Financial Planning, Pensions Advice, Financial Adviser Dunfermline, Fife, Edinburgh and Central Scotland

Thursday 13th December 2018

When you think about how often you’ve moved jobs or home, it’s not surprising that it’s common to lose the occasional important document. But the number of lost pensions could make a huge difference in achieving retirement aspirations for pensioners who have lost them.

The UK has almost £20 billion in unclaimed pensions, research from the Pensions Policy Institute (PPI) has revealed.

PPI estimates that there are as many as 1.6 million unclaimed pensions from an analysis of the market. The figure could be even higher once public sector pensions are factored in.

With the total value of these unclaimed pensions at £19.2 billion, the average value of an individual lost pension is £12,125. While it’s not a huge amount, it could provide a welcome boost to retirement plans. There’s likely to be some pots that hold significantly more than the average value too. Lost pension pots could mean you’re unable to achieve some of your retirement dreams, despite having the cash to do so.

A growing problem

The issue of lost pensions is likely to grow unless action is taken.

The research found that people typically lose track of their pensions when changing jobs or moving home.

Nearly two-thirds of UK savers have more than one pension. However, the introduction of auto-enrolment and workers moving jobs more frequently means the number of pensions an average person holds is likely to rise. Over their lifetime, the average person has around 11 jobs. If each of these offers a pension, it’s a lot of different schemes to keep track of.

On top of this, younger generations are more likely to move home frequently, partly due to the rising trend in renting over owning a home. Forgetting to update the address that a pension provider holds means it’s easy to lose touch with your retirement savings.

Dr Yvonne Braun, Director of Long-Term Savings and Protections at the Association of British Insurers (ABI), said: “These findings highlight the jaw-dropping scale of the lost pensions problem. Unclaimed pensions can make a real difference to millions of savers who have simply lost touch with their pension providers.

“The industry has stepped up its efforts to reconnect savers with their lost nest egg, developing a new framework launched earlier this year to help pension providers trace ‘gone-away’ customers more consistently. But industry efforts can only go so far; we need a radical digital solution to cope with the way society is changing, or the problem will get worse.

“It is important that the government stands by its promises to take forward the Pensions Dashboard.”

What is the Pensions Dashboard?

The Pensions Dashboard project aims to make it easier to keep track and understand how your pensions are growing.

Your retirement income rarely comes from one source; making it difficult to keep track of everything. It can also make it challenging to effectively plan your retirement too. The problem comes because we tend to look at each pension separately (or forget about some of them altogether). However, for effective financial and retirement planning, you need to look at the bigger picture.

The proposed Pensions Dashboard will let you see all your pension savings at the same time through an up-to-date online portal. As a result, it will be easier to get a snapshot of how your retirement savings are progressing, as well as the individual pots you’ve accumulated.

The project is still in the development phase, but it’s hoped the Pensions Dashboard will be available from 2019. In the 2018 Autumn Budget, it was revealed that the project will benefit from a £5 million boost.

What to do if you have lost pensions

While the Pensions Dashboard is a positive step, it doesn’t help you if you’re worried about lost pensions now. Here are some steps you can take to reconnect with lost pensions and remain organised.

1. Contact the pension provider: If you can recall who your pensions are with, this is usually the easiest option. You should receive statements giving an update of your pension regularly. If you haven’t received one in a while, it’s likely they have an old home address for you. Where possible have details such as your National Insurance number and pension plan number handy to speed up the process.

2. Speak to your employer: If you’ve been enrolled in a Workplace Pension, you can also contact your employer or former employer directly. If it’s run by the firm, they’ll be able to provide you with details and update your contact information. If the pension scheme was operated as a personal or stakeholder pension, they’ll be able to provide the details of who to speak to next.

3. Use the Pension Tracing Service: If you’re struggling to find the necessary details of either your pension provider or employer, the Pension Tracing Service could help. It’s free to use and searches a database of pension schemes.

4. Consider consolidating your pensions: If you find you have multiple pensions to keep track of, consolidating them may be the best option. However, there may be fees associated with this and you might also lose other benefits. As a result, it’s not the right option for everyone. Contact us today to discuss the structure of your retirement savings.

5. Keep your details up to date: Once you’ve found ‘lost’ pension funds, make sure you keep on top of details. Always let your employer and pension provider know if you move home or change your name. It means you’re easier to stay in contact with and should make sorting out any future issues much smoother.

Maintaining contact with your pension provider and tracking down any lost savings is just the first step in creating the retirement that you want. With the support of financial planning, you can align your retirement ambitions and finances. Whether you have just reconnected with old pension savings or want to review your retirement provisions, please get in touch with us.

November marks Will Aid Month. We want to take the opportunity to remind you just how important a will is and explain why it should be considered a crucial part of your financial planning.

You no doubt have an idea of what you’d like to happen to your wealth and assets once you pass away. For many, it will mean leaving it to children or grandchildren. But you might also want to leave something for other family members, friends or charity. A will is crucial for ensuring your wishes are carried out.

Should you die without a will in place, your assets will be distributed according to the Rules of Intestacy. These specify a rigid order of who should benefit from your estate. It’s unlikely that these will align with exactly what you want. This is particularly true for modern, often complex, families.

If, for example, you have children from a previous relationship, have since remarried and the value of your estate is worth less than £250,000, all your wealth will pass to your surviving partner. This could effectively disinherit your children.

Despite the importance of a will, it’s a step that many in the UK are failing to take. More than half (56%) of parents in the UK with children under 18 have no will, a survey by Will Aid revealed.

Writing a will should be a task you undertake in the context of financial planning too. With the right information, you can understand what inheritance you can leave behind. This allows you to decide how you want different assets distributing.

Thinking about your legacy with wider financial goals in mind can help give you confidence and improve financial security too. Perhaps you’re worried about spending too much during your retirement years for fear of not leaving the legacy you want behind. Financial planning can give you an understanding of how lifestyle changes will affect what you leave to loved ones.

With this in mind, these are the steps you should be taking as you prepare and write your will:

1. Value your estate

It’s hard to think about the distribution of assets if you don’t know the value of them. A good starting point for writing your will is creating an up-to-date list of what your assets are and how much they’re worth. This is an area we, as financial professionals, can help you with, as well as providing an insight into how the value might change over the years depending on your retirement decisions.

2. Deciding on beneficiaries and distribution

Next, you should spend some time thinking about who you’d like to inherit your wealth. It’s likely there’s more than one person you want to leave an inheritance to. Once you have a list of beneficiaries, you’ll need to consider how you want your estate to be distributed.

You should be as specific as possible here. While you can allocate each person a portion of your estate, it may be a complicated process to distribute your estate depending on your assets. For example, if three children equally inherit a property, they’ll have to come to an agreement as to how they’ll proceed. Perhaps you have some jewellery you’d like to go to your granddaughter or a property that will suit a son with a growing family. If you have a specific request for items or assets, make it clear.

3. Assess Inheritance Tax liability

Do you know if your estate will be liable for Inheritance Tax (IHT)? If your estate’s value is more than the Nil-Rate Band and Residence Nil-Rate Band for IHT, it may change how you use and distribute your wealth now.

The current Nil-Rate Band is £325,000. If your estate is worth less than this, no IHT will be due. If you’re passing on your main home to children or grandchildren, you may also be able to take advantage of the Residence Nil-Rate Band. This is currently set at £125,000, rising to £175,000 in 2020/21.

There are several steps you can take to reduce IHT liability or help your loved ones cover the bill they may face. If you’d like to understand what IHT may be due when you pass away, please contact us.

4. Consider a charitable donation

Many people choose to leave a charitable donation as part of their legacy. If you’ve been a lifelong supporter of a cause, naming charities in your will can be an excellent way to continue this. As with all beneficiaries, you should be as specific as possible about what you want a charity to receive from your estate.

Leaving a charitable donation can have IHT benefits too. Leaving 10% or more of your estate to charities means your IHT rate will be decreased from 40% to 36% if your estate is liable.

5. Note other wishes

While the main aim of a will is to ensure your estate is distributed in line with your wishes, it can also be used to cover other areas.

If you have dependents, for example, you can name a guardian to care for your children until they’re 18, as well as someone to look after their inheritance. You may also choose to make your preferred funeral arrangements known, though this would not be legally binding.

6. Choose executors

Executors are the people who deal with distributing your estate. It’s a good idea to choose more than one executor; you can appoint up to four and those chosen can also inherit from your will.

An executor should be someone you trust and who is able to take on the responsibility of the role. It can be a friend or family member. Alternatively, you can appoint a professional executor, such as a solicitor or an accountant. A professional executor will take their fee from your estate and they can be a good choice if your estate is complex.

7. Writing the will

With your legacy plans set out, it’s time to write your will. There are several options when doing this.

You can choose to make your own will, but you should keep in mind it’s a legal document that needs to be written and signed correctly to be valid. Often, taking advice from a regulated solicitor that specialises in wills and probate is the best course of action.

Whichever option you choose, make sure your will is valid. Your will must be in writing, signed by you and witnessed by two people. Beneficiaries should not act as witnesses, and, where possible, neither should executors.

8. Storing and updating

Once you’ve written your will, there are two points to remember. The first is to store it in a safe place, this could be in your home, with a solicitor, bank, or a Probate Service, and ensure your executors know where it’s kept.

Secondly, don’t write a will and forget about it. Circumstances can change considerably; your wishes today can be very different to those you will have in a decade. It’s good practice to review your will every five years and after big life events, such as getting divorced, receiving an inheritance or having children.

While you’re writing your will, there is another task you should tick off; naming a Lasting Power of Attorney (LPA).

An LPA gives someone you trust the power to make decisions on your behalf should you become too ill to do so. An LPA can only be written while you’re sound of mind. As a result, it’s an important step to take before it needs to be used. The combination of a will and LPA can help make sure that your wishes are carried out through your later years of retirement and once you pass away.

To discuss your finances and the legacy you leave loved ones, please contact us today. We can help you put the figures in context with your wider aspirations.

Will you be better or worse off because of today’s Budget?

In a relatively quiet Budget our summary answers that question, please read on to find out.



The personal allowance and higher rate threshold will increase earlier than expected to £12,500 and £50,000 respectively from April 2019. The income tax rates and bands for Scottish taxpayers will be announced in the Scottish Budget on 12 December.

There are no other changes to income tax bands or allowances.


Main residences will remain exempt from Capital Gains Tax (CGT), ensuring families that sell their home don’t face a tax from the sale of their property.

Furthermore, all shared equity purchases of up to £500,000 will be exempt from Stamp Duty.

Small businesses and self-employed

The threshold for VAT registration will remain unchanged for the next two years despite speculation that it would drop. The fact the current £85,000 turnover threshold remains in place will be a relief to many people who are self-employed or run small businesses.

Businesses occupying property with a rateable value of less than £51,000 will have their business rate cut by a third over the next two years. The amount businesses pay in rates has been a longstanding issue for many, particularly those in retail as the high street attempts to compete with online businesses. The changes will mean savings for 90% of shops, restaurants and cafes.

Finally, a £695 million initiative that will help small businesses to hire apprentices was also announced. Those firms taking on apprentices will have the amount they need to pay halved.

People paying into pensions

Despite concerns ahead of the Budget that there would be some changes to tax relief on pensions, no changes were announced in the speech. For those paying into a pension, it provides some level of certainty, at least for a further year.


Technology giants

There will be a new tax targeting digital businesses. The UK Digital Services Tax will target specific platform models and technology giants. It will only be paid by firms that generate £500 million in revenue globally and will come into effect in April 2020. Digital tech giants will be taxed 2% on the money they make from UK users.

Tax avoiding businesses

Once again, the Chancellor accounted that there would be a clampdown on large companies that avoid paying the correct level of tax. The Chancellor aims to raise £2 billion over the next five years by targeting tax avoidance and evasion.


If you want to discuss how you are affected by today’s Budget or have any questions, please contact us to speak to one of our finance professionals.

Just after 3.30 pm today the Chancellor, Philip Hammond, stood up to deliver the first Budget on a Monday since 1962 and the last before Brexit.

He started by saying this would be a Budget for “hard-working families … who live their lives far from this place … and care little for the twists and turns of Westminster politics”.

Nevertheless, he soon turned to Brexit although, as usual, he started with a review of the state of the UK economy.

The economy and public finances

The Chancellor said growth would be “resilient” and improve next year from an Office for Budget Responsibility (OBR) forecast of 1.3% to 1.6% in 2019, then 1.4% in 2020 and 2021, 1.5% in 2022 and 1.6% in 2023.

He also reported that the OBR predicts real wage growth in each of the next five years.

Turning to borrowing Mr Hammond reported that it will be £11.6 billion lower than forecast earlier this year. He then said it would fall from £31.8 billion in 2019/20 to £26.7 billion in 2020/21, £23.8 billion in 2021/22, £20.8 billion in 2022/23 and £19.8 billion in 2023/24, which would be its lowest level for more than two decades.


The Chancellor said we are at a “pivotal moment” in the Brexit talks with a deal leading to a potential “double Brexit dividend”.

However, he also went on to say that amount spent on ‘no deal’ planning will be increased to £2 billion. He also made it clear that the Spring statement might be updated to a full Budget, depending on the Brexit outcome.

Alcohol, tobacco and fuel

It was announced in October that fuel duty will be frozen for the ninth consecutive year.

Tobacco duty will rise by an amount equal to inflation plus 2%. However, beer, cider (except white cider) and spirits duty will be frozen for a year. Duty on wine will rise in line with inflation.

Living Wage

Mr Hammond announced that the National Living Wage will be increased, rising from 4.9% from £7.83 to £8.21 from April 2019. He said this would benefit around 2.4 million workers.


The personal allowance and higher rate threshold will increase earlier than expected to £12,500 and £50,000 respectively from April 2019. The income tax rates and bands for Scottish taxpayers will be announced in the Scottish Budget on 12 December.

There are no other changes to income tax bands or allowances.

He also reconfirmed his commitment to an individual’s main residence remaining exempt from Capital Gains Tax (CGT). However, he announced a reduction from 18 to nine months in the period a home continues to qualify for CGT relief once the owner has moved out.


In a relief for many small business owners, the Chancellor announced that VAT threshold will remain unchanged for the next two years.

Universal Credit

The Chancellor announced a further £1 billion over five years to help with the transition as existing welfare claimants move to Universal Credit.


Mr Hammond announced that the number of first-time buyers was at an 11-year high.

He went on to confirm that the Stamp Duty exemption announced in the 2017 Budget would be extended to first time buyers who buy shared ownership properties. This change will be backdated to first-time buyers who purchased a share ownership property after the last Budget.

No other changes to Stamp Duty were announced.

He also announced a further £500 million for the Housing Infrastructure Fund to support the building of 650,000 new homes.

Pensions & ISAs (Individual Savings Accounts)

Despite the usual pre-Budget speculation, the Chancellor made no mention of pensions in the Budget.

There had also been some people who suggested the Chancellor would make changes to Lifetime ISAs (Individual Savings Accounts). However, nothing was mentioned in his speech about Lifetime ISAs, or indeed any other type of ISA.

However, it has subsequently been confirmed that the maximum annual ISA subscription will remain unchanged at £20,000.

Premium Bonds

While not in the speech, it has been revealed that the minimum investment for Premium Bonds will be reduced £25 from £100.

Furthermore, other people not just parents and grandparents will be able to purchase Premium Bonds for children under 16.


The Chancellor said a package of measures would show that Britain is “open for business.”

The most headline-grabbing of these was perhaps a new Digital Services Tax targeting established tech giants. Mr Hammond was keen to point out this would not be an online sales tax stating it would only be paid by profitable companies with a worldwide turnover of at £500 million.

Starting in 2020 he said it would be expected to raise over £400 million per year.

Turning to smaller businesses, the Chancellor announced that business rates for businesses occupying commercial properties with a rateable value of £51,000 or less will be cut by a third over two years.

He also announced a new £695 million initiative to help small firms hire apprentices with the amount they pay being cut by 50%.

Finally, he announced a £650 million package to help ailing high streets.

Health and education (England only)

The Chancellor confirmed the injection of capital into the NHS announced by the Prime Minister earlier this year describing it as a £20.5 billion real terms increase for the NHS.

He also announced at least £2 billion per year, by 2023/24, of extra funding for a new mental health crisis service.

At the same time, he announced a one-off £400 million for schools to help them pay for “the little extras they need”. Mr Hammond said that would be the equivalent of £10,000 for every primary school and £50,000 per secondary school.

Plastic tax

Finally, a new tax on packaging which contains less than 30% recyclable plastic was announced. Although the Chancellor resisted the temptation to impose a direct tax on single-use plastic cups.


If you have any questions about the Budget and how it might affect you please do not hesitate to get in touch.

If you feel as though your finances are under pressure as you support both children and elderly parents, you’re likely to be part of the ‘Sandwich Generation’. Research has found that many of those aged between 40 and 60 are struggling with financial responsibilities.

Despite being caught in the middle of two types of dependents, many in the Sandwich Generation aren’t financially prepared, according to a survey from LV=.

Among those dubbed the Sandwich Generation:

  • 52% are worried about the consequences of a serious illness affecting themselves or their partner
  • 30% are worried about the prospect of themselves or their partner dying and leaving the family without an income
  • 54% want to save but can’t afford to
  • 37% have less than £125 disposable income each month
  • 46% cite children as a constant source of unexpected expenses

While working to support families, the Sandwich Generation is neglecting their own long-term financial security. On average those within this group have a pension valued at £60,000 that they expect to last 20 years. It’s an amount that is likely to result in an income of less than £260 a month, according to LV=. Even when the full State Pension is added, assuming you qualify, at £164.35 per week, many are facing a retirement struggling financially.

Justin Harper, Head of Marketing at LV=, said: “It’s clear this group feel they are being pulled in many directions, with pressures to care for older relatives and ongoing responsibilities for their children. The Sandwich Generation have huge financial obligations and with the rising cost of living, are worrying about what could be around the corner. Spreading finances too thinly and dwelling on their worries, means the impact of having little to no plans in place, could expose them to a real income shock.”

Five tips if you’re part of the Sandwich Generation

With different priorities pulling at your finances, it can be challenging to manage daily expenses alongside building security. These five tips can help get you on the right track:

1. Create a realistic budget

Setting out a monthly budget that covers everything, from utility bills to savings, can help you find the areas to cut back on.

You probably already have some sort of budget, even if it’s just in your head. But writing it down and keeping track of what you’re spending makes it far easier to stick to. If you find you’re regularly going over what you set aside to spend or undersaving, you may need to revisit what’s realistic.

Of course, there are times when unexpected bills crop up. Leaving a portion of your income to act as a buffer in these events can help.

2. Build up an emergency fund

The Money Advice Service (MAS) recommends having a safety net of at least three months’ salary to fall back on. However, 57% of the Sandwich Generation don’t have this amount, the research found. As a result, 34% don’t feel they could handle a personal financial crisis.

If you’re among those that don’t have an emergency fund, now is the time to build one up. Looking at the end figure can seem daunting. Instead, focus on putting away a small portion of your wage every month as soon as you’re paid. Breaking it down into smaller chunks can make creating a financial safety net more manageable.

When your finances are really under pressure, even putting away small sums can seem impossible. But making it part of your monthly budget can mean you feel far less apprehensive about the future.

3. Consider protection

If you’re one of those that are worried about how your family would cope should something happen to your income, some form of protection can give you peace of mind.

Income Protection that will pay out monthly in the event of illness or injury, for example, can ensure both you and your loved ones have a safeguard in place. There are other options too, such as Critical Illness Cover and Life Insurance. Which one is right for you will depend on your situation and what you’re concerned about.

When your finances are already stretched, it can seem like an unnecessary expense. However, consider the financial consequences of not having any cover should illness, injury or death strike.

4. Don’t neglect your own financial future

With a focus on providing for ageing relatives and children, the research suggests the Sandwich Generation are doing so at their own expense. Don’t forget to take steps to secure your own financial future too.

One of the key steps to take here is to save into a pension. If you’re working full-time, you’ve probably been automatically enrolled into a Workplace Pension in the last couple of years. While you can opt out of this, it’s short-sighted.

5. Talk to a finance professional

There’s a common misconception that financial advice is only for the wealthy. The truth is that it can help you to get the most out of your money. Seeking the advice of a financial adviser or planner can help you balance the needs of today with those in the future.

By better understanding how your money choices will affect your financial security immediately and in the future, you’ll be in a better position after speaking to a professional. Contact us today to get the process started.

Investors are increasingly investing their money with sustainability concerns in mind, figures show. As October marks Good Money Week, we take a closer look at what ethical investing is and how the market’s growing.

It’s predicted that the UK’s ethical investment market will grow by 173% by 2027, according to research from Triodos Bank. With the projected total amounting to £48 billion, ethical investing is slowly moving into the mainstream. But what is it and how does it influence your investment choices?

What is ethical investment?

In simple terms, ethical investing is where you invest your money with other considerations beyond the financial return in mind. You base your investment decisions on the impact your money could have; creating a double bottom line if you will.

When you look at changes in society in general, it’s not surprising that ethical investment is growing. Have you already cut down on the amount of plastic you use? Do you purchase Fair Trade items from the supermarket? Or are there some brands you avoid because they test on animals? These are ethical decisions you make as part of your daily routine; ethical investment is an extension of this.

Ethical investment comes in many different forms and there are a lot of terms used to broadly cover the same motives. You may have heard phrases like sustainable investment, responsible investment, SRI (socially responsible investment) or impact investing. ESG (environmental, social and governance) is another commonly used term that breaks down ethical investing into three core areas of consideration:

Environmental: These are investment concerns that cover a range of environmental impacts. Companies developing renewable energy sources, providing alternatives to deforestation or taking steps to improve the local ecosystem can fall into this category in a positive way.

Social: Again, the social segment covers a broad range of issues. Providing safe working environments, paying a living wage and ensuring no children are employed throughout a supply chain, are social issues to consider. It can also cover a company’s impact on the communities where it operates.

Governance: Governance issues focus on how the company is run. Funds that cover governance issues may, for example, look at female representation on boards, whether the company avoids paying taxes or remuneration levels of the highest paid executives.

What’s the size of the ethical investment market?

When you look at the size of the whole investment market, the number of funds taking ESG factors into consideration is still niche. However, it is growing, and the pace of growth is set to increase.

In 2023, the market will reach a ‘tipping point’, according to Triodos Bank. This is partly being driven by the next generation of socially conscious investors seeing an increase in their income. As a result, the UK market alone is expected to reach £48 billion by 2027.

The Triodos Bank research found:

  • 55% would like their money to support companies which contribute to making a more positive society and sustainable environment
  • 61% of investors believe that for the economy to succeed in the long term, investors need to support progressive businesses tackling ESG issues
  • A fifth of investors are planning to invest in an SRI fund by 2027
  • Ethical investment appeals more to younger generations; 47% of those aged between 18-34 intend to invest in an SRI fund within the next nine years
  • Within this group, 56% are motivated to invest in ethical funds because of climate-related disasters in the news; compared to 30% for older counterparts

While there is a growing interest in ethical investment, there is still a limited market, which can make it challenging. 73% of UK investors have never been offered ethical investment opportunities. Furthermore, 61% would not know where to go for more information in SRI.

Despite this there is a demand for more information; 69% of investors would like to have more knowledge and transparency about where their money goes.

The challenge of defining ‘ethical’

You may have already spotted one of the biggest challenges with ESG investing; we all have different values and ethics. It’s a highly subjective area.

You may consider a company to be ethical because it’s taking proactive steps to improve the lives of its employees in the poorest parts of the world. Someone else, on the other hand, may say the company unethical because the firm operates in the oil and gas sector, resulting in environmental degradation. As a result, it’s important to define what your personal priorities are, as well as where you’re willing to compromise, before you start looking at ethical investment opportunities.

According to Triodos Bank, these are the five biggest issues that would put off investors:

  • Manufacturing or selling of arms and weapons (38%)
  • Worker/supply chain exploitation (37%)
  • Environmental negligence (36%)
  • Tobacco (30%)
  • Gambling (29%)

So, how do you invest with your values in mind? There are three key ways to do so:

Negative screening: This is where you actively remove companies from your portfolio or avoid investing in them because you don’t consider them to be ethical.

Positive screening: Positive screening is where you actively invest in companies that align with your principles, allocating a portion of your investable assets to support these firms.

Engagement: An engagement strategy is where you use your power as a shareholder to promote long term, ethical changes. As it relies on shareholder power, it’s a strategy that’s more effective for institutional investors, such as pension funds, than the average retail investor.

The above are ways of investing ethically and striving to encourage change but do this in very different ways. In the case of energy and reducing the amount of carbon emissions, for example:

  • A negative screening approach would divest from oil and gas companies
  • An investor using positive screening would put their money into renewable firms
  • While those using the engagement approach would hold shares in oil and gas but vote at Annual General Meetings to invest in sustainable technologies

As with all investments, you do need to balance the risk of your investments potentially decreasing in value. If you’d like to discuss how your ethics and values can be reflected in your investment portfolio and what impact this could have on financial return, please get in touch.

Investing can seem like a daunting process. But getting to grips with investing can lead to greater financial security and growth.

Whether you’re investing for the first time or expanding your portfolio, it’s important to understand how your objectives and situation should influence your decisions. Asking these seven questions beforehand can support you when it comes to making investment choices.

1. What are your goals?

Before you even start investing your money, you should have a realistic idea of what you’d like to achieve. Your goals will have a direct influence on which option will be best for you.

  • Do you want to build a nest egg for retirement?
  • Save for your child to go to university?
  • Build a house deposit?

Answering this question should set the foundation to move forward with investment decisions.

One of the key things to think about here is whether you want to invest for income or growth.

Investing for income means you’ll likely want to sacrifice the potential of higher returns in favour of stability and consistency. Conversely, investing for growth means you’ll probably have to take greater levels of risk.

2. How frequently will you invest?

The answer to this question will come back to your current situation. You have two options; investing a lump sum or ‘drip feeding’.

If you have a lump sum of cash that’s not delivering the returns you want, investing it can make sense. Likewise, if you’ve recently acquired a lump sum, such as through the sale of property or inheritance. The other option is to ‘drip feed’ money in at a consistent rate, for example, as you get paid each month.

As markets fluctuate, timing investments to maximise return and minimise risk is incredibly difficult and generally not advisable. As a result, ‘drip feeding’ money is a conventional way to reduce the impact of this. It’s an approach that means dips have less of an effect.

Of course, you can create a hybrid strategy too; investing a lump sum to get started and continue to add to it at regular intervals.

3. How much risk are you willing to take?

Chancing higher returns means potentially higher levels of risk. By taking greater levels of risk, your initial investment can climb significantly. But on the flip side, you do risk seeing greater fluctuations in value.

The answer to this question will be personal. It will all come down to how risk averse you are. Taking the time to think about how much uncertainty you’re willing to tolerate for the chance of returns is crucial. There are investment opportunities for all risk appetites.

4. What is your capacity for loss?

All investments can decrease in value and, in rare circumstances, be lost altogether. The chance of this happening varies depending on the investment choices you make. But you need to consider what you can afford to lose.

Investing all your wealth is rarely, if ever, a good idea. Ideally, you will have a separate account that you can use to fall back on should you experience a financial shock. No one wants to lose money when investing but it shouldn’t leave you in a financially vulnerable position should it happen.

If your finances would be devastated if you lost the money you’re planning to invest, it’s worthwhile looking at alternatives. Other options, such as a Cash ISA, may be more suitable for your circumstances.

5. How long will your money be invested?

Your investment timeframe will be influenced by your overall financial goals and directly affect how much risk you can afford to take.

Investment markets are constantly rising and falling. The longer you invest for, the more likely you are to be able to ride out short-term volatility risk.

Broadly speaking, you should look to invest for a minimum of five years. And the general rule of thumb is; the longer your money will be invested for the greater level of risk you can afford to take.

So, if you’re investing with a view for retirement that’s still decades off, you’re more likely to benefit from choosing markets that are more volatile. In contrast, if you’re holding money in a Stocks & Shares ISA to buy a home in five years’ time, a more conservative approach is wise.

6. How frequently will your review it?

Do you want to take an active role in managing your investments? Or do you want someone to do it for you?

Again, the answer to this question is personal; there’s no right or wrong approach. However, it’s advisable that you review your investments on an annual basis at least. This allows you to plan more effectively for the time when you want to withdraw the money and reflect changes in your circumstances. It’s also an opportunity to make sure your money is working as hard as possible.

7. What other assets do you have?

If you’re already investing, it’s important to look at any new investments in the context of these. You want to hold a diverse range of assets. This means should a portion of the market experience volatility, you’re somewhat cushioned by your other investments.

Even with these questions answered, investing can still seem like a minefield if it’s a new venture. Contact us today and we can help you review your existing investment portfolio or discuss how you could begin investing. By taking a bespoke approach, we can align your investments with your personal aspirations.


The number of people saving into a Workplace Pension has reached a record high. But far from providing a comfortable retirement income, those making minimum contributions could face an unexpected shortfall when the time comes to giving up work.

Pensioners could have less than minimum wage to live on, despite making monthly pension contributions, according to Aviva.

Alistair McQueen, Head of Savings and Retirement at Aviva, said: “Millions of people are sleepwalking towards less than minimum wage at retirement.

“To their credit, millions of employees have embraced auto-enrolment since 2012, in the belief that it will deliver them a comfortable retirement. But based on the current system and today’s data, they’re in for a shock, with many currently on the road to living on less than minimum wage.”

More than 7.7 million people are now paying into their Workplace Pension; compared to just one million in 2012. The statistic indicates that auto-enrolment is a success. However, the minimum contribution levels could mean that many retirees won’t receive the level of income they’re expecting.

The minimum contribution to a Workplace Pension is currently set at 3% for employees and 2% for employers; rising to 5% and 3% respectively in April 2019.

A typical 22-year-old paying into a Workplace Pension would be on track to receive a retirement income equivalent to £6.55 per hour, according to Aviva. It’s an amount that’s significantly below the National Minimum Wage of £7.38.

Working 37.5 hours a week, an employee on minimum wage would earn £14,391 a year. But many workers are on course to receive just £12,772 annually in retirement when their Workplace Pension and full State Pension are combined.

How much you need in retirement will depend on your lifestyle and aspirations. However, according to Which? the average retired household spends around £26,000 a year. This covers all the essential outgoings and some luxuries, such as European holidays and eating out occasionally.

For those that aren’t supplementing their Workplace Pension, it could mean hardship in retirement.

If you’re worried about your level of income in retirement, there are some steps you can take to grow your projected income.

1. Increase your Workplace Pension contributions

Making higher monthly contributions to your Workplace Pension is one option.

Figures suggest that contribution levels were at a high in 2012; with 9.7% of salary being diverted into a pension. However, the figure is now just 3.4%. Aviva advocates the minimum contribution level being increased even further; reaching at least 12.5% by 2028.

If this is a step you want to take, talk to your employer first. They may be able to help with setting up additional payments on your behalf. You can also contact your pension provider directly to set up further contributions.

You will continue to receive tax relief on pension contributions up to either 100% of your earnings or £40,000 a year, whichever is lower.

Some employers may match or increase their own contributions in line with yours to a certain point; making it an even more attractive option

2. Pay into a Personal Pension

On top of your Workplace Pension, you can also open a Personal Pension. This can give you more flexibility to save in a way that suits you. With multiple pensions, you’re able to take varying levels of risk, for example.

You won’t receive any employer contributions with a Personal Pension. So, it’s almost never the best option to do instead of a Workplace Pension because of this. But it can supplement the money you’re already saving directly from your salary and add to your overall income during retirement.

Contributions to a Personal Pension should also benefit from tax relief.

3.Use salary sacrifice benefits

If your workplace offers salary sacrifice schemes, they’re worth investigating. You’ll give up some of your monthly earnings, with your employer, instead, putting it towards something else, such as your pension.

The key benefit to this option is that the money will be deducted pre-tax. So, you’ll pay less Income Tax and National Insurance.

4. Use an Individual Savings Account (ISA)

An ISA is a tax-efficient way to save with the long term in mind. Each year you can put up to £20,000 into an ISA. You won’t pay any Income Tax on the interest or dividends you receive from an ISA. Any profits you make from investments are also free of Capital Gains Tax.

You have two options when opening an ISA; a Cash ISA or a Stocks and Shares ISA.

A Cash ISA will provide you with interest on your savings. The money held in a Cash ISA is safe, assuming you stay within the limits of the Financial Services Compensation Scheme. However, with low interest rates, it is possible that the value of your money will decrease in real terms. A Stocks and Shares ISA will invest your money. This means you may receive returns that outpace inflation, but you are also at risk of losing your money.

If you’re aged between 18 and 40, the Lifetime ISA is also worth considering. You can still choose between cash and stocks and shares account, but you’ll also benefit from a 25% government bonus. LISA accounts have an annual allowance of £4,000, so paying in the maximum means you’ll receive a £1,000 boost. The drawback here is that you will face a financial penalty if you withdraw the money for purposes other than buying your first home or retirement.

To discuss your current pension forecast and the steps you can take to improve it in the context of your personal situation, please get in touch with us today.

Going to university can be expensive. But not just for the student; parents are expecting to pay out thousands of pounds every year to help their child secure a degree.

Parents anticipate spending £5,721 each year their child is at university, according to research from Lloyds Bank. Over the course of an average three-year degree, it amounts to £17,165. With around half of young people choosing to pursue higher education, it’s an expense many households in the UK could be facing.

Just 10 years ago, the figure would have been enough to cover tuition fees and leave some leftover, that’s now not the case. Current tuition fees are capped at £9,250. With accessible student loans covering tuition fees, many parents are focussed on the other costs associated with university.

The research found:

  • Two-thirds of parents who anticipate sending their child to university expect to support them financially on some level
  • Only 14% of parents do not anticipate helping their child financially while they study
  • 65% of parents believe they will have to provide support with accommodation costs
  • 64% will offer financial help with items essential for study
  • 58% expect to pay some or all tuition fees
  • 52% will help with travel to and from classes
  • 23% are prepared to pay for luxuries

Robin Bullochs of Lloyds Bank said: “The costs associated with going to university can mount up quickly, and often it’s unexpected costs that rack up the bill making it essential to take some time to consider the many expenses that may arise and budget for how these will be afforded.”

The findings suggest parents will face additional outgoings they may not have factored into their budget once teens head to university. Having a fund you’ve been saving into before they go to university can help spread the cost. For families that have more than one child aspiring to achieve a university education, it could be essential.

With this mind, how can you save for the cost of supporting your child through university?

Junior Individual Savings Account (ISA)

Like their adult counterparts, Junior ISAs offer a tax-efficient way to save.

Each tax year you can add up to £4,260 into a Junior ISA. The interest or return made from a Junior ISA is tax-free. Any money you add to an ISA will be locked away until your child turns 18; at this point, it will be converted into an adult ISA and fully accessible to them.

If you’re considering opening a Junior ISA, you have two options: A Cash ISA or Stocks and Shares ISA. Which one is best for you will depend on your attitude to risk and how long you’ll invest for.

Junior Cash ISA: If you choose a Cash ISA, the money you put in is safe and you will get a defined amount of interest. That being said, there is a risk that the money won’t grow as quickly as inflation, meaning it loses value in real terms.

Junior Stocks and Shares ISA: A Stocks and Shares ISA offers you an opportunity to access potentially higher returns by investing. The return you receive will be dependent on the performance of the underlying investments. It is, of course, possible that the value may temporarily decrease at times.

Children’s savings account

There is a range of children’s savings accounts to choose from. Often, these types of accounts will offer you more flexibility, such as being able to make withdrawals. However, depending on the terms, this may come with a penalty, for example, losing the specified interest rate.

Children’s savings accounts can offer competitive interest rates that will allow the money you deposit to keep pace with inflation in real terms.

Some accounts will specify you put in a certain amount each month or limit contributions. As a result, weighing up the pros and cons of each account is important before you make a decision.

Child Trust Fund

If your child was born between 2002 and 2010, they will have a Child Trust Fund.

The now defunct government scheme aimed to help parents build up a savings account for children. Each account benefitted from an initial £250. Some children may have received more as an initial payment and benefitted from a further boost when they turned seven.

If you didn’t open a Child Trust Fund, the government will have automatically opened one in your child’s name. It’s estimated that 1.5 million Child Trust Funds are ‘lost’ or forgotten about. So, it’s worth looking into this and you can track down ‘lost’ accounts here. Once they turn 18, your child will be able to withdraw any money in the account and spend it as they wish.

Even if you haven’t added to the account since it was opened, it can provide a starting point to build future savings on. As the Child Trust Funds initiative has since been shelved, you can transfer the money into a Junior ISA account if you choose.

Bare Trust

A Bare Trust is the simplest form of trust. It’s where a gift is held for the beneficiary, it can be opened by anyone and then managed directly. The child will be entitled to the money, and able to withdraw it, once they turn 18.

There are several benefits to using a Bare Trust:

  • First, the trustee can withdraw money from the Trust before the beneficiary turns 18, so long as it’s to benefit the child. It gives you a level of flexibility that some of the other options don’t have. For example, you could take out money to pay for college or sixth form fees.
  • You can also manage the Trust directly. If you’d like to make specific investments or have a clear risk profile, a Bare Trust might suit your needs.
  • Finally, there’s no contribution limit; you can add as much as you like to a Bare Trust.

As well as the options above, you may also want to consider saving or investing money in your own name. This is a good option if you don’t want your child to have full control and access to the money when they turn 18. It allows you to retain some control over how it’s spent and how quickly.

If you want tailored advice on saving for your child or grandchild, we’re here to support you. Taking your personal circumstances into consideration, we can help you choose the savings vehicle that’s best for you.

More pensioners are choosing to forgo a guaranteed income that comes from an annuity, instead favouring making withdrawals directly from their pension using flexi-access drawdown. While providing more flexibility, the latest data suggests those using drawdown may face financial hardship later in life.

Ensuring that your savings will support you throughout your later years is a critical part of financial planning. Part of this is making sustainable withdrawals from your pension.

Two years ago, the average pension withdrawal rate was 4.7%. The figure now stands at 5.9%, according to figures from the Financial Conduct Authority (FCA). Retirees are increasingly using their Pension Freedoms to achieve the retirement they want. However, steps need to be taken to ensure it can provide a comfortable income throughout later years.

Taking regular payments or lump sums out of a pension means it needs to generate greater returns to maintain value. Once you factor in additional charges of between 1.5-2%, you’re looking at a significant challenge. To ensure the pension maintains value in real terms, you’re likely to need to generate returns of 7-8%.

How much of your pension should you take?

Of course, you expect to use your pension during your retirement years. The challenge is striking the right balance to ensure your savings support you through your entire life. With life expectancy rising and more people needing care, it can be complex.

The first thing to note is there’s no one-size-fits-all figure.

You may have heard of the ‘4% rule’, suggesting that you shouldn’t take more than 4% from your pension annually. However, a realistic, sustainable figure could be lower. A typical 65-year-old would need to take their pension at a flat rate of 3.5% to be sustainable, according to research from the Institute and Faculty of Actuaries.

The figure suggests some pensioners would be better off searching for a competitive annuity product over using drawdown.

Six tips when accessing your pension through drawdown

If you’re considering using drawdown to access your pension, taking a sustainable income should be a core priority. These six tips can help assess the level of income you can afford to take.

1. Factor in life expectancy

When assessing retirement income, your life expectancy is key. Underestimate and you could be left struggling financially. But, on the other hand, you don’t want to be living frugally when it’s not necessary. The average person over 50 underestimates how long they’ll live by up to six years, research from Retirement Advantage revealed. The current life expectancy for a 50-year-old is between 86 and 89.

2. Consider taking a guaranteed income

You don’t have to choose between taking a guaranteed income and drawing cash out when you need it. If you’re concerned about your pension lasting a lifetime, a hybrid approach can work, while still offering you flexibility. Using a portion of your pension to purchase an annuity product that will cover basic costs can give you peace of mind.

3. Pause withdrawals

If you plan to take money from your pension at regular intervals, remember to assess your finances each time. If the money isn’t needed, you’ll typically find it’s better left invested. With low interest rates, it’s likely that any cash you hold will decrease in value in real terms.

Whether you still have money remaining from the last withdrawal or are benefitting from other sources of income, a pause means your pension can continue to grow.

4. Match withdrawals to investment performance

With the above point in mind, it’s possible for invested money to decrease in value too. If your pension has experienced a downturn, leaving it invested for a period to recover can be beneficial. Over the long term, your pension investments should increase. However, it’s likely to see temporary decreases at points too, particularly if you’ve opted for a higher risk strategy.

Matching your withdrawals to investment performance, so you don’t withdraw at the low points, can help maximise the value of both your pension and the amount you’re taking out.

5. Regularly monitor your pension

Those people approaching retirement will often keep a close eye on their pension. Don’t let that good habit go once you’re retired.

Regularly taking the time to review your pension, how it’s performing and assessing how much longer it will last is essential. Should you be taking a level of income that’s unsustainable, it means you’ll be aware sooner, allowing you to take the necessary steps to address it.

6. Seek financial advice

Financial advice and cash flow forecasting are your friends. With the information to understand what your income needs are and how this will affect your pension, you’re in a better position to take a consistent, sustainable level of income throughout your retirement years.

If you want to understand how your pension can support you throughout all your retirement, contact us today. We’ll help you assess how much you can afford to take out of your pension in the context of your retirement goals and other assets.

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