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If you’re covering the analysis from the Centre for Economics and Business Research (Cebr) showing lockdown is causing households to rise at a rapid pace please see the following comment from James Higton, financial planner at Quilter. James gives first time investors tips on how to make the most of the savings.
“There have been reams of figures and stories on the negative impact the current pandemic and lockdown is having on household finances. This is of course important, but for some people they are still finding they have more money in their pocket at the end of the month as spending is diminished.
“This analysis from Cebr shows that average monthly household spending stands £795 lower than pre-lockdown, a 30% fall, as such for some savings are increasing at a healthy rate. However, everyone’s position is different.
“This is great news as UK households are suffering from devastatingly low savings and weak financial resilience. The risk is that people should not view this as free money. It needs to be saved for the long term, not spent on online shopping or as soon as the doors are re-opened.
“While it is important to have a liquid cash buffer, with interest rates at rock bottom levels, you need to ensure that your money is working hard for it where it can. Consider opting for a stocks and shares ISA to ensure you have a long-term savings pot, as well as a more immediate one. ISA’s are a tax efficient savings vehicle that will allow your investment to grow, free of capital gains and income tax.
“ISA’s are able to hold a variety of funds, stocks and shares within them to fit the goals of the investor and they also allow easy access. For those looking to invest tax efficiently whilst retaining access to the capital, this is the investment vehicle most advisers would recommend.
“Remember the stock market is volatile and so you should place money in it for the assumption that it is going in for the long term. There are thousands of different investment assets available, from gold to government bonds, US equities to property and more - it can be a minefield. A financial adviser is there to determine the right place to invest money dependent on your goals.
“One thing that is important is diversification. Placing your money fund that invests in different companies, shares, properties and bonds will allow you to cushion market volatility and also achieve growth in different areas. We would normally expect shares to yield the biggest growth over the long term, but if the stock market falls we may also see government bonds overtake these.”
Notes to Editors:
About Quilter plc:
Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.
Quilter plc oversees £95.3 billion in customer investments (as at 31 March 2020).
It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions; and discretionary fund management.
The business is comprised of two segments: Advice and Wealth Management and Wealth Platforms.
Advice and Wealth Management encompasses the financial advice business, Quilter Financial Planning; the discretionary fund management business, Quilter Cheviot; and Quilter Investors, the Multi-asset investment solutions business.
Wealth Platforms includes Old Mutual Wealth UK platform and Quilter International, including AAM Advisory in Singapore.
The Old Mutual Wealth Heritage life assurance business was acquired by ReAssure Group Plc on 2 January 2020.
Since its IPO in June 2018, Quilter plc’s businesses have progressively rebranded to Quilter, as follows:
This press release is for journalists only and should not be relied upon by financial advisers or customers.
Please remember that past performance is not a guide to future performance. The value of investments and the income from them can go down as well as up and investors may not get back any of the amount originally invested. Exchange rate changes may cause the value of overseas investments to rise or fall.
This communication is issued by Quilter plc. Registered office: Millennium Bridge House, 2 Lambeth Hill, London EC4V 4AJ, United Kingdom. Registered number: 6404270. Registered in England.