Mantle Financial Planning ® Chartered Financial Planners & Tax Advisers 2019-01-18T16:11:46Z http://www.mantlefp.com/feed/atom/ WordPress Colin Caulfield <![CDATA[Sir Steve Webb presents to Mantles]]> http://www.mantlefp.com/?p=7100 2019-01-17T11:51:47Z 2019-01-18T11:50:38Z Details of how to potentially increase your State Pension

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Mantle’s consultants and para-planners were very fortunate to be afforded an hour long meeting with former Pension Minister Sir Steve Webb on Wednesday.

Sir Steve provided a very interesting insight into the Government workings on pensions, including some of the difficulties he faced when Pensions Minister on Auto-Enrolment and Pension Freedom legislation.

In addition, Sir Steve outlined 2 areas of the State Pension which could be useful for clients.

The first is if you have ‘gaps’ in your State Pension. https://www.gov.uk/voluntary-national-insurance-contributions

If you apply after 5th April 2019 the rates will be higher. To see how much you could pay you would need to obtain a personalised State Pension forecast (‘BR19’) – https://www.gov.uk/check-state-pension

The second is about losing National Insurance (NI) credits if you waive the right to receive Child Benefit because you or your partner are deemed ‘high earners’. https://www.gov.uk/child-benefit-tax-charge

Sir Steve has created a petition to the Government to extend the current 3 month timescale for claiming back-dated NI credits. If you’d like to sign this, please click on the following link: https://petition.parliament.uk/petitions/231761

If you’d like to discuss any of the above for your own personal circumstances, please contact your Mantle Financial Planning consultant.

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Colin Caulfield <![CDATA[Pressure On Hargreaves To Cut Fees]]> http://www.mantlefp.com/?p=7097 2019-01-17T18:04:17Z 2019-01-16T12:58:11Z The post Pressure On Hargreaves To Cut Fees appeared first on Mantle Financial Planning ®.

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Fund supermarket Hargreaves Lansdown came under fire this week after claiming credit for charge cuts on its influential list of favourite funds, while keeping its own charges high, according to The Times Online.

Senior figures in the fund management industry say that Hargreaves own charges remain the industry’s second highest, which has allowed it to enjoy juicy profit margins of about 65 per cent.

They are also concerned about the exclusion of some funds from the approved ‘Wealth 50’ fund list, such as Terry Smith’s top-performing Fundsmith Equity fund.

Hargreaves charges 0.45 per cent, more than any other investment platform except Chelsea Financial Services, which charges 0.55 per cent.

Analysis by Boring Money, a financial website, found that for a £100,000 portfolio of Isa investments, allowing eight deals a year, and including fund fees of £600, Hargreaves’s charges were the 16th highest out of 17 platforms at a total of £1,050.

Hargreaves has negotiated reductions in the annual charges of the 50 actively managed funds (plus 10 tracker funds) on its Wealth 50 list however.

Mark Polson of the Lang Cat, a financial services consultancy, says “This shouldn’t absolve Hargreaves from cutting its own costs. To start with, half the money invested through its platform is not in funds with a discount, so doesn’t benefit from the reduced prices,” he says.

“As Hargreaves pushes the cost of Wealth 50 funds down, but leaves its own charges untouched, we have the bizarre situation where it is becoming common to find that the platform charge is bigger than the fund charge.”

Why no Fundsmith Equity fund?
This fund, managed by Terry Smith, has returned 272 per cent since its launch in November 2010, putting it top of the 150-plus funds in its sector over three and five years. Commentators say they are puzzled that Hargreaves cannot find a place in the Wealth 50 for this stellar performer when it continues to hold Neil Woodford’s Equity Income fund, which has lost 9 per cent over the past three years and stands 216th of the 217 funds in its sector for performance over that period.

Suspicions remain that Smith’s fund was denied a place because it would not cut its standard annual charge of 0.95 per cent. Polson says: “All the evidence suggests that Smith’s refusal to cut his charges for Hargreaves was the clinching reason.”

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Investment Committee <![CDATA[Weekly Market Update]]> http://www.mantlefp.com/?p=7091 2019-01-14T15:31:17Z 2019-01-14T07:30:50Z Global markets made a positive start to 2019...

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Despite the familiar line-up of threats and challenges, global markets made a positive start to 2019. Neither politicians nor central bankers have resolved any of the main concerns. Trade talks between China and the US were extended for an extra day, with hope mounting that a deal would be struck, while the US government shutdown rumbled on with little sign of a resolution. Throwing the complexities of Brexit into the mix it was surprising that markets managed to climb the wall of worry, with most major indices comfortably up over the week.

The UK Parliament resumed debating Theresa May’s Brexit deal last week. Rebel Conservative MPs joined forces with Labour to inflict a fresh blow on Theresa May’s government in a Commons Brexit vote. It means the government will have to come up with revised plans if Mrs May’s EU withdrawal deal is rejected by MPs this week. It could also open the door to alternatives, such as a referendum. EU members were only willing to offer clarifications and are opposed to reopening the talks.

It was no surprise that growth in the UK’s economy slowed in the three months to November, expanding at its weakest pace in six months. The economy grew by 0.3 per cent during the period, with manufacturers suffering their longest period of monthly falls in output since the financial crisis. UK industrial production also dropped at its steepest annual rate since 2013 during November, echoing weakness across Europe.

US consumer prices fell for the first time in nine months in December, dragged lower by oil prices, while core inflation remained firm near the Federal Reserve’s 2 per cent target. The Fed will take this as further proof that price pressures are building more slowly than some had feared based on the strong growth of the tight labour market.

The minutes of the December Federal Open Markets Committee meeting struck a much more market-friendly note than the press conference at the time. The switch in tone seemed to go down well with investors, while the Federal Reserve Chairman, Jerome Powell, expressed his opinion that he doesn’t see a US recession in the near future, despite the rising likelihood of slowing growth elsewhere around the globe.

If you would like more information on the above article or advice on your personal financial circumstances, please contact us >>

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Investment Committee <![CDATA[Weekly Market Update]]> http://www.mantlefp.com/?p=7082 2019-01-07T13:33:44Z 2019-01-07T07:30:42Z A volatile year and 2019 appears to be no different...

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Last year was a volatile year and 2019 appears to be no different. Investors have grown increasingly worried over a broad global growth slowdown, after a string of weak data. China’s private-sector index of manufacturing activity indicated contraction for the first time in 19 months, while, the US ISM Manufacturing index release for December was much weaker than expected. However, last week markets were bolstered by a combination of activity from Chinese authorities, an upbeat tone from the US Federal Reserve and increased confidence that a solution could be found to Donald Trump’s trade war, with talks set to resume this week.

To help boost China’s economy their central bank agreed to cut the required reserve ratio for banks by 0.5 per cent on 15 January and a further 0.5 per cent on 25 January. Authorities were also actively trying to encourage lending to small businesses as a further sign to help improve domestic conditions.

US Federal Reserve chair Jay Powell offered his upbeat assessment of US economic prospects following a strong jobs report last Friday, easing those fears of a 2019 downturn. A patient approach to potentially higher interest rates was enough to contribute to a strong rally in markets. Powell’s reassurance countered fears about the impact of US-China trade tensions and waning corporate profits. Investors believe there is no chance the Fed will lift rates in 2019, and a greater than 50 per cent chance of the US central bank actually easing policy this year. Confidence remains low!

The Democrats took over the US House of Representatives last Thursday, which will allow them to disrupt President Trump’s economic agenda and potentially release his tax returns. Talks to end the shutdown of the US government were paused with no signs of movement on either side.

As we start 2019, one would expect the major drivers of global equity markets to be the ongoing reduction in liquidity, slower earnings growth and rising volatility. The US Federal Reserve is continuing to raise interest rates and beginning quantitative tightening by reducing its bond holdings, an approach which is being replicated around the world. Earnings growth will slow as the US tax reform benefit passes through. Overall, the expectation is for flatter returns this year, accompanied by higher volatility. This will create opportunities for those investors who can actively navigate the more challenging environment

If you would like more information on the above article or advice on your personal financial circumstances, please contact us >>

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Colin Caulfield <![CDATA[That Was The Year……]]> http://www.mantlefp.com/?p=7069 2019-01-03T15:30:54Z 2019-01-03T15:30:52Z The post That Was The Year…… appeared first on Mantle Financial Planning ®.

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As you will have no doubt heard in the news, 2018 was not a good year for the majority of investments – in the UK or globally.

President Trump started a trade war with China, after imposing tariffs on approx. $50bn worth of imports. The new import taxes were aimed at forcing Beijing to stop what the US claims had been systematic theft of US intellectual property and applied to a wide variety of products. China swiftly responded providing their intention to impose their own tariffs. Although these tariffs only represent a very small element of global trade, the fear of escalation continued to worry markets.

Emerging markets also came under pressure as the US dollar rose strongly following the steady rise in US interest rates. A rising dollar is generally negative for emerging markets as refinancing dollar debt becomes more expensive to service.

From a risk perspective, geo-political tensions and trade wars will continue to dominate headlines and markets will react accordingly in the short term. Economically, the challenge for central banks is how they unwind years of financial stimulus which has enhanced asset prices for almost a decade.

As the global economy improves, central banks need to reduce this stimulus in an orchestrated way which is fundamental to financial stability. Overall, global growth is improving but inflation has risen at a slower pace despite a tight labour market. We firmly remain within the ‘Goldilocks’ environment which continues to deliver reasonable growth and stable inflation. While we see further potential volatility triggers on the horizon in the short term, we also believe that the economic cycle has further to run.

The performance of our 3 most popular Wealth Management portfolios for the year, together with the FTSE 100 Index, is highlighted below:

Moderately Cautious -3.2%

Balanced -4.6%

Moderately Adventurous -4.9%

FTSE 100 Index -8.7%

We appreciate it can be nervous times for investors, but it’s important to remember these type of downturns are part of investment market cycles – we’ve just gone through a low-volatile period in recent years.

Our advice is to ride out the volatility storm and wait for more promising news.

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Colin Caulfield <![CDATA[BREXIT ‘No Deal’ For State Pensions]]> http://www.mantlefp.com/?p=7062 2018-12-19T17:18:26Z 2018-12-27T13:09:30Z Government confirms Basic State Pension plans for a no deal

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The British government has released guidance confirming that UK nationals living in the European Union (EU) will still receive their state pension in a no deal Brexit scenario.

However, the Department for Work and Pensions (DWP) clarified that ‘uprating’ (inflation) will depend on the deal reached with the EU.

In its guidance, the DWP explained: “The UK leaving the EU will not affect entitlement to continue receiving the UK state pension if you live in the EU, and we are committed to uprate across the EU in 2019 to 2020.

“We would wish to continue uprating pensions beyond that but would take decisions in light of whether, as we would hope and expect, reciprocal arrangements with the EU are in place.”

It also stated that it expects UK-based firms to have made plans to make sure that UK nationals in the European Economic Area will still receive payments from their annuities or personal pensions, even if the UK leaves the EU without a deal.

Furthermore, the government confirmed that benefits, including child benefit and disability benefit, would continue to be transferred to UK nationals in EU countries following Brexit.

It called on the EU and its member counties to “continue their commitments to EU citizens and protect the rights of UK nationals living in EU countries”.

The DWP continued: “We want UK nationals to be able to stay in the EU countries that they live in when the UK leaves the EU, and for their rights to employment, healthcare, education, benefits, and services to be protected.”

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Colin Caulfield <![CDATA[Happy Christmas !]]> http://www.mantlefp.com/?p=7045 2018-12-19T14:23:28Z 2018-12-19T10:47:26Z The post Happy Christmas ! appeared first on Mantle Financial Planning ®.

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Very best wishes for Christmas from all of us at Mantles,

and a happy, healthy, prosperous New Year.

Mantle Financial Planning will be closed between Christmas and the New Year and will reopen on 2 January.

Rather than sending Christmas cards, we will be making a donation to Shooting Star Chase– a children’s hospice who care for babies, children and young people with life-limiting conditions.

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Investment Committee <![CDATA[Weekly Market Update]]> http://www.mantlefp.com/?p=7053 2018-12-18T09:22:56Z 2018-12-17T07:00:17Z Despite the uncertainties surrounding Brexit, the UK equity market was relatively resilient last week...

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Despite the uncertainties surrounding Brexit, the UK equity market was relatively resilient last week. UK Prime Minister Theresa May won an internal Tory Party vote of confidence and will remain unchallenged as party leader at least for the next year. This followed the postponement of last week’s vote on the withdrawal agreement as it was unlikely to be passed by parliament in its current form. If the agreement cannot pass parliament, a no deal exit is more likely although there is the ability to postpone the Article 50 withdrawal before we leave on March 29 next year. Given that the Christmas recess begins this Thursday, it is unlikely that anything will be achieved until next year, so for now the uncertainty continues.

UK average weekly earnings, including bonuses,rose by 3.3 per cent on the year in the three months to October, the biggest rise since July 2008. Although retail employment has struggled the overall labour market remains relatively robust. The Bank of England continues to make noises surrounding the need to raise interest rates to gradually offset wage driven rises in inflation. However, recent figures show slowdowns in both manufacturing and construction that could lead to lower levels of employment in the new year,making any interest rate rises unlikely. The real worry is that GDP only increased by 0.1 per cent in October and was flat in the previous two months,which could pave the way for a potential recession next year.

The European Central Bank confirmed the end of its asset purchase scheme but otherwise kept policy broadly unchanged, promising protracted stimulus for an economy struggling with a slowdown and political turmoil. The central bank repeated its promise that rates would be kept at their current record lows at least through next summer and that it would keep open-ended the time horizon for reinvesting cash from maturing bonds. The ECB lowered its eurozone forecasts for growth this year and next in the face of increased general uncertainty, with risk more balanced towards the downside.

China’s economy slowed again in November, with retail sales and industrial production both weakening. Even as Chinese exports have remained resilient in the face of US tariffs, weak consumer spending and slowing investment in housing construction are weighing on China’s economy. Chinese policymakers have injected cash into the banking system and fiscal authorities have pledged to increase infrastructure spending, but the latest data suggest that further measures are likely.

US core inflation edged up to 2.2 per cent year on year in November, from 2.1 per cent the previous month. While the US central bank is still widely expected to raise interest rates for a fourth time this year when it meets on Wednesday, the outlook for further rate rises in 2019 has become murkier amid trade worries, market turmoil and dovish comments from Federal Reserve chair Jay Powell. Markets are pricing in a 34 per cent chance of a rate hike next year. Low by anyone’s standards.

If you would like more information on the above article or advice on your personal financial circumstances, please contact us >>

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Colin Caulfield <![CDATA[State Pension – Defer or Take ?]]> http://www.mantlefp.com/?p=7032 2018-12-18T09:16:15Z 2018-12-12T10:37:31Z More and more people are continuing to work in later life...

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To defer or not to defer?

More and more people are continuing to work in later life. According to the Department for Work and Pensions, 10.4 per cent of over-65s are still working, double the amount from 20 years ago. The average age on leaving the workforce is 65.1 years for men, up from 63.1 in 1998. For women, the change is starker: up to 63.9 years from 60.6.

Of course, some of these people continue to work through choice; for others it is down to necessity. In either situation, there is the ability to defer the State Pension until a later date.

Today, people get an additional 1 per cent of pension for every nine weeks they defer, rather than for every five weeks as it was for those who reached state pension age before April 2016. However, the benefit of doing so is considerably less than it was prior to the introduction of the single-tier pension in 2016.

There is also no longer the option to take the additional benefit as a lump sum, with the arrangement only giving a greater income when it comes into payment.

So if someone did not take their state pension for one year, they would get a future state pension of £493 a year higher (just below 5.8 per cent of the maximum single-tier pension of £8,546.20).

This means people will need to live around 17 years before the money they receive from their higher state pension outweighs the loss of the first year of income (although it does depend on how much the state pension increases in the future).

That is not to say there are no potential benefits in deferring – for example, reducing taxable income for those who stay in work – but there is a risk people will lose out financially if they die relatively early. Taking the state pension at state pension age and reinvesting any income not needed into an Isa or pension is an alternative option.

If you would like more information, please contact us >>

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Investment Committee <![CDATA[Weekly Market Update]]> http://www.mantlefp.com/?p=7039 2018-12-12T09:36:15Z 2018-12-10T07:00:54Z In the UK, the government’s Brexit plans were plunged into further disarray...

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The only way is down, well that’s what markets currently believe, driven by negative news flow. The gains made at the end of November were swiftly erased as global equity indices resumed their downward trend with a vengeance. Most of the themes that drove the downturn were all too familiar. In the UK, the government’s Brexit plans were plunged into further disarray, while the hopes of a resolution to the US-China trade war, which rose following the G20 summit, were short lived.

With markets volatile, and ultimately making little progress this year, there would seem to be scope for some seasonal good cheer this December. However, it would be unwise to base any investment strategy on this or any other stock market adage. Trying to time the market to play short-term trends can have expensive consequences if you get it wrong. In 2002, for instance, the stock market fell heavily over the course of December.

Oil ended the week below the $66 at which it entered 2018, although that all changed as OPEC agreed to cut production by 1.2m barrels a day, defying opposition from US President Donald Trump, who wants to keep supply high and maintain low prices to act as a tax cut.

Relations between China and the US took a negative tone when Meng Wanzhou, the chief financial officer of Chinese telecoms giant Huawei, was arrested in Canada, in connection with the alleged violation of American sanctions against Iran. Meng, who is the daughter of Huawei’s founder, is now facing extradition to the US. The fear is that China will likely become more negative in respect to the trade war, and potentially against US companies.

In the UK, the FTSE 100 fell to its lowest level in two years. This sell-off came as Theresa May’s Brexit plans were faced with further disruption. The government was forced to publish the legal advice it had received on its proposed Brexit deal. It was also held to be in contempt of parliament for not having done so earlier. Although the prime minister was determined to press ahead with a vote on her deal, it appears that this has now been delayed. A further curve ball was that the European Court of Justice confirmed that Article 50 exit clause can be unilaterally revoked, allowing a country to reverse its decision to leave the EU during the two-year period.

The markets have got themselves into a funk over lower oil prices and US and Chinese business cycle risks. At the time of writing, the market is not expecting much more from the Fed, even though the Fed itself thinks it is not quite at neutral yet. This bearish ending to the year might be short-lived. The US data doesn’t point to imminent recession risks and, business cycles don’t die of old age (or indeed from stock market volatility). Unless we are totally misjudging the impact of the current level of real interest rates, it seems to be the case that if the Fed pauses after a hike in December, optimism on the growth outlook and markets could come back very quickly.

If you would like more information on the above article or advice on your personal financial circumstances, please contact us >>

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