Financial Focus Summer 2020 Newsletter

Holding your nerve with your investments Hard as it feels, now is the time to try and stay calm. There is no disputing the impact of the Covid-19 pandemic. Despite previous coronavirus outbreaks in Asia, such as SARS in 2002, on this occasion it is different. Time now seems to be divided into 'before and after': the old normal and the new socially-distanced reality we are coming to terms with. These two eras are clearly visible in the global stock markets, most of which fell sharply in March as the virus spread globally, closely followed by lockdowns and economic contraction. A steady stream of commentary has discussed whether life as we knew it has changed forever, from air travel to working patterns. That perspective of major changes has also extended to suggestions that there has been a fundamental change in the investment world. The scene has certainly altered – at least for now. There has been increased volatility in the values of investments, while businesses have reacted to the new environment in a variety of ways, the most obvious being to reduce dividend payments, which you will probably notice in coming months. TAKING A LONG VIEW However, it is worth trying to take a longer-term view. Think back – if you can – to previous crises, such as the financial crisis of 2007/08, the 9/11 terrorist attacks, the turn-of-millennium dotcom bubble and even the great storm and accompanying stock market crash of 1987. At the time, each of those events felt momentous and a break in history. Now, with the benefit of hindsight, these may even appear as little more than dips on a long-term investment chart. Investors who stayed the course did suffer in the short term, but they benefited in the long term. Those who panicked and sold up may have chosen the worst point to do so, and then faced the difficult decision of when to reinvest. All we can say with certainty is that 2020 will be remembered as a difficult year for investors, but perhaps just one of many over the life of a portfolio. B The value of your investments, and the income from them, 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. 2 Welcome to our summer newsletter. No- one could have predicted how the last few months have turned out. The disruption to everyday life seems set to continue, with coronavirus lockdown measures easing but still bringing us nowhere near to our to 'pre-Covid-19' lives. The same can be said for the stock markets, which have seen sharp falls; the investment landscape has certainly shifted - if not permanently, then for the forseeable future. This naturally has implications on personal financial planning, savings and investments, protection and pensions. Will-writing and estate planning has also seen a recent increase in demand, for sobering reasons, but the astonishing fund-raising accomplishments of Captain Tom Moore highlight the importance of planning for long and productive later lives. In this edition we bring you an overview on how these globally altered circumstances may impact on your own financial positions. 03 It will happen to you Lockdown prompts a will-writing uptake 04 Planning towards your century Living longer, active lives requires careful financial planning 05 Tax rises on the way Funding the Government's Covid-19 measures will fall on taxpayers 06 Time to review your drawdown plans How coronavirus could impact your pension withdrawals 07 The kids are alright Savings limits for children have doubled as CTFs start maturing this year 08 Leaving it to chance Can you afford to rely on State provision? In this issue... This newsletter is for general information only and is not intended to be advice to any specific person. You are recommended to seek competent professional advice before takingor refraining from takinganyactionon thebasisof thecontentsof thispublication. Thenewsletter representsourunderstandingof lawandHMRevenue&Customspractice. © Copyright 4 June 2020. All rights reserved. INVESTMENTS Cover image: gvictoria/ Ian Dyball/ Mitch Hutchinson/