About Nicholas Grogan

Posts by Nicholas Grogan

Is sharing a pension on divorce common?

The University of Manchester Research has published a report entitled: Pensions and Divorce: Exploratory Analysis of Quantitative Data. The report has found that, within couples, men have substantially more private pension wealth than women. This poses challenges should they divorce. The researchers looked at the pension wealth of almost 30,000 people over the age of

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Is salary sacrifice more attractive since the introduction of the Health & Social Care Levy?

We have written previously about how employees exchanging part of their salary and/or bonus for increased pension contributions has become common. We explained how this can be far more attractive than the employee making a direct pension contribution on his/her own behalf. Attractions of salary sacrifice Contributions paid out of an employee’s after-tax pay are

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Do the recent tax changes mean I should look at taking a dividend or bonus from my business again?

The social care announcement on 7 September 2021 increased both national insurance (NICs) and dividend tax from 2022/23. In addition, the March Budget revised corporation tax rates from 2023/24. The combined effect of these announcements might shift the decision of whether to take a dividend or not from your business. We have looked at some examples to see where these shifts might have taken

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What is the new Health and Social Care Levy?

To begin with, it is worth a quick reminder of the current social care position in England: (Wales, N. Ireland and, in particular Scotland, have their own variations on the theme): There is a £23,250 capital means test ceiling, above which all care costs must be met by the individual: the self-funding route. For those with wealth between

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Who do you work with best?

The clients we serve best have the following qualities: They work in partnership with us to make good financial decisions Our clients appreciate, that the advice of a highly qualified advisor is useless if not acted upon. The ultimate decision lies with them, and our role is to help them make it a good one.

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Am I better off picking my own funds?

Morningstar has published updated research as part of its annual Mind The Gap study on how much of market returns US investors get. The headline is those investors get 1.7% less than they should. What is the reason behind the difference? The explanation the report gives for this is that the investors mistime their buys

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How often should I look at my portfolio?

Your portfolio represents your future. It is only natural to want to check how your investments are doing. How often you need to do this depends on the type of investor you are. Speculators who constantly buy and sell individual stocks will monitor performance frequently, perhaps daily. Those investing for the long term with robust

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What was in the money sections of the weekend’s papers? (09/08/2021)

Help tomorrow’s widows prepare for an income shock In this article for the Financial Times, former pensions minister Steve Webb summarizes why two alterations to the state pension mean widowed women might experience an income “shock” along with bereavement in retirement. Among many mathematical examples, he encourages no couple to make any assumptions about the assistance available to

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Why do I own bonds which do not pay me much?

In today’s markets, bond yields are low and those of high-quality bonds are the lowest. In addition, they could quite feasibly crash too with interest rate rises. So why have bonds in a portfolio? It is quite straightforward. Imagine you only hold equities with a portfolio of £200,000. The economy takes a turn for the

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What was in the money sections of the weekend’s papers? (12/07/2021)

UK advertising watchdog to crack down on misleading crypto marketing The Advertising Standards Authority has informed the Financial Times it plans to pull misleading crypto advertisements. According to the agency, crypto is on a ‘red alert’ in financial advertising. Customers have usually been the ones to highlight potentially damaging adverts. However, the Advertising Standards Agency wants to

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Why is diversification so important?

Building an investment portfolio requires a mixture of investment science and common sense. The evidence suggests timing when to be in and out of markets (or sectors, or companies) is extremely difficult. It also suggests identifying a manager who can persistently beat the market is very hard to do in advance. We, therefore, focus on

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What is your approach to investing?

We sometimes refer to the way we invest as mostly being a ‘systematic’ approach. It is our duty to do what is right for our clients. When investing, we build on a foundation of facts. This is because we believe we would be doing our clients a disservice if we did it any other way.

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What is salary sacrifice?

It has become common practice for employees to exchange part of their salary and/or bonus in return for their increasing the pension contribution they pay by the same amount. This can be far more attractive than the employee making a direct pension contribution on his/her own behalf, particularly if the employer is prepared to increase

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What does my portfolio invest into?

What is an equity (or share)? An equity (or share) represents ownership of part of a company. This gives you a right to your share of any dividends paid and a claim on the company’s assets. Returns from equities come from changes in the price of the shares and dividends paid out. Are all equities

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What is investing?

This may seem an obvious question with an obvious answer. In some ways it is. We believe investing to be the means of building wealth to fund lifestyle and personal choices. It is a slow, emotional, and sometimes painful process requiring a robust plan, patiently executed over many years. Anyone hoping to get rich quick

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Will having more money make me happier?

There has been as much research into what makes us happier as there has been into what makes us wealthier. As financial planners, we are trying to help our clients improve their lives using their money. So, it is therefore important to look at what drives happiness and how it relates to money. The happiness

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How importance will inheritances be in the future?

The Institute for Fiscal Studies (IFS) has published a new report on likely future inheritances. It may give a future Chancellor something to consider The Institute for Fiscal Studies (IFS) has regularly looked at inheritance and inequality. In its latest paper, it has gone into greater detail, drawing on data from a variety of sources:

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What was in the weekend’s papers? (26/04/2021)

Financial advisers are putting your money in tracker funds – so why are you paying them? Financial advisers are facing pressure to justify their fees after putting customers’ money into tracker funds run by Vanguard. This is what this article in The Telegraph says. Vanguard, which launched its advice service earlier this month, runs £42bn of funds

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What is a Wrap?

Spreading your planning across a number of companies tends to generate mountains of paperwork. It also increases the hassle of getting up to date valuations or putting any changes in place. A Wrap Platform allows you to hold everything in one place. This enables you to quickly understand what you have and what you have

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What was in the weekend’s papers? (12/04/2021)

‘I tracked down my £14k lost pension – before the Government seized it’ More savers are trying to track down forgotten-about pension pots before the government takes the money for other uses, according to The Telegraph. The Government said in January that pensions that had lain dormant for years would be used to fund “good causes”.

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What was in the weekend’s papers? (29/03/2021)

Neil Woodford scandal: What fund bosses knew but never told us The Woodford scandal continues to unfold. The latest comes from The Sunday Times, which says the firm overseeing the fund, Link Fund Solutions, knew of its risky holdings but did not warn investors of such risks. Several requests of information were sent by Hargreaves Lansdown, who

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What was in the weekend’s papers? (08/03/2021)

Death tax to catch thousands more in £1bn pandemic raid The Telegraph says grieving families are set to be hit with a £1bn “stealth tax” grab. This is after Rishi Sunak revealed in his Budget that the government would cash in on inheritances to support public finances. Speaking in parliament last week, Sunak revealed his five-year freeze

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What was announced in the 2021 Budget?

This is one of the more important budgets of recent times. So, what was announced? Income tax rates, thresholds, and thresholds For 2021/22 Personal Allowance increasing to £12,570, basic rate band to £37,700 meaning a higher rate threshold of £50,270 – but then these figures will be frozen until April 2026. No changes to dividend

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What was in the weekend’s papers? (01/03/2021)

Lockdown savings? Put them in an ISA while you can This article in the Guardian looks at how the Covid pandemic has bolstered many people’s balances. It also has some tax-efficient places for readers to put their extra cash. The piece mentions various investment ideas but for most, we believe bespoke advice is best. Rishi

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What are dog funds?

The number of underperforming, or “dog”, funds has risen by a third this year, new data has shown. This is partly due to the gulf between the performance of different styles of investing. The pandemic has exacerbated this, but value and income investing have lagged behind growth investing for a while. How bad could having

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What was in the weekend’s papers? (22/02/2021)

NS&I blocks loyal savers from accessing their own cash Holders of savings bonds with National Savings & Investments could find their money locked away, according to The Telegraph. Previously customers could withdraw their cash at any moment with a penalty of 90 days’ interest. However, untouched savings are being automatically put into newer bonds which removes

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What was in the weekend’s papers? (01/02/2021)

Q&A: A basic guide to the GameStop squeeze The madness of the GameStop drama caught the full attention of the investment world last week. This Financial Times article asks how did millions of retail investors put big financial institutions under pressure with GameStop last week? This piece seeks to explain how the phenomenon, which began on a

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What was in the weekend’s papers? (25/01/2021)

NS&I boss apologises for customer service amid rise in withdrawals The Guardian covers how NS&I have apologised after low staffing levels left them unable to cope with “unprecedented” demand of savers withdrawing their cash. Savers pulled £26.5bn from the bank in the final three months of 2020. This came after it dramatically reduced the rates

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Do I have too much in cash savings?

The coronavirus (COVID-19) pandemic has caused massive job losses across the country. But some households have been saving more money than ever [1]. For these households, they have a choice which could have a big impact on their future wealth. This is the choice between saving or investing. More money to invest than usual The

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What are some good financial habits?

Paying yourself first Before you pay any bills, consider paying yourself first. This means saving and investing a portion of your earnings before you do anything else with your money. In the book The Richest Man in Babylon, written by George S. Clason, the parables are told by a fictional Babylonian character called Arkad, a

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What was in the weekend’s papers? (18/01/2021)

How Covid-19 rebooted retirement If coronavirus has brought a positive, writes the Financial Times’ it has purred people to look at their retirement plans. The article talks to several financial planners who say the pandemic has encouraged people their clients to re-evaluate what matters most to them. It has also given them a taster for what retirement

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Should I start my year-end tax planning now?

Last year, Autumn arrived without an Autumn Budget. In fairness, the Chancellor, Rishi Sunak, had already presented one 2020 Budget. This took place last March, and the pandemic made forecasting for 2021/22 all but impossible. The result was that, for the second year running, the Budget was deferred to the Spring. Whether Mr Sunak’s job

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How can I stop “sleepwalking” into retirement?

Around three in four people risk outliving their savings in retirement, a report looking into the impact of the pension freedoms indicates. The research found evidence many retirees risk potentially running their pension savings down. It termed this as “sleepwalking into retirement”. The study examined retirement planning and spending habits following the introduction of pension

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What was in the weekend’s papers? (11/01/2021)

Over-55s at the mercy of a new pensions ‘experiment’ next month Incoming investment pathway rules have been dubbed “fundamentally flawed” and “potentially dangerous”, writes The Telegraph. These new rules compel providers to offer people those without a financial adviser a default fund strategy based on their money plans when they hit the age of 55.

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What was in the weekend’s papers? (04/01/2021)

Our 8-point checklist to get your pension in order for 2021 Perhaps second-guessing a few people new year’s resolutions, The Telegraph has offered readers a checklist to get their pensions in order. The first two steps the newspaper suggests are tracking down old pensions and checking charges. On the first point, the article quotes Aegon’s Kate

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What was in the weekend’s papers? (14/12/2020)

Why ‘final salary’ pensioners should really fear a wealth tax Amid rumours of the Government imposing a ‘wealth tax’, The Telegraph warns those with sizeable defined benefit pension should worry. The tax, thought up by a group of think tanks, proposes to make individuals with more than £500,000 assets after debt pay 1% of their net worth.

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Why do you believe dividend investing is flawed?

We have written a post previously about focusing on income when investing. I wanted to go into some of the evidence behind focusing on income when investing not being the best strategy. When looking at this, there is probably no more famous theory in Finance than Modigliani/Miller. Known as the Dividend Irrelevance Hypothesis it says investors

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How could the change to RPI affect me?

Buried amongst the other announcements made on 25 November was a paper from the Treasury looking at measures of inflation. It revealed a decision about replacing the Retail Prices Index (RPI) with the Consumer Prices Index (CPI) including owner-occupied housing costs (CPIH). The RPI has not been an official National Statistic since 2013 because of serious deficiencies

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What was in the weekend’s papers? (30/11/2020)

Philip Green urged to plug pension gap before Arcadia administration Sir Philip Green is under pressure to use his wealth to make up the “huge shortfall” in the Arcadia’s pension scheme. This takes place as the group is expected to enter administration, writes The Guardian. Thousands of workers’ pensions could fall by 10% if the Pension

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What was in the weekend’s papers? (23/11/2020)

“Can you be sure of a comfortable retirement after the pandemic?” Financial security in retirement is something we can never take for granted. Naturally, Covid-19 and its effects have prompted savers to reconsider and review their retirement plans. The Financial Times asks how sure we can be of a safe retirement after the pandemic. Many made

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Can I buy property with my pension?

All registered pension schemes can (in theory at least) invest in property, including land, either in the UK or overseas. Pension schemes can invest directly in property, but many choose to invest indirectly using pooled vehicles. These include unit trusts, open-ended investment companies (OEICs) or real estate investment trusts (REITs). As well as allowing smaller

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How should I take my profits from my business?

When business owners choose how to take their profits, there is a compelling argument in favour of pension contributions. Dividends may still be the preferred route for most. However, changes in how they are taxed may drive more directors who do not need the income to use employer pension contributions instead. Remember, since April 2018,

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Am I going to have to pay more Capital Gains Tax?

In July 2020, the Chancellor asked the Office of Tax Simplification (OTS) to review Capital Gains Tax (CGT). The aim was to ‘identify opportunities relating to administrative and technical issues as well as areas where the present rules can distort behaviour or do not meet their policy intent’. The review has attracted strong engagement from

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Do I need critical illness cover?

The coronavirus (COVID-19) pandemic has caused many households to reassess their financial defences with the purchase of protection insurance. The diagnosis of a serious illness can mean a tough time for your health and your wealth. If you were to become critically ill and could not earn a living, would your family cope financially? Our

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What was in the weekend’s papers? (09/11/2020)

The Lockdown 2 survival guide for pension savers While our portfolios recovered quickly from the market downturn earlier this year, some pension savers may still be reeling from it. The Telegraph looks at what they can do to protect their money from any upcoming turbulence. The piece offers some guidance, imploring people to stay invested and

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Is my money locked away if I invest?

It is always important to manage expectations when investing. We often get questions about whether there is an explicit time someone must invest for how accessible the money is. How long do I have to invest for? If you are investing in an investment account or an ISA, then technically you could invest the money

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What was in the weekend’s papers? (26/10/2020)

Emotions cost investors dear, research finds The Financial Times contained an article explaining how research has found investors lose an average of 3 per cent a year in returns to emotionally driven investment decisions.  It also found the gap that widens significantly in times of steep volatility such as the current pandemic. These decisions can

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