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Protecting against the Brexit effect

8-Jun-17

Protecting against the Brexit effect

Britain’s savers are caught in a vicious crossfire of low-interest rates and rising inflation. Over the past 11 months – since just before the Brexit vote – the Consumer Price Index (CPI) has risen from 0.3% in May 2016 to 2.7% in April this year, the latest month reported by the Office for National Statistics (ONS). The Bank of England is predicting that inflation will peak at around 2.8%, but independent economists are expecting the 3% mark to be breached sooner rather than later.

Either way, with interest rates still anchored at record low levels, and expected to remain that way for the foreseeable future, there is little relief in sight for those clients who have to settle for 1% or less for putting their cash on deposit with a bank, building society or in National Savings and Investments. Even where those savings are invested in a Cash ISA, inflation is effectively causing losses, in real terms – it is a huge price to pay for housing capital.

Cause and effect

We can attribute the main cause of our rising inflation to the fall in the value of sterling against the major currencies following the Brexit vote almost a year ago. The price of imported goods, including oil, has shot up, putting enormous pressure on the value of disposable income and savings.

But knowing the reason is little consolation to people who are powerless to do anything about it – particularly with the pound continuing to jump around in the run-up to the General Election. The circumstances have emphasised the need to look around for new ways to help clients fight back against this erosion of capital value.

A higher return – and a tax break – might warrant a little higher risk

One answer to the conundrum, though perhaps not suitable for everyone, is to consider accepting a degree of risk in return for higher reward. Introduced in April 2016, the Innovative Finance ISA (IFISA) is designed to allow private investors – as distinct from savers – to earn higher rates of interest through putting their cash into different asset classes, such as peer-to-peer (P2P) loans. More recently the range of eligible assets for IFISAs has been extended to include corporate debentures and crowd bonds.

The result is that, through an experienced IFISA provider like Triple Point Advancr, it is now possible to secure fixed rate, tax free returns for advised clients of up to 6.7% over periods of 1, 2 or 3 years (provided they are held within an IFISA  or SIPP). This is a level that keeps them ahead of inflation, allowing their capital to grow, whilst also providing a reasonable level of capital security.

Triple Point Advancr investors need to have a minimum of £1,000 (maximum £1m) and income can be paid out monthly or automatically reinvested for a compounded gain. Underlying investments are selected by Triple Point’s committee of experts who have a successful track-record stretching back over 12 years.

Investments are made in fixed term debt securities, which are secured against the assets of the issuer – typically these are companies that operate in the leasing, lending and asset finance sector, which ultimately finance creditworthy smaller businesses after they have undergone a robust due diligence process.

Triple Point has so far provided over 50,000 loans and leases to UK SMEs, thereby not only providing investors with an inflation-fighting return, but also supporting growth and investment in the UK economy.

Triple Point Advancr offers fixed-term secured bonds targeting high annual returns and are built around a simple idea; to give individual investors direct access to our professionally managed leasing and lending investments via fixed interest secured bonds.

Risk Warning: remember that Triple Point Advancr Bonds are investments, not savings, and your capital and interest are at risk. Tax treatment depends on individual circumstances and is subject to change. Your capital will be tied up for a fixed term, and past performance is not a reliable guide to future returns. Advertised rates are correct as of 07/06/2017.

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As with all investments, our products place capital at risk. Investor’s may not get back the full amount invested. Our products invest in unlisted or smaller company shares which are likely to have higher volatility and liquidity risks than quoted shares. Any tax reliefs referred to may be subject to change and tax treatment will depend on the individual circumstances of the investor. Any reference made to past performance or forecasted performance of our products is not reliable indicators of future results. Triple Point does not provide investment or tax advice, and information on this website should not be construed as such. Potential investors should seek specialist independent tax and financial advice before investing in any alternative investment. Nothing on this website constitutes an offer, or invitation to treat, or inducement for you to engage in any investment activity.

Triple Point is the trading name for the Triple Point Group which includes the following companies and associated entities: Triple Point Investment Management LLP registered in England & Wales no. OC321250, authorised and regulated by the Financial Conduct Authority no. 456597, Triple Point Administration LLP registered in England & Wales no. OC391352 and authorised and regulated by the Financial Conduct Authority no. 618187, and TP Nominees Limited registered in England & Wales no.07839571, all of 18 St. Swithin’s Lane, London, EC4N 8AD.