Worldwide Financial Planning

Sunak faces quite a juggling act, needing to satisfy markets as well as the many hostile factions of the conservative party. His cabinet includes a few familiar faces from both Johnson and Truss governments, but with the treasury now firmly on a sound money footing under Jeremy Hunt. The response has been positive with bond yields and sterling both heading in the direction of their pre-mini budget levels. The calm may not last however, with investors pinning an awful lot of hope on next month’s Autumn statement. Disappointment will be costly.

So, when news broke that some defined-benefit (company pensions) pension funds had inadvertently created an unstable, self-devouring feedback loop that made a Jimi Hendrix guitar solo sound like the Deerhunter theme, the government bond market shuddered.

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The end of Liz Truss’s premiership sadly does not mean an end to the instability she wrought on both the currency and bond markets. We now have a leadership election and, with no obvious unifying candidate in sight, the core problem of the disconnect between a sizeable chunk of MPs, the party membership and reality remains. This has so far finished off four prime ministers and there is little to suggest it won’t be fatal for a fifth.

There are methods of assessing concentration risk and make sure you ask about that on your next review. However, there are other key risks in a fund that you should also look out for, or ask about. This is a bit of science, but, bear with me. All of your pensions and ISAs/investments are affected by the items below. You want the best returns for your security later so they all matter.

Growing opposition on the Conservative backbenches, international criticism and extremely hostile financial markets forced Liz Truss to sack Kwasi Kwarteng as chancellor and rethink plans to cut taxes. The government has been in damage limitation mode all week as it tried to reassure its critics that a bit of economic orthodoxy is not too bad after all. News that Kwarteng had to rush back to London for a crisis meeting on the fate of his mini-budget saw sterling rise and brought some calm to the gilt markets.