With the season of good will to all men (and women of course) pretty much upon us, The Sunday Telegraph Money section has less cheerful things on its mind, namely how to have a good divorce. According to The Telegraph, married individuals born since 1960 are almost as likely to divorce as get cancer: the figures are 42pc and 50pc respectively. As they also point out, while treatment for cancer has improved hugely in 58 years, the laws on divorce have resisted serious change. But changes are afoot with the Government considering a radical measure to remove blame from divorce, creating just one reason for a split: the irretrievable breakdown of a marriage. Its consultation closes this month, with rules due next year. Clearly, such a change would have financial implications too. The Telegraph article also highlights that when it comes to ongoing maintenance, two recent court rulings have already changed things. For those who are interested, the article gives some detail of the cases and a list of tips for those going through this hugely difficult time in their lives.
Also lacking in festive good vibes is Jeff Prestridge, writing in the Financial Mail on Sunday. To be fair to him, the subject of his article isn’t exactly a Christmas jolly – it’s the stark reality that people in the UK are simply not saving enough for retirement – as he puts it “most of us are sleepwalking into a retirement that will be undermined by financial worries.” In the article he highlights the massive discrepancy between how much money people think they need to put away for a decent retirement and what the reality really is. Prestridge cites research from Fidelity about the “power of seven” which highlights that someone aged 68 would need to have accumulated a pension pot of seven times their household income in order to maintain their lifestyle into retirement. This is not news to professional planners who will have done more than their fair share of cash flow calculations to model scenarios with clients as to what their retirement years might look like financially, and what the cost will be now. For those without the benefit of such advice, it is good to see the national press raising the profile of such an important issue and giving positive tips on how people can improve their prospects by using some basic tools. However, when it comes down to the crunch, for so many families struggling to make ends meet, instilling a strong savings discipline can often be easier said than done.
On a rather different subject, the MoS fund focus column looks at the Blackrock World Mining Trust, which is celebrating its 25 year anniversary this month. The MoS gives an overview of the specialist investment trust which has a dividend yield of more than 4% – and which is paid quarterly. With regard to that yield, the article explains that whilst 60% of the trust’s income comes from the dividends of underlying stocks , this is topped up from holdings in fixed income bonds issued by mining companies and royalties from investments it made in businesses on the cusp of production. As well as going into some background detail about these alternative income generators, the article also looks at the performance record of the trust which it calls “more than respectable”.
Writing in the Sunday Times Money section, Ian Cowie is reminding readers that share price volatility can throw up some buying opportunities. He goes on to explain his reasons for buying shares in Apple and Boeing recently with both having seen quite large falls in their share price as a result of red October. We’ll spare you the detail here, but suffice to say that the message of buy on weakness and sell on strength is at the heart of it.
The Sunday Times is also reporting on the news that the Backto60 campaign group, which is fighting to reverse rises in the state pension age for women has just won its battle to force a judicial review. The article reports that last Friday, the Royal Courts of Justice granted the review into what Backto60 argues is an action which harms the human rights of women and that the Judge has said that all points of gender and age discrimination should be examined at the review
Interestingly, with many professionals concerned about the environment for bond investments, the Sunday Times Money includes an article entitled “And relax…If skittish markets are making you nervous, try a bond”. Whilst the article highlights the fact that rising interest rates tend to be bad news for bond investors and it does mention the risks involved in investing in bonds and bond funds, perhaps the idea that bond fund investors should “relax” might just be taking a step too far!