Long-term financial planning is more vital than ever in the aftermath of the UK’s vote to leave the European Union, according to a leading chartered financial planner.

Alan Mellor, Managing Director of Cheshire-based Phillip Bates & Co Financial Services, has been cautioning clients not to be overly concerned by the Brexit decision.

Alan, whose office is in Neston, said: “The result of the referendum was a surprise to most people and not a result markets anticipated.

“This inevitably leads to uncertainty, which is never a positive thing for investment markets.  The FTSE100 initially went down a little under 5% with European markets slightly more heavily affected.

“This is a moderate reaction to the result and reflects the markets confidence that the change to our political position will not have a major impact on company performance.

“The fall in the value of the Pound relative to the Dollar has been one of the things most remarked upon in news headlines.  This will, if sustained, affect investments to a degree.  However this will help exports but increase inflation in the short term.

“It is absolutely essential that the Government and the Bank of England do everything in their power in the coming days and weeks to ensure as much stability as possible. My clients are looking for reassurance in the aftermath of such a historic and seismic event.”

Phillip Bates & Co is the only Chartered Partnership in its area with both the financial planning and accountancy businesses holding the prestigious chartered status.

Alan added: “It is more essential than ever that people ensure they have sensible, balanced and long-term financial plans in the UK and overseas.

“Our planning is always geared around what might happen in the future including dramatic events such as the Brexit vote.

“This means using managers who have a track record of identifying well run companies that are likely to make profits and pay dividends in the future.  These companies will still do this, albeit in a market which may be slower for some time.

“Additionally, we diversify into fixed interest investments such as gilts and corporate bonds, as well as income producing assets such as infrastructure and property.  Gilts are likely to be a beneficiary of uncertainty as they tend to be a place of safety when stock market uncertainty is prevalent, although property may well suffer a similar down turn to equities.

“Inevitably, there will be a lack of optimism among many investors over the coming weeks, but good financial planning should always be about the longer-term.”

Future pensions upheaval remains a strong possibility following the Budget, according to a leading chartered financial planner.

Alan Mellor, Managing Director of Cheshire-based Phillip Bates & Co Financial Services, believes Chancellor George Osborne may delayed further changes until the Europe referendum is out of the way.

Alan, whose offices are in Neston, said: “Radical pension changes were threatened leading up to this Budget but with political priorities to the fore, major changes have been put off until a future date, possibly once the Brexit vote is decided.”

Alan says the Chancellor’s announcement of a new Lifetime ISA may hint at future pension reforms.

The Lifetime ISA is the biggest change affecting family finances and will be introduced from April 2017. Savers aged between 18 and 40 can save up to £4,000 a year and receive a Government bonus of 25% – up to £1,000 a year up to the age of 50 provided they keep the money in the ISA until they are 60 or use it before then to purchase a first home.

Alan said: “This measure will prove popular for those saving to buy a house and the ability to borrow from this fund will be attractive to many. The worry is that both of these features detract from the reason we save into pensions – for retirement.

“There will be widespread concern if this announcement is part of a longer term strategy around pensions. The 25% bonus only equates to tax relief at 20% and it would also take away the principle of a pension being deferred income and tax similarly deferred until later.

“The move would be attractive to the Chancellor because it would bring in a huge tax take today of £6-10billion rather than waiting 20-30 years for a tax take.”

Alan highlighted a small number of other key announcements in the Budget including:

• The reduction in Capital Gains Tax to 10% for basic rate taxpayers and 20% for higher rate payers. The previous higher rate will still apply to the sale of residential property that is not your main home;
• The regular ISA will increase to £20,000 from April 2017, reinforcing its importance as a planning tool for all savers;
• Around 600,000 small businesses to be exempt from business rates – saving them on average £6,000 a year. A further 250,000 will pay reduced rate from April 2017;
• Corporation tax to be cut to 17% by 2020 providing a further boost to small businesses.

Alan concluded: “The Budget should provide a timely boost to small business owners, but there remain questions as to whether the Chancellor will be able to meet his long-term financial targets for the UK economy.”