About Nicholas Grogan

Posts by Nicholas Grogan

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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Can I get tax relief for working from home?

Employers can pay employees up to a maximum of £6 per week tax-free, to cover additional costs they may have incurred because of working from home. Where employers have not paid their employees the home expenses payment, individuals can claim this tax relief through a new online portal. More than 54,800 claims have been made

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What is financial wellbeing?

I have always been passionate about helping people feel more financially confident and achieve financial security. What this can be boiled down to is increasing financial wellbeing. The Financial Wellbeing Book, published in 2016, laid out five parts to financial wellbeing: A clear path to identifiable objectives Control of daily finances Ability to cope with

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How could the US Election affect my portfolio?

Many investors are worried about the US election’s effect on the stock market. One school of thought is a Biden victory could lead to measures that would hit businesses. Another asserts the stock market prefers Republican victories. What does the data say? The logic of efficient markets is that anticipated events do not impact prices.

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Is pensions tax relief safe for now?

The Government has rejected the Public Accounts Committee (PAC)’s proposal that HMRC should evaluate pensions tax relief. The concern was HRMC did not understand the impact of some of the UK’s largest tax reliefs which includes pension tax relief. The committee called for a formal review, but the Government disagreed. They pointed to several recent consultations

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What was in the weekend’s papers? (05/10/2020)

FINANCIAL TIMES “Property sellers risk tax penalty amid housing ‘mini-boom’” Advisers warn of lack of awareness over shortened deadline for paying CGT. COMMENT: We looked at this in this post. “Investment trust boom in wake of Woodford liquidity concerns” Trust model helps managers control risks of a sell-off when holding unlisted companies. COMMENT: We do

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How could COVID affect my planned retirement?

The Institute for Fiscal Studies the effect of the pandemic on those nearing the end of their working lives. In a new Briefing Note, the IFS investigated how workers aged 50 and over have reacted to the pandemic. This has included how their retirement plans have already been affected by the crisis. What were the findings?

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When should I start planning my retirement?

The Money & Pensions Service (MaPS) has undertaken some research among people aged 50-70 with some pension savings besides the State Pension. The results make disturbing reading: 37% of over 50s are leaving their retirement financial planning until their final two years before retirement or won’t prepare at all 35% of retirees said they left financial

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What has NS&I done to its savings rates?

National Savings & Investments has significantly cut the rates it offers to savers. Savings analysts have long kept one eye on NS&I’s next move. The bank helps to fund the Government’s spending, so it has to balance the rates paid to savers with the cost to the Treasury. NS&I had planned cuts earlier this year.

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Does my business need shareholder protection?

Imagine a scenario where your business partner and fellow director has died. Your business partner’s wealth, including their share of the business, passes down to their family. This poses significant potential risks to your company. They could become involved in business decisions they know nothing about. They could also sell the shares without your consent

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How could Capital Gains Tax change?

As well as reviewing the operation of capital gains tax (CGT), the Chancellor asked the Office of Tax Simplification to consider “opportunities to simplify the tax”. What changes could emerge and what could this mean for financial planning strategies for our clients? Charging capital gains made by individuals to income tax If you are taxed

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What was in the weekend’s papers? (24/08/2020)

FINANCIAL TIMES “‘Two companies to pay £10.7m to investors sold risky schemes” Avacade and Alexandra Associates provided investment services without being authorised by regulator. COMMENT: You should always check that your adviser is regulated by the Financial Conduct Authority. Also, if you are advised to invest into something which offers high returns for low or

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Should I invest my money or pay off my debts?

You may have some spare money some surplus income. Either way, you might be thinking about what is best to do with this. Is it better to invest or repay your debts early? Paying off your debt could mean means reduced stress, and a greater ability to withstand personal emergencies, recessions, and depressions. Investing means

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What was in the weekend’s papers? (17/08/2020)

FINANCIAL TIMES “‘Dividends cut by 445 LSE-listed companies” Some yields still remain attractive even after changes, analysts say. COMMENT: You can find our thoughts on income investing here. “Pensions cash a temptation for silver job seekers” If you’re made redundant in your fifties, should you dip into your retirement funds? COMMENT: We always recommend to

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Should I still be investing in Commercial Property?

The Financial Conduct Authority (FCA) is floating the idea of new rules designed to improve investor experiences in open-ended UK Commercial Property Funds. Most are currently suspended due to uncertainties on the value of the properties because of the COVID pandemic. In the past, they have placed restrictions on withdrawals due to a lack of

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