The need to have a diversified portfolio
Thursday 25th January 2024
Katy Baxter
I have long recommended the need for clients to have a well diversified portfolio of investments. Although the last couple of years have had specific geo-political and economic challenges they have certainly not been unique and a look back in history shows how different assets perform in different years. The image shows how each asset class has performed over the last 13 years. It is such a striking image and as they say a picture paints a thousand words. Forecasting is pretty much impossible and the case for diversification cannot be made any stronger. Please click here to view for a bigger view but if you would like a PDF copy of the image please email me. At Montgomery Estate Planning…
Inheritance Tax receipts at record levels
Wednesday 10th January 2024
Katy Baxter
Inheritance Tax continues to be a political hot potato with some commentators predicting it might be reduced or eliminated by the present Chancellor. One thing is for sure - current rates of revenue continue to raise funds for the government to increasing record levels. In the eight months from April to November 2023 data from HM Revenue and Customs showed receipts had totalled £5.2billion. This is a significant amount of income for HMRC and so it's quite hard to imagine this will be cast aside, and with a potential change in government coming this year I would not expect Sir Keir Starmer and Rachel Reeves to be abandoning this valuable source of tax revenue. Currently 4%, or 1 in…
Quarter 3 (2023) update
Tuesday 21st November 2023
Katy Baxter
As we bid farewell to the third quarter of 2023, let's delve into the financial landscape of the United Kingdom and other countries to explore the key economic developments that have shaped the past three months. There is still a certain amount of volatility in the markets and indices rise and fall almost on a daily basis. Keeping focused on a diversified portfolio of funds over the longer term is without doubt the right way to weather the uncertainties. Katy Baxter Financial market background The main equity regions had a mixed performance over Q3. UK equities rose over the quarter as companies were helped by sterling weakening in comparison with the US dollar and energy companies benefitting from a recovery…
Winners of U25 Trophy at Cowes Week 2023
Monday 7th August 2023
Katy Baxter
We are proud to have sponsored the young sailors competing for the Under 25 Trophy at Cowes Week 2023, one of the UK's longest running and most successful sporting events. The Montgomery Estate Planning Under 25 Trophy was presented to the highest placed Under 25 Crew: Charlie, Harry and Tom White. The Triplets from Wootton, sailing in the Squib class, were extremely proud to have won again in 'Kestrel'. Great sailing against tough competition and weather conditions allowed the IoW based Triplets to retain their 2022 title, another first for the trophy winners. We are also pleased to have been part of the presentation for the Cowes Week Youth Trophy which was presented to Christopher-Joel Frederick, who is a leading…
Record Inheritance tax collected
Thursday 27th July 2023
Katy Baxter
The first quarter of the 2023/24 financial year saw £2bn collected by the Treasury in Inheritance Tax (IHT). The latest figures follow a record-breaking year in 2022/23, which saw a total of £7.1bn raised in IHT. The latest quarter has raised 11% more than the same period last year, which exceeds the previous peak of £1.8bn in Q3 2022/23. In June 2023 tax receipts recorded an income of £795m, which marks a monthly all-time high. The Office for Budget Responsibility (OBR) has estimated that IHT will raise £7.2bn in the 2023/24 financial year, with as much as £8.4bn by 2027/28. However, there has been recent media speculation that the Government is considering scrapping the tax ahead of the next general election…
Proud to be sponsoring U25 Trophy at Cowes Week 2023
Tuesday 6th June 2023
Katy Baxter
We are proud to be sponsoring the young sailors competing for the Under 25 Trophy at Cowes Week. We will be supporting them, their families and friends during one of the UK's longest running and most successful sporting events on Wednesday 2nd August 2023. The Montgomery Estate Planning Under 25 Trophy will be presented to the highest placed Under 25 Crew at the Prize Giving on Friday 4th August. Cowes Week has always been popular for young competitors as it provides them with a perfect opportunity to realise their talent and helps to encourage our future sailing stars. Competing for the U25 Trophy gives the most amazing platform for them to compete on equal terms with sailors of all ages and…
Sustainable and Responsible (ESG) investment funds – what’s really under the bonnet?
Thursday 1st June 2023
Katy Baxter
There's much talk these days about ESG in the investment world and as a new advisory business we wanted to be able to offer our clients a range of ESG funds when building their investment portfolios. We know that some clients have strong views on how their investments make the world a better place and this is borne out by recent figures which show that in 2022, UK investments in ESG funds reached a record £91 billion which was up from £56 billion two years earlier. So what do each of these factors actually mean: Environmental factors Natural world factors and the biosphere. Includes the interaction and use of renewable and non-renewable resources (ecosystems, biodiversity, water, minerals) Examples of this are climate change,…
Katy's outlook for UK inflation and interest rates
Tuesday 11th April 2023
Katy Baxter
With UK inflation higher than expected and interest rates now at 4.25% what's ahead? The Bank of England's latest 0.25% increase to UK interest rates takes them to 4.25%. Many hope it will be the last hike of the year but with inflationary pressures persisting, Ian our Chief Operating Officer asked Katy for her outlook on inflation and interest rates. Were you surprised Katy by the BoE's decision? Not really Ian, although 2 out of the 9 members of the Monetary Policy Committee didn't want to increase rates. Whilst the collapse of Silicon Valley Bank and concerns over Credit Suisse caused some more volatility in the markets, the impact on the UK banking system was limited. The…
Some good deals ahead.....
Wednesday 1st February 2023
Katy Baxter
It's been nearly two years since the Ever Given container ship blocked the Suez canal semi-paralysing the global shipping supply chain. Even worse, at the time the Ever Given was ploughing into the desert, ports around the world had ships anchoring for weeks before lockdown-hit docks could unload them. People and businesses wanted goods, but they were stuck at sea. Packed into containers floating off the coast, or slogging around the continent of Africa to avoid the Suez Canal traffic jam. That had a major impact in pushing up prices of imports over the past couple of years. Why? Because 90% of all traded goods travel by sea! 11 billion tons of goods, worth $14 trillion per year. Clogging that up creates…
Client webinars - 2023
Wednesday 30th November 2022
Katy Baxter
Our forthcoming webinars on 24 January 2023 and 2 February 2023 between 11am - 12pm will cover the following topics. If you would like to attend please email us at help@montgomeryep.co.uk Inheritance Tax - a stealth tax that is going to affect many more of us - what can we do to reduce the burden for our families? Passing assets and wealth to loved ones - things to think about now, and in the future, to protect value for the next generations 2022 - a year of Big Market Days! What does this mean for the future - find out what the fund managers are saying... How best to invest - the best way to increase diversity but not risk …
Big Market Days
Friday 18th November 2022
Katy Baxter
When we've had a year in markets like 2022, it can be tough to work out how normal/abnormal it has been - or how we should be feeling. One way is to count how many days there have been where the market moved - up or down - by more than 1%. We can call these BMDs (Big Market Days) for lack of a better phrase. The chart shows that count of days. Also highlighted in orange are those days where the move was more than 2%, and red those days where it was more than 3%. (This uses the US equity market because the data is more easily available) Back to the question: "how abnormal has it been?" So far this year we've…
The ups and downs of investing
Wednesday 26th October 2022
Katy Baxter
Over recent months and weeks global stock markets have been volatile to say the least and it's been an uncomfortable ride for our investors. The temptation when the world is laden with bad news is to grab the reigns. To take action or do something/anything in order to feel in control. However, investors who try to do this, to 'time the market' over the course of an investment cycle often suffer whiplash. Looking back at financial history helps us understand why timing the market - abandoning the process - is rarely a good idea. The chart opposite shows bull and bear markets going back to the Second World War (using US equity markets where there's lots of data). Although the…
Some good news
Wednesday 7th September 2022
Katy Baxter
In these times of doom and gloom finding something to cheer about can be more difficult but I have found something. The so called 'triple-lock' guarantees that the state pension will rise in line with inflation, average wage growth or 2.5% - whichever is highest. The measure was paused in 2022 due to the impact of COVID on public finances but it is going to be being reinstated in April 2023 which is good news and will result in a large rise for those receiving state pensions. Inflation of more than 10% will see the basic state pension rise to more than £155 a week, while those who have reached state pension age since 2016 could see their weekly payments…
What a Senior Market Strategist just told me……
Wednesday 10th August 2022
Katy Baxter
One of the great advantages of the role I have is not only speaking to my lovely clients and their families, but also talking with fund managers and market strategists. You might think that sounds quite dull, but it really isn't! Our media have a fascination in focusing on the dour and negative aspects of almost everything, including of course the state of our economy, but having a more balanced and insightful view can provide reassurance. It is always good to be able to reflect on the conversations I have with my clients, the concerns, and the financial planning priorities they have, and think about the economy/market information I receive, from their perspective. It's no good hearing from these…
Diversification remains key to investors
Friday 15th July 2022
Katy Baxter
People who hold investment portfolios are currently experiencing an extended period of volatility and it is highly likely that the value of their portfolio has reduced since the end of 2021. Primarily the reasons behind this are the supply chain problems post COVID and the war in Ukraine, both of which have led to an increase in inflation, the raising of interest rates and the ongoing worry of the major economies of the world falling into recession. Now more than ever there is a need for investment portfolios to be well diversified and in line with a client's appetite for risk, which is why at Montgomery Estate Planning we favour Multi-Asset and Multi-Manager funds. Multi-Asset funds typically include a wide…
Making up their minds
Friday 17th June 2022
There is much being said in the financial press about market volatility and the stock markets, so we wanted to try and find an article that was not too deep in technical language, and echoed our own views. The following comment from 7IM, one of the fund managers included within the Montgomery Estate Planning panel, is we feel worth reading. "As of December 2021, markets thought the Bank of England (BoE) would raise rates to around 1% by the end of 2022. What's striking is that the markets believed, at the time, this would be enough to bring inflation under control, leaving the BoE free to spend 2023 CUTTING rates. Six months into the year, we can see how well…
The importance of an up to date Will when estate planning
Wednesday 27th April 2022
Katy Baxter
Few of us want to spend time talking about what happens to finances on our passing and therefore matters can be left and are not reviewed which can prove costly in terms of loved ones making hefty inheritance tax payments to the government. This has been shown clearly as the latest HMRC data reveals that IHT receipts for the period April 2021 to February 2022 now stand at £5.5bn; £0.7bn higher than the same period last year. Also, almost half (47%) of Brits who have a Will haven't updated it for more than five years, meaning nearly half of wills in the UK are likely to be out-of-date. Of those, a third (33%) haven't updated it for over 7 years, and a…
Upcoming client events in April 2022
Thursday 17th March 2022
Katy Baxter
Seminar & Webinar agenda - 12 and 14 April 2022 1. Limiting the amount of Inheritance Tax payable by loved ones remains more important than ever as property prices increase and the government freezes tax allowances. Katy will give an insight into the strategies available to reduce tax bills and will also discuss how to use charitable trusts to leave a lasting legacy and allow your loved ones to work with charities that are close to your heart. 2. Having an up-to-date Will and Lasting Power of Attorney form the core of estate planning so we will talk through how to do this and the pitfalls to avoid. 3. The geopolitical landscape continues to be impacted by significant shocks so our guest…
Leaving a legacy using a Charitable Trust
Thursday 3rd March 2022
Katy Baxter
Nearly all charities in England and Wales have experienced some negative impact from Covid-19, reports the 2021 Government Charity Commission Covid-19 survey. According to the figures, 85% of charities have had their services, and delivery of services, impacted, and 72% are dealing with a change in their financial position. This could mean that they have had to draw on their valuable reserves, or reduce the services they can provide. Restrictions to 'in-person' fund raising events have had an impact on fundraising levels, as we would of course expect, and 62% of charities consequently anticipate a threat to their charity's financial viability in the next 12 months. All of this obviously makes it extremely difficult for charities to be…
New Year’s resolutions are notoriously hard to maintain
Thursday 20th January 2022
Katy Baxter
There are countless theories out there about how long it takes to form a habit, but it seems to be between 21 and 66 days. If you are already slipping, maybe it is a good time to double down. If you commit to your New Year's resolution now, by the end of March 2022 you'll be doing it in your sleep. We believe you can help yourself with some simple financial New Year's resolutions. But where to begin? Warren Buffett famously said, "Do not save what is left after spending, but spend what is left after saving" and whilst these are wise words, if you're anything like me, you need to read it three or four times till the…
Property values and equity growth
Thursday 11th November 2021
The overall value of UK housing stock has risen from £5.67trn to £6.42trn over the last year, with private property wealth reaching a new high of £4.87trn, according to figures released by the Equity Release Council. While the level of mortgage debt has reached unprecedented levels, now above £1.5trn, fast rising property prices mean that for every £1 of mortgage debt, there is more than £3 of equity in our homes. The recent national lockdowns turned borrowers into a nation of savers as households repaid more than £19bn of mortgage capital during both Q1 and Q2 2021, having never repaid more than £18bn in any previous quarter. The Equity Release Council figures suggest that more than three quarters of…
UK Onshore Investment Bonds
Wednesday 13th October 2021
Katy Baxter
When you buy an investment fund, you may choose to do so via a wrapper which helps confer certain tax benefits on the income and capital gains which you receive. A UK Onshore investment bond is one of the wrappers you can choose. UK Onshore Investment bonds are generally available for a single premium - that is, a one-off lump sum. You can choose how that money is invested from a range of options that combine a variety of different asset classes within the one fund. Life companies offer external links to fund management houses, increasing your scope to mix, match and specialise within your portfolio. Funds within a UK Onshore investment bond benefit from a non-reclaimable 20% tax credit.…
Tax hikes to raise money for social care
Tuesday 14th September 2021
In a move designed to fund the spiralling cost of social care, the Government announced a controversial increase to National Insurance contributions (NICs) in the form of a 1.25% "Health and Social Care Levy". Although pensioners do not pay NICs, workers of state pensionable age will have to pay the levy, which will take effect from April 2022. The Government announced an increase of 1.25% in tax on dividend income. This means that tax on dividend income will increase from 7.5% to 8.75% for basic rate taxpayers, from 32.5% to 33.75% for higher rate taxpayers, and from 38.1% to 39.35% for additional rate taxpayers. At present, there appears to be no change to the annual tax-free dividend allowance of…
Inheritance Tax (IHT) bills on the rise – especially if you live in the South
Tuesday 24th August 2021
Katy Baxter
The human cost of COVID has been huge and will have an impact on families and people's lives forever. The financial impact has also been felt by many and although likely to be temporary, the government finances have been hit hard and somehow this debt will need to be repaid in the years to come. To not hinder economic recovery and growth, Rishi Sunak has limited fire power at his disposal. However, in March this year he already showed part of his intent by raising money via taxes when he froze two IHT thresholds for the next five years. This means the IHT Nil-Rate Band is remaining at £325,000 and the Residence Nil-Rate Band will be kept on…
Growth & Inflation are on the rise
Tuesday 13th July 2021
Fed's hawkish tilt: Prospects for inflation and interest rates continued to garner headlines during June as investors digested news of rising prices alongside a more hawkish tone from the US Federal Reserve (Fed). Share prices were knocked by speculation that gathering inflationary pressures could encourage central banks to taper off their economic stimulus measures and consider raising ultra-low interest rates. Amid growing optimism about the global recovery, Brent crude oil rose to US$76 per barrel - its highest level since October 2018 - during the month. Rising prices: Although Fed policymakers have continued to underplay concerns over inflation, investors were rattled by the news that the annualised rate of US consumer price inflation had surged from 4.2% in April to…