Your Future.
Your Way.
Insightful, cost effective advice tailored to you
Your Future.
Your Way.
Insightful, cost effective advice tailored to you
Latest Article
You might think that a Conservative Chancellor of the Exchequer would regard his Budget as a success if it was enthusiastically welcomed by the Daily Telegraph. But a Chancellor always has other important audiences. How will they respond to Rishi Sunak’s Budget?
Posted by: Chris Gilchrist
Interest rates are low and the Bank of England has signalled that it expects them to stay low for at least the rest of this year. After NS&I cut its interest rates last autumn, the commercial banks swiftly followed with rate cuts of their own. Most instant access accounts now pay under 0.2% and even a 90-day notice account pays well under 1%.
In his Autumn statement, Rishi Sunak reiterated a timeworn Chancellor’s pledge to restore the public finances. Notably, he declared that the financial emergency had only just begun and that public borrowing and debt were clearly unsustainable. These statements, Treasury briefings and forecasts by the Office for Budgetary Responsibility have led analysts to start working out how much taxes need to increase in order to plug a gap of about £40 billion between the government’s revenues and its spending that is expected by 2025. Income tax, National Insurance, VAT, capital gains tax, inheritance tax – which will go up?
Stock market crashes create anxiety for investors, especially those who – like most retired people – are withdrawing regular sums from their investments to provide the income they need. But FiveWays’ retirement income planning strategy, which we call ‘bucketing’, means clients are insulated from all but the very worst possible stock market disasters.
At the start of 2020, many commentators predicted flat or slightly declining house prices over the year as we waited to see what kind of Brexit trade deal the government struck with the EU. When the pandemic struck and we entered lockdown, the consensus was that prices would fall. Yet as soon as the market opened up in July, when viewings and transactions were permitted again, prices started to rise and in some areas it seems they have risen quite strongly.
Chancellor Rishi Sunak made his July mini-budget seem bigger than it was. But the real new spending he announced was not worth £30 billion but about £20 billion, and this is based on optimistic estimates of job recovery. If that sounds a lot, bear in mind that the government has actually spent £160 billion so far on anti-COVID measures and allocated a further £122 billion to loans and guarantees. And consider that the government has allocated an astounding £15 billion to purchases of protective equipment – more than annual spending on policing in England and Wales – and £10 billion to its test-and-trace scheme.
In our current state of enforced isolation, many of us have more time on our hands than usual. It’s a time when we actually get round to doing those things that we tend to say ‘I will get around to it’ but never do. Apart from all the DIY, two activities have suddenly become much more popular: writing or updating a Will, and creating a Lasting Power of Attorney.
