If u don’t plan, u plan to fail.

Pension warning as millions ‘fall short’ and can’t afford one week holiday in retirement GB News

Some 1.2 million Britons will not be able to afford a one-week holiday in retirement as their pension savings are estimated to not be enough.

About a million more people than a year ago are at risk of “falling short” of having a minimum lifestyle standard in retirement, new research found.

Amazon UK Adnams Southwold Ghost Ship Pale Ale Mini Keg, 5L

Scottish Widows used the retirement living standards produced by the Pensions and Lifetime Savings Association (PLSA) to make the finding.

The minimum standards under its definition are having enough income in retirement to cover basic needs with some leftover for fun.

For example, this includes being able to afford a one-week UK holiday and having £50 to spend a week on groceries or £95 as a couple. The minimum standard assumes that someone would not have a car.

The increase in those projected to fall short of the minimum standards has been driven by living costs rises, such as surging rents, the report said.

It added: “More people will be renting or carrying mortgage repayments on through retirement in the future.”

The typical age that people say they would like to retire at is 62 but with current estimates, this seems impossible.

According to the PLSA, a single person will need to be able to spend about £14,000 a year to achieve the minimum living standard, £31,000 a year for moderate, and £43,000 a year for comfort. For couples, it’s 22k, 43k, and 59k.

Scottish Widows has suggested a roadmap to increase minimum contributions into pensions from eight per cent to 12 per cent, “with a strong steer that those who can afford 15 per cent should do so”.

Pete Glancy, head of pensions policy at Scottish Widows, said: “The growing gap in retirement outcomes and people’s quality of later life, between those who are currently retired and those who will retire in the future, is of great concern.

“It is likely to be a long time before Britain has been saving enough to give future pensioners the outcomes they hope for. In the meantime, helping people to make the very most of what they have is going to be critical.”

No plan ?

He added: “At present, only the wealthiest tend to rely on professional support from a qualified financial adviser.

“As an industry, we need to find a way to give people better support in making good financial decisions at a price more savers are willing and able to pay.”

Not all savers are the same, they will have their own expectations and requirements when it comes to visualising their retirement.

The State Pension triple lock acts as a crucial safeguard against rising retirement living costs. With a significant 8.5 per cent increase to just over £11,500 annually from April 2024, the State Pension remains a substantial foundation of retirement income.

The State Pension triple lock, alongside improved annuity rates, will help median earners be able to achieve most aspects of the Moderate level.

According to the report, younger people would like to retire earlier with those aged 18-29 wanting to retire at 61 and only prepared to work until they reach 64, if necessary.

The increase in those projected to suffer the poorest retirement outcomes has been driven by rises in the cost of living relative to the growth in wages at an average of just 6.2 per cent, Scottish Widows revealed.

There’s a new name atop of Winterflood’s list of monthly movers in London’s investment company space but which fund has a biotech company to thank for making it into the top five?

ByFrank Buhagiar

The Top Five

JPMorgan Emerging Europe, Middle East & Africa (JEMA)not only makes it back onto Winterflood’s list of biggest monthly movers in the investment company space, but the emerging markets investor takes top spot. The lion’s share of the +35.6% share price gain was made from 11 July 2024 onwards, a period in which there has been no news out from the company apart from a series of net asset value updates. Lack of news hasn’t put off buyers. On the contrary, the volume of shares traded has been steadily rising from 40,000 on 11 July 2024 to 389,000 shares on 18 July 2024. Rising volumes + small market cap of £59m = strong share price gain.

Castelnau Group (CGL) drops one place to second despite increasing its gain on the month to +34.2% from +27.5% previously.Shares in the flexible investor still benefiting from that Net Asset Value update issued on 4 July showing net assets stood at £317.5m as at 28 June 2024, a near one-third increase on the £236m reported as at 31 May 2024. As previously noted, the increase is largely down to a +45.7% jump in the value of funeral operator Dignity which accounts for over 70% of CGL’s total assets. CGL, one of the few funds with a share price that trades at a premium to net assets. Easy to see why.

Downing Strategic Micro-cap (DSM) stays in third but the shares did extend their gain to +29.4% from +20.1% previously. The micro-cap investor, which is in wind-down mode, announced the Payment of Third Special Interim Dividend of 17.5p. That means the fund’s total assets are down to just £5 million. Not much left for Milkwood capital to get its hands on then if the Board’s suspicions are correct and the 28% shareholder is looking to gain control of the company and acquire DSM’s assets on the cheap – as announced on 8 July 2024 Milkwood has requisitioned a general meeting to prevent the Board from declaring any “dividend, return of capital or other distribution on or prior to the Requisitioned General Meeting”.

British & American (BAF), another tiddler to make it into the top five courtesy of a +21.1% share price rise. As with CGL above, the strong performance is down to a jump in the £6million market cap’s net asset value (NAV). On 5 June 2024, the company’s NAV as at 31st May 2024 stood at “not less than 24.8 pence per ordinary share on a fully diluted basis.” Fast forward one month and as per the 8 July 2024 update, NAV had jumped to “not less than 29.7 pence per ordinary share on a fully diluted basis”. A large part of the increase likely down to BAF’sholding in Geron Corporation. Shares in the Nasdaq-listed biotech, which accounts for 28% of BAF’stotal assets, are up +13.5% in July alone. Geronimo!

Tritax EuroBox (BOXE) completes the top five. Shares are up +14.9%, a little off the +15.2% gain reported previously. The share price still buoyed by BOXE’s 1 July announcement that revealed the European logistics real estate trust “is in discussions with a number of parties from whom it has received and/or solicited expressions of interest regarding a possible offer for the Company.” One of these is Brookfield Asset Management. As for the names of the rest, perhaps we’ll find out soon.

Scottish Mortgage

Scottish Mortgage’s (SMT) share price finished the week ended Friday 19 July 2024 down -1.6% on the month compared to no change the previous week. NAV fared worse after extending its monthly loss to -3.3% from -0.9% previously. Turns out it was a tough week for global investment trusts as a whole – the sector finished the week down -0.8% having been up +3.4% seven days earlier. With the Nasdaq off 3.6% over the course of the week, SMT was always likely to find the going tough.

Thursday 25 July

Brunner Investment Trust PLC ex-dividend payment date
North American Income Trust PLC ex-dividend payment date
Sequoia Economic Infrastructure Income Fund Ltd ex-dividend payment date
Sirius Real Estate Ltd ex-dividend payment date
Tufton Oceanic Assets Ltd ex-dividend payment date

UK

The UK is currently perceived as cheap, home to out-of-favour, downtrodden sectors that have struggled over the last decade. It is weighted towards the more value-oriented sectors, like banking and energy, which have failed to keep pace with the rapid growth of technology stocks over the years. Reviewing the data from the last three years to the end of June 2024, trusts with more balanced approaches and those leaning towards value have performed well. Temple Bar (TMPL), is one of the most value-tilted strategies across the sector, meaning it has benefitted from UK value outperforming UK growth this year. City of London (CTY) also leans a little towards value and has performed well over the period. That said, manager Job Curtis isn’t a pure value player. He emphasises companies with robust balance sheets capable of sustainable cash generation and good growth potential, alongside attractive valuations, as he thinks it supports both dividend and future capital growth, contributing to the trust’s resilience and impressive dividend track record over time.

STYLE EXPOSURE OF UK TRUSTS

	THREE-YEAR RETURN (CUM FAIR NAV)	EQUITY STYLE VALUE %	EQUITY STYLE GROWTH %	EQUITY STYLE CORE %	RANKING
Edinburgh Investment Trust	36.0	22.0	38.2	36.1	1
Temple Bar	33.9	72.3	7.5	16.2	2
City of London	29.9	55.5	16.4	31.7	3
Merchants Trust	29.4	64.6	3.8	40.8	4
Law Debenture	29.2	48.1	20.6	30.0	5
BlackRock Income and Growth	21.3	38.3	31.6	31.0	6
Murray Income	15.7	33.8	37.3	39.6	11
	Three-year total return
FTSE All-Share	23.9

Source: Morningstar

Edinburgh Investment Trust (EDIN) tops the table and has from its balanced style over this period. EDIN underwent a change in management in March 2020, where the portfolio was revamped to focus on a growth-at-a-reasonable-price (GARP) approach, which blends elements of growth and value. EDIN’s new manager, Imran Sattar, came on board this year, and much like his predecessors, echoes this focus, preferring to invest in both growth and value companies as well as those with latent recovery potential. This multi-style and flexible process is designed to reduce the volatility of returns through the economic and market cycle, and has resulted in sector-leading performance over the last three years.

We decided to merge both the UK All Companies sector and UK Equity Income sector together, which left us with a large list of UK trusts. For the sake of keeping the data readable, we selected the top five, to keep things consistent for readers, but also highlighted a few trusts of interest further down the list. As we can see from looking at the four trusts following EDIN in the table above, each strategy is titled to value, a pattern followed by most others in the UK peer group.

BlackRock Income and Growth (BRIG) and Murray Income (MUT), on the on the other hand, place an emphasis on balancing quality, income and valuation, adopting more of a blended strategy when investing in the UK, quite different from most peers.

Adam Avigdori of BRIG prefers to stay style-agnostic, meaning the portfolio is not strongly tilted to either growth or value, but a balance of the two. He argues that markets have shifted into ‘goldilocks’ territory, which, in this context of slowing and in cases falling inflation, has signalled the peak for interest rates and certain broad macroeconomic indicators are not expected to deteriorate further. He argues that within this environment, his focus on investing in quality companies that are cash generative, have good growth prospects and sit at reasonable valuations, which in our view demonstrates blending aspects of both styles, could be better placed to drive returns over the long term. Consequently, he argues that purely style-focused strategies might not continue to drive markets as they have in the past.

Charles Luke and Iain Pyle, managers of MUT, echo the belief on quality, arguing it allows them to blend the most appealing aspects of both growth and value strategies. This leads them to target companies with good quality characteristics, including strong business models, robust balance sheets, and compelling ESG characteristics, as well as seeking out businesses with attractive income profiles, given that dividend yield acts as a valuation backstop. They also believe that a focus on high-quality companies demonstrating these traits offers fewer tail risks and a greater margin of safety, which in turn can lead to less volatile and more resilient earnings streams over time.

By emphasizing quality, income, and valuation, both BRIG and MUT aim to navigate market uncertainties and provide stable, long-term returns to shareholders.

Kepler

I’ve bought 1573 shares in SDCL for 1k

I intend to buy a further 1k of AEI, if I can get a better entry point.

With the changes to the Snowball, I should be able to confirm next years fcast of 9k and a target of 10k, after the dividends for September are announced.

I’ve bought for the Snowball

2165 shares in JLEN for 2k

1309 shares in SUPR for 1k

The Motley Fool

Here’s how I’d start making powerful passive income from scratch

by Charlie Keough

Having multiple streams of passive income is the dream for millions of investors. There are plenty of ways to achieve this. I could start a business or buy property. But I think the easiest way to start out is by buying dividend shares.

Famous investor Warren Buffett once said: “If you don’t find a way to make money while you sleep, you will work until you die.” That’s a mantra that’s driven most of my investment decisions.

During my time investing, I’ve slowly been building up my nest egg. In the years to come, I’m confident that it’ll provide me with a solid source of passive income.

If I were starting from scratch today, here’s what I’d do.

Consistency is key
There is one tip that I deem to be imperative. That’s to invest on a regular basis.
This can be difficult, and life can get in the way. Unexpected outgoings crop up all the time. And it’s smart to have an emergency fund for times like this. However, by choosing a select amount, say £200 a month, and ensuring that I invest that every month, I know I’ll be able to achieve my goals more quickly.

Investing regularly provides so many benefits. For example, by doing so, I’m pound-cost averaging. This means by drip-feeding my money into the stock market, I’m not trying to time the market. As they say, time in the market beats timing the market.
With that in mind, by investing regularly I can also benefit from compounding. This means I’ll be earning interest on my investments as well as the extra money I make.

If u want to do nothing and sit thru the thick and the thin, the thing to remember is that gains are unlimited and losses limited to 100% of your investment if u don’t CostPriceAverage.

U knew MRCH was a dividend hero and u were waiting for an entry position.

Mr. Market gave u an opportunity, even though at the time every bone in your body was telling u not to buy. U decide to buy as the yield as had risen to 8.5%.

U decide to KISS and re-invest the dividends.

U now decide to take out your profit and leave in your stake, as u would like to own the Trust, when u start your de-accumulation ‘pension’ yielding 4.8%. U have achieved the holy grail of investing, in having a Trust that pays u a dividend and sits in your account at zero, zilch, nothing.

The cash taken out re-invested, could yield 8%+ to grow your Snowball.

The Results Round-Up – The Week’s Investment Trust Results

Gore Street Energy Storage announces a new dividend policy alongside its full-year results. Brunner mentions the Medicis in its Half-year Report after the share price tacks on 26%, while Polar Capital Technology reveals it is looking to lower its share price after a strong run.

ByFrank Buhagiar•19 Jul, 2024•

Gore Street Energy Storage (GSF), strongly placed

GSF’s NAV per share for the year came in at 107.0p compared to 115.6p 12months earlier. The lower outcome is largely down to external factors including the high interest/inflation rate environment. Chair, Pat Cox, doesn’t sound overly worried “We expect to see improving market conditions as inflation continues to subside and rates come down.” Dividends for the year totalled 7.5p per share, meaning the fund has generated a +48.4% NAV total return since the 2018 IPO. As Cox points out “Despite challenging market conditions, the Company has achieved significant growth by raising new funds and expanding our diversified energy storage portfolio to approximately 1.25 GW across five markets.” What’s more, with £60.7 million in cash plus a further £58.6 million in debt headroom, the company is in a strong financial position to drive further growth and “take another significant step forward in scale”.

Shares didn’t react too well to the results though – closing down 6.6% on the day while the discount widened to -39.73% from -35.45%. At first glance, the reaction is somewhat puzzling for, as JPMorgan points out “The revenue and NAV had been well flagged”. There was news on the dividend front, however, including a target for the current financial year of 7p per share. That’s lower than the 7.5p for the year just gone. The company highlights “This is consistent with investors’ expectations based on the current NAV.” That’s not all “from the 2024/25 financial year, the profile and quantum of dividend distributions will be more closely aligned with operational and other cashflows rather than NAV.” The prospect of lower and more variable dividends, a possible cause for the underwhelming share price reaction then.

JPMorgan: “(The change in dividend policy) looks a sensible move given that NAV is not directly related to current cash flows, and when dividend cover is <1.00, the payments have to be part funded by expensive debt.”

Jefferies: “The decision to align dividends with operational cash flows instead of NAV makes sense. Furthermore, increased operational capacity in FY25, in turn strengthening dividend cover, will enhance the fund’s capital allocation flexibility.”

Liberum: “The weakness of the GB market has been well documented in 2024. As a result, the diversification of geographic markets remains a positive for the GSF portfolio, allowing poor revenue performance in GB markets to be partially offset by a strong performance in the Irish and Texan markets in FY 24. We view the current discount to NAV as providing an attractive opportunity.”

Numis: “Given the significant increase in capacity expected in the portfolio, GSF has scope to meaningfully grow its revenues and ebitda in the coming months and makes it our preferred play amongst the pure play battery peers.”

Brunner (BUT) and the Medicis

BUT’s +12.8% NAV total return for the half year, not far off the +13.9% posted by the composite benchmark (70% FTSE World Index Ex UK and 30% FTSE All-Share Index). BUT theglobal investor’s share price outshone them all, rising +26% as the discount narrowed to -5.5% from -15.4%. A vote of confidence in the trust’s bottom-up approach which, as Chair, Carolan Dobson, explains, is favoured because “in short it is much easier to predict the future behaviour and potential performance of an individual company than it is an entire economy or geographic region.” Can’t argue with that. “For this reason, our managers concentrate staunchly on building the company’s portfolio from the ground up, finding companies that meet Brunner’s strict investment policy”.

The investment managers see reasons to be positive. That’s because “After the mono-dimensional markets of the past few years it is interesting to see such different types of equity investments leading this year.” These include “companies which are creating scarcely believable technologies” on the one hand. While on the other, “traditional banks – a business model which dates to the Medicis – are having a field day. This wider market breadth is reassuring and suits Brunner’s balanced approach.” The market liked what it heard – share price added 10p on the day to finish at 1385p.

Winterflood: “BUT benefited from overweight positions in Industrials and Financials, as well as underweight in Consumer Staples. Key detractors included not owning Nvidia”.

Polar Capital Technology (PCT), looking to lower the share price

PCT saw its NAV per share rise by an eye-catching +40.8% over the full year, outperforming the already impressive +38.9% posted by the benchmark (sterling terms). The NAV growth, a vindication of a pivot towards AI, particularly the semiconductor and component subsectors. That strong performance has meant the share price regularly trades above the £30 level now. Turns out having such a high share price can be problematic for some investors. As Chair, Catherine Cripps, explains “a higher share price might be a barrier to investment for certain investors including regular savers who may wish to invest smaller amounts per transaction on a regular basis.” So, the Board is proposing to subdivide each existing share into 10 new shares to lower the share price. Subject to approval at the upcoming AGM, shareholders can therefore expect a sharp drop in the share price, albeit for a good reason.

Looking ahead, sounds like the Investment Managers are not losing any sleep over the global economy “whether there is a recession or not and what equity markets do over the next six to 12 months perhaps misses the point. Astounding new innovations such as AI augur well for a longer-term innovation-led growth and prosperity cycle.” Shares closed down on the day by almost 5% at 3235p, a case of shareholders taking profits after such a strong run perhaps.

Numis: “We continue to rate Ben Rogoff highly and think that Polar Capital Technology is an attractive way to gain diversified exposure to global technology stocks.”.