Financial Focus: Summer 2020

Summary

We have just come through an unprecedented six months. At the beginning of the year, nobody could have predicted the disruption we would be facing in our day-to-day lives – at home, at work, and in our personal finances. From stock-market turbulence, job cuts and furloughing, to the Government’s various mitigating responses – Covid-19 has taken its toll our financial health as well as our physical and often emotional wellbeing.

In our summer newsletter, we look at some of the ways in which personal finances, savings and investments may have been affected since the start of the year, and steps we can take to protect ourselves from further damage.

To start with, a sobering message: ‘It will happen to you’. Solicitors have seen a significant uptake in will-writing in recent months, according to the Law Society. Notwithstanding the logistical impracticalities of witnessing signatures while social distancing, the pandemic has served as a reminder to all of us not to procrastinate. Intestacy laws do not necessarily pass everything to a remaining spouse and leave no provision for unmarried partners. Don’t file and forget your will, and if you haven’t yet written one, do so without delay.

Clients who rely on a pension for regular income should consider the article ‘Time to review your drawdown plans?’ With uncertainty in the investments landscape, it may be worth leaving the capital in pensions portfolios intact in the short term and relying on other savings for income, until the markets resume stability. This is something that requires careful discussion.

Those affected by reduced income or job insecurity during the coronavirus lockdown may have found succour in the Government’s coronavirus job retention scheme (CJRS) and the FCA’s work to secure mortgage payment holidays for those struggling. Yet these measures aren’t permanent and need to be paid for – eventually by the taxpayer – and State benefits such as Universal Credit are notoriously low. In ‘Leaving it to chance?’ we reiterate the importance of personal financial protection to bolster any State provision.

On a cheerier note, the fundraising efforts of centenarian Captain Tom Moore are an inspiration for a fulfilling retirement. With more people living into their 90s, in ‘Planning for your century’ we consider the financial planning which needs to be considered for a long, productive and comfortable retirement.

At the other end of the age spectrum, the first generation of child trust funds (CTFs) are reaching maturity in September when their owners reach their 18th birthdays. While CTFs are not available to new investors, their replacement, the Junior ISA, offers comparatively favourable interest rates and product choice. The savings limit has also more than doubled this year, to £9,000. ‘The kids are alright’ looks at what’s available for the younger generation.

Download the newsletter below.