POST EU REFERENDUM COMMENT- JUNE 2016

Whichever way you voted, 23 June 2016 will be remembered as a momentous day in the history of not only the UK, but also Europe and beyond. After months of uncertainty and market volatility, the people of the UK voted to leave the European Union (EU) by 51.9% to 48.1%, after 43 years of membership.

The decision inevitably brought some uncertainty and confusion to the markets, sterling and the political landscape. Events will continue to unfold at a rapid rate. What is unclear is how long that uncertainty and confusion will continue.

Immediate reaction

The UK’s vote to exit the EU sent shockwaves through financial markets. After a week of positivity in the markets, the outcome came as a surprise to the City, which clearly expected a Remain vote.

David Cameron, who campaigned ardently for the UK to remain in the EU, announced that he will stand down as Prime Minister by October, following the election of a new Conservative party leader. The Prime Minister has said that Article 50, the formal request from the UK to leave the EU, will be activated when his successor is in situ, triggering two years of formal exit talks. However President of the European Parliament, Martin Schulz suggested that the UK should begin negotiations imminently.

What is clear is that voter turnout was high – 72.2%. What’s also apparent is the huge regional and generational divide. Voters in Scotland resoundingly chose to remain in the EU, so the breakup of the UK is a distinct possibility with Scotland expected to hold another independence referendum. Whoever the new Prime Minister is, they face an immense challenge to reunite the country.

The focus for investors is now on the short and long-term macro implications.

Sterling and the markets

The morning after the vote the FTSE 100 index tumbled 8.7%, paring back some of the losses later, following reassurance from the Bank of England with Mark Carney pledging to do whatever it takes to protect Britain from financial crisis. It closed just 3.15% lower at 6138.69.

Equities across the globe also fell sharply, while perceived safe haven assets – including gold – rallied. Sterling fell against its major trading currencies to touch a 31-year low, but recovered from the initial shock, the pound bouncing back 4 cents against the dollar to $1.3642.

International ratings agency Moody’s downgraded Britain’s creditworthiness to negative from stable.

European implications

Brexit brings serious implications for the EU itself. Brussels has demanded that the UK start talks to leave the EU immediately, but the ‘Leave’ camp are resisting Brussels’ call to go quickly. With the EU increasingly concerned about the potential spread of contagion to mainland Europe, meetings and discussions will be ongoing over the coming weeks and months.

Intervention of policy makers

The Bank of England’s statement offering liquidity and determination to ensure financial stability, helped soothe the markets. The reaction of central banks and policy makers will be instrumental in limiting the downside and calming fears over the economy.

The bottom line

With the result undoubtedly a surprise for the markets, we find ourselves in uncharted territory. What ‘leave’ really looks like is still unknown. The UK faces an extended period of uncertainty and market volatility, during which time it is important to maintain investment focus.

We remain composed and professional and will continue our considered, measured approach to carefully navigate these challenging investment conditions.

Volatility is an inevitable part of investing. Movements can be extreme and it is natural to feel concerned about the investment climate. It is essential to consider longer-term timescales instead of focussing too closely on short-term volatility. However concerning market fluctuations may be, it’s important to remember that we have jointly worked hard to formulate a financial plan which is in-line with your own personal requirements and will continue to do so. Financial advice is obviously key, so please don’t hesitate to get in contact with any questions or concerns you may have.

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 

Lifetime Isas should be more generous?

Enable’s IFAs in Bishops Stortford know the value of Isas for a retirement or savings plan and it is interesting to see that the man pushing forward the development of the Isa tax model to replace pensions tax relief thinks that the Lifetime Isa bonus and annual allowance should be doubled.

Centre for Policy Studies research fellow Michael Johnson was speaking at Money Marketing’s  Retirement  Strategy Summit recently and said the new Lifetime Isa that is due to launch in April 2017 should be made more generous. He said: “The next steps we are considering with the Lifetime Isa is to potentially double the bonus rate, from 25 to 50 per cent and secondly to increase the annual allowance from £4,000 to £8,000. “Part B is then to scrap all tax relief. Part C is to scrap the lifetime allowance, because it is irrelevant to 99 per cent of the population, and replace that with the higher annual allowance and bonus. Then we should lower the age when you can open a Lifetime Isa to six-weeks-old. “Then what we are doing is pre-funding the state pension, in which case you can scrap the state pension. Because, let’s not kid ourselves, the state pension is rapidly becoming ludicrous.”

The Government had unveiled the Lifetime Isa in the March Budget when it was widely assumed bigger plans to scrap pension-tax relief entirely were being shelved because of the impending Brexit vote. Under current proposals the product is open to those under-40s who will receive the bonus up to the age of 50. It can be accessed early, without penalty, for first time house purchase. The Government is considering allowing early access for other life events. Enables’s IFAs can help you plan for your retirement.

Source: Money Marketing

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 

Financial Planning: Joint or single policies?

At any stage of your wealth management or financial planning having the right insurance is vital. When you are buying level term life insurance, you will find you can get it either as a single policy or as a joint couples policy. If you have a partner and both of you are getting life cover, a joint policy may be marginally cheaper than getting two single policies, but you need to be aware that it will usually only pay out once, on the first death.

So if you are trying to weigh up the benefits of a joint policy verses two single policies the main pro of a joint policy is that it is likely to be cheaper than two single policies. If you are married but have no dependants it is also likely to be much less hassle setting up just one joint policy compared to two single ones.  But if you have dependants you will only get one payout, usually on the death of the first policyholder whereas single policies, pay out twice to dependants.

One of the other issues can be that if you split up with your partner you may have to cancel the joint cover and buy two single policies, priced on your new age and health, which will almost certainly be more expensive. Two single policies will pay out on the death of each person, rather than just on the first death, but two singles policies are typically more expensive. If you are married with dependants and determined to stay married a joint policy may be sufficient but it is worth knowing the pros and cons.  Enable’s experienced IFAs in Bishops Stortford can help you decide.

Source: Money Saving Guide

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 

Well qualified advisors are invaluable according to LV=

The importance of well-qualified advisors is invaluable and it is good to see that LV has been raising the issue again. They say the Government should “force savers reaching retirement to take guidance if they do not have a financial adviser.” In LV=’s response to the Treasury’s consultation on public financial guidance, the mutual says low take up on advice is creating a real “mis-buying crisis.”

According to the firm’s research around half a million people retire each year without taking financial advice. It was clear in the March budget that the Government would create two new guidance bodies, responsible for pensions and money respectively, to replace the Money Advice Service and The Pension Money Advice Service (TPAS), and LV= says “the compulsory guidance, which would be funded by an industry levy, needs to be broader than pensions to include other retirement income options.”

“People are making important financial decisions without adequate support. It’s essential that all consumers are able to access affordable, regulated advice but when people can’t, or don’t, take advice we believe guidance should be compulsory. Says Managing director of life and pensions Richard Rowney. “This would further inform retirees about their options and help them make the most of their money.” “Making guidance mandatory, and increasing accessibility of advice, would be beneficial to all, as not only would individuals be better off but they would be less likely to rely on state support in retirement and would contribute more to the UK economy.”

Source:  Money Marketing

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 

DECISION DAY BECKONS FOR THE UK

On June 23rd, eligible UK citizens can make their voices heard on a major issue that has been making global media headlines and providing politicians, economists and heads of state with sound bites for over a generation. Should the UK remain within the European Union (EU) or leave and make its own way in the world?

The great uncertainty in this debate, now universally referred to in the media as ‘Brexit’, is the lack of real tangible evidence as to what a vote for either side would mean in practice. Since the inception of the EU (and its multiple antecedent monikers), no member state has ever left, so no-one can accurately predict what the outcome might be. What
is clear is if the UK does vote to leave, it will be major world political, social and economic news.

Clearly, there is much for each voter to consider before they cast their votes on the 23rd. From the EU’s perspective, if the UK votes to leave then this might pave the way for voters in other countries to stage their own similar referenda. However, it is also possible that if the UK wants to opt out, the EU may give way on a number of negotiating fronts in a bid to convince us to stay.

One thing is certain, on June 23rd, the eyes of all the world will be focussed on the UK, as this is a major political and economic issue with domestic, European, and global ramifications.

In reality, however, politicians, economists, bankers, and fund managers globally may try to confidently predict the long-term implications of the UK staying in or leaving the EU. At this point in time, nobody really knows.

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 

MARKETS: (DATA COMPILED BY THE OUTSOURCED MARKETING DEPARTMENT)

Global equity markets – with the exception of the FTSE100 – continued their three-month recovery.

Having itself recorded three months of gains, the FTSE100 drifted on the last day of the month by 40 points to close down marginally 0.18% at 6,230.8. This late dip was attributed to ‘Brexit’ fears as polls indicated the leave campaign taking a small lead for the first time. The FTSE250, however, rose by 2.28% to end May at 17,184.7, whilst the junior AIM market also gained 1.62% to 739.5.

Across the pond the Dow Jones marked time, rising a nominal 0.08% to 17,787.2 as market watchers analysed the latest missives from The Federal Reserve regarding the direction and timing of any interest rate rise. The technology based Nasdaq closed the month at 4,948.05 to show a rise of 3.62%.

On the continent the Eurostoxx50 also recorded its third month of improvement, lifting 1.16% to 3,063.48, again with all eyes here on the UK’s ‘Brexit’ referendum campaigns.

The Japanese market saw the Nikkei225 recover strongly, ending May at 17,234.98 for a rise of 3.41%

The currency markets were sanguine in May with Sterling unchanged against the US Dollar at $1.45, but up 2.36% against the Euro at €1.30. The Euro also weakened by 2.63% against the greenback to $1.11.

The price of oil (Brent Crude) continued to improve as the lack of a decisive production quota policy from the Organisation of Petroleum Exporting Countries (OPEC), terrorist action in Nigeria and Canadian bush fires dampened global output somewhat. At $49.51 a barrel ‘black gold’ rose 4.47% in the month and now sits up 35.12% over the last three months.

Gold meanwhile lost its sparkle, dipping 6.01% in May to $1,215.15 a Troy ounce.

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

UK INFLATION DIPS

April saw the UK’s Consumer Prices Index (CPI) fall for the first time since September 2015 to 0.3%.

Last year was, according to the ONS, who compile the data, a year of historically low inflation, with the CPI hovering around zero.

Globally, inflation has been muted, with some Eurozone countries flirting with deflation.

Here in the UK, the main factors in the fall in CPI were a large drop in the price of air fares between February and March this year, a reduction of 14.2%. This is set against a rise of 4.5% seen in these prices in the same period last year. The cost of clothing and footwear also fell as retailers dropped prices to boost sales following April’s cold weather.

If the costs of food, energy, tobacco and alcohol are stripped out of the calculation, the so-called core inflation rate, fell to 1.2%.

Following this trend, the wider Retail Prices Index (RPI), a barometer measure still used for some future rent and pension calculations, also fell from an annual rate of 1.6% in March to 1.3% in April.

These falls in inflation, to below the Bank of England’s target level of 2%, required the Governor, Mark Carney, to write his sixth letter to the Chancellor of the Exchequer, to explain the reasons. In this he said: “The underlying causes of the below-target inflation of the past year and a half have been: sharp falls in commodity prices, the past appreciation of sterling, and to a lesser degree the subdued pace of domestic cost growth.”

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