How Employee Benefits can help you build a better and more sustainable business
August 2017

MetLife have recently released the findings of the UK Employee Benefit Trends Study 2017 and it makes very interesting reading.

Employee benefits can help employers build stronger businesses as well as provide real value to the employees that work for them.  In the face of uncertainty, the findings of MetLife’s report are an invaluable guide to clearer decision-making around optimising benefits as part of a wider engagement and people strategy.

The focus for this year’s report is wellness — not just the value gained from helping employees take responsibility for their own health, but also the benefits and services employers can offer to help them manage stress, gain a greater sense of financial control and, in turn, bring their whole selves to work.  We know that less stressed employees are more productive and creative.

The conclusion of their findings is that more rounded employees will surely develop into stronger businesses.

The key areas of best practice include the following:

  1. Commit to bringing more certainty to your employees.   Fundamentally, those employers who offer stability to their employees will ultimately benefit.
  2. Give financial wellness prominence in your benefits strategy.  Physical and mental wellness programmes can help in boosting productivity.
  3. Good communication and a continuous commitment.   This is essential and issuing a range of different and diverse communication is most effective.
  4. Meet employee needs on personalisation.  Thanks to technology and the range of different methods in which we can communicate, delivering flexible, customisable benefits at work is now looking like a must have, rather than a nice to have.

However, every challenge brings opportunities and enlightened employers should use this moment in time to look closely and with urgency at how they can strengthen their organisations to make them fit for the future.

In an uncertain world, the value of certainty increases: whether that’s the peace of mind that comes with knowing we are protected should the worst happen or the knowledge that we are in control of our finances.

It is time for a new approach to Employee Benefits – one that starts with the workforce and is driven by employee needs.

If you require advice and guidance on how an Employee Benefits package can assist you and your business, please get in touch with us.

Staff need to be enrolled before they can opt out
August 2017

As outlined in in The Pension Regulator’s latest compliance and enforcement bulletin, during their inspections they’ve been carrying out across the country they came across a number of instances where employers had agreed to opt staff out of a workplace pension before they’d been enrolled.

If employers do this, it means they are not complying with their duties in the correct way and may risk a fine if they appear to be making the decision to opt out on behalf of their staff.  Eligible staff need to be enrolled first – they can only opt out if they wish to after being enrolled.

Employers need to follow all the steps in The Pension Regulators  Duties Checker, including setting up a scheme, putting eligible staff into it and writing to them, before they can choose whether to stay in or opt out.

If you require advice on your workplace pension, please get in touch with us.

Investment round up – 2017 half-year report
August 2017

The first six months of 2017 have presented investors with an interesting half year.

Think about the first six months of 2017 in the UK.  There were several serious terrorist attacks, Article 50 was triggered to start the formal Brexit process, the Budget less than perfectly executed and, to round matters off, a snap election was called which delivered no overall majority to the winners.  A challenging half year, to put it mildly.  So, what happened to the UK stock market over the period?

As the table above shows, the answer in terms of the Footsie index, was a rise of just under 2½%.  That number hides a rollercoaster ride with three distinct cycles.  For all the movement, by the end of June the index was at much the same level as it was in mid-January.  It is a reminder that at times short term “noise” in investment markets can be so deafening that what has happened over the longer term gets drowned out.

There is another lesson from the table worth noting.  Although the two US indices, the Dow Jones and S&P 500, both show returns of around 8%, you would have been better off with European shares, as represented by the Euro Stoxx 50 index.  The reason is simple: in the first half of 2017 the dollar fell by about 5% against the pound, while the euro rose nearly 3% against the pound.  When looking at indices, never forget the currency.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as long-term investment and should fit in with your overall attitude to risk and financial circumstances.



China becomes an emerging market as MSCI finally opens up
August 2017

China-listed shares are finally to be included in the leading emerging markets index.

As we as highlighted in May, China has the world’s second largest equity market, but at present shares listed on the Chinese stock exchanges don’t figure in the MSCI Emerging Markets Index.  The MSCI index is the most important equity index for emerging markets, with an estimated $1,600 billion of funds using it as a benchmark.  While the index already has a 28% China weighting, this relates to Chinese companies listed on stock exchanges outside China, notably Hong Kong and in the United States.

For each of the last three years, MSCI has reviewed whether conditions in the Chinese stock markets were appropriate to warrant including shares listed on them in the emerging markets index.  In 2014, 2015 and 2016 the answer was no.  Various technical reasons were given and each time the Chinese authorities made adjustments in the hope that next year MSCI would change its mind.  Last month, the answer finally switched to yes.

Look out for May 2018

The change will not happen overnight: adding such a large market to an index in a single move would be too disruptive.  Instead, MSCI has set out a gradual approach.  In May next year, MSCI will add shares in the largest 222 listed Chinese companies to its index, with an initial 5% weighting.  The weighting is expected to rise over time until it reaches the full 100%, at which point Chinese-listed shares will represent about 15% of the MSCI Emerging Markets Index and total Chinese content, including the existing non-China listings, will approach 45%.  Other smaller Chinese listed companies may also be added in the future, further raising the Chinese exposure of the index.

MSCI’s decision has been widely seen as a coming of age for investment in China and, on some estimates, could produce $500 billion of inflows over the next five to ten years.  If you want to increase your exposure to China ahead of that predicted rush, there are a variety of options available.  Please get in touch with us if you would like to discuss these.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.

No summer Budget
July 2017

The general election left the future of many spring Budget announcements up in the air, but that situation may soon change.

When Theresa May announced her snap election in April, it threw a major spanner in the previous month’s Budget. There was no time to pass the 776 pages of Finance Bill before parliament shut down.  The result was that about 80% of the Bill was removed and its uncontroversial residue passed through parliament in a few days.  At the time it was anticipated that following the election the Chancellor – not necessarily Mr Hammond – would reveal a Summer Budget, just as his predecessor did in 2015.  The second Budget of the year was expected to reinstate the lost measures and add a few more that were best left until after the polls closed.

It did not quite work out that way, as we all know.  Mr Hammond has remained in place at 11 Downing Street and in June told Andrew Marr “… there’s not going to be a sort of summer Budget or anything like that, there will be a regular Budget in November as we had always planned…”  Shortly after that appearance, the background notes to the Queen’s Speech revealed that there would indeed be a Summer Finance Bill, even if there was no Budget.

A tight timetable

The new Bill will incorporate “a range of tax measures including those to tackle avoidance”, but precisely what those measures will be or when the Bill will emerge is unclear.  The Treasury has a record of stretching seasonal limits when it comes to publications and will not be helped by the parliamentary timetable, which arrives at the summer recess on 20 July.  Parliament resumes on 5 September, but only for nine days before the conference recess, which runs until 8 October.

One planned-and-abandoned/deferred measure which could be relevant to you is the reduction in the money purchase annual allowance.  This generally operates when pension contributions are being made at the same time as benefits are (or have been) being drawn.  If you think this might affect you, it is vital you check the current situation with us before taking any action.  Click here to get in touch.

The value of tax reliefs depends on your individual circumstances. Tax laws can change. The Financial Conduct Authority does not regulate tax advice.

Getting our hopes up for an interest rate rise?
July 2017

Last month saw the first suggestions that interest rates could increase soon.










In June, the US central bank, the Federal Reserve, increased short term interest rates for the second time this year and the fourth time since December 2015.  The 0.25% increase to 1.00% − 1.25% had been well signalled by Fed officials, so there was no surprise.  As seems to be the case these days, the focus was more on whether the next rate rise was still three months away or might be deferred.

The day after the US interest rate decision it was the turn for the UK central bank, the Bank of England, to make its annoucement.  This was universally expected to be another “no change”, leaving base rate at the 0.25% fixed amidst post-referendum concerns last August.  The rate did remain unmoved, but there was nevertheless a major surprise: three out of the eight people charged with setting the rate voted for an increase.  According to Reuters, this was the nearest the Bank has come to raising interest rates since 2007.

Not so fast

Does that mean the Bank’s next meeting might see the first rise in interest rates in a decade?  The answer is probably no.  One of the trio of rate risers will have left the Monetary Policy Committee by the time of the next meeting.  Her replacement is thought to be less anxious to raise rates.  A new deputy governor is also due to be appointed, bringing the Committee up to its normal quota of nine.  The balance of the Committee is thus set to change.

Despite some apparent differences between the Bank’s governor, Mark Carney, and its chief economist, Andy Haldane, most experts still do not see the first base rate increase happening until 2018.  That is good news if you have a variable rate mortgage, but bad news if you have a deposit account or cash ISA.

The value of your investment can go down as well as up and you may not get back the full amount you invested.  Past performance is not a reliable indicator of future performance.