Advisa Insights – April 2024

Newsreaders welcome

We sincerely hope you have had a wonderful easter break.

In this month’s edition, we bring you a variety of engaging topics designed to keep you informed and prepared for the future. Here’s what’s inside:

National Outlook: Our overview of the state of the UK economy, guided by our monthly calendar of key economic events.

ESG Explained: A Conscious Financial Future: Discover the importance of Environmental, Social, and Governance (ESG) criteria in shaping a sustainable future and how it impacts your investments.

Navigating the Future with Advisa Wealth’s ESG Investment Strategy: Learn how Advisa Wealth is adapting in ESG investing, providing strategies that regularly provide positive returns but also contribute to a positive global impact.

Funding Your Retirement: Navigating Through the Costs for a Fulfilling Future: Retirement planning can be daunting. Our guide offers insights and tips on how to effectively plan for your retirement, and provide for a comfortable and fulfilling future.

Local News in Jersey: Stay up-to-date with the latest happenings in our community. From policy changes to local events, we’ve got you covered.

We’re committed to bringing you valuable information to help you stay ahead. Whether it’s keeping pace with local developments, making conscious investment choices, or planning for your retirement, our newsletter is designed to empower you with knowledge.

Warm Regards,

Advisa Wealth Team

 

National Outlook

In our latest economic overview, the UK has experienced mixed signals in the recent quarter. The labour market has shown signs of cooling, with the unemployment rate inching up to 3.9% in January from 3.8% in December, as reported by the Office for National Statistics. Additionally, wage growth including bonuses decelerated, posting a rise of 5.6% on an annual basis, down from 5.8%.

Despite these challenges, the British economy found its footing in January, growing by 0.2% month-on-month, a modest recovery driven by notable rebounds in retailing and construction, especially house-building. This growth marks a slight easing of recessionary pressures felt in the latter half of 2023 and offers a glimmer of optimism for Prime Minister Rishi Sunak as an election looms.

Consumer inflation has shown tentative signs of easing, with the Consumer Prices Index including housing costs (CPIH) rising 3.8% in the 12 months to February 2024, a decrease from 4.2% in January. Similarly, the Consumer Prices Index (CPI) increased by 3.4% over the same period, down from 4.0%.

In response to the inflationary outlook, the Bank of England has held interest rates steady at 5.25%, signalling potential rate cuts ahead, with financial markets anticipating three reductions totalling 0.75 percentage points this year.

Retail sales in February maintained their ground, aligning with a growing consumer confidence buoyed by the slowing inflation and the prospect of lower interest rates, though sales volumes remain slightly below pre-pandemic levels.

As we navigate these complex economic currents, the mixed data points underscore a cautiously optimistic view, with signs of resilience amidst challenges, suggesting a nuanced path forward for the UK economy.

 

ESG Explained: A Conscious Financial Future

In the ever-evolving landscape of global finance, Environmental, Social, and Governance (ESG) investing has surged from a niche interest to a critical strategy reshaping how individuals and institutions allocate their capital. At its core, ESG investing is not merely a trend but a profound shift towards sustainable and responsible investment practices that consider the broader impact of where money is placed. This conscientious approach to investing reflects a growing recognition of the interconnectedness of financial returns, environmental stewardship, social responsibility, and corporate governance.

Read more on Environmental, Social, and Governance

 

Navigating the Future with Advisa Wealth’s ESG Investment Strategy

At Advisa Wealth, we understand the growing desire among investors to align their financial goals with their values, recognising the profound impact of climate change, global responsibilities, and social issues on investment decisions. Our dedication to responsible investing stems from a keen awareness of these evolving priorities, coupled with the expanding universe of investment opportunities that not only address but champion these causes.

Read more about Advisa Wealth’s ESG Investment Strategy

 

Funding Your Retirement: (Part 2) Navigating Through the Costs for a Fulfilling Future

To read part 1, Planning For Your Retirement: A Journey to Your Ideal Future, click here

Retirement marks a significant transition in life, not just in terms of daily routines and activities, but also regarding financial planning and management. Understanding and accurately estimating the costs associated with retirement is pivotal in ensuring that this phase of life is as fulfilling and stress-free as possible. This article delves into the essence of retirement funding, guiding you through the process of calculating retirement costs, and highlighting the importance of considering healthcare expenses.

Read more about Funding For Your Retirement

 

Local News Highlights

No Income Tax Increase in Jersey

Jersey’s Treasury Minister, Deputy Elaine Millar, has confirmed that the government has no plans to raise income taxes or introduce new corporate taxes. This decision aims to maintain the international competitiveness of Jersey’s finance sector, distinguishing it from recent tax increases in the Isle of Man. Millar emphasises the focus on finding “real efficiencies” within public sector costs instead of broadening the tax base, such as by taxing second property sales, to safeguard the finance sector’s global standing.

 

Changes to Short-Term Holiday Let Rules in Jersey

Jersey is set to update its planning rules, allowing property owners to list their properties as short-term holiday lets on platforms like Airbnb for up to 12 weeks a year without needing planning permission. This move, facilitated by Environment Minister Steve Luce, is aimed at providing clarity for the industry and potential hosts. It builds on initiatives by former Environment Minister Jonathan Renouf to support the growing trend of short-term rentals without the bureaucratic hurdles​.

 

Exploring Higher Mortgage Rates in Jersey Compared to the UK

Jersey lenders have been asked by the Jersey Consumer Council to explain why mortgage rates on the island are higher than those in the UK. This inquiry, spurred by consumer concerns over the “Jersey premium” on mortgages, seeks a detailed justification from lenders within three weeks. Factors such as market conditions, regulatory environments, and operational costs will be considered in their response. This move aims to understand and possibly address the disparity in mortgage costs between Jersey and the UK​.

 

Jersey’s Stamp Duty Receipts Fall Amid Housing Market Slowdown

In 2023, Jersey witnessed a significant £17 million reduction in stamp duty receipts, attributed to the housing market’s slowdown. The decline was anticipated and accounted for in the government’s fiscal planning. A 3% increase in stamp duty for non-primary residences was introduced at the start of the year, aiming to regulate the market, but it has been criticised for dampening investor interest, further affecting the market’s vitality.

 

Jersey Introduces Compensatory Allowance for Independent Taxation

Jersey’s transition to independent taxation for couples includes a new compensatory allowance to mitigate potential negative impacts. This change aims to prevent any significant tax increase for couples, especially those with one partner earning below the tax threshold or unable to work. Assistant Treasury Minister Ian Gorst emphasises the allowance’s role in ensuring a fair and smooth transition, countering claims of potential tax increases up to £3,000 for some couples.

 

Brittany Ferries to be ‘more involved’ in Channel Islands

Brittany Ferries is enhancing its role in the Channel Islands through a deeper partnership with Condor Ferries, as outlined by CEO Christophe Mathieu. This collaboration includes using the Brittany Ferries ship, Barfleur, for specific operational needs and introducing combined ticket offers to improve travel options for Islanders. Additionally, Condor plans to resume its pre-Covid sailing frequencies, aligning with Brittany Ferries’ aim to bolster ferry services in the region amidst discussions for a new ferry service agreement.

 

Jersey finance watchdog warns of scam email

The Jersey Financial Services Commission (JFSC) has alerted finance firms about phishing scam emails impersonating its director-general, Jill Britton. These fraudulent emails ask recipients to open a PDF attachment, aiming to steal sensitive information or install malware. The JFSC emphasises that the scam emails come from an unauthorised address and differ from the commission’s standard email format. It advises verifying the authenticity of emails claiming to be from the JFSC, especially before opening any attachments, and reminds that all legitimate JFSC emails will end with @jerseyfsc.org.

Next month’s Economic Calendar

What may impact your money?

Key events, explained:

BoE Interest Rate Decision: An interest rate tells you how high the cost of borrowing is, or high the rewards are for saving.

Unemployment Rate: The unemployment rate is one of the primary economic indicators used to measure the health of an economy. It tends to fluctuate with the business cycle, increasing during recessions and decreasing during expansions. It is among the indicators most commonly watched by policy makers, investors, and the general public.

Inflation Rate: Inflation is the rate at which prices are rising over time. For example, if a loaf of bread costs £1 and that rises by 10p, then bread inflation is 10%. Price rises have been getting faster since February 2021, when the CPI rate was just 0.4%.

GDP Growth Rates: Gross domestic product (GDP) is the total monetary or market value of all the finished goods and services produced within a country’s borders in a specific time period. As a broad measure of overall domestic production, it functions as a comprehensive scorecard of a given country’s economic health.

Retail Sales: The primary purpose of the Retail Sales Index (RSI) is to produce a short-term measure of the changes in the volume and value of sales of goods by retail businesses in Great Britain, providing a timely indicator of economic performance and strength of consumer spending.