29th July 2016



The vote to exit the EU came as a shock to many, including the City which was clearly expecting a Remain vote. Many have been left contemplating what the future holds and how markets will react, especially considering that the formal negotiations to leave the EU are likely to be lengthy.

Commentators have suggested that growth is expected to slow in the short term, and as a result of the decline in sterling, inflation could be set to jump. The Bank of England has offered emergency liquidity and interest rates may well be set to fall even further.

On a more positive note, sterling’s decline may act as a stimulus and encourage export trade as goods priced in pounds become more affordable to foreign purchasers. The Chancellor will be reviewing and reducing Corporation Tax rates in a positive move designed to signal that the UK is still open for business.

Market volatility set to continue

It’s likely that the UK market will continue to exhibit a high degree of volatility as events unfold and the terms of departure become clear. Whilst the risks surrounding Brexit can seem immense, many commentators have said that although the UK’s departure from the EU has had a destabilising effect, they do not see it fundamentally affecting global economic recovery over the longer-term.

Diversify and review

Against this backdrop of uncertainty it’s natural for investors to feel apprehensive. When markets rise and fall on a daily basis, it’s important to maintain a longer-term focus. To counter some of these economic uncertainties, diversification of assets is key to ensuring that you are not overly exposed to one share, sector or market. In addition, regularly reviewing your portfolio and circumstances with your adviser makes good financial sense, especially in challenging markets.

The value of investments and pensions and the income they produce can fall as well as rise. You may get back less than you invested.


How often do you pause to think about your pension plan? Are you saving enough for a comfortable retirement, or will your standard of living fall? Are you missing out on valuable tax relief on pension contributions? These are mistakes you should avoid at all costs.

Thinking you’ll get by on your state pension

Although the basic state pension has increased to £155.65, not everyone will get this amount as it will depend on their contribution record. Getting a pension forecast from gov.uk will show you what you are likely to receive. The state retirement age is set to increase too, so if you were born after 6 April 1978 you won’t be entitled to receive your state pension until you’re 68 years old. You don’t have to be a maths genius to see that the basic state pension won’t amount to much more than £8,000 a year, falling well short of the UK average wage of £27,600.

Not joining a workplace scheme

By 2018, all UK companies will be required by law to offer a pension scheme. Joining is simple and means you will have an additional source of income in retirement. Employers pay into the scheme on behalf of their staff, provided they don’t opt out, and employees receive tax relief on their contributions.

Believing you can just keep working

Many people put off making proper plans on the basis that they’ll never give up work. This is a dangerous assumption. Physically, we all age at different rates and you may not feel fit enough to continue into old age.

Banking on a windfall

Whilst some people will receive money from their families, figures from the Prudential1 indicate that just 28% of people retiring this year believe they will have money spare to leave to loved ones on their death. With life expectancy steadily increasing and the cost of care continuing to rise year on year, hoping for an inheritance from the older generation shouldn’t be a substitute for proper pension planning.

Selling a business or property

Relying on your home or business to provide money when you want to retire poses a number of problems. Finding a buyer might prove difficult as markets can go up and down. If you plan to sell your home to raise funds, you will have to find a suitable property to live in, and there will be costs associated with the sale and purchase.

Pension planning can seem complicated, but taking professional advice and regularly reviewing the progress of your plan with your adviser can mean the difference between enduring and enjoying your retirement years.

"Three hands are raised against a sky blue background, all have fingers crossed superstitiously, hopefully averting bad luck."


Retirement presents a series of opportunities and challenges; a primary concern for many people is ensuring they don’t run out of money. A sustainable, well-structured retirement income strategy is therefore desirable for any retiree.

To enjoy a comfortable old age means doing some in-depth thinking well in advance, asking yourself what your goals are and how much money you want to have at your disposal. Other prime considerations should be – will I be able to maintain my lifestyle? Do I want to leave an inheritance? How might my financial circumstances change? Will I run the risk of outliving my retirement pot?

So how should you approach creating a robust financial plan?

A hierarchy for retirement income

Many people find it helpful to think in terms of Maslow’s famous Hierarchy of Needs. His pyramid contained different levels of need that human motivations move through, starting with the physical requirements for human survival and ending with mankind’s highest aspirations. Using this hierarchical approach in a personal finance context was pioneered by money guru Mitch Anthony, who employs it as a useful aid in deciding how to plan your income in retirement.

Survival Income

At the base of the pyramid, survival income comprises the income you need to pay all your basic day to day household expenses. It involves drawing up a budget to cover your regular bills and running costs.

Safety Income

The next layer up, safety income is the amount you might need to meet life’s unexpected events. This could include health and later-life care costs and any emergency financial help you might want to give your family.


The value of pensions and the income they produce can fall as well as rise. You may get back less than you invested. 6


When will you reach your peak earning potential? Many people assume it will be towards the end of their careers, perhaps at some point in their 50s, giving them more time to plan their finances before they approach their retirement years.

However, figures from the Office for National Statistics1 show that in actual fact workers can expect to reach their peak earning powers between the ages of 40 and 49. From then on, incomes start to fall. This can come as a wake-up call to those who have yet to make adequate provision for their financial future.

Family protection is paramount

Most people in their 40s have a lot of calls on their time and money. It can be hard to cope with all the financial pressures of raising a growing family, like mortgages and the cost of education. That’s why every family needs a back-up plan that includes an emergency cash fund, and adequate life insurance to cover the mortgage and protect their income.

When it comes to pension planning, it’s worth bearing in mind that pension contributions attract valuable tax relief, and due to the beneficial effect of compound interest and reinvestment of dividends, even small sums saved now can make a difference to the level of pension you will enjoy when you retire.

Working with your adviser you can make the most of your earnings, whatever your age, and ensure you have the right plans in place to protect your future.

Tax treatment varies according to individual circumstances and is subject to change.

Image of a young businessman who sits on the top of the mountain and looks into the distance to the beautiful mountains, thinking about future plans


Amongst the myriad of terms used in the world of investment are some geographic references for certain investible areas. Whilst there’s no universally-agreed definition as to what constitutes an emerging or frontier market, there are some generally-accepted views.

An emerging market describes a country whose economy is developing, which economists and fund managers expect to achieve higher investment returns, but at a greater risk. This will include countries that may become developed markets. The four largest are commonly referred to as the BRIC countries (Brazil, Russia, India and China). The next five are often considered to be Mexico, Turkey, South Korea, Indonesia and Saudi Arabia. Iran is also included in this category by some.

Frontier markets are countries that have less-developed economies than emerging markets but that are beginning to open up. Also referred to as pre-emerging markets, they are viewed as having future growth potential. Whilst these markets can produce potentially high returns, they are less-sophisticated economies, and come with a much higher degree of risk attached. Around 32 countries fall into this category, with Argentina, Croatia, Kenya, Bahrain, Vietnam and Pakistan featuring on the extensive list.

It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK.