The Covid-19 pandemic is now beginning to fade from the collective consciousness, despite the best efforts of the Omicron variants to snare those who had previously avoided the virus. It is understandable that we do not want to linger on that dark period of lockdowns, social isolation and, until the vaccines arrived, considerable fear. However, by upturning our lives, the pandemic provided many lessons: some already have had a clear impact, while others have been forgotten.
In the first camp is the realisation that technology has made the traditional commute to the office for five days a week unnecessary for many workers. A recent survey revealed that the average time spent in the office is now 1.5 days a week. With desks left empty nearly two thirds of the time, there are profound implications for not only the office property market, but also for the retailers who relied on the footfall of office workers.
In the slipped away category, three lessons stand out:
1. You need to have an up-to-date will. The necessity became all too obvious when the possibility of a sudden death arrived. That risk has thankfully largely disappeared but keeping your will up to date – or making a will if you do not have one – should still be a priority.
2. Timing the investment markets is next to impossible. The arrival of Covid-19 prompted sharp falls in world markets in February 2020, followed by rapid recoveries, starting at what looked the grimmest time – March 2020. Anyone who claims to have got that timing right is probably flexing the truth.
3. The UK’s social security net is not fit for purpose. Many benefits had to be bolstered and/or supplemented during the pandemic because they were simply inadequate. For example, Universal Credit was increased by £20 a week (withdrawn in September 2021) and both the furlough scheme, and the self-employed income support scheme were introduced (both of which have now also ended). The social security system has been weakened further since, as the lagged mechanism for index-linking has allowed inflation to erode the benefit values. If you were considering saving money by cutting out the premiums for your life and health protection policies, think again.
While it’s understandable that we all want to put the last couple of difficult years behind us, some issues, and fault-lines, are worth remembering and factoring into your resilience planning.
The value of investments and any income from them can fall as well as rise. You may get back less than you invested.
Tax treatment varies according to individual circumstances and is subject to change.
The Financial Conduct Authority does not regulate tax, wills or. benefit advice.
Past performance is not a reliable indicator of future performance.