There is always a time delay between writing this article and its appearance in print so I am writing this before Christmas, but I hear many people say that they can’t wait for the new year to arrive and place 2020 behind them. I’m quite sure I haven’t encountered anyone for whom this year has not been an unusual one. I know that for myself the most important thing as I sit writing this article is that my family are all well, I still have the money to put food on the table, and I do fully recognise the significance of this.
But what has happened in the UK financial world? In the first quarter the Dow Jones and the FTSE 100 saw the biggest quarterly drops since 1987, plunging 23% and 25% respectively. Interestingly today (14/12/2020)*1, the Dow Jones*2 is higher than it began this year whilst the FTSE 100*3 has still got some way to go, but then again the Dow Jones does include Apple and Microsoft.
The UK Government has helped the housing market by increasing the stamp duty threshold to £500,000 for anyone completing on a residential property before 31st March 2021. This has meant that we should see a rise in property prices, otherwise we were highly likely to see a drop.
The Bank of England Base rates, which influences most interest rates, including savings accounts, credit cards, loans and mortgages, have also gone down this year to a current rate of 0.1%. The rate was cut to a record low following the financial crisis of 2008/2009, it stayed at the same level until August 2016 when it was cut to 0.25% following the Brexit vote, although we did see a slight increase before the current cut. There is even talk of a negative interest rate for the UK which would mean the lender would actually pay you to borrow money instead of them charging you interest and savers would earn a negative return, other countries have already offered this.
Many people are talking about increases to taxes in the future to pay for all the aid people will receive. As the end of the tax year draws closer maybe its time for you to consider all the tax benefits available if you have savings on deposit. At Monetary Solutions we offer a free without obligation consultation so why not pick up the phone today.
*1 BBC News 31st March 2020
*2 Dow Jones opened on 2nd Jan 2020 28,868.80 Opened 14th Dec 2020 30,123.91
*3 FTSE 100 opened on 2nd Jan 2020 7542.44 Opened 14th Dec 2020 6546.75
Allowances, limits and thresholds correct at the time of writing, but are subject to change in the future. Please confirm the current position before taking any action