Urgent news if you have a deferred pension

Piggy bank with bandage on
Has your pension potential been harmed by missing the transfer boat?
Yes, pension transfer values from salary- schemes have plummeted – see below.

So welcome Rishi Sunak as Prime Minister! We wish him and his new government well and so far, things are stabilising again – Sterling is up and Gilt yields are lower.

Time will tell of course and Mr Sunak has a Herculean task ahead of him thanks to the energy crisis, surging inflation and a large government debt – much of that due to evil Mr Putin and Covid of course.

What else? Well. On one market (the TTF Hub), European Natural Gas prices have fallen 80% from their peak and are even lower than they were a year ago. When will that feed-through to lower electricity prices I wonder? Still, it should save the Government significantly on its subsidy (and budget deficit) and impact headline inflation, so that’s good – as long as all the energy companies haven’t bought-forward at peak prices of course. Centrica today announced that its natural gas capacity here has increased significantly so that’s positive as well.

What is China doing? One minute there is a rumour President Xi is deposed and the next is that he is ‘reselected’ for a third term and with eyes on Taiwan. The continued heavy-handed reaction to Covid with yet another lockdown in Wuhan and its economic impacts don’t help. Then, why was the previous leader manhandled out of the conference… Is China a safe place to invest – let alone trade?
The Hong Kong Stock Market is sending signals and is now down by more than half since its peak in January 2018, levels first seen in 2005 and perhaps more crucially, a third lower than the trough after the Pandemic hit (the Chinese market is lower than then too). It’s not looking too pretty there and adding-in the Chinese desire to ‘gamble’ which exaggerates ups and downs… is this a time to speculate I wonder? Remember too the currency is linked to the US Dollar. We have not held and don’t hold any direct Chinese or Hong Kong funds and the direct Chinese one we ‘inherited’ by takeover was sold well, some time ago.

And then, what were some of the revered financial institutions doing in the UK when the Gilt crisis unravelled? We are told Schroders lost £21billion in its ‘Solutions Division’ on fumbled trading in ‘Liability Driven Investments’. In short, this means speculative derivates which are designed to ‘do a job’ and which, well, the experts may have miscalculated.

Not only is that rather poor but it reflects very badly on these big fellows who investors assume have ample checks and balances to protect against excesses – what are they doing with small investors’ money…? I flagged Scottish Widows’ Protected Pension series last time. It’s the ‘same’ issue. That’s bounced a little off the bottom but is still only about half what it was a year ago. Perhaps both these firms need to rename their products… Other players in the LDI segment include Legal and General, BlackRock and Insight Investments. Others taking a hit included the BT Pension Scheme which lost £11billion.
‘Experts’ say LDIs have done a great job since 2008 till now but with respect, that is because interest rates paid by State borrowers have been on the descent and then at record lows into ‘minus’ territory, so surely they allowed for the inevitable change back to more ‘realistic’ levels…?

Good news for a change  

One of our Defensives, a winding-up Investment Fund in secure loans has had some very good news. One loan in its books for £1.03million has finally seen the original guarantor company cough-up $2.55million and also in two months 100million shares in the parent company with a further cash payment in a year of $1.8million.

I have been saying that the loans were likely to yield more than the heavily written-down values in the end and yet, even now, we can buy more shares at a significant discount to the overall value to add to our 5% stake in the Fund; every penny helps significantly! Of course there can still be odd bad news as the few loans remaining become even fewer but the comfort cushion at the present share price is still large. There are ups and downs but there is leeway despite another smaller loan also being placed into administration.

Another of our larger holdings is a quoted Investment Trust which invests in other funds, designed to be very balanced with a defensive overlay. However, recent volatility has seen its price widen-out from the underlying asset value which has held-up pretty well but now, we can buy more at a 26% discount to the net asset value!
At some point this nigh £300million Trust will roll-over and wind-up so for each 74p we pay today, we’ll receive £1 – a 35% profit and whilst we wait we’ll be paid 6.5% income from a rather ‘boring’ portfolio of assets and we shall still enjoy whatever ride they give us meantime. Remember, this has nothing to do with whether the market goes up or down – simply a technical trading opportunity to us with Investment Trusts (which most investors never have with their advisers/fund managers).


Pension transfers – boat missed?  

If you have deferred benefits from a salary-related pension, your chance to transfer may be going. If fortuitously you have a transfer value which is still current, you may want to review your options immediately! This article notes that transfer values have fallen to their lowest for 20 years, a drop of a third this year. Turbulence sees DB transfer values fall to record lows  

Annuity rates have risen of course too and we completed a successful transfer for a client in May with £74,905. His scheme income due from then was £2,692pa, increasing by only 3%pa and a spouse’s pension. That pot could now buy an annuity of £3,552pa! Aaah – the joys of hindsight but no-one can say we weren’t telling people to at least check and have a review! Just think… the ‘received wisdom’ from Regulator and Schemes alike then and now is that it is unwise to consider a transfer ever. We disagree strongly.

Top 100 IFAs  

And thank you again Citywire for allocating us in the top 100 Independent Financial Advisory firms in the Country. The Top 100 2022 We do try our hardest and are pleased to hit the mark in terms of your criteria. It is reassuring to clients too that they know there is independent scrutiny of our integrity and prowess too!



For Barnstaple residents and visitors, you are now greeted with a rather more attractive wall with local connections than what was there before, when you enter the Square.
We were delighted to be able to fund this through our Charitable Foundation to help ensure it happened:- Mural has transformed Barnstaple ‘grot spot’ into tourist destination  

Blue Planet Investment Trust  

There is nothing much to report in terms of news at present but rest assured the matter has not gone away and is still very much in our minds. As explained, it is a tiny holding, less than 0.5% of all of our clients’ assets.

We have been reminded on many occasions that we are humbled to have such lovely clients. One of them, an 85-year-old who has been with us for decades, wrote after receiving the last Blue Planet letter.  

She also wrote to them saying: ‘You appear to be concerned about what Milton’s are doing with Clients’ money. I can tell you, the answer is: Investing it with a high degree of success. Certainly, I would be asking you why you are wasting Clients’ money in this shameful vendetta against this very reputable company?’

She noted to us: ‘I feel sure you are aware of how much we have appreciated your very careful and considered management of our funds over many years and all the advice too, and of course the continual contact. I want to assure you of our continued confidence and support at this time. Thank you for all you do.’ Thank you so much.    

Poverty in the UK
Where do we go wrong in the UK? Not said in any discriminatory way at all as poverty is poverty, but the biggest segment in need is single parenthood and that is no surprise, is it and often absent parents contribute nothing or little and they seem to be able to escape the system easily. Some 25% of families are headed by a lone parent doing their very best and over half of all children now grow-up outside of the traditional two-parent household. In Europe, it is one-eighth – so half our numbers.
Rachel de Souza, Children’s Commissioner for England, stated that families should indeed be put at the heart of the benefit system, law making and general policy. Just think how economically positive that would be for the families involved and the State too if our numbers were as good as those in the EU!



Link Administration suggests that the weak Pound (or strong Dollar) has added £1.9billion to the dividends on UK shares in the third quarter alone, as we noted was inevitable. The overall income from investments has continued to rise, so all good news (unless you are in ‘growth’ investments which typically don’t pay much or any dividends)!


Bore holes – Amigos  

The Philip J MIlton & Company Plc Charitable Foundation is pleased to be sponsoring some bore holes in Uganda with local charity Amigos. We have been connected with the Charity pretty much since it started and are really pleased to be able to help in such an effective way. Half price boreholes are saving lives thanks to North Devon sponsor

My best wishes

Philip J Milton DipFS CFPCM Chartered MCSI FPFS FCIB
Chartered Wealth Manager
Fellow Of The Personal Finance Society, Fellow Of The Chartered Institute Of Bankers