bitcoin is on its way to breaking records, getting closer to hitting new high prices, showing that it's gaining more value and could go even higher than we've seen before. I am super excited about how my crypto investment is going so far, making over $35,000 weekly is an amazing gain. All thanks to Scott Taylor whose teachings has kept us on the right tract.
Excellent overview & you have made me reflect on my next financial move.
@JamesShack why did you put SEIS/EIS into TIER 4 and ISA in TIER 3? They both are risky, they both are free from tax and in addition EIS and SEIS have tax relief. Seems to me they should be in same TIER.
How is moving money from an ISA into a pension more tax efficient? Interest gained from an ISA is tax free and I thought withdrawing from it is too
These recent NI reductions, I've increased my pension contributions to 8%, with 6% matched from employer. I don't miss them and it helps with reclaiming tax and child benefit tax.
How are you likely to pay less tax when taking out from your pension than from an isa?
Anything from your pension over your personal allowance you would pay tax on. Everything from an isa would be completely tax free.
At what stage would you save for a house deposit if not already on the property ladder?
I know it’s not financially smart, but you can’t put a price on the psychological benefit of being mortgage free. I have young children and will hopefully be mortgage free in 3 years, it must be a nice feeling to know that even if I lose my job, they will still have a roof over their head.
When that’s paid off I will then have the free money to do the previous steps of investing!
What about overpaying student loan to reduce debt. Current interest rate is 6% 😢😢?
As a protection advisor. Thank you for putting insurance in the correct place.
IF YOU ARE READING THIS. GET INCOME PROTECTION. That is your number 1 priority. Your workplace cover is shit (even if its 12 months sick pay). Make sure you get the income to kick in after your sick pay ends. Once you have this you can look at other things like life cover and critical illness.
But for goodness sake, protect the one thing you cannot do without. YOUR INCOME!!!
Hi James. What would you recommend (regarding pensions) for people working for the NHS and enrolled in the NHS pension scheme? Would that be worth to have a private pension as well as the NHS one?
Actually I learned recently you are limited on how much salary sacrifice you can make into your pension. You cannot sacrifice to bring your taxable income below national minimum wage
I wish I had seen this video in my 20's.
Very informative video ,could you create more video about tier 5 and 6 as there less content available on them tnx
@jamesshack would this be your recommendation on what to do with a windfall of cash?
Another excellent video with high quality graphics. These should be part of every 18 year olds education in life.
Very interesting to learn about Tiers 5 – 6!
Thanks for this video, really helpful. I imagine most people would be at tier 3 and if they did a good job of these they'd be well sorted for life. I'm overpaying my student loan right now to get rid of it asap and would like to put those loan deductions I get, back into my pension. My company does the 3% but I imagine I could choose to pay more for tax relief, even if my company doesn't contribute more.
I max out my ISA every year but I only have £3900 of taxable income a year so what is the most I can put into a Pension stocks and share Sipp a year?