The stock markets in 2019…so far! What’s protected?

17 April 2019

As we have noted in previous (and recent) blogs, there is so much 'noise' going on in our media at this time that it is not unreasonable to worry about these current times. With Easter upon us, there will be time to reflect.

It is also worth noting that through the Brexit noise that has been surrounding us, you might think that investment markets and values are finding it difficult/challenging, and they did in the last quarter of 2018.

However, since the start of the year (02 Jan) 2019 (to 09 April 2019), we've seen the following examples:

Market Index

Increase in 2019

FTSE100

(6,734-7,425)

10.26%

FTSE 250

(17,586-19,433)

10.50%

Dow Jones

(23,346-26,150)

12.01%

As we note on many occasions, past performance is not a guarantee of or guide to future performance.

The demonstrates the positive aspects of volatility, but conversely of course funds can fall as well as rise. But what of your overall protection of your arrangements? Who provides protection for different types of plans and to what level?

Reminder of what is and isn't protected when investing your money

  • Deposit Protection Limit: deposits held with authorised banks, building societies and credit unions are protected up to £85,000 per person, per authorised firm. So, for the deposits in a joint account, each account holder is protected up to the limit (i.e. £85,000 x 2).
  • National Savings & Investments (NS&I), like Premium Bonds: NS&I investments are backed by the Treasury and customers receive 100% cover for all their money invested with NS&I, rather than being limited by the Deposit Protection Limit.
  • Investment savings protected by the Financial Services Compensation Scheme (FSCS): you may be able to claim compensation if the investment firm you did business with has failed and was authorised by the Prudential Regulation Authority or the Financial Conduct Authority. Strict rules and conditions apply for a claim to be eligible.
    • If the firm failed after 01 April 2019, the limit of compensation is £85,000 per eligible person, per firm.
    • Prior to this, and after 01 January 2010, the limit was £50,000.
  • Pension Protection Fund: protects people with a defined benefit pension when an employer becomes insolvent. If a pension scheme qualifies, compensation of 90% of benefits for members below normal retirement age would normally be paid by the PPF, subject to a cap. The cap for compensation from 01 April 2019 for 2019/20 is £40,020.34 at age 65. Those over normal retirement age or who retired early due to ill health would normally receive 100% of the pension they are currently receiving.

Protection levels can change over time, as we can see with the FSCS change above. However you plan to manage your financial planning over the course of this new tax year and into the future, take good financial advice and speak to the team at Chapters Financial Limited in Guildford.

No individual advice is provided during the course of this Blog.

Keith Churchouse FPFS

Director

CFP Chartered FCSI

Chartered Financial Planner

Chapters Financial Limited is authorised and regulated by the Financial Conduct Authority, number 402899