We’re now well into spring but rather than enjoying the Great British countryside, you likely find yourself cooped up indoors.

With much of the country in lockdown, you might find yourself turning to the comfort of a good book. If so, why not stay engaged with the great outdoors by choosing some so-called ‘New Nature Writing.’

It’s a genre that has seen a real resurgence of late. From Paula Hawkins to Robert MacFarlane, British authors are putting themselves at the centre of a narrative that celebrates our ‘everyday connections with the natural world’.

Here’s your guide to five of the best.

1. Waterlog, by Roger Deakin

It’s only right to start our list with the book often credited as kick-starting the genre over 20 years ago.

Roger Deakin’s 1999 bestseller Waterlog: A Swimmer’s Journey through Britain, traces his escapades all around the British Isles.

‘From the sea, from rock pools, from rivers and streams, tarns, lakes, lochs, ponds, lidos, swimming pools and spas, from fens, dykes, moats, aqueducts, waterfalls, flooded quarries, even canals’ he ruminates on what it means to be an island race, and the effect that this has on our relationship to water.

The book begins (and ends) in the moat that surrounds his Suffolk home, getting a ‘frog’s eye view of the rain on its surface’ before open-air swimming the width and breadth of Britain.

Deakin died in 2006 and, although one of three books by the author, this was the only one to be published in his lifetime. 

2. The Old Ways, by Robert MacFarlane

Robert MacFarlane became a friend of Roger Deakin in later life and refers to their friendship often in his books.

In The Old Ways: A Journey on Foot, MacFarlane sets out to discover the drove-roads, holloways, and tracks that mark the passage of our ancient ancestors, asking what it means to make tracks and uncovering the history of these ancient byways.

He begins in England, leaving his home and following the fresh tracks of wildlife in the snow. From there, he follows ancient sea roads in the Hebrides, journeys briefly to the West Bank in the occupied Palestinian territory, before returning to England and walking in 5,000-year-old footprints.

A top ten bestseller on release, the author describes the book as the third in a loose trilogy – after Mountains of the Mind and The Wild Places – about ‘landscape and the human heart’.

As with all of MacFarlane’s books, it’s also about language. He’s trailing not just the people that made the tracks and ‘old ways’ that he follows, but the nature writers that preceded him too.

3. H is for Hawk, by Helen MacDonald

Winner of the Samuel Johnson prize for non-fiction in 2014, H is for Hawk tells of MacDonald’s attempts to follow a childhood dream and train a goshawk, following the death of her father.

Whilst the author struggles with grief, and the challenge of training £800 goshawk Mabel, she also parallels her tale with that of T H White, author of the 1951 The Goshawk, a similar tale of falconry and the battle of wills between hawk and trainer.

Interweaving the narratives of the author’s battle with depression, the training of Mabel, and the life and experiences of T H White, makes for a thrilling and intricate story.

Intensely honest, the nature in the book is the goshawk, itself a metaphor for grief, but the result is uplifting and inspiring. 

4. Love of Country: A Hebridean Journey, by Madeleine Bunting

Situated on the northwest coast of Scotland and comprising hundreds of islands, the Hebrides form the setting for Madeleine Bunting’s book that charts their history, cultures, and traditions.

From ancient shipping routes to modern concepts of Britishness, Bunting spent six years writing the book, travelling to the islands – and back again – from her home in east London.

Overcoming a feeling of being an outsider, whilst avoiding the inclination to over-romanticise, she plots her journey. On a north-west heading, she visits seven of the Hebridean islands as she moves forward in time, from the seventeenth century to the present day.

She takes literary detours along the way, via ‘WH Auden, Stephen Spender, Cecil Day-Lewis and George Orwell [who] all headed north’ and in whose footsteps Bunting is well aware that she is travelling.

The book is part memoir, part travelogue, part history of the islands and a worthy addition to the ‘New Nature Writing’ cannon.

5. The Butterfly Isles, by Patrick Barkham

Originally published in 2010, The Butterfly Isles: A Summer in Search of our Emperors and Admirals follows Barkham over one action-packed summer as he sets out to spot every one of the UK’s 59 native species of butterflies. 

The author’s love of the creatures was formed when he spotted a Brown Argus – ‘not exactly rare but hard to find in East Anglia’ – when he was eight years old. Thirty years later, his interest showing no sign of waning, he set himself the challenge and this fascinating book is the result. 

Despite his lifelong love, the book is written for laymen rather than lepidopterists, and for lovers of the British landscape.

From London parks to Scottish bogs, the 59 varieties needed to complete the set don’t make the author’s life easy.

But his love of the creatures is clear, as is his love for the British landscape, in all its forms.

Over the last few months, speculation that the Bank of England would increase its base interest rate has been mounting. However, the impact of Covid-19 has changed that, leading to the central bank making two cuts to the interest rate in quick succession.

Coinciding with the 2020 Budget, the base rate was cut from 0.75%, where it’s been since August 2018, to 0.25% on Wednesday 11^th March. Just a week later, the rate was cut again on Thursday 19^th March to just 0.1%. The latest cut represents a historic low, and it could have an impact on your finances.

The Bank of England base rate is the official borrowing rate of the central bank, affecting what it charges other banks and lenders when they borrow money. This then has a knock-on effect on personal finances.

Why has the Bank of England cut interest rates?

The rate cuts have been in direct response to the coronavirus pandemic.

As the virus has spread globally, it’s had a significant impact on economies. In the UK, non-key workers have been urged to work from home, pubs and other leisure facilities have been temporarily ordered to close, and many other businesses have taken the decisions to either reduce operations or suspend them. These are steps that are hoped to stem the spread and relieve pressure on the healthcare system but come at an economic cost.

The latest interest rate cut has increased its quantitative easing stimulus package and pumped more money into the UK economy. The aim of this is to calm the financial markets, which have experienced volatility over the last few weeks, and stabilise the economy.

In a statement, the Bank of England said: “Over recent days, and in common with a number of other advanced economy bond markets, conditions in the UK gilt markets have deteriorated as investors sought shorter-dated instruments that are closer substitutes for highly liquid central bank reserves. As a consequence, the UK and global financial conditions have tightened.”

The Monetary Policy Committee, which is responsible for setting the base rate, voted unanimously to increase the Bank of England’s holding of UK government bonds and sterling non-financial-grade corporate bonds by £200 billion, bringing the total to £645 billion.

But what does this mean for your finances? The impact will depend on whether you’re looking at borrowing or saving.

Borrowers

For some borrowers, the lower interest rate is good news. This is due to the cut lowering the cost of borrowing.

The area where you’re likely to see the most immediate impact is your mortgage if you have a tracker or variable rate one. A tracker mortgage, for example, tracks the Bank of England base rate, so your mortgage repayments should drop before your next payment. A variable mortgage tracks your lender’s interest rate, this will follow the trend of the Bank of England, and most borrowers will benefit from the full 0.65% drop, but it does vary. It’s worth checking with your lender about how your mortgage repayments will change if they haven’t already contacted you.

Unfortunately, those with a fixed-rate mortgage won’t benefit from the rate cut.

Savers

The years since the financial crisis have been difficult for savers. Low-interest rates over the last decade have meant savings aren’t working as hard as they may have done before 2008.

Interest rates on savings accounts are now likely to fall even further. When you factor in the pace of inflation, this means that many savings are likely to be losing value in real terms. This has a particular effect if you’re saving for medium and long-term goals. Inflation rising by a couple of percentage points each year can have a large impact when you assess the impact over ten or 20 years, for instance.

If you have a fixed-rate account, your interest rate and savings will be protected for the time being. However, if you have savings in other types of accounts, it’s likely the amount they earn will fall eventually. Banks must give existing customers at least two months’ notice of a cut, for current accounts and instant-access savings accounts.

For long-term saving goals, investing can help savings match the pace of inflation, maintaining your spending power. However, it’s important to note that investment values can fall and experience volatility, with the pandemic having an impact on markets too. As a result, it’s important to assess your financial goals and risk profile before making any investment decisions.

If you’re unsure what the base rate change means for you, please contact us. We’re here to help you adjust financial plans and goals as circumstances change, whether they’re within your control or not.

Please note: 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.

We’ve now entered a new tax year. Whilst some changes were made during the 2020 Budget, other allowances and exemptions have stayed the same. Planning can help you make the most out of your finances over the next 12 months. So, which allowance should you keep in mind?

1. Personal allowance and National Insurance

The personal allowance for the new tax year remains the same at £12,500. This is the amount you can earn before Income Tax is due. Existing tax rates and thresholds are also unchanged. However, the National Insurance threshold has been increased, from £8,632 to £9,500, meaning 500,000 people will no longer pay the tax.

2. Savings allowance

Depending on how much you earn, your annual savings allowance could be up to £6,000, allowing you to save and receive interest tax-free.

This is made up of two parts. The first is the personal savings allowance. If you’re a basic rate taxpayer you can earn up to £1,000 in interest per year with no tax. For higher-rate taxpayers, the allowance falls to £500, whilst additional rate taxpayers don’t have an allowance. As a result, around 95% of savers shouldn’t pay tax on their savings.

For low-income individuals, the starter savings rate can be as high as £5,000. However, for every £1 you earn over the personal allowance (£12,500) the allowance will reduce by £1. As a result, it’s only suitable for those with an income of less than £17,500.

3. ISA allowance

In addition to the above savings allowances, your ISA allowance should play an important role in financial plans for most people. For the current tax year, you can save £20,000 into ISAs as there were no changes made in the Budget. Any interest or returns made in an ISA are free from tax. You can choose to deposit the full amount into a single ISA or spread the allowance over several. As you can save cash or invest through an ISA, these accounts provide you with the flexibility to choose an option that suits your goals.

The Chancellor did make a change to Junior ISAs though. In the previous tax year, you could place up to £4,368 into a JISA per child. This has now been increased to £9,000, perfect if you’re building a nest egg for children or grandchildren. Like adult counterparts, any interest or returns earned are tax-free.

4. Pension Annual Allowance

There was no change to the maximum pension Annual Allowance, which remains at £40,000. However, there was a significant change in the Tapered Annual Allowance that may limit how much you can tax-efficiently save into a pension each tax year.

Both the threshold income and adjusted income thresholds for the Tapered Annual Allowance were increased by £90,000, taking them to £200,000 and £240,000 respectively. For many pension savers affected by the Tapered Annual Allowance last year, this change will allow them to save more tax-efficiently for their retirement in 2020/21. But the minimum reduced Annual Allowance has fallen from £10,000 to £4,000. As a result, some high earners will find their allowance has been cut. Please contact us to discuss your circumstances.

5. Capital Gains Tax allowance

Capital Gains Tax (CGT) is the tax you pay when you sell certain assets and make a profit. This could include investments that are not held in an ISA or a second property. The rate of CGT depends on the type of asset you sell and Income Tax rate, but it can be as high as 28%. As a result, making use of your annual allowance is important.

The CGT allowance for 2020/21 has increased slightly from the last tax year to £12,300. If you plan to dispose of assets over the next 12 months, it’s worth keeping this figure in mind. If you plan to sell property, you should also note that you now have to pay CGT on property sales within 30 days.

6. Dividend allowance

If you own shares in a company that makes dividend payments, your dividend allowance remains the same for 2020/21. You can receive up to £2,000 in dividends before any tax is due on them. This includes paying yourself £2,000 in dividends if you’re a company director too. Dividends above the allowance will be taxed according to your marginal tax rate.

7. Entrepreneurs’ relief

For the current tax year, there have been significant changes made to entrepreneurs’ relief. If you have plans to sell or give away your company these are important.

Entrepreneurs’ relief means you can pay less CGT when selling your business under certain circumstances. Previously, you would have been charged 10% on the first £10 million of gains, with gains above this limit being taxed at the usual 20%. However, entrepreneurs’ relief for 2020/21 has been cut to a far less generous £1 million. As a result, some business owners planning to sell will now face far higher CGT.

The entrepreneurs’ relief applies to an individual level, so that a £1 million allowance is the maximum you can claim per person, rather than for each business you sell.

8. Gifting annual exemption

If you’re worried about the impact of Inheritance Tax on your legacy, gifting during your lifetime can help you reduce the bill.

Each year individuals can make use of the annual exception that allows you to gift up to £3,000 a year tax-free. This gift is considered immediately outside of your estate for Inheritance Tax purposes. Other gifts are also immediately exempt from Inheritance Tax, including those up to £250 per person and those made from your income.

Gifts given outside of these allowances are known as Potentially Exempt Transfers. If you live for seven years after giving the gift, these are considered outside of your estate. However, if you die within seven years, they may be considered part of your estate for Inheritance Tax purposes.

Setting out your plans for the year ahead

Whilst the end of the tax year is often characterised by people making the most of their allowances, there are benefits to planning how you’ll use them at the beginning of the year. If you plan to use your ISA allowance by investing in a Stocks and Shares ISA, for example, it allows you to drip feed regular amounts in over the next 12 months. Reviewing your financial plan for the year ahead now can help you feel more confident in the steps you’re taking. Get in touch with us to discuss your financial plan for 2020/21.

Please note: 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.

A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits.

The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation which are subject to change in the future.

While the coronavirus pandemic has affected the health of hundreds of thousands of people worldwide, it has also had a devastating effect on small and medium-sized businesses in the UK and beyond.

Following a £12 billion package of measures announced in the Budget, the Chancellor has since unveiled a substantial support package designed to help businesses survive during this uncertain period.

If you’re a small business owner, there is help available from the government and beyond. Here’s a summary of the support on offer.

Coronavirus Job Retention Scheme

In a measure unprecedented in modern times, the Chancellor announced a ‘job retention’ scheme in which the government will pay up to 80% of the salary of ‘furloughed’ workers.

If you have essentially laid-off workers temporarily, and you notify employees of this change, HMRC will refund 80% of these workers’ wage costs, up to a cap of £2,500 per month, for three months.

It means that if you intend to re-employ your staff when your business reopens, the government will pay up to 80% of their wages in the interim.

Note that changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.

Statutory Sick Pay

Businesses with fewer than 250 employees (at 28 February 2020) can reclaim the cost of any Statutory Sick Pay (SSP) caused by the coronavirus (up to a limit of 14 days per individual). This will be refunded to the company, in full, by the government.

In order to be eligible for the changes to Statutory Sick Pay, you must keep records of the employee’s absence and SSP payments, but the employee will not need to provide a doctor’s note. 

VAT deferral

All businesses in the UK can defer their Valued Added Tax (VAT) payments for three months.

This deferral will apply from 20 March 2020 until 30 June 2020 and is an automatic offer (you don’t need to apply). You will be given until the end of the 2020/21 tax year to pay any liabilities that have accumulated during the deferral period.

Business Interruption Loans

A new Coronavirus Business Interruption Loan Scheme will see banks offer loans of up to £5m to support SMEs, for up to six years. The business loan scheme will be delivered by the British Business Bank and businesses will access the loans via their high street bank or one of 40 accredited finance providers by requesting a government-backed business interruption loan.

The government will pay to cover the first 12 months of interest payments and any lender-levied fees, so businesses will not face any upfront costs and will benefit from lower initial repayments.

To be eligible for a business interruption loan you must:

• Be based in the UK with an annual turnover of no more than £45 million
• Meet the other British Business Bank eligibility criteria

Business Rates Support

All retail, leisure and hospitality companies in England will be exempt from business rates for the 2020/2021 tax year. Nursery businesses will also be exempt from business rates in 2020/21.

If you have a business in the retail, hospitality or leisure sector with a rateable value of less than £15,000 then a cash grant from the government of £10,000 will be made available. If the rateable value of your business in these sectors is £15,000 to £51,000 then a £25,000 grant is available. Speak to your local authority to check your eligibility.

The £3,000 grant announced in the Budget for businesses that qualify for Small Business Rate Relief or Rural Rate Relief has been increased to £10,000. This will be administered by the local authority from early April and, if you’re eligible, you will be contacted directly and do not need to apply.

Other Budget announcements

In addition to emergency measures to tackle the coronavirus outbreak, there was other good news for small businesses.

The government also announced that it is delivering on its commitment to increase the Employment Allowance to £4,000. This means that businesses will be able to employ four full-time employees on the National Living Wage without paying any employer National Insurance contributions (NICs).

The Chancellor also confirmed that the Corporation Tax rate would remain at 19%.

Other support

Facebook for Business grants

During the coronavirus pandemic, and to help up to 30,000 eligible small businesses in over 30 countries where they operate, Facebook are offering $100m in cash grants and ad credits.

The social media giant will begin taking applications in the coming weeks. In the meantime, you can sign up to receive more information when it becomes available.

Throughout February there was one key global headline that had an impact on stocks, the coronavirus.

What began in China a couple of months ago has spread across the world, including Europe, by the end of February. The International Air Transport Association has already warned that the virus could cost the industry nearly $30 trillion. Companies in a huge variety of areas have stated their operations will be affected too, from Apple to Burberry.

Over the course of the month, stocks have plummeted, in fact, £35 billion was wiped off the FTSE 100 on 25^th February alone.

Whilst that can be a worry, it’s important to keep in mind that short-term volatility does happen. For most investors, sticking to a long-term financial plan is the best course of action. If you have concerns, please contact us.

UK

The big news this month was the resignation of Sajid Javid as Chancellor following a proposal that he sacks all his advisers. He’s been replaced by Rishi Sunak, who has just a few weeks to prepare for the Budget on 11^th March.

Brexit uncertainty continues to have an impact, as Prime Minister Boris Johnson prompted fears of a hard Brexit early in the month. It’s an issue that’s likely to continue affecting markets throughout the year as a trade deal between the UK and EU is hashed out. Political uncertainty, almost with a slowing Eurozone, meant GDP stagnated in the final quarter of 2019.

Whilst not the growth investors would hope for, there are signs that the UK economy is gradually recovering and moving away from the possibility of a recession. Of course, much of what happens in the coming months will depend on how trade deals progress.

• UK construction fell at the slowest pace since May, registering a PMI of 48.4, but continues to contract
• Manufacturing was slightly stronger than expected in December with a PMI of 50, the point that suggests growth rather than contraction
• The service sector sported the strongest PMI since 2018 at 53.3
• House prices were also higher than expected, following a rise of 0.4%, according to Halifax following a 4.1% increase year-on-year.

Europe

Investor confidence across Europe fell for the first time in four months. It’s amid fears that the coronavirus will have an impact, with the barometer falling from 7.6 in January to 5.2, However, it’s still higher than last autumn when there were fears that a trade war would have an impact.

Overall, there has been good news in much of Europe this month. Following GDP growth in the fourth quarter of just 0.1% across the Eurozone, flash PMIs were expected.

However, European stalwart Germany is showing signs of weakening. The country’s GDP flatlined between October and December 2019. Deutsche Bank has also predicted that coronavirus could drive Germany’s economy into a recession this year.

US

Continuing the coronavirus news, a quarter of US firms say the virus will hit their profits by 16%, so the volatility experienced over the last few weeks could continue into spring.

The impact of the White House’s trade war with China has also become apparent. The US trade deficit in 2019 fell for the first time in 2019 as the ongoing tensions curbed imports. The trade deficit fell 1.7% over the year to $616.8 billion.

Focussing on the tech industry, Twitter hit a milestone this month. It logged $1 billion in quarterly revenue for the first time, following a 14% increase year-on-year. Share prices increased 6% following the annual earnings release.

Asia

So far, China is the country that’s been affected the most by the coronavirus. Inflation hit an eight-year high due to the impact of the virus. In a bid to boost the market that’s been under pressure for more than a month now, China cut tariffs on US goods worth billions of dollars that were introduced last year. Despite coronavirus, President Xi insists the country can still hit its growth targets.

Read our blog for more investment updates.

If you have any concerns about your investment portfolio in light of recent events, please get in touch.

Please note: 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.

If you find yourself with a lump sum – perhaps through an inheritance, a bonus or because an investment has matured – you may be wondering what you should do with it.

One of the common questions that we’re asked is ‘should I pay off my mortgage with a lump sum, or should I invest it?’

As with all financial advice, there are pros and cons to both choices. However, before we consider the pros and cons of using a lump sum to invest or repay your mortgage, there are some other questions you should ask yourself first.

3 questions to ask before investing or repaying your mortgage

1. Do I have an emergency fund?

Experts recommend that you keep around three to six months’ salary in an emergency fund. This is an easy-access savings account where you can get hold of money quickly if you need it – for example, to replace your boiler or for car repairs.

If you don’t have an emergency fund, consider using some of your lump sum to create this financial safety net.

2. Do I have other debts?

If you have outstanding balances on a credit card or store card, or you have unsecured personal loans, then it’s likely that you’re paying a higher rate of interest on these borrowings than you are on your mortgage.

In this case, it may be a sensible choice to repay these debts off first, before you start thinking about making a capital repayment to your mortgage.

3. Am I contributing to a pension?

If you don’t already have a pension, or you are making less than the maximum contributions (typically 100% of your earnings or £40,000, whichever is lower) then it may be worth considering using some or all of your lump sum to make a pension contribution.

Pensions are an excellent way to save because of the tax relief you get from the government. So, if you do have a lump sum, paying into your pension might be a good place to start.

The pros and cons of repaying your mortgage with a lump sum

There are many complicated calculations that you can undertake to work out whether you will be financially better off by investing your money than you are paying off a lump sum.

In theory, if you can achieve a better return from your investment than the interest rate you are paying on your mortgage, then you could be better off investing. However, things are rarely that simple! Factors such as the type of mortgage you have, the term remaining and the type of investment you’re considering will all come into play, making an exact answer difficult to establish.

Firstly, if you’re considering paying a lump sum off your mortgage, you should establish whether you will pay any Early Repayment Charges (ERCs). If you’re on a special fixed, variable or tracker rate deal then it’s likely you will pay charges if you want to make a lump sum repayment to your mortgage.

Depending on your interest rate, ERCS can run into thousands of pounds and so this might influence your decision.

Even if no ERCs apply, paying a lump sum off your mortgage can be inflexible in that it can be difficult to get that money back in the future should you need it. You may then have to remortgage your home to get the money back, which can be a costly and difficult process.

There are advantages to repaying your mortgage with a lump sum. One of the most important is the psychological benefit of you feeling more secure in your home, knowing that you either have a much smaller mortgage, or that you own the property outright if you’ve paid off your mortgage in full.

If you have repaid your mortgage, then you will no longer have to make a monthly payment, and this could help you to budget if, for example, you’re heading into retirement or you anticipate a change to your income.

If you’re paying off a lump sum to reduce the size of your mortgage you typically have two choices:

• Keep the mortgage term the same and reduce your monthly repayments – paying a lump sum off your mortgage can help your cash flow on a monthly basis.
• Keep your monthly repayments the same and reduce the mortgage term – this will give you the security that your mortgage will be paid off more quickly than you originally anticipated.

The pros and cons of using your lump sum to invest

In a low interest rate environment, you may prefer to use your lump sum to invest. If you’re benefiting from a low rate on your mortgage – many deals are currently available at less than 2% interest – you may feel that investing your money for the long term may be a better option.

If you expect to invest for a long period, then there is certainly potential for growth. According to Vanguard, the average stock market return in the UK between 1997 and 2018 was 9.9% a year. This represents a healthy return over time, and certainly more than the interest rate you would currently pay on a mortgage.

Investing your lump sum can give you the ability to earn returns according to the level of risk you are prepared to take.

Of course, 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 your lump sum can be risky, and there are no guarantees.

One reason that you might not want to consider investing a lump sum rather than repaying your mortgage is if you are looking for a quick return. If your mortgage only has a couple of years left to run, it might not be suitable to invest for that short a period, as investments are typically recommended for the medium to long term.

Get in touch

If you have a lump sum and you’re not sure what to do with it, get in touch with us.

Every client’s circumstances are unique, and you will have different priorities, goals and circumstances to another investor. The right advice will depend on your specific situation and what your long-term plans are, and so it can pay to speak to a professional.

Please note

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it. Think carefully before securing other debts against your home.

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.