Brits reluctant to invest
An article published by the Financial Times in early October highlighted that millions of people living in the UK have five-figure sums sitting in cash – despite the corrosive effects of inflation.
‘The large amount of excess savings points to a culture in Britain in which people would rather hold cash than invest in stock marketsThe global network of stock exchanges that lets investors buy and sell shares in publicly listed companies..’1 Plus, using historical data we can see that £1,000 saved as cash in 2013 would have grown to £1,167 by the end of 2023, compared to over £2,200 if that same £1,000 was invested in the Moneybox Balanced Starting Option.*
What’s more, if this investment was made with a Stocks & Shares ISA, any investment gains made would be free from tax too.
The report went on to say that ‘the Financial Conduct Authority has flagged that 8.6 million people in the UK have more than £10,000 sitting in cash, half of them could possibly benefit from investing. Other figures from HM Revenue & Customs show that 3 million people have more than £20,000 sitting in a Cash ISA – but nothing in a Stocks & Shares equivalent.’1
Moneybox’s own financial guidance research found that 70% of Brits still don’t invest, 25% of those with financial regrets say they regret not investing, and 31% of current investors regret not investing earlier in life.
So, if you’re already saving, is it time to look at investing too? It’s an easy way to tackle two goals at once: making sure you’re covered in the short term, and setting yourself up to grow your wealth over the long term.
Capital at risk. All investing should be long term. The value of your investments can go up and down, and you may get back less than you invest.
Tax treatment depends on individual circumstances and may be subject to change in the future.
Before committing to the long term nature of investments, you should have a shorter term cash supply available for emergencies.
Gold hits all-time high
Gold hit an all-time high on Monday 21 October 2024, rising to $2,740.37 a troy ounce – and it’s continued to rise since. This represents a gain of more than 40% in the last year. The rise has been fueled by the ongoing wars in the Middle East, coupled with uncertainty over who will win the US Presidential Election on 5 November.
That’s because gold’s image has always been that of a ‘safe haven’ asset – it’s seen by investors as a good place to park their cash in times of uncertainty. This isn’t always the case though, and you should do your own due diligence before investing in the precious metal.
S&P 500 having its best year since 1997
America’s benchmark index, the S&P 500A stock market index that tracks the performance of the 500 largest companies listed on US stock exchanges., posted a small loss of 0.06% in October.2 However, since the start of this year the S&P 500 is up 20.30% (since 2 January 2024).2
Who’s to thank? Well, the Federal Reserve (Fed) was able to facilitate a substantial interest rate cut without worrying investors. It delivered what has become known as a ‘soft landing’ – bringing inflation under control without restricting economic growth. Plus, the Fed has shifted its focus away from getting inflation down towards making sure the US unemployment rate doesn’t go up much more.
Put it all together, and it’s looking rosy for American markets. Eyes will be on the Presidential Election on 5 November, where the current Democrat Vice President, Kamala Harris, faces off against former Republican President, Donald Trump. But remember, elections rarely have a direct impact on the markets.
FTSE 100 flat
The FTSE 100The main stock market index in the UK, the FTSE 100 tracks the performance of the 100 largest companies on the UK stock market. – the UK’s benchmark market index – ended the month on a slight loss. The index reported an overall drop of 1.54%.3 It’s not bad news, especially in a month when there’s a Budget announcement.
Speaking of which, the Budget on 30 October revealed one large-scale change for investors. Capital gainsThe profit you get when you sell an asset for a higher price than you paid to buy it. Quite literally, the ‘capital’ you’ve ‘gained’. tax thresholds were increased – the lower rate rising from 10% to 18%, and the higher rate rising from 20% to 24%.
Capital gains tax is charged on the profits you make over the capital gains tax allowance when selling any investments held outside of a Stocks & Shares ISA.
If you’re not investing with a Stocks & Shares ISA with Moneybox already, open one or transfer in today. Plus, the £20,000 ISA allowance has been confirmed until 2030.
Capital at risk. All investing should be long term. The value of your investments can go up and down, and you may get back less than you invest.
Tax treatment depends on individual circumstances and may be subject to change in the future.
Before committing to the long term nature of investments, you should have a shorter term cash supply available for emergencies.
*Investing returns are based on our Balanced Starting Option and include all fees. Where available, returns data for the selected fundsFunds, also called ‘tracker funds’, are financial instruments that have been set up to match or ‘track’ the price of a market index. Investing in a fund lets you get exposure to different financial assets like shares and bonds, without having to buy them directly. have been used. Where the fund has a shortened performance history, we have used the appropriate index to simulate performance.
1 ‘Why are the British so reluctant to invest?’, Financial Times, 4th October 2024
2 Google Finance, 1 October – 31 October, 2024
3 Google Finance, 1 October – 31 October, 2024
