We like you, will no doubt discover the full gory impact of today’s expenditure cuts announcement, gradually over the next few days. Such is the detail and nature of these things, that several days after the main headlines are losing their initial impact, news of further implications and ramifications will seep into the public domain.
However the real impact will come some way down the line as the various benefit cuts, tax increases and additional costs (such as the hike in rail fares) start to directly hit your wallet. The vast cocktail of measures makes it very difficult for anyone to quickly assess the precise affect on them. Nevertheless, the coming weekend’s papers and professional economists’ blogs will no doubt make a good stab at quantifying the bad news for a range of ‘case study’ families.
For some of our clients the changes could require a rethink of their f
uture financial plans and using our experience and lifetime cashflow modelling software, we will be able to demonstrate the effect of changes such as increased expenditure and deferring retirement age (increase in State pension age to 66).
We also expect many more people to ask us to help them examine carefully their pension arrangements, particularly those people whose jobs are in jeopardy or whose pension benefits are being diluted. We fully expect that many final salary pension schemes will require increased contributions for lower benefits at a later pension age.
We won’t know for some time whether the medicine the coalition has administered has saved the day or pushed us towards a double-dip recession. Economists seem fairly equally divided on this point. All we can say for now is that we are here for our clients, ready to listen and provide practical advice.
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