Save your pension pot now!
Over a year ago we re-iterated the urgent situation that faced pension savers. There are just a few days left to save your pension pot.
The gradual reduction of the lifetime allowance meant that any funds in excess of the limit would almost certainly be taxable at 55 per cent — given that the limit was £1.5 million, it implies higher rate tax due. The lifetime limit has reduced in recent years after being set at an unrealistic level by the Labour government. But by 5 April 2014 the lifetime allowance will have dropped to £1.5m from £1.8m, and for 2014/15 be just £1.25 million.
This is mostly going to effect higher earners who have maximised their pension contributions, but could also include those who sold off business or family assets and invested the proceeds.
This retrospective change had to have exemptions for the prudent — or opportunist — savers who saw the benefits that was presented. But while the exemption has not been hidden, it has not exactly been highly publicised. And it is a simple matter of registering with HMRC that your fund size exceeds the limit to enable your protection.
There are several types of lifetime allowance protection
Pension savings before 6 April 2006
Some people had built up pension pots worth more than £1.5 million before 6 April 2006 when the lifetime allowance was introduced. Lifetime allowance protection was introduced so that they didn’t have to pay the lifetime allowance tax charge on pension pots built up before this date. There are two main types of protection for pension pots built up before this date, these are:
- primary protection
- enhanced protection
Pension savings before 6 April 2012
The lifetime allowance gradually increased to £1.8 million by 2010-11 but from 6 April 2012 the lifetime allowance was reduced to £1.5 million. A new form of protection called fixed protection was introduced to protect those who had built up pension pots of more than £1.5 million but no more than £1.8 million.
Pension savings before 6 April 2014
From 6 April 2014 the lifetime allowance will be reduced to £1.25 million. A new form of protection called fixed protection 2014 is being introduced to protect those who have built up pension pots of more than £1.25m but no more than £1.5 million. People could able to apply for fixed protection 2014 from August 2013.
The key provision is that once protection for your existing fund is given, no further contributions can be made.
So if you suspect that your fund has grown to more than £1.25 million protect it now. After 5 April will be too late.
Apply for Fixed Protection 2014 at HMRC.
Tesla euro expansion announced
Tesla have announced further plans to expand the supercharging network across Europe. Late last year they described how the charging network would expand to be within 100km of all residents in Germany, with the 50 point being the end of March.
Now they are now adding more service centres, and offering free high speed tuning for cars where they can legally be driven to the Model S maximum of 125mph. By the end of 2014 80% of Germans will have a service centre within 100km. In the UK, planned sales and service centres in Birmingham and Manchester suggests that supercharger stations will follow that route too, and the Tesla map shows a connection to the Bristol area as well.
And the chargers are now even opening in Switzerland. The map on the Tesla website suggests that by the end of 2014 there will be routes providing free* charging from north west England to Rome, through France, Holland, Switzerland and Germany, and even diversions into Austria and Spain.
* For 85kwh batteries
This network both supports the stated objectives of the company, and provides more confidence for traditional ICE car drivers to consider electric as an option. Most ICE cars will manage 500 miles or so, but not many drivers push it to the limit, preferring instead to top and take a break at reasonable intervals of about 2 – 2.5 hours. Knowing that you can do the same in an electric car will drive new customers to the brand. This infrastructure development will support huge sales of the Model S and later the X. The only question is whether there will be enough places to charge at each station, as queueing for 5 minutes to fill with petrol is a very different proposition to joining a queue to re-charge.
Again in Germany, Tesla is seen as an invasion – albeit a welcomed one, and someone has even created a parody depicting the downfall of the petrol car.
And the expectation for Model S sales in Europe and Asia to twice those of the US suggests that even if the US stand still output will triple. And that is in addition to the late 2014 launch of the Model X falcon wing SUV.
Whether it can be done remains to be seen, but Elon Musk has not been one to make blase predictions for the sake of publicity – his car does the talking. If Tesla do produce and sell as he suggests, the share price will not only become more realistic and justified, but is likely to keep on rising.
See for yourself what the fuss is about – take a test drive. I remain long TSLA, in stock and call options,and may sell puts as my position grows.
Press release. Tesla Commits to Further Expansion in Europe
GENEVA, Switzerland, March 4, 2014 /PRNewswire/ —
New Supercharger locations and service centers enhance customer experience
In order to serve a growing customer base in Europe, Tesla will open more than 30 new service centers and stores across the continent, the company announced today at the Geneva Motor Show. Tesla will also continue rapidly expanding its Supercharger network, allowing Model S drivers to travel long distances across Europe for free.
The retail, service, and Supercharger expansions come as Tesla dials up its commitment to Europe, which continues to be a priority market for the company.
In a recent trip to northern Europe to engage with customers, Tesla co-founder and CEO Elon Musk highlighted the rapid increase in the rollout of the company’s Supercharger network for Europe. “By the end of this year, we expect you will be able to travel almost anywhere in Europe using only Superchargers,” Musk said.
In 2013, Tesla delivered 22,477 vehicles to customers worldwide. By the end of 2014, Tesla expects combined sales in Europe and Asia to be almost twice as high as sales in North America. Part of that projected growth will come from the UK, where right hand drive versions of the Model S will soon be introduced. Highly competitive leasing and financing options, similar to a program the company recently launched in Germany with rental company Sixt, are also expected to drive growth on the continent.
The European launch of Model S has been successful not only in terms of sales, but also for the accolades awarded to the car. In 2013, Model S was named Car of the Year in Sweden and Norway, Most Stylish Car in Switzerland, and it won the Car of the Year Prize of Honor in Denmark.
Russian stocks at a low point, is it time to buy?
With the rest of the world having taken breath and moved on from last weekends trauma in Crimea, are there any bargains left over?
Russian stocks prices have not moved back — yet. But in spite of the barely disguised corruption the market is cheap. So if you have a contrarian streak, or just can’t look that gift horse in the mouth, Russia could be the place to be.
But sensibly, don’t go wading into the MICEX with a pin buying whatever it pricks. rather let someone else take the strain, by buying ETFs.
There are several listed in New York, that most traders will have access to through their platforms. Or there are some listed on the LSE, that every uk investor can get at.
The one I have picked is the Market Vectors Russia ETF. This is classed as Emerging Europe, and is down 18% so far this year including the 12% landslide on the 3rd March. But this only pulls it back to the level of August 2013. It is also a straightforward index tracking ETF with no complications and no leverage. I urge caution to anyone considering ETFs that they don’t fully understand.
The advantage with US listed ETFs is that they have options available that can be used as well as or instead of the shares. This offers a distinct advantage for me over UK shares, in that I can buy the shares, sell calls against them, and of the price starts an upward trend I can sell puts that will either get me back into a position at a discounted price or just add to my income.
|Symbol||Name||Price||Change||Assets * ▼||Avg Vol||YTD|
|RSX||Market Vectors Russia ETF||$23.59||-0.42%||$719,523||4,473,750||-18.32%|
|ERUS||iShares MSCI Russia Capped Index Fund||$17.62||-0.62%||$238,118||506,928||-19.45%|
|RSXJ||Market Vectors Russia Small-Cap ETF||$32.00||-0.34%||$14,746||20,268||-24.07%|
|RUSL||Direxion Daily Russia Bull 3x Shares||$16.10||-1.23%||$12,339||74,359||-48.23%|
|RBL||SPDR S&P Russia ETF||$22.88||-0.26%||$11,968||51,449||-18.24%|
|RUSS||Direxion Daily Russia Bear 3x Shares||$18.60||+1.42%||$10,450||65,375||+65.92%|
|RUDR||VelocityShares Russia Select DR ETF||$48.33||-5.27%||$2,035||3,579||n/a|
In London the choice is wider.
|XMRC||db X-trackers||MSCI Russia Capped Index|
|FXRU||FinEx Funds plc||Russian Corporate Bond|
|HRUB||HSBC ETFS Plc||MSCI Russia Capped UCITS ETF GBP|
|B57ZBF4||iShares Trust||MSCI Russia Capped Index|
|CSRU||iShares VII plc||MSCI Russia ADR/GDR UCITS ETF|
|CRU1||iShares VII plc||MSCI Russia ADR/GDR UCITS ETF|
|B17NZ81||Lyxor ETF Russia||Dow Jones Russia GDR|
|B1WLRB7||Market Vectors ETF Trust||SBI USD Russia ETF Trust|
|RUSD||RBS Market Access||DaxGlobal Russia Idx UCITS Fund|
Source: Hargreaves Lansdown
The odds of real conflict starting are still low, but Russia is unpredcitable. Any good news will likely see the markets rebound, while the markdown so far has allowed for confrontation. That is not to say it won’t drop further if they start shooting at each other.
These ETFs provide a choice for the “what to buy”, “when” is still to be determined. Watch for the turnaround on the charts before committing.