How much money is enough in retirement?

Liam Roche
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How much money is enough in retirement?

£19,000 per year necessary for a ‘comfortable’ single-person household retirement

Knowing how much money one needs for retirement isn’t an easy number to calculate. However, it remains of vital importance for those seeking comfort as they enter the later stages of their lives.

Which?, the consumer group, has come up with estimates of annual income, including state pensions, that people are likely to need in retirement. Their findings are as follows:

Single-person household

  • ‘Luxury’ retirement – £31,000 (pot size of £671,000 needed for annuity; £422,140 for drawdown)
  • ‘Comfortable’ retirement – £19,000 (pot size of £305,170 needed for annuity; £192,290 for drawdown)
  • ‘Essential’ retirement – £13,000 (pot size of £123,365 needed for annuity; £77,350 for drawdown)

Two-person household

  • Luxury’ retirement – £41,000 (pot size of £757,000 for annuity; £442,020 for drawdown)
    ‘Comfortable’ retirement – £26,000 (pot size of £265,420 for annuity; £154,700 for drawdown)
  • ‘Essential’ retirement – £18,000 (pot size of £47,325 for annuity; £28,810 for drawdown)
  • Which? added that these estimates are net of tax and based on someone retiring at 65 and withdrawing all their income through drawdown over 20 years.
  • Commenting on the estimates, Becky O’Connor, head of Pensions and Savings, interactive investor, said: “These estimates are a useful guide for people to know the retirement that they are roughly on track for, given their current pension pot size. But the amount we should all aim for is very personal and at the end of the day, depends on circumstances and goals, such as whether you want to leave an inheritance.”

O’Connor also suggested that people may have two come to terms with a potential fall in living standards when they stop working.

“It’s important to think about the lifestyle you have now and how much you would like this to continue when you retire. If your income will be substantially lower, then unless your costs fall dramatically too, you will have to get used to a potential drop in living standards when you stop work,” she said.

“Living costs do tend to fall for retired people and these estimates also assume major expenses like housing costs are largely paid off. But bear in mind any costs you expect to continue into retirement that could eat away at your pot faster, such as housing costs, as well as whether you will need to continue to support adult children or leave them an inheritance, should be factored into your own personal calculation for what your retirement pot should be.”

The Which? drawdown estimates reduce the pot size to nothing after 20 years, which means if you lived to be older than 85, in these scenarios, you would become dependent on the state pension at that point.

Millennials are leading the way in the bitcoin community

Liam Roche
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Millennials are leading the way in the bitcoin community

Bitcoin is up by 3.38% to $37,344.7824 in the past 24 hours

Bitcoin is constantly on the minds of investing-minded millennials as the cryptocurrency is viewed as a way of creating wealth.

It could even be that millennials’ interest in bitcoin is what paves the way for an eventual mass adoption.

Data collected by Crypto Parrot, the cryptocurrency trading simulator, shows that millennials aged between 25-35 lead the way in the bitcoin community with an engagement rate of 41.51%.

Those aged between 35 and 44 years old are the second-highest group with an engagement rate of 20.16%.

18-24, 45-54 and 55-64 year olds have respective engagement rates of 16.65%, 10.8% and 6.59%. While men (85.77%) are far engaged than women (14.23%).

Crypto Parrot’s report suggests that the high engagement of young people could be linked to their lives revolving around the digital world more generally. “During this era, the financial system has shifted to digital products from banking to payments. Therefore, bitcoin being the pioneer digital currency, naturally suits millennial conversations,” the report said.

As millennials begin to seek financial maturity they are driving bitcoin’s adoption, betting on the asset’s portability, security, and global nature.

“As new generations are regularly ushered in the financial world, the tendency towards cryptocurrencies will potentially grow further. Furthermore, millennial children are witnessing their parents adopt and talk about bitcoin, a significant factor in sustaining bitcoin adoption,” the reports adds.

At the time of writing the price of bitcoin is up by 3.38% to $37,344.7824 in the past 24 hours.

This relative calm has spread across the wider crypto market, with other leading cryptocurrencies like Ethereum and Cardano moving by less than 2% over the last day.

Oil rally lifts FTSE 100 above 7,100 for first time since May 10

Liam Roche
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Oil rally lifts FTSE 100 above 7,100 for first time since May 10

Though it didn’t quite match yesterday’s growth, the FTSE 100’s early gains still lifted it to a recent high.

Up 0.3%, the UK index is now above 7,100 for the first time since May 10 and is around 70 points from matching the then-14-month peak struck on that date.

“The FTSE 100 built on yesterday’s strong performance to trade solidly higher on Wednesday morning, lifted by rising oil prices which boosted the big energy firms on the index, BP and Shell,” says Danni Hewson, financial analyst at AJ Bell.

“An upbeat assessment of demand from producers’ cartel OPEC and the waning prospect of a big increase in Iranian supply have helped support a rally in crude prices. Something which could make the market a little nervous if it is sustained given investors’ current preoccupation with inflation risks.”

Connor Campbell, financial analyst at Spreadex added: “Looking at the trading landscape this Wednesday, however, and a low energy open may make it difficult for the FTSE to significantly make strides towards those levels.”

“The DAX and CAC, for example, both started the session flat following a far worse than forecast German retail sales reading, while the Dow Jones is heading for a similarly sluggish performance this afternoon,” Campbell said.

Wednesday could be a day where the markets tread water, saving their energies for the US jobs focused sessions on Thursday and Friday, which bring the unemployment claims and latest non-farm payroll data respectively.

FTSE 100 Top Movers

Burberry (3.44%), British Land Company (2.16%) and Land Securities (1.82%) were the top risers on the FTSE 100 during the morning session.

At the bottom end, Kingfisher (-2.32%), Aviva Group (-1.72%) and Antofagasta (-1.63%) each lost ground on Wednesday morning.

Oil

Brent crude oil surged past $70 per barrel for the first time since March on Tuesday.

The news comes as OPEC+ stayed true to their plan of releasing more barrels of oil into an improving market.

The benchmark for oil used across the world now stands at $70.78, as OPEC+ producers, headed up by Russia and Saudi Arabia, said they were restricting output as there are a number of uncertainties at play. This is despite there being an increase in demand globally.

Brent crude oil surpasses $70 a barrel for the first time since March

Liam Roche
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0
Brent crude oil surpasses $70 a barrel for the first time since March

OPEC+ representatives agreed to move ahead with plans to release more oil to the market next month

Brent crude oil surged past $70 per barrel for the first time since March on Tuesday.

The news comes as OPEC+ stayed true to their plan of releasing more barrels of oil into an improving market.

The benchmark for oil used across the world now stands at $70.78, as OPEC+ producers, headed up by Russia and Saudi Arabia, said they were restricting output as there are a number of uncertainties at play. This is despite there being an increase in demand globally.

According to a poll by Reuters, US crude stockpiles were expected to fall by 2.1m barrels last week. In addition, oil prices were pushed up by Chinese data that showed manufacturing rose at its fastest rate this year in May.

Prices were also boosted by Chinese data showing that the country’s factory activity grew at its fastest pace this year in May.

Following a virtual meeting OPEC+ representatives agreed to move ahead with plans to release more oil to the market next month.

A number of traders, as reported by the Financial Times, have suggested that the vaccine roll-out, along with stimulus packages, have pushed demand for oil. The resultant deficit is what caused the price of crude oil to surge by over 30% since the end of last year.

“Unless widespread cheating develops or a renewed uptick in global coronavirus cases evolves, OPEC’s current recipe for success would appear to represent a viable plan,” said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.

Wizz Air reports massive loss as pandemic takes its toll

Liam Roche
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Wizz Air reports massive loss as pandemic takes its toll

For the 12 months to 2020, Wizz posted a net loss of €482m

Wizz Air (LON:WIZZ) said it will lose money next year as the effects of the pandemic on the airline industry could be prolonged as travel restrictions remain across the continent.

The budget airline said on Wednesday that restrictions had remained longer than expected. Between April and June, Wizz expects to fly around 30% of its normal schedule.

Wizz Air chief executive Jozsef Varadi said the company is cautiously optimistic about the businesses’ recovery, adding that it has “started later than what we would have liked”.

Varadi expects to record a net loss for the 12 months to March 2022, unless restrictions are lifted in a “permanent” and “accelerated” way.

For the 12 months to 2020, Wizz posted a net loss of €482m, as flyer numbers fell by 75% to 10m.

Liquidity stands at €1.617bn as of March 31. The Hungarian airline went through €84m during the last quarter.

Susannah Streeter, senior investment and markets analyst at Hargreaves and Lansdown, commented on the outlook of the travel sector and Wizz’s prospects.

“High hopes that brighter skies were in sight for the airlines have been clouded by fresh strains of Covid emerging in parts of the world. It has meant that the lights have been stuck on amber for many travel destinations for longer than expected, throwing holiday plans into disarray.”

“The Hungarian carrier flies routes mainly to and from Eastern European countries, which have been far from speedy in vaccine roll outs, although lighter travel restrictions compared to the UK do put it in a slightly more resilient position. It’s also been flexible in its reaction to ever changing rules, by nimbly ramping up to 80% capacity last summer before reducing back down to 20% only weeks later.”

Down to its low-cost base and expansion into different areas during the pandemic, Wizz could yet emerge as a winner from the pandemic.

During the morning session, the Wizz Air share price is down by 1.56% to 4,800p per share.

Zoom faces challenge of adapting beyond lockdowns

Liam Roche
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0
Zoom faces challenge of adapting beyond lockdowns

Zoom saw revenues rise 191% in the first quarter of this financial year

Zoom (NASDAQ:ZM) last night said it expects its revenue for the current quarter will surpass estimates due to the increased provision of hybrid models of working.

Over the past year, Zoom’s brand has been popularised across the world as companies and schools increasingly used its service to cope with being locked down.

James Andrews, Personal Finance Expert at money.co.uk, commented:

“Zoom has been one of the biggest success stories of the past 15 months, seeing revenues surge 326% over its 2021 fiscal year as ever more companies and individuals signed up during various lockdowns. In short, it’s gone from a relatively unknown US tech firm to a household name across the globe.”

With the vaccine roll-out proving to be a success, the question now is if Zoom can stand firm in the face new challenges.

“The key question investors have been asking is if the firm can continue to grow as people return to work and virtual meetings are replaced by face to face ones. So far, at least, the answer appears to be ‘yes’, with the video conferencing platform seeing revenues rise 191% in the first quarter of this financial year,” said Andrews.

“With Zoom now established as the leading specialist video conferencing tool, the other big question is whether it can continue to hold its position as the likes of Facebook, Microsoft, Google and more seek to muscle into the market leveraging their existing users, platforms and bank balances to take revenue from Zoom.”

The company based in San Jose, California, addressed those concerns by forecasting revenue for the current quarter to reach between $985m and $990m. According to data from IBES Refinitiv, this is above Wall Street estimates of $931.8m.

Zoom shares closed down by 1.15% yesterday, as the company has seen a steady decline since October.

Tekmar Group: strategic growth emerging

Jon Levinson
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0
Tekmar Group: strategic growth emerging

Tekmar Group (AIM:TGP) - Today’s 2nd interims (as the year-end is changing to September) contained a part of a business strategic review from the recently appointed CEO, Alistair Macdonald. The Covid impacted results showed a 29% revenue decline to £29.1m with an Operating loss of £2.4m to March 2021, which compares to a previous profit of £2m.
It is estimated that there will be €50bn of global spend on subsea cable procurement and installation in the next decade with over 60,000km of subsea cable to be installed by 2030, creating substantial opportunity for Tekmar’s technology and services. ...

CFA Institute members say equities correction likely in next one to three years

Liam Roche
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0
CFA Institute members say equities correction likely in next one to three years

Plurality argue equities have been out of sync with the real economy since the start of the pandemic

The CFA Institute, the global association of investment professionals, surveyed its membership to analyse the impact of the coronavirus pandemic, and found that many respondents are expecting market corrections within the next one to three years.

The results showed that 45% of those surveyed thought this to be true, believing that equities in their respective markets have recovered too quickly.

The proportion of respondents who believe that equities are fairly valued was low across the board.

50% of respondents in North America are concerned about a correction, compared to 40% of Europeans, while respondents in emerging markets appear more optimistic that equities in their own market.

Double-digit declines have occurred in the S&P 500 every 1.87 years since 1950, therefore stock market crashes are more common than it may seem.

While the US stock market has been showing some signs of weakness with the Nasdaq trading lower for three weeks in a row last month. This is also raising concerns on Wall Street that a crash could be on the way.

Big tech companies reached new highs since the pandemic and many analysts argue that the markets are due for a correction as the economy recovers thanks to a fall in Covid-19 cases.

However, with a somewhat contrary view, a majority of analysts polled by Reuters believe that a near-term correction is unlikely.

Reuters polls of nearly 300 equity strategists taken across May showed all 17 stock indexes surveyed on were forecast to rise, with yearly gains in nearly all of them predicted to be in double digits in 2021.

“When it comes to assessing the market environment we prefer to choose ‘half full’. We will remain vigilant for rebalancing opportunities … as we expect rates and equities to drift higher,” noted Ehiwario Efeyini, senior market strategy analyst at Bank of America.

“In terms of the broader economic environment, we are closer to mid-cycle than late cycle and that growth is currently flashing bright green and surprising more than expected.”

“It is interesting to see the survey results telling us that respondents believe that equities have recovered too quickly, as it could show that CFA Institute members believe there is a disconnect between economic growth fundamentals and capital markets caused in part by monetary stimulus, which could be corrected in a not-too-distant future of less than three years,” said Paul Andrews, Managing Director of Research, Advocacy and Standards at CFA Institute. 

 “To me, it also indicates to authorities that monetary stimulus is not a simple or linear lever to pull given the complexity of the economic and financial ecosystem; there will be unintended consequences to consider in the future.”

Analysts see this UK housebuilder’s profit rising 20% in 2021

UK Investor Magazine
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Analysts see this UK housebuilder’s profit rising 20% in 2021

The latest release from Nationwide recorded a 10.9% increase in property prices in the year to March, the fastest rate in around seven years.
The boom in the UK housing market was helped by tax incentives offered by the UK government, as well as a broad 'race for space' observed in buyers scrambling to upsize to rural properties "with people reassessing their needs in the wake of the pandemic," outlined by Nationwide's chief economist Robert Gardner in the report.
Given the jump in activity, it's likely interest in housebuilding shares increases and analysts have highlighted one UK housebuilde...

The commodities supercycle and mining royalties with Trident Royalties

UK Investor Magazine
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0
The commodities supercycle and mining royalties with Trident Royalties

Trident Royalties presented at the May UK Investor Magazine Virtual Conference and delivered a truly fascinated Q&A session covering the commodities supercycle and the composition of their mining royalty portfolio.

CEO Adam Davidson gave his views on the possibilities of a commodities supercycle and outlines the market pressures driving commodity prices.

Adam Davidson also discusses why Trident Royalties wanted to make Lithium a central part of their portfolio of royalties, given the increasing demand for electric batteries.

The full video presentation is available in the video section of the UK Investor Magazine website.

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