Why tuning out political speculation may help you stick to your financial plan Investments 13/08/2024 In a historic victory, the Labour Party won a majority in the 4 July 2024 general election. After 14 years of Conservative government, you might be wondering what the change means for you and your financial plan. Since Keir Starmer took office, a day has barely passed without headlines speculating about the changes Labour will enact. The news can affect your emotions and spur you to make decisions that don’t align with your financial plan. For example, after reading that some investors are already acting to “protect their pension” from Labour, you might think you need to do the same. Or suggestions that Starmer could raise revenue by increasing the standard rate of Inheritance Tax may mean you start thinking about how to pass on wealth now. Indeed, according to a poll from interactive investor, in the weeks before the general election, 15% of investors made changes to their portfolio, and a third considered doing so.
97% of fund managers believe uncontrolled climate change will affect investments Investments 03/07/2024 A survey has revealed that the majority of bank and fund managers believe that uncontrolled climate change will impact their investments in the medium term. Read on to find out how it could affect your finances. UN: The window for tackling climate change is closing In the Paris Agreement in 2015, 195 nations pledged to tackle climate change. The agreement aims to limit global warming to “well below” 2C when compared to pre-industrial levels and to “pursue efforts” to keep warming within a 1.5C limit. Scientists have previously warned that crossing the 2C threshold could lead to irreversible changes to ecosystems and the climate. However, despite the pledge, the UN warned in 2023 that the window to reach climate goals was closing. A report from the organisation said “much more needs to be done”. Exceeding the climate target could disrupt many communities and parts of modern life, which may affect the performance of investments. Most bank and fund managers say climate change will impact investments within 5 years A survey published in FTAdviser asked bank and fund managers how they believe climate change will impact their investments.
The surprising effect your childhood has on your money mindset Investments 03/07/2024 Your relationship with money may play a huge role in how you handle financial decisions and your long-term security. Many factors affect your financial decisions, but you might be surprised by how much your childhood experiences still influence you today. The majority of parents recognise how important financial education is. Indeed, according to Nationwide, almost 9 in 10 parents to children aged between 8 and 13 say personal finance education would help their children better understand the value of money. 59% also agreed that personal finances were more important than maths. Yet, studies suggest these parents might be considering the positive effects of financial education too late. Research: Money habits could be set by age 7 A 2013 study from Cambridge University indicated that financial habits are formed by the age of seven. The research suggests that children have often formed core behaviours by the age of seven which they will take into adulthood and could affect financial decisions for the rest of their lives.
4 compelling reasons you might want to consolidate your pension Retirement 03/07/2024 It’s been more than a decade since auto-enrolment was introduced, and now most workers automatically become members of their employer’s pension scheme. While more people saving for retirement is excellent news, it could mean you end up juggling multiple pots. One option is to transfer one pension to another, known as “consolidation”. It’s usually simple to do and there are many reasons why you might want to transfer a pension. However, there are also some potential drawbacks that you may wish to weigh up first. Here are four compelling reasons you might want to transfer one pension to another. 1. It could make it easier to keep track of your savings during your working life With each job potentially providing you with a pension, the number of pots you might need to manage could become overwhelming during your working life.
Why “safety in numbers” might not apply to investing Investments 18/06/2024 Being part of a group can make you feel like you’re less likely to fall victim to a mishap or other negative event. While the hypothesis might be true in some circumstances, the opposite may be said when you’re investing. Read on to find out why failing to follow the crowd could be a good thing. The inclination to be part of a large group and adopt the behaviours of people around you is sometimes referred to as “herd mentality”. Following the same route as other people can give you a sense of security and help you feel as though you’re making the right decisions. After all, you might think: they can’t all be wrong, can they? Yet, financial decisions should often be based on your circumstances. So, a safety-in-numbers approach could have the opposite effect and harm your long-term finances. A fear of missing out could lead to you following the crowd There are lots of ways that a herd mentality might affect your investment decisions, including a fear of missing out.
