Essentially Wealth – Quarter Three 2021

An increasing sense of optimism seems to be apparent as the country emerges from lockdown, providing a much more familiar feel to the season, with anticipation growing that this will prove to be a Great British summer. There has already been a packed sporting schedule to enjoy, with events such as test cricket still to come; many of us have staycations planned and, for the musically minded, the Proms have made a welcome return.

Social media has infiltrated our everyday lives, bringing both positive and negative impacts.

Astonishingly, 3.96 billion people, over half of the global population, currently use social media worldwide, almost double the 2.07 billion recorded in 2015. With the average person having 8.6 social media accounts, there’s no wonder it has become such a major influence in many people’s lives.

It can be challenging to feel confident in our pension provision these days. Increased life expectancy and high living costs mean we need to save ever more into the pot for a comfortable retirement.

With the largest ever peacetime deficit on our hands thanks to the pandemic, and an aged Inheritance Tax regime firmly on the government’s radar, could this combination lead to unwelcome tax rises on transfers of wealth? Viewed by some economists as a way to generate revenue without inhibiting the economy, whilst also improving social mobility, the Institute for Fiscal Studies have been exploring two ‘i’s’ – inheritance and inequality.

We’ve heard it all before – it doesn’t take a rocket scientist to appreciate how the pandemic has prompted a seismic shift in public behaviour, as it’s impacted all our lives. Appreciation of this major shift in the way we live our lives should also translate to our investment choices, making them a prime consideration when evaluating future prospective investment opportunities.

When it comes to saving for retirement, there are always options, no matter how late you leave it. Increase your contributions. If you’re currently paying the minimum 8% (including tax relief and 3% employer’s contribution) into your workplace pension, consider increasing it. Making a few cuts elsewhere can help you find those much-needed funds.

With the average annual fee for private schools now £36,000 (£12,000 per term) for boarders and £15,191 (£5,064 per term) for day pupils3, making the decision to privately educate your child is a big step and a massive financial commitment. In addition to fees, added extras such as registration fees and funds to cover things like outings, uniforms and clubs, all need financing.

The medical, social and financial impacts of the pandemic have been far reaching. Some people who are recovering from COVID are left with prolonged symptoms, leading to a diagnosis of ‘long COVID’. Similarly, from a financial perspective, many people have lost earnings, but economic recovery could help restore their financial health and wellbeing. Unfortunately, a minority could suffer the financial equivalent of long COVID.

People paid £1.5bn into Individual Savings Accounts (ISAs) in April4; this constitutes the highest level of April inflows in over six years. During the month, people invested £78m more into ISAs than over the entire previous 12-month period.

Have you ever read one of those articles focusing on tell-tale signs of an investment scam? It might not be as useful as you think.

Rising living costs and increased life expectancy mean that it’s more difficult than ever to save up enough to provide a sufficient income for our retirement years.