What’s Inside This Month’s Newsletter
This May, Steve Rowe takes us on a lively journey through the origins of May Day, tying its themes of renewal and resilience to both investment markets and everyday life. He shares insights into the enduring optimism needed to navigate market fluctuations, the value of staying the course with investments, and how Lucent’s unique approach—including access to resident psychologist Jessica Schlupp-Taylor—can support you through both financial and personal challenges.
You’ll also find exciting updates about the upcoming Juggling Mind and Money podcast, details on how to maximise opportunities with the Lifetime Allowance changes, and a look back at Lucent’s inspiring evening with Frank Bruno MBE. Whether you’re curious about upcoming events, pondering your financial future, or simply seeking a dose of Steve’s trademark wit and wisdom, this edition has something for everyone.
Grab a cup of tea, enjoy the read, and let’s welcome the summer together!
May Day
As I write this on 1st May, and plan to send this out on the May Day Bank Holiday on 6th May 2024, I am intrigued as to exactly why we have this Bank Holiday each year? From personal experience, I think every person in a financial institution is absolutely knackered after the end of the tax year, and clearing up afterwards means by the start of May, an additional day off is required!
However, it turns out it actually has something to do with farming or some such, in the distant past! Who knew the world didn’t revolve around financial services?
In actual fact, it has ancient origins and marks the mid-way point between the Spring Equinox and the Summer Solstice. For those of you not versed in the relationship between time and the movement of our planet around a star, it is halfway between the time when night and day are the same length and the longest day of the year.
In short, it’s the start of SUMMER!!!! Which, after what seems a terribly long winter, is very welcome.
Traditions of May Day
Traditions of May Day include such things as gathering around the May Pole or the May Bush. The sap is certainly rising at this time of year, isn’t it? Indeed, John Malalas wrote in the 6th Century about ‘Maiouma’, which was a "nocturnal dramatic festival, held every three years and known as Orgies…’ and during this time money was set aside by the authorities for torches to cover the cost of ‘all night revels’.
As with even the longest winter, the summer will eventually come, and is kicked off by some frothing excitement at May Day. The longest of nights always end with a dawn of new hope. And so it is with investment markets. Most of 2022 and three-quarters of 2023 were the Winter. Not of discontent for those we have educated, I hope! Because, there is always a dawn, you just have to wait for it to come around. But if not ‘discontent’, then certainly a feeling of emptiness. There were large gains in investment markets from October 2023 that meant that globally, they exceeded their previous highs, but there has been a slight pull back in the last month. All of which is perfectly normal.
Like the youthful at a May Day festival, staring at the May Pole or May Bush (whatever your preference), there may be some over-excitement pushing things a bit further then calming down afterwards and settling into the long lazy summer of more steady growth. Who knows what will happen in the short term, the long-term evidence shows an impressive upward trendline of growth in companies and therefore profits of investors. And to gather that harvest, you need to stick with the plan and stay invested.
Those pagans were filthy in the olden days, weren’t they? Let’s leave it there, and I wish you a happy month of frolicking.
May Day Help!
Of course, there is another May Day and that is a call of distress coined by Fred Mockford who worked at Croydon Airport in the 1920s. Not the only great thing to come from Croydon, with our very own Heather Bendall hailing from there. Heather has just left to work with a more local company to her, in Surrey, and I was certainly distressed at that, crying ‘May Day’ over and over.
We can all be in a May Day situation can’t we? When it comes to investment management, you may feel like crying May Day, but as we know, that would be a false statement because you know markets will fall at some point and then rise again. False May Day distress calls are a criminal offence and you could end up banged up!
What are not false May Day calls, and ones you must make, are when you are in deep (or shallow!) emotional distress. This may be about your money, but more likely about your life. Have you ever been in such a situation? Often this can be caused by grief, illness of you or a loved one, anxiety, work pressures, life… there are endless causes.
One day I’m healing, the next day I am breaking again. Both days, I am not giving up. Tiny Buddha
Our Resident Psychologist
If you’re suffering, we can help in your mission of not giving up and seeking a happier life. We have Jessica Schlupp-Taylor on call, our resident psychologist, to help you with whatever you are going through. This is, I think, a unique offering in the UK and maybe in the world from a financial advice company. Jess has been helping our clients for nearly 4 years and they have ended up in a much better place because of it.
Jess is a great confidant, aids with mental models to help you feel better and more optimistic, and is cracking good fun to boot. As you can see above, she enjoys sitting in airy light rooms and reading menus. This was just before she uttered ‘tofu – that’s a joyless experience, I’m having the Beef Wellington’ to me. That’s wisdom.
May Day and May Day
The time after tax year end also brings a load of new tax rules to understand. Here are some key things to remember:
Lifetime Allowance Abolishment
If you have taken ANY tax-free cash (Pension Commencement Lump Sum) prior to 6th April 2024 and want to take some more then it’s important to determine whether you are entitled to a TTFAC – A Transitional Tax Free Amount Certificate.
It may entitle you to more tax-free cash than you could have previously. BUT – BIG WARNING! If you apply and aren’t entitled to more, it may mean you get less entitlement, then you cannot revoke it.
To calculate the previous amount you have used or were entitled to:
1. Calculate your deemed amount used in the past:
Lifetime Allowance* x LTA used (%)** x 25%
*LTA - £1,073,100 unless you have a protected amount
**LTA Used – you should have certificates from your pension providers explaining this in percentage terms
2. Find out how much tax-free cash you actually got paid in £.
This is ESPECIALLY important in any defined benefit pensions you have. For example, you may not have taken a lump sum and the full income, but under the old rules, you would have been deemed to have used the tax-free lump sum allowance.
3. You now have the:
- Amount deemed to have been used in £
- Amount actually taken in £
Maximum Amount of Tax-Free cash entitled to now: = £1,073,100 X 25% = £268,275
If the amount actually taken in £ is lower than the amount deemed to have been used in £ then it may be worthwhile applying for the TTFAC.
However, we would urge you to seek professional advice on this. If this applies to you then you should seek personal advice, because gathering the information and applying it to your situation is difficult.
For all Lucent Clients, we are working this out for you. It MUST be done before you take any more tax-free cash. That is the key.
An Evening with Frank Bruno MBE
We were grateful to be able to interview Frank Bruno on Thursday the 11th of April and we gather that all people who attended had a great time! We were particularly proud of Luke who stepped in to do the Interview with Frank. Speaking in front of people is nerve-wracking enough as it is, but when you’re faced with the former heavyweight champion of the world with the words of his manager ringing in your ears “he seems a bit grumpy tonight” and having only been given the questions the day before, you’re going to be nervous! But not Luke, he was like Des Lynam, Harry Carpenter, Steve Bunce and Gary Lineker rolled into one! At one point, when Frank bemoaned the tax man’s effect on his career earnings as a fighter, Luke quipped “we could have helped you with that”.
Also, to Lisa and ‘the miiilllllliiooonns of fight faaans’ that joined us from around the world, we are also grateful. Lisa organised it all, almost singled-handedly! And it was a cracking job, although making me wear a vest, boxing robe, gum shield and gloves probably went a bit too far, right?
That's all for now, have a great May - see you next month!
Disclaimer: This article does not constitute financial advice. We recommend that you speak to a qualified financial planner for advice tailored to your individual circumstances and goals. Financial markets may go up or down, and you are not guaranteed a return on your investment. Past performance is not necessarily a guide to future performance.
