Guest piece by Modwenna Rees-Mogg, founder & CEO of AngelNews and Pitching for Management.
The papers and other media are full of Brexit discussions and we are now all waiting for confirmation of who, how and when Article 50 will be triggered. Until then we are in a false dawn but, whilst the commentators chat and the politicians politic, we have the great advantage of having some time to think what the UK has up its sleeve to ensure that we make a success of our nation in the future.
Much of the examination of the UK’s assets have been focused in recent weeks on the City of London and car manufacturing. Rightly so, as they are key strategic assets in the palm of our hands, but it’s important now that the discussion moves on. 80% of our GDP is generated from the services sector, i.e. the skills of our people and it’s the people of the UK, one group in particular, I feel it is vital that we focus upon.
Whilst most of the discussion about people in the context of Brexit has been around immigration of skilled and unskilled workers. It’s now time to refocus this discussion about a key group of under-utilised skilled individuals already holding British passports, namely older professionals.
Sadly, it is wishful thinking to assume the Government has time to address this issue right now, so we are going to have to do something about it for ourselves. Each of us needs to become an independent economic unit in our own right.
There is no indication yet that the UK economy is going to generate quickly the financially generous provision for older people that is so badly needed. Yet there are loads of signs that older people are living longer and are fitter than any previous generation. We can, need and want to be able to give value in return for “work” far longer than in the past. The idea that we find it acceptable to “retire” at 65 or 67, play golf and then die is yesterday’s news. We want to be able to keep generating an income that will supplement a pension and ensure that life continues to be financially pleasant.
The working environment now needs to adapt to embrace the skills of older workers, especially if immigration is going to shrink post Brexit. For a few older people, the conventional “big corporate” world will offer a part time home, but these opportunities will become fewer and farther between as technology replaces jobs that people could previously do. Big corporate is a young and technology-minded person’s game these days.
So our most experienced ABC1’s are going to have to find new ways to monetise their skills and build wealth. Some will become great entrepreneurs – people like Stuart Lucas and Ian Baillie, the co-founders of Asset Match, who have created an award winning FinTech business whilst their peers are in the “retirement zone.” Others are selling their skills as advisers, mentors, coaches and NEDs. A few will turn a hobby into a money spinning opportunity. Didn’t best-selling Mary Wesley publish her first book aged 80 or thereabouts – is there a book in you too?
For thousands though, the answer will be to become a more savvy investor. With the risk of inheritance tax being a real issue, a priority for many will be to mitigate what the tax man can grab from your estate. That means hunting out investment opportunities that are sheltered from IHT. AIM shares and growth company investments eligible for EIS and SEIS will be a good starting point, but this is an area where it is vital to take advice and/or to get “expert” yourself before writing even one cheque. The cleverest tax efficient investors make good or even great money, the unwary lose.
Stock market performance will be volatile as Brexit plays out, so another tactic to make money will be to look for opportunities which are not vulnerable to short term uncertainty. Looking for investments in economies (and sectors) less or unaffected by Brexit needs to be considered, preferably in hand with a knowledgeable fund manager who knows what they are doing. Clearly looking overseas – to the Far East, Africa and elsewhere, is worth considering in this context. And the great advantage older private investors have over the International Trade Secretary is that you have time and don’t have to wait to set up a trade deal to do a deal. You just need to seek out the help you need – whether from people or the internet and other research, fix your strategy and get on with it.