2011, the year of the yo-yo

It is hard to believe how volatile the markets have been this year, and so far there seems no sign of that fading. The majority of the uncertainty relates to the Greek, and wider Eurozone debt problems.

This graph of the FTSE 100 over the last month visually demonstrates the volatility;

 

Here at Pembroke, we have ensured that our risk rated investment portfolios always have been, and continue to remain, widely diversified (i.e. not just invested in equities). This has meant that we have fared very well when larkets have fallen, and our clients portfolios have suffered much smaller falls than the wider market.

 

A lot of commentators are forecasting a stronger q4, but just in case we continue to remain well diversified and equally cautious.

ISA Limit to increase to £11,280

High inflation means ISA limits will increase to £11,280 from next April, the Treasury has announced.
The Office for National Statistics today published inflation figures for 2011, measured from September, with the consumer prices index (CPI) hitting a record 5.2%. This means the inflation linked ISA limit will rise from £10,680 to £11,280.

Junior ISAs will be available from 01 November 2011 with a limit of £3,600 for each eligible child.

This is good news for savers and Investors, and now means that a couple can shelter £22,560 between them every year into ISA’s from 6th April 2012 onwards. This really is a useful strategy and very complementory to Pension savings. Remember that all future income from an ISA is tax free and so can prove to be a highly welcome and tax-efficient source of income in retirement.

Here at Pembroke we run an Income portfolio on our Wealth Management service. Speak to us if you would like more information.

Junior ISA’s

Today sees the launch of the new Childrens ISA which enables parents, grandparents et al to help young savers to build a decent Tax free ‘pot’ that they can get their grubby hands on from the age of 18.

For further information, click here and you will be taken to the Jump Savings website which has further details.

Please speak to us if you have any questions at all about this.

A ‘real’ problem….

Although the latest Consumer Prices Index (C.P.I.) figure has fallen to 5%, what this means for you as a saver or someone seeking Income, is quite a stark reality. In order to achieve a ‘real’ return (in other words a retrun that is above inflation as measured by CPI) this is what your deposit or investment has to yield on an annual basis;

Basic rate tax payer = 6.25%

High rate tax payer = 8.33%

Extra high rate tax payer = 10%

On the basis that the ‘best’ one year deposits are currently offering just over 3% as a gross rate, it is fair to say that you need to look elsewhere for higher returns.

If you are worried about falling income from your savings, speak to us today