It has been a remarkable 12 months and one that no one could have envisaged this time a year ago.

The Covid-19 pandemic has so far seen over 70 million confirmed cases and 1.6 million deaths across 190 countries.

The commencement of the vaccination programme is wonderful news to end the year and offers the world a way out of this terrible crisis over the first part of 2021.

Possibly the most impressive feature of 2020 has been the incredible resilience people displayed in the face of a global pandemic. 

A big part of this was how quickly we all adapted to the so called ‘new normal’, a major feature of which was the adoption of technology to enable us to carry on with our business lives and to stay in touch with families and friends.

Some commentators have referred to how the world has leapt forward 10 years in terms of our everyday use of technology during the last momentous few months.

The markets also showed resilience. After the initial panic of March/April, the markets rebounded and values have continued to strengthen throughout the year.

Having said this, the recovery from the biggest economic shock in 300 years will inevitably take some time.

Chancellor Rishi Sunak’s Spending Review at the end of November made plain the size of the fiscal hole the UK faces – £394billion or 19% of GDP which equates to the highest level in peacetime.

The Chancellor has also pledged to spend over £280billion to help get the country through Covid-19.

What did come as some surprise was his decision to delay until next Spring’s Budget any announcements regarding how he expects to address the vast deficit.

It is likely, the Chancellor will want to try his best to avoid any increases in income tax, VAT or national insurance. 

That leaves the possibility of an increase in Capital Gains Tax, a cut to tax reliefs, the implementation of a wealth tax, and/or a rise in inheritance tax by scrapping or altering the Residential Property Nil-Rate Band.

There is also the question of what will happen to the housing market in 2021. The Government artificially boosted people’s appetite to buy and sell by reducing rates through his so called ‘Stamp Duty Holiday’. This runs until the end of March after which there are inevitably concerns that prices will start to turn downwards.

The sense of volatility will be further fuelled by the fallout from Brexit. Whether we leave with ‘No Deal’ and revert to WTO terms or Prime Minister Boris Johnson ekes out a deal during the next few days, we are entering a brave new world.

Meanwhile, January will also see the inauguration of Joe Biden as the 46th President of the United States after the tumultuous Trump years. We await with interest the reaction of the markets to the changing of the guard and the policies Biden puts forward in his first 100 days in office.

All of which brings me back to the importance of a long-term, balanced financial plan that is capable of weathering the inevitable storms – including a global pandemic.

It has been heartening to hear from so many clients who have appreciated this approach more than ever and the reassurance you say this has given many of you during these unprecedented times.

On behalf of all of the team at Phillip Bates & Co Financial Services, I would like to take this opportunity to thank you for being such valued clients and to wish you and your loved ones our very best wishes for Christmas and the New Year.

We also hope that it will not be too long before we can properly meet up again!