Market Bulletin

2017 was the year of the campaign trail, with several key elections held in counties with great influence on global economics and stock markets. Here, we recap on the political posturing that defined the past 12 months, and what it meant of the global stock markets.

On 20 January, Donald Trump was inaugurated as the 45th president of the United States. Global stock markets had rallied since the election result, with many in corporate America hoping to benefit from promised tax reforms. Not everyone was happy – on inauguration day, 420 marches were reported in the US making it the largest single-day protest in American history.

In Europe, the Dutch were hailed as having “defeated populism” in the 15 March election by denying the Geert Wilders-led Party of Freedom’s bid for power.

On 7 May Emmanuel Macron of En Marche! was declared president of France having won the second-round vote against the Marine Le Pen-led National Front by a decisive margin. World stock markets are at their highest point for the year so far.

Across the Channel, the UK general election on 8 June restored Theresa May as prime minister, but only after the Democratic Unionist Part of Northern Ireland agrees to support a Conservative minority government. As the result came in, the prospect of a hung parliament led to an immediate fall in the value of the pound.

After a relatively quiet end to the summer, aside from ongoing Brexit discussions, the eurozone’s biggest player Germany held its federal election on 24 September. The result saw the Christian Democratic Union win only 33% of the vote – its lowest share of the vote since 1949 – but enough to see Angela Merkel remain as chancellor. Markets then rallied for the last week of September and continued to climb in October.

Into autumn and it was the turn of the Japanese to go to the polls on 22 October. Given the dramatic fall in popularity that many world leaders had found themselves in over the year, it was a relief for prime minister Shinzo Abe to secure a big election win. The father of ‘Abenomics’ and the ‘three arrows’ policy of monetary easing, fiscal stimulus and structural reform, Abe’s victory was welcomed by a rise in markets.

Elsewhere in Asia, perhaps the most significant global change was happening in China where the hugely powerful Communist party held its five-yearly congress. President Xi Jinping cemented his legacy with his own political philosophy being written into the country’s constitution.

Emerging markets will dominate the electoral calendar in 2018, with votes due in the likes of Russia, Mexico, Brazil and Pakistan.

Need advice about your investment options? Please us on 01202 520550.

Omnis Investments launches Strategic Bond and UK Equity Income funds

Omnis Investments, the fund range available exclusively to our advisers, is to launch two new funds on 5 December 2017 to be offered initially though the Omnis Managed Portfolio Service, a risk-graded discretionary management service for Openwork clients.

The Omnis Strategic Bond Fund is to be run by Fidelity International’s Ian Spreadbury, Claudio Ferrarese and Tim Foster. It greatly enhances the service’s ability to diversify across fixed income, investing across developed and emerging market government bonds, inflation-linked bonds, investment grade and high-yield corporate bonds.

Ian Spreadbury is one of the most respected and recognisable names in the fixed income space with over 30 years of investment experience. He and co-managers Ferrarese and Foster will focus on what they see as three core pillars of bond investing – aiming to deliver an attractive risk adjusted return, while striking an appropriate balance between income, low volatility and equity diversification.

The Omnis UK Equity Income Fund is to be run by Royal London Asset Management’s Martin Cholwill. The fund gives the service much greater choice and flexibility in allocating across UK equity holdings, sitting alongside the Omnis UK Equity and Omnis Income & Growth funds.

Martin Cholwill has vast experience in managing money since 1983, and is widely recognised as one of the best fund managers in his field. The fund will adhere to Martin’s robust, stable investment process, that has proven effective through several market cycles. His high-conviction style focuses on fundamentals, favouring companies with strong business models and sound finances.

Toni Meadows, Chief Investment Officer at Omnis Investments, said: “These managers are from the very top-tier of UK investors, and we are thrilled to have secured their talents for Openwork advisers and their clients.

The new funds offer diversification benefits, as well as the ability to deliver meaningful yields to the portfolios, and are a great addition to our armoury.”

He added: “Six months in and the Omnis Managed Portfolio Service is already gaining traction, and adding additional funds to the toolbox makes us more confident that we can deliver greater, cost-efficient diversification and even better risk-adjusted returns”.

John Clougherty, head of wholesale at Fidelity International, said: “Fidelity International is delighted to have been selected by Omnis to provide fixed income expertise for the Omnis investment proposition. We very much look forward to working with Omnis and the Openwork advisers.”

Phil Reid, head of wholesale at Royal London Asset Management, said: “RLAM is delighted to partner with Omnis and work with the growing number of Openwork advisers. I’m particularly pleased Omnis has selected our UK Equity Income strategy; we see this as a strong endorsement of our investment process.”

Budget, November 2017

The media will be full of facts and deep analysis on the Budget that Philip Hammond has delivered,
including the headline grabbing rabbit that escaped the chancellor’s hat to abolish stamp duty for most
first-time buyers in England and Wales. Out of the 88 pages which constituted the chancellor’s second
Budget, table 2.1 on pages 28-30 (see below) is once again the most revealing.

It shows plainly the impact on the public finances of each measure being announced: a (-) is a ‘giveaway’
or fiscal boost from Treasury to the economy, (+) takes money out of the economy and into the public
finances. We call it “THE table” because it is the quickest way to gauge the reality of what has just been

It identifies 69 specific policy decisions with either a positive or negative effect on the public finances.
Taken together they represent a near £25 billion giveaway over the six years from 2017/18. This is pretty
substantial when compared to the equivalent number in the Spring Budget, which indicated a mild
tightening of £2bn over five years. The Autumn Statement last year was the greatest giveaway in recent
years at £33 billion. So, taken together, the chancellor will have put £56 billion from the public purse into
the UK economy in just over a year.

The table shows the detail in 414 entries across housing, the NHS, families and work, economic
development, tax compliance, tax rates, air quality and other measures.
Budgets are one of the most important set-piece events in the national calendar. Markets move, careers
are made and lost, the economy can be aided or hindered. And sitting behind the Budget is the
independent forecast of the Office for Budget Responsibility (OBR).
The OBR published its November outlook for the economy and public finances as the chancellor sat
down today. The economy and public finances are naturally very difficult to forecast but the point of trying
to nail this particular jelly to a wall is to determine the projections for the health of the economy, the
subsequent flow of tax revenues to the exchequer, and demands upon the same for spending. The
performance of the engine of the economy is far more important than any one headline tax or spend

At the core of those forecasts was the fact that this is the first time in modern history that the official UK
GDP growth forecasts are below 2% every single year through to 2022. A sobering thought for us all as
we look towards the festive season.


Table 2.1: Autumn Budget 2017 policy decisions (£ million)1
Head 2017-18 2018-19 2019-20 2020-21 2021-22 2022-232
Housing and Homeownership
1 Land Assembly Fund3 Spend 0 0 -220 -355 -355 -355
2 Housing Infrastructure Fund: extend3 Spend 0 0 -215 -710 -1,070 -1,185
3 Small sites: infrastructure and remediation Spend 0 -275 -355 -120 0 0
4 Local Authority housebuilding: additional investment Spend 0 0 -355 -265 -260 0
5 Stamp Duty Land Tax: abolish for First Time Buyers up to £300,000 Tax -125 -560 -585 -610 -640 -670
6 Right to Buy for Housing Association tenants: pilot Spend 0 0 -85 0 0 0
7 Council Tax: increase maximum empty home premium to 100% Tax 0 0 0 0 +5 +5
National Health Service
8 NHS: additional resource Spend -400 -1,900 -1,070 0 0 0
9 NHS: additional capital Spend -600 -420 -840 -1,020 -960 -360
Supporting families and working people
10 Fuel Duty: freeze for 2018-19 Tax 0 -830 -825 -845 -865 -885
11 Alcohol Duties: freeze in 2018 Tax -35 -225 -230 -230 -235 -240
12 Air Passenger Duty: freeze for long-haul economy flights and raise business class multiplier Tax 0 0 +25 +25 +25 +30
13 Targeted Affordability Fund: increase Spend 0 -40 -85 -95 -100 -110
14 Universal Credit: remove 7 day wait and extend advances to 100% Spend -20 -170 -205 -195 -160 -145
15 Universal Credit: run on payment for housing benefit recipients Spend 0 -130 -125 -135 -110 -40
16 Universal Credit: in-work progression trials Spend * * * -5 -5 0
17 Private rented sector access schemes: support for households at risk of homelessness Spend 0 -10 -10
18 Disabled Facilities Grant: additional resource Spend -50 0 0 0 0 0
19 Relationship Support: continue programme Spend 0 -5 -10
An economy fit for the future
20 Domestic spending: preparing for EU Exit Spend 0 -1,500 -1,500 0 0 0
21 National Productivity Investment Fund3 Spend 0 0 0 0 0 -7,000
22 Research and Development: NPIF investment3 Spend 0 0 0 0 -2,300
23 Research and Development: increase R&D expenditure credit to 12% Spend -5 -60 -170 -175 -170 -175
24 Oil and Gas: transferrable tax history Tax 0 +5 +20 +10 +10 +25
25 Patient Capital Review: reforms to tax reliefs to support productive investment Tax 0 0 +45 +35 -15 -20
26 Innovation: Ultra Low Emission Vehicles: plug in car grant Spend 0 -50 -50 0 0 0
27 Innovation: tech, AI, and geo-spatial data Spend 0 -70 -75
28 Transport: accelerate capital investment for intra-city transport (Transforming Cities Fund) Spend 0 -10 -240 -285 +525
29 Transport: additional investment in local roads Spend -55 0 0 0 0 0
30 Public Works Loan Board: new local infrastructure rate Spend 0 * -5 -5 -5 -5
31 Skills: National Retraining Scheme initial investment Spend 0 -20 -45
32 Skills: investment in computer science teachers and maths Spend 0 -30 -50
33 Skills: teacher premium pilot Spend 0 -10 -15 -15 -5 0
34 Business Rates: bring forward CPI uprating to 2018-19 Tax 0 -240 -530 -525 -520 -520
35 Business Rates: extend pubs discount to 2018-19 Tax 0 -30 0 0 0 0
36 Competition and Markets Authority: additional enforcement Spend 0 -5 -5 +5 +15 +10
37 Aggregates Levy: freeze in 2018-19 Tax 0 -15 -10 -10 -10 -10
38 HGV VED and Road User Levy: freeze in 2018-19 Tax 0 -15 -10 -15 -15 -15
Avoidance, Evasion, Fraud and Error
39 Avoidance and Evasion: additional compliance resource Tax -10 +10 +170 +585 +580 +740
40 Corporation Tax: tackle related party step up schemes Tax +15 +45 +45 +45 +45 +45
41 Corporation Tax: depreciatory transactions Tax +5 +10 +10 +10 +10 +10
42 Royalty payments made to low tax jurisdictions: withholding tax Tax 0 0 +285 +225 +160 +130
43 Online VAT fraud: extend powers to combat Tax 0 +10 +20 +40 +50 +45
44 Offshore Time Limits: extend to prevent non-compliance Tax 0 * * * +5 +10
45 Carried Interest: prevent avoidance of Capital Gains Tax Tax 0 +20 +170 +165 +150 +145
46 Insolvency use to escape tax debt Tax 0 -5 +70 +135 +150 +150
47 Dynamic coding-out of debt Tax 0 0 +55 +30 +20 +20
48 Construction supply chain VAT fraud: introduce reverse charge Tax 0 0 +90 +135 +105 +75
49 Waste crime Tax 0 +30 +45 +45 +50 +45
50 Fraud, Error, and Debt: greater use of real-time information Spend 0 +85 +75 +65 +40 +40
A fair and sustainable tax system
51 Corporation Tax: freeze indexation allowance from January 2018 Tax +30 +165 +265 +345 +440 +525
52 Capital Gains Tax: extend to all non-resident gains from April 2019 Tax +5 +15 +35 +115 +140 +160
53 Non-resident property income: move from Income Tax to Corporation Tax Tax 0 0 0 +690 -310 -25
54 Capital Gains Tax payment window reduction: delay to April 2020 Tax 0 0 -1,200 +950 +235 +10
55 VAT registration threshold: maintain at £85,000 for two years Tax 0 +15 +55 +105 +145 +170
56 Tobacco Duty: continue escalator and index Minimum Excise Duty Tax +45 +35 +40 +45 +40 +35
Other public spending
57 Adjustments to DEL spending Spend +1,000 0 -1,135 0 0 0
58 Official Development Assistance: meet 0.7% GNI target Spend 0 +375 0 0 0 0
59 Scotland police and fire: VAT refunds Tax 0 -40 -40 -40 -45 -45
Air Quality
60 Air Quality: increase Company Car Tax diesel supplement by 1ppt from April 2018 Tax 0 +70 +35 -30 +130 +90
61 Air Quality: First Year Rate increased by one VED band for new diesel cars from April 2018 Tax 0 +125 +50 +10 * *
62 Air Quality: funding for Air Quality Plan and Clean Air Fund Spend -20 -180 -215 -80
Previously announced policy decisions
63 Tuition Fees: raise threshold to £25,000 in April 2018 Tax 0 -50 -100 -175 -235 -295
64 Tuition Fees: freeze fees in September 2018 Tax 0 -5 -15 -25 -35 -45
65 Oil and Gas: funding for UK continental shelf exploration projects Spend 0 -5 0 0 0 0
66 NICs: maintain Class 4 NICs at 9% and delay NICs Bill by one year Tax -10 -125 -645 -685 -565 -525
67 Making Tax Digital: only apply above VAT threshold and for VAT Tax * * -65 -245 -515 -585
68 City Deals: Swansea and Edinburgh Spend 0 -30 -30 -30
69 Social rented sector: maintain current rent policy without Local Housing Allowance cap Spend 0 0 -155 -205 -255 -320
Total policy decisions3 -230 -6,045 -9,915 -3,315 -2,960 -2,520
Total spending policy decisions -150 -4,460 -7,190 -3,625 -1,450 -1,105
Total tax policy decisions -80 -1,585 -2,725 +310 -1,510 -1,415
* Negligible
1 Costings reflect the OBR’s latest economic and fiscal determinants.
2 At Spending Review 2015, the government set departmental spending plans for resource DEL (RDEL) for the years up to and including 2019-20, and capital DEL (CDEL) for the years up to and including 2020-21. Where specific commitments have been made beyond those periods, these have been set out on the scorecard. Where a specific commitment has not been made, adjustments have been made to the overall spending assumption beyond the period.
3 These figures do not feed into the Total policy decisions line. In 2021-22 and 2022-23, funding for these measures has been allocated from the aggregate total for capital spending. This includes the National Productivity Investment Fund. The NPIF will extend into 2022-23 at £7bn in that year.



20th November 2017


Food prices on the rise though UK headline inflation unchanged
UK inflation remained unchanged at a five-year high of 3% during October, wrong-footing analysts who had predicted a further rise. However, food prices rose 4% year-on-year, their fastest rate in four years as the fall in the pound pushed up the cost of living. UK wage growth was 2.2% between July and September, compared with a year earlier, while the UK unemployment rate was stable for the third month in a row at 4.3%. A new report from the Centre for Economic Performance has found that the average household is now paying £404 a year extra due to rising prices.

One step closer to US tax reform…
House Republicans have voted to pass plans for what could be the most significant overhaul of the US tax code in over 30 years, prompting treasury secretary Steven Mnuchin to say he expects the tax reform bill to be sent to president Donald Trump this side of Christmas. The Senate now must vote on its version of the tax plan, with suggestions over the weekend that the White House may be willing to remove a contentious provision to repeal the Affordable Care Act if it proves a hinderance to getting the tax bill through.

… as inflation climbs closer to 2% target
Core consumer prices in the US climbed 1.8% year-on-year to in October, up from 1.7% in September, and a step closer to the Federal Reserve’s 2% target. According to Bloomberg (20 November), there is currently a 92.3% probability of policymakers raising interest rates further at their next meeting on 13 December.

German coalition talks collapse…
Two months on from the election, and talks aimed at forming a coalition government in Germany have seeming collapsed. The Free Democratic Party (FDP), which received 10.6% of the vote in September, has pulled out of talks with chancellor Angela Merkel’s Christian Democratic Union (CDU/CSU) party. In what represents her biggest challenge in 12 years in power, Merkel may well have to face a second election, or form a minority government with the Greens.

… as its economy grows
The euro was last week buoyed by strong economic data from the eurozone’s largest economy as German GDP grew by 0.8% during the three months to end of September, beating the consensus estimate of 0.6%. The Federal Statistics Office (Destatis) attributed the rise to an increase in business investment, especially machinery and equipment. With an annualised growth rate of 2.8%, this is the fastest the German economy has grown since the first quarter of 2011. Italian GDP also surprised, growing at 0.5% during the three months to end of September, beating the consensus estimate of 0.3%.


All eyes on Hammond’s Autumn Budget

Chancellor Philip Hammond will deliver his third Budget statement on Wednesday, which watchers will hope delivers insight into the measures taken to ensure the success of the UK economy as it prepares to exit the EU. Having already made bold targets on bringing down public sector debt – and aiming to balance the books by 2025 – Hammond can expect borrowing to be up to £8bn lower this year. It is reported that the Treasury will pledge to build 300,000 homes per year with £5bn put aside for housing schemes, while the chancellor is also under pressure to ease financial pressures on the NHS and address public sector pay. Small businesses will be on tenterhooks with suggestions that the VAT threshold could be lowered from the current £85,000 limit on annual turnover.

The Omnis Managed Investments ICVC and the Omnis Portfolio Investments ICVC are authorised Investment Companies with Variable Capital. The authorised corporate director of the Omnis
Managed Investments ICVC and the Omnis Portfolio Investments ICVC is Omnis Investments Limited (Registered Address: Washington House, Lydiard Fields, Swindon, SN5 8UB) which is
authorised and regulated by the Financial Conduct Authority, 25 North Colonnade, London E14 5HS. Omnis Investments Limited does not offer investment advice nor make recommendations
regarding investments. Potential investors are particularly advised to read the specific risks and charges applicable to the Funds which are contained in the Prospectus and Key Investor
Information Documents (KIIDs).
Omnis Investments Limited is registered in England and Wales under registration number 06582314 (Registered Office: Washington House, Lydiard Fields, Swindon SN5 8UB).


13th November 2017


UK given two weeks to clarify Brexit bill
The EU’s chief Brexit negotiator Michel Barnier has given the UK two weeks to clarify what divorce it will pay if progress is to be made in Brexit talks. The so-called ‘divorce bill’ has proven to be a barrier to negotiations, but the EU is demanding clarity on monetary commitments before it will open talks on a transition period on the principles of a future trading deal. Next month, an EU summit will determine whether enough progress has been made on preliminary issues to allow Brexit talks to move on to the next level. More pressure was piled on prime minister Theresa May over the weekend with reports that 40 Conservative MPs had agreed to sign a letter of no confidence in her leadership – this in turn meant the pound took a tumble on Monday morning.

Trump’s Asia tour ramps up pressure on North Korea
Donald Trump used the platform of his visit to Asia to issue more warnings against North Korean leader Kim Jong-un. At a speech at the Asia-Pacific Economic Cooperation summit in Vietnam, the US president asserted that the region must not be “held hostage to a dictator’s twisted fantasies of violent conquest and nuclear blackmail”. The tour across Japan, South Korea, China, Vietnam and Philippines has seen Trump look to garner support for further sanctions on Pyongyang.
Chinese inflation on the rise
China’s consumer price inflation (CPI) accelerated to 1.9% in October year-on-year, which was higher than had been forecasted. According to the National Bureau of Statistics, the producer price index rose 6.9% in the same period, unchanged from the previous month’s increase. It was also revealed that the country’s trade surplus with the US fell to $26.6bn in October, from $28.1bn. As previously discussed (see Market Update 6/11/17), one serious concern for investors is China’s mounting debt.

Investors frustrated with delay on US tax reforms
Stock markets have been preoccupied with a perceived lack of progress on US tax reform. With a Thanksgiving break fast approaching, there are fears that the signing off on a concrete tax reform plan is likely to be delayed, which could in turn weigh on the value of the dollar. There are discrepancies between plans delivered by House of Representative and Senate Republicans, including a delay in the implementation of a corporate tax rate cut.

UK manufacturing sees September surge
UK manufacturing output grew by 0.7% from August to September, more than double the expected 0.3% figure. The growth, according to the Office for National Statistics, was driven by increases in the production of computer, electrical and general machinery and equipment. Total production output, including commodities, climbed by 0.7%, for the sixth consecutive month.


Crucial UK data due before Autumn Budget
With chancellor Philip Hammond set to outline his Autumn Budget on 22 November, this week sees the release of crucial data on the state of the UK economy. Official statistics are due for inflation and unemployment. While the latter remains under control – the jobless rate stood at a 42-year low of 4.3% between June and August this year – rising inflation could be problematic. Economists polled by Reuters believe the headline data will show that inflation climbed to 3.1% last month, up from 3% in September. Others believe the figure will be higher as the impact of the weaker pound feeds through to higher prices. Either way, inflation above 3% will require the Bank of England governor Mark Carney to write to Hammond to explain why the figure is so far in excess of the Bank’s stated 2% target. The UK economy is expected to lag behind many of its European neighbours this year – last week the European Commission cut its growth forecast for 2017 from 1.8% to 1.5%.

UK Consumer Price Inflation (September 2012 – September 2017)

Rsz _1rsz _united -kingdom -inflation -cpi _1

Source: Office for National Statistics,


Time for a move in US inflation?

Fresh inflation data is also due from the US this week. It will be the final reading of the Consumer Price Index (CPI) before next month’s Federal Reserve meeting, where officials are widely expected to initiate an interest rate rise (the market is currently pricing in a 92% probability of a December rate rise). The annual core inflation rate, which excludes food and energy prices, has stood at 1.7% for the past five consecutive months.

US retail sales figures are also due, a key indication of the mood of consumers’ willingness to spend. The last month-on-month figure showed a sharp 1.6% rise in September, buoyed by a surge in receipts at services stations, which reflected higher gasoline prices after hurricane Harvey disrupted production at oil refineries in the Gulf Coast. The big spending, of course, happens between Thanksgiving and Christmas, and global advisory business FTI Consulting last week published its 2017 US Holiday Retail forecast, which projects 4.5% growth in discretionary holiday spending, an increase from 3.3% during the 2016 season.

US Retail Sales (September 2016 – September 2017)

Rsz _united -states -retail -sales

Source: US Census Bureau,


Through a well-diversified approach to asset allocation, the Omnis investment team aims to defend and grow the value of your portfolio through market cycles. Further falls in sterling on Monday, to fresh recent lows against the dollar at $1.3070, flies in the face of some analysts who had predicted the currency had bottomed out. The Openwork Wealth Services Limited investment team have remained underweight the pound in their portfolios since the formation of the Service in April 2017, and recently increased that underweight with a move into Asia Pacific equities.


The Omnis Managed Investments ICVC and the Omnis Portfolio Investments ICVC are authorised Investment Companies with Variable Capital. The authorised corporate director of the Omnis
Managed Investments ICVC and the Omnis Portfolio Investments ICVC is Omnis Investments Limited (Registered Address: Washington House, Lydiard Fields, Swindon, SN5 8UB) which is
authorised and regulated by the Financial Conduct Authority, 25 North Colonnade, London E14 5HS. Omnis Investments Limited does not offer investment advice nor make recommendations
regarding investments. Potential investors are particularly advised to read the specific risks and charges applicable to the Funds which are contained in the Prospectus and Key Investor
Information Documents (KIIDs).
Omnis Investments Limited is registered in England and Wales under registration number 06582314 (Registered Office: Washington House, Lydiard Fields, Swindon SN5 8UB).

OMNIS Analysis – What The UK Rate Rise Means For Investors

The move from 0.25% to 0.5% reverses the cut that was put in place immediately following last year’s EU referendum. This could be a signal of shift in policy from the Bank, which may well initiate further rate hikes in the months ahead to combat a rise in inflation.

“The nine MPC members voted seven to two in favour of a rise, but crucially the announcement was accompanied by minutes that painted a cautious picture on future interest rate increases due to the fragile nature of the economy and uncertainty over Brexit,” said Toni Meadows, chief investment officer at Omnis Investments.

“Policy makers also omitted language from previous statements saying that more hikes could be needed than financial markets expect. This implies officials are comfortable with pricing for two more quarter-point increases, roughly one by late next year and another in 2020.”


The Omnis Managed Portfolio Service and constituent Omnis funds are monitored daily, as are movements in equity markets, bonds and currencies.

Meadows notes that the Bank’s dovish tone on the future path of interest rates pushed bond yields lower, which is positive for UK gilt prices.

“It also hit the value of sterling and this is positive for our global bond and equity holdings,” he said.

“The UK equity market initially rallied but has subsequently settled back at similar levels to before the announcement.”

Across the Atlantic, today will also see the widely anticipated announcement of a new chair for the US Federal Reserve. The expected selection of Jay Powell instead of John Taylor also paints a dovish picture for the future path of interest rates in the US, and is broadly supportive of equity markets.


The value of investments and any income from them can go down as well as up and you may not get back the original amount invested. Past performance is not a guide to future performance and should not be relied upon. Always seek professional advice before acting.

Millions working into old age because they don’t pay into pensions

Millions of people face the prospect of working into their 70s or 80s to make ends meet amid a pensions timebomb.

A probe by the Financial Conduct Authority reveals a third of workers – roughly 15 million people – are not saving towards retirement.

Those who are depending on the state pcould be in for a rude awakening.

Writing in the Mirror, FCA chief executive Andrew Bailey says: “Around 15 million adults who are not retired are not paying into a pension…

“While the state pension is a hugely important part of retirement provision… for many people it is not enough to maintain living standards.” He adds the FCA’s largest ever survey into the nation’s personal finances, a poll of 13,000 people, shows “many are not saving enough for their retirement”.

The average amount being put away is 4.2% of earnings, experts recommend at least 12%. The FCA’s report Financial Lives, comes as experts predict the pensions crisis will worsen.

With the population getting increasingly older, the state pension age keeps rising in a bid to reduce the escalating pensions bill.

The looming turmoil comes despite many people being automatically enrolled in workplace pension unless they have opted out.

Former pensions minister Sir Steve Webb said: “The good news is over eight million people have been enrolled into a workplace pension in the last five years.

Credits: Getty“But many of these people are only putting a few pounds a week into a pension… Contribution rates now need to be steadily increased if people are going to be able to afford to retire.”

Pensions expert Tom McPhail, of brokers Hargreaves Lansdown, said: “For all the success of auto-enrolment…, it is worth remembering there are almost as many who have been left behind.”

Those with no pension pot may have to claim extra benefits, mean­ing more strain on public finances.

What today’s interest rate rise means for you

As was widely expected, the Bank of England’s Monetary Policy Committee (MPC) today raised interest rates for the first time in 10 years.

The change is a small one, moving from the all-time low base rate of 0.25% that the MPC moved to immediately following last year’s EU referendum, back up to 0.5%. Nevertheless, this could be a signal of shift in policy from the Bank which may well initiate further rate hikes in 2018 to combat a rise in inflation.

While today’s move is unlikely to have a significant impact on your finances, those on variable rate mortgages could see a small increase in their monthly payments. Payments will not change for those currently on fixed rate mortgages.

Savers may benefit from a small increase in interest paid on their cash accounts, though rates offered through bank accounts remain feeble. Annuity rates may also see a small increase.

If you have any questions regarding your finances, please contact us and we will be happy to help address any concerns you may have.


MARKET UPDATE – End of October 2017

All eyes will be on the Bank of England tomorrow (Thursday 2 November) as it is reported that there is an odds-on chance that the Monetary Policy Committee will increase interest rates by 0.25%.  While this increase will be the first in a decade, it is simply a reversing of the most recent cut made in August last year.


Also, on Thursday, the Bank of England will publish its Inflation Report which will provide updated forecasts for the economy, inflation, employment and so on.  This will be an interesting insight on what the Bank believes is happening to the economy ahead of the first Autumn Budget, which will take place in three weeks time on 22 November.


During October, the FTSE 100 recorded its highest ever closing level on 12 October at 7,556.24.  It ended the month at 7,493.08, which was still 1.6% higher than the September closing figure of 7,372.76.


In the US, the Dow Jones Industrial Average continued its upward momentum, closing at 23,377.24, a gain of 4.3% above October’s opening level of 22,423.47.  This marked the seventh straight monthly gain, leaving March as its only losing month so far in 2017.


In terms of £ Sterling, it ended the month at 1.33 US Dollars, which was 0.7% lower than the beginning of October.  Against the Euro, £ Sterling strengthened slightly during October, being 0.8% higher at 1.14 Euros.


Inflation, as measured by the Consumer Prices Index (CPI), increased again to 2.8% (this is based on September’s data which is reported in October).  This was up from 2.7% with rising prices for food and recreational goods, along with transport costs, which fell by less than they did a year ago.


The 12-month rate actually increased to 3.0% (September’s data), which was its highest level for 5 years.  This figure is significant because state pension payments from April 2018 will rise in line with September’s CPI.  Under the “triple lock” guarantee, the basic state pension rises by a rate equal to September’s CPI rate, earnings growth or 2.5%, whichever is the greatest.  At the moment, the full new state pension is £159.55 per week, equivalent to £8,296.60 per year.


Furthermore, this steadily rising inflation rate continues to mean that inflation remains an issue for long-suffering bank and building society savers who are losing money in real terms when you consider the rate of savings interest compared to the rate of inflation.  This appears to be having an impact as the amount they saved into Cash ISAs in tax year 2016/17 was £19.5 billion lower than the previous tax year.


With external influences remaining uncertain, it is reasonable to assume that we may well be entering a volatile period for investors and as usual it remains increasingly important to invest in a well diversified investment proposition.