The conversation with elderly parents or friends about putting in place a Lasting Power of Attorney (LPA) – a legal document that appoints one or more individuals (attorneys) to make financial and/or healthcare decisions on their behalf if they lose the mental capacity to run their own life – is unlikely to be a particularly easy one to start.
Brokers’ buy lists are once again under the spotlight, following the controversy surrounding the lockdown of Neil Woodford’s flagship Woodford Equity Income fund at the beginning of June.
Prior to the past few months, I have had personal dealings with financial advisers only a couple of times. In my first encounter, several decades ago, I was persuaded it would be a shrewd move to pull out of the company pension and open a personal pension with the Equitable Life. That was not my finest hour, with hindsight, though I was not alone: you would be surprised how many financial journalists in the 1990s lost their savings that way.
When the then chancellor Gordon Brown introduced Individual Savings Accounts (Isas) as an enhanced, more generous version of tax-free Personal Equity Plans 20 years ago in 1999, his aim was a pretty simple one: he wanted to get ordinary people more engaged with their finances, and in particular promote the idea that stockmarket investment was the best way to build a more prosperous long-term future.
At the risk of being labelled a one-issue bore, I am returning to the question I raised last month – that of how to encourage women to become long-term investors. What are the factors that deter them, and what could be done to change things?
I recently attended an evening event designed as a forum for young women keen to learn how to make the most of their money. Most, I guess, were under 40. They were engaged and curious; they were not knowledgeable about investing, but they were certainly not fearful of the idea, and asked sensible, practical questions about how to get started, how to prioritise demands on their money and how to approach the risks attached to investing in the stockmarket.
Around 3,000 funds are listed in the Investment Association’s sector classifications and are readily available to private investors, so it’s easy to understand why many people trying to set up or add to a portfolio may feel like rabbits in the headlights, overwhelmed by far too much choice. And that’s before you throw in another 400-plus investment trusts and the ever-expanding universe of ETFs tracking market indices or ‘weighted’ versions of them.
If you’re in your early 60s and looking forward to retirement, the past couple of months have hardly been a time for celebration of the approach of your golden years – indeed, quite the opposite. On 6 November 2018, the state pension age (SPA) for men and women was briefly equalised as women’s SPA rose to 65. It’s the latest hike in a series of adjustments that started in 2010 and were accelerated in 2011, designed to bring men and women into line in state pension terms.
In a financial world where transparency for consumers has become a huge buzzword in recent years, one of the biggest relics from a past, non-digital age is the platform exit fee.
For the past two decades or so, as final salary schemes have declined and it has become increasingly clear that the state pension alone will be barely enough to scrape by on, we have been exhorted by the powers that be to take control of our own financial destiny.