Saturday 28 May 2011
Nomination by Kinnird Primary School as an Enterprise Champion...
I was delighted to receive a letter the other day from Falkirk Council advising me that I had been nominated by Kinnaird Primary School as an Enterprise Champion.
The nomination recognises that I have, through support, demonstrated an attitude that is enthusiastic and motivating and that I have inspired and encouraged young people to develop an enterprising attitude. I have to attend an informal presentation to collect my certificate of recognition on 7th June.
I have been nominated for this award by the Primary 7 class teacher and seconded by 2 pupils following my visit to the school to talk to the pupils about financial planning during their school finance week.
The pupils wrote:
- “Mr Hale was inspirational when he came during Finance Week, to talk to P7 about tax and money. He showed us a fantastic video and we now feel inspired to save money!”
- “He taught us the importance of saving money, so when you’re older you can have a better life and achieve your future dreams “.
- “Mr Hale invented a client and made graphs of their accounts to help us understand savings and pension. He made it interesting and easy to understand”.
I must say that this nomination came to me as a total surprise and I am actually overwhelmed by it. I very much enjoyed preparing for the presentation that I did for the primary 7 class and enjoyed even more presenting it and the interaction with the children about financial planning.
I would like to thank very much Kinnaird Primary School for inviting me to talk to the class and to the teacher and pupils who nominated me for this award. I am very delighted to have been nominated and I look forward to receiving my certificate of recognition on the 7th June.
Garry Hale
Director
HK Wealth Managers Ltd
Monday 16 May 2011
National Savings are back with Index-Linked Savings Certificates
NS&I have re-introduced new issues of its savings certificates, including index-linked Savings Certificates (often referred to as inflation-beating savings) and fixed-interest Savings Certificates.
The new Issues are available in a 5-year term only and offer tax-free returns based on inflation, Retail Prices Index (RPI) plus a fixed rate of 0.5%. They offer a maximum investment of £15,000. Fixed-interest Savings Certificates will pay 2.25% AER.
It is anticipated that Billions of pounds will flood into these new government backed investments as savers look to beat inflation on their savings. Savers are currently affected by the combination of high inflation and low interest rates, which means that the real value on savings are being eroded by inflation.
Although these do appear to look very attractive to savers particularly higher rate tax payers I would also consider the following points.
As we know currently inflation is at a very high level and with RPI at 5.3% it is well above the Bank of England’s inflation target. Also, at the moment interest is at an all time low and has been for some time now. Just in the last week the Bank of England has warned that inflation may rise further to a peak later this year. This would suggest that upon reaching its peak inflation will start to fall again.
It is therefore important to consider the effects of the anticipated returns over the full 5 year period where savers may be disappointed with the total return over the 5 years. It is possible to bail out after just 1 year where the return would be RPI plus 0.25%.
The anticipation over the next year or so is that interest rates are likely to start rising to bring the current high inflation under control. As inflation starts to drop the guaranteed return of inflation plus 0.5% will gradually become less attractive over time. The effect of this is that as interest rates start to rise again savers will start to receive some better rates of interest on their cash savings.
I therefore think there will be a point over the next year or so when there will be a tipping of the scales and that savers will benefit from the returns offered by the new NS&I Indexed Linked Savings in the early years of the 5 year period when inflation is still very high, as inflation drops savers will see a drop on their returns.
As a result although savers are receiving a very low rate of interest on their cash savings at present as inflation drops and interest rates increase savings will start to see some better rates of interest appear.
To conclude I would suggest that the rates currently look very attractive, particularly for higher rate taxpayers, and that they may be suitable for some savers as part of an overall savings and investment strategy to avoid the effects of high inflation.
The new Issues are available in a 5-year term only and offer tax-free returns based on inflation, Retail Prices Index (RPI) plus a fixed rate of 0.5%. They offer a maximum investment of £15,000. Fixed-interest Savings Certificates will pay 2.25% AER.
It is anticipated that Billions of pounds will flood into these new government backed investments as savers look to beat inflation on their savings. Savers are currently affected by the combination of high inflation and low interest rates, which means that the real value on savings are being eroded by inflation.
Although these do appear to look very attractive to savers particularly higher rate tax payers I would also consider the following points.
As we know currently inflation is at a very high level and with RPI at 5.3% it is well above the Bank of England’s inflation target. Also, at the moment interest is at an all time low and has been for some time now. Just in the last week the Bank of England has warned that inflation may rise further to a peak later this year. This would suggest that upon reaching its peak inflation will start to fall again.
It is therefore important to consider the effects of the anticipated returns over the full 5 year period where savers may be disappointed with the total return over the 5 years. It is possible to bail out after just 1 year where the return would be RPI plus 0.25%.
The anticipation over the next year or so is that interest rates are likely to start rising to bring the current high inflation under control. As inflation starts to drop the guaranteed return of inflation plus 0.5% will gradually become less attractive over time. The effect of this is that as interest rates start to rise again savers will start to receive some better rates of interest on their cash savings.
I therefore think there will be a point over the next year or so when there will be a tipping of the scales and that savers will benefit from the returns offered by the new NS&I Indexed Linked Savings in the early years of the 5 year period when inflation is still very high, as inflation drops savers will see a drop on their returns.
As a result although savers are receiving a very low rate of interest on their cash savings at present as inflation drops and interest rates increase savings will start to see some better rates of interest appear.
To conclude I would suggest that the rates currently look very attractive, particularly for higher rate taxpayers, and that they may be suitable for some savers as part of an overall savings and investment strategy to avoid the effects of high inflation.
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