24th February

The 99 - 2nd December 2024

January 27, 2025

Good afternoon 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.

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Alice & the GFY team x

6.5 million

That's how many people in the UK are planning to take out a credit card this new year to help afford everyday essentials such as bills and food, according to new research from responsible lender Creditspring.

Opinium research of 2,000 UK adults weighted to be nationally representative. Research undertaken between 29th November ā€“ 3rd December 2024.

Need support managing your finances? 

In partnership with GFY, Creditspring has put together these resources to help you stay on top of your money this year.

Biggest mortgage lender predicts three interest rate cuts in 2025

Charlie Nunn, the chief executive of Lloyds Banking Group, has said he expects three interest rate cuts this year thanks to the resilience of household and business finances.

He shared this at the World Economic Forum (WEF) in Davos.

šŸ‘€ What happens at Davos?

The World Economic Forum (WEF) is an annual gathering held in Davos, Switzerland, where global leaders from business, government, and society come together to discuss pressing global issues, including:

  • economic development

  • climate change

  • and technology.

šŸ¤” What does he mean by 'the resilience of household and business finances'?

He pointed to the fact that, on average, personal finances are looking positive:

"The UK economy is what I would characterise as very resilient but relatively slow-growing.

And that's first of all because household finances continue to strengthen - there are some customers struggling to make ends meet and we're always focused on them.

But actually, deposits and savings in households have increased 6% year-on-year, and cash flows for many businesses have also strengthened in the last year."

āœ‚ļøSo what would three cuts take rates to?

  • The base rate is currently 4.75% with a decision due on 6th Feb.

  • If the Bank of England implements three interest rate cuts of 0.25% each, it could bring the base rate down to 4% by the end of the year.

šŸ¤” How will this impact mortgage holders?

  • For those with fixed-rate mortgages, Nunn says their payments will remain stable.

  • However, individuals on variable rates can expect a slow decrease in their mortgage costs as base rates fall.

šŸ‘€ Anything to watch out for?

He commented on a lack of investment in growth and a 'tight labour market' with quite high wage inflation as well as uncertainty over the budget.

But was overall positive about the UK's prospects relative to the rest of the world.

"The UK is well-placed, we think, relative to the rest of the world, but sentiment has been down in the last few months and people have been nervous about some of the changes that the chancellor made on taxes in the coming months."

Plans to soften ā€˜Non-Domā€™ Tax Changes

The Chancellor of the Exchequer, Rachel Reeves has stated that she will soften the plans to abolish the ā€˜non-dom' status, making it more attractive, generous and ensuring a smoother transition.

šŸ¤” Who are Non-domiciled residents or ā€˜Non-domsā€™?

  • Non-domiciled residents or "Non-doms" are people who live in the UK, but have their home overseas for tax purposes.

  • It refers to a person's tax status, and not their nationality, citizenship or resident status, but can be affected by these factors.

  • Non-doms are taxed in the UK only on income earned within the UK. They aren't taxed on income made abroad, unless, they pay that money into a UK bank account.

šŸ“‹ Recap - What was the initial plan?

In March 2024, Jeremy Hunt, the former Chancellor of the Exchequer, announced the abolition of the non-dom regime and the introduction of a residence-based regime in the 2024 Spring Budget.

From April 6, 2025, new UK arrivals are tax-free on foreign income and gains (FIG) for their first four years, but after that, they will pay standard UK tax thereafter.

In August 2024, the new Chancellor maintained the plan and extended the Temporary Repatriation Facility (TRF)* to three years, but the draft legislation may change.

*TRF allows non-doms to transfer assets to the UK at a reduced tax rate, boosting spending and investment in the UK.

šŸ¤” Why is she proposing changes?

At the World Economic Forum (WEF) The Chancellor said that they had listened to the concerns raised by the ā€˜non-domā€™ community and that these changes would increase the generosity of the facility, helping non-doms repatriate their funds to the UK.

According to the BBC, there are concerns that the planned changes could prompt more wealthy people to leave the UK.

A report by Henley & Partners stated that over 10,000 millionaires left the UK in 2024 - a 157% increase from 2023.

šŸ” What is the impact?

šŸ’° According to HMRC, 74,000 individuals claimed non-dom status in 2023 contributing Ā£6.2bn in total UK income tax.

šŸ§¾ļøThe PMā€™s Spokeperson, stated that the new system addresses unfairness in our tax system, attracting the best talent and investments to the UK, while ensuring that everyone who is a long-term resident of the UK pays their tax here.

šŸ‘ŽThe rich often explore secret offshore tax regimes as exposed in the Panama papers scandal* in 2016, and the new residence-based regime may help curtail this.

*The Panama Papers leak of confidential documents from the Panamanian law firm, Mossack Fonseca revealed how the firm helped wealthy individuals and corporations to create offshore companies to hide assets and avoid paying taxes.

šŸ” Some well known ā€˜Non-Domsā€™

Prominent ā€˜non-domsā€™ include:

Akshata Murthy, wife of former PM Rishi Sunak

AntĆ³nio Horta OsĆ³rio, CEO of Lloyds Banking Group

Roman Abramovich, former Chelsea FC owner

Mark Carney, former Governor of the Bank of England

Stuart Gulliver, CEO of HSBC

Pascal Soriot, CEO of AstraZeneca

The new system was accused of driving away wealthy UK residents... Is it right that the Chancellor softens it?

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Adele accused of spooking ā€˜hauntedā€™ house sale

Whatā€™s the impact on your house price if haunted

A house in West Sussex once rented by Adele has apparently been ā€œimpossible to sellā€ after the artist said it ā€œgave her the creepsā€ during an interview.

After Adele left, it was put up for sale but received no offers.

One potential buyer backed out in August 2020, allegedly after hearing the rumours.

The owner has since submitted planning permission to transform the property, and has cited Adeleā€™s comments as having hindered the selling process.

šŸ”Whatā€™s the seller saying?

"The first tenant, Adele, stayed for six months and blighted the property by saying it is haunted," it said.

"This comment negatively impacted future marketing efforts and continues to affect the property's reputation to this day."

According to its listing on Rightmove, Lock House and its 32-acre estate features 10 bedrooms, 10 bathrooms, an indoor and outdoor swimming pool, sauna, tennis court, and a cinema room, and is on for a cool Ā£5,995,000.

šŸŽ¤ What did Adele say?

Adele showed American TV network CBS around the Grade II-listed house in 2012 and said she found it ā€œquite scaryā€, but didnā€™t actually use the word haunted.

šŸ‘»Haunted houses: avoid at all costs or bag a bargain?

While the supernatural can attract a fair bit of interest in a property, studies suggest that strangely enough having a ghost as a flatmate doesnā€™t equate to higher demand.

Experian reports that properties thought to be haunted can fetch 10-25% less than market value.

If youā€™re looking to sell, best to ā€˜unhearā€™ that suspicious creaking you thought youā€™d been hearing in the attic upstairs!

Luckily, if you do have a sneaking suspicion that your property might be haunted, youā€™re not under any obligation to disclose it.

On the flip side, buyers could get a great price if theyā€™re not bothered about a potential poltergeist in their property.

 šŸ”What else can affect a propertyā€™s value?*

Addresses are key

Your address plays a big role. Homes with ā€œWarrenā€ in the address can go for more than double the national average.

Research from Zoopla also shows that properties on a ā€œHillā€ can fetch double that of homes on a ā€œStreetā€.

And, believe it or not, having ā€œKingsā€ in your address makes your home worth 20% more than one with ā€œQueens.ā€

*Correlation not causation! - itā€™s unlikely that a street name explains the total difference in property value. Instead, they tend to appear more frequently in desirable areas with higher demand and better amenities.

Odd but true

Odd-numbered homes apparently sell for more than even-numbered.

According to Zoopla, having an odd house number will land you an extra Ā£538 on average.

But be warned - if your house is number 13, you might lose around Ā£6,500 compared to similar homes in the area.

Would you consider buying a house that was rumoured to be 'haunted'?

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Explained: How to understand your payslip

šŸ‘©ā€āš–ļø The Law šŸ‘©ā€āš–ļø

All employees and most workers (incl. zero-hours & agency) are entitled to receive a detailed payslip - online or physical - on or before payday.

šŸšØ The Importance šŸšØ

Your payslip is more than a formality ā€“ itā€™s a key tool to ensure your employer has paid you correctly and youā€™re up-to-date on deductions like tax and NI.

Who is NOT Entitled to a Payslip?

Self-Employed Individuals. Since they handle their own tax and deductions, self-employed people do not receive payslips. A few other specific groups do not have a legal right to a payslip, but may receive a similar breakdown of pay and deductions anyway, e.g. Armed Forces Personnel, Police Officers, Merchant Seafarers and Fishermen/women who are paid by profit share.

A Quick Guide to Tax Codes šŸ†˜

Your tax code is a unique combination of numbers and letters used by HMRC to tell your employer or pension provider how much tax to take from your pay. Hereā€™s a breakdown of common tax codes and what they mean:

Standard Tax Code (e.g., 1257L)

For most people, this code indicates how much of your income is tax-free. For example, 1257L means you can earn up to Ā£12,570 before paying tax.

BR Code

Your income is taxed at the basic rate of 20% with no personal allowance applied. This often happens if you have multiple jobs or HMRC needs more information from your employer.

D Codes (e.g., D0, D1)

Typically used when you have more than one income source. Your personal allowance is applied to your main income, so your second source is taxed at the basic or higher rate.

K Codes

If your code starts with K, it means you owe tax from past years or have taxable benefits like a company car. You will never pay more than 50% your income to cover these.

Emergency Tax Code (1257L W1, 1257L M1, 1257L X)

Assigned when HMRC doesnā€™t have all your information. These codes tax you as if only basic personal allowances apply. Theyā€™re temporary and will be corrected once HMRC has updated information.

Sources/Read More:

Biggest mortgage lender predicts three interest rate cuts in 2025

Plans to soften ā€˜Non-Domā€™ Tax Changes

Adele accused of spooking ā€˜hauntedā€™ house sale