We know you work hard for your money and want to be able to get to know our advisers better. Here you will find some of our adviser’s blogs, where they talk about different areas of financial planning that they feel could be of benefit to you.
We also post blogs about interesting events which happen at Beacon, including the renovation of a Chapel into our new offices.
Tony Larkins CFP, APFS, FCMI Chartered and Certified Financial Planner
A former Accountant of 10 years, Tony has won many accolades since becoming an independent financial advisor in 1991 and now has qualifications that are held by under 1% of advisers. He is a mentor for the Princes Trust, a Chamber of Commerce Owners Managers Committee member, was the East Midlands Chairman for the Institute of Financial Planning 2010 and 2011 and is now the Regional Vice Chairman for the Personal Finance Society, as well as being a qualified life coach. Tony has also recently been awarded a Fellowship at the Chartered Management Institute.
Tony Larkins is Managing Director and Chartered Independent Financial Adviser working from the head office in Kimbolton, Cambridgeshire.
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Are you up to date on Inheritance Tax allowances and what they could mean for you and your family?
Most people know that you have an allowance on death on which Inheritance Tax (IHT) is not paid, and many know that this is £325k. Some also know of the additional allowance for your main home which is currently £150k. Some
even know that from next tax year the combined figure will be £500k or £1m for a couple.
What many do not know is that this allowance has clauses and thus is not available for everyone. Gifts made prior to death can count as part of your £325k allowance, and if your home is not left to certain individuals you do not qualify for the allowance. It often amazes me that given the major effects i.e. cost of IHT, just how few actually plan.
IHT is a voluntary tax in that you can arrange your finances to avoid paying it, and the methods are not complicated. Despite this £5.2bn was paid in 2017/18, and mainly on the estates of women.
This last point about paying IHT on the estates of women is because most couples Wills leave everything to the other, and men normally die first. Wills can be changed even after someone has died and planning can start when one person is left on their own. However, planning should start early!
Start by checking that your life cover policies are written in trust and that your pensions have been set up correctly with the right beneficary(ies).
Records for 2015/16 show that over half of those who died in the year were over 85, but that over two thirds left partners alive with around 80% of the total wealth of those dying that year – I guess this is why so many of my clients are widows.
So if IHT is avoidable, allowances are not available to everyone and time is of the essence for planning – have you sorted your plan?
Why do some reach their aspirations but most not, given we know in many cases it’s not down to intelligence?
Having been advising for 28 years, I have met with thousands of individuals; many are comfortably off and most are not, but whilst the definition of rich varies depending on your own experience, I have met very few that would consider themselves as rich.
That said, most people have no real desire to be rich, but would like to be comfortable (or just that bit above comfortable).
In answer to the title question, my experience tells me it is often down to a number of reasons rather than just one. These include having no focus on saving, taking advice from unsuccessful family and friends, not setting financial goals, spending more than earned, being too scared of failure, lacking discipline and just not working hard enough.
The above list is not exhaustive, but I believe that with the right attitude most people can achieve their aspirations.
As a financial planner my role is to help an individual work out what that is, why they want it and how important that is i.e. just how much of a priority that is.
The use of pensions and ISA’s play an important part in wealth accumulation as does going the extra mile in your career. It does not matter what you do, you can still do it to your best ability.
In my career I seem to have always been studying, initially as an accountant, then I qualified as a life coach, a Chartered Financial Planner, Wealth Manager, a Certified Financial Planner and a Chartered Fellow of the Management Institute.
It is never too late to achieve, money is not everything but job satisfaction and knowing you are doing the best you can makes for a happy life that when coupled with knowing what you want strongly leads to success and achieving your aspirations.
It’s never too late to take advice from a financial planner to help you achieve that something extra.
Today is the first day of the rest of your life.
In life do you act or react?
Is your cup half full or half empty?
We have the same 24 hours as everyone else, it’s what you do with yours that makes you different.
Are you a human being or a human doing?
I have just suffered the greatest sadness in my life….
It’s now what I see as important to me and others and about what I do going forward.
It doesn’t always take a major event in your life to make a change, it can just be a moment of inspiring thought. The important thing is not to ignore that thought, but to evaluate it and see what you need to do, and if necessary find someone to assist.
It could be a change of career, a decision to move, live abroad, get fit, retire or anything personal to you.
If money is involved (and it is not always), speak to me, as a financial planner rather than just a financial adviser, I help people achieve their goals. Sometimes goals they thought were impossible.
Let this article be the spark for your inspiring thought and do two things:
1) Write down what you want
2) phone/email me for a free chat (no cost and no commitment)
Go on, make today special.
Rich, Comfortable or Aspiring to be?
For some, an inheritance is the only way to acquire wealth, for others it is hard work. Often after paying for long term care fees an inheritance is no longer a life changing amount, so for most, wealth is down to them.
Starting a pension at an early age and putting in more than the minimum is to be encouraged, as is saving into an equity ISA and getting on the housing ladder.
It is difficult to see a better way of making money than a pension. Ignoring all growth, a 5% contribution matched by an employer for a basic rate tax payer means 4% of salary = 10%. Given you can have 25% back tax free your fund actually only costs 1.5% to get 7.5%. For a high rate tax payer it is even better because 0.5% becomes 7.5%. Don’t worry if you don’t understand the numbers, I can explain further if you are interested; but put into numbers £50 can become £750. So it’s no wonder the government limit the amount you can put in each year before incurring a tax penalty.
Equity ISA’s do not have the same benefits but the government would not limit the amount you can put in if it wasn’t costing them by you having one.
If you have more month left than money perhaps you need to look at what you should do differently. There always seems to be people worse off than you, but appear to live better so look into your finances.
Buying a house and clearing your mortgage means more stability than renting and less payments when you are older. I realise deposits can be a problem, so decide your priorities when spending on luxuries.
It is never too late to save for a pension. The returns can be even better if it is just for 1 or 2 years.
Finance can seem like a mine field; you may already be wealthy or comfortable and feeling that just maybe an expert eye over what you are doing is worth having. We can offer you a free chat about what you have, what you do and what you want. From this we can establish if our involvement can benefit you. If we cannot assist, you leave contented. If we can, you decide whether what we bring is worth having, remember – it is your money, your desires and your decision. Our job is to help where we can to provide added peace of mind, perhaps save tax and hopefully give you structure and a better investment return. We cannot make you do anything you do not want to do. You decide. Just as you decide what adviser to work with – and we are not all the same.
Contact us today for an initial review on 01480 869466.
Happy New Year – Or is it?
It is a New Year and a time to reflect on what went well last year and what did not. Time is only a day older but for many it can be a cathartic experience of moving on with renewed vigour and enthusiasm, a time for making New Years resolutions such as getting fit and losing weight, seeing families or telling yourself you will do XYZ, that you have been putting off for years.
Christmas is a time when we think even more about lost loved ones and think of our own mortality, care fee planning and IHT. It is also a time when we review our investments.
Starting with the latter (investments) there are not many who would advocate holding money in cash acounts paying 1% – 2% when inflation is more than that; but the last 3 months of 2018 saw a lot of volatility in the stock market.
Stock markets around the world have been hard hit due, in the main, to the USA and China with a touch of Brexit thrown in. One of the big problems is how some companies which are favoured have dropped so much, e.g. ASOS 60%, Boohoo 31%, even Apple 25%. These individual falls have knock on effects for their particular industry.
Choosing a financial adviser with a specialist Discretionary Investment Team has never been more important. At Beacon we have had our own investment team for 10 years, but they have probably never
had to work so hard with fund reviews, investment manager meetings and fund switching. You can see why advisers who either try to do it themselves or have a dedicated team but without discretionary permissions just bury their heads in despair. The FTSE finished the year at 6728. Meaning a 12.5% fall from the start of 2018 when it was 7688. Which is why I invested more in my active management team rather than follow passive funds, which are clearly not cheap if the funds have dropped so much more. If your adviser is not a discretionary manager look for one that is. You can tell by seeing how much they have moved funds in the last 3 months without asking you.
I mentioned IHT earlier; there seems to be confusion over how it works. It is not a death tax, it can become liable during your lifetime. You can also do things to mitigate it. Older people often look at the 2 year loop hole, but proper planning includes Wills and often Trusts. Depending on an individuals age when they start to plan, they could have 4 or 5 nil rate band allowances available each if done correctly. If you think you will have a liability speak to an adviser.
Personal Finance Society Regional Chairman comments effecting you.
Unlike the expectation of an Accountant or Structural Engineer to be Chartered the general public are still not expecting their financial adviser to have the same level of qualifications. This is somewhat strange given the importance of financial planning and just how much money is often involved in someone’s pensions and savings. To maintain Chartered Status a member must be seen to offer a professional judgement, objective advice and act in the interests of the client. If the practice the adviser works for is also Chartered (as you would expect other professional practice’s to be) then this is an endorsement that the company has passed their annual review of proving the practice has management, with the experience and expertise to ensure the business model is effective and sustainable.
Many people can say they can do something but external proof by a chartered body should give the confidence required.
I have been the “Chartered Champion” for the CB, PE and LN post codes for many years having first become Chartered in 2009 and my company Beacon was Cambridgeshire’s first Chartered practice. I am now honoured to have become the Regional Chairman, and with that comes the responsibility of representing the thousands of financial advisers in the area, and promoting highly qualified advice, from a professional body.
People seldom move banks through inertia and the same can be said for financial advisers.
Fortunately, it has become much easier so give some thought to what you want from your wealth, to do with your wealth and who you feel best to assist you.
Fees are normally similar, and it costs a lot more to put things right than getting things right first time.
Beacon are a Top 100 practice for the 6th year running out of 13691.
Make a Choice.
Life is full of choices and where ever you are now is based on the choices you have made in your life so far.
Naturally I hope you have made the right choices and are happy with what life has thrown at you, And that you don’t have too many regrets.
Choice offers opportunity, even if that choice is to do nothing. Deliberating on what could have been or should have been is not healthy and is a waste of emotion unless it is the spur to help you do something again but better.
My world of finance is full of so many choices everyday that lessons can be learned, but crying over ‘spilt milk’ teaches nothing. In building Beacon, I recognised my weaknesses and instead of working on them to the detriment of ignoring my strengths, I simply recruited others who were better than me. My management team and I have worked together for 10 years or more, and my Heads of Investment, Finance and Marketing are all Chartered in their own profession which means they are competent, I can trust them and after 10 years also shows I like them, and we have a mutual respect.
Your future starts now, and what choices you make going forward will affect your future, choosing to review your financial position is really important whatever stage you are at in life, so choosing an adviser is
important. Three things you should consider when making that choice are:- -Do you believe them to be competent, trustworthy and do you like them? Simple research should show the qualifications of the company and individual, and don’t settle for the basic diploma – it’s your finances!
Look at the leadership structure, is it diversified, qualified and long standing or do one or two people profess to know everything? Look at areas that are specific to you, be that pension, investment or something else. After all, some advisers claim to be able to do most things.
Costs are another issue, and something to bear in mind, but the days of companies charging 4% or 5% are over for all but a few of the larger companies who think no one will notice, or the smaller companies that need more to survive.
Whatever you do or don’t do is a choice, so why not make a positive choice and find an adviser to review your finances, after all, the worst thing that can happen is to be told everything is great and you need to do nothing different.
Jeffrey Mills Solicitors + Winters Legal = Beacon Wealth Legal
October 1st saw the coming together of Jeffrey Mills Solicitors and Winters Legal, both well respected companies, and a subsequent change of name to Beacon Wealth Legal.
Both companies are now owned by the Beacon Wealth Group which also owns Beacon Wealth Management Ltd and are the same company responsible for helping to save the Royal Oak in Hail Weston.
Both solicitors’ practices have the same family values and desire to provide good affordable advice.
Clients will see little or no difference – apart from the stationery, because all the staff will remain in both companies and the solicitors will keep their existing clients.
The changes that will occur are mainly in-house as a sharing of best practice ideas will inevitably result in improved systems and client services.
Just bringing together the collective brains of so many experienced solicitors is exciting and challenging.
If you are an existing client of either company we hope you will be very pleased about the improved service you will receive. If you’re not a client but would like to be, please do not delay in contacting us.
The only minor change is in St Ives where, due to size and location, it has been decided to combine all the staff in the much larger Winters office in the High Street near Barclays.
All existing files new and old will be kept as before. Both management teams will also join forces to become one. Jeffrey Mills Practice Manager, Linda Eaton, said; “This will be a great fit and we welcome the partners of Winters to the management team.”
“Winters Legal Partners both said they are really excited about joining the Beacon Group given their vibrant approach to business strategies.”
“Personally, I am really pleased we have been able to pull this off; both teams include great individuals and being that much larger, new ideas will lead to improvements all round.”
Further acquisitions will not be ruled out, but it would need to be a well-respected company with good current working practices and ethics, before they would even be considered. Family Values are paramount.
A separate part of the Beacon Wealth Group has on the same day acquired two buildings on Market Square, St Neots, and Fishers Yard, St Neots after a developer threatened to acquire the buildings and close the shops in favour of development into housing. I have no intention of making changes, as St Neots needs all the shops it has and more.
Life in Retirement
Every moth I am meeting with people who are considering retirement, which is one of the reasons why after 27 years as an adviser most of my clients are now retired.
When you are young you see retirement as being such a long way off and not something you need to think about, but for those that have reached it they know, just like everything else this time goes so fast that if you blink you are retired before you know it.
The last few years before retirement for some can seem long, or drag as they bide their time until they reach their desired age to stop work. For some of course, age is just a number, and I have quite a few clients that are working beyond state retirement age. Many of these are business owners who either like what they do, or have no-one to succeed them. Others just enjoy working and if they are skilled their employers certainly don’t want them to leave with all their knowledge and experience, especially as the replacement, while usually bright, has none of these.
The scary thing is that often individuals are financially able to retire sooner than they think and also to go part time as they slow, and just don’t know it.
Whatever your age, unless particularly ill at the moment, you are probably at the fittest you will ever be, and thus more able to enjoy life than you will do in say 10 or 15 years’ time.
The idea of retiring at 65 was because the state pension for most was their only form of income to see them through the rest of their life.
If you have a pension fund and/or investments, there is a good chance you could retire early and enjoy a couple of extra summers at home.
Early planning is important if you want to retire early, and fund choice as well as contribution level is key to the size of the fund which will determine just how early you want to go. For some, a slow down to perhaps a 3-day week supplemented by the fund is equally important.
Our in-house investment team has enjoyed superb results and we have avoided every one of the 58 so called “dog funds” from the likes of Jupiter, HSBC, St James Place, Fidelity Aberdeen and Invesco Perpetual that have just been announced. It should be remembered however, that past performance is no guarantee of future performance and just because our average risk portfolio beat all registered funds of the same level of risk last year, and have outperformed over every cumulative year of the last 9 years, things can change. Funds go down as well as up.
If you fancy the idea of retiring early or slowing down talk to your adviser… or us. Your adviser should preferably be qualified above the minimum so for pension advice ask if they have G60 or AF7 and for investment advice. IMC ,or better still be a Chartered Wealth Manager. Any adviser serious about their profession will have studied appropriately, and somewhat beyond the minimum.
To Infinity and Beyond.
I think we all remember Toy Story, with Woody, Buzz Lightyear, Jessie, Mr Potato Head, Hamm, Rex and Slinky, and the phrase “To infinity and beyond”.
Using this as a tenuous link to Buzz Aldrin, who with Neil Armstrong, became the first two astronauts to land on the moon, on 21st July 1969. (Something I guess many of you remember).
Well Buzz Aldrin is having quite a horrid time at the moment, suing two of his children and former manager who he claimed are spending his money, having claimed he has dementia which he disputes.
This sad but high-profile case, should serve as a reminder that you need to be very careful about who you choose to appoint, in both your Will and Powers of Attorney, because guardians and attorneys do have a lot of power and authority when called on to act.
Your financial plan is designed to help you enjoy life to the end, and be flexible in case of early demise, care free planning or others in need you wish to help.
Pensions today are usually utilised via a drawdown facility and are closely monitored. Investments are managed to an agreed level of risk, access and tax efficiency. Low paying cash ISA’s usually switched to low risk stocks and shares ISA’s. Whatever the structure there is a plan.
Those chosen by you to act as if they are you need to know you well, so appoint them carefully and leave detailed instructions.
Pensions today are not part of your estate for Inheritance Tax and can be used to pass wealth down through the generations in a tax efficient way.
Poorly worded instructions can lead to your wishes being ignored, so if you think you could have issues – even if it’s only with one child, then action can be taken to protect your wishes.
Whilst you are healthy and fully compos mentis, spend a bit of time with your financial adviser and solicitor or us if you prefer, in deciding what you actually need when – perhaps even with the aid of a cash flow plan.
We help construct many such plans and recognise that whilst they must be open to change they need to have proper thought given to them.
Your money needs to last to infinity and beyond.
A Helping Hand
For the last 2 Fridays (I only work 4 days per week), I have been hard landscaping my mothers front garden with my sister’s boyfriend (Phil). He fortunately does know what he is doing and is good with his hands.
I have helped my mother decide on the design she wanted, which needed to be low maintenance and practical, but would look nice. Phil brought the materials, his own tools and has the experience to know what to do in the right order and how.
So, in summary my mother said what she wanted, I helped in this decision and then grafted by doing lots of manual, but less skilled work, and Phil directed and did all the difficult stuff.
So, what you may be asking is, what does this have to do with an article on finance! Actually, quite a lot.
My role of Financial Planner is about helping our clients come up with what is important to them at whatever stage they are at in life. Years ago, my mother would have preferred grass, hedges and lots of flowers. Time and energy has changed this, just as in various stages of life, clients want different things and need to change what they have.
Younger clients usually focus more on protecting what little they have and making sure those around them are secure. High earners want investment growth and tax securing and older people usually want income or access to capital without too much risk.
I say usually because clients’ needs and desires differ, because people are different. My mother who is an Octogenarian is far from normal, as she walks and dances every week and achieved her gold medal in tap dancing after 2 hip replacements; but even she recognises the need to have some things simpler in life to enable her to enjoy other things. As a Financial Planner my role is helping to decide what is really needed and then with the help of in-house researchers and investment managers, construct the solution.
As you have gone through life your needs have no doubt changed, but have your financial plans adapted to this change or are you still holding the same plans in the same funds you always have, even if you feel your needs haven’t changed that much, the world has, and what was right then may not be now.
So, whatever you want for your current stage of life I suggest a review and chat is a good idea, so call us if you haven’t carried out this exercise recently.
As for my mother, several bags of slate, some top soil and fewer bushes to trim will sort her current needs.
Turning 50 is set to become a milestone in pension planning. Here are top ten pension planning at 50 tips
People approaching 50 should start off by ringing all of their pension providers and getting an up to date statement of what they have got. They should work out which pensions are defined benefit (DB) and which are defined contribution (DC).
2. Think about where you’ll want to live
Some people may have plans to retire abroad, to move closer to the grandkids, or simply to live in a smaller home. It’s important to think about where you plan to live early on, as these decisions often take years of internal wrangling. Experience tells us that even if downsizing makes financial sense it is often not something people relish when the time comes.
3. Think about when you’ll want to finish work
Anyone aged 50 today will not receive their state pension until age 67. Many people will not have saved enough into their pension, meaning working until they’re older compared to today’s retirees (many of whom will have lucrative DB pensions).
Nearly a million people over-60 work part-time in the UK, so working fewer hours a week and gradually moving into retirement could be easier than you think. In recent years, the government has been striving to improve the work prospects for people over-50.
Employers can no longer force employees to retire just because they’ve reached a certain age and the government has also launched the Fuller Working Lives initiative, with the aim of increasing retention and recruitment of older workers.
4. Work out what you’ll need
The new state pension provides an annual income of £8,546 in 2018/19, but for most people this simply won’t be enough. Start by adding up all of the money you are spending now, remembering to include all the nice-to-haves like eating out and going on holiday as well as the household bills, mortgage repayments and cost of commuting to work.
The next job is to imagine what you will spend when you have stopped work, although this can be tricky. Think about if you will have repaid the mortgage, whether the kids will still be at home and if your transport costs will change when you are no longer heading to work every day.
5. Pay more in
When you’ve worked out what you’ve got and what you need, you can plug your details into a pension calculator to see if you have a gap in your saving. Don’t be put off if you do – it’s fairly common – and you still have time to change your financial future.
Even paying a small amount more into a pension can make a big difference, just adding an extra £80 per month from age 50 could give you around £25,000 more in your pension when you get to 67. Speak to your boss if you are employed, because many companies will increase how much they pay into your pension if you pay in more too.
6. Remember your family
If you are married, or share your finances with your partner, consider their pensions too. The household bills can be covered by both of you, so work out your joint retirement income.
Make sure you have let your pension schemes know who you would like to benefit in the event of your death. Modern day DC pensions will normally allow the full value of your savings to be paid to your heirs without tax if you die before age 75. The trustees have to take a judgement on who to pay your pension pot to, but it is better for you to let them know your intentions. DB pension schemes are a different kettle of fish. You will normally be entitled to a pension paid to your spouse or financial dependents, sometimes a pension for dependent children, and they may be entitled to a lump sum too but check the rules carefully to ensure you know how your own circumstances are catered for.
7. Stay on track
Your planning should start in earnest at age 50, if not before, but like a flourishing garden it will require regular attention. Checking your pension a couple of times a year is a good habit to get into from age 50. You can make this job easier by getting online to view your pension, and you may also want to consolidate your pensions making them easier to keep track of. Make sure you are not giving up any valuable guarantees particularly on some older pension plans.
8. Work out if you’ll want security, flexibility, or a bit of both
Since April 2015 the rules about what you can do with your pension are far more flexible. You can still choose an annuity, which will provide a secure income for the rest of your life, but you can also keep your pension invested and draw an income from the investments, as well as encashing your pension entirely.
Using the pension pot to buy a secure income will be the right choice for lots of people, particularly if they will not sleep soundly with the knowledge that their income might fall or stop completely.
For those people who don’t require income certainty, the flexibility of keeping their money invested may be attractive. You can always do a bit of both, buying an annuity to cover the retirement essentials whilst using income drawdown for any nice-to-haves.
9. Choose the right investments
At this point, your focus may well shift from growing your pension as much as you can, to protecting what you have already built up. Remember that at 50 you could have another 15 or 20 years before you start drawing on your pension so plenty of time to invest and ride out any fluctuations in the stockmarket. This is particularly the case if you plan to keep your pension invested in retirement.
Someone with a £100,000 pension at age 50 could boost their overall pension by over £20,000 if they improve their investment returns by just 1% every year until they’re 67. Getting started is easier than you think. Most investment brokers have their list of the top investment funds available and provide tips on how to choose something that suits you. If you need more help, paying for financial advice at this point can be very worthwhile.
10. Don’t ignore your other finances
Just because retirement is looming into view, doesn’t mean that you should ignore your other financial goals. Paying off the mortgage, helping the kids with school or university fees or helping older relatives can all be important priorities so make sure you balance your goals.
Inheritance Tax – Tricks of the trade.
Most people understand that although it is an unfair tax, that if you have a large estate you end up paying Inheritance Tax, or rather your estate does when you go.
Most people are also aware that the government allows £325,000 per person to be off set against the estate and a further allowance if you pass your property to next of kin, which is currently £125,000.
However, what most people don’t know is that you can have more than one £325,000, I don’t mean your partners (If you had one), I mean an individual can have more than one £325,000.
For example, a married couple of 60 could have potentialy 8 between them i.e. 4 each, and possibly more. This is why it is important to start taking advice early and planning. Clearly not everyone will have £millions to worry about, but Inheritance Tax was described as a voluntary tax, and for most it still is.
There are many other allowances and acceptances that can be utilised with preplanning that can save £millions more. So given the average person does not have £millions there are ways for the reasonably well off to avoid the tax. In 2016 there were 40,000 who paid inheritance tax and this was a huge increase on the past. It is also estimated that despite the additional residential nil rate band the numbers will continue to increase.
The other big area is Pension Death Benefits. Do not assume they can be passed on in a tax efficient way. I have seen cases where tax is needlessly incurred and beneficiaries have not been updated, as well as an ignorance between how benefits of a section 226 pension pay out compared to the new pensions. If you have any doubts over your pension or a desire to reduce your estates liability to Inheritance Tax, if your existing adviser has not addressed this, then talk to us.
Moving Your Pension or taking out a SIPP
I just wanted to give some clarity around the issues raised.
Moving your pension or having a SIPP in itself is not a problem as long as the adviser has researched the whole of the market, can demonstrate they are moving you for the right reasons and can show that the portfolio of investment assets is suitable, flexible and has the potential to meet all your objectives in the future.
The problem being highlighted in the news currently is people having spoken to advisers that have not researched the portfolio and moved people’s pensions into areas that are likely to fail.
Here at Beacon Wealth Management Ltd we have a Chartered Investment Manager looking into and researching portfolios on a daily basis making sure our clients investments are on the right path to achieve growth. (The value of investments and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements.)
You should always seek qualified advice from an IFA, preferably a Chartered (APFS) or Certified (CFP) Financial Planner. If you have If you have any doubts or questions over your pension please call us on 01480 869466.
You are a SPECK in the cosmos
We come, we go and we leave a trail some brighter and longer lasting than others, but the trail we leave is ours, forged from the life we live the decisions we have made and the way our life has touched those of others.
The life we have lived so far can’t be changed, but the future can, because it has not happened yet. Whether you are 20, 60 or 100 years old there is time, don’t let others tell you what you can and can’t do. I get frustrated when people don’t fulfil their potential.
If like me you are living the life you want the planning will revolve around maintaining your life and structuring the end. For everyone else it is about deciding what you want, why you want it, and just how much do you want it, and then who or what can help you, age and experience will be reflected in your decision making. There may be very little you want to change and often the ability for change can already be achieved you just don’t know it.
My role as a financial planner allows me to bring together my pervious experiences as an accountant and incorporates my knowledge as a qualified life coach and charted fellow in management to help clients work out what they want and often how they can achieve it. Sometimes this can just involve restructuring of existing finances, for others it is about a structured plan. That said most of my clients are financially wealthy and are or have been more successful than the average person so they have the ability to achieve their financial goals easier. But goals and aspirations are not all about money and often more to do with quality of life for them and those they love.
Many of my older clients have significant wealth they are saving for a rainy day, or for their family to inherit. I realise the importance of preparing for long term care, but for the older client there is the opportunity to maintain this but still improve the life style of them and others.
How often have you thought that we could have done with more money when we were younger with mortgages and children and that now we are older we don’t need as much but have it, gifts to children can give grater pleasure to you , seeing how this benefits them now, rather than when you die and their needs have changed.
My job is financial planning, which is helping clients plan it’s not just about maximising returns, saving tax and providing protection in the event of a major problem although with our awards and reputable portfolio performance we do of course do all this.
We are but a speck in the cosmos; we after all are just of 7.5 billion people on the planet and 1 of an estimated 108 billion that have been born in the last 50,000 years. So go on decide what trail you wish to leave and speak to me or someone like me if you feel we can help in your plan.
Structure is Good
If you are putting a football team together you typically play 4 4 2, which means that in addition to a good keeper you have 4 defenders, 4 in midfield and 2 attackers, and, if you want to do well you have the best possible players.
Reality is a little more difficult because 2 of the 4 defenders are often wingbacks which means they do not just stay in defence, but are expected to adapt to the demands and take the opportunity to go forward helping to create goals, while those in midfield have varying skills of helping those in front and back and acting as the main engine of the team. The attackers role is to score goals and be a bit defensive at times.
So why is a finance article talking about football? An investment portfolio is made up of lots of different types of investments that are designed to work in harmony regardless of economic criteria.
We have recently seen a stock market correction and the FTSE 100 took a bit of a beating, whilst our structured portfolio was hardly effected. Our portfolio includes shares from around the globe in various industries, and in various size companies as well as other asset classes, including corporate bonds, Fixed interest and absolute return funds, and thus continue to outperform.
Funds make up an important part of a plan, but like a football team a proper plan will include a selection from the various bank accounts, ISA’s, GIA’s, bonds, pensions, etc. Again like a football team the actual construction will depend on the opposition and purpose. For opposition read economic factors and for purpose read personal goals and aspirations.
Like team tactics, planning tactics will include tax exposure, desired beneficiaries, age and other assets owned to name a few.
Some plans are designed for growth and income whilst others are more tax driven, be that obtaining tax relief, for example via pensions VCT/EIS, or tax avoidance such as saving inheritance tax in 2 years, or being available to avoid being accessible for care fees. Each client, therefore, has an individual team design.
As a financial planner my role is to help design the make-up of the team (plans), characteristics (funds) and objectives to achieve the goals, just as a football manager prepares the team. So call and let me assist you, first in defining what you want, and then how to achieve it, or email email@example.com
Get Well Soon
In January our Marketing Assistant had a terrible car accident resulting in broken bones and an air ambulance being called and now a long recovery period.
This accident serves as a reminder of just how precious life is, and how close we come sometimes to having everything snatched away without notice. I feel sure that some of you reading this will have suffered traumatic experiences and already know the importance of making the most of each day.
Recognising our own immortality is one of the reasons why when I work with clients, it’s not all about the consistently high returns we have achieved over the last 8 years; it’s about what is the purpose of having money, and how much is required to do the things they want to do, and how important it is to do things while you can, rather than having regrets. Most of us have regrets of some kind.
In my head I still feel young, but I don’t have the same energy as 20 years ago, and I will take the car instead of walk. In another 20 years I will simply not be bothered to do certain things or have to leave myself longer to complete them.
In summary we don’t always know what’s round the corner, so construct a bucket list.
There will come a day when your arms are weak, your legs struggle to carry your weight, your eyes grow dim and ears become
blocked, hair recedes, and desires become lost. Enjoy life now.
You are probably not the fittest or healthiest you have been, but you are probably better than you’re going to be. Enjoy life now.
Review your pensions and consider your ISA’s, look at your bonds and review your unit Trusts for Investment returns and for efficiency. Enjoy Life now.
Don’t put off to next year what you want to do now, whether that is spending, saving or reviewing. Enjoy life now.
Contact me if you want to discuss your options at firstname.lastname@example.org
*Our Cautious Ethical Portfolio for 2017 grew 10.58% ranked No.1
*Our Average Risk Normal Portfolio for 2017 grew 12.9% ranked No.1
(- source F.E. Analytics)
**Funds go down as well as up and past performance is no guarantee of future performance
You should always seek qualified advice from an IFA, preferably a Chartered (APFS) or Certified (CFP) Financial Planner. Please contact me for further advice
Alice in Wonderland
Alice asked the Cheshire cat; “Which way I ought to go from here?”
The Cat replied; “That depends a good deal on where you want to get to?”
Alice; “I don’t much care where”
Cat: “Then it doesn’t matter which way you go.”
Before the Sat-Nav and phone apps, I often asked people the way if I was trying to get somewhere, as I feel sure you did….. But you needed to know where you wanted to get to.
Don’t be a victim of circumstance, be a victim of attitude and make that attitude positive. The future is not always written, which means you can influence it, to the benefit of yourself and others.
Children In Need raised the profile number of remarkable children and carers who show just what can be done, and I doubt your want is greater than their accomplishments.
You decide what you want, and how important they are to you, then gather people, systems, Etc. around you, be that a personal trainer, Life Coach, financial adviser or medical team. Standing still is going backwards.
My own motto is sit optimus which means ‘be your best’. Is it easy, of course not, will there be times when energy saps, of course there will. It’s how you choose to react and what you do about it.
Recently I did a stupid thing that could have lost my hand. As it was, I only damaged 3 fingers, and was unable to drive for 10 weeks, and am left having physio every day. Sure there have been periods when I feel annoyed with my stupidity and lack of mobility. But the team at Hinchinbrook (initially) and now Addinbrokes have worked wonders, although I have been informed I will never get full movement back, there is very little I can’t do now, but I intend to improve further, and know how.
We are at the start of 2018, so forget the past and consider the future, there is not much you can do about what’s happened, but you can influence what’s to come. Pick a couple of areas for improvement. Too many and it becomes unpleasurable. For example you may decide to make yourself go out and enjoy life more or Vis versa if you are too busy. It could be you will stop smoking, or loose a few pounds, and get fitter, or my favourite – ensure your existing investments are performing well and action is being taken to save, review and spend. It’s my favourite because as a Financial Planner this is part of what I do for/with clients.
Most people believe we have one life, and it’s up to us to make the most of it, and not blame others for what we have….. Or don’t have.
Then unlike Alice know where you want to get to.
Is £1 Million Enough
I grew up believing to be a millionaire would mean I would be rich beyond my wildest dreams and able to have and do anything I want.Now, many years later and in my mid 50’s I realise £1million is still a lot of money but inflation and personal expectation mean £1million no longer goes as far as it did. Albeit it still goes quite a way.
The inheritance tax allowance is increasing to £1million for a couple who pass their home to their children and who’s estate is below £2 million. Pensions funds are usually outside of your estate and not included for inheritance tax calculations, usually, but not always. In a recent survey only 7% knew that pension providers have discretion over whom to pay the fund to, which is made worse when 32% had not nominated their request even though some had encountered changes to their personal circumstances. Accessing pension funds in retirement is still regarded by many to be the favourable option when this is often not the best thing initially.
Going back to the £1million. How much do we need to feel comfortable and better still wealthy?
This will clearly differ between individuals. For some, the state pension is sufficient, whilst others want up to £10k per month, a big house(s) and considerable savings.
If we assume a house value of £500k – £600k and the remaining £400k to £500k in savings, then using an assumed 4%, income would be £16k – £20k per annum, which for many would not be sufficient especially if wanting to retire early or have a desire to spend more whilst younger.
Each Client is different in terms of need and what they have, and my role is to become a Rosetta Stone, to help with making sense of everything, be you a wealth accumulator or spender.
Plan Like a Holiday
Earlier this year my wife and I went to Cornwall, which is somewhere we had not been for over 30 years, The main reason was to visit the Eden Project, something that had been on my wife’s bucket list for about 20 years. Given the distance we stayed near St. Austell which was close to the Eden Project as well as The Lost Gardens of Heligan, St. Michaels Mount and Lands’ End. It was also quite close to Port Isaac which Doc Martin fans will know as Portwen.
So given this is an article about finance why do I mention my holiday? – Quite simply because like finances it needed a plan. It was a long journey that due to road works had hold up’s and diversions just like the road to retirement is not always plain sailing. Several events were planned for the 6 days and weather was going to be varied, we had breakdown insurance and a spare tyre and the usual rations of sweets and water for sustenance. So rather like life’s journey which would include life cover, critical illness cover and Health Insurance the precautions were made, fortunately only the sustenance was used. This is rather like an ISA that is used for events in life when you need that little extra to improve the journey.
Sat-Nav informed me how far the journey would be and how long it would take, and rather like the planned period until retirement the numbers didn’t quite tally on arrival, but it wasn’t far out; and despite distance the journey seemed quite quick. Someone considering retiring in 2 years can see the end and whilst 2 years may seem a while it is only 24 pay days. In financial terms 5 years is not that long, but it is better than 2. The journey however, may still not be smooth, allowing you to save, as you may suffer sickness, loss of employment, or another pressing need on your money such as a child’s wedding or house deposit, clearly if you have been making good provisions for many years 2 years can just be the icing on the cake. Whether you have 2, 5 or ten years until you wish to retire, speak to a financial planner. Often I am able to help clients retire earlier than planned.
Beacon Enjoy Further Success
Tony Larkins of Beacon Wealth Management Ltd has always recognised the importance of quality and this year has employed a Chartered Financial Planner to head up the employee benefits department. A Fellow of the Chartered Insurance Institute
to head up the Paraplanners department and a Business Development Manager to improve services to new and existing introducers, which have helped increase turnover and profits and helped maintain their position in the top 100 Independent Financial Advisers in the UK.
We have previously reported on Tony Larkins acquiring a group of High Street Solicitors, and this year through new staff and system improvements he has turned the group into a profitable business of a time when many High Street Solicitors are
struggling. During his short ownership the practice has produced Trainee of the year in 2016 and runner up in 2017.
The latest adventure was the saving of a local pub. Last week this pub won the CAMRA award for most improved rural pub and achieved acceptance in the Good Pub Guide,and through new exciting Italian Chefs has continued to see the pubs popularity grow which has resulted in profitable trading.
Final Salary Pensions
Part 2 of 2
Last month I wrote about the major change from buying an annuity with a pension fund, and the new preferred method of drawing down on a pension fund, the amount you require when it is needed and as often as desired. How a final salary pension, the one time gold standard for pensions, are being switched to protect the fund for the members benefit i.e. they pass it on to their own chosen beneficiary, rather than being kept by the pension company. This month I thought I would list some examples of our clients:
•We have clients who wish to retire before the scheme age or who wish to reduce the days’ they work and need to supplement their income. Switching a defined benefit so that it can be used like a defined contribution scheme allows them to do this.
•We have individuals with no spouse or who feel they will outlive their spouse and switch to preserve the fund value for their family.
•Some don’t need the pension income so will switch the plan which is now free of Inheritance Tax, and spend their savings in ISA and bonds that would attract a 40% Inheritance Tax charge.
•Some like the flexibility of taking money for a car or to clear the mortgage at the start plus a higher income, with a view to reducing the money taken as they get older and expect to have a lower desire to do things.
•Others have very different reasons and would simply have the money go to their families rather than the old employer or pension company.
As you can see we are very active in the pension market. Each of our financial advisers hold the required advanced pension exams, as does our specialist researcher who is able to use specific software in house tailored to the individual demands of every client.
I am unaware of any other company with this level of in-house expertise locally or nationally.
Given all the above and the huge benefits most will achieve by switching their defined benefit and defined contribution scheme to this type of pension, there are still times when we recommend clients do not. Just because something can be done it does not always mean it should. We undertake full research in every case prior to making a recommendation.
Final Salary Pensions
Part 1 of 2
2 years ago George Osborne said in his budget people no longer need to buy an annuity with their pension. What I don’t think he realised (or perhaps he did), was just how many would swap their final salary pensions for the same benefits now offered to those with normal money purchase (defined contribution) schemes?
Final salary pensions were always regarded as the gold standard of pensions, and this is confirmed by just how many have closed because companies can’t afford to keep them going.
The idea of a pension is that you save as much as you can afford for as long as possible so that you have an income in retirement that is sufficient to provide a comfortable life.
The problem for the traditional annuity is that the rates are so low they usually represent poor value, and little or no flexibility, and then when you die the pension company keeps the rest of the fund, which given the offered annuity rate effectively means they keep the whole fund.
However just like a final salary pension, an annuity is designed to give a guaranteed income (often increasing) for the rest of your life and then a percentage of the value for a surviving spouse.
Under George Osborne rules you can decide how much income you want and change it whenever you want. You can also access lump sums and not only does it not have to reduce on death, the whole fund can go to your spouse or whoever you decide, and is not treated as part of your estate for IHT(Inheritance Tax). It can of course go to your spouse and then on their death be passed to the family etc. free of IHT. Under this scheme the funds remain invested, so if invested well, they can continue to grow even though you are taking money out.
By switching from a final salary (defined benefit) scheme you are no longer at the risk of the employerdefaulting, and the pension money going to the pension protector fund that offers a maximum pension of £34,665 currently and a standard 90% of lower normal benefits.
The liability for employers of a defined benefit scheme are huge and ongoing as fund requirements are based not only on life expectancy but Government Bonds. These, and interest rates have been low for a very long time meaning fund values are needing to be much bigger than they were. Employers are often keen therefore for people to leave the scheme and may even pay a premium to encourage people to leave.
If interest rates are set to increase, the transfer values will be reduced.
I am unaware of any company locally with our experience so if you want your final salary pension reviewed contact us or if your own adviser hasn’t reviewed it check they have the ability and qualifications
You should always seek qualified advice from an IFA, preferably a Chartered (APFS) or Certified (CFP) Financial Planner. If you have a financial question, e-mail:email@example.com
Did You Know?
Did you know that 35% of the world’s wealth is owned by just 1% of the population and that even if you are on the breadline in the UK, you are still in the top 14% of the worlds wealthiest people. So why doesn’t it seem like it?
When we consider just how poor many parts of the world are and the poverty faced by others we should be thinking how lucky we are. And in truth perhaps we do sometimes, especially when we see the famine in war torn countries on the news.
Our own issues whilst pitiful in consideration are still relevant to our own circumstances. Maybe there are more days in the month than our salary covers, or our pensions are too small to allow us to retire early from the stress of the job.
Or maybe we just think the above is true and we don’t know what to do about it.
Every day I see clients, I am surprised by how I am able to help them see things differently and often I am the bearer of good news. Employers must dread their staff seeing me, because I can often find a way for clients to retire early or to achieve their big desire.
Beacon advises clients of all ages, but whilst I have several young entrepreneurs, most of my personal clients are over 50.
The majority of those seeking advice under the retirement age don’t know what pensions they are invested in and some even have cash ISA’s, whilst many of my older clients are over state retirement age, have more than sufficient money to last their lifetime, but are reluctant to spend having spent all their life saving. I help find that happy medium; after all whilst you can’t take your money with you, you don’t know how long you will need it and whether care fees will become relevant.
On the point of care fees, you will often read about the average time in a care home being 10 – 15 years, and costs £500k to £800k.
The reality, using Bupa’s data in 2011 according to the London School of Economics between 2008– 2010 states the average length of stay was 801 days, with half lasting less than 462 days. Only 55% survive more than one year and costs usually total less than £85k.
I agree this is still a lot of money and that if you need care you may need more, but taking off the £85k, the amount received from state and private pensions, the actual cost suddenly doesn’t seem so scary, and is more manageable to be considered within a financial plan.
If you knew the expiry date of your birth certificate and the quality of the life you will enjoy, planning would be easy and whilst provisions and planning need to be put in place, you should live for today in a sensible way and plan for tomorrow.
You should always seek qualified advice from an IFA, preferably a Chartered (APFS) or Certified (CFP) Financial Planner. If you have a financial question, e-mail:firstname.lastname@example.org
During our working lives we often accumulate various pensions from our times with different companies but is usually only when we approach the last 10 years before planned retirement that we start to think about whether we have a sufficient amount saved and whether any or all of these pensions should be consolidated to save costs and to see if they can grow better.
Let me dispel the first myth.
Consolidation does not usually mean lower costs. The majority of pensions have charges calculated on a percentage basis. So if that is 1.5% then it doesn’t matter how many pots you have, the total will be the same.
We actually find that very often consolidation into a new plan actually has higher costs. So if this is the case, why do we do so much of it for clients? The main reason is the second point for consolidation – better growth.
Most older and some newer pensions have very limited range of funds to choose from and some funds such as with profit funds have very limited potential for growth; and although they have their place in some investment portfolios many fail to even grown to match inflation.
Many pensions also lack the new flexibility offered by the government on pensions – which most of our clients enjoy.
A pension plan review is usually a good idea whilst time allows you to do something about them. Naturally the most financial matters people put them off until they have to do something i.e at `or about retirement, I would always suggest you seek advice as early on as possible because it can take quite some time to obtain proper details from some companies. After all many of the older pensions companies do not attract new business, so why should they rush to provide you with the information required for a proper analysis is this will lead to you taking your investment elsewhere and them losing money in charges.
You should always seek qualified advice from an IFA, preferably a Chartered (APFS) or Certified (CFP) Financial Planner. If you have a financial question, e-mail:email@example.com