“ISA savers retreat to cash despite poor returns”
The latest ISA figures showed UK investors shied away from stock markets last year.
COMMENT: It is only natural to be worried about what could happen in the markets. Those who stayed in cash may have been fortunate to miss out on the current market downturn. However, most will nee returns over the long term much higher than what cash can deliver to meet their long term goals. The best way to get these returns is a diversified portfolio of stocks & shares, loans to Governments & Companies, and property.
“Q&A: High earners in line for pay-outs after court ruling”
Pension Protection Fund’s cap on retirement benefits ruled unlawful.
COMMENT: In the case of Hughes V PPF Justice Lewis held the Pension Protection Fund’s (PPF) cap on deferred members’ benefits amounts to unlawful discrimination on the grounds of age.
The PPF offers different levels of benefits depending on whether members are past their normal pension age or not. Those that are, broadly receive 100% of their benefit entitlement, whereas deferred members and members below the normal pension age receive 90% of the value of their benefits subject to a cap set at £41,461 in the current tax year.
This case challenged the legality of the cap and Justice Lewis ruled the cap was disproportionate and therefore unjustifiable: it affected only a small group of members but could have a very severe adverse effect on those members. As the cap is considered unlawful it should be disapplied.
The claim did not ask the question of the 90% rate, however, Justice Lewis indicated his view that this would potentially be appropriate and necessary.
“Low-interest rates are a tax on savers”
Central bankers cannot find a way to help borrowers without hurting savers.
COMMENT: I refer to the comment on the first story.
“The mind-bending world of financial hybrids”
Yields of 6% or more beckon, but be aware of the risks.
COMMENT: One of the founding principles of our investment process is that risk and reward are related. If something looks too good to be true it usually is.
“Investors take £10bn flight from US stocks”
With fears of a new market crash, worried savers are grabbing their profits.
COMMENT: We cover the idea of timing the market here. We believe moves like this are more likely to harm returns over the long term than enhance them.
“The £10m investment hangover”
Buyers fear they will be left with nothing but a bad taste in their mouths after their wines go missing.
COMMENT: In the short time I have been doing these posts I have seldom not had to look at a story about investing in a collectable like wine. The mainstream investment markets are some of the most regulated sectors in the world. I covered this here. The market for wine does not seem to be anywhere near as well protected.
“£50bn fund that slashed payouts as markets soared”
Savers in Britain’s biggest investment fund have seen thousands of pounds slashed from their investments despite being told that it would protect them from market shocks.
COMMENT: This article is about Prudential/M&G’s PruFund range of funds. These aim to give investors a more “smoothed” investment experience and dampen the day to day ups and downs of the market. What they don’t do, unless you pay extra, is protect investors from every market fall. At the height of the recent market downturn, the funds reduced their prices as the value of the underlying investments had exceeded what the fund could smooth out. One thing we have noted with these funds is that in these times they can tend to lag behind stock markets when they recover. We have a few clients in these funds but we have stressed to them that these funds are not a magic bullet which will give them cash plus returns for no risk.
“Drawdown pensioners could save £12,300 by switching provider as many face extortionate fees”
Complex and confusing charging structures are making it difficult for pensioners to work out how much they are paying in fees.
COMMENT: Whilst we talk a lot about financial planning and lifelong investment, an important part of what we do is being a broker. By this, I mean getting the best deals for your clients on their pensions, investments, and insurance policies. This is not a process we take lightly but is one that some might have forgotten about =for whatever reason. For all our clients we always look to strike a balance between costs and getting a product that does what it needs to do for them.
“Delaying probate threatens to spring costly money traps”
Bereaved families that delay administering the estates of their lost loved ones because of Covid-19 are in danger of falling into costly financial traps.
COMMENT: We cover the probate process here.
“Five funds to get you through the coming recession”
The International Monetary Fund expects British GDP to drop 10pc this year, so buckle up with these funds.
COMMENT you can read about how we select funds here. We do not select funds based on what we think might happen over the next year or two. No one can accurately predict this. Instead, we try to spread money widely in a prudent manner. We use established fund managers with long term records of successfully managing money to do this. These may be active or passive funds depending on which we have the most confidence in each asset class.