The £1M Blind Spot: Why the UK Financial System is Failing British Indians
From AI job displacement to the "tax wrapper" trap, it’s time to move beyond passive index funds and Western-centric advice.
TL;DR: Being a high-earning British Indian professional often means being "sandwiched" between UK tax traps and family commitments in India; all while AI threatens the very roles we've spent decades mastering. If your financial strategy is just "max out the ISA and buy index funds," you're funding Silicon Valley's growth instead of your own family’s security. Here is why we need a different playbook.
When we started Helix Research as a newsletter back in 2021, and again, when we converted that newsletter into a hedge fund mouthpiece in 2024, the British Indian Community embraced us, with open arms, gave us support, made introductions, and to date, many of our investors are British Indians.
I think it’s fair that I talk about some of the unique challenges that this community faces. This is just my observation, based on my conversations with clients. I don’t profess being an expert, or to understand the situation completely.
The British Indian Community has built extraordinary wealth across two continents. But we are served by a financial system that’s blind to our unique needs.
Many of our clients work in areas such as:
Computers/ IT
Mathematics & related fields
Business & Finance
Management
Legal
A vast majority of them have a degree, often a masters degree, and some doctorates. Their work involves a significant subject matter expertise, and experience gained over several years. Yet, most of them feel threatened by AI. And fairly so, a vast majority of AI usage in corporates, target these areas.
A question that comes up, very often in the last two years is, ‘there are aspects of my job that has been automated of late, we are doing more with less; what if I become that fodder, in this AI game, that big companies play?’
Initially, I was ‘corporatised’ (I don’t know if such a term exists, but I mean someone entrenched within the corporate world, to be blinded to everything else) to ask, how would you upskill yourself?
But then I quickly realised that the AI takes lesser time than us to upskill, or there’s just too many applicants who will upskill themselves for free.
I now ask, ‘what if it happens?’ instead. The discussion quickly shifts to emergency funds, income protection, savings, investments, alternate sources of income, property in India, business interest in India, investments back home, parents, the child’s education etc.
Stop! Let’s take a step back.
If you have these questions in mind, I highly recommend a 360 degree assessment of your finances, using our Compass tool. Here’s the link to do it yourself.
It takes about 15-20 minutes. But if you need help, just book some time with me, and I’ll help you with it. You can setup a call with me, by clicking here.
Now, most British Indians are working full time, in high paying jobs. That’s great. But, quite often, that is the only source of income, and is PAYE, meaning that they are paying the top tax rates, before they see a penny in the bank account.
I don’t think that is wrong. But can you have an alternate source of income? Yes, you can.
Yet, most British Indians would find it difficult to implement it. Not that they don’t want to, or they are not capable, but the right guidance doesn’t exist.
Do we British Indians own assets- yes. Very well. A house that’s our primary residence is often the first asset. And we pay a mortgage on it, for 15,20, 25 years. Any windfall, such as a bonus, goes towards repayment of the mortgage, so that we get more equity. ‘What if I stop working (ill health, or disability etc.) or if I move back to India? How do I manage the mortgage gap?’, ask a few clients, in my age group.
Our savings and investments are ‘tax efficient’, we claim. We use the ISA, SIPP, JISA and every tax efficient scheme that was ever announced, during our lifetime.
That’s great! The system shows you how to accummulate, but unfortunately, I haven’t come across a single client, who has knowledge of how to ‘withdraw’ from the wealth created, in a tax efficient way. Neither does the advice business do a good job in this aspect.
Some clients have over £1m in their ISAs, can’t pass it on to their children, and the only way to be tax efficient is to pass it on to their spouse. What will they do with it? How can they withdraw from it? No one tells you.
Now, you know how efficient HMRC is, with the tax wrappers. They know what you do with every penny, and they restrict how you can use it. And top of it all, except for your pension, this is money that was already taxed. Atrocious, we say!
It’s quite common for most people to invest in index funds, within these tax wrappers. Oh! I used this index fund and it gave me 20% last year, they say. Not that they picked a multibagger portfolio. I am secretly thinking, how brainwashed that is!!
The idea of passive investing through index funds, was created to fund the largest companies, continuously.
Only you think you are building wealth with it. The advice business plays the fiddle to this idea and funnels your money to the biggest corporations in the economy.
When the biggest boys can borrow at much lower rates than us, and when there are a thousand other companies that give me a better return, why am I funding Nvidia, and Microsoft, or Amazon, or the biggest UK plcs?
Amazon - they take my money for the online orders I make, plus they take my investment as well!! My god!
Ah, there are a number of desis here, who will invest in the Indian market, with an NRE account, and still choose an Indian index fund. Infosys, Reliance and TCS can get loans at rates cheaper than your best rates, remember. They don’t need your money, and they are actively giving it back (aka buybacks!).
Now, some of them plan to retire in India, and have bought a property in one of the premium communities, and have rented it out, until they move there. Now HMRC wants to tax that!!
Shall I sell it? You pay tax on the remittance (TCS, not the IT firm!) to the Indian tax authorities, and then pay HMRC. Now, that’s tax efficiency for you.
Retiring in India means a frozen State Pension, some clients say. Not that I care that much, but it does hurt, they say.
Plus the currency swings are crazy, some of them say.
‘Why is my property in India, subject to inheritance tax?’, ask a few clients.
Many of them, in my age group, and first generation immigrants themselves, ask very frequently, ‘We are like a sandwich, spread thin like peanut butter working jobs and running around, with commitments towards the child’s education (and that cost is not under my control), plus aging parents in India who require medical attention, care expenses, hospitalisation etc.’
When my dad was ill back in 2018, I rushed to be by his side, but despite all the insurance and whatever, I ended up exhausting all my emergency cash by the time he died. Then came the last rites, and the first year ritual.
Then came two more deaths in the family…
Listen, I don’t have the solution to all of your problems, but being in touch with so many of you, means that I understand, and I can refer you to professionals who know how to deal with these problems.
If, after dealing with these questions, you have money sitting outside the tax wrappers, and want a mechanism to preserve the capital, and get a good return on your investment, just reply to this email, and I can send you our factsheet.
P.S. I originally wanted to share this via video, but a stubborn cough had other plans. I’m glad it did—this story deserved the space that only the written word can provide.