Fairey Associates Budget & The Impact of Coronavirus 2020

**As the UK turns to the delay phase, Coronavirus and its impact is everywhere you turn, but what does it all mean for you and your investments?
 
Investments
Markets are heavily down over the last couple of weeks, but this is not something to panic about, and our advice is to sit tight. This is where the fundamentals of our financial planning strategy come to the fore. It is now a better time to invest than two weeks ago; it is a worse time to take money out.
 
Investment is always for the long term and market shocks such as this are both impossible to predict, and also completely normal. This is the same with the bounces of recovery that have always historically followed.
 
The current market performance is not solely down to a reaction to the new virus, but of other factors since. The oil standoff between Russia and Saudi Arabia and Trump’s surprise closing the USA to Schengen countries have both been particular actions that have spooked the markets. These issues will resolve themselves.
 
There are a wide range of companies and types of investments in our underlying portfolios, and this means that the headline figures used on the news are not always a reflection of what is happening in your portfolio. We can see this in both the short and long term numbers below.
 
 
                                                   1m       1yr       5yr

FTSE 100                                  -29.75  -23.26  -4.77

Adventurous                             -22.78  -10.35  37.98

Moderate to Adventurous         -20.46  -8.72  32.94

Moderate                                   -18.23  -6.94  30.32

Cautious to Moderate                -16.00  -5.36  27.99

Cautious                                     -12.38  -2.53  25.18

Source: FE Analytics 13/03/2020. Fairey Associates 2019/20 Hybrid Portfolios
 
We don’t know what actions governments will take in the short term and how they will impact markets, but if you are worried I ask you to simply look at the companies in the underlying portfolios – HSBC, Vodafone, BP, GlaxoSmithKline, BMW, Nestle, Facebook, Amazon, Google, Kimberly Clark – do you think these companies will survive and grow? The last company here is the maker of Andrex toilet paper, their share price is down 15%...
 
 
The Budget
With everything else going on in the world you may have missed the budget.
 
Key points are:

• For those of you affected by the tapered annual allowance for higher earnings, the threshold on which this applies will go up to £240,000
• If you are close to the Lifetime Allowance, this will now rise to £1,073,100
• There are no changes to Income Tax bands for 2020/21
• Capital Gains Tax allowance rises to £12,300
• Inheritance Tax – Residential Nil Rate Band goes up to £175,000 as expected
• National Insurance primary threshold (the point at which employees pay NI) rises to £9,500
• Entrepreneurs’ relief limit is cut to £1,000,000 of lifetime gains, these gains are taxed at a reduced 10%
• Junior ISA limits rise to £9,000

 
If you are impacted by these changes our advisers will review them with you when you next meet. 

**This is for information only purposes and does not constitute Individual Advice