Investing Insiders Weekly #4

Top Story

SURPLUS SURPRISES: Pension schemes could spend spare cash on savers

New rules will make it easier for employers to dip into their spare pension cash reserves – and they might spend some of it on their savers (which could be you!).

✔️The good news: The rules will make it easier for employers with ‘defined benefit’ pension schemes (where you get a guaranteed income in retirement, vs where you save up a pot of money) to spend their spare cash on their businesses – but they will also be able to use it to boost their savers’ retirement income.

For example: they could increase the amount incomes rise each year with inflation. Some schemes (hello, Church of England pension scheme) have already been sharing their spoils with their savers.

❌The bad news: Pension experts reckon that most employers probably won’t do this, or at least it won’t be their top priority to start with. It’s more likely they’ll use the cash to boost their businesses first. Boo.

💡The takeaway: The millions of people in these types of pension schemes could get a boost to their income – but many might not, or it might not happen for a while. Keep an eye on your pension and any communications from your employer/scheme.

One Minute Market Fix

Global stock markets have AGAIN hit record highs so far this week, despite all the geopolitical and trade chaos of the past few weeks. The MSCI All-Country World Equity Index, which tracks stocks globally, hit a new all-time peak on Wednesday.

Why? Well, it’s to do with TACO – no not the Mexican food, but the popular new acronym ‘Trump Always Chickens Out’. Investors are starting to doubt that Donald Trump’s ongoing tariff threats will really hold, as he has so far reversed almost every tariff he has imposed (and all of them were recently found to be illegal by the US federal trade court).

Regulator Latest 

DON’T NAME OR SHAME: The FCA has officially chickened out on plans to ‘name and shame’ big finance firms under investigation (even if they hadn’t been found guilty yet).

🤓In a nutshell: The Financial Conduct Authority, which regulates basically all big finance firms, came up with the bright idea to ‘name and shame’ firms that were facing enforcement investigations, even before they had been found guilty of wrongdoing.

The government and financial services weren’t happy with the plans, as it could have damaged firms’ share prices and reputation before any verdict. Not exactly ‘innocent until proven guilty’.

Unsurprisingly, it has finally scrapped that idea and gone with a more watered-down approach, saying it will only confirm that enforcement investigations have happened, if it’s already in the public domain. The aim now is simply to increase transparency, without damaging firms’ reputations unnecessarily.

Chart That Made Us Look Twice

Gold prices have soared over the past year, sitting at around £2,500 this month compared to roughly £1,800 last summer. Prices have literally doubled in the past two years.

Source: Royal Mint

Why are gold prices rising? Gold is considered a relatively ‘safe’ investment, as historically it has always maintained its value. With all the uncertainty going on in markets right now with trade tariffs and global conflicts, investors are rushing to safer investments, which has sparked a so-called ‘gold rush’.

So…what’s next for gold prices? While no one really knows what will happen next in markets, experts are saying they anticipate the price will keep rising. Goldman Sachs said last month it expects prices to hit new record highs this year driven by increased demand from central banks and investors.

Platform Watch 👀

SPOILER: Big names don’t mean big returns

Santander is a household name… but its five-year returns (in the five years to January 31 this year) on its ready-made portfolio are nothing to write home about. In fact, it had the worst five-year performance out of 22 investment providers’ ready-made portfolios we analysed.

Strong historical returns aren’t a guarantee of future performance, but it doesn’t hurt to know which firms have been getting it right in the past.

Insider Edge: What Smart Money Is Watching

Your parents could earn up to £6,600 from the government if they help out with your childcare. Huh?!

Well, if you claim child benefit and take time off work to look after your children, you can claim National Insurance credits that count towards your state pension, so you don’t end up worse off.

But, many people don’t realise they can pass those credits on if a family member helps out with the childcare instead. These are known as ‘specified adult childcare credits’.

So, if you go back to work and your mum or dad looks after your children for you, those credits can be transferred to them. Each year of credits is worth £330 in state pension income – £6,600 over a 20-year retirement.

Plus, you can currently backdate the claims to 2011, too, so if you missed out in the past, you haven’t lost out! And no, claiming the credits will not negatively affect your pension.

The requirements are that the carer must be under state pension age – currently 66 – and the child must be under the age of 12. The parent must also be working and claiming child benefit.

Apply here.

Rate Of The Week 💵

You may have noticed that everywhere is slashing its savings rates right now. BUT…

You can still bag a 4.8% interest rate on a cash ISA with Tembo, and that’s without any sneaky introductory offers that expire after a few months.

The catches: You need to deposit £10 when you open the account. Note that it’s not a flexible ISA, so if you take money out of the account, it still counts towards your £20,000 annual ISA limit.