It is no secret the Government debt has reached epic levels. With interest rates being as low as they are, it is accepted that servicing the debt may not be as challenging as the size of the debt would (superficially at least) indicate. Low to negative yield Government Bonds (Gilts) are being bought by the
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This month has some welcome positive news. There was an increased likelihood of economic growth picking up in China as early as the second quarter. While economies are recovering in many parts of the world, they are a long way from where they would have been in the absence of Covid-19. Predictions are that global
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Level term assurance policies have a known level of cover that will be paid out in the event of death within a known period of time. Premiums remain level throughout and should you survive the policy term, there will be no benefit. As this type of contract only provides cover in the event of death
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First-principles thinking helps reverse-engineer complicated problems. The idea is to break something down to its base elements. We can then reassemble them from the ground up. This approach was used by the philosopher Aristotle. Elon Musk and Charlie Munger are among those who use it now. It allows them to cut through the fog of
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There are many benefits of turning using a financial planner. Financial planners have the expertise to advise on how best to achieve your goals. They can play a role in deciding where to invest your money to ensure it is working hard in pursuit of your ambitions. You are bound to think about how safe
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Unit trusts and OEICs (open-ended investment companies) are collective investment schemes which allow individuals to participate in a large portfolio of assets by pooling their money together with other investors. This gives the individual access to a much wider spread of holdings than can normally be achieved with smaller sums of money, which in turn
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A report on the front page of Wednesday’s Financial Times has added weight to the possibility. It has highlighted a quirk of the calculation which could cost the Government dearly if no changes are made. To understand why we need to understand the fundamentals of the Triple Lock. The increase each April is the greater
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Deferring the state pension is the default option. If you do not claim it the Government will not pay it to you. For a lot of people, this might be a better option for them. Of course, you need to think about how long you defer for too. Factors to consider As with all pension
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Markets have continued to make progress in May, encouraged by further evidence in the developed world of an easing of both Covid-19 related deaths and new cases. There is strong evidence the lockdown measures put in place in Europe have delivered the desired results. Countries such as Denmark and Germany, where restrictions have eased more
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There is a growing unease about the economic fallout of COVID-19. Many businesses are laying off contractors and putting staff on extended leave. There is also the natural worry about contracting the disease. What this crisis has shown is being unable to work can turn our world upside down. No one likes to think something
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More than a fifth of UK households live in privately rented accommodation. The Government has introduced measures to protect renters affected by COVID-19. This radical package of measures protects renters and landlords affected by COVID 19. With these in force, no renter in either social or private accommodation will be forced out of their home.
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Although many spend a lot of time trying to, no one can accurately predict the future. If I could, I doubt the Governments of the world let me spend my time dealing with investment portfolios. Because we do not know which investments will outperform, we invest money into a wide variety of them. We know
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Something happened yesterday which has never happened before. The Debt Management Office (DMO), the Treasury arm charged with the task of selling government debt, sold £3.8bn worth of gilts at a negative yield. The stock concerned was 0¾% Treasury 2023 and the average yield was -0.003%. There was no shortage of market interest as they could have
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a Accumulation Units A type of fund where any income generated (dividends/savings interest) is used to purchase more units in the fund. An accumulation unit will have ‘Acc’ at the end of the fund name. This differs from Income Units. Allocation Rate The insurer may decide to allocate more or less than the contribution to
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There is a debate about whether gold makes for a good way to protect portfolios against stock market declines or rising inflation. When I was at school the currency of the playground was premier league stickers. If you had a “shiny” you could command a higher price than the standard card. Deep down, there is
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Some mortgage borrowers may have been adversely affected financially by The Coronavirus (COVID-19). Because of this, they may consider requesting to take a mortgage payment holiday on their mortgage for up to three months. The Government’s policy aims to ease the stress some borrowers will face during the pandemic. It also provides some flexibility at
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A Whole of Life Assurance policy with guaranteed premiums promises payment of a known level of cover upon death of the life / lives assured whenever death occurs, provided that premiums are maintained. The premium and sum assured are fixed throughout the life of the policy (in some cases it is possible to include an
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The damage from falling victim to a fraud or scam is not only financial. It can also have huge emotional consequences. Remember that if you are a victim of this type of crime, you are not alone. Support is available, but you need to report what has happened as soon as possible. How to spot
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MIT AgeLab has identified three simple questions to ask yourself to gauge how prepared you are for retirement. They uncover crucial factors which may determine your future quality of life. When it comes to retirement planning, we are inclined to focus on accumulating wealth and spending it wisely. While not outliving our wealth is essential
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The research on how best to generate retirement income has been evolving for decades. In the 1950s and 1960s, the leading strategy was to buy bonds live off the interest. This prevailed until the high inflation of the 1970s ravaged the true value of bond interest. In the 1980s, retirees shifted to buying dividend-paying shares
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After the events of the first quarter of 2020, world stock markets bounced back in April. The US market was the standout performer, enjoying the best month since 1987. Over March the S&P 500 rose by more than 14%. Indeed, the index is up by 30% from its 23 March low, meaning that the US
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One of the most valuable assets of a business is its staff, with business success or failure depending on them. Some of these people because of their specialised knowledge, skills or contacts, are vital to the profitability of the business. They are often referred to as ‘key persons’ as their death or incapacity could result
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Watching your portfolio’s returns go up and down can be an emotionally trying experience. Rebalancing to a predetermined, diversified asset mix makes it so you do not have to worry about market instability as much. Having a suitable mix of assets in your portfolio can serve as a buffer against extreme swings in the market.
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The Lifetime Allowance (LTA) limits how much someone can draw from their pensions without incurring tax charges. It currently stands at £1,073,100 (2020/21). Lifetime allowance charges can arise on various occasions with the main ones being: When benefits are initially taken (Taking tax-free cash from a pension is an example of this), On the death
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Whether you want to spread your risk Let us look at four scenarios where you have your money in shares in: a single company, Many companies in the same industry in the same country, Many companies in many industries in the same country or, Many companies in many industries in many countries around the world.
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We have updated our guide to actions which could be taken to minimise taxes here. For our clients, some of the key ones are making full use of the ISA and Pension allowances. The only thing we would advise against doing now is disturbing invested assets to make use of these allowances. An example of
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Lifetime ISAs aim to help people aged between 18 and 40 save for their first home or retirement. A Lifetime ISA (LISA) lets you save up to £4,000 per year. At the end of the tax year, the Government will top up your ISA with a 25% bonus. These bonuses are available on LISA contributions
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The Government introduced personal pensions in 1988. This allowed the self-employed or employees of companies not offering a pension scheme to have a pension. They are money purchase schemes where contributions receive tax relief. Pensions underwent a radical change from 6th April 2006 with the introduction of Pensions Simplification and the March 2014 Budget announced
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Everything that goes into growing the money in an investment plan or pension involves time and money. You should expect to pay a reasonable level of charges. These charges do reduce growth. Let us use an example where the underlying investments within a plan grew by 5% before charges. If charges were 1%, they would
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Anyone, who is a taxpayer and has money to save or invest, should look at Individual Savings Accounts (ISAs). These are “wrappers” in which someone can hold a range of savings and investment products. They are free of UK income and capital gains tax by anyone aged 18 or over (16 or over for cash
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Junior ISAs (JISAs) became available from November 2011. Both cash and stocks and shares JISAs are available. Children can hold one of each at a time (two accounts in total). Who is eligible? All UK resident children under the age of 18 who do not have a Child Trust Fund (CTF) are eligible for JISAs.
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On 25 March the Coronavirus Act 2020 received Royal Assent. It is a bumper piece of legislation, running to 348 pages and covering a wide range of areas (many excluding Scotland because of its devolved powers), including: Food supply; Statutory Sick Pay (SSP) modifications, such as the funding of the employer’s liabilities; Suspension of the rules that
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On Friday the Chancellor gave a graphic illustration of what ‘whatever it takes’ means. After waiting a year and a half for a Budget, within the space of nine days we have had three. The latest, presented in Downing Street was a real money-no-object blockbuster: Coronavirus Job Retention Scheme This type of scheme echoes measures
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As the world grapples with a global pandemic, we face a tough time. There are lots of opinions on Covid-19, some more informed than others. Our role is not to add to these but to advise them on how they have impacted on their financial planning. Stock markets across the world have fallen, recovered briefly,
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Zoom is a video meeting app which is like skype but works on any device. All you need is a device with a camera, a screen, a microphone and speakers. This could be a laptop, tablet, or your phone. It is safe and secure. It works very well, and also allows us to share screens.
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Further to the recent government announcements and in the interest of staff, their families, and our clients, we will have a reduced team in the office. Also, all client face to face meetings are suspended over the short term. Any staff who are not in the office will be working remotely. If you have a
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It is an unbelievable 500 days since the last Budget in October 2018. The Chancellor, Rishi Sunak, has only been in the job a few weeks and to say the Budget will have represented a challenge for him is a massive understatement. Even more so given current world events. Budget Day started with an announcement
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As you might imagine, this is a question clients ask us often. A rule of thumb is the “4% rule”. This means on a £100,000 pot you would withdraw £4,000 and increase the withdrawals each year with inflation. Taking any more runs the risk of the pot dwindling and running dry within 30 years. We
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Every year, thousands of people lose millions of pounds due to investment scams. Technological advances mean scams are becoming more common and harder to identify. There are some warning signs you can use to avoid falling victim to scammers. Investment scams aim to get unsuspecting people to hand over money. They can seem legitimate, appearing
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It is natural to see headlines about world markets falling and to worry about your portfolio. While it is never fun to see your portfolio take a hit, losses are a normal part of investing. Over the last near eight years, our portfolios have fallen in value a significant portion of the time. A key
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The returns you can get from your money can mean different things to different people. To some, getting better returns is something to boast about. We believe returns are meaningless unless they go towards making your life better in some way. This can be being able to retire earlier or being able to help loved
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When taking an income from your pension pot, you will start with two choices. Do you want to hand over your money to an insurance company and they will pay you an income for the rest of your life? Or do you want to keep a pot of money from which you decide how much
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A survey of 2,000 people reveals we spend 110 hours a year think about what might have been. Eight out of ten believe their lives would be better if they had taken more risks. The most common regrets were: Not saving more when younger Not keeping in touch with old friends Not taking the plunge
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On Friday 7th February, the House of Commons Library (HoCL) issued a briefing paper entitled ‘Reform of Pension Tax Relief’. The following day the front page of the Financial Times (FT) ran a headline “Javid eyes tax raid on high earners”. The article suggested restricting tax relief on contributions to 20% could “raise more than
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Investing comes with risks. We have covered before why it is not a good idea to take more risk with your portfolio than you are willing to. Something else you need to get right is to not take more risk than what you can afford to take. We call this your risk “capacity”. Imagine being
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If you want to make better decisions with your money, we can help. However, working with us is not for everyone. We help our clients take the necessary steps to get the most out of their money. There are some things some expect from us which bear little relevance to what we do. Some of
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Although often in the news, Inheritance Tax (IHT) is easy to misunderstand. If you thought IHT was for wealthy people to worry about, think again. Rising property prices have meant more estates than ever are likely to face an IHT bill. The amount of IHT collected has doubled over the last decade. If your estate
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To be in control of your money, you should have a plan for what you spend. This allows you to give each pound you make a purpose. Although this may seem like a lot of work, it is key to lasting financial success. A good spending plan will help you take each financial step as
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Perhaps you have been asked to be a trustee or you are considering setting up a trust yourself. In either case, there are a few things you should know before deciding. Being a trustee requires a certain level of involvement. This blog post should hopefully give an insight into what is involved. What does a
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Divorce is one of the most difficult subjects to talk about. The emotional upheaval of divorce can be difficult to deal with. So too can the financial implications. When relationships end, there are so many things to consider. Children, home, and support are the first things you focus on. When you begin the process of
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Getting the most out of life can be like climbing a mountain. The goal is to reach the peak and hoist up your flag. The journey will be challenging, so you need to be passionate about it. Most financial plans involve investing and markets always have difficult periods. It is essential to have something to
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Over time, those who have invested money into the world equity markets have generally done best. However, investing our hard-earned money, and the risks involved, can make any of us feel nervous. Any decision you make involves risks. The decision to invest is no different. Whatever you invest will go down in value as well
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Proposed rules mean solicitors must increase their due diligence on whoever they refer to. So, what does this mean for law firms? The Solicitors Regulation Authority (SRA) urges firms to have a holistic picture of their client’s needs. Part of this is having formal relationships with financial planners such as ourselves. There are clear links
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The start of the new year is the time when tax planning comes to the fore in the financial planning calendar. It gives enough time to put anything in place before the end of the tax year on April 5th. But does the General Election on 12th December mean tax planning should take place early?
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Doing the right thing with your pensions is not always easy but it has become much harder for members of the NHS pension scheme. Many have incurred tax bills through no fault of their own. Some are opting out of their pension schemes altogether to avoid tax. Giving up the lucrative benefits afforded by the
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Many of us go to great lengths to protect what we have while we are here. We put in alarm systems, smart doorbells, thick locks. However, most of us do not do anything about protecting what we have when we are gone. A new survey by the British Heart Foundation found 61% of people do
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Our portfolios incorporate how to maximise the chances of long-term investment success. This means nothing if we do not invest for the long term. We built our investment process on the belief that over the long term, the global economy will reward those who invest in it with suitable returns. We also believe the investment
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We can get the answer to just about anything in a few clicks. However, the difference between getting a solution and the one which is right for you can be huge. This difference is where the value of good advice is. The truth is everybody would probably benefit from financial advice in some way. Saving
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We covered how we decide where our clients should invest in an earlier post. Now we move onto what to invest into. We believe where to invest is the primary consideration when making investment recommendations. However, what to invest into is also important. Rather than buying a bunch of shares, bonds, or properties, we recommend
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In a previous post, we explained the guidelines clients should invest by. We will now start to explain how we put this into practice for clients. A lot of financial industry talk can lead you to believe there is a “perfect” recipe for what you should invest in. Sadly, you can only know the perfect
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We have spent considerable time and effort in building a portfolio construction process sitting at the forefront of the profession. Its genesis lies in answering a simple question: ‘What should we do to ensure clients have the best chance of investment success?’ This has ultimately led to a series of underlying questions which we will
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If something were to happen to you, the last thing you want is to be worrying about money. Financial planning is not just about getting what we want from life. It is also about protecting our loved ones. We do not like to think about illness and death but ignoring them can have severe consequences.
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Lifetime financial planning done correctly has to include a fluid financial forecast created using sophisticated planning software. We take a snapshot of your financial situation and project this forward year by year. The process is only as comprehensive as the information we put into it. The more information we put in, the better the output. The
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Financial planning is key to resolving worries about money. It may be useful to think about financial planning in terms of some common concerns: Will we be able to support our current standard of living in retirement? Can we manage financially if one or both of us needs long term care? What happens to my
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