As a direct consequence of the COVID-19 outbreak, global stock markets are suffering a period of turbulence. When markets move significantly it can prove very challenging to hear through the noise and focus on the bigger picture.

Statistics show many young people are not using their ISA allowance only 17% of ISA savers are under the age of 35, but half of ISA savers are aged 55. So, what are the options for ISA savers?

COVID-19 and the NHS
The Chancellor wasted no time in diving into the heart of the issue on the minds of so many across the nation: the COVID-19 crisis. Taking an empathetic tone, he reassured the British public that “we will get through this together”, emphasising the temporary nature of the crisis and his firm belief in the ability of the British economy to weather the storm.

Mr Sunak then called on all parties across the House to support his £30bn fiscal stimulus, including welfare and business support, to “keep this country and our people healthy and financially secure”.

He pledged:

• £5bn emergency response fund to support the NHS and other public services
• Statutory Sick Pay (SSP) will be paid to all those advised to self-isolate even if they don’t have symptoms
• To support businesses employing fewer than 250, the government would refund up to 14 days’ SSP
• A Coronavirus Business Interruption Loan Scheme will support businesses experiencing increased costs or cashflow disruptions, providing access to £1bn of government-backed loans
• Business rates in England will be suspended for 2020-21 for firms in the retail, leisure and hospitality sectors with a rateable value below £51,000
• Any company eligible for small business rates relief will be allowed a £3,000 cash grant.

Mr Sunak promised an extra £6bn in NHS funding over the course of this Parliament, which would go towards hiring 50,000 more nurses and building 40 new hospitals.

The economy and business
On the morning of Budget day, the Bank of England (BoE) had announced an emergency cut in interest rates to bolster the economy amid the COVID-19 outbreak. BoE base rate was reduced from 0.75% to 0.25%, returning it to its lowest level in history. The BoE said it would also free up billions of pounds of extra lending to help banks support firms. Mark Carney, the Governor of the BoE, was keen to emphasise that COVID-19 was a temporary economic shock, stating: “The Bank of England’s role is to help UK businesses and households manage through an economic shock that could prove sharp and large, but should be temporary.”

Mr Sunak also revealed that, not taking into account the impact of COVID-19, the British economy is forecast to grow 1.1% this year, then 1.8% in 2021-22, 1.5% in 2022-23 and 1.3% in 2023-24, while inflation is forecast to be 1.4% this year, increasing to 1.8% in 2021-2022. Borrowing as a percentage of GDP will be 2.1% this year, rising to 2.4% in 2020-21 and 2.8% in 2021-22.

Personal taxation and wages
The Conservative manifesto promised that during the course of this five-year Parliament, there will be no rise in the rates of Income Tax, VAT or National Insurance. From April, the Personal Allowance will be frozen at £12,500 before we start paying 20% Income Tax. Also frozen is the £50,000 threshold at which people start to pay the higher 40% rate of Income Tax. (Rates and thresholds may differ for taxpayers in parts of the UK where Income Tax is devolved.) The National Insurance threshold will rise to £9,500 from April, saving some 30 million workers around £100 a year.

As previously pledged, the new single-tier State Pension will increase from £168.60 a week to £175.20 in April. For pensioners receiving the older basic State Pension, this will increase from £129.20 to £134.25 per week (3.9% increase). The rise is the result of the triple-lock system, which means that the State Pension rises in line with inflation, earnings or 2.5%, whichever is the highest. The Conservatives have vowed to keep this in place for this term of Parliament.

Looking at Inheritance Tax (IHT), the main residence nil rate band will increase from £150,000 to £175,000 in 2020-21, as previously scheduled.

To support the delivery of public services, particularly in the NHS, the two tapered Annual Allowance thresholds for pensions will each be raised by £90,000. So, from 2020-21 the threshold income will be £200,000, meaning individuals with income below this will not be affected by the tapered Annual Allowance and the Annual Allowance will only begin to taper down for individuals who also have an adjusted income above £240,000.

For very high earners the minimum level to which the Annual Allowance can taper down will reduce from £10,000 to £4,000 from April 2020. This reduction will only affect individuals with total income over £300,000.

The 2020-21 tax year ISA (Individual Savings Account) allowance will remain at £20,000.

The JISA (Junior Individual Savings Account) allowance and Child Trust Fund annual subscription limit will be significantly increased from £4,368 to £9,000 in 2020-21.

The Lifetime Allowance for pensions will increase in line with the Consumer Prices Index (CPI) for 2020-21, rising to £1,073,100.

From 11 March the lifetime limit on gains eligible for Entrepreneurs’ Relief is reduced from £10m to £1m, in response to evidence that the costly concession has not been a major incentive to entrepreneurial activity.

Infrastructure and the environment
Mr Sunak announced a huge £600bn package, claimed to be the biggest investment in transport and infrastructure since 1955. Outlining the proposed spending on roads, rail including HS2, gigabit-capable broadband and housing by mid-2025, he said, in short: “if the country needs it, we will build it.” The package includes:

• £2.5bn available to fix potholes and resurface roads over five years
• £27bn to build or improve motorways and other arterial roads
• Up to £510 million in shared rural network to improve 4G coverage
• Allocation of £1bn from the Transforming Cities Fund
• Flooding - £5.2bn over five years investment programme for flood defences and £120m in emergency relief for communities affected, £200m for flood resilience.

Environmental measures announced include:

• Nature for Climate Fund – investing £640m in tree planting and peatland restoration
• New plastic packaging tax from April 2022
• Fuel subsidies for red diesel users will be abolished in two years, apart from agriculture, rail, fishing and domestic heating sectors.

Other key points

• Priority to ensure people have affordable and safe housing – extending the affordable homes programme with £12.2bn funding
• Supporting local authorities to invest in their communities by cutting interest rates on lending for social housing by 1%
• £1.1bn allocation from the Housing Infrastructure Fund to build 70,000 new homes in high-demand areas
• From April 2020, minimum wages will rise; for example, the National Living Wage for those aged 25 and above, will increase 6.2% to £8.72 per hour, and to a projected £10.50 by 2024
• The 5% VAT on sanitary products will be abolished from 2021
• Corporation Tax will remain at 19%
• Fuel duty frozen for tenth consecutive year
• Duties on all spirits, beer and wine frozen
• The government will introduce a 2% Stamp Duty Land Tax surcharge on non-UK residents purchasing residential property in England and Northern Ireland from 1 April 2021
• R&D investment of £22bn a year by 2024-25.

Closing comments
The Chancellor signed off his first Budget with these words: “We’re at the beginning of a new era in this country. We have the freedom and the resources to decide our own future. A future where we unleash the energy, inventiveness and creativity of all the British people. And a future where we look outwards and are confident on the world stage. That starts right now with our world-leading response to the coronavirus. This is a Budget delivered in challenging times. We will rise to this moment. We will get through this together.”

A drop in oil prices sent international shares tumbling when stock markets opened this morning.

Concerns about the impact of the coronavirus on global economic growth have weighed on demand for oil. Over the weekend, talks took place between the Organization of the Petroleum Exporting Countries (OPEC) and other producers about cutting output to support oil prices, but they failed to come to an agreement. In response, Saudi Arabia, OPEC’s de facto leader, said it would raise production and lower prices in an effort to preserve its market share and win over new customers from rivals.

When the commodity markets opened on Sunday evening, oil prices plunged. Investors reacted on Monday morning by moving money out of riskier assets such as shares and into what are traditionally considered ‘safe haven’ assets like government bonds which fluctuate less in price during periods of turbulence. The FTSE 100 opened 8% lower, but recovered some of those losses in early trading.

The coronavirus outbreak has rattled markets. In China, where it originated, the authorities appear to have contained the virus, but it continues to spread internationally with new cases reported in most countries around the world. Italy has been hit particularly hard, with much of the northern part of the country now under lockdown.

Central banks have taken steps to limit the impact of the virus on the global economy. At its meeting last week, the Federal Reserve, the US central bank, cut interest rates by 0.5%. The Bank of England looks set to follow suit at its next meeting on 26 March, if not before, and the Chancellor of the Exchequer is expected to include various measures to help businesses when he announces the budget on Wednesday. Meanwhile, the International Monetary Fund has pledged US$50 billion to support developing countries struggling with the virus.

While the current turbulence may cause you some concern, try to avoid any knee jerk reactions. It’s important to remember to look on your portfolio as a long-term investment, with most portfolios designed to deliver returns over a period of at least five years. Although coronavirus may hinder the markets in the short term, we do not expect the effects to be long lasting.

Diversification, the spread of investments across different asset classes and regions, can also help. While bond holdings may not completely offset the losses caused by shares, they should offer a degree of protection as the market fluctuates.

If you have any questions about the impact of the coronavirus on your portfolio, please don’t hesitate to contact me.

This update reflects our view at the time of writing and is subject to change.

The document is for informational purposes only and is not investment advice. Every effort is made to ensure the accuracy of the information but no assurance or warranties are given.

Gross domestic product (GDP) statistics published by ONS showed the UK economy saw zero growth across the final three months of 2019, down from a rise of 0.5% in the preceding quarter. This left last year’s annual GDP growth rate at 1.4%, marginally up from 2018, but still one of the weakest rates of expansion recorded since the 2008 financial crisis.

The sluggish fourth quarter performance, though, was largely a result of the political turmoil gripping the country at that time. Survey evidence since the general election result was announced has pointed to a significant improvement in business sentiment and growth in consumer confidence.

However, while analysts have expressed growing optimism that the UK economy has enjoyed a much-improved start to 2020, the anticipated economic problems caused by the coronavirus outbreak look set to hamper any potential recovery. While producing reliable estimates of the likely economic impact of the Covid-19 outbreak is extremely challenging, it will undoubtedly hit global growth prospects over the coming months.

Economists believe China is facing a potentially short-lived but sharp first quarter shock and given China’s significance on the global economic stage, the impact will undoubtedly reverberate around the rest of the world. Although the ultimate extent of the shock will clearly depend on the success, or otherwise, of international efforts to control the spread of the disease, the impact of the coronavirus already looks set to severely dent prospects of a quick and meaningful UK economic recovery.

Markets
As February ended, markets completed a seven-day losing streak, the worst since the 2008 financial crisis. Several major global indices fell as panic selling relating to the escalating coronavirus outbreak prevailed. On 28 February, the World Health Organization upgraded the global risk of the coronavirus outbreak to ‘very high’ but said that it had not seen evidence that the virus was spreading freely enough for it to be a pandemic.

Many global indices are now in correction territory, which means they have lost 10% since recent all-time highs. The FTSE 100 fell over 11% in the last week of February alone, and finished the month down 9.68% on 6,580.61, the FTSE 250 lost 8.57% during the month.

On European markets, the Euro Stoxx declined 8.55% in the month and in Asia the Nikkei ended down 8.89%. In the US, the sell-off saw the Dow Jones register consecutive days of 1,000-point losses, to close on 25,409.36, down 10.07%. As calls intensified for governments and central banks to coordinate a policy response, Jerome Powell the Federal Reserve Chairman pledged to “use our tools” to backstop the US economy as fears impact markets and threaten growth prospects.

On the foreign exchanges, sterling closed the month at $1.28 against the US dollar. The euro closed at €1.16 against sterling and at $1.10 against the US dollar.

Gold is currently trading at around $1,585 a troy ounce, a loss of 0.27% on the month. The coronavirus impacted demand for raw materials. A combination of slowing global growth, investors reducing exposure to risk and accommodative monetary policy are likely to support gold price. Crude prices also slipped in the month. Brent crude is currently trading at around $50 a barrel, a loss of over 10% on the month. Faced with a slump in demand and falling prices, OPEC’s (Organization of the Petroleum Exporting Countries) top producer is asking members of the OPEC+ group to consider an additional collective cut of 1 million barrels per day when the coalition next meets in Vienna (early March).

Avoid the impulse
Before buying anything, especially those items that are more expensive like electronics and gadgets ask yourself:

• Do I need it?
• Can I afford it?
• Will I use it?
• Have I checked if it is cheaper elsewhere?

If you have answered no to any of these then don’t buy it.

Google it
Google is your friend when shopping. Especially if you know what you are buying. You may be able to find what you are looking for cheaper online or for the same price with cheaper or free postage. And always look out for online deals or use money apps like Honey which automatically search for and apply discount codes to your basket. You may be able to purchase items substantially cheaper if you buy it second hand on sites like Amazon Marketplace or eBay.

Do you need to upgrade?
You may have an iPhone XR or a Samsung Galaxy S10 in your pocket and you may be coming to the end of your mobile phone contract.

You may be thinking it doesn’t cost a lot to upgrade but, to upgrade your iPhone to an iPhone 11 Pro could cost you from £799 and to upgrade your Galaxy S6 to an S20 Ultra will cost you from £1199. But do you really need that phone upgrade. You may not have noticed the cost of your current phone as it is bundled in the monthly charge with your calls, texts and data costs. And once it is paid off that is extra money available to you every month to save, or to pay a little extra towards another bill, such as a credit card.

Work it out
Nearly a quarter of Britons have a gym member on 12% use it regularly. And with the average gym membership being £35 per month that £420 a year being wasted.

If you are not using your gym membership cancel it as soon as possible and become more tech savvy about your fitness. You will find a YouTube channel on almost every kind of workout from dance to yoga. Alternatively, you could download some free apps like 7 minute workout or the Zombies, Run - the immersive running game.

Watch what you’re watching
If you have multiple tv and streaming subscriptions cut down to the ones you really watch. Do you really need Netflix, Amazon Video, Britbox, Apple Tv and Google Play? If you still want to keep terrestrial channels such as the BBC move from satellite and cable subscriptions to Freeview or Freesat.

What else?

• Avoid eating out or ordering in cooking at home can be much cheaper
• Cut your utility bills. See if you can get a cheaper deal by switching supplier. If you are on the cheapest deal try using less by turning down the thermostat, switching off lights and washing up in a bowl instead of under a running tap.
• Get rewarded when you do spend. Sign up to loyalty schemes for the retailers you use most often.

There are many ways you can spend less, if you would like help with better money habits, please get in contact.

It’s clearly been a long and rocky road getting to this stage with the process costing two Prime Ministers their jobs and dividing families the length and breadth of the country. However, since Boris Johnson won a landslide victory in December’s election with a mandate to ‘get Brexit done’, the UK has been heading inexorably towards the EU exit door.

The final hurdle in the 1,317-day Brexit saga was safely cleared when the European Parliament rubber-stamped the Withdrawal Agreement at a historic session on 29 January. And the UK is now set to bring the final curtain down on 47 years of EU membership and set out to forge new relationships with the rest of the world.

Although Big Ben’s chime will not mark the departure moment, Brexiteers have arranged a series of celebratory events with a giant clock face projected on to Downing Street counting down the final hour. In addition, commemorative 50p coins inscribed with the words ‘peace, prosperity and friendship with all nations’will enter circulation.

In many ways, however, while the day certainly has huge political symbolism, life for most people will pretty much carry on as normal as the country embarks on an 11-month transition period. Indeed, the principal changes relate more to legal or institutional issues, for instance, the article 50 process will officially be over and non-reversible.

So, while UK citizens will no longer be EU citizens, the country will remain in the EU single market and customs union. As a result, British passport holders will still be able to travel and work in the EU, and the UK will continue to follow EU rules, which means the financial services regime will continue as before.

More significant changes are likely to occur on 1 January 2021, the UK’s first scheduled day outside of EU rules. And what happens then will very much depend upon the type of deal the UK manages to negotiate with the EU.

If you have any concerns relating to Brexit either now or in the coming months, then please do get in touch. Remember, we’re always here to help.

The chancellor has pledged to tackle the cost of living and tear up strict budget rules to hike borrowing for infrastructure spending. He will use the Budget to:

• Fulfil government pledges on tax to “help tackle the cost of living for hard-working people.”
• “Level up” economic performance in struggling towns in northern England and the Midlands
• “Build on” recent announcements to boost spending on public services and tackle the cost of living

But Mr Javid will have little room to manoeuvre with tight constraints on day-to-day public spending.

If you have dependents – people who rely on you financially – then you should have life insurance. In fact, if you have dependents and don’t have life insurance, you are exposing them to grave financial risk. And who would want to do that?

Life insurance tends not to feature on ‘to do’ lists because it makes us confront uncomfortable questions, such as what would happen to our loved ones if we were to die unexpectedly in the next few years.

However, we all carry a deep responsibility to ensure those we leave behind at least have sufficient funds to carry on with life if we’re no longer around. That means putting plans in place to address unpleasant possibilities.

Types of life insurance
There are two main types of life insurance. The one most people need is ‘term’ insurance. This pays out if the policyholder dies within a stated period – the ‘term’.

The other type – ‘whole of life’ insurance – pays out on your death, whenever that occurs. This is more of an investment vehicle than a financial protection plan and is typically used for estate planning.

Dealing with debt
Term insurance pays out money that can be used to clear debts such as a mortgage, lifting a huge financial burden and enabling your loved ones to stay in the family home.

It can also provide for day-to-day living expenses – everything from groceries to utility bills, and from school and university fees to family holidays.

Key points

GET ENOUGH COVER
Buy sufficient insurance to take care of your family until the youngest is financially self-sufficient.

YOU BOTH NEED IT
If you’re in a couple, you both need cover, even if one of you stays at home. The proceeds can pay for services such as childcare and keeping up the house.

BUY SEPARATE POLICIES
Joint life insurance covers you both under one policy, but separate policies are more flexible and provide greater protection, although they cost a bit more.

WORK COVER ISN’T ENOUGH
Many firms offer ‘death in service’ life insurance. However, once you’ve worked out how much cover you need, you’ll probably realise this isn’t enough and you’ll need a policy of your own.

THE SOONER THE BETTER
The older you are, the more expensive life insurance is, so bite the bullet and buy young.

PUT YOUR POLICY ‘IN TRUST’
Doing so places the proceeds outside your estate so it can be paid to your beneficiaries without any delay associated with probate. It also keeps the money from the clutches of the tax man.

REVIEW REGULARLY
Monitor your life insurance coverage to make sure it keeps pace with your circumstances. Events such as marriage, the birth of children and moving home might prompt you to increase the amount of insurance you have.

It is important to take professional advice before making any decision relating to your personal finances.