News In Review

“For all our disagreements, the world is undeniably heading in the right direction”

At a Downing Street news conference on Sunday evening, following the conclusion of the COP26 Summit, Boris Johnson hailed the climate deal as “game-changing”, before adding that it sounds “the death knell for coal power.”

Despite a late intervention by India and China, which resulted in the deal being altered to ‘phase down’ rather than ‘phase out’ coal, Boris Johnson acknowledged, “We can lobby, we can cajole, we can encourage, but we cannot force sovereign nations to do what they do not wish to do. For all our disagreements, the world is undeniably heading in the right direction.”

Though notably tinged with disappointment, the PM was positive that a tipping point has been reached in people’s attitudes, but cautioned, “The fatal mistake now would be to think that we in any way cracked this thing.” UN Climate Chief, Patricia Espinosa said the agreement reached at the Summit was a “huge step forward.”

Under the climate pact, countries have been asked to republish their climate action plans by the end of 2022, with more ambitious emission reduction targets for 2030. There is also an emphasis on developed countries increasing funding to countries already suffering the effects of climate change, beyond the current $100bn annual target. As part of the agreement struck in Glasgow, countries will meet again next year to pledge further major carbon cuts.

In a surprise announcement last Wednesday, the US and China agreed to enhance their climate co-operation over the next decade. In a joint declaration, the world’s two biggest CO2 emitters pledged to ‘recall their firm commitment to work together’ to achieve the 1.5°C temperature goal.

Q3 economic growth

As supply chain problems continue to weigh on the pace of the economic recovery, the latest data from the Office for National Statistics (ONS) shows that economic growth slowed to an estimated 1.3% in Q3, a significant slowdown from the 5.5% growth recorded in Q2. The UK expanded less than the ONS initially anticipated in July and August, when the ‘pingdemic’ essentially kept the economy flat, followed by a rebound in September, boosted by services output growth. In Q3, there was a fall in underlying inventories, reflecting some of the recent supply chain challenges and a negative contribution from net trade. The UK economy is currently 2.1% smaller than the final quarter of 2019, before the pandemic took hold.

Jobs recovery continues

ONS figures released on Tuesday show that there were 160,000 more workers on payrolls in October than in September, despite the end of the furlough scheme. Job vacancies also hit a fresh record at 1.17 million in the three months to October, whilst the official unemployment rate fell to 4.3%. Sam Beckett, Head of Economic Statistics at ONS said, “It might take a few months to see the full impact of furlough coming to an end, as people who lost their jobs at the end of September could still be receiving redundancy pay. However, October’s early estimate shows the number of people on the payroll rose strongly on the month and stands well above its pre-pandemic level.”

Inflation rises

The cost of living surged to 4.2% in October, according to ONS Consumer Prices Index (CPI) figures released first thing on Wednesday morning. This is against a forecast of 3.9% and is the highest 12-month inflation rate since November 2011.

US and China virtual summit

The world’s two most powerful nations held talks in a virtual summit in an attempt to improve relations which had deteriorated during Donald Trump’s presidency. In the talks, which lasted for 3.5 hours, Chinese President Xi Jinping said “Humanity lives in a global village, and we face multiple challenges together. China and the US need to increase communication and co-operation.”

US prices rising at fastest pace for over 30 years

According to the Bureau for Labour Statistics, the latest US Consumer Prices Index highlights that prices have increased by 6.2% over the last year, primarily driven by increases in fuel and food prices. This represents the highest 12-month increase since the period ending November 1990. A sharp jump from September, when prices were rising by 5.4%, inflation has been a growing global concern as the impact of the pandemic permeates. New and used vehicles were also large contributors, as prices rise at pace.

Here to help

Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have.

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.

‘Flip the context’ and protect your hard-earned cash

Pension savers lost more than £2m to scammers in the first five months of this year. The average amount lost per victim so far in 2021 is a staggering £50,949 – more than double the £23,689 lost on average in 2020.

This is according to worrying research from the Financial Conduct Authority (FCA), which found that pension holders are nine times more likely to trust pension ‘advice’ from an online acquaintance than from a stranger they met face to face. To avoid losing your life savings, the FCA suggests ‘flipping the context’, and imagining what you would do if a stranger in the pub told you to put your pension into something they were selling.

Spotting scams

Have you:

• Been offered a free pension review out of the blue?

• Been guaranteed high returns?

• Been offered the opportunity to release cash from your pension under 55 years of age?

• Felt pressured into a deal, for example with a ‘time-limited’ offer?

• Been offered an unusual investment opportunity (often unregulated and high risk)?

If so, or if you have doubts about any investment opportunities related to your pension, get in touch.

The value of investments and income from them may go down. You may not get back the original amount invested. A pension is a long-term investment. The fund value may fluctuate and can go down. Your eventual income may depend on the size of the fund at retirement, future interest rates and tax legislation.

News in Review

“We think there will be some need to increase interest rates to bring inflation sustainably back to target”

Following many hours of discussions, the Monetary Policy Committee (MPC) decided to retain the Bank of England (BoE) base rate at its record low of 0.1% at its meeting last week. The decision was made despite predictions of inflation hitting a peak of 5% next April. BoE Governor, Andrew Bailey, clarified that inflation is currently being fuelled by “global supply shocks” rather than demand pressure on the UK economy. “Putting interest rates up, I’m afraid, isn’t going to get us more gas” he said.

In an interview last week, Mr Bailey said the MPC’s decision had been a “close call”, but that the Committee wanted to see “more evidence” of how the UK labour market was faring following the end of the furlough scheme, before taking further action. However, he stated that an interest rate increase was a likely outcome of future MPC meetings, concluding, “We think there will be some need to increase interest rates to bring inflation sustainably back to target. And we will be ready to do that.”

Global food prices hit decade high

Global food prices have soared by 30% in the past year to reach their highest levels in a decade, according to the United Nations Food and Agriculture Organisation’s (FAO) latest food price index, which tracks international prices of the most globally-traded food commodities. The index rose to its highest level since July 2011, to average 133.2 points in October, compared with 129.2 for September. One of the largest contributors is wheat prices, up 40% year-on-year. Supply chain disruption, political issues, labour shortages and factory closures are all said to be behind the current situation, while the impact of climate change is also said to have led to a poor harvest in many countries this year.

COP26: what has been agreed so far?

As the COP26 climate summit entered its second week, former US President, Barack Obama, arrived in Glasgow to address delegates about the role young people can play in the battle against climate change. Despite the country’s absence from global climate efforts for four years during the Trump administration – he urged that, “The US is back.”  Speaking to younger generations, he said, “I want you to stay angry, I want you to stay frustrated, but channel that anger, harness that frustration. Keep pushing harder and harder for more and more, because that’s what’s required to meet that challenge.”

So far in Glasgow, we have seen a pledge to end deforestation backed by $14bn of private and public funds; a commitment from more than 100 nations to decrease methane emissions by 30% by 2030; a 46-nation-strong pledge to end coal power; and a pledge of £290m from the UK to help poorer countries cope with the impact of climate change.

Rishi Sunak’s speech on COP26’s Finance Day set out plans to decarbonise the City of London and he announced that listed companies in the UK will need to publish a transition plan that sets out their path to ‘green’ their businesses.

Addressing a rally of climate activists, Ugandan activist Vanessa Nakate said, “Leaders rarely have the courage to lead. It takes citizens, people like you and me, to rise up and demand action, and when we do that in great enough numbers, our leaders will move.”

US Central Bank reduces its bond-buying programme

The US Federal Reserve has announced that it will be scaling back the bond-buying programme implemented at the beginning of the pandemic to support the US economy. The $120bn worth of bonds the central bank has been purchasing monthly to keep borrowing rates low is set to decrease by $15bn this month due to the US’s economic rebound.

Markets update

On Monday, the S&P 500 closed above 4,700 for the first time after eight straight record-setting sessions but dropped back on Tuesday to close on 4,685.25 as key inflation data was released. The Dow Jones and Nasdaq Composite also closed down, at 36,319.98 and 15,886.54 respectively. European stock markets opened cautiously higher on Wednesday as investors digested soaring inflation in China and Germany.

Here to help

Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have.

Boost the value of your home

Homeowners have benefited from double-digit house price growth in the last few months and many people are looking to boost the value of their home even further. Whether you’re planning extensive renovations or finishing touches, it’s important to understand which projects will add the most value.

Aim high

Loft conversions can add valuable space to a property and, according to research1, boost a home’s value by as much as 20%. After factoring in costs, this can represent a significant boost of more than 7% to the property’s value.

A privy price

Another big installation that might be worth forking out for is a shiny new bathroom. By maintaining the existing layout, you can keep the costs down and reap maximum profits. For a simpler project, a downstairs toilet can add about 5% in value.

Keep it simple

The research suggests that one of the best ways to add value to your home is by giving it an extensive lick of paint.

This easy, low-cost solution could add almost £5,000 to the asking price, based on an average property value of £255,000. Another project that will boost value without blowing the budget is installing a new boiler or central heating. Doing so could offer an estimated profit of about £2,500. Likewise, investing in double glazing might provide returns of around £1,400.

Think twice

There are some projects, however, that might not be worth the investment. Installing solar panels just before you sell might leave you out of pocket. The average fitting will set you back £2,727, nearly £1,500 higher than the expected boost to value (£1,273).

1GetAgent, 2021

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.

Grandparents increased generosity during the pandemic

Most grandparents are familiar with the financial challenges faced by their grandchildren as they progress through education and into the world of full-time work. Costs such as university tuition fees can leave upcoming generations with substantial debts even before they enter the workplace, making it harder for them to save for a deposit on their first property purchase.

The impact of coronavirus has added a new dimension to the problem, with disrupted education and a battered economy raising uncertainties about future earnings potential. Many grandparents who have been fortunate enough to be able to help the next-generation-but-one along the rocky road to their lifetime dreams and ambitions, have been able to increase their help.

Evidence that grandchildren have often benefited financially from locked-down grandparents, unable to spend on holidays and eating out, has been provided through research conducted by Scottish Friendly Assurance Society. The financial mutual company surveyed a sample of grandparents who were already investing for their grandchildren to see what influence the pandemic had exerted.

Almost half increase their largesse

Responses showed that 47% of those grandparents had increased amounts given to their grandchildren during the previous 12 months. The main drivers were found to be a reduction in their own spending opportunities during the COVID-19 restrictions and a heightened desire to create a larger savings buffer for their grandchildren at a time of economic uncertainty.

Jill Mackay of Scottish Friendly commented, “There are grandparents who do have the discretionary income to put towards family savings and this can be a big support. It’s also encouraging to see grandparents deciding to invest more of their money rather than save it in cash.”

The value of investments and income from them may go down. You may not get back the original amount invested.

‘Cash is king’ mentality could prove costly

For many years, savers have seen cash as a safe, reliable option when building up a nest egg for the future.

However, inflation has the potential to seriously reduce the value of cash savings over the years. Whilst a modest level of price inflation is considered a marker of a healthy economy, high inflation rates will gradually erode the spending power of money – especially when combined with low interest rates. The higher the differential, the worse the impact will be.

For several years, the Bank of England’s (BoE’s) target for inflation has been around 2%, allowing for inevitable short-term fluctuations; rates have typically been subdued since the 2008 financial crisis, as have bank interest rates. However, the Consumer Prices Index (CPI) – the official measure of UK inflation – has grown much faster this year as the economy recovers from the pandemic, a trend which may well persist beyond 2021. On the other hand, the BoE reduced its base interest rate to a record low of 0.1% during the first lockdown. Together, high inflation and low interest mean that those with excessive cash in the bank will see the spending power of their savings eaten away rather quickly.

Cash is no longer king

It is therefore surprising that a NatWest survey of over 2,000 people found that, of the 76% of parents and guardians who are saving and/or investing for their children, four in five are doing so exclusively in cash. Whilst commending parents for putting money away for their children, NatWest commented, ‘The purchasing power of these ‘safe’ cash balances actually goes backwards over the longer term.’

There is no denying that a healthy bank balance, in addition to appropriate protection insurance policies, serves as a reassuring buffer against financial shocks. However, a bank or savings account is rarely the best place for significant sums.

The value of investments and income from them may go down. You may not get back the original amount invested. A pension is a long-term investment. The fund value may fluctuate and can go down. Your eventual income may depend on the size of the fund at retirement, future interest rates and tax legislation.

News in Review

“The world is looking to you”

All eyes turned to Glasgow on Monday as world leaders convened for COP26, which is being hailed as the most important climate change summit since the Paris Agreement was struck in 2015. The next couple of weeks are set to be packed with important announcements about the future of the planet.

As Prime Minister of the hosting country, Boris Johnson opened the conference with a stark warning, “Humanity has long since run down the clock on climate change. It is one minute to midnight on that clock and we need to act now.” Other notable speakers included Sir David Attenborough, whose impassioned speech drew rapturous applause from the audience. “We are already in trouble, the stability we all depend on is breaking,” he said. “This story is one of inequality as well as instability. Those who have done the least to cause this problem are being the hardest hit.” He concluded, “The world is looking to you.”

The major announcements made so far include an agreement by more than 100 countries to end and reverse deforestation by 2030, a pledge by India to reach net zero by 2070 and announcement of a Global Methane Pledge which aims to limit methane emissions by 30% within a decade. Today, Chancellor Rishi Sunak will address the summit, as part of a day dedicated to finance, to outline plans to make the UK the first net zero financial centre.

Corporate tax in the spotlight at G20

A major corporate tax deal was agreed by leaders of 20 of the world’s major economies over the weekend at the G20 Summit in Rome. The agreement, which was proposed by the US and is set to be put into place by 2023, will see large businesses taxed on their profits at a rate of at least 15%.

Also included in the ‘Rome Declaration’ was a pledge to boost COVID-19 vaccine supply and a commitment to strengthen actions to halt and reverse biodiversity loss by 2030.

“Preparing for a new economy”

UK fiscal news in the last week was dominated by the Budget and Spending Review on 27 October. Rishi Sunak delivered his third Budget, declaring that it begins “the work of preparing for a new economy post-COVID.” He took the opportunity to announce that reducing taxes will be his “mission over the remainder of this Parliament.”

However, on Budget Day itself, no major tax changes were announced and instead, the focus was on spending. The Treasury had released a series of funding announcements ahead of the Budget, including statements setting out spending plans for health, education and transport. Specific spending pledges included £21bn on roads, £46bn on railways, £3.8bn on skills and training, £1.7bn in grants from the Treasury’s Levelling Up Fund for towns and cities, and £5.9bn in funding for the NHS to tackle the immediate backlog of patients awaiting treatment.

Last Wednesday, the Office for Budget Responsibility (OBR) latest forecast predicted that economic recovery will be quicker than previously anticipated, with revised figures suggesting that the UK economy will grow by 6.5% this year – an upgrade from March’s 4% figure. The forecast implies the economy will regain its pre-pandemic level by the turn of the year, six months earlier than previously expected. OBR predictions suggest the CPI measure of inflation will average 4% over the next year, peaking at 4.4% in Q2 2022. The Chancellor added, “The pressures caused by supply chains and energy prices will take months to ease” adding “it would be irresponsible for anyone to pretend that we can solve this overnight.”

Speculation rises ahead of MPC meeting

With the Bank of England (BoE) hinting at a Base Rate rise from the current 0.1% before the end of the year, the financial world is waiting with bated breath for the outcome of the BoE’s next Monetary Policy Committee (MPC) meeting on Thursday. Many mortgage lenders have already started raising rates in anticipation of a Base Rate increase.

Here to help

Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have.

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.

Economic Review – October 2021

OBR forecasts stronger growth

The Office for Budget Responsibility (OBR) has upgraded its UK economic growth forecast and is now predicting the economy will return to its pre-pandemic level six months earlier than previously expected.

Chancellor Rishi Sunak unveiled the independent forecaster’s revised projections during his Budget statement delivered to the House of Commons on 27 October. The new forecast suggests the economy will expand by 6.5% this year, a large upgrade from March’s figure of 4.0%. The revision means the OBR now expects the economy to regain its pre-pandemic size by the turn of the year.

The OBR also scaled back its estimate of the pandemic’s longterm ‘scarring‘ effects from 3% to 2%. Despite this change, next year’s growth forecast was lowered to 6.0% (from 7.3% in March), partly as a result of the stronger performance predicted across 2021. Over the longer term, the economy is expected to revert to its pre-pandemic average growth rate of 1.5%, as the scarring effects of Brexit and the 2008 financial crash reassert their influence over the economy.

Office for National Statistics (ONS) data released after the OBR had produced its updated figures, showed the UK economy grew by 0.4% in August. While this was just under analysts’ expectations, it did signal a return to growth following July’s 0.1% economic contraction. ONS said the service sector made the largest contribution to growth, benefiting from the first full month without COVID restrictions in England.

More recent survey data suggests the economy gained further momentum last month. The flash reading of the IHS Markit/CIPS Composite Purchasing Managers’ Index (PMI) stood at 56.8 in October, up from 54.9 the previous month and significantly above the consensus forecast in a Reuters poll of economists. The PMI did, however, report divergent sectoral trends with growth looking increasingly dependent on the service sector.

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UK inflation likely to hit 5%

The Bank of England’s new Chief Economist has said he expects inflation to reach 5% by early next year and that the Monetary Policy Committee (MPC) will have a “live” decision on interest rates at its next meeting on 4 November.

In his first interview in the role, Huw Pill, told the Financial Times, “I would not be shocked – let’s put it that way – if we see an inflation print close to or above 5%, and that’s a very uncomfortable place for a central bank with an inflation target of 2% to be.” Mr Pill went on to describe the MPC’s upcoming decision as “finely balanced” and added, “I think November is live.“

The Chief Economist’s musings came hot on the heels of comments made by Bank Governor, Andrew Bailey. Speaking during an online event hosted by the G30 group of central bankers on 17 October, the Governor warned that the MPC will soon need to act in order to guard against inflationary expectations becoming entrenched.

Mr Bailey said, “Monetary policy cannot solve supply-side problems – but it will have to act and must do so if we see a risk, particularly to medium-term inflation and to medium-term inflation expectations. And that’s why we at the Bank of England have signalled, and this is another such signal, that we will have to act.“

Ironically, the latest official data released by ONS revealed a slowdown in the rate of inflation. Price growth, as measured by the Consumer Prices Index, fell to 3.1% in the year to September, down from August’s rate of 3.2%.

Recent survey evidence though continues to highlight growing inflationary pressures. Indeed, input price data from the latest PMI showed ‘an unprecedented rise in inflationary pressures, which will inevitably feed through into higher consumer prices in coming months.‘

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Markets: (Data compiled by TOMD)

Although supply chain issues and inflation concerns continue to weigh on sentiment, many global indices closed October in positive territory. In the US, despite downbeat financial updates from tech heavyweights Apple and Amazon toward month end, a more positive earnings picture was recorded by some other major US large caps, who posted better-than-expected revenue growth, reflecting strong demand trends across pockets of the economy. The Dow and NASDAQ closed the month registering robust gains; 5.84% and 7.27% respectively.

On home shores, the FTSE 100 slipped back towards the 7,200 level at month end, after hitting 20-month highs earlier in the week. Strong trading updates from several UK large caps helped bolster the blue-chip index, but a weaker showing from commodity businesses, weighed down by price swings, kept the markets lower. The FTSE 100 ended the month up 2.13%, to close October on 7,237.57. The FTSE 250 index closed on 23,106.61, a small monthly gain of 0.33%. The Junior AIM index closed on 1,223.18, a loss of 1.66% in the month. The Euro Stoxx 50 gained 5.00% in the month to close the month on 4,250.56. In Japan, the Nikkei 225 recorded a loss of 1.90% in the month, to close on 28,892.69.

On the foreign exchanges, sterling closed the month at $1.36 against the US dollar. The euro closed at €1.18 against sterling and at $1.15 against the US dollar.

Brent Crude is currently trading at around $83 per barrel, a gain of over 7% on the month, supported by expectations that the Organization of the Petroleum Exporting Countries, Russia and their allies (OPEC+) would maintain production cuts. Gold is currently trading at around $1,770 a troy ounce, a gain of over 2% over the month. A stronger dollar and rising US inflation caused the price to falter at month end.


Index Value
(29/10/21)		   % Movement
(since 30/09/21)
  FTSE 100 7,237.57 2.13%
  FTSE 250 23,106.61 0.33%
  FTSE AIM 1,223.18 1.66%
  EURO STOXX 50 4,250.56 5.00%
  NASDAQ Composite 15,498.39 7.27%
  DOW JONES 35,819.56 5.84%
  NIKKEI 225 28,892.69 1.90%

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Retail sales extend record decline

Official statistics show that retail sales fell for a record fifth month in a row, although the latest survey evidence does point to a more recent recovery in sales volumes.

According to ONS figures, retail sales unexpectedly fell in September, with volumes 0.2% lower than August. While volumes remain above pre-pandemic levels, they have fallen steadily since peaking in April and this latest decline marks the longest successive run of monthly falls since records began in 1996. ONS said non-food stores were particularly hard hit in September, with consumers buying fewer household goods and furniture.

The latest Distributive Trades Survey published by the Confederation of British Industry (CBI), however, paints a more positive recent picture with its headline net balance of retailers reporting sales growth rising to +30 in October from +11 in September. The survey, though, did highlight ongoing global supply chain problems, with retailer stocks reduced to their lowest level since records began in 1985.

Commenting on the findings, CBI Principal Economist Ben Jones said, “The UK’s economic recovery has been pretty bumpy lately and the same seems true of the retail sector. Sales performance has jumped around in recent months, while stock shortages continue to bite.“

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Workers enjoy pay rebound

Data from the ONS annual earnings survey confirms pay levels have rebounded sharply this year, particularly for those workers hardest hit during the early part of the pandemic.

The recently released figures show that median weekly pay for full-time employees was £611 in April 2021; a 4.3% rise compared to the same month of the previous year. This revival was particularly stark across certain sections of the workforce. Weekly pay for construction workers, for example, rose by 16.8% in 2021 compared with a 10.4% fall the previous year, mainly due to the impact of furlough.

ONS Head of Earnings Nicola White commented, “After virtually flatlining last year at the start of the pandemic, earnings are returning to something like their long-term trend over the last few years. Increases this year were most marked for the groups worst affected in 2020, such as younger people, men and those in lowest-paid jobs.”

Other data also paints a robust picture in relation to pay growth. A survey published last month by the Recruitment and Employment Confederation, for instance, found starting salaries rising at their fastest rate in the survey’s 24-year history, with strong demand for staff and a shortage of candidates pushing up pay rates.

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It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission.

Mortgage process a mystery to many young adults

It is not only prohibitive house prices and stringent affordability criteria that are making it hard for young people to get on the property ladder. A new survey has revealed that the mortgage process is poorly understood by more than half of all young adults.

In the survey1, 52% of 18 to 34-year-olds rated their understanding of the whole mortgage process as either fairly or very bad. This incomprehension was reflected across other financial products too: 53% said they had a fairly or very bad understanding of different types of insurance and when they might need them.

Lost in translation

For many young adults, the language used to explain financial products and services acts as a barrier to their understanding. More than one in three 18 to 34-year-olds said they were not very or not at all confident that they would understand the relevant terminology.

These results suggest a significant proportion lack the required knowledge and understanding to make sensible and informed decisions about the best mortgage and protection products for their circumstances.

Here to help

When making important financial decisions, it’s always a good idea to seek expert advice. We’ll guide you through the mortgage process from start to finish and explain everything you need to know in plain English. Get in touch – whatever your age!

1PaymentShield, 2021

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments. Equity release may require a lifetime mortgage or a home reversion plan. To understand the features and risks, ask for a personalised illustration.

New investment habits set to outlast lockdown

In the past 18 months, many Britons have saved more money than usual as the closure of the economy reduced spending. Many canny investors have been channelling their savings into increased investment contributions.

New research1 suggests that the majority of UK investors (76%) intend to keep up higher levels of contributions, with half saying they intend to sacrifice everyday spending to continue doing so. On average, post-lockdown investors plan to invest nearly a fifth (19%) more, increasing to 36% more for younger investors. Just 6% plan to reduce their contributions.

While the number of investors has surged during lockdown, many experts assumed that this would reduce as restrictions (and lockdown boredom) were lifted. This has not been the case however, especially as many savings accounts have continued to offer poor returns as interest rates remain low.

Get started now

Historically, investments have performed better than cash deposits in the long term. While returns on your investments are never guaranteed, building a diversified portfolio may be a smart move while interest rates remain so low.

1Barclays Smart Investor, 2021

The value of investments and income from them may go down. You may not get back the original amount invested. A pension is a long-term investment. The fund value may fluctuate and can go down. Your eventual income may depend on the size of the fund at retirement, future interest rates and tax legislation.