With costs and prices rising worldwide reaching unprecedented records, we briefly analyse the background to it, offer a timeline of possible peaks and regression, and contemplate how to mitigate its eroding effect

Inflation in the UK keeps beating records, finishing March with the annualised inflation increasing at a rate of 6.2% by the end of 2021: the highest recorded level since 1992 and a level not predicted until June. Forecasters are now predicting that inflation will rise to 9% by autumn, a phenomenon not seen since 1982, affecting the cost of goods and services and, therefore, eroding the value of money.

The pandemic and the war in Europe: not only has COVID-19 had a major influence on finances worldwide, but the conflict in Ukraine is causing the prices of many goods to achieve new high records. The price of oil had dropped drastically at the beginning of the pandemic, but the increase in demand due to more mobility and Europe’s reliance on Russian oil and gas has rocketed the price of a barrel to a high in March of USD 130. Until the supply chains find new ways to meet demand, energy prices will remain inflated.

The effects of the conflict in Europe spread of course to other markets. As explained by The Week, Russia is the world’s largest exporter of gas and wheat, and one of the largest exporters of oil and sunflower oil. On the other hand, Ukraine is the world’s fifth-largest exporter of wheat and the fourth-largest of maize. Therefore, changes in prices were and are still expected, but not at the rapid pace they are increasing at the moment. “Where inflation goes from here is difficult to predict”, explains Miles Robinson, Managing Partner of the financial planning and investment firm Tilney. “The energy crisis and supply chain disruption mean that other outcomes are possible though – where we could foresee inflation remaining elevated for longer.”

According to Robinson, there is still light at the end of the tunnel. “Although we see many different outcomes, the most likely is that inflation in advanced economies peaks during the second half of 2022 and gradually falls back towards the target in 2023.” Yael Selfin, chief economist at KPMG UK, said in an interview with Reuters that these high rates would also put pressure on the Bank of England to keep on raising interest rates. “We raised the UK’s most important interest rate (Bank Rate) from 0.1% to 0.25% in December 2021, to 0.5% in February 2022, and then again to 0.75% in March” announces the Bank of England on their site. “We have done this to make sure the rate of inflation comes back down to 2% – this is the target the Government has set us. We may need to increase (these) further in the coming months. But that all depends on what happens in the economy and what we (predict for) the next few years”. The goal of Chancellor Rishi Sunak is to try to control the rise so that by the year-end inflation stabilises and then decreases in 2023. “Provided inflation expectations can be managed and global commodity prices stabilise by next year, we should see inflation returning to the Bank of England’s 2% target by mid-2024,” Selfin said to Reuters.

So, where does this leave us at the moment? What should we do with our assets so they do not continue losing value?

Taking wealth management advice could be particularly beneficial at this time to mitigate the effects inflation has on our assets, particularly cash savings and volatile assets like commodities. Miles Robinson and other experts in this field are providing valuable guidance during these uncertain times: “For investors, assuming a moderate or high inflationary environment we continue to favour equities over bonds and cash because profit margins remain strong, growth is above-trend and relatively equities remain cheaper than bonds.”

Can you beat inflation?

As investors search for stability and security in uncertain times, the allure of gilts (short for gilt-edged securities) has grown significantly. These fixed-income securities have long been considered a safe haven investment, particularly due to the reliable creditworthiness of the UK government. However, recent trends in gilt investing have brought forth concerns about potential negative outcomes for investors' long-term financial plans. In this article, we delve into the downside of gilts, shedding light on the risks associated with this seemingly foolproof investment.

The appeal of gilts, a.k.a. UK government bonds, stems from their perceived low risk and steady income stream. Traditionally, gilts, these bonds issued by HM Treasury to fund government spending, have been a popular choice for risk-averse investors seeking a predictable and secure return on their investment. Furthermore, they have historically outperformed other fixed-income assets during economic downturns and periods of market volatility. Miles Robinson, Managing Partner at Evelyn Partners, explains why the trend is rising: “For many years the return from Gilts was expected to be very low and they were primarily held for diversification. However, this has changed following the numerous increases to bank base rates.” According to Harvey Jones, Finance Editor at the Daily Express, two-year gilts now yield around 5.25 per cent a year and could soon pay 6 per cent as the Bank of England battles inflation. He explains it as a trustworthy investment since “they pay a fixed rate of interest, known as a coupon, along with a cast-iron pledge to return your capital in full at maturity”.

Gilts are sold in units of £100 and have maturities ranging from three months to fifty years. Gilts released just a few years ago offer yields as low as 0.25 per cent, but because sellers have cut prices to draw buyers, they are now cheaper to purchase. This gives savers a chance to earn profits that are tax-efficient in addition to their £20,000 Isa allowance. Jones uses a gilt with an October 2026 maturity date and a 0.4% yearly coupon as an example. Although that does not sound like a very good return, there is a catch: Each £100 gilt now costs just £86 to purchase, but when the bond is redeemed, holders receive £100. As a result, they receive £14 for every £86 they invested (or a 16.3% capital gain). The trend has currently gone up because the price has gone down, so it can be a good investment that leads to cash flow at a specific time since it always pays on the date. Robinson adds: “The additional benefit is for many investors – but not all – the portion of the return that is capital gain is not subject to tax, so you may have to receive interest on a bank deposit of more than 7% or maybe even 8% to achieve the same net of tax return.”

Gilts have become increasingly popular in recent years for many reasons. One important reason is that interest rates have been low for a long time, which has made investors look for ways to earn a reliable income with a secure pay date, such as these bonds. Additionally, the UK government's dedication to keeping interest rates stable and controlling inflation has made them even more attractive to investors nowadays. However, the current trend of investing in Gilts is not without its potential pitfalls. Here are a few negative outcomes that investors should consider:

 Gilts are fixed-income securities, meaning their returns are fixed at the time of issuance. Inflation erodes the purchasing power of future cash flows, which can result in a significant loss of real value for investors. If inflation rises unexpectedly, the fixed returns from gilts may prove insufficient to protect against its adverse effects.

 Gilts are sensitive to changes in interest rates. When interest rates rise, the market value of existing gilts decreases, potentially leading to capital losses for investors who sell before maturity. The possibility of rising interest rates cannot be ignored as central banks signal a shift towards tightening monetary policy.

 Overreliance on gilts in an investment portfolio can lead to an insufficient level of diversification. Concentrating too heavily on one asset class increases vulnerability to specific market risks and decreases the potential for maximizing returns.

 While gilts offer stability, they may not provide the highest potential returns compared to other investment options. Investing solely in gilts may mean missing out on more lucrative opportunities in other asset classes, such as equities or real estate. A balanced approach that considers risk and return trade-offs is crucial for long-term investment success.

To address the potential negative outcomes of investing in gilts, here are a few strategies that investors may consider:

 Allocating a portion of the investment portfolio to a broad range of asset classes, such as equities, real estate, and international bonds, can help mitigate the risks associated with overexposure to gilts.

 Engaging with professional investment managers who actively monitor and adjust the portfolio composition can help navigate changing market conditions and optimize returns.

 Investors should carefully evaluate their risk tolerance and long-term goals.

Miles Robinson shares one last piece of advice: “Whilst it is always wise to keep an appropriate ‘rainy day fund’, for those investors who have significant levels of cash on deposit in a bank or building society, beyond that set aside for unexpected bills – investing in Gilts now could be a good alternative. However, if you are not an expert in investments, it is wise to take advice to ensure that you are aware of the cost of the exercise and the tax treatment of the returns.”

In conclusion, gilts can be a short-term strategy for those who are currently looking to invest some cash funds. However, a long-term strategy should include a diversified portfolio carefully curated by a financial advisor who can readjust the plan according to market trends and each investor’s needs.

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Our introduction service is free and without obligation so if you would like to explore what our wealth managers can offer you, please contact 

Are gilts the best investment strategy nowadays?

Miles Specialises in Investment Management for Private Clients and Charities. He has 22 years of experience with Tilney, now Evelyn Partners. He has worked with a very broad range of clients including some key clients in the Birmingham Office. He also managed the Birmingham office for 8 years (2007-2015) and the London Investment Management team for 5 years (2015-2020). Miles is a Chartered Financial Analyst (CFA).

Managing Partner - Investment Management

Miles Robinson

Evelyn Partners is the UK’s leading integrated wealth management and professional services group, created following the merger of Tilney and Smith & Williamson in 2020. With £61.8 billion of assets under management (as at March 2024), we are one of the largest UK wealth managers ranked by client assets and the seventh largest accountancy firm by ranked by Group fee income (source: Accountancy Age 50+50 rankings 2023). 

We have a network of offices in 30 towns and cities across the UK, the Republic of Ireland and the Channel Islands. Through our operating companies, we offer an extensive range of financial and professional services to individuals, family trusts, professional intermediaries, charities, and businesses.

Our purpose is to ‘place the power of good advice into more hands’, and we are uniquely well-placed to support clients with both their personal financial affairs and their business interests. Our personal wealth management services include financial planning, investment management, personal tax advice and, through Bestinvest, we have a multi award-winning online investment service for self-directed investors. For businesses, our wide range of services includes assurance and accounting, business tax advice, employee benefits and forensics.

There is no ‘one size fits all’ solution for financial planning and the service you receive should reflect that and be personal to you. Everyone has different lifestyles and financial circumstances, aims for the future and attitudes towards investing. 

With a service that always begins with a thorough discussion about what you have and what you want to achieve, Evelyn Partners provide financial advice to help people at all stages of life with their financial goals. Whether you need retirement and pensions advice, support with estate planning, guidance when selling your business, would like to invest for children or achieve other goals, the financial planners at Evelyn Partners are there to support you.

Evelyn Partners provide a personalised investment portfolio that takes into account your investment time horizon, attitude to risk and the returns you require, with a focus on preserving and growing your wealth to give you financial security both now and in the future. 

With a discretionary investment management service, you can choose to delegate responsibility for managing your investments to Evelyn Partners, giving you peace of mind that your investments are in expert hands. Your investment manager will build a bespoke, diversified portfolio for you and then manage it on a day-to-day basis in line with your wishes. If you’d prefer more involvement with investment decisions, one of their experienced investment managers can provide investment advice, recommending a bespoke portfolio to suit your needs and provide an ongoing service where you receive support on all your investment decisions.

Evelyn Partners

Investment Director working with Private client multi-generational families, senior executives, and business owners to implement their financial goals, aims and ambitions.



Chris has worked in the industry for more than 25 years with his primary focus on discretionary fund management. He thrives on working with family offices, high net worth private individuals, pensions, companies and trusts. Key to this success is understanding what investment capital can provide for each investor when considering individual longer-term aspirations. Chris works closely with lawyers, accountants and financial planners.



Chris works with several leading professional legal, accounting and financial planning practices for on and offshore clients. During his career he has developed trusted relationship responsible for team assets in excess of £2bn.



Chartered Wealth Manager
Chartered Fellow of the Chartered Institute for Securities & Investment (CISI)

Director, Investment Management

As a Financial Planning Partner in the London Gresham Street office, James works with a range of high net worth individuals and families, many of which have worked successfully in professional practices or owned/sold their own business. He also specialises in pensions and retirement planning, helping clients navigate the various aspects of retirement provision that often form a central part of the advice process.



James has been providing private client advice since 1999, working previously within a large accountancy firm before joining Evelyn Partners in 2019. His experience encompasses advising business owners, C-suite directors, partners of accountancy and law firms, and investment professionals.



Working closely with large family groups to help structure adopting strategies for maximising the tax-efficiency of their financial affairs using a variety of structures and tax-efficient investments.

A significant focus is on understanding and challenging client's objectives to help form strong and long-lasting relationships.



Professional qualifications and memberships

Partner, Financial Planning

Divorce; Ben Glassman heads the firm's Family & Divorce practice from the London office. He and his team have a wealth of experience advising clients and their legal representatives during this unsettling time.



Ben has particular specialist knowledge in pensions and divorce and has used this understanding to grow the firms Family team. Ben has a network of family lawyers whom he assists with pension income equalisation and expert witness reports. Ben is particularly adept at identifying strategies to maximise the total settlement size by identifying the true value of investments, pensions and businesses and how best to preserve these were beneficial to do so.



Ben is regularly asked to present to family lawyers and barristers on how best to increase financial settlements and the key issues lawyers should look out for. He has been involved in several high profile and sizable divorces cases, where his advice has increased divorcing parties’ estates by several hundreds of thousands of pounds.



Ben is a Chartered Financial Planner and a Fellow of the Chartered Insurance Institute, with 20 years financial services experience. Ben provides expert witness to the courts in regards to matrimonial assets and is a member of Resolution.

Holistic financial planning, wealth structuring, tax-efficient investments, internationally mobile executives, non-UK domiciles, UK and Non-UK pensions, US connected individuals



Mark has over 20 years of experience providing holistic advice to private clients. His career originally started in the world of Private Client tax qualifying as a Chartered Tax Adviser whilst working for KPMG in London, before moving on into the world of investment and financial planning with SG Hambros (now Kleinwort Hambros). Mark joined Evelyn Partners in 2013 and is a Partner in our Financial Planning team in London and heading up our specialist focus on providing advice to clients with an international dimension to their financial affairs. He is also a qualified Pension Transfer Specialist and an expert in the area of tax efficient investments.



Mark is one of a very small number of advisers in the UK who is qualified to a Chartered level in the disciplines of both tax and financial planning, which allows him to be able to provide advice to clients and families with some of the most complex of needs.



Fellow of the Personal Finance Society (FPFS)
Member of the Chartered Institute of Taxation (CIOT)
Associate Member of the Society for Trust & Estate Practitioners (STEP)

Managing Partner working with senior executives, business owners and multi-generational families to achieve their financial goals.



I lead a team in our City office that manages discretionary assets of circa £2 billion on behalf of a wide variety of high net worth private individuals, pensions, companies and trusts. We work in close co-operation with financial planning, accountancy and legal advisers to preserve and grow the real value of our client assets through time.



Manage the investment content of circa 40 Big Four Accountancy Partners, many of which have personal independence restrictions.



Chartered Wealth Manager.
Chartered Fellow of the Chartered Institute for Securities & Investment (CISI).
Masters in Wealth Management

Managing Partner, Investment Management

Stefan graduated from Leeds University with a degree in Politics (with Economics) before training as an IFA. He has over 20 years financial services experience, and he heads up the Leeds Investment management team and so is responsible for significant assets under management. Stefan is part of the charity investment team, and runs numerous ethical investment mandates, being a strong advocate of this investment approach



Successfully grown client assets despite the variety of financial crisis that have struck over the last 2 decades!



Partner, Investment Management

My sector specialisms are working with Senior Executives in all aspects of their financial plan throughout their career and in retirement, with clients at the time of a Divorce particularly regarding the implementation of a Pension Sharing Order and restructuring and rebuilding wealth and with Professional Athletes, in building a plan from the initial stages of their career, including specialist insurance, and into retirement.



I began my career in Financial Services 20 years ago after graduating from The University of Birmingham with a Bachelor of Commerce Honours Degree.

I am authorised as a Pension Transfer Specialist and have a strong technical knowledge in pensions advice in areas such as annual allowance and lifetime allowance planning considerations, income structuring and pension death benefits planning.

I provide advice to National Lottery winners as one of the chosen Chartered Financial Planners on the Camelot panel.

As a Chartered Financial Planner, I have strong technical knowledge and apply this in an easy to understand manner. I use cashflow modelling as a valuable tool to help demonstrate a client’s financial future and to provide clarity and comfort.



I have worked at Tilney Financial Planning since January 2013, being promoted to Director in 2018 and then to Partner in 2019.
I was a Finalist in the Women in Financial Advice Awards 2020 and 2021.



I have been a Chartered Financial Planner and Fellow of the Personal Finance Society since 2010.
I am a member of the Chartered Insurance Institute and Personal Finance Society.
I am authorised as a Pension Transfer Specialist.

Inheritance tax planning
Retirement planning
Business exit and succession planning



Worked in the industry for over a decade. I have been with Evelyn Partners for just over 2 years. Before this I worked for a top 500 UK law firm in their IFA arm where I worked alongside solicitors in both the corporate and private client teams to help clients achieve their objectives.



Chartered Financial Planner
Distinction Grade MBA



Financial Planner

Richard specialises in complex pension and investment matters with a particular focus on business owners and SMEs.



Richard joined Tilney which eventually became in Evelyn in January 2015 and has over twenty-five years' experience in the financial services industry advising HNW/UHNW individuals.

Richard is a Chartered Financial Planner and Fellow of the Personal Finance Society, the highest qualification awarded by the Chartered Insurance Institute

Richard has also qualified as an affiliate member of the Society of Trust and Estate Planners (STEP).



Substantial technical expertise and experience in working with HNW and UHNW clients from the following groups:

Business owners and those exiting their business
Lottery winners
Senior Partners of Accountancy and Solicitor firms
Family Investment Companies
Trustees

Chartered Financial Planner
FPFS (Fellow of the Personal Finance Society)

Matthew works with private individuals, IFAs, charities, solicitors, trustees, accountants and businesses. He manages investment portfolios that are personalised to clients' objectives and attitude to risk.
He is the investment lead for KPMG within our Professional Practice team working with Partners and those with independence restrictions.
In addition, Matthew manages AIM portfolios for clients looking to minimise inheritance tax liabilities for the next generation.
Matthew is part of the Asia-Pacific research team.



Matthew joined the company in 2014 (then Ashcourt Rowan), initially as a member of central research team working closely with the Chief Investment Officer (CIO) and Head of Strategy. Following the acquisition of the business by Tilney in 2016, he started working with high net worth clients, concentrating specifically on personalised discretionary managed portfolios.



Matthew works closely with his clients and their advisers to understand their needs and objectives.
Building and managing portfolios on a bespoke basis that take into account compliance and tax constraints as well as liquidity needs and income preferences.



Matthew has been awarded the Chartered Financial Analyst (CFA) Charterholder status and is a member of the Chartered Institute of Securities and Investment (CISI).
Matthew holds a BSc in Economics from the University of Kent.

Associate Director, Investment Management

High net worth clients - advising on all aspects of wealth planning
At retirement planning
Estate Planning



Ian has over 30 years experience of working with private clients and advising on all aspects of their wealth management and planning.
His current role, as Managing Partner of the Leeds office, still allows him to maintain a small client bank where he enjoys building lasting relationships. He particularly enjoys working with family businesses and collaborates with fellow professionals to ensure the best outcome for his clients.
Prior to joining Tilney in 2014 Ian was the Regional Financial Planning Head for Yorkshire & Scotland for a nationalfirm of Chartered Accountants. Before that Ian was the MD of a Wealth Management business in Sheffield that was owned by a regional chartered accountancy practice.

advised a client on how best to restructure his late father's pension Self Invested Personal Pension as without advice a significant proportion of the fund was going to result in an unnecessary tax charge

successfully worked with a family business to advise them on how to use their pension funds to acquire their business premises

worked with a family business to secure maximum value on disposal and then created a Family Investment Company as part of the ongoing financial planning for them

Managing Partner, Financial Planning

I am very experienced adviser and therefore have a broad skill-set. I have spent many years giving personal financial planning advice, which has included providing guidance on matters such as retirement planning, Inheritance Tax Mitigation, and Investment Management. However, my passion, is dealing with owner managed businesses and providing advice on company structures, exits and extracting monies from businesses in as tax efficient manner as possible.



I am the Managing Partner (Dip CII, CFP, MCSI) of Tilney's North East Office, which is based on the Newcastle Quayside and provides Wealth Management advice to both Personal and Corporate clients.

I have over 30 years’ experience as a financial planner and head-up Tilney's North East Financial Planning team. I have been part of the Tilney Group for over 25 years and am very proud of what we have accomplished in the North East.



Over the years I have featured many times in the National Press, providing expert comment on financial planning matters. I am extremely proud of the professional network that I have established over the years and the loyal client bank that I have built-up.



I am one of circa 1000 UK Financial Planners with the ‘Certified Financial Planner qualification’ (CFP). I am also a Chartered Member of the CISI (MCSI) and a member of the Chartered Insurance Institute, Personal Finance Society and Institute of Financial Planning (Dip CII).

Private Client portfolio management, developing bespoke portfolios for individuals, Charities and pension schemes



Christopher has worked in Investment management and Stockbroking since 2006, he joined the business in January 2019, having spent the preceding 9 years as an Investment Manager with Evelyn Partners



He is passionate about providing a first-class service to his clients that is both personable and informed.



Christopher holds an Undergraduate degree in Politics and Economics from Newcastle University, is a holder of the CISI Masters in Wealth Management and is a Chartered Fellow of the CISI

Understanding clients lives and future plans, Chris provides tailored financial planning advice in all areas including; Planning toward financial independence and security, managing a tax-efficient income strategy and passing on wealth tax-efficiently



Chris joins Evelyn Partners from Schroders Personal Wealth where he worked as a Chartered Financial Planner, providing holistic financial planning advice to clients and their families.



Chartered Financial Planner
Advanced Diploma in Financial Planning
BA (Hons) Business and Management

Chartered Financial Planner

Working with Business Owners/Entrepreneurs and high net worth families across all generations. Specialising in the complexities of various tax entities and how they interlink with wider planning, tax efficiency and overall objectives.

Working with business owners in the lead up to a transaction to ensure all opportunities are considered linked to the current and future objectives/views.



I have worked in the industry for 27 years and in the UHNW/HNW space for over 10 years.

Working closely with professional partners so all aspects of the overall plan are linked up and understood and in line with objectives and evolving legislation, tax and views.


My experience is focused on tax planning across all areas of the financial plan and understanding how this compliments other plans in place and can be superior when linked to overall objectives.



I look after many large families with complex financial circumstances and needs. I provide bespoke and creative services that link in with their Accountants/Tax and Legal advisers so that a formal and rounded approach is provided, I manage this for my clients. I have vast experience in this area and business structures.
Women in Finance Awards - Winner - Financial Planner / Team Leader and Role Model of the Year.

Norther Power Awards - Power List



Chartered FSCI
Certified Planner Qualification
Honorary Fellow PFS
STEP - Advanced Certificate - Advising Family Business

Chartered and Certified Financial Planner

Adam specialises in providing advice to Ultra High Net Worth, HNW & SME’s in all areas of personal and financial planning. As well as this Adam specialising in giving financial planning advice to Sports and Entertainers working with some of Europe’s top footballers and global music stars.



Advising some of the worlds top sports and entertainers



Miles Robinson

Bio

Articles from author

Can you beat inflation?

Are gilts the best investment strategy nowadays?

Start your journey to your
Financial well-being

FIND OUT MORE

LEGAL

CONTACT US

Miles Robinson

Bio

Articles from author

Can you beat inflation?

Are gilts the best investment strategy nowadays?

Start your journey to your Financial well-being

FIND OUT MORE

LEGAL

CONTACT US

Start your journey to your
Financial well-being