Have you resolved that 2020 is the year you get your financial situation organised? You may have been thinking about looking at your pension or starting a savings plan for your children? Perhaps 2020 is the year you buy a bigger house for your growing family, or downsize as they leave the nest? Maybe 2020 is the year you will retire and make a start on all your big life goals. Whatever your financial resolutions for this new decade, we can help you achieve them.
1) I want to review my pension
If you are self-employed, you may have no pension provision at all, so this should be a priority. The sooner you start, the more you can save before you retire. Even a small amount saved regularly will mount up over a long period. We can review the market and find the right product for you.
If you have a personal pension that hasn’t been reviewed for a while, it would almost certainly benefit from changes to the investment funds.
And if 2020 is your planned retirement year (lucky you!) we can help you decide what to do with your pension pot. There is a huge range of annuity products available for you to invest in and we can advise on those. And of course the new pension freedoms mean you can withdraw it and spend it in any way you choose (sensibly of course!).
2) I want to change my mortgage
If your mortgage product is due for renewal this year, it is worth reviewing the market to see if there is a better deal for you. There has been a change in the mortgage market, with lenders trying to keep their borrowers more actively, rather than borrowers having to change lender every time their mortgage product ends. However, your existing lender won’t do a thorough review of the market for you – we will! And if we find a better product, we can arrange a transfer for you on your behalf, often at no charge to you.
If 2020 is the year for moving house, we can also help you. We start with understanding your current position, the amount you want to borrow and your employment circumstances. Once we know what you are looking for, we can do a thorough search, calling on our up to date knowledge of the market. Using industry recommendations and our specialist software we find the right product from the thousands of mortgages available. We can particularly advise if you have unusual financial circumstances, you need bridging finance or need to borrow large sums.
3) I want to ensure my family is provided for
This is an area where many of us bury our heads in the sand. But sadly many of us know someone who has died young, or who has had a serious illness. A lack of protection planning can have a massive impact on family finances. It is worth considering how your money might run out, if anything happened to you as a result of long-term sickness or injury. This tool from Legal & General is helpful to help you work out how many weeks’ breathing space you could have. A relatively small amount of money saved each month can give significant peace of mind.
4) I want to save for the future
Maybe 2019 was the year you became a parent, or a grandparent and want to start a fund to help them in the future. Maybe you have inherited a significant amount and are wondering how best to invest it. Perhaps you are just looking at your bank account and wondering how to make your money work a little harder. There is a staggering array of savings and investment products on the market. We can help tailor investments to your own needs.
Whatever your financial resolutions we are best placed to give you totally independent advice which focusses on you and your needs. Take a look at the comments of our clients and let us see if we can help you.
Get in touch
We can help you keep your 2020 financial resolutions. Book an appointment by calling us on 01543 410512.
We do not ask for a fee for an initial meeting, where we can meet to check whether we can offer what you need. Any business that we conduct on your behalf will be subject to a fee. We will always advise you of the fee up front before we start any work for you.
An update on pension changes
/0 Comments/in Retirement Savings /by AdminThe pension market is ever changing, and this year has seen more changes than most as the Covid-19 pandemic affects the financial services industry. Here is an update on some key changes to help you plan your pension arrangements.
Has my pension changed in value?
At the start of lockdown, stock markets fell considerably and while they have regained much of their value pre-March, they are likely to remain volatile for a while. Pension funds are often mainly invested in stock markets, so these fluctuations can impact directly on the value of pension funds. If you track the value of your pension closely, you may have seen sharp changes in your fund this year, and you may be concerned about its value.
Do I need to change my pension?
As a general guide, if you have many years to go before you retire, we would advise that you don’t need to take specific action. Pensions are a long-term investment and over the life time of your investment, this is a short-term fluctuation. Markets should hopefully recover any short-term losses over time, and markets have already risen strongly since the falls in March.
Do you have a plan?
We always discuss with clients their long-term plan aims. This should not just be ‘I want as much money as possible’, a proper plan should have a proper aim to be meaningful. You may want to retire early, but why? This could be to spend more time with your grandchildren, or to go travelling, for example. Having a deliberate aim in mind should help you to plan more effectively in the meantime. Don’t let short term fluctuations or changes derail your plan, but let us help you achieve it with you.
If your pension isn’t being managed speak to us and we will be able to make specific recommendations based on:
– Your aims
– The length of time you have before you retire
– The amount you have in your pension pot
– Whether your funds are invested appropriately for you personally
– How much you need to save
(The state pension is unaffected by fluctuations to the stock market.)
Minimum age for drawing a personal pension
The government recently confirmed again that the minimum age for drawing a personal pension in the UK is to rise to 57. Currently savers who pay into a personal pension can access their money at 55. This comes as no surprise as the minimum pension age was set to be 10 years below state retirement age – currently 67.
We have no timetable for this legislation yet, but if you would like to understand the potential impact, please give us a call.
Changes to pension tax relief
We mentioned in February that we were anticipating changes in pension tax relief for higher rate tax payers. This change didn’t take place in the Spring budget. However after the financial impact of Covid-19 the government will be looking to ways to balance the books. One way or another they will have to raise a large amount of money in the future.
Many industry commentators are once again speculating that this change will be announced. If you are a higher rate tax payer, talk to us about the most efficient way to save for your future. Please get in touch and arrange a meeting with one of our independent financial advisers.
Case study: Drawing funds from an occupational pension
/0 Comments/in Retirement Savings /by AdminThe client
Our client approached us as she had received a pre-retirement pack from an old company occupational pension scheme, from a well known high street name.
This was for a relatively small plan value, and the pension offered was only £70 a year. Our client asked if we could arrange for her to draw the whole fund as cash. Alternatively she wondered if we could transfer the fund to add to her existing sizeable pension benefits that we manage.
Our solution: drawing funds from an occupational pension
We examined the data and advised that it was in her best interests to draw the fund. There was quite a sizeable penalty on making a transfer, but not on drawing the funds directly from the scheme. The latter option was clearly preferable. The transfer would only be a last resort.
The retirement paperwork gave options for drawing the fund as a one-off payment under the triviality rules. However our client did not qualify to use these as her overall pension savings were too high.
We therefore considered drawing the benefits under the small pot rules, where you can draw plans of up to £10,000 as one off payments. There are various versions of these rules depending on the type of scheme, but they are quite straightforward for occupational schemes.
The challenge: changing the rules
There was no option for this in the paperwork, so we contacted the scheme administrators to ask for this.
The administrators confirmed our understanding that we could use these rules, but they then advised that the scheme have chosen not to adopt the rules that actually allow this. They also advised that they thought the scheme had a lot of members in a similar situation, with small pots, who would probably prefer, or have preferred, to draw the funds as cash.
We thought this was worth challenging, as it would actually cost our client quite a sum of money if she transferred her benefits instead. We drafted a letter for her to send to the scheme trustees to ask them to change their stance.
The occupational pension administrators then advised us that they had reviewed our data. As a result they chose to adopt the rules which would benefit our client.
This decision meant our client was better off. But crucially it also opened up this option for other members of the scheme.
Please note though, drawing a cash payment rather than a pension is often not the right choice. Advice is important, as shown by this case, where we were able to provide an option our client would have not known was even available.
Case study: Mortgage advice at the end of product life
/0 Comments/in Mortgages /by AdminThe client
One of our long-standing clients approached us for mortgage advice as his product was ending. He was looking to take out a new 5-year fixed rate product.
Our solution: mortgage advice
We reviewed his options, and looked at suitable products from a number of lenders. The best option for him was to take an offer from his existing high street lender. Our client spoke to the lender, and was offered a competitive rate.
The challenge: changes in rates
A few weeks later we went to apply for this, to find the rate had increased. The client was happy to go ahead with this, but we could see no reason for the change. We therefore suggested he should wait whilst we did a little more digging.
On checking the numbers we found that his loan to value was just under the 80% mark. However on checking the rates we found the rate he was being offered was for loans over 80%. It was possible the lender had changed their recorded property value, but this seemed unlikely.
After much pondering we came up with a possible answer. As the lender charges daily interest, then this is added to the loan every day. This could mean that during the month then he could be pushed over the 80% threshold, and by waiting until his monthly payment was paid, then the original products would become available again. We therefore suggested waiting until the start of the next month, and then re-apply for the product change.
We did this, and were offered the original rate. By waiting a few days and working with us the client saved £1,525.80 over the next 5 years. Had the client gone direct to the lenders website and applied himself he could have ended up with the wrong product without realising.
Financial resilience: how would you cope with a life changing event?
/0 Comments/in General /by AdminAccording to Scottish Widows, in the UK up to six million people each year suffer a life changing event that causes a sudden loss of income. Many more experience events that cause a sudden rise in outgoings. Examples include:
Many of these events happen without warning, leaving individuals with little or no choice but to face them, but the impact can be substantial. The inability to pay essential bills and meet mortgage payments can lead to huge financial stress.
While many people have faced these challenges this year, the government support has enabled the majority to continue meeting their financial obligations. However, in more normal times, individuals need to find their own way through the new situation, coping with the stress of the event as well as the financial impact.
The ability to cope financially when faced with a sudden fall in income or unavoidable rise in costs is known as financial resilience. Not everyone has the financial resources to cope if they are unable to work. A poll of more than 2,000 adults by Zurich UK suggests as many as one in eight would have to sell their home to make ends meet if that ever happened. In the survey a third of respondents said they did not feel financially resilient.
How would you cope?
When asked how they would cope with a sudden significant loss of income:
These are all major decisions, and have a significant impact on you as well your partner and any family. Being financially resilient can and does help cushion the blow of these income shocks.
How can a financial adviser help?
Working with a financial adviser can help you look at alternate ways to cope with the impact of a life changing event or a major financial blow on your existing income. We take a long-term view with you, and take time to understand your financial situation, including the levels of savings or other financial support you have access to. We can then look at ways to protect your income that can help you in times of sudden change, to protect you and your family.
When you decide to insure your income, or your life, what you are really insuring is the financial stability of yourself and your loved ones. There are many options to explore depending on your circumstances and priorities, and it is our job as independent advisors to guide you through to achieve financial resilience for you and your family.
3 financial steps to take to protect the important things in life
/0 Comments/in Mortgages, Retirement Savings /by AdminIn the last few months have you stepped back to consider what is important? Have you been reviewing your future plans and finances? Have you realised the importance of ensuring your family and future are protected? After three months of lockdown, we are starting to see shops and businesses opening up. We are all getting used to a new way of working. Now is the perfect time to take some simple steps to ensure your finances are arranged in the best way to support your family. Here are our 3 steps to financial planning.
Step 1: Getting your finances in order
For most of us our mortgage payment is the biggest item of monthly household expenditure. You may have applied for a mortgage holiday in recent weeks. If you haven’t, the option is still available. However, if you can avoid this, we would suggest you do so. Some lenders are saying they think this should affect your ability to borrow in the future.
Aside from this, it can be a good idea to check if you are on the best mortgage deal. We may be able to find a better rate or a better option to help you reduce that monthly payment. There has been a change in the mortgage market, with lenders trying to keep their borrowers more actively, rather than borrowers having to change lender every time their mortgage product ends. However, your existing lender won’t do a thorough review of the market for you! We will review what they have to offer and advise you on the alternatives, for example whether a 2 year or a 5-year fixed rate might suit you best. When we find the right product – whether this is with your current lender or a different lender – we can arrange a transfer for you on your behalf, often at no charge to you.
Step 2: Planning for your future
Are your pension arrangements well planned? If you have been working for any length of time, it is likely you have a number of different company pension schemes and maybe a personal pension which needs reviewing. Now is a good time to ask, are you in the right plan, are you investing in the right funds and are you paying too much in fees?
We can help you identify what plans you have, and check that they are still suitable to support you in retirement. A quick check can also reveal who stands to gain any death in service benefits, which you can change.
For our small business owner clients, we can help you plan a personal pension scheme to support you in the future. Even if your business finances are under pressure right now, starting a pension is an essential step.
Step 3: Supporting your family
Whenever we see a client, we always check to see if they have made a will. So many financial arrangements are set up to benefit you in your lifetime. But did you know they can also be structured to support your family after your death? If you would like us to recommend a solicitor to help you with this, or if you need us to work with your solicitor, please let us know.
We can also ensure that you have arrangements in place to support your family after your death or if you can’t work because you are ill. If we have learnt anything in 2020 it is that life can take some very unexpected turns. We can find the right type of plan at the right monthly costs with cover levels that are right for your needs. We can check any existing plans you have to make sure they are still suitable for you.
Reduced Office Hours
/0 Comments/in Uncategorised /by AdminDue to the current ongoing situation with Covid-19, we are reducing office opening hours. The office will now be open from 9am until 2pm.
If you have any queries outside of these hours, please leave us a message on the answerphone, or email enquiries@acuityfinancial.co.uk, and we will respond as soon as possible.
We hope all our clients are keeping safe and well during these unprecedented times.
Business as usual
/0 Comments/in General /by AdminWe wanted to reassure our clients that we are continuing to work very much as normal for the foreseeable future. We already have systems set up so that our staff can work from home if needed.
If you have an appointment and would prefer to do it either by telephone or via video conferencing, we are all set up to do that. Just give us a call on 01543 410512 ideally the day before your appointment and we will arrange that with you.
Changes on pension tax relief for higher rate tax payers
/0 Comments/in Retirement Savings /by AdminWhat is pension tax relief?
What are the current rates?
What are the potential changes to pension tax relief?
What other pension changes may be announced?
Your financial resolutions for 2020
/0 Comments/in General /by AdminHave you resolved that 2020 is the year you get your financial situation organised? You may have been thinking about looking at your pension or starting a savings plan for your children? Perhaps 2020 is the year you buy a bigger house for your growing family, or downsize as they leave the nest? Maybe 2020 is the year you will retire and make a start on all your big life goals. Whatever your financial resolutions for this new decade, we can help you achieve them.
1) I want to review my pension
If you are self-employed, you may have no pension provision at all, so this should be a priority. The sooner you start, the more you can save before you retire. Even a small amount saved regularly will mount up over a long period. We can review the market and find the right product for you.
If you have a personal pension that hasn’t been reviewed for a while, it would almost certainly benefit from changes to the investment funds.
And if 2020 is your planned retirement year (lucky you!) we can help you decide what to do with your pension pot. There is a huge range of annuity products available for you to invest in and we can advise on those. And of course the new pension freedoms mean you can withdraw it and spend it in any way you choose (sensibly of course!).
2) I want to change my mortgage
If your mortgage product is due for renewal this year, it is worth reviewing the market to see if there is a better deal for you. There has been a change in the mortgage market, with lenders trying to keep their borrowers more actively, rather than borrowers having to change lender every time their mortgage product ends. However, your existing lender won’t do a thorough review of the market for you – we will! And if we find a better product, we can arrange a transfer for you on your behalf, often at no charge to you.
If 2020 is the year for moving house, we can also help you. We start with understanding your current position, the amount you want to borrow and your employment circumstances. Once we know what you are looking for, we can do a thorough search, calling on our up to date knowledge of the market. Using industry recommendations and our specialist software we find the right product from the thousands of mortgages available. We can particularly advise if you have unusual financial circumstances, you need bridging finance or need to borrow large sums.
3) I want to ensure my family is provided for
This is an area where many of us bury our heads in the sand. But sadly many of us know someone who has died young, or who has had a serious illness. A lack of protection planning can have a massive impact on family finances. It is worth considering how your money might run out, if anything happened to you as a result of long-term sickness or injury. This tool from Legal & General is helpful to help you work out how many weeks’ breathing space you could have. A relatively small amount of money saved each month can give significant peace of mind.
4) I want to save for the future
Maybe 2019 was the year you became a parent, or a grandparent and want to start a fund to help them in the future. Maybe you have inherited a significant amount and are wondering how best to invest it. Perhaps you are just looking at your bank account and wondering how to make your money work a little harder. There is a staggering array of savings and investment products on the market. We can help tailor investments to your own needs.
Whatever your financial resolutions we are best placed to give you totally independent advice which focusses on you and your needs. Take a look at the comments of our clients and let us see if we can help you.
Get in touch
We can help you keep your 2020 financial resolutions. Book an appointment by calling us on 01543 410512.
We do not ask for a fee for an initial meeting, where we can meet to check whether we can offer what you need. Any business that we conduct on your behalf will be subject to a fee. We will always advise you of the fee up front before we start any work for you.
Financial planning when going through a divorce
/0 Comments/in Mortgages /by AdminDivorce is stressful. We can at least help in taking part of that stress away for you.
Sometimes our services are needed most when our clients are going through a stressful change in their lives. Recently Paula has been advising several clients who are going through the divorce process, working with them and their solicitor. Here she offers some key financial issues to think about when you are going through a divorce or separation. She also covers what information you may need to provide for us and your solicitor to advise you appropriately.
Mortgage planning for divorce
If your separation means you need to sell your home – what your solicitor will refer to as the matrimonial home – you will need to consider whether you need a mortgage in order to buy a new property. You will also need to have an idea how much you may need.
In order to help you with this, you will need an idea of what the matrimonial home is worth, the amount of any existing mortgage and an indication of how any equity may be split between you and your ex-partner. Proof of earnings will be needed to help you obtain a new mortgage. You will also need an idea of the value of any property you are looking to buy. We are happy to talk to you about getting a mortgage in principle so you can have that conversation with your solicitor.
Pensions considerations
The value of your pension and your ex partner’s pension will be taken into account with any financial settlement. You will need to supply your solicitor with the Cash Transfer Value of any occupational and private pension schemes. We can obtain that information for you if you wish, to help you to fill in form E.
If you are allocated a pension sharing order as part of the settlement, you will need some idea of where you are going to invest that money. If you have a private pension plan it may make sense to invest it here. We can look at the amounts involved, and consider how close you are to retirement age before we advise you.
You may need to access some capital in the short term for example when you are waiting for your matrimonial home to sell. If you are over 55, you may be able to release a tax free cash sum from your pension pot to help you.
We do understand that considering your financial affairs while going through a divorce is stressful. Our aim is to help you consider all the possibilities to help you make the right decisions. We want to ensure the financial aspects of the divorce go as smoothly as possible for you.
If you would like to book an appointment with Paula to discuss any of these issues, please call us on 01543 410512. We do not ask for a fee for an initial meeting, where we can meet to check whether we can offer what you need. Any business that we conduct on your behalf will be subject to a fee. We will always advise you of up front before we start any work for you.