The Long Run Up To the Election
In the long run up to the General Election, the economy, along with the National Health Service, will prove to be the battlefield on which voters will be asked to make decisions.
Generally, the UK Economy has recovered well over the last few years; although often it is true to say that most individuals have not felt the benefits of this in terms of increased disposable pay, income from savings, or even quality of life.
However, just as the consensus of economic recovery has emerged, so the wider world proves that the UK can still be impacted on by global issues, much as the last government claimed as it was ejected from office.
The latest event to cause some attention has been the fall in Oil prices. Whilst positive from an individual’s perspective, and indeed from many companies, this has impacted on key markets and has been felt by the FTSE 100 Index. As with all investor’s portfolios, the key has been diversification, as some indices like the FTSE 250 have fared better, whilst portfolios containing alternative funds would also have avoided some of the volatility.
Indeed the change in large company fortunes has been reflected in the composition of the FTSE 100 itself. Oil services company Petrofac and engineer IMI left the blue-chip index to move down to the FTSE 250 and were replaced by housebuilders Barratt Developments and Taylor Wimpey.
Meanwhile, bakers Greggs, luxury shoemaker Jimmy Choo, retailer Game Digital, specialist investment firm Allied Minds, property investment group CLS Holdings, and hospitality company Spirit Pub Company moved up to the FTSE 250, pushing out mining companies Ferrexpo and Hochschild. As was seen by recent events, food giants like Tesco and Morrisons have also had a difficult time dealing with changing consumer shopping habits.
On a positive note, December 2014 also saw Barclays, HSBC, Nationwide, Santander and Standard Chartered all pass “demanding” stress-tests designed by the Bank of England to evaluate whether the core UK banking system is in a position to weather another financial crisis.
Whilst politicians will argue their case for survival, the more important issue for most people is ensuring that their investment monies perform well for them, and for many people producing a competitive income remains their key priority.
The key in this, as outlined above, is to establish a diverse portfolio and to ensure that you take advantage of all the tax breaks available to you. Placing the maximum monies into Stocks & Shares ISA’s for couples can produce tax-free income from an investment sum of £30,000. Using the two tax years available over the next few months can double that figure. Advice should always be taken to ensure that the correct attitude to risk is taken, whilst monies should only ever be invested with a clear and realistic timeframe in mind, and considering your tolerance to risk and reward.
Pensions remain topical but continue to offer basic or higher-rate tax relief depending on your tax status, and are an excellent method of saving for the future. Finally, NS&I are finally launching new Pensioner savings Bonds for 1 Year (2.8% Gross) and 3 year Terms (4% Gross).
If you would like to learn more about any of the points raised in this article please contact Shaun Bell or Stuart Read at Sabre Financial on 01548 856444 or via email at firstname.lastname@example.org or email@example.com.
By Sabre Financial | Friday, January 02, 2015