Despite recent concerns over travel to some European countries, the lockdown is at last being unlocked, and many of us are making full use of the opportunity to enjoy the simple pleasures we have been missing. A drink in our local, or a meal in our favourite restaurant or a trip to the ‘non-essential’ shops.
But as the masks and the injunctions to keep our distance remind us, Covid-19 has not gone away.
At Continuum we are looking how the world has changed, and how it will affect your money.
What has changed?
It is tempting to think that things are simply going back to normal. In Germany, where lockdowns were eased a little sooner than in the UK, most June data suggested that economic and social activity has already started to pick up. Air pollution has returned to near pre-Covid levels in Europe as drivers get back on the to the road, and any drive out shows that UK motor vehicles are doing the same.
Most shops are open, even if there are queues to get in, and pubs are selling beer again, even if customers have some limitations.
But behind the good news there may be some changes. While most aspects of normality are returning, there are some sectors and markets where recovery may be delayed, and in some cases may not be coming at all. The travel sector has taken a major blow, and some airlines now grounded will never take off again.
But while it is easy to blame Covid for the business failures, how many are a direct result, and which have simply been accelerated as a result of the lockdown it is hard to say.
What about the financial markets?
The financial markets first reacted to Covid with falls, as investors were panicked by the unknown. Those who stayed invested subsequently may have made back most of their losses as the markets recovered, and while they remain volatile, it may be that the worst is over.
The recovery in the markets may mean that losses from pension pots and investment portfolios are not as severe as were first feared – but the lasting changes in the wake of Covid could mean it is vital to look again at your current investment strategies – and update them.
What about the property sector?
It is still too early to say just what the effect of the crisis has been on the property market. Immediately they were allowed to open after lockdown, estate agents reported a surge in enquiries and sales as pent-up demand was released.
Certainly, there was no sign of the collapse in house prices that had been predicted by the doomsayers. In many areas, they actually seemed to be on the up. The Chancellors generous provision of a stamp duty holiday may have done a great deal to stimulate the market, both for home owners and investors.
There is still the possibility that the end of furlough will mean job losses and a reduction in this new market buoyancy. Prices could yet sink back a little before the combination of low interest rates and a growing population start to push them steadily back up again.
The story for commercial property could be very different. One of the effects of the lockdown was that many people – and many companies discovered the benefits of working from home. This may be the start of a long-term trend as telecommuting replaces the real thing, and demand for office space, and consequently the prices realisable for commercial property decline.
What should you do?
The changes to the financial landscape may not be as dramatic as feared, but they do it exist, and it makes a great deal of sense to take a fresh look at your own financial roadmap. Worries about huge government debt, globalisation and lasting changes to entire business sectors mean that you may want to update your financial and investment strategies.
We can help you rebalance your investments and pension pot to fit the new conditions, and help you with any other aspect of your financial planning – from life insurance to a mortgage allowing you to take advantage of the Stamp Duty holiday.
The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to suitable Protection products or investment strategy, you should seek independent financial advice before embarking on any course of action.
Your home may be repossessed if you do not keep up repayments on your mortgage.
The Financial Conduct Authority does not regulate taxation advice.
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