Month: July 2022

What is a Trust and Would it be Good for Me?

If you have assets such as land, property, cars, money and investments, you’ll want to be sure they go to your chosen beneficiaries in the future.

That way you can be sure that your loved ones have financial stability in the future and that you’ve left them a meaningful legacy.

But hang on, doesn’t that sound a bit like taking out a Will?

Well, yes, but there’s a key difference in that a Will only comes into effect after you pass away, whereas a Trust can be implemented from the moment it is set up. That can give you the confidence, certainty and peace of mind you want moving forwards, so you can be sure your family will be provided for further down the line.

At the same time, setting up a Trust can also have many tax benefits, and means your chosen beneficiaries won’t have to go through the Probate process following your death.

So it’s well worth exploring this option, seeking professional financial advice and seeing if this is the way forward for you.

What types of Trusts are there?
There are several different types of Trusts you can look at, depending on your specific wishes and circumstances:

Will Trust

This could be a good option if you’re married or in a civil partnership, as it makes sure your surviving partner can continue living in your property following your death. It can also ensure a share of the property can be included in your inheritance.

Discretionary Trust

This permits trustees to decide how to use the income from the trust and choose how much money beneficiaries will receive. That means it’s a good option for those who want maximum flexibility if their circumstances change.

Bare Trust

This provides or allows for the option of passing assets onto a young person when they reach the age of 18. That means the assets in the Trust will initially be held in the trustee’s name, rather than the beneficiary’s, and the trustee will be responsible for looking after them until the chosen beneficiary hits the age when they are able to access the trust themselves.

Trusts for Vulnerable Beneficiaries

This is a good option if you have a chosen beneficiary who lacks capacity to make decisions for themselves, and will therefore need financial support and help with managing their affairs. This could include a child, an under-18 who has lost a parent, or somebody with a disability.

If you have any questions on setting up a Trust to protect your assets for the future, get in touch and we’ll be happy to help. We have the knowledge and experience to advise you on the different options open to you and help you determine which ones best reflect your specific wishes and circumstances.

There are 1.8m job vacancies – but who will fill them?

According to a recent report in City AM, there were 1.8m job vacancies advertised in the UK in the week to May 1st, up roughly 15% on the same period a month earlier.

The report stated that recruiters were ‘in overdrive’ as they struggled to fill the vacancies, with Neil Carberry, Chief Executive of the Recruitment and Employment Federation (REF) saying: “‘The data continues to show that employers across the UK are eager to hire new staff.”

Surely that has to be good news, on top of the near-30m that are already on UK payrolls.

There is a problem though. A few weeks after the initial report, the REF was back on the pages of City AM, stating that an ‘increasing skills shortage’ could hit companies’ growth. Neil Carberry said: “Labour supply is the big issue we have to solve.”

Recruitment companies were blaming a lack of candidates – specifically, a lack of suitably qualified candidates – for their inability to fill vacancies.

Let’s now leave the UK, and travel over to California, where companies are increasingly demanding that employees return to the office. Tesla boss Elon Musk was unequivocal, stating that everyone must do a minimum of 40 hours in the office every week. ‘If you don’t show up,’ he said, ‘We’ll assume you have resigned.’

Apple also issued the same edict – and immediately ran into trouble, with suggestions that half of all their staff may opt to leave rather than face a full-time return to the office.

Clearly people have got used to very different ways of working during the pandemic. For employers – and by extension for the economic recovery of the UK and world economy – these changes to ways of working, and what employees now want from a job, are going to cause problems.

Employees – especially Millennials and Generation Z which follows them – want very different things to their parents’ generation. They want to work for companies that share their values and don’t necessarily see salary as the key factor in a job. Reports that ‘millennials want nap time and pets at work’ may be slightly exaggerated, but there’s no doubt that having experienced working from home, a significant number have no wish to go back to commuting – as Apple are now finding out.

It means that employers, and the recruitment firms working on their behalf, will have to offer more flexible pay and benefits packages. They may well have to accept working from home for at least part of the week – and offer significant training to beat the skills shortages.

With the war in Ukraine, continuing supply chain problems and inflation hitting operating costs, finding the right staff is another big problem for employers to deal with. Hopefully they and the recruitment firms solve it, as the UK’s continuing economic recovery may well depend on it.

How worried should we be about the price of food?

Andrew Bailey, the Governor of the Bank of England, made an apology last month. Not for inflation heading towards 10%, but for sounding ‘apocalyptic’ about the price of food.

The possibility of more increases in food prices was a ‘major worry’ for the UK economy, he said, as he warned of a ‘very big income shock’ and shortages of wheat and cooking oil.

Since he made that speech, the situation has, if anything, worsened, with reports of 25m metric tonnes of grain ‘trapped’ in Odessa – a figure which could, apparently, treble by the end of the summer as countries in Asia and Africa face food shortages.

It’s a simple law of economics that a reduction in supply and the same demand will send prices up. So how worried should we be? It’s a phrase beloved by the headline writers, but should we really worry about ‘heating or eating’?

Food prices will unquestionably continue to rise – and it is not just a problem for the UK. India has already halted wheat exports, saying that its ‘food security is at risk.’

The United Nations has warned of a global food crisis that ‘could last for years,’ with some poorer countries facing the possibility of long-term famines.

Last year, Ukraine produced 33m tonnes of wheat, of which it exported about 20m. As the world’s fifth largest exporter, that figure placed it behind France, Canada and the US with – inevitably – Russia at the top of the list. With sanctions having been imposed on the Russian economy, it is likely that Russia’s wheat may flow east to China – which recently suffered a poor harvest – rather than to the west.

Given all this, it is unsurprising that the price of Spring Wheat recently hit a 14-year high on US commodities markets, or that the president of large US food manufacturer recently joined Andrew Bailey in the ‘apocalyptic’ camp. Robert Unanue, President and CEO of Goya Foods said simply: “We are on the precipice of a food crisis.”

The problem, of course, is that food isn’t simply an ingredient like wheat. The price of aluminium for tinned goods is rising. Lesley O’Brien, director of Freight Link Europe, recently said that “pretty much everything you buy comes on the back of a truck”, and pointed out that the cost of running one lorry had risen by £20,000 compared to last year.

Should we be worried? It is difficult to avoid being worried. How worried you are will depend on your own financial circumstances – but if ever world events demonstrated the need for long term planning and saving for the proverbial ‘rainy day,’ it is surely those we are experiencing at the moment.