Could you become an Isa millionaire? Meet the man who did it in his 30s

0:03Lee Boyce: Welcome to This Is Money podcast sponsored by Charles Stanley Direct. I'm Georgie Frost and joining me and Simon Lambert today is Lee Boyce. And coming up, do you have what it takes to be an ISA millionaire? We get some tips from a 36-year-old. Yes, you heard that right, a 36-year-old who's achieved it. Plus, there's a new easy access Best Buy. Lee will tell you all about it. And an NS &I savings account that has got the This Is Money saving expert rather excited. but you need to get your skates on if you want to take advantage. Also today, trouble in the housing market ahead of the budget as data shows a huge spike in house price cuts and abandoned sales.

0:40Lee Boyce: But in better news, more cuts to mortgage rates. And are you sitting on a retro gadget gold mine? Don't forget yourself to say with all the latest breaking money news, just go to thisismoney.co.uk or download the app. But first, a message from our sponsors. Do you love talking about money as much as you like listening to it? Charles Stanley Direct's financial coaching service gives you a real human, yes, an actual expert to help you make sense of your finances. No jargon, no pressure, just clear answers to your money questions. Book a free 15-minute call today at charles-stanley.co.uk forward slash financial coaching.

1:16Lee Boyce: Go on, your future self will thank you. Remember, investment involves risk. Now back to the show. ISA speculation continues to rumble on ahead of the budget with, as we know, the Chancellor very keen to get us to stuff less into cash savings and more into stocks and shares, saying it's better for our money and it's better for the economy. Well, one piece of data gives a bit of a boost to her argument. It is the number of people who've become ISA millionaires, including, as I mentioned at the top of the show, a 36-year-old. Am I right in saying, Lee, 100 % from investing?

1:51Georgie Frost: Yeah, totally from investing.

1:53Lee Boyce: There we go. Olly Perry is the 36-year-old and is just one of almost 5 ,000 ISA millionaires reaching the seven-figure milestone on contributions of£206 ,000 that he made over 11 years. And you guys spoke to him. So, ISA millionaires, 5 ,000, almost 5 ,000, and one of 36-year-old. That'd be all right, wouldn't it?

2:16Georgie Frost: It's not a bad guy, isn't it, Georgie? I should point out that 4 ,850 investors that are ISA millionaires is actually a data set from 2022. That is the most up-to-date figures that HMRC have. So the likelihood is that there's probably a fair few more that have managed to join the club between then and now. And Oli is one of those that has joined that club in that meantime. He hit this ISA millionaire mark in 2024. for, as you say,£206 ,000 that he started investing 11 years ago. His annualised returns during this period have been 20%, double the S &P 500. Pretty good going. Now, the reason why I really like this story is because of Olly's age.

3:00Georgie Frost: I think it's really interesting that, you know, I think we're in the danger of when we think about ISIS millionaires, it's people that have held ISIS since they began in 1999 and the previous product before that, including Lord Lee, who we've interviewed before, and we've mentioned in the story who was sort of claimed to be UK's first ISA millionaire but this is Ollie is now 37 and he got in touch with us at the start of the month not to boast he didn't want to be like look at me I'm an ISA millionaire he actually got in touch because he wanted to kind of shine a light on his story and say hey look it's not completely outside the realms of possibility to do this there's a couple of massive caveats to it though that you need to know about and the first one is the likelihood is you will need to be able to max out your isa allowance every year for many people that is just simply implausible 20 000 pounds and i think something like 96 of people don't use the full isa allowance every year the people that actually do use a part of their wrapper um that's a pretty big hurdle but i know that there's a lot of listeners and a lot of readers that do potentially max out their iso allowance or could max out their iso allowance if they wanted to um and actually when mr perry started in 2013 the iso allowance was 11 280 pounds it went up to 11 520 in um 2013 14 a little bit more and it's been 20 grand since 27 17 18 um but his investments have basically outperformed um a lot and this there's a there's a the second thing i should point out here is there's a lot of risk but what i'll do is i'll i'll go through it the tips that he gave and how it worked right so the first tip he gave was learn about investing and what you're investing in i think it helps that ollie is a former financial advisor um and a consultant and went to london school of economics 2009 so he clearly already has a base knowledge of how the economy works how money works which is crucial when we talk about financial education all of the time and he said traditional newspapers like the ft we'll give a shout out to the ft that's fine and reading this is money books podcasts also helps him in the beginning and he didn't himself take any financial advice he just went and did his own research and he sort of strategy was focused on individual stock picking in industries he understood and he said before you even start to put 10 pounds in an ice and do some research about investments um there's a lot of value in understanding how stocks are performed what inflation is and how it erodes the value of money he says if i was starting again today i would go and search for peers and people making podcasts in the financial space to get ideas yeah i think what he's saying here is just keep reading keep learning keep listening um individual stock picking can be risky and i think a lot of people especially novice investors uh will prefer the safety of getting into a product that spreads risk and has lots of companies in one big package but sometimes you know fortune does does favor the brave um and and the second tip it gives us to fully use your stocks and shares allowance we've just gone through that number three is to be brave for market beating growth again this this taps into a little bit of the risk-taking element of this because one thing that ice and millionaires definitely have in common is that they've made some astute and you could possibly say lucky investments over the years um it's very unlikely that those that have got a million pounds have been invested in index trackers for example it's more likely there's been some success stories along the way gains locked in got out and as we point out in this we've had things like dot-com bubble people potentially made a lot of money out of that and exited at the right time and actually he goes on to talk about here one of the the bravest things that he did um involves bitcoin actually and i I know that a lot of listeners like to hear about Bitcoin successes and things.

6:58Georgie Frost: He had Strategy, which is MSTR, world's largest corporate owner of Bitcoin. It announced in August 2020, it plans to build a massive Bitcoin treasury. And he jumped in in December 2020, because it could be held in an ISA at that time, made some good gains off of that. But I think the biggest thing he did, the bravest thing, the smarter web company, which I think we've discussed on this podcast in the past, It was a UK design firm that pivoted towards becoming its own Bitcoin treasury. Basically, it IPO'd in 2024. Ollie's ISA provider didn't list the stock immediately, so he initially bought it in a standard stocks and shares account and later purchased it in his ISA at an average of 28p.

7:40Georgie Frost: He says, the shares soared to over 600p amid Bitcoin treasury hype. I sold 97 % of my ISA holding at 260p. Sending for shares too early, some at the top and some on the way down, netting around 400 000 pounds and realized profits over two months inside his isa wrapper lovely jubbly i mean that is that's a that could have blown up in his face like easily could have blown up in his face and it but then the more sensible things that he'd done he says other bets that paid off included investing relatively early in the mag 7 stocks alphabet amazon microsoft um he said between 2013 2024 amazon's up 800 microsoft 700 alphabet 400 it is an exercise in a bit of risk in a bit of bravery and as he points out here in point number four is preparing for mistakes uh along the way he said investing in over 50 stocks and etfs over the past decade and a bit has taught me plenty through trial and error and one mistake he said was investing in certain commodities that perform poorly despite exciting trends i'm guessing he hasn't jumped on the gold hype uh or 25 which has seen it go off something or 60 although some of of steam has kind of come off of that and he also said that um he was expected to do better or some off of the kind of commodities needed to build electric cars so rare earths copper nickel minerals he just expected it to do better than what it's done and he's learned from his mistakes of that and then number five he really reiterates about being willing to take some risks um he said learning leaning too heavily on ets was a misstep partly for their lower volatility through diversification but also due to laziness spreading bets across etfs to save for butter diluted my returns picking specific winners could have multiplied my gains this brings up a broader lesson diversification versus picking and holding winners i would really point out here that this is quite i would say not novice investing i think that basically there's three types of people who hold money i would say there's the people that just aren't willing to invest whatsoever and want to hold it all into cash which is where uh the chancellor is trying to push people potentially into investing more uh there's talks again about the cash rise limit being cut uh after it was on it seemed to be the rumors seem to be building at the start of the year got cut down now the rumors are building back up again uh that this could potentially happen and you're going to be strong arming those people into investing and i think the next set of people are the kind of tentative investors those people that are willing to dip a toe in they've kind of heard success stories from friends that may be in a vanguard or an aj bell or something like that that tracks you know um you know life strategy or something like that that has plenty of diversification in there and they've seen pretty healthy gains especially versus saving in cash and then i think you get people like ollie that are kind of taking that next step and they fully immerse themselves into the world of investing they read all of the fact sheets they go through everything they pick out individual shares they're willing to take the risk and willing to lose money because that's basic we always see those warning signs uh on investment products you know capital at risk investment can go down we we know all that i mean there's no risk on a on a savings product a cash writer product saying warning this might be eroded by inflation but we are used to seeing the investing warnings and i think that people are fearful if you've got 50 000 pounds and you take a big gamble on it and it turns to 10 000 pounds then you're going to be sick about it aren't you but if you turn 50 000 pounds into 200 000 pounds you kind of think you're like the wolf of wall street like you know you're kind of managing to yeah outperform the market so i i would i would treat this story with a bit of caution don't just go off and start picking individual stocks and getting into bitcoin and all that you have to arm yourself with as much knowledge as possible but the reason why we shone the spotlight on this this week is because there has been a lot of financial doom and gloom around lately georgia would say you know um talks about what could be in the budget whether we're going to see middle classes attacked again and middle earners and higher earners for that for that as well and also impending stock market armageddon again which doesn't help sow the seed for people to start investing but i mean 50 100 has been touching record highs this week is there going to be a big global global um stock market correction you know it's hard and actually i was thinking about it there was that blip in april the ai blip where all markets everything went into freeform panic and then it also clawed back it all got wiped back on pretty quickly and i don't know if people got stung by that i don't know if people exited etc etc but there is a lesson in that in riding out of storms and thinking about investing on over the long term and that's what i'm getting at with this is there's obviously been some short term gains in ollie's portfolio here but it's very dangerous game playing the short or short term game when you're investing loads of food for thought i don't think being a nicer millionaire is completely out in the realms of possibility i think there's way more people that are potentially out of millionaires now just because the 20 000 pound uh annual wrap has been around for what six seven years and people are on there's a lot of smart people out there that have managed to build up a nice tax-free buffer um i mean i started thinking georgia this is my last thought okay So I started thinking, what if the Chancellor actually attacked how much you could hold overall in your Isorapper?

13:19Georgie Frost: What if they just hacked out? One million pounds is the maximum you can have in there. And then we just killed off the Isor Millionaire notion. Not outside the realms of possibility, completely made up by me. But you can see how things like that could come to fruition.

13:37Lee Boyce: It'd be rubbish because these are gifts of articles, aren't they? talking to ISA millionaires. Simon, I want to talk to you a bit about risk. Lee was there talking about risk and taking elements of risk. The reason I mention that is because I've, over the last couple of weeks, had a couple of chats with some fund managers and one actually last night who was at the Treasury said that risk or the concepts around risks, the fear that Lee was talking about, is the biggest thing holding people back. And we know that they've been mooting the suggestion of perhaps softening the language, shall we say, of some of these investment vehicles, maybe to sound less scary.

14:16Lee Boyce: But the other one was thinking about risk in a different way. And I was listening to a podcast about this. You think about what your goal is, and let's say that's retirement, and you think, what would be the biggest risk to me getting there? And if you're thinking about that way, you'd probably say, well, it's cash, isn't it? So is there something about the way that we need to think about risk? And if so, what on earth, if it is what's holding us back, can we do to make people feel more comfortable with it?

14:45Simon Lambert: It's a very good question. And before I answer it, I will say, first of all, hats off, Ollie. Great work. Bravo. I am phenomenally impressed. I've been investing for longer than you and I'm nowhere near being an ISA millionaire. I think the key bit here is, as Lee said, he's used his whole ISA allowance, but he has also taken some pretty big bets with some pretty large amounts of money. That Smarter Web Company one. Wow, that really did pay off. And the place you would have heard about the Smarter Web Company first? This is money. We had the exclusive story on the fact that Smarter Web Company was planning on doing this.

15:24Simon Lambert: Andrew Webley of the Smarter Web Company got in touch with us, got in touch with me like at the tail end of last year to tell us about it. And it was a good story. And we were always very clear in the stories that this was super high risk. I mean, if you think investing in Bitcoin is high risk, then investing in Bitcoin treasury companies, it takes that and like magnifies it some. I mean, micro strategy when it was booming was described as Bitcoin or steroids. Right. So it's super high risk. Could have gone the other way. so when you do or if you do put a large amount of money into something like that you need to be prepared for that to have gone in completely the opposite direction and actually if anybody bought into smart web company when those shares were at their peak they would now be down by quite a lot so you've got to be very careful about that stuff and the bigger the bet you make the larger your losses could be but also the larger your gains and i said bet but that's really the wrong word it's an investment isn't it but if you're investing in something like a small web company that said it's now going to transition to being a bitcoin treasury company i think that's where you start crossing over from the investment to bet element but the research had been done there um by the founder of the company and he said look this does not exist in the uk there's no listed way to get access to bitcoin in the uk um it has worked for strategy micro strategy now called strategy it should work here there will be the interest okay so so he'd done a lot of you know this wasn't just some pie in the sky idea right so obviously we researched this probably before we wrote about it but that is like at the extreme end of the kind of risk and at the other end you've got doing the sensible thing putting your money into a global stock market tracker fund but in a global stock market tracker fund you've done super well uh over the last you know 10 years because it's been driven by the us which has been driven by the magnificent seven um which have seen like stratospheric share price gains so you do need to be aware that the one thing that has happened here is that ollie has managed to very successfully and much better than i've done ride the wave of a very strongly rising market but that's a market that's also seen covid in the middle of it and the crash then but what's been really interesting is whenever we've seen corrections probably you know stretching back certainly to covid the what that covid one and maybe before that is you're starting to see the corrections come really hard and fast after the initial crash and i wonder whether that has for some people dialed down their perception of the risk that there might be because if you look back for example to the dot-com boom bust it took a long time for some of those companies to get anywhere near back to the level that they were and if you look at the footsie 100 it took donkeys years for it to get back to its peak um so but to go to your question about risk and do people take enough risk after me talking about lots of risk there no they don't and we think about investment risk in a very different way to the way we think about other risks in our life.

18:38Simon Lambert: We take risks all the time. Moving job is a risk. Moving home is a risk. Having kids is a risk. Leaving the house is a risk, fundamentally. We manage to do most of those on a daily basis. And we might take bigger risks. Some people might like to take part in action sports or things like that. or you know people might go i'm going to do a charity skydive i bet you there's people out there who've done charity skydives but will say oh i'm not investing it's too much risk i tell you what there is a lot of people out there doing there's a lot of people out there

19:15Lee Boyce: putting really expensive suvs on finance deals right on pcp finance deals they're buying cars

19:24Simon Lambert: that you know the list price is like 60 000 pounds and then they pay the depreciation over the next three years for example and they are pretty much guaranteed to lose about 25 000 pounds on that car over three years so they'll willingly lose 25 grand over three years on a car but lots of those people might say i don't want to invest it's too much risk and that's the thing that we need to change and i don't necessarily think sometimes the risk warnings help i don't think half the time people even look at the risk warnings but but i i think there is this thing where we need to and this is the thing that the government really needs to do rather than attacking the cash iso won't help what that will do is that will sow the seed in the mind of lots of people well you know what there's no point because they'll only change the rules on you that's what people say about pensions as well well there's no point putting money in your pension they'll only change the rules on you and that is from years of people changing the rules um they'll only come and raid it the you know this mentality stops people doing things and if they do that to the iso which is you know our most successful financial product then it will only lead to people going what's the point they'll only come for the stocks and shares iso next so i think that would be the wrong thing but trying to get across to people that idea of like you could make some money here and the longer term thing i think that's what you need to do and you need to use some of those statistics you know like there's lots of reports that talk about this for example there's the barclays equity guilt study comes out every year very very in depth and if you look over longer periods so over 10 year time periods and it's done every 10 year time period going back 120 years maybe even longer basically once you get to that 10 year time period your chance of losing money is absolutely minute and actually your chance of making above inflation gains is much greater and investing has been proven to be the way of making above inflation gains but i don't know i don't know how we get this message across to more people because we're trying to get this message across to people all the time and i think success stories like ollie's are important i do think that i wouldn't advocate that the average person does this because you've got to be totally dedicated to this but i think you know more of that stuff around like well you know i invested 200 pound a month and i did it for five years and now i've got this great pot and i'm on my way is the kind of thing that we need to be talking to people about amongst the footsie 100 companies for example bae shares are up 60 this year rolls royce one of our most famous names in engineering and not related to the car company which is a common mistake um i think those shares have doubled over the last year you know there's this there are british stock market success stories now the difficulty is is like ideally you don't want people going home just putting all their money in rolls royce because when rolls royce shares fall by 30 they've lost 30 but it's that spreading your risk and it's about you know taking a bit of risk and it will pay off and one day you'll thank yourself for it and and you know yes not everything will go right but we know that in life to go back to my original point not everything goes right we make bad decisions all of the time sometimes it was a mistake to buy that house that's an expensive mistake sometimes it was a mistake to to to take that job sometimes go out with that man yeah yeah sometimes i leave the house and i think it was a mistake doing that but you know we chalk we chalk it up to experience we go do you know what i'm going to learn from that mistake i'm going to try not to make it again i mean we all repeatedly make the same mistake don't we but you know i think it is the the mentality thing but i do agree with your point of we we need to change how people think about risk and encourage them to take a bit more risk and and everything that has the way the system has been set up over the last 15-20 years has been to discourage people from doing that and this has come at the same time as you have seen financial advice completely fall out of the experience of the vast majority of you know kind of middle-class people who might have some money to invest because of changes in the way advisors are paid and it's no longer common to have financial advice so you don't have those advisors helping people over that hurdle of starting to invest.

24:05Lee Boyce: But we do have a load of apps now to make it so much easier to invest. We're moving in the right direction. Lee, Simon there spoke about what's not going to work and that's probably cutting the cash isa limit or making big changes to the cash isa to get everybody investing. However Lee, I do want to ask because you mentioned it in your newsletter um some of the sort of ideas being

24:25Georgie Frost: mooted around what's on the table yeah so we've gone back we've gone back to putting the isa back in on the table the isa was on the table it was moved off the table now it's back on the table again a couple of things that we're kind of hearing rumors of outside of potentially the cash isa limit being slashed british isa oh georgie there's there's there's how is that back there's reports the british isa it's sorry i'm trying not to laugh at this just because we kind of spoke about it quite a lot when the conservatives were in power they got quite sort of fixated on it and then the scene as labor came into power was like man and now it seems to be back um which is given an extra uh five thousand pound tax-free allowance uh to invest in uk listed companies um it was scrapped by over on the grounds that it would overcomplicate ices um but the treasury is obviously very keen on uk investment to have a boost a shot in the arm um and there's some way shape or form that the british isa could make its way back into the plans of the government um there's another another rumors apparently treasuries weighing up whether a savings should be forced to hold a minimum minimum amount of uk company shares or funds are in their ices apparently city figures are pushing for a minimum allocation of 25 to 50 percent i think i think the reason for this is because especially in recent years a lot of people have heavily invested in the u.s uh just you know british money has gone into u.s companies because of the magnificent because we've seen such fantastic gains in some of the companies that are there in the S &P 500.

26:09Georgie Frost: I think the government is saying, hey, hold on a minute. They should be going to UK companies. In theory, I understand the logic, very difficult to police, very difficult to actually implement and forcing people into doing something quite often backfires and doesn't do the thing that they were expecting to do. Axing stamp duty on London shares. so investors currently pay tax when they buy shares electronically it's called stamp duty reserve tax cost 0.5 percent of the price you pay for the shares talking about getting rid of that um you know it would it wouldn't cost a huge amount of money i think when we think stamp duty we think of the property market um we think of the billions of pounds that raises for the treasury it's actually quite a small fry like almost for 120 million quid or something like that you know so there's there's talks about basically just getting rid of that again i'm what convinced it will do an awful lot i don't think it will make a huge amount of difference anything though that would make investing easy and making investing in uk companies more attractive should be on the table though and should be looked at it's the forcing strong army people into doing things that i kind of take a little bit of kind of umbrage with and that's why i'm very firmly in the camp of i'm not sure cash i says uh the allowance should be cut there's a couple of reasons for it one of them being it's one of a financial product that people actually know about trust understand and moving the goalposts probably not great but it wouldn't affect an awful lot of people because not hardly anyone maxes out their announcers i said at the top of the show and for example someone like me wouldn't really affect me because i kind of do an 80 20 split of investing to cash anyway but there are a lot of people that park money in cash isis for a whole wave of reasons, not just because they don't want to invest, but it might be because, you know, they're going to use it for something within that five-year period I was talking about earlier.

28:08Georgie Frost: So don't want to take any risk in investing. They just kind of know what they're doing with that money. I just don't think it's the right move personally. And again, I don't think it will make an awful lot of difference. The real key, Georgie, and the real thing I think about this is just having the choice over our financial decisions, I think is absolutely crucial. The other thing I should also point out here, Georgie, is that, you know, let's face it, 10 years ago, we couldn't say£20 ,000 into an ISA. It is quite a good product. It has been ramped up to a point where, you know, there are a lot of people that are wealthy that are maxing this out and do very well from the sales with it.

28:47Georgie Frost: And I guess that's where the argument lay. You know, there are, we again said at the top of the show, there's nearly 5 ,000 people are ice millionaires if i had to put like a stab at that i would have thought that that has probably doubled or tripled uh since 2022 that's a real just stab in the dark figure that's quite a large chunk of people that are managing to keep their cash tax free um and i think actually in that set of data from hmrc there was something like 25 super investors that had more than 8 million pounds uh in their ices i think we talked about it earlier in the year when that data came on the podcast you know we're talking about the wealthy paying a fairer share even though you could argue that wealthy already pay quite a fair share of tax but again that goes back to my point of could there be a lifetime cap on what's kept in an ISA so all those things mixed up you can see why it's a bit of a quandary for the chancellor well we've still got a ways to go Lee still got

29:43Lee Boyce: a ways to go a month ago we've got a lot covering the show just want to quickly get some savings accounts. It's not all about investing, Lee. Some savings accounts here. Zopa launching a tabletopping easy access account rate of 4.7%. Meanwhile, your savings expert, Sylvie Morris, getting rather excited about a new account from NS &I, but warning, you may have to move pretty quickly if you want to take advantage. Lee, just sum up what's going on out there.

30:07Georgie Frost: Oh, you know I love a bit of savings, George. I know. Now I love it. So yeah, Zopa have got a easy access rate paying 4.75%, but you need to open its current accounts i have it the current account is called biscuit there's actually a couple of people on the team that have got that account and said that it seems pretty good you do also need to have paying at least 500 pounds a month into that zopa easy access i'm pointing out here that this is not an isa this is just a run-of-the-mill uh easy access account so if you do earn too much interest in your higher rate taxpayer additional rate taxpayer or even a basic rate taxpayer you've got to be careful not to breach your personal savers allowance but that said um currently that is the best easy access rate there's a couple of uh sort of 4.4 percent out there but zopa really sort of come out fighting with that easy access account and actually i think it's quite clever linking it to the current account because there's a lot of data out there suggesting that people like to save alongside their current account and like to keep their money with it and i would look at it as an alternative to the big banks who are offering easy access rates linked to current accounts of a percent one measly horrible horrific one percent so well worth a look and then the nsni account that sylvia's talking about here is a one-year fix paying 4.04 percent um it looks like an increasingly good deal and there's only one account that currently beats it which is cover bank at 4.09 percent i did check before uh we recorded a podcast that nsni account was still there because it's very unusual for nsni to be table topping um and when it does tables it it shuffles down a lot so it doesn't take in too much money and breach its uh financing targets so if you are after a fix that nsni account is a good one and of course one of the big boons of nsni is that all the money is protected by the government uh rather than the 85 000 pound financial services compensation scheme limit which uh is per banking license at the others there are also a couple of other four percent coventry and leeds building societies have both got a four percent one year fix um so it looks good there are some actually some smaller building societies i'm going to shout out to the smaller building societies here georgie if you've got one in your town or nearby sometimes they're postcode linked but newcastle building society offering 4.1 fixed for a year loughborough 4.15 and bath 4.2 if you're in those areas well worth going to see what your building society is up to what they're offering and what they're doing let's support the building societies georgie i like them that's it for part one

32:54Georgie Frost: i'm joined now by blaring gashy from charles stanley direct for our weekly invest and explain feature. Blaren, we have a question here from a podcast listener. If I take a tax-free lump sum from my SIP but take 15 % instead of 25%, what decides how much the next 10 % is worth? Is it the pension value when I take the first lump sum or if my investments grow the pension value when I take the second lump sum? The floor is yours. Really quite a complex question there. If you only take 15 % of your SIP as a tax-free lump sum now, the remaining 10 % will be based on the value of your pension when you take it.

33:31This means that the next portion isn't fixed at today's value, it moves with your investments. So if investments go up, the amount you can take as tax-free cash will go up. But if it falls, that 10 % will be worth less. As a general rule of thumb, when it comes to pensions, your 25 % tax-free cash entitlement is always a quarter of whatever your uncrystallised pot is worth. It's very important that you understand the uncrystallised pot at the time you withdraw. And this is up to the limit of the lump sum allowance, not based off the value of when you first take your tax-free cash payment. Ben Gashi from Charles Stanley Direct.

34:06Lee Boyce: Welcome back. There are signs of a faltering property market ahead of the autumn budget. Home sellers are slashing their asking prices, and there's also been a spike in the number of sales collapsing altogether so what simon lambert is going on out there what's the picture who's

34:22Simon Lambert: saying it so the property market depending on where you are looking at is not doing very well the big issue is the parts of the property market in the most expensive areas of the country where people paid high prices for homes four years ago five years ago three years ago pandemic boom and are now finding that the demand is not there for those large expensive homes anymore particularly the ones that are further out of town you had the race of space you had people rushing to move out of town you had people saying well i'm not going to need to be back in the office anymore so it doesn't matter about my commute and you had people who were also benefiting from extremely low mortgage rates you now have the opposite of that situation occurring you have people being expected to go back to their workplaces far more often it's still a surprising number of people who only have to go in a few couple of days a week but most people are finding they're having to go in more often they're also maybe finding that actually they didn't want to move out of town and they prefer to being closer to town and they preferred not having to drive to the station and pay to park at the station and all those other things or they prefer to being closer to the schools or the catchment areas or all these other things they're also finding that they definitely preferred much cheaper mortgage rates.

35:42Simon Lambert: I must admit, I'm finding now one month into my new mortgage that I definitely preferred the old one. The old one was at 1.4%. The new one is at 3.95%. I did prefer that old mortgage, if I'm going to be honest. And I definitely preferred the amount of money that used to go out of my bank account compared to the amount of money that goes out of my bank account now so you can see why people can't see this can't pay the same amount for houses anymore um we have got uh some data here uh from uh property data from 20ci and it said in the year to date there have been 918 ,585 price reductions which is a 16 % jump from 791 ,820 in 2024 and 23 % higher than the 747 ,873 ,000 recorded in 2023.

36:44Simon Lambert: So why if we all know that the property market in those parts of the country isn't doing so well and this is predominantly southeast, east of England, southwest. London's not as badly affected but london didn't quite see the same pandemic boom because london house prices had already been suffering um so it is those kind of like those areas people rush to move to why if we know the property market isn't doing so well are people putting their houses on for too much money there's a number of things going on here first one loss aversion nobody wants to sell at a loss unless it's their suv that they bought on a pcp deal which they're perfectly happy to do but nobody wants to sell at a loss their most valuable asset their home nobody wants to sell that at a loss and so they don't want to accept that it might possibly be worth less than they paid for it um and so they want to price it so that they at least break even or ideally most people want to make money on houses because we are absolutely bombarded in our lives by this idea the property prices always go up um but also Simon it's not just the loss of the house price

37:55Lee Boyce: it's so expensive to buy houses like imagine how much you paid in stamp duty and moving costs and

38:03Simon Lambert: add that to any drop as well moving on to point b because you're in this boat and you want to try and get the most amount for your of money for your house you're going to anchor on the price that houses around you have gone on the market for and maybe houses around you have sold for and your probably going to decide that your house is a bit better than they are it's just human nature to think that so you're probably going to think well i'll put a bit on and so you end up being encouraged to maybe price a bit high moving on to point c and estate agents come around and they've given you a valuation and maybe you've done that sensible thing where you've got three agents around and they've given you a valuation one of them's given you a higher valuation you've quizzed them on this you said it's higher than the other valuations they told you about how you know they know the market they're very successful in the area they'll definitely get it sold definitely worth more and you want to believe that because of perhaps points a and b and so you put it on for a bit more money uh moving on to point d everybody else is doing the same thing and it's so expensive to move going back to your point georgie that you feel that you have to put it on for as much money as possible otherwise you're not actually going to be able to move home and also you people doing the same thing downsizing try to maximize their profit as well which all comes down to the fact to the bit where there's a lot of pressure on you to just go as high as you can and i would say my final point is people think well you know what if we price it a bit high we can allow people to negotiate a bit of a discount i think they're getting a deal the problem is is that there's a wealth of evidence that this doesn't work there is a wealth of evidence that suggests you're better to price realistically first time around build up some interest and hopefully hopefully if you can get two buyers competing against each other that's when you get the price up and there's also a growing amount of data indicating that prices that go on the market too high and then have to have a reduction actually ends up sitting on the shelf for longer that people think oh well there's been a reduction so that house isn't going to sell must be something wrong with it or also sometimes they think well if they've reduced the price and they've made a big reduction in price must mean that they need really need to sell and they're open to negotiation so what you get is you get a rush of people coming around to view your newly

40:29Lee Boyce: reduced house and then you get a load of lowball offers how much lee do you think taking mind what simon just said there how much do you think the budget specifically is playing on certain areas of the market and with that i'm thinking about things like wells taxes fears for properties over perhaps a million is that are we seeing any picture with certain types of people

40:56Georgie Frost: properties usually say georgie i mean i don't think it's any secret in this podcast i'm looking to move house i mean our house is sold we're looking to go up to that you know up the ladder a little bit and it's almost impossible i mean lots of people are kind of not listing their homes because they're kind of fearful what's coming in the budget and i've had numerous conversations with estate agents in recent times uh to that effect um i think it's had a huge uh i think the uncertainty people but when you're buying a massive asset an expensive asset like a house uncertainty any type in any way shape or form is gonna hamper the market and people have been burnt in the past and i'm talking about things like stamp duty holidays uh for example when when they've completed maybe a few days before stamp duty holidays come in and it would have made it cheaper all of that kind of thing i think there's a real fear in the market over a certain price point of property there's going to be a raft of property taxes coming in and people are worried about that and of course all will be revealed roughly this time next month and perhaps absolutely nothing will be revealed in the property market but you only have to look at the data um in this um these stats by uh property data firm 20ci right so we mentioned it almost 990 ,000 price reductions that's a 16 jump on last year and um 23 higher than 2023 compared to 2021 2022 uh when the property market was booming it's double the amount of asking price cuts and all of those things those four things that i mentioned definitely to play i definitely think estate agents um i can certainly say from experience in this local area are very competitive and i and actually just as simon said i had three um three separate estate agents come and value the property uh two were roughly in the same ballpark one national agent was way too high uh way too unrealistic in my opinion of what i believe the property to be worth um but it does sow that into your head you're like well maybe we should list it for that price but you could bet your bottom dollar you'll list it at that price you'll get hardly anyone coming through the door and then the estate agent will say a few weeks time oh yeah we should probably reduce it to get more interest and it will just go down back to the price point that the sensible agents had suggested so i think yeah going back to your original question yes uh the the budget is definitely playing on it and we actually spoke to phil spencer uh the tv property experts there's no high this is a really tough time to be selling a home in many parts of the country there are more homes for sale than buyers and unless and until that changes prices will stay under pressure i personally at the moment i kind of like i'm washing my hands of trying to find somewhere because nothing's really coming to play and i think you've got the budget then once it's done it's christmas and you know people just aren't interested and in boxing day you get the boom in in-house listings perhaps if not much is going on in the budget and in fact you know there is a chance absolutely nothing goes on um we might see the boxing day boom and maybe we'll see a resurgence in the property market and everyone feels a bit more settled down um mortgage rates are kind of still stable compared to what we've been used to in recent years and there are reasons to be cheerful bit of christmas cheer

44:22Lee Boyce: there Lee thank you Simon Lee mentioned their mortgage rates good news if you're looking for a mortgage I suppose two major banks have cut theirs both HSBC and Barclays announced they'll be lowering rates across some of their fixed mortgage deals why is that will we see others follow suit I've been a bit of nervousness in the mortgage market recently

44:42Simon Lambert: I mean bear in mind you can fix below the base rate at the moment for five years or two years if you've got a lot of equity so mortgage rates have come down a lot and then that's and then that's stalled and they've gone up a little bit um what's happened here is we saw inflation figures come out this week inflation has stayed steady at 3.8 this is seen as the peak of inflation there's hope that this might encourage the bank of england to be a bit more forthcoming with interest rate cuts um and so mortgage lenders have moved to lower their rates also it's nearly the end of the year and you do tend to see banks offering some keener mortgages in november and december time try and get some more money in before the end of the year people have got targets to hit and so on so it's possible that we could see them tickle down before the end of december um and even into the new year because you normally get a similar effect at the start of the new year when you get a bit of a kind of boom let's start the new year with some lower rates thing going on but as lee said it all depends on the budget i think i'd be worried about if i was going to buy an expensive house right now is council tax yeah i mean like this you know the carefully middle of the road think tank the ifs in the report we were talking about last week you know they were talking about one extreme extreme measure that rachel weaves could take would be to double the the top two rates of council tax band g and band h i mean that would be huge because you've got to pay that every month i'm in band g i'm pay four grand a month already if it doubled that'd be another four grand a year it's a huge amount of money you know you look at that as a higher rate taxpayer and allowing for national insurance and everything else you know you've got to double what that you've got to earn eight grand to pay four grand i mean that i've just worked out my calculator while we were talking it'd be about 330 something a month so you're talking you know kind of pre-tax you'd need an extra 600 pounds that's a huge amount of money to get in especially if your mortgage has just gone up by 500 quid so you could see why people might be looking at this going hmm i might sit on my hands until after the budget to see what happens here and just work out exactly how expensive this house is going to be i don't know i think a lot of this property stuff is i'd rate reviews would be a lunatic to double the top two rates of council tax i mean that that would that would definitely kill off the economy that would but then there's other stuff like you know this talk of like removing the capital gains tax exemption for selling properties worth more than one and a half million pounds you start looking at that and start picking it doesn't take long to start picking holes in it but it's a completely mad plan there is a part of me that goes you can dismiss all of this because those are completely mad ideas and then there's this other little voice in my head that says are we actually at the stage where we do start to get mad ideas and they are actually enacted i sincerely hope not we were

47:35Georgie Frost: looking at our house and it was a band g uh this week and it actually played in my mind of being like we're in a nice little comfy middle of the road band d and i saw the ifs report about council tax and i was like i think it might be wise to wait to after the budget if we're seriously interested in like i never thought i'd be saying there's a council tax banded property that is too high uh it generally was in our conversation this week between my wife and mine i tell you i tell

48:03Simon Lambert: you what right i mean we talked about ollie's story at the top of the show i would like to take inspiration from that and one day fulfill my ambitions of becoming an isa millionaire i am not becoming an isa millionaire if they double council tax rates there'll be money coming out of my isa welcome to the rich people's problem well do you know what guys i was going to ask you

48:23Lee Boyce: for anyone listening is going oh for the love of god two guys in banjee's moaning about it but it's quite inconsistent what your house is worth for it to be considered in a...

48:33Simon Lambert: My house when I bought it was basically a three-bedroom chalet bungalow.

48:38Lee Boyce: But that's the concept, that's the idea, isn't it? People have in their head when you say, oh, I'm going to Banji, oh, well, you know, you're rich, so therefore you can afford it, no?

48:46Simon Lambert: Yeah, I think what's interesting is like some of these areas where you have incredibly low council tax, that's what causes the problem because the bans, effectively, you've got Banji in the middle, and we should do a show properly on council tax an how it works you've got band d in the middle and then they stretch out beyond that and there's a limit to how much they can change from band d so if you look at band d band d in one local authority you know might be x and band d in another local authority is y and there are some local authorities out there with very very low council tax levels um and i don't really understand how they get away with it um you know and how it works really like that and that is i i do think potentially there is something that you could see change there and the advantage to the government of basically increasing council tax is that it gives more money to local authorities from council tax therefore the government can give less money to local authorities and the government is currently in a position where local authorities are constantly having to come to the government saying we need more money um because that's so much costs have been lumped onto local authorities local authorities are paying huge amounts for care right which really shouldn't be on the local authority but we'll do a proper episode on this like where we go into it in more depth and we'll

50:11Lee Boyce: stop talking about it now all right let's turn on to something a slightly happier subject as the saying goes i like this saying one man's trash is another man's treasure or woman's either way um could you be sitting on a retro gadget gold mine now why we ask this lee is because you're a bit of a am i right in thinking i didn't i haven't made this up nintendo that's that's the thing for you it's not no sega mega drives or anything it's just no atari is that another yeah i have uh so

50:37Georgie Frost: i'm mainly nintendo yeah i've got one of the old retro consoles and i've also got an atari jaguar which was well there you go yeah um but that's this is different this this story that we've got here we've been about mobile phones here we're talking about obsolete old mobile phones um i think there's been a trend in this sort of uh the the kind of dumb phone chat where maybe you could argue that uh modern day smartphones have got over complicated they've taken over our lives you only have to get on the tube and everyone's just sort of looking at a phone now it dominates everything that we do in our lives and i think there has been a trend in people going Matt I don't need any of this stuff I just need a phone that makes calls and texts and I completely get it and I think people I've definitely overheard conversations in recent times talking about weaning themselves off using their phone too much now what we have here is some data from Gumtree suggesting that prices of old phones old mobile phones are skyrocketing and some of them are becoming incredibly uh collectible my favorite one in this list is the motorola diner tac 8000 x i mean that is catchy isn't it georgie um but it's one of those massive phones um and we were having this i was having this conversation in the office the other day so can you imagine if you took one of those on the tube and like oh yeah the phone call hello yeah i'm on the tube it's like

52:03Lee Boyce: the ones have you seen pretty woman there's a scene in pretty woman where they're sitting in the park and he's got this massive brick next to his face and then she she turns it off anyway

52:12Georgie Frost: that's what that looks like they can sell for up to five grand uh in the wow box they work they go i would be very surprised uh well that's the conversation we're having i've got no idea if you could actually for these work or not um and and there's more phones in this this a nokia uh n950 between one and one and a half grand orbital city phone one and a half grand to three and a half grand um the blackberry porsche design 250 quid to 1500 pounds i really like the blackberry era there was a couple of years of a blackberry era it felt like it was like the dominant force in the market kind of it felt like the the working man's phone i could take emails on the go look at this like you know um and it kind of seems like it went came and gone pretty quickly but i've definitely got an old blackberry in the drawer because a couple of months ago i charged it up to see if it still worked and lo and behold it actually charged up and it had loads of messages on it from yesteryear it was like a nostalgic look in the past um original apple iphone uh you know they can go for 100 quid but they can go for 10 grand uh if you've got probably a box uh boxed kind of sealed version of one and like a lot of things in the retro arena um you know it's all about condition it's all about having the original uh paperwork with it and boxes and all of that kind of thing um my weapons of my poison of choice as you say are uh games consoles i do love the old nintendo stuff i'm still out here in the shed office uh playing nintendo game cube uh with my six-year-old because i find the graphics are like nicely cartoony without being too hyper realistic there's no way it can connect to the internet no dangers it's just you plug it in you switch on and within one to two minutes we're playing mario kart or we're playing mario strikers and it's absolute uh absolutely lovely it's a nice little oasis of climate here but quite a lot of these phones are obsolete don't work whatsoever and actually the collecting of it is just people building up a collection of old phones and thinking that potentially they're only going to grow in value and actually some of the comments in this uh were quite funny someone said in the real world most of your old gadgets are worth little beyond their value value is recyclable junk and then someone else said i can understand keeping a few examples in museums or whatever but who is sad enough to collect this absolute stuff and what warrants any value to it reality is old tech is so lacking in functionality as little or no value other than a modest novelty value and there really aren't many buyers and then someone replied it's funny but unless you're a collector of something yourself you'll never understand and then the final comment on this little thread words where you're right about not understanding some collectors came across a bloke once who collected factory clocking in machines how sad is that but there are little pockets of niches of what people collect and enjoy collecting and i say you know go for it it's not crack on and if you enjoy collecting old mobile phones you enjoy collecting mobile phones i enjoy collecting old nintendo stuff i enjoy collecting old nintendo stuff also quite like enjoy i quite enjoy collecting old swatch watches if i see one in a charity shop for a couple of quid i pick them up especially if they're boxed and i've got a little swatch collection going on this is a bit of fun isn't it it's just a bit of kind of like let's spot one out in the wild and it's it's quite fun to collect um and people are into all sorts of things if old mobile phones is your jam then you go for it you're not harming anyone absolutely right you said one man's trash is another man's treasure

55:49Simon Lambert: Simon, stat of the week. £2.2 trillion. This is the record amount in cash that savers are sitting on. Despite the Chancellor's efforts to persuade more households to invest, as we were discussing earlier, this is some analysis of Bank of England statistics by financial services firm Bowmore Wealth Group. £2.2 trillion. Imagine what we could do if people put that£2.2 trillion to work instead of building up more and more cash. And to repeat an old point of mine that I've made many, many times, I think this is an indication that what we are doing in this country in terms of making people with money feel poor, which they are not, is not working.

56:37Simon Lambert: And it is time to change the strategy.

56:41Lee Boyce: All right, then on that note, Lee, thank you, Simon. Thank you. Thank you for listening. That is it. you can keep up to date with all the latest breaking money news just go to thisismoney.co.uk or download the app and if you have any comments or questions for the team or anything you'd like

56:56Simon Lambert: them to look into simon you can email us at podcast at thisismoney.co.uk or come to thisismoney.co.uk for slash podcast joining the debate in reader comments and email us tell us if you collect something weird or offbeat or unusual email us at podcast at thisismoney.co.uk we want to know about what you collect and why. And if you like our podcast, we're not raters wherever you found us. It helps other people find us too.