Author: Mark

A will is the only way for your wishes to be legally enforceable when you pass away. However, it’s becoming more common for families to dispute wills. So, what can you do to ensure your will is upheld?

In most cases, a will is followed, and families will respect the wishes of the deceased. But the possibility of someone contesting your will is something you should think about.

According to a report in iNews, the number of Inheritance Act claims increased by 72% in 2021. The Inheritance Act allows a court to make orders for the provision of a spouse, child, or other dependents from a deceased person’s estate.

In addition, the number of will disputes fought in the High Court in 2020 was 192. This figure compares to 128 in 2018.

While disputes represent only a small proportion of estates, they can be costly and stressful for your loved ones. If you’re worried that someone could dispute your wishes, taking steps now to minimise the chances can provide you with peace of mind and help ensure your estate is distributed how you’d like.

Here are three things you can do.

1. Talk to loved ones about your wishes

Some disputes occur due to misunderstandings when people are grieving. In these cases, a conversation with your loved ones now can make a difference.

It can be difficult to talk about passing away and what you’d like to happen to your assets when you do, but it’s an important conversation.

It allows you to explain your decisions and provide loved ones with an opportunity to ask questions.  It means that when you pass away, they won’t be surprised by the contents of your will.

You may also want to write a letter of wishes. This document isn’t legally binding, but it can be used alongside your will to provide guidance and explain what you want in your own words.

2. Take care to avoid mistakes in your will

Someone can’t dispute your will simply because they don’t like the contents, they must have valid grounds for doing so.

One common reason is that the will is not valid, and this is often due to avoidable errors. For instance, if your will is not properly signed and witnessed, someone could challenge it.

While you can write your will yourself, seeking the support of a legal professional can minimise mistakes and provide you with peace of mind.

You may want to change your will in the future. You can do this either through a codicil, which makes an official alteration to your existing will, or by writing a new will. You should make sure alterations are clear and destroy any previous wills to avoid confusion and potential reasons for disputes.

3. Make it clear you understand your decisions and have the mental capacity to make them

Other reasons for contesting a will include that you didn’t understand the decisions you were making, that they were made under duress, or that you lacked the mental capacity to make them.

Maintaining clear records about your plans and speaking to people about them can be enough to show that you understand the contents of your will. As well as family, this may include professionals, such as a solicitor. Emails to your solicitor may demonstrate your wishes and that you fully understood the implications if a dispute arises.

If you’re worried that mental capacity may be used as a reason for contesting your will, obtaining the opinion of a qualified doctor, usually your GP, can help.

A trust could provide you with an alternative way to pass on wealth

A trust isn’t the right option for everyone, but it can provide you with an alternative way to pass on wealth if you’re worried about your will being disputed.

One of the reasons you may use a trust is that you can set out rules that must be followed by the trustee, who will manage it. This may include who will benefit from the assets held in a trust and when certain assets will be distributed.

A trust can also be an effective way to pass on wealth during your lifetime.

Trusts can be complex, and they may not be the right option for you, so it’s important to seek advice.

If you’d like help creating an estate plan, from understanding your assets to how you can pass on wealth while minimising disputes, please contact us.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

Will writing and estate planning are not regulated by the Financial Conduct Authority.

If you’re nearing retirement, you may be starting to think about planning the next stage of your life.

What steps spring to mind? You may prioritise organising your pension, claiming your State Pension, or reviewing how much you have in a savings account. These steps are important for creating security, yet good retirement planning goes further than your finances.

So, what should retirement planning include? Setting out lifestyle goals is crucial for building a retirement plan that means you get the most out of your life.

Here are five questions that you should think about as you approach retirement. They can also help you get the most out of the financial planning process by ensuring your aspirations are at the heart of any decisions you make.

1. What are you looking forward to in retirement?

If you’re nearing retirement, you may be excited about the next stage of your life. Setting out what it is you’re looking forward to can help you make decisions that are right for you.

According to the Great British Retirement Survey from interactive investor, 49% of people that haven’t yet retired are looking forward to greater freedom and 42% see retirement as an opportunity for a new business or hobbies.

3 in 10 people still working think their life will improve when they retire. Pinpointing what it is that will make retirement an exciting milestone for you is crucial.

2. How will you fill your days when you retire?

While you may have big plans for your retirement, it can be easy to overlook the day-to-day when you set out your lifestyle.

Going from working full-time to having freedom can be overwhelming at first. Some retirees can find they don’t know how to fill their days initially and you may need a period of adjustment. By setting out how you’d like to spend your time before you retire, you can start building a retirement lifestyle that you find fulfilling.

3. What will give you purpose in retirement?

Much like filling your days, retiring can pose a challenge for some retirees if they feel like they’ve lost their purpose and drive when giving up work.

According to an Aegon report, just 4 in 10 people think about what gives their life joy and purpose.

Considering your driving force is a useful exercise at any point in your life and reviewing this as you retire is an important task.

4. How will you maintain social connections in retirement?

Work can play a pivotal role in your social life. So, when you retire, it can leave a gap.

Thinking about how you’ll maintain or create new social connections can improve your retirement lifestyle. That may mean making sure you stay in touch with family and friends or planning ways to get out of the house to meet new people, like joining a club that interests you.

Research from the National Institute for Health Research found that 1 in 3 people aged 50 years and over in the UK report feeling lonely. A lack of social connections can harm your mental health and has been linked to depression, so your social life in retirement is vital for your overall wellbeing and happiness.

5. Do you have any concerns about retirement?

While you may be looking forward to retirement, it’s natural to have some concerns too.

From worries about your finances to being anxious about the lifestyle change, thinking about your concerns is as important as setting out what you’re looking forward to.

It means you can address any worries that you have and put a plan in place to deal with them. By being proactive, you can really focus on enjoying your retirement to the fullest.

Using your lifestyle goals to shape your financial decisions

Lifestyle aspirations play a crucial role in effective retirement planning, but getting to grips with the finances remains important.

Having a clear idea about what you want to get out of retirement can help shape your financial decisions so they reflect your priorities.

If you want to see more of the world when you initially retire, taking a larger income from your pension during the first few years could make sense. Or if you hope to make workshops, classes, and hobbies a regular part of your schedule, including these costs in your budget can ensure you’re able to fill your days how you want.

By combining lifestyle and finances when you’re retirement planning, you can have confidence in the decisions you make. Please contact us to discuss your retirement and the lifestyle you’re looking forward to.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

If you opened a defined contribution (DC) pension in the 1990s or 2000s, the charges you’re paying could be higher than comparable pensions opened more recently. Between now and your retirement, the difference could add up to thousands of pounds.

Research conducted by the Institute for Fiscal Studies found that many older DC pensions deliver “poor value for money”. Among people in their 50s, the average annual fee for a DC pension taken out in the 1990s is above 1.1%. This compares to a charge of 0.8% for DC pensions opened in the last decade.

The difference between 1.1% and 0.8% can seem small. However, over the decades your pension will be invested, it can add up.

For example, a 50-year-old with a pension worth £21,000 could have an additional £2,400 at the age of 67 if they switched from a pension charging 1.1% to one with a 0.8% fee. This example assumes that annual investment returns in the future are the same as the average over the last five years.

The larger your pension, the more you could gain by switching.

The research assessed the returns of different pensions too. It found that the higher fees of older pensions are not justified by better performance in many cases. So, if you do have an older DC pension, moving your retirement savings to another scheme could make sense.

Kate Ogden, a research economist at the Institute for Fiscal Studies, said: “It is vital that people get the most out of the retirement saving they have done over their working lives. This won’t happen automatically. Older pensions risk becoming poor value for money. The fee charges are often higher than those on pensions taken out more recently.”

In addition to potentially higher charges, older DC pensions may not be invested in the way you’d like. Asset allocation decisions you made many years ago may no longer suit your retirement plans.

Your pension should reflect your investment risk profile and other factors, like when you plan to retire.

Even if you’re no longer contributing to a pension, it’s important to continue to assess performance and engage with it to ensure it helps you reach your goals.

What value is your pension delivering?

If you took out a DC pension a long time ago, it’s likely delivering poor value for money in terms of charges. The research found four-fifths of pensions started in 2013 have a charge of 0.75% or less. In contrast, just 1 in 9 pensions opened in 1993 do.

To determine the value of your pension, you should assess what fees you’re paying and compare this to alternatives available today. It could save you thousands of pounds, which can then be invested to boost your retirement savings.

Charges are an important part of reviewing your pensions, but you shouldn’t automatically switch your pension if they are high. There may be other things that make the pension valuable, such as:

• Investment performance: You should review charges in the context of the pension’s performance. A higher charge may be justified if your retirement savings are growing at a faster pace.
• Greater flexibility: Some older pensions may allow you to access your savings sooner than newer pensions. If you want to retire early, this can provide you with more freedom.
• Guaranteed annuity rate (GAR): Some older pensions may have a GAR. Today’s annuity rates are typically lower than the 1990s and earlier, so you could receive a higher retirement income by retaining an older pension.

Before you make any decisions about your pension, you should carefully review it. Once you’ve left a scheme, you may not be able to go back, and you could lose any benefits you hold now. You may also need to pay an exit fee.

Transferring your pension

If you decide that a pension isn’t delivering value, you’ll need to find another pension scheme to move your savings to. This could be an existing pension or one with a different provider.

There are a lot of pension providers to choose from. You should consider the fees of pension schemes as well as other factors, such as the choice of investment funds on offer and past performance, although you should remember that past performance is not a guarantee of future performance.

Some providers may also have minimum or maximum contribution levels or require regular deposits.

With so many providers to choose from, it can be difficult to know which option is right for you. If you have questions about your current pension or are thinking about switching, please contact us.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation, which are subject to change in the future.

As 2021 drew to a close, the Covid-19 pandemic and its consequences continued to affect economies.

The first case of the Omicron variant was reported in South Africa at the end of November 2021. It quickly spread and some counties began to reintroduce restrictions and offer booster vaccine shots. As before, the measures taken to reduce the spread of Omicron affected many businesses, particularly those in the travel and hospitality sectors.

The Organisation for Economic Co-operation and Development (OECD) also warned that surging inflation could undermine global recovery. The OECD predicts that price pressures will peak in early 2022.

UK

Headline figures from the UK paint a gloomy picture, but there are signs that the economy is getting back on track.

In October, the UK economy grew by just 0.1%. Growth forecasts for 2022 have also been revised down. The CBI now predicts the UK will grow by 5.1%, which compares to the organisation’s previous forecast of 6.9%. Accounting organisation KPMG has an even gloomier outlook and predicts growth of just 2.6% in 2022.

The Bank of England (BoE) warned that UK inflation would comfortably exceed 5% by spring 2022. In response, the BoE’s base interest rate was increased from 0.1% to 0.25%. While only a minor increase, the decision may be part of a long-term plan to gradually increase interest rates from historic lows.

Figures suggest that despite soaring costs, businesses are growing. Data from IHS Markit PMIs found:

• Soaring cost pressures are continuing to hit UK manufacturers. Factories saw prices rise at their fastest pace in at least 30 years, since records began. Firms also reported ongoing shortages of components, commodities, and labour. Despite these challenges, the PMI rose from 57.8 in October to 58.1 in November, showing that growth is becoming more rapid.
• The construction sector is facing similar difficulties. However, the PMI also shows the pace of growth is rising, as the measure increased from 54.6 to 55.5 in November.
• Export sales have supported service sector businesses, with the PMI reaching 58.5. Demand for services and businesses trying to offset rapid inflation led to the prices charged by providers increasing at the fastest rates since the survey began in 1996.

In December, the English government introduced “Plan B” to slow the spread of Omicron. While England avoided another full lockdown, restrictions did affect businesses, particularly those within the travel and hospitality sectors. Scotland and Wales introduced stricter measures that also affected business operations. In 2022, the spread of Omicron could lead to governments taking more stringent steps.

Brexit is also set to affect firms in 2022. From 1 January 2022, there will be new customs checks. The International Monetary Fund (IMF) warned that the UK still faces post-Brexit trade challenges, while a poll from the Institute of Directors indicates that many firms are not prepared. The survey found 3 in 10 importers described themselves as “not at all prepared” for the changes to border checks.

Europe

Overall, data suggest that eurozone growth is picking up, but the figures also hide subdued growth in some sectors.

The PMI for output was 54.2 – a figure above 50 suggests that the economy is growing. However, the data mostly reflects the resilience of the service sector, as manufacturers are being held back by supply shortages.

Factory orders in Germany, the eurozone’s largest economy, also suggest that growth could be more subdued in the coming months. Orders fell by 6.9% in October, which was much worse than expected. The country’s economy is being affected by weaker overseas demand.

This month, Turkey featured in headlines as the country’s central bank was forced to stage an intervention to prop up the ailing lira. President Erdogan defended his economic policy of low-interest rates despite the currency losing value and inflation climbing.

The European Commission is set to propose stricter labour rules to regulate the gig economy. If introduced, the rules could seriously affect the profitability of some firms, including those that have done well during the pandemic, such as food delivery services.

US

The US also continued to battle rising inflation and supply chain challenges.

The rate of inflation in 2021 was 6.8%. The figure is the highest since 1982, according to the Bureau of Labor Statistics. The rising cost of living is putting pressure on US families and businesses, and on the social spending bill that president Biden is trying to pass.

Job figures show that there are more openings in the US, with around 210,000 jobs added to the economy in November. However, this is far less than the expected 550,000, as a record 4.5 million Americans quit their jobs in November.

Asia

In China, imports surged by 32% year-on-year in November to around $254 billion (£187 billion) as firms tried to restock depleted commodities. Export growth slowed and grew by 22% to $326 billion (£240 billion) but was stronger than forecasted.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The value of your investments can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Despite the pandemic, the property market continued to move in 2021. Thousands of families purchased their first home, moved up the property ladder, or decided to invest in property during the year. Here are a few of the key events and figures that highlight what happened in the property market in 2021.

A Stamp Duty holiday helped support the property market

There were concerns that Covid-19 restrictions would lead to the property market stalling. To combat this, the chancellor introduced a Stamp Duty holiday in England and Northern Ireland in July 2020, and, after an extension, it finished in September 2021. Scotland and Wales also introduced similar temporary reductions when buying property.

The holiday meant that homebuyers could save up to £15,000 when buying a home. The threshold for paying Stamp Duty temporarily increased to £500,000, compared to the usual £125,000, so fewer families need to pay the tax. It encouraged more people to consider moving while they could reduce the associated costs. According to Which?, around 1.3 million buyers benefited from the holiday across the UK.

The organisation also estimates that the holiday led to sellers hiking property prices by more than £16,000 as buyers clamoured to find a property. As a result, the Stamp Duty holiday is associated both with increased demand and rising prices.

2021 was the busiest property market since 2007

The Stamp Duty holiday helped to make 2021 the busiest property market in almost 15 years.

According to Zoopla, by the end of 2021, 1 in 16 homes had changed hands, making it the busiest property market since 2007. Homebuyers in 2021 may have experienced delays in the process, from mortgage applications to solicitors, as professionals in the industry dealt with higher demand alongside the pandemic restrictions.

House prices continued to climb

Rising property prices have been making headlines over 2021. With demand rising and the Stamp Duty holiday placing pressure on home buyers, it’s no surprise that prices increased in line with this.

In November, the average UK property prices reached £270,000 for the first time according to the Halifax House Price Index. In the three months to November, prices increased by 2.3%, while over the year they had increased by 8.1%. Wales, Northern Ireland, and Scotland have outperformed the UK average in terms of property price growth.

The pandemic affected what home buyers were looking for

The pandemic and the associated restrictions led to a shift in what home buyers were looking for in a dream property.

Reflecting a wider trend for working from home, the Zoopla data shows there has been greater demand in commuter zones and more rural areas. With the freedom to work anywhere, workers are increasingly searching for a home with a local area that meets their needs without having to contemplate work opportunities as much.

In addition to this, larger homes with outdoor spaces were in demand after lockdown restrictions meant people were forced to stay in their homes. Home offices and larger living spaces have also become key features home buyers are looking out for. With people appreciating the space their homes offer more, it could change which types of property are in demand in the future.

What will 2022 hold for the property market?

There’s no consensus among property experts about what 2022 will mean for the property market. However, according to a report in the Guardian, demand for property is set to continue driving up property prices, albeit at a slower pace. It is estimated that property values will increase by up to 3.5% a year between 2022 and 2024.

If you’re looking to purchase property this year, whether as a home or as an investment, working with a mortgage broker can help you access a mortgage with a competitive interest rate and the flexibility you want. If you’d like to talk to one of our team, please contact us.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

When you think about writing or updating your will, who you want to benefit from your estate is often the first consideration. However, just as important is how you want to split up the assets you have. There are several options to think about.

A will is the only way to make sure your assets are passed on to who you want. As well as naming beneficiaries in a will, you can also specify how you want your estate divided up. This means you have control over who receives which assets or how larger assets are divided.

Gifts within a will are known as “bequests” and it’s worth spending some time thinking about who you’d like to receive certain items. Among the types of bequests to consider are the following seven.

1. Specific bequest

A specific request is used when you want a specified beneficiary to receive a particular item or lump sum of money. This can be used to pass on sentimental items, such as jewellery, as well as valuable assets like specified shares.

2. Pecuniary bequest

A pecuniary bequest is also known as a “general bequest” and it’s similar to a specific request. It’s when you give a lump sum of money to a specific recipient.

3. Demonstrative bequest

In some cases, you may want a beneficiary to receive the proceeds of a sale, which is known as a “demonstrative bequest”. For example, you may state: “I leave my child, Hannah, the proceeds from the sale of my holiday home in Cornwall.”

4. Residual bequest

A residual bequest is often used to wrap up the remaining assets of your estate after other bequests have been made and any debts or tax due have been settled. If, after specific or demonstrative bequests you state “I leave the remainder of my estate to my children,” this would be considered a residual bequest.

5. Reversionary bequest

A reversionary request allows you to set out what you would like to happen to assets if the intended beneficiary passes away before you do. For example, you may state you want your partner to receive certain assets, but that these should pass to your children if your partner passes away.

6. Conditional bequest

In some instances, you may want to place conditions on a gift being received. Unlike the options above, a conditional request means certain conditions that you set out in your will must be met before the beneficiary receives their inheritance. This could include getting married, having children, or other restrictions.

You may also want to set out conditions for how the gift is used. For instance, you may state: “I leave my daughter, Sarah, £20,000, providing she uses the money as a deposit for a property”, or “I leave my son, Andrew, £40,000, provided it is added to his pension.”

7. Charitable bequest

Finally, you may also choose to leave a gift to a charity or other organisation. As with leaving a gift to a person, you can name certain assets to pass to a charity or can specify a percentage of your estate.

Leaving a charitable legacy means you can support causes that are important to you. If your estate could be liable for Inheritance Tax (IHT), gifting can also help reduce the bill. Gifting some assets to charity can reduce the total value of your estate to below IHT thresholds. If you leave at least 10% of your entire estate to charity, you can also pay a reduced IHT rate of 36%, compared to the standard 40%. If IHT is a concern for you, please contact us.

Understanding your estate when setting out your will

When reviewing your will, understanding your estate and the value of various assets can help you set out bequests in a way that reflects your goals. If you’d like to review your finances and create an estate plan you can have confidence in, please contact us.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The Financial Conduct Authority does not regulate will writing or estate planning.

As a parent, you may want to help your children achieve financial security by providing a financial gift. Yet, you may also be worried about the effect it could have on your own lifestyle, as well as the inheritance you leave loved ones. Before gifting significant sums, it’s important to review your overall finances.

According to research from Canada Life, 38% of parents have already passed on “significant financial gifts” to the next generation. It’s something many more parents may be thinking about too.

There are plenty of reasons for providing a financial gift. Among those given were:

• To help with general living expenses (21%)
• To reduce the value of their estate (18%)
• To act as a house deposit (17%)
• To fund a car purchase (17%)
• To support major purchases (17%)
• To purchase a house outright (13%).

As living costs have increased, wages have been stagnant and so your children or grandchildren may struggle day-to-day or with reaching milestones. Getting on the property ladder is a well-known challenge that they may be facing, and gifts are frequently used to act as a deposit. Whatever your reasons for wanting to provide a gift, you should first assess the long-term effect it will have.

Here are five questions to answer before you gift some of your assets.

1. Do you expect the money to be repaid?

In some cases, you may want the sum to be repaid. If you do, make sure you’re clear from the outset to ensure you’re all on the same page. If you need it for a particular goal, such as retirement, a misunderstanding could affect your plans. It may also be a good idea to make the arrangement formal and contact a legal professional.

2. Will taking a lump sum out of your assets have a long-term effect?

It can be difficult to understand how taking a lump sum out of your assets can affect your long-term wealth. If you remove money from investments, for instance, it will also affect your expected investment returns. Taking some time to assess the effect it could have now means that you can lend financial support with confidence. Making gifts part of your financial plan can help you see how they could affect other priorities and goals. If you’re not sure whether a gift could harm other goals, please contact us.

3. Will you still have a financial buffer after providing a gift?

You may calculate that you have enough to live the lifestyle you want after giving a financial gift, but remember that the unexpected can happen. You should ensure you still have a financial buffer to provide a safety net if you need it.

4. Would gifting now affect how much inheritance loved ones receive?

Providing loved ones with a financial gift now may mean their inheritance is less than expected. In some cases, a gift now could provide greater financial security and makes sense. However, if leaving an inheritance is important to you, it may not be the right decision. It’s a good idea to talk to beneficiaries about how gifts will affect what you leave behind, as it could affect their own decisions.

5. Where will you take the gift from?

As well as deciding whether or not you can afford to give a gift, you should consider where the money will come from. An ISA, for example, is a tax-efficient way to save and invest, and you may not be able to replace the money you withdraw if it exceeds the ISA annual subscription. Withdrawing money from a pension could also affect long-term forecasts. If you’d like to discuss your assets and how you can make a gift, please contact us.

Are gifts an effective way to reduce the value of your estate?

While the research found many parents are gifting to support their children in reaching goals, 17% didn’t have a particular reason. Instead, the motivation was to reduce the value of their estate. If your estate could be liable for Inheritance Tax (IHT), gifting can be an effective way to reduce the bill. However, not all gifts will reduce the value of your estate immediately.

Gifts that are immediately outside of your estate include:

• Up to £3,000 each tax year, known as your “annual exemption”
• Small gifts of up to £250 for each person, each tax year
• £1,000 gifts for wedding or civil partnerships. This rises to £2,500 for grandchildren and great-grandchildren, and £5,000 for a child
• Regular gifts that help with another person’s living costs
• Gifts made out of your normal income.

Other gifts may be “potentially exempt transfers” and could be considered part of your estate for up to seven years for IHT purposes. If reducing your IHT liability is a motivation for gifting, please contact us to discuss your options.

If you’re thinking about gifting, whatever the reason, taking some time to weigh up the consequences it could have on your lifestyle is crucial. Please contact us to go through your plans in the context of your other goals.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The Financial Conduct Authority does not regulate tax or estate planning.

2022 may only have just started, but now is an excellent time to start thinking about the end of the tax year. Planning now can help you make the most of allowances and reduce how much tax you pay.

The 2021/22 tax year will end on 5 April 2022. This date is when many tax-efficient allowances will reset. In some cases, it will be your last opportunity to use them, although which allowances should form part of your financial plan will depend on your circumstances. Among the allowances that will reset on 5 April 2022 are:

• The ISA allowance, which allows you to save or invest up to £20,000 each tax year tax-efficiently
• The pension Annual Allowance, which is the amount you can tax-efficiently save into a pension each year
• The Dividend Allowance, which is the amount you can receive in dividends each tax year before you will need to pay tax
• The Capital Gains Tax annual exempt amount, which is the amount you can earn in profit when selling certain items before tax is due.

The end of the current tax year may seem like a long way off, but it’s worth starting to think about it now for a variety of reasons.

Take your time reviewing the allowances that will reset

If you leave your tax year planning until closer to the deadline, you may overlook some of the allowances that could be useful for you. By starting the process now, you give yourself plenty of time to review which allowances you should use. Maximising appropriate tax allowances can reduce your tax liability and help your money to go further.

Avoid being affected by delays

The end of the tax year is a busy time for financial providers, such as pension providers or accountants. If you want to make a change, leaving it until the last minute could mean you’re affected by delays and that you end up missing out. Taking steps now means you can make decisions without the pressure to do so quickly to meet deadlines.

Spread out contributions you want to make

As part of your end of tax year plan, you may want to maximise contributions to your ISA or pension. Doing so can help your money go further and help you reach long-term goals. By setting out your plans now, you can spread out these contributions over several months. It also means you have longer if you want to move illiquid into tax-efficient wrappers.

Making tax-efficient allowances part of your financial plan

When you’re making a financial plan, you should consider the allowances that will help you reach your goals.
If you’re saving for retirement, maximising your pension Annual Allowance each year could help you save more for your future. Or considering the Capital Gains Tax annual exempt amount when planning how you’ll dispose of assets can significantly reduce your tax bill.

By embedding allowances into your wider financial plan, you’re more likely to make use of them this tax year and future ones.

While you may only just be reviewing your allowances for 2021/22, understanding the allowances for the 2022/23 year is useful too. It can give you confidence in your future, while being able to drip-feed money into an ISA or pension can also make your goals more manageable. Rather than depositing a lump sum at the end of the tax year, you can spread out your contributions to make them part of your regular outgoings.

When investing, drip-feeding can make sense too, as you’ll be buying shares or units at different points throughout the year. This can help smooth out short-term volatility.

As well as making allowances part of your plan now, you should also review them each year. Allowances can change, as can your goals, which can affect which allowances make sense for your financial plan.
If you have any questions about the allowances that could reduce your tax liability and how to make them part of your wider financial plan, please contact us.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The value of your investments (and any income from them) can go down as well as up, which would have an impact on the level of pension benefits available.

Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances. Levels, bases of and reliefs from taxation may change in subsequent Finance Acts.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

If you’ll be retiring this year, you may be looking forward to more free time to focus on what you enjoy. As you start making plans, you need to set out your expectations and how you’ll create an income. To do that, a bit of planning is required, and these eight steps are a great place to start.

1. Set a retirement date

The first step is to decide exactly when you want to retire. It can help ensure you have everything in order.
A phased approach to retirement is becoming more popular. Whether you want to cut down your working hours or switch to a less demanding job, a phased approach can ease you into retirement. If this is your preference, set out a time frame for when you want to give up work completely as well.

2. Think about the retirement lifestyle you want

How do you want to spend your time in retirement? This next chapter of your life is a great opportunity to tick off bucket-list items and create a lifestyle that suits you.

According to interactive investor’s The Great British Retirement Survey 2021, travelling is a top priority. 3 in 10 workers said they hope to travel more when they retire. Whether that’s your goal or you have something else in mind, you should consider what you want your day-to-day life to be like, as well as the one-off experiences you’d like to have.

3. Calculate your income needs

Once you have a clear picture of what you want your retirement to look like, you should calculate how much this lifestyle will cost. Understanding your income needs means you can assess how to access your pension and other assets, as well as highlight where there may be a shortfall.

As well as expected costs, it’s just as important to create a buffer should the unexpected happen. Taking measures to build an appropriate safety net means you can have confidence in your financial plan throughout retirement.

4. Consider if your income needs will change during retirement

Retirement can last for decades and it’s likely your income needs will change. This could be down to changes in your circumstances. Inflation will also affect how much income you need.

As the cost of living rises, your income will also need to increase to maintain your spending power. If you don’t consider inflation when making a retirement plan, you could find your income affects your lifestyle in your later years.

5. Factor in life expectancy

When calculating how much you need to retire, life expectancy is an important factor. The interactive investor report found that 41% of workers are worried about running out of money when they give up work. Understanding how long your pensions and other assets need to last can help ease these concerns.

According to the Office for National Statistics, a 66-year-old man has an average life expectancy of 85. For a woman, their life expectancy would be 87. Keeping in mind that many people will live beyond the average age, will your plan provide you with enough income if you were to live into your 90s?

6. Think about if you want to take a lump sum from your pension

If you have a defined contribution (DC) pension, you can usually take a 25% tax-free lump sum. This can be attractive and help you kickstart your retirement plans. However, withdrawing a significant sum from your pension at the start of retirement can have a long-lasting effect. You should carefully weigh up whether it would reduce your income for the rest of your retirement, and the effect this would have on your plans.

7. Check how much State Pension you will receive

The State Pension provides a reliable income in retirement. It can create a base to cover your essential costs, which your other pensions and assets can complement. How much State Pension you will receive will depend on your National Insurance record. The State Pension Age for men and women is now equal and slowly rising, so you should also check when you’ll be entitled to the State Pension. You can check both of these things on the government’s website.

8. Review your pensions

Finally, you need to review your other pensions. This may include workplace pensions and self-invested personal pensions. Remember to go through your paperwork carefully as you’re likely to have multiple pensions. 66% of workers have more than one pension, the interactive investor report found, and it can be easy to misplace the details.

You should ensure you have the current value of all your pensions, as you’ll need to decide how to use them to create an income in retirement. It’s also worthwhile evaluating other assets you may have, such as investments or property, which could be used to create an income.

49% of workers see retirement as a time of financial freedom and independence

Almost half of workers see retirement as a time of financial freedom, the Great British Retirement Survey 2021 found. While this can often be achieved, it requires a financial plan. With the information you’ve gathered in the above eight steps, you need to consider how and when to access different assets you have to turn your retirement dreams into a reality.

It can be difficult to know how to bring different assets together to create security in retirement and how to effectively plan for long-term events that may be out of your control. That’s why we’re here to offer you support every step of the way. If you’re retiring in 2022, please contact us to start building a retirement plan that matches your goals.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The value of your investments (and any income from them) can go down as well as up, which would have an impact on the level of pension benefits available.

Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances. Levels, bases of and reliefs from taxation may change in subsequent Finance Acts.

Over the last two years, holidaymakers have faced disruptions when heading abroad, or even when planning a staycation in some cases. Now, with travel restrictions gradually lifting, you may be looking forward to planning your next trip.

One of the 2022 travel trends is sustainability. With a few small changes to your holiday plans, you could reduce your negative impact on the environment and support communities. When discussing sustainable travel, the focus is often on carbon emissions. While important, there are other things you can do to minimise harmful impacts, while maximising the benefits tourism can bring.

As you book your next trip, here are 10 things you could do to make it more sustainable.

1. Give cruising a miss

Choosing a cruise for your holiday can mean you get to see several different places on your trip and enjoy all the amenities offered onboard. But in terms of sustainability, cruising can be harmful to both the environment and communities.

Cruise ships are typically all-inclusive, which can be attractive if you want a stress-free holiday. However, it also means you’re less likely to spend your money at local attractions, shops, cafes, and more, so the positive impact of tourism is reduced. On top of this, cruise ships generate and dump huge amounts of waste, which can destroy valuable marine ecosystems, and, in many cases, your carbon footprint will be higher than a land-based trip.

2. Offset your carbon footprint

Ideally, sustainable travel would mean cutting out carbon-intensive transport, like flying. For most people, that would mean they couldn’t enjoy the holiday they want, and carbon offsetting presents an alternative.

Carbon offsetting means you take steps to reduce emissions to compensate for emissions you’ve used somewhere else. For example, you may invest in projects like protecting rainforests or installing a wind farm, after you’ve flown on holiday. If you’re interested in carbon offsetting, be sure to do your research and choose a reputable provider.

3. Use public transport to get around

When you’re on holiday, rather than hiring a car, opting for public transport where possible can cut your environmental impact. It’s a chance to see more of the destination you’re visiting and get to know what life is like for the locals too.

4. Support local businesses

How much of what you spend on holiday benefits the community you’re visiting? Choosing to eat at a local café and purchase souvenirs from a family-run shop means your money is far more likely to stay in, and benefit, the local area rather than increasing the profits of large corporations.

5. Choose excursions run by local guides

Much like the above, choosing excursions and trips hosted by locals means you can actively support the local economy and community. You could also get a lot more out of the experience by being able to listen to a local perspective.

6. Cut down your use of single-use plastic

Plastic is having a devastating impact on environments around the world. You may have made changes at home to cut down your use of plastic and, with a bit of planning, you can do the same when you’re on holiday. Packing a refillable water bottle and backpack is simple, and over the holiday could mean you use far fewer disposable bottles and plastic bags.

7. Visit protected areas and environmental projects

A holiday abroad is a great opportunity to see different natural environments to those we find in the UK. Paying to visit protected sites and other sustainable projects can help ensure they’re funded so future generations can enjoy these areas too.

8. Choose sustainable accommodation

As sustainability becomes more popular, holidaymakers have more choice than ever when choosing sustainable accommodation. From an eco-lodge to a hotel that’s leading the way to reduce water use, where you decide to stay can have an impact. Alternatively, choosing accommodation that is locally run or prioritises local suppliers and producers can support communities.

9. Book one, longer trip a year

As travel has become more affordable, it’s become common to take several trips throughout the year and even visit destinations for just a weekend. Slowing down and spending longer in one destination can help reduce your environmental impact. It’s also a chance to really explore and discover hidden gems rather than just ticking off a handful of tourist sights.

10. Embrace the culture

Spending some time learning about the place you’re visiting can help you have a much richer experience when you’re there. Whether you learn some key phrases in the local language or read about the history of the place, embracing the culture can help you identify where small changes can improve the sustainability of your holiday.