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Ask Rachel
Working in the financial industry for over 30 years, Rachel Thrussell is the leading independent expert on UK savings products. Her views are constantly in demand from both the industry and the press.
I’m about to sell my house and for a short amount of time I will have around £200,000 in my bank account. Should I split this between banks so that it’s all protected under the compensation rules?
As long as the funds remain in the account for less than six months, you won’t need to go through the hassle of splitting them up. Depositors with temporarily high balances are covered up to £1 million for six months from the date on which the money is transferred into their account, or the date on which they became entitled to the amount – whichever is later.
This rule is specifically designed to protect people in your situation. It’s for those who deposit funds over the Financial Services Compensation Scheme protection limit of £85,000 until they have the time to spread the funds between institutions, as a result of specified events. These include selling a house, a divorce settlement or inheritance.
This week's
average rates
| No Notice | 0.64% |
| Notice | 1.07% |
| Cash ISA | 1.29% |
| 1 Year Fixed Rate Bond | 1.46% |
| 2 Year Fixed Rate Bond | 1.65% |
| 3 Year Fixed Rate Bond | 1.85% |
| 4 Year Fixed Rate Bond | 2.11% |
| 5 Year Fixed Rate Bond | 2.14% |
| 11 December 2018 | |
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Advisers predict top asset class performers for next year
Whether you’re thinking of dipping your toes in the investment waters or are already a seasoned pro, knowing the asset classes that are predicted to come out on top could put you ahead of the game and potentially boost your investment returns in the process. Luckily, Aegon has researched the area and canvassed advisers, resulting in some key asset class performance predictions for the next 12 months.
The research revealed that the top-performing asset classes are predicted to be US equities (22%), emerging market equities (15%) and UK equities (14%). The prediction comes despite all sectors reporting recent falls, and UK equities in particular seeing record outflows since the EU referendum in 2016, suggesting that the tide could be starting to turn.
At the other end of the scale, cash is predicted to be the worst performer (24%) – despite cash traditionally being seen as a safe haven in times of volatility – followed by gilts (19%) and corporate bonds (8%). However, a high proportion of advisers (22%) are unsure of the asset class they’d predict to be the best performer over the next year, highlighting the political instability and market volatility currently facing the sector, so the jury may still be out.
Not only that, but views differ depending on the average size of clients’ portfolios: for advisers whose clients have an average pot of £200,000 or more, Asia Pacific assets are predicted to be the fourth highest performing asset at 11%, yet this falls to just 4% for advisers whose clients have investment pots that are, on average, under £100,000. It’s a similar story in terms of Japanese equities, as advisers whose clients have an average pot of under £100,000 are more likely (6%) than those whose clients’ have an average pot of over £200,000 (2%) to expect Japanese equities to perform well in the next year.
“In this highly volatile investment landscape, advisers are right to question whether the longest bull market in history could be coming to an end,” said Nick Dixon, Investment Director at Aegon. “When it comes to investment decisions, advisers and investors are having to face a number of concerns head-on. However, our research shows that advisers remain level-headed in the face of a very fickle market; they are right to remain focused on long-term returns, diversification, and avoid reacting to fast-moving market conditions.”
If you’re thinking of investing, the key is to make sure you get the right advice. Speak to a professional, independent adviser, and be prepared for the fact that you may end up with less than you put in, depending on the eventual performance of the funds you invest in. It’s all about being comfortable with risk, and making sure you have the right support at your side.
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