The lockdown measures are starting to be relaxed, and the world seems keen to get back to work.
But the aftermath of a 3-month lockdown with the country at an economic standstill could include a financial hangover.
How can you ease your own financial headaches? At Continuum we are looking for the answers.
Will there be a downturn?
With a large proportion of the country not working for three months, Rishi Sunak has said that a recession is possible. When the Chancellor of the Exchequer talks about recession, it is probably worth listening – but the fact is that not all economic experts agree. Bank of England Governor Andrew Bailey agrees that a short technical recession may occur, with some economic contraction caused by the simple fact that people were not at work and generating wealth. However, his belief is that Britain’s economy will bounce back strongly as soon as the lockdown is lifted.
Threadneedle Street expects a rapid “V” shaped recovery as lockdown is lifted and the world gets back to work
His optimism may already be justified. The resurgence in stock markets in recent weeks supports the idea that despite the pandemic, the global economy remains in good health.
But even if the outlook is positive it still makes sense to ensure that your own finances are in good shape after the last few months.
Back to business as usual?
Certainly, the powers that be are doing their best to promote the recovery. Under Mr Bailey, the Bank of England has already supported the economy through the last few months with a cut in interest rates to 0.1% and £200bn of quantitative easing.
The government is also working on damage limitation, with support schemes for businesses and jobs. Around 7.5 million workers have been furloughed with the Government paying 80% of their wages up to £2,500 per month. The cost of the scheme is cripplingly high – and the treasury cannot afford to continue to fund it at the current level. But does this mean that when lockdown is lifted, most workers can simply go back to work.
What about your money?
The next few months may see some challenges – even a short sharp ‘v’ shaped recession – which will inevitably affect your finances before the economy bounces back.
- Interest rates will probably stay low
- Your income may suffer – especially if you run a business
- Your investments may experience volatility
However, there are steps that you can take to protect yourself. If you already have income protection in place you should congratulate yourself – and think about it for the future. But there are some steps that you can take now.
Look at your investments and pensions
Expert help may be essential. At Continuum we have helped our clients through difficult times before. We can look at your holdings and work with you to try and create an investment strategy which will do the same for you – remember, the post-covid world may have some different financial realities to deal with.
We can also help you with all the other financial planning you need to make the most of the recovery as soon as it comes. We can identify the opportunities, and help you harness them to build your wealth.
Lockdown is coming to an end, but nobody can be certain how quickly the bounceback will be behind it. You need to be prepared – why not contact us today?
The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to suitable investment or Protection strategy, you should seek independent financial advice before embarking on any course of action.
The value of investments can fall as well as rise and you may get back less than you invested.
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