Is inflation about to rise?

Millions of Britons could potentially see their savings shrink should inflation start to rise.

The latest inflation forecast figures due out (15th August 2017) showed prices rising at 2.7% but with pay remaining flat even with the news that unemployment continued to fall. In the end the Office for National Statistics showed that the consumer price index (CPI) remained at 2.6% the same as the previous month.

There are a number of different factors creating inflationary pressure in the economy including rising commodities and oil prices. A strong economic growth pushes up inflation also with an increase in the demand for goods and services potentially leading to an increase in prices. The falling pound also contributes to higher inflation as that makes importing goods more expensive.

The rising inflation and the stagnating growth in British households pay packets eats away at the nations savings placing a rising pressure on households. Philip Shaw, chief economist at Investec forecasts inflation to gently rise over the coming months to 3%.

The reality is that most people don’t know how to protect their savings and it could see their wealth simply drain away.

In the long-term this is a threat to people becoming financially worse off in retirement especially if you take in to account low interest rates and the stagnant wage growth.

So what can we do to minimise the risk? In a survey by YouGov 27% felt property was a good way to outpace inflation, 13% thought Cash ISAs could help maintain spending power and surprisingly only 7% said investing in stocks and shares ISAs would help particularly as these offer more protection against inflation than Cash ISAs even though there may be a greater investment risk. As the ISA pot increases yearly, now at £20,000 a year, the biggest danger is that some may leave more of their long term cash savings in cash.

Alistair Wilson, head of Zurich’s Retail Platform Strategy said “If you are putting money aside for the long-term, a workplace pension is one of the best ways to grow your savings, and prevent them from being eaten away by inflation. Not only do you receive a top-up from the Government in the form of tax relief, your employer is also likely to put money into your pot, which can help turbo-charge your savings.”

So here are three simple steps to help beat inflation

1. Shop smart – research before making a purchase
2. Consider stocks & shares ISA rather than Cash ISA
3. Top up your workplace pension – benefit from matched employer contributions, you receive tax relief and are better protected from short term market fluctuations

Professional advice is essential

When it comes to looking after our retirement planning and investments, vigilance and professional advice are essential. If you are wondering what to do, contact Robert Bruce Associates for individual assistance.

NOTHING IN THIS ARTICLE SHOULD BE SEEN AS GIVING INDIVIDUAL FINANCIAL ADVICE.

Source:
Goldmine Media
The Guardian
Zurich

Pension or ISA in retirement?

It seems with all the changes in legislation over the past couple of years, the full freedoms to pension savers and the launch of the Lifetime ISA (LISA) has opened up the need to consider how funding ISAs fits in with investors longer term objectives.

ISAs are traditionally used for savings in a tax efficient way, free of income tax and capital gains with no tax to pay when cashed in unlike pensions which receive upfront tax relief and up to 25% taken as tax-free cash.

The “LISA” which launched in April is a long term saving product, locking up cash until the saver buys their first home or takes the pot as a pension and contributions being boosted by the government. Eligible for over 18 and under 40 and contributions receive a government bonus on any sum up to £4000 a year.

If you are under 40 maybe its worth opening a LISA, you only need £1 to secure the option in investing and once you’ve passed your 40th birthday you’ll loose the chance to open an account.

According to a MetLife study 34% of savers are looking to the ISAs for the majority of their guaranteed income in retirement. Even over 55’s (more than a quarter 28%) are considering using ISAs. Around 21% of pension savers are making more use of ISAs following pension freedoms.

MetLife UK wealth management director, Simon Massey, said: “The increase in annual ISA subscription limits from £15,240 to £20,000 in April this year highlights how much can be saved tax-free, and makes them a real option for retirement planning.”

The MetLife research shows that financial advisors are welcoming the flexibility that pension freedoms, and the incoming ISA subscription limits are bringing. However, saver should be careful before dismissing pensions as tax benefits are still the clear winner over ISAs especially for the higher-rate taxpayer and a pension can only be drawn on after the age of 55 unlike an ISA where funds can be taken before retirement.

Ultimately a hybrid strategy of pension and ISA funding is probably the best idea giving the investor more flexibility moving forward for retirement.

Professional advice is essential

When it comes to looking after our retirement planning and investments, vigilance and professional advice are essential. If you are wondering what to do, contact Robert Bruce Associates for individual assistance.

NOTHING IN THIS ARTICLE SHOULD BE SEEN AS GIVING INDIVIDUAL FINANCIAL ADVICE.

Source:
The Telegraph
The  Actuary

UK’s divorce has begun

There has been uncertainty in the air ever since we decided to Brexit from the EU. With the triggering of Article 50 on March 29th what does it all mean for UK investors?

We know that by leaving the European Union will be one of the most significant changes we will have seen in the UK economy for a generation as to the impact it may make, well, it could be so small we may not even notice. However the implications of Brexit and its impact on markets is certainly a significant challenge for planning over the next couple of years. A lot will come down to the negotiations and settlement made on the terms of Brexit and for now we need to take a step back and assess what is really going on.

The UK economy against expectations has remained strong and subsequently the UK stock market surged ahead with both FTSE100 and FTSE250 showing record highs and the economy growing stronger that most developed economies since last summers referendum. Growing by 2% overall in 2016. Yes the performance of sterling has had its setbacks but in doing so it has made the UK exports more attractive to the rest of the world. With current UK interest rates restricting its appeal to other currencies, especially the dollar, a low-value pound could continue offering further benefits to UK exports and the FTSE.

Savings on the other hand do not move at rapidly as the stock market so there is unlikely to be much change until concrete facts are provided on the eventual deal made and the same probably will apply to the legal and regulatory framework of UK pension plans. The one thing it does allow it for UK legislation to deviate from EU requirements in the future.

Research suggests that six in ten (60%) of remain voters felt pessimistic about the economic outlook compared to one in five (22%) of those who chose to leave. This negativity is also having an effect on peoples own finances and how they plan to save for the future.

Whatever the outcome attention on Brexit will continue in the coming years and investors should be prepared to respond to opportunities rather than getting caught up in all the noise.

Professional advice is essential

When it comes to looking after our retirement planning and investments, vigilance and professional advice are essential. If you are wondering what to do, contact Robert Bruce Associates for individual assistance.

NOTHING IN THIS ARTICLE SHOULD BE SEEN AS GIVING INDIVIDUAL FINANCIAL ADVICE.

Source:
Zurich UK survey, 24th March
M&G investments

Retirement Planning: It’s Good to Talk

Retirement Planning: Turn That Noise Down

In the process of retirement planning, the average person spends a significant amount of time on the internet, reading publications, receiving advice from family and friends and taking in much more information from various sources. Often on reaching the age where retirement planning is something you start to consider, it’s the time when you discover you’re saying the things you heard your parents say, turn the lights off, turn the heating down and turn that noise down!

Many of the customers Robert Bruce Associates advisors meet for the first time are looking for someone to ‘turn the noise down’, to help them see what is critical and what’s just ‘noise’. Every day we are all exposed to many, many sales messages from all angles as companies compete to be the loudest of the bunch. Deciding on your next holiday or pair of shoes is not a potentially life changing event, planning for your retirement can be. Setting a process in place that determines the way you make the most of your later life can be both a daunting and life-changing process. It’s not an everyday event to make decisions that’ll affect you in 20, 30, 40 or more years, time. Why it is important to seek the best advice for you, and the advice isn’t a one-off hit but the start of a lifetime journey.

Retirement Planning: Nothing Like a Cup of Tea & a Chat

Many of today’s life functions can be carried out on the internet but some can’t. To date there appears to be no service for getting your hair cut via the web, and even if there was would we not miss the social interaction we have with our hairdressers? Sometimes there’s nothing like human interaction, and even better if it’s face to face. Robert Bruce Associates always take the personal approach. From the beginning of the retirement planning process until the day you retire you’re likely to have the same advisor with Robert Bruce Associates. Available on the phone or to meet for a chat and a cup of tea Robert Bruce Associates believe in the human approach. Our team of advisors have over 200 year’s collective experience to share helping you turn down the background noise and focus on what’s critical to you.

We’re ready to talk when you are; it’s good to talk.

Professional advice is essential

When it comes to looking after our retirement planning and investments, vigilance and professional advice are essential. If you are wondering what to do, contact Robert Bruce Associates for individual assistance.

NOTHING IN THIS ARTICLE SHOULD BE SEEN AS GIVING INDIVIDUAL FINANCIAL ADVICE.

Retirement Planning: 2015 v 2016

Like every year, a significant amount has happened during 2015 to influence retirement planning. When reflecting on the significant points you can see that every downside has an up. Take for example interest rates, the record low rate continues to suppress our savings but provides a more stable economy for planning our financial activity. While we see the slow, low growth, we avoid the boom and bust cycles. To deliver significant returns on investment during years of low growth and low-interest rates can be a challenge but it does reduce the moments of being either a big winner or massive looser.

Let’s Here About for the Girls!

The plight of retirement planning for females has become a major focus. A combination of lower wages thus, fewer retirement funds but a longer life during retirement years is a toxic formula. Changes in wage equality appear to be taking shape, but will retirement planning take account of the child care years? A solution needs to be found for those females taking the career and family paths. There’s still a higher percentage of females who make up the part-time and low paid employment sectors. It is important for the economy and us all that the retirement gender gap closed.

Self-Fulfilling Poor Retirement!

Being self-employed has seen a boom in recent years. There’s now an estimated 4.6m* within the UK operating as self-employed. It’s estimated that perhaps less than 10% of those are making the right provisions within their retirement planning. The flexibility and freedom in the working day that comes with being self-employed are also true in the planning of your retirement. You have the freedom and flexibility to invest as you see fit when you see fit but without the right advice, this can often leave you with an unexpected gap when it comes to taking your retirement.

What Will 2016 Bring?

In short, more of the above!

Robert Bruce Associates has been providing financial advice for almost 50 years thus, we expect and plan for all scenarios. Our advice is built around you the individual taking into account the current needs and your future retirement vision. Flexibility is a built-in feature to ensure your retirement plan can move with you and the market growing at the pace you need and can afford. Whatever 2016 will bring we wish you a fantastic and successful retirement planning year.

Professional advice is essential

When it comes to looking after our retirement planning and investments, vigilance and professional advice are essential. If you are wondering what to do, contact Robert Bruce Associates for individual assistance.

NOTHING IN THIS ARTICLE SHOULD BE SEEN AS GIVING INDIVIDUAL FINANCIAL ADVICE.

*Source: http://www.moneyobserver.com/news/03-12-2015/self-employed-workers-overlooked-pension-provision-arrangements

 

Retirement: What’s the Most Wonderful Time of the Year

What are the effects of winter on retirement?
It’s winter, the time for long dark nights and the news warning of yet another Artic Blast is on its way.  For those in retirement, winter can be a difficult season. Many feel cut off from their normal routine losing the important daily contact with their neighbours, friends and acquaintances. Winter can make you confined to the house watching endless daytime telly that would eventually get to us all. For those not yet retired, retirement seems like the best solution to avoid that alarm clock and slip back under the duvet for another few minutes or hours. Whatever the circumstance winter can be a precarious time of the year as the seasonal effects make their mark on our psychological state.

Four seasons within one’s mind.

Seasonality has shown to play an important role in the process of an investment decision. It can affect our moods which in turn influences our behaviour leading us to conclusions on investment we wouldn’t make at other times of the year. At Robert Bruce Associates, we see a significant change during the winter months in the types of investment conversations. It’s hardly surprising that as the flu bug starts to do the rounds many start to consider the benefits of living in a warmer climate leading to that villa in the South of Spain becoming ever more appealing. Seasonality can also lead to you making a retirement decision. Deciding when to retire may be one of the most important decisions an individual makes during his or her lifetime. Getting out of bed early to start the long commute to work in the cold, wind and rain is certainly a challenge at the best of times but when you’re of retirement age and pondering on the actual date, it’s difficult not to say today!

Do it right!

Robert Bruce Associates has over 200 years of collective experience in helping clients through the retirement journey. From setting their retirement plan, making the first investment to the actual retirement day decades later. Our highly experienced team of advisors are always on hand to take that call on the very cold, very dark Monday morning when you feel you’ve had enough at it’s time to ‘cash in your chips’. Making the right decision at the right time within the right environment is vital in maximising the benefits of your retirement plan.

So wrap up, have a hot beverage and go out and face the day.
Your time in the sun is coming but let’s make sure it’s the time to make the sunshine stay.

 

Professional advice is essential

When it comes to looking after our retirement planning and investments, vigilance and professional advice are essential. If you are wondering what to do, contact Robert Bruce Associates for individual assistance.

NOTHING IN THIS ARTICLE SHOULD BE SEEN AS GIVING INDIVIDUAL FINANCIAL ADVICE.