My article this month is a bit of a mishmash, in that there are lots of things to write about and not enough space to do them all justice. Investment markets are probably the easiest to sum up: volatility again! Uncertainty abounds. Wherever we look, there are doubts and fears concerning politics, growth, interest rates, inflation, disinflation, deflation, production, demand, supply, exchange rates, Ukraine. Need I say more?

There is nothing (as I have often said) that markets dislike more than uncertainty. Hence the recent ups and downs of world stock markets. On balance though, despite five years of relatively decent growth, the longer-term outlook is still considered to be reasonably encouraging, and despite the likes of Tesco knocking holes in our investment and pension funds, the ‘green shoots’ have been, and are still being, nurtured, though the jury is still out on when they will truly flower!

Oh, I mentioned the ‘P’ word then, but not as much as the Chancellor of the Exchequer. He has been fiddling around with the legislation again in a bid to make things lovely for those at, or near, pension age. From next April even more of the restrictions on access to pension plans will be removed, thus making it easier and more flexible to plan for income in retirement. That is what we are told anyway. Some will say that it is an easy way of increasing the Government’s take of income tax and VAT. Certainly, 25% of the amounts withdrawn from plans will be free of tax, and the balance will be taxed at the individual’s appropriate tax rate. Doubtless, a great deal of the income withdrawn will be spent on things that are subject to VAT, and it is interesting to note that the amounts that can be paid into personal pension arrangements and receive tax-relief have been systematically reduced over several years. There are also concerns from some about the provisions for those who withdraw all of their pension savings and are then left with nothing but the State pension to live on. More on this closer to April 2015.

On the Mortgage front, there has been something of a rate war over the last few months, as lenders have vied to see who will offer the best fixed-term interest rates. They are wary, though, to make sure that these deals are being offered only to those borrowers deemed to be the safest with whom to deal. The loans with the lowest loan to value ratio will benefit from the great rates, and then only if the borrowers’ credit, employment, and salary history is entirely suitable. It is still a trial for many first-time buyers and those less well-off to get a suitable mortgage.

Lastly, a couple of sad events recently have reminded me of the importance of ensuring that you have an adequate level of protection, either for personal or family necessities, in the event of loss of life, serious accident, or redundancy. Sometimes thoughts of the acquisition of wealth can outweigh the importance of protecting what you have. It is important to get the appropriate balance, in a variety of ways, of the means to protect yourself and your family, if applicable, against some of the nasty things that life occasionally throws at us.

Still, enough of sadness. The season of good cheer is looming large: health, peace, and happiness to our readers, and hopefully, a little bit of wealth as well.

Here’s looking forward to 2015!

David Foot