Beaufort Financial work with Walsall College photography students
Beaufort Financial Birmingham have worked with local photography students at Walsall college to bring a local feel to their brand
The work was part of a competition lead by Co-Founder and Chartered Financial Planner Paul Gorman. The students were given a brief which explained Beaufort's brand concept - art and science. With firms nationwide, the brief also encouraged a local element to photographs submitted.
Once submitted, the entries were judged against the brief by a panel at Beaufort and the winners were chosen. Monetary prizes were offered for first, second and third place as well as the fantastic opportunity to work with a professional service and have images published for commercial use. All winning work will be used in future digital and offline marketing, branding and communications from the Birmingham firm as well as being displayed in the local offices.
The winners were revealed on 18th May at a presentation at Walsall college and prizes were awarded in the following order:
First place - Guyvor Weals - Tails
The idea for the image originated from the smoke effect seen when acrylic paint enters water. I felt this would relate to Beaufort's theme of art and science. I created some acrylic paint mixtures of blue and yellow colours; and poured them into a fish tank full of water. I used Photoshop to dictate the colour of areas of the image, helping to create colours to match Beaufort's brand.
Second place - Debi Heath - Birmingham Library
Linking to the local area I decided to focus on Birmingham Library because of the links to science and art through books and the design of modern architecture. From an abstract point of view, I focused on only part of the building, taking into consideration the shapes and patterns formed by the structure.
Joint third place - Gemma Palmer- Waves and Alexandra Mole - Selfridges
The idea to create the image that I entered came from a few different elements from the brief. First of all I wanted to ensure I had the colour scheme in mind and also I wanted to include feel ofBirmingham and the Midlands. I then came up with the idea of capturing iconic landmarks which resulted in me capturing the photographs of the Selfridges building.
Offering some more detail on the concept, Beaufort's website states that the firm's financial advice to consumers combines the 'art' of knowing and understanding life goals, with the 'science' of identifying the best financial solutions to achieve them.
Reflecting on the competition, Paul Gorman said This has been a great opportunity to work with local students and give them the opportunity to work with us. The results have provided us with high quality stimulating imagery that will help to establish our local brand. I look forward to working with Walsall college again in the future..
If you would like to keep a look out for upcoming use of imagery you can visit beaufortfinancial.co.uk/birmingham
Beaufort Financial sponsors cycling club
Away from the office, our Chartered Financial Planner, Paul, is a very keen and enthusiastic cyclist.
Most weekends, he'll be out on his road bike trying to keep fit and at the same time enjoying the local scenery.
We recently agreed to support and sponsor Bridgtown Cycling Club, which is the club that Paul predominantly rides with.
The cycling club has a growing membership and typical rides around the roads and lanes of Staffordshire & Shropshire and sometimes Warwickshire.
Paul said I find cycling a great outdoor activity. It's the combination of getting a good workout, discovering new countryside and meeting some lovely people, that really appeals to me
On Paul's cycling radar next month is a 100 mile charity bike ride from Wolverhampton to Aberdovey, followed the week after by The Dragon Ride - another 100 mile ride, this time a very hilly route, in the Brecon Beacons.
Retiring on time: Five tips for giving up work on your own terms
Do you have a dream retirement age in mind? Most people do.
Unfortunately, many people believe that, no matter how hard they wish to retire on time, they will be beholden to their employer long past the age they'd like to be putting their feet up.
The situation
According to research from Scottish Widows, more than 10 million UK adults estimate that they will need to continue working until they are no longer physically able to do so. Furthermore, three million people say that they have no choice but to work until the end of their life.
Less than a quarter (24%) of people expect that they will have left working life behind completely by the time they reach 65, with the least optimistic outlook held by younger generations.
51% of people expect to remain employed on at least a part-time basis; and just 18% say that this will be down to preference, rather than necessity.
Your options
Retiring at a reasonable age shouldn't be impossible, but it will mean planning ahead and might mean making some changes to your current financial habits.
1. Know your position
Look at what you are currently doing to prepare for retirement and use a calculator (such as this one) to work out:
- How much you are likely to have in retirement, without making any changes
- What age you could retire
- How much you will need (lump sums and income) to retire on your own terms
- What the shortfall is
You can then use this information to determine what needs to change between now and the age you want to retire, to ensure that you have enough money to support your desired lifestyle.
2. Save more
Putting more money aside now, will give you more income when you choose to access it. It sounds simple enough, doesn't it? But, according to the research, 23% of 25-54-year olds are concerned that they are not putting enough away for the future. Meanwhile, 39% fear running out of money completely after they give up working.
3. Take advantage of the helping hands offered
If you are paying into a workplace pension, you already have a great foundation for sensible saving habits. However, for those who have joined a pension through the introduction of automatic enrolment, the minimum contributions made by you and your employer are unlikely to be enough to provide an adequate retirement income.
Currently, your employer must contribute the equivalent of 2% of your pensionable earnings (the income you receive between £6,032 and £46,350 each year), whilst a further 3% is taken from your salary before you receive it. Unfortunately, current expert guidelines state that the average worker will need to put a total 12% of their annual earnings to one side, meaning that many people currently contribute less than half of what they will need to live the retirement lifestyle they aspire to.
4. Repay debts
If you can retire without debt, you will be able to do more with your income. Reducing your living costs as you enter retirement will make a big difference to your ongoing budget. With a smaller portion of your retirement income being lost to repaying debts, you will have more available to enjoy the retirement lifestyle you want.
How you achieve this will differ, depending on your circumstances. But it could include moving into a smaller property, cutting back on non-essential spending and even smaller changes, such as shopping around for better deals from utility providers.
5. Talk to a professional
Engaging with a financial adviser or planner will help you to get on the right track to retiring on your terms; your income and age of choosing.
Research has shown that, those who seek the help of advisers and planners can save up to £98 per month extra toward their retirement income, which could give you an additional £3,654 per year to live on when you stop working.
Planning for retirement can be a daunting task. But, by talking to the right person, you can ensure that you are able to stop working, when it suits you, and with the retirement income you want. For more information or to get started, why not get in touch with us?
Further interest rate rises predicted: How to stay ahead
We're almost half way through 2018, and it's likely that you've already thought ahead about some things. Maybe you're planning a trip abroad during the summer holidays, or you're a really eager Halloween costume aficionado (and we won't mention those who are already thinking about tinsel and stockings!).
But have you thought about interest base rate rises?
They're not as exciting as holidays and parties, granted, but it is important to act now if you are going to protect your finances from the impact of the predicted increases over the next 12 months.
What's likely to happen?
According to experts, the Bank of England (BoE) is likely to raise the base rate twice in 2018, with another two increases expected to follow next year (Source: EY ITEM Club. Naturally, all financial predictions should be treated with an amount of scepticism, however, it seems certain that when rate rises do come, they will be gradual in nature.
Nonetheless, borrowers should not underestimate the impact on their personal finances, nor should savers overestimate the benefits of them.
If the predictions made come to fruition, the base rate may increase by as little as 0.25% each time, but that will still be a minimum increase of 1% over the next 24 months. Whilst it might not sound like much (especially if you remember the late 80s and early 90s), it is likely to impact you.
What will an increase mean for you?
There are two sides to the potential effects of base rate rises; the negative impact on borrowers, and the benefits it can bring for savers.
For borrowers:
Last year, it was estimated that 3.9 million homeowners had variable, or tracker mortgages (Source: Council of Mortgage Lenders). That means that just over two fifths of homeowners face a rise in monthly repayments every time the base rate is increased.
Variable and tracker rates are, by definition, not fixed. Therefore, when the BoE increases interest rates, this rise is passed on by the mortgage lender to those people with these types of mortgages, pushing up their monthly payments.
If you have a tracker or variable mortgage, the first thing is to understand how much your mortgage payment will increase by if interest rates rise, then ask if you can afford it. If not, it is time to start looking at your options. These include:
- Moving to a fixed rate mortgage
- Cutting back on other expenses to free up the money to cover the increased payments
- Use the time you have to head off any rises and start putting a financial buffer in place which can absorb the extra costs for a while
Fixed rates are usually offered on a fixed-term basis, so it is likely that you will need to shop around every two-to-five years to find a product that suits your needs.
For savers:
Increases in interest rates are mostly good news for anyone building their savings. Whether it's to be used as a deposit on your next home, or you are concentrating on making sure that you have enough to live on in retirement, higher interest rates should give you better returns on your savings.
However, it is unlikely that providers will be rushing to pass any rate rises onto their customers, so where you choose to keep your money now, will matter in the long run. That means that you will need to shop around if you are to see the best possible growth in your savings.
It is also important to keep inflation rates in mind. Even though they may show signs of having peaked last year at a post-Brexit-vote high, it is still tough for savers to find a real return on their money and this is unlikely to change anytime soon.
Our three top tips for finding the best saving account are:
- Shop around; using more than one comparison tool
- Consider differ types of account; could locking money away in fixed-growth options be better for you?
- Do your research into how providers reacted to the previous rate rise; if they were reluctant to pass the increase onto savers, they are unlikely to act differently during future rises
Where to go from here
Whether you're currently borrowing or saving (or, most likely, a mix of both) you will undoubtedly be looking for ways to stay ahead of the potential base rate rises over the next 24 months. The best way to do this is to engage with a financial planner or adviser to develop a strategy and gain insights which will enable your money to work for you and allow you to meet your financial goals.
For more information, or to get started, feel free to get in touch.
Gender pay gap does not need to continue into retirement
Historically, men have received more money annually from the State Pension than women. In a recent Which? survey it was shown that over 20 years, women would receive £29,000 less on average than men; however there are a few factors at play that mean the annual discrepancy may be largely offset. These include women receiving their state pension earlier than men at 60 and not 65. With the state pension age now being very close to equalised, how will this effect women going forward - will they continue to take a reduced annual benefit than men?
How the State Pension is calculated
To be eligible to receive any State Pension, you must have at least 10 years of National Insurance contributions on your record. How much you receive each week will depend on how many qualifying years you have in total, and to receive the Full State Pension, you will need a minimum of 35.
Qualifying years can be accrued in three ways:
- By paying National insurance through an employer or self-assessment
- By receiving National Insurance Credits, which are awarded by claiming some State Benefits
- By making voluntary payments
Where is the gender gap?
The main reasons for the gap in pension benefits are: women are more likely to work less hours, women have historically earned less than man, have taken time off work or leave employment altogether for periods of time during their lives to take care of children and or elderly and infirm relatives.
The new flat rate of state pension benefit that was introduced in April 2016 (currently £164.35 per week) is designed to rectify the previously mentioned issues that currently negatively affect women. In the past, a part of the state pension was based on earning and the more you earned the more you would receive from the state in retirement. This has been replaced and you are now awarded a flat credit for each year you earn more than £6,032 per annum no matter how much you actually earn in any one year.
Childcare and National Insurance credits
Parents who receive Child Benefit and are caring for a child under the age of 12 receive National Insurance credits automatically. If a parent is not entitled to Child Benefit they should still apply and ask for no payments as this will activate the automatic credit and count towards the state pension.
Grandparents and other family members aged over 16 but under state pension age that provide care for a child aged under 12 may also be able to get Specified Adult National Insurance credits. These are not credited automatically and need to be applied for (using form CF411A).
State pension credits for carers
If you receive Carer's Allowance, you'll automatically receive credits on your National Insurance record and therefore credit for your state pension.
Understanding your State Pension should be seen as part of the wider retirement planning process. So, to make sure that you have enough retirement income to achieve your goals, you can:
- Calculate how much you will get:
Using a State Pension forecast calculator, you can see how much you will have when you stop working and need to access your pension.
Knowing how much you will have if you don't make any changes to your current situation will help you to identify any shortfall.
- Fill in any gaps in your record:
You can view your National Insurance record and make any voluntary contributions by clicking here.
- Evaluate your other pensions:
Knowing what you can expect to get in retirement income from your workplace or personal pensions will give you a better idea of the overall income you can expect to receive when you stop working.
- Seek financial advice:
Research has shown that those who engage with a financial adviser or planner could put an additional £98 toward their pension each month. This equates to an extra £3,654 in annual retirement income for later life.
Talking to a financial planner will also enable you to make better financial decisions and create a plan which will see you meeting your long-term retirement goals by making adjustments and changes in the short-term.
To get started, please feel free to contact us.
UK homeowners more financially stable than other countries
UK adults who own their home are less vulnerable to financial shocks than those in other countries, according to HSBC.
Financial resilience
The UK has the second lowest number of people who would struggle to cope if mortgage interest rates increased by 2%; worldwide, 22% of people would face instability should interest rates rise, in Britain, it is just 16%.
Even a 5% rate rise would only negatively affect 35% of the UK's homeowners, compared to almost half (47%) of the global population.
Big spenders, bad savers
The study also shows that, on average, UK mortgage holders spend 34% of their monthly income on repayments, 4% below the global average. However, despite the tendency to spend large amounts on housing, many people looking to buy a house will struggle to save a large enough deposit. Globally, 80% of prospective homebuyers find saving a deposit to be difficult, compared to 84% of people getting ready to buy in the UK.
Despite this, current UK homeowners take an average of just four years to accumulate their deposit. While the worldwide average is a year longer, and French buyers spend around seven years saving.
One of the reasons behind the length of time people spend saving is growing deposit aspirations; 69% are planning to put a 20% deposit down. The main source of this money is regular savings at 78%.
So, whilst buying a house in the UK might be tough, it is comparably easier than in many other countries.
How interest rate rises affect homeowners
Tracie Pearce, HSBC UK's Head of Retail Products says:
Interest rates have been at historic lows for many years, and many people who got onto the property ladder in the last decade have never experienced anything else. In fact, the recent increase in the UK's Bank of England Base Rate would be the first time they have seen one.
Many home owners are heading into uncharted territory having entered the housing market with record low mortgage rates. They may have taken out a fixed rate that is due to come to an end or are on a Tracker rate and will possibly see their rate creep up over time.
While it is positive to see UK homeowners' resilience and confidence in their finances, it's important they are conscious of potential interest rate rises and how they might affect household budgets.
Preparing for a financial shock
The research shows that 41% of people are willing to stretch themselves financially to buy a better home. Consequently, leaving a larger safety net in place is sensible, because without it, the smallest financial shock could leave you in danger of:
- Being unable to make mortgage payments and potentially losing your home
- Falling behind on essential costs, such as household bills
- Falling into debt and negatively impacting your credit score
- Needing to borrow from friends and family to make ends meet
There are two forms of financial protection which can make riding out an income shock, or interest rate rise much more manageable:
1. An emergency fund
Emergency funds can be used for all kinds of financial trouble, from a broken-down car, to home repairs, or even to cover the costs of medical equipment after an accident.
Put simply, an emergency fund is money which can be used if your income cannot cover an essential expense. It is recommended that this fund is equal to three-to-six months of living costs just in case your household unexpectedly loses an income.
This will also provide a buffer if your interest rates rise more sharply than expected.
2. Insurance
The purpose of insurance is to pay out when something goes wrong. It is something that you never want to need, but you always need to have. There are three types of insurance to consider, which will protect you and yours from the financial implications of ill health or death:
- Life Insurance: Pays out a lump sum if you die of an illness which is covered within the terms of the policy
- Critical Illness Cover: Pays a lump sum or income upon diagnosis of a serious illness
- Income Protection: Replaces a portion of your income if you are unable to work due to illness or injury
The importance of financial planning
Taking financial advice and having a clear plan of action surrounding your finances can keep you financially confident and stable, no matter what trouble you may face. A good financial plan will include safeguards to protect you and your family, should the unexpected become reality.
To talk about the best ways to reinforce your family's financial stability, get in touch.
Knowing your goals: How to plan your retirement around the things that matter to you
Research from Scottish Widows has shown that the top priorities for those planning for retirement, are generating an income (41%), and having flexibility over that money (40%).
Other goals came in much lower, with the ability to pass on benefits, such as an income or lump sum, to a spouse or dependent at 10% and control over investments at just 9%.
However, it is unlikely that the priorities you have for your retirement will be the same as everyone else. So, how can you identify your retirement aims, and further still, achieve them?
Understanding your retirement priorities
We can't tell you here how to define your aims for retirement, but we can tell you that they should be:
- Personal
Your priorities should reflect the things that are most important to you, not necessarily your family. If you have a desired lifestyle in mind, generating enough income to support that will be high on your list, much like freeing up time to spend with loved ones will be important to some. Don't be afraid to delve deep and work toward a retirement that truly reflects your aspirations.
- Adaptable
Your retirement priorities are likely to be flexible and can change as you go through life. For example, whilst you may currently be intent on leaving money behind for your children, that vision may expand to include grandchildren and great-grandchildren eventually. It doesn't matter how many times you re-evaluate your plan, as long as you adjust it accordingly, and remain on track for a successful and financially stable retirement.
- Realistic
If you don't have a high salary and have not been putting large amounts into your pension fund during your working years, it is unlikely that you will be able to retire on an income which is equal to what you have during working life. But, you probably shouldn't aim for that as you probably don't need it.
With financial planning, you can set yourself attainable goals that will make you feel just as accomplished and ensure that you have an enjoyable and affordable retirement.
Planning for a retirement that suits you
Retirement planning can be a lengthy process but, with the help of a financial adviser or planner, you should find that it is rewarding and worth it for that added peace of mind, so you will not have to worry about being able to afford to live during retirement. Retirement planning involves:
- Analysing where you are now and where you aim to be
Your current position includes all forms of savings, investments and pensions which will be used to provide you with an income in retirement.
How much you will need, will depend on the annual income you need to support your desired lifestyle, as well as your estimated life expectancy.
You can find all of this out by using a retirement calculator, like this one.
- Plugging any gaps
If your current savings habits are unlikely to provide you with the income you need in retirement, you have three options:
- Accept that you will need to live a more reserved lifestyle, on a budget
- Continue working, even if it is part-time, or as a consultant, to continue earning and delay full retirement
- Start putting more money into your pension funds to boost the amount you will be able to access later.
- Accessing your pension
Since the introduction of Pension Freedoms in 2015, the options surrounding your retirement income have grown, meaning that you have more control from the age of 55.
Your retirement income is likely to be formed of two or more of:
- State Pension
- Workplace pension(s)
- Personal pension
- Savings
- Income from property and investments
It is up to you to decide how to organise those to meet your retirement needs.
Fixed and variable income
The difference might seem straight-forward and self-explanatory; however, it is worth reiterating that:
- A fixed income, such as those provided by Defined Benefit schemes, and Annuity or the State Pension gives you a guaranteed, often inflation-proofed annual income which will be provided for the rest of your life.
- A variable income, available via Flexi-access Drawdown, is not fixed, nor is it guaranteed, but it does mean that you can withdraw money as and when it is needed. Though using this as your only income will increase the likelihood of spending too much and running out of money in later life.
Both options have advantages and disadvantages, and the level of popularity between the two has changed dramatically since the pension reforms. FCA research shows that a third (30%) of pensions accessed since 2015 have been transferred into drawdown, while just 12% have been taken as an Annuity.
However, both play a key role in meeting your retirement goals.
It is important to remember that combining the two options is possible and that you do not have to make an either/or decision when you retire. Rather, it is better to do so. A fixed income acts as the foundation; paying your running costs, such as bills, mortgage and living costs. Meanwhile, a variable income can be used to cover other costs, whether planned or unexpected, which keeps your finances secure and means that you will be able to support yourself throughout retirement.
The role of financial planning
A financial planner will be able to help you to define your goals in a way which turns them into achievable targets. They will then work with you to find methods and routes to get you from your current position, to living your ideal retirement lifestyle, using what you have currently and building on it.
To discuss how financial planning could help you to achieve your retirement dreams, get in touch.
Spring Statement: An update for EIS and VCT investors
The recent Spring Statement included an announcement that the government will consult on how venture capital investments in start-up companies can be structured.
Venture capital schemes, including Venture Capital Trusts (VCTs), Enterprise Investment Schemes (EIS) and Seed Enterprise Investment Schemes (SEIS) deliver capital to start-up and small businesses while, subject to certain rules, investors qualify for tax-relief on their investments.
Patent Capital Review
The announcement comes after the government published the Patent Capital Review, aimed at unlocking £20 billion of long-term investment in innovative UK businesses, via venture capital schemes.
The new consultation is primarily aimed at understanding the funding requirements of innovative, knowledge-intensive companies, as well as how a new way of structuring Enterprise Investment Schemes (EIS) might work.
The 'Financing growth in innovative firms: Enterprise Investment Scheme knowledge-intensive fund consultation' document issued by HM Treasury said: The government sees the venture capital schemes as being increasingly focused on growth and innovation in the future. Evidence gathered during the consultation suggested that knowledge-intensive firms - which have high growth potential but are R&D - and capital intensive - have the most difficulty obtaining the capital they need to scale up. The EIS and VCT schemes are therefore being significantly expanded for knowledge-intensive companies. The government also announced that it would consult on a new EIS fund structure aimed at improving the supply of capital to such companies.
One of the ideas under consideration is to provide additional incentives to investors, including the possibility of exempting, rather than deferring, the gains on other assets when investments are made into an EIS.
However, it is understood that the government is not considering introducing a new EIS structure, reducing the three-year minimum holding period for EIS investments, or increasing the tax-relief available to investors.
VCT and EIS Tax-relief
Subject to certain criteria VCT, EIS and SEIS investments attract tax-relief, making them popular with those investors prepared to accept the significantly higher levels of risk associated with this type of investment.
VCT investments qualify for upfront tax relief equal to 30% of investments made in to new shares. If the investment is sold within five years, the tax-relief must be repaid.
EIS and SEIS investments qualify for tax-relief of 30% and 50% respectively. However, they must be held for at least three years, otherwise the tax-relief will be withdrawn.
Furthermore, gains on VCT, EIS and SEIS investments are exempt from Capital Gains Tax (CGT) and further relief is available if the investment is ultimately sold at a loss.
There are limits on the maximum tax-relief that can be claimed on VCT, EIS and SEIS investments.
Speak to us
The consultation closes on 11th May 2018, and more information can be found by clicking here.
If you would like to know more about the government's consultation or the tax benefits of investing in a VCT, EIS or SEIS please contact us, we'll be glad to help.
Divorce: Why you might be paying the price for decades to come
Getting divorced is an expensive process.
It can also take years, or even decades to fully be free of the effects.
During the process, you are likely to be affected emotionally, physically and financially, but over time, the first two effects will lessen. Unfortunately, the financial effects are often the slowest to heal.
According to research from Prudential:
- The annual income for divorcees is £3,800 less than those who have never been divorced.
- 23% of retirees will take significant debts into retirement with them, compared to 16% of non-divorcees.
The good news is, whatever the circumstances surrounding your divorce, it is possible to get yourself into a financially stable position again.
Richard Collins, Charles Russell Speechlys Family Law Partner, says:
We are beginning to see many more people divorcing just prior to, or during retirement. These decisions can only be made easily if there is proper financial provision in place for both spouses' retirement.
The fact that divorcees tend to have lower debts than their married counterparts may be down to the courts encouraging a clean break between divorcing couples where a clean break is affordable.
This allows divorcing couples to regain control over their own finances and consider how they want to plan for their separate futures. Many divorced couples re-evaluate their spending and finances after divorce and take this opportunity to build a stable financial future for themselves including growing enough pension provision for their retirement.
I've seen people post-divorce relishing their independent financial status and seizing the opportunity to make financial decisions for themselves, knowing that they are building up wealth and securing their future.
Your first priorities should be:
- Housing
Having somewhere to live in the short and long term is the most vital thing to consider when separating or divorcing. If you are staying in a shared home, will you be able to afford the payments now you are alone?
You may be entitled to support or state benefits to help you to find affordable housing and stabilise your finances.
- A financial safety net
One of the best ways to improve your financial stability, is to build up a financial buffer or safety net. Ideally, this should be equal to three-to-six months household expenditure. Try to hold your emergency fund in an instant-access account, even if that means compromising on interest rates.
At this point, it is also worth updating your will, as divorce will render your current one invalid.
Top tips for maintaining your financial stability during divorce
1. Handle the process practically
Don't rush into decisions. It is understandable that your head will be ruled by your heart at a time like this. However, financial decisions can affect you for life, so it is vital that you allow your sense of logic to step in and override any rash commitments you may be tempted to make.
To give logic a fighting chance, it may be worth discussing your ideas and thought processes with a friend or family member you trust.
2. Get your paperwork in order
Take care of your current obligations first, whether that's cancelling payments, changing your address with your bank or updating your nominated beneficiaries on your life insurance. Most of these can be done over the phone or online and, whilst they are small tasks, they can often feel very important and will give you a sense of accomplishment and control.
3. Re-evaluate your goals
What you want out of life may have changed since you last thought about your finances. During a calm moment, you should think carefully about what you want your life to look like and your ideal financial situation. Make some notes as you rediscover your priorities and keep them in a safe place; you will need them again.
4. Prioritise financial protection and retirement
If you haven't already invested in insurance, now is the time to take out Life Insurance, Critical Illness Cover and Income Protection. If you are living alone, or have dependants, the peace of mind is worth it.
Once the immediate threat of emergency is covered, it's time to think more long-term. Research has shown annual income is less for divorcees, but how can you avoid letting that affect the quality of your retirement?
You have three options:
- Making up the shortfall with bigger pension contributions.
- Accepting that you will have less to live on and adjusting your lifestyle accordingly.
- Staying in work for longer to earn more money and continue to build your pension.
Of course, you may have had plans to grow old with your ex and gracefully mature together. Now you have the opportunity to rethink that plan and replace it with your own aims and desires. Think about what you want your retirement to look like, then use a retirement income calculator to determine how much you will need to save to achieve it.
5. Make a plan
Now that you know what you want and what you need to get there, you can begin to put a plan in place to make sure that you keep your finances on track. To do this, you will need to find ways to bridge the gap between your current circumstances and your desired lifestyle. Which may seem impossible, but there are many options to consider.
Of course, if you would prefer the hard work to be done for you, you could consult an independent financial planner…
6. Consult a professional
Independent financial advisers and planners are experts at finding the solutions and strategies to bring you closer to your financial goals.
The main benefit of talking to a professional is the knowledge that they are clued up on the many types of product available and will have access to knowledge that you will not. That means that you can be secure in the knowledge that the products and methods suggested are the most suitable for your circumstances.
To rebuild your financial stability and confidence, get in touch.
Giving money to charity? Six mistakes to avoid
As a nation, we gave over £9 billion to charity last year. (Source: Charity Aid Foundation)
In addition, 53,000 legacies were left, totalling £1.4 billion (Source: Legacy forecasting)
That's something to be proud of.
However, we also gave more than £5 billion to the tax man in Inheritance Tax (IHT) (Source: Office for Budget Responsibility (OBR)). What if you would prefer for that money to be given to good causes instead?
Making gifts to charities achieves three things:
- It makes you feel good
- It helps animals, people and communities in need
- It puts that money immediately outside of your estate, and is exempt from IHT liability
You can give more, and make the most of your ability to help, by avoiding these six common mistakes:
1. Not using Gift Aid
Gift Aid allows UK charities to reclaim the tax they would otherwise lose on your donation. When donating, you usually need to put a mark in a box to signify that you would like to use Gift Aid on your donation.
Doing so means that the charity can keep more of the money you have given and put it to use toward causes that you believe in.
In the 2016/17 tax year, Gift Aid enabled charities to reclaim £1.27 million which would otherwise have been lost to tax. (Source: Gov.uk)
2. Donating at the wrong time
We all feel more generous at Christmas, but the causes you support need funding all year round. In addition, a regular, monthly donation is much better for both you and the charity. This is because you help them to make an income each month, and it makes your own budgeting much easier.
You may even find that you can afford to donate more overall by giving a small amount each month, rather than a yearly lump sum.
3. Not reviewing subscriptions
Monthly subscriptions and Direct Debits can be easy to forget about and you could be donating for longer than you planned to. Make sure that you are reviewing your budget regularly so that your budget makes financial sense.
You may even find that you can afford to donate more, as your circumstances change.
4. Failing to research
Charities have dominated the headlines for all the wrong reasons lately, so make sure that you know who gets your money and how it is used. Investigate the allocation of funds and make sure that a larger proportion of your donation is used to help the cause, rather than funding the lavish lifestyle of the CEO.
Consider where your donations are going. Remember that donations to local charities will have a more immediate and visible effect, but national organisations are able to reach further and hold more power.
5. Not keeping records
Charitable donations are exempt from IHT, but you may need to prove that you have donated the money. Keeping your proof of donation is the best way to do this. It is worth keeping these documents with your will, as the eventual executor of your estate may need to rely on them.
If you like to regularly review which organisations you support, it may be worth keeping a log of when your donations start and end.
6. Not leaving legacies
Remember that you can write charitable donations into your will and they will be immediately exempt from IHT, this is a great strategy for reducing your estate after your death. However, it is important to keep this updated with the right charity information, as well as the right amount.
If you find yourself in need of a will review, or maybe you still haven't written one, Will Aid Month offers the chance to have your will completed by a professional in return for a voluntary charity donation.
For further help with estate planning and giving money to good causes, get in touch.