It’s almost impossible these days not to think of that apparently Chinese curse about living in interesting times. The last few weeks might be characterised as too interesting as we tune in daily to find out the latest political twist. While business as usual goes on every day, the uncertainty that lies ahead makes investment planning of almost any kind an anxious prospect.
In our 2019 autumn newsletter, released against the backdrop of parliamentary dissension and political turmoil, we look at the benefits of taking a long-term view of your investments and shutting out the short-term noise. With data showing that over the last 30 years to 2018, only about 0.2% of days generated around half of total performance, it may not be wise to react to turbulence in the headlines by jumping out of the market too quickly.
Investments are only one part of most people’s financial landscape. Managing all your sources of income to balance your outgoings is the bedrock of sound planning. When circumstances change, especially coming up to retirement, understanding your spending and the income you will have to cover it is even more important. We explore the ongoing importance of cash flow planning to help manage your finances in later life.
If you wanted to add some light reading to your autumn book list, the Office of Tax Simplification (OTS) second report on inheritance tax, published in July, might be just the thing. For a tax that generates relatively little revenue, IHT is certainly complicated in both structure and outcomes. After an 18-month review, the report contains a wide range of proposals that could affect your estate planning in the coming years.
Finally, this October marks the seventh anniversary of the start of workplace pension auto-enrolment, perhaps proving that some grand government schemes can be a success. However, one sector of the working population has been left untouched – the self-employed. Their numbers have been growing rapidly, but their pension participation has seen a continuous decline from 27% in 2008/09 to just 15% in 2017/18. Pension contributions across the board are still too low, however, and need to be increased. What is the way forward for those people who are under-saving for their retirement?
Our next newsletter update will come in the winter, when we should be in calmer, or at least more certain, waters. We look forward to discussing further developments with you then.
We hope you find the contents of this newsletter useful and informative and, as always, let us know if you think you may be affected by any of the topics in this edition.