What's happening to those?

Okay, lifetime ISAs or LISAs are being phased out.

Which we knew.

We did know, we did know, but we've had more details now.

I think the first thing to say is if you already have a LISA, you don't need to panic because you can keep adding money to it and use it in exactly the way you were intending to.

But there will be a new product replacing them.

I guess it might be useful just to recap how lices actually work because I think that's sort of the starting point.

On the income that's paid outside of an ISA and in excess of allowances that there are there for these.

So what do we have here?

Yeah, so you can see a lot more green on this table.

And that is, as you say, because of tax-free cash.

So most people, when they access their pension, can take 25% of it completely tax-free up to a limit of just below 270 grand.

And that basically skews the table even more in favor of pensions because it's such a valuable benefit.

So if you drop down a tax band in retirement, the tax-free cash basically dials up the benefit of that.

You get an even bigger uplift.

So it's worth making that point.

This week in markets, after a bumpy few days for equities, earnings season could restore investor confidence.

It's been a bumpy few days for the stock market, with investors seeming to lose faith in artificial intelligence.

This week is off to a stronger start, though, and a new round of company earnings could help to restore confidence.

Just days after the bull market celebrated its fourth birthday, the US stumbled last week.

The Nasdaq index, which is skewed towards tech firms, fell by 4% as investors fretted about inflation and the cost of financing AI.

Asian tech companies suffered even steeper losses, with Samsung and SK Hynix down double digits.

From 2030 onwards.

Exactly.

So how is the government gonna achieve this? Well, the current plan is that each year the state pension will rise by at least the highest of 2.5% or inflation, but then there's this second step.

So the government will then see whether that rise is enough for the state pension to hold its value relative to earnings.

Or, for example, if it rises and then it slips below, I guess like 30%-

Yeah

... 10 years in advance.

But often there seems to be this assumption that we've gone from a triple-lock to a double-lock, and all that matters is inflation and 2.5%.

Mm-hmm.

There's also something called tax-free childcare, and this is actually less well-known, I think.

I hadn't heard of it before I was doing research for this.

Um, but it's basically a savings scheme, and you put money aside for childcare, and then the government will top it up by 25%.

Um, and that's not just for babies and toddlers, you can use it for after-school clubs, breakfast clubs for children when they're in primary school.

Yeah.

So you can basically use pensions to keep your income under the 100K mark.

So for example, if you have a salary of £109,000, you can make a 10K gross pension contribution and keep your adjusted net income at £99,000, and you wouldn't lose out on the free childcare.

which they found things a bit more difficult on that basis.

Yeah, so the collapse of RBG was quite a specific case because there are other factors going on there.

You know, there are management issues, litigation funder thrown in, which thankfully Keystone does not have to deal with.

But one of the key ways that Keystone grows is essentially by recruiting more and more lawyers because it entirely shuns inorganic growth.

So it basically needs to keep dragging people in in order to keep growing its revenue.

And as we know, in the wake of the pandemic, the recruitment market was extremely hot and the legal sector in particular saw huge amounts of movement and the salaries being offered were just insane.

So it had a bit of a tough period trying to keep attracting those senior lawyers that it needs.

Is that still the case? And how do we see the prospects for them in future?

Gemma, can you say a bit more about that, why it's doing it, what's happening in short?

Yeah, so I'll try and simplify it.

But basically Aviva wants to cancel £450 million worth of preference shares on the basis that they are, in the company's words, an inefficient form of funding, which don't serve the purpose that they originally intended for.

So essentially, the shares represent a very expensive form of funding that Aviva just wants rid of as it pushes ahead into its new life with DirectLine.

But for shareholders, preference shares can be very attractive as they rank higher than ordinary shares.

And it essentially means that you might be in line for a fixed dividend.

And if the company goes bust, you're higher up the ladder than ordinary shareholders.

This time, though, it has learned something from that lesson, seemingly, in that the offer is slightly different to shareholders.

What are your thoughts?

It has.

I think part of the reason that the market responded so enthusiastically was just because there was a plan in place and they've been holding out for it for quite a long time.

And also it was coming off the back of a decent year.

So profits were down in 2024, but less down than people expected.

And while there were some quite big net outflows, again, they were better than expected.

So the new chief executive was coming from a relatively strong position.

So how successful do we think this is going to be or what kind of chances of success do we think it's going to have? Because these are quite aggressive moves as you implied there.

One positive, though, for the year ahead is the fact that There are structural hedges in place, which is one of the terms we discuss in the piece, which should ensure, according to many observers, at least that banks are still able to make a lot of money from our deposits and prove very profitable, even as base rates start to fall.

Indeed.

So yeah, structural hedging is one of the terms we unpack.

It comes up all the time in UK bank financials.

It essentially delays the impact of interest rate movements.

So In the last few years, we've seen interest rates coming up.

So we've got the structural hedges in place, which means the true impact of those interest rate rises hasn't already been felt.

But again, the picture's been improving on this front in recent years.

But Gemma, what are some of the broad brush differences between the two sectors, if we can boil it down on such terms?

I think when you're looking at the UK, and you'll see this in our coverage, a huge amount hinges on net interest income, which is essentially the difference between what a bank earns on its loans and what it pays out on its deposits, and underpinning a lot of that interest income and mortgages.

So when you're looking at the UK, you're thinking about the housing market, you're thinking about what people are doing with their money on sort of a retail basis and a commercial basis.

But when you look at the US, as we've just been talking about, investment banking is a big, big driver of growth.

And obviously what drives investment banking is quite different related, but not exactly the same as to what, you know, drives a house purchase or a company loan.

So I think those are, from a revenue mix perspective, important things to think about.

Also, just the scale of the US is almost incomparable to the scale of the UK.

But yeah, again, that may be a bigger point of difference in the near term as well with the UK, with Europe.