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Is wearable tech set to turn us into our own Doctors?

Many people reading this article will have a Fitbit, assiduously clocking up their 10,000 steps a day. Others will have taken it further, maybe checking their heart rate on an Apple watch, logging their workouts and maybe even going so far as using the watch’s ECG (electrocardiogram) functions. 

Maybe when you have finished your workout you pop a pulse oximeter on your finger, checking your blood oxygen level… 

These are all medical checks that we can perform at home using wearable technology – and they are medical checks that wouldn’t have been imaginable ten years ago. So what does the future hold for wearable tech? Could we, in effect, become our own doctors? 

The growth in the wearable tech market – by 2024 the market just for wearable devices to monitor vital signs is expected to reach $1bn (£730m) – will be driven by several factors. Populations are getting older, research and development is improving all the time, 5G is going to lead to improved connectivity, and, sadly, the current pandemic has made everyone far more aware of their own health. 

So what will we see? ‘Worn’ tech devices such as watches will continue. But wearable tech will mean exactly that, technology becoming part of your clothes so it is less intrusive. We’ll see sensors, biomechanical and motion, placed at specific parts of the body to communicate with an overall Body Area Network system. And the future will bring ‘implantables,’ including everything from intelligent pacemakers to devices that monitor key wellness levels such as blood sugar. 

These devices will communicate with both the wearer and with their medical practitioner. The information the wearer receives will, in many cases, allow him or her to take immediate action. The medical practitioner will receive vital information, be alerted to key triggers – and will also save time, with the wearable tech gathering much of the key information on a patient’s health. 

“The age of wellness wearables is definitely here,” said one clinical director. “Whether it is middle ear devices that monitor your heart rate, the wearable on your wrist that tells you how you are sleeping, or an ECG monitor around your chest – there are so many technology developments that enhance the care doctors can provide.” 

There is, though, one potential downside. None of what I’ve described will be free – and some of the most sophisticated wearable tech will be very expensive. Could wearable tech widen the health divide between rich and poor? The answer seems obvious – and may well present medical professionals and policymakers with plenty of potential headaches.

Sources
https://www.medicaldirector.com/news/future-of-health/2019/02/new-report-reveals-the-future-of-wearable-devices-in-healthcare

Could we see negative interest rates in the UK?

In February, the Daily Telegraph had a headline which must have alarmed savers up and down the land: ‘Savers face threat of negative interest rates.’ 

According to the story, the Bank of England had told the clearing banks that they ‘must be ready to introduce the policy in the next six months.’ 

What are negative interest rates? Have other countries introduced them? And are we really likely to see them in the UK? 

Negative interest rates are exactly what the name suggests. Rather than being paid interest on any money on deposit, a negative interest rate means that it costs you money to have funds on deposit. To use some very simple maths, if you have £1,000 on deposit at an interest rate of 1% you have £1,010 at the end of the year. If the interest was a negative 1% then you would have £990. Add in the effects of inflation and you would be demonstrably worse off by leaving your money on deposit.

Negative interest rates are a weapon used by central banks in a bid to stimulate economic growth. So the central banks can force the clearing banks to pay negative interest rates to savers, forcing them to spend and it can pay negative interest to money the clearing banks have on deposit, encouraging them to make loans. 

Until quite recently it was thought that interest rates could not go below zero – but this has not proved to be the case, with banks in Europe and Japan using negative rates to try and stimulate their economies. Germany – where savers have an estimated €2.5tn (£2.18tn) on deposit – is one country where savers have been battling negative interest rates. 

So could we see such rates in the UK? The British public reportedly have built up savings between £100bn and £125bn during the last year. There is reportedly a further £225bn in accounts which pay zero interest. 

Clearly if this money were released into the economy it would provide a huge stimulus – and the Bank of England is rumoured to have held conversations with more than 100 high street and online lenders. Rates have already been cut to 0.1% during the pandemic – so could they turn negative? 

Most commentators seem to think it unlikely, arguing that the six months the Bank of England has given banks to prepare for negative interest rates is long enough to see a ‘vaccine-fuelled recovery’ in the economy. 

But if 2020 taught us anything, it was that what was unthinkable at the beginning of the month was the norm by the end of it. While negative interest rates certainly seem unlikely, it might be worth considering that ‘never say never’ is truer than ever.

Sources
https://www.express.co.uk/finance/personalfinance/1393360/negative-interest-rates-uk-savings-mortgage-bank-of-Englandhttps://www.theguardian.com/business/2019/nov/22/germanys-risk-averse-savers-grapple-with-negative-interest-rateshttps://www.moneydashboard.com/blog/how-negative-interest-rates-impact-your-moneyhttps://www.cityam.com/before-the-bell-negative-interest-rates-remain-a-distant-and-unlikely-prospect/

Property Funds: The doom and gloom has been overdone

A model home on cement background, Business loans or saving money for buying or sell a real estate concept.

Many people will be familiar with property funds. Investing in commercial – rather than domestic – property, these funds have been part of many portfolios, typically providing a balance to higher risk equity funds. 

That, of course, was before Covid-19. When the UK went into lockdown in March last year many property funds had to suspend dealing. Anyone who has ever bought or sold a house knows that a physical inspection of the property – a valuation – is an integral part of the process. The same is true of commercial property. 

When the pandemic struck, valuers declared ‘material uncertainty’ – a clause meaning that a valuation has been prepared ‘under extraordinary circumstances’. That meant valuations could not be relied on, which in turn meant that many property funds took the decision to halt dealing. 

As lockdown eased in the summer, valuers gradually lifted the ‘material uncertainty’ clause, finally removing  it from virtually all UK property at the beginning of September. With funds having been suspended due to material uncertainty, it was generally assumed that they would start trading again immediately: in fact, very few reopened as soon as they could.  

With another round of lockdown in November – and the current one set to last until March – should investors remain wary of property funds in the long term? After all, there were plenty of stories of landlords failing to collect rent in the fourth quarter of 2020 – and we all know what a bad year it was for retail. Add in ‘the decline of the office’ – another recurring theme at the moment – and you could be forgiven for thinking that no sane investor would ever touch a property fund again. 

There are, though, real grounds for optimism in the economy – and that optimism may well be reflected in property funds. In its recent quarterly forecast, the Bank of England said it expected the UK economy to “recover strongly from the second quarter of 2021, towards pre-Covid levels”. 

Depending on which paper you read, ‘Brits have stashed away £100bn in lockdown’ or the ‘UK economy [will] reach pre-pandemic levels if Brits spend £125bn savings’. 

There is some doubt about the figure – and some doubt whether we have ‘stashed it away’ or cautiously saved it. What is undeniable is that we have saved money during lockdown – witness the problems the ‘sandwich’ or ‘commuter’ economy is having – and with interest rates close to zero there is every reason to suspect a lot of it will be spent as restrictions are relaxed. 

It is therefore reasonable to think that property funds will once again come to play their part in investors’ portfolios, once again balancing the higher-risk/higher-reward equity funds and giving clients portfolios which reflect their long-term financial planning goals. 

Sources

https://www.propertyfundsworld.com/2021/01/18/294566/uk-property-primed-great-2021

https://citywire.co.uk/funds-insider/news/property-funds-emerge-from-lockdown-in-need-of-a-cure/a1408738

Can the British high street be saved?

Back in 2018 Mike Ashley, owner of Sports Direct and other high street brands, famously declared that ‘the British high street will be dead by 2030.’ The targets of his anger were MPs in general and the then-Chancellor Philip Hammond in particular. Any more taxes on the high street, Ashley argued, and it would collapse in the face of increasing competition from online retailers. 

In particular, Ashley and many other high street chains had business rates in their sights. Many shops were paying more in business rates than they were paying in rent. Unless the system was reformed, they argued, that would be it for the national high street. 

That was in 2018, well before coronavirus and well before lockdown. Anyone who has been into a town centre lately will know the devastating effects lockdown has had. 

The second round of lockdown measures were reported to have ‘battered’ footfall in the run-up to Christmas, with Bonmarché becoming the latest chain to collapse into administration. 

Figures for Boxing Day, traditionally one of the busiest shopping days of the year, suggested that footfall was down 60%. 2020 was reported to be the worst year for retail job losses for 25 years. 

Now we are in the third lockdown and Chancellor Rishi Sunak is extending the furlough scheme into the summer. 

Politicians are talking about there being ‘no guarantees’ of lockdown being lifted by the spring. Meanwhile we go on Amazon and buy everyday items we would previously have bought in our local shops…

One day all this will come to an end. Life will go back to ‘normal.’ But will that be too late for the British high street? Will we have become so used to working from home that, to take just one example, ‘the commuter economy’ will never recover? 

If the national high street is to be saved there has got to be some new ideas and an acceptance that the high street does not just equal retail. 

Local councils will need to become proactive and high streets will need to become a mix of retail, leisure and public space. In short, the best way to save our high streets may be to stop thinking of them as traditional high streets…https://www.retailgazette.co.uk/blog/2018/12/mike-ashley-mainstream-high-streets-already-dead/

Sources
https://www.retailgazette.co.uk/blog/2018/12/mike-ashley-mainstream-high-streets-already-dead/

The Investment Theories which go against conventional wisdom

Many of you will have heard the old stock market maxim; ‘Sell in May and go away.’ It ended with, ‘Don’t come back until St. Leger day’ and held that the best investment practice was to sell up in May and enjoy the English summer season, the Lord’s test, Ascot and Henley. 

Sadly, Wall Street and the Shanghai Composite Index don’t take too much notice of the English season, and that old advice has rather dropped out of favour!

But are there any other seemingly outdated investment theories and should you pay any attention to them? 

Perhaps we should start with the ‘Greater Fool Theory’ which, very simply, says it doesn’t matter what you pay for an investment as long as you can find a ‘greater fool’ to buy it at a higher price. These days the Financial Conduct Authority do not recognise ‘greater fool’ as wholly satisfying the requirement to ‘know your client…’ 

‘Buy the worst performing market.’ Has one of the world’s stock markets performed poorly this year? Then believers of this theory say you should invest in it next year. 2019 was generally a good year for world stock markets, but of major markets South Korea lagged behind, only rising 9%. The Brazilian market, in contrast, rose by 32%. What happened in 2020? South Korea was up by 31%, Brazil by just 3%. And anyone following this theory will be heavily invested in the UK’s FTSE index in 2021 – compared to other countries, the UK’s leading index performed poorly in 2020. 

The ‘Prospect Theory’ tells us that investors are more worried about the prospect of loss than they are attracted by the expectation of profit. If a portfolio grows at a steady 5% for three years it will – allowing for compound interest – have the same return as one which grows 12%, falls 2.5% and then grows by 6%. 

The theory tells us the majority of investors will opt for the steady 5% return and, in many ways, this theory goes right to the heart of what a good financial adviser does. It is not about the latest fashionable investment theory or the return of an old favourite, it is about knowing your client, working with your client over the long term and building a savings and investment portfolio that matches the client’s level of risk and financial goals. Theories may come and go and that is a fundamental which will never change. 

Sources
https://www.investopedia.com/articles/financial-theory/controversial-financial-theories.asp

Can being flexible with hours really boost productivity?

In the old days it was simple. You went to work for a company, spent your whole life there and duly retired. ‘Security’ was what people wanted in a job. 

But the world of work was changing, even before the pandemic. As more Millennials, people who came of age around the turn of the century, entered the workforce, employers found their staff wanted very different things: an employer who shared their values; a better work/life balance and – above all – flexibility. 

And as the Millennials were followed by Generation Z, people who entered the workforce in the second decade of the century – the trend was only accentuated. Flexibility, the ability to work from home, the chance to balance work with family commitments… The old days of Monday to Friday, 9 to 5 were disappearing fast. 

But far from that being a problem, could it be a ‘win-win’? Can increased flexibility lead to increased productivity? Are we really more productive in the spare bedroom than we are in the traditional office? 

The pandemic has made that question relevant for thousands of companies – and the early indications are that the answer could well be ‘yes.’ 

Is it just that happier employees produce better work? Or does it go deeper than that? 

For employers, flexible working has one huge benefit as it means that they can employ, or work with, the best people, irrespective of geography. An employer’s pool of talent is no longer restricted to within commuting distance of the office and for some companies it literally becomes the whole world. 

Flexible working also allows companies to employ people who simply might not be able to get into a traditional office, for example, by reason of caring responsibilities or disability. 

It also, subject to the inevitable Zoom meeting, allows people to work the hours that suit them. All of us know people who’d prefer to start work ridiculously early and finish by mid-afternoon. And there are plenty of people who do their best work late at night. 

It is hard to see the trend towards flexible working ending, even when the pandemic is eventually over. Most employers will unquestionably want staff back in the workplace, but they will be wise to to accept employees’ needs for flexibility. Flexible working may become just as important in recruitment as the remuneration package. 

Millennials and Generation Z value companies that trust them, and that allow them to work when and how they feel most effective. A recent Canada Life survey found that 77% of UK employees thought flexible working made them more productive: that is a statistic employers will not be able to ignore.

Sources
https://facilityexecutive.com/2018/03/remote-work-flexibility-positive-impact-productivity/#:~:text=Flexibility%20Improves%20Communication%2C%20Creativity%2C%20Productivity,saying%20it%20remains%20the%20same.

And https://gett.com/blog/how-flexible-working-can-increase-productivity/

Should I worry about “buy now, pay later”?

Buy now, pay later schemes are becoming increasingly popular as firms such as Klarna and ClearPay partner with large online retailers ASOS and JD Sports, as well as many others. According to Statista, the usage of the Klarna app more than doubled between March and July of 2020, hitting over 460.000 monthly active users in the UK alone. 

The promise of try-before-you-buy allows consumers to make their order and send back any items they wish to return before making any payments, which reduces the need to wait for refunds to clear before making further purchases. With Klarna in particular boasting zero interest, customer fees or late charges and making their money through merchant transaction fees it’s understandable that customers are flocking to use the service. 

If it sounds too good to be true, that may mean that it is. What some consumers may not realise is that if they fail to clear their balance not only will their credit score be adversely affected but their debt can be passed on to debt collection agencies. 

The consequences of missed payments vary wildly between different lenders, and as this specific type of loan is so new to the market, the lack of regulation means that the associated fees and rates don’t need to be presented up front in the same way as with credit cards. 

Which? is calling for full regulation of these firms, as people are driven to spend more than intended, and more than they can afford, subsequently falling into debt. 

Research from Which? showed that nearly a quarter (24%) of users of these plans paid more than they intended to, and over one in 10 (11%) reported that they suffered late charges as a result. 

Interestingly, 26% of users reported that they had not planned to use a buy now, pay later plan at all until it was presented to them as an option at checkout. 18% claimed they used the plan as a result of being offered a discount for doing so. 

While these services do have their benefits for consumers, it’s important for consumers to also be aware of the risks associated with accruing debt.

Sources
https://www.creditstrategy.co.uk/news/news-top-stories/which-calls-for-full-regulation-of-buy-now-pay-later-firms–18601

https://www.theguardian.com/money/2018/nov/17/klarna-buy-now-pay-later-system-that-is-seducing-millennials#:~:text=Klarna%20allows%20people%20who%20shop,pay%20for%20their%20online%20order.

https://www.statista.com/statistics/1137411/klarna-monthly-active-users-uk/

https://www.cnbc.com/2020/12/14/buy-now-pay-later-plans-are-booming-in-the-covid-economy.html

https://pittsburgh.cbslocal.com/2020/12/15/coronavirus-pandemic-buy-now-pay-later-plans/

Worrying about saving for retirement is more common than you may think

Determining how much you need to save for the retirement you want can be difficult enough without actually having to save the money. Your requirements and desires will change over time in the same way that your income is likely to fluctuate.

You can’t be expected to know exactly what you’ll need in 5 years time, let alone 20 or 30, depending on where you are in your journey towards retirement 

As we’ve seen from the events of 2020, even the safest predictions can be subject to unexpected outcomes. It appears that this uncertainty is reflected in the minds of savers, according to Schroders 2020 Global Investor Study.

The study is an independent survey of over 23,000 investors from 32 different locations globally, and responses were collected between 30th April and 15th June 2020. The study suggests that 41% of investors across the world fear that they will not have enough savings to fund their retirement. The time at which the survey took place may be a factor itself as to why some respondents feared a savings shortfall. Whilst responses were being collected the Coronavirus pandemic was in full swing, subsequently upheaving previously held notions of job security and general stability. There were, however, specific answers within the survey which point to more definite reasons as to why people are worried about their retirement savings.

When asked if they believe that the state provided pension in their country was not enough to live off, 55% agreed. In fact, only 19% thought that it was sufficient. 

This view can likely be attributed in no small part to constantly shifting pension rules, which leave many expectant retirees stumped as to what they should prepare for. In fact, 41% of investors agreed that the adapting of rules by governments led them to the conclusion of not seeing the point in trying to save specifically for their retirement. 

Having a plan can be helpful. If you have any concerns about your own pension or retirement savings, you may benefit from seeking the advice of a professional. 

Sources
https://dfm.moneymarketing.co.uk/posts/savings-shortfall-41-worry-they-won-t-have-enough-to-retire

Are premium bonds still worth it?

With the NS&I adjusting the premium bond prize-fund rate to just 1% in December of 2020, down from the previous 1.4%, around 21 million people saw their chances of winning fall. An impressive £99 billion worth of savings are currently held in NS&I premium bonds, and the interest change has brought into the spotlight the question of whether premium bonds are even worth buying.

What are premium bonds?

Premium bonds are effectively an instant access savings account. Rather than each individual earning interest on their savings, the interest across all premium bonds is given out in a monthly prize draw, similar to a lottery. Most people, on most months, will get zero interest, but there is a chance of winning up to a million pound prize, if luck is on your side. Each bond costs £1 and has an equal chance of winning, so the more bonds you own the higher your chances. The minimum purchase is £25 and one person can hold up to £50,000 worth.

What are the benefits over a regular savings account?

Premium bonds are operated by the NS&I rather than a bank, and so are backed by the Treasury. As such they are as safe as can be. Any capital in premium bonds is at zero risk, and can be withdrawn at any time. Any interest gained in the form of a prize is also paid to the winner tax free, but these benefits are not as attractive as they once were. 

The level of safety supplied by premium bonds is no longer unique. Thanks to the savings safety rules and the Financial Services Compensation Scheme, all UK-regulated savings accounts are protected up to a value of £85,000 per person, per institution. With the maximum amount that you can put into premium bonds being £50,000 there are few occasions where that safety cannot be found elsewhere. 

Thanks to the personal savings allowance (PSA) launched in 2016, all savings interest is now automatically paid tax-free unless you are a basic 20% rate taxpayer earning more than £1,000 interest a year, a higher 40% rate taxpayer earning more than £500 interest a year, or a top 45% rate tax payer. 

Where premium bonds do become useful is for those with larger amounts of savings who will already be paying tax on their interest, as premium bond prizes don’t count towards the PSA. It’s also something to consider for those who are feeling lucky, because although the odds of the larger prizes are enormously stacked against you… somebody does win them. 

Whether or not premium bonds are right for you will depend on the wider context of your financial situation. Before acting either way, it’s recommended to take professional advice. 

Sources
https://www.hl.co.uk/news/articles/ns-and-i-interest-rates-slashed-how-to-get-more-from-your-savings

https://www.moneysavingexpert.com/news/2020/12/martin-lewis-reveals-who-should-have-premium-bonds/

https://www.moneysavingexpert.com/savings/premium-bonds/

https://www.moneysavingexpert.com/savings/personal-savings-allowance/

Why bookkeeping is so important for your business

Keeping on top of financial records is integral to the success of any business, and each business will have a unique ideal outcome in terms of perfect bookkeeping. Larger organisations may have their own finance departments to handle these concerns, but many businesses and sole traders simply aren’t equipped to deal with bookkeeping internally. While hiring a dedicated bookkeeper is certainly an option for some, for many it may be more efficient and effective to outsource those tasks to an external professional.

What’s so important about bookkeeping?

First and foremost, bookkeeping allows you to keep the reins on your finances. Without a clear picture of where your investments sit and when your invoices are due, you can lose control of all of the processes that are impacted directly and indirectly as a result. 

Confidence that your bookkeeping is up to date also brings with it a peace of mind that allows you to focus your attention on the places it’s better used. You have enough to keep you busy when running a business, bookkeeping needn’t be the thing that keeps you up at night. 

It isn’t just about peace of mind, however, there are practical advantages to good bookkeeping. When you know how your finances stand today, you can strategise where they should be next week, and a year down the line. Planning ahead for the growth and development of your business is made much more difficult by not knowing where it currently sits. Tracking your profit (or loss) leading up to the current moment also allows you to learn the impact of past business decisions, influencing whether you change your tactics or repeat previous successes. 

Why could outsourcing bookkeeping be the answer?

For some businesses, using a quality third-party bookkeeping service is an attractive option. For businesses that are in the process of growing, the workload relating to bookkeeping may be at a stage that doesn’t warrant the attention of a dedicated employee but has become a time-sink for an existing employee whose ability is better spent elsewhere; by using the services of an external bookkeeper, you can maximise your internal resources. External bookkeepers can also provide extensive experience that could not realistically be attained through the training of existing employees in a short timeframe. 

Requirements differ greatly from business to business, so if you’re thinking about how best to approach your bookkeeping, it’s recommended to speak to a professional for advice before acting.

Sources
https://www.newsanyway.com/2020/11/11/bookkeeping-a-solution-to-your-problem/