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Mother’s nature

Many of us who pontificate about personal finance issues, whether in the media or as IFAs, often tend to do so in a vacuum.

We glibly tell people not to panic and that the current market is “a buying opportunity”. We expect some of them to believe us, perhaps even to hand over money to be invested on their behalf.

As journalists, we write for people who are genuinely worried about what is happening to their savings and investments, yet there are times when what we say shows no understanding of how events in the real world have left so many people petrified about what to do next.

A few weeks ago, as stock- markets plummeted in the aftermath of the collapse of Lehman Brothers, my partner and myself exchanged contracts on a property we were selling in the New Forest. Amazing, you might think, and you would be right. Not only did we exchange and complete a week later but the final sale price was only about 7 or 8 per cent lower than what we asked for when the house went on the market at the beginning of May.

All that week as I was producing reams of copy for magazines and websites on the effect of the credit crunch, I was terrified that our buyers would pull out at the last minute or gazunder us to the tune of a few thousand quid.

My partner and I shifted our stuff into storage before moving into our mother- in-law’s place until we find somewhere we want to live. To thank her for putting us up, we took her out for a swanky meal.

During the meal my mother-in-law mentioned she had just sold several years’ worth of equity Isas because she no longer believes in the potential for a stockmarket recovery for at least 10 years, probably a lot longer. For about five minutes I tried to reassure her, using all the standard arguments that any financial adviser would recognise.

If she sold, my mother- in-law would be crystallising her losses at a time she did not actually need the money, plus she would lose her Isa allowance. This would be a shame as income from the fund might be need to boost her pension at some stage.

I argued that sharp falls in the market in the past have often been accompanied by equally rapid recoveries, bringing shares back or close to the position they had been only a few weeks or months earlier. My mother-in-law remained unmoved.

She has since sold off her entire portfolio of Isas and the FTSE 100 Share index has fallen from about 5,200 to 4,300 points. As I write, barely 36 hours after the £50bn Darling/Brown bailout of UK banks, the FTSE has closed down another 1.2 per cent and the Dow Jones has dropped more than 7 per cent.

Last week, as share prices continued to fall, my mother-in-law asked me whether I thought she ought to be taking all her savings out of her bank.

“Why would you want to do that?” I asked, incredulously. “Because I don’t believe my money is safe there either,” she replied. A few acquaintances have apparently withdrawn several thousand pounds each and are keeping the cash at home.

When discussing this with my partner that same night, assuming we might have had a giggle about it, she told me she agrees with her mum and would like to take out a big chunk of the money we have in one or two savings accounts until we find a home we like.

So far I have resisted this although we have begun the process of opening several more saving accounts into which we can divide our money in £50,000 chunks, just in case.

Just in case? In less than six months, my bearings as a personal finance writer have shifted from a common assumption that keeping money in a savings account is boring but occasionally necessary, to the idea of splitting up our assets because we no longer trust a single high-street bank to look after them safely.

Last night, my mother- in-law suggested that we applied for a local allotment. You can guess the reason why. Apparently there are not many left, as other people in the village have had the same idea.

I have put my foot down this time. There is no way I am going to break my back digging over rows of potatoes when it is much cheaper in terms of time to nip to the greengrocer and buy them.

Oddly enough, the share price falls are taking place at a slower rate than property prices.

Nic Cicutti can be contacted at


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Healthcare predictions for 2015 from Jelf Employee Benefits

The continuing fall-out from the Competition and Markets Authority’s (CMA’s) review, the rise of the private GP and digital engagement will be the primary focuses in the private healthcare industry during 2015, according to Iain Laws, managing director, healthcare and group risk, at Jelf Employee Benefits.


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