Preparing for and thriving in a recession

Pension scams cost Brits 4 billion a year and could be the next big financial scandal according to the Sun.

Problems started a few years ago after the then Chancellor George Osborne changed the rules to allow savers to access 25% of their pension pots tax-free from the age of 55. Thousands of people have since been scammed out of their money or made poor investments and lost everything.

In the past, we could not touch our pensions until age 60, but the rules have become more flexible leading to some people foolishly frittering away the money that would've otherwise bought a secure pension in an annuity for life during retirement. 

We know that the average pension pot of someone in the 50s is around £70,000, indicating that there will be a major shortfall in pension savings for millions of people in 10-15 years’ time. An awful lot of people will be unable to retire and some could be homeless.

In other news, the current Chancellor Philip Hammond said he will resign from the government if Boris Johnson is elected leader. Hammond is a known remainer and, along with fellow remainer MP’s, may attempt to block Brexit. 

The Brexit saga could run and run leaving the country and the EU in a state of limbo or uncertainty thus deterring investment.

A government thinktank recently warned that a no-deal Brexit could wipe 10% off UK property prices.

The United Kingdom has a recession around every 10 years and we are 10 years on from the last recession, so it doesn’t take a financial genius to work out that we are due for one in the next few years. However, it does take a genius to tell you exactly when the next recession will be!

In my experience, recessions often come from almost out of the blue triggered by an unexpected event, such as the 1970s oil crisis or the 2008 financial meltdown.

Currently, we have several possible causes of recession, including Brexit, the America-China trade war and increased tensions in the Gulf after Iran seized a British oil tanker.

Recessions are just part of life and they come and go, so we all need to prepare for lean times as well as good, like the Joseph story in the Bible. Joseph prophesised 7 good years, followed by 7 lean years and famine and told the Pharaoh to store grain during the good years. How many governments have enough grain in the store?

You need to ensure you are not carrying too much consumer debt or even too much good debt on properties or business when the downturn hits.

On the plus side, a downturn opens up opportunities to acquire assets at greatly discounted prices. For instance, if and when the stock market has a correction, or crash, there will be a number of good company’s shares on sale at below asset value. That will be the time to buy. 

The same applies to property, even if you don’t have much cash.

Can You Acquire Property With No Money Down? Yes you can!

Learn multiple no money down strategies by joining me at the “No Money Down Weekend” in London on 27 July.

For more information, email me at charles@charleskelly.net