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News Column

50 – Is it All Over?

By Sarah Williams

Whilst I am not quite 50 years of age, the clock is certiainly ticking and has made me sit back and think about what it means heading to this milestone. It was no doubt one of those adverts – the one’s that make you feel extrememly old “over 50’s”.

To mant it’s just the start, having brought up the familly, hopefully enjoying greater financial security, less expenditure with little or no mortgage and the dreaded costs that come with raising children may well have gone (well significantly reduced anyway). My retired clients continue to laugh when they advise me their 30 something is still not 100% financially independent and probably never will be!!

The financial liberation brings more confidence, wealth of experience, more free time and for doing things for yourself!!

– What will your 50’s look like?

Now the sensible stuff. Maybe it’s a time to ensure that this new found freedom can continue at retirement, ensuring that financially at least you can enjoy the lifestyle that you desire at retirement. This is especially relevant now that the government has pushed back receipt of state pension to 66/67. It’s always a good start to obtain a state pension forecast which will confirm your state retirement age, your contribution history and state pension projection of benefits:

https://www.gov.uk/check-state-pension

Have you reviewed your Will? – is it still appropriate? Have you looking over your Protection arrangements – do they represent good value?

Are your investments and retirement arrangements well managed and appropraite as you head closer to taking benefits – how much would they suffer if there was a market downturn and would this push your planned retirement further down the line – is this acceptable?

A free financial health check will assist you to understand your financial position and formulate a plan of action with any shortcomings.

Article August 2018

Sarah Williams is an Independent Financial Adviser for Vision Independent Financial Planning Limited

Contact : Tel – 07900 676369 Email –

This article does not provide individual financial advice and are the views of the columnist only. Vision Independent Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority.

Sarah Williams of W.T Independent Financial Planning is an Appointed Representative of Vision Independent Financial Planning Ltd.

 

Is this One Step too Far for Buy to Let Investors?

By Sarah Williams

A new government is looking to extend tenancy agreements providing them with greater security.

The government’s proposals are that tenants will be able to vacate early whilst landlords will have greater financial security.

Greater regulation and tax changes for the investor have resulted in property investors making losses on property investment. These changes include a 3% stamp duty surcharge for second properties, the removal of offsetting lending costs and a withdrawal of 10% wear and tear depreciation.

Many investors view bricks and mortar as a low risk tangible asset. However, there are many risks by investing in property including rental voids, liquidity and price volatility. There is also the risk of a future interest rate increase.

An alternative, more flexible investment offering greater tax concessions is to consider a well managed diverse investment portfolio, with the ability to use valuable annual allowances including ISA, Capital gains, Dividend and Savings allowances. Capital Gain tax rates are far more beneficial on direct investments with 8% lower rates than investing in property.

Consequently, for a rental property property to match the capital return on a diversified portfolio of stocks and bonds, the housing market will need to outperform other asset classes.

The Labour party believe proposals do not go far enough so there could be even more changes in the years ahead.

Article July 2018

Sarah Williams is an Independent Financial Adviser for Vision Independent Financial Planning Limited

Contact : Tel – 07900 676369 Email –

This article does not provide individual financial advice and are the views of the columnist only. Vision Independent Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority.

Sarah Williams of W.T Independent Financial Planning is an Appointed Representative of Vision Independent Financial Planning Ltd.

 

What is the Future of the State Pension?

By Sarah Williams

The state pension will be 109 years old this year – so what will the next 109 years look like for you, me, our children and grandchildren – whilst I do not have a crystal ball the figures simply don’t add up.

Even though the state pension offers the lowest replacement income relative to average earnings of any organisation for economic co-operation and development it does not bode well for the future.

The state pension is funded by National Insurance contributions which pay straight from workers to the retired, there are no savings and is run like a current account with periods where an overdraft is required. Indications are that the projected number of people of state pension age compared to the working population is anticipated to increase, placing a larger strain on public finances.

The position is heightened as money coming in is in line with earnings, whilst pension increases with inflation and the triple lock; placing a greater strain on the system.

Taking dramatic changes such as stopping the state pension or means testing would be catastrophic for any political party which is why we have seen some changes such as extending the state retirement age. This is likely to change again with current proposals being linked to average life expectancy. As the government website states https://www.gov.uk/state-pension-age “The state pension age is under review and may change in the future. “

The introduction of auto-enrolment was brought about to ensure that individuals provide for their future and reduce reliance and burden upon the state.

We are likely to see further changes including the triple lock and further extension to state pension age, whether this is sustainable over the longer term is doubtful. Regardless of any future changes relying upon the state pension to provide financial support is not a sensible strategy and a case of taking matters into your own hands and making your own arrangements.

Article June 2018

Sarah Williams is an Independent Financial Adviser for Vision Independent Financial Planning Limited

Contact : Tel – 07900 676369 Email –

This article does not provide individual financial advice and are the views of the columnist only. Vision Independent Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority.

Sarah Williams of W.T Independent Financial Planning is an Appointed Representative of Vision Independent Financial Planning Ltd.

 

733,000 People at Risk of Passing on Their Pension to the Wrong Person

By Sarah Williams

In an ever-changing working environment with the average person expected to have 11 different jobs during their working life and as many pension schemes, it is no wonder that this number is so high.

When joining a pension scheme, members are asked to fill out an “expression of wishes” form that outlines to the pension trustees who should receive any death benefits. The trustees and pension providers often consult these forms when deciding on how to distribute the pension death benefits, alongside any will that is in place.

According to research by Royal  London, nearly three quarters of a million-people coming to retirement are at risk of passing their pension to the wrong person. The analysis of 733,000 people aged between 55 and 64 who are in at least their second relationship may be affected by this issue.

The problem stems from individuals informing the pension trustees that they wish to pass on their pension benefits to a first spouse but after a divorce they form a new relationship. Unless the records are amended there is a risk any benefits after death may go to an ex-partner.

How Much are your Death Benefits?

A further consideration should be the value of your death benefits. Some older schemes for instance may provide return of premiums only; whilst this is unusual, it does exist. When recently reviewing a new client’s pension arrangements, we established his scheme valued at £87,300 but only provided death benefits of £19,001 which was a mere 21% of the true value.

There are many reasons to review your pension, not simply the performance, risk, charges but also death benefits. Under pension freedoms the options to pass on your pension wealth to the next generation is very powerful. Maybe it’s time to look at your own arrangements?

Article May 2018

Sarah Williams is an Independent Financial Adviser for Vision Independent Financial Planning Limited

Contact : Tel – 07900 676369 Email –

This article does not provide individual financial advice and are the views of the columnist only. Vision Independent Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority.

Sarah Williams of W.T Independent Financial Planning is an Appointed Representative of Vision Independent Financial Planning Ltd.

 

How to Choose the Right Financial Adviser

By Sarah Williams

Individuals now have greater control over their financial affairs, especially with changes such as pensions freedom. Whether you choose to seek financial advice is likely to depend upon the complexities of your financial affairs and whether you feel capable to deal with your own finances.

The first step is to think about the assistance you will need, can afford and would value. General guidance on debt management and budgeting could be provided from free sources such as Money Advice service or Citizen Advice and for over 50’s the Governments Pension Wise service.

Financial advice is offered either on an independent or restricted basis. As the name suggests, restricted usually involves recommending types of products or through limited providers, whilst independent will consider arrangements across the market.

Advice is generally offered on varying levels from one off events, such as arranging a mortgage, to a more holistic approach, managing a client’s complete wealth including investment management, estate and tax planning.

Your choice of adviser will no doubt come down to their expertise, confidence, cost and ability to build a long term relationship offering quality of advice and service.

Most advisers offer a free introductory meeting with details of fees provided at the end of the meeting. Be wary of exit fees, some advisory companies charge up to 6% exit charge should an investor exit the arrangement within 5 years.

Personal recommendations carry a good deal of weight, so often a good place to start.

Don’t be afraid to ask questions – Do you offer face to face advice, how often are arrangements reviewed, how long have you been an Adviser, do you specialise in any particular area, will I always see you as my Adviser?

Of course these are just a few questions. Ultimately, you need to feel comfortable and trust your adviser.

Article April 2018

Sarah Williams is an Independent Financial Adviser for Vision Independent Financial Planning Limited

Contact : Tel 07900 676369 Email

This article does not provide individual financial advice and are the views of the columnist only. Vision Independent Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority.

Sarah Williams of W.T Independent Financial Planning is an Appointed Representative of Vision Independent Financial Planning Ltd.

 

So what is a financial review?

By Sarah Williams

Quite simply the opportunity to review your financial needs and arrangements and consider how well placed these are to meet your objectives – these vary considerably and often this is very personal. These may include the ability to protect your family in the event of a premature death, your ability to retire at 55, ensuring that your investments are tax efficient and performing well or reducing the impact of inheritance taxation.

Questions may well be asked that you may never have thought about and you may well not have the answers. Why would we ask ourselves “what would happen if our loved one died tomorrow – they are fit and healthy and in their 30’s”.

Maybe we should consider such questions, but with hectic and busy lives and with retirement maybe decades away our natural though is that it can wait – can’t it? And do you want or need to really consider such morbid thoughts? Or you nay simply feel you can arrange this yourself.

The answers to questions posed will determine the types of insurances you need and can afford, the types of investment and pensions you arrange and the level of risk that you take.

Answers often give rise to more questions but hopefully provide a better understanding of the financial world, which is surely not a bad thing.

So why do we not take financial advice? Many believe it’s expensive, it won’t benefit them, it’s not a priority it can wait, the list continues.

Maybe it’s time to review that to do list; considering moving the “seek financial advice” from the bottom to the top.

Most Independent Financial Advisers offer a free no obligation consultation. So why not see for yourself?

Article February 2018

Sarah Williams is an Independent Financial Adviser for Vision Independent Financial Planning Limited

Contact : Tel 07900 676369 Email

This article does not provide individual financial advice and are the views of the columnist only. Vision Independent Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority.

Sarah Williams of W.T Independent Financial Planning is an Appointed Representative of Vision Independent Financial Planning Ltd.

 

Time to find a smart fund manager

By Sarah Williams

Smart phones, smart TVs, smart toasters. You put smart in front of a product and it sounds more exciting and of course you definitely want one.

Smart Brexit means absolutely nothing. It’s a bit like all the other monikers that have been used to describe one of the most complicated policy changes in British history: soft Brexit, extreme Brexit, hard Brexit, austere Brexit.

Any deal will be nuanced and complex and elongated. It won’t be boiled down to a pithy slogan. The result of these talks will have a huge impact on the UK, its economy and one’s investment strategy over the next two years and beyond.

At the moment these ludicrous definitions are being taken seriously by investors and traders appear to be trying to discount the likelihood of hard and soft Brexit’s without really having a clue what they mean.

Over the past few months, I’ve come to the conclusion that Brexit will truly mean Brexit – no deal and a complete break with the single market – or the UK will remain in the European Union (EU) as it is.

So will we see an exit deal put to the people in the form of a second referendum – will this mean the Brexit-weary electorate voting to reject such a deal and stay in after all.

Either outcome will have a huge impact on the investment landscape. Dependent upon your own investment strategy and whether your funds are actively or passively managed could have a big part to play in managing risk including volatility and managing upside with performance. Volatility can of course bring along many opportunities with the ability for an active manager to purchase value stock at discounted prices.

Is it time to find your smart investment manager?

This article does not provide individual financial advice and are the views of the columnist only. Vision Independent Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority

 

32 Days from the breadline

It may surprise you to hear that this statistic(*) relates to the length of time before many UK employees and their households could survive financially on their savings if income is lost through long term sickness, critical illness or death.

Recent research by Legal & General reviewed parent’s attitudes to financial planning, asking 1,000 families with children under the age of 18 without life insurance questions about their long term financial planning. Worryingly 51% and 61% (under the age of 35) of respondents didn’t know how their families would cover housing costs should they die unexpectedly, potentially putting many families at risk of losing the family home.

So why do we insure our cars and buildings but not our families financial security? Quite simply, these are in the main compulsory and cover for our dependants are not. Research has found there are a number of reasons: too complicated, too young, too expensive, never thought about taking out a policy or concerned the company would not pay out.

This is where an Independent Financial Adviser can help explain and understand any concerns, determine needs, priorities, review the market and obtain the most appropriate and cost effective plan yo meet the families budget. How a plan is arranged can make a difference to the family and why financial advice should be sought.

Don’t just take our word for it, here is a quote from Sir Winston Churchill

If I had my way, I would write the word “insure” upon the door of every cottage and upon the blotting nook of every public man, because I am convinced for sacrifices so small families and estates can be protected against catastrophes which would otherwise smash them up forever

(*) Source: Legal & General

This article does not provide individual financial advice and are the views of the columnist only. Vision Independent Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority

 

The Power of the ISA – are there really ISA millionaires?

by Sarah Williams

Over the years, I am often asked by new clients whether funding Individual Savings Accounts (ISA’s) are worth it?

The answer is simply “yes.” With no further tax due on capital gains or income, they are extremely  attractive tax planning tools. The strict limit on ISA contributions means that reaching ISA millionaire status typically requires a combination of dedicated saving and exceptional investment returns.

ISA allowances have become far more generous in recent years – rising to £20,000 per year from the start of April 2017, so in future the millionaire club is likely to grow.

The number of ISA millionaires are thought to be around 1,000. Such investors are likely to have invested for many years maximising annual tax allowances through ISA’s and it’s predecessors Personal Equity Plans (PEPs) and Tax Exempt Special Savings accounts (TESSAs).

They are likely to incest for growth with an appetite to risk that allows them to invest in equities. Such assets can provide very attractive returns and likely that they will have also experienced periods where investment values have significantly fallen. ISA performance would ultimately depend on the level of risk taken, concentration of assets and the level of diversification within a portfolio.

Risk and reward often go hand in hand, and getting it wrong can be very costly. We would always recommend taking professional independent advice.

Such advice will consider the various tax planning rules available including pensions and ISA’s. Pension funds can normally be accessed from age 55; maximum 25% tax free cash can generally be taken from the fund value, the remaining funds taxable at the individual highest marginal rate in the tax year that income is taken. A typical dilemma for individuals is whether to invest in ISA’s or pensions or both – the answer will ultimately depend upon individual needs, circumstances and priorities.

This article does not provide individual financial advice and are the views of the columnist only. Vision Independent Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority

 

New Main Residence Relief – Will it reduce your inheritance tax on death?

by Sarah Williams

Headlines from politicians and the media are often there to shock or impress, only when you get underneath the bonnet and look at the finer details do you establish what these changes mean in practice.

This can be said of the new main residence nil rate allowance commencing in the new year. The government never make life easy and one could say over engineered although its aim is no doubt achieved – give a little but not too much. However this often causes issues as individuals read the headline, don’t take advice as the feel this change addresses any issues they had.

The new rules provide an additional allowance of £100,000 in the tax year 2017/18 and a further £25,000 over the following three tax years, so that in 2020/21, clients will potentially have their existing nil rate personal allowance of £325,000 and an additional £175,000. However this assumes that a property is involved and this passes directly to the descendants, such as children and step children.

This is where it becomes a little more complex, what if you downsize or sell a property, what happens to spouses allowance on death, or discretionary trusts or discretionary will trusts, are other trusts affected the list does not stop there.

In addition, where estates exceed £2million a taper relief comes into play, reducing any property related relief potentially to zero. As a business owner you may feel this does not affect you as your main assets attract business property relief or a farm agricultural relief however this is not the case as taper relief does apply to all assets.

The simple answer is to seek professional assistance as this is a complex area and important to take independent financial advice, which often involves working alongside other professionals.

This article does not provide individual financial advice and are the views of the columnist only. Vision Independent Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority

 

Best Business Awards 2017

We are thrilled to announce that Vision have been awarded ‘Best Customer Focus’ at one of the UK’s highest profile awards, the Best Business Awards.

The Best Business Awards highlight and reward excellence in business. All entries were judged by a large, independent panel of past winners and other business experts, who selected the winners according to strict criteria.

Commenting on the award to Vision Independent Financial Planning, in Best Customer Focus Category, the Chairman of the judges said:

“Vision Independent Financial Planning has proved it’s commitment to customers by paying for an extensive independent quality assurance review by tax specialist Grant Thornton of it’s legacy advice given to customers. This is something few other independent financial advisers (IFAs) have undertaken. After achieving a glowing report, Vision now plans to continue with an independent review every year. With advice by IFAs constantly being scrutinised by regulators, this is an exceptional initiative that inspires confidence in Vision.”