If you’re living in the UK, there’s a good chance that John Lewis has become synonymous with Christmas for you, as their adverts have captivated audiences since they first aired in 2007.
The stories often focus on themes of love, generosity, and Christmas spirit, and in 2024, John Lewis has once again struck an emotional chord.
Indeed, this year’s advert, ‘The Gifting Hour’, tells the tale of two sisters in search of the perfect gift for the other. One of them stumbles across a magic door that allows her to relive her childhood memories, ultimately finding a deeply meaningful present for her sister.
With Richard Ashcroft’s acoustic rendition of ‘Sonnet’ as the soundtrack, it’s almost guaranteed to be a tear-jerker.
While these adverts do tug at your heartstrings and get you in the mood for giving at Christmas, some of their most memorable ones also hold some fascinating financial lessons.
So, continue reading to discover three key financial insights you can glean from John Lewis’s iconic Christmas adverts.
1. ‘Give a Little Love’ and charitable giving
John Lewis’s 2020 advert, ‘Give a Little Love’, depicts a series of interconnected vignettes created by eight different artists.
They ultimately come together to tell a story of kindness and giving, showing that even small actions can have a positive ripple effect.
You might want to consider applying this belief to your estate planning by making a charitable bequest in your will. Not only can you support a worthy cause, but it could bring Inheritance Tax (IHT) benefits for your loved ones.
In 2024/25, the nil-rate band – which is the threshold below which no IHT is due – stands at £325,000.
You can also make use of the residence nil-rate band of £175,000 provided you leave your primary residence to a direct lineal descendant, and pass on any unused allowance to your spouse or civil partner.
Altogether, this allows you to potentially leave up to £1 million of your estate to loved ones before IHT is due.
While this seems like a considerable sum, you might end up quickly reaching it when you factor in all of your assets, particularly your home.
Though, charitable donations are not considered part of your estate for IHT purposes. So, leaving part of your estate to a charity in your will could bring down its total value, reducing a potential IHT bill for your family.
Moreover, leaving at least 10% of your estate’s value to a qualifying charity could reduce the rate of Inheritance Tax (IHT) your loved ones pay from 40% to 36%.
Above all, you’ll be supporting a cause that’s important to you, perhaps one that has had a positive effect on your community in the past.
Just because you’re gone, doesn’t mean you can’t continue to make a positive impact on the world.
2. ‘Buster the Boxer’ and delayed gratification
‘Buster the Boxer’, which John Lewis released in 2016, brought smiles with its depiction of animals bouncing on a trampoline that was meant as a Christmas present for a young girl.
Her boxer, Buster, seems disheartened as he watches the other animals enjoying themselves. Though, he patiently bides his time, and eventually gets to bounce on the trampoline himself and enjoy it to the fullest.
The concept of delayed gratification, or waiting to reap greater rewards, is also applicable to investing.
While it can be tempting to chase short-term returns, taking a long-term view could be more rewarding. The old adage, “time in the market, not timing the market” exists for a reason, after all.
For instance, Nutmeg reports that if you picked a randomly chosen global stock on any day between January 1971 and July 2022, and then held onto that investment for 24 hours, you would have a 52.4% chance of positive returns.
If you extended this holding period for a year, your probability of returns would rise to 72.8%. Hold onto it for 10 years, and this would rise even further to 94.2%.
As you can see, by remaining invested and resisting the urge to react to short-term volatility, you could benefit from the market’s upward trend over time, much like Buster’s eventual enjoyment of the trampoline.
3. ‘The Bear and the Hare’ and saving for the future
In the 2013 advert, ’The Bear and the Hare’, John Lewis shared the touching story of a bear who saves throughout the year to purchase a meaningful gift for his friend, the hare.
It was such a popular advert at the time, so much so that Lily Allen’s acoustic cover of Keane’s ‘Somewhere Only We Know’ became her third number-one hit.
The bear’s dedication to saving shows the power of consistent habits. Indeed, setting aside a portion of your income regularly, even in small amounts, can grow over time thanks to the power of compounding.
An example from Nest highlights this perfectly. If two people start saving £200 each month to their pensions, including tax relief and employer contributions, for 10 years, their contributions would total £24,000.
Though, one person made their contributions between the age of 22 and 32, while the other makes theirs between 32 and 42.
If both received yearly growth of 5% (net of any charges) until the age of 60, the person who made their contributions earlier would have £125,000 saved, while the other would only have £77,000 – simply owing to the longer time they have had in the market.
This shows just how beneficial compounding growth can be.
Whether you’re saving for a specific goal, such as buying a home, or building a retirement fund, setting clear objectives could help to keep you motivated and ensure that you allocate your funds effectively.
Get in touch
If you’d like some help managing your wealth over the festive season and beyond, then we can help.
Please call 01992 500261 or fill in our online contact form to organise a meeting and we’ll be in touch.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
The Financial Conduct Authority does not regulate estate planning or will writing.
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