MTTM Podcast Episode 502 – Changes to Help to Save, the latest on Gold and Warren Buffet insights

Listen to Episode 502

On this week's show Andy explains how the Help to Save scheme works including how you can get a free £1,200 Government bonus. He also discusses the recent changes to eligibility rules that have resulted in over half a million more people now being able to benefit from the scheme. I then take a look at the soaring price of gold, discussing the reasons behind its recent rally to all-time highs and the potential outlook. Even if you're not an investor, listen closely as it can have important implications for your home insurance. Finally, I take a look at the investment strategy of Warren Buffett, exploring how he managed to make money while other billionaires lost out during recent market turbulence and what lessons ordinary investors can learn from his approach.

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Episode 502 Podcast Summary

Help to Save Scheme Explained

Summary

In this segment, Andy explains the government's Help to Save scheme, a savings account for those receiving Working Tax Credit or Universal Credit. He details how the account works, the 50% bonus structure, the recent extension of the scheme and the crucial changes to eligibility criteria, particularly for Universal Credit recipients.

Key Insights:

• The Help to Save scheme allows eligible individuals to save between £1 and £50 per month for up to four years.
• It pays two tax-free bonuses: the first after two years (50% of the highest balance achieved) and the second after four years (50% of the additional highest balance achieved in years 3 & 4).
• The maximum total bonus achievable over four years is £1,200 on savings of £2,400.
• Eligibility for Universal Credit recipients has been broadened: the minimum earnings threshold is removed from April 2025; earning just £1 or more from work in the last assessment period is sufficient. Eligibility is locked in at the point of application.

Gold's Rally and Home Insurance Implications

Summary

In this section, I discussed the recent surge in the price of gold, which has hit new all-time highs above $3,500 per ounce before pulling back slightly. I explored the factors driving the rally, including central bank buying, weak economic outlooks prompting interest rate cut expectations, gold's haven status during uncertainty, and a falling US dollar. I also touched upon the technical analysis outlook and stressed the importance of revaluing gold jewellery for home insurance purposes.

Key Insights:

• Gold prices have risen significantly (up 44% over the last year) due to a "perfect storm" of factors including central bank buying, economic uncertainty, and its role as a haven asset.
• While the technical outlook remains bullish medium-term, gold could still be vulnerable to short-term pullbacks. Key support levels to watch are around $3,300 and $3,250.
• The rising value of gold means many people may be underinsured for jewellery items. It's crucial to get up-to-date valuations and inform your insurer.
• Check home insurance policy details, as high-value items (e.g., over £10,000) may need to be specifically named, kept in a safe, or require separate cover.

Lessons from Warren Buffett's Investment Strategy

Finally, I analysed how Warren Buffett's investment approach, particularly through Berkshire Hathaway, allowed him to profit during recent market volatility triggered by trade tariffs, while the broader market (like the S&P 500) declined. 

Key Insights:

• Buffett reduced holdings in stocks he deemed overvalued (like Apple) and increased cash reserves (US Treasury Bills) significantly throughout 2024, anticipating market froth.
• Lessons include: investment isn't "all or nothing" (you can 'drip out' or size down positions), stick to your investment process to avoid noise and FOMO, and recognise that cash can be a strategic holding, especially when earning interest.
• Buffett's focus on value investing and strong companies, including defensive sectors like consumer staples, helped cushion his portfolio during the downturn.
• Buffett's actions exemplify his famous quote: "Be fearful when others are greedy and greedy only when others are fearful."

Episode quiz 

1. What is the maximum amount an individual can save per calendar month into the Help to Save scheme?
a) £25
b) £50
c) £100
d) £200

2. How many times are bonuses paid out during the four-year lifetime of a Help to Save account?
a) Twice
b) Three times
c) Four times
d) Five times

3. As an approximate percentage, how much has gold increased in value over the last year?
a) 10%
b) 26%
c) 44%
d) 70%

4. What action did I strongly advise listeners take regarding their gold jewellery due to the price increase?
a) Sell it immediately while prices are high
b) Store it in a bank vault instead of at home
c) Buy more gold jewellery as an investment
d) Get it revalued and update your home insurance

5. What type of asset did Warren Buffett significantly increase holdings in during late 2024 and early 2025, reportedly holding over $300 billion worth?
a) Technology stocks
b) Corporate bonds
c) UK Government Gilts
d) Cash and short-term US Treasury Bills

Answers

1. b) £50
2. a) Twice
3. c) 44%
4. d) Get it revalued and update your home insurance
5. d) Cash and short-term US Treasury Bills

Resources

Links referred to in the podcast:

• Take out a free trial of 80 20 investor
• Help to save scheme extended (and eligibility rules expanded)
• Help to Save Scheme explained
• Where next for the price of silver and gold? (Ep 479)

 

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