Driving Hastings forward 01424 205481

The problem with investing a lump sum amount in one go, is the timing of the stock market. If it is high then it will be a while before those investments increase further. Making smaller regular payments by drip-feeding money into your investments on a monthly basis can be a much better and highly effective strategy. Here we highlight some of the main benefits of investing smaller amounts on a regular basis.

Getting ‘pound cost averaging’ right

Investors are not happy when they experience falls in their values. However, short-term falls in share prices can actually provide opportunity and prove advantageous over the long-term for regular savers. By investing smaller amounts every month, investors average out the buy price of investments and benefit from a phenomenon known as ‘pound cost averaging’. This means your investment buys more units or shares when the price goes down, as per the table below and allows you to benefit from bigger returns if and when the share price recovers.

Month Amount Investment Share Price Number of Shares
1 £100 £5.00 20
2 £100 £4.00 25
3 £100 £2.50 40

Based on the table above, the average price purchased over the 3 months is £3.53 per share which is £300 investment divided by 85 shares. However, if you had invested the full £300 lump sum in one go during the first month, you would only have received 60 shares, which is £300 investment divided by £5.00. Of course had the market risen each month, your monthly investment would have bought fewer shares and actually have been worse off than if you’d invested a lump sum at that time. It is fair to say, investing is as much about timing as picking the right stock.

Benefits of regular savings

Some people believe that you need lots of money to start investing. In fact, drip-feeding money into investments over a longer period of time can build a very substantial sum. If you invested £250 per month for ten years, you would have a total of over £37,500 (based on a medium growth rate and a 1% charge).

Affordability – you can start investing from as little as £25 per month and it often costs no more in dealing charges

No fear – Instinctively you will watch the shares as the move up and down and probably want to buy quickly and more when shares are rising and less when they are falling. With smaller investing the money can be automatically taken from your bank account via direct debit and invested every month, regardless of price and movement, which removes the fear factor.

Flexibility – you can alter your investment choices and the amount you invest from month to month. You can even suspend payments for a period if you wish.

The sooner you start the more you will have invested on share platforms, you can choose to invest monthly into a wide selection of investments including, FTSE shares and eligible investment trusts. It’s easy to get started and you can set up a direct debit with some companies from just £25 per month and drip-feed money into your investments. You can also set up a regular savings instruction into Stocks & Shares ISAs, Fund & Share Accounts, SIPPs, Pensions or a Junior Stocks & Shares ISAs with many companies.

The value of your investment and the income from it can go down as well as up and you may not get back the original amount invested. Past performance is not a reliable indicator for future results. Levels, bases and reliefs from taxation are subject to change and their value depends on the individual circumstances of the investor. Please contact us for further information or if you are in any doubt as to the suitability of an investment.

This guide and article are not advice. If you are unsure of that suitability of an investment for your circumstances please seek advice. Once held in a pension money is not usually accessible until age 55, which is rising to 58 in 2028. 

Need more help? This feature aims to give some informal hints. If you are unsure of the suitability of an investment for your circumstances please contact McPhersons Financial Solutions for a free meeting info@mcphersonsfs.co.uk or call 01424 730000.

 

 

The buy-to-let market has seen some very significant changes in 2016, most significantly the increase of the additional 3% in stamp duty on any property you own in addition to your primary home.

What this means for those looking to invest their money in buy to lets or property generally may not find the same kind of sound investment that property once provided and offered.

The hike in stamp duty means that any buy-to-let property now attracts a 3% surcharge, which is a considerable increase from the previous rate. Under the old system, if you were buying a property for £200,000, you would pay nothing on the first £125,000 and 2% on the remaining £75,000, resulting in a stamp duty tax bill of £1,500. Now with the 3% levied on the first £125,000 and 5% on the £75,000, you get hit with a much larger £7,500 stamp duty tax bill. This now makes the wait to get additional cost back from any profits much longer.

The longer term prospects for the financial health of buy-to-let does not look good. From April 2017, new limits are being introduced on the amount of mortgage interest that can be offset against rent payments.

It’s a complicated system that some predict will transform profitable buy-to-lets into loss-making properties in most locations, which in turn could force landlords to raise rents considerably or put their properties up for sale.

The chancellor has also stated there will also be cuts to the ‘wear and tear’ allowances, which allow costs for maintenance to be offset against rental income, making achieving a profit even harder to achieve for landlords.

There are also plans in the pipeline from the Bank of England for greater restrictions on who will be eligible for a buy-to-let mortgage. These will mean a wider consideration of a potential landlord’s financial situation, including scrutiny of their monthly income and outgoings, as opposed to just consideration of the rental income of the property under the current system.

The landlords association feels this is a deliberate ploy by the chancellor to free up housing to substitute those the government has failed to plan for.

Ultimately, if you are looking to enter the buy-to-let market soon, you should consider the returns and these new rules. When investing it is always wise to spread your investments and have a diversified portfolio that doesn’t rely solely on placing your money in property just in case as now bricks and mortar means that, even if matters in the property market don’t go your way. 

Need more help?

This feature  aims  to give some informal hints and McPhersons are offering small businesses free advice so get in touch now to arrange your free meeting on 01424 730000 or info@mcphersons.co.uk.

 

The European aerospace and defense giant Airbus has stated that they would reconsider UK investment if Britain left the EU.

Britain must compete for international investment, stated Paul Kahn, the president of the 16,000-employee Airbus UK.

David Cameron has promised a referendum regarding the UK’s EU membership by late 2017 and the debate has been rising up the politic and business agenda. However, the UK should not fear an exit from the EU, stated the chairman of the construction equipment firm JCB on Monday.

According to Mr Kahn, companies like Airbus should be at the forefront of the debate considering that the referendum is perhaps less than 18 months away.

Airbus is the world’s second-largest plane maker and employs 6,000 people at its site in Broughton in North Wales. They assemble the wings for all Airbus aircraft. The world’s largest plane maker is Boeing.

At Filton, near Bristol, several thousand more people are employed to design wings and test landing gear. The president of the company also said that if Britain did leave the EU, the business would not suddenly close.

Airbus is also one of Europe’s biggest industrial enterprises spanning civil aviation, defense and space. Operations are also in Germany, France and Spain. The company could face more red tape in areas such as work visas and trade barriers if Britain did leave the EU, Kahn said.

Hastings Insurance Group, one of Europe’s fastest growing insurance businesses and home to well known brands such as Hastings Direct who are based in Collington, near Bexhill and who are a major employer in the area today announced that following receipt of appropriate regulatory approvals, it has completed the transaction announced on 8 October 2013, with Goldman Sachs Merchant Banking Division acquiring 50% of the voting share capital of the Group.

Goldman Sachs Completes Hastings Insurance Investment

Goldman Sachs Completes Hastings Insurance Investment

Gary Hoffman, Chief Executive of Hastings Insurance Group, said:

“We are delighted to welcome Goldman Sachs Merchant Banking Division as a new shareholder and look forward to working to deliver our clear strategic plan and to continue providing refreshingly straightforward insurance.

Sumit Rajpal, Global Head of Financial Services investing for Goldman Sachs Merchant Banking Division, said:

“We are pleased to have formally completed the transaction. We remain extremely impressed by the quality of the Hastings management team and are excited about the prospects for the business as it enters the next stage of its growth.”

This kind of direct investment in to the area is great for the whole area.

Business In Hastings has an exclusive report from Sarah Owen, Labour candidate for MP in Hastings & Rye regarding her recent trip to China to exchange ideas and promote the local Vacuum Technology and other high tech manufacturing industries that the Hastings & Rother area becoming world famous for. Here in her own words is an overview of the trip.

We also have a small gallery of images from here trip which you can go to here.

Hastings: The South East manufacturing hub.

china-sarah-owen-2

Sarah arriving at Songshun Lake high tech park

When I talk to people outside of Hastings they normally say to me; ‘Oh, arrow in the eye, tapestry, invasion by Normans.’ They’re far less likely to know about building components for the Large Hadron Collider at CERN, high-powered lasers or high vacuum technology. Still less likely are people to mention that Hastings is the high tech hub of South-East England.

Hastings, which is my home town is the birth place of innovations including the first television broadcast to teaching Turing, but Hastings doesn’t just deserve that recognition, our future as a town depends on it. It isn’t enough to just be a high-tech hub, Hastings needs to be known as a high-tech hub.

Global influence

The investment that our businesses need to grow, thrive, and create the well-paid, high skilled jobs that our town needs, depend on our town’s reputation. However, in today’s world, our competitors, clients, and supply chains are not just limited to the UK, they’re global.

They’re in cities like Guangzhou and Shenzhen in southern China, where I visited earlier this month.

These two cities, both in the province of Guangdong, are China’s high tech pioneers. Guangdong’s open, outward-looking economic policies stand greatly at odds with the lagging social and political development in the rest of China – the world’s second largest economy whilst still being a developing nation. However, there is still plenty that we could learn, gain and offer this industrial powerhouse – with particular regard to high tech manufacturing.

Growth & Investment

Since the late 80s, Guangdong area has seen phenomenal growth, seeing only a brief dip in GDP growth during the global recession to a still enviable 7.2% – putting the UK’s forecast (and overdue) 2.2% in the shade. As a province, it has consistently led China’s growth over the past 30 years and is predicted to grow at above 8% and contribute another $900 billion to China’s economy.

None of this happened by accident. It took a deliberate, conscious decision by the Chinese government to turn fields of crops and low grade industry into science parks, technology hubs and business clusters. It was only possible with investment from business, the state, academia and by attracting support from overseas.

One example is the Guangzhou Science City, which is home to almost every kind of science and high tech industry you can think of including high vacuum, bio-tech, IT and renewable technology to name just a few. From its inception, the science city hasn’t stood still and constantly looks to support and welcome the next big technological innovation.

Support and R&D

This is heavily supported by the state through the Guangzhou Development District. On my trip, I met the Director of the committee responsible for it, who explained not only how much they had financially supported businesses in the science city, with reduced rents and the highest grade facilities but also practical business support and R&D. There is now 24/7 support for new businesses – his phone was never switched off.

We need to ask ourselves what we can learn from how they encourage growth.  This is most evident when attracting foreign investment, where applications for foreign direct investment are completed by the authorities within 3 working days. Without this commitment, and the continued support of the local development departments, thriving companies like Rio Bio would not have been able to expand as quickly as they had.

Maintaining our position on the global stage

Next to the continued austerity and slow growth we’re faced with here, Guangdong’s example is enviable. When I told both the Chinese businesses and development committee that our own local council will face a 70% reduction in funding from central government by 2017, they asked how on earth we expected to support growth in Hastings? And that is, quite literally the million dollar question.

Whether this support is replicated in the UK by our calls for a dedicated British Investment Bank to support SMEs, a cut in business rates or freezing energy bills which will have a direct impact on particularly manufacturing business’s sky rocketing overheads – it is clear that Government must act now to provide practical support to our local industries if we not only want to maintain our position, but to continue being the birth place of innovation.

Hastings: Time to show the world we’re open for business

china-sarah-owen-tec-66

Sarah at the first Tec 66 event in summer with Maggie Aderin Pocock, Lord Bassam and Council leader Jeremy Birch and business leaders.

Hastings is home to established names with world-class reputations, General Dynamics, Torr Scientific and Photek among them. But we need some of the reputation of those brands and our excellent experienced service industry, to not only be located in our town, but associated with it as well.

Businesses in Guangdong are crying out for the quality that Hastings’ businesses can offer, as much as we are for high quality jobs. But Hastings’ reputation for high-tech manufacturing and services is barely known elsewhere in Britain, let alone on the other side of the world, in China.

Tec 66: Why its important

This is why events such as Tecc 66 are so important. We need to be prepared to shout about what we are good at, and sell to a global market, which is what I did at every opportunity that I was visiting businesses in China. Nothing less will do in today’s globalised world.

That is why I am working to bring more international exhibitors to the next Tec 66 event and other similar events for our creative industries. That will help build on existing trade links, support our businesses to join major international supply chains, create jobs and ultimately ensure that Hastings has an economic identity that is known worldwide.

To get in touch with Sarah or to follow her via Twitter please see below

Email: Sarah@sarahowen.org.uk

Twitter: @sarahowen_

You can also find out more about Sarah at her website here.

An opportunity has arisen for the Hastings and Bexhill area to potentially have assisted status. Assisted status means that business in the area may be eligible for extra funding which can aid capital purchases or to take on additional staff or help with training. Basically its good for the area so its worth trying to get.

assisted status

Help Hastings & Bexhill get assisted status.

This will need the support of the local business community (including Business In Hastings visitors).

All that is required is a letter of support needs to be sent to Government Minister Michael Fallon backing our bid for Assisted Area Status for Hastings & Bexhill area.

The area meets most of the criteria for assisted status but the bid will be strengthened considerably by businesses writing in with support letters.

Below is a draft letter to Michael Fallon for you to adapt on your company letterhead and we at Business In Hastings would be really grateful for your help to achieve this important recognition, to attract funding and investment for the town longer term.

Here is the PDF version of the letter: Assisted area letter to Michael Fallon. You can use this, however you may need to highlight the text and copy to a word or open office document

If you would like a Microsoft  Word version (.doc or .docx) then please send an email to Jim Christy here.

Any extra funding and help to improve the local economy for both businesses and for the everyone who lives in the area is a good thing and the request will more likely be considered if the local business community is behind it.

We’ll keep everyone updated via the site and our newsletters. If you haven’t signed up for our newsletter yet then you can do so here.

Its well worth doing and only take a few seconds to sign up and gets you a summary of all the important business and developement news that’s happening in Hastings & Rother.

**Update**

You can now simply sign up at Amber Rudd MP’s website, the letter is already ready and all you need to do is add your name and email address and it will be sent immediately. Here’s the link.

http://amberrudd.co.uk/businessinvestment/

 

There is £350,000 funding remaining to create sustainable jobs in East Sussex. The East Sussex Invest or ESI fund can provide financial incentives for:

  • Companies relocating to East Sussex and creating local jobs
  • Local companies moving within the county to grow and create more local jobs
  • Start-up companies which will create local jobs.
east-sussex-county-council-ESI-Fund-news

East Sussex Invest Fund (ESI Fund)

There is scope within the ESI Fund to make a loan where insufficient jobs will be created within 12 months if continuing growth can be demonstrated.

The minimum grant available on the Economic Intervention Fund is £10,000.

Who can apply – eligibility criteria

The custodians of the ESI Fund will consider companies from all sectors, although normally this excludes retail. They particularly encourage applications from higher value manufacturing, engineering, scientific, bio-chemical, ICT and research and development companies.

Eligible companies must meet these minimum criteria.

  • Businesses must be one of these:
    • A company new to East Sussex that is looking to move into the County and create new jobs for local residents
    • Existing East Sussex company looking to move and expand within the county and create new local jobs
    • New start-up company setting up in East Sussex and creating new local jobs
  • Create sustainable new jobs in the county and be able to provide evidence of plans for further growth.Demonstrate the difference the grant or loan will make to the project or company.
    • If relocating, normally a minimum of five jobs is required within 12 months.
    • If a start-up, a minimum of three new jobs is required within the first six months.
  • Demonstrate what difference the grant or loan will have on the decision to relocate or start up in East Sussex.
  • Outline which capital elements the grant would support and what level of match funding is available.
  • Comply with State Aid regulations if applicable – see What is State Aid – Department for Business Innovation and Skills.

Guidance notes

East Sussex Invest (ESI) guidance notes (Adobe PDF)(opens new window)

When to apply

This fund is now open and will close when the funds are fully allocated. (The ESI Fund is currently about half way through its original allocation)

Enquiries

If you have any questions, please contact Vera Gajic in Economic Development and Skills.

Phone: 01273 482205
Email economicintervention.fund@eastsussex.gov.uk

How to apply

Register online and an application form will be emailed to you.

One way to complete this form

Do it online