Investment market update: September 2021

Investment market update: September 2021

While the direct impact of the Covid-19 pandemic has lessened for many economies, businesses are now struggling with the indirect consequences, such as supply chain issues. From microchips to aluminium cans, firms around the world are facing challenges getting hold of the materials and goods they need.

Markets have largely recovered from the Covid-19 volatility, but global investors expect a market correction, according to a Deutsch Bank survey. Some 58% of investors said they expect a correction between 5% and 10% by the end of the year.


Government announcements could have an impact on both employees and employers. An increase in National Insurance contributions (NICs) from April 2022, which will become a separate health and social care levy from 2023, will increase outgoings for both individuals and businesses. NICs will increase by 1.25 percentage points.

For business owners and investors, the government’s announcement of dividend tax rates increasing by 1.25 percentage points from April 2022 could have an impact too.

Figures suggest that UK businesses are struggling with supply chain issues caused by the pandemic, Brexit, and other factors. The IHS Markit Purchasing Managers Index (PMI) monitoring business activity fell to 55. While the reading indicates growth, it has fallen to a six-month low that has been linked to supply chain challenges.

The challenges have affected a range of industries, including construction. “Sustained and severe” supply chain issues were blamed for the PMI falling from 58.7 in July to 55.2 in August. The British Retail Consortium (BRC) suggests UK shop price increases of 0.4% in August were also related to shortages in microchips and shipping problems. The organisation added that supply chains are on the edge of coping.

Throughout the month, shortages of food, energy, and fuel have also been widely reported. While steps have been taken to reduce the impact, including the military being drafted in to help deliver fuel, the CBI warned that the labour crisis could last up to two years.

This is reflected in the number of businesses struggling to fill vacant roles. According to the Office of National Statistics, 13% of businesses said vacancies have become more difficult to fill when compared to last year in September. This compares to 9% that said the same thing in August. The hospitality industry in particular is facing challenges. Some 30% of accommodation and food service firms highlighted challenges finding workers.

It’s not just imports that are slowing. UK exports to the EU fell by around £900 million in July, a 65% drop. Rising exports outside of the bloc didn’t make up the shortfall.

Demand and challenges facing businesses mean inflation is above the 2% Bank of England target. Michael Saunders, a member of the bank’s Monetary Policy Committee, suggested higher rates of inflation could mean that interest rates will begin to rise next year, affecting both borrowers and savers across the UK.

In other news, Morrisons and Meggitt were both promoted to the FTSE 100. The share prices of both firms surged after attractive takeover bids, meaning they were worth enough to be included in the index. However, it could be short-lived as both firms would be delisted if the takeover bids go ahead.


Eurozone GDP figures show economies within the bloc are recovering stronger than initially thought. The GDP figure for April-June has been revised upwards from 2% to 2.2%.

Germany is also leading the way with an unexpected surge in factory orders for major goods, like ships. Official data from Destatis shows a 3.4% rise despite expectations of a fall.


Supply chain challenges are also having an impact in the US. While the manufacturing sector is still growing, the pace is slowing down. The PMI data from IHS Markit fell from 63.4 in July to 61.1 in August.

Another area that has disappointed, is job growth. Just 235,000 new jobs were created in the US in August, a significant slowdown when compared to a month earlier and a figure that falls short of expectations. The data would suggest the pandemic is continuing to have an impact on the labour market, with no jobs added to the leisure and hospitality sectors as concerns around the spread of the Delta variant remain.


Data from China shows that the pandemic continues to have an impact on activity and demand. The country’s service sector’s PMI data in August fell to 46.7 from 54.9 in July. The below-50 reading means the sector is contracting. Increased restrictions to curb the spread of the Delta variant have been blamed.

However, export figures suggest the outlook in China isn’t glum. Exports increased by 25.6% in dollar terms in August, according to official data. Exports reached $294.3 billion, which helped to calm the worries of a slowdown.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The value of your investment 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.

7 signs of stress and how to combat them to improve your wellbeing

7 signs of stress and how to combat them to improve your wellbeing

National Stress Awareness Day is on 3 November. Stress is something everyone experiences at different points in their lifetime, but it can harm your wellbeing and health. Recognising the signs of stress means you can take steps to reduce the impact it has on your life.

According to a study from HR software provider CIPHR, Brits feel stressed eight days a month on average. That adds up to around three months a year. Almost 8 in 10 people said they felt stressed at least once a month. So, if you feel stressed, you’re not alone.

The research found there are many reasons for stress. Financial anxiety and a lack of sleep were the most common causes. Things like health, work in general, and cleaning were also found to have an impact. Recognising the signs of stress is important for managing the effect it has, so here are seven of the most common symptoms.

1. You feel tired

Even when you plan to get eight hours of sleep, stress can still leave you feeling exhausted in the morning. This may be because you’ve had a restless night, or had trouble going to sleep because your mind is focused on your concerns. It can be a vicious circle too, as a lack of sleep can exacerbate other signs of stress and add to your worries.

2. You experience regular headaches

The occasional headache is common, but if you’re experiencing them frequently, it could be a sign of stress. Stress headaches will often feel like pressure on either side of your head and may be accompanied by tense shoulders and neck. If headaches are common, it’s also advisable to seek medical attention, which can ease concerns if you’re worried about your health.

3. You feel more emotional

Stress can heighten emotions and may mean you react differently in some situations than you normally would. You may, for example, feel more tearful or irritable during the day. This is one of the signs that can worsen if you’re experiencing a lack of sleep too.

4. Your diet has changed

Hormones released when you’re stressed can affect your relationship with food. For some, stress can mean they lose their appetite in the short term. For others, it can lead to stress eating, which could mean eating more or choosing unhealthier foods. A poor diet can contribute to stress, tiredness, and your capacity to carry out day-to-day activities.

5. You feel overwhelmed

Feeling overwhelmed and like you’re not in control of things is common when you’re stressed. It can mean if you’re facing a problem, you’re not able to come up with a solution to resolve it. When you have a lot on your plate, being overwhelmed can mean you feel less able to tackle it, potentially causing even more stress.

6. You’ve lost motivation

Whether you’re putting off work tasks or avoiding doing the things you used to enjoy, stress can mean you lose motivation. While it can seem easier to avoid these things, it can mean you miss out on activities that would lift your mood.

7. You get ill easier

As well as an emotional impact, stress can have a physical one too. Stress can impact your immune system and mean you become ill more frequently. It can also mean it takes longer for you to recover and feel like yourself again.

5 ways you can combat stress and boost your wellbeing

If you’ve been feeling stressed, it can seem like there’s little you can do. But some relatively small steps can have a real impact on your wellbeing and help reduce the levels of stress you’re experiencing. Here are five ways to do this:

1. Exercise

Stress can mean you feel lethargic but pushing yourself to exercise can release feel-good hormones that can boost your mood. Where possible exercise outdoors to get the added benefits of fresh air and nature.

2. Set small goals

Setting out a plan can help you take back control and work towards your goals. Setting small targets can help keep you on track and mean you feel like you’ve accomplished something each day. Remember to celebrate the positive steps you’re taking.

3. Connect with people

Stress can lead to people feeling isolated and you may avoid spending time with others, whether that’s your family, friends, or colleagues. Make a conscious effort to make plans to socialise.

4. Create some me-time

Think about what you enjoy doing and schedule some time to focus on this. It could be reading a book, going for a walk, or something entirely different, but don’t feel bad about spending time on the things that are important to you.

5. Talk about your worries

Don’t be afraid to seek help or talk about what is causing you stress. It can help you see things from another perspective and create a plan to reduce stress. In some cases, chatting with loved ones can help, in others working with a professional to talk through your worries can be beneficial.

The great British obsession: Why we love to check house prices

The great British obsession: Why we love to check house prices

It’s often said that British people are obsessed with owning a home and property prices. A new survey indicates that’s the case, with more than half of Brits checking how much their family and friends have paid for their homes. There’s more than one reason why people love to check how much a property has sold for.

According to a survey from Zoopla, just a fifth of people think it’s acceptable to ask someone what their home is worth. Many think posing this question is “rude”, but online tools mean it’s easier than ever to snoop and harder to resist checking. 6 in 10 Brits admitted they have looked up how much others have paid for their home. From friends to colleagues, it’s become common to look at the sale price of properties of someone you know.

The survey found that some people use property prices to make presumptions about a colleague’s salary or even check potential partners. 11% has checked how much a colleague paid for their home and 3% have checked the price of their boss’s home. 8% also said they checked the value of the home of a partner, ex-partner, or someone they were dating, with the value influencing the decisions some made about their relationship.

But there are other reasons for watching property prices rise.

1. To understand your own home’s worth

Some 23% of people said they checked house prices to better understand how much their own home is worth. Your home is likely to be one of your largest assets, so it’s not surprising that people want to keep track of its value.

Your home increasing in value can also help you secure a better mortgage deal. As the property price rises, the amount of equity you hold also increases. As a result, you can take out a mortgage with a lower loan-to-value (LTV) ratio. Generally, the lower the LTV, the more competitive the interest rate you’ll be offered. For example, a first-time buyer with an LTV of 90% is likely to pay a higher interest rate than someone who needs a mortgage to cover 70% of the value of their home.

Over a mortgage, keeping track of your home’s worth and remortgaging could save you thousands of pounds in interest repayments. If you need help finding the right mortgage deal for you, please get in touch.

2. The rapid rise can be exciting to watch

House prices have soared over the last decade. And it can make watching the value of your home, and other properties, exciting to watch compared to other assets you may have.

According to the Halifax House Price Index, in the year to August 2021, house prices have increased by a huge 7.1%. The average house in the UK is now worth a record £262,954. With interest rates low on savings accounts and investment markets experiencing volatility in the last year, seeing your house price climb can be satisfying.

3. To inspire projects for your own home

Almost a fifth (18%) of snoopers said they checked properties online because they were curious to see what someone’s home looked like on the inside. As well as giving you a glimpse into someone’s life, it can be a great way to understand what’s possible with your own property or inspire ideas for your next DIY project. If you’re thinking about knocking down a wall to make living spaces open plan, for example, seeing photos from another property can help you visualise it.

It’s also a chance to see what adds value and what local buyers may be looking for. If a property is valued higher than your home, you may be able to see what improvements have a real impact. Would converting the loft lead to a return on your investment if you want to sell? Or would giving the décor a simple update have a real impact on the value of your home?

How does your home fit into your plans?

As one of your largest assets, your home is likely to play a key role in your plans too. Whether being mortgage-free is essential for your retirement plans or you hope to move to accommodate a growing family, your home may be important to your future. You may even plan to sell your home or release equity to fund plans.

Understanding what your home is worth and taking steps to reduce mortgage repayments through a competitive deal can help you get the most of your property. If you’d like to discuss your mortgage or other property needs, please contact us.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

Why money conversations are important for you and your loved ones

Why money conversations are important for you and your loved ones

How often do you discuss your finances? In the UK, talking about money and our long-term financial plans are often still seen as a taboo subject. Breaking down this barrier could help you and those who are important to you make better money decisions.

Talk Money Week will take place between 8–12 November and aims to encourage people to talk more about finances. From discussing pensions in the workplace to saving goals with family, having an open conversation about money can be a positive thing. Despite this, Talk Money Week research found that 9 in 10 adults, the equivalent of 47 million people, don’t find it easy to talk about money, or don’t discuss it at all.

Talking about money can be difficult, but according to research, people who talk about money:

  • Make better and less risky financial decisions
  • Have stronger personal relationships
  • Help their children form good lifetime money habits
  • Feel less stressed or anxious and more in control.

It’s a step that can help improve your financial wellbeing and long-term resilience. It doesn’t just help you, either – it can support the financial security of the people around you too.

If money isn’t something you talk often about, it can be difficult to start conversations and get into the habit. Here are three reasons to start doing it now.

1. Take control of your finances and goals

Money-related stress is common. Research from CIPHR found that 79% of people feel stressed at least once a month, and money was the top cause of this. Some 39% of people said money was the thing they worried most about.

Talking about your concerns can help your worries seem more manageable. When you’re stressed, it can be difficult to make decisions and understand what your options are. Talking about it can help you create solutions and take control of your finances.

You shouldn’t just speak about concerns, either; talking about what money will allow you to do can help motivate you and keep you on track. For instance, talking about a savings account that will help you book a dream trip, or how increasing your pension contributions will mean you can retire early, are just as important as sharing the things you worry about.

2. Make better financial decisions

Financial decisions can seem complex and, at times, it can be difficult to understand what your options are. In other cases, you may take certain steps simply because that’s what you’ve done in the past, even if it’s not right for you now.

Perhaps you save into a savings account with your current account provider because that’s what you’ve always done. But a conversation with a colleague could highlight that there’s an alternative account that’s offering a higher interest rate to help your money go further. Or a conversation may mean you start to consider investing some of your savings rather than holding cash.

Talking about money can help you look at your finances from a different perspective and mean you make better decisions.

3. Pass on your financial knowledge

Over the years, you’ll have picked up your own body of financial knowledge. By making it part of everyday conversation, you can help people around you make better financial decisions too. Perhaps you could highlight why paying into a pension early makes sense to younger generations, or have some tips for starting an investment portfolio.

It can also help you foster a relationship where loved ones feel comfortable coming to you to ask for advice or share their concerns. It can mean they’re less likely to bury their head in the sand if they’re struggling or to miss opportunities.

Having open conversations about money and how it can help you achieve goals can help loved ones make better decisions.

When should you talk to a financial planner?

Talking to loved ones about your finances can be beneficial. However, there are times when working with a financial planner can help you get the most out of your assets. A professional can help you understand the complexities of things like tax allowances, as well as how the decisions you make now will affect your goals.

By working with a financial planner, you know you can have confidence in your plan. It can be useful at any point in your life, including milestones like retiring, and is a step that can ensure you remain on the right track long term. If you’d like to arrange a meeting, please contact us.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

5 reasons you need to write a will (and keep it up to date)

5 reasons you need to write a will (and keep it up to date)

Half of the adults in the UK don’t have a will. While you may have a reason for putting the task off, there are many compelling reasons to make time to write a will that could provide peace of mind.

A survey from Will Aid found that 49% of UK adults do not have a will in place. A fifth said their reason for putting it off was because they do not want to think about death. While contemplating passing away is difficult, it is important to think about what you’d want to happen to your estate after you die.

Even if you have a will in place, you should regularly review it. Over time your wishes and circumstances can change. What you wrote 10 years ago may no longer align with your goals. Whether you’ve welcomed grandchildren, inherited money, or simply changed your mind, your will should reflect what you would like to happen to your estate. It’s a good idea to review your will every five years or after big life events.

If it’s something you’ve been putting off, here are five excellent reasons to make writing or updating your will a priority.

1. A will is the only way to ensure your wishes are followed

Without a will, your estate will be distributed according to intestacy rules. This can be very different from what you want, particularly if you have a complex family or want to leave something to several people. The only way to ensure your wishes are followed is to write a will.

2. You can use a will to name a guardian for your children

If you have children, you can use a will to name a guardian for them. Despite this, only a quarter of parents have named a guardian for their underage children in their will, according to Will Aid.

Without a named guardian, a court would decide who looks after your children. In some circumstances, this may not be who you wished and could even be someone your child does not know well.

3. A will can reduce family conflicts occurring

Grief can lead to family conflicts and has the potential to cause long-term disputes. In some cases, how your estate is distributed may be contested and it could cause rifts. This may be due to one person believing they know what you would want, which sharply contrasts with what another believes. Setting out your wishes clearly in a will can provide certainty and reduce the risk of family conflicts arising.

As well as putting a will in place, it may be worth speaking to your loved ones about your wishes too. This gives you a chance to help them understand why you may be making certain decisions.

4. You can leave a charitable legacy in your will

As well as leaving wealth to your family and friends, you may want to support a charitable cause too. Your will means you can leave a legacy to causes that are close to your heart. There are several different ways of doing this, from leaving a specific sum to charity to leaving a proportion of your estate. A legal professional will be able to offer advice on the different options you may want to consider.

As well as having a positive impact, a charitable legacy can also reduce a potential Inheritance Tax (IHT) bill. If you leave more than 10% of your estate to charity, the rate of IHT paid will reduce from 40% to 36%.

5. If your estate could be liable for Inheritance Tax, a will can reduce the bill

As well as leaving a charitable legacy, there are other steps you can take to reduce an IHT bill. Writing a will can help you maximise allowances so that you can pass on more of your wealth.

You can leave £325,000 to loved ones without any IHT being due, this is known as the “nil-rate band”. In addition to this, you may be able to take advantage of an additional £175,000 allowance known as the “residence nil-rate band”. You can use this if you leave your main home to your children or grandchildren. Naming your children or grandchildren in your will as benefactors of your home can increase the amount you can pass on without leaving an IHT bill.

Depending on your circumstances and goals, there may be other things you can do to reduce IHT. For example, placing some assets in a trust and passing these on through your will may be right for you. Keep in mind that trusts can be complex and often irreversible, so it’s important to take appropriate advice. If you’re worried about IHT, there are often steps you can take to reduce the bill.

If you’d like to discuss the value of your estate and how you can pass on assets to your loved ones, please contact us.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The Financial Conduct Authority does not regulate will writing, tax planning, or estate planning.

Are you taking enough risk with your pension? Being too cautious could mean lower returns

Are you taking enough risk with your pension? Being too cautious could mean lower returns

Research suggests that millions of workers are being too cautious with their pensions. Taking too little investment risk with retirement savings could mean your pension is much lower than it could have been. It could affect your retirement lifestyle.

Pensions and investment risk

If you pay into a defined contribution (DC) pension, your money will usually be invested. This includes your own contributions, employer contributions, and tax relief. By investing your money, you’re giving it a chance to grow over your working life.

All investments come with some level of risk, and values can rise as well as fall. Your pension provider will usually offer several investment funds for you to choose from, with varying levels of risk. Knowing how much risk you should take can be difficult, but research suggests many pension savers are being too cautious.

According to IFA Magazine, an estimated 4 million workers under 40 are in low-risk pensions. When asked how much risk they thought was appropriate, 39% of under-40s said the most appropriate level of risk for their pension was “medium”. Some 28% said they think “low-risk” investments are appropriate. This compares to just 20% that said “high”.

When assessing the appropriate level of risk for your pension, your age matters.

This is because young workers are still investing with a long-term time frame in mind. When you’re investing for the long term, you have a longer period for investment volatility to smooth out. When you’re 40, you could still have several decades before you’ll start accessing your pension. Taking a higher amount of risk with your pension when you’re younger has the potential to deliver higher returns.

Your pension returns are also reinvested, so you benefit from the effect of compounding. Over decades of paying into a pension, taking more risk in the early years can mean your pension is larger at retirement.

Traditionally, pension savers will take more risk in their early years, before moving into lower-risk options as they near retirement. Your pension provider may automatically do this for you. So, it’s important they have accurate information about when you hope to retire.

Of course, age isn’t the only thing you need to consider when deciding how much risk to take with your pension, but it is an important factor.

What impact could low-risk investments have on your retirement?

It can be difficult to understand how the decisions you make now could affect your retirement.

Pension providers must provide you with a forecast of how your pension will grow. While these are not guarantees, they can provide a useful indicator of how your pension will change over the years.

Each pension fund will be made up of different assets, including equities, which are one of the main assets that will help you grow your pension. An “adventurous” fund with a higher risk level is likely to have a higher mix of equities. Reviews from the Financial Conduct Authority (FCA) highlight the impact this can have.

The FCA conducts a review of investment return assumptions every 4–5 years; the last review was in 2017. According to an Interactive Investor report, the real rate of return, which considers the impact of inflation, is 4% for equities. This compares to 0.3% for corporate bonds and -0.5% for government bonds. Choosing a pension fund with a higher proportion of equities can have a real impact over the long term.

Being too cautious with your pension during your working life can mean the difference between achieving your retirement goals and not.

Should you switch to a different pension fund?

While there are reasons for taking more risks with your pension, you need to consider your personal circumstances.

Set out what your retirement plan is first. When do you plan to retire and how long will you be paying into your pension? As a general rule, the longer you’ll be investing your pension, the more risk you can afford to take. If you’d like to discuss if you should take more or less risk with your pension, please contact us.

If you do decide to switch to a different pension fund, it’s usually easy to do so. If you have an online account, you can typically log in and see the different options available to you. In most cases, you’ll be able to switch with just a few clicks of your mouse.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits.

The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation, which are subject to change in the future.