A valid option, worth considering
In addition to your own pension contribution allowances, people often don’t realise that they can also put money into someone else’s savings. If the recipient is a non-taxpayer, as most children are, they are still entitled to tax relief on any contributions made. Pension rules allow anyone to pay contributions on behalf of a child, so other family members such as grandparents can get in on the act too.

HMRC data indicates over 60,000 families have opened pension plans for their children. As personal pensions come with no minimum age restriction, many people opt to open one when their child is born.

Know the numbers
Current pension rules allow you to put up to £2,880 a tax year into a pension for a child. Tax relief of 20% means that this is then topped up to £3,600. No further Income Tax or Capital Gains Tax will be payable on the investments held in the personal pension, until your child starts taking benefits, (which currently cannot be before age 55). If you start pension contributions once a child is born and used the full allowance, the contributions would cost just under £52,000 over 18 years, and this, under current rules would be topped up by around £13,000 in tax relief.

Assuming growth in investments over the period, when the child reaches age 55 currently, they would have a sizable pension pot to draw upon, the spending power of which will of course depend on the passage of inflation over the intervening years.

Getting the balance right
Aside from retirement provision, you also need to consider providing financial assistance for more pressing priorities, such as university fees or money for a house deposit, or a wedding perhaps. Any pension savings won’t be available to help children with these financial priorities earlier in their adult lives. So, ideally a pension for your child should be regarded as part of a wider plan, rather than the only investment embarked upon.

Start a pension for your child today
With the full State Pension currently £168.60 a week, this is certainly not enough on its own to provide a comfortable retirement, so why not set the wheels in motion to provide a retirement windfall for your child? It’s also a great way to introduce your child to the concept of long-term saving. Families thinking about how to save and invest most efficiently during 2020 shouldn’t overlook pensions for children. Even if the full allowance isn’t contributed, any money saved could still provide a valuable nest egg at retirement.

KET TAKEAWAYS - Taking a closer look at children’s pensions

• You can open a pension for each of your children
• You can put up to £2,880 a tax year into a pension for your child
• Tax relief (20%) means that this is then topped up to £3,600
• Other relatives can also contribute
• When your child reaches age 18, they become the owner of the pension
• At 18 they can continue to contribute or leave the savings invested
• They can access the savings from age 55 (under current rules)
• So, you are investing for your child’s long-term future
• Investments in a pension are free from UK Income and Capital Gains Taxes
• Contributions into a child's pension has no impact on your tax status
• Gifts to a child’s pension are often covered by one of the Inheritance Tax exemptions and so could fall outside your estate for Inheritance Tax purposes.
• The sooner you start putting money into a pension the more your contributions add up
• Even modest amounts add up over time

If you would like to know more about investing for children, please get in touch.

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

Since the introduction of automatic enrolment, over 10 million eligible employees have been signed up to a workplace pension scheme. But for self-employed people, no such scheme exists, meaning that many of those who work for themselves are struggling to prioritise their pension.

While there are many benefits to being your own boss, including the flexibility to work your preferred hours, better work-life balance and tax-deductible expenses, pension provision is unfortunately not among them. The Pensions and Lifetime Savings Association (PLSA) estimates that a single person could need around £33,000 per year to maintain a comfortable standard of living in retirement, so it’s advisable to start saving as soon as you can.

Concerns about later life
While 74% of the UK’s self-employed workforce believe it’s important to save for retirement, according to recent data, just 24% are actively contributing to a pension. Reasons for not contributing include; a low or variable income often associated with self-employed work, exclusion from auto enrolment and a perceived lack of flexibility compared to more liquid investments.

Don’t rely solely on the State Pension
The full State Pension is currently £168.60 per week, or just over £8,750 per year – not an amount that many could live on while maintaining the living standards they’re used to. The amount you receive also depends on your National Insurance contributions – you need to have 30 qualifying years to receive the full amount.

You can check your National Insurance contributions record at www.gov.uk/check-national-insurance-record

Sooner rather than later
The sooner you start saving into a pension, the longer your money has to grow, to benefit from added tax relief and the compounding effect of investment returns. Delaying, even by a few years, means you need to contribute a higher percentage of your income to achieve a comfortable retirement. Analysis shows that the cost of delaying pension contributions by 10 years, from age 25 to age 35, could result in your required pension contribution almost doubling.

Tax advantages
Paying into a pension gives you access to valuable tax breaks; you’ll currently get tax relief on contributions into a pension up to the value of £40,000 per tax year. If you’re a basic-rate taxpayer, you’ll get an extra £25 for every £100 you pay in and if you’re a higher-rate taxpayer, you can claim additional relief through your tax return.

What type of pension is best?
Flexibility and control over contributions is likely to be a priority for self-employed people. You may prefer to pay a smaller regular amount rather than a daunting lump sum. And don’t forget, if you have an existing pension, it may be possible to reactivate this.

We have expert knowledge of the range of pension options available for self-employed people, whether that is personal pensions, stakeholder pensions or self-invested personal pensions (SIPPs).

KEY TAKEAWAYS - Taking a closer look at your options

• 74% of self-employed workers believe saving for retirement is important
• Just 24% of self-employed workers are actively contributing to a pension
• Picture your future – a single person could need £33,000 a year for a comfortable retirement
• Automatic enrolment doesn’t benefit the self-employed
• Check your National Insurance record, but don’t rely solely on the State Pension
• Delays cost – it pays to start sooner rather than later
• Paying into a pension has valuable tax breaks
• Flexibility and control are important for self-employed
• Could an old pension be reactivated?

Talk to us
If you’re self-employed and need advice about your pension planning, please get in touch to discuss your options. We’re here to help.

The value of your pension investments can go down as well as up, so you could get back less than you invested

In July, Omnis Investments appointed Jupiter Asset Management (Ben Whitmore supported by Richard Curling) to run the Omnis Income & Growth Fund.

Ben is one of Jupiter’s leading UK fund managers. Omnis specifically sought him to take over this Fund because of his excellent long-term track record in value investing - a style that Omnis wanted to retain within the range - and his skills in identifying opportunities among larger companies. Jupiter also appointed Richard, a specialist in smaller companies, to the Fund. His role is to carefully migrate assets out of smaller company investments as opportunities to do this arise and shift the Fund’s focus to larger companies. The intention is that, over time, Ben becomes the sole fund manager of the Income & Growth Fund.

In the first six months under Jupiter’s stewardship, performance has started to show signs of recovery (although it is still too soon to assess the Fund as a long-term investment). The allocation managed by Ben; mostly his additions to the portfolio with a few legacy holdings that he chose to retain, has added the greatest value.

Overall the Fund has underperformed against its benchmark (FTSE All Share Total Return) which is due to the poor, relative performance of the legacy smaller company holdings. However, Jupiter has made significant progress in refocussing the portfolio towards larger companies and this transition will continue over the coming months. It has relatively little exposure to smaller companies now, so their impact going forward should be reduced.

There have also been some encouraging stock stories from within the Fund’s portfolio of investments. Capita, a retained holding, has rallied more than 50% since the transition after recovering from difficulties it was facing over the summer. Vodafone, one of Ben’s additions and a top ten holding, appeared undervalued because it may have to cut its dividend, but has risen nearly 20%. Volkswagen, added by Ben as Omnis gave him the freedom to invest in a limited number of overseas stocks, has seen sales pick up and could benefit from spinning off Lamborghini.

Overall, Omnis are optimistic about the change they are seeing under the Fund’s new stewardship. Omnis believe that this transition to Jupiter and the appointment of Ben Whitmore, highlights one of the key benefits of investing with Omnis - Flexibility. Omnis manage their own funds, allowing us to make decisions in relation to the selection of fund managers as they see fit, where they believe that this is in the best interests of investors. With Omnis, you can always be sure that your investment is in safe hands.

If you have any questions about this fund manager change, or want more information on investments available through Omnis, please contact us.

This update reflects Omnis’ view at the time of writing and is subject to change.

The document is for informational purposes only and is not investment advice. Omnis is unable to provide investment advice. Every effort is made to ensure the accuracy of the information but no assurance or warranties are given.

The value of investments and any income from them can go down as well as up and you may not get back the original amount invested. Past performance is not a guide to future performance and should not be relied upon. Always seek professional advice before acting.

Figure 1: The Vix index: Wall Street’s fear gauge

Source: Bloomberg

While the coronavirus poses obvious healthcare threats, the threat to investors might be less clear. In short, efforts to limit the spread of the virus – particularly in China – have caused factories to shut their doors and encouraged consumers to stay at home. This has disrupted global supply chains, leading to a shortage of some key components, and undermined retail sales. Against this backdrop, companies have begun to reduce their profit forecasts for the first quarter of the year. The impact has been most pronounced among airlines, cruise ship operators and commodity (e.g. oil and precious metal) producers. However, as illustrated by Mastercard’s recent profit warning, a wide range of companies are likely to be affected.

So, should we be joining the panic and selling shares where possible? The answer is complicated by the fact that no-one knows exactly how great the pandemic threat really is. While we take some comfort from the response – both in medical and investment terms – to previous outbreaks such as SARS and African Swine Flu, there is little way of knowing how relevant these episodes are to the current situation. Nonetheless, we can argue that, historically, selling shares at this stage would lock in losses and forego future gains.

Though some questions remain over the strength of future company profits, we believe that in most scenarios the impact of the virus should prove temporary. Once contained, manufacturing activity should recover while consumers may well make up for the purchases they have recently deferred. Furthermore, to our minds, valuations are all important. The recent sell-off has left the majority of global stock markets at valuation levels we consider reasonable, even against a more uncertain outlook for profits. In short, we are more likely to consider yesterday’s sell-off as an opportunity to top-up share holdings in OMPS portfolios rather than to cut them.

As ever, we will continue to monitor developments closely. Heeding the words of the seminal economist John Maynard Keynes, we must stand ready to change our minds if presented with a change in the facts. For now, however, we believe history, valuations and the economic outlook argue investors will be best served by maintaining their share holdings.

Concerns about the impact of the coronavirus on global economic growth have weighed on demand for oil. Over the weekend, talks took place between the Organization of the Petroleum Exporting Countries (OPEC) and other producers about cutting output to support oil prices, but they failed to come to an agreement. In response, Saudi Arabia, OPEC’s de facto leader, said it would raise production and lower prices in an effort to preserve its market share and win over new customers from rivals.

When the commodity markets opened on Sunday evening, oil prices plunged. Investors reacted on Monday morning by moving money out of riskier assets such as shares and into what are traditionally considered ‘safe haven’ assets like government bonds which fluctuate less in price during periods of turbulence. The FTSE 100 opened 8% lower, but recovered some of those losses in early trading.

The coronavirus outbreak has rattled markets. In China, where it originated, the authorities appear to have contained the virus, but it continues to spread internationally with new cases reported in most countries around the world. Italy has been hit particularly hard, with much of the northern part of the country now under lockdown.

Central banks have taken steps to limit the impact of the virus on the global economy. At its meeting last week, the Federal Reserve, the US central bank, cut interest rates by 0.5%. The Bank of England looks set to follow suit at its next meeting on 26 March, if not before, and the Chancellor of the Exchequer is expected to include various measures to help businesses when he announces the budget on Wednesday. Meanwhile, the International Monetary Fund has pledged US$50 billion to support developing countries struggling with the virus.

While the current turbulence may cause you some concern, try to avoid any knee jerk reactions. It’s important to remember to look on your portfolio as a long-term investment, with most portfolios designed to deliver returns over a period of at least five years. Although coronavirus may hinder the markets in the short term, we do not expect the effects to be long lasting.

Diversification, the spread of investments across different asset classes and regions, can also help. While bond holdings may not completely offset the losses caused by shares, they should offer a degree of protection as the market fluctuates.

If you have any questions about the impact of the coronavirus on your portfolio, please don’t hesitate to contact me.

This update reflects our view at the time of writing and is subject to change.

COVID-19 and the NHS
The Chancellor wasted no time in diving into the heart of the issue on the minds of so many across the nation: the COVID-19 crisis. Taking an empathetic tone, he reassured the British public that “we will get through this together”, emphasising the temporary nature of the crisis and his firm belief in the ability of the British economy to weather the storm.

Mr Sunak then called on all parties across the House to support his £30bn fiscal stimulus, including welfare and business support, to “keep this country and our people healthy and financially secure”.

He pledged:

• £5bn emergency response fund to support the NHS and other public services
• Statutory Sick Pay (SSP) will be paid to all those advised to self-isolate even if they don’t have symptoms
• To support businesses employing fewer than 250, the government would refund up to 14 days’ SSP
• A Coronavirus Business Interruption Loan Scheme will support businesses experiencing increased costs or cashflow disruptions, providing access to £1bn of government-backed loans
• Business rates in England will be suspended for 2020-21 for firms in the retail, leisure and hospitality sectors with a rateable value below £51,000
• Any company eligible for small business rates relief will be allowed a £3,000 cash grant.

Mr Sunak promised an extra £6bn in NHS funding over the course of this Parliament, which would go towards hiring 50,000 more nurses and building 40 new hospitals.

The economy and business
On the morning of Budget day, the Bank of England (BoE) had announced an emergency cut in interest rates to bolster the economy amid the COVID-19 outbreak. BoE base rate was reduced from 0.75% to 0.25%, returning it to its lowest level in history. The BoE said it would also free up billions of pounds of extra lending to help banks support firms. Mark Carney, the Governor of the BoE, was keen to emphasise that COVID-19 was a temporary economic shock, stating: “The Bank of England’s role is to help UK businesses and households manage through an economic shock that could prove sharp and large, but should be temporary.”

Mr Sunak also revealed that, not taking into account the impact of COVID-19, the British economy is forecast to grow 1.1% this year, then 1.8% in 2021-22, 1.5% in 2022-23 and 1.3% in 2023-24, while inflation is forecast to be 1.4% this year, increasing to 1.8% in 2021-2022. Borrowing as a percentage of GDP will be 2.1% this year, rising to 2.4% in 2020-21 and 2.8% in 2021-22.

Personal taxation and wages
The Conservative manifesto promised that during the course of this five-year Parliament, there will be no rise in the rates of Income Tax, VAT or National Insurance. From April, the Personal Allowance will be frozen at £12,500 before we start paying 20% Income Tax. Also frozen is the £50,000 threshold at which people start to pay the higher 40% rate of Income Tax. (Rates and thresholds may differ for taxpayers in parts of the UK where Income Tax is devolved.) The National Insurance threshold will rise to £9,500 from April, saving some 30 million workers around £100 a year.

As previously pledged, the new single-tier State Pension will increase from £168.60 a week to £175.20 in April. For pensioners receiving the older basic State Pension, this will increase from £129.20 to £134.25 per week (3.9% increase). The rise is the result of the triple-lock system, which means that the State Pension rises in line with inflation, earnings or 2.5%, whichever is the highest. The Conservatives have vowed to keep this in place for this term of Parliament.

Looking at Inheritance Tax (IHT), the main residence nil rate band willincrease from £150,000 to £175,000 in 2020-21, as previously scheduled.

To support the delivery of public services, particularly in the NHS, the two tapered Annual Allowance thresholds for pensions will each be raised by £90,000. So, from 2020-21 the threshold income will be £200,000, meaning individuals with income below this will not be affected by the tapered Annual Allowance and the Annual Allowance will only begin to taper down for individuals who also have an adjusted income above £240,000.

For very high earners the minimum level to which the Annual Allowance can taper down will reduce from £10,000 to £4,000 from April 2020. This reduction will only affect individuals with total income over £300,000.

The 2020-21 tax year ISA (Individual Savings Account) allowance will remain at £20,000.

The JISA (Junior Individual Savings Account) allowance and Child Trust Fund annual subscription limit will be significantly increased from £4,368 to £9,000 in 2020-21.

The Lifetime Allowance for pensions will increase in line with the Consumer Prices Index (CPI) for 2020-21, rising to £1,073,100.

From 11 March the lifetime limit on gains eligible for Entrepreneurs’ Relief is reduced from £10m to £1m, in response to evidence that the costly concession has not been a major incentive to entrepreneurial activity.

Infrastructure and the environment
Mr Sunak announced a huge £600bn package, claimed to be the biggest investment in transport and infrastructure since 1955. Outlining the proposed spending on roads, rail including HS2, gigabit-capable broadband and housing by mid-2025, he said, in short: “if the country needs it, we will build it.” The package includes:

• £2.5bn available to fix potholes and resurface roads over five years
• £27bn to build or improve motorways and other arterial roads 
• Up to £510 million in shared rural network to improve 4G coverage
• Allocation of £1bn from the Transforming Cities Fund
• Flooding - £5.2bn over five years investment programme for flood defences and £120m in emergency relief for communities affected, £200m for flood resilience.

Environmental measures announced include:

• Nature for Climate Fund – investing £640m in tree planting and peatland restoration
• New plastic packaging tax from April 2022
• Fuel subsidies for red diesel users will be abolished in two years, apart from agriculture, rail, fishing and domestic heating sectors.

Other key points

• Priority to ensure people have affordable and safe housing – extending the affordable homes programme with £12.2bn funding
• Supporting local authorities to invest in their communities by cutting interest rates on lending for social housing by 1%
• £1.1bn allocation from the Housing Infrastructure Fund to build 70,000 new homes in high-demand areas
• From April 2020, minimum wages will rise; for example, the National Living Wage for those aged 25 and above, will increase 6.2% to £8.72 per hour, and to a projected £10.50 by 2024
• The 5% VAT on sanitary products will be abolished from 2021
• Corporation Tax will remain at 19%
• Fuel duty frozen for tenth consecutive year
• Duties on all spirits, beer and wine frozen
• The government will introduce a 2% Stamp Duty Land Tax surcharge on non-UK residents purchasing residential property in England and Northern Ireland from 1 April 2021
• R&D investment of £22bn a year by 2024-25.

Closing comments
The Chancellor signed off his first Budget with these words: “We’re at the beginning of a new era in this country. We have the freedom and the resources to decide our own future. A future where we unleash the energy, inventiveness and creativity of all the British people. And a future where we look outwards and are confident on the world stage. That starts right now with our world-leading response to the coronavirus. This is a Budget delivered in challenging times. We will rise to this moment. We will get through this together.”

The rise is the result of the triple-lock system, which means that the State Pension rises in line with inflation, earnings or 2.5%, whichever is the highest.

Private pensions
To support the delivery of public services, particularly in the NHS, the two tapered Annual Allowance thresholds for pensions will each be raised by £90,000. So, from 2020-21 the threshold income will be £200,000, meaning individuals with income below this will not be affected by the tapered Annual Allowance. The Annual Allowance will only begin to taper down for individuals who have an adjusted income above £240,000 (the £200,000 allowance plus the £40,000 you can save into your pension). For every £2 of adjusted income over £200,000, the annual allowance will reduce by £1.

For individuals with income over £300,000 the minimum level to which the Annual Allowance can taper down will reduce from £10,000 to £4,000 from April 2020.

The Lifetime Allowance for pensions will increase in line with the Consumer Prices Index (CPI) for 2020-21, rising to £1,073,100.

Annual allowance charge on excess is at applicable tax rate(s) on earnings
Lifetime allowance charge if excess if drawn as cash 55%; as income 25%
Pension commencement lump sum up to 25% of pension benefit value

If you would like to know more about how pension allowances may impact your retirement planning please get in touch.

HM Revenue and customs practice and the law relating to taxation are complex and subject to individual circumstances and changes that cannot be foreseen.

Lessons from history
Over recent years many investors have become used to a variety of political, financial and economic factors impacting markets, from the Brexit Referendum and subsequent prolonged uncertainty, to the global financial crisis and even further back to the dotcom bust in the early noughties. Although markets do not respond well to periods of uncertainty, fluctuations go hand in hand with stock market investment; and while market movements can be concerning, experience has taught us to expect the unexpected.

It is important to remember that some market turbulence is inevitable; markets will always move up and down. As an investor, putting any short-term fluctuations into historical context is useful. Investors with diversified portfolios, who stay in the market, have typically been rewarded over time.

Plan and focus, be strategic
Instead of being too worried by turbulence, the best strategy is to be prepared. It is best to stick to your well-defined plan and diversify your holdings, as well as expecting and accepting market movements. Your plan will be tailored to your objectives, in line with your attitude to risk and will take into account your financial situation, which will stand you in good stead to weather short-term market fluctuations.

In it for the long haul
Even though it can be difficult to ignore daily market movements, it is vital to focus on the long term, and remember that turbulence also presents investment opportunities. Investment requires a disciplined approach and a degree of holding your nerve if markets descend. Investment professionals know that markets can fluctuate and will inevitably go down as well as up from time to time. The worst investment strategy you can adopt is to jump in and out of the stock market, panic when prices fall and sell investments at the bottom of the market.

Keep calm and carry on
On the day of the Budget, the outgoing Chairman of the Bank of England, Mark Carney and the Chancellor, Rishi Sunak, were keen to highlight the temporary nature of the downturn, that is worth bearing in mind. Both the BoE and the Chancellor have taken steps to support the UK economy, which should also help to calm the markets. The BoE has cut interest rates on two occasions and expanded its bond buying programme, known as quantitative easing. Meanwhile, Mr Sunak announced a package of emergency measures for UK businesses worth £350 billion.

As Rudyard Kipling wrote, it is important to “keep your head when all about you are losing theirs” – a clear head will certainly stand you in good stead through these challenging times.

Market turbulence is a timely reminder to keep your investments under regular review – that is what we do best. Please rest assured we are working hard to manage the fluctuations, so your money has the best chance of growing for the future.

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.

TAKEAWAYS 

• Global stock markets are suffering a period of turbulence as a result of the COVID-19 outbreak
• When markets move significantly it can prove very challenging to hear through the noise and focus on the bigger picture
• Although markets do not respond well to periods of uncertainty, turbulence is part and parcel of stock market investment
• Investors with diversified portfolios, who stay in the market, are typically rewarded over time
• To navigate market turbulence, it is best to stick to your well-defined plan, diversify your holdings, and expect and accept market movements
• The worst investment strategy you can adopt is to jump in and out of the stock market, panic when prices fall and sell investments at the bottom of the market
• A clear head will certainly stand you in good stead through these challenging times
• Market turbulence is a timely reminder to keep your investments under regular review – that is our job
• Please rest assured we are working hard to manage the inherent fluctuations of markets, so your savings have the best chance of growing for the future.
• Stock market turbulence presents challenges - although markets do not respond well to uncertainty, fluctuations are part and parcel of stock market investing and we are experienced in dealing with it.

All major governments have responded to the challenge with fiscal and financial stimulus for businesses and individuals alike.

*close is 19 March 2020 due to time difference

£ Sterling has also suffered during these difficult times and closed on 20 March at 1.16 US Dollars.  This was 9.2% lower than the figure at the end of February. 

It was a similar story against the Euro, £ Sterling closed on 20 March at 1.09 Euros, which was 6.4% lower than the February closing figure.

Inflation, as measured by the Consumer Prices Index including owner occupiers’ housing costs (CPIH), will be reported on 25 March.  It was 1.8% in January 2020 (this is January’s data which is reported in February).  This was 0.4% higher than the previous month.  The 12-month rate for the Consumer Prices Index (CPI) rate which excludes owner occupied housing costs and council tax was 1.8% in January, up from 1.3% in December.

In moves reported to help to bolster cash flow for households and small businesses affected by the coronavirus, the Bank of England has cut interest rates twice during March.  The first cut to 0.25% was on 13 March followed by a further cut to 0.1% on 19 March.  The previous change was an increase to 0.75% in August 2018.

The Omnis Managed funds, Openwork Graphene Model Portfolios and Omnis Managed Portfolio Service provide you with a diversified asset allocation in line with your Attitude to Risk, investing in Developed Market Equities, such as UK, US, Europe and Asia Pacific as well as Emerging Market equities.  Cautious and Balanced investors will also have significant holdings in UK and Global Bonds, as well as Alternative Strategies.

We believe this multi-asset approach aims to minimise global equity market falls in volatile periods.

Past performance is not a guide to future performance.  The value of an investment and any income from it can fall as well as rise as a result of market and currency fluctuations.  You may not get back the amount you originally invested.

Markets: Shares fluctuate despite government and central bank measures

• Global shares fell sharply at the start of the week after governments introduced stricter rules to contain the spread of the coronavirus;
• Further support from governments and central banks helped stock markets recover slightly on Tuesday, but they dropped again on Wednesday as concerns about the impact of the virus on the global economy returned;
• Those concerns also weighed on government bonds- usually considered a safe have asset in times of market turbulence as governments tend not to default- which fell on Wednesday.
• Omnis view: The extensive measures announced by authorities appeared to have offered some support to the markets by the end of the week. However, US shares subsequently tumbled on Friday as New York and California brought in new social distancing rules. The markets are likely to continue fluctuating until governments manage to contain the virus and the impact on the global economy becomes clear.

Central banks: Efforts ramped up to support global economy

• The Bank of England cut interest rates for a second time in a week to the lowest level ever and pledged to expand its bond buying programme- known as quantitative easing (QE)- to bonds issued by large companies;
• The Federal Reserve- the US central bank- also said it would buy corporate bonds and took other measures to ensure money continues to flow through the financial system;
• The European Central Bank announced it would significantly increase its programme of QE and do whatever it takes to support the euro;
• Omnis view: With interest rates at historic lows, central banks are employing a wider range of tools to limit the impact of the coronavirus on the global economy in the short run. These measures should also accelerate the recovery over the longer term.

UK: Chancellor launches further round of measures

• The Chancellor Rishi Sunak announced a package of emergency measures to support the British economy, including loan guarantees worth over £300 billion and a pledge to cover 80% of employee wages for three months;
• Meanwhile, the pound weakened to its lowest level against the US dollar since the 1980s, although the fall was partly explained by increasing demand for dollars which are another ‘safe haven’ in periods of market turmoil, especially for companies.
• Omnis view: While the latest measures should ease immediate concerns, their ultimate success will depend on whether they manage to protect jobs and avoid bankruptcies.

China: Evidence of the economic impact of coronavirus starts to emerge

• Figures published by China’s National Bureau of Statistics showed that industrial activity fell dramatically in January and February, and unemployment rose sharply in February.
• Omnis view: These figures are the first indication of the effect of the coronavirus on the Chinese economy. Whether other countries experience a similar economic slowdown remains to be seen, although the steps taken by governments and central banks (outlined above) are designed to minimise the impact.

Commodities: Oil prices continues to fall

• The coronavirus and the subsequent price war between the Organization of the Petroleum Exporting Countries (OPEC) and its partners continued to weigh on oil prices which hit their lowest point in 17 years.
• Omnis view: Talks between OPEC and US producers about cutting output could help ease the pressure on the oil markets.

LOOKING AHEAD - TALKING POINTS

Economic data

• Wednesday- UK inflation rate in February.

Monetary policy

• Thursday- Bank of England’s latest meeting.

This update reflects Omnis’ view at the time of writing and is subject to change.

The document is for informational purposes only and is not investment advice. We recommend you discuss any investment decisions with your Openwork financial adviser. Omnis is unable to provide investment advice. Every effort is made to ensure the accuracy of the information but no assurance or warranties are given.

In this difficult time, we hope that you and your family are all well and managing through this
extraordinary and tough period. The Openwork Investment Committee met yesterday (Tuesday 24
March) and we would like to reassure you that while your investment values are likely to have fallen
in the short-term, we are confident that all processes are being followed correctly.

We discussed all the following investments, some of which you may hold:

 Omnis Funds
 Openwork Graphene Model Portfolios
 Omnis Managed Portfolio Service
 Openwork Portfolio of Funds
 Openwork Recommended Funds
 Prudential PruFund
 VCT and EIS Products

There are a number of points that we wanted to highlight to you.

Stay Invested

As you have seen, global equity markets fall and the value of your own investments fall as well. It is
natural that some of you will be thinking whether you should sell your investments and move to
cash or some other “safe haven”. Our strong message to you is stay invested. Focus on the
investment objective that you set with your Financial Adviser at the outset and trust the process.

History shows that as night follows day, global equity market recoveries follow global equity market
falls and it is damaging to miss out on the recovery days. The following chart shows the performance
of the FTSE All Share between 30 September 1998 and 28 February 2020 and the impact if you
missed the 10 best days. The cost of missing these 10 best days would have been nearly 3% a year
(Source: Omnis Investments).

We even saw this yesterday when the FTSE 100 Index had its second best day ever rising by 9.1%. It
was similar in the United States where the Dow Jones 30 rose by 11.4%. If you had moved to cash
24 hours earlier, you would have missed out on these gains.

Understand Your Attitude to Risk

We know that you will have discussed your Attitude to Risk and your capacity for loss
comprehensively with your Financial Adviser. We are delighted that this process appears to have
really worked during this extremely short-term volatile period.

If you are a Cautious investor, you have been protected from the extreme falls of global equity
markets. In fact, if you are invested in the Openwork Graphene C1 Cautious Model Portfolio, your
investment will have fallen by less than 1% over the last 12 months, compared to the FTSE 100 which
has fallen by over 20% (Source: FE Analytics)

Prudential PruFunds

We are aware that the Prudential PruFunds have seen downward unit price adjustments in the last
week to 10 days. Again, there is nothing untoward here and this is simply the consequence of how
the product/funds work. We note that the Expected Growth Rates have remained unchanged and
fully expect upwards unit price adjustments when global equity markets recover.

Property Funds

A number of property funds have suspended dealing as a result of the consequences of us all being
based and, for many, working from home. We have always been very specific about the issues with
liquidity with property funds and this is why they are not included in our portfolios. Furthermore,
we have only ever recommended that you have a maximum of 15% of your investment in property
funds to protect you in times like this.

VCT and EIS Products

Although high risk and not suitable for everybody, we know this is traditionally a very busy time for
VCT and EIS products, giving you the chance to get tax relief on your investment in exchange for
investing in smaller, high risk companies. We have a panel of products still available for you and your
Financial Adviser and expect some of these to remain open into the new tax year.

We understand it is an unprecedented time for all of us. Some of you may be home-working for the
first time as well as having to home-school your children. For others, you have had to cancel your
Easter holidays and are not able to leave your home.

In such times, it is important to know that your hard-earned pension savings and other investments
are being looked after. We cannot stop short-term market falls but we can reassure you that your
money is being monitored closely. We fully expect global equity markets to recover. We cannot
predict timescales but if you do not need your money now, we believe you will be rewarded for
staying invested.

We will update you again after our next meeting and in the meantime, please look after yourselves
and stay safe.

Thank you.
Mike Morrow, Paul Mitchener and Jon Baillie
Openwork Investment Committee

The value of investments and any income from them can fall as well as rise and you may not get
back the original amount invested. Past performance is not a reliable indicator of future
performance and should not be relied upon

We continue to see significant volatility in global equity markets with large daily falls and gains seemingly now the norm. With this in mind, it is really important that you think twice before taking any action over your pensions and investments.

As expected, major European markets, including the FTSE 100 index, followed the US markets the previous evening and fell by about 4% yesterday (1 April 2020). This followed a period where they had risen in five out of the previous six days.

The US markets fell for the second successive day, also by about 4%, on concerns about the number and trajectory of US coronavirus cases.

Whatever you are invested in, we’d like to remind you about the following key principles.

1. Stay invested – as you have seen global equity markets fall and the value of your own investments fall as well, it is natural that some of you will be thinking whether you should sell your investments and move to cash or some other “safe haven”. Our strong message to you is stay invested, focus on the investment objective that you set with your Financial Adviser at outset and trust the process. History shows that as night follows day, global equity market recoveries follow global equity market falls and it is damaging to miss out on the recovery days. The following chart shows the performance of the FTSE All Share between 30 September 1998 and 31 March 2020 and the impact if you missed the 10 best days. The cost of missing these 10 best days would have been over 3% a year (Source: Omnis Investments).

Two weeks feels like a long time in markets still searching for answers about the social and economic impact of the coronavirus pandemic. On 23rd March we wrote a note entitled “There is a Path out of this”. We said Italy and other nations would be close to a peak in new case rates and this has proven to be true, even if the rate of decline has been slower than we expected. We also said this would afford markets the opportunity to rally and almost from that point stock markets have risen sharply. The key question is what happens next?

The good news is curtailing social interaction in so many countries simultaneously is having an impact on the spread of the virus, but the bad news is that it is also slowing economic activity. Over the short term, the price being paid in economic terms is eye-watering (without forgetting the human cost). Nearly 10 million Americans made a new claim for jobless benefits in the last two weeks, and the story is similar across most of the countries that have introduced some form of lockdown.

In this environment of little or no economic activity, some companies will fail, but many of those were already weak. Others will need to raise money to get them through this period, either by issuing bonds, taking advantage of existing lending facilities offered by banks or selling new shares. Dividends (payment made to shareholders out of company profits) are being cancelled to preserve cash, companies have stopped buying their own shares (which they tend to do when shares look cheap) and profits this year are rapidly declining in many sectors. However, at some point, the short-term disruption will lead to companies merging or purchasing competitors. Put simply, some companies will get too cheap and other businesses will opportunistically buy them. This should support share prices.

In markets there are always winners and losers, and the legacy of this episode will speed changes which were already going to happen. In retail, for example, even before the crisis, many businesses were suffering from the impact of online competition from the likes of Amazon, and the virus will only speed up the demise of a number household names. This can be contrasted with the extraordinary profits being earnt by food businesses such as Sainsbury’s and Tesco as they strive to keep up with the appetite of a captive audience of consumers. Airline and travel companies are obvious losers in this situation, and we think the impacts here will be far longer lasting than in other parts of the economy. Technology businesses in general will benefit as companies seek ways to improve productivity by replacing unreliable humans. The virus will cause changes in the workplace too. More people will work from home even after the movement restrictions end. There are obvious opportunities for cleaning companies, while those linked to health and wellbeing will receive a permanent boost.

Markets have rallied as new case rates started to peak in Europe, but we are far from out of the woods and the human toll will continue to rise for some time, albeit at a reducing rate. The support provided by central banks has stabilised the financial system, with measures easily surpassing the initial reaction to the global financial crisis of 2008. In the US alone, the Federal Reserve (the US central bank) is conducting as much quantitative easing (its bond-buying programme) every ten days as it undertook in 15 months between December 2008 and March 2010.

Government support has been targeted at preserving productive capacity. It probably will not be effective for everybody, but more should be on its way. Infrastructure projects, such as roads, other transport links and digital technology, seem likely areas of spending as the world tries to get back to normal. In the last few days, there have been reports of a possible $1.5 trillion package of measures in the US, and although the European Union is yet to agree a deal, the pressure is rising for some form of coordinated response. Also, the Bank of England recently announced it will directly fund some of the UK government’s extra spending. This “short-term” tactic, which effectively involves printing money to fund government spending, has been used before, but we expect it to be on a much bigger scale on this occasion. All these measures should accelerate the economic recovery.

As this crisis unfolds, there will be periods of bad news and good news. Relief that we could soon see an end to the widespread shutdown has been reflected in the markets, but in the weeks before that becomes a reality, investors will have to endure bad economic and corporate news. There is also the possibility that as people begin to move around and return to work, infection rates will pick up again. The experience of China shows the return to work is not necessarily automatic. While it is hard to estimate, China’s productivity is probably back to 75-85% of its capacity, but not to the same extent across all regions or sectors (as the charts below illustrate). Do not expect China to totally return to normal until the world recovers.

You would want to be covered in the unlikely event that you were to die from COVID-19.

The cost of life insurance rises as you get older, so retaining your existing policy will help ensure you benefit from, in most cases, a lower monthly premium than you would get if you started a new policy.

If you have developed a medical condition or your health has deteriorated since taking out your policy, you may find getting another policy could cost significantly more or you could even be denied cover.

Many policies include extra benefits, such as remote access to GPs, second medical opinion services and other expert support services to help with physical and mental wellbeing. These could be invaluable over the coming months.

Critical Illness: Whilst it’s the impact of Coronavirus that the population is worrying about, every day people are still being diagnosed with cancer and suffering from strokes and heart attacks. These haven’t gone away and the impacts on people’s lives can be devastating healthwise and financially. Critical and serious illness policies are designed to help you and your loved ones cope if you were to be diagnosed with a critical illness.

Given that one in two of the population are expected to suffer from cancer during their lifetime, critical illness provides invaluable peace of mind.

All Critical Illness policies are medically underwritten and whilst in many cases this will be undertaken through online medical underwriting, it may require the insurer to access records from your GP or for you to undergo medical examinations. Taking out a new plan would involve going through medical underwriting again.

If you have developed a medical condition or your health has deteriorated since taking out your policy, you may find getting another policy could cost significantly more, you could have medical exclusions added to your policy or you could even be denied cover.

As with life insurance, the cost of Critical Illness rises with age, so you are likely to find the cost of a new policy higher than the one you have.

Income Protection: An income protection policy is put into place to provide an income if the policy holder is unable to work due to an accident or ill-health. Policies include a deferred period, before a claim can be made (usually 3 or 6 months), but some have shorter periods and can even pay-out from day one.

If the definition of disability is met as a consequence of the Coronavirus, or its impact on underlying or existing conditions, then we would expect the income protection claim to be paid.

While everyone is currently worried about the Coronavirus, it is not the only scenario that could stop you working. Being involved in an accident or suffering from a separate illness are just, if not more, likely to prohibit you from being able to work. Maintaining your Income Protection premiums will help ensure you and your family can cope financially.

Also, Insurers have withdrawn deferred periods of Day 1, Week 1 and 2 Weeks so if you currently have a policy like this, you may not be able to set up a new one on the same basis.

Accident, Sickness and Unemployment Cover/Mortgage Payment Protection Insurance: These policies are designed to cover the costs of your mortgage and other key expenses in the event of you being unable to work due to accidents, sickness or in some cases unemployment.

If you have developed a medical condition, you may find the condition is excluded on any future policy you took out.

Insurers have withdrawn unemployment cover from the market, so if you cancel cover with this option you may well find that you can’t purchase it again. And if you did cancel, there would be an initial exclusion period during which you would be unable to make a claim. The fact that the insurers have withdawn cover is a good indication that they believe the risk of redundancy claims over the coming months is likely to rise signficantly. You will know your inividual circumstances, but in an uncertain economic environment unemployment cover could be invaluable.

Financial planning is all about preparing for those things that may not be so certain (and taxes). Plans should be reviewed regularly so they adapt to changes in your circumstances and reflect developments in the wider economy and financial markets.

Cashflow modelling, sometimes known as cashflow forecasting takes a view of investments, debts, income and expenditure. It takes in to account things like inflation, changes in income and interest rates.

It can then be used to model a range of different scenarios to help you make informed choices about your finances.

The heart of any sensible long-term financial thinking
In essence cashflow modelling provides a rolling balance sheet that has your income, savings, investments and other assets on one side and your spending requirements and commitments on the other.

With this information to hand, it is possible to assess your current situation. By adding in assumptions about the possible direction of variables such as inflation and investment returns, predictions can be made about how your situation might change over time.

In turn, this can help inform decisions such as when might be the optimum time to retire and how best your retirement income might be funded. It can also embrace estate planning, allowing you to put plans in place that can mitigate any potential Inheritance Tax liability.

Flexible forecasting and planning
Cashflow modelling is endlessly flexible and takes account of your personal preferences. You might want to determine the impact of moving to a smaller property at some point – perhaps when your children are financially independent, or when you retire.

Similarly, you might want to explore the merits or otherwise of accessing part of your pension savings sooner rather than later – in other words, before you retire. How would that affect your income after retirement? Cashflow modelling could help provide the answers.

What if?
Cashflow modelling also allows for examination of “What if?” scenarios. What if there’s a financial crash? What if there’s a change in your family situation, such as the arrival of grandchildren or a divorce? What action should you take in anticipation, either now or in the future?

Your financial forecasts will be shaped to a significant degree by your attitude to risk. Some people are bullish about potential gains from their portfolio, while others want to achieve as much security and certainty

as possible. Thinking about the future will help confirm how you feel on these matters. If you expect to generate investment growth, you might choose to maintain an active interest in equities even beyond retirement. If you’re more risk-averse, you might prefer more safe haven assets or options. Or, of course, you might opt for something in between.

An active eye
We’re here to help you decide on a strategy that suits your preferences, but we won’t then sit back and simply watch how events unfold.

We’ll work with you to maintain your cashflow model, refining and repurposing it so that it continues to match your preferences, however they develop.

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

It is important to take professional advice before making any decision relating to your personal finances.

EIS and VCT are investment vehicles which encourage investment in small, unquoted trading companies in their early stages, who are typically trying to raise capital. These initiatives benefit the economy by promoting innovation amongst the small higher-risk business community, which in turn drives productivity, creates jobs and boosts economic growth.

Since their launch in the 1990s, they have become popular features on the investment landscape. Both schemes still provide an attractive proposition for experienced investors today, looking for the chance to invest in new businesses with the added benefit of portfolio diversification.

High volume of inflows to the small business sector

The schemes have proved successful in terms of generating cash for the small business sector. Data shows since their launch in 1994, over £20bn of funds have been raised through the EIS scheme, with 29,770 individual companies benefiting from investment. VCT have had a similarly positive impact, raising £8.4bn of funds since their creation in 1995.

How do they work and how much can I invest? In the case of the EIS, investors typically purchase shares directly in firms. VCT are listed companies that allow investors to spread the investment risk over a number of companies by subscribing for shares in the VCT itself, a similar approach to investment trusts.

Currently both offer 30% tax relief and tax-free capital growth, provided an EIS investment is held for at least three years and a VCT for five years. The maximum amount anyone can invest in an EIS is £1m per tax year, or £2m, as long as at least £1m of this is invested in ‘knowledge intensive’ companies. Individuals can invest up to £200,000 each fiscal year in new shares issued by a VCT.

Potential risks
While there are plenty of benefits associated with these schemes, they are only suitable for investors who are comfortable holding high-risk investments. This enhanced risk element stems from the fact that EIS and VCT invest in small, fledgling enterprises.

Although some of these companies will flourish and deliver strong returns, some will fail. As a result, these schemes have a high-risk profile, which is something any prospective investor needs to carefully consider. EIS and VCT investments are only suitable for a relatively small proportion of an investor’s overall portfolio. As these schemes invest in small companies with shares that are illiquid, they can be hard to sell.

As long as the risks are fully understood, these schemes are worth considering for investors seeking a long-term investment that maximises tax-efficiency and provides portfolio diversification.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes, which cannot be foreseen.

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

Don’t rely on the State Pension

Whether you’re employed or self-employed you’re entitled to the full basic State Pension (currently £168.60 a week) if you’ve paid in 30 years of National Insurance Contributions. If you’re self-employed you can only claim the additional State Pension if you’ve had periods of employment. On its own State support is unlikely to enable you to continue your current standard of living into retirement. That’s why it’s imperative for the self-employed to find other ways to provide the additional income needed in retirement.

Start saving early

It’s stating the obvious, but the sooner you start saving into a pension the bigger your potential retirement fund. You’ll also have more time to benefit from the tax relief that’s available.

To highlight the importance of saving early, a 25-year-old male looking to retire at 68 would need to contribute £236.25 per month in order to achieve a retirement income of £17,500 a year. If the same man had waited until he was 45 before he started saving, he would need to contribute £495.83 to achieve the same level of income, an additional £259.58 per month.

Minimise the amount of tax you pay

One of the main benefits of paying into a pension is the tax relief the savings attract. For example, if you’re a basic rate taxpayer and pay £80 into your pension you effectively end up with £100 to invest. The maximum amount you can save each year that attracts tax relief (otherwise known as the annual allowance) is £40,000. Importantly, if your income is low and you’re not able to save the full £40,000 in one tax year, you can carry forward any unused allowance, and use it towards contributions in the next tax year.

Please note:

•               You must have been a member of a registered pension scheme during the years you want to carry forward

•               Your tax relief is limited by your annual earnings in the year you want to carry forward

•               You can only carry forward unused allowance from the three previous tax years

What type of pension is right?

The self-employed can choose from a range of different pension products, including stakeholder pensions, personal pensions and Self Invested

Personal Pensions (SIPPs). Each has its advantages and disadvantages – we can advise on which is best for you.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes, which cannot be foreseen.

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

Finance: the last taboo
There’s a wide variety of reasons why people don’t like to discuss their finances. In some cases, money is simply viewed as a vulgar subject to talk about, while many individuals lack financial confidence and therefore feel foolish discussing their finances; for others it’s easy to just ignore the issue altogether or simply leave it to someone else to sort out. As a result, many of us don’t like to talk about money, which means finance stands out as one of the last taboo topics in our society.

Importance of financial conversations
A failure to communicate about money though can lead to serious problems especially for other family members. This particularly relates to the younger generation and the importance of nurturing a sense of financial responsibility that will ensure they are ready to take control of their finances. It’s also critical in relation to older people as, if discussions have not taken place, there is no way of knowing their wishes when important issues relating to their financial future inevitably emerge.

Elephants in the room
While it is therefore vital to talk, discussing some financial topics can prove extremely challenging for many people. For example, parents often find it difficult to discuss issues surrounding inheritance and the transfer of wealth which means conversations with their children on this topic can be awkward or stilted. It is imperative, however, that parents do include their offspring when making financial planning decisions in order to ensure they are ready to assume responsibility for family assets when the time arises.

Finance paralysis
An inability to talk about money can also lead to personal finance paralysis, which is basically the fear of making a bad decision. This can result in people either delaying important financial decisions or not making any decisions at all. Talking issues through with a trusted confidante though is a particularly good way to help alleviate such anxieties as it equips people with both the knowledge and conviction to make appropriate decisions.

Talk to us
As with most things in life, it’s usually easier to figure out financial problems if you talk them through with someone you trust. Discussing issues with those people that matter to you can help get things into perspective and thereby aid the decision-making process. And remember, we’re always here to help too, so feel free to get in touch and start a financial conversation with us.

Key Takeaways

• Experts have long stressed the best approach to financial issues is to talk about them
• A failure to communicate about money can lead to serious problems
• This particularly relates to the younger generation and the importance of nurturing a sense of financial responsibility
• It’s also to older people as there is no way of knowing their wishes when important issues relating to their financial future inevitably emerge
• Parents often find it difficult to discuss issues surrounding inheritance and the transfer of wealth
• It is imperative that parents include their offspring when making financial planning decisions
• This will ensure they are ready to assume responsibility for family assets when the time arises
• An inability to talk about money can lead to personal finance paralysis, a fear of making bad decisions
• This can result in people delaying important financial decisions or not making any decisions at all
• As with most things in life, it’s usually easier to figure out financial problems if you talk them through

We’re here to help, so feel free to get in touch and start a financial conversation with us.

Financial planning is all about preparing for those things that may not be so certain (and taxes). Plans should be reviewed regularly so they adapt to changes in your circumstances and reflect developments in the wider economy and financial markets.

Cashflow modelling, sometimes known as cashflow forecasting takes a view of investments, debts, income and expenditure. It takes in to account things like inflation, changes in income and interest rates.

It can then be used to model a range of different scenarios to help you make informed choices about your finances.

The heart of any sensible long-term financial thinking
In essence cashflow modelling provides a rolling balance sheet that has your income, savings, investments and other assets on one side and your spending requirements and commitments on the other.

With this information to hand, it is possible to assess your current situation. By adding in assumptions about the possible direction of variables such as inflation and investment returns, predictions can be made about how your situation might change over time.

In turn, this can help inform decisions such as when might be the optimum time to retire and how best your retirement income might be funded. It can also embrace estate planning, allowing you to put plans in place that can mitigate any potential Inheritance Tax liability.

Flexible forecasting and planning
Cashflow modelling is endlessly flexible and takes account of your personal preferences. You might want to determine the impact of moving to a smaller property at some point – perhaps when your children are financially independent, or when you retire.

Similarly, you might want to explore the merits or otherwise of accessing part of your pension savings sooner rather than later – in other words, before you retire. How would that affect your income after retirement? Cashflow modelling could help provide the answers.

What if?
Cashflow modelling also allows for examination of “What if?” scenarios. What if there’s a financial crash? What if there’s a change in your family situation, such as the arrival of grandchildren or a divorce? What action should you take in anticipation, either now or in the future?

Your financial forecasts will be shaped to a significant degree by your attitude to risk. Some people are bullish about potential gains from their portfolio, while others want to achieve as much security and certainty

as possible. Thinking about the future will help confirm how you feel on these matters. If you expect to generate investment growth, you might choose to maintain an active interest in equities even beyond retirement. If you’re more risk-averse, you might prefer more safe haven assets or options. Or, of course, you might opt for something in between.

An active eye
We’re here to help you decide on a strategy that suits your preferences, but we won’t then sit back and simply watch how events unfold.

We’ll work with you to maintain your cashflow model, refining and repurposing it so that it continues to match your preferences, however they develop.

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

It is important to take professional advice before making any decision relating to your personal finances.

Key Takeaways

• Financial planning is all about preparing for your future
• Cashflow modelling is at the heart of any sensible long-term financial strategic thinking
• It provides a rolling balance sheet, helping you assess your current financial situation and test the effect of different scenarios on your finances
• By adding in assumptions about the possible direction of variables such as inflation and investment returns, predictions can be made about how your situation might change over time
• This can help inform decisions such as when might be the optimum time to retire and how best your retirement income might be funded
• It can also embrace estate planning, allowing you to put plans in place that can mitigate any potential Inheritance Tax liability
• Cashflow modelling is endlessly flexible and takes account of your personal preferences

We’ll work with you to maintain your cashflow model, refining and repurposing it so that it continues to match your preferences, however they develop

Download it now »

In his speech, Mr Sunak did not shy away from the “profound economic challenges” facing the nation. He revealed that, in just two months, the economy contracted by 25% – the same amount it grew in the past 18 years. Meanwhile, the IMF is predicting that we face the deepest global recession since records began. Despite this dire outlook, the Chancellor reassured the nation “I will never accept unemployment as an unavoidable outcome” and proclaimed that “no one will be left without hope.”

After stating that a full Budget and spending review would follow in the autumn, Rishi Sunak moved on to the subject at hand, his three-step plan to ‘support, create and protect’ jobs.

Supporting jobs
Mr Sunak’s first announcement concerned the imminent and much-disputed end of the furlough scheme in October. He responded to critics’ calls for extensions to the scheme by saying it would be “irresponsible” to give people hope they will be able to return to jobs that only still exist due to furlough. Instead, he said, the government would support employers to bring back their staff with a one-off ‘Job Retention Bonus’ of £1,000 per furloughed employee, who is still employed at the end of January next year.

Next, the Chancellor turned his attention to the plight of younger people across the UK, who have been particularly vulnerable to unemployment during the crisis. In response, he announced a new ‘Kickstart Scheme’ to incentivise employers to create jobs for 16 to 24-year-olds. An initial £2bn has been earmarked for the scheme, with the government footing the bill for six months’ wages (100% of the National Minimum Wage for 25 hours a week, employers can top this wage up). He also announced measures encouraging businesses to hire apprentices and trainees.

Creating jobs
The second part of his plan focuses on creating “green jobs” to enable a “green recovery”. Firstly, he announced a £2bn Green Homes Grant scheme which, from September, will enable homeowners to apply for vouchers to spend on making their property more energy efficient. The grants will cover at least two-thirds of the cost up to £5,000 per household. Secondly, £1bn will be made available to improve the energy efficiency of public buildings. Overall, this £3bn package could make over 650,000 homes more energy efficient and support around 140,000 green jobs.

Secondly, in order to create and support jobs in the housebuilding and property sectors, he said that people needed to feel “confident to buy, sell, renovate, move and improve.” Therefore, he announced a temporary increase in the Stamp Duty threshold from £125,000 to £500,000, effective immediately and running through to 31 March next year. He was keen to point out that this measure will mean that nine out of ten people who are purchasing a home in England and Northern Ireland, will pay no Stamp Duty.

Protecting jobs
The tourism and hospitality sectors are huge employers in the UK and have been some of the hardest hit industries during the coronavirus pandemic, with 80% of hospitality firms forced to cease trading temporarily in April. Ensuring there is enough demand is key to enabling businesses to reopen successfully, said the Chancellor. Therefore, the first measure announced was a cut to the rate of VAT applied on food, accommodation and attractions from 20% to 5%, effective from Wednesday 15 July 2020 until 12 January 2021.

Secondly, the Chancellor unveiled the ‘Eat Out to Help Out’ scheme, which he said, “has never been tried in the UK before”. In order to encourage customers back into pubs, cafes and restaurants, the scheme will offer customers a 50% discount (up to £10 per person) on sit-down meals between Monday and Wednesday in August, with businesses able to recoup the cost.

“We will not be defined by this crisis”
Summing up his speech, the Chancellor claimed that “We will not be defined by this crisis, but by our response to it.” It was his hope, he concluded, that the plan would “turn our national recovery into millions of stories of personal renewal.”

Whether you’re a first-time buyer, a second- stepper or further up the housing ladder, buying a home is always a big move and can feel a bit like a roller coaster ride at the best of times. Now there is the added complications and worries that the COVID-19 pandemic may have caused for people’s lives, finances and general wellbeing.

Here are some tips that can help you navigate the home moving process as smoothly as possible.

Smooth sailing
Taking advice will save you time, money and stress. We are on your side, we know the industry and the most appropriate lenders, to be able to recommend the most suitable mortgage for you and we can offer useful advice on all aspects of the house buying process. More now than ever, the value of professional advice is immeasurable. As the mortgage market changes, it’s our job to keep our finger on the pulse. We’ll be able to help you get a decision in principle from a lender, which will give a seller the confidence that you are a serious purchaser.

Expert navigation
We can help you familiarise yourself with all the stages involved in getting a mortgage. We’ll explain important things like how affordability checks work, what paperwork you’ll need to provide to a lender in support of your application, and what costs and fees you should budget for. You will need to have saved a deposit - in most cases the bigger the deposit you can put down, the lower your interest rate is likely to be.

Check out your finances in advance
Start by taking a look at your income and outgoings; any lender considering your mortgage application will expect you to be on top of all your bills and be comfortably able to afford your monthly mortgage payments. It makes sense to cut back on things like unused subscriptions and watch how much you spend on things like eating out. Lenders will want to see a healthy credit score - a higher score usually means you are a lower risk; the more points you score the better the chances that you’ll be offered better interest rates. Being under time pressure can increase your stress levels, so it pays to have your finances in order before you start looking for a property and a mortgage.

Work with a good estate agent
It’s worth taking the time to get to know a reputable estate agent. Explain your circumstances to them so that they can pass on relevant information to sellers. First-time buyers with a mortgage offer in place are in a strong position as they can proceed more quickly than another buyer who has yet to sell their property.

Don’t forget to get a survey done
Having a survey carried out on a property before you commit to buying it makes good sense. It can save you thousands of pounds in repair bills and a lot of stress in the future. There are various options available, and we will be able to offer help and advice on choosing the type that meets your needs.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

JISA and CTFs both benefit
JISAs replaced Child Trust Funds (CTF) in 2011, but those who still
hold CTF will continue to benefit from the increased allowance. Both JISA and CTF are a tax efficient way to build up savings for a child. It is not possible to have both a JISA and a CTF.

Savings for children
A junior ISA can be opened for any child under 18 living in the UK and the money can be held in cash and/or invested in stocks and shares. Once the person who has parental responsibility for a child has opened the account, anyone can contribute to it. The child can manage the account from age 16 and at age 18 they can withdraw the money if they want, when the account otherwise becomes a normal cash or stocks and shares Individual Savings Account (ISA). Alternatively, they can keep saving into it as a standard ISA.

The tax benefits for JISAs and CTFs are the same as for an adult ISA. So, there is no Capital Gains Tax and no tax on income.

Investing for their future
Following the Budget, it was reported: ‘By saving towards their future, families can give children a significant financial asset when they reach adulthood – helping them into further education, training, or work.

Junior ISAs and Child Trust Funds are tax-advantaged accounts for children, designed to encourage a long-term savings habit.’ Two principles which apply to many aspects of financial planning are particularly relevant when planning for your child’s financial future:

• The longer the timescale, the more scope there is for your investments to grow
• Taking expert advice can help you avoid potential pitfalls

The potential of a JISA
It is estimated that if £9,000 was invested every year from birth and assuming a 2% annual return, which is obviously by no means guaranteed, the JISA would be worth around £194,000 at age 18. Saving such a large amount is obviously out of the question for most people, but whatever amount you can afford to save for your child’s future, a JISA is an ideal choice.

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.

Do you know your State Pension age?

Advice is key to achieving your financial resolutions
A new study has found the likelihood of success in this area is heavily linked to receiving professional advice and the establishment of clear financial objectives. The research provides a measure of the value attributed to advice when it comes to helping investors achieve their goals.

The research, based on data relating to more than 100,000 advised investors, found that 8 out of 10 people with a defined retirement goal, had at least an 80% greater probability of achieving their financial objectives.

Create a financial plan to secure your financial wellbeing
The study clearly demonstrates how taking expert advice and constructing a tailored plan can significantly boost an investor’s financial wellbeing. Not a surprise, as the benefits associated with financial planning are renowned and abundant.

The value of financial advice comes in different guises and can include better return on investment, peace of mind, accomplishing goals and understanding opportunities. This combines to create future security, ultimately making sure you have enough money.

Discussing your financial objectives with us enables you to consider exactly what you want to achieve and establish clear goals that are both realistic and achievable. Regular financial reviews provide opportunities to monitor progress and adapt plans where necessary. Good financial planning can mean investments are tax-efficient by minimising both current and future tax liabilities.

It’s good to talk, we can help
This study once again reiterates the significant value that can be gained from seeking professional financial advice.

We can help manage the inherent volatility of markets, so your savings have the best chance of growing for the future – without giving you sleepless nights in the process and help make sure you aren’t taking too much, or too little, risk with your money.

The value of your investments and any income from them can fall as well as rise and you may not get back the original amount invested.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

These tales of millennials bring the end to industries often go viral on social media and bring some interesting responses. When The Economist asked, “Why aren’t millennials buying diamonds?” it got some interesting replies including “Because you can’t live in a diamond or eat a diamond”

So, we know what industries are being “killed” by the younger generation, but what industries are they supporting and investing in? Data from The Share Centre shows millennials-investors aged 18 to 36, and baby boomers-investors aged 60 plus, are taking distinct approaches to investments.

Millennials:

• Are more willing to use tracker funds
• Put a bigger emphasis on investing in technology
• A more adventurous in their fund selections

Baby Boomers

• Focus more on capital preservation
• Take more of a cautious approach to fund selections

While there are differences in both groups there are some similarities. With a new era of innovation and treatment pharmaceuticals & biotechnology companies appeal to both age groups as well as traditional sectors such as oil and gas producers.

Whatever your age we can help you with tailored investment advice for your needs.

The value of investments and any income from them can go down as well as up and you may not get back the original amount invested.

Why diversify?
Adopting portfolio diversification means you do not put all your eggs in one basket. A balanced portfolio contains a combination of different asset classes, such as equities (shares), bonds, property and cash.

Equities have the potential to deliver higher returns than bonds, but bonds can provide an element of capital preservation for times when a more risk-averse approach is required. You can also diversify your portfolio further through choosing different geographical regions and industry sectors.

Don’t overdo it
While building diversity into an investment portfolio is undoubtedly important, try to guard against over-diversification. This could make your portfolio unmanageable and could mean you spread your investments too thinly, resulting in a detrimental impact on potential returns.

Holding your nerve
The pandemic has unsettled global markets and it has been an unnerving time for many investors. I’s important to remember that stock market volatility is inevitable, and markets can often rebound quickly once immediate issues are resolved. Experienced long-term investors know that the worst investment strategy you can adopt is to jump in and out of the stock market and sell up when investments have hit rock bottom.

Keep in touch
Financial advice and regular reviews are essential to keep your portfolio in line with your attitude to risk and your objectives. This allows you to develop and continue to follow a well-defined plan.

Your circumstances or objectives may well have changed recently, so please don’t hesitate to contact us with any questions or concerns you may have.

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

It’s never too early to start saving into a pension…
You should start saving for retirement as soon as possible, as the sooner you begin, the longer your savings have to grow. Other financial challenges can make this difficult but investing regular amounts in a pension throughout your working life gives you the best chance of enjoying a prosperous retirement.

…but better late than never
Don’t think it’s too late to start saving for your retirement. The favourable tax treatment pensions enjoy and their potential for investment growth, means any contributions you make later in life can still make a huge difference to your standard of living in retirement.

Take control of your retirement
When you reach 55, it’s important to carefully consider what you can do with your pension pot. For instance, you could keep your savings invested, take a cash lump sum, draw a flexible income (drawdown), buy a fixed income (an annuity), or a combination of these. While this flexibility may enable you to retire earlier or semi-retire, it’s vital you take full control of your retirement options at this stage. This should include seeking advice to discuss the pros and cons of the different avenues available to you.

Know your numbers
You can contribute as much as you like into your pension, but there is a limit on the amount of tax relief you will receive each year. The Annual Allowance is currently £40,000, or 100% of your earnings, whichever is lower. You can, however, carry forward unused allowances from the past three years, provided you were a pension scheme member during those years.

For the 2020-21 tax year the Tapered Annual Allowance limits altered. The Threshold Adjusted Income limit is £200,000 and the Adjusted Income Limit is £240,000. If your income plus pension contributions exceeds the Adjusted Income Limit, your Annual Allowance is reduced by £1 of every £2 you are over the Adjusted Income Limit. A Lifetime Allowance also places a limit on the amount you can hold across all your pension funds without having to pay extra tax when you withdraw money. This limit is currently £1,073,100.

Get good advice
Retirement planning is never a case of ‘one size fits all’. It is vital you obtain sound financial advice tailored to your individual needs. We offer advice and help with all aspects of pensions and retirement planning, whether you’re just starting out and want help choosing the most appropriate pension products, or you’re approaching the stage of life when you need to utilise your pension pot and want to know the most efficient way to access your funds. We are here to help.

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

Overlooking the need to revisit your protection policies over time could mean that your family wouldn’t have enough money to pay the mortgage or meet household bills if you were to die. A review is an opportunity, not only to assess your current cover needs, but also to consider newer plans that might be more appropriate to your circumstances and potentially more cost-effective.

Updating your cover as your life changes
Major life events can signal that your cover might need updating. If you’ve moved to a new house and taken on a bigger mortgage, you will need to review the sum assured (cover provided by the policy) to ensure that there won’t be a shortfall in the event of a claim.

Starting a family can be an overwhelming experience and it’s understandable that parents don’t automatically think about their life insurance needs at this exciting time. However, at this stage family expenditure is likely to increase and it’s often the time when parents should think about additional types of insurance cover.

Protection policies can provide not only a lump sum on death or the diagnosis of a critical illness, but also an income for families impacted by an accident, sickness and unemployment. They can also help parents pass their wealth on to future generations and play a major role in Inheritance Tax planning too.

Keeping your needs covered
Insurance is one of the most important financial products anyone can take out and one of the best ways of ensuring your family is provided for financially, if one of life’s unexpected and unwelcome events should happen.

As with all insurance policies, conditions and exclusions will apply

Are you approaching retirement?