Good morning and welcome to The 99: the home of financial news and insights made simple. You can count on accessible, trustworthy, and unbiased news insights every Monday.

This week, you’ll find your usual round-up of must-know financial stories, plus:

• The free will campaign is back! Last Autumn we worked with the brilliant team at Octopus Legacy to give anyone who wants one, a free will in partnership with charities across the UK - with the GFY community raising £1,298,190 for charity through gifts left in wills 🎉🎉🎉 

  • The campaign is back meaning you can write or update your will for FREE using GFY’s link until 31st March. 

    Also, this year we’ll be sharing even more content to support you when will writing AND sorting your Lasting Power of Attorney.

    You can write your will 👩‍💻 Online, 📲 Over the phone, or 👥 face-to-face

  • The cost of the will is covered by whichever charity you choose, saving you up to £150 – many choose to leave a gift to charity as a thank you - but it isn’t required to claim the free will offer.

• A community dilemma:

  • How do I save for maternity leave with my partner?

• How to become an ISA millionaire (realistic-ish) edition

Struggling to view the whole email? Somewhere above this text you’ll see ‘view on web’.

As always, if you have any feedback, questions or content requests, just reply to this email. We would love to hear from you.

Alice & the GFY team x

How do I save for maternity leave with my partner?  

Do you have a career dilemma or money question? Join the GFY community forum and get support from over 1800 supportive community members

2025 Bonus Season: Trends + A Frugal Approach this Year?

It is bonus season, and an annual survey by the Financial Times (FT) indicated that people are taking a more cautionary and frugal approach to spending bonuses, despite higher bonus payouts this year. 

🤔 Higher Bonuses in 2025 vs. Competing Costs of Living 

• Over 50% of the respondents anticipate a bigger payout than last year, with most people expecting around £10,000 - £50,000 on average. 

• People in financial services are expected to receive the most “substantial” increases following the scrap of the EU bonus cap* followed by those in the legal and asset management sectors.

• The two worst-performing sectors were energy and management consultancy, with the highest numbers of respondents reporting bonuses worth “substantially less” than last year.

• However, most people are not feeling richer, due to the increased cost of living and rising expenses like higher school fees and mortgage payments.

**EU Bonus Cap - This was a regulation introduced by the EU in 2014 to limit employees in financial services bonuses to twice their basic salary. This was done to prevent excessive risk-taking by bankers following the 2008 financial crisis. It was scrapped in the UK in October 2023, to attract businesses and make London more competitive following Brexit.  

📊  Change in Performance Metrics

• Around 1 in 10 respondents said the metrics used to measure their performance had changed this year. 

• For instance, in Jan 2025, Deutsche Bank announced a new system to identify and reward employees who demonstrate teamwork and other non-financial skills.

What do people intend to do with their bonus this year?

INVEST IT 📈

• More people are choosing to invest the majority of their bonus this year, a slight increase from 2024. 

• This year, more investors are turning to VCTs and EIS for long-term UK investments, drawn by 30% upfront tax relief. Others include pension, general investment account, property, crypto, Venture Capital Trusts (VCTs)*,  Enterprise Investment Schemes (EIS)* and alternatives like art and wine.

• This year, more investors are turning to VCTs and EIS for long-term UK investments, drawn by 30% upfront tax relief.

*Venture Capital Trusts (VCTs) - This is a company that buys small stakes in a large number of early-stage companies.

**Enterprise Investment Schemes (EIS) - This is a government initiative that provides a valuable source of funding to early-stage companies while offering tax benefits to investors.

SAVE IT …including those saving to leave the UK

• Saving was the second most common response driven by the fear of redundancy, the weakening UK economy, and the risk of further tax rises. 

• Other respondents were looking to save and move somewhere warmer with lower taxes. This also included younger adults aside from the ‘expected’ older respondents with large pensions.

• Another study by Aegon, indicated that in the event of a surprise £5,000 bonus, 70% of people would prefer to save for the future or pay off debt than spend the money on themselves or loved ones.

• The study also revealed that 67% of Gen Z chose to save or repay debt, compared to 75% of Baby Boomers.

SPEND IT …especially those looking to pay off debt

• 14% of readers intend to spend their bonus. They highlighted going on holiday, paying down their mortgage, home improvements, buying property, and school fees as their key areas to spend on.

• One in five said they would use the cash to pay down a chunk of their mortgage, and a handful of ‘high-earning’ young adults said they would clear their student loans early. 

How the 2024 Autumn Budget will impact bonuses this year…

• 1 in 3 people said the Autumn budget influenced how they would deploy their bonus in 2025, with January’s increases to private school fees being the most upsetting.

• Recap: As part of the Autumn budget in October 2024, the Chancellor, Rachel Reeves, announced the end of VAT exemption for private school fees which came into effect in Jan 2025.

Depriortising pensions this year or not?...

• People chose not to invest their bonuses in their pension compared to previous years, due to changes announced to inheritance tax (IHT) last year in the Autumn budget. i.e., inherited pensions will be included in taxable estates for IHT purposes.

• However, those caught by the “six-figure salary trap” were going ahead, as they felt they had no choice. 

• Other groups were keen to keep maximising the £60,000 annual pension allowance before the government further reduced them.

*Six-figure salary trap refers to the situation where individuals earning between £100,000 and £125,140 effectively face a 60% tax rate, due to the gradual reduction of their personal tax allowance.

Cash ISA allowance to be cut?

What are ISAs?

ISA stands for Individual Savings Account. There are five types:

1. Cash ISA

2. Stocks and shares ISA

3. Lifetime ISA

4. Innovative finance ISA

5. Junior ISA

Unlike regular savings or investment accounts, ISAs shield your money from tax on interest, dividends, and capital gains

Every tax year you can save up to £20,000 in one ISA or split the allowance across multiple (the Lifetime ISA is the only one that is currently capped at £4,000 per year). See the 101 guide to ISAs for more.  

You can currently keep all your £20,000 yearly allowance in a cash ISA, so reducing the allowance to £4,000 would be a big cut for cash savers.

Why is Reeves considering this?

A group of global fund managers have been pushing for Reeves to scale back tax reliefs for cash ISAs to encourage more people to invest, specifically in UK companies.

The Chancellor has promised to boost growth in the UK, and so far, that’s not really happened.

Does she have a point?

• According to a report by investment company, abrdn, UK retail investing as a percentage of wealth is the lowest in the G7 at 8%, excluding pensions.

• UK adults’ wealth is more tied up in property and cash, while people in the US and other developed countries are much more likely to invest.

• abrdn estimates that if the UK population invested at a similar rate to the US, it could inject up to £3.5tn into capital markets over the long-term.

Investing in the stock market does have the potential for higher returns: according to data from Moneyfacts, the average stocks and shares ISA produced a 11.86% return in the last year, compared with 3.8% for the average cash ISA.

Investing vs Saving:

However, investing in funds and shares is riskier and would not suit those who might need the money short-term, like saving for a house deposit and looking to buy in under 5 years, or to keep an emergency fund.

There’s also scepticism about whether it would boost UK business, as there are currently no plans in place to limit investments to solely British companies.

What’s the response?

Cash ISAs are a key source of funding for banks and building societies, which use the deposits to fund loans to households and businesses. Nationwide has said that any attempt to cut tax breaks on cash ISAs would reduce the availability of mortgages for first-time buyers.

He argued that rather than totally abandoning the cash individual savings accounts, it should be easier to switch money between investments and cash. He added that people also chose not to invest because of a lack of confidence and limited understanding about investing.

Delta Plane Crash: Why Passengers Are Getting $30K & Can They Sue?

What happened?

A Delta Air Lines plane crash-landed in Toronto on Monday, skidding along the runway in flames before flipping upside down. Miraculously, all 76 passengers and four crew members survived, with only minor injuries. The cause of the crash is still under investigation.

What has Delta offered passengers?

Delta is offering every passenger $30,000 (£23,792) in compensation—no strings attached. However, legal experts say this is likely an “advance” payment and could be deducted from any future claims.

Has this happened before?

Yes. After a crash in San Francisco in 2013, Asiana Airlines offered passengers $10,000 upfront. More recently, Alaska Airlines gave $1,500 to passengers affected by a mid-air door-plug blowout.

A key example is the 2009 US Airways "Miracle on the Hudson" crash, where a plane landed on the Hudson River after bird strikes disabled both engines.

All 155 passengers survived, and they were each offered $5,000 plus reimbursement for lost luggage. Some passengers later pursued additional legal claims.

Can passengers sue?

What caused the crash?

The official investigation is ongoing, but experts suggest harsh winter conditions and a rapid descent may have contributed. The cockpit voice and flight data recorders have been recovered, and Canada’s Transportation Safety Board is leading the inquiry.

Is air travel becoming more dangerous?

This is the fourth major aviation incident in North America in just three weeks. However, experts - including the US Secretary of Transportation - say air travel remains the safest form of transport and that these incidents are unrelated.

Welcome to GFY’s guide on how to become an ISA millionaire (realistic-ish) edition.

If you have questions on the fundamentals of ISAs, have a look at GFY's 101 Guide to ISAs for a complete breakdown of how ISAs work and the different types available. 

While ISAs provide a tax-efficient way to save and invest, recent discussions, including potential policy changes from Rachel Reeves (see above!), could impact the allowance and rules in the future. Nonetheless, this guide will demonstrate the power of compound interest and how similar tax advantages exist in pension contributions as well.

What is an ISA millionaire?

Big caveat: achieving ISA millionaire status is not guaranteed and clearly heavily depends on having a solid income that allows for consistent contributions over time. Also, we're talking about investing in this article and it's important to remember that when you invest your money is at risk. The following guide offers guidance and helpful rules of thumb but it shouldn't be taken as advice.

Ok, let’s go…

What Actually is an ISA?

An ISA, or Individual Savings Account, is a ‘tax wrapper.’ This is because it effectively ‘wraps up’ your money and protects any returns or interest earned on your money from being taxed. Alongside your pension, it’s one of the most tax-efficient ways to invest. You can either save or invest in an ISA.

See the 101 guide for more. 

When Is the ISA Deadline in 2025?

The ISA deadline for the 2024/25 tax year is midnight on April 5, 2025. This is your last chance to use your £20,000 ISA allowance for this tax year, after which it resets. If you don’t use your allowance before the deadline, you lose it forever – it doesn’t roll over.

So How Do You Become an ISA Millionaire?

Let’s do the sums. If you consistently max out your ISA allowance and achieve a 7% annual return*, you could reach £1 million in around 25 years, all tax-free. However, this assumes you have a very good income that allows you to contribute the full amount each year. 

Here’s an example of how investing the full £20,000 allowance every year could grow over time:

*a 7% annual return is roughly what history has shown us is possible if you were to invest in an index fund like the S&P 500. The S&P 500 has delivered an average annual return of 10.13% since 1957, but when adjusted for inflation, the real return drops to 6.37% (Investopedia). While it may not reach £1 million, it still highlights the power of compound interest and tax-free investing. Additional pension contributions can further boost retirement security.

**Given the prices of things goes up over time, this figure factors that in so you can get a sense of the real value of your portfolio.

So not quite £1 million but still pretty great on paper. However, let’s be honest, this isn’t going to work for the vast majority of people. So…

How Do You Become an ISA Millionaire - Realistic(ish) Edition 

The median gross annual earnings for full-time employees were £37,430 in April 2024 (ONS), so quite clearly, not everyone can max out their ISA allowance from the start. A more practical approach is to gradually increase contributions as your income grows and make a plan that is realistic for you. 

Here’s how it could look irl, starting at 20:

Starting at 30

But given the majority of the GFY community are 30+, let’s look at how this could work for you…

These two scenarios assume gradually increasing contributions rather than maxing out the ISA every year from the beginning. While it may not reach £1 million, it still demonstrates the power of compound interest and tax-free growth. Plus, additional contributions to a pension can further boost financial security in retirement.

The ISA deadline for the 2024/25 tax year is midnight on April 5, 2025. This is your last chance to use your £20,000 ISA allowance for this tax year, after which it resets. If you don’t use your allowance before the deadline, you lose it forever – it doesn’t roll over.

Assumptions:

1. Annual Investment Growth: Assumes an average annual return of 7%, which reflects a long-term stock market return estimate.

2. Compounding: Returns are compounded annually, meaning gains are reinvested and generate additional growth over time.

3. Consistent Contributions: Contributions are made at the end of each year.

4. Tax-Free Growth: Assumes all investments are made within an ISA, meaning no tax on gains or withdrawals.

5. Inflation Adjustment: Inflation is assumed to be 2.5% per year, reducing the real purchasing power of future portfolio values.

6. Stable ISA Rules: Assumes that ISA contribution limits remain unchanged, allowing for continuous annual investment.

7. No Withdrawals: The calculations assume no withdrawals during the investment period.

8. Market Performance Variability: The 7% return is an average, meaning real-world returns will fluctuate year to year.

But How Much Can You Save or Invest in an ISA?

If you really want to go all out, you can contribute up to the maximum ISA allowance (£20,000 per tax year) across all types of ISAs combined. This means you could split your allowance between a Cash ISA, a Stocks & Shares ISA and a Lifetime ISA – but the total cannot exceed £20,000 in one tax year.

TL;DR – Key Takeaways:

If you’re aiming for ISA millionaire status, the key is consistency, good income growth and long-term investing. While nothing is guaranteed, taking full advantage of your ISA allowance and compounding growth can put you in a strong financial position over time.

✅ The ISA deadline is April 5, 2025 – use your allowance or lose it.

✅ You can contribute up to £20,000 per year across all ISAs.

✅ ISAs shield your money from tax (Capital Gains Tax, Income Tax, Dividend Tax).

✅ Becoming an ISA millionaire is possible with consistent investing.

✅ A slightly more realistic path to significant ISA wealth involves gradually increasing contributions over time.

If you haven’t maxed out your ISA yet, now’s the time to get started - you have 40 days (from 24/02/2025). 

Do you have a career dilemma or money question? Or want to start a conversation? Join the GFY community forum and get support from over 1800 supportive community members:

Sources/Read More:

2025 Bonus Season: Trends + A Frugal Approach this Year?

• Bonus season: how does yours measure up?
  FT

• Deutsche Bank Tweaks Bonuses to Emphasize Metrics Like Teamwork
  Bloomberg

• UK financial regulators scrap cap on bankers’ bonuses
  Guardian

• UK workers would prioritise saving over spending a bonus
  Professional Paraplanner

Cash ISA Allowance to be cut

• Bonus season: how does yours measure up?
  Financial Times

• How to stop the taxman raiding your savings
  The Times

• Savings providers vow to fight any attempt to cut cash ISA limit
  The Guardian

• Cash ISA Update Rachel Reeves
  The Express

• Tell Sid Report Press Release
  Abrdn

• How ISAs Work
  Gov.uk

Delta Plane Crash: Why Passengers Are Getting $30K & Can They Sue?

• Delta plane crash passengers offered $30,000 with 'no strings attached
  Euronews

• Legal experts weigh in

  Business Insider