When it comes t these decisions, no one knows what will happen so I think it’s fair enough for GM to give his view.

It’s a question of risk appetite. If you’re happier to invest in the stock market it’s higher risk, with higher potential returns or even a negative as you mention.

Low risk = pay down the mortgage. Not sexy but it will give you a completely predictable ‘return’.

Then it’s up to the person to decide.

I do enjoy your articles GM but have some concern over your “advice” in this instance - if John is considering purchasing another property within 5 years then I would look at reducing the mortgage balance through over payment as, which you point out, there are no guarantees that an investment will grow at 5% pa whereas reducing the mortgage provides certainty of the debt reducing and could ensure that John qualifies for a lower rate mortgage in the future as he would have a reduced LTV. This could also help John to achieve a shorter mortgage term on the new property which would reduce the interest payments.

Were the 5 years to coincide with a market contraction such as we have seen recently then he might be in a position to sell his investments at a low price (and a probable significant loss) to enable him to purchase a property.

I would take the same view with the cash ISA’s and not consider transferring to a S & S ISA.

Just a thought....

Hi Cryrst, the autumn budget announces changes which come into effect at the start of the next financial year, which is the following April.

Therefore the announcements made in November 2019 recently came into effect in April 2020.

A high level summary of the main taxes are as follows:

Income Tax:
-First £12,500 (0% tax) - the Personal Allowance*
-Next £37,500 (20% Basic rate / 7.5% dividends)
-Up to £150,000 (40% Higher rate / 32.5% dividends)
-Over £150,000 (45% additional rate / 38.1% dividends)

*Personal Allowance reduces by £1 for every £2 over £100,000.

Capital Gains Tax
-Annual Exempt Amount: £12,300
on gains over this:
Basic rate: 10% investments/18% property
Higher rate: 20% investments/28% property

Inheritance Tax
-Nil rate band: £325,000*
-Residence nil rate band (RNRB): £175,000**
-Excess: 40% (reduced to 36% if 10% or more of the estate is left to charity)

*If married, this can be transferred to the surviving spouse on death.
**Can also be transferred to surviving spouse. This only applies if your main residence is to be inherited by direct descendants and is intended to protect the family home from IHT. If property value of below the RNRB, RNRB is limited to the value of the property.

There were no major changes to the tax bandings this April and we won't know next years until the autumn budget. Does this answer your question or is there a particular tax you wanted to query?

Morning Cryrst. Yes, earnings over £50,000 are taxed at 40% higher rate.

Overtime will count as additional earnings. If your basic salary was £46,000 and you had £6,000 of overtime, your total earnings would be £52,000.

Worth mentioning that if you are making pension contributions, this reduces your earnings. For example, if your gross earnings were £53,000 and you were making £4,000 of gross pension contributions, your 'adjusted net income' would be £49,000, meaning you could apply for the marriage allowance.

Here is a link to the HMRC website to apply: [Link]

Also would hmrc have my contributions against my N/I number because it goes to a private pension company or would I need to go back through all of my pay slips or dig out my p60 or p11d.