Printed on paper produced using wood fibre and manufactured at a mill that has been awarded the ISO14001 and EMAS certificates for environmental management. Jacqueline Lee-Lis LLB (Hons), APFS 2 Brassey Hill Limpsfield Oxted Surrey RH8 0ES e: jackie@leelis.co.uk office@leelis.co.uk w: www.leelis.co.uk Jacqueline Lee-Lis is an adviser with Julian Harris Financial Consultants, authorised and regulated by the Financial Conduct Authority, FCA No. 153566. Registered office: Julian Harris House, Musgrove, Ashford, Kent, TN23 7UN On 23 March 2020, Boris Johnson announced the first UK lockdown in response to the Covid-19 pandemic. It was a traumatic period that many of us want to forget, but looking back there were some valuable lessons to be learned: 1. Don’t rely on the social security safety net. It was immediately clear that the benefit system was incapable of dealing with the massive changes and income loss created by the pandemic. A variety of emergency support measures were rushed through, such as the Coronavirus Job Retention Scheme (aka the furlough scheme). Five years later, the benefit system has reverted to its pre-pandemic paucity. 2. Your will should always be kept up to date. Completing or updating a will is one of those do-it-later tasks that are sometimes left undone for decades. For many, the pandemic was a sharp reminder of the dangers of such procrastination. Suddenly, a will became a vital document. 3. Keep a rainy-day fund. The government’s income replacement schemes took a while to get off the ground and left loopholes. Many never fully replaced the earnings lost. A cash reserve is a key part of financial planning, there to deal with crises. 4. Take a long-term investment view. The investment markets fell sharply when the virus hit. The FTSE 100 dropped by from 7,542 at the start of 2020 to 4,994 on 23 March. The index ended the year at 6,461. Panicked investors who sold out as the first lockdown was imposed paid a high price for their short-term approach. ✣ The value of your investment and any income from it can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances. The Financial Conduct Authority does not regulate will writing and some forms of estate planning. 8 PLANNING The lessons of March 2020 Five years ago, the UK was at the start of the Covid-19 pandemic. 8 1.1 million miss the deadline An estimated 1.1 million taxpayers missed the 31 January tax return filing deadline. If you’re one of them, you face an array of penalties, including an initial £100 fixed penalty, even if you have no tax to pay, or you have paid the tax due on time. After 3 months, there are additional penalties of £10 per day (to a maximum of £900). You then incur 5% of the tax unpaid at 30 days, together with interest (currently at 7%) on any tax paid late. ✣ The Financial Conduct Authority does not regulate tax advice. Tax treatment varies according to individual circumstances and is subject to change. No change to automatic enrolment The Department for Work and Pensions has once again left the lower age limit, income thresholds and contribution rates for automatic enrolment in workplace pensions unchanged for the new tax year. The lack of any updating means that, for example, a 21-year-old now qualifies for the full National Living Wage, but not auto-enrolment (which still starts at 22). Most experts also believe the 8% minimum total contribution rate is too low to provide an adequate retirement income. NS&I cuts National Savings & Investments has been busy cutting its variable interest rates. Income Bonds now pay 3.26% (3.30% AER), down from 3.93% (4% AER) at their 2024 peak. The Premium Bond prize rate will be 3.8% from April, against 4.40% in the early part of last year. There has been one rate increase, on the Direct ISA, but its new 3.5% rate is well adrift of the market-leading rates. NEWS ROUND UP Credit: ANDREI ASKIRKAi/Shutterstock.com Credit: Ground Picture/Shutterstock.com
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