With low savings rates currently on offer an investment strategy is the way ahead
It pays dividends to spend some time to get to understand investment concepts
QYou advised me last year about the tax payable when we sell our flat. We now have around £100,000 to invest. As we are both in our 70s, we need some monthly income to top up our pensions. What would you suggest?
ATake a look at the top of the savings tables and you’ll feel thoroughly depressed. With the Bank of England base rate at a record low of 0.1%, cash savings rates are woeful, particularly for those looking for a monthly income.
The best easy-access savings account pays 0.5% AER, giving you a £41 income top up each month. Lock your money up for five years in a fixed-rate account and you’ll be offered 1.25% AER each year, giving you just over £100 a month. Rates are similarly woeful in tax-efficient cash Isas.
First off – I won’t be making any investment recommendations. With such a significant sum, I would strongly suggest engaging with a regulated financial adviser, who can understand your goals and recommend a suitable investment strategy. The Money Advice Service, a government-backed organisation designed to help people understand their finances, runs a directory of regulated advisers. Visit directory. moneyadviceservice.org.uk to find out more.
Costs will vary – some advisers charge fixed fees, some
charge hourly fees, others charge you as a percentage of your assets. You’ll usually encounter an upfront fee and, if you decide to go ahead with them, an annual fee to get a yearly review of your investments.
Let’s go back to cash. Although the rates at the moment are truly dreadful, there’s one major advantage – you’re not taking any ‘capital
risk’ with your savings. Although you won’t earn much interest, you won’t lose your lump sum.
However, you face other risks, such as inflation (prices rise faster than the return you are getting, meaning you can buy less with your money), or shortfall risk (your money doesn’t grow to the level that will allow you to meet your financial goals. But to get
better returns, you’ll need to consider a range of other investments that could deliver a better return, but come with the risk of losses.
These include assets like corporate bonds and gilts, stocks and shares and property.
You’ll want a mix of assets, to diversify your portfolio, meaning if one asset drops in value, losses are cushioned
by holding your funds in other, unconnected assets.
One approach investors take to generate an income in retirement is to take a ‘natural income’ from their investments, which involves buying assets that pay an income such as shares, which pay dividends, and corporate bonds, which pay interest. This would, in theory, allow you to keep your savings untouched, simply allowing you to cream off the income on a monthly basis.in conclusion, spend some time understanding the concepts and then have a chat with a financial adviser.
Hopefully you’ll build a portfolio that can help get you a healthy income and give you peace of mind.
NFU Scotland has come out all guns blazing in its response to two major consultations on animal transport.
The union said that with many of the proposals put forward in the documents provingtobehighlycontentious – and given the vital role that transport plays in Scotland’slivestockindustry –itwasdeeplycriticalofproceduresincludedinboththe Defra and Scottish Government consultations which closed this week.
Acrossthecountrythetopic has been one of the most talked-aboutissuesinfarming circles, with most feeling that the proposals could damage the sustainability of livestock enterprises on many of Scotland’s island and more remote regions.
The Defra consultation, which related to journeys in(orpartlyin)englandand Wales proposed a ban on the live export of stock for further finishing or slaughter and restrictions on journey length and conditions, including outside temperatureduringtransport,headroom and stocking density.
The Scottish consultation looked specifically at the Farm Animal Welfare Council (FAWC) report into animaltransportanditsrecommendations. Expresscerns.”
ing his anger at the proposals, union president Martin Kennedy said: “The ability to transport livestock safely throughout the UK is fundamental to the Scottish livestock industry and opposition to the deeply flawed proposals in these consultations has galvanised the whole Scottish livestock sector.
“Regrettably, the driver behind much of this was a FAWC report that was, in our opinion, poorly written and simplistic in approach and shows no appreciation or understanding of livestock production across all parts of the UK.
Kennedy said the union had worked closely with a wide range of stakeholders on these consultations: “Hundreds of members attended NFU Scotland webinars on this subject and all members were encouragedtoresponddirectlytothese damaging proposals.
“The importance of transport to livestock producers on Scotland’s islands and in more remoteareasisparamountand members from those regions werequickesttovoicetheircon
Kennedy said Scotland enjoys an excellent track record in ensuring all animal health and welfare requirements in transit are met and requirements around the likes of journey times,restperiods,stocking densities,vehiclestandards, vehicle certification and drivercompetencehasbeen well policed and adhered to inscotlandformorethan15 years to good effect.
“To ensure the best possible welfare outcomes, the FAWC report would have been better to focus on fitness of animals to travel and development of best practice guidance, rather than focusing on the length of journey or the external temperature at the time of transport.”
Kennedy said that with no evidencetosuggestthatthey would benefit animal welfare, the proposed changes to journeys based on durationandweatherconditions would cause serious delays and disruption, potentially damaging welfare outcomes. He added: “Proposed changes to vehicle requirements would add significant costs and lead to many more journeys being made, increasing greenhouse gas emissions which work against both farming’s and the government’s net zero targets.”
Glasgow-based Schoolcloud, the company behind what it says is the most popular online parents’ evening software in the UK, has been acquired.
The buyer is educationfocused software firm Tes, and terms of the deal were not disclosed.
Schoolcloud was started by Robbie Beattie and Marcus Fields, who aged 15 set about solving a school-wide issue of room double bookings. Their school – Mearns Castle High School – gave them £100 to help develop Room Booking
System. They then launched their business from the playground in 2006 – and now, more than 6,000 schools use Schoolcloud to help them with their parents' evenings, school events and room booking.
Additionally, the firm has picked up awards and has 15 staff based at its office in The Albus building at Clyde Gateway in the East End of Glasgow. The software helps schools with room bookings, clubs, events and, “most significantly,” parents’ evenings.
British Airways owner IAG suffered a pre-tax loss of €7.8 billion (£6.8bn) in 2020 as the airline industry was decimated by the fallout from the pandemic.
The huge deficit compares with a profit of €2.28bn a year earlier.
Revenues slumped 69 per cent from €25.5bn to €7.8bn last year as the Covid-19 crisis hit.
The number of passengers using IAG’S airlines remains significantly down on prepandemic levels, and fell again during the traditional peak festive season.
The group, which also owns Aer Lingus and Iberia, said capacity for 2020 was just 33.5 per cent of 2019 levels, and is only expected to be around 20 per cent between January and March.
Chief executive Luis Gallego said the results “reflect the serious impact that Covid-19 has had on our business”.
Getting people travelling again will require “a clear road map for unwinding current restrictions when the time is right”, he added.
Richard Flood, investment manager at Brewin Dolphin, said: “[These] results from IAG demonstrate the huge impact of Covid-19 on the airline industry. However, the group took a range of self-help measures to see it through the turbulence of last year and, as
we approach the re-opening of economies and potentially more travel, IAG is in a comparatively strong position.
“The group is much less exposed to business travel than some of its peers, which is expected to take longer to return; has access to ample liquidity; and will likely benefit from reduced capacity from competitors on key routes.
“Although there is no guidance for 2021 from IAG, it looks to be among the aviation industry’s survivors.”
Neil Shah, director of research for Edison Group, noted: “Going forward, investors will remain anxious about the future of IAG as the company declined to provide guidance and lockdowns around the world continue to be enforced.
“As the group continues to be involved in restructuring and ways to reduce costs, investors will brace themselves for the coming months while they wait for progress being made on vaccine roll-outs.”
Gallego added: “We know there is pent-up demand for travel and people want to fly. Vaccinations are progressing well and global infections are going in the right direction.
“We’re calling for international common testing standards and the introduction of digital health passes to reopen our skies safely.”
He said IAG airlines will not require passengers to prove they have been vaccinated against Covid-19.
Testing will be key for travel until vaccines have been rolled out across the world, he added.
Australian airline Qantas has said in future it will require passengers to prove they have received a jag before they can board its international flights.
Gallego said there was a “big increase” in demand for travel after Prime Minister Boris Johnson announced his plan for easing restrictions in England on Monday.