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Month: April 2022

Market Update April Monday 25th 2022

US interest rate expectations dominate markets

Expectations for interest rates were front and centre for markets this week, as Jay Powell, chair of the US Federal Reserve (Fed), said on Wednesday that it was appropriate to move quickly in order to control inflationary pressures, with a 0.5% rate increase in May a real possibility. Earlier in the week, the chair of the St Louis regional Fed said a rate increase of 0.75% could not be ruled out sometime this year.

US Treasury yields, which move inversely to price, rose with the 10-year now yielding 2.93%. The market is pricing in US interest rates of around 2.8% by the end of the year, today they are in the range of 0.25% to 0.50%. Similarly, officials from the European Central Bank pointed to the possibility of a rate increase as early as July. It was only four months ago that Christine Lagarde, president of the ECB, said a rate rise in the Eurozone was very unlikely.

As of 12pm on Friday, London time, US equities were flat over the week, whilst the US technology sector had fallen 1.3%, having declined by 15.8% since the start of the year. European equities dropped 0.9%, and the UK market lost 0.6%. Japanese equities rose 0.5%, whilst the Australian market fell 0.7%. Emerging markets dropped by 2.3%, with China suffering a loss of 3.9%.

Sterling sells off following weak UK retail sales data

In line with US Treasuries, German bunds also sold off, with the yield on 10-year bonds now standing at 0.93%, a level that has not been seen since 2014. UK gilts also sold off, with the 10-year yield trading at 1.98%. This was exacerbated by weak UK retail sales figures leading to a sharp selloff in Sterling on Friday, and in consequence, increasing the inflationary pressures on the UK. Versus the US Dollar, Sterling is now trading at $1.29, as low as it has been since the end of 2020.

Commodities also sold off this week, with Brent crude falling just over 4%, now trading at $107 a barrel. Copper dropped by just over 1%, iron ore lost 3.2% and gold was down by almost 2% at $1,935 an ounce.

Netflix tumbles close to 40%

There were mixed company results this week, but perhaps most eye catching was the sharp fall in Netflix’s share price following the news that its subscriber numbers had fallen for the first time in over a decade, with the price falling by close to 40%. Tesla, the electric car manufacturer, on the other hand reported revenue growth more than doubling for the last quarter to $18.7 billion.

However, in an environment where investors are increasingly looking for profits today, rather than growth tomorrow, its high valuation (Price/earnings ratio 78x versus 19x for the US market) proved a headwind for the share price which fell slightly over the week. Whilst more lowly valued consumer discretionary stocks, such as Heineken, Danone and Procter and Gamble, saw share price rises over the week as first quarter sales rose despite hiking prices for end consumers.

Will your pension run out early?

Impact On People Opting For Early Retirement As A Result Of The Pandemic

An increasing number of people have been forced into early retirement due to the economic impact of the coronavirus (COVID-19), with many worried about how they’ll make ends meet in the future. Because of the pandemic, we are currently in a challenging economic period. The global economy has taken over ten years to recover from the shock of the last financial crisis.

In a recent survey, the findings showed that 3% of people in the 55-64 age group have taken early retirement due to the coronavirus pandemic. And 4% of people in this age group have had to access some of their pension savings to cover living costs because their income has dropped due to redundancy or reduced pay. These percentages may seem small, but they represent hundreds of thousands of people.

Risks Of Early Retirement

While early retirement may sound like a dream come true, for those with insufficient pension savings it can be a ticking time bomb. Every year of early retirement will have an impact on your pension, in that it represents both a year lost for saving and a year added for spending. Simply put, you’ll need to make less money last longer. Unless you’ve budgeted carefully and are sure you have enough savings, you could run the risk of your pension running out in your later years. This is an expensive time for many people, due to the cost of financing care, and that can result in unexpected hardship.

Planning For Early Retirement

If you’re planning early retirement, you should consider the following steps:

1. Calculate all your savings in different pension pots to find out what your total is.

2. Track down any lost pensions from previous employers and add these to your total.

3. Check how much of the State Pension you can expect to receive, and from what age.

4. Create a budget for your retirement spending, making sure to include any additional future costs you’re aware of and a little extra for future costs you’re unaware of. Be honest about how much you’ll need.

5. Make sure that the total you have in pension savings, when combined with the State Pension you’ll receive, is sufficient to cover all your future costs.

Alternatives To Early Retirement

If your financial situation is forcing you to withdraw from your pension but you’re not ready yet to stop saving, there are ways to access your pension that do not affect your annual allowance and therefore allow you to continue contributing at the same rate in the future.

These include:
Taking up to 25% of your savings as a tax-free lump sum (from a defined contribution pension)
Accessing a defined benefit pension (if you have one)
Withdrawing a pension pot worth under £10,000 in its entirety under ‘small pots’ rules
Buying certain types of annuity

Can You Afford To Retire Early?

We know that you work hard for your money, so you should be able to enjoy it as much as
possible. When planning for retirement, there are now more choices available than ever before. By understanding precisely what you’ll need to get to where you want to be, you can ensure you’re prepared for the future. So when working out if you can afford to retire early, your starting point should be to think about whether your savings and investments will be enough to cover all your outgoings, as well as all your essential living costs and any regular debt repayments you may have to make.

Answering All Those Big Questions

We can give you more information on any of these options and help you to choose the ones that are best for you. We’ll answer all those big questions you might have: When can I retire? How can I make my money last? Should I take a lump sum? To find out more and discuss your options – please contact us.


Sustainability Matters

Plan For A Better Tomorrow, Today

Responsible investment is a catch-all term to broadly describe funds that invest to make a positive change, either to the environment or for society. Within this umbrella term there are four broad investment approaches: ethical exclusion; responsible practice; sustainable solutions; and impact funds.

Increasingly more pension savers are asking where their funds are invested. Many are no longer just concerned about getting the best returns – they also want their money to be used in a way that helps society and the planet. The Department for Work and Pensions (DWP) is currently consulting on improving the governance, strategy and reporting of occupational pension schemes on the impact of climate change.

The growth of Environmental, Social and Governance (ESG) issues – from an increasing awareness of climate change, global responsibilities and social issues to investing in companies that act responsibly and prioritise making the economy cleaner, safer and healthier – is an important consideration for many investors.

Considerations Within Retirement Portfolios

While ESG concerns have been gaining profile in the investment world for many years, there is reason to believe that there will continue to be a big shift toward these considerations within retirement portfolios and the coming transfer of wealth to sustainability-minded Millennials.

Eight out of ten people (83%) think global warming will be a serious problem for the UK if action is not taken, and there is a lack of awareness about the extent to which pension funds are working to reduce the impact of climate change. In the survey, around half (51%) say global warming is ‘extremely’ or ‘very’ important to them.

Categories Of Criteria Used To Assess Companies

However, there remains a lack of understanding among some savers as to how pension schemes are taking action against climate change. Three-fifths of workplace pension holders (59%) say they don’t know if schemes are taking any action; just one in seven (15%) workplace pension holders think schemes are.

ESG refers to the three categories of criteria used to assess companies when investing responsibly: ‘E’ stands for ‘environmental’ factors, such as carbon emission and water management; ’S’ stands for ‘social’ factors, such as employee welfare, diversity and inclusion; ‘G’ stands for ‘governance’ factors, such as business ethics and corruption.

Percentage Of People’s Wealth In Their Pensions

The concept of ESG investing has existed for decades but has grown enormously in popularity over the last five years. While early adopters of this practice were often driven by moral or ethical concerns, over time the financial benefits of ESG investing have become clearer, which has encouraged mass adoption.

ESG investing is becoming increasingly popular, and many investors are choosing ESG funds for their Individual Savings Accounts (ISAs) and general investment portfolios. However, these accounts usually hold a lower percentage of people’s wealth than their pensions.

Greater Transparency Around Climate Impact

The survey also found a number of people don’t understand what pension schemes do with their money. Little more than two-thirds (68%) of the general population understand that pension schemes invest in a range of companies and other investments, and only one in five (22%) pension holders say they know the types of companies that their pension invests in.

Despite these knowledge gaps, when it comes to pensions there is still strong support for greater transparency around climate impact, in terms of the investments that are made and the way firms operate. Six in ten (62%) people think that pension schemes and other investors should hold those in charge of the companies they invest in to account for their efforts to minimise their impact on climate change.

Behave In A Way That Helps Tackle Climate Change

Two-thirds (66%) think investors have a responsibility to encourage the companies they invest in to behave in a way that helps tackle climate change. A similar proportion (65%) think that financial services firms should report on the impact the companies they invest in have on climate change.

Around seven in ten people (68%) say that pension schemes should be transparent about the extent to which they invest in a climate-aware way. Seven in ten (69%) also want financial services firms to be transparent about the impact of their own operations on climate change.

Looking For More Freedom Over How Your Pension Is Invested?

Pension holders now have far more freedom over how their pension is invested than many realise. If you would like to ensure your pension is invested according to your preferences, including a preference for ESG investments, contact us for more information.

Market Update April Monday 18th 2022

Global Markets

The major indices ended mixed over a holiday-shortened week, which saw the release of the first major corporate earnings reports of 2022. Value stocks continued to outperform their growth counterparts, but small-caps regained ground lost the previous week on large-caps. Financials lagged within the US market, dragged lower by JPMorgan Chase after the banking giant missed Wall Street’s estimates and energy shares outperformed. The market was closed Friday in observance of the Good Friday holiday.

Anticipation of a sharp deceleration in earnings growth appeared to be one factor weighing on sentiment. In contrast to recent quarters, analysts have been lowering their earnings estimates and expect profits for the S&P 500 as a whole, to have grown in the mid-single-digit percentages over the year before—the slowest pace since late 2020. However, worth noting that research suggests companies typically exceed analyst estimates by some margin.


Inflation data and how price pressures would impact corporate margins also seemed to be in the spotlight. Producer price inflation data out of China over the weekend prior weighed on sentiment before trading began on Monday, while Chicago Federal Reserve Bank President Charles Evans, historically considered “dovish,” said at an event in Detroit that he considers an accelerated pace of rate hikes worth debating.

On Tuesday, the US Labour Department reported that headline inflation jumped 1.2% in March, bringing the year-over-year increase to 8.5%, slightly above consensus expectations and a new four-decade high. The core rate excluding food and energy prices rose only 0.3% however, below consensus expectations of around 0.5%. Stocks initially rose on hopes that inflation might be peaking, but the rally was short-lived as crude oil prices rallied back through USD 100 a barrel after Russian President Vladimir Putin said peace talks with Ukraine are stalled. The S&P 500 ended the week -2.1%.


European shares rose amid some relief that the European Central Bank (ECB) did not adopt a more hawkish stance at its policy meeting. The pan Europe 600 Index ended the holiday-shortened week 1.09% higher. The UK’s FTSE 100 fell 0.79% as energy stocks weakened and the UK pound strengthened against the U.S. dollar. A stronger pound weighs on the index because many of its companies are multinationals with overseas revenues.

Alongside a stronger pound, the UK’s economic recovery showed signs of faltering while inflation continued to accelerate. Gross domestic product growth slowed to 0.1% in February, versus 0.8% in January, due to a decline in construction and production output. The quarterly growth rate was 1.0%, down from 1.3% in January. However, the full effect of Russia’s invasion of Ukraine in late February was not captured by the data. Meanwhile, inflation jumped to a 30-year high of 7.0% in March from 6.2% in February on rising fuel costs and across-the-board increases in prices. UK financial markets indicated that traders are all but certain the Bank of England will raise its key interest rate by a quarter-point to 1.0% in May.


Chinese markets retreated in the week to Thursday as a surging coronavirus outbreak in Shanghai fueled concerns about supply chain disruptions. The broad Shanghai Composite Index eased 0.8%, and the blue chip CSI 300 Index declined 0.92%. Shanghai reported more than 27,000 coronavirus cases on Thursday, a new record, as the city experiences its worst outbreak since the virus first emerged in Wuhan in 2019. Shanghai’s 25 million residents have been under lockdown since March 28.

Minimum Pension Age to Increase

Age Change To When People Can Start Taking Pension Savings

The government has confirmed that it plans to increase the minimum pension age at which benefits under registered pension schemes can generally be accessed, without a tax penalty, from age 55 to age 57 commencing 6 April 2028.

The Treasury is consulting on how best to apply its decision to increase the age when people can start taking their private pension savings. The Normal Minimum Pension Age (NMPA) will increase in line with increases to the State Pension age.

Unqualified Benefits Right

Members who currently have an ‘unqualified right’ to access their benefits under a registered pension scheme before age 57 and members of the armed forces, firefighters or police pension schemes will be permitted to retain their existing minimum pension age. The government is planning to introduce a protection regime which would mean that an individual member of any registered pension scheme (occupational or non-occupational) who has an unqualified right – for example, without needing the consent of their employer or the trustees – under the scheme rules at the date of the consultation to take pension benefits at an age below 57 will be protected from the increase in 2028.

Protected Pension Age

A member’s protected pension age will be the age from which they currently have the right to take their benefits. The protected pension age will be specific to an individual as a member of a particular scheme. So an individual could have a protected pension age in one scheme where they have a right to take pension benefits at an age below 57, but for schemes where no such right exists the new NMPA of 57 will apply from 2028. It will also apply to all the member’s benefits under the relevant scheme, not just those benefits built up before April 2028. Individuals with an existing protected pension age under the 2006 or 2010 regimes will see no change in their current protections.

Associated Pension Schemes

In recognition of the special position of members of the armed forces, police and fire services, the government is proposing that, where members of the associated pension schemes do not already have a protected pension age, the increase in the NMPA will not apply to them. Individuals who do not have a protected pension age who access their pension benefits before age 57 after 5 April 2028 would be subject to unauthorised payments tax charges.

Pension Tax Rules On Ill-Health

There will be no need for individuals or schemes to apply for a protected pension age. This is in line with the approach taken under the existing protected pension age regimes. The government is not proposing to make any changes to the current pension tax rules on ill-health as part of this NMPA increase. Unlike the protection regime introduced in 2006, where individuals are entitled to a protected pension age in relation to the increase in NMPA from 2028, they will be able to draw benefits under their scheme even if they are still working.

Scheme Benefits Crystallised

In addition, currently, if an individual wants to use their protected pension age, then all their benefits under the scheme must be taken (crystallised) on the same date. However, considering the pension flexibilities introduced in 2015, the government proposes that this requirement will not be a condition of the 2028 protected pension age regime. This would mean, for example, that an individual with a defined contribution pension with a protected pension age of 55 would be able to allocate some of their pension to a drawdown fund, and at a later date use the remainder to purchase an annuity, without losing their protected pension age.

Normal Minimum Pension Age

The government’s position remains that it is, in principle, appropriate for the NMPA to remain around ten years under State Pension age, although the government does not intend to link NMPA rises automatically to State Pension age increases at this time.
The announcement means that there is the potential for some people to be caught in the middle, being able to access their pension at 55 prior to April 2028, but having to wait until they turn 57 to access any untouched pension funds after this date where they don’t qualify for protection.

Planning For The Retirement You Want

This announcement may, in particular, have an impact on the timing for taking your pension benefits. It’s never too early to be planning ahead. To discuss how we can help you plan for the retirement you want, please contact us.

Weekly Market Update April Monday 11th 2022

Equities and bonds fall as the US Fed continues to communicate a tightening message

Equity and bond markets fell this week as the US Federal Reserve (Fed) continued to communicate a desire to get ahead of inflationary pressures, with further tightening of monetary policy through rate rises and a rapid withdrawal from the bond purchasing programme. This coincided with further sanctions being taken against Russia by the US and Europe, raising concerns that this could further pressure consumer prices higher. Inflation across much of the OECD rose 7.7% for the year to February, versus 1.7% in the same month last year. Whilst energy has been by far the largest contributor, with the annual rate of inflation running at 27%, there is evidence that this is increasingly trickling through to other areas, with food inflation having increased by 8.6% for the year to February.

US Treasury yields rise to a new high for the year

As of 12pm on Friday, London time, US equities fell 1.0%, whilst US technology stocks dropped 2.6%. European equities, more exposed to financials which benefit from rising rates, rose 0.4%, whilst the UK market rose 0.9%. The Japanese stock market suffered a broad sell-off in tandem with US equities, losing 2.4%, whilst the Australian market fell 0.2%, shielded by the worst of the market moves through significant exposure to financials and commodities. Emerging markets dropped by 1.7%, with Latin America suffering the most as the dollar strengthened and crude oil prices fell, leading to the region recording a loss of 3.4% over the week.

Fed to embark upon a “rapid” reduction of its balance sheet from May

Minutes released by the Fed this week from the last interest rate setting meeting showed several members believing that a half point interest increase would have been appropriate, were it not for the Russian invasion of Ukraine and the resulting economic uncertainties. Fed Governor Lael Brainard said on Tuesday that she expected the Fed to embark on a “rapid” reduction of its balance sheet from May. 10-year US Treasury yields, which move inversely to prices, rose to 2.68%, a new high for this year. German bunds increased to a yield of 0.68% and UK gilts 1.73%.

Brent crude falls to $100 a barrel as countries tap into their reserves

Commodities were mixed, with gold rising 0.6% to $1,936 an ounce, copper up 1.1%, trading at $10,311, whilst iron ore fell 4.2%, as did crude oil, with Brent falling 3.9% to $100.3 a barrel and US WTI (West Texas Intermediate) to $96.2.

Issues under discussion

Weighing up the chances of a recession

Investors are having to weigh up the chances of a recession, triggered by tightening monetary policy and rising commodity prices versus a robust economic recovery as the world exits covid restrictions.

However, to further complicate the picture, unlike most of the rest of the world, China continues to operate a zero-tolerance covid policy, locking down entire cities to control the spread of the disease regardless of the resulting economic fallout. Expectations are therefore strongly in favour of China to increasingly ease monetary policy in the second half of this year, whilst the Fed continues to tighten, potentially offsetting some of the growth concerns.

However, right now, the Fed is tightening, China is suffering from lockdowns and Europe faces the potential for sharply higher energy prices should either Russia block the supply of oil and gas, or perhaps increasingly likely, Europe decides that it simply cannot trade with Russia in the face of seemingly worsening war crimes being reported by Ukraine on an almost daily basis.

It’s Good to Talk

Getting Financial Help During The Coronavirus(Covid-19) Pandemic

The coronavirus (COVID-19) pandemic has not only dealt a blow to the UK economy, many people and families have unfortunately experienced financial hardship. According to a recent survey, 31% of the population say they are struggling with their finances due to the effects of the pandemic.

With the pandemic causing many workers to lose working hours or their jobs, it’s more important than ever to know what financial options you have.

Under-35s Are Most Likely To Borrow

But the survey shows that the impact is not spread evenly. It appears that people aged 18-35 have experienced the most financial difficulty and are most likely to seek help from others. During the pandemic, 18-35s have been four times more likely than any other age group to receive financial support from their family or friends. They’ve also been twice as likely as other age groups to take out a loan to make ends meet.

People Aged 35-55 Have Been Impacted Less

Those in the 35-55 age group have been less likely to need to borrow than the under-35s, and also less likely to report a worsening of their financial situation than those aged 55-65. But that’s not to say that they have it easy. Nearly one in three people in this age group say their finances are worse now.

People Aged 55-65 Have Their Retirement Plans Disrupted

Many people in the 55-64 age group have had to change their retirement plans. Income from work for one in four of these people has fallen 40%. A rise in unemployment has led to increasing numbers of people taking early retirement, with some relying on their property wealth to fund this.

Over-65s Are Supporting Their Families

Over-65s have been less affected than the general population, with 17% reporting that they are struggling financially. This is likely due to their pension income, which, in a lot of cases, will have remained level. More than one in ten of those aged over 65 say they have offered financial support to family members, which is the highest of any age group.

Before providing help to younger family members, it’s important to make sure that you can afford to without affecting your standard of living. Consider how your costs might rise later in life and ensure that you retain enough wealth to cover these additional expenses.

Support Is Still Available If You, Your Family Or Your Business Need It

In response to the impact of coronavirus, the government agreed a raft of measures with providers across a range of sectors to ensure struggling consumers are treated fairly. For those still worried about paying utility bills or repaying credit cards, loans or mortgages due to the impact of coronavirus, support is still available. Visit

People struggling to pay essential bills are encouraged to:

Contact providers: if you think you might have a problem paying bills, contact your providers to explain the situation and receive help Ask for help if it is needed: if you are struggling with your bills or credit commitments, free advice is available. Coronavirus has affected the entire nation and many people need support now, even if they never have before Explore payment options: if you are struggling with bills, it is better to agree a payment plan with your provider/s and keep making regular instalments, rather than cancelling direct debits and letting debt build.

Help And Financial Support

Even though the government has relaxed some of the COVID-19 restrictions, this is still a particularly difficult time for many households across the UK, with some struggling to keep up with bills, loan payments and mortgages. If you would like to discuss your situation, please contact us for more information.

Market Update April Monday 4th 2022

Indexes close out positive month but down quarter

The major indexes ended mixed for the week, with the S&P 500 Index closing out its best month since December but its worst quarter since early 2020. Cyclically sensitive stocks underperformed as investors girded for a slowdown in growth, with the financial services and industrials sectors in the S&P 500 among the losers. Higher interest rate expectations took a toll on the information technology sector, while the typically defensive consumer staples and utility sectors outperformed.

Ukraine dominates sentiment

Stock prices fluctuated over the week in apparent response to the evolving situation in the war in Ukraine. The week started off on a strong note, which traders attributed to reports that Russia was prepared to allow Ukraine to join the European Union in return for a pledge to stay out of NATO as well as progress in ceasefire talks. The S&P 500’s four-day winning streak was broken on Wednesday after a Russian official said that talks with Ukraine yielded no breakthroughs and that Russia was regrouping forces in a push to complete the takeover of the eastern Donbas region. The mood soured further on Thursday, as Ukrainian President Volodymyr Zelenskyy said that Ukrainian forces are preparing for new Russian attacks. After rising briefly on the renewed tensions, oil prices resumed their decline following the Biden administration’s announcement of an extended-release from the nation’s Strategic Petroleum Reserve to combat inflationary pressures.

The week brought several closely watched economic reports, most of which came in roughly in line with consensus expectations. The most prominent may have been the March nonfarm payrolls report, which showed that job gains fell somewhat below expectations at 431,000 versus 490,000, but the unemployment rate fell a bit more than expected, to 3.6%. Monthly growth in average hourly earnings met expectations, at 0.4%, as did monthly consumer income gains, at 0.5%. Personal spending, reported Thursday, only rose 0.2%—less than expected and perhaps reflecting a growing unwillingness to pay higher prices. February job openings remained little changed and near-record highs.

Russia threatens to halt natural gas supplies if not paid in rubles

President Vladimir Putin signed a decree stipulating that foreign buyers must pay for Russian natural gas in rubles from April 1 onward, raising concerns about possible supply disruptions in Europe and the potential economic implications. The G-7 countries unanimously rejected the directive. Germany said it would continue paying for Russian energy in euros and set in motion an emergency plan for rationing natural gas in case deliveries cease or are curtailed.

Bond market suffers its worst quarter since 1980

Prices of U.S. Treasuries rose for the week as the yield on the benchmark 10-year U.S. Treasury note fell slightly, but the Bloomberg U.S. Aggregate Bond Index rounded out its worst quarter since late 1980, and its third-worst quarter since the index’s inception. March was the worst monthly performance for the index since July 2003. (Bond prices and yields move in opposite directions.)

Europe gained ground

Shares in Europe gained ground in a choppy week of trading, overcoming concerns about the macroeconomic outlook amid strong inflation and the ongoing Russian invasion of Ukraine. In local currency terms, the pan-European STOXX Europe 600 Index advanced 1.06%. Germany’s DAX Index climbed 0.98%, France’s CAC 40 Index tacked on 1.99%, and Italy’s FTSE MIB Index added 2.46%. The UK’s FTSE 100 Index added 0.73%.

Core eurozone bond yields fluctuated over the week but ended the period roughly level. Higher-than-expected inflation data boosted expectations for further interest rate increases and drove yields higher. The move reversed as optimism over Russian-Ukrainian peace talks faded and European Central Bank (ECB) chief economist Philip Lane said that the ECB should be ready to revise policy should macroeconomic conditions deteriorate significantly. Peripheral eurozone government bond yields broadly tracked core markets. UK gilt yields fell in line with U.S. Treasuries, which declined on geopolitical tensions and fears of a recession.

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