Tilney Smith & Williamson expands in Surrey with the acquisition of HFS Milbourne

We are pleased to announce that HFS Milbourne has become part of Tilney Smith & Williamson, the national financial planning & investment management group. This is an exciting time for us as we move forward into the next chapter! Please find full details here.

Can you afford to retire if you are self-employed?

New research shows the majority of the self-employed are not saving for retirement.

Source: IFS

Here’s a quick quiz:

  • Are you self-employed?
  • If so, have you contributed to a private pension in the last year?

The Institute for Fiscal Studies (IFS) examined the answers to these two questions and found the probability of answering yes to both is much the same. Drawing on government data, the IFS calculated that in 2018:

  • 15.1% of the UK workforce – some 4.8 million people – were self-employed.
  • Just 16% of the self-employed contributed to a private pension.

As the graph shows, the proportion of pension contributors among the employed and self-employed workforce was on a steady decline from 1998 until 2012. In October 2012, pension automatic enrolment was launched, and by March 2019, over 10 million workers had joined a workplace pension arrangement. The self-employed were left out of auto-enrolment, hence the sharp divergence of the employee and self-employed lines from 2012 onwards.

The IFS research struggled to establish why only one in six of the self-employed were saving in a private pension, two thirds less than 20 years ago. It found that the characteristics of the self-employed workforce have changed over that period – it now consists of more females, an older demographic and an increase in part-time workers – but none of these factors were enough to account for the fall in pension contributions. Given the tax relief which pension contributions attract, one surprising discovery was that the largest decline in self-employed contributions came from the higher-income bracket and the long-term self-employed.

If you answered yes to the first question and no to the second, then you may be expecting the state pension to make up the largest slice of your retirement income, a view shared by more than a quarter of the self-employed. At present, the state pension amounts to £175.20 a week. If that sounds like a less than comfortable retirement plan, perhaps you need to rethink the answer to that second question…

The value of tax reliefs depends on your individual circumstances. Tax laws can change. The Financial Conduct Authority does not regulate tax advice. 

The value of your investment and the income from it can go down as well as up and you may not get back the full amount you invested.

Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.

National Living Wage set to outpace new state pension

The National Living Wage (NLW) rises by over 6% in April.

The 6.2% increase to £8.72 an hour equates to £15,870 a year based on a 35-hour week. The substantial rise is not down to inflation – which ended 2019 at only 1.3% – but due to a policy of George Osborne’s. When he made the surprise announcement of the NLW in his 2015 Summer Budget, Osborne set a goal for it to match 60% of median earnings by 2020. The new Chancellor, has set a revised target of the NLW reaching two thirds of median earnings by 2024.

Pushing up minimum earnings is a double-edged sword for the Treasury. It ought to mean a reduced government outlay on in-work benefits and increased tax and NICs income, but it also adds to the government’s costs as an employer, placing pressure on all wages, not just those at the minimum level. What it has not done so far is impact on the cost of state pensions.

State pension equivalence?

As a result of the Conservative party election win, we know that the ‘Triple Lock’ will continue to apply to the new state pension, with annual increases which are the greatest of:

  • Consumer Price Index (CPI) price inflation;
  • average earnings growth; or
  • 5%.

The NLW will have to rise faster than earnings to move from 60% to 662/3% of median earnings over the next four years. It’s therefore quite likely that, as in the past four years, the NLW’s growth will outpace earnings.

A corollary is that the new state pension looks set to continue shrinking as a proportion of the weekly equivalent of the NLW. From April, the new state pension will be only about 57% of the NLW (and thus little more than one third of median earnings). When the NLW and new state pension first came into being in 2016, the pension was nearly 62% of the NLW.

Those numbers are a reminder that the new state pension is far from generous, even for those with minimum earnings. If you want a comfortable retirement, then the new state pension needs topping up.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.


Riding out investment bends

Professional investor interest has been focusing on US government bond yields, with potential lessons for long term investment.

Source: US Treasury

On 22 March the US stock market caught a sudden – and brief – chill. One of the main reasons was the red line in the graph shown above.

This shows a yield curve plot, which shows the return an investor would receive from buying US Treasury securities, based on their term to maturity – from one month to 30 years. What happened on 22 March was that the yield on 10-year Treasury bonds fell below that of 3-month Treasury bills.

Usually the longer the term to maturity, the higher the yield, as demonstrated by the black line on the graph, which dates from one year ago. Intuitively that makes sense – the longer the period of time money is lent, the greater the risk that inflation will emerge to erode returns, so the higher the interest rate demanded.

History has shown that when yields fall with lengthening maturities – described as an inverted yield curve – a recession is imminent. The logic is that investors will accept a lower return from longer dated bonds because they anticipate short term rates will be cut to counter the impact of the recession. In the US, the reverse yield curve has a very good track record as a warning flag, which explains the stock market’s reaction to the news.

Whether yield curve movements have retained their predictive capacity is now the subject of some debate. There are those who believe that central bank actions since the 2008 financial crisis have so distorted the bond market that the yield curve can no longer be trusted. On the other hand, there are experts who worry about the credibility of any ‘This time it’s different’ message. The inversion has started to fade, but as ever, time will tell if the message is right or not!


The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.

HFS Milbourne Team take on the Mundays 5k

A team of 6 runners from HFS Milbourne took on the Mundays LLP 5k charity fun run on 8th May 2019 arranged in aid of the Princes Alice Hospice. For 2019 this was held in the new setting of the picturesque Painshill Park in Cobham.

A great effort by the whole team on a blustery Spring evening with a few rain showers thrown in for good measure!

Autumn Statement

We have pleasure in attaching here our summary of the key announcements in the Chancellor’s Autumn Statement 2014 We hope you will find it useful and interesting.

It was much more significant than most Autumn Statements have been in the past and reflects the fact that there is only one more such occasion before the May election.  So George Osborne was clearly aiming to make a favourable impression.

The greatest impact will be on the housing market, which will immediately feel the beneficial effects of his lowering of stamp duty for the vast majority of home buyers – although it will only serve to dampen the very top end of the market.

The reform to ISAs – making them inheritable, at least between married couples and civil partners – echoes the upcoming and welcome changes to the taxation of pension death benefits.

There were many other important announcements which we cover in the summary.

Autumn Statement 2014