On Track – Issue 9 – June 2015

ONTRACK
PARTNERS
Issue 9
June 2015
TAVISTOCK WEALTH
MARKET
COMMENTARY
The Conservative Party’s outright victory in the
UK General Election is likely to be positive for
the economy in the medium term.
TAVISTOCK BUILDS
SOUTH WEST HUB
THE QUEEN’S
SPEECH
Tavistock Investments has acquired
Cornwall based advisory firm, Duchy.
The key points from the Conservatives’
policies and proposed legislation.
PREMIUM BONDS
ISAS
MARKET NEWS
ONTRACK
WELCOME
TO YOUR
LATEST
ISSUE OF
ONTRACK
Since the last edition of ‘On
Track’ the General Election
has taken place with the
Conservatives winning the
majority vote. As a result, we
have compiled a list of the
key policies and proposed
legislation as announced in
the Queen’s speech.
Included in our June edition is a market commentary from
Tavistock Wealth. They have provided an overview of fund
performance and the effects that current affairs have had
on the financial market.
As always, if you have any
questions after reading this
issue, please call us on
0844 871 8409.
Issue 9
June 2015
GROUP NEWS
TAVISTOCK
BUILDS
SOUTH WEST
HUB
As you may already be aware
from recent press releases,
Tavistock Investments has
acquired Cornwall based
advisory firm, Duchy.
Duchy will become a part of Tavistock Partners with their
managing director, Tim Mears, heading up our new South
West operation.
For further information, you can read City Wire’s article here.
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ONTRACK
Issue 9
June 2015
START EARNING
INTEREST ON
YOUR ISA
An Individual Savings Account (ISA) is one of the most tax
efficient ways of saving money as the interest earned is protected
from HM Revenue & Customs.
Each year, you get an ISA allowance which sets the maximum
that can be saved within the tax-free product from 6th April to
5th April. The 2015/16 allowance is £15,240.
Previously, you would get half of your allowance in cash and
half in shares, or you could choose to put it all in shares.
However, since July 2014, the rules changed and became a lot
more relaxed:
• Use the maximum allowance for cash or investing:
You can put all of the £15,240 in a cash ISA or a stocks and shares ISA.
• Splitting your allowance:
You must stay within the annual allowance and you may only invest in one stocks and shares and/or one cash ISA
per tax year. However, since the new rules were introduced,
you can choose how you split your money. For example, you could invest £3,500 in a cash ISA and £11,740 in a stocks and shares ISA or do it the other way round if you wanted to.
Do you have savings sat in
a bank account earning a
low level of interest that will
eventually be taxed? Tax
efficient products like ISAs
were introduced to benefit
savers so why not take
advantage?
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ONTRACK
Issue 9
June 2015
KEY POINTS
TO TAKE AWAY
FROM THE
QUEEN’S SPEECH
On 7th May 2015, the Conservatives became the newly elected
government, winning a 12 seat majority. On 27th May 2015,
the State Opening took place to mark the first day of a new
parliamentary session, where the Queen’s speech outlined the
Conservatives’ policies and proposed legislation.
Below are some key points:
•Although the UK economy grew by 2.8% last year, there are cuts to come as part of a £12bn saving in welfare costs.
This includes a restriction in jobseekers allowance to under 21s.
•Before the end of 2017, a referendum will take place and
Britons will be able to have their say as to whether we
should stay as part of the EU.
•An extra £8bn to be put into the NHS.
•Rent to buy levels of discount will be extended to 1.3m
housing association tenants with new houses built to
replace them, funded by the sale of high value vacant
council houses.
•Personal tax-free allowance will be increased to £11,000 by
2017; however the aim is to increase this to £12,500 to
ensure that those working 30 hours per week on minimum
wage will not pay income tax.
•The ‘Triple Lock’ (pensioners receiving a 2.5% increase in
state pension) will continue to apply but it is questionable
as to whether it will continue after the new single tier
pension is introduced in April 2016.
•Bring forward legislation to reform trade unions and to
protect essential public services (such as transport)
against strikes.
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ONTRACK
Issue 9
June 2015
PREMIUM BONDS
INVESTMENT
LIMIT RISES
As of 1st June 2015, the maximum amount you can invest in
premium bonds rose from £40,000 to £50,000. This is the second
time the limit has risen within the last year with the rate having
increased from £30,000 to £40,000 one year ago.
With £19.7billion invested, the number of bonds has increased by
169% since 2003.
How do Premium Bonds work?
Suitable for savers who:
In simple terms, Premium Bonds are a savings account which
you can put money into or withdraw from when you want.
The interest paid is decided by a monthly prize draw. If
your bond number is drawn, you can win between £25 and
£1million tax-free.
•Want the chance every month to win the £1million jackpot or other tax-free prizes
The bonds are backed by the government’s retail bank, NS&I,
therefore there is no risk taken with the money you put in,
only with the interest earned as prizes are not guaranteed.
•Want to make the most of tax-free investment opportunities
Typically, the minimum holding is £100 and each pound will
buy you one bond. For example, if you invest £1000 you
will get 1000 bonds; these are then individually entered into
the price draw. Currently, the odds of winning for each £1
bond number are 26,000 to 1. Each bond will continue to be
entered into the draw until you decide to withdraw them.
Premium Bonds can be bought online via the NS&I website,
in post offices, over the phone or through a monthly standing
order. Previously, parents and legal guardians who wished to
purchase bonds for their children or grandchildren were not
able to do this online or over the phone, however since 1st
June, this is now possible.
If you are a Premium Bond holder, you can check if you are a
winner at www.nsandi.com/prize-checker from the third day
of each month.
•Have £100 or more to invest
•Want security for their money
Not for savers who:
•Want a regular income from their investments
•Are looking for guaranteed returns
•Are concerned about the effect inflation will have on their savings
•Want to buy them as a gift, unless it is for their child
or grandchild.
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ONTRACK
Issue 9
June 2015
TAVISTOCK WEALTH
MARKET
COMMENTARY
The Conservative Party’s
outright victory in the UK
General Election was a surprise
given that the polls had
consistently predicted a hung
parliament. Prime Minister
David Cameron will now have
a clear mandate to govern
without having the constraints
of a coalition partner.
This is very likely to be positive for the economy in the
medium term, but the looming referendum on Europe
will ultimately be the focal point of his administration.
A “Brexit” could possibly be the catalyst for a second
independence vote in Scotland, which would have far
reaching implications within the United Kingdom.
The FTSE 100 rose 0.34% to close at 6,984 and gilt yields
were virtually unchanged across the maturity spectrum.
Global equity markets were relatively subdued and the
MCSI World posted a small gain of 0.05%. The S&P 500
rose 1.05% and the Nikkei 225 climbed 5.34% on the
back of further yen weakness. The Hang Seng fell 2.52%
and German DAX declined 0.35%. The US Federal Reserve
continues to prepare for an eventual hike in interest rates but
the US bond market remains resilient as ten year rates hover
just above the 2% level. The US dollar was supported by the
Fed’s comments and appreciated 2.44% versus its main trading
partners. Commodity prices drifted lower in the benign trading
conditions and the S&P GCSI fell 2.18%. Natural gas lost 3.96%
but light crude oil rose 1.12% to close at $60.30 per barrel. The
situation in Greece remains a very large obstacle to harmony in
the Eurozone and both politicians and investors will be tested
to the extreme during the summer months.
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ONTRACK
Issue 9
June 2015
MARKET NEWS
Latest market news in brief.
UK INFLATION RATE
TURNS POSITIVE
Rising transport costs helped the UK’s inflation rate turn
positive in May after one month of negative inflation.
Read the full article here (bbc.co.uk, 16/06/2015)
PA
BOOST FOR
NEW HOMES
According to Crest Nicholson, the recent general election
and the economy has boosted demand for new homes in
the South of England.
Read the full article here (telegraph.co.uk; 16/06/2015)
GREEK TRAGEDY?
Greek shares fall for third day as euro exit fears grow.
Read the full BBC article here (bbc.co.uk; 16/06/2015)
Reuters
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ONTRACK
Issue 9
June 2015
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T: 0844 871 8409
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and Sutcliffe Solloway Financial Planning is an appointed representative of Tavistock
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Tavistock Wealth Limited
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