What the Brexit means for your money
The UKs historic referendum has resulted in a vote to exit the EU. Despite a rally in stock prices and sterling late last night, this mornings market predictions paint a picture of uncertainty for contractors across the UK.
Whilst the full impact of the UKs exit is yet to be realised, in this special report our financial advice partner, Contractor Financials, look at the immediate impact on contractor mortgages, protection and wealth.
Mortgage rates have sat at an all-time low despite the looming referendum. Up to market close last night, SWAP rates, the money market instrument used by many lenders to fund their fixed rate lending, remained bullishly priced. However, with stocks seeing an overnight tick down and the value of the pound dropping to a 30 year low, SWAP rate sentiment could turn from bull to bear over the coming days and weeks.
The interest rates offered on fixed rate mortgages are inextricably linked to SWAP rates and any upward movement in these money market rates is likely to follow through to the pricing of 2, 3 and 5 year fixed rate deals, pushing rates north.
To head off the impact of a possible rate rise, contractors can secure their next mortgage deal now, locking into todays interest rates and avoiding the market uncertainty which is expected to follow last nights vote.
Contractor Financials are able to secure your next deal up to 3 months before your current deal ends, sometimes even further in advance, and with a range of exclusive deals up for grabs, now may be your last chance to grab one of the exceptionally low rates in the market.
Insurance companies have substantial equity holdings and during the past Credit Crunch, poor overall performance of investment portfolios held by insurance companies was intimated to impact premiums on life and other protection policies.
With FTSE 100 futures slumping 8% overnight, and uncertainty over the short to medium term outlook of equities, contractors who are holding off taking up any form of insurance should think again. After all, with our company funded life insurance, you could be cutting your tax bill the day you take up the policy.
To find out more about protection, and how these can be funded by your limited company, click here.
Investments and pensions
Despite the uncertainty, the fundamentals of investment still hold true, even after yesterdays historic vote.
Investments are a long term game and short term losses shouldn’t necessarily drive you to substantially change your investment approach – this should be led by your individual goals and attitude to risk.
If you’re concerned about your current investment approach, or are yet to secure a contractor pension, you should obtain impartial advice from a qualified professional.
To speak to a wealth management adviser, click here.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Mortgage advice is given by ContractorFinancials, which is a trading name of ContractorFinancials Ltd and is regulated and authorised by the Financial Conduct Authority no 207478. Not all products are regulated by the FCA e.g. buy to let mortgages.
The value of investments may fall as well as rise and past performance is not a guide to future returns.
Financial advice is given by Contractor Wealth Management Limited which is an appointed representative of Intrinsic Mortgage Planning Limited and of Intrinsic Financial Planning Limited who are authorised and regulated by the Financial Conduct Authority. Intrinsic Financial Planning Limited and Intrinsic Mortgage Planning Limited are entered on the FCA Register (http://www.fca.org.uk/register) under reference 440703 and 440718.