The Longest January

So we finally got through January.

With each day happier, brighter times draw nearer.

I recall seeing a meme on social media

30 days hath September

April, June and November

All the rest have 31

Apart from January which has about 77.

It certainly felt like that.

Whilst markets have slowed somewhat in January most of our portfolios managed to hold onto the gains made in the latter part of 2020.

One of the questions asked most often in January was how had the investments produced a positive return over the last 12 months despite the pandemic.

Well, on the whole clients didn’t panic so instead of wanting to sell assets at the worst possible time, they knew to follow the rules of investing.



Avoid Greed

Avoid Fear.

Some portfolios showed big losses between February and March last year but managed to bounce back remarkably quickly as the year went on.

Secondly we are pleased with how the recommended investments have performed, particularly given the backdrop of doom and gloom surrounding Covid.

Then there’s the money injected into the system.

As advisers we try to meet with fund managers as often as we can. The meetings nearly always throw up a nugget, a gem, something that sticks in your mind.

This one is (to me) mind blowing.

In 2020 the amount of money injected into the system by the central banks amounted to $1.2 billion dollars……….. per hour.

And there is no sign of this stopping!  

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An interesting blog about a little bit of interest being of interest and the interest in the interest rate rising

In these unprecedented times, people are looking for alternatives to interest from traditional bank accounts given the current bank of England base rate of 0.1%.

However, many people are still holding out for interest rate rises.

I recall in a previous life (at a well known Insurance Company) inflation was referred to as the silent embezzler.

Put simply, £10,000 in the bank today will generally buy you less than it would say, 5 years ago.

So the absolute minimum for any money, is to grow in line with inflation.

That however, is easier said than done in a deposit account when the rate of inflation is significantly higher than The Bank of England base rate (and the vast majority of deposit rates).

So, when do we see interest rates rising, returning to normal?

I used to say at meetings that interest rate rises were always six months away, a bit like the pub which advertises free beer tomorrow.  Neither ever seem to arrive.

After the financial crisis of 2008-09, what appeared to be temporary cut in the bank of England base rate, saw the rate drop to 0.5%. In the twelve years since, the rate has not once risen to 1% and currently sits at an all time low of 0.1% with talk of negative interest rates a real possibility!

Can interest rates rise? Given the amount of borrowing by central governments around the world, is this a realistic possibility?

Another astounding quote heard in financial circles in the last few weeks.

Should the cost of borrowing increase by 0.5%pa, the additional annual cost to The US Treasury would be equal to the Country’s entire military budget for the year.

I guess the interest rate rises are still 6 months away!



Our Christmas opening hours are as follows:

Wednesday 23rd December 2020: 8:00am – 14:00pm

Thursday 24th December 2020 – Friday 1st January 2021: Closed

Monday 4th January 2021: 8.00am – 17:00pm (normal office hours)

We would like to wish our clients a Merry Christmas and a Happy New Year.

Thank you for your continued support.

Exam Success

Congratulations to our Apprentice Josh on passing the RO2 Investment Principles & Risk exam last week. Josh has now passed three exams towards his Diploma in Financial Planning and has three to go!

Well done Josh!

Pension Awareness Day

Today is Pension Awareness Day and it’s no secret the average person knows little about their pension.

Recent research from Royal London revealed 66% of pension customers admit to having little or no knowledge about pensions and more than a quarter of workplace pension customers have no idea what happens to their pension money, or think it’s saved in a bank account. It’s good to plan for your future. Whether you’re years from retirement, nearing retirement or about to retire, it’s important to have all the information available to make the right decisions.

At T&H we are fairly optimistic that our clients (in the main) fall into the 34% who do have at least a reasonable knowledge of pensions.  We strongly believe in the ongoing connections with our clients, not just advising but educating in the journey to and through retirement.

Make Hay While The Sun Shines

AKA   Is this the end for pension tax relief.

Well, probably not.

However, the subject is in the news again.

Back in 2016 The rumour mill went into overdrive that the end was nigh for higher rate tax relief on pension contributions. So much so, that record amounts were being put into pensions to grab the generous tax breaks before they disappeared.

Such was the hysteria that George Osbourne announced on a Saturday morning (interrupting my holiday!) that pension tax relief was here to stay.

So will history repeat itself?

Will this be much ado about nothing (again)?

Who knows? I suspect tax relief will stay in some form, but we are in unprecedented times.

The cost of the Coronavirus dwarfs anything we’ve seen before and  is likely to be felt for generations. Therefore it does make sense that something may have to give.

We have a phrase at T&H that nobody will march in the street against that.. I do think that the removal of pension tax relief, particularly higher rate relief, could be seen as an easy target.

When you also consider that the current government doesn’t have to call another election for another four years, then some tough unpopular choices look easier now than a year or two down the line.

So, whilst I would never advocate acting in haste when it comes to investing or (as some might say) allowing the tail to wag the dog……

Make Hay while the sun shines .

Exam Success

Congratulations to our Office Manager Sophie on passing the AF1 Personal Tax & Trust Planning exam. Sophie sat this exam in July and received the results last week.

Well done Sophie!

Summer Newsletter

Please find below a copy of our annual newsletter, which we hope you will find of interest:


Should you have any queries or require more information on any of the articles or any other financial matter, please do not hesitate to contact us on 01772 825755.

Where are we now? Continued…

Our focus remains with our existing clients’ investments and our thoughts are with those most affected by the pandemic.

How is the economy responding?

Private consumption, private trade and private investment have been hit hard by the virus. All are down by over 30%. This was to be expected during a time of lockdown. The public purse has been called upon to provide a counterbalance, and it is digging deep. At least 14 new government actions have been introduced since lockdown in a bid to support the economy. This has not come cheap. Government borrowing is expected to rise from £40bn in 2019/20 to beyond £300bn in 2020/21. This means that the equivalent of about half of all central government spending in 2020/21 will be funded by borrowing. And this borrowing will have to repaid over time, reducing expenditure elsewhere. Despite government action, the economy is still shrinking. It fell by a record 5.8% in March 2020, and the Bank of England’s central scenario projects a fall of 14% in 2020. This is greater than anything we saw during the financial crisis of 2008. Unemployment is projected to rise from 4% to 10% (c3 million people); and wages are expected to fall. An common outlook sees the deep drop in 2020 being followed by a strong rebound in 2021, and resolution of longer-term economic trends from 2022. This may be optimistic.

How are businesses responding?

Government intervention is helping business to keep the lights on. 80% of businesses are trading and 20% have paused trading. Very few have ceased trading permanently, so far. Regardless, trading conditions are tough. 80% of businesses are using furlough, and 1-in-4 jobs are in furlough. Sales have, on average, fallen by 45%. The hardest hit sectors have been accommodation, food services, textiles and education. The Finance/Insurance sector is down, but by only 0.5% compared to the wider economy’s 5.8%. Curiously, investment markets have seen some rebound since mid-March, despite the very challenging economic arena. It would be wrong interpret this as the markets putting coronavirus behind them. To a large extent, this reversal has been driven by the recent largesse of governments and central banks. Many will be asking what happens if this largesse stops before the economy starts.

How are households responding?

Households do not share the confidence of the investment markets. 80% are worried about the impact coronavirus is having on society, the economy and households. Consumer confidence has fallen to -33. There is evidence of households preparing for a coming storm. Spending is down, use of debt is down, and saving is up.

How are savings and retirement customers responding?

There is encouraging evidence that the call to customers to “keep calm and remember the long term” has been heard. There has been no systemic withdrawal of savings; no systemic reduction in contributions; no systemic switching of investments (beyond the most engaged customer cohort). There is, however, no room for complacency. A negative shock to household finances will inevitably have a negative impact on their ability to save for retirement. And, as the government looks to balance its books, there will inevitably be speculation about what this could mean for areas of expenditure such as the state pension triple lock, pensions tax relief and automatic enrolment.

Covid-19 pandemic boosts intergenerational planning

The coronavirus pandemic could see a rise in intergenerational planning as investors look to leave money for their family and friends, Quilter Financial Planning has found. The financial planning giant asked more than 1,000 adults in the UK whether coronavirus had encouraged them to think about supporting other relatives financially now or in the future. Nearly a fifth (17%) said they were more likely to look at leaving money to help their loved ones in the future and this figure rose to one quarter of people among those who had received financial advice. The survey also found one-in-five people have been prompted to try and help family and friends with short-term financial pressures, such as paying bills or making up income shortfalls and 15% of those surveyed were already supporting friends and family before the crisis.”

As always, we will continue to use this time to review plans and advice with our clients.

(Taken in part from Aviva and professional adviser)

Where are we now regarding investments?

Once again we try to make sense of the current pandemic and the impact on investment markets.

Our focus remains with our existing clients’ investments and our thoughts are with those most affected by the pandemic.

We have taken views from some of our investment funds and interspersed this with some of our own views.

After weeks of unprecedented turmoil in markets, things have been calmer over the past two weeks. Effectively, many assets have retraced some parts of their losses from their lows around the 23rd March and in some cases showing a remarkable bounce. It once again reminds us of the impossible (and frankly dangerous) task of trying to think you can time markets.

Major equity indices year-to-date in Europe are still down around 25%, and US indices are down around 15%, though the technology sector is much nearer to flat now. Markets are generally more orderly now. It appears that distressed selling has abated. It appears the market has become more understanding of the epidemiological data and its path, and the fact that lockdown measures are slowing and, in some areas, now clearly reversing the flow of new cases.

There was also the massive government and central bank support, which has now largely been promised, even if not yet delivered. Many of you will be familiar with the UK’s support schemes for employment and businesses and these are widespread in other geographies. Helicopter money – in the US a cheque with Mr Trump’s large signature on it – is now fluttering to the ground. 

Also, positively, capital markets do appear to be doing what they should do; i.e. providing capital, at a price, to those that need it.

What is the future?

We need to be aware that it’s not just the virus that can wrong-foot markets, US presidential elections, China tensions, the Gulf are all still live and impactful issues. 

We are cautiously optimistic. Medical science has learned fast about both treatment and containment of the virus, and massive government support should limit defaults, especially in larger companies. Against this, there are still investments that can have long term value.

At Trafford and Houghton we remain focussed on providing support for our clients. This has been possible thanks to the ongoing dedication of our advisers and support staff. We continue to conduct regular reviews with clients (via telephone) and have (on the whole) had very positive meetings.

Ian, Martin and Will.