2015 market outlook: Pensions, elections and interest rates

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Investing

Gareth Trainor

27th January 2015 at 4:22pm

It’s January and I’m counting the calories, upping the exercise ­– and reviewing my finances. While I certainly can’t predict everything that might happen, I’ll try to highlight some of the events that could affect your pension, savings, mortgage – and holidays.

Pensions are changing

Sweeping changes to how you can take your pension come into effect from April. These will make investing increasingly important in retirement, so why not take the opportunity to get ready for what’s happening and review your pension investments?

The UK general election in May means markets could move either way as uncertainty flares. You can start to prepare for potential short-term market upsets by reviewing your pension or ISA investments early in the New Year to make sure they’re still right for you. Consider spreading your risk by choosing a variety of investments, and take a long term view.

UK interest rates could edge up later in the year…or possibly next

The debate around when interest rates will increase has been particularly lively recently. Some commentators are now saying end of this year, others 2016.

Whatever the outcome, the latest guidance from the Bank of England suggests that when they do increase rates it will be slowly – and they’ll stay lower than they were before the financial crisis.

Rates obviously have a big impact on your mortgage and savings accounts so to keep up to date, watch out for the Bank of England’s next inflation report due out in February.

Elsewhere, lower interest rates in the Eurozone mean the Euro is likely to be weaker over the coming year. Meanwhile, with quantitative easing coming to an end in the US, the dollar is likely to strengthen. The rising interest rates in the UK mean that sterling should perform well too.

And if you need a break from it all…

So if, like me, you’re looking for a better value holiday option, Europe might be a better destination. Its weaker currency could give you more for your money.

Find out more at or more at Standard Life Investments’ outlook.

Read more about investments on the Standard Life website

 

If you received this content as part of our printed Download newsletter, you might notice some of the content about interest rates has changed slightly. As we say, the debate around interest rates has been particularly heightened – and changeable – recently, though expectations and guidance on rates is always subject to changing economic conditions. The content of this blog is accurate as at 23 Januray 2015.

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