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There have been a number of developments and trends in 2013 and it is probably fair to say that whilst the growth numbers look good, some people are still a bit cynical about the “recovery”.
Nevertheless, we thought we would end the year with a brief review of the main events and a roundup of some significant statistics that have affected wealth management this year.
Auto enrolment, the new compulsory workplace pension for employers and employees is now underway. There appear to have been relatively few teething problems, as employers and their advisers have planned effectively to ensure that employers meet their obligations and employees are kept well informed.
So far, only larger employers have been involved, but from 2014 onwards smaller employers will engage in the same process. This will be challenging for them and it is important that they seek expert advice.
In March 2013, the Government introduced significant assistance to help kick start the mortgage market. This has widely been seen as a success and even resulted in the withdrawal of supplementary funding to lenders by The Bank of England in November.
The Chancellor’s Autumn Statement announced an expansion to the number of lenders participating in the scheme, which is an encouraging sign for the longevity of its availability. We have a concise guide to the schemes available elsewhere on our website, in a blog dated 25 November.
2013 has generally been a positive year for world markets, as investors continue to look for better returns. The FTSE 100 has seen an increase in value of 12.75%* in the first eleven months of the year and the Dow Jones Industrial Average is up by 22.75%* over the same period. As we are all aware, markets can and do get it wrong, but it appears that some confidence in business returned during 2013. Some things did lose their glister in 2013 though – the price of gold has fallen by more than 25%* this year. * Source Yahoo Finance 29 November 2013.
The Bank of England Base Rate has held steady at 0.5% throughout the year. There was speculation over the second half of the year that this rate would increase sooner than had been expected, due largely to the improvements in UK economic performance. For the time being low interest rates are advantageous for homeowners, business people and other borrowers, but the downside of course is continued disappointment for savers.
The cost of living has been a consistent theme this year, whether the talk is of energy prices or Pay Day lending. With an election only 18 months away this will probably remain a hot topic.
An American business, PNC Wealth Management, calculated that if you bought your “true love” all 364 gifts that are mentioned in the 12 Days of Christmas it would cost an eye watering $114,651, 10.6% more than last year, illustrating how inflation is the investor’s main enemy!
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