Storm Eunice has shown the importance of robust insurance protection
At a time when finances are strained and climate-related events threaten to make things worse, not having the right insurance cover could lead to major setbacks.
Storm Eunice was a timely reminder for us all that we need insurance cover to help protect us against a range of aspects we encounter in our daily lives. Being financially resilient is more important than ever, and insurance plays a key role in helping us build that resilience.
Here are a few key areas to consider.
Home and buildings
Not only is having buildings and contents insurance typically a condition of most UK mortgage offers, but it is also absolutely critical to protect your home against a range of possible risks.
These include extreme weather events such as Eunice, but even more everyday issues such as burst pipes, burglary, or fires.
Really basic issues can invalidate your home insurance, so it is important to keep on top of your policy. Leaving a home unoccupied for a length of time (often around 30 days), not updating your provider when you make alterations to the property, or not using an intruder alarm are all things which can invalidate your cover.
Another major one, which has become more prevalent during the pandemic, is using your home for business purposes. ‘Working from home’ if you have an office job is typically not a problem, but it can become an issue for occupations which involve selling products online from your house, or having customers come to your property for any reason.
The value of your contents should also be scrupulously accounted for. Overestimating the value of the content of your home can lead to policies being invalidated. Items of specific high value such as collectibles, jewellery or electronic equipment should be explicitly accounted for.
Travel
Storm Eunice caused the cancellation of hundreds of flights in the UK, underpinning the importance of travel insurance.
But the need for it to protect your holidays is much broader than just foul weather, and the pandemic has made getting the right policy more important than ever. With travel ramping back up in the wake of government restrictions being lifted, it is essential to ensure you’re fully covered from the moment you leave your house, to stepping off the plane in your destination and back again.
The most important thing to be mindful of is travel advice warnings. During the pandemic major issues arose for travellers where the Foreign, Commonwealth & Development Office (FCDO) would issue travel warnings for certain countries, but flights would still be operating to those regions.
If the FCDO advises against all but essential travel to a region and you still go – it can invalidate your insurance. But if the airline is still operating the flight you’re booked on and you don’t have insurance – they are under no obligation to refund you.
Many airlines improved their booking and flight change policies as a result of the pandemic, but some are now returning to their less flexible pre-pandemic state.
Life and illness
Life and serious illness protection is a major policy that many people unfortunately forget.
Life insurance is essential when you have dependents such as children, or co-own property and have a mortgage in place. Were something to happen to you, without cover in place, your partner would be liable to cover the mortgage payments despite losing your income.
Some workplaces offer types of cover as a part of employment contracts, but this is not always guaranteed. Life and serious illness cover is therefore essential to protect against the most tragic of unexpected events.
Because these kinds of policies typically deal with such high levels of pay-outs, insurance firms can be extremely particular about the details of policies and information.
Failure to disclose information such as pre-existing medical conditions, missing premium payments, trying to claim too soon, and some types of death are reasons why an insurer may refuse to pay out.
The most common issue however is failing to purchase cover far enough in advance. Not only will you get a better premium the younger you are, but also the longer you hold a policy for, the less likely it will be turned down in the event of a serious, terminal illness or for other pre-existing conditions that might lead to your death.
Student loan changes increase pressure on The Bank of Mum and Dad
From 2023 future graduates will start to repay student loans sooner, putting more pressure on young people at a time when cost pressures are rising exponentially.
The threshold for repaying student loans will drop from £27,275 to £25,000 and graduates will continue to pay them back for much longer – up to 40 years.
With student loan changes in the UK set to exclude many young people from receiving financial support, The Bank of Mum and Dad will feel heightened pressure to support their children.
Here are some ways you can help your children financially in higher education and beyond.
- Look further than Student Finance
There are plenty of opportunities out there at the grasp of ambitious children. If you believe your child has the potential to apply for extra funding – such as a scholarship – why not encourage them to do it?
Postgraduate Search has a comprehensive list of bursaries and scholarships: don’t assume these are only for low incomes, top grades, or new starters – there are incentives for everything from subject choice and sporting talent to gender and nationality.
You can also search for hardship funds and advice for emergencies or managing debt at the university, too. University welfare teams, lecturers or simply a student adviser can be the best place to start.
- Be careful how you give
Most UK students don’t have to pay tuition costs until after graduation. After that, 9% will be taken monthly from their salaries.
Most won’t ever pay back their entire loans, and some will never pay anything at all if they don’t reach the income threshold. Student debt doesn’t function like normal debt such as a credit card or mortgage. You only pay if you can.
As a parent, you might be wondering how you can help your children financially, but using a lump sum to pay down student debt is not an effective solution. It would be more sensible to put that towards a child’s deposit on a house.
Alternatively, if you have extra monthly income you think can help, giving them money to deposit in a Lifetime ISA (LISA) can be an effective way to help them financially in the long term.
- Help them become organised
Good financial habits come naturally to some, but for your graduate child, they might not be the best with their money despite several years at university learning how to get by.
Helping them develop good financial habits and teaching them about important financial tools such as credit cards, savings accounts and insurance can be a really good way to help them without necessarily just giving them money.
Good financial habits will help them enter their new careers on a really strong footing and prevent disasters in the future.
- Use your Junior ISA (JISA) allowance
If you still have a few good years to wait for your children to go to university, try looking into opening a Junior ISA account.
That way, when they turn 18, your children can use a bigger pot of money to go to university, accomplish their dreams or even use it as a deposit for a house.
This account can also be a useful tool to help to educate your children about finance, as it offers the option to continue saving and investing the money after they turn 18.
Junior ISA subscriptions see their limit maintained at £9,000 per year. The JISA limit was last changed in early 2020, when it was doubled from £4,500 to its current level. So, there are plenty of resources.
The World In A Week - Russian Invasion
Written by Millan Chauhan.
Following Russia’s invasion of Ukraine, volatility in markets reached two-year highs which has since seen Russia hit with several sanctions, aimed to restrict its global exports and punish its wealthiest individuals. Western Allies also agreed to block Russia’s access to the Swift international banking payment system. S&P Global has also downgraded Russia’s credit rating to junk status with the sanctions set to reduce the capabilities of their financial markets. Continental Europe is very dependent on Russian Gas, with Germany buying 49% of its gas supply from Russia.
The MOEX (Moscow Exchange) Index closed at -33% on Thursday with the index down -46% year-to-date. Shares in oil and gas stocks sold off sharply with Gazprom closing at -37%. The Russian Rouble also plummeted in value, falling 30% against the US Dollar. The price of Brent Crude Oil briefly surpassed $100 with the sanctions imposed set to distort global supply chains further. This is only expected to increase inflationary pressures and exacerbate the same problem policymakers are trying to address when the Federal Reserve are set to meet next on March 15th.
Global markets sold off sharply last Thursday with Global Emerging Markets & European Markets impacted most, MSCI Emerging Markets declined -3.7% and MSCI Europe ex-UK fell -1.5% in Sterling terms. The S&P 500 closed +2.1% in Sterling terms following significant intra-day trading on Thursday that saw the largest daily swing since March 2020. Volatility remains very high as markets price in new waves of information.
Russia is a very small component of our Global Emerging Markets Equity asset class exposure, but the event itself clearly resonates through global markets. We hope a resolution can be achieved quickly.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 28th February 2022.
© 2022 YOU Asset Management. All rights reserved.
The World In A Week - Storm before the calm?
Written by Shane Balkham.
The continued threat of a Russian invasion into Ukraine kept markets volatile last week. Tensions were heightened as Russian military exercises, together with their ally Belarus, saw shelling along the border with Ukraine. Inevitably, there were casualties on the Ukraine side of the border.
Fears rose that these exercises were the prelude to a full-scale invasion, as the number of troops amassed on the border reached 190,000. Mediation was given one final chance, with President Macron suggesting to Vladimir Putin, over a telephone call, of holding a Ukraine Summit to discuss security and strategic stability in Europe. This was on the condition that Russia does not invade Ukraine.
The situation does appear to be at an inflection point, one in which diplomacy could still end up being the winner, although there is much at stake and all out conflict is still a valid and likely scenario.
Another battle that is brewing is with the Federal Reserve and its fight with inflation. Promising to raise rates and start its quantitative tightening policy next month, the officials at the US Central Bank have a little over three weeks to set out their forward guidance, in order not to surprise markets.
Traditionally, before the Federal Reserve meets, its officials embark on a series of meetings to deliver the message of what can be expected from future monetary policy. It is an almost cast-iron certainty that rates will be raised by the Federal Reserve, but what is unknown is the pace and path of these future hikes.
Expectations have already violently swung this year, from three hikes in 2022 to six, as well as some Fed officials calling for a half-percent hike in March. Be prepared for plenty of rhetoric as the US Central Bank looks to dampen demand in order to tackle inflation.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 21st February 2022.
© 2022 YOU Asset Management. All rights reserved.
Government under pressure to act over cost-of-living crisis: here’s what it might do
British households are facing an unprecedented cost-of-living crisis in 2022.
A harsh combination of factors have come together to make the business over everyday life more expensive for every household.
The Government, as a result, has come under considerable pressure to act to soften the blow of rising prices, energy bills and other areas of life which have become more costly.
But what has it done so far to alleviate the issue? And what could it still do to act?
The Chancellor Rishi Sunak has a Spring Statement coming on 23 March, which traditionally is fairly light on new policies, and generally contains updates on the UK’s economic performance, and the translating tax revenues for the Treasury.
But in recent days the Chancellor has been called upon to implement a full emergency Budget to tackle the cost-of-living crisis.
While he hasn’t at the time of writing gone so far, he has taken some measures to ease the pain for households.
What has the Government done so far?
- Energy bill help
On 3 February energy regulator Ofgem announced an unprecedented hike in the energy bill cap. The regulator rose the ceiling of what energy firms could charge customers on a Standard Variable Rate (SVR) by 54% – to £1,971 per year.
As a result, on the same day the Chancellor announced a package of measures to soften this hike for households.
The first of these measures is an energy bill rebate. This comes in the form of a £200 discount on energy bills, which households will get in October this year. This will then have to be paid back by paying an extra £40 a year on bills for the next five years.
The second measure the Chancellor Rishi Sunak has introduced is a £150 Council Tax Rebate for any households living in Band A or Band D properties. This will come through for those households in April, and will not need to be paid back.
The Government is also increasing the number of households which qualify for the Warm Homes Discount, which means some three million families will soon be eligible.
- Rate hikes
The second major step taken by the Government (albeit an independent arm of the State) is from the Bank of England, which is beginning the process of hiking interest rates.
The Bank Rate has been set at 0.1% since the onset of the coronavirus pandemic. Prior to this it was at 0.75%.
But the Bank of England surprised most analysts by hiking the rate to 0.25% in December, then again on 3 February – the first time it has done a back-to-back rate hike since 2004.
Although the absolute level of the Bank Rate is still low, it is a signal of intent from monetary policymakers to attempt to quell inflation.
By raising rates, the Bank of England makes it more expensive for households and businesses to borrow money, and more attractive to save. By doing this it hopes demand for goods and services will reduce, thereby slowing price rises.
In practical terms for households, this means debts such as mortgages and credit cards – unless fixed on a guaranteed rate – will get more expensive.
Investment markets now predict that the Bank of England could keep hiking rates for the rest of the year, at least four more times, with a rate of around 1.25% by 2023.
What could the Government still do?
- Energy bill VAT cut
Since leaving the European Union, the Government has been at pains to show off what it has been doing with its newfound post-Brexit powers.
One of the major policy levers that it has taken back from Brussels is the ability to set its own VAT rates – which were set centrally by the European Commission.
As a result, with the energy crisis, many MPs have called upon the Government to slash the VAT rate on energy bills.
The Government argues that doing so wouldn’t target savings in the right way, instead it would be giving a tax break to wealthier households.
But with the volatile political climate at the moment, it is still a lever that Sunak could reach for were it to become pressing to act again to help households.
- National Insurance climb down
The real elephant in the room during all the discussion around the cost-of-living crisis is the fact that the Government has already pushed through plans to hike National Insurance – dubbed a tax on working by critics.
The 1.25% hike was passed through Parliament last year, before the reality of the crisis took hold. But now the policy is gaining increasing criticism, considering the pressure households are under.
Many MPs in the Conservative Party, despite having voted the policy through, are now vocally calling for it to be reversed. While Rishi Sunak has so far resisted, a change in the political climate could soon make it untenable.
With the tax hike, earners on £30,000 a year will face an extra £255 to pay to HMRC, while someone earning £50,000 will pay an extra £505.
Dividend tax is also rising from April 2022. The basic rate dividend tax will be 8.75% up from of 7.5%. Higher rate dividend taxpayers will pay 33.75% up from 32.5%, and additional rate dividend taxpayers will pay 39.35%, up from 38.1%.
The World In A Week - Roses are red, the markets are too
Written by Cormac Nevin.
Last week was a busy one with regards to both news flow and market movements. The MSCI World Index of developed market equities was down -1.2% for the week in GBP terms, compounding a -2.0% return for the month to date and -6.3% for the year to date. This was led (once again) by a strong sell-off in US tech and growth names, with the NASDAQ 100 down -3.5% last week capping a -13.0% year to date loss. Markets are having to adjust to a higher inflation and higher interest rate environment, coupled with geopolitical risks around Ukraine and Taiwan. Fixed Income provided little buoyancy for investors as interest rates continued to rise, in particular the Sterling credit & gilt market has been a very poor performer.
The standout market event of last week was the release of Consumer Price Index data in the US on Thursday which illustrated that once again prices were rising faster than expected. This led to comments from Federal Reserve members implying that monetary policy needs to be tightened more rapidly, even potentially involving a rate rise of 1% by July. Markets are now concerned that developed market central banks, particularly those in the US and UK, are now meaningfully “behind the curve” and that the persistency of inflation has taken them by surprise.
Higher inflation readings are being sustained by ongoing global supply chain issues as economies in the Far East are disrupted by the spread of the omicron variant. Tight labour markets also increase the risk of economies entering into a wage-price spiral, despite the handsomely remunerated Governor of the Bank of England suggesting workers hold off on wage increase demands. The machinations of Mr Putin are keeping energy prices high and the market jittery, while romantics out there will also be sad to hear that the price of cacao continues to trade close to its five-year high.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 14th February 2022.
© 2022 YOU Asset Management. All rights reserved.
How to spot an investment scam
Investment scams are nothing new, but scammers are becoming more sophisticated than ever.
With the internet and easy movement of money, there are far greater opportunities for a fraudster to part you with your wealth.
In the first half of 2021 alone, financial trade body UK Finance estimates that more than £107 million was lost to investment scams, a 95% rise on losses in the first half of 2020.
When it comes to investment scams, it pays to take a critical eye to almost anything you’re approached with.
And while it is impossible to always be fully alert to these tricks, knowing what they might try is a good way to protect yourself from losing money.
Cold calling
Cold calling is perhaps the go-to for investment scams and is a well-trodden way to swindle money. In the vast majority of cases, if you get a call out of the blue from someone who wants to talk about investments, just hang up.
Indeed, pensions cold calling is now illegal, and has been for some time. Generally if you get a call like this where someone wants to discuss how your pension is invested, it’s a scammer. They are either operating illegally within the UK, or from abroad where the authorities have limited power to stop them.
Even when someone purporting to be from your bank calls to discuss the matter, it is generally advisable to politely end the call and try contacting the institution directly using their customer service line. Chances are it was a scammer who knows who you use for your banking or other financial products.
Cold calling isn’t the only way that scammers will try to contact you. Emails, text messages, letters and social media are all avenues for attack. But cold calling can be one of the most harmful as the fraudsters are often expert verbal manipulators. Take a deep breath and tell them no.
‘Trustworthy’ sponsors
This is a growing issue, especially as a range of mainstream media personalities and outlets are often engaged in combatting scammers, and then are themselves used to target victims.
Perhaps the most famous is Martin Lewis of MoneySavingExpert, who routinely reminds his followers on social media that often his image, or even fake commentary, is used to promote investment scams.
In another recent instance, consumer group Which? found its logo and name being used by scammers to try and push investment scams via email.
The scam involved victims being forwarded to a fraudulent website advertising fixed-rate bonds, something Which? says it would never do. The firm warns that the biggest giveaway in this instance is strange email addresses associated with the email message.
‘Guaranteed’ returns or ‘risk free’
Scammers will use all manner of promises to try and lure you into a fraudulent investment. One of the biggest red flags to watch for is the promise of “guaranteed returns” or “risk-free” investments.
Neither is ever possible when it comes to investment, as all investments carry some form of risk, and the return you can make is generally impossible to fully guarantee.
Look at the level of returns on offer if you aren’t sure. Savings rates are very low at the moment so anything offering high returns for your money is likely a scam.
And anyone promoting a legitimate investment will know not to try and tell you you’ll definitely get a high rate of return – hence why ‘risk warnings’ are so common with many marketing materials of investment firms.
Unusual investments
Another common red flag to watch for is unusual investments. Perhaps the most well-known example of this was the storage pod investment pension scam.
In 2017 the Serious Fraud Office (SFO) launched an investigation into two SIPP firms Capita Oak Pension and Henley Retirement Benefit for selling ‘storage pods’ to investors.
The SFO estimated losses around £120 million for those scammed into the scheme since 2011 – which essentially involved storage containers being purchased with investor money, which were then rented out.
Investors later found the returns were not as advertised and they couldn’t withdraw their money either.
Similar variations of this scam exist to sell other outlandish investments, including hotel rooms in the Caribbean or palm oil plantations in Asia.
Report the scam
This list is not exhaustive but is designed to give you an idea of how scammers might try to part you from your cash.
If you feel like you’ve been contacted by a scammer it is really important to report it. Not only to protect yourself, but to protect others who they might try and target.
- Text messages should be forwarded to Action Fraud – using number 7726.
- If you think you’ve fallen victim to a scam, in England, Wales or Northern Ireland, report it to Action Fraud online or by calling 0300 123 2040. In Scotland, report to Police Scotland by calling 101.
- You can also report a phishing attempt using the Action Fraud site, or by forwarding an email you think is suspicious to report@phishing.gov.uk.
If you have any concerns or issues you’d like to discuss further relating to scams, don’t hesitate to get in touch with a financial adviser to discuss.
What are the inheritance tax implications for unmarried couples?
Marriage, once a staple social institution, is largely in decline. For those who choose to cohabit long-term with their partners, this creates tax and inheritance implications.
The number of unmarried cohabiting couples has risen considerably in the 21st Century. Between 2002 and 2020 (the most recent numbers available) unmarried cohabitation rose by around 78%, according to the ONS.
While in social terms, deciding against marriage or civil partnership is a perfectly normal part of modern society, it can create complications for those couples when it comes to financial planning, inheritance and taxes.
The purpose of this article is to explore those issues, and not make a judgement about the social choices!
Before going any further, it is important to clarify a common misconception. For legal purposes, there is no such thing as a “common law partner.” It is a very commonly held misconception about cohabitation. This extends to the point where some companies will allow you to pick “common law partner” when filling out forms. But it simply does not exist as a legal concept.
That being said, here are some primary things to think about if you are in a long-term cohabiting couple, and are concerned about the implications for your joint finances in the event a partner passes away.
Banking
Perhaps not considered in the same vein as broader inheritance, there is a basic legal issue which arises for couples that cohabit but are unmarried or civil partnered.
Many couples choose to do their banking through joint accounts, but others may choose to keep things separate. This can create a significant issue if one were to die, as the other would have no right of access to their accounts, and therefore money.
Such a situation can create ancillary headaches with issues such as how household bills, mortgage or rent payments get made. This can be rectified with some admin work, but bigger issues can arise if one partner held cash that the other then needs to access so that they don’t fall behind on those bills.
Property
Property ownership can be clear cut, but only if it is arranged correctly when purchased. If one partner owns a property in their name alone, the surviving partner has no clear right of ownership or habitation if the owner dies.
While broadly it falls under inheritance rules and will be governed by a document such as a Will, there is an easy way to protect against the problem, by making changes to the paperwork to incorporate both partners into ownership – either as joint owners or owners in common.
Common ownership can be a more practical solution, were the couple to split up, as essentially, they both own an agreed share of the asset. Joint ownership can be more complicated, because it means both parties share ownership of 100% of the asset.
Inheritance Tax
While the financial perks of marriage are fairly limited these days, there is one major benefit to being legally attached to your partner.
Inheritance rules make clear that married, or civil partnered spouses, enjoy far more protection and allowance against IHT than unmarried couples.
Everyone has an IHT allowance of £325,000-worth of assets. This is called the Nil Rate Band (NRB). IHT is payable at 40% of any assets above this level.
The Residential Nil Rate Band (RNRB) adds an extra £175,000 on top of the NRB when exclusively accounting for the value of the person’s main home. However, the rules are that in order to use this allowance, the person who died must have left their home, or a share of it, to their direct descendants.
For a married couple there is a spousal exemption when one of the partners dies. All the assets held by one can be transferred tax free to the other. Then, when the final partner dies, the entire sum of both people’s NRB and RNRB are combined to give a final allowance. This is potentially worth £1 million when taken in total.
Alternatively, for an unmarried couple, were one to die, the other would be liable for IHT on any assets they inherit worth above the other partner’s combined IHT exemption. Worse, the IHT will be payable before the assets can be transferred, potentially leaving the surviving partner with a hefty tax bill – one which they may have to sell their home to pay.
Finally, when the surviving partner dies, IHT is due again for anything over their personal allowances. This means those assets will potentially be taxed twice if their value still exceeds the allowances.
How to mitigate the issue of unmarried IHT?
It would be easy to suggest getting married or civil partnered would be the clear and easy way to mitigate the issues mentioned above. Ultimately this is true as at a stroke it takes away the issue of allowances, and gives special right of ownership and access to banking and property.
But in legal and social terms it may not be quite so easy, and that is understandable.
Having a Lasting Power of Attorney (LPA) and a Last Will and Testament (Will) in place is a great starting point. This will provide clarity on a partner’s inheritance, and their ability to access important resources such as bank accounts in the event of the other’s death.
Even if an unmarried couple has lived together for 50 years, without key documents such as Wills, there is no certainty that they will be the beneficiary of an inheritance. If someone dies intestate, inheritance of their property typically reverts to the nearest blood relative (next of kin), generally a child.
But there are also ways to structure wealth that can mitigate some of the issues, without resorting to tying the knot. If you would like to discuss this issue further don’t hesitate to get in touch with your financial adviser.
£250 work from home tax relief set to end – but still time to claim
A longstanding tax relief for anyone who works from home is set to be axed.
The Government has spent around £500 million giving cash back to workers who have had to stay at home during the pandemic.
Some 4.9 million workers have claimed the allowance since the pandemic began, according to HMRC. The Government has now set its sights on axing the relief as a result of its high cost, with HMRC conducting a review.
However, plans have not yet been confirmed, so for anyone who has worked at home – even for just one day – during the pandemic in the last two years can claim up to £125 per year, or £250 in total.
What is the relief?
Anyone who has to work from home can claim some of their tax back. The relief was introduced in 2003 to help home workers with bills such as internet, electricity, and other expenses they may incur.
For anyone paying the basic rate of income tax the relief is £62.40 per year. For higher rate payers, this rises to £124.80.
How can I claim it?
In order to claim you’ll need identifying documents such as a passport, National Insurance number, or payslips from your work.
You’ll need to go to the Government website, and go through the online process to claim, stating the date when you began to work from home.
The relief will then be paid to you through your normal pay, with up to £250 discounted from your tax bill as a lump sum if you’re claiming for backdated work. Your tax code will change directly with your employer.
There are some stipulations, however. If you’re self-employed or pay tax by self-assessment you cannot claim the allowance, as you must apply for the relief on your return instead.
If you receive expenses from your employer for working from home, this makes you ineligible.
If you’ve always worked from home or if you weren’t obliged to by the pandemic, then you can’t claim either. You can only claim the relief if you didn’t choose to work from home but were told to by your employer.
This is why the cost to the Treasury has ballooned during the pandemic – as millions of workers have probably not been able to work from the office.
That being said, at the start of the pandemic the rules were relaxed so that you only have to show you’ve worked from home for one day to claim the entire year’s sum.
How long do I have left to claim?
While nothing has been made official, it is believed HMRC is actively reviewing the relief with a view to either making it less easy to claim, or shutting it down entirely.
The Chancellor will be making his Spring Statement on 23 March – this is probably the most likely time when the loophole would be announced as closing. Many policies announced at this point tend to come into effect at the end of the tax year on 5 April.
For now however, the scheme is still open and available. If you go online and go through the process, you can still get back a tidy sum for the past two years’ work.
The World In A Week - The Return of History
Written by Cormac Nevin.
As the war in Ukraine entered its second week, the impact of a prolonged conflict began to take its toll on markets. The MSCI All Country World Index of global equities was down -1.3% last week, however the sell-off was intensely concentrated in Europe as the MSCI Europe Ex-UK Index returned -8.9%, while the FTSE All Share Index of UK stocks was down -6.7%. Other markets such as Japanese and US equities were assisted by a weakening GBP and recorded a small positive return. Yet again, these events highlight the critical importance of diversification.
The second and third order effects of the conflict are now becoming evident in international commodity markets and will soon become painfully so to consumers. As of today, oil has surged to roughly $130 per barrel while UK natural gas futures have gone parabolic and have far exceeded the price spike in December of last year. Another troubling dimension is the impact on food and fertiliser prices, given Russia and Ukraine’s global importance in the production and export of both. Wheat futures have surged to an all-time high, and the geopolitical tail risk of food insecurity in the developing world is becoming more pronounced. The Roman poet Juvenal recognised the importance of bread and circuses to maintain civil order, and the emperors would no doubt be surprised to learn that Egypt and North Africa are now major importers of grain from the Eurasian Steppe. The 2011 Arab Spring uprisings were preceded by a spike in the price of food which led to regime change across the region.
These developments likely give more room to run for two of the investment theses which we have had sympathy with over the last two years. One being, that inflation would likely be less transitory than many central bankers might have hoped, and that markets may not be able to rely on monetary support to the same extent in future. Secondly, that there has been a structural underinvestment in the old economy (commodity production & supply chains) and too much capital allocated to flashy tech stocks. As a result, our commodity-focused value equities, inflation-linked bonds, commodities, and absolute return strategies, have been strong performers recently.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 7th March 2022.
© 2022 YOU Asset Management. All rights reserved.