Chancellor’s Summer Statement

Chancellor’s Summer Statement

The main points of the Chancellor’s Summer Statement are summarised in this article.

The Chancellor’s focus was on the government’s ‘Plan for Jobs’, with the objectives of supporting, creating and protecting jobs. The main initiatives announced were:

  • The ‘kick-start scheme’ to encourage employers (not Northern Ireland) to create new six month work placements for 16-24 year olds on Universal Credit and deemed to be at risk of long-term unemployment. The government will provide funding for each job at the level of 100% of the relevant National Minimum Wage for 25 hours a week plus the associated employer National Insurance contributions and employer minimum automatic enrolment contributions.
  • A Job Retention Bonus consisting of a one-off payment of £1,000 for employers that have used the Coronavirus Job Retention Scheme (CJRS) for each furloughed employee who remains continuously employed until 31 January 2021. To be eligible, employees will need to earn at least £520 per month (above the Lower Earnings Limit) on average for November, December and January. Employers will be able to claim the bonus from February 2021. More information will be available by 31 July and full guidance will be published in the Autumn.
  • Employers will receive a payment of £1,000 for each 16-24 year old trainee to whom they provide work experience. The government intends to improve provision and expand eligibility for traineeships to those with Level 3 qualifications and below, ensuring more young people will have access to training.
  • Investment in infrastructure projects.
  • Incentives to create ‘green’ jobs.
  • Green Homes Grant is to be introduced to provide at least £2 for every £1 spent up to £5,000 per household to homeowners and landlords making their properties more energy efficient. For those on the lowest incomes, the scheme will fully fund energy efficiency measures of up to £10,000 per household.
  • An immediate temporary Stamp Duty Land Tax (SDLT) holiday in England and Northern Ireland until 31 March 2021 by raising the threshold above which the main rate of SDLT is payable from £125,000 to £500,000. For second homes, the 3% additional rate will continue to apply. The new rate table is shown below (and the previous position can be seen here):
Slice of Residential Property Value SDLT Rate %
Up to £500,000   0
£500,001 - £925,000   5
£925,001 - £1,500,000 10
Over £1,500,000 12

The devolved administrations in Scotland and Wales set their own rates of tax on Land and Buildings Transaction Tax (LBTT) and Land Transaction Tax (LTT) respectively. At the time of writing, neither country had announced their plans.

  • A temporary cut in VAT for the hospitality sector from 15 July to January 2021. A 5% rate of VAT will apply to supplies of food and non-alcoholic drinks from UK restaurants, pubs, etc and accommodation and admission to attractions across the UK. Further guidance will be published by HMRC shortly.
  • Half-price discounts on meals at participating restaurants on Mondays to Wednesdays in August, of up to £10 per head.

The Chancellor confirmed that there will be a Budget and Spending Review in the Autumn.

Investment Diversification is Key

Investment Diversification is Key

When you examine investment performance over the long term, there is no obvious pattern.   Take Emerging Market funds some years returns are top, some years they are bottom.

The white box represents a simple diversified portfolio where money is allocated equally across all 12 sectors.  The white box is much less volatile than other individual asset classes: this reduced volatility is often referred to as the "only free lunch in investing".  My clients usually respond back with “don’t put all your eggs in one basket”.

An expert financial adviser, working with a risk profiling tool, can create the optimum mix of assets to meet the long-term needs and risk capacity of each client.  Seeking to maximise the return for the level of risk for the client's portfolio.

If you would like an assessment of your own portfolio for diversification and risk.  Get in touch, our initial consultation is always at our expense.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.