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Personal Financial Planning Posts

Friday August 1, 2014 at 1:13pm
As the adage goes if you fail to plan then you plan to fail. Probably the most important plan you will ever make is your Personal Financial Plan. The reason is this will give you the steps you need to take in order to: Understand what you need to do to live the life you want to live Help to avoid running out of money Provide you with real and lasting security for your family and dependents Give you clarity about what your financial future looks like Help you achieve peace of mind about money an....
Friday April 4, 2014 at 12:23pm
Changes announced in the budget mean you could turn a £10,000 investment into £18,333 simply by using tax efficient pension investments. Let me explain.It used to be that you invested in a pension during your working life and then bought an income for life in the form of an annuity. There are two problems with annuities; firstly they work by the people who live longest being subsidised by those who die earliest. Many see this as grossly unfair, in effect a stranger is benefiting from....
Tuesday January 28, 2014 at 10:00am
The majority of people I speak to do seem to acknowledge that they need to save for their retirement. Their commitment to doing so, however, is less certain.The Government recognises that many people need ‘encouragement’ to invest in a pension. Hence the advent of Pensions Auto Enrolment, being rolled out across the country over the next few years. Although pension Auto Enrolment will increase the number of people who have a pension the general belief is that those pensions will be n....
Thursday January 9, 2014 at 10:00am
You may be wondering what Auto Enrolment is all about and even why the government is bothering with it. The scheme being introduced between 2012 and 2016 makes it compulsory for employers and employees to contribute to employees’ pension funds unless the employee opts out. Most smaller companies will not be affected by the changes until 2016 but it is important for all of us to understand why this is a big issue.Why company final salary schemes are closingMany private sector employers ran ....
Wednesday December 4, 2013 at 4:46pm
If the inventor of the electric light bulb, amongst other things, gives you advice on how to succeed in life it is probably worth taking notice. This is the man who took 10,000 failed attempts at inventing the light bulb before he succeeded. Although the approach he applied (in italics below) to setting and achieving goals is straight forward, many people miss opportunities because they don’t have help or guidance in tackling what are quite difficult questions. Be clear about what you wan....
Thursday November 21, 2013 at 10:00am
I do a lot of professional development, normally around technical financial matters but one recent talk really got me thinking. I have written many blogs on how life is not a dress rehearsal; we only have around 70 or 80 years if we are the lucky ones. Precious time is passing us by. Ask yourself how well you score in the following areas of your life and decide which parts of your life you may like to work on first. The idea is you score yourself from 1 to 5 on each of these life goals: Financi....
Thursday September 12, 2013 at 11:14am
Back in 2007 George Osborne promised to “take the family home out of inheritance tax”. This hasn’t happened, in fact the nil rate band has remained frozen at £325,000 and will remain at this level until 2018. With increases in the value of the family home it could be that your home and certainly other assets will be subject to inheritance tax, meaning less of your wealth being passed on to your family.There are ways you can protect your wealth and save on inheritance tax.....
Friday July 5, 2013 at 4:05pm
With the pound falling against the US dollar and some commentators predicting parity next year it is worth considering what this means for your investments and how to apply to your investment strategy. Currencies are not like shares or bonds, they do not pay dividends or interest, there is no expected return from them. However currency movements can have a big impact on your investments when those investments are converted back to your local currency that is UK pounds.No one has the ability to c....
Thursday May 16, 2013 at 9:00am
In 2002 the Nobel Prize for Economics was awarded to Daniel Kahneman, a Princeton University psychology professor. He had never even taken a course in Economics. However, Kahneman was recognised “for having integrated insights from psychological research into economic science, especially concerning human judgment and decision making under uncertainty.”We have long advised clients that investment success is as much to do with their own investment behaviour as it is to the performance ....
Thursday May 2, 2013 at 9:00am
Don’t let short term distress cloud long term vision The economic system works and has provided positive returns over cash over time. Investors simply receive a higher return for taking on the risk or volatility of equity investment. However, investor behaviour is tainted irrationally by what is happening in the local market. For example here in the UK the Chancellor in the recent budget had to cope with the loss of coveted AAA status for UK debt, a possible third dip to the recession, sla....
Thursday April 18, 2013 at 9:00am
The budget was a pretty lack lustre affair. The much trailed General Anti Abuse Regime (GAAR) has failed to stop any of the tax planning that we have available. A greater deterrent to such planning is the much more aggressive approach HMRC is now taking in its correspondence.One initiative that did catch my eye was the new Help to Buy scheme. There are two variants of the scheme with the first part being launched this month. For the next three years buyers of New Build properties up to £60....
Thursday March 7, 2013 at 11:22am
“Life should not be a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside in a cloud of smoke, thoroughly used up, totally worn out, and loudly proclaiming "Wow! What a Ride!” Hunter S ThomsonI came across that quote recently and it really made me stop and think and prompted this blog. The reality is that it is not so easy to “skid in broadside...thoroughly used up” and worn out because to do....
Thursday February 14, 2013 at 9:00am
Have you ever noticed how on a two week holiday the second week always seems to go much faster than the first? It’s not so different in life, really. The second half seems to go much quicker than the first. If you don’t take control over whatever life you have left, or don’t give it the time or the importance it deserves you are probably heading for some painful regrets later on when it is too late to do anything about it. This is especially true when it comes to planning your ....
Thursday January 31, 2013 at 10:09am
When it comes to savings and investments many people think that holding cash is the no risk option. However, the better investor makes a decision on which risks to take and which to avoid. Doing nothing, including staying out of the market, carries risk. With inflation running at anything between 3 per cent and 5 per cent depending upon which month and which measure you use, and returns on cash, after tax, often less than 1 per cent holding low risk/return investments actually carries two big ri....
Thursday January 24, 2013 at 9:00am
To paraphrase Benjamin Franklin - there are two things certain in life, death and taxes. With the closing of tax loopholes making it more and more difficult to shelter your hard earned money from the highest rate of tax now is the time to make sure that you make the most of the money you have, to give you the life you want. When meeting clients to discuss investments, insurances, pensions etc. it is easy to get straight into investment performance, fund costs, provider comparisons and the detail....
Thursday January 17, 2013 at 9:00am
It’s certainly been a busy news week for pensions, with proposed changes that are likely to see some winners and losers. If you haven’t already got a handle on how you’re going to provide for your old age - and even if you think you have – recent news about pensions means it is well worth your having a review with your independent financial advisor in the near future to check everything is on track.One bit of news last week provided a sigh of relief. Thankfully after a th....
Thursday December 13, 2012 at 9:00am
You could hardly have missed the widespread news last week as Chancellor George Osborne unveiled his 2012 Autumn Statement, setting out the coalition's financial plans until 2017/18. As we’d all been led to expect, it was pretty depressing news on the economy which seems to be stubbornly resistant to staying on the road to recovery. Estimates for Britain's economic growth have dropped sharply. The Office for Budget Responsibility (OBR) now expects our economy to shrink by 0.1% this year, i....
Thursday November 22, 2012 at 9:00am
The Enterprise Investment Scheme (EIS) is not on many people’s radars – but it should be! An investment opportunity with tax reliefs of 30 per cent for an investment you only need to hold for 3 years is an attractive proposition for anyone getting poor returns on their investments. So, what’s the catch? I hear you say. Well, actually there isn’t one, although you do need to understand what the Enterprise Investment Scheme is all about to fully appreciate whether it’....
Thursday November 15, 2012 at 9:00am
Some news last week will be of particular interest to anyone already with a personal pension or thinking about one.Pensions regulator the Financial Services Authority (FSA) announced it wants to move to inflation-adjusted illustrations for personal or stakeholder pension schemes and is currently consulting on its plans with a target start date of April 2014. What does this mean? Effectively it will ensure that the effect of inflation is taken into account when forecasting pension performance and....
Thursday October 11, 2012 at 9:00am
Everyone needs to finance their retirement and, despite some of the bad press over recent years, personal pensions are still by far the most tax-efficient way of saving for old age. It was quite encouraging to see in recently released data from the Office for National Statistics that, although the number of people in workplace pension schemes has stagnated between 2010 and 2011, contribution rates have risen slightly. But it was worrying that a recent survey by the Prudential showed owners of sm....
Thursday August 30, 2012 at 9:00am
Bank holiday weekends are known to see a rise in A&E admissions through DIY mishaps. And the long weekend in August got me thinking about the so-called DIY pension or Self Invested Personal Pension (SIPP). SIPPs are appealing to investors due to their flexibility but fees can be higher. However, research published in August (2 in 3 DIY pensions left to fail) suggested a number of people managing their own personal pension don’t have the expertise, understanding of market risks or ....
Thursday August 16, 2012 at 10:00am
Andy Parker was invited to contribute to a new book being produced by the Institute of Directors, to be published later in 2012. Here’s a sneak preview of his Chapter focusing on directors’ pensions, exploring the full value of pensions investments for directors and owner managers.For owners and directors of small businesses a pension may seem like a luxury impossible to afford. Company owners often overlook the significant benefits available through Small Self-Administered Schemes (....
Thursday August 2, 2012 at 10:00am
Andy Parker was invited to contribute to a new book being produced by the Institute of Directors, to be published later in 2012. Here’s a sneak preview of his Chapter focusing on the importance of taking a proactive approach to your pension investment strategy.Given the turbulence in UK and international markets over the past 10 years you’d be forgiven for being cynical about investment, Stock Market returns and the advice you might be given on your pension investment strategy. Cynic....
Thursday May 17, 2012 at 9:00am
When Paul McCartney sang “When I’m 64” at the height of Beatlemania in the 1960s he couldn’t possibly have imagined what life had in-store for him at 64. What about you? Have you thought about what’s in store for you once you reach retirement age? Whether you approach retirement with trepidation or with a big sigh, glad to leave working life behind and do the things you’ve always dreamt of, will largely depend on how much planning you’ve done a....
Thursday April 26, 2012 at 9:00am
As an investor you could be excused for being somewhat confused by the fluctuations in the markets over recent years and the apparent mismatch between the depressing news headlines and the buoyancy of the FTSE100 for example. The FTSE 100 index has risen from 5000 to nearly 6000 and back to 5750 in a matter of months. Back in September/October 2011 when the FTSE 100 was touching 5000 points some days, the news headlines certainly weren’t predicting this kind of improvement: "I don&rsq....
Wednesday March 21, 2012 at 9:31am
The news today is all about the budget. As promised in previous statements the BBC is reporting that the Chancellor will increase the personal allowance to £9,205, which might sound like good news but, read on. The personal allowance trap is the little-known area of income tax quicksand, which progressively drags you under once your income exceeds £100,000. It creates a situation where individuals pay 60% income tax on some of their income. How can this happen? It’s all down to....
Thursday March 15, 2012 at 8:55am
How many times have you said, “When I win the lottery I’ll ….” Everyone says it. We’ve all had our favourite fantasy where we scoop the jackpot and dream of how we’ll spend it. Strangely, nobody ever says, “When I get my tax-free cash lump sum from my pension, I’ll …”. Yet this is much more likely and achievable than waiting in the lottery winners queue. So to get the ball rolling, we thought we’d help you on your way to fulfill....
Friday February 3, 2012 at 11:52am
If you come into money from an inheritance, bonus or even a lottery win, your thoughts may immediately turn to paying off your mortgage. Although we live in a society where debt is commonplace and accepted, many people want to pay off their home loans at the earliest opportunity. After all, a home without a mortgage is financially secure.But think twice. Instead of clearing or reducing your mortgage, consider your future. In particular, think about your pension provision. Inadequate pension You ....
Thursday August 25, 2011 at 9:00am
Although a daily report on the position of the FT100 index of UK shares is totally irrelevant to the long term investor, the media insist on relaying it in almost every news report at the moment. Steve Forbes, publisher of US Forbes Magazine, makes an interesting point; “You make more money selling advice than following it. It’s one of the things we count on in the magazine business – along with the short memory of our readers.” There is no doubt that big movements in sto....
Thursday July 14, 2011 at 9:00am
This blog was written in 2011. The information contained is no longer current but has been left intact as a part of our blog history.We can and frequently do help clients to mitigate Stamp Duty on purchase of a home or commercial premises. But when it comes to avoiding the Inheritance Tax (IHT) payable on the home on death, many clients seem to think there’s little they can do. With the rise in property prices and Inheritance Tax thresholds at £325,000 per person once the home is add....
Thursday July 7, 2011 at 9:00am
Gone are the days when an investment in the FTSE all share index would provide a reliably, healthy rate of return. For the last 11 years the FTSE all share index has returned only 2.4% per annum. The investment winners today are those who focus on keeping costs low whilst also investing in a broader, globally diversified portfolio. One such globally diversified portfolio when back tested returned 7.4% per annum for each of the past 11 years. Compare this with the FTSE 100 which has actually lost....
Thursday June 30, 2011 at 9:00am
How many parents out there are tearing their hair out worrying, not whether their son or daughter will make the grade and get into university, but how on earth they are going to fund them if they do? If you have a child going to University later this year the cost over 3 years might be as much as £52,000. This is based on course fees around £9,000 per annum, accommodation of £5,000 per annum and living costs on top of say another £100 per week. And that assumes they live ....
Thursday May 26, 2011 at 10:00am
In a previous blog I talked about why many investors feel confused and uncertain about investing for the future. Part of this is because the emphasis of the financial services industry is to convince investors that they can beat the markets through company research and stock picking and by getting the timing right. This results in high advisory and transactional costs paid for by the investor. Part of the problem lies with the inherent volatility of markets causing investors to feel greed when m....
Thursday April 7, 2011 at 10:00am
The number I’m referring to is the amount of money and resources you need to enjoy the lifestyle you desire both now and especially when you start to work less or stop work completely. How much is enough to provide you with the things and experiences you want now, and to allow you to enjoy retirement rather than ‘live it out’? Why should you accept that your lifestyle has to change dramatically if you work less or when you enter retirement? Cutting out holidays, taking the kids....
Thursday March 31, 2011 at 10:00am
It is a rare person that does not strive for financial independence, financial security and financial peace of mind. These objectives may seem difficult to define in financial terms but the aim of personal financial planning is to do just that.Personal financial planning will enable you to define: where you are now financially (your net worth) where you want to get to (in terms of the amount you need in savings to enable you to retire) how you are going to get there (by helping you to create ....
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