‘Against a
backdrop of robust goods demand and continuing supply constraints, global
inflationary pressures have remained strong’
In a unanimous decision,
the Bank of England (BoE) Monetary Policy Committee (MPC) voted to maintain Bank
Rate at its record low of 0.1% last week. The vote came as the supply chain
crisis, largely driven by an ongoing shortage of heavy goods vehicle (HGV)
drivers, shows signs of holding back economic recovery.
This certainly seems to be borne out by the MPC’s latest forecast, which
has revised expectations for Q3 growth down by 1% compared with its August
projections. The Monetary Policy Summary of September outlined, ‘Since the
August MPC meeting, the pace of recovery of global activity has showed signs of
slowing. Against a backdrop of robust goods demand and continuing supply constraints,
global inflationary pressures have remained strong and there are some signs
that cost pressures may prove more persistent.’
The BoE also projected that inflation would reach above 4% in the final
quarter of 2021, twice the target level of 2%, ‘owing largely to
developments in energy and goods prices.’ Soaring gas prices have so far
caused nine suppliers to go bust this year, affecting nearly two million households.
However, the MPC maintained its position that many of the factors driving
current inflation levels will prove transitory, with inflation falling back to
close to the 2% target over the medium term.
Expected to be addressed in the MPC’s November report is the end of the
furlough scheme on 30 September and its impact on the labour market and
economic recovery.
US economy defies rise in Delta cases
Rising COVID infections across the United
States, attributed to the Delta variant of the virus, have not hindered
economic recovery, it seems. This is according to the US Federal Reserve, which
said the labour market was recovering and high levels of inflation – currently
at 5.3% – will prove temporary. It said it may start cutting back on emergency
economic support ‘soon,’ but did not specify further.
The country has not been unaffected,
however; the Federal Open Market Committee, responsible for setting US monetary
policy, commented that increased cases were slowing the pace of recovery.
The US Central Bank remains cautious in its
approach, stating that monetary policy and the course of the economy still
depended largely ‘on the course of the virus.’
London
– an investment powerhouse
Five
years after the referendum results set the UK on the path to Brexit, the City
of London still holds the lion’s share of the European investment management
market, according to a new report from the Investment Association. Its data
reveals that London holds a massive 37% market share – larger than Paris (18%),
Frankfurt (10%) and Zurich (8%) combined.
The
world’s second largest investment centre after the United States, the UK also
remains an attractive hub for overseas investment. The report shows that
overseas clients accounted for 44% of total assets under management in the UK,
or £4.2trn, as of the end of 2020.
In
a year marked by economic turmoil, total funds under management for UK
investors nevertheless rose by 11% year-on-year to stand at £1.4trn.
Market update
After a frenetic weekend in the UK, where
the spiralling petrol crisis forced the government
to suspend competition law to help oil companies work together to deliver fuel
to petrol stations, the FTSE 100 held onto
gains on Monday, as it benefited from a strong session for major oil stocks. On Tuesday, the FTSE 100 fell back as energy
prices continued to soar, with the price of oil reaching a three-year high,
stoking concerns that supply chain problems may prompt a slowdown in economic
activity.
German election news
Preliminary
results show the Social Democratic Party (SPD) claimed a narrow
victory in the German election at the weekend. The verdict means
that a coalition will need to be formed, with negotiations potentially taking
months. With Germany taking over leadership of the G7 in January, the
main parties want a new government in place by the end of the year. In the
meantime, Angela Merkel will remain Chancellor.
Here to
help
Financial advice is
key, so please do not hesitate to get in contact with any questions or concerns
you may have.
“This is fundamentally a growth market, and we see it
continuing to be that way”
The travel
industry has featured prominently in the news over the past seven days, with an
easing of travel restrictions announced on both sides of the Atlantic. Last
Friday, simplification of the traffic light system and testing requirements in
England, was greeted positively by business groups, with the British Chambers
of Commerce describing the move as ‘very welcome news for businesses in the
travel sector and beyond.’ And on Monday, the US announced a relaxation of
its COVID travel restrictions, with fully vaccinated UK and EU citizens allowed
to fly to the country from November. Boris Johnson is currently visiting President
Biden at the White House to discuss various issues including trade, climate change,
Northern Ireland and Afghanistan.
Meanwhile, Boeing published its annual 20-year jet
market forecast last week, predicting a full air travel recovery by 2024,
followed by a resumption of long-term demand growth. In a press briefing, the
company’s Vice President of Commercial Marketing, Darren Hulst said, “This
is fundamentally a growth market, and we see it continuing to be that
way.” In a bullish assessment, Mr Hulst also noted that “the global
economy is trending back to where it would have been had the virus not actually
happened.”
Inflation rises sharply
Amongst a raft of economic data released by the Office for National
Statistics (ONS) during the last seven days, the latest inflation figures
revealed a record monthly jump in the rate of price rises. The Consumer Prices
Index (CPI) measure of annual inflation hit 3.2% in August; this was up from
2.0% the previous month and 0.3% higher than City economists’ consensus
forecast. However, ONS pointed out that the impact of last year’s Eat Out to
Help Out Scheme on the cost of restaurant meals, was a key contributor to the
sharp increase and suggested that ‘much’ of the rise was ‘likely to
be temporary.’
Economists do though expect
the CPI rate to continue rising over the next few months, partly due to a sharp
hike in household
energy bills. Indeed, the soaring cost of wholesale gas and electricity was a
recurring theme last week, as prices surged after a key electricity
interconnector in Kent was taken offline following a fire. The surge in
wholesale prices has not only fuelled concerns about rising inflation, but also
sparked fears that a growing number of smaller energy firms could go out of
business.
Retail sales fall again
ONS data released
last Friday also showed that retail sales unexpectedly fell in August, with
volumes down 0.9% compared to July. Although sales remain well above
pre-pandemic levels, downward revisions to previous months’ data now shows a
steady decline since April’s lockdown easing peak, with August marking a record
fourth consecutive monthly decline.
According to ONS,
the further easing of hospitality restrictions impacted the latest data, with
spending switched away from supermarkets in favour of restaurants and bars.
Shops also reported supply chain issues, with separate ONS data showing 6.5% of
all retail businesses unable to get the stocks and other goods and services
they needed in August, with department stores and clothes shops particularly
badly affected by this disruption.
Borrowing higher
than expected
On Tuesday, public sector finance statistics
showed that government borrowing remains on a downward trajectory, although the
latest decline was lower than analysts had expected. In August, the government
borrowed £20.5bn; this was £5.5bn below the comparable month last year but a
similar amount above the average forecast in a Reuters poll of economists.
Higher interest payments on inflation-linked bonds saw the cost of servicing
the government’s debt rise to £6.3bn last month, almost twice the level recorded
a year earlier.
Labour shortages remain a concern
A Confederation of British
Industry (CBI) and Pertemps Network survey released on Monday, has again
highlighted ongoing business concerns over the impact of labour shortages. The
survey found that just over three quarters of all businesses reported access to
labour as a threat to the UK’s labour market competitiveness; the highest
proportion since this question was first asked in 2016. Firms have been
struggling to recruit staff following the pandemic and Brexit, and the CBI said
that supporting firms to plug the shortages gap in the immediate term is vital.
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.
After reaching record highs in June, the housing market is now ‘taking a breather‘, according to the Royal Institution of Chartered Surveyors’ (RICS) August survey.
New buyer enquiries fell for a second consecutive month, with the latest net balance dropping to -14%. Despite this slip in demand, supply still lags; new listings fell with a net balance of -37%, an eighth negative reading in the past nine months. Sales were also down in August, with a net balance of -18%.
Despite this headline negativity, the RICS survey anticipates near-term sales growth, evidenced by the three-month expectations indicator remaining at +4%. Meanwhile, Savills foresees a ‘small spike in September‘ as some buyers take advantage of the final phase of the Stamp Duty holiday before the nil-rate threshold reverts to £125,000 in October.
Commenting on the survey, RICS Economist, Tarrant Parsons said, “The latest survey evidence inevitably points to market activity taking a breather following the flurry of sales seen ahead of the tapered Stamp Duty holiday withdrawal. That said, while momentum has eased relative to an exceptionally strong stretch earlier in the year, there are still many factors likely to drive a solid market going forward.”
New government investment in affordable homes
The government has allocated £8.6bn to deliver around 119,000 new affordable homes, of which 57,000 will be available to buy.
Part of the Affordable Homes Programme, the funding should help thousands of buyers onto the property ladder. Since the first lockdown effectively shut down the construction industry, the supply of new homes has been badly hit at a time when housing demand has soared. The resulting mismatch between supply and demand has forced prices higher, making home ownership an impossible dream for many.
Previous government initiatives such as First Homes, a scheme offering new homes at a 30% discount on the open market value, have tried to make buying a house more affordable. There is certainly demand for such assistance; a record 55,649 households used Help to Buy to purchase a property in the year to the end of March.
Energy efficiency crucial to Scotland’s housing strategy
As Glasgow prepares to host COP26 in November, this year’s Scottish Housing Day (15th September) focused on the climate emergency.
Housing currently accounts for around 15% of Scotland’s greenhouse gas emissions. Therefore, to achieve the Scottish government’s commitment to net zero emissions by 2045, household energy efficiency will need to be at the forefront of government strategy.
A recent Knight Frank Global Buyer Survey revealed an appetite for change in the UK, with 84% of respondents citing the energy efficiency of a future home as being important to them.
Nicola Barclay, Chief Executive of Homes for Scotland, said, “Scottish Housing Day has a timely role to fulfil in focusing minds on the energy efficiency of our homes, particularly on how we close the performance gap between new and older properties.”
“There has been a sharp rise in demand for rental properties in recent months, especially in central city markets, signalling the return of city life, as offices and other leisure and cultural venues continue to open up more fully.“
Gráinne Gilmore, Head of Research at Zoopla
Source: Zoopla September 2021
All details are correct at the time of writing (16 September 2021)
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.
Commercial property investment volumes reached £31.4bn at the end of July, according to the most recent UK Commercial Market in Minutes report from Savills. This was 32% above the same period in 2020 and 4% higher than the five-year average.
Savills also noted a promising rise in the three-month rolling total for investment volumes. The May-July 2021 reading of £16.1bn was a 38% increase on the previous three-month period. Industrial assets received the highest quantum of investment for the period measured. At £9.7bn, this equated to 31% of total investment, above its share (14%) in 2018.However, total investment for industrial assets remained 7% below the same period in 2018. Likewise, regional office investment volumes were 40% up on 2020 but 23% below their 2018 level.
An interesting trend highlighted in the report is the shifting pattern of affordable workspaces. Traditionally, cheaper fringe space has helped generate economic growth by providing space for new entrepreneurs and creatives. Over the last decade, however, the pattern has somewhat flipped. In London, office rents have risen sharply in cheaper locations; 53% in the fringe compared to 29% in the city core. As a result, the gap between core and fringe rents (previously 19%) has vanished. Indeed, by the end of 2020, fringe locations had nudged slightly ahead.
Return of workers sparks office space war
As firms start welcoming workers back to the office, footfall is increasing in city centres. This bodes well for the office sector, but commercial landlords still face several challenges.
Across UK high streets, footfall rose by 2.6% in the first week of September, according to data from Springboard. This was even higher in inner London, where footfall jumped by 4.1%.
Office space provider IWG reported a ‘very strong recovery‘, as occupancy rates bounced back. Similarly, property firm Derwent London said that rent collection had returned close to prepandemic levels with net rental income for the six months to the end of June rising to £90.1m from £84.4m in 2020.
This bounce-back looks set to provoke a “war for space“, according to Derwent boss Paul Williams. He thinks tenants now want “the right space, not just the cheapest space“, which perhaps spurred Derwent’s recent acquisition of two buildings in the ‘knowledge quarter’ on Euston Road and Tottenham Court Road.
IWG is adapting to the new environment by adding space outside London. Mark Dixon, IWG’s Founder and CEO, commented, “This fundamental shift in the way people work is clearly a positive tailwind and we are seeing increasing levels of interest from enterprises wishing to transform their working practices.”
Meanwhile, scrutiny is increasing over offices’ environmental impact, which is driving demand for greener offices. The upcoming UK energy efficiency standards will tighten regulation of commercial buildings’ energy performance from 2023.
Industrial assets received the highest quantum of investment for the period measured. At £9.7bn, this equated to 31% of total investment, above its share (14%) in 2018.
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.
“This rise will impact the wider economic recovery”
Over the past
seven days, government plans to raise National Insurance contributions to fund
the health and social care system have continued to feature prominently in the
news headlines. Last Wednesday, despite warnings of a mass Tory rebellion, MPs
voted by 319 votes to 248 to approve the new ‘health and social care levy’.
Earlier that day, the Prime Minister had defended the move, insisting it was “the
reasonable and the fair approach”, despite it breaking a key manifesto
commitment.
The decision, however, came under
intense fire from business groups. Manufacturers’ organisation, Make UK,
described it as ‘ill-timed as well as illogical,’ while the Federation
of Small Businesses said the tax hike marks ‘an anti-jobs, anti-small
business, anti-start-up manifesto breach.’
British Chambers of Commerce (BCC) Head of Economics, Suren Thiru,
said, “This rise will impact the wider economic recovery by landing
significant costs on firms when they are already facing a raft of new cost
pressures and dampen the entrepreneurial spirit needed to drive the recovery.”
UK growth rate slows sharply
According to the latest gross
domestic product statistics published last Friday, the UK economy grew by 0.1%
in July. While this represents a sixth consecutive month of growth, the
increase was much lower than June’s figure of 1% and significantly below the
consensus forecast of 0.6% taken from a Reuters poll of economists. Analysts
said the slowdown was primarily due to July’s upsurge in COVID cases and the
‘pingdemic’, which left many workers self-isolating at home. In addition, the
figures highlight the ongoing impact of supply chain problems.
Trade deficit on the rise
Other data released last Friday
showed Britain’s goods trade deficit at a seven-month high of £12.7bn in July.
This widening was driven by a 6.5% fall in goods exports to the EU, which was
only partially offset by a 5% rise in exports to non-EU countries.
Data published the previous day
revealed that Germans spent nearly 11% less on British goods during the first
six months of 2021, with the UK now expected to drop out of Germany’s top 10
trading partners by the end of this year for the first time since 1950. BCC
Head of Trade Policy, William Bain, commented, “Exports to the EU fell in July. Taken in
conjunction with German trade data, the UK is clearly doing less trade with the
EU than three years ago. Overall, the figures remain concerning.”
Labour market recovery continues
There was brighter news on the
jobs front though, with Office for National Statistics data released on Tuesday
showing the labour market continuing to recover. The latest official figures
put employee numbers back at pre-COVID levels; job vacancies at an all-time
high, while unemployment continues to fall. This situation, however, is
creating problems for employers, with a survey published last week by the
Recruitment and Employment Confederation reporting the most severe shortage of
job candidates on record.
Other data released last week
showed the number of people on furlough stood at 1.6 million at the end of
July, 340,000 fewer than the previous month. Estimates suggest up to a million
employees could still be on furlough when the scheme winds down at the end of
September and this continues to cast a high degree of uncertainty over the
labour market. The Confederation of British Industry recently warned that,
while the end of furlough will inevitably bring some people back into the jobs
market, it will not be a ‘panacea’ that will ‘magically fill labour
supply gaps.’
US-China trade relations
Last week also saw hopes of a
reset to the strained US-China relationship. In their first conversation for
seven months, US President Joe Biden spoke by phone to his Chinese counterpart
Xi Jinping last Thursday night. The White House said the 90-minute call had
been initiated by Mr Biden and that the two leaders had a “broad, strategic
discussion”. The pair discussed the “responsibility of both nations to
ensure competition does not veer into conflict” and this has raised hopes
of a potential improvement in US-China trade relations.
Autumn and Winter Plan
On Tuesday,the government
announced measures to deal with rising COVID cases in England over the winter.
If Plan A is not sufficient to prevent “unsustainable pressure “on the
NHS, Plan B will be required as a “last resort.”
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.
Taking out a mortgage is something thousands of us do every year,
and yet misinformation about the mortgage process – and particularly deposits –
is rife.
So, here are
a couple of deposit myths you shouldn’t believe:
You need a huge
deposit to be approved
Many people
believe you’ll only get approved for a mortgage with a hefty deposit, which
means those with smaller deposits are discouraged from trying. While it’s true
that a larger deposit will result in lower monthly repayments and often better
rates, it is not the be all and end all. Indeed, the government recently
launched a mortgage guarantee scheme for those with small deposits, enabling
more people to get onto the property ladder.
2. Your deposit is your only major cost
When it
comes to the cost of buying a property, many people only factor in the deposit
as an initial cost. Unfortunately, there are a few other costs to consider that
can really add up. Solicitors’, estate agents’ and surveyors’ fees can cost
several thousands, while Stamp Duty means many buyers will also face a
significant tax bill.
Let us help
Whether you
need advice on saving for a deposit or help with finding the most suitable
mortgage for your circumstances, let us help. Get in touch and we can help make
your homeownership dreams a reality.
As a mortgage is secured
against your home or property, it could be repossessed if you do not keep up
mortgage repayments. You may have to pay an early repayment charge to your
existing lender if you remortgage.
The pandemic has affected almost everyone in numerous different
ways, whether that is financially, medically, or socially; its death toll has
been appalling and overshadows everything. Fortunately, the vast majority have
come through the pandemic, but the speed of recovery has been variable.
Medically,
many patients have recovered well, but some have prolonged symptoms which have
been diagnosed as ‘long COVID’. A corresponding picture emerges with people’s
finances, as many people have lost earnings or even their jobs, but economic
recovery could help restore their financial health. A minority, however, may
suffer the financial equivalent of long COVID.
Insurer and
pension provider Legal & General (L&G) has monitored the financial
effects of COVID-19 throughout the pandemic, particularly the long-term impact
on the prospective pension income of workers over 50 who are closest to
retirement. In the early months of the crisis, the picture wasn’t too
disturbing; last August, only 2% of this group envisaged cutting their pension
contributions.
What are the numbers?
Fast-forward
eight months to April this year and the L&G research revealed that some 12%
of workers over 50 were paying less into their pension pots because COVID-19
had disrupted their finances. This led L&G’s number-crunchers to work out
just how severe the impact could be on the retirements of those one-in-eight
(about 1.7 million) 50-plus workforce members.
The message
from L&G’s figures is simple, ‘A 50-year-old opting out of a workplace
pension could be £50,000 worse off by the State Pension age of 67 if they never
opted back in and continued working full time throughout.’ So, if you have
cut back on your pension contributions during the pandemic, you should consider
restarting them as soon as you can.
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.
“Following the most successful vaccine programme in the world, we’re beginning the biggest catch-up programme in the history of the NHS”
On Tuesday,
Boris Johnson took to the Downing Street podium, following an earlier
appearance in the House of Commons, to set out the government’s intentions to “help
our NHS recover from the pandemic and build back better by fixing the problems
in health and social care.”
The Prime
Minister continued, “For more than 70 years, we’ve lived by the principle
that everyone pays for the NHS through our taxes, so it’s there for all of us
when we need it… Following the most successful vaccine programme in the world,
we’re beginning the biggest catch-up programme in the history of the NHS.”
A new health and social
care tax will be introduced across the UK, aimed
at supporting social care and tackling the health backlog caused by the
pandemic, including increasing hospital capacity. From April 2022, the tax, expected
to raise £12bn a year, will initially begin as a 1.25% increase in National
Insurance, paid by both workers and employers. From April 2023, it will become
a separate tax on earned income, calculated in the same way as National
Insurance, and ring-fenced as a health and social care levy, which will
appear as a separate line on payslips. Tax on share dividends is also scheduled to
increase by 1.25%, in a move expected to raise £600m.
Over the next three
years, £5.4bn of the sum raised will be used to support changes to the social
care system. In England, from October 2023, a
cap of £86,000 will be introduced on care costs over a person’s lifetime. Those
with assets under £20,000 will have fully-funded care, whilst people with
assets of between £20,000 and £100,000 will be entitled to care cost subsidies.
The social care cap will apply only to patients
in England, but the levy is applicable across the UK. Health services in
Scotland, Northern Ireland and Wales will receive an extra £2.2bn a year.
The proposals face an MP vote in
the House of Commons on Wednesday.
Triple lock changes for 2022-23
Also on Tuesday, Secretary of State
for Work and Pensions, Thérèse Coffey, announced suspension of the ‘wage’
element of the pension triple lock, to avoid a disproportionate rise of
the State Pension following the pandemic. For
the 2022-23 tax year only, the new and basic State Pension will increase
by the higher of either 2.5% or the rate of inflation.
Autumn Budget and
Spending Review date confirmed
On a busy day for fiscal news, on Tuesday,
Chancellor Rishi Sunak confirmed that the date of the next Budget, alongside a
Spending Review setting out UK government departments’
resource and capital budgets for three years, will be 27 October.
Summer property
price upturn
In August, UK
property prices recorded their second largest month-on-month rise in 15 years,
according to the latest Nationwide House Price Index. Prices increased by 2.1%
last month, with annual house
price growth rising from 10.5% in July to 11.0% in August. With the average
house price now heading towards £250,000, values are on average 13% higher than before the pandemic.
Expectations
are that in the short-term, underlying demand is likely to remain solid. With
borrowing costs low, consumer confidence has rebounded, this combined with the
lack of supply in the market, suggests continued support for house prices.
Interestingly,
housing energy efficiency has been found to have a modest price implication,
with the report outlining that a 1.7% house price premium can be derived for an
owner occupier property rated A or B, when compared to a D-rated home.
Conversely, properties rated F or G have been found to attract a 3.5% discount,
compared to a similar D-rated property.
Food production at risk of moving overseas
Staff shortages are causing such strain in
UK food manufacturing, the British Retail Consortium (BRC) has warned, that
some production may be moved to other countries entirely. Speaking last week at a special
session of the UK Trade and Business Commission, Andrew Opie, Director of Food
and Sustainability at the BRC, said shortages of HGV drivers and other supply
chain staff, mean that the sector is currently “just on the edge of
coping.” With many factories
unable to recruit sufficient levels of staff, he warned the Christmas period
would be “incredibly challenging,” continuing, “Despite
every effort that’s being made by food factories, we cannot recruit enough
indigenous people here. They just do not want to do those roles for whatever
reason.”
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.
Equity release has become an
increasingly popular option for many people, with a record number of products
now available on the market.
With over 500 equity release
options available to consumers1, rates have also dropped by an
average of 2% in the past five years. The maximum loan to value (LTV) has held
steady over this period at 49%.
Demand increases
Equity release stood up to the
challenges of the pandemic, with customers taking out 19% more lifetime
mortgages in H2 2020 than in the first half of the year2. Equity
release is clearly still a sought-after option of accessing funding in later
life.
Did you know…?
More and more people are using
equity release, and yet consumers still lack basic knowledge – for example,
that they can switch to a cheaper rate and potentially save thousands of
pounds. The FCA does not require equity release providers to stay in touch with
clients after they’ve taken out a loan, or to inform them of any opportunities to
switch.
The potential savings are not
insignificant, with one equity release broker saying it has saved remortgagers
an average of £33,795 over a period of 10 years3.
Could you save too?
If you are an equity release
customer and would like to know if switching might benefit you, then we can
help. Talk to us and we can assess whether it is an option for you.
1Moneyfacts,
2021
2Equity
Release Council, 2021
3Key,
2021
Equity release
may require a lifetime mortgage or a home reversion plan. To understand the
features and risks, ask for a personalised illustration.
Did you know that this expression about the
envy of others dates all the way back to 1913, when a New York Globe comic
strip ‘Keeping Up With the Joneses’ first appeared and created an
enduring, meaningful expression?
Even further back, envy was evident in biblical times; the Tenth
Commandment is proof of that – ‘Thou shalt not covet thy neighbour’s house…
nor any thing that is thy neighbour’s.’ A TV cartoon about the neighbouring
Flintstone and Rubble families is less convincing evidence of materialism in
the Stone Age!
A friendly approach
More relevant to the present day can be seen from two centuries ago, when
the British class system meant that much of the population led impoverished
lives, with harsh industrial working conditions, poor housing and little
opportunity for social mobility. That was when mutual organisations became
established as co-operatives, or friendly societies, to begin improving
ordinary families’ lives.
In 1820s Lancashire, a group of workers formed a sickness and benefits
society that later became Shepherds Friendly Society, today a provider of
long-term insurance and investment products. As a mutual, owned by its members,
a much-modernised Shepherds Friendly still champions the principles of its
founding members, broadly advocating thrift and a caring, sharing community.
Before the Pandemic, Shepherd’s Friendly ran a survey themed ‘Keeping up
with the Joneses: Does it make us happy?’ Among the 2,000 respondents, 52%
admitted comparing their finances to those of family and friends; 30% had been
tempted to buy something because people they knew had done so; 9% had bought
something unaffordable just to impress others.
More reassuringly, ‘achieving personal goals’ was a top-scoring
response to a question about feeling successful, whereas the bottom-scorer was
‘owning expensive items’. Consider what will bring you the most happiness –
maybe focusing on your own finances and being realistic about what you can
really afford, without damaging your long-term financial outlook, will be the
right route – rather than excessive expenditure beyond your means.
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.
