Market Insight
Variable Yields and the Need for a Stable Income
This Article was Written by: Rory Maguire - Fundhouse
Market Insights, Stable Income, Variable Yields
In March 2024, the FCA concluded a thematic review (TR24/1) into retirement income advice.
Interestingly, within this review, they found that many advice firms settle on 4% as a ‘sustainable income’ level for end clients. As shown below, at current yields (bold bars), 4% is quite sustainable, although only three years ago (light bars), the average yield was below 2%. Available yields move around a lot. To read the full article, including how Fundhouse approaches income solutions with yields that are so varied, please register/login here
Source: Fundhouse/Refinitiv/Bloomberg. Data as at end June 2021 and June 2024. Available yields are a function of variables like base rates (set by central banks) and the price of assets (high prices offer lower yields and vice versa).
Speak to the team: mps@fundhouse.co.uk.
Fundhouse is the trading name of Fundhouse Bespoke Limited. Fundhouse provides investment management services to professional clients and does not provide financial advice. Importantly, this note does not represent investment advice, and any reader should always speak to their financial adviser before making any investment decisions. Please note that the value of any investment may go down as well as up, and you may lose capital when investing, and the value of your investments may not always increase. Please ensure that you are comfortable bearing financial losses and that you are comfortable taking a long-term investment view of five years or more.
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