Business as usual

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We 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

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What is pension tax relief?

When we are advising clients on their pension options, we often need to explain pension tax relief. Tax relief is the biggest advantage that pensions have over ordinary investments. This is an incentive set by the government to encourage you to pay into your pension pot. When you pay money into a pension, the government refunds the tax that you paid on this this part of your income meaning the amount is immediately boosted by tax relief. Usually you don’t need to worry about this. Your pension provider will claim it as tax relief on your behalf and add it to your pension pot. You get relief at source in all personal and stakeholder pensions, and some workplace pensions.

What are the current rates?

As it stands, when you pay into a pension, you receive tax relief at the highest rate you pay income tax. Basic rate taxpayers receive 20% pension tax relief and higher rate taxpayers 40%. So if you are a basic rate tax payer you only need to pay £80 to save £100. Higher rate tax payers only need to pay £60 to save £100.

What are the potential changes to pension tax relief?

However, many people within the financial services industry  are speculating that the budget on 11 March may see reforms in this area. There is a suggestion that we may see changes for higher rate tax payers, with a reduction in the tax relief rate from 40% to 20% tax relief. If this is the case, higher rate tax payers would do well to make any pension deposits before the budget. There is unlikely to be any change for basic rate tax payers.
Of course, this is likely to be a highly unpopular move. The Chancellor may decide not to make this change at this time. However, it is a significant change that has been discussed for several years. If it does not happen in this budget, it is still likely to happen in the foreseeable future.
If you are a higher rate tax payer and would like to 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.

What other pension changes may be announced?

We might also see an announcement in the budget about pensions dashboards. This would help people keep track of their retirement savings by displaying all of their pension pots, including the state pension, in one place online. This has been promised in previous budgets, but the December Queen’s Speech announced the Pensions Schemes Bill which should include this change.

Your financial resolutions for 2020

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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.

Financial planning when going through a divorce

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Divorce 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.

How much should I save in my pension?

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This is a question that our clients always ask us when we are discussing their private pension arrangements. Putting money away every month or year to benefit us at some point in the future is a major decision to make, and can feel very unreal, when you are more concerned about covering your day to day costs. Of course as advisers, we don’t actually tell you the answer! It is very much your decision. But we can tell you the things we discuss with clients when we are looking at their pension options.

How long until you retire?

The conversation about how much you should invest will very much depend on how long you have until you retire. Put simply, if you are in your thirties or forties your pension pot has longer to grow than if you have reached your mid fifties. You may also have a view about what age you want to be when you retire. Don’t forget you can currently claim the state pension on reaching 66, but this is set to increase, meaning many of us won’t be able to claim that until you are 68.

What other pension arrangements do you have in place?

Very often when we speak to clients they have had a number of previous jobs. This is likely to mean that they have a number of other pension pots in place, some of which they may have forgotten about. If you can find the details of those other pensions before you come and talk to us, this will help us advise you as to the best course of action. You may be able to transfer some of those pots into a new personal product which you then pay into regularly.

How much risk are you comfortable with?

This is a very personal decision and one we can support you with. Some of our clients want a very secure investment and others are happy to take a little more risk. Some pensions will include a combination of funds, so you can benefit from both approaches.

What are your retirement plans?

This can be the most enjoyable part of pension planning! Some people’s retirement plans include travelling the world and supporting their grandchildren. Others have ambitions simply to remain active and enjoy their garden. Whatever your plans are it is worth remembering that the basic state pension is just £129.20 a week in 2019/20. However modest your plans, we suspect you are going to want a little more than that to live on.

What pension contributions can you afford?

This is an essential question, and it would be worth considering before you come to talk to us. Ideally you would be able to put aside a sum every month to invest, so do think about a sum that is affordable for you.
Don’t forget that whatever you put into your pension, you automatically get 20% tax back from the Government as an additional deposit. So for example £200 a month from your bank account means £250 a month goes into your pension.

What if things change?

Don’t forget, we offer all of our pension clients an annual review, so if your circumstances change, you can adjust the amount you put into your pension.

If you would like to review your existing pension arrangements, contact us on 01543 410512 and make an appointment to see one of our advisers.

Old Pensions and Coffee

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Our client asked us to review a number of pension schemes from old employers, with one of the schemes run by a well-known Scottish insurer dating back to the 1980’s.

As part of our review of any pension scheme we write for detailed information on the scheme, and we look at the charges on the contract. In this case alarm bells immediately began to ring, as the fund only had a small value which was surprising given it had been invested for over 30 years. On checking the charges we discovered that there were a number of ‘set’ fees, rather than percentage charges. There were a number of these, such as a set monthly plan charge and also a fee as contributions were no longer being paid. Fortunately such charges are extremely rare nowadays.

When the charges over the year were added up they came to over 10% of the plan value a year, so it is not surprising the value was not great, as it will have been falling year upon year for many years. The projected final values at retirement were nil for every projection, excepting if the higher rate of return were achieved in which case the whole fund could be used to buy about 4 cups of coffee – not a great outcome.

Fortunately having identified this we were able to move the plan to a new contract with a much more attractive charging structure, and whilst the final value of this plan is still not projected to be massive, at least you wouldn’t be able to spend it with 3 friends in one afternoon trip for a coffee.

This shows the benefit of checking pensions, as you don’t know what might be in the background if you don’t know what to look for, or the questions to ask. If you would like us to check out your pension for you please contact us on 01543 410 512 or email enquiries@acuityfinancial.co.uk and we will get back to you, we will even let you have a coffee for free!

 

 

 

Acuity Financial and The Alrewas Show

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We are pleased to announce that we are supporting the Alrewas Show this Saturday, 20th July. Get yourself down there and show your support. There are a wide variety of activities and shows on offer, and it is sure to be a great day for all.

We are now members of the Equity Release Council!

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Equity Release is a subject that has become prominent in the news recently, as more and more people are looking to raise funds through their property. Equity Release is one way of doing this, and we are now proud to say that we are members of the Equity Release council!

To become a member of the Equity Release Council, we must adhere to their high standards and principles. Therefore, we will always:

  • Ensure that all our actions promote public confidence in equity release as a potential retirement solution
  • Act at all times in utmost good faith
  • Communicate high expectations for equity release outcomes in all our dealings
  • Ensure conflicts of interest are managed fairly and reduced to the lowest practical level
  • Exercise due skill, care and diligence in all that we do and uphold the standards set out by our professional bodies at all times
  • Always act with the best interests of our clients being paramount, treating our customers fairly in all our actions.

If you would like to know more about Equity Release, and how this could be of use to you, please contact us on 01543 410512, or email enquiries@acuityfinancial.co.uk.

You can also visit the Equity Release Council website at https://www.equityreleasecouncil.com, where you can find more information about the council and what it does.

If it seems too good to be true it probably is!

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A company which offered ISAs and bonds online, has gone bust owing £237 million to over 11,000 people.  These bonds and ISAs were advertised online on a comparison site and tempted investors by indicating a return of 8% per year. The serious Fraud Office are now investigating.

An 8% return on a low risk investment seemed too good to be true, and one of our clients called us to ask if he should invest some of his funds into this product. We advised him that the investment he was considering was extremely high risk and he could potentially lose his entire fund, he hadn’t considered this and decided against the investment.

By contacting us our client saved a large amount of his capital as he could have lost all of his investment and would have been one of the 11,000 plus people now out of pocket.

If you are considering investing funds then please have a chat with an adviser as they could save you from a costly mistake!

Call us now on 01543 410512 or drop an email with your query to enquiries@acuityfinancial.co.uk.

Mortgage product ending soon? Thinking maybe of just changing product?

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Let us check whether this is best for you, and if it is we can normally arrange it for you, without charging you anything.

That’s right. There has been a seed 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.

Some are better than others. Some lenders will offer all their mortgage products to existing borrowers, some will have a limited range with the best rates only being given to new borrowers, though they are now becoming the minority.

A further change is that many lenders have changed their systems so that we can access your mortgage account (with permission of course!), and if it is in your best interests we can arrange a product transfer for you.

We will always check whether you would be best served by changing lender, as we can look at thousands of mortgages, but if the current lender does offer good rates this is much easier to arrange than a remortgage.

It should be quick, normally doesn’t need underwriting again, and there is no need to use a solicitor to change lender.

And, again a recent change, most lenders will pay us a fee for arranging this. If so, and the case is straightforward as it should be, then we won’t need to charge you anything directly for arranging this for you.

So, if your product is ending in the next 4 months why not give us a call. We can advise you, arrange everything for you, you will get advice on your options which most lenders won’t offer, and it won’t cost you anything.

What do you have to lose?

Call us now