danielashby

5 staycation destinations perfect for autumn

With summer over, the nights are already starting to draw in and the colder weather is arriving after months of record-breaking temperatures. That doesn't mean you have to shelve your UK holiday plans until the spring though. Throughout autumn, there is still plenty of places to head without having to step on a plane when you want to enjoy a break.

Whether getting outdoors to take in the stunning autumn views or being cosy inside with a cup of tea is your idea of an excellent autumn break, these five staycation destinations may be just what you're looking for.

1. Aviemore, Scotland

Scotland is known for its breathtaking scenery and Aviemore is beautiful. Surrounded by mountains and the Cairngorms National Park. If you love to be outdoors, it's the perfect place to consider for your staycation. You can try your hand at skiing, canoeing and even dog sledding. There are gentler outdoor pursuits to take in, from trails around its stunning national park to wildlife watching.

When the weather turns or you want to head indoors, there are more than enough options for dining, shopping or stopping to have a drink. You can watch, or even take part in, traditional ceilidh dancing too. There's a chance to step back to the 1700s at the Highland Folk Museum or enjoy a trip on a steam train by taking the Strathspey Railway.

2. Dartmouth, Devon

Dartmouth is situated on the mouth of the River Dart and is one of Devon's most popular towns thanks to its historic streets and scenic location. As it's surrounded by countryside, it's in an excellent location for taking a brisk autumn walk and there are many traditional English pubs to stop at for lunch or dinner to get your energy back too.

Other landmarks to keep an eye out for when you're exploring Dartmouth include the 14^th-century castle, which offers views of the estuary and Baynard's Cover Fort, which dates back to the 16^th century. If you love the picturesque views of the water, why not head out onto the river? The Dartmouth Paddle Steamer is one of the last coal-fired steamers in the UK. Along the way, you'll be able to take in many iconic Dartmouth landmarks at a leisurely pace too.

3. Whitby, Yorkshire

Why not head to the seaside on your next staycation? Whitby might not offer warm Mediterranean waters this autumn, but it's got plenty more going for it. Strolls along the coast are guaranteed to offer great views and are even better when you have traditional fish and chips at the end too. The harbour is a great place to end up, the atmospheric Abbey towers, which is said to have inspired Dracula author, Bram Stoker, over the cobbled streets as you walk along the beach.

Not too far from the harbour is a whale bond arch that was erected sometime after 1853, paying homage to the history of Whitby. If you're lucky, you may even get a chance to see whales in the wild too. In autumn, vast shoals of herring migrate to the Yorkshire coast, attracting a plethora of other animals. Head out on a boat and you could spot seals, whales, dolphins and much more.

4. Stratford-upon-Avon, Warwickshire

Celebrated for being the birthplace of playwright William Shakespeare, you'll find plenty of history and attractions at Stratford-upon-Avon. The market town is easy to navigate if you want to walk the Shakespeare trail, taking in plenty of sights, including his wife's Anne Hathaway's cottage, the family home, which is now a working museum, and his final resting place in the Holy Trinity Church.

Don't worry though, it's not all about the famous playwright. Amongst the other things to do at Stratford-upon-Avon include the MAD museum, a butterfly farm and the 18^th-century mansion of Compton Verney, which is home to an award-winning gallery and museum, is just a 20-minute car journey away and set in 120 acres of parkland.

5. Cambridge, Cambridgeshire

Cambridge is synonymous with the university in the city, but it isn't just students that will love visiting here. The stunning building that seems unchanged for centuries makes it the ideal place for an autumn walk as you take in the view. Walking alongside the River Cam, where you can find many college gardens, are Backs as they're known, is a must. Of course, if you're visiting Cambridge for the first time, you should go punting on the river too; wrap up warm and relax as a guide navigates.

If you're a fan of delving into history, a university tour is a great way to explore the nooks and crannies of the world-famous institution. There are several arts venues to take in too, including the Fitzwilliam Museum, as well as plenty of traditional pubs and shops to browse.

by danielashby

Ethical pensions: Considering where your money is invested

Considering ethics when investing has slowly been on the rise over the last couple of decades. However, even if it's something you think about with your investment portfolio, you may not have factored in your pension(s). As contributions are often deducted from your salary automatically, they can slip your mind.

Yet, whether you have one or multiple pensions, they're likely to be one of your largest assets. After all, employee contributions typically span decades over your working life, coupled with employer contributions, tax relief and investment returns. As a result, if ethical investing is something you're interested in, including your pension in such decisions is worthwhile.

What is ethical investing?

Put simply, ethical investing is about incorporating your personal views into how and where you invest. Much like ethical shopping means actively choosing some products and avoiding others for ethical reasons, it's the same concept with investing, Whilst you might choose the Fairtrade fruit at the supermarket, for example, you'd choose the companies that pay a fair wage to invest in.

It's about having a goal that goes beyond simply delivering returns on your money. For example, encouraging green energy innovation, fairer working practices across the global supply chain, or reducing environmental degradation. Some refer to ethical investing as having a double bottom line; the returns and the positive impact you hope it will encourage.

Ethical investing is often filled with jargon and you may have heard the practice of incorporating values into investing as sustainable, responsible or green investing; they all broadly mean the same thing. Ethical investing can then be broken down into three key areas, referred to collectively as ESG:

• Environmental: These link to sustainability and the depletion of resources. Environmental considerations may be using energy efficiently, managing waste, or reducing deforestation.
• Social: The social issues that relate to how a company treats people. This could cover relationships in communities where they operate, diversity policies, and labour standards throughout supply chains.
• Governance: This term focuses on corporate policies and how a company is run. Among the areas covered are tax strategy, executive remuneration and protecting shareholder interests.

When it comes to pensions, incorporating ethics may mean switching to a different fund or actively selecting ethical investments if you have a SIPP (Self-Invested Personal Pension).

Growing interest in Ethical Pensions

Research conducted by Invesco highlights a growing demand for pension products that reflect ESG principles in some way:

• 82% of people would favour part of their pension(s) automatically going to a company which meets a certain ethical standard
• 72% of defined contribution (DC) pension members want their scheme to include ethical investments in its default fund
• 46% would choose a fund that only invests in 'socially and environmentally responsible companies' with returns of 6%, rather than a fund that delivers returns of 6.5% but invested in all types of companies
• If a fund only investing in 'socially and environmentally responsible companies' and one investing in all types of companies both had the same historic returns of 6%, 60% would rather invest in the responsible option

The drawbacks of investing ethically

Whilst ethical investing does allow you to back companies that align with your values, there are drawbacks to consider.

First, ethics are highly subjective. Whilst your pension provider may offer an ethical fund to choose from, it might not align with your values. As a result, you may have to compromise.

Second, considering ethics is a growing trend among businesses, but you will be limiting your investment opportunities. This may mean that returns are lower due to choosing ethical investments.

Finally, validating claims that companies make in their corporate social responsibility (CSR) reports can be difficult, as can measuring the positive impact of investments.

As demand for ethical investment continues to grow, it's likely these issues will become smaller. However, they are worth considering if you're interested in investing your pension ethically. Remember, your pension should provide you with an income throughout retirement. Other factors need to be considered alongside ethics too.

Investing your pension ethically

If you decide you want to invest your pension ethically, how you do so will depend on the type of pension you have.

• If you have a Workplace Pension, you'll be automatically enrolled in the default fund. However, many providers now offer an ethical option that you can easily switch to, often through logging in online. Here, you should be able to see the ESG criteria set out, as well as historic performance.
• A Personal Pension typically works in the same way as a Workplace Pension, except you can choose which provider you want to use. As a result, you can screen out those that don't offer an ethical fund.
• If you have a SIPP, you can either choose investments personally or select a fund, giving you far more control over the ESG elements you want your investment to incorporate.
• With a Defined Benefit pension, you don't have control over how your pension is invested. However, many have begun to embed some ESG practices into their investing principles, having responded to action from members to do so.

If you'd like to discuss how your pension is invested and the income it's projected to deliver at retirement, please contact us.

Please note: 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.

by danielashby

Just a fifth of investors stuck to their plan during 2018 volatility

2018 proved a difficult year for investors. Volatility meant many saw the value of their investments fluctuate and it led to the majority tinkering with their long-term financial plans amid concerns. However, it's a step that may not be right for them and could mean lower returns over the long term.

During a year that was characterised by global economic concerns and uncertainty, from Brexit to a trade war between the US and China, investment markets were volatile. In the last quarter of 2018 alone the MSCI World Index fell by 13.9%, the 11^th worst quarterly fall since 1970. As a result, it's not surprising that some investors felt they had to respond by changing plans they'd initially set out.

Responding to market volatility

Whilst investing should form part of a long-term financial plan, research from Schroders indicates that many investors decided to take action after experiencing volatility in the short term. Just 18% of investors stuck to their plans in the last three months of 2018. Seven in ten investors said they made some changes to their portfolio risk profile:

• 35% took more risk
• 56% moved into lower-risk investments (36%) or into cash (20%)

Despite many making changes to their plans, more than half of investors said they have not achieved what they wanted with their investments over the past five years. Interestingly, many attribute their own action or inaction as the main cause of this failure. The findings indicate that investors may recognise that deviating from long-term plans can have a negative impact, as well as judging decisions with the benefit of hindsight.

Claire Walsh, Schroders Personal Finance Director, said: No-one likes to lose money so it is not surprising that when markets go down investors feel nervous. Research has repeatedly shown that investors feel the pain of loss more strongly than the pleasure of gains. That can affect decision making.

As our study shows even just three months of rocky markets led many investors to make changes to what should have been long-term investment plans. That could potentially lead them into making classic investment mistakes. These include selling at the bottom when things feel bad or moving their money into cash in an attempt to protect their wealth, but then leaving it there too long where it can be eaten away by inflation over time.

Why should investors have held their nerve?

It's easy to see why investors might be tempted to tinker with financial plans after seeking investment values fall. But, for many, it's likely to have been the wrong decision.

Investing should be done with a long-term outlook, generally a minimum of five years. Volatility is a normal part of investing and any financial plan should have considered how the ups and downs of the market would affect your goals. A long-term outlook allows for dips and peaks to smooth out. Changing your position whilst experiencing volatility could mean selling at low points and missing out on a potential recovery in the future.

Of course, there are times when it's appropriate to change your investment position. For example, a change in your income or investment goals may mean that your risk profile has changed. However, changes shouldn't be made in response to normal investment volatility alone, they should consider the bigger picture.

Creating a financial plan that considers volatility

When you create a financial plan, it's impossible to guarantee the returns investments will deliver. However, your decisions should consider potential volatility and what's appropriate for you. With the right approach, you should feel confident in the plans you've set and hold your nerve next time investment values fall.

Among the areas to consider when building a financial plan with a risk profile and level of volatility that suits you are:

• What are you investing for?
• How long do you intend to remain invested?
• What is the risk profile of other investments or assets that you hold?
• How likely is it that your situation will change in the short or medium-term?
• What's your overall attitude to risk?

If you're worried about investment volatility, please get in touch. Our goal is to work with you to create a long-term financial plan that you have confidence in, even when markets are experiencing a downturn.

Please note: The value of 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.

by danielashby

Using your savings to achieve aspirations

What's on your bucket list? Whether incredibly exciting experiences, exotic travel destinations or something entirely different features on your list, it's likely finances will play some role in how achievable they are. Could your savings be used to tick a few of your aspirations off?

You may have been saving with specific goals in mind or simply putting money to one side for the future. However, dipping into savings can be something people find difficult. To have built up a healthy savings fund you've likely established good money habits and accessing savings can go against this. However, it may mean you miss out on opportunities to achieve aspirations, even if you're in a financial position that allows for it.

As a result, it's important to understand your savings and how dipping into them will affect your plans, giving you the confidence to make decisions.

If you have big plans ahead, from helping younger generations get on to the property ladder to a once in a lifetime trip, there are a few things to consider. Your savings are likely to be spread across multiple products, how do you know where you should take the money from and when should you do it? Among the areas to consider are:

• Accessibility: When looking at various savings, the first step should be to see how accessible they are. Are any of them fixed term accounts? Or are some of them invested? If you're planning ahead for a few years' time, accessibility is less likely to be an issue, but if you want the money soon, it may limit your options. Be sure to check that you won't lose any of your savings, interest or returns by taking money out. Some accounts may lower interest rates, for example, if you make a withdrawal before a set date.
• Tax efficiency: Would accessing your savings affect your tax position? There are some instances where taking a lump sum from savings may mean an unexpected tax bill. Let's say you decide to use some of your pension after the age of 55 savings to kick-start retirement; the first 25% can usually be withdrawn tax-free, but, take out more than this and it may be considered income for tax purposes. If you sell stocks and shares, you may be liable for Capital Gains Tax too. Looking at the tax efficiency of different options allows you to maximise your savings.
• Allowances: As you've been saving for the future, you may have made use of allowances. Your ISA (Individual Savings Account) allowance means you can save £20,000 each tax-year tax-efficiently. If you take money out of an ISA, you can't return the money without using the current year's allowance, which may limit you. In some cases, allowances will have little impact on your decisions, but in others they are important. This will depend on your personal circumstances and plans.
• Potential for future growth: Which of your saving pots has the biggest potential for growth in the future? Accessing savings that are invested over a cash account with a low-interest rate may not be in your best interests financially when you look at the long term, for example.

The impact on your long-term financial security

Of course, it's important to consider what impact using savings now will have on your long-term financial security. If you're worried about how taking money out of savings could affect future plans, this is an area financial planning can help with.

Often people find they're in a better financial position to start accessing their savings than they first think, but it's normal to have some concerns. Cashflow modelling can help you visualise the short, medium and long-term impact of using your savings. It can also model how taking savings out of different saving products will have an effect, allowing you to choose the right option for you.

It's also an opportunity to weigh up how your financial security will be affected. Would using a portion of savings mean your emergency fund is depleted, for example? Understanding the long-term implications gives you the tools needed to decide how much and when you should make a withdrawal from your savings. Taking the time to consider the long-term impact of your decision means you can proceed with confidence and really enjoy spending the money on turning aspirations into a reality.

If you're thinking of accessing some of your hard-earned savings to work through your bucket list and have concerns, please contact us. Our goal is to work with you to help you get the most out of your money by creating a financial plan that reflects aspirations and boosts confidence.

by danielashby

Could your property boost your retirement fund?

Property is increasingly being seen as an asset that's vital for funding retirement. It's no surprise, after all, our homes are often one of the largest assets we have, but what are your options and the drawbacks of doing this?

The value of property has grown enormously over the last few decades. If you're approaching retirement now, you've likely benefited from this at some point. According to figures from Nationwide, the average home cost £59,534 at the beginning of 1989. Over a 30-year period, it increased to £212,694. As a result, property has become an integral asset to consider when planning for retirement or thinking about how you'll pass your estate on to loved ones.

Property and retirement: A growing trend

Some retirees are already exploring how they can use property wealth to enhance their lifestyle and supplement other financial provisions. Research suggests it's a trend that's set to continue. According to analysis by Canada Life younger generations are three times more likely to plan to use property wealth to fund retirement:

• Almost one in ten (9%) people aged between 16 and 54 expect the wealth stored in their homes to be their main source of income in retirement
• This compared to just 3% of those aged over 55

Alice Watson, Head of Marketing and Communications at Canada Life Home Finance, said: It is good the younger generation recognises that they can unlock wealth from their property in retirement. This openness is likely driven by the reality that many under 50s will receive less generous pensions under the Defined Contribution scheme, compared to the majority of the older generation on the Defined Benefit plan.

Notably, the research also illustrates the evolving profile of retirement income, and lends further weight to the argument that Equity Release is moving into mainstream financial planning.

The findings suggest the majority of over 55s are confident in their financial security. Half believe their State or Workplace Pension will provide sufficient income, whilst one in five are relying on savings. However, with 21% underestimating how long they'll live for, more could be reliant on property wealth than expected in the future.

What are your options?

With a significant portion of your wealth likely locked in property, it's natural to wonder what you can do to access it should you need to.

One of the most obvious answers here is to downsize. Selling your home to purchase a cheaper property to spend retirement in can free up some of the investment you've made in property. This used to be the traditional route retirees went down. But what if you can't or simply don't want to move? Or what if downsizing wouldn't release as much capital as you need?

Equity Release is an option that more retirees are choosing. There are several different types of Equity Release products, but they typically allow you to take either a lump sum or several smaller sums though a loan secured against your property which you pay interest on. This money is then repaid when you die or move into long-term care, as a result, you don't usually make payments to reduce the loan during your lifetime, though some products allow you to pay off the interest.

Equity Release can seem like a fantastic way to fund retirement, but there are some crucial things to consider; it isn't the right option for everyone.

1. As you don't usually pay the interest, the amount owed can rise rapidly
2. Accessing the equity may mean you're liable for more tax and affect means-tested benefits
3. You may not be able to move in the future or face a high cost for doing so
4. Equity Release will reduce the inheritance you leave behind for loved ones
5. You will not be able to take out other loans that use property as security

Before you look at Equity Release products it's important that you explore the alternatives to ensure it's the right route for you. There may be different options that are better suited to your circumstances and goals.

Building a retirement income that suits you

Whilst property wealth is set to play a growing role in funding retirement, it's important that other sources aren't neglected. Retirement income is typically made up of multiple sources and may include:

• State Pension
• Workplace and/or Personal Pensions
• Investments
• Savings
• Property

Choosing property over contributing to a pension can be tempting if retirement still seems far away, especially when you factor in property growth over the last 30 years. However, once you consider tax relief, employer contributions and investment returns, as well as tax efficiency, pensions should still play an important role in holistic retirement planning.

If you're starting to think about retirement, whether the milestone is close or you want to understand how your current contributions will add up, we're here to help. We'll work with you to help you understand the different income streams that could provide a comfortable, fulfilling retirement that matches your aspirations.

by danielashby

Trusts: What are they and what are they used for?

A trust may be one of those financial tools you've heard of but know little about. In some circumstances, they can be an excellent way to help manage assets and reduce tax liabilities. However, it's important to understand what they are and where setting up a trust can be useful before proceeding.

What is a trust?

Even the basics of a trust can seem complicated due to the legal jargon used. But the principle is relatively simple.

A trust is simply a legal arrangement for handing assets to one or more people or a company (trustees) to control on behalf of one or more people, known as beneficiaries. Whilst the trustees have control of the assets, they must act according to rules set out by the person that set up the trust (the settlor) and with the interests of the beneficiaries in mind.

Say, for example, you want to ensure a child in your family would be taken care of should something happen. A child won't be able to take control of an inheritance, but you may not want to hand over money intended for the child to another adult without being able to stipulate how it can be used. A trust allows you to set out some rules and have peace of mind that the trustee must act in the interests of the child.

Many different assets can be placed in a trust, including money, investments or property.

There are many different types of trust, which may have different advantages depending on your needs. Among the most common types of trusts are:

Bare trusts: As the name suggests, these are the simplest types of trust. The beneficiary has the absolute right to the assets within the trusts, as well as any income they may generate. Whilst, the trustee will take responsibility for managing the trust's assets, they have no say in how or when the assets or capital is distributed.

Discretionary trusts: This is where you give the trustees the power to decide how to use the income assets which the trust generates. How much power they have is stipulated by the settlor in a letter of wishes. They may, for example, have the power to decide the portion of income that is paid out, which beneficiaries beneficiates will receive income and how frequently disbursements are made.

Interest-in-possession trusts: In this case, a beneficiary has the right to receive an income generated by the trust's assets or the right to use assets it holds. This can be for life or for a defined period of time. For instance, a beneficiary may have the right to live in a property that is held in trust until they die.

Settlor-interested trusts: If you or your spouse or civil partner will benefit from the trust, this is known as a settlor-interested trust.

Mixed trust: This is an option that blends multiple types of trusts. So, a portion of the assets held in trust can be set aside as an interest-in-possession trust, whilst the remainder can be treated as a discretionary trust, giving trustees greater control over a portion of the assets.

The above are examples of just a few of the types of trusts available. There are other options, which may be more suitable to your circumstances, if you're thinking of using a trust.

When can using a trust be useful?

There are many instances where a trust can be a useful way to hold assets, including:

• Providing certain conditions are satisfied, assets held in trust aren't considered part of your estate. This means they will not count towards a potential Inheritance Tax bill when you die.
• Having greater control over how and when assets are distributed after you die.
• Preserving the assets rather than splitting them up between beneficiaries. This may mean the wealth you've accumulated is able to grow further and still benefit loved ones.
• Holding and managing assets for people that are not ready or are unable to do so themselves. This may include children or vulnerable people.

Setting up a trust

If you think that setting up a trust is right for you, it needs to be a carefully considered decision, from both a financial and legal perspective.

Once a trust has been set up it may be impossible or very difficult to reverse the decision. As a result, it's vital that you ensure it's the right choice for you financially before you take any further steps. Ensure you look at the medium and long term when assessing how appropriate a trust is for your financial situation. It's also important to note that beneficiaries may pay tax on distributions they receive, this may play a key role in understanding if it's a good idea for you.

From a legal perspective, a trust needs to be precisely worded. For this reason, you should use a solicitor to help you set it up. You can expect solicitor fees to be around £1,000 or more, though this will depend on your personal situation and the complexity of the trust. It's a fee that could save you from making costly mistakes.

If you'd like to discuss the financial merits and drawbacks of a trust with your situation in mind, please contact us.

Please note: The Financial Conduct Authority does not regulate wills, trusts, tax or estate planning.

by danielashby