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Many British
expatriates close their UK bank accounts and open new ones in offshore centres
once they leave the country. They may
not have a choice if their bank does not allow non-UK residents to hold
accounts. Nationwide International in
the Isle of Man is a popular choice for expatriates, in Spain and elsewhere, but it has announced that it is closing
its doors in summer 2017.
The bank will
start closing customer accounts from the beginning of 2017 It has
sent out an initial letter to clients advising them of the news, but will be
writing again with important information and dates regarding the closure of
their specific accounts.
In the
meantime, it suggested that since looking for a new home for their savings can
take time, clients should start looking now.
If you have accounts
with Nationwide International, you can choose to close them right away or wait
until you have the closure dates. The
bank has removed any notice requirement on its accounts, and fixed rate bonds
can also be closed before the scheduled maturity date, with no penalty.
You can
continue to deposit money into your accounts until you close them, but cannot
open any new ones. Nationwide assures
clients that their money remains in safe hands.
The bank's decision
to close came following a strategic review of its operations and was based on a
number of factors including falling customer demand, running costs and changing
market conditions.
This only
affects Nationwide International in the Isle of Man. Accounts held with the Nationwide
Building Society in the UK are not affected and the business continues as
usual.
Looking for a new home for your
savings
This is a
good opportunity to review your savings and consider if a bank is the best
place for your money.
The Bank of
England interest rate has been at historic lows since March 2009 and was cut to
an even lower 0.25% following the Brexit referendum. If you need your savings to provide an
income, preferably without withdrawing much capital, or are looking for capital
growth to keep pace with inflation over your retirement years, seek advice on
how you may be able to generate better returns from your savings.
How long do you need your money to
last?
This is a
sobering question and not one most people can answer with certainty.
Underestimate this, however, and your money could run out too soon, leaving you
unable to live the lifestyle you want. Life expectancy has been increasing and
you need to make sure that your savings will provide the income you need right
to end of your and your spouse's retirement years. No-one wants to be forced to
reduce their quality of life, especially in their later years.
You therefore
need to establish a strategic savings and investment strategy to preserve the
value of your wealth and income.
Remember to
factor in the effect of inflation on reducing your spending power each year.
Say, for example, you typically spend €5,000 a month. Assuming an inflation
rate of 3% a year, in 10 years' time you could need about €6,720 a month to
maintain the same spending, and €9,030 in 20 years.
Time not timing
The
uncertainty over Brexit has been making some people cautious about
investing. However, trying to time when
to buy and sell investments has plenty of risks - but the biggest one may be
the risk of missing out.
To illustrate
this point, a hypothetical £10,000 investment in the FTSE All-Share index for
the 10 year period to 31 December 2015 would have earned a profit of £7,197 if
invested the whole time. If the five best days were missed, the profit would be
considerably lower at £1,831. Missing the 10 and 30 best days would have
resulted in losses of £607 loss and £5,269 respectively. (Source: Russell
Investments)
Short-term
declines or uncertainty should not detract from the long-term potential of
stockmarket investing. Looking at the
FTSE All-Share index from 1996 to 2015, although there were average intra-year
declines of 15.7%, annual returns were positive for 15 out of the 20
years. A hypothetical lump sum
investment of £100,000 at the start of 1996, with dividends reinvested, would
have been worth £367,525 at the end of 2015. (Source: Russell Investments)
It is
important to ensure that your portfolio is built around your risk profile, and
with strategic asset allocation and diversification to reduce risk and meet
your objectives. You want to ensure that your portfolio is suitable for you.
Take specialist advice and build a good relationship with your financial
adviser so they understand your needs and guide you through the Brexit years
and into the future.
At Blevins
Franks our investment advice is personalised for each client. We take the time to get to know you, your
situation and objectives, and use sophisticated means to establish your risk
profile ensuring we recommend a portfolio that you are comfortable with. Investments can be in Sterling or Euros or a
mix of currencies, and you can switch currencies at a later date.
We have been
providing trusted financial advice to British expatriates in Spain for over 40
years, only recommending funds that have been carefully vetted for performance
and security. We would be happy to have
a free, no obligation discussion with you to outline your options and explain
how we can help you.
David Bowern, Partner, Blevins
Franks
Email:
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Tel: 952 809 212
These views are put forward for consideration purposes only as the
suitability of any investment is dependent on individual circumstances; take
individual personalised advice. The value of investments can fall as well as
rise. Past performance should not be seen as an indication of future
performance.
Read the original article here
Tax rates, scope and reliefs may change.
Any statements concerning taxation are based upon our understanding of
current taxation laws and practices which are subject to change. Tax information has been summarised; an
individual is advised to seek personalised advice.
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