Ride out the post-Brexit roller coaster

What interesting times we live in now that the nation has voted to do a Brexit. We have witnessed political musical chairs played out in the corridors of Westminster – and Labour has yet to stop moving its furniture.

Nigel Farage, meanwhile, has gone off to drink copious amounts of good beer, while Boris Johnson has been asked to wave the flag for the UK on the global stage. You couldn’t make it up. It’s on a par with a political thriller by Michael Dobbs – maybe even better than House of Cards.

But the Brexit shenanigans have not been restricted to politics. Financial markets have wobbled, sterling has dropped like a stone (rallying occasionally) and there has been a cut in the base rate. A slowdown in the economy is almost assured, threatening jobs.

On the personal finance front, Brexit has delivered both opportunities and disappointments. Provided borrowers have hefty equity in their home or a big deposit to hand, they can now lock into some of the best fixed-rate mortgage deals that have ever been available – deals, fixed for five or even 10 years that will take borrowers through to the next election and beyond. That’s financial certainty guaranteed – something out of kilter with the uncertain times we live in. If you can, bag a deal.

In contrast, a weak pound has not helped those holidaying abroad, and it has stoked fears of a sharp rise in inflation, while there is no end in sight to the misery that deposit savers have endured since the 2008 financial crisis.

At best, savings rates will remain as moribund as they are now. At worst, they will continue to be given a wet shave by banks and building societies keen to keep the profits rolling in.

Shopping around for the ‘best’ interest rates has never been more important, especially if your money is sitting in an account earning pitiful interest of 0.1% or 0.05%.

As for anyone looking to secure a lifetime income through the purchase of a pension annuity, they face a big dilemma. Annuity rates have been given a near 17% haircut since June last year – and are plumbing new depths every week. Shopping around for the best deal can help, but for some it may make sense to bite their lip and wait for a bounce back in rates (which, admittedly, may not come quickly).

For investors, the UK stock market – and for that matter other markets around the globe – has resembled a roller coaster since the Brexit vote on 23 June.

In the immediate aftermath of the vote, the FTSE 100, an index reflecting the share price fortunes of the 100 biggest listed companies in the UK, plunged to below 6000. But it then recovered to reach a new 11-month high.

Of course, with economic slowdown inevitable, UK corporate profits will come under pressure, although many leading companies do generate big chunks of their revenues overseas, protecting them from economic fallout here.

Downward pressure on corporate earnings is normally not good news for investors. Yet such uncertainty – such negativity – should not put off equity investors looking to build long-term wealth through tax-efficient vehicles such as pensions and individual savings accounts (Isas).

My mantra at times like this is to bite the bullet, think long term and keep investing – preferably on a regular monthly basis, and through unit trusts and investment trusts that spread their holdings across companies, and often markets (thereby diversifying risk for investors). Provided you hold your nerve, such long-term investing should reward you.


Pulling up the drawbridge (suspending your monthly investments) until markets ‘stabilise’ simply does not make sense. Markets rarely do, and you will be lucky to call it correctly.

If you need a little help or reassurance, speak to an independent financial adviser. Their purpose in life is to ensure you have sufficient wealth put aside to give you financial security in retirement. Their services do not come free, but every penny will be well spent if they give you back your financial mojo.

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