Scottish independence and personal investments

Posted by Josh Conibear in Personal Finance on 24 February 2014 - Josh worked as a Credit Analyst at checkmyfile until 2014

Reflecting the potential and unceremonial separation of Scotland from the UK, the Scottish Widows brand will see somewhat of a radical makeover, or at least English customers will see a new brand emerge.

The brand was recently split into two when Lloyds Bank sold Scottish Widows Investment Products to the fund group Aberdeen Asset Management, while keeping hold of the core life and pensions business.

This story is simply a taster of what might happen on a much broader scale if Scotland votes for independence in September. If you live south of the border, you might be wondering how much a fracture could damage Britain’s general economic standing (or, whatever side of the border you are on, whether you’re on the hook as a taxpayer if the sterling currency union goes horribly wrong), but you may not have thought about how it might affect you personally. A yes vote might have an impact on the value of your investments.

Indigenous Scottish fund management groups – like Alliance Trust, Baillie Gifford, Kames Capital and Aberdeen – currently have around half a trillion pounds under management (£520bn). But the vast majority of their customers live outside Scotland. 86%of the cash they raked in last year was derived from outside Scotland, according to Scottish government figures.

There is a real possibility that investors may be affected by independence, regardless if you live in Scotland or not.

There’s an old saying “many a mickle makes a muckle” (i.e., that small savings soon amount to large sums) reflecting Scotland's historic reputation for careful financial management. The two clergymen behind the original Scottish Widows, Robert Wallace and Alexander Webster, are credited with inventing life insurance in 1748. And it was a Dundonian jute trader, Robert Fleming (grandfather to Bond author Ian) who pioneered investment trusts in the 1870s before going on to found a City dynasty.

Scottish fund groups, moreover, are still moving markets. Aberdeen’s £600m deal with Lloyds in November saw it overtake Schroders as Europe’s largest quoted fund manager. Not bad for an outfit that was branded a pariah and teetering on the brink of corporate disaster ten years ago, when its role in the split-capital investment trust scandal saw 97% wiped off its share value. The movement isn’t always positive though, as the recent Royal Bank of Scotland (RBS) bail out stands as a monumental reminder.

As Alistair Darling, who is heading the pro-union Better Together campaign, likes to point out, it was another disastrous Scottish colonial adventure, the Darien scheme, which precipitated the 1707 union with England by nearly bankrupting the nation. Had Scotland been independent when RBS went down, needing £45bn, he observes, the same fate would have been unavoidable.

One possible consequence of a breakaway Scotland would be new regulatory and tax authorities that would impose an extra layer of costs on investments there. But even if the union is retained, Clunie reckons the uncertainty surrounding the vote is already “an immediate problem”. As he told The Daily Telegraph, capital investment in the energy sector is being delayed over anxiety about how subsidies might change if Scotland parted from the union.

The creation of a new state is no easy matter, as Gavin McCrone, author of Scottish Independence: Weighing up the Economics notes, “Scotland could be perfectly viable. But it would be a bumpy ride to begin with”. No matter what 2014 will bring for Scotland, it will be an interesting if not testing year for business and investments in the United Kingdom generally.

The Cost of Incorrect Information on Your Credit Report

Your credit file is compiled from a number of different sources, including payment history from each of your lenders (past and present) and public data as reported by local authorities and courts. The majority of people find that everything held about them is correct, but due to the large amount of information being shared, errors in the information reported can happen, which can lead to issues when you go to apply for credit.

Published on 2 Feb 2018 by Tom Blandford

Full Article

Your Guide to Open Banking

On 13 January, the UK banks embarked upon arguably one of the biggest changes to personal finances since the introduction of computers. Open Banking is aiming to make it easier for banks, lenders and consumers to access and share information, with a view to creating new products and opportunities through innovation and increased competition.

Published on 15 Jan 2018 by Jamie Mackenzie Smith

Full Article

HMRC Bans Credit Card Tax Payments

From 13 January 2018, it will no longer be possible for consumers to use a personal credit card to make a payment on HMRC’s Self-Assessment tax portal. Historically, this has been a popular option as it allows what is often a considerable sum to be deferred.

Published on 12 Jan 2018 by Tom Magor

Full Article

How to Get the Best Deal When Buying a New or Used Car

Buying a new car is both exciting and expensive, but if you know where to look and when, you can grab yourself a bargain. If you take a little time to look into finance or loan deals as well, you can bring down the overall costs significantly.

Published on 11 Jan 2018 by Kevin Pearce

Full Article

Are football clubs exploiting their fans

With Premier League teams under huge pressure to remain in the top flight of English football, the amount lavished on transfer fees and player wages have soared in recent years.

Published on 8 Jan 2018 by Sam Twyford

Full Article

What The 2017 Autumn Budget Means For First-Time Buyers

Wednesday’s autumn budget brought great news to would be first-time homeowners: if you’re buying a home up to the value of £300,000, you won’t have to pay stamp duty for the property. This, the Conservative Party estimate, will benefit 80% of first-time buyers, saving them potentially thousands of pounds on the total cost.

Published on 28 Nov 2017 by Jamie Mackenzie Smith

Full Article

Blacklists - Ten things you probably didn't know

1. Blacklists are not unlawful. No lender is compelled by law to give credit or to give any reason when declining credit. Each may consult several sources of information before making a decision, including any form of list that may exist. Any list containing personal data is automatically regulated by the Data Protection Act 1998.

Published on 9 Oct 2017 by Barry Stamp

Full Article

Is a credit building card a good idea

A credit building credit card is most often used by people that are either looking to improve their credit rating or take out their first credit card.

Published on 24 Mar 2017 by Kelly Luff

Full Article

Which Credit Report Information Can Landlords See

Whenever you rent a property, you will be required to pass some checks set by the landlord or letting agent to prove that you will be a good tenant and that you’ll be able to afford to rent the property.

Published on 7 Mar 2017 by Kevin Pearce

Full Article

Impacts of late payment on your credit card agreement

We’ve all done it before – had that mad panic when we’ve forgotten to pay a bill. But what happens if you do forget to pay your credit card by the monthly repayment date?

Published on 20 Feb 2017 by Kelly Luff

Full Article
keyboard_arrow_left

keyboard_arrow_right

We have loads of great customer reviews