According to research conducted by Dr Eamonn Butler of the Adam Smith Institute, Britain is headed for doom at some point between 2019 and 2032 by his best estimate. Citing that our Government is actually doing relatively little to remedy this and still writing cheques on the backs of a workforce that may well have entirely lost its faith in politicians, our welfare system and public services all cost far too much and need a serious overhaul.

One has to take the Adam Smith Institute pretty seriously these days and the article doesn’t make good reading. Mind you the problem would be solved with some “once a generation” nasty events – such as plague and war to reduce the number of pensioners and curtail life expectancy rates significantly. I do hope that my cynicism is very misplaced!

Cynicism aside, this would lead to a downgrade of UK Gilts in general which has historially been a safehaven for investors. This is the time of year that many people attempt predictions about the future – frankly this is at best educated guessing, at worst fortune telling. Neither really have a place in the armoury of a good financial planner. But if pressed, I’m expecting house prices to continue to fall – in my view they have a long way to drop yet. Most people simply are not moving rather than realising the losses. I would also expect interest rates to rise perhaps by 1.5% over the next 12 months. Inflationary pressures would seem to be driving this – not helped by increased indirect taxes (VAT). Inflation tends to help equity markets – perhaps creating a false sense of “good feeling”.

If Butler is right, one might expect many Europeans (and others) that have come to Britain as economic migrants, to seek an alternative home – but for our comparatively generous welfare system – which we know will be altered. So if I was to play along with Butler, one might expect an exodus from UK which would both help the UK (reduced costs) and hinder it (reduced cheap labour and perhaps further property price reductions).

The truth is that NOBODY knows what the future holds. It is very easy to forget this when reading predictions about the future that are doomsday like. We are able to address these issues in the UK and we are all fortunate enough to live in a country that offers the opportunity for most of us to create our own future, admittedly some have a better start than others on this. As you may have observed I am somewhat sceptical about predictions, much can change in life. I have not yet come across any econmoist that consistently gets any “predictions” right. We would do well to observe the rather hapless success enjoyed by the weather predictions.

The short facts are obvious – don’t rely on the State, sort your own finances out and get your own “house in order”, have a plan, review it and make adjustments. Don’t spend more than you earn and build liquidity.

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