Personal finance: looking back on 2020

This week, in a departure from our normal Q&A column, Smith & Pinching's advisers reflect on the challenges we’ve faced in 2020 and look ahead to opportunities in 2021.

Matthew Hinchliffe: It’s certainly been a year of challenges for everyone. We’ve been able to carry on providing advice to our clients throughout the year. At Smith & Pinching we’ve always invested in new technologies, so the foundations were already in place for us to talk to clients via a range of different channels, including video calling. We’ve been delighted with how readily clients have embraced new ways of working with us. It was lovely to be able to see clients in person when restrictions eased – with appropriate face masks and social distancing.

Douglas Bridges: Of course, we’ve needed to give clients advice and reassurance throughout the market turbulence that has been a feature of this year. For most clients, we have advised them to “keep calm and carry on” with their investments rather than react to short-term changes in market conditions – but I could understand their concerns as markets nose-dived in the early stages of the crisis. We’re not out of the woods yet, but we’ve seen some fairly solid recovery in the latter part of the year, with hopes high for effective vaccines being distributed worldwide. I remain positive about the prospects for a return to pre-Covid investment values during 2021.

Matthew: Lockdown has been an opportunity for people to rethink their life plans and I’ve had discussions with clients about their retirement planning, with some clients enjoying a quieter life so wanting to retire sooner and others less keen on a slower pace and becoming determined to defer their retirement as long as possible. Changing objectives can require adjustments to their financial strategy, so we have worked with clients to achieve that.

Douglas: The pandemic has prompted many people to think about what protection they have in place for maintaining their income if they were to fall ill, so we’ve seen an increased interest in income protection and critical illness insurance policies. Everyone has become more aware of their own mortality, so reviewing life insurance has been popular too.

Matthew: I’m looking forward to 2021 – I’m feeling optimistic that it will bring opportunities for investors to see some growth. Investing when markets are low buys you more shares or units for your money, giving the potential for growth in your holding when markets recover, although returns cannot, of course, be guaranteed.

Douglas: It’s important to remember that life will indeed return to some kind of normality at some stage. Now is the time to optimise your pensions, savings and investments using the current year’s allowances.

Any opinions expressed in this article do not constitute advice. The value of your investment can go down as well as up and you may get back less than the amount invested. The return at the end of the investment period is not guaranteed and you may get back less than you originally invested. 

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