We live in turbulent times – at all levels. 2015 has been a very turbulent year - socially, economically, politically, and even sportingly!
At the start of 2015, few would have envisaged a Conservative prime minister governing the UK with a majority, without the need of another party for support in parliament.
Or that the price of oil would have all but collapsed to under $40 a barrel, or that over a 100,000 immigrants would have made their way from Syria across the Mediterranean to try and find a new life in Europe.
Or that Leicester City, bottom of the Premier League at the start of 2015, would be riding high by the end of the year.
All remarkable events that few would – or could - have predicted, but how different and changed are our lives? It was the Greek philosopher Aristotle who said: “While everything changes, everything remains the same as well.”
Perhaps a more relevant proverb is the French “plus ca change, plus c’est la meme chose” – “the more things change, the more they stay the same” – basically, turbulent changes do not affect reality on a deeper level other than to cement the status quo.
Promises of an economic revival have proved, as yet, false. Bank rates remain at 0.5% in the UK and it is likely they will not move for months, despite the recent 0.25% rise in the USA.
There was a hint of better times in April when the FTSE 100 Index reached the dizzy heights of over 7,100, but it dipped under the 6,000 mark a few months later and is still not much better.
It looks like predicting the future, financial or otherwise, is a mug’s game, but this is what we ask of our Independent Financial Adviser. And we don’t really have the choice of saying “I can’t be bothered!”
There is just too much at stake, for ourselves and our families. We cannot ignore the financial future or behave like Charles Dickens’ Mr Micawber in “David Copperfield” – “something will turn up.”
For many the financial year, despite plenty of intervention from overseas markets and George Osborne, the Chancellor of the Exchequer, has probably changed very little.
It was a good year to own property, as in previous years; it was not a good year to be a saver, as in previous years. It was probably one of the last good years to be a landlord. The chancellor has targeted “buy-to-let” owners through a variety of measures outlined in his June budget and November Autumn statement.
Those currently involved can form an orderly queue for the exit door over the next few years; those who had been thinking about it will probably now look elsewhere, if there is somewhere else to look!
Pity the poor savers, especially pensioners who a decade ago had planned for a comfortable retirement based on the income from their investments. They have had a torrid time, with little choice but to dip into those savings, cash in some of their ISAs or premium bonds or release some equity in their home.
In the past year, Osborne’s pension reforms have allowed those 55 and over access to their pension pots if they needed cash; and from next year, at some point, there will be the opportunity to sell back an annuity, already bought with the pension pot, for cash.
Those still putting money into a pension, whether for the next five or fifty years, will be eagerly awaiting Osborne’s latest deliberations and decisions in his 2016 budget!
The experts are predicting little change in the upward movement of property prices, so your home is likely to remain your best investment, especially as all gains are free of tax.
The shortage of housing, affordable and otherwise, is likely to continue. The Chancellor has made a few gestures to solving this growing problem, but will have to take more drastic action if he wants the older generation to downsize.
The cost of moving, even to a smaller home, is expensive. As well as stamp duty, there are the professional fees, legal and estate agents, as well as all the removal costs.
Stamp duty is the one area where Osborne has the ability to make a real impact. In some countries, especially in the Far East, the stamp duty collected on a sale is shared between the Treasury and the seller.
That would make a real difference if you are downsizing as that extra money could possibly cover the whole of the stamp duty on the new property and some of the professional charges as well. That would be a genuine incentive.
Another area that has shown little change in 2015 covers the companies and organisations that give us the poorest customer service. The “Daily Mail” will announce its Wooden Spoon winner in the New-Year.
The seven candidates are – BT, Barclays, EE, HMRC, npower, Scottish Power and TalkTalk, who hit the headlines in October when it was revealed that customers’ details had been hacked.
Although banks have been a regular contender in the past, no bank has ever won – quite remarkable after their part in the financial collapse of 2008 – and this is Barclays first-ever entry into the shortlist.
Just for the record, the previous winners have been Scottish Power (2014), BT (2013 and 2008), HMRC (2012), TalkTalk (2011 and 2010) and British Gas (2009).
EE have been in contention in four of the five past year and were last year’s runner-up; in July they were fined £1 million by telecoms regulator Ofcom for poor handling of complaints. That might just be enough to give them the Wooden Spoon award after several near misses!
For a free, no obligation initial chat about your individual finances, call us on 0800 0112825, e-mail info@wwfp.net or take a look at our website www.wwfp.net.
The value of shares and investments can go down as well as up. Your home may be repossessed if you do not keep up repayments on your mortgage.
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