Author: richard

Welcome to our latest client update, from a week that brought us a new son for the Prime Minister and his partner, a promotion for Captain Tom and rising stock markets around the world.

As usual, the stock market figures quoted in this update were correct at the close of business in the relevant market on Wednesday. The commentary was written on Thursday morning, and then revised after the Prime Minister’s briefing on Thursday evening, when he offered the optimistic view that the UK was “past the peak and on the downward slope.” Next week, we will hopefully be reporting on the Government’s plan to “get the UK back to work.”

The Latest News

Last week it was China, this week it was the turn of the US to report an economic downturn in the first quarter of the year. As the country recorded 1m confirmed cases of Coronavirus, figures showed that the economy had contracted by 4.8% in the first three months of the year. This was the worst performance since 2008 and ended a run of expansion going back to 2014.

There was more bad news for the US on Thursday afternoon when the latest unemployment figures showed that more than 30 million Americans have lost their jobs since mid-March.

You may have heard economic commentators talking about something called the Purchasing Managers’ Index. It is, simply put, a numerical measure of business confidence in a country, with any figure above 50 indicating optimism and anything below 50 meaning that businesses are pessimistic. You won’t be surprised to hear that the figures recorded in April were the lowest ever – 12.9 in the UK and 13.5 in Europe.

But in many ways, those figures – like the GDP fall in the US and the similar figures that will surely follow from the UK – are yesterday’s news. The emphasis now is on the recovery as many European countries start to gradually ease the restrictions of lockdown and, in the UK, Chancellor Rishi Sunak finally bowed to pressure to help small firms.

Small and medium sized companies will now be able to obtain loans of up to £50,000 which will be 100% guaranteed by the Government. These ‘bounce back’ loans will be a lifeline for many small companies and should mean that far more firms survive the pandemic than might otherwise have been the case.

The Stock Markets

Almost without exception this was a good week for world stock markets, with several of them making significant gains as a top US infectious disease expert said the early results of a drug being developed by Gilead Sciences were “quite good news.”

Among major markets, Germany’s DAX index led the way, rising by 7% to 11,108. The UK’s FTSE 100 index was up by 6% to 6,115 and in the US, the Dow Jones was up 5% to 24,634.

The only major market to fall was China’s Shanghai Composite, which was down 1% to 2,822, but the other major markets in the Far East – Japan, Hong Kong and South Korea – all rose by 3%.

The pound was up by 1% in the week and, on Wednesday evening, was trading at $1.2447.

Our Thoughts

We mentioned the phrase ‘new normal’ last week and they suddenly seem to be the words on everyone’s lips. Unquestionably the world is going to look very different when we finally emerge from this pandemic.

This morning, the boss of Barclays has said that “big, expensive offices may become a thing of the past” and – with the Times reporting that we’ll need to be at the airport four hours before a flight as medical screening is added to security, far more of us may choose to work at home and holiday in the UK.

We won’t know the full effects of the virus until some time after we have finally beaten it. Many household name businesses will have disappeared. Many business owners – especially those close to retirement – will decide that the game is no longer worth the candle. But new businesses will emerge, finding new ways of working and delivering new products to new markets.

We remain optimistic – and this week that optimism was shared by the world’s stock markets. Saving and investing remains a long term commitment: Coronavirus may have brought that into sharp relief, but the fundamentals do not change. Neither does our commitment to give you the very best financial planning advice.

Whatever your views on this week’s news, there has been the usual slew of offbeat stories to lighten the mood. Pride of place though, must go to Captain Tom Moore or, as we must now learn to call him, Colonel Tom Moore. He celebrates his 100^th birthday as we write and has so far raised a quite staggering £31m for the NHS. Never was a promotion more richly deserved.

Let us finish this week with news of a company that is doing well during lockdown. That company is fashion retailer Boohoo, where, perhaps unsurprisingly, sales of tops have increased because, “everyone wants to look smart on Zoom calls.”

Welcome to our latest client update at the end of another week which brought the usual mixture of good and bad news, but which ended positively for the majority of world stock markets.

The stock market figures we quote were correct at the close of business (in the relevant market) on Wednesday evening, while the commentary was written on Thursday morning and then, as always, revised after the Government’s daily briefing on Thursday evening.

The Latest News

As we remarked last week, lockdown seems to have now settled to a regular mix of good and bad news. This last week was no exception.

The impact of the virus was clearly shown when China reported its first ever fall in GDP, with a drop of 6.8% in the first quarter of the year. As we reported last week, far worse is expected in the UK and other Western economies when the figures for the second quarter are revealed.

In the US, 4.4m more people became unemployed, taking the total number of jobless claims to over 26m. To give just one example, Disney stopped paying more than 100,000 workers.

It was also a bad week for the price of oil, which continued to drop dramatically as demand all but dried up. At one point, the price turned negative for the first time ever, as storage space around the world became full.

In the UK, there was the usual gloom on the high street as Top Shop and Miss Selfridge said they could close 100 shops. Chancellor Rishi Sunak was ‘not persuaded’ that the Government should guarantee 100% of loans to companies, despite widespread criticism of the number of businesses getting support from the banks.

Sunak did, though, extend his Coronavirus Loan Scheme to all financially viable UK businesses, allowing companies with a turnover in excess of £45m to apply for up to £25m of finance.

On Monday, the Government’s furlough site went live, with 1m UK employees being registered for the job retention scheme on the first day. This week also brought help for start-ups, as the Treasury announced £1.25bn ‘to protect firms driving innovation in the UK.’ This comprised a £500m loan scheme for ‘high growth firms’ and £750m for SMEs focused on research and development.

Cheaper clothes and fuel saw UK inflation drop to 1.5% and, proving the old ‘it’s an ill wind’ adage, US giant Netflix revealed that they had added 16m new subscribers in the current crisis.

The Stock Markets

Like the previous week, the week just ended was a much more ‘sensible’ one on the world’s stock markets, with all the major markets once again moving in a relatively narrow range. Fortunately, for most markets that movement was upwards.

Three markets led the way, rising by 3% in the week to Wednesday evening. Those were the Russian and Indian markets, and the UK’s FTSE-100 index of leading shares, which closed at 5,771. The FTSE is up by more than 13% since the gloomy days of mid-March when the full impact of Covid-19 was just being appreciated and Chancellor Rishi Sunak was introducing the first of his measures to support the economy.

In Europe, the French and German stock markets both rose by 1% in the week, and China’s Shanghai Composite was up by a similar amount. The US Dow Jones fell just 24 points in the week, leaving it unchanged in percentage terms at 23,476.

The only major markets to record falls were Hong Kong – down 1% to 23,894 – and Japan’s Nikkei Dow, which dropped 2% to finish Wednesday at 19,138.

The pound was down against the dollar in the week, falling 2% to trade at $1.2313.

Our Thoughts

Several of Thursday morning’s papers picked up on the ‘light at the end of the tunnel’ theme. However, many of them also reported that some form of social distancing may have to stay in force for the remainder of this year. In Germany, wearing masks is now compulsory on public transport, with most states also making masks mandatory while shopping.

That’s going to mean more good news for Amazon and more bad news for the high street and we’d suggest that we are now going to see a world gradually adapting to living with the virus as all countries race to develop a vaccine.

Like every business, we will need to adapt to the ‘new normal’: in the short to medium term that will certainly mean doing more business remotely, using technology like Zoom and Skype. But, we will emphatically still be here to answer your questions and help you cope with the changing circumstances.

One thing the ‘new normal’ will demand is more – and better – communication with clients. We will never fail you on that score and we’ll be with you every step of the way as the economy gradually recovers.

Welcome to our latest client update.

With the quietest Easter any of us can remember out of the way, we’re back to normal for the update this week. That means the stock market figures quoted were accurate as at close of business on Wednesday, with these notes written on Thursday and then revised after the Government’s daily briefing on Thursday evening.

The latest news

This ‘week’ – given that we wrote our last update a day early – has seen its fair share of winners and losers. Let’s go quickly through them…

In the US, Bernie Sanders conceded defeat in the race for the Democratic nomination, meaning that November’s Presidential election will almost certainly be between Donald Trump and Joe Biden.

In the UK, the high street had another bad week as figures for March confirmed that retail footfall had fallen to its lowest level on record, and clothing chains Oasis and Warehouse went into administration, putting more than 2,000 jobs at risk.

It also looks like it will be a bad week for growth in China. The country’s GDP figures for the first quarter of the year will be published as this update reaches you. The consensus is that GDP will have fallen by 6.5% in the first quarter, but some forecasters are suggesting the fall could be as much as 10%.

Sadly, that pales into insignificance compared to the forecasts for the UK economy in the second quarter. Chancellor Rishi Sunak has reportedly told Cabinet colleagues that growth could fall by as much as 30% between April and June. Newspaper headlines went further, variously suggesting a 35% drop in GDP, two million people losing their jobs and – according to the Telegraph – Britain ‘facing the biggest economic shock in 300 years.’

What about the week’s winners?

Thanks to another stimulus package from the Federal Reserve, US shares were at one point enjoying their biggest weekly gain in 46 years. As we report below, the Dow Jones index had an excellent week.

Inevitably, it was another good week for Amazon unless you work in their HR department. Having hired an extra 100,000 staff last month, they added another 75,000 as demand for deliveries continued to increase.

There has also been an upsurge in online gaming, as increasing numbers of people have switched to playing and watching e-sports. Covid-19 will undoubtedly speed up changes to the UK high street. Could it do the same to the way we play and watch sport?

The stock markets

After the fluctuations of the last few weeks, this was a much more subdued week on world stock markets, with most of them moving in a narrow range. The US led the way up, rising by 4% to 23,504. The worst performer was the Russian market, which dropped 5% to 2,499 as the Covid-19 virus took a much stronger hold in the country.

China’s Shanghai Composite index was unchanged in percentage terms despite widespread warnings about Asian growth this year, while the UK’s FTSE-100 index fell by 2% to 5,598. Pride of place probably goes to the Greek market, which dozed peacefully through Easter, starting the week at 608 and ending it at 608.

The pound had a good week against the dollar, rising by 2% since our last update to close on Wednesday evening at $1.2544.

Our thoughts

This last week has seen the usual mix of good and bad news. As we’ve mentioned above, Rishi Sunak gave a stark warning to his Cabinet colleagues. With Dominic Raab confirming another three weeks of lockdown on Thursday evening, it seems inevitable that the UK’s growth will be sharply down in the second quarter of the year. The Chancellor has, however, been equally adamant that the UK, which had a strong economy before the pandemic struck – will bounce back quickly.

By the same token, the International Monetary Fund has predicted a ‘deep recession’ – but was equally quick to say that global economies will bounce back. Those are views that we share.

Yes, there is going to be some short term pain and, as the Chancellor has said, he cannot protect every job and every business. But we remain convinced that world trade and global economies will recover – and they may well recover more quickly than the generally accepted wisdom currently has it.

Finally, like the rest of the country, we must applaud Captain Tom Moore.

Captain Tom has been doing laps of his garden. He’s 99 and wanted to do 100 laps before his 100^th birthday at the end of this month. Tom’s original aim was to raise £1,000 for NHS charities. So far he’s raised nearly £15m, with donations coming from 53 countries. In the time it has taken us to write this update, Tom has raised £500,000. Like the rest of the country, sir, we salute you.

Hello, and welcome to our latest weekly client update.

It would be easy to forget that it’s Easter this weekend. It is – and that means we have brought this week’s update forward by a day. The stock market figures quoted were accurate as at close of business on Tuesday, and the update was written on Wednesday morning and revised after the Government’s briefing on Wednesday afternoon.

The latest news

Last week, we reported that the Prime Minister had tested positive for Covid-19 and was in self-isolation. As everyone will now know, his condition has deteriorated and, as we write this, he has spent his second night in intensive care. As we do with everyone suffering from this dreadful virus, we send him our very best wishes for a speedy recovery.

In the interim, Dominic Raab is standing in for him but, as expected, Wednesday’s briefing saw Chancellor Rishi Sunak fielding the tough questions, after it emerged that the banks had approved only 0.65% of applications for the Business Interruption Loan Scheme.

On the high street, this week saw Debenhams call in the receivers and New Look simply refuse to pay its creditors, instead inviting them to come and take their stock back. Some high streets are going to look very different when this crisis is over.

Global airlines warned of 25m job losses and the French Finance Minister warned the country was facing its worst downturn since World War II.

More optimistically, the rate of infection in Spain and Italy does appear to be easing slightly, and Europe is starting to look at a staggered relaxation of the current lockdown restrictions. There was also good economic news from Germany, which we report on below.

The stock markets

Last week saw most leading stock markets fall. This week – or in the six days since our last client update – they have all moved resolutely in the right direction.

The German DAX index led the way, rising by 9% to 10,357, boosted by news that factory orders had only fallen by 1.4% – much better than the analysts’ predictions of 2.4%.

In the US, the Dow Jones index was up by 8%, while at home the FTSE 100 index of leading shares rose 5% to 5,704. The markets in France, Hong Kong and Japan all rose by a similar amount.

South Korea was the best performer in the Far East, with the market up 8% to 1,824 while China’s Shanghai Composite rose 3% to 2,821.

Finally, the pound started the week trading at $1.2378 and ended it at $1.2344 – unchanged in percentage terms.

Our thoughts

If you are writing a monthly or quarterly review of the news and stock markets, you have a longer timeframe and – almost by definition – a more balanced mix of good and bad news. Writing every week you’re much more at the mercy of events and – as we have commented above – this was a week when there was certainly some bad news, especially if your glass is by nature half empty.

Despite that, world stock markets had a good week. There seems to be a growing realisation that doing ‘whatever it takes’ cannot include crashing the world economy, and stock markets responded rapidly to the news from Germany and the possible easing of lockdowns in Europe. 

As we wrote previously, we are certain that when Covid-19 is defeated – as it will be – there will be a real sense of optimism and a determination to rebuild as quickly as possible.

As usual please contact me if you have any questions…

Welcome to our second Client Update of the current crisis. As was the case last week, this update was written on Wednesday and Thursday, with the stock market figures quoted correct as at close of business on Wednesday, and the news and opinions completed on Thursday evening, after listening to the Chancellor outline his plans to help the self-employed. As expected, they will be paid 80% of their average earnings over the last three years to a maximum of £2,500 a month.

The latest news

When he was Prime Minister, Harold Wilson famously said that “a week is a long time in politics.” If it’s a long time in politics, then in the current climate a week seems like an eternity.

In the UK, we may not be living under quite the same lockdown conditions as France or Italy, but this week saw the Government pass the Coronavirus Act, giving itself unprecedented peacetime powers. Schools are now closed, all but essential shops have been ordered to close (many people will have been pleased to see off-licences added to the list of those that can remain open…) and the majority of us are making the most of the one period of exercise allowed to us each day.

The rules on social distancing seem to be gradually becoming understood and both industry and the public have rallied to Boris Johnson’s call for help. As we write this, the Government has ordered 10,000 ventilators from the Dyson company and more than 500,000 people volunteered to help the NHS in one day.

In Europe, Spain has sadly joined Italy in passing the death toll recorded by China and the number of cases in the US is increasing rapidly. By Friday morning, it had more confirmed cases than any other country. Earlier in the week, the US government passed a near $2tn (£1.67tn) aid package for business and the US economy, described by one US Senator as a “wartime level of investment in the economy.”

The stock markets

The rumours of this US aid package had buoyed world stock markets even before it was actually announced. The markets are still down for the month as a whole and for the year to date. But perhaps this was the week we saw some light at the end of the tunnel as far as stock markets are concerned.

The only major world market that did not rise in the week was India, which fell by 1% as 1.3bn people went into lockdown.

Most markets enjoyed double digit gains, with France leading the way. The stock market there was up by 18% in the week to 4,432. The German and Japanese markets both rose by 17%, while the US Dow Jones index was up 7% to 21,201. China’s Shanghai Composite Index – which as we noted last week has proved relatively resilient to the pandemic – rose just 2% to 2,782.

In the UK, the FTSE 100 index of leading shares was up 12% in the week, rising from 5,080 to 5,688. The pound rose by 2% against the dollar during the week, closing Wednesday at $1.1865.

Our thoughts

Despite the rise in stock markets this week it is easy to look at the above figures and start to worry. Let us make two points. First of all many of our clients have very diversified portfolios: the falls in the FTSE, for example, will not necessarily be mirrored in the value of your savings and investments.

Secondly, world stock markets have historically always recovered in the long run. Clearly we cannot give specific financial planning advice in this update, but it is worth noting that whether it was Black Monday in 1987 or the financial crash of 2008, markets recovered over time.

We ended last week by writing: ‘We’re certain that when this is over there will be a renewed spirit of optimism and a determination to rebuild as quickly as possible.’

We think you saw that this week, whether it was industry’s rapid response to the need for ventilators, the huge numbers volunteering to help the NHS or the response of stock markets to the US stimulus.

We will send you another update next Friday. Until then, stay safe, stay well, and remember that we are always here to answer your questions. We may be working from home, but we are never more than a phone call or an email away.

Hello, and welcome to our latest weekly client update. As previously, the update was written on Thursday (and revised after the Government’s daily briefing) with the quoted stock market figures correct as at close of business on Wednesday. Please note that next week we will bring everything forward by a day to allow us to send the update out before what we’ll optimistically call the ‘Easter break’.

The latest news

It hardly counts as ‘latest’ news, such is the pace of change, but the last seven days saw the Prime Minister, Health Secretary and Chief Medical Officer all test positive for Covid-19. Speaking from isolation, Boris Johnson said that ‘things will get worse before they get better’ and it currently seems that the rate of infection in the UK is doubling every 3-4 days.

Health Secretary Matt Hancock did return to work – and to the daily news updates – on Thursday, and has committed to 100,000 tests per day by the end of April.

Our last update outlined the measures central banks and governments around the world were taking to combat the pandemic but, as UK Chancellor Rishi Sunak said, governments will not be able to ‘protect every company and every job.’

By the time this is eventually over, some household names will have ceased to exist and – if the queue for bailouts is any guide – many of them will be in the airline industry. Virgin Atlantic will be asking the UK government for help and, in the US, American Airlines says it needs $12bn (£9.67bn).

Meanwhile, the number seeking unemployment benefits has risen sharply: nearly 1m people have applied for universal credit in the UK in the last two weeks. In the US, it was reported on Thursday afternoon that the number claiming unemployment benefit had surged to over 6m.

The stock markets

Most of the major world stock markets have fallen over the last week, as the ‘bounce’ from the stimulus packages introduced by the various governments wears off. The UK’s FTSE 100 index of leading shares was down by 4% and this was typical of the falls seen on the major European markets. The US Dow Jones index was down by just 1% while China’s Shanghai Composite index fell by 2% as factory activity in the country reportedly jumped back to pre-pandemic levels.

The one exception to the falls was the Russian market, which rose by 1% in the week. The pound also enjoyed a good week against the dollar, and was up by 4% to $1.2378.

Our thoughts

It would be easy to see the news from this week as wholly negative: stock markets down, the numbers of companies seeking bailouts and the number claiming unemployment benefits both up. But that was always going to happen, given the measures that have had to be taken to combat the virus.

And there have been some good news stories this week, reinforcing our view that when the virus is over, the recovery may be quicker than many people are currently predicting.

As we noted above, Chinese factory output is already back to pre-crisis levels. In the US, President Trump has said that, “With interest rates for the United States being at zero, this is the time to invest in our decades long awaited Infrastructure Bill.”

And while stock markets may be down this week, we have not seen the wild fluctuations that we saw in previous weeks. All the major world markets, with the exception of India, remain higher than they were two weeks ago.

As usual, please stay safe, stay well, and remember that we are always here to answer your questions. We may be working from home, but we are never more than a phone call or an email away.

Very suddenly, very clearly, we are living in unprecedented times. 

The death toll from the Covid-19 pandemic is rising around the world and, as we write this on Thursday evening, the Bank of England has just reduced interest rates to 0.1% – the lowest level in the Bank’s 325 year history. The FTSE 100 index of leading shares, which started the year at 7,542, closed on Wednesday at 5,080 and is down 23% for the month to date. 

In this crisis, firms like ours can do one of two things. We can say nothing and hope for the best. Or we can communicate with our clients, give them the latest information and assure them that, whatever happens, we will still be here to answer their questions. 

We have decided on the second course of action. And so, starting today, we are going to send out a Weekly Client Update. Some weeks the news it contains will not make pleasant reading: but we take the view that you would rather have regular contact than – as some advisers will opt to do – simply say nothing and cross their fingers for luck. 

The Weekly Update will split into three sections: 

• The latest news on the virus and the moves that are being taken to combat it 
• An overview of world stock markets’ performance over the week in question. Space may mean that we cannot comment on every market every week, but we will always give you the ‘highlights’ 
• Lastly, our thoughts on the events of the week as we try to take a broader view and look to the future

The stock market figures quoted will be accurate as of the close of business on Wednesday. We will write the Update on Thursday evening, but clearly it must be proofread and compliance checked before we can send it out to you. Events are obviously moving very rapidly at the moment, so hopefully you will understand if some news is occasionally out of date by the time you read the Update. 

The latest news 

It hardly seems credible that the Budget speech was delivered little more than a week ago. It already seems like old news and on Tuesday, Chancellor Rishi Sunak unveiled a raft of new measures designed to support businesses and the economy as he repeated his promise of doing ‘whatever it takes’ to get the country through this crisis. 

As we have mentioned above, the Bank of England has cut interest rates to unprecedented low levels, and backed this up by buying £200bn of government and corporate bonds – what used to be termed ‘quantitative easing.’ It also looks like the Chancellor will announce further measures – almost certainly designed to support wages – on Friday afternoon. 

The week has also seen similar moves in the US, with the package there amounting to $1tn (£870bn at current exchange rates). The European Central Bank has announced a €750bn (£700bn) set of proposals. 

Domestically, schools will largely close from today and – if you really want an indication of how serious the situation is – the Church of England has said it will limit weddings to just five people. 

The stock markets 

It seems slightly ironic – given the source of the global pandemic – that the stock market which has fallen least this year is China’s Shanghai Composite index. As of yesterday, it was down by just 5% in March and by 11% for the year as a whole. 

Most major markets have seen falls of between 20% and 30% this month. The UK’s FTSE-100 index – at 5,080 – is down by 23% in March and 33% for the year as a whole. The US Dow Jones index is similarly down by 22% and 30% respectively and closed Wednesday at 19,899. Germany’s DAX index – which closed on Wednesday at 8,450 – has suffered a bigger fall, down 29% this month and 36% since the beginning of the year. 

The biggest falls have been seen in the more volatile, emerging markets. The ECB will clearly be worried about both Greece and Italy, with the Greek market down by 47% this year and Italy – the centre of the outbreak outside China – down by 36%. 

It is also perhaps worth commenting on the pound, with newspaper headlines saying Pound crashes to 1980s levels. The pound is down by 10% against the dollar so far this month, and by 13% for the year as a whole: it closed on Wednesday at $1.1585. 

Our thoughts

Many clients will be asking an obvious question. ‘Should I cash in now to prevent further losses, or should I hold on in the hope that markets recover?’

The answer to that question will depend on every client’s individual circumstances. The purpose of this Update is not to offer financial planning advice, but to provide information and reassurance. To echo the Chancellor’s words on Tuesday afternoon, we will do ‘whatever it takes’ – and a key part of that is being here to answer your questions and, if necessary, to look at your financial planning in the light of the changing circumstances. 

Another reasonable question is, ‘how long will markets take to recover?’ Very clearly, we’re in uncharted waters. All economies will technically go into recession and – whatever action the Government takes – some previously profitable companies will go out of business. There is, however, an interesting article in the Economist this morning suggesting that some economies – it cites Singapore and South Korea as examples – could start to recover as early as the second half of this year. 

The short answer is that we do not know. But we’re certain that when this is over – as it will be – there will be a renewed spirit of optimism and a determination to rebuild as quickly as possible. 

In the interim we will keep our promise to update you every week. Many of our clients have been with us for a very long time. We have always kept them updated and we will not let anything – not even a global pandemic – interrupt that. 

Please contact me if you have any questions regarding this update or if you have any questions relating to your Pension or Investments…

Good news for property owners looking to sell; The Royal Institution of Chartered Surveyors (RICS) has reported that sales expectations have ‘’risen sharply’’ according to a survey of property professionals. House sales rose in December for the first time in seven months, boosted mainly by higher activity in London and the South East of England. 

The report for December suggested that interest from new buyers was increasing over many parts of England and Wales, with the RICS’ chief economist saying:

“The signals from the latest RICS survey provides further evidence that the housing market is seeing some benefit from the greater clarity provided by the decisive election outcome.

“Whether the improvement in sentiment can be sustained remains to be seen given that there is so much work to be done over the course of this year in determining the nature of the eventual Brexit deal.

“However, the sales expectations indicators clearly point to the prospect of a more upbeat trend in transactions emerging with potential purchasers being more comfortable in following through on initial enquiries.” 

The Office of National Statistics’ (ONS) new set of figures suggested that house prices grew by 2.2% up to November 2019, showing a 0.9% increase when compared with the year up to October. Further to this, the latest ONS house price index showed that house prices had jumped 7.8% in Wales, whereas average house prices in England increased by 1.7% to £251,000. Scotland also saw a rise of 3.5% and Northern Ireland saw a rise of 4%. 

According to the HomeOwners Alliance, the average UK home is now worth £235,298. Prices were shown to have increased by an overall figure of 2.1% in 2019, once all the figures and indices across the UK had been collated and examined. 

Other property experts and high street banks have also weighed in with predictions on a future upturn in the market. Rightmove have predicted a 2% rise in the price of property during 2020, which was mirrored by the HomeOwners Alliance. 

Nationwide have predicted that the economy will “continue to expand at a modest pace in 2020, with house prices remaining broadly flat over the next 12 months.” Halifax were also reserved with their predictions, mentioning that they “expect a modest pace of gains to continue into the next year.” 

While it seems that increases are small and steady, they are increases all the same – meaning that homeowners can finally rejoice at this newfound market growth. We hope you’ve enjoyed this update and if you have any questions about what we’ve discussed above, feel free to get in contact.

If your business uses freelancers or contractors, you’re no doubt aware of the changes in IR35 legislation, due to come into effect on 6 April.

But how prepared are you and what steps have you taken? You wouldn’t be alone if you were feeling concerned about what the new rules may mean.          

In a recent survey of 1,500 business owners, Be Digital UK found that 41% of companies were reviewing their strategy for the procurement of contractors due to IR35. While 21% of businesses said that they had already gone on to statement of work contracts, 11% said they were reducing their use of contractors entirely. Somewhat surprisingly, given all the media coverage, 35% of business owners said they weren’t even aware of the new proposals. 

What impact will the changes have?

The new legislation, which currently only applies to the public sector, will be expanded to cover the private sector. Under the new rules, if you are a medium or large-sized company, you will have to determine whether a contractor falls inside or outside the IR35 parameters. Currently, it’s the responsibility of the contractor rather than you, as the contractor’s client, to establish their status.

If IR35 reveals that a contractor should in fact be considered a full time employee by HMRC, you, as the client of the contractor, would need to set up PAYE or NICs. It’s feared that this could deter many SMEs from hiring contractors as many will just not want to take the risk of getting it wrong.     

It’s important, however, that businesses do not simply impose a blanket ban on using all contractors as a knee-jerk reaction. David Chaplin, CEO and Founder of Contractor Calculator Shield said, “As we leave the EU, reliance on a flourishing, flexible workforce will be vital and firms should not panic, provided they begin their compliance process now.” 

Moving to a position where you only hired PAYE employees would mean you would have to offer all the other benefits and statutory benefits that go with employment. 

The Government has implemented a review of the IR35 reforms in light of various criticisms but it has a short time frame so it is not thought the conclusions will have much impact on the legislation.

What do you need to do? 

If your business falls within the scope of the legislation, you need to be auditing your current use of contractors right now. Take the following steps:

• Make time to get a broad understanding of the new rules.
• Work alongside your accountant and ask them for advice.
• Start reviewing and assessing each contractor’s contract.
• Get your assessments done quickly. Outsource to specialists if necessary.  
• Try and get compliant quickly so as not to be an easy target for HMRC.   

While it may sound time-consuming, IR35 is a good opportunity to review your workforce and your relationship with your contractors. If you can be ahead of the game in establishing which  contractors are genuinely outside IR35, you will be in a good position to access the best talent over your competition. Be aware, though, that some contractors will decide to close their public service companies down completely.

There is no denying that IR35 is a huge shake-up. However, it needn’t be a reason for genuinely self-employed contractors to lose out – or for the firms that hire them. 

With the government’s first budget set for 11 March, we wanted to take a look at some of the main measures that are expected to be included. Will the Conservatives adhere to the spending commitments made in their manifesto? Or will they do a u-turn on some? Here are a few of the key areas to look out for: 

National Insurance

One of the main personal finance pledges in the Conservative’s manifesto was a tax cut for over 30 million workers by increasing the threshold for paying National Insurance. Workers who earn more than £12,600 a year can expect to save around £100 a year. 

Regional investment

Mr Javid is expected to also announce changes to Treasury rules to enable higher levels of investment in the north and the Midlands. The new rules are expected to change the government’s policy of investment against gross value added, a policy that has traditionally benefited London and the south-east. New rules are expected to include improvements to well-being or a reduction in regional productivity gaps. 

Infrastructure

Another part of the Conservative manifesto included plans to increase spending on infrastructure by around £20bn above the current rate of expenditure. This additional funding may be made available to various projects across the country, with the key question being whether the government will go ahead with the first phase of the HS2 route between London and Birmingham. 

Public spending

The Prime Minister’s election campaign promised to bring an end to a decade of austerity by increasing spending on public spending. It’s hoped that the Chancellor will deliver on the Prime Minister’s promises, such as the training of thousands of new police officers, funding schools, vocational training and funding for new hospitals. Overall, the manifesto included £1.5bn in additional day-to-day spending so all eyes will be on Downing Street to see how this will be spent. 

Environment

The government committed to reach net-zero carbon emissions by 2050, although there have been few spending-related measures announced to hit that target. We can, therefore, expect environmental spending to be included within the next budget. The manifesto mentioned plans to make homes more energy-efficient, with £9.2bn to be committed to insulation and other measures for schools and hospitals. 

Offshore wind was another policy covered in the manifesto, increasing capacity to 40GW by 2030. £800m was committed to carbon capture and storage, alongside £500m to reduce the carbon output of energy-intensive industries.

Many spending commitments were made as part of the Conservative manifesto. It remains to be seen whether the government will make good on these promises on 11 March. In the meantime, if you have any questions about what we’ve discussed above, feel free to get in contact.