Martin Aitken & Co Ltd News & Developments

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The state of retirement in 2022

An annual survey from major investment manager Abrdn has provided a snapshot of people who have or plan to retire in 2022.

Wherever you are in your retirement planning, the below research offers an interesting insight.

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Inflation: getting real about returns

With inflation edging ever closer to double digits, the way you think about investment returns may need to change.

From January 2000 to the start of this year, inflation, as measured by the Consumer Price Index (CPI), averaged 2.3%. Over that period, it had briefly risen above 5% three times – in 2008, 2011 and, most recently in late 2021. The last time CPI inflation was above 7% was in March 1992, over 30 years ago.

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An unexpected first quarter

Despite the numerous shocks that occurred in the first quarter of 2022, the world’s share markets held up surprisingly well.

Cast your mind back to the start of the year. The world was coming to terms with the latest Omicron variant of Covid, which was supposedly proving less serious than its predecessors. The latest available UK inflation figure (for November 2021) was 5.1% and the Bank of England had delivered an early Christmas present of a 0.15% rise in interest rates to 0.25%. Across the Atlantic, US inflation was higher at 6.8%, but the US central bank, the Federal Reserve, had delayed its first increase in interest rates. Investment markets had enjoyed a generally good 2021, particularly in the US, and while interest rate rises were expected in 2022, the post-pandemic investment outlook was reasonably sunny.

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Quantitative tightening: A reversal of fortunes?

One of the defining financial strategies of the last 13 years – quantitative easing – is about to go into reverse.

The Bank of England will slowly trim its £9 trillion portfolio throughout 2022, but only time will tell when it comes to the impact on personal investments.

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Learning lessons from the UK dividends bounce back

New research shows that the UK dividend payments rebounded strongly in 2021 but still remains below their pre-pandemic level. The experience of the last two years holds important lessons for investors.

2020 was a grim year for anyone who relied on UK company dividends as a source of income. The total dividend payments from UK plc fell by 43%, taking them just about back to a 2011 level. Unsurprisingly, the Covid-19 pandemic was to blame, with companies rushing to preserve cash and the Bank of England forcing banks to stop dividend payments.

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2021: Investment wrap-up

The world’s share markets generally produced solid returns in 2021, but UK stocks and fixed-interest investments suffered. Maintaining an international outlook in your portfolio can help underpin its value.

2021 was a good year for most investors in share-based funds, particularly those who had holdings linked to the US market.

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Placing a cost on retirement

How much income do you need for a comfortable retirement?

New research has put a post-pandemic price on the answer.

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Spring Budget 2021

Despite the many rumours beforehand, the Chancellor still managed to produce some surprises on Budget Day. He chose to spend big initially, with major investment incentives for companies in the next two years.

However, the widely anticipated corporation tax rise then kicks in with a vengeance – a one-off jump from 19% to 25%. Individual taxpayers did not escape either, with Mr Sunak reaching for the old stealth tax favourite of freezing tax bands, thresholds and allowances.

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