1. Investing can beat cash over the long term There’s never a bad time to consider investing when you’re focussing on the long term – five years or longer. No one knows whether the stock market will be higher or lower tomorrow. There’s never really a picture-perfect moment to invest or to sell. And buying in at the market low point and selling at the top is almost impossible to get right. Generally, investing in the stock market has yielded better returns than cash over the long term. Taking a long-term approach with your investments helps cut out the short-term noise and with it, the worries about finding the right time to invest. If you think you’ll need the money in the next five years, it’s sensible to hold cash. So if you’re putting away money for the long term, and are happy with the extra risks involved, investing in a stocks and shares ISA could ...

Safeguarded benefits are defined as benefits that are not money purchase or cash balance benefits. This means defined benefits, guaranteed pensions including guaranteed minimum pensions and guaranteed annuity rates (GARs). An individual with safeguarded benefits worth more than £30,000 within a pension must take financial advice before they can do any of the following: Convert these benefits into a different form of flexible benefits under the scheme.Transfer these benefits to another scheme to take flexible benefits.Take a cash lump sum in respect of these benefits. The issue of giving up Safeguarded benefits is a tricky one. Pensions that have a ‘defined benefit’ or a ‘final salary’ are usually best left where they are. The FCA’s position is that you start your advice from the position of it being ‘unsuitable’ to transfer and then work from there! Where the ...

The most common types of pensions are: State pension – this is a regular pension that you receive from the government which you can claim when you reach state pension age. Workplace pension – this is usually arranged by your employer. A percentage of your pay is put into your pension every payday and your employer will usually contribute. Private/ personal pension and Self Invested personal Pension (SIPP) Approachable finance offer private and SIPP pensions these give you an alternative or additional pension income to your work-based pension. A good IFA and Wealth Manager will advise the portfolios that are best suited your needs and risk approach and will manage the investments for you. 2. Pay into your pension as soon as you can – the earlier that you start paying into your pension, the longer that the investment has time to grow. 3. Free money from the government...

Please see below some useful information on the COVID-19 and financial planning. Furloughed Employees Owner Managers/Director Clients and the Job Retention Scheme FCA Guidance on Pensions Advice: Covid-19 Gifting wealth Funding ISAs Please find below a summary of the latest thinking on pension contributions and revised patterns of income. Many of your clients and/or their family members/friends will be impacted by the recent government announcements and their pension provision is an important part of their employment package. Below is a brief summary of the key pension points and some additional clarification on individuals that have been furloughed. Furloughed Employees   For employers that are furloughing their employees They can claim up to £2,500 per month in salary for each furloughed employee. There is a ceiling of 80% of the employees’ salary as at February 2020. Th...

Mortgages If you are struggling to pay your mortgage as a result of your finances being impacted by coronavirus, you can apply for a three-month payment holiday. Interest accrued during the period will be added to the outstanding balance of your loan and can be repaid over the rest of the mortgage term. To apply for the payment holiday, you need to contact your lender, either by telephone or online. You do not need to prove that you are in financial difficulties. If you bought your property through the help to buy scheme, you can also apply for a three-month payment holiday on interest on the equity loan. Renters If you are renting and you’re worried you cannot pay your rent, there is help for you too. Legislation  has been put in place to stop you from being evicted for at least three months. To take advantage of the scheme, contact your landlord as soon as possible and...

Hi Everyone Here is the link to the government website for help to small business. https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses Few points to mention There should be a major announcement in the next 48 hrs for help with self-employed income. In regards to staff, normal contracts apply so if you are considering making people redundant check staff contracts e.g do they need to be paid for a full month/ redundancy pay. In relation to the point above look at the employee retention scheme that runs from the 1st April avoiding those issues. For those limited companies corporation tax bills are due 9 months and 1 day after the end of their business year. These can be negotiated with HMRC into some kind of payment plan Make sure you apply for the rates relief with your local council Commercial mortgages can also b...

Martin Lewis of Money Saving Expert fame has described 2020 as a ‘savings horribillis’ and it is hard to argue! A major high street bank has cut its main savings rate by 0.5% with cash savings rates at record lows. Most people’s average savings earnings are now around 0.4%! Often people are unwilling to invest cash savings yet are happy to invest in pension. This is despite many of the underlying assets and risks can be similar. There seems to be an acceptance that pension ‘has’ to be invested but savings don’t? There still remains a great deal of confusion with investors in regard to pensions and what options are available with their pension, on retirement, in regard to income and lump sum. The danger of pension freedoms is that many people are considering cashing in pensions, paying large amounts of tax and then putting that money in a bank when savings rates are at record ...

It’s not worth having a workplace pension Not true! Most people receive more back than they contributed. They also receive contributions from their employers and in most cases tax relief. My property is my pension Not everyone wants to sell their home when they retire to live somewhere smaller. Bills still need to be paid. I’m too old to start a pension If it’s a workplace pension, you’ll miss out on “free money” in the form of a contribution from your employer. Secondly, saving into a pension is probably the most tax efficient way to save I’m too young to start a pension Starting early makes a huge difference thanks to the magic of compound interest. I can’t afford it With auto enrolment, if you opt out you’ll be re-enrolled again every three years when hopefully your financial situation will have improved. My pension will be lost if I die before retire...

A common enquiry over the last few years is a request for us to ‘sign a form’ to cash in or transfer a pension in its entirety into a bank account. Often, we are contacted by people who simply do not understand that there are often better ways of taking pension. Whether it be using ‘guarantees’ associated with their pension that they were not aware or exploring options such as buying an annuity or flexible drawdown. Whilst it may appear like the easy option of cashing in your pension, you have to consider that a full encashment will often mean a large ‘emergency tax’ bill of at least 20% of the fund value (after tax free cash).  Often the cashed in pension will sit in a bank account earning little or no interest. Not to mention the ‘opportunity cost’ of reducing the figure that gains interest by 20% paid out in tax. If your pension is in a ‘pot’ which is invested...

A new year often means that you are setting yourself goals to achieve in the coming year and in financial planning it is important that your family is looked after if anything should happen to you. If you are in a couple and have kids, the focus should be on whether both incomes would still be required if either party was to pass away or become seriously ill? All ‘protection planning’ should be bespoke to an individual’s circumstances. The three main covers are life and/or critical illness that tend to pay a tax-free lump sum and income protection that pays out an income if you cannot work due to accident or illness.  A general rule of thumb is to take out life and/or critical illness cover for any mortgages you may have, to make sure your house is paid for. However often this is insufficient in itself as it does not take into account how the running costs are to be met by con...