Are the best things in life really free?

Recent research* shows that many of life’s most enjoyable events come with a hefty price tag. The research calculates that going to university, buying a house, getting married, having two children and then retiring could, on average, add up to £566,659 over the course of a lifetime. This is a huge sum and illustrates the need for careful planning.

Separating ‘wants’ from ‘needs’

Many people believe that the key to meeting financial goals is to identify what is most important to you. For instance, whilst you might want to eat out several times a week; affording a home of your own, or enjoying a comfortable retirement, might mean cutting down on these nights out.

The problem is that we can all find ourselves trying to save for multiple goals at once and this can feel like an almost impossible task. This is where taking financial advice can really help. We will be able to assist you in putting together a financial plan that addresses both your short and longer-term financial needs.

Getting the savings habit

As a starting point, everyone needs to have some money put away for emergencies like an unexpected bill. This means having some cash that can be accessed quickly. Then it makes sense to think about the bigger and more exciting things in life, and have money saved that steadily builds up for the future. Tax-efficient accounts like ISAs can really help here and you can invest lump sums or make regular monthly contributions.

Whatever your age, plan for retirement

You should certainly think about your pension savings, even if retirement seems light years away, it will come around quickly enough, and the more you can save now, the longer your money has to grow. If you think about it, failing to save for retirement might mean you’re struggling to afford even the basics in years to come.

*Source – Royal London, 2019

What money rules would you pass to the next generation?

As parents and grandparents, we all hope the values that we hold dear can somehow be passed on to our children and grandchildren. We’d all like them to be able to make the right financial decisions for the future. Here are a few thoughts that might just help

Spend less than you earn
It’s not easy to get ahead if you’re spending as much, or more, than you’re earning. Everyone needs a back-up fund, and one of the easiest ways to ensure you’re putting money by for a rainy day is to pay yourself first. Transferring money into a savings account on pay day can help you manage your budget better and encourage you to maintain the savings habit. If you don’t have any cash reserves, you could find yourself building up debt by putting emergency spending onto your credit card.

Take control, keep on track
Everyone has financial aims and learning to control money from a young age will help them become achievable. Whether it’s saving for a deposit for a home of your own or ensuring you have enough to live on in retirement, starting early, getting good advice and regularly reviewing the progress you’re making towards your goals all make good sense.

If it seems to be too good to be true… Financial scams are now widespread and come in a variety of forms. What they offer may look appealing and be presented by people who seem plausible, but scams have resulted in people being used as money mules and risking criminal prosecution or losing substantial amounts of money to bogus or unsound investments, or even being conned out of their entire pension savings. Don’t let this happen to you.

Taking financial advice about major transactions such as investments, mortgages and pensions aims to ensure that your interests will always be fully protected, and you will be able to make the right decisions for your financial future.

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.

Gifting early to avoid IHT

Many people are considering reducing the size of their estate to minimise the Inheritance Tax (IHT) that will be payable on their death.

Recent research* estimates that nearly seven million parents have already given their children around £227bn of their wealth early in order to reduce the amount of IHT payable on their estates. A further 6.5m are thought to be considering similar moves.

Using trusts and life policies
Many families are using trusts to ringfence assets, effectively removing their value from their estates. However, anyone considering giving away assets in their lifetime should take professional advice. Inheritance Tax is complex and lifetime gifts can end up being taken into consideration for tax purposes if all the conditions applying to these types of gifts aren’t fulfilled. Also, Chancellor Philip Hammond earlier this year ordered a review of the IHT system, the implications of which we will monitor closely.

The Financial Conduct Authority does not regulate some forms of taxation advice.

*Source – Direct Line Group, Oct 2018

Number of working women aged 60-64 has doubled

Employment statistics show that more women are staying in the workplace for longer, with 48.5% in this age bracket in employment*, compared with just 23.4% back in 1998. This is attributed variously to the short-notice rise in the state pension age from 60 to 65 or 66 currently affecting many women born in the 1950s, higher incidence of divorce later in life, financial necessity, or simply a desire to keep mentally active.

It’s also a welcome indication that employers acknowledge the benefits of retaining the skills of older employees within the workplace, though most employers can no longer force retirement
when an employee reaches a certain age.

*Source – Royal London, Oct 2018