Well, the first weekend is over since the announcement of the lockdown and it is incredibly quiet on the roads which shows that people are heeding Government advice about self isolating.

The stock market was down -6% on Friday and was giving back some of the gains made during the week. Currently the FTSE 100 is around 5300.

Protecting Your Wealth

In times like this what can you do to protect your wealth? When you have seen rapid falls in investment prices in a couple of weeks and volatility continuing, you need to stay in the market as much as possible as it is nigh on impossible to predict, with any certainty the recovery.

If you are withdrawing income from your investments and pensions think about the amount of income you are taking. Can you reduce it? At the moment, everyone’s, spending ability has been drastically reduced so do you need the income you are withdrawing? Is it then just sitting in your bank account? If you can reduce it this will ease the pressure on the fund that supports it.

Are you taking income from a cash fund or cash account? If so, you will not be selling funds that have dropped in value and this would be a good thing. If you are not then consider changing the strategy so that income comes from the cash fund or account.

If you need income or a withdrawal consider taking the money from the lowest risk investments that have not fallen as much as equities. Funds such as cash, gilts, corporate bonds and absolute return should not have fallen as much, so withdrawal from these will be the preferred option.

Can you suspend pension payments and take your income from cash on deposit or other investments such as ISA’s. Withdrawals from ISA’s are tax free whereas withdrawals from pensions are subject to income tax. If you can survive by withdrawing tax free money that will definitely save you in the long run.

Please speak to your adviser about any of these options.

We are all now set up remotely, so feel free to phone or email us and we will be only too happy to help.

Stay safe and healthy everyone.


Phil J McGovern FPFS