Let’s be honest, on the morning of 21 October few of us were waiting with bated breath as the latest UK inflation stats were revealed. But, for millions of people, that moment was significant.

That’s because the September (Consumer Price Index) CPI inflation figure forms part of the government’s ‘triple lock’ formula used to determine the forthcoming rise in the level of State Pensions.

Triple lock
The triple-lock safeguard was introduced by the Conservative-Liberal Democrat coalition in 2010 and aims to ensure that the value of the State Pension is not eroded by inflation. The three-pronged guarantee states that, each year, the State Pension will increase by whichever rate is higher out of: September’s CPI inflation; July’s average earnings growth, or 2.5%.

And, as September’s CPI was 0.5% and July’s previously announced earnings growth was 1.0%, next year’s State Pension is set to rise by 2.5%, the minimum amount allowed by the legislation. As a result, from April 2021, pensioners on the ‘old’ basic State Pension will see weekly payments increase by £3.40 to £137.65, while the full ‘new’ single-tier State Pension will rise by £4.40 to £179.60.

Don’t rely solely on it
The actual amount of State Pension retirees receive is also dependent on their National Insurance record. To qualify for any State Pension, you need at least 10 years’ worth of contributions, while to obtain the maximum amount, 35 qualifying years are required. This means the amount pensioners receive can vary significantly with some not entitled to any State Pension at all.

Additionally, experts have stressed that, even if you do qualify for the full State Pension, this on its own is not enough to retire on. Indeed, analysis shows that, on average, retirees require more than twice the maximum State Pension to enjoy a comfortable retirement.

Plan, plan, plan
In other words, people need to build up a sizeable nest egg which can be used to supplement any State Pension payments, if they wish to retire in relative comfort. Personal pensions are the most common way of doing this, largely because of their favourable tax treatment, but other investments, such as ISAs, can also be used to accumulate retirement funds.

The key is careful planning. And, as retirement planning is never a case of ‘one size fits all’, it’s vitally important to obtain expert advice to ensure any plans are tailored to meet your specific needs. If you’re worried about how you might survive on the State Pension and need help creating a well-structured retirement plan, then we can assist – we’re only a phone call away.

An ISA is a medium to long term investment, which aims to increase the value of the money you invest for growth or income or both.

The value of your investments and any income from them can fall as well as rise. You may not get back the amount you invested.

Key takeaways

• Few of us were waiting with bated breath for September’s inflation rate
• But the figure was significant as it forms part of the ‘triple lock’ used to determine State Pension rises
• The triple-lock means payments increase by the greater of: September’s CPI inflation; July’s average earnings growth, or 2.5%
• From April 2021, the State Pension will rise by 2.5% (the minimum amount allowed) with the ‘new’ full weekly payment increasing by £4.40 to £179.60
• Not all pensioners receive this maximum amount though
• Experts say even those that do will not have enough to live on – retirees typically need more than twice that amount to retire in comfort
• People therefore need to build up a sizeable nest egg to supplement State Pension payments and this requires careful planning
• We can help you create a well-structured retirement plan.

Please give us a call if you would like to discuss any of the above.  Our office number is 01908 686810.

log post goes here!

So, what should we watch out for? There have been rumours aplenty, with quite possibly some red herrings sent swimming by the Treasury to test the waters. Here are five points to watch:

• The timing of tax increases The Chancellor has said he wants to “level with the people” about the state of public finances. However, everybody from the World Bank to the Institute for Fiscal Studies has said now is the time to rebuild the economy, not to raise taxes. Will Mr Sunak heed that advice or follow the path suggested in the past few days by Conservative grandees such as Ken Clarke and William Hague?
• Reform of capital taxes The Chancellor has reports on his desk from the Office of Tax Simplification (OTS) about reform of Inheritance Tax and Capital Gains Tax. Outside of government there has also been a weighty report from the Wealth Tax Commission on the introduction of a one-off wealth tax to raise £260bn. While Mr Sunak has come out against a wealth tax, the Commission’s report does give him some cover to reform the tax treatment of capital.
• How much is flagged for autumn? Another Budget is currently scheduled for autumn. By then there will also be another Spending Round due as last November’s Spending Review only covered 2021/22. Add in the promise that there will be a ‘Tax day’ on 23 March with a raft of consultations issued and it may be that the Spring Budget provides a taster for the main course served towards the end of the year.
• Corporation tax It seems generally accepted that the Chancellor will ‘borrow’ Joe Biden’s plans to raise revenue by increasing corporation tax. The figure most widely discussed is a gradual shift from the current 19% to 23% or even 25%. This is his fourth best option, given that that Mr Sunak’s neighbour in Number 10 has insisted on adhering to the 2019 manifesto pledge not to raise rates of income tax, VAT and NICs. However, increasing corporation tax is an ambiguous sign that post-Brexit UK is ‘open for business’. It could be that higher tax rates are accompanied by increased capital allowances, giving companies more incentive to invest.
• Under the radar The Chancellor is likely to follow a well-trodden path of stealth taxation. Freezing income tax allowances and bands has been widely suggested, even though the Chancellor himself announced increases last November. We could also see another hike in Insurance Premium Tax and perhaps new ‘simplification’ efforts that, for example, scrap the dividend allowance.

The real – as opposed to rumoured – announcements included:

• The main rate of corporation tax will be increased to 25% from April 2023 for companies with profits of at least £250,000. At the same time, a small profits rate of 19% will be introduced for companies with profits below £50,000.
• For two years from April 2021, companies investing in qualifying new plant and machinery assets will benefit from a 130% first-year capital allowance.
• The coronavirus job retention scheme (CJRS) will be extended in full until the end of June 2021 and then phased out over the following three months.
• The self-employed income support scheme will also be extended at its current level with a fourth grant covering the period February to April. A fifth grant will cover following three months, but this will be at a lower level for those who have seen less than a 30% drop in turnover. Eligibility for the SEISS will be extended to include those who became self-employed in 2019/20.
• The personal allowance and higher rate threshold will rise to £12,570 and £50,270 for 2021/22 and will then be frozen for the next four years.
• The capital gains tax annual exemption, the inheritance tax rate nil rate band and the lifetime allowance will all be frozen at their current levels until April 2026.
• The business rates holiday for retail, hospitality and leisure businesses will be extended for three months and then reduced to a 66% relief until the end of March 2022.
• The temporary 5% VAT rate for hospitality, hotel and holiday accommodation and admission to certain attractions will be extended to the end of September 2021 and then replaced by a 12.5% rate until 31 March 2022.
• The exemption from stamp duty land tax on the first £500,000 of residential property value will be extended to 30 June and then replaced by a £250,000 exemption until 30 September 2021.
• A new residential mortgage guarantee scheme will run from April 2021 to December 2022, aimed at increasing availability of 91%-95% loan-to-value mortgages. The maximum property value will be £600,000 and mortgages must be arranged on a repayment basis.
• Fuel duty was frozen again this year, alongside alcohol duties which are frozen for the second year running.

With hopes rising about vaccines and the end of lockdowns, could we see a rise in inflation when the economy reopens?

As vaccines continue to be deployed rapidly around much of the world, hopes are increasing about the global economic recovery. Many people expect there to be a strong rebound once coronavirus restrictions are lifted, but there are fears that the rebound could increase inflationary pressures.

As well as increasing demand, there are concerns that central bank quantitative easing (QE) programmes and increased government spending could combine to push up the rate of inflation. Notably, US President Biden’s $1.9 trillion stimulus package is likely to be introduced in March.

What would higher inflation mean for investors?
Government bond yields have been rising substantially (which means prices have fallen) as investors price in the impact of higher inflation on returns. Inflation is bad news for government bonds because it erodes the real value of the fixed interest rates that they pay.

The concerns have also affected the stock market. Investors are worried that if inflation spirals out of control then banks will have to stop QE and perhaps increase interest rates. That would be bad news for big tech companies in particular, where today’s share prices depend on rates remaining low. While low rates increase the current value of their future cash flows, the present value of future earnings falls if rates rise.

As a result, cyclical stocks that are more sensitive to the economy, such as industrials, are looking more attractive, while growth stocks like tech are becoming less popular.

Could inflation spiral out of control?
While inflation is likely to increase in certain areas of the economy after lockdowns ease, we believe it would just be a short-lived rise. Longer-term deflationary forces including ageing demographics, low productivity growth and efficient global supply chains cast doubt over predications of a new age of higher inflation.

We’re also confident that if inflation does increase slightly then it’s likely to be because economic growth is strong, which is in turn good for company profits and investment returns. With interest rates at record low levels, central banks have plenty of room to increase them to levels that would still be below the long-term average. Conditions in stock markets appear to have steadied already after the recent bond market tantrum.

Earnings season better than expected
Many companies performed better than expected in the fourth quarter of 2020. Tech giants reported strong earnings, with Apple’s revenue reaching $111.4 billion in its best quarter ever. Resilience from companies in more cyclical sectors reinforced shifting sentiment about the economy. For example, Caterpillar, which makes mining and construction equipment, beat expectations for the final three months of 2020 – earnings per share fell 22%, as opposed to the 30% estimated by analysts.

The recovery should benefit UK equities

The economic recovery should favour the more cyclical nature of the UK stock market, which is weighted towards sectors that are more sensitive to the economy, such as energy and financials.

Sterling also strengthened against the US dollar and euro as investors grew more confident about the UK’s vaccine programme and prospects for reopening the economy. In February, sterling rose to $1.40 against the dollar for the first time since 2018.

Key Takeaways

• The vaccine rollout and hopes around the economic recovery have led to increasing inflation expectations. Government bond yields have been rising substantially (which means prices have fallen) as investors price in the impact of higher inflation on returns.
• Investors are worried that if inflation spirals out of control then banks will have to stop QE and perhaps increase interest rates. That would be bad news for those sectors where today’s share prices depend on rates remaining low.
• The economic recovery should favour the more cyclical nature of the UK stock market, which is weighted towards sectors that are more sensitive to the economy, such as energy and financials.

Successful vaccination programmes are rolling out on both sides of the Atlantic, pointing to a brighter economic outlook.

The US and UK continued their rapid vaccine programmes to combat the coronavirus pandemic, while Europe lagged in its rollout, resulting in a resurgence of COVID-19 cases in some parts of the EU. As a result, the US and UK are likely to be able to reopen their broader economies sooner, while much of Europe still faces strict lockdowns.

Budget brings some relief
In his March Budget, Chancellor Rishi Sunak outlined stimulus measures to support businesses and workers through to the autumn. This much-needed spending foreshadows the largest hike in taxes for decades, with tax and spending decisions to total almost £60 billion in the 2021–22 fiscal year.

In addition, the government mapped out its plan for lifting lockdown restrictions and hopes to be in a position to remove all legal limits on social contact on 21 June. Pent-up demand is likely to push up the pace of economic growth for the rest of this year and in 2022.

US introduces new stimulus measures
In the US, Joe Biden’s $1.9 trillion stimulus passed through both houses of Congress in March. Under the legislation millions of Americans will receive one-off cheques for $1,400 and the unemployed will continue to receive $300-a-week top-ups until September. The OECD believes the stimulus will turbocharge the American economy and add a percentage point to global growth.

The US also leads the world in total coronavirus vaccines administered, suggesting the American economy is likely to begin its recovery process sooner than many other developed regions.

Inflation worries linger
Inflation worries hit bond markets, but the consensus is that any rise in inflation is most likely to be short lived. Government bond prices fell sharply (and yields increased), reflecting concerns about an increase in inflationary pressures as the global economy started to recover from the pandemic. Inflation is detrimental to bonds because it erodes the real value of the fixed interest rates they pay.

Investors are concerned about inflationary pressures as economies reopen, but we don’t expect the likely spike in consumer prices to persist. Inflation is likely to pick up as spending on services surges when lockdowns end, and government spending is another tailwind. But it’s likely to be a fleeting phenomenon and should not pose a longer-term challenge to fixed income markets.

Cyclical stocks are still attractive
Cyclical stocks remain in favour, as vaccines are administered and the economic outlook improves. Cyclicals like financial and energy stocks tend to perform well when the economy is expanding. But sectors that benefited during the height of the pandemic, such as tech, have fallen as prospects for the economy brighten.

This environment has benefited Europe’s stock market, which comprises fewer technology firms than America, and more cyclical companies such as banks and commodity firms. The broad rotation away from tech towards cyclicals looks likely to continue.

Big money in digital art
Commodity prices have risen this year, including copper and other metals used in electric vehicles, as well as oil. But gold lost some of its shine as a safe and steady investment, with its price falling steadily since the start of the year.

The Suez Canal was the scene of a stuck cargo vessel in March, blocking the vital shipping route for several days. Around 12% of the world’s trade happens via the Canal and it is thought that each day of the blockage halted billions of dollars in trade traffic.

In March, auction house Christie’s sold a digital piece of art by contemporary artist Beeple for $69.3 million – the latest example in the market for non-fungible tokens (NFTs). The artwork itself was composed as a single, unique and encrypted image file – the first sale of its kind by Christie’s, with bidding opening at $100. The eventual anonymous buyer paid for the work in Ether, a cryptocurrency.

Moving home can be a hectic and exciting time, but don’t forget about protection – taking out the appropriate policies can save you a lot of stress in the long term.

If you’ve just moved home or are about to, it probably feels like you’ve been caught up in a bit of a whirlwind over the past few months. With searching for a property during a pandemic, making the move before the stamp duty holiday ends and potentially getting caught up in the resulting conveyancing backlog, protection policies are probably not top of your priority list.

Yet it’s important to take the necessary precautions to ensure your new home and possessions are looked after – now more than ever. Here are some of the main types of protection you should be thinking about.

Mortgage protection
If you’re unable to work due to illness or injury or because you’ve lost your job, mortgage payment protection will cover the cost of your mortgage each month. These policies usually last for a year or until you return to work – whichever is soonest.

You can pick how much you want your policy to pay out each month, and this can include a buffer for other expenses, such as bills. It’s important to bear in mind though that providers usually set monthly limits of between £1,500 and £2,000. You won’t always be able to claim straight away, and there’s usually a waiting period of one or two months. The cost of mortgage protection will depend on:

• your salary;
• the size of your mortgage repayments;
• the type of policy you choose; and
• how soon you want to be covered.

Income protection
Income protection provides you with a regular income if you are unable to work due to illness or injury. There’s usually a minimum wait of four weeks before you can start receiving payments.

Buildings insurance
If you’ve got a mortgage, you’re likely to have buildings insurance to cover the cost of repairing damage or rebuilding the structure of your home if it’s damaged. But have you looked carefully through the policy and made sure that it definitely covers everything you need it to? Once you’ve moved, you may realise that your new home has a slightly more complex structure than you first realised, and it’s important to make sure your buildings insurance takes this into account. If you’re lucky enough to not have a mortgage, it’s still a sensible idea to invest in this type of insurance for peace of mind.

Contents insurance
If you’ve bought new furniture and gadgets for your home, you might need to review your contents insurance. This type of insurance covers the cost of replacing possessions in your home if they’re stolen, destroyed or damaged. It’s a good idea to double check which of your items are covered so that you’re not caught out if something does go wrong.

Act now
When you’re caught up in the excitement of moving, thinking about protection might be the last thing on your mind. But remember that your circumstances can change quickly and it’s important to make sure you’re prepared now in case things don’t go to plan in the future. For more information about protection and to talk about whether your current policies are right for your situation, speak to your financial adviser today.

The economic recovery is gathering momentum as the pandemic recedes and successful vaccination programmes continue to roll out on both sides of the Atlantic.

April saw the continuation of progress made in March, as a more settled month in the investment markets, with equities performing well and bonds showing stability and positive returns. The International Monetary Fund (IMF) increased its forecast for growth in 2021 to 6%, citing stimulus bills in richer countries helping economies bounce back from the Covid-19 pandemic1. Equities in the US and UK performed well – no doubt helped by progress made in vaccination rollouts and their economies beginning to open up again.

US stimulus measures
The US experienced a stronger first quarter than experts predicted, with the banking sector in particular exceeding expectations, and a rise in consumer prices. This was helped by increased activity in areas like retail investing, aided by the Biden administration’s stimulus measures to regenerate the economy. The next target to help fuel the recovery is an infrastructure spending plan, which aims to strengthen ailing sectors like transport, roads and the electric grid.

Boost for the UK stock market
With the reopening of non-essential shops and services in the UK, the number of job vacancies picked up in April. Along with a successful vaccination programme, this gave a boost to the stock market. The spending plans for workers and businesses outlined in the government’s latest Budget also helped soften the blow of the pandemic. The market’s bias towards economically sensitive sectors, including finance, energy and hospitality, and a relatively small tech sector, means it should continue to rise as the economic recovery picks up.

In Europe, the recovery has got off to a slower start, due in part to the delay of the vaccine rollout, which has dented investor confidence. But there was some encouraging activity in April, with Europe performing better than expected and the Stoxx Europe 600 Index hitting an all-time high.

Oil prices rise
In April, the International Energy Agency amended its forecast for the growth in oil demand, following faster economic recoveries in the American and Chinese markets than expected.2 The market for oil itself saw a rise in price, pushing up inflation as well the price of gold. Gold as a commodity is attractive to investors as a safe place to invest during times of unrest in the markets and rising inflation.

The markets in April saw a continuation of the trend from previous months, with a general shift away from technology stocks (which saw good profits from the stay-at-home economy) to more cyclical companies – such as banks, airlines and industrial firms, which benefited from reopening economies. After such a long period of inactivity and stagnation due to the global pandemic, things are now moving unusually fast in the world economy and financial markets.

Lenders are now offering a government-backed 95% mortgage scheme to help more first-time buyers onto the property ladder.

The government is hoping to turn ‘generation rent’ into ‘generation buy’ with the help of a 5% mortgage deposit scheme launched on 19 April.

Following the outbreak of the coronavirus pandemic, many lenders withdrew low-deposit mortgages. In just under a year, the number of 95% mortgages available to first-time buyers fell from 391 to just three. It’s hoped the scheme will give lenders the confidence to offer low-deposit mortgages again by taking on some of the risks involved.

What is the 5% deposit scheme?
First announced in this year’s Budget, the programme offers first-time buyers or current homeowners the chance to secure a 95% loan-to-value mortgage on homes worth up to £600,000. It’s available on both new-build and existing properties.

The government hopes the scheme will provide an affordable route to home ownership by helping people who may be renting but are unable to save for a deposit.

Buyers will still only be able to borrow in proportion to their income, typically a multiple of 4.5. As a result, the scheme will particularly benefit buyers in lower-value housing markets such as northern England and Scotland.

There are also a number of lenders offering 95% loan to value mortgages without using the government guarantee. With an ever increasing range of options to consider, speak to your financial adviser about the current range of 95% loan to value mortgages.

What’s the catch?
There are a few conditions that you’ll have to meet under the scheme. You’ll need to:

• Buy a property to live in – second homes and buy-to-let properties aren’t eligible.
• Apply for a repayment (not interest-only) mortgage
• Pass standard affordability checks, including a loan-to-income test and credit score assessment.

It’s worth considering the fact that the higher proportion of the property price you borrow, the higher the amount of interest you’ll repay on your mortgage. So it might be good to take a step back and figure out if you can save for a little longer and borrow less.

Speak to your financial adviser about how the 5% mortgage deposit scheme could help you get on the property ladder.

What does loan to value mean?
Loan to value is the percentage of the property value you’re loaned as a mortgage – in other words, the proportion you're borrowing. For example, if you have a 95% mortgage on a house worth £200,000, you would put down £10,000 (5%) of your own money as a deposit and borrow the rest (£190,000).

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

The combined economic effects of stimulus measures, inflation and increased spending all contributed to an eventful month.

In May, vaccine rollouts gathered pace and pandemic-based restrictions began to lift in many countries. However, a new wave of cases in India raised concerns worldwide.

Despite reports that the UK economy shrank in the first quarter compared with the previous three months, the level of employment increased, although it remains below pre-pandemic levels. Inflation doubled to 1.5% in April, and the next stage of reopening the country took place in May, with indoor dining allowed and air travel to a ‘green list’ of countries.

America saw its GDP grow by 1.6% in the first quarter, bringing it back almost to where it was before the coronavirus struck. Household spending on imported goods from China especially soared – perhaps as a result of stimulus checks and the reopening of services following the vaccine rollout implemented by the new Biden administration.

Inflation is picking up
With increased spending came the news that the US inflation rate soared to 4.2% in April, which is higher than expected, and cause for concern around supply, with bottlenecks pushing up costs for manufacturers and consumer prices. The stimulus checks are thought to account for some of the rise, and experts also believe a boom in consumer demand is behind it too.

The Federal Reserve’s position is that inflationary pressures are temporary, and policymakers believe it will fall back down towards the end of the year. It’s not seen as something that will force central banks to increase interest rates any time soon.

Commodity prices are rising
Commodity prices in May rose, with the price of iron ore and copper reaching record highs. Copper – seen as a bellwether for the global economy – rose to over $10,000 a tonne, surpassing the previous peak set in 2011 (during a commodities boom.) Demand for copper comes from China and the green transition in rich countries: it’s used in a range of industries, from electric vehicles to wind turbines and solar panels.

‘Dr Copper’ is closely watched in markets because of its ability to diagnose important shifts in the world economy. Plans for fiscal stimulus in America and Europe lean towards the ‘greening’ of economies, favour copper demand. As a pliable, cost-effective conductor of heat and electricity, copper is a vital input to green tech.

There is concern that a green energy bubble could form due to the large investment in the sector (like wind, solar or hydro industries.) These companies have stretched market valuations – and may not be earning as much as their share values suggest.

Bitcoin in freefall following Musk snub
The walk-back from Elon Musk in his support of Bitcoin, underlined concerns around the feasibility of cryptocurrencies as a stable investment. Musk – previously an outspoken supporter – announced his company Tesla would not be accepting Bitcoin as payment for its vehicles.

His retraction followed news of the environmental effects from the electricity used to mine the currency. The result was a huge drop in the value of Bitcoin (and other digital currencies) – which continued its plummet days after the announcement.

As lockdown measures begin to lift, financial markets are making their adjustments in anticipation of a rise in inflation, with bond yields picking up (meaning prices have fallen) and stock markets rotating from defensive sectors into cyclicals.

Following the news that thousands more people are expected to pay the standard 40% inheritance tax this year because of the effects of the pandemic, we explore some of the ways to navigate the complexities of inheritance tax.

The complex laws around inheritance tax (IHT) caught many people off guard during the Covid-19 pandemic. Along with the often-sudden loss of a loved one came the issues arising from IHT on gifts passed down to children and grandchildren.

This tax year marks the latest in a series where the number of people being charged IHT on gifts has increased. Since 2009, beneficiaries have paid 40% IHT on estates worth more than £325,000.

Gift your way to less inheritance tax

• There are ways to avoid passing on a large IHT bill to your family, whether it’s through gifting or charitable donations:
• You can give away assets or cash worth up to £3,000 a year (known as the annual exemption) with no IHT to pay regardless of the total value of your estate when you die.
• You can give as many gifts of up to £250 to as many people as you want each year – although not to anyone who has already received a gift of your whole £3,000 annual exemption. To make use of this exemption, it’s important to keep accurate records.
• If you are married or in a civil partnership, you can pass on your entire estate to your surviving spouse, tax free, when you pass away. Things could become more complicated, however, if your spouse was born in a different country.
• If you give a gift – of any amount – and live for a further seven years after the gift has been given, the beneficiaries will not have to pay any IHT if you pass away after that seven-year period.
• Leaving money to a charity means it’s free of IHT and could cut the tax rate on the remaining amount in your estate.

Transferring to a trust or pension
Setting up a trust to transfer some of your estate into for the benefit of your grandchildren is another way to reduce the IHT liability on your assets. However, the trustees could still encounter some income or capital gains tax.

While it may not be the most obvious choice, setting up a pension for your children or grandchildren could be a tax-efficient option. The fund will transfer to them when they turn 18 but they won’t be able to access the money until they’re much older.

As with anything tax-related, the rules are especially complex when it comes to where your inheritance goes and how much your beneficiaries will end up receiving. That’s why it’s so important to speak with your financial adviser to review all your options and find the most efficient ways to pass on your wealth.

Inheritance tax facts
Following the Budget in March, it was announced that thresholds will remain the same for IHT until 2026:

• For single people, the threshold is £325,000.
• For those who are married or in a civil partnership, the threshold is £650,000.
• Couples can also pass on their assets (like an owned home) worth up to £1 million in total if they leave it to children or grandchildren.

To learn more about how to make the most of your money this tax year and for more information about inheritance tax and your tax-free allowances, speak to your financial adviser.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen

With the UK leading the way in lifting its pandemic restrictions, the coronavirus Delta variant has put many countries on edge.

Nations experiencing a surge in the Delta variant of the coronavirus are in a race between vaccinating a majority of the public and getting ahead of the new strain in order to lift restrictions with confidence. The US, UK and EU are experiencing spikes in the rates of infections and there is some worry from economists about Europe’s previous positive outlook experiencing a setback due to the rapid spread of the variant across the Continent.

The UK’s ‘freedom day’ did go ahead on 19 July, albeit with businesses and local authorities given the ability to apply their own mandates in areas like mask wearing. The government’s aim to push on with the full reopening of society was boosted by the news from the Office of National Statistics (ONS) of a 356,000 surge in payroll figures for June. This is still below pre-pandemic levels, however.

Uncertainty about the Delta variant led to a volatile period for stock markets towards the end of the month. But fears were alleviated by the expectation of ongoing support from central banks as well as strong corporate earnings in both the US and Europe. In better news for UK markets, London overtook Amsterdam as the biggest share trading centre in Europe. This marks the first time London has taken the mantle since the conclusion of the Brexit transition.

The United Nations estimates that the financial toll of the coronavirus pandemic on global tourism could result in a $4 trillion loss to the global economy. Poorer countries are likely to be hardest hit, mainly because of low vaccination rates.

Inflation and consumer spending continue to rise
On both sides of the Atlantic, a surge in the growth of prices has given economists renewed concern about overheating economies. US consumer prices rose again in June and the inflation rate in the UK hit 2.5% in the same period (which is the highest level since 2018). The Bank of England’s monetary committee believes this is still a temporary phenomenon of strong growth, and expects things to fall back to pre-pandemic levels.

House prices in the US rose by over 14% in the year to April 2021, signifying the fastest rate of growth in 30 years. The American job market continued to regain ground, too, with a further drop in jobless claims in June and July.

China’s surge in stocks and bonds
Focus turned to China, following news that its economy expanded by 1.3% in the second quarter. This was mainly a result of retail sales, a growth in manufacturing and increased investment. The country’s exports also rose in June, along with GDP growth of 7.9%. Global holdings of Chinese stocks and bonds surged, as reported in July, by around 40% to more than $800 billion over the past year.

This is seen as a result of investors purchasing assets at a high rate, even accounting for the tense economic relations between China and the wider international community. China’s crackdown on tech companies like ride-hailing app Didi Global, which has listed its shares in the US market, is an example of causing an air of uncertainty for investors.

You might be thinking about whether to invest in crypto currencies. We explain why it may not be the right choice, and how to better approach your portfolio.

This year has been eventful for bitcoin, with the cryptocurrency reaching a record high and then almost halving in value all in the space of six weeks. The walk-back in May from Tesla’s Elon Musk in his support of bitcoin underlined concerns around the idea of cryptocurrencies as a stable investment. Musk – previously an outspoken supporter – announced his company would not be accepting bitcoin as payment for its vehicles.

What followed was a series of plunges in its value – not helped by the additional news of Chinese regulators signalling a crackdown on the use of digital currencies.

Bitcoin in brief
Bitcoin is a type of digital, decentralised currency, allowing the transfer of goods and services without the need for a trusted third party. The network is based on people around the world called ‘miners’ using computers to solve complex mathematical problems in order to verify a transaction and add it to the ‘blockchain’ – a massive and transparent ledger of each and every bitcoin transaction maintained by the miners. The first to verify is rewarded with bitcoin. Thereis a finite amount of bitcoin that can be produced and, as more are created, the mathematical computations required to create more become increasingly difficult.

Cryptocurrencies can be volatile
Bitcoin’s high volatility (risk) makes it a poor substitute for money in a broad sense. The unsteady air around cryptocurrencies in May showed the speculative nature of this asset class. Bitcoin and cryptocurrencies in general have more in common with commodities and currencies – they are much harder to value than cashflow-producing equities and bonds.

Reasons to be crypto cautious

• Cryptocurrencies are a volatile choice and susceptible to stock market bubbles, which can affect investments negatively during a downturn.
• They’re not a tangible form of investment, and are not regulated, which can be a red flag when it comes to your investments.
• Volatility means investors are likely to act on doubts and sell if they fear a fall in return.

Where to invest?
A sensible approach is to invest in high-quality companies that are well-established businesses. These are usually businesses with strong management teams, serviceable levels of debt and predictable cash flows. To avoid being hit by market volatility make sure your portfolio is invested in a wide range of assets, and less vulnerable to market shocks.

Staying invested when there is a downturn can help you get through any turbulent times and put you in a good position to benefit from any ensuing recovery.

Our financial advisers can help advise you on your investment choices.

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

Many fixed mortgage deals will be approaching the end of their term this October, so it’s a good idea to review your buy-to-let mortgage.

With interest rates still at low levels and demand for rental properties increasing around the country, investing in a buy-to-let (BTL) is a popular choice for many.

Buy to let basics
A BTL mortgage is a specific type of product for those who want to buy a property with the intention of renting it. Because of this, there are different terms and rules around a BTL mortgage (compared to a regular mortgage for a property the buyer intends to live in.)

• With a BTL mortgage, the anticipated rental income is taken into account when the lender calculates how much you can borrow.
• A BTL mortgage could suit investors with enough equity to put down a deposit of at least 20% of the value of the property (but some lenders could require up to 40%.)
• Your credit record is closely scrutinised with a BTL mortgage, as with a regular mortgage application.
• Interest rates for BTL mortgages are usually higher than a regular mortgage.

Things to remember
If you have a BTL mortgage already and its fixed interest rate term is coming to an end, you may be thinking about switching products or providers to gain a better deal.

Here are some other things to look out for:

• Examine all of your options into the type of product to suit your investment going forward. A financial adviser is best placed to help you with this.
• Don’t forget to research any fees and charges around changing your product too, as these could be higher than you expect.
• When changing products, you may be asked about your property’s rental income history in order to assure any new lenders that you are able to keep up with mortgage payments.
• Show that you have sufficient savings to cover any gaps in rental periods when your property could be unoccupied.
• For your own peace of mind, having a cushion of savings available to cover any essential repairs is important.

If you are looking to remortgage your BTL property or are thinking about transferring your mortgage to a different provider, our advisers can help you find a product that best suits you.

Some buy to let mortgages are not regulated by the Financial Conduct Authority.

YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE

Working out how long your pension pot will need to last – as life expectancy rises – is worth thinking about sooner than later.

The lockdown caused many people to reassess their lifestyles, which for some meant choosing early retirement. But what retirees have found is that pension pots are not matching the period of time needed to enjoy a comfortable life.

Life expectancy is going up. The Office for National Statistics offers an online calculator which gives an estimate of life expectancy – and with it an idea of how many years people will need their pensions to sustain them.

What’s your number?
The ‘Class of 2021’ report from Standard Life Aberdeen lays out how much value an average pension pot needs – around £366,000 if you multiply the average annual amount retirees surveyed said they would spend (£20,000) by 20 years of post- retirement time. A third said they had less than £100,000 saved.

Retirees need more than they think
The survey reported that two thirds of retirees were at risk of running out of money post retirement. Along with people living longer (on average, people aged 55 today will live to their mid-to-late 80s) there is the issue of rising inflation which raises the cost of living as years go by. Volatility in the investment markets also adds to the concern for people approaching retirement when it comes to pensions.

How to plan for the years ahead
Those surveyed did have plans to tackle this issue, however. Half of the those surveyed aimed to reduce the amount of money they spent on a day-today basis in order to save for retirement. Other considerations include downsizing their home and seeking part-time work after retirement in order to generate an income.

There is concern among almost half of those surveyed about being financially ready to finish working in the coming year. Yet many are aware of the need to be prepared when it came to their finances post-retirement, making any necessary adjustments – ideally with help from a financial adviser.

Keeping track of workplace pension plans and thinking about consolidating them into one pot might be a good place to start planning towards the goal of making your retirement as financially worry-free as possible.

Our financial advisers can help you review your pensions and advise on how to make the most of your pension.

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

Make the most of your tax allowances by using the different types of ISAs that are available.

Individual Savings Accounts (ISAs) were first introduced in 1999 and are a tax-free way to save into a cash savings or investment account. There lots of different types of ISA available, but the right one for you will depend on your financial goals. We explain how they work so you can choose the one that is best for you.

Cash ISA
A cash ISA works in the same way as traditional savings account but you won’t have to pay tax on any of the interest you earn.

For the 2021-22 tax year each person has an ISA allowance of £20,000. To take out a cash ISA you have to be a UK resident and over the age of 16. If you don’t use the allowance before the end of the tax year you will lose it and you’ll have to start anew on 6 April.

Some cash ISAs are instant access while others have a fixed rate. You can only open one cash ISA per year but you are allowed to transfer to another cash ISA or a stocks and shares ISA with another provider if you want to.

With a stocks and shares ISA you can hold a variety of investments such as shares, bonds and funds. Just like the cash ISA you can save up to £20,000 a year tax free, but you get to choose what investments you put inside it, so it’s worth getting financial advice. You also have to be 18 or over to be eligible.

Stocks and shares ISAs provide an option for people looking to avoid the erosive impact of inflation on returns. Over time there is the potential for better returns with an investment ISA over cash, although the risks are also greater.

If you want to invest in a stocks and shares ISA you need to be comfortable with the possibility of making losses and prepared to invest for the longer term.

Lifetime ISA
The lifetime ISA (LISA) can be used by first-time buyers to fund a deposit for a property or taken tax-free at the age of 60. As well as paying interest, LISAs benefit from a 25% bonus from the government to encourage saving towards a home or retirement.

The maximum you can put in each year is £4,000, which comes out of your £20,000 ISA allowance. The LISA can only be opened by anyone aged 18–39, but you can keep saving in one until you are 50.

With the LISA, you can get a bonus of up to £1,000 a year up until you are 50. If you open one at the age of 18, this means you could end up with a maximum bonus of £32,000.

However, there are some restrictions with a LISA. You have to keep your money in a LISA for a minimum of one year before you can withdraw it and if you take your money out before you are 60 and you don’t use it to buy a home, you will have to pay a 25% penalty.

Junior ISAs
If you're looking to put some cash aside for your kids, Junior ISAs (JISAs) are a great way of doing so. These accounts are available to anyone under 18 and tend to offer much higher rates than adult accounts, but there are some restrictions.

Like the adult accounts, you won’t pay any tax on your interest. In the 2019–20 tax year you can save or invest up to £9,000 in a JISA. You can save for your child either in a cash JISA, a stocks and shares JISA, or a combination of the two. JISAs can be opened by parents with children aged under 16 and then by children themselves when they are aged 16 and 17.

Innovative Finance ISA
If you invest with an innovative finance ISA (IFISA) the company offering the ISA will use the money to lend to borrowers or businesses – known as peer-to-peer lending. You’ll be offered a rate of interest from the borrower when paying back the money you’ve invested.

You can invest up to £20,000 a year in an IFISA and any interest earned will not be taxed. While you can earn higher rates of interests than with a traditional savings account, they are a much riskier option than a cash ISA as the borrower could potentially default on their loan.

Our financial advisers can help you and your family find the right product to suit your needs and financial situation.

An ISA is a medium to long term investment, which aims to increase the value of the money you invest for growth or income or both. The value of your investments and any income from them can fall as well as rise. You may not get back the amount you invested.

We now know to expect extra spending on Manchester trams, the NHS, post-16 education, incentives for UK investment by overseas companies and even new cutters for Border Force…can there be anything left for tomorrow?

The answer is yes. For a start, 27 October is not just Budget Day, but also the date when the Office for Budget Responsibility (OBR) publishes its latest Economic and Fiscal Outlook and the Chancellor publishes a three-year Spending Review, which will take us beyond the next election.

Much of the pre-Budget releases are likely to include the parts of those documents which the government want to be heard and remembered. Those ‘leaks’ also have the benefit of a degree of spin – for example the emphasis on total spend rather than annual spend: £5 billion sounds much better than £1 billion a year for half a decade, half of which has been previously announced.

The good news is that the latest public sector finance data, published on Thursday, showed that in the first half of 2021/22 the Treasury had borrowed £43.4 billion less than the OBR had projected at the time of the March Budget, giving Mr Sunak some spending wiggle room.

The bad news is that the reduced borrowing still amounted to over £108 billion. Nevertheless, it looks unlikely that any major tax increases will be revealed this week. Mr Sunak has already introduced £42 billion of tax rises this year (corporation tax, NICs, dividend tax) which have yet to bite.

Where the Chancellor may take some tweaking tax action is around the topics sitting in his in-tray. For example:

• The Office for Tax Simplification (OTS) reports on inheritance tax have to date yielded no response beyond a promise – so far unrealised – to simplify application paperwork from the start of 2022.
• The second of the OTS reports on capital gains tax, originally commissioned by Mr Sunak, arrived after the March Budget and might now be addressed. Rumours continue to suggest that CGT rates will be more aligned to those for income tax.
• Pension tax relief is a Budget perennial and the Treasury has still not addressed the issues around net pay arrangements and low earners on which it consulted in 2020.

As ever, the Budget’s most interesting content will be in the detail, not necessarily the headlines surrounding it.

While some of the announcements may have seemed rather long term, Mr Sunak did provide some more immediate relief for households and businesses still fragile from the effects of the pandemic.

The previously announced freezing of tax allowances and thresholds for income tax and the introduction of the new Health and Social Care Levy are due to raise very large amounts of revenue over the next five years. These, together with the accompanying increase in dividend tax, provide a crucial backdrop to the spending increases and tax changes announced in the Autumn Budget.

In the more immediate future, there was, however, a slight loosening of the rules governing CGT: effective immediately the deadline for reporting and paying CGT after selling UK residential property will increase from 30 days to 60 days after completion.

A 6.6% increase to the national living wage to £9.50 an hour, starting on 1 April 2022, was confirmed. Young people and apprentices will also see increases in the national minimum wage rates.

And, as the country grapples with petrol prices at their highest level for eight years, a planned rise in fuel duty was cancelled again, the 12th time in a row.

In welcome news for drinkers, a fall in tax on their favourite tipple is likely, as long as it’s at the softer end. Reform of the levy on alcoholic drinks will see tax pegged to alcohol content, with higher strengths incurring proportionately more duty. All tax categories (e.g. beer, wine) will move to a standardised set of bands, with reduced rates for products below 3.5% ABV.

Businesses in the retail, hospitality and leisure sectors received particular sympathy from the Chancellor. Still reeling from months of Covid-enforced shut down, they were recognised as needing ongoing support, with a 50% cut in business rates in 2022/23. The business rates multiplier will also be frozen for 2022/23. From 2023, no business will face higher rates bills for 12 months after making eligible improvements to an occupied property.

How the Chancellor’s plans play out against a backdrop of potentially rising inflation and no let up in the calls on the public purse should make for a lively run up to the new tax year.

Financial markets were unsettled in October for a number of reasons. They include soaring energy prices due to the global shortage of natural gas supplies and high demand in Asia. Markets became calmer after Russian President Vladimir Putin indicated that his country could supply additional gas to Europe. The increase in energy prices and shipping costs prompted the The Organisation for Economic Co-operation and Development (OECD) to raise its inflation forecast for the G20.

The natural gas shortage pushed up oil prices, with Brent crude rising to its highest level in seven years. The Organisation of Oil Exporting Countries (OPEC) agreed to increase oil production gradually to meet high demand as countries come out of pandemic-induced lockdowns.

US stocks rally

In mid October the S&P 500 index enjoyed its best days since July, making up for fall earlier in the month. Strong company earnings results contributed to the performance, as did the stability brought by the news of the Senate’s decision to temporarily raise the federal debt ceiling.

October followed September as a month of rising inflation in the US. However, higher prices didn’t deter consumers, with retail sales also up from previous months. There was another lower-than-expected jobs report, with the working economy still affected by the Delta variant and a sluggish labour market.

UK Budget news and interest rate speculation

In early October the FTSE 100 had its best first week of the month since May, helping it to a 20-month high and a recovery of most of the losses it experienced since February 2020 and the start of the pandemic.

However, the Bank of England warned that the UK economy is more vulnerable to the global rise in inflation than other G7 nations, and that it could slow the recovery. Attention remained on the Bank of England’s move to raise interest rates, with economists predicting a rise as soon as early 2022. City traders are betting that it will happen before the end of this year.

In this year’s much anticipated Autumn Budget, Rishi Sunak set out the government’s plans to help get the economy back on track following multiple lockdowns. Policies announced included an increase in the National Living Wage and a 50% business rates discount for firms in the retail, hospitality, and leisure sectors up to a maximum of £110,000. Dividend tax rates will also rise by 1.25% from April next year which means investors will pay more on their earnings. Further thoughts from Omnis Investments’ CIO, Robert Jeffree, can be found here.

China’s third-quarter slowdown

Asia suffered an ongoing shortage of coal, with power cuts reported across countries reliant on the fuel, like China (where coal generates two thirds of the country’s electricity), and with India on alert for similar outages. Coal prices in China hit a record high during the month along with a dip in manufacturing (the latter due to power shortages and ongoing outbreaks in coronavirus cases).

The crisis surrounding the Chinese property developer Evergrande saw the company sell part of its stake in a bank to a publicly owned investment group on condition that the developer uses the proceeds to repay a loan. Figures released in October also showed that the pace of economic growth in China slowed in the third quarter compared with the previous year.

To keep your investments from losing value or slowing the growth of your as- sets, avoid these common investing mistakes.

There are more risks and opportunities than ever for investors to navigate in today’s rapidly evolving markets. Here are four approaches we believe every investor should follow.

Don’t pile into cash – stay invested

The biggest advantage of cash is that it offers relative safety. Cash can help diversify a portfolio during times of volatility and is easy to access in an emergency. With cash you’ll be paid interest on the money, which will be tax free where it’s in an ISA.

You won’t lose any money by putting your money in cash, but it tends to offer lower returns than other asset classes. It’s also important to know about the impact of inflation on your savings and investments as it can make a huge difference to how much profit you make. Cash is seen as a short-term safe haven and should not be held over a substantial period of time to avoid the impact of inflation.

While it’s good to have some cash savings for a rainy day, the spending value of your money can fall over time if inflation is higher than the interest rate you receive. With interest rates on cash investments at historically low levels, and well below the inflation rate, millions have seen the value of their savings eroded in recent years. To make money on your investment you’ll need to find an account or investment that gives you a greater return than the current rate of inflation.

Don’t go chasing fads – think about the long term

Short-term gains can seem appealing for investors, but if you don’t want to lose your savings, it’s best to not believe the hype about the latest investment craze. Choosing the wrong investment can be a costly mistake. Many investors are turning to social media platforms such as Facebook, Twitter, YouTube, TikTok and other unregulated sources for information about investing.

While it may seem tempting to get investment recommendations this way, it puts you at significant risk from volatile stocks or even fraud. It’s easy to jump on the bandwagon, but momentum is typically falling by the time most people join.

Don’t put all your eggs in one basket – diversify

One of the biggest mistakes when investing is putting all your eggs in one basket as it can leave you exposed to fluctuations in the market. If you’ve invested in one stock and something unexpected happens and it plummets, you could find your nest egg suddenly disappearing.

One way to lower risk is by spreading your wealth over a wider range of investments so it’s not concentrated in one place (known as diversification). By diversifying your portfolio, you can reduce the risk that all of your investments will experience the same negative impact at the same time.

Ideally, you should be looking to build a diverse portfolio with a mix of different investments in line with your attitude to risk. A balanced portfolio will contain a mixture of asset classes, such as stocks, bonds, and alternatives.

Sit tight when it’s right

When markets wobble it can be tempting for investors to sell their shares to avoid any further losses. It’s easy to react to short-term losses but the best thing you can do is most often precisely nothing.

Timing the market involves buying and selling investments when you think they will rise or fall at exactly the right moment. It’s a difficult strategy that rarely works and there are too many unpredictable factors.

If you sell into a falling market you will lock in your losses and it could take you years to get back to where you were. While markets can fall sharply, given time they can rebound, so instead make sure you take the long view. Stock markets have a history of recovering from downturns. If you see your investment drop, don’t worry. Just keep your cool and sit tight.

It pays to seek advice

A financial adviser can help you work out how to achieve your long-term financial goals, while taking inflation into account so it doesn’t eat up your returns. Your adviser will speak to you about your attitude towards risk and the level you are comfortable with, helping you make the right investment choices..

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

Markets signed off the year amid high inflation rates and renewed concerns over the coronavirus.

The Omicron variant of the coronavirus unsettled markets at the beginning of December, with investors unsure about how renewed restrictions on socialising and travel will affect the global economy. The Organisation for Economic Cooperation and Development (OECD) urged national leaders to accelerate the vaccination rollout in order to slow the spread of the virus and reduce the impact of new strains.

Stock markets in the US and Europe had recovered most of their initial losses by the middle of the month after being encouraged higher by reports that the variant would unlikely be as disruptive as first feared. Persistently high inflation is another theme that has dominated markets throughout 2021 and the readings at the end of the year provided no relief.

The cost of living rises

The UK’s inflation rate surged in November to 5.1%, which is its highest rate in more than a decade, and exceeds the Bank of England’s expectations. According to the Office for National Statistics, the Consumer Price Index was propelled upwards by soaring energy costs but prices rose across the board.

The euro area’s average annual rate of inflation rose to 4.9% in November, the highest it has been since the creation of the single currency more than 20 years ago. In Germany inflation stood at 6%, a level not seen since the aftermath of reunification three decades ago.

Annual consumer price inflation in America rose to 6.8% a 39-year high. Prices jumped by 0.8% from October to November. A range of factors have fuelled inflation lately, including supply chain bottlenecks, labour shortages, fiscal stimulus and ultra-loose monetary policy.

Central banks take action

Policymakers on both sides of the Atlantic decided to act. In the UK, the Bank of England has raised interest rates from 0.1% to 0.25%, its first increase in more than three years, saying that the risks of inflation required it to take pre-emptive action even as the Omicron wave of coronavirus engulfs the UK. The bank’s Monetary Policy Committee decided it could not wait any longer before seeking to cool the spending in the economy.

Meanwhile, the US Federal Reserve said it will accelerate its “tapering”—the reduction of monthly bond purchases—in order to wind down economic stimulus and contain runaway inflation. From January the central bank will reduce its asset-buying by $30 billion every month—double its current pace.

ISA
An ISA is an individual savings account that allows you to save tax-free money in a cash or investment account, so you could end up getting more for your money. An ISA is a medium to long term investment, which aims to increase the value of the money you invest for growth, income, or both. There are a few different types of ISAs including, Cash ISA's and Stocks and Shares ISA's. The value of your investments and any income from them can fall as well as rise. You may not get back the amount you invested.

Cash ISA
A Cash ISA is a tax-free savings account where you can deposit up to a yearly limit and pay no tax on the interest that you earn. There are three principal types of cash ISA: Instant Access, Regular Savings and Fixed rate. Anyone over the age of 16 can open one cash ISA in each tax year with as little as £1. Although Cash ISAs can be a good way to start your investment journey, they can have their drawbacks. If you find yourself with low interest rates and high inflation, this can lead to poor rates and therefore eroding value.

Stocks and Shares ISA
A stocks and shares ISA, also known as an investment ISA, is a tax-efficient investment account that can help make your money work harder. Unlike a cash ISA, a stocks and shares ISA gives your money more potential to grow by investing it in a range of places like shares, funds, investment trusts and bonds, instead of keeping it in cash. It’s a smart way to protect your money from being taxed, as you won’t pay a penny in capital gains, tax, or income tax on any profits you make in the future. So, whether you’re saving for a holiday of a lifetime, a property deposit, or simply for a rainy day, switching to a stocks & shares ISA could give your savings the boost they need to meet your financial goals.

Don’t forget to use your 2021-2022 allowance before the end of 5 April 2022.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

New research from The Openwork Partnership, one of the UK’s largest and longest established financial advice and investment networks, shows more than 11.6 million are keeping all their money in cash despite ongoing low rates.

Its nationwide study found 22% of adults prefer to keep all their money in cash while the same number will not consider stock market investments despite potentially higher returns as they don’t understand it.

The Openwork Partnership is warning about the risks to savers of reckless caution – the cost of missing out on higher returns on their money because they stick to cash accounts. Despite the recent Bank of England base rate rise, rates on cash accounts remain below inflation while the FTSE-100 gained 14.3% last year – its best performance for five years.

Excess savings in the UK – the extra amount people have saved because of restrictions during the COVID-19 pandemic – is estimated to be around £163 billion compared with £112 billion a year ago.

Just 15% of those questioned said they had a healthy balance between savings and investments while 14% said they were willing to miss out on higher returns by avoiding stock market investment.

One potential reason for avoiding the stock market highlighted by the research was lack of knowledge – around 11% said they did not know where to go for advice. However, nearly one in 10 (9%) said they had benefited from financial advice in terms of higher returns on their cash.

Claire Limon, Network Director at The Openwork Partnership, said: “It is good news that people have built up savings and the money will be very valuable given the looming rises in the cost of living.

“But there is a real risk of reckless caution costing people substantial amounts from ignoring stock market investment in favour of keeping money in cash when rates remain at very low levels – meaning savers are losing money after inflation is taken into account.

“It is understandable that people are worried about the risks of losing money on the stock market but advice from a professional adviser can help ensure their money works hard for them and any investments are tailored to their appetite for risk.”

The table below shows the picture across the country with people in Wales most worried about investing in the stock market and most likely to want to keep all their money in cash.

In the Autumn Budget in 2021, it was revealed that the Junior ISA spending limits would remain at £9,000 for the 2022/2023 tax year. The JISA limit was last changed in early 2020, when it was doubled from £4,500 to its current level.

JISA and CTFs both benefit
JISAs replaced Child Trust Funds (CTF) in 2011, but those who still hold CTF will continue to benefit from the increased allowance. Both JISA and CTF are a tax efficient way to build up savings for a child. It is not possible to have both a JISA and a CTF.

Savings for children
A junior ISA can be opened for any child under 18 living in the UK and the money can be held in cash and/or invested in stocks and shares. Once the person who has parental responsibility for a child has opened the account, anyone can contribute to it. The child can manage the account from age 16 and at age 18 they can withdraw the money if they want, when the account otherwise becomes a normal cash or stocks and shares Individual Savings Account (ISA). Alternatively, they can keep saving into it as a standard ISA.

The tax benefits for JISAs and CTFs are the same as for an adult ISA. So, there is no Capital Gains Tax and no tax on income.

Investing for their future
Following the Budget, it was reported: ‘By saving towards their future, families can give children a significant financial asset when they reach adulthood – helping them into further education, training, or work.

Junior ISAs and Child Trust Funds are tax-advantaged accounts for children, designed to encourage a long-term savings habit.’

Two principles which apply to many aspects of financial planning are particularly relevant when planning for your child’s financial future:

• The longer the timescale, the more scope there is for your investments to grow
• Taking expert advice can help you avoid potential pitfalls

The potential of a JISA
It is estimated that if £9,000 was invested every year from birth and assuming a 2% annual return, which is obviously by no means guaranteed, the JISA would be worth around £194,000 at age 18. Saving such a large amount is obviously out of the question for most people, but whatever amount you can afford to save for your child’s future, a JISA is an ideal choice.

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.

Key takeaways:

• The JISA allowance will remain at £9,000 for the 2022/2023 tax year.
• Junior ISAs are long-term, tax-free savings accounts for children.
• JISAs replaced Child Trust Funds (CTFs) in 2011.
• Both benefit from the increased allowance of £9,000 per tax year.
• JISAs can be opened for any child under 18 living in the UK.
• Once the person who has parental responsibility for a child has opened the account, anyone can contribute to it.
• The child can manage the account from age 16 and at age 18 they can withdraw the money.
• There is no Capital Gains Tax and no tax on income.
• The ISA allowance will remain at £20,000 for 2022-2023.

Finance: the last taboo
There’s a wide variety of reasons why people don’t like to discuss their finances. In some cases, money is simply viewed as a vulgar subject to talk about, while many individuals lack financial confidence and therefore feel foolish discussing their finances; for others it’s easy to just ignore the issue altogether or simply leave it to someone else to sort out. As a result, many of us don’t like to talk about money, which means finance stands out as one of the last taboo topics in our society.

Importance of financial conversations
A failure to communicate about money though can lead to serious problems especially for other family members. This particularly relates to the younger generation and the importance of nurturing a sense of financial responsibility that will ensure they are ready to take control of their finances. It’s also critical in relation to older people as, if discussions have not taken place, there is no way of knowing their wishes when important issues relating to their financial future inevitably emerge.

Elephants in the room
While it is therefore vital to talk, discussing some financial topics can prove extremely challenging for many people. For example, parents often find it difficult to discuss issues surrounding inheritance and the transfer of wealth which means conversations with their children on this topic can be awkward or stilted. It is imperative, however, that parents do include their offspring when making financial planning decisions in order to ensure they are ready to assume responsibility for family assets when the time arises.

Finance paralysis
An inability to talk about money can also lead to personal finance paralysis, which is basically the fear of making a bad decision. This can result in people either delaying important financial decisions or not making any decisions at all. Talking issues through with a trusted confidante though is a particularly good way to help alleviate such anxieties as it equips people with both the knowledge and conviction to make appropriate decisions.

Talk to us
As with most things in life, it’s usually easier to figure out financial problems if you talk them through with someone you trust. Discussing issues with those people that matter to you can help get things into perspective and thereby aid the decision-making process. And remember, we’re always here to help too, so feel free to get in touch and start a financial conversation with us.

Key Takeaways:

• Experts have long stressed the best approach to financial issues is to talk about them
• A failure to communicate about money can lead to serious problems
• This particularly relates to the younger generation and the importance of nurturing a sense of financial responsibility
• It’s also to older people as there is no way of knowing their wishes when important issues relating to their financial future inevitably emerge
• Parents often find it difficult to discuss issues surrounding inheritance and the transfer of wealth
• It is imperative that parents include their offspring when making financial planning decisions
• This will ensure they are ready to assume responsibility for family assets when the time arises
• An inability to talk about money can lead to personal finance paralysis, a fear of making bad decisions
• This can result in people delaying important financial decisions or not making any decisions at all
• As with most things in life, it’s usually easier to figure out financial problems if you talk them through

Save up
You will need to have saved a deposit - in most cases the bigger the deposit you can put down, the lower your interest rate is likely to be. Open a dedicated savings or investment account and make sure it’s paying a competitive interest rate.

Check your credit score
Even if you’re re-mortgaging or moving up the housing ladder your credit history will be important. A good credit rating can help you secure a better mortgage deal, with a lower interest rate.

The general rule is the higher the score the better, and the more likely you’ll be accepted for a mortgage or other credit. If you’re looking to take out a mortgage or re-mortgage, check your credit score regularly. You can usually get a simple overview for free and it pays to check with several different sources. Credit Karma, Equifax, clear Score and Experian all offer a service to help you understand your rating.

If you find it is lower than expected there are ways to improve it:

• Pay more than your minimum payments on credit cards
• Bring your overdraft down
• Close unused credit accounts
• Register for the electoral roll

Budgeting
It’s important to review your income and outgoings. If you have accounts, memberships or subscriptions that you no longer use, it makes sense to close them down. Cut back on unused subscriptions and watch how much you spend on things like eating out. Prospective lenders will also look at the debt you currently have, including whether your current account is in credit. If you have any savings, it makes sense to pay off loans and credit cards but be sure to leave yourself enough saved to cover emergencies.

Get some good advice
Getting professional financial advice can save you time, money and stress. We know the industry and the most appropriate lenders, to be able to recommend the most suitable mortgage for you. We can also offer useful advice on all aspects of the house buying process. More now than ever, the value of professional advice is immeasurable. As the mortgage market changes, it’s our job to keep our finger on the pulse. We’ll be able to help you get a decision in principle from a lender, which will give a seller the confidence that you are a serious purchaser

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

Key Takeaways:

• We can guide you through the requirements before you embark on your move.
• Taking advice will save you time, money and stress – the value of professional advice is immeasurable.
• Take advice for help with all the stages involved in getting a mortgage.
• Review your finances and credit score to put yourself in the best position.
• Working with a reputable estate agent is important.
• YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

As the end of the tax year approaches, there’s still time to take advantage of your annual tax-free allowances if you’ve not already done so. This is one of the best ways to make your money work harder and grow, especially with interest rates on the rise. We can guide you through the best ways to use your allowances – depending on your needs.

ISAs
The maximum you can invest across your ISAs (if it’s a cash ISA, stocks and shares ISA or innovative finance ISA) is £20,000. For a lifetime ISA the annual allowance is £4,000.

Pension allowance
Your personal pension contribution allowance is £40,000, although it can be lower for higher earners and where pension savings have been flexibly accessed already. Any contributions you (or your employer) make receive tax relief from the government (based on your income tax band) of 20% or more – and the money in your pension pot will grow tax free.

Gift allowances
A financial gift is a great way of using tax-free allowances for any extra cash, and your adviser will be able to talk you through the options available, which could include:

Junior ISAs
If you’re looking to put some cash aside for your children, Junior ISAs (JISAs) are a great option. In the current tax year you can save or invest up to £9,000 in a JISA. You can save for your child in a cash JISA, a stocks and shares JISA or a combination of the two.

Child’s pension
A child’s pension can be set up by a parent or guardian, but anyone can contribute. You can pay up to £2,880 in the current tax year into a pension on behalf of a child and the government automatically tops this up with 20% tax relief on the total amount contributed, taking the figure up to £3,600.

Cash gifts
Making a cash gift can help a loved one (and help with your estate planning). Everyone has an annual gifting limit of £3,000 that is exempt from inheritance tax (IHT). This is known as your annual exemption. If you fail to use it one year, you can carry it over to the next tax year (so if you didn’t use the gift last year you could give away £6,000).

It’s worth remembering that any gift you give, even to family members, could be subject to capital gains tax (CGT). CGT is the tax you pay on any profit or gain you make when you dispose of an asset, such as a second home or shares. If you gift an asset and it has risen in value compared to what you have paid for it, you could be liable to CGT. The current CGT allowance is £12,300. This is the amount of profit you can make before CGT is applied.

Marriage allowance
If you are married you might be able to take advantage of the marriage tax allowance. It allows one half of a couple who earns less than the income tax threshold (£12,570) to transfer up to £1,260 to their higher-earning spouse (who must be a basic rate taxpayer).

Our financial advisers can help you make the most of your annual allowances and lay out what is available to you, before the end of the tax year.

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

Stories about stock market falls are guaranteed to make headlines like the financial crisis of 2008 and the stock market lows of March 2009. And for many they are still fresh memories but it’s worth noting that an investment then in global stocks would have grown more than twofold a decade down the line*.

That might be an extreme example with those kinds of returns never guaranteed, and those who try to second-guess markets or try to time when to invest their wealth often get it wrong. However, it does go some way to illustrate the benefits of investing over a long-term time horizon and riding through the peaks and troughs of market movements.

Investing for the long term

Volatility in markets has many varied causes, from political shifts and central bank actions through to modern media. The Omnis fund managers responsible for your investment are looking at specifics that determine the real value of stocks and shares, and overarching thematic trends, such as long-term changes in demographics or spending habits across the globe.

Short-term movements in stock markets, as sharp as they may be, are part and parcel of investing. If you are investing over a sensible timeframe, your investments correctly reflect your attitude to risk and you have a well-diversified portfolio, in most cases, you should have little to fear.

*Financial Express, MSCI World Index, 09/03/09 to 09/05/18

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

When you’ve finished scrubbing your worktops with baking soda and polishing your windows with newspapers, why not try spring-cleaning your finances? Here are some handy hints to get you started:

Throw away unnecessary spending habits

Look at your bank statements for the last couple of months for a snapshot of your finances. It can help highlight any problem spending areas and where you can potentially make savings.

Do you have countless direct debits or standing orders? Is there anything you’ve signed up for that you no longer use? Those small payments going out every month can really add up! If you have credits cards make sure you pay them off in full each month, or if not see if you can shift your debts to a lower interest credit card or loan. Just to give yourself space to gradually pay it off without incurring huge amounts of interest.

Invest in an ISA

An Individual Savings Account (ISA) is a tax-efficient way of saving. In the current tax year (April 2022 to April 2023) the government allows us to put up to £20K into an ISA. Make sure you take advantage of this before the tax year ends in April 2023.

You can save your money in a Cash ISA or Stocks and Shares ISA or split the allowance across both types. A Cash ISA you don’t pay tax on the interest you make on these savings. With a Stocks and Shares ISA means you don’t pay tax on any income or capital gains you’ve made on your investments - but obviously this involves more risk.

There are a few other things to bear in mind. The tax efficiency of ISAs is based on current rules. The current tax situation may not be maintained. And of course, the benefit of the tax treatment depends on individual circumstances.

With Stocks and Shares ISAs, although there is no fixed term you should consider them as a medium to long term investment, of ideally five years or more. And remember, the value of your Stocks and Shares ISA and any income from it may fall as well as rise. You may get back less than you invest.

Spring clean your protection

Spring-cleaning your protection insurance is also important as you’ll want to make sure you have the right cover for your family and your lifestyle.

If you’re renting a property you will want to protect your belongings with home contents insurance. If you have just bought a home, you’ll need to make sure both your building and possessions are adequately covered. You should also think about accidental damage cover or home emergency cover.

If you have others who depend on your income, consider taking out cover to provide financial security for them should you become ill or die. Life insurance and critical illness insurance may give you the peace-of-mind that you or your family could cope should the worst happen.

Set yourself a budget

To get started, use your bank statements to analyse your spending patterns and tally up your typical monthly outgoings. Compare this to your monthly income and you can quickly see what’s left (or not) by the end of the month.

Once you’ve done this you can set yourself a budget based on accurate figures. Keep it realistic as you’re more likely to stick to it.

Check on your mortgage

If you’ve got a tracker, fixed or discount rate mortgage, make sure you know when it ends as you’ll likely be switched to your providers Standard Variable Rate (SVR). The SVR is usually higher than the amount you’ve been paying and when interest rates change, so can your monthly payments.

It’s worth finding out what alternative products your current mortgage provider offers before checking out the rest of the market.

Get trusted advice

Discussing your finances with an expert can make managing your finances simpler. We can help you establish a financial plan that’s designed around your specific needs, make sure it stays on track, and provide ongoing advice that will help you achieve your goals.

If you would like to spring clean your finances this year, please get in touch for a review.

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

Key Takeaways:

• We have a few handy tips to help you spring clean your finances.
• Throw away unnecessary spending habits to help you save more and avoid spending excessive money.
• ISAs are tax-free savings account that allow you to put in up to £20k a year.
• Check what insurance and protection you have to ensure you have the right cover for you and your family.
• Create a budget for yourself to stop unnecessary spending.
• Check your mortgage to see if you could be getting a better deal and saving money.
• Spring clean through your finances and get in touch for a review today.

The new tax year means annual allowances are reset and ready to be reused – to help you make the most of your money. This year more than ever, with interest rates and inflation on the rise, it’s a great time to review your pensions and investments with your adviser.

Note: The following figures apply to the 2022/2023 tax year, which starts on 6 April 2022 and ends on 5 April 2023.

ISAs
The maximum you can invest across your ISAs is £20,000 (if it’s a cash ISA, stocks and shares ISA or innovative finance ISA). For a lifetime ISA, the annual allowance is £4,000.

Junior ISAs
If you’re looking to put some cash aside for your children, Junior ISAs (JISAs) are a great option and often come with higher interest rates. In the new tax year, you can save or invest up to £9,000 in a cash JISA, a stocks and shares JISA, or a combination of the two.

Pension allowance
Your personal pension contribution allowance is £40,000, although it can be lower for higher earners and where pension savings have been flexibly accessed already. Any contributions you (or your employer) make receive tax relief from the government (based on your income tax band) of 20% or more – and the money in your pension pot will grow tax free.

Child’s pension
A child’s pension can be set up by a parent or guardian, but anyone can contribute. You can pay up to £2,880 in the new tax year into a pension on behalf of a child and the government automatically tops this up with 20% tax relief on the total amount contributed, taking the figure up to £3,600.

Gift allowances
A financial gift is a great way of using tax-free allowances, and your adviser can help explain the options available.

Making a cash gift can help a loved one (and help with your estate planning). Everyone has an annual gifting limit of £3,000 that is exempt from inheritance tax (IHT). This is known as your annual exemption. If you fail to use it one year, you can carry it over to the next tax year.

It’s worth remembering that any gift you give, even to family members, could be subject to capital gains tax (CGT). CGT is the tax you pay on any profit or gain you make when you dispose of an asset, such as a second home or shares. If you gift an asset and it has risen in value compared to what you have paid for it, you could be liable to CGT. The CGT allowance for the new tax year is £12,300. This is the amount of profit you can make before CGT is applied.

Marriage allowance
Married couples or those in civil partnerships may be able to share their personal tax allowances. To be eligible, one partner must earn less than the Personal Allowance threshold of £12,570, and the other must be a basic rate taxpayer. The lower earner can transfer £1,260 of their tax-free allowance to their partner, reducing the tax paid by up to £252 a year. Our financial advisers can help you make the most of your annual allowances now that we are into a new tax year.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

Key Takeaways:

• A new tax year means annual allowances are back to zero and ready to be filled or topped up, to make the most of your money.
• The maximum you can invest across your ISAs is £20,000.
• Your pension contribution allowance for the new tax year is £40,000.
• The Capital Gains Tax allowance is £12,300 for the 2022/2023 tax year.
• A financial gift is a great way of using tax-free allowances, and your adviser will be able to help talk you through the options available.
• Married couples or those in civil partnerships may be able to share their personal tax allowances.

1 April

National Living Wage (for age 23+) rises from £8.91 to £9.50

National Minimum Wage rises to £9.18 (for 21-22-year olds), £6.83 (for 18-20-year olds), £4.81 (for 16-17-year olds) and £4.81 (for apprentices under 19 or in the first year of their apprenticeship).

Council tax bills rise by up to 2.99% (including a 1% social care precept) although there may be some regional variations.

The Energy Price Cap increases by 54% as announced by Ofgem in February. Those on default tariffs paying by direct debit will see an increase of £693 from £1,277 to £1,971 per year. Prepayment customers will see an increase of £708 from £1,309 to £2,017.

Households in Council Tax bands A-D in England will receive £150 Energy Bills Rebate on their council tax bill to help protect them from rising energy costs. Discretionary funding will also be provided to support those in Council Tax bands E-H or those on low incomes who don’t pay council tax.

Reduced VAT rate of 12.5% on suppliers of hospitality, holiday accommodation and attractions, reverts to the standard rate of 20%.

5 April

End of the 2021/22 tax year. Have you used all your allowances?

6 April

Start of the 2022/23 tax year

ISA allowance remains at £20,000 (if it’s a cash ISA, stocks and shares ISA or innovative finance ISA) and £4,000 (for a lifetime ISA)

Junior ISA allowance remains at £9,000 (for a cash JISA, stocks and shares JISA or a combination of the two)

National insurance contributions paid by workers increases by 1.25%.

11 April

State Pension and benefit rates rise by 3.1% in line with the Consumer Price Index. This means the basic State Pension increases to £141.85 per week and the full rate of new State Pension increases to £185.15.

Standard Lifetime allowance for tax free pension saving remains at £1,073,100 until the 2025-26 tax year.

Personal tax allowance remains at £12,570. The basic rate threshold remains at £37,700 and higher rate at £50,270.

31 July

Working Tax Credit and Child Tax Credit claims for 2021/22 must be confirmed and renewed for 2022/23 if required.

Deadline for second payment on account for 2021/22 for those that pay self-assessed income tax.

1 October

All domestic electricity customers will receive a £200 discount on their energy bill from October. However, this discount will be automatically recovered from people’s bills in equal £40 instalments over the next 5 years, beginning in 2023.

30 September

Old £20 and £50 notes can no longer be used after 30 September. Although some banks and the Post Office may still allow withdrawn notes to be paid into customers accounts.

31 October

Paper income tax self-assessment deadline for 2021/22 returns to be with HMRC.

December

The government scheme that guaranteed 95% mortgages with selected lenders ends. This scheme was launched in April 2021 to help first time buyers after lockdown.

Your financial plan could be impacted by these key dates. Talk to us for advice.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

Key Takeaways:

• The new tax year is upon us making it a good time to make sure your fully prepared for the financial year ahead.
• Your financial plan could be impacted by these key dates, talk to us for advice.
• HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

Soon afterwards, their eldest grandchild passed his driving test. They decided they’d like to buy him a car, so they made a withdrawal. Being able to do this so easily cemented their trust in the investment company. Over the next year, they made several more deposits.

Paul and Mary then agreed they’d like to help one of their children with a deposit for a house. However, when they tried to withdraw the majority of their original investment, they couldn’t access their money or get through to the company by phone, email or any other means. It was at this point, they realised they’d been scammed.

On top of wiping out most of their life savings, the scam took a toll on the couple’s mental health. They both suffer from feelings of embarrassment and guilt, and Paul has developed severe depression.

Anyone can fall victim to a financial scam

Although Paul and Mary feel foolish, financial scams can be extremely sophisticated and trick the savviest of us. We’re used to hearing stories about elderly and vulnerable people being conned but recent research by Lloyds Bank found 18 to 24 years olds are most likely to fall victim to investment scams, making up approximately 25% of all cases. And, in fact, victims aged under 45 account for 70% of all reported investment scams.

Types of financial scam

Financial scams take many forms including high-return investment opportunities, like the one Paul and Mary fell for, pensions transfers and health insurance supplements. Criminals use phishing (emails) or smishing (texts) to impersonate trusted organisations and trick people into giving away their personal information or money.

Top tips to avoid being scammed

1) Follow the advice of UK Finance’s Take Five to Stop Fraud campaign:

• Stop: Take time to stop and think before parting with money or personal information

• Challenge: It’s ok to refuse or ignore requests that make you feel uncomfortable. Only criminals will try to rush or panic you

• Protect: Tell your bank immediately if you think you’ve fallen for a scam and report it to Action Fraud

2) Great deals don’t come looking for you. Scammers often advertise on social media and the internet. They may also send ‘deals’ by email, phone or direct message.

3) Make sure it’s genuine. As in Paul and Mary’s case, scammers can easily set up fake companies, profiles and websites. Don’t underestimate the lengths a fraudster will go to in order to convince you they’re genuine. Before parting with any money, it’s a good idea to seek professional advice. You can also use the FCA website to check the details of financial services companies.

4) Protect your payments. Consider your payment method. It’s very hard to get money back if you pay by bank transfer. Paying by card offers the greatest protection.

If you’d like help with any aspect of your finances, we’re here to help.

Key takeaways:

• If something seems too good to be true, it probably is.
• Give yourself time to think before parting with personal information or money.
• Speak to a professional before making big decisions about your finances.

They chatted about making a will a few times, but somehow life always got in the way. Until one day, 10 years after moving in together, Pete got a call that would change his life forever – Tom had been killed in a car accident.

The intestacy trap

On top of grieving for his partner, Pete found he was also facing an uncertain financial future. UK intestacy laws meant he wasn’t entitled to inherit any of Tom’s property or financial assets unless he had joint ownership. Pete knew that Tom would have wanted him to inherit everything but, without a will, that didn’t matter.

Pete and Tom had owned their property as joint tenants, meaning Tom’s share automatically passed to Pete according to the rights of survivorship. However, without children or any surviving parents or siblings, the remainder of Tom’s assets ended up being passed onto a distant uncle he had scarcely known.

Without Tom’s savings and investments, life insurance policy or even the car that Tom owned but they both used, Pete now struggles to pay his bills.

How a will could have helped

Had Tom got around to writing a will, he would have been able to specify exactly who would receive what from his estate, including his savings, investments, car and other belongings. As well as writing a will, Tom could have made his wishes known by nominating beneficiaries to his pension and writing life policies under trust. By taking these steps, he would have given Pete the extra financial support he now so desperately needs.

As it stands, Pete still has the legal right to claim against Tom’s estate as they had been cohabiting for more than two years - but this will be a costly and time-consuming process and a positive outcome isn’t guaranteed. If Tom had made a will, this added stress could have been avoided.

Don’t put it off

In the UK, the number of cohabiting-couple families is growing faster than the number of married-couple and lone-parent families. However, cohabiting couples have none of the legal protections afforded by marriage. A will is one way to ensure your partner inherits according to your wishes. Despite this, three in five UK adults do not have one.

Let us help

Any will must be drawn up accurately without ambiguities and executed correctly for it to be valid and effective. So, it makes sense to use an experienced professional.

A consultation with a will-writing expert will allow you to explore ways in which to reflect your wishes and protect the financial future of your loved ones in the most tax-efficient way possible.

If you’d like to find out more about how to arrange a will, we’re here to help.

Will writing is not part of The Openwork Partnership’s services and is offered in our own right.

The Openwork Partnership accepts no responsibility for this aspect of our business. Will writing and Trusts are not regulated by the Financial Conduct Authority.

Key takeaways:

• If you’re cohabiting with your partner (but you’re not married or in a civil partnership), it’s important you both make a will. This can ensure that if one of you dies, the surviving partner inherits according to the other’s wishes.
• An expert can help ensure your will is drawn up accurately and executed correctly so that it is valid and effective.

Whether you're saving for your future, buying your first home, remortgaging or want to protect your home and income – speaking to an expert can make all the difference.

Saving for your future

Robyn and Tim met in their late 20s and soon got married. They were keen to get on the property ladder so spoke to a financial adviser who helped them form a savings strategy.

They both opened a Lifetime ISA and opted for a Cash ISA (rather than stocks and shares) as they were not willing to risk the value of their savings falling in return for a higher potential gain.

Their adviser also encouraged them to review their pensions. As both of their employers matched anything they paid in, it made sense to maximise their pension contributions – even though retirement felt a long way away.

Buying your first home

They saved the maximum amount of £4,000 a year into their Lifetime ISAs, topped up by the government 25% bonus. In just 3 years they saved the £30K deposit needed to buy a £300K home. But before they could start house hunting, they needed to secure a mortgage.

A good mortgage adviser can scour the market, chase the provider to keep your application on track and guide you through the home buying process – invaluable if you’re a busy professional buying for the first time.

Their adviser helped them understand the different mortgages available and which most suited their needs. As a result, they bought their home knowing they could comfortably afford their monthly repayments.

Remortgaging

Robyn also owned a flat with her Dad that she lived in before she met Tim. She now lets it out but wanted to remortgage and release some funds.

Armed with more knowledge, she initially researched the market herself – but found that most Buy to Let mortgages are only available through brokers.

She found a specialist Buy to Let mortgage adviser who managed to secure her a low fixed rate mortgage which also released £40K of her equity. Her monthly repayments only increased marginally, and she has peace of mind that they won’t rise for the duration of the fixed term.

Understanding your tax position

Although Robyn and Tim didn’t exceed the first-time buyer stamp duty threshold of £300K for their new home, as Robyn already owned a property, they were not considered first time buyers. So they had to pay 3% of the house’s value in stamp duty. Had they got tax advice before getting married, they may have reconsidered their options.

When Robyn remortgaged her flat and replaced her Dad’s name on the deeds with Tim’s (a condition of the new mortgage) her solicitor warned they may be liable for more stamp duty – as she was gaining 50% of the property from her Dad, then Tim was receiving 50% from her.

As this was a complicated situation, Robyn sought specialist tax advice. As a result, they avoided paying a large amount of additional stamp duty.

Protecting your home and income

When you take out a mortgage it’s not just the building and its’ contents that needs to be insured. You should also consider what would happen if you or your partner lose your job, become critically ill or die.

Robyn and Tim spoke to an adviser to discuss protection. As a result, they can both now relax, knowing they will be able to pay off their mortgage and stay in their home, should the worst happen.

If you want to learn more and receive advice tailored to your personal circumstances, please get in touch.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Tax advice is not regulated by the Financial Conduct Authority.

Key takeaways

• Financial advice can be invaluable, whatever your income and whatever stage of life you’re at.
• A mortgage adviser not only recommends a mortgage that best suits you, but also guides you through the home buying process.
• You should always consider tax implications before big life events – such as getting married, buying a home, or separating from your partner.
• When you take out a mortgage you should also make provisions for if you were to lose your job, become critically ill or die.

Angela was looking at ways she could reduce her inheritance tax. After spending some time researching, she realised she could make small gifts to as many people as she likes, and these gifts will be exempt from IHT. Wanting to help her grandchildren out, she gifted them £1000 each.

Isabella, Harrison, and Ava were thrilled to receive the generous gift from their grandma and were quick to discuss what they wanted to do with it. After listening to their ambitious ideas, Angela sat the children down and told them that the best thing to do, was to put it into savings and investments to make more out of the money and eventually carry out their future goals.

The surprises of savings accounts
After listening to her grandma, Ava being the youngest of the 3, wasn’t too clued up on savings, so deposited the £1000 into a regular savings account. Regular savings accounts can be great, easy ways to save securely and access money easily, however, they do not make a lot of interest.

With average interest rates for a savings account at 0.06%, Ava looked back into the savings account after a year to discover it had only made £0.60 in interest. The little interest added meant that Ava couldn’t afford the new laptop that she so desperately wanted and had to settle for an older version instead.

Are Cash ISAs still effective?
With the desire to buy a new car, Harrison chose to put his money into a cash ISA after reading about the tax-free, easy to access advantages that they had.

However, Cash ISAs also have a very low interest rate due to the fact they are affected by the rise of the cost of living and high inflation, meaning you make little to no interest on the money that is in there.

The average cash ISA interest rate being 0.63%, Harrison went back to check on his investment after a year and found that it had made £6.32 in interest. Although this interest earned meant that he was unable to put the deposit down for the car he wanted.

Why Stocks & Shares ISAs would’ve been better
Isabella the oldest of the 3 was saving for a deposit on her first home. She found that a stocks and shares ISA was the most appropriate way to invest her money.

Stocks and shares ISAs are a good way to start investing your money as you can invest up to £20,000 a year, any income is protected from tax, and they can offer considerably higher returns over time.

With an average return on stocks and shares ISA being 13.55% if paid yearly, Isabella reviewed her account after a year and was surprised to see that she had made £144.24 of interest on the £1000 she inputted into the ISA. Using this way of investing now means Isabella has the money to be able to pursue her dreams of home ownership.

Let us help
Don’t let what happened to Harrison and Ava, happen to you. Whether you are taking your first steps in investment or a seasoned saver we’re here to guide you through the most suitable ways to invest your money, ensuring your future and you are protected.

The value of your investment and any income from it can fall as well as rise and you may not get back the amount you invested.

Key takeaways:

• You can reduce IHT by gifting money to family members.
• Savings accounts are good and easy short-term ways of saving, but don’t offer good interest.
• Cash ISAs are tax-free, easy ways of saving money but can interest rates can easily be affected by rise in the cost of living and higher inflation.
• Stocks and shares ISA are tax-free ways of saving with considerably higher returns over time.

Mortgages - Sorting the fact from the fiction

When they found out they were getting two for one, Sarah and Andrew couldn’t have been happier. But bringing up twins hasn’t been cheap and the couple are aware that as the children grow so will the strain on their finances. Having heard stories about the ever-rising cost of higher education, Sarah and Andrew are particularly keen to start saving for the twin’s university education.

How much does university cost?

On average, it costs just under £57,000 to go to university in the UK, according to Save the Student. This figure is based on the fact that the cost of tuition for most students is about £9,250 a year, average living costs are £9,720 a year and the majority of undergraduate degrees last three years. However, the exact cost can vary quite a lot depending on where you study and the course you’re doing. If Isabelle still wants to become a vet after doing her A-levels, she’ll be looking at going to university for five or six years so her costs will be higher than average. As well as a tuition fee loan, students can get a maintenance loan to help cover living costs. However, the average maintenance loan is only about £5,640 a year so there is more than likely going to be a significant shortfall.

Where should Sarah and Andrew start?

The good news for Sarah and Andrew is that they’ve started thinking about saving early. With at least eight years before the twins go to university, if their parents start saving straight away there is plenty of scope for their investments to grow.

The first thing Sarah and Andrew should do is get advice from an expert. This will help to ensure they make the right investment decision for their particular circumstances and avoid potential pitfalls.

What will Sarah and Andrew need to consider?

There are three main points Sarah and Andrew will need to consider when deciding on the best way to save for Isabelle and Isaac’s future:

• Ownership

Sarah and Andrew will need to decide whether to give ownership of the investments they make to Isabelle and Isaac. This is not generally recommended as it would mean the twins could cash that investment and blow the lot on their 18th birthday (16th if they were living in Scotland).

• Type of investment

As Isabelle and Isaac are still quite young, Sarah and Andrew have the option of making long-term investments that will hopefully achieve better returns. Being able to invest over a long period will widen the range of investment types available to Sarah and Andrew. Once they’ve made their initial investments, they would be well advised to review them on a regular basis to make sure their money continues to work as hard as possible.

• Tax

Sarah and Andrew shouldn’t choose their investment based on tax. However, once they’ve decided on the most suitable investment for their circumstances, it makes sense to invest via the most tax-efficient route.

If you’d like to discuss investment options for your child’s university education, we’ll be happy to help.

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

Key takeaways:

• The earlier you start saving, the better. This opens up the possibility of long-term investments offering potentially higher returns.
• Get advice from a professional to help ensure you make the right investment choice first time.
• Consider who’ll have ownership of the investments – giving ownership to a child can be risky.
• Review long-term investments on a regular basis.
• Once you’ve chosen your investment, make sure you invest via the most tax-efficient route.

Angela was looking at ways she could reduce her inheritance tax. After spending some time researching, she realised she could make small gifts to as many people as she likes, and these gifts will be exempt from IHT. Wanting to help her grandchildren out, she gifted them £1000 each.

Isabella, Harrison, and Ava were thrilled to receive the generous gift from their grandma and were quick to discuss what they wanted to do with it. After listening to their ambitious ideas, Angela sat the children down and told them that the best thing to do, was to put it into savings and investments to make more out of the money and eventually carry out their future goals.

The surprises of savings accounts
After listening to her grandma, Ava being the youngest of the 3, wasn’t too clued up on savings, so deposited the £1000 into a regular savings account. Regular savings accounts can be great, easy ways to save securely and access money easily, however, they do not make a lot of interest.

With average interest rates for a savings account at 0.06%, Ava looked back into the savings account after a year to discover it had only made £0.60 in interest. The little interest added meant that Ava couldn’t afford the new laptop that she so desperately wanted and had to settle for an older version instead.

Are Cash ISAs still effective?
With the desire to buy a new car, Harrison chose to put his money into a cash ISA after reading about the tax-free, easy to access advantages that they had.

However, Cash ISAs also have a very low interest rate due to the fact they are affected by the rise of the cost of living and high inflation, meaning you make little to no interest on the money that is in there.

The average cash ISA interest rate being 0.63%, Harrison went back to check on his investment after a year and found that it had made £6.32 in interest. Although this interest earned meant that he was unable to put the deposit down for the car he wanted.

Why Stocks & Shares ISAs would’ve been better
Isabella the oldest of the 3 was saving for a deposit on her first home. She found that a stocks and shares ISA was the most appropriate way to invest her money.

Stocks and shares ISAs are a good way to start investing your money as you can invest up to £20,000 a year, any income is protected from tax, and they can offer considerably higher returns over time.

With an average return on stocks and shares ISA being 13.55% if paid yearly, Isabella reviewed her account after a year and was surprised to see that she had made £144.24 of interest on the £1000 she inputted into the ISA. Using this way of investing now means Isabella has the money to be able to pursue her dreams of home ownership.

Let us help
Don’t let what happened to Harrison and Ava, happen to you. Whether you are taking your first steps in investment or a seasoned saver we’re here to guide you through the most suitable ways to invest your money, ensuring your future and you are protected.

The value of your investment and any income from it can fall as well as rise and you may not get back the amount you invested.

Key takeaways:

• You can reduce IHT by gifting money to family members.
• Savings accounts are good and easy short-term ways of saving, but don’t offer good interest.
• Cash ISAs are tax-free, easy ways of saving money but can interest rates can easily be affected by rise in the cost of living and higher inflation.
• Stocks and shares ISA are tax-free ways of saving with considerably higher returns over time.

Of course, saving for a pension when you’re self-employed is not as straightforward as it is for an employed person, who might automatically benefit from a workplace scheme and employer contributions. We’ve outlined some key points below for you to consider:

Don’t rely on the State Pension

Whether you’re employed or self-employed you’re entitled to the full basic State Pension (currently £129.20 a week) if you’ve paid in 30 years of National Insurance Contributions.

If you’re self-employed you can only claim the additional State Pension if you’ve had periods of employment.

On its own then, State support is unlikely to enable you to continue your current standard of living into retirement. That’s why it’s imperative for the self-employed to find other ways to provide the additional income needed in retirement.

Start saving early

It’s stating the obvious, but the sooner you start saving into a pension the bigger your potential retirement fund. You’ll also have more time to benefit from the tax relief that’s available.

To highlight the importance of saving early, a 25-year-old male looking to retire at 68 would need to contribute £236.25 per month in order to achieve a retirement income of £17,500 a year. If the same man had waited until he was 45 before he started saving, he would need to contribute £495.83 to achieve the same level of income, an additional £259.58 per month.

Minimise the amount of tax you pay

One of the main benefits of paying into a pension is the tax relief the savings attract. For example, if you’re a basic rate taxpayer paying £100 into your pension each month, HMRC will effectively add an extra £20 in tax relief.

The maximum amount you can save each year that attracts tax relief (otherwise known as the annual allowance) is £40,000.

Importantly, if your income is low and you’re not able to save the full £40,000 in one tax year, you can carry forward any unused allowance, and use it against earnings in the next tax year. Please note:

• You must have been a member of a registered pension scheme during the years you want to carry forward
• Your tax relief is limited by your annual earnings in the year you want to carry forward
• You can only carry forward unused allowance from the three previous tax years

What type of pension is right?

The self-employed can choose from a range of different pension products, including stakeholder pensions, personal pensions and Self Invested Personal Pensions (SIPPs). Each has its advantages and disadvantages – we can advise on which is best for you.

Perhaps the most flexible pensions are stakeholder schemes. They allow you to save as little as £20 per month and the charges are relatively low, which is helpful if you have irregular income levels.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes, which cannot be foreseen.

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

Key takeaways:

• A state pension alone is unlikely to be sufficient to fund your retirement.
• Make your money go further by taking advantage of the tax relief available on your pension savings.
• There are a lot of factors to take into account when choosing a pension, so it makes sense to get professional advice.

Whether you want to go on holiday or just want to save some money for the future, budgeting is a good way to put aside some money for reaching this goal. Here you can find some tips to help you take control of your finances.

Why is budgeting so important?

You might think that it’s not worth to spend that much time with counting all your income and expenses. But if you use apps or spreadsheets to make it visible how much you earn and spend on average every month, it will pay off.

In case of the unexpected or just having a big expense, it’s important to have some savings not to become indebted.

How to start budgeting?

First you will need to count how much money you bring home on average. Don’t forget to take your benefits into consideration as well so that you can put down the precise number.

After you became aware of how much you earn every month, it’s necessary to count your monthly average expenditure too. Don’t forget to look at at least three months of your expenses to be able to see some trends.

If you know your income and your expenses, you can compare them in order to see whether you spend more than you earn or not. If there is some money which remains every month then it’s easier for you to make a savings account. If you earn less than you spend, try to cut back on your expenses not to get into a debt spiral (spending and borrowing in turn).

In case of having debts and savings at the same time it may be a good idea to pay off the one with the other, because for loans the interest rates are higher so you earn less with the saving’s interests than you have to pay for the loan’s interests.

What kind of costs do you have to count with?

If you know how much money you spend every month, you can set up categories to see the amount of your needs and wants. First count the essential spending, for example the rent, utility bills and mortgage. These are your needs which you can’t leave out of your expenses. Although there are some tips to cut back on utility bills what you can also include in your budgeting.

In order to set budgeting goals you also need to know how much you spend on nice-to-have items like meals or holiday. You can save more if you tackle the biggest costs, for example eat outs. From a financial aspect it’s better to cook for yourself and your family than having meal in a restaurant. When cutting back on costs don’t forget to remain the things in your budget you really love within your means. It’s also important that you don’t concentrate on a typical month to work out the amount of your disposable income and set your financial goal according to this.

After you have set your financial goals, you can concentrate on the third main category of where your income gets into. It’s necessary to build some emergency savings in case of the unexpected. Experts recommend to have at least 3 to 6 months living expenses as a backup, but to have £1000 is already a good start.

How to set your budgeting goals?

When you set your budgeting goals it’s good to use the 50/30/20 rule where the biggest category is the essentials, the next one is the fun stuffs and the last one is the savings. So try to split your income according to the percentages each category gets.

Try to set realistic financial goals, so don’t forget to build in a buffer to be able to adapt to the rising prices as well. Make the plan together with your family so that it will be easier to stick to the plan. Don’t forget to review your budget from time to time. With this checking you’ll see whether you need to change your goals and where you could still cut back on your expenses.

You can also use piggybanking to automate spending. You can set spending categories, create a jar/piggy bank/account for each one and don’t exceed the amount of money you have there while paying for items within these categories.

If you’d like to discuss your budgeting goals, we’ll be happy to help.

Key takeaways

• Budgeting and saving is important to be able to cover the unexpected expenses.
• First count your monthly average income and expenses and compare them.
• Cut back on your expenditures to earn more than you spend. Next set a savings account as well to have some backup.
• Set realistic financial goals to be able to stick to the plan.
• Use budget planner or spreadsheet to make your finances more visible.
• Professional advice can help increase your savings and improve your budgeting.

Aware the incident could have been much worse, the couple were still left with an enormous mess to sort out. High winds had caused the inside of the chimney to collapse. However, Rachel and Nathan’s home insurance provider refused to pay for the structural damage because, according to their terms and conditions, the wind hadn’t been strong enough to constitute a storm. They also refused to replace the living room carpet because the couple’s contents insurance didn’t include accidental damage cover.

So, what can you do to make sure your home insurance provides you with the protection you’d expect when the unexpected happens?

Let’s start at the beginning - what exactly is home insurance?

Home insurance is split into two parts – buildings and contents.

Buildings insurance – this covers the building itself, including walls, floors, doors, windows and the roof. It also covers permanent fixtures such as baths, toilets, fitted kitchens and even wallpaper.

Contents insurance – This typically covers anything that can be taken with you if you move e.g. kitchen appliances and furniture.

Not all home insurance is equal

As Rachel and Nathan discovered to their cost, not all home insurance is equal. Although tempting to simply go with the cheapest option, it’s always best to check the details of any policy you’re considering to see exactly what’s included. For example, some buildings insurance covers garages, greenhouses and garden sheds but some policies don’t.

It's also a good idea to check for exclusions. You may find some insurers won’t pay out for anything considered to be the result of general wear and tear or damage that happens over time, such as damp or rot.

Meanwhile, contents insurance generally has a single-item limit, meaning high-value possessions may need to be named separately. You may also have to pay extra to cover belongings when they are taken outside your home.

Accidental damage cover is something else to think about. Rachel and Nathan decided to do without it. However, if they’d added it to their contents insurance, the cost of replacing their living room carpet may have been covered. According to MoneySuperMarket, mishaps account for over a quarter of all home insurance claims, so accidental damage cover may be worth prioritising.

Reading reviews of insurance providers can also be useful. Most events that result in a claim are pretty stressful, so you don’t need things like poor customer service making matters worse. According to the Association of British Insurers, home insurance prices fell to the lowest levels on record in the first quarter of 2022 meaning you shouldn’t have to pay a fortune for a good policy.

Do you really need home insurance?

Homeowners – although buildings insurance isn’t a legal requirement, most mortgage lenders insist on it. No one is going to force you to buy contents insurance but it can provide valuable peace of mind and combining it with your buildings insurance may save you money.

Renters – you don’t need to worry about buildings insurance – this is your landlord’s responsibility. However, contents insurance may be a sensible idea.

Key takeaways:

• What’s covered by home insurance varies from policy to policy, so you should check what’s included before making a purchase.
• Check the terms and conditions for any exclusions to make sure you’re getting the cover you need.
• Paying extra for accidental damage cover is worth serious consideration with over 25% of claims occurring as the result of mishaps.
• Read reviews before choosing an insurance provider – good customer service can be just as important as cost.

• Not already in a pension
• Between the ages of 22 and the state pension age
• Earning more than £10,000 a year
• Working in the UK

Rachel was happy to be enrolled into her workplace pension when she joined the charity but, now the cost of living crisis is starting to bite, she’s considering opting out in order to maximise her take-home pay. So, would this be a wise move or a false economy?

What will Rachel get out of her workplace pension?

In 2019, the government increased the minimum contribution to workplace pensions to 8% - at least 3% from employers with employees making up the balance. It’s important for Rachel to remember that her contribution comes from her pre-tax earnings, so opting out of her workplace pension may not boost her take-home pay as much as she expects.

The government is also contributing to Rachel’s workplace pension in the form of tax relief. As a basic-rate taxpayer, Rachel only needs to pay in £80 to increase her pension savings to £100 because the taxman contributes £20.

So effectively, Rachel is contributing 4% of her qualifying earnings (any pre-tax employment income between £6,396 and £50,270) to her workplace pension. The government then adds 1% tax relief and the charity tops this up with a 3% contribution. This means, in effect, Rachel’s net contribution is being doubled. In other words, for every £100 Rachel contributes, £200 is landing in her pension pot.

But does Rachel really need another pension on top of her state pension?

The short answer to this is yes! Many people overestimate how much they’ll get from their state pension. Currently, a full state pension provides an annual income of just over £9,600. Rachel will definitely get a proportion of this, as she’s already made ten years’ worth of National Insurance contributions. However, to get the full amount, she’ll need to make 35 years’ worth of contributions. Even if she manages this, according to Which, a single person needs £19,000 a year to enjoy a comfortable retirement and closer to £31,000 a year to be able to afford luxuries like exotic holidays and a new car every five years.

Why should Rachel get advice?

With costs rising left, right and centre, it’s understandable that Rachel wants to make savings wherever she can. However, by opting out of her workplace pension, she would essentially be throwing away free money from her employer and the Government. If possible, it would make sense for her to continue paying into her workplace pension while looking to make savings elsewhere.

Probably the best thing Rachel can do is seek advice from a professional. They’ll be able to explore options that allow her to enjoy the best possible standard of living both now and in the future.

If you’d like to discuss pension planning or any aspect of your finances, we’re here to help.

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

Key takeaways:

• A workplace pension helps you to boost your retirement savings with contributions from your employer and the government.
• The state pension alone is unlikely to be sufficient to fund your retirement.
• Get professional advice to make sure you get the retirement you deserve.
• The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.
• HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

How much do I need to save?

A 5% deposit of the property value is the minimum amount you are able put down and however with this your options may be limited. A 10% deposit will provide with more options, whilst a 25% deposit will enable you to get competitive mortgage rates. The larger deposit you can provide, the less risk you will be considered to lenders and better rates will be available to you.

Where do I start?

Set a savings goal, which you can break down into easier amounts and a time frame to achieve it. Regular saving is most effective and it’s important to be realistic on how much monthly you can save so that it’s more easily attainable and doesn’t feel like such a chore or impact your life severely. To decide on how much to save, researching house prices in the area you would like to buy your property and using mortgage borrowing calculators online can help you work out how much you may need to save.

Buying schemes and saving accounts options

There are various government buying schemes such as Help to Buy and Shared Ownership and mortgage deals which you may be able to use depending on how much deposit you can raise.

With a Lifetime ISA (LISA) as a first time buyer under 40, you get a 25% bonus on your savings. For example, if you put £1,000 into your Lifetime ISA, the government will add an extra £250. This would mean you have £1,250 at the end of the tax year. It could help you in reaching your deposit goal quicker.

Top tips on how to build your savings:

• Set up a savings account – look into a suitable ISA and consider a Lifetime ISA
• Look at your current spending habits – analyse and see where you can possibly reduce your monthly bills and expenditure (e.g. minimise unused subscriptions/gym membership, change energy or network providers, eating out, daily coffees etc.) to save money.
• Create a budget and stick to it – make the budget realistic so it’s easier to stick to and when you struggle, remember the goal in mind. Set up standing orders so the money is automatically allocated to savings before you have chance to spend it.
• Reduce your rent/living costs – If possible, consider moving in with family, friends or find cheaper/shared accommodation which can allow you to save money quicker.
• Make extra money – sell clothes, items online that you don’t need, or if you have a skill/talent/craft that you can turn into a business, this can help you earn extra cash.
• Make use of discounts, vouchers and online deals – every little saving helps.
• Try “no spend” months or weekends” – only pay your bills and regular outgoings and necessities and move the money you save to your savings. Consider alternative free activities.
• Set limits – If it helps, take out a certain amount of money in cash for the week or month and leave your cards at home.
• Consider investing options – including saving accounts with higher interest rates, stocks and shares ISAs
• Ask for help and advice – from friends and family for support and we’re here for any financial advice you may need.

We’re here to help you on where you can save and invest your money towards your deposit, provide you with financial advice to make sure your savings and investments are working for you and advise you on how much you can borrow for a mortgage. We’ll also be here to help find the right mortgage deal when you are ready to buy your first home!

If you would like to find out more, please get in touch with one of our advisers.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

A stocks and shares Lifetime ISA is a medium to long term investment, which aims to increase the value of the money you invest for growth or income or both. The value of your investments and any income from them can fall as well as rise. You may not get back the amount you invested.

Key Takeaways:

• A 5% deposit of the property value is the minimum you can put down.
• Set yourself a savings goal, which you can break down into easier amounts and a time frame to achieve it.
• Government schemes such as Help To Buy and Shared Ownership mortgage deals can help first-time buyers.
• With a Lifetime ISA (LISA) as a first-time buyer under 40, you get a 25% bonus on your savings.
• YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
• A stocks and shares Lifetime ISA is a medium to long term investment, which aims to increase the value of the money you invest for growth or income or both. The value of your investments and any income from them can fall as well as rise. You may not get back the amount you invested.

After seeing their six-year-old son’s birthday list, Liz and Dan have realised it’s high time they started teaching Archie about the value of money. It’s true they both have reasonably well-paid jobs and only the one child but, even so, a Saint Bernard puppy, a quad bike, a horse and a life-size dalek don’t come cheap. So, what can Liz and Dan do to ensure Archie doesn’t end up bankrupting them before he goes to high school?

Pocket money

Archie is nearly seven - the age when most parents start giving their children pocket money, according to research by Barclays. And the bank says this is a great time to start teaching youngsters about the value of money. By getting Archie to earn his dough by doing household chores, Liz and Dan will help Archie appreciate the effort that goes into earning money and encourage him to develop a strong work ethic.

Pocket money can be paid in cash or using a prepaid card. There are a number of cards available that are designed specifically for youngsters from companies including GoHenry, Osper and HyperJar. A pre-paid card could also be a gentle way for Liz and Dan to introduce Archie to electronic payments and the world of online banking.

Talking about money

By talking to Archie about money and what they spend it on each month, Liz and Dan can help him to appreciate the kind of ongoing financial commitment involved in buying something like a Saint Bernard puppy or a horse. Archie’s probably too young for them to go through their entire household finances with him. But they can start with a large sum and show him how quickly the figure falls as they tick off all their monthly bills.

Showing Archie how they budget provides a good opportunity to talk about the difference between wanting something and needing something. This will also allow Liz and Dan to introduce the benefits of saving as a way of affording treats and luxuries, after paying for essentials.

Making saving visual

Barclays suggests that making it easy for children to visualise how it’s possible for money to grow can help get them excited about saving. Liz and Dan could do this by giving Archie a clear jar to turn into a homemade piggy bank. Alternatively, they could set up a savings account so Archie can go online to see how additional deposits and interest add up over time.

Budgeting for a big day out

Research by the Bank of England found only a quarter (27%) of youngsters in the UK enjoy school lessons about money. The study revealed kids thought using real money in real situations would help make learning more fun.

Archie wants to take a couple of friends to the zoo for his birthday. This offers a great opportunity for him to use money in the real world. Putting Archie in charge of the budget for the trip may help to increase his appreciation of the value of money. Liz and Dan should agree an amount Archie has to spend and ask him to think about how he’d like to use that money. They’ll need to remind him of all the things that will have to be paid for including fuel, entry tickets, food and drink etc. Allowing Archie to take the lead as much as possible during the trip – by handing over cash or holding up cards to make payments – will help boost his financial awareness and hopefully make learning about money more engaging.

Key takeaways:

• Giving children pocket money for doing household chores can help them appreciate the effort that goes into earning cash and encourage a strong work ethic.
• Talking to children about money helps them to understand budgeting and the difference between essentials and luxuries.
• Making it easy for children to visualise how their money can grow may encourage them to save.
• Putting children in charge of budgeting for a big day out can boost their financial awareness and make them more comfortable handling money.

It’s becoming increasingly popular to use humour during services to reflect the personality of the individual being celebrated. A survey by Co-op Funeralcare on the music people would like at their final goodbye found Another One Bites the Dust by Queen, Going Underground by the Jam and Highway to Hell by ACDC were among the chosen tunes.

After the music’s faded, gravestones offer another opportunity to raise a smile long after you’ve gone. One of the most famous examples of a humorous epitaph is Spike Milligan’s ‘I told you I was ill’. Meanwhile, Mel Blanc - the man behind the voices of Bugs Bunny, Daffy Duck, Porky Pig and many others – opted for the famous Looney Tunes sign-off ‘That’s all folks!’ In a similar vein, gameshow host Merv Griffin, who presented Wheel of Fortune in the USA, went with ‘I will not be right back after this message’.

A funeral that captures the essence of the person being remembered can provide some level of comfort to loved ones during an incredibly difficult time. Another way to make things as easy as possible is to have your financial affairs in order.

Whole of life plans

A whole of life plan provides your loved ones with a lump sum when you die. With some policies, you pay monthly or annual premiums until your death, while others allow you to stop paying at a certain age - although this may impact the amount of money your loved ones receive.

Create or review your will

A will allows you to specify how your property, money and possessions will be distributed when you die. If you pass away without a will, the rules of intestacy will determine this for you and may not reflect your wishes. A will can also be used to set out plans for the guardianship and any future financial support of your children.

Accounts, bills and policies

Make a list of your accounts, bills and policies to help those left behind. This is important in case there are outstanding debts attracting interest that could be settled. Remember to include:

• Current/savings accounts
• Investments/pensions
• Credit cards/loans
• Mortgages
• Insurance policies

Paying for your funeral and other expenses

Dying is costly! According to the SunLife (2022) Cost of Dying Report, you’re looking at an average bill of £8,865. This includes:

£4,056 – the average cost of a basic funeral

£2,484 – the average amount spent on extras such as the memorial, death and funeral notices, flowers, order of service sheets, limousines, venue and wake

£2,325 – the average amount spent on legal professionals

A pre-paid funeral plan allows you to set aside money to pay for your funeral. However, these plans aren’t currently regulated. If you’re taking out a policy before 29 July 2022, when they will be regulated, make sure you check the provider’s status on the FCA website. Don’t buy a plan if its status is 'not applying for authorisation', 'application refused' or 'application withdrawn’.

If you’d like more information on estate planning, we’re here to help.

Key takeaways:

• A whole of life plan can provide your loved ones with a lump sum payment on your death.
• An up-to-date, valid will helps to ensure your property, money and possessions are distributed according to your wishes after you die.
• Keep an up-to-date list of your financial assets and debts to help loved ones in the event of your death.

A remortgage is the process of moving your home’s existing mortgage to one with a new lender. Remortgaging could help you save money if you weigh up the fees involved with the savings you could make. Here’s how it works.

People remortgage for many different reasons, including:

• Finding a better deal elsewhere – you might be on a standard variable rate (SVR) and want to move to a fixed-term rate.
• Coming to the end of a fixed-term deal on your current mortgage and wanting to lock in a lower rate with a new lender.
• The loan-to-value on the home is lower (as more of the mortgage has been repaid).
• Wanting to get ahead of a rise in interest rates, which would affect mortgage rates.

How a remortgage could help you save
One of the big reasons people remortgage is to save money on their monthly payments. If you’re on a standard variable rate that is higher than the fixed-rate deals currently available, you could save by switching – either to a fixed-rate mortgage or one that ‘tracks’ the Bank of England’s base rate.

If your home has gone up in value and you’ve paid off enough of your mortgage to give you a lower loan-to-value, it means you own more of your home and have less to pay off. Remortgaging could result in lower monthly mortgage payments because you’re paying off less of a loan amount (and in turn, less interest on it too).

How long does the remortgage application take?
The process can take between four to eight weeks from the time you apply so it’s good to start planning early. If you’re coming to the end of a fixed-rate or tracker term, your lender should tell you that your mortgage will move onto their standard variable rate1. This could be an ideal time to move if you find a better deal elsewhere, or you may even find an attractive deal with the same lender and go through a ‘product transfer’ (see box).

How much does a remortgage cost?

• Existing lender fees
  Your existing lender could charge you a fee if you’re leaving them early into a fixed period in your mortgage. This is known as an ‘early repayment charge’ and could be in the range of 1% to 5% of your outstanding mortgage balance. They will also charge you an ‘exit’ fee of around £50 to £100 to cover their administration costs.
• New lender fees
  Your new lender could charge you a range of fees, so before you commit it’s important to check what you will pay. This will help you calculate whether a move is financially beneficial overall.
  • Their fees could include:
    Application fee to set up your new mortgage. Could also be called an ‘arrangement’, ‘product’ or ‘booking’ fee. This could be around £1,000.
  • Valuation and conveyancing fees. Some providers won’t charge for these, but it’s worth checking if you are moving to a new lender.
  • Solicitor’s fee covering the legal paperwork to do with managing the transfer of your mortgage.

Is a remortgage right for you?
Whether or not you remortgage all depends on your situation and the type of mortgage plan you’re currently on. You may want a mortgage that lets you make overpayments, or you could be coming to the end of your current deal’s fixed term and think the lender’s SVR will be too high. One of the most important things you can do before you decide is gather your current mortgage paperwork, look at the fees and get some expert advice on your next steps.

What about product transfers?
If your mortgage is coming to its maturity date but you’d prefer to stay with your current lender, you could consider a product transfer. Switching to a new mortgage product with the same lender could save you money and time.

Our financial advisers can help guide you through choosing the option for you.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

The Bank of England has raised interest rates and warned further hikes are likely in the coming months. This will mean bigger bills for some homeowners.

On 3 November 2022, the Bank of England raised interest rates from 2.25% to 3% - the eighth hike since December 2021 - in a bid to combat soaring inflation. And, the Bank’s Governor, Andrew Bailey, has warned people to expect further rises in the coming months.

It is now widely anticipated that rates will rise to over 5% by Spring next year. This has had a huge impact on the mortgage market – with some lenders pulling deals altogether and others replacing their offerings with more expensive alternatives.

What does a rise in interest rates mean for your mortgage?
If you don't have a fixed-rate mortgage, you're likely to see your borrowing costs rise, although how they are affected will depend on the type of product you have. Your adviser can help you assess your mortgage deal and figure out ways to make savings.

• Only borrowers with a mortgage that moves up or down with the base rate will be immediately affected by the interest rate change.
• This includes tracker mortgages and standard variable rate mortgages (which you revert to when a mortgage deal ends).

Fixed-rate mortgages
If you're on a fixed-rate mortgage deal, you won't see any change in your monthly payments. This is because the interest rate you pay stays the same for the length of your mortgage deal.

But with further interest rate rises expected, if you're close to the end of your current term, it may make sense to look for a new deal sooner rather than later. You can generally lock in a new mortgage deal three to six months before an existing deal comes to an end.

If you've got more than six months to the end of your current deal, you'll either need to wait for a while or pay the early exit fee (A fee you may have to pay your current lender if you end your mortgage deal prior to the ‘official end date’) We can advise you on the best way forward.

Standard variable rate mortgages
You end up on a standard variable rate (SVR) when a tracker or fixed-rate mortgage deal ends, and you don’t remortgage.

If you’re currently on your lender’s SVR, you may well see your monthly payments increase following the rise in the base rate. You may not be hit with the full increase though, as these rates go up at a lender’s discretion.

Tracker mortgages
Tracker mortgages follow the Bank of England’s interest rate. So, payments on your tracker mortgage will rise as a direct result of any increase in the base rate. Exactly when this happens will depend on your lender.

As a rule, tracker mortgages do not exactly match the base rate but are set at a level just above it. For example, if your lender’s rate is the base rate +1%, the interest you’ll pay in total on your loan will be 4% (based on the base rate of 3% - 3 Nov 2022).

Whatever type of mortgage you have, we can advise you about how the interest rate rise might affect you and address any questions or concerns you have.

How to save on your mortgage costs
The best thing you can do is to speak to your financial adviser. If you’re on a tracker mortgage, they'll be able to advise whether changing to a fixed-rate deal to protect yourself from any further rises is a good idea. They'll also let you know about the fees involved when making changes to your mortgage. If you're on an SVR, the interest rate you will switch to when your initial mortgage deal ends, you can switch to a new mortgage deal at any time. With interest rates rising, your adviser can help you look at available fixed-rate deals.

If you're already on a fixed-rate deal, your mortgage payments won’t increase until your current term ends. With many lenders letting you lock into a new deal six months before your existing one finishes, it’s a good idea to plan ahead.

Whether you’re looking to remortgage or you're a first-time buyer, we can help you find the right deal for your circumstances.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT

Actively talking about money can be positive for both you and your loved ones, and research suggests it’s something younger generations are more likely to do. According to Royal London, 76% of 18 to 24-year-olds spoke to their parents about money matters when they were growing up. In contrast, this falls to 43% for those over 65.

If money wasn’t openly discussed during your childhood, it can be hard to change your mindset around the topic. Yet, when you’re planning a future with your partner, your finances will play a critical role. So, if you currently keep your financial planning separate, working together could be useful.

That doesn’t mean you have to share everything or combine finances completely if it’s not right for you. Instead, you could set out how you want to work together with a financial planner.

Bearing all this in mind, here are five reasons you should create a financial plan with your partner.

Understand what you both want to achieve
While you may have talked about your goals in your relationship, setting out a financial plan provides a good opportunity to talk about your priorities and understand if you’re on the same page as your partner. This may include when you’d like to retire, and what your lifestyle will look like when you give up work. Or it could be how you’ll support your wider family or bucket list destinations you want to visit.

Making these goals a clear part of your financial plan means you’re far more likely to achieve them. Without a plan, it can be all too easy for aspirations to fall to the wayside.

Discuss your attitudes to financial decisions
When dealing with finances, it’s important that you’re comfortable with the decisions you make. This applies to both you and your partner if you’re working towards shared goals.

For example, how does your partner feel about taking investment risk? Or what is their attitude to using credit? Talking about these issues can help you create a financial plan that you’re both comfortable with.

It could improve your wellbeing
Money is often linked to stress, and it can affect your overall wellbeing too. Research shows that financial stress can increase later in life. This is understandable as, on top of considering things like mortgage repayments and day-to-day costs, you may also be thinking about retirement or supporting other family members. According to Aviva research, more than 40% of 55 to 64-year-olds say they are “struggling financially”.

A long-term financial plan that incorporates you and your partner’s circumstances and goals can deliver peace of mind.

Have confidence in the future
One of the reasons that the topic of money can be stressful is that you may have questions about the future or wonder what will happen in some circumstances. For example, you might be concerned about the consequences of you or your partner losing your income, or how one of you would cope financially if the other passed away.

Financial planning helps you set out a blueprint, but it also considers how you’d cope if the unexpected happens. By doing this, you can take steps to provide security in these circumstances. By planning together, you can have confidence in both your and your partner’s long-term financial security.

It could help make your money go further
Planning as a couple can make financial sense. Working together could mean you’re able to make the most of tax breaks or allowances.

Which ones are right for you will depend on your circumstances and goals but may include using the Marriage Allowance to reduce Income Tax liability, making use of both of your annual ISA allowances, or contributing to your partner’s pension.

Contact us to create a financial plan for you and your partner
We are here to help you navigate the challenges of creating a tax efficient financial plan and understanding your goals. If you’d like to arrange a meeting with us, please get in touch.

If you have any questions about tax efficient financial planning, please contact us.

The value of your investment can go down as well as up and you may not get back the full amount you invested.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen

With announcements relating to energy bills, Income Tax, the State Pension, tax allowances, and Stamp Duty, there are plenty of ways your finances could be affected in 2023 and beyond.

Here are the key points of the autumn statement and what they mean for you.

You may pay more Income Tax in 2023/4The chancellor’s announcements mean many millions of workers are likely to pay more Income Tax over the next few years, for two key reasons.

1. Personal Allowance and higher-rate threshold frozen

The Personal Allowance – the amount you can earn before you pay Income Tax – has been frozen at its current level of £12,570 until 2028.

Additionally, the threshold at which the higher rate of Income Tax begins (£50,270) has also been frozen until 2028. So, as your earnings rise, you’ll pay more tax than if these thresholds rose each year in line with inflation.

1. Reduction in the threshold at which individuals pay additional-rate tax

Additionally, Hunt reduced the threshold at which additional-rate Income Tax becomes payable.

You will now pay the 45% rate of tax on any earnings over £125,140 (it was previously £150,000). In simple terms, if you earn more than £150,000, this specific move means you’ll likely pay just over £1,200 a year in additional Income Tax.

You may pay more Dividend Tax and Capital Gains Tax from 2023
As part of his plan to increase tax revenue, the chancellor announced reductions to two key tax allowances.

Dividend Tax
The Dividend Allowance – the amount you can earn from dividends before you will pay Dividend Tax – will reduce from £2,000 to £1,000 in 2023, and then to £500 in 2024.

If you receive any income from dividends, it’s likely that you will pay more tax on these dividends from April 2023 onwards.

Capital Gains Tax
The Capital Gains Tax (CGT) annual exempt amount will fall from £12,300 to £6,000 in 2023, and to £3,000 in 2024.

This means that you will only be able to make profits of £6,000 on non-ISA investments (things like company shares or a second home) in the 2023/24 tax year before CGT becomes due.

Your State Pension will rise
Under the “triple lock”, brought in by the coalition government in 2010, the State Pension increases each year by the higher of:

• The average increase in wages across the UK
• Inflation, as measured by the Consumer Price Index (CPI)
• or 2.5%.

Hunt announced that he would increase the State Pension in line with September 2022’s inflation rate of 10.1%. So, if you’re in receipt of the State Pension, that means a significant boost to your payments from April 2023.

If you’re on the full, new State Pension, the BBC reports that you will receive £203.85 a week, up from £185.15.

Pension Credit and other benefits will also be uprated in line with inflation.

You’ll likely pay more for energy from April
One of Hunt’s initial moves on becoming chancellor was to scale back Liz Truss’s Energy Price Guarantee.

This guarantee ensures that, for six months from 1 October 2022, the average household will pay energy bills of around £2,500 a year.

In his speech, Hunt announced that, while support for energy bills will remain in place, it will become less generous from April 2023. The guarantee will rise to £3,000 for a further 12 months, meaning you could well see your gas and electricity bills rise again in the spring – although the government say their measures would save the typical household £500 in a year.

There will be additional support for more vulnerable households, such as pensioners and those on benefits.

Inheritance Tax thresholds frozen until at least 2028
At present, qualifying estates can pass on up to £500,000 with no Inheritance Tax (IHT) liability using the nil-rate and residence nil-rate bands.

The qualifying estate of a surviving spouse or civil partner can continue to pass on up to £1 million without an IHT liability.

These two thresholds had already been frozen until 2026. The chancellor announced an extension to this freeze, meaning that the nil-rate bands will remain at these levels until at least 2028.

As house prices and asset values rise, it will become increasingly likely that the value of your estate exceeds the combined nil-rate bands, and that your family may face an IHT bill on your passing.

Stamp Duty changes become a “holiday”
In September, Kwasi Kwarteng announced some increases in the thresholds at which Stamp Duty is payable.

Stamp Duty in England and Northern Ireland is now only paid above £250,000 while first-time buyers only pay the tax on purchases over £425,000 (and discounted Stamp Duty on properties up to £625,000).

While these changes will remain, the chancellor said they will now be time-limited, ending on 31 March 2025.

Other key announcements at a glance

• The largest-ever rise in the UK’s national living wage. For workers aged 23 and over, it will rise by 9.7% to £10.42 an hour from April 2023.
• Confirmation that the main rate of Corporation Tax will increase to 25% for companies with over £250,000 in profits from April 2023.
• The lifetime cap on social care costs in England due to come into force in October 2023 will be delayed by two years.
• Electric cars, vans, and motorcycles will begin to pay Vehicle Excise Duty in the same way as petrol and diesel vehicles from April 2025.
• Councils will have more flexibility in raising Council Tax without asking voters.
• HS2 and the Northern Powerhouse Rail schemes will continue as planned.
• A £13.6 billion package of business rates support over the next five years.
• Spending of £2.8 billion in 2023/24 and £4.7 billion in 2024/25 for adult social care and an additional £3.3 billion in 2023/24 and a further £3.3 billion in 2024/25 to improve the performance of the NHS.
• A significant increase in windfall taxes. The oil and gas companies' tax rate will increase from 25% to 35% of profits on UK operations from January 2023 until March 2028, while there will also be a 45% tax on profits of older renewable and nuclear electricity generation.

Get in touch

If you have any questions about how the autumn statement could affect you, we can help. Please get in touch to arrange a time to chat.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

Overpaying on your mortgage now could save you more on interest down the line and help reduce your mortgage payments. It could also make sense to overpay on your mortgage rather than keep your money in a savings account, because you’ll earn more in interest savings on your mortgage than you could earn in a typical savings account.

An overpayment is any additional payment you make over your usual monthly mortgage payment. Overpayments can either be a one-off lump sum or a regular overpayment made throughout the year. Overpaying on your mortgage means you can potentially clear your mortgage balance quicker.

Lenders will offer you better rates if you have a lower loan to value. The more you can pay to reduce your mortgage, the potentially lower interest rates you’ll have when you come to remortgage to a new deal.

Overpaying on your mortgage might not be right for everyone. Using savings to overpay on your mortgage could leave you with less cash to fall back on in an emergency.

Not all lenders have the same rules for overpaying and there may be a penalty fee called an Early Repayment Charge if you overpay too much.

You should only make overpayments if you’re sure you can afford them. It’s a good idea to make overpayments if you already have an emergency fund, and you don’t have any other, more pressing debts that need to be repaid.

We can help guide you through all your mortgage options including advice on making overpayments.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Taking out an offset mortgage enables you to use your savings to reduce your mortgage balance and the interest you pay on it.

Offset mortgages can help you save money over the course of your deal as there’s less interest to pay over the longer term. Interest rates on offset products can be higher than on an equivalent standard repayment deal, but thanks to the savings placed aside, these are charged on a smaller loan amount. This means you will pay less mortgage interest while the savings are offset.

An offset mortgage can help to lower your monthly repayments or lead to earlier repayment of your balance. There is also no tax to pay on the benefit received from an offset mortgage.

We can help guide you through all your mortgage options including whether an offset mortgage is right for you.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Approved by The Openwork Partnership on 03/01/2023

Many lenders allow us to secure a new fixed rate for you months in advance of your current rate ending. It’s important to start early and we can help you navigate everything you need to, to ensure your needs are met.

We can help guide you through all your mortgage options so please get in touch soon.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

By gathering information about your income and expenses, categorizing your expenses, setting financial goals, determining your disposable income, and creating a budget plan, you can take control of your finances and achieve your financial goal.

1. Compare income and expenses

Make a list of all your average monthly outgoings then compare it to your current income and see if you spend more than you earn. If there is money left over every month then it’s easier for you to add this to savings. If you earn less than you spend, try to cut back on your expenses slightly.

2. Set realistic goals

Set yourself short and long-term financial goals. Short-term goals should take around one to three years to achieve and might include things like setting up an emergency savings fund or paying credit card debt. Long-term goals, such as saving for retirement or your child’s education, may take decades to reach.

3. Follow the 50/30/20 rule

Once you’ve identified your monthly income and expenditures, it’s worth using the 50/30/20 rule. This is a technique where you divide your income into three categories. 50% of your budget covers any essentials like rent and bills, 30% covers variable costs like eating out and shopping and 20% covers savings and paying off debts.

4. Cut back on nice to haves

We are all guilty of enjoying the finer things in life, but identifying what nice to have items you can cut back on can help you achieve your financial goals quicker. For example, cutting back on eating out may only save you a small amount each month, but can be a huge saving in the long term. You may be surprised by how much money you could accumulate by making one minor adjustment at a time.

5. Review your budget regularly

Once you have created your budget, don’t forget to review it from time to time, especially as the cost-of-living crisis is beginning to catch people out with rising prices. By checking it frequently, you’ll see whether you need to adjust your goals and where you could still cut back on your expenses.

Key takeaways:

• Budgeting and saving are important to be able to cover the unexpected expenses.
• Compare your average monthly income and expenses and see whether you are spending more than you earn and where you can cut back.
• Set realistic financial goals to help motivate you to stick to your budget.
• The 50/30/20 rule helps people to categorize spending into essentials, nice to haves and savings.
• It’s important to review your budget regularly as the cost-of-living crisis is beginning to catch people out with rising prices.

The Chancellor, Jeremy Hunt, has delivered the next part of his plan: “a Budget for long term and sustainable growth”. Read on to find out who were the winners and losers from the 2023 spring Budget.

Winners

Over-50s returning to work
In his speech, the Chancellor said that “older people are the most skilled and experienced people we have”. So, he announced steps to make it easier for those over 50 to work for longer.

Firstly, the government announced an enhancement to the “midlife MOT” strategy – offering reviews to help individuals take stock of their finances and wellbeing to prepare for a more secure retirement.

Hunt also introduced a new kind of apprenticeship – called a “returnership” – aimed at over-50s who want to return to work.

The Chancellor also announced some significant pension reforms aimed at encouraging more over-50s to remain in work, or to return to work. This brings us to…

Pension saver
The Lifetime Allowance (LTA) restricts the amount of tax-efficient pension savings an individual can accrue in their lifetime.

Having reached a peak in 2012, the LTA has been frozen at £1,073,100 since 2020.

To encourage people to remain in work, rather than retiring to avoid punitive tax charges for exceeding the lifetime limit, Hunt made the unexpected decision to abolish the LTA. The government will remove the LTA tax charge from April 2023, and completely abolish it in a future Finance Bill.

In addition, the Annual Allowance that restricts the amount that you can save tax-efficiently in any one year will also rise, from £40,000 to £60,000 in April 2023. You will also continue to be able to carry forward unused Annual Allowances from the three previous tax years.

Finally, many high earners are also affected by the Tapered Annual Allowance. The Chancellor announced that the minimum Tapered Annual Allowance will increase from £4,000 to £10,000 from 6 April 2023. The adjusted income threshold for the Tapered Annual Allowance will also be increased from £240,000 to £260,000 from the same date.

These are major steps that will allow pension savers to accumulate significantly more tax-efficient pension savings over their lifetime, and reduce some tax disincentives to work.

In addition, once an individual flexibly accesses their defined contribution pension savings, the total tax-relieved pension savings they can make each year is restricted to the level of the Money Purchase Annual Allowance (MPAA). To support those who have left the labour market to return and supplement their income, or build up their retirement savings, the government will also increase the MPAA to £10,000 from April 2023.

Parents with young children
In an attempt to boost growth and get more people into work, working families will have access to 30 hours of free childcare each week for children aged between nine months and four years.

This is alongside boosts to subsidised childcare for parents on Universal Credit including upfront support.

Support will be phased in until every single eligible working parent of an under-five gets this support by September 2025.

Households with high energy bills
Back in November, Hunt announced that the government’s Energy Price Guarantee – an initiative of the Truss administration – would continue in its present guise until April 2023.

Under the guarantee, for six months from 1 October 2022, the average household has been paying energy bills equivalent to around £2,500 a year.

In April 2023, the guarantee was set to rise to £3,000, however the Chancellor announced that the Energy Price Guarantee would be extended by a further three months.

This is designed to keep bills at £2,500 on average and the Treasury says this will save the average family £160 on top of the energy support measures already announced.

Drivers
With inflation remaining high, the Chancellor argued that now is not the right time to uprate fuel duty with inflation, or increase the duty.

So, he announced a one-year extension of the 5p cut in fuel duty, saving the average driver £100 on top of the £100 saved so far since last year’s cut.

In addition, the Chancellor announced an increase of £200 million to the “potholes fund”, taking the annual amount allocated to £700 million. The increase is expected to fix the equivalent of up to 4 million additional potholes across the country.

Pubgoers
While duty rates of all alcoholic products produced in, or imported into, the UK will increase in line with inflation, from 1 August, draught relief in pubs will be up to 11p lower than the relief for supermarkets. This is in addition to changes already due to come into effect in August.

Swimmers
Hunt talked about the risk to swimming pools and other community facilities due to rising costs. In response, he announced a £63 million to fund public leisure centres and pools.

Losers

Businesses with larger profits
Back in 2021, when he was Chancellor of the Exchequer, Rishi Sunak announced that Corporation Tax would rise in April 2023 for businesses making more than £250,000 in profits.

The Budget confirmed that this increase will proceed in April as planned – with around 10% of companies paying the top rate.

Companies with profits of less than £50,000 will continue to pay Corporation Tax at 19%.

However, businesses will be able to offset 100% of their UK investment in IT equipment, plant, and machinery against profits to reduce their tax bills. This is an effective cut to Corporation Tax of £9 billion a year, and the government aim to make the scheme permanent when it is responsible to do so.

Taxpayers
In his November statement, the Chancellor reduced the Income Tax additional rate threshold from £150,000 to £125,140, increasing taxes for those on high incomes.

He also announced that Income tax, National Insurance, and Inheritance Tax (IHT) thresholds would be maintained at their current levels for a further two years, to April 2028.

Over the next five years, this is likely to see many people pay more Income Tax, as rising earnings push them into a higher tax bracket.

In addition, as house prices and asset values rise, it is likely that more and more estates will face an IHT bill over the next five years.

Savers
While it may now be possible to contribute more to your pension tax-efficiently, the subscription limits for tax-efficient ISAs were frozen at:

• £20,000 for an adult ISA
• £9,000 for a Junior ISA.

Smokers
In the Budget document, the Treasury confirmed that duty rates on all tobacco products will increase by RPI plus 2% from 6 pm on Budget day.

The rate on hand-rolling tobacco will increase by RPI plus 6% and the minimum excise tax will increase by RPI plus 3% this year.

Get in touch
If you have any questions about whether you are a winner or a loser from the spring Budget, and how it will affect you and your finances, please get in touch.

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

Approved by The Openwork Partnership on 15/03/2023.

Start with an open mind

There is the danger of becoming too fixated on certain locations or certain properties. It’s important to be open when searching for your first home, ensuring that you’re considering all locations and types of houses. Often buyers become stressed because they have narrowed their search down too far too early.

Talk to your local estate agent

It’s worth booking in a conversation with your local estate agents as after all, they are the experts. They will be able to give you an idea of properties available in the area, upcoming areas to search in and whether your budget is realistic to where and what you’re looking for.

Check out the location before putting an offer in

You don’t want to commit to a house before even knowing what the location or neighbourhood is like. If you fail to do this, you could be stuck…for a long time! It’s a good idea to identify three to four neighbourhoods you’d like to live in based on commute time, schools, recreation, crime, and price.

Use property finding websites

With the world evolving, property search websites have become the most popular way in finding properties for sale and to rent. They are easy to use, open all hours, provide you accurate results and you don’t even have to move from the sofa! Some of the many include Rightmove, Zoopla and OnTheMarket.

Speak to a mortgage adviser

We can give you an idea of how much you will be paying monthly, taking various fees and rates into account. We will also be able to tell you whether your budget is enough to get you the property you want and what deal we believe is right in light of your needs.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

Approved by The Openwork Partnership on 17/03/2023.

Key Takeaways:

• It’s important to consider everything when making one of the biggest purchases of your life.
• Buying your first home is an overwhelming experience, so making sure you’re open to everything is key.
• When finding your first home it’s important to consider things like the neighbourhood, whether it’s a starter house or your forever home, price and affordability.
• Estate agents are great for finding your first home, they will give you insight into where to buy, upcoming areas to buy into and if you can afford certain areas.
• Property finding sites are great for finding your first home, they are open all hours, are easy to use and you don’t have to move from the sofa!
• We can help make the process of finding your first mortgage as smooth as possible.
• YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

Whether you’re a first-time buyer, downsizing or moving to your dream family home, it’s an exciting – and busy – time. It also comes with costs that could take you by surprise, so here’s a look at the ones you’re likely to come across and how we can help you through the journey.

Advice fee

We can help when you’re applying for your mortgage in principle, putting you in a strong position once an offer is accepted. The benefit of using a broker is that they have the expertise to ensure you’ve covered the required checks and paperwork related to buying your home and getting a mortgage.

We will let you know at the start of the process about our fees.

Booking and arrangement fees

These fees go to your mortgage lender. The booking/application fee is usually £100 to £300, but the arrangement fee can be much higher, anything from £0 to over £2,000 or a percentage of the loan. We can help you decide whether it’s better in the long term to opt for a mortgage with a slightly higher interest rate and lower arrangement fee, rather than a high arrangement fee and lower interest rate.

Valuation fee

Your mortgage lender will need to value the property themselves to make sure it’s not over- or under-priced. The valuation will also confirm the amount they’re willing to lend to you. Some lenders don’t charge a valuation fee, but if they do, it can cost upwards of £250 – depending on the size of the property and its value.

Surveyor’s fees

It’s important to know that the valuation fee doesn’t look at the structure of your new home, or any issues to do with maintenance and repair. We will be able to arrange an expert to conduct a thorough structural survey of the property. This will help you decide whether to negotiate the terms of the sale with the seller and their agent – before you exchange contracts. Survey fees can range from around £300 to over £1,500 - all depending on the level of service required and the size of the property.

Conveyancing costs

Buying a property involves lots of paperwork, and the legal side of things (known as conveyancing) covers the fees to solicitors or licensed conveyancers to carry out the work (‘disbursements’) as well as their own specific fees. Conveyancing can cost from £850 to £2,000, and disbursements, for example local authority searches which can cost around £250 to £450.

Electronic transfer fees

On the day you complete the sale and exchange contracts, a fee of around £50 will be added to your costs to cover the transfer of funds from your lender to the solicitor.

Insurance

Your lender will need to see that your new home is insured with buildings insurance. In 2022, the average cost of buildings and contents insurance was between £146 and £152 a year. We will help you find the best insurance plan to cover your new home and calculate how much contents coverage you will need as part of your insurance. At the same time we can review your personal coverage to check that you have enough life insurance to cover the mortgage should anything happen.

Removals

Once you’ve got the keys to your new home, it’s time to move in! Removal firms can charge anything upwards of £300, depending on how much you’re moving and how far it’s going.

We will help take the stress out of home buying and can find you the competitive deals and savings available.

Don’t forget the stamp duty

As a buyer you will have to pay a stamp duty land tax, this depends on whether you’re a first-time buyer, where you live, and where the property is located within the UK. First-time buyers will pay no stamp duty land tax on properties up to £425,000.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

Approved by The Openwork Partnership on 17/03/2023.

Key Takeaways:

• Buying a home comes with extra costs and fees you need to be aware of – from securing your mortgage to booking the removal van.
• There are additional costs you need to be aware of when buying your first home.
• Consider additional costs such as advice fees, booking and arrangement fees, valuation fees, surveyor’s fees, conveyancing fees, electronic transfer fees, insurance, removals and stamp duty.
• Always remembers additional fees when buying a home, save that little bit extra to account for them.
• YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

Because of the way many lenders decide what rates to offer, we’re currently seeing tracker products priced a lot more competitively than fixed rate products.

Unlike a fixed rate, the monthly payment of a tracker mortgage fluctuates and the rate charged on the mortgage ‘tracks’ the Bank Rate usually for a set period. Whilst you may have to pay a penalty to leave your lender, especially during the tracker period, there are tracker products that have no early repayment charge, so you are free to leave without penalty.

If you’re coming up to the end of your fixed-rate and you’re faced with a higher interest rate than you were expecting, switching to a tracker at a lower rate may be tempting. Although you may find there are cheaper tracker products on offer than current fixed rates, you must be confident that you’ll be able to afford your repayments if the rate goes up.

We can help guide you through all your mortgage options including advice on whether a fixed rate or tracker product is more suitable.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Approved by The Openwork Partnership on 27/03/2023

Saving for your child’s university education requires careful planning and budgeting. By starting early, considering investment opportunities, encouraging your child to save, looking for scholarships and bursaries, and planning, you can make saving for university a manageable goal and give your child the best possible start in life.

What is the cost of university?

According to Save the Student, it costs roughly £61,000 to go to university in the UK. This figure comes from tuition fees costing most students £9,250 a year. As most courses last around 3 years, this amounts to around £27,750 over the course of their time at university.

As well as a tuition fee loan, students can get a maintenance loan to help cover living costs like accommodation, travel, food, and books. The average maintenance loan is approximately about £5,820 a year, so there will more than likely be a significant shortfall that parents will need to cover. However, the exact cost of university can vary depending on where your child studies and the course they choose.

It’s important to consider the following when saving for your child’s university education.

Start early

How you save for your child’s university costs will depend on how long you’ve got before the money will be needed. For example, if your child is due to start university in the next few years, sticking with cash savings is likely to be your best option so the money is readily available and there’s no investment risk.

Consider Investing

Investing some of your savings can help you achieve higher returns, but it also comes with higher risks. It's important to understand what investment options you have before making any decisions. These options include:

• Stocks and Shares ISA – A tax-efficient investment account that can help make your money work harder. Unlike a cash ISA, a stocks and shares ISA gives your money more potential to grow by investing it in a range of places like shares, funds, investment trusts and bonds, instead of keeping it in cash.
• Junior ISA – Junior ISAs have a tax-free allowance of £9,000 per tax year, which can be invested in cash, stocks and shares, or a combination of both. The funds in a Junior ISA are locked in until the child reaches the age of 18, at which point the account will convert to a standard adult ISA.

Encourage your child to save

Teaching your child about the importance of saving and encouraging them to save for their own education can help reduce the financial burden on you. Encourage them to take on part-time work and save some of their earnings towards their university education. They can use the following to help them save:

• Regular Savings Accounts - Many banks and building societies offer savings accounts for you to set up on a child’s behalf. Regular savings accounts are designed to encourage children to save an amount every month, and often run for a set amount of time.
• Instant Access Savings Account – Instant access savings accounts allows you or your child to withdraw or deposit money at any time.

Scholarships, Grants and Bursaries

Each university offers their own scholarship, grant and bursary programmes to help students pay for their education. Different universities offer different financial aids, so it is worth doing your research beforehand. Your child may be eligible for financial support based on academic or sporting achievements.

Plan Ahead

Creating a financial plan and setting goals can help you stay on track and make saving for your child's university education more achievable. Work out how much you need to save, how much you can realistically contribute each month, and how long it will take to reach your goal.

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

As a parent, you want to do everything you can to ensure that your children have a bright and secure future. One way to do this is by investing on their behalf. Not only can they start adulthood with some savings, but getting children involved early with saving also helps them learn important lessons about money.

The earlier you start investing, the better. Time is a powerful tool when it comes to investing, and the longer you have, the more time your money has to grow. Even if you can only contribute a small amount each month, starting early can make a big difference in the long run.

What investing opportunities are available?

In the UK, there are numerous different ways to invest in a child’s future. The main ones are:

• Junior ISA – Junior Individual Savings Accounts (JISAs) are a tax-efficient way to invest for your child's future. Junior ISAs have a tax-free allowance of £9,000 per tax year, which can be invested in cash, stocks and shares, or a combination of both. The funds in a Junior ISA are locked in until the child reaches the age of 18, at which point the account will convert to a standard adult ISA.
• Savings accounts – Many banks and building societies offer savings accounts for you to set up on a child’s behalf. You can start an account with as little as £1 for any child aged up to 18. There are two types of savings accounts: regular and instant access. Regular savings accounts are designed to encourage children to save an amount every month, and often run for a set amount of time whereas instant access allows you or your child to withdraw or deposit money at any time.
• National Savings and Investment (NS&I) Premium Bonds – NS&I Premium bonds are investments placed in a savings account that allows penalty-free withdrawals. There is no interest earned, instead the interest rate funds are placed in a monthly draw and any prize won is tax-free.
• Self-Invested Personal Pensions (SIPP) – Your child’s retirement may seem a world away, but you could consider opening a SIPP to invest for their future. Parents can benefit from the tax relief associated with SIPP as they can invest up to £2,880 each tax year with a 20% government top up. This amounts to the £3,600 annual contribution limit.
• Child Trust Funds (CTFs) – Even though Child Trusts Funds (CFTs) are no longer available, you can still contribute up to £9,000 a year into an existing CTF account. If a child was born between 2002 and 2011, they might have a Child Trust Fund. These can be transferred into a Junior ISA.

It’s important to remember that investing is a long-term game, and that staying consistent with your contributions will pay off in the long run. Even if you can only contribute a small amount each month, it's better than nothing. Consistency is key when it comes to building wealth over time.

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

If the end of your fixed rate mortgage is on the horizon (even if it’s months away), then it’s a good idea to start looking at your options today.

 If you haven’t got a new deal in place when your fixed rate mortgage ends, your lender will put you onto their standard variable rate, which tends to be higher than the rates on most other mortgage options. So it pays to get the right mortgage for you in place.

 When it comes to remortgaging, some people prefer to search the market themselves. This could be time consuming, and the right deals for you might not be that easy to find. Others leave it to the last minute (or even worse forget about it altogether) which can leave them paying more than they need to. 

But did you know there’s another way?

By seeking advice from a mortgage adviser now, you could get the right deal for you sooner.

We can search an extensive panel of lenders for you, finding deals and options that you may not have even considered. And by planning your next remortgage steps today, you’ll cut down on the risk of missing your mortgage expiry date.

 No one wants to pay more than they need to, so it helps to plan ahead with the support of an expert.

We can expertly find the right mortgage for you – whatever your circumstances.

 It’s a myth that you have to wait until your current mortgage plan expires before you can remortgage. In fact, most lenders will allow us to secure a new fixed rate for you months in advance. Plus you can often change your mind after you’ve secured the mortgage, before you renew.

There are plenty of mortgages out there to consider. A green mortgage may work for you if you have a more energy-efficient home, or a long-term mortgage may help if you’re looking to reduce your monthly payments. We will consider your overall financial situation and needs in depth to help find the right fit for you.

We know new doesn’t always mean better and it may make more sense to stay with your current lender. If your current lender is the right option for you, we will tell you.

What if you’re not in the same boat as before?

Everyone’s circumstances change over time! Don’t worry if you’ve had a credit blip, you’re earning less or your property has dropped in value, because that doesn’t mean you’re automatically stuck for choice. Your options are out there, and with an experienced adviser at your side, you’ll be able to find them.

Protect your future by planning ahead with an adviser from Collective Financial Planning Ltd

With thousands of mortgage deals and options on the market, it can be difficult to compare products and feel secure in the knowledge that you’re making the right choice.

But help is at hand – our experienced advisers can protect your time and energy, as well as your mortgage payments! With access to a wide range of lenders and the right search tools at our fingertips, we can find the right deal for you. We’ll also be saving you hours of searching time and mortgage comparison headaches.

Our expert advice will make your mortgage search and application process pain-free, and our inside knowledge will protect you from any nasty surprises. So are you ready to get ahead of the game? Then speak to us today.

Call our office on 01908 062448 or drop us an email on info@colfinancial.co.uk

Approved by The Openwork Partnership on 26/04/2023

While it may seem like an added expense, the cost of financial security is a small price to pay for the security it provides. Most of us don’t think twice when it comes to protecting our vehicles or mobiles phones and pets, so why not do the same when it comes to your source of income. Here are some ways you can protect yourself if you’re self-employed:

Income Protection

Being self-employed means your income y is directly tied with your ability to work. This means if you’re unable to work due to illness or injury you could suffer significant loss of pay. Income protection pays out a regular tax-free income, on a short or long-term basis, to cover expenses such as your rent or mortgage, bills and other living costs if you are unable to work.

This valuable insurance could help reduce stress, prevent your family suffering financial hardship, and give you the breathing space to help you get back on your feet when you most need it.

Critical Illness Cover

If you were to be diagnosed with a serious illness such as heart disease, it would have a significant impact on your ability to work. Critical illness cover usually pays out a tax-free lump sum if you’re diagnosed with a serious illness covered by your policy. These usually include, cancers, heart attacks and strokes.

Life Insurance

If you were to pass away unexpectedly, your family could be left in a difficult financial situation. Life insurance pays out either a lump sum or regular payments on your death, giving your dependants financial support after you’re gone. This can help them to cover expenses such as funeral costs, mortgages, bills and provide them with financial security during a difficult time.

If you’d like advice on how to protect your finances, or you’d like to review your protection needs, please get in touch.

Approved by The Openwork Partnership on 18/05/2023

1. Use existing savings for income
If the value of your DC pension has fallen recently, one way to help it to recover could be to keep as much of it invested as possible. Consider whether you could live on less income than you are currently taking.

Using alternative savings or investments could help reduce the amount you need from your pension. By leaving your money invested in your pension, you’ll retain more fund units, which may increase in value when markets recover.

When things are looking better, if you have depleted your emergency fund you could use some of your income to rebuild it gradually. This will provide a buffer to support you if markets drop again in the future.

2. You could take a phased retirement
Many people are choosing to take a phased retirement to fight the effects of the cost of living crisis. This might include:

• Taking a part-time job
• Setting up your own business or working as a contractor
• Staying in your old job but on reduced hours.

Continuing to work means you could contribute more to your pension, helping it to grow further.

Keep in mind that the Money Purchase Annual Allowance (MPAA) might limit the amount of tax relief you can receive. Once you start drawing income flexibly from your pension, you can only receive tax relief on contributions up to £10,000 a year, although you can make contributions over this amount.

You could also receive your State Pension payments alongside any income you make from work once you reach State Pension Age. If you are struggling to cover your monthly expenses, this could provide a welcome boost to your income.

We can help you understand all the financial implications of phased retirement and pension contributions.

3. An annuity could provide guaranteed annual income for the rest of your life
If you would like a guaranteed annual income but don’t want to go back to work, you could consider an annuity.

Buying an annuity with a lump sum from your pension can deliver a guaranteed annual income for the rest of your life.

Annuities are becoming an attractive option for retirees again. Rates have risen to a 14 year high in 2022, meaning you can now get much more for your money.

For example, in December 2022 a 65-year-old with a pension pot worth £100,000 could secure a guaranteed income of £6,873 a year for life.

The same person would only have been able to receive £4,521 a year if they had bought the annuity at the start of 2022.

4. A lifetime mortgage could free up cash from your home
A lifetime mortgage is a loan that you take out against the value of your home, allowing you to exchange equity for tax-free cash. To be eligible, you must:

• Be over 55
• Own your home, which must be worth/valued at more than £70,000
• Have little or no mortgage left to pay
• Be a UK resident.

Benefits of a lifetime mortgage:

• You retain ownership of your home.
• The cash can be used to pay for anything.
• You don’t need to repay the loan, or the interest accrued, until you move into long-term care or pass away.

Disadvantages of a lifetime mortgage

• Interest will be charged on the original loan and the interest accrued, so the amount you owe will grow.
• The interest rates on lifetime mortgages tend to be higher than on residential mortgages.
• You may have less to leave your beneficiaries in your will.

5. Downsize your home to reduce monthly bills
Moving to a smaller property with a better Energy Performance Certificate rating could offer a win-win situation.

Not only could this help free up some cash from the sale of your old property, but a smaller, more efficient home could also reduce monthly bills.

Get in touch
If you’re worried about the rising cost of living and would like to discuss ways to protect your finances from the effects of inflation and rising energy prices, we’re here to help. Please get in touch to arrange a time to chat.

Important Information
The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

Past Performance is not a guide to future performance and should not be relied upon.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes, which cannot be foreseen.

A Lifetime Mortgage is not suitable for everyone and may affect your entitlement to means tested benefits, so it is important to seek financial advice before taking any action. If you are considering releasing equity from your home, you should consider all options available before equity release.

The interest that may be accrued over the long term with a Lifetime Mortgage, may mean it is not the cheapest solution. As interest is charged on both the original loan and the interest that has been added, the amount you owe will increase over time, reducing the equity left in your home and the value of any inheritance, potentially to nothing.

Although the final decision is yours, you are encouraged to discuss your plans with your family and beneficiaries, as a Lifetime Mortgage could have an impact on any potential inheritance. We would also encourage you to invite them to join any meetings with us so they can ask questions and join in the decision, as we believe it is better to discuss your decision with them before you go ahead.

Approved by The Openwork Partnership on 18/05/2023

1. Form a healthy and potentially profitable habit
Investing regularly helps you to build good habits and keep you committed to a long-term investment strategy. No matter how little you put away, over time, your steady and regular investment should build up.

A good way to start is to invest a fixed portion of your income every month. Then, as your income fluctuates over your working life, simply adjust the amount you’re saving in line with the amount of money you are making.

2. Limit your exposure to one-off events and benefit from pound cost averaging
Global stock markets can be unpredictable and volatile. They move up and down frequently, sometimes sharply. This is why, when investing in stocks and shares, it's important to take a long-term view – usually at least five years.

Saving regularly means you can benefit from “pound cost averaging” and this helps smooth out the market’s peaks and troughs. Although there’s no guarantee of this, the theory is that when markets are low, you acquire more shares or fund units for your money, and when markets are high, you acquire less.

So, by drip-feeding your money into an investment over a period of time, you will inevitably end up investing across a range of prices. In effect, you should pay the average price over a fixed period, which can help to reduce your risk and, potentially, provide smoother returns.

3. Reap the rewards of compound growth
Compound growth is one of the most powerful and underrated benefits of long-term investment.

Investing small amounts of money each month could mean you start investing sooner. And the sooner you start investing, the longer your money will be exposed to the growth potential of both being in the markets and from compounding.

The powerful effects of compound growth mean that even small sums add up and can help make a big difference later down the line.

As you might imagine, compounding has its largest impact during the latter stages of your investment journey; 5% growth on £100 is only £5, but 5% growth on £1,000 is £50.

So, if you want to reap the rewards of compound growth, start early, and establish (and maintain) a good savings habit.

4. Instils good investing discipline
Some people hesitate over when to invest money and attempt to time the best moment to buy in to the market. This approach is incredibly difficult and even seasoned fund managers don't try to time the market.

In fact, professional investors and fund managers with large sums to invest will often drip-feed their funds into the market over time.

If it's good enough for the experts, it a great approach for novice investors!

5. Pick up potential bargains
When stock market prices start to fall, many people panic. They will often sell their investments and, when spooked by market changes, many investors may refuse to re-enter the market until things settle down.

Because fear can sometimes drive prices artificially low, this is often the best time to buy into the market. So, adding to your investment at these times may mean that you enjoy larger returns when the markets rally.

If you find it difficult to remove emotion from investing and struggle to benefit from market downturns, regular investing can help by removing the emotional element of buying into the stock market.

Get in touch
If you’re interested in finding out more about how you could invest your money wisely and potential profit from long-term growth through regular investing, we’re here to help.

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

Past Performance is not a guide to future performance and should not be relied upon.

Approved by The Openwork Partnership on 18/05/2023

1. Keep calm and carry on protecting yourself
It can be easier said than done, but even when your bills are rising and things are looking a bit worrying, staying calm and thinking objectively about your finances really is the best way to approach the challenge.

You might be tempted to start cutting down on your expenses, but one thing it’s really important not to cut is your financial protection.

Research has revealed that 1 in 7 people in the UK are considering cancelling their life insurance policies to save money during the cost of living crisis.

Removing a monthly expense such as a life insurance or income protection premium might feel like a smart move in the short term. But things could become even more challenging if you were to fall ill and not be able to work for a few months or longer. If this were to happen when you’d cancelled your cover, you might struggle even more without the potential pay out from your policy.

If you are struggling to pay your monthly expenses, it’s important to reach out and talk to an expert. We can help you to see your finances more clearly and to create a plan of action that takes you from worrying about money to feeling in control.

2. Reducing debt might be the best place to start
If you want to boost your financial wellbeing, it might be best to begin by reducing your debts to lenders.

If you have high levels of debt, your monthly payments could be one of your most costly expenses. If you have some savings, reducing or eliminating the amount you owe could help free up money to be deployed more usefully elsewhere.

High-interest debt is often tied to credit card debt. If you’re carrying a long-standing balance from month to month it could be costing you dearly every month.

To illustrate the potentially damaging effects of interest on debt, if you have £1,000 sitting in a savings account earning 1% interest, you’re only making £10 a year. If you have £1,000 on a credit card at 18% interest, you’ll be paying £180 a year. Using your savings to pay off the debt will mean you are £170 a year better off.

In short, the sooner you can cancel out debt the better.

If you have debt in multiple places, you might want to consider consolidating them.

There are various options for consolidating debt, but the right solution will depend on your individual circumstances. We can help you understand which course of action might be most suitable for you.

3. There might be some easy cost savings that will reduce your monthly bills
Once these bigger things are taken care of, you can look for some smaller actions you could take to reduce your monthly expenses. Review your bank statement to identify anything that you no longer need. Things to look out for include:

• Streaming services that you rarely or never use

• Subscriptions that you don’t get value from

• Gym memberships that you don’t use

• Delivery fees for online shopping.

Given the sharp rise in energy costs this year, it may also be helpful to consider how you could use energy more efficiently in your home to save costs.

The Energy Saving Trust reports that the average UK household spends £65 a year powering appliances on standby mode. So, remaining vigilant about turning off appliances like TVs or games consoles when you aren’t using them could help to save money across the year.

Additional savings could be made by installing and fully utilising the features of a smart thermostat; the average installment cost is £215. The Energy Saving Trust estimates that a typical household could save £180 a year by using a smart thermostat so that your heating only comes on when you need it.

By identifying and plugging these “money leaks”, you may be able to reduce your monthly expenses without having to slash spending on the things you enjoy.

Get in touch
If you’re worried about the rising cost of living and would like to discuss ways to protect your finances from the effects of inflation and rising energy prices, we’re here to help. Please get in touch to arrange a time to chat.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

Approved by The Openwork Partnership on 18/05/2023

The mortgage market is going through another unpredictable time with mortgage lenders withdrawing mortgage deals and increasing rates in a reaction to the recent news that inflation is slowing at a less- -than-expected rate.

Do you need to remortgage now?
If you’re due to remortgage now, don’t panic! The good news is that help is at hand.

Despite the recent withdrawal of some mortgage products and rates, we still have access to thousands of mortgage rates and can search an extensive panel of lenders for you, finding deals and options that you may not have even considered. We’ll also be saving you hours of searching time and mortgage comparison headaches.

Speaking to an adviser can help during these unpredictable times
If you’re worried about remortgaging, seek mortgage advice from an expert. We have our fingers on the pulse of the mortgage market and are equipped with in-depth knowledge of the different mortgage products on offer. Our insider knowledge can make your remortgaging process simple, so are you ready to find the right mortgage for you? Speak to us today.

Call us on 01908 062448 or drop us an email on info@colfinancial.co.uk

Your home may be repossessed if you do not keep up repayments on your mortgage

Approved by The Openwork Partnership on 12/06/2023

• Being able to talk to their mortgage lender about their ability to afford payments with it having no impact whatsoever on their credit score
• Switching to interest-only for six months without impacting credit score
• Implementing a 12-month minimum before repossessing homes

Mr Hunt said that lenders agreed to allow struggling borrowers to extend the term of their mortgages or move to an interest-only plan temporarily "no questions asked".

The meeting between the Chancellor and lenders follows the recent decision by the Bank of England to increase its Base Rate to 5.00%, up from 4.5% as the Bank tries to tackle inflation. Millions of UK households will see their budget squeezed as a result.

If the interest rate rises or the cost of living are causing you concern about your repayments, you should speak directly to your lender. We’re also here to help offer advice and guidance when you need it.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

Approved by The Openwork Partnership on 30/06/2023

Many customers have seen the benefits, for example, one of our insurers reported that in 2022, 99% of GP appointments were offered within 2 hours of a customer contacting them. They also saw the demand for these appointments increase by 126% from the previous year showing that wider emotional, health and family support services can really make a difference in people's lives.

With the NHS feeling pressure like never before, knowing your family’s health is covered can give you extra peace of mind.

Here’s one little thing you can do today, talk to an adviser from Collective to discuss the healthy extras available for you and your family

Health and wellbeing services can be discussed with your adviser when you’re considering a protection policy. By looking at the needs of you and your family, we can help you get the right protection in place.

Ready to get started?

Call us on 01908 062448 or drop us an email on info@colfinancial.co.uk

Approved by The Openwork Partnership on 27/06/2023.

Expiry date – 25/06/2024

Is now a good time to remortgage as the Bank of England base rate stays the same?

Whilst the Bank of England base rate remains the same, interest rates are still the highest they have been in 15 years. So if you are one of the thousands coming to the end of your fixed rate deal over the next few months it’s very likely you’ll see your payments increase as a result of higher mortgage rates but it’s a common misunderstanding that the Bank of England base rate is directly linked to the mortgage rates on offer. There are many factors that determine mortgage rate pricing.

Lots of factors determine mortgage pricing – not just interest rates
Even though the base-rate hasn’t changed, we have seen interest rates steadily increasing and it’s likely you will have noticed that mortgage lenders have been decreasing their rates slightly. This is because mortgage lenders use a number of factors to determine mortgage rates and one of these is something called ‘swap rates’ which lenders use to reflect expectations for future interest rates.

Consequently, many mortgage lenders have already priced the latest base-rate increases or non-movement into their rates so the impact on new mortgage deals is likely to be minimal.

In addition, after the UK annual rate of inflation reached 11.1% in October 2022, a 41-year high, it has been falling ever since and this gives banks and building societies more confidence that interest rates could fall in the longer term.

We can help you navigate the mortgage market
If you need to remortgage, we can help you navigate the mortgage market effectively. We continuously monitor the mortgage and wider financial market and can compare a huge range of lenders and mortgages on your behalf, finding a solution that’s completely tailored to your needs.

Call us on 01908 062448 or email us at info@colfinancial.co.uk

Through regular investing, you can invest a small amount into the markets every month. Investing little and often is a great habit to develop and instil in younger family members. Instead of saving up a chunk of money to invest in one lump sum, investing this way can make a significant difference to your overall levels of wealth over the longer term.

One big benefit of investing a small regular sum is that, you’re putting your money to work straightaway. Even with rising interest rates, leaving money sitting in a bank account can be less profitable than investing it in the market.

01 Form a healthy and potentially profitable habit

Investing regularly helps you to build good habits and keep you committed to a long-term investment strategy. No matter how little you put away, over time, your steady and regular investment should build up.

A good way to start is to invest a fixed portion of your income every month. Then, as your income fluctuates over your working life, simply adjust the amount you’re saving in line with the amount of money you are making.

02 Limit your exposure to one-off events and benefit from pound cost averaging

Global stock markets can be unpredictable and volatile. They move up and down frequently, sometimes sharply. This is why, when investing in stocks and shares, it’s important to take a long-term view – usually at least five years. Saving regularly means you can benefit from “pound cost averaging” and this helps smooth out the market’s peaks and troughs. Although there’s no guarantee of this, the theory is that when markets are low, you acquire more shares or fund units for your money, and when markets are high, you acquire less.

So, by drip-feeding your money into an investment over a period of time, you will inevitably end up investing across a range of prices, which can help to reduce your risk and, potentially, provide smoother returns.

03 Reap the rewards of compound growth

Compound growth is one of the most powerful and underrated benefits of long-term investment. Investing small amounts of money each month could mean you start investing sooner. And the sooner you start investing, the longer your money will be exposed to the growth potential of both being in the markets and from compounding. The powerful effects of compound growth mean that even small sums add up and can help make a big difference later down the line.

As you might imagine, compounding has its largest impact during the latter stages of your investment journey; 5% growth on £100 is only £5, but 5% growth on £1,000 is £50. So, if you want to reap the rewards of compound growth, start early, and establish (and maintain) a good savings habit.

04 Instils good investing discipline

Some people hesitate over when to invest money and attempt to time the best moment to buy in to the market. This approach is incredibly difficult and even seasoned fund managers don’t try to time the market. It’s about time in, not timing.

In fact, professional investors and fund managers with large sums to invest will often drip-feed their funds into the market over time. If it’s good enough for the experts, it a great approach for novice investors!

05 Pick up potential bargains

When stock market prices start to fall, many people panic. They will often sell their investments and, when spooked by market changes, many investors may refuse to re-enter the market until things settle down. Because fear can sometimes drive prices artificially low, this is often the best time to buy into the market. So, adding to your investment at these times may mean that you enjoy larger returns when the markets rally.

If you find it difficult to remove emotion from investing and struggle to benefit from market downturns, regular investing can help by removing the emotional element of buying into the stock market.

Get in touch
If you’re interested in finding out more about how you could invest your money wisely and potential profit from long-term growth through regular investing. Please get in touch to arrange a time to chat.

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested. Past Performance is not a guide to future performance and should not be relied upon.

Approved by The Openwork Partnership on 04.10.2023

Centuries ago, Benjamin Franklin announced that...

“By failing to prepare you are preparing to fail.”

This is especially true when it comes to ensuring your personal finances are protected from the rainiest of days. However, with the rising cost of living likely putting pressure on your spending, you may be considering cancelling your cover, even when this could leave you more vulnerable than before. Read on to discover some of the reasons you should consider prioritising your financial protection over other cost of living worries.

Rising costs should highlight the necessity of financial protection

A recent survey by Which? has revealed that 59% of households have resorted to cutting back on essentials, selling items, or dipping into savings to pay their rapidly rising bills. Financial protection products such as life insurance, income protection, and critical illness cover are sometimes the first things that people decide to cancel when things are tight. However, without financial protection, one unexpected event or serious illness could plunge you into having to deal with a crisis with no financial support in place.

Life insurance means your family will not face financial hardship

Keeping your life insurance policy can ensure your family benefit from financial support if the worst happens. Without protection in place, your family could perhaps no longer afford their regular outgoings, leaving them in a difficult financial position at what will already be a stressful time. Cancelling your policy could jeopardise the financial security of your loved ones. If you’re the main breadwinner, without your contribution to the household your family may struggle to meet their regular financial commitments.

You could receive cover during a critical illness

If you cancel your critical illness cover to save money, you could find yourself out of pocket if you’re diagnosed with a serious condition. You may have to take an extended period off work on a significantly reduced income. Critical illness provides a lump sum if you are diagnosed with a specified illness such as Heart attack, Stroke, Cancer or Multiple sclerosis. Conditions may vary between providers.

While it’s unpleasant to think about, you should consider your own circumstances and whether you might be vulnerable if you cancel. Having protection to offset unexpected healthcare expenses could be essential to preserving your financial wellbeing. You may not feel you need insurance in all the areas discussed here.

For example, some employee benefit packages include life insurance, so it’s worth checking to see if this is something you already have through your work. The type and level of protection that is most suited to you will depend on your circumstances. We can help you decide what would provide you and your family with the most benefit and help you understand which policy is right for you, too.

Potential consequences

If you cancel your protection now with the intention of taking out cover again when your finances permit, you may find the premiums are significantly higher – especially if your health has deteriorated since you took out your original protection. You may also find there are exclusions based on pre-existing conditions. The short-term savings often may not be worth the potential long-term vulnerability you cause yourself.

Your pension could be your ‘secret weapon’ of protection

According to Pensions Age, 86% of savers are not on track to achieve their retirement expectations. This serves as a caution that foregoing pension contributions could leave you short when it comes to your retirement funds.

So, pausing or cancelling your contributions now could have a negative effect on the size of your pension pot when you come to retire. This may leave you having to compromise on your later-life plans. Discussing your pension with us could help to prevent overspending or under budgeting that may affect the funds you’d like use for your retirement.

Income protection could support you while you’re unable to work

Injury, illness, or an accident could prevent you from working and earning your living at any time, making it hard to meet everyday expenses. Even if you receive Statutory Sick Pay (SSP), paid at £109.40 a week in 2023, it may not be enough to cover your usual expenses and could force you (and your family) to adapt your lifestyle while you recover.

Moreover, if you’re self-employed, you aren’t eligible for SSP. Income protection could save you from such stress. If illness or injury prevent you from working, you can expect to receive up to around 60% of your wages. Just as important as a payout, an income protection plan could give you access to rehabilitation services that grant you the ability to work again. As an example, 82% of Aviva customers who had rehabilitation support returned to work.

Life insurance plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse. A pension is a long-term investment not normally accessible until 55 (57 from April 2028).

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

The tax implications of pension withdrawals will be based on your individual circumstances.

Get in touch by calling us on 01908 062448 or by email info@colfinancial.co.uk

We can help to assess your financial wellbeing and assist in finding the right protection for you. This can help to safeguard your finances when confronted with unexpected circumstances. Please get in touch to arrange a time to chat.

Approved by The Openwork Partnership on 16.10.2023

Life can be full of surprises. You can’t be prepared for everything. You may have some insurance to support you financially if the unexpected happens, but have you considered how private medical insurance might offer you and your family the peace of mind you need if your health takes a turn for the worst?

A growing trend
According to data published by The Telegraph, close to half a million people have taken out private medical insurance over the past year, as NHS waiting lists hit record levels this autumn. According to government statistics almost 7.8 million people were waiting to start routine hospital treatment in September 2023.

Against this backdrop, it’s hardly a surprise that more people than ever are considering the benefits of private medical insurance including faster access to medical treatment for themselves and their families.

It’s not just speed of access, it’s also about the quality of care you receive, the flexibility of choosing where and when you would like to receive treatment, and the range of treatments, medicines, facilities and consultants available to you. Cost-restrictions in an already stretched NHS mean that not all breakthrough treatments are accessible. With private medical insurance you can sleep easy, safe in the knowledge that the very best care is available.

It’s more affordable than you think 
Avoiding lengthy waits for treatment and quality of care are just two of the biggest attractions of taking a route which has traditionally been seen as too expensive for most. But through our specially selected health insurance partner we can help you find the right policy for your budget. If you already have private medical insurance, we may be able to find you cheaper premiums for your circumstances, and all with a free no obligation quote.

The pandemic provided a reminder to us all of just how precious good health is – and acted as a reset for many. Health became a priority, and continues to be so. Spending money on private medical insurance may not have previously been a priority but protecting you and your family over the long-term means a growing number of people are taking the time to consider a more proactive approach to getting the treatment they may need.

We love our NHS but we know the pressure it’s under
We have nothing but respect for the hard-working and talented individuals who make the NHS what it is. But we also know that the service that has given so much to so many is under unprecedented pressure. We also know that there is often a faster and better alternative.

We can make sure you get all the information you need to decide whether private health insurance is the right option for you.

Call us 01908 062448 or drop us an email on info@colfinancial.co.uk

Approved by The Openwork Partnership on 30/10/2023

• The government is reducing debt and borrowing, with borrowing forecast to be lower this year, next year, and on average over the forecast period compared to the OBR's March forecast.
• Underlying debt is also lower as a percentage of GDP, by an average of 2.1 percentage points across the forecast.
• The government is on track to meet its debt and borrowing fiscal rules with greater headroom against both rules compared to spring.
• The government has made available up to £14.1 billion for the NHS and adult social care and an additional £2 billion for schools in both 2023-24 and 2024-25.
• Total departmental spending will be £85 billion higher in real terms by 2028-29 than at the start of this Parliament (2019-20).
• Households on the lowest incomes have benefited the most from government decisions on tax, welfare, and public spending since Autumn Statement 2022.
• The government is introducing the largest package of measures to tackle tax non-compliance since 2016, which is forecast to raise an additional £5 billion of tax revenue over the next five years.
• The government is continuing to drive forward the Public Sector Productivity Programme to reimagine the way public services are delivered.

Cutting tax and rewarding hard work

Tax Cuts for Workers

• The main rate of Class 1 NICs will be cut from 12% to 10% from 6 January 2024, benefiting over 29 million workers.
• The average worker will receive a tax cut of over £450 in 2024-25.
• Class 4 NICs for self-employed will be reduced from 9% to 8%, and Class 2 NICs will be abolished.

National Living Wage Increase

• The National Living Wage will increase by 9.8% to £11.44 from 1 April 2024.
• The age threshold will be lowered from 23 to 21 years old.
• This will benefit over 2.7 million low-paid workers.

Welfare Reform

• The government is launching a Back to Work Plan, with over £2.5 billion in funding, to help people find and stay in work.
• The Fit Note process will be reformed to support returning to work after illness.
• The Universal Support programme will be expanded to match people with disabilities to jobs.
• The Work Capability Assessment will be reformed to provide better support.
• Additional Jobcentre Support will be expanded.

Changes to the benefit system

• All working-age benefits will be uprated by 6.7% in line with inflation for 2024-25.
• Pensioner incomes will be protected by maintaining the Triple Lock.

Support for High Cost of Living

• Local Housing Allowance rates will be raised to the 30th percentile of local market rents.
• This will benefit 1.6 million low-income households.
• The government has provided £104 billion in support to households to help with the cost of living.

Backing British business

The government is taking action to boost business investment and drive long-term economic growth.

Key measures include:

• Making full expensing of plant and machinery investment permanent, worth over £10 billion a year.
• Simplifying and improving R&D tax reliefs, worth £280 million a year.
• Removing barriers to investment in critical infrastructure.
• Providing £4.3 billion of business rates support over the next five years.
• Reforming the pensions market to unlock investment into high growth sectors.
• Announcing further targeted support for digital technology, green industries, life sciences, advanced manufacturing, and creative industries.
• Investing £4.5 billion to unlock investment in strategic manufacturing sectors.
• Confirming the next set of investment zones in Greater Manchester, the West Midlands, and the East Midlands.
• Doubling the flexible funding envelope for each investment zone from £80 million to £160 million.
• These measures are expected to raise business investment by around £20 billion per year in a decade's time.

Changes to ISAs

The government is making changes to simplify ISAs and provide more choice, meaning it will be easier for people to choose the best ISA accounts for their needs and move money between them. This involves digitalising the ISA reporting system to make it more effective, as well as expanding the investment opportunities available in ISAs to include Long-Term Asset Funds and open-ended property funds with extended notice periods.

Key highlights:

• Allowing multiple ISA subscriptions – The government will allow multiple subscriptions to ISAs of the same type every year from April 2024.
• Allowing partial transfers between providers – The government will allow partial transfers of ISA funds in-year between providers from April 2024.
• Removing the requirement to reapply for an existing ISA annually – The government will remove the requirement to reapply for an existing dormant ISA from April 2024.
• Expanding the Innovative Finance ISA to include Long-Term Asset Funds – The government will allow Long-Term Asset Funds to be permitted investments in the Innovative Finance ISA from April 2024.
• Expanding the Innovative Finance ISA to include open-ended property funds with extended notice periods – The government will allow open-ended property funds with extended notice periods to be permitted investments in the Innovative Finance ISA from April 2024.
• Allowing certain fractional shares contracts as a permitted investment The government intends to permit certain fractional shares contracts as eligible ISA investments and will engage with stakeholders on implementation.
• Digitalise the ISA reporting system – The government is announcing the digitalisation of the ISA reporting system to enable the development of digital tools to support investors.
• Harmonise ISAs to those over 18 years of age – The government will harmonise the account opening age for any adult ISAs to 18 from April 2024.
• The government is freezing the Individual Savings Account (£20,000), Junior Individual Savings Account (£9,000) Lifetime Individual Savings Account (£4,000 excluding government bonus) and Child Trust Fund (£9,000) limits at their current levels for 2024-25.

It’s been a challenging year with inflation dominating headlines. While inflation has fallen, it’s still higher than the Bank of England’s 2% target at 4.6% in the 12 months to October 2023.

Ahead of his speech, Hunt faced pressure to reduce the tax burden on both households and businesses while there was speculation about a potential Inheritance Tax cut, which didn’t materialise.

In his speech, Hunt said the plan for the British economy was working as the UK avoided a previously forecast recession this year. However, he cautiously added that the “work is not done” as he set out 110 measures to “reduce debt, cut taxes, and reward work”.

Here are the key points of the Autumn Statement, and what they might mean for you.

National Insurance cut for employees and self-employed workers

The chancellor cut National Insurance (NI) for 29 million working people.

The main rate of employee NI will be reduced by two percentage points from 12% to 10% from 6 January 2024. The new rate will save the average employee earning £35,400 a year more than £450 annually.

In addition, Class 2 National Insurance contributions (NICs), which are mandatory for self-employed workers earning more than £12,570 a year, will be abolished from April 2024. It’s estimated this will save the average self-employed person £192 a year. The good news for self-employed workers is they’ll retain access to contributory benefits, including the State Pension.

In 2024/25, Class 4 NICs paid by self-employed workers on earnings between £12,570 and £50,270 will fall from 9% to 8%.

Combined, these two changes will result in an average self-employed person earning £28,200 saving £350 a year from 2024/25.

The State Pension “triple lock” will remain in place

After weeks of uncertainty, Hunt confirmed during the Autumn Statement that the State Pension “triple lock” will be honoured.

Under the “triple lock”, the State Pension increases each year by the higher of:

Inflation, as measured by the Consumer Prices Index (CPI) in September (of the previous year)

The average increase in wages across the UK from May to July (of the previous year), or

2.5%.

Wage growth of 8.5% means someone on the full new State Pension will receive more than £900 a year extra in 2024/25.

Similarly, Pension Credit will also rise by 8.5% in April 2024.

Abolition of pension Lifetime Allowance confirmed

While the chancellor didn’t make any new announcements related to pension allowances during the Autumn Statement, he did confirm that the previously reported abolition of the pension Lifetime Allowance will take effect from 6 April 2024.

Hunt also announced plans to consult on a pension “pot for life”. Under the plans, pension savers would have the legal right to choose the scheme their employer pays pension contributions to. This move could help workers manage retirement savings and reduce the number of people with multiple small pensions.

ISA holders will benefit from more flexibility

The annual subscription limits for ISAs (£20,000), Junior ISAs (£9,000), Child Trust Funds (£9,000), and Lifetime ISAs (£4,000, excluding government bonus) will remain the same in 2024/25.

However, changes could provide savers and investors with more flexibility.

First, ISA holders will be able to deposit money into multiple ISAs of the same type each tax year from April 2024. They will also be able to partially transfer money between providers.

Second, investors with an Innovative Finance ISA will be able to invest their money in a greater range of assets, including long-term asset funds and open-ended property funds with extended notice periods.

Other measures

National living wage

Hunt announced the largest increase to the UK’s national living wage. It will rise by 9.8% to £11.44 an hour. In addition, the new rate, which comes into force in April 2024, will be expanded to include 21- and 22-year-olds for the first time.

It’s estimated the increase will benefit almost 2.7 million people, with full-time workers earning the national living wage receiving a boost of more than £1,800 a year to their income.

Benefits uprated

In line with September 2023 inflation figures, Hunt announced an increase in benefits of 6.7%. He also added an increase to the Local Housing Allowance, providing 1.6 million households with an average of £800 of support next year.

A shake-up of the benefits system was also unveiled. Benefit claimants who fail to find work for more than 18 months will have to complete a work experience placement. Long-term unemployed who are deemed to be not adequately looking for jobs will also face stricter penalties.

Business rates discount to continue for another year

The 75% business rates discount for retail, hospitality and leisure firms has been extended for another year in a welcome boost for high street shops, pubs, and more.

The multiplier for small business premises is also frozen.

Freeze on alcohol duty

In further positive news for pubs, the chancellor announced a freeze on all alcohol duty until 1 August 2024.

Full expensing

Businesses will continue to benefit from full expensing. It allows firms to offset spending on plant and machinery against profits.

The measure was previously set to expire in March 2026 but has been made permanent.

Enterprise Investment Scheme and Venture Capital Trusts

To support early-stage, innovative companies, both the Enterprise Investment Scheme and Venture Capital Trusts, which provide a tax break to investors, have been extended to 2035.

Please note: All information is from the Autumn Statement 2023 document and the government’s Autumn Statement news bulletin.

The Winners

Young and low-paid staff

Although the news was released ahead of the main statement, the announcement confirmed a large-scale increase to the national living wage, bringing the hourly rate from £10.42 to £11.44 (an improvement of almost 10%). The new rates will come into effect from April 2024 and impact just under 3 million workers across the UK.  

Eligibility for the new rate will also expand to 21 and 22-year-olds from the first time: A 21-year-old will get a 12.4% increase, from £10.18 this year to £11.44 next year, worth almost £2,300 a year for a full-time worker. 

Additionally, the minimum wage for apprentices is also to rise considerably, from £5.28 to £6.40. This 21% increase is also set to take effect in April 2024.

Pensioners

The state pension will increase by 8.5%, in line with the triple-lock system. The move comes after rumours that he would opt for a slightly lower inflationary figure. However, the announcement delivers an increase to the State Pension, boosting it to £11,500.

Also announced was a consultation on a “pot for life” scheme. These proposed reforms will give workers the legal right to nominate a single pension scheme across their entire working career that employers pay into. The programme aims to end the difficulties of workers who, after moving jobs, accrue multiple, separate retirement funds, and sometimes lose access to pension entitlements.

This builds upon other recent work from Hunt’s Mansion House reforms to drive market innovation. The latest measures could provide an extra £1,000 for average earners saving from 18 and help combat the ongoing cost of living crisis.

Workers

27 million people in the UK will benefit from the National Insurance cuts announced today. The Government will reduce the headline rate of National Insurance from 12% (to 10% for employees. The cut will also be enforced from 6 January 2024 instead of the new financial year.

The 2% cut will be worth £760 a year to someone earning more than £50,000 — however, even a 2% cut multiplied across every worker paying National Insurance could cost the Government somewhere in the region of £10bn.

Growing businesses

The Chancellor again confirmed a £4.5bn fund to support the UK’s manufacturing sector. The package is aimed at eight sectors deemed “key to economic growth,” with the car industry in particular set to be one of the biggest beneficiaries, receiving around £2bn.

There was also a range of pro-investment measures, including a £1bn scheme to create 12 investment zones (similar but separate to Sunak’s freeports), and the indefinite extension of the Full Expensing system. Under the system, for every £1 of investment in IT, machinery and equipment, businesses can claim back 25p in corporation tax, making it one of the most generous capital allowances in the world.

Benefits claimants

Welfare benefits are set to rise by 6.7% under the 2023 Autumn statement, in line with the 6.9% inflation rate recorded in September, which equates to an extra £470 a year for the lowest-income households. Prior to today’s statement, it was thought the Government would use the October inflation rate of 4.6%, as this would mean a smaller benefits increase and therefore preserve approximately £2bn in funds. 

This news comes alongside further details of the Back To Work plan, designed to help over 1 million UK residents get off benefits and move into gainful employment. 

The hospitality industry

The Autumn Statement has promised a host of benefits for hospitality businesses in the coming year, specifically pubs and pubgoers. 

Alcohol duty will be frozen until August 2024, which means no increase in duty for beer, cider, wine or spirits. The Chancellor also confirmed the Government’s ‘Brexit pubs guarantee’, which ensures that pints poured in pubs and restaurants stay cheaper than alcohol bought in a supermarket.

Finally, Mr Hunt said he would extend the 75% discount on business rates up to £110,000 for another year. While this discount applies to retail and leisure businesses as well as the hospitality industry, the Chancellor specifically mentioned that the measures will save the average independent pub over £12,800 over the year.

The self-employed

Some of the most notable updates in the UK Autumn Statement were changes to self-employed National Insurance payments. Namely, abolishing Class 2 contributions which are currently compulsory along with a 1% reduction of Class 4 contributions from 9% to 8%.

When combined, Hunt said, “these reforms will save around two million self-employed people an average of £350 a year from April."

The Losers

Public services spending

Mr Hunt focused on the idea of a “more productive state, not a bigger state”. As such, the Chancellor gave targets rather than promises of investment: the public sector is tasked with increasing productivity growth by 0.5% per year. One measure to help achieve this is the reduction of the size of the Civil Service to pre-pandemic levels, as well as a review to see how “bureaucracy is holding [police, fire and ambulance services] back”.

Through these tactics, Mr Hunt hopes to keep the growth in public spending lower than the growth in the economy, while also protecting essential public services. 

Fossil fuel companies

Fossil fuel companies stand to lose out on the new subsidiaries offered by Mr Hunt. Of the £4.5 bn investment package to the UK manufacturing sector, £960 million is earmarked for clean energy.

With the funds set to become available in 2025, the fossil fuel industry will soon feel added pressure to transition away from carbon-intensive energy sources.

Long-term unemployed

The Chancellor also announced reforms to benefit entitlements. Specifically, if a claimant is still without employment after seeking a job for 18 months, they must undertake mandatory work placements "to increase their skills and improve their employability."

Continuing, Mr Hunt said that if they "choose not to engage with the work search process for six months, we will close their case and stop their benefits".

Smokers

The House also heard Hunt’s plan to increase hand-rolling tobacco duty an additional 10% above the existing tobacco duty escalator.

The move continues the Government’s work to support the long-term sustainability of the health service. Notably, the Prime Minister’s October announcement of a “smoke-free generation,” that has the potential to prevent up to 115,000 cases of strokes, heart

disease, lung cancer and other lung diseases.

What’s Next?

The 2023 Autumn statement contained a variety of measures aimed at growing the economy, supporting business, and levelling up regions across the country. 

Yet, with changes set to affect both business and personal finances, it’s important to seek financial advice based on the economic changes laid out by the Statement. With National Insurance contributions changing along with billions in business support announced, there’s a lot to grapple with. What’s more, it can be difficult to understand how the Autumn Statement affects you without expert financial advice. 

So, if you want more information on how the Autumn Statement could affect your finances, don’t hesitate to get in touch.

The value of investments and any income from them can fall as well as rise, so you may not get back the original amount invested.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

Approved by The Openwork Partnership on 22/11/2023

Should I consider private medical insurance?

Life can be full of surprises. You can’t be prepared for everything. You may have some insurance to support you financially if the unexpected happens, but have you considered how private medical insurance might offer you and your family the peace of mind you need if your health takes a turn for the worst?

A growing trend
According to data published by The Telegraph, close to half a million people have taken out private medical insurance over the past year, as NHS waiting lists hit record levels this autumn. According to government statistics almost 7.8 million people were waiting to start routine hospital treatment in September 2023.

Against this backdrop, it’s hardly a surprise that more people than ever are considering the benefits of private medical insurance including faster access to medical treatment for themselves and their families.

It’s not just speed of access, it’s also about the quality of care you receive, the flexibility of choosing where and when you would like to receive treatment, and the range of treatments, medicines, facilities and consultants available to you. Cost-restrictions in an already stretched NHS mean that not all breakthrough treatments are accessible. With private medical insurance you can sleep easy, safe in the knowledge that the very best care is available.

It’s more affordable than you think 
Avoiding lengthy waits for treatment and quality of care are just two of the biggest attractions of taking a route which has traditionally been seen as too expensive for most. But through our specially selected health insurance partner we can help you find the right policy for your budget. If you already have private medical insurance, we may be able to find you cheaper premiums for your circumstances, and all with a free no obligation quote.

The pandemic provided a reminder to us all of just how precious good health is – and acted as a reset for many. Health became a priority, and continues to be so. Spending money on private medical insurance may not have previously been a priority but protecting you and your family over the long-term means a growing number of people are taking the time to consider a more proactive approach to getting the treatment they may need.

We love our NHS but we know the pressure it’s under
We have nothing but respect for the hard-working and talented individuals who make the NHS what it is. But we also know that the service that has given so much to so many is under unprecedented pressure. We also know that there is often a faster and better alternative.

We can make sure you get all the information you need to decide whether private health insurance is the right option for you.

Call  us on 01908 062448 or drop us an email on info@colfinancial.co.uk

Approved by The Openwork Partnership on 30/10/2023

How private medical insurance can help you cope with cancer  

Cancer impacts so many of us 

Cancer is a disease that leaves very few of us untouched. Statistics from Cancer Research UK suggest that as many as one in two people born after 1960 will be diagnosed with some form of the disease over the course of their lifetime.  

That’s the kind of statistic that makes you think. Little wonder that one of the most common questions clients ask is whether private medical insurance covers the disease. With soaring waiting times and the NHS stretched like never before, it’s one that has assumed ever greater importance. 

The simple answer is, yes. Private medical insurance can cover all types of cancer.  

What benefits can private medical insurance deliver?  

Private treatment for cancer can give you shorter waiting times, a choice of hospitals and access to a wider range of better medicines and treatments, some of which are unavailable on the NHS. Most importantly, it provides you with the peace of mind that if you were diagnosed with the disease, there’s a policy tailored for you to tackle it head on. It’s important to emphasise that private healthcare never competes with the NHS, one of the country’s most treasured institutions. Instead, they work hand-in-hand, with the level of integration between the two very much your choice.  

Prevention is always better than cure  

According to Cancer Research UK cancer risk statistics, around four in 10 UK cancer cases are preventable each year. That’s an extraordinary figure and one which illustrates why a range of varied health insurance policies do all they can to encourage people to live healthy lives and make better health choices. Whether that’s support for quitting smoking or discounted gym memberships, these policies are designed to put your health first.  

Early diagnosis can make a huge difference  

Cancer treatment has come a long way, with survival rates (people who live for five years or more) up to 90% for common forms of the disease, such as bowel, breast and ovarian cancer, if they are caught early. The range of tools available to you via your private health insurance are both enormous and impressive, making that early diagnosis far more likely. 

Treatment without delay  

Once a diagnosis has been made, it’s imperative for treatment to start as quickly as possible. One of the greatest benefits of any private medical insurance policy is the ability to skip NHS waiting times. Even small delays can have a big impact. Private medical insurance can also open up a world of treatment options, which may not ordinarily be available to you on the NHS. Some policies even include the option of home-delivered chemotherapy and, in the worst cases, palliative care at home too.  

Choosing the right policy  

There are a range of options – and we’re here to help you make the choice which best fits your circumstances and your future and we can make sure you get all the information you need to decide whether private medical insurance is the right option for you.

Call us on 01908 062448 or drop us an email on info@colfinancial.co.uk

Approved by The Openwork Partnership on 06/11/2023

Do you keep meaning to sort out your will? We can help you. 

Life is busy, we get it. But is anything more important than being in control of your future? Recent research* suggests that only 44% of UK adults have made a will, which means that you’re far from alone if you haven’t yet got around to completing what, for some, appears to be a daunting task.

It’s always worth bearing in mind that if you die without a will, the law decides who inherits everything you own (your assets) according to certain criteria called ‘intestacy rules’. So your assets may not be divided up as you would like, meaning your loved ones’ future isn’t in your hands, but in the hands of HM Treasury.

What is a will?

A will allows you to direct how your assets are distributed after you die. These might consist of properties, bank balances or prized possessions. If you have a business or investments then your will describes in black and white who will receive these assets and when. It also enables you to leave gifts to a charity or charities of your choice, should you wish to.

In short, a will is the only way to ensure your money, property, possessions, and investments go to the people or the causes you care about most. 

Don’t put it off

A 2023 report* from the National Will Register found that 42% of adults in the UK hadn’t spoken to anyone about what should happen to their assets after their death. Even among the age group most likely to have written a will, three in ten over 55s hadn’t discussed their wishes with anyone. 

It’s easy to understand why people put off such major decisions but this isn’t a subject which should be parked – it’s one that needs to be proactively tackled before it’s too late.

Which is where we come in. Getting it right is too important to leave to chance, so get in touch and we can ensure you’re directed to the right place to ensure the will you write is uniquely designed to express your wishes and safeguard your loved ones’ futures. 

Approved by The Openwork Partnership on 07/02/2024

Will writing is not regulated by the Financial Conduct Authority.

What is a Lasting Power of Attorney (LPA) and do I need one?

A Lasting Power of Attorney (LPA) is a legal document that allows you to appoint one or more people to make decisions on your behalf during your lifetime. The people you appoint to manage your affairs are called the attorneys. An LPA is a completely separate legal document to your will although many people put them in place at the same time as getting their will written, as part of planning for their future.

What does a Lasting Power of Attorney (LPA) cover?

There are two types of LPA which come into effect when you are no longer able to make your own decisions.

A health and care LPA lets your attorney make decisions about your medical treatment and day-to-day care. This can include where you live, what you eat, what medical treatment you receive and who you see.

A financial decisions LPA lets your attorney handle (and make decisions about) your money and property. This can include paying your bills, selling your property, collecting your pension and collecting your benefits.

Do you need an LPA?

Without an LPA, if you need someone to step in and manage your finances or make decisions about your healthcare in the future, their only option will be to apply for a deputyship order through the court. This can be a costly, complex and lengthy process. If you have an LPA, it can take effect as soon as it’s needed, meaning your chosen attorney can step in to help straight away.

Once your LPA is in place, you have peace of mind in knowing that someone you trust can look after your affairs if you're ever unable to yourself, because of an illness or an accident.

Don’t put it off

More than 75% of the over 55s have not registered an LPA. The benefits and the simplicity of putting one in place should encourage you to make the decision to get your ducks in a row before it’s too late.

Which is where we can help. Getting it right is too important to leave to chance, so get in touch and we can ensure you’re directed to the right place to organise and register your LPA.

Approved by The Openwork Partnership on 20/02/2024
Will writing and Lasting Power of Attorney are not regulated by the Financial Conduct Authority.

At 12.30pm today, Chancellor of the Exchequer Jeremy Hunt announced the UK Spring Budget, as well as the economic and fiscal forecast by the Office of Budget Responsibility.

These legislative announcements are game-changers for Britain's economy, and Hunt’s announcements included a number of sweeping changes that could potentially affect the personal finances of everyone living and working in the United Kingdom.

In laying out the Spring Budget, Hunt reinforced the government’s dedication to building the British economy while also helping working families.

Hunt’s last announcement, made back in November, included boosts to minimum wages, an increase in State Pension, and a reduction to the headline rate for National Insurance. As of today, the government is maintaining their low-tax strategy by decreasing National Insurance even further, alongside major initiatives aimed at helping drivers, families, those in debt, and other crucial economic groups.

So, ultimately, who wins and loses? Who will benefit? Who will miss out? We’re breaking it all down in this post.

The Winners

Employees

Perhaps the most notable development from the Spring Budget announcement was the continuing drop in the main rate of National Insurance.

Referring to the tax increases for higher-income individuals, Chancellor Hunt stated that: “because we’ve asked those with the broadest shoulders to pay a bit more, today I go further. From April 6th, employee National Insurance will be reduced by another 2p, from 10% to 8%.”This is in addition to the reductions from November’s Autumn Statement, when the rate was brought down from 12% to 10%.

The cut is primarily aimed to benefit employees instead of employers. For example, today’s reduction would be worth around £450 for someone on a full-time salary of £35,000. However, think tanks warn that tax cuts that lack a highly specific target may do more harm than good.

The Institute for Public Policy Research (IPPR) says the cut would cost the government around £10.4 billion, and although that money would then be divided amongst taxpayers, it’s unlikely to end up in the hands of those that need it most. Since high-income individuals benefit most from National Insurance cuts, almost half of the money would go to the richest 20% of households, while only 3% would benefit the poorest 20% of families.

While a National Insurance cut would increase annual household disposable income, the IPPR warns that the negative impact on public services negates this benefit.

Families claiming child benefit

Around 500,000 families will gain almost £1,300 from an increase in the high-income threshold for child benefit. Hunt says he will change the way child benefit is paid. At present, high-income thresholds only apply to individuals as opposed to households, which is set to change.

However, as the transition would take a significant amount of time to enact, the Chancellor announced an immediate solution by increasing the higher income threshold from £50,000 to £60,000.

First-time home buyers

Hunt claimed that the government is on track to deliver over a million homes, opening up the property market and helping young people get onto the property ladder. More than £188 million has already been allocated to building new homes, and over £242 million is still to be spent on building homes across London.

In addition, Hunt stated that a higher rate of property capital gains tax is to be reduced from 28% to 24%, in a bid to increase revenues by increasing the rate of transactions.

Drivers

Fuel duty has been frozen at 52.95 pence per litre since 2011. When the Ukraine War threatened to send prices skyrocketing, a temporary 5-pence reduction to fuel duty was introduced in 2022 to balance things out.

That reduction was extended in 2023. But it has now been extended yet again by Jeremy Hunt in today’s budget announcement, preventing a 13% increase in fuel duty according to the chancellor. Scrapping the increase could cost the government around £2 billion, according to independent think tank Resolution Foundation. While obviously benefiting drivers and the UK industry in general, the plan could have notable climate consequences.

Arts, the media, and the film industry

To help maintain creative sector growth in the UK, the Chancellor has announced a wave of tax relief measures for the British film industry. For example, the rate of tax credits for visual effects studios will be increased, and a 40% tax relief on gross business rates for eligible film studios in England until 2034 was announced. Additionally, the budget included a new tax credit for UK independent films made with a budget under £15 million.

Hunt also announced £26 million in maintenance funding to the National Theatre, and stated that the tax relief for theatres will be made permanent. The relief rate now sits at 45% for touring and orchestral productions, and at 40% for non-touring productions.

Households on universal credit

The Chancellor also announced plans to assist households currently living on universal credit, by making loans easier to repay.

Hunt stated: “Nearly one million households on Universal Credit take out budgeting advance loans to pay for more expensive emergencies like boiler repairs or help getting a job. To help make such loans more affordable, I have today decided to increase the repayment period for new loans from 12 months to 24 months.”

Hunt also announced that he would also abolish the £90 Debt Relief Order charge, and extend the Household Support Fund — aimed at supporting local councils in helping families with food banks and vouchers — for an additional six months.

The Losers

Holiday home landlords

The chancellor claimed that he intends to scrap tax breaks that make it more profitable for second homeowners to let out their properties to vacationers, rather than those who let their properties to long-term tenants. As such, the government is set to abolish the furnished holiday lettings regime.

Vapers and Smokers

The Chancellor also announced a new tax on smoke-free heated tobacco products — set to take effect from October 2026 — following on from the government’s proposed vaping crackdown announced in the autumn. Hunt also announced a one-off increase in tobacco duty. This means that taxes on tobacco products will rise further, making the habit far more expensive.

Oil and Gas Companies

Chancellor Hunt has announced an extension of the windfall tax on oil and gas companies. This means the government will apply the tax for another year beyond the previous end date. Instead of concluding in March 2028, it will continue on into March 2029, raising £1.5 billion.

The windfall tax (more accurately known as the 2022 Energy Profits Levy) is a response to the soaring profits oil and gas companies began making after the combined impact of the lifting of COVID-19 restrictions and price increases due to Russia’s war in Ukraine. The 35% tax (originally 25% but raised in January 2023) applies to any profits made from the extraction of UK oil and gas.

Non-Domiciled Residents

The Chancellor also announced that rules over the taxation of non-dom residents — those who live in the UK but keep their permanent, registered place of residence abroad — are set to change. Hunt stated that the existing system will be replaced by a: “modern, simpler and fairer” one, as of April 2025. From then on, non-domiciled residents living in the UK will face the same taxes as other UK residents after four years.

What’s Next?

As you can see, the 2024 Spring Budget statement has unveiled a number of key initiatives aimed at growing the economy, supporting business, and boosting industry across the nation. 

It’s clear that these new initiatives will have a major impact on the finances of British people, and businesses operating in the country. It’s vital, therefore, to seek sound financial advice based on the adaptations laid out by the budget. Indeed, it can be tricky to understand exactly how the Spring budget will affect you or your enterprise without consulting qualified financial advisors first.

So, if you want more information on how the Spring budget could affect your finances, don’t hesitate to get in touch now.

The value of investments and any income from them can fall as well as rise, so you may not get back the original amount invested.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

Approved by The Openwork Partnership on 06/03/2024

Hardly a day goes by without the cost of living hitting the headlines. For many homeowners the increasing costs of owning and running a home is having a huge impact on household budgets. Even if you are near the top end of your monthly budget, or are expecting a ‘payment shock’ when you come to remortgage next, you may be wondering whether it’s worthwhile paying more than the minimum repayment each month, with the aim to save money in the long run.

So, what are the benefits of making mortgage overpayments?

• Mortgage-free sooner
  Overpayments can either be a one-off lump sum or a regular overpayment made throughout the year. Overpaying on your mortgage means you can potentially clear your mortgage balance quicker.
• Reduce the amount of interest you pay
  It could also make sense to overpay on your mortgage rather than keep your money in a savings account, because you may earn more in interest savings on your mortgage than you could earn in a typical savings account.
• Access to better rates in the future
  Lenders will offer you better rates if you have a lower loan to value. The more you can pay to reduce your mortgage, the potentially lower interest rates you’ll have when you come to remortgage to a new deal.

Are there any downsides to overpaying your mortgage?

Overpaying on your mortgage might not be right for everyone. Using savings to overpay on your mortgage could leave you with less cash to fall back on in an emergency.

Not all lenders have the same rules for overpaying and there may be a penalty fee called an Early Repayment Charge (EPC) if you overpay too much.

You should only make overpayments if you’re sure you can afford them. It’s a good idea to make overpayments if you already have an emergency fund, and you don’t have any other, more pressing debts that need to be repaid.

It’s always a good idea to discuss your options with an adviser, we can help guide you through all your mortgage options including advice on making overpayments.

Approved by The Openwork Partnership on 07/02/2024

The start of a new year presents a great opportunity to set out your goals and aspirations for the coming 12 months. For others, it can also mean new beginnings, new challenges or simply a fresh start.

No matter your mindset for 2025, now is a great time to review your financial goals and plans for the year ahead. Whether it’s finally getting onto the property ladder, safeguarding your family’s health and financial wellbeing, or thinking about plans for retirement, the right advice can help you on the path to identifying new opportunities and achieving your goals.

With so much to explore and understand, good advice has arguably never been so important. So what should you be considering as you look ahead this year?

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

Approved by The Openwork Partnership on 03/01/2025.