Here we are again, with a new Prime Minister and a Cabinet reshuffle which sees many people returning to jobs they did before Liz Truss came into office.
The change of leadership also signals a change in direction. Exactly what that might be won’t actually be clear until the fiscal statement initially promised for 31 October.
A new Autumn Statement
The fiscal statement has now been "upgraded" to a full Autumn Statement to be delivered by Chancellor Jeremy Hunt on 17 November. As Kevin Peachey, Cost of Living correspondent at the BBC website says:
"That will feature some big decisions on issues such as benefits and pensions, and give us a clear idea of the kind of economic policies the new Prime Minister, Rishi Sunak, and his chancellor wish to pursue that will affect all of us."
Sunak’s decisions will especially impact on those receiving state pension, and revolves around the thorny issue of whether the basic state pension should
a) rise in line with prices to £156.20
b) rise in line with earning to £149.65
(For pensions drawn before 6th April 2016, it’s currently £141.85 per week)
Politics and estate planning
All planning, whether financial, personal or national, is at its core educated guesswork based on existing figures. When the road ahead is particularly unclear, it can seem harder to be certain of the underlying trends and previous patterns. However, as we've said before in our previous blog "Estate planning and mini budgets", this is the time to take a holistic viewpoint. Estate planning is there to help you ride out short-term volatility.
Jittery markets
The other major system that our political landscape affects are the investment markets. They are jittery institutions at the best of times, and like highly strung racehorses, need to be reassured and calmed at time!
Market fluctuations are hard to predict, so regardless of your own personal politics, it was generally reassuring that when Sunak was announced as the new PM, the pound rose to its pre-Truss levels. Government borrowing levels also improved.
As one senior market analyst quoted at the ITV news website said:
"We are seeing markets provide a clear vote of confidence that Sunak will manage to avoid the kind of missteps taken by his predecessor."
OK, so what impact will this have on my estate planning?
The simple truth is, we don't know yet. What we can do is break down the elements of your estate planning to regroup, and (with the help of a financial advisor), help lower any risks that have risen above your own risk threshold. Once the Autumn Statement is out, we should know more about the key parts of your planning, such as pensions and tax.
Our advice for the meantime is - dig out that estate planning document you made a while back and read it. See what you have in place, what you might add, and what worries you. Then call us for a consultation.
We can go through your plan and really nail down what we need to keep an eye on - and what is just fine as it is. We're not in the business of making rapid decisions and hasty changes based on a few words from a PM who can still count his days in office in hours!
What we do want to do is reassure you that having an older estate plan that needs looking at is still so much better than having no plan at all. If you have done your estate planning, you will have an overall viewpoint to work from, even if the view itself has changed.
So, if you are worried about your estate planning, contact us for an initial discussion.
Still a bit confused?
If you are confused by the ever-changing political situation, you are not alone. Health professions use a standard test, The Abbreviated Mental Test Score (AMTS)for:
"Determining the presence of cognitive impairment in a patient.
Initially developed to pick up the presence of dementia, now commonly used to identify any confusion (acute or chronic)."
In the light of events over the past few weeks, the rumour is that they have dropped one question requirement, which is asking for the "Name of the current monarch (or prime minister)"!