What can we learn from the Covid-19 pandemic?

As we pass the various one-year anniversaries around the Covid-19 pandemic, there are some useful lessons to draw for your financial planning.


The past year has been difficult for almost everyone – including the Chancellor. On 11 March 2020, Rishi Sunak delivered his first Budget, less than a month after becoming Chancellor. It included a set of “temporary, timely and targeted” measures to address the impact of the then new coronavirus. On the same day, the World Health Organisation declared Covid-19 to be a pandemic. In the months since, Mr Sunak has regularly returned to the despatch box to announce further support schemes. If you take a step back, the pandemic experience has offered some important financial lessons.

The value of an up-to-date will

Over half the adult population does not have a will, and Covid-19 had many scrambling to put something in place, or make changes to an existing will that was no longer relevant. This urgency came just as the practical difficulties of will writing reached a peak, when finding solicitors open for business or arranging appropriate witnesses had become a major headache. Then the issue faded from the headlines with the easing of lockdown in the summer and some temporary legislative tweaks, but the importance of having an up-todate will remains.

 Stay calm

In the second half of February 2020, the world’s main investment markets started to react to the potential impact of Covid-19. Then by about a month later, the value of global shares had dropped sharply, with both the UK and US markets falling by about one third between 19 February and 23 March. Also on 23 March Prime Minister Boris Johnson announced the start of the first lockdown, with the immediate closure of some businesses. Any investor who took fright at the Prime Minister’s words and sold up hoping to cut their losses would have chosen the worst time to quit the markets. Investors who did not panic were rewarded with a recovery that saw some markets close 2020 with a value higher than the starting point. That was not true for the UK, where the FTSE 100 declined by 14.3% over the year. However, from its 23 March 2020 low to the end of the year, the FTSE 100 rose by 24.5%.

Your retirement plans can shift

The pandemic has had a major impact on working patterns, and by early May, nearly nine million jobs were covered by the government’s furlough scheme. Research by the Institute for Fiscal Studies revealed how people also revised their retirement plans. One in eight workers aged 54 and over changed their planned retirement age as a result of the pandemic, with most opting to retire later, not earlier. The pandemic has served as a reminder that events, rather than personal choice, can determine a retirement date meaning retirement plans need to stay flexible.

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The value of your investment and the income from it can go down as well as up and you may not get back the full amount you invested.

Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.


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