Welcome to your September update from Danbro Financial Planning. In this edition, we’ll assess the financial impact of the current UK ‘energy crisis’; consider the opportunities opening up for borrowers amidst a rapidly changing mortgage market; and we’ll look at the potential for brand new tax year parameters, following a government-led review.
So, lots to get into. But first, as always, we begin with a message from our director, Liam Winstanley.
A message from our Director…
I can’t believe it’s over a year since we started our monthly newsletters!
It would be something of an understatement to say that a lot has happened during that time. We’ve all been touched in some way or another by the pandemic, and many of us - and our families - continue to be affected in our day-to-day lives.
But in spite of the awful human tragedy (not to mention, the economic cost) of the pandemic, it has, I believe, highlighted the strength of human resolve, co-operation, medical ingenuity and technical innovation.
For investors, the last 18 months has seen unprecedented market turmoil followed by recovery. And, as we digest further potential, inflationary pressures and rising gas and energy prices, the road ahead remains uncertain and it’s important, in my mind, to ‘tune out the short term noise’, focus on your long-term goals, remain diversified, and stay in touch with your plan!
Best wishes and enjoy the newsletter,
In the news this month…
We start this month’s news round-up with the developing ‘situation’ in the UK’s energy sector. As you may be aware, wholesale energy markets have reached record highs this month, thanks in large part to a ‘global surge in the demand for gas’. With ‘half of the country’s electricity generated in gas-fired power plants’, the current arms race style ‘gas grab’ is concerning for both politicians and energy companies alike. Not to mention consumers.
Energy prices look set to reach a 10 year high, with the Guardian anticipating that as many as half a million more people could be ‘driven into fuel poverty’. Furthermore, industry experts are predicting a bleak winter for suppliers, with fewer than 15% of providers still standing at the start of next year, compared to the start of 2021.
Elsewhere, thousands of new pensioners have been left waiting for their first State Pension payments following a backlog in processing applications at the Department for Work and Pensions (DWP). Throughout this summer, thousands of people who’ve turned 66 (the new State Pension age) have applied for their state pension, but have not yet got any money. Many have aired their ‘disappointment’ and ‘disgust’, with some stressing that their personal pension was ‘not enough to live on’. The DWP is already under fire after it emerged that an estimated 200,000 female pensioners are collectively owed over £2.5bn worth of underpaid state pensions.
Staying with pensions, and an alarming report in the Independent that ‘nearly half of workers don’t know how to plan for their retirement’. A survey conducted by industry giants Aviva found that only 27% of those asked were ‘confident’ in knowing what constituted a ‘good’ amount to have in their pension pot, while almost 40% of workers in their 40s and early 50s admitted to ‘pushing retirement plans to the back of their minds’. As a result, Aviva are calling for the creation of a ‘living pension accreditation’, to ensure employers can support workers to reach their minimum retirement standards.
Moving on to mortgages and the news that Platform (the Co-operative Bank’s broker-only brand) has launched a record low (sub-0.8%) two-year fixed rate deal on residential mortgages. The 0.79% rate comes with a fee of £1,499 and is limited to those seeking to borrow a maximum of 60% of the property’s value. This is the latest announcement in a growing trend that, as consumer champions ‘Which?’ explain, has led to plummeting rates, a ‘mortgage rate war’ and ‘dozens of sub-1% mortgages’.
Another positive mortgage-related story sees ‘Countryside Properties’ become the latest house builder to scrap ‘unfair’ contract terms after thousands of leaseholders were told they would no longer be subject to ground rents that double every decade. Countryside announced that they will be keeping rents at the same level following a probe by the Competition and Markets Authority. Click here to find out more.
And finally, the Office of Tax Simplification have produced a report analysing the potential costs, implications and benefits of changing the UK tax year end date from April 6th, with both March 31st and December 31st under consideration. Take a look at the review’s findings, here.
This month’s featured article…
This month’s feature article comes from Wired, and considers the merits of Adam Tooze’s new book, ‘Shutdown’. Tooze is an economic historian at Columbia University, specialising in world crises (business must be booming…) such as the 2008 financial crash.
An interesting, and alternative, assessment of the social, environmental, and geopolitical impact of COVID during the year 2020, Shutdown dissects the economic damage of the pandemic and ‘highlights the chance for a Green New Deal’. Take a look at Wired’s review of the book below.
On a lighter note…
Next Sunday (October 3rd) it’s the 2021 Virgin Money London Marathon, the first full capacity London Marathon for two-and-a-half-years. Last year’s Marathon was the first ‘elite-only’ race in the event’s history, following the cancellation of mass participation events in light of the pandemic. This year, the race was once again pushed back from spring to autumn to comply with COVID-19 regulations. This time though, finally, the amateurs - those who make the Marathon what it is - are back! From Superman to Wonderwoman, and average Joe to Mighty Joe, thousands of runners - experienced and… otherwise - will be aiming to cross the famous finish line on The Mall, all in aid of good causes. And, this year, our Director, Liam, will be among them!
Following months of gruelling training and early starts, Liam’s targeting an impressive finish of sub-3 and a half hours, and will be running in support of Blood Cancer UK, a fabulous charity which funds vital research into all forms of blood cancer as well as providing support and information to patients and their families.
His fundraising target is £2,500! So, if you’d like to donate, please follow the link to his Just Giving page below. Thank you so much and best of luck, Liam!