Annuities hit by Brexit

Enable’s IFA’s in Bishops Stortford know the instability of Brexit will continue to impact on financial planning for some time.  And for those who are just retiring or are newly retired the amounts paid by annuity rates will be disappointing. Just Retirement and Retirement Advantage have both recently announced cuts to their annuity rates, and more companies are likely to follow.

Annuities are available for retirees and are a product that offers an income for life, they are usually bought at retirement with all or part of a person’s pension savings.  At the moment annuity returns reflect the current direction of travel in interest rates, and since Brexit they are hitting even lower long-term rates.

“Gilt yields and annuity rates have been dropping steadily over the past year. The events of the past couple of days have given new momentum to that trend.” Says Tom McPhail of Hargreaves Lansdown, “For any investor planning to buy an annuity in the immediate future, it may make sense to do so sooner rather than later. Once you’ve obtained a quote from an annuity company the terms are usually guaranteed for between two and four weeks.”

But the other-side of falling annuity rates is the impact of lower interest rates on mortgages, more and more longer-term fixed-rate mortgages are likely to emerge reflecting falls in gilt yields. To review your pension or your mortgage you might want to talk it over with one of our experienced IFA’s at Enable.

Source: The guardian

Issued by: Enable Independent Financial Life Planners • 
25c North Street, Bishops Stortford, Herts CM23 2LD • Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE 

What of Britain’s housing market post EU referendum result?

Enable’s experienced IFA’s in Bishops Storford are here to try and help you make sense of the economic landscape so you can plan your finances. Some analysis are currently saying that while Brexit may not directly affect demand for property, there could be some complex knock-on effects for mortgage rates and the building industry, all of which could alter the long-term direction of travel for house prices.

The younger generation may well be wondering if property is still worth the investment. It has long been the case that timing matters but the right timing is also notoriously difficult to predict- on top of timing the amount you borrow and the rates you pay on the debt is crucially important.

According to modelling by online investment firm True Potential a £100,000 property bought for cash in 1985 generated a return of £540,589 – or 441pc – by 2015. Even with interest paid at the prevailing Bank of England base rate – considerably more than many savings accounts offer – a investment of £100,000 would have grown to £265,000, or £487,754 if interest was reinvested, over the three decades.

But attitudes toward property appear to be changing, David Harrison of True Potential said “People are split on whether property has been a money-maker or a costly investment,” he said. “ Property is also a very illiquid asset (this is an asset which cannot be easily sold or exchanged) with high costs and it can take a long time to see returns.” In a survey of 2,000 adults, property was picked by half as the best investment they had made over the last 30 years. But property was also the most cited “worst ever financial decision”, with a third of respondents saying it had been their biggest mistake.  These results really do highlight just how important it is to make informed decisions when buying property.

Source: The Telegraph

Issued by: Enable Independent Financial Life Planners • 
25c North Street, Bishops Stortford, Herts CM23 2LD • Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE 

Osborne hits the road

Enable’s Independent Financial Advisors are glad to see that the Chancellor has set to work on building stronger economic and trade relationships with the UK’s closest trading partners.  He has recently travelled to New York for discussions with Wall Street investors on the first leg of a series of targeted ‘missions’ to key global financial and political centers.

Mr Osborne is urging leaders from some of America’s biggest investors to stick with the UK following its decision to leave the EU, offering up a golden opportunity “for them to help define an even stronger relationship with Britain.” The trading relationship between the UK and the US is pivotal: the US is the largest single destination for UK exports, and the UK is America’s largest trading partner in Europe. In 2014 UK exports to the US totalled £88 billion (17% of total UK exports) and last year, the UK was the US’s sixth largest trading partner.

George Osborne said “While Britain’s decision to leave the EU clearly presents economic challenges, we now have to do everything we can to make the UK the most attractive place in the world to do business. Britain and the US have been at the forefront of open trade in the last 200 years and pursuing a stronger relationship with our biggest trading partners is now a top priority."

The trip to the US is the first in a series with the Chancellor also leading a major trade mission to Singapore and China to discuss trade and promote investment into the UK ahead of the G20 Finance Minister’s meeting in Chengdu.

Source Gov.uk

Issued by: Enable Independent Financial Life Planners • 
25c North Street, Bishops Stortford, Herts CM23 2LD • Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE 

Interest rates look likely to be cut again

To try and counter the post-Brexit effect on the economy it is looking very likely that the Bank of England will cut interest rates to a new historic low earlier than expected. Bank of England governor Mark Carney had already suggested to policymakers on the Monetary Policy Committee (MPC) that an exit vote would slash rates over the summer. Economists at Hargreaves Lansdown said it was "now probable" rates will be cut on Thursday, with financial markets pricing in a reduction from 0.5% to 0.25%.

They said it might even be possible that rates may drop to zero in August as the Bank struggles to bolster flagging growth and contain the fallout of Britain's vote to leave the EU. Once again good news for borrowers, but not good news for the long-suffering UK savers.

Mr Carney also said on unveiling the Bank's Financial Stability Report that Brexit risks to the economy had started to "crystallise". Mr Carney has been quick to stress he is personally reluctant to reduce rates lower than 0.25% or into negative territory in a recent speech he said : "As we have seen elsewhere, if interest rates are too low or negative, the hit to bank profitability could perversely reduce credit availability or even increase its overall price."

The Bank has unveiled a series of measures to help limit the Brexit blow, relaxing banking rules to boost their lending firepower by up to £150 billion and pledging to pump in at least £250 billion if needed to calm markets in the immediate aftermath of the Brexit decision. Enables IFA’s in Bishops Stortford are here to help you plan financially as a saver or a borrower.

Issued by: Enable Independent Financial Life Planners • 
25c North Street, Bishops Stortford, Herts CM23 2LD • Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE 

Source: The Independent

Maintaining a diverse investment portfolio

At times of uncertainty further change is not usually the best option.  Enable’s IFA’s in Bishops Stortford have seen the best strategy for weathering change is diversification. We can never be sure of what the market will do at any moment, so the importance of a well-diversified portfolio in any market conditions should always be remembered.

Diversification is not a new concept and in general, a well-diversified portfolio combined with an investment horizon of three to five years can weather most tricky times. Spreading your wealth in part in Equities and investing in securities that track various indexes usually make good long-term diversification investments for your portfolio. By adding some fixed-income solutions, you are further hedging your portfolio against market volatility and uncertainty.  Some say it pays to be more of a lazy investor if you invest money on a regular basis it helps smooth out the peaks and valleys created by market volatility. But just because you have your investments on autopilot does not mean you should ignore the forces at work its good to remain in tune with overall market conditions.

But it also pays to take a long-term view of the markets, time and time again it has been shown that investing with a long-term yields greater returns. There can be times, when sharp market drops alert investors to risks in their portfolios. This is usually not the best time to make changes but Enable’s IFA’s can talk you through your options if you are worried.

Source: Motley fool

Issued by: Enable Independent Financial Life Planners • 
25c North Street, Bishops Stortford, Herts CM23 2LD • Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE 

Pensions eroded by hidden charges

A year-long study by the Transparency Task Force (TTF) has recently uncovered that more than 100 charges are being levied on pensions eating away the value of funds by more than a third. TTF's chairman, said: “The shocking news is that we have uncovered more than 100 types of costs and charges being routinely applied to pensions and investments, many of which are being hidden from the consumer, which is just plain wrong.”

Earlier studies have already suggested that undisclosed costs could combine with the annual management charges declared on pension statements to consume a third of the value of a pension fund over its lifetime. But the TTF research has now suggested the losses could be even higher, because it has allegedly discovered yet more hidden charges. Andy Haldane, the Bank of England’s chief economist, has said “I consider myself moderately financially literate – yet I confess to not being able to make the remotest sense of pensions.”

The Association of British Insurers said pension providers were strongly in favour of making costs transparent and explaining them “in a meaningful and comparable way". The Investment Association, representing UK investment managers, issued a statement saying: “It should be noted that, when it comes to the costs that come with investing on the markets, asset managers play a major role in reducing these for investors by pooling their savings together and achieving significant efficiency savings that they would not be able to enjoy if they simply traded in markets independently.”  If you want to talk through the cost of your pension Enable’s IFA’s in Bishops Stortford are here to help.

Source: The Independent

Issued by: Enable Independent Financial Life Planners • 
25c North Street, Bishops Stortford, Herts CM23 2LD • Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE 

FTSE 100 resilience

Whichever way you voted in Brexit Enable’s independent financial advisors in Bishops Stortford would have expected some volatility in the markets through this period. And the FTSE 100 has indeed suffered but then leapt to its highest level since 2015.  Just a week after the referendum it’s trading was around 6,577 the highest level since August 2015.

Returning financial confidence, after the initial shock of the outcome, had been growing all week despite one of the most volatile weeks since the 2008 financial crisis. And the Bank of England Governor Mark Carney managed to inject some extra confidence into markets by promising Britain was tough enough to deal with the transition period. He also heavily hinted interest rates are set to be cut in the next couple of months to provide extra stimulus to the economy. It is expected the Bank's base rate will be cut from 0.5 per cent to 0.25 per cent in August.

Connor Campbell, financial analyst at Spreadex.com, said:  "Considering we are exactly a week on from the Brexit referendum, and subsequent market panic, the fact that the FTSE has climbed all the way above 6500 for the first time since last August is staggering.”

The index may have been propelled to this 10ish month high by the governors promise of stimulus, including a rate cut but the impact such news has had on the value of sterling may not be such good news. If you are concerned about your financial planning we are here to advise.

Source: The Express

Issued by: Enable Independent Financial Life Planners • 
25c North Street, Bishops Stortford, Herts CM23 2LD • Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE