First of all may I hope you and your family are well and managing to cope with the restrictions necessary to reduce the impact of Covid-19.

As the pandemic spreads you may have heard or experienced people close to you who have suffered because of this virus which brings it home how serious the effects of this are to those infected and helps understand the restrictions placed on each of us.

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In the UK measures are now in place to support individuals and business such as;

  • Cover for employees on temporary leave (furlough) and Income Support Scheme for Self Employed. Resolution Foundation estimate 11.7m people are furloughed as of 20th
  • Business rate relief, deferral of VAT and payments on account for businesses
  • Change in Statutory Sick Pay to cover people with Covid-19 and those that have to self isolate.
  • Support for charities.
  • Business interruption loans doubled last week to 12,000 in a week.

On the economic front

  • Due to lack of demand and oversupply and storage oil futures go negative which impacted the markets yesterday. Oil is lowest since 1999 at $15 a barrel.
  • CPI in UK for March falls to 1.5%
  • Outside furloughed employees unemployment in UK is estimated to rise to 10% by the end of the year.
  • Bank of England base rate at 0.1%, Next meeting 7th
  • BOE increase Government overdraft bypassing bond market which makes sense in the short term to reduce future burden on taxpayers.
  • China, Hong Kong, South Korea Taiwan and Singapore continue to operate and open up business. As net importers of oil they will benefit from the low oil prices.
  • A number of European countries have started to ease restrictions and return to work. UK will review the lockdown on or around 7th
  • Expected 35% reduction on GDP in quarter 2 was expected by the market a few weeks ago.
  • Since end of January 2019 to March 23rd FTSE 100 fell 31%. Since March 23rd to April 20th FTSE rose by 15.60% which highlights the volatility in the market.

Update on Covid-19

  • Oxford University start tests on Vaccine with volunteers in the south west.
  • Physical distancing appears to slow the spread of virus and infection rates are slowing in the UK.
  • Testing rates in UK per day stand at around 20,000 against a target of 100,000 a day expectation by end of April.
  • Over 17,000 people have died linked to Covid-19 but is expected to be 40,000 in the UK.
  • Vaccine for general population is expected to take 12 to 18 months.
  • For countries who have relaxed their restrictions focus will be on a secondary infection rate .

Areas of Advice for Clients covered over the last week 

Global markets are now in a deep recession and due to the correction in the market investment managers are more confident about future growth rates in the medium to longer term so for longer term investors its not a time to sell at a low point unless you need the money now. For those who accept the volatile market it is a time to invest.

For clients who have been taking income from their drawdown pension we have looked at the possibility of reducing income payments where affordable, to reduce the impact on the underlying funds and maximise any recovery.

Confirming auto-enrolment responsibilities for companies remain in place for furloughed employees.

Reassessing risk profile of clients to take advantage of the fall in markets for longer term investors.

Recommending investing in volatile markets by drip feeding money into the market to reduce overall risk where clients have enough emergency cash.

Advice on the impact of Inheritance Tax and the options available to cover individual’s circumstances.

Discuss updating Wills and considering Lasting Power of Attorneys .

Update on the impact of the new Annual Allowance rules and controlling the Lifetime Allowance.

Warning people about scam investments such as fixed rate bonds and property investments that are too good to be true – if you have been contacted, please speak to your Adviser before taking action.

We are continually updating our website to keep our clients as informed as possible during this uncertain time, however should you have any queries, please contact your Adviser.

Stay safe everyone!