Ageing – A Problem Facing Us All

What’s the solution to the ageing dilemma? As we grow older and live longer as a nation it puts strain on the state and on our own resources. According to the 2017 book The 100-Year Life: Living and Working in an Age of Longevity by Lynda Gratton and Andrew Scott half the babies born in wealthier countries since 2000 will see their 100th birthday – 103 in the UK – changing everything from work and economics to our relationships. While living longer, potentially to 100 years and more, is to be welcomed, no-one would want to live it in poor health and relative poverty. 

What life span have the children got to look forward to?

The challenges of long-term care are well documented. State pension ages for men and women have been increasing and governments have launched new initiatives such as pensions freedoms and auto enrolment in recent years in order to boost individual retirement savings, which for most people are inadequate. As the 100-year life states, what this means for individuals is: “If we live for longer we need to invest more in our financial assets to support a longer life. However, a longer life is not just about getting the finances right but also about making sure you invest in your health, your families and friends and your own productive abilities. A longer life will lead us to reassess how we balance these financial and non- financial forces over our lives.”* 

A recent survey shows that women’s retirement savings are set to fall short by 16 years, while men are on average likely to come up 10 years short. So, although the average woman in the UK wants to retire at 63, if they did so their savings at retirement would run out by the time they were 69, assuming they are spending £27k per year. The survey based this on an average life expectancy of 85 and average savings of £392 per month. It says that in order for Brits to fund their living expenses to age 85, they either need to drastically increase the amount they save or continue working for significantly longer. 

I believe Advisers such as ourselves, are in a unique position to add value and expertise to clients’ wellbeing by helping them do this by building the products and tools that enable them to meet the wealth and health challenges of the future. 

Johnson pledge to cut tax

Would you believe it?

Tory leader contender Boris Johnson pledged to cut income tax bills for those earning more than £50,000 a year, if he wins the race to succeed Theresa May as Prime Minister.

Speaking to the Telegraph, Johnson said he would use the money currently set aside for a no-deal Brexit to raise the 40 per cent tax rate threshold to £80,000, cutting taxes for around 3 million higher earners. As an MP, the former foreign secretary earns £79,468.

“We should be raising thresholds of income tax so that we help the huge numbers that have been captured in the higher rate by fiscal drag,” he said.

While some of the costs would be offset by the no-deal Brexit fund, if Johnson is named Prime Minister, the Telegraph calculated that the move would cost approximately £9.6bn per year.

Commenting, Labour’s shadow chancellor John McDonnell said the proposal highlighted “how out of touch the Tories are”, the BBC reported.

According to The Guardian, McDonnell added: “Exactly as predicted, the Tory leadership race is degenerating into a race to the bottom in tax cuts. When there are 4.5 million children in poverty, 1 million elderly in severe poverty, the schools’ budgets and our police service stretched to breaking point, this [is] the Tory priority.”

I can see his point!

Should I Stay or Should I Go

Oh dear, dear. I have to confess right here to being old enough to remember those words of Joe Strummer and Mick Jones back in the eighties. Maybe they echo some of the thoughts which have been going on in Mrs May’s head of late although she doesn’t quite strike me as being a fan of The Clash.

Whilst the latest news tells us that Theresa May will step down on Friday 7 June (today), we’ve then got the subsequent leadership election getting underway from 10th June. And with all the shenanigans that it will involve. Those hoping to see some light at the end of the Brexit tunnel are still very unsure what her departure might actually mean in terms of getting Brexit decisions made. Or not made. Whether you think that her departure as PM is a good thing or not, the whole thing throws yet more short-term uncertainty into an already very uncertain situation. At the time of writing, at the end of May, (oh the irony) the latest inflection point around a possible fourth attempt at getting the Withdrawal Agreement though the house of commons was all too much. It looks though we are about to enter the next phase of the Brexit saga with as much clarity as a very muddy pond.

What the papers said this last weekend

The Sunday Times reports a CBI warning that growth in business activity has virtually ground to a halt over the last 3 months as a result of what it terms ‘Brexit limbo’

There’s an interesting profile of Andrew Formica, head of Jupiter Asset Management, who is out to confound the naysayers, while James Timpson, CEO of Timpson Group, advises retailers to look after the rents and the rates will take care of themselves.

Louise Cooper provides a sobering guide to the potential pitfalls of freelancing, while an article about pension equality shows how just 63p a day can close the pension gap for women who take a break from work.

There is also a Raconteur supplement about the future of banking, leading with an analysis of how the race is on as tech shakes up capital markets.

The Mail on Sunday takes a look at the sport and leisure sector, with an item about giving portfolios a fitness boost and some added muscle without all the legwork.

They report ‘L&G sells off British insurance unit to Allianz’, and that Mr Kipling firm Premier Foods has lost its chairman.

Fraudsters pretending to be the taxman will be hit as HMRC deletes over 1,000 fake phone numbers, while The Prudent Investor asks “I want to add some emerging markets funds, but which should I choose?”

Sarah Davidson wonders how many savings accounts is too many, and reckons that 4 is the magic number.

The Sunday Telegraph reveals how you could save £17,000 a year on care by staying at home and reports that pension savers who follow the crowd could lose out by £2m.

As £165m Lendy collapses, experts warn that ‘a dozen more peer-to-peer firms will follow’.

They also name the 6 ‘cheapest’ British investment trusts.

Almost £200m lost through investment fraud in 2018

According to an article in “MoneyAge”, a News Sheet for IFAs, victims of investment fraud lost over £197m in 2018 as scammers use increasingly “sophisticated tactics” to persuade people to invest their savings, according to new figures from Action Fraud.

The Financial Conduct Authority (FCA) issued a warning to potential victims of investment scams today, 6 February, after it emerged that the average victim lost £29,000 last year, as fraudsters move away from cold calling and towards online techniques.

In August, The Pensions Regulator and the FCA joined forces to launch a campaign, ScamSmart, urging people to be aware of scammers targeting their pension savings, after they revealed an average of £91,000 was lost per victim in 2017.

The number of people visiting the ScamSmart website increased from 31,000 in the 55 days prior to the launch of the campaign to 173,000 in the 55 days after, according to FCA figures.

Of those who checked the FCA Warning List, 54 per cent had been contacted via online sources in 2018, up from 45 per cent the previous year.

FCA executive director of enforcement and market oversight, Mark Steward, said: “Investment scams are becoming more and more sophisticated and fraudsters are using fake credentials to make themselves look legitimate.

“The FCA is working harder than ever to help protect the public against this threat. Last year we published over 360 warnings about potentially fraudulent firms. And we want to spread the message so we can all better protect ourselves from investment scams.”

In January, pensions cold-calling became illegal and companies caught nuisance calls could face enforcement actions and fines of up to £500,000.   Aegon head of pensions, Kate Smith, said: “Legislation to prevent pension cold calling will help to some extent, but investors shouldn’t be lulled into thinking they’re home and dry.

“To fully fight fraud a considerable amount of work needs to be carried out to inform people and the over 55s in particular, that cold calling is illegal and they need to continue to be on their guard. A government led campaign to keep this issue in the limelight would help to combat the scourge of fraud.”

According to Action Fraud, investments in shares and bonds, forex and cryptocurrencies by unauthorised firms accounted for 85 per cent of suspected investment scams in 2018.

The FCA warned the people must be extra vigilant during Q1, the peak investment season.  These include the following six:- 

  • unexpected contact,
  • time pressure,
  • social proof,
  • unrealistic returns,
  • false authority and
  • flattery.

Last month, the Insolvency Service said it has applied to wind-up 24 companies, connected to 3,750 scam victims, since 2015.


Five things Investors should not fear this year

Terence Moll is a chief strategist at Seven Investment Management and a well respected voice in financial circles.

In an Article he wrote recently in New Model Adviser, he muses over why investors should not be worried? He thinks fears are exaggerated – and they actually have plenty to be cheerful about. Here are five things he says investors should not fear this year.

A US recession

The big question for global growth is the US. It is the developed world’s growth engine at the moment, and US recessions have often been associated with equity crashes in the past.

Although some commentators fear a recession in 2019, he is not overly worried.

The US is currently growing at around 2.5%. From these levels, it normally takes at least two years for growth to turn negative.

Moreover, the usual imbalances associated with recession – soaring inflation, a housing crunch or a commodity price shock – are largely absent. He thinks a US recession is unlikely before late 2020, at the earliest.

Trade wars

So far, tariffs have been implemented on around 2.5% of world imports, corresponding to less than 0.6% of world output. They are certainly a negative for growth, but on a tiny scale to date.

Although they could get much worse, the US and China will reach a compromise that will not harm their economies (and their people) too much.

The UK

Brexit is a shambles and investors are worried the UK could end up exiting with no deal in place, which would be a really terrible deal, in March.

But it is in the interests of both the UK and the EU to reach a broadly sensible outcome. He thinks a deal that is not too painful for the UK will materialise.

A Corbyn government

Jeremy Corbyn’s bark is worse than his bite. If he came to power he would be so constrained by the range of views within his Labour party, and by business pressures and economic restraints, he would not be able to do much that would derail the UK’s financial market.


Markets are volatile. They move up and down. Whenever markets fall, commentators concoct stories to explain why they have fallen – stories that are often alarming and are frequently complete inventions, with no basis in fact. It is best to ignore the headlines.

Markets were exceptionally quiet in 2017. Volatility returned to more normal levels in 2018, and he expects more of the same in 2019. He says this is not something investors should worry about because it is simply how the financial world works.