Temp – Holding our nerve through uncertain markets
24.03.2021 by Jim Ker
It’s no secret that markets are currently feeling the pressure due to the global outbreak of Covid-19. According to Which, the UK Stock Market has fallen much faster than previous shocks, sparking widespread reports that a global recession may be on the cards. It’s easy and understandable to see how this could make many savers worried about their money and look at making some rather big financial decisions – shifting the direction of their long-term investment plans. But whilst it’s wise to consider your options in these uncertain times, hasty moves when it comes to savings and investments could do more harm than good.
“There are only two prices that count. The price you buy at and the price you sell at. What this means is that when markets are down it only matters to those that need to cash in their policies early.”
(The Martin Lewis Money Show – A Coronavirus Special Episode)
At Kingston Unity, we deliver long-term savings and investment solutions for our Members. When we say long-term, we’re talking five years as a minimum, usually longer. When we invest the Society’s With Profits fund, we are seeking a medium to low-risk investment with the aim of achieving a return over the long-term. We achieve this by investing in a range of different assets, including equities, property, Bonds and Gilts, and cash. It is these fluctuations in market volatility that our With Profits fund has been designed to weather and we’re very confident that we are remaining robust throughout these unchartered waters. Many of our products also offer guarantees on your initial investments.
Looking Long Term
In times of market downturn, context is important. Although the market is currently feeling the impact of Coronavirus (Covid-19), 2019 also saw the UK Stock Market grow by 12% over the course of the year.* This shows the need to look at long-term investments with exactly that in mind – the long term. In addition to that, we are beginning to see markets steady, according to this article in Which. While this is no excuse for complacency, it does show that rash decisions may not be the best moves when it comes to our finances.
To help our Members who are investigating their options, we’ve put together some recommendations to help savers keep calm, carry on and remain confident in their investment decisions:
1. Don’t Panic
These are scary times, but as we mentioned above, now is not the time to be pulling all your money out of savings accounts and sticking it under your mattress. Financial institutions across the world are experiencing the same situation and withdrawing your money or transferring it to another provider could do more harm than good to your long-term savings plans. Kingston Unity has made a number of key strategic moves for the benefit of the Society and, most importantly, for the benefit of its Members and their savings.
2. Check your policy details and know your guarantees
Many of our With Profits products offer guarantees on your investments. On our Investment ISAs we guarantee that you will be able to withdraw 100% of your initial investment, plus any bonuses we have added, less any withdrawals you might have made, on the 10th anniversary or each 5th anniversary after that.
For our Investment Bond holders, we guarantee 101% of your initial investment, plus any bonuses we have added, less any withdrawals you have made, on the 10th anniversary or each subsequent 10th anniversary after that. Check your product information or get in touch with us and we will be able to help.
3. Review your drawdown options
Remember, with our Investment Bonds, you can withdraw up to 5% of your initial investment each year penalty-free. For Investment ISAs, you can withdraw up to 10% of your investment penalty-free. Check your product details to see how this could help your financial needs without dramatically altering your savings plans.
4. Seek professional advice
If you’re unsure what to do, we encourage you to seek advice from an Independent Financial Adviser who will have the expertise to help you navigate through situations such as this one. The peace of mind you can receive from this might be just what you’re looking for. Remember though that you may be charged for this service.
Putting our Members first, always
As a mutual, we are here solely for the benefit of our Members and have worked with our expert advisers to ensure the Society remains in good shape for the future and delivers a fair outcome for all. The decisions we have made are entirely designed for the benefit of the Society and its Members with a long-term outlook.
Above everything. Stay safe. If any of our Members have any questions or would like to talk to one of our team about how we might be able to help them, please don’t hesitate to get in touch. Our phone lines are a little busier than normal, but we are still open and we’re still here for your benefit. We’re also in the process of upgrading the Members’ area on our website to provide you with detailed information and up to date answers on the subjects that you have been speaking to us about. You can find your way to the Members’ area here.
Has the outbreak of Covid-19 affected your long-term savings plans? Let us know if you have any concerns about your savings products with us. We cannot provide advice, but we are happy to give you all the information you need to help you.