Without Prejudice Universal Credit DWP Scammers Tried Everything To Trick Me After Colluding LEYF Paedophiles To Deny Rights After Mum Died Dementia Assessment Is To Murder Me Dalian Atkinson Was Tasered Dad Call For Support If I Do Police Turn Up I Study The Mental Health Elder Abuse Act 30


    Dear friend   I feel I can’t keep sending ‘emergency’ eshots as things are changing so fast and the consequences and implications will take some time to digest by ‘everyone and everything’.
It was sad to see the Prime Minister resign today. I don’t say that in any other way than criticism at the behaviour and reactions and the immense stress she faced after being selected in fair voting only weeks ago. The degree of arrogance and disloyalty and the naïve behaviour of ‘some’ who seem to imagine that such acts will not tarnish their own futures is also unbelievable.   The markets’ excessive reaction to the ‘Mini Budget caught everyone unaware to be frank too and whilst certainly it is not just a UK thing as like concerns are global, so it is acutely unfair to place all the issues we are facing at one or two individuals’ doors here in the UK.

I was thinking that when we and every other Nation had to make Pandemic-based reactions no-one was ‘worried’ about unfunded budgets seeing our National Debt double to over £2trillion and yet a mere few billions of experimental tax cuts which were likely indeed to stimulate the economy (and thus tax-raising and benefit reduction by better pay and more working) have caused such panic.
Ultimately, Putin is to blame too – his actions (or our economic reactions to the war) have created the energy crisis, the rampant inflation (some would have still been there but nothing like as bad), the escalating borrowing costs for government debt as a result, the artificially high US Dollar and the volatility in global markets.

The markets are surprisingly steady – probably a combination of relief and hope of future stability. Whatever happens, expect cuts in public services and spending to demonstrate appropriate aplomb and grasp on the finances. Perhaps the new government will have to have a list of tax and spending ‘aspirations’ to which we can all aim.
However, can pensions, etc rise by the latest CPI 10.1%? That would be excessive and unfair on those not expecting anything like that sort of increase (or any at all) and belts must be tightened – publicly and also personally. Just because ‘you’ want to continue doing all the things you have been able to afford to do these last few years with financially comfortable times doesn’t suddenly mean you are entitled to expect an equivalent increase in your income to meet the higher costs of these discretionary things you can’t afford any more. Taking personal responsibility is one of the realities of life, I guess and that is going to be needed big-time for a while in the face of some awful global headwinds over which you or I have no control.   There have also been rumours that some ‘distressed loan funds’ are buying Gilts being dumped by Liability managers who misjudged the extent to which yields could rise in the short-term. This may not be true but the figures suggest there is some mileage in that… with hindsight we all see the spike in yields as a great buying opportunity in government-backed bonds… The 2073 Index-linked Gilt has recovered by over 70% from its September 27 low for example – how daft.
One thing which has happened is that long and short dates are now closer together in expectation and that is good as it helps planning and future volatility in this asset class used to finance governments should not be so extreme and after all, recent low rates with negative returns were so artificial there was no way they would endure for ever.

Many UK companies’ shares are trading at ‘distressed’ levels too and that is wrong regardless of these issues so a great buying opportunity, especially as the chances of being subjected to a bid from some US predator with dear dollars is very high indeed and that certainly isn’t reflected in prices. Conversely the US could suffer a triple whammy – a currency which has to sink back to a better reality (costing UK investors in translation terms), shares which still have excessively high price:earnings’ ratios and generally lower earnings compounded by higher corporate borrowing costing more interest.   The Currency markets still cannot make-up their minds. UK investors in global or US funds have had great protection against the falls in US shares this year as the currency gains have offset those but that will reverse at some point and dramatically – perhaps linked to a change in Ukraine as the Dollar’s safe haven status passes. Japan has seen its currency in real terms plumb levels last seen in the 1970s and sorry, rather than a basket case but it represents a fantastic buying opportunity (and cheap and great holidays!). Yes, it’s cost money these last few years but putting your Pound there should see increasing Japanese share prices and a currency which will rebound at some point. I like ‘value’ opportunities where you can gain twice. The US is a dear situation where you stand to lose twice.       Pension transfer values from final salaries   We’ve been saying it for oh so long now but have you missed the boat, if the transfer value was imperative to you and to leave a giant pot to family on your death for example? The Mail reports on an extreme case:- My pension transfer value has plunged from £740k to £340k: What’s happened, and is my early retirement dream over? Average transfer values have been seen at between 25-40^% lower than just a year ago from what we hear.   If you have deferred benefits from a salary-related scheme then time is against you if you are thinking of a transfer, if it is the right thing for you. You want to hope your actuaries and trustees are a little behind the curve and so you can grab a transfer value now to at least fix three months’ guarantee when they can’t change the figure. The case noted showed how a member of a scheme saw his transfer value fall from £740,000 to £340,000 since last year as interest rates have risen. How could this happen? Because you are not an investor in the scheme but simply a liability. If therefore the actuaries say that the known mathematical liability you represent costs less to cover, then the amount of money the scheme has to put aside for ‘you’ falls – it really is that simple. There is more to it than ‘this’ but let me try to explain.

The scheme say owes you £15,000pa pension for life from retirement, with other benefits, some increases built-in etc. If the rate of return the Scheme can secure from ‘guaranteed’ investments is only 1%, then it has to demonstrate it has say £1million (your transfer value) put to one side to cover that liability (remembering that the pot shrinks as you age and then die so the liability ends). So if interest rates on those safe, long-dated government stocks go up to say 5%, than the liability pot can shrink to say £350,000 because what hasn’t changed are your final salary at the time of leaving and the length of your service. Yes, the Scheme isn’t reneging on what it has to pay you every year but it doesn’t have to keep so much money to cover its liability to you.       Responsible investing   The latest carnage on markets for bonds and shares has seen my predictions for ‘ethical’ investments come true. People flooded into all the same sort of over-priced stuff in ‘fluffy’ funds sold to them by highly rewarded marketeers and sure enough, they have been hit hard as the bubble has been bursting with the artificial ‘green’ or ‘moral’ credentials of too many of these things and which have also come tumbling-down around their ears. We’ve all realised we need our fossil fuels today and tomorrow at least, regardless of the mighty programme to change things but that will take years and we in the UK are leading the way – we have the fourth highest numbers of offshore wind turbines in the world for example. Even then, the solution is not so simple in that most renewable power sources have short lifespans before needing replacing again and all the natural resource expended in manufacturing and installing replacement kit.

However, some companies’ marketing teams need to be more sensitive – such as Scottish Widows, which is pushing its approach to ‘responsible investment’. First, I have to tell it, we are responsible investors too, so they don’t have the monopoly on ‘that’ word simply because they deselect certain arbitrary investments.
However, more to the point is ‘how responsible has it been to push a ‘Protected Pension Investment’ in the ‘Guaranteed Funds’ sector’ when it has lost over 40% in one year? (It still has £1billion in the pot). That is highly irresponsible and yes, that’s you, Scottish Widows – what are you going to say to all those safety-conscious investors who thought they knew what the writing on the tin meant?     Previous Editions       A thousand cuts     Read More       Turnaround     Read More       Mini Budget     Read More         Risk Warning   Stock market investments can offer income through the payment of dividends and interest and good opportunities for capital appreciation over the longer term. By this, generally we mean periods in excess of five years, preferably much longer. However, we can never promise you particular returns, especially in the short-term. At any point in time but especially in the short term, your capital could be worth less than the original amount invested as some of the selected holdings may fall in value, regardless of expectations at the time of acquisition. We may also invest in funds that hold overseas securities. The value of these investments may increase or decrease as a result of changes in currency exchange rates. Returns achieved in the past cannot be relied upon to be repeated.

To remind you, why do I send out occasional emails? Because everyone can save money. We have no connection with any companies mentioned and you have to make your own contacts and satisfy your own enquiries. What is in it for us? If we can prove that we are knowledgeable and that our service and advice have good value, then you might contact us for professional financial planning and investment help. You don’t have to do that though and there’s no charge for emails. If simply they save you money, then accept them with our compliments! However, you’ll know where we are!

If you have any queries of any form or indeed any subjects you think I could include, please contact me. I also refer you to our website www.miltonpj.net. We celebrated our 35th anniversary in 2020 and have been publishing a well-respected independent column in the local Paper for most of that time and free client newsletters as well.

Do not forget however the usual caveats – this is not ‘advice’ and you are encouraged to seek that before embarking upon any financial route involving investments, etc.     My best wishes

Philip J Milton DipFS CFPCM Chartered MCSI FPFS FCIB
Chartered Wealth Manager
Fellow Of The Personal Finance Society, Fellow Of The Chartered Institute Of Bankers
    Choweree House 21 Boutport Street Barnstaple Devon EX31 1RP       W miltonpj.net(01271) 344300 | (01271) 342810 | E info@miltonpj.net     Registered in England Number 3233275   VAT Number 682 2544 28 Authorised & Regulated by the Financial Conduct Authority     This email was sent to rattynem@btinternet.com You received this email because you are registered with Philip J Milton & Company Plc Unsubscribe here     © 2022 Philip J Milton & Company Plc  

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