Articles - Evolution Financial Planning


Establish financial and lifestyle goals

Admin : July 13, 2020 8:53 am : Articles, Blog, Estate Planning & Wills, Financial Advice, Financial Planning, Protecting What Counts, Saving and Investing

Gathering information and developing your strategy

Evaluating your financial and lifestyle goals in greater depth is essential if you want to get a picture of your future responsibilities and aspirations.

With a full understanding of your circumstances and priorities, our role is to provide you with custom-tailored professional advice, to effectively create your blueprint to success, enabling you to achieve your financial and lifestyle goals, and together develop a strategy to make these become a reality.

Create a picture of your finances
In order to create your financial blueprint, you need clarity over your financial and lifestyle goals, your objectives and your motivations. An integral part of this process includes cash flow modelling. This illustrates what might happen to your finances in the future and enables you to plan to ensure that you make the most of your money to allow you to achieve your financial and lifestyle goals.

Cash flow modelling shows your current position relative to your preferred position and your goals by assessing your current and forecasted wealth, along with income inflows and expenditure outflows, to create a picture of your finances, now and in the future.

This detailed picture of your assets should include your investments, liabilities, income and expenditure, which are projected forward, year-by-year, using calculated rates of growth, income, inflation, wage rises and interest rates.

In order to implement a detailed plan that outlines how to deliver your financial future, communication is vital. To ensure that, over time, you achieve your desired lifestyle goals, it is important for us to regularly review your financial plan, at least annually, and make any necessary amendments should your personal circumstances change.

Asset allocation mix
Cash flow modelling can determine what recommendations and best course of action are appropriate for your particular situation and the right asset allocation mix. The growth rate you require is calculated to meet your investment objectives. This rate is then cross-referenced with your attitude towards risk to ensure your expectations are realistic and compatible with the asset allocation needed to achieve the necessary growth rate.
Where cash flow modelling becomes particularly useful is the analysis of different scenarios based on decisions you may make – this could be lifestyle choices or perhaps investment decisions.

By matching your present and expected future liabilities with your income and capital, we can make recommendations to ensure that you don’t run out of money throughout your life.

How much to save, spend and invest
A snapshot in time is taken of your finances. The calculated rates of growth, income, tax and so on that are used to form the basis of any cash flow modelling exercise will always be assumptions. This is why regular annual reviews and reassessments are required to ensure you remain on track.
Nearly all decisions are based on what is contained within the cash flow, from how much to save and spend, to how funds should be invested to achieve the required return, so there is a lot that needs to be managed.

A lifetime cash flow plan will enable you to:
Produce a clear and detailed summary of your financial arrangements
Define your family’s version of the ‘good life’ and begin working towards it
Work towards achieving and maintaining financial security and independence
Ensure adequate provision is made for the financial consequences of the death or disablement of yourself or your partner
Plan to minimise your tax liabilities
Produce an analysis of your personal expenditure planning assumptions, balancing your cash inflows and your desired cash outflows
Estimate future cash flow on realistic assumptions
Develop an investment strategy for your capital and surplus income in accordance with your attitude to investment risk, flexibility and accessibility with which you are comfortable
Become aware of the tax issues that are likely to arise on your own death and that of your partner

Run through the numbers
With every financial corner you turn, it is important to run through the numbers, which will help you make the right financial decisions. It is important to be specific. For example, it is not enough to say, ‘I want to have enough to retire comfortably.’ You need to think realistically about how much you will need – the more specific you are, the easier it will be to come up with a plan to achieve your financial and lifestyle goals.
If your needs are not accurately established, then the cash flow will not be seen as personal, and therefore you are unlikely to perceive value in it. Some years, there may not be any change, or just small corrections. However, in other years, there may be something significant. Either way, you will need to ensure things are up to date and to keep your own peace of mind knowing your plans are still on track.

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Visualise your future

Admin : July 9, 2020 8:49 pm : Articles, Blog, Entrepreneur, Financial Advice, Financial Planning, Homes and Property, Protecting What Counts, Saving and Investing

Reaching a state of complete financial well-being

Financial well-being ultimately comes from achieving financial security and independence. When you’ve reached a state of financial well-being, you’ve got to a point where you have a sufficient level of income for your lifestyle needs, enough capital to give you peace of mind, and the knowledge that whatever happens you, your family and business are fully protected.

Most people have lifestyle goals that are directly related to their finances. So why is it then that some people have the ability to live the life of dreams and pass on their wealth successfully to the next generation, but others face the prospect of selling their home or worry about health and care fee costs, and leave behind a tax bill for their loved ones to deal with?

Tangible and realistic goals
Regardless of what life stage you are in, you are likely to have some short, medium and long-term financial and lifestyle goals. Setting tangible and realistic goals, following them, and tracking and reviewing your progress is the key to success in achieving them.

If you are married, it makes sense for you and your spouse to both share the same financial and lifestyle goals. Otherwise, achieving them will be almost impossible. It’s important to develop your financial and lifestyle plans together, and review your progress together to make sure both of you are contributing to the same outcomes.

How much money will I need?
Determining what your short-term, mid-term, and long-term financial and lifestyle goals are is the first step. This may include planning for that dream holiday, buying a new property, university savings for your children or grandchildren and retirement savings. Once you’ve both agreed your financial and lifestyle goals, the next step is to determine a good estimate for how much money you’ll need for each of them.

Determining an accurate amount will involve clearly identifying each of them. So for example, do you want to pay for your children or grandchildren to have a private education? If you are saving to pay towards your children’s or grandchildren’s university fees, what percentage do you want to pay? Your retirement savings needs will depend greatly on the lifestyle you plan to lead once you are retired, as well as when you plan to retire.

What savings goals should I set?
It’s important to prioritise each of your financial and lifestyle goals in order of importance, and then determine how long you have to save or invest for each of them. Retirement could be many years away, but your short-term goals could be in a year or two. Next, estimate how much interest or capital gains you’ll expect to see from saving and investing your money. While capital gains or growth are never guaranteed, an estimated average can be used for these purposes.

When you set your financial and lifestyle goals, don’t just pick an ambiguous number. Look at how much you’re earning, what your expenses are, and determine how much you could realistically save or invest each month. You should have both a monthly and yearly savings and investment goal, and ideally they should align based on your overall total wealth solution.

Do I have a sufficient emergency fund in place?
It’s no surprise that when life presents an emergency, it threatens your financial well-being and can cause tremendous stress. Are you currently living without a financial safety net? How would you hope to get by financially without running into a short-term crisis? If you don’t already have a rainy day fund in place, this should be the first savings goal on your list. Your emergency fund should be sufficient to cover at least six months of your outgoings. This should include all of your living expenses, and the expenses of any dependents you have.

Where should you keep your emergency savings? If you already have an emergency fund, how does it fit in with your goals? Being prepared with an emergency fund gives you confidence that you can tackle any of life’s unexpected events without adding money worries to your list.

Do I know where my money is going?
Are you tracking your expenses? If you don’t know how much you spend in a month, that will seriously hinder your ability to budget. That’s why tracking your expenses is so crucial. Make a budget plan you can stick to. But making a budget plan and making a budget plan you can follow are two entirely different things. This is why tracking your expenses is important, and it can inform your budgeting choices.

How would I cope with unexpected car problems or medical bills? Do I know where my money is going? Am I in control of my spending? Have I prepared a budget plan? Provided you stick to it, a budget plan will help you keep on top of your spending and make sure you can identify wasteful expenditure.

Is my family protected if the unexpected were to happen to me?
We can’t predict the future. However, we can help our loved ones by planning for it. It’s not just you that your financial planning has an impact on. We all intend that our plans will come good. But making sure that your family – or your business – can cope if you fall ill or were to die unexpectedly is something we can too easily put to one side.

Would your family or business find themselves unable to pay the bills if something were to happen to you? This is why it’s essential that your financial and lifestyle goals are fully protected to ensure that an outstanding mortgage and any liabilities would be paid off, and your family would continue to receive an ongoing income if the worst were to happen. Should an unforeseen event occur today, are you adequately protected? If not, take action now.

What do I need to invest for? What do I want to invest in?
When it comes to building an investment portfolio, you should have specific goals that reflect your risk tolerance, time horizon or asset class preferences based on your financial and lifestyle goals. Do you have plans to buy another property or to invest in a new project or business venture?

Knowing how much of a role you want to play in selecting and managing your investments can help you choose the approach that aligns with your investment goals.

Your investing preference can also impact the investment products and offerings you might choose. If you feel you don’t have the time or experience to monitor your portfolio balances so they stay true to your original target goal allocations, you should look to choosing fund types that take on some of that work. Ask yourself: how experienced am I with investing? How much assistance do I need? How much control do I want over my investments? Do I prefer to be in charge or do I want my investments managed for me?

How can I further grow my wealth?
Whatever the origins of your wealth, it now provides for even greater growth opportunities. An effective total wealth solution focuses on long-term goals while managing risk along the way. The old adage ‘Don’t put all your eggs in one basket’ applies when you are looking to further grow your wealth. An appropriate diversified asset mix is key to investing wisely.

To further grow your wealth by investing, this involves buying financial assets such as shares, government and corporate bonds, and property. The main reason for investing and taking on additional risk you wouldn’t have if you kept your money in cash is the hope of making a higher return. The aim of investing for growth is that the investments you put your money into will increase in value over time. Ask yourself: am I prepared to accept a higher level of investment risk? Have I set my investment goals based on my financial and lifestyle goals?

What will my children’s future hold?
What action do I need to take to provide my children with an independent education? The thought of paying school fees for five, ten or even fifteen years can look like an insurmountable mountain to climb. Which schools should I apply to for my children? Do I want my children to board or not?
Also, no matter how harmonious you may want your family life to be, some disruptions and disturbances are inevitable. When they occur, they may not only be stressful, but they can also lead to financial worries and difficulties. How would my family cope financially if I were no longer around? Have I made provision for every possibility? If your family could end up becoming financially vulnerable, you need to make provision sooner rather than later.

How can I support my children and parents?
With longer life expectancies and people starting families later than ever, many of us can expect to become part of the ‘sandwich generation’ at some point. Will I be faced with the task of caring for my elderly parents alongside my dependent children? Finding yourself squeezed between – and often by – these two generations can be very stressful. As well as facing time pressures, chances are your finances will become very stretched too.

Do I expect to have to financially support my parents in later life? Do I have plans in place if I need to care for my parents while also trying to make financial provision for my children as they enter adulthood? Balancing the demands of raising and supporting your children and worrying about your parents’ independence and well-being without planning is difficult. The trouble with being stuck in the middle is that you run the risk of neglecting your own self-care while attempting to help everyone else. It’s essential to have a plan of action in place to care not only for your ageing parents and children, but yourself too.

How do I talk to my grown children about how to handle the money they will inherit? How can I ensure the wealth will last for them and beyond?
You may have accumulated wealth after many years in a successful career, from the sale of a business or received a substantial inheritance. But when children inherit wealth, it can pose plenty of questions, particularly around how they should best invest, manage and preserve these assets. There is also a common concern that children who are set to inherit wealth lose their motivation if they are aware of the scope of the family’s wealth and a likely inheritance.

While access to and knowledge of this wealth can be a positive thing, there’s always the risk that the security provided by the money might lead to complacency and entitlement. Do I have concerns about how best to prepare my children for their inheritance? Are my children prepared to receive such wealth? Have I had an honest conversation about money with them before they inherit these assets?

Do I have the right plans in place to retire when I want?
What should I be saving for retirement to live the life I want? Do I know my exact number? The reality is that there are countless factors that will impact on how much you will need in retirement. Therefore, determining your target goal for retirement savings can be more challenging than it may seem. So what is the solution? Instead of thinking of your retirement savings goal as one big number, look at breaking this number down in connection to your life goals.

For instance, if you have any idea about where you might want to live or in what type of property you want to live in the future, that can go a long way towards long-term retirement planning. Setting a retirement goal doesn’t necessarily mean sticking to one large monetary goal. Instead, aim to incorporate retirement savings into your goals for today. How much money will I need to save in advance to deliver the income I want in retirement? How will I spend my time in retirement? How much will my leisure and travel pursuits in retirement cost me?

Time to get motivated to reach your personal and financial goals?
Setting personal and financial goals makes it more likely that you’ll save and invest for – and achieve – every financial and lifestyle goal. You’ll be more motivated to reach each of them since you can gauge their progress. And you can consider the time horizon and risk level separately for each goal and invest accordingly to ensure they form part of your overall total wealth solution.

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Maintaining a diversified portfolio

Admin : July 7, 2020 9:46 am : Articles, Blog, Financial Advice, Financial Planning, Saving and Investing, Working Women

Spreading risk between different kinds of investments

When you start investing, or even if you are a sophisticated investor, one of the most important tools available is diversification. Whether the market is bullish or bearish, maintaining a diversified portfolio is essential to any long-term investment strategy.

Diversification allows an investor to spread risk between different kinds of investments, called ‘asset classes’, to potentially improve investment returns. This helps reduce the risk of the overall investments, referred to as a ‘portfolio’, under-performing or losing money.

With some careful investment planning and an understanding of how various asset classes work together, a properly diversified portfolio provides investors with an effective tool for reducing risk and volatility without necessarily giving up returns.

If you have a lot of cash – more than six months’ worth of living expenses – you might consider putting some of that excess into investments like shares and fixed interest securities, especially if you’re looking to invest your money for at least five years and are unlikely to require access to your capital during that time.

If you’re heavily invested in a single company’s shares – perhaps your employer – start looking for ways to add diversification.

Diversifying within an asset class
There are many opportunities for diversification, even within a single kind of investment.

For example, with shares, you could spread your investments between:
Large and small companies
The UK and overseas markets
Different sectors (industrial, financial, oil, etc.)

Different sectors of the economy
Diversification within each asset class is the key to a successful, balanced portfolio. You need to find assets that work well with each other. True diversification means having your money in as many different sectors of the economy
as possible.

With shares, for example, you don’t want to invest exclusively in big established companies or small start-ups. You want a little bit of both (and something in between, too). Mostly, you don’t want to restrict your investments to related or correlated industries. An example might be car manufacturing and steel. The problem is that if one industry goes down, so will the other.

With bonds, you also don’t want to buy too much of the same thing. Instead, you’ll want to buy bonds with different maturity dates, interest rates and credit ratings.

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Review your needs and goals

Admin : July 3, 2020 10:41 am : Articles, Blog, Financial Advice, Financial Planning, Working Women

Take the time to think about what you really want from your investments

You need to consider what you really want from your investments. Knowing yourself, your needs and financial and lifestyle goals, and your appetite for risk is a good start.

Consider your reasons for investing
It’s important to know why you’re investing. The first step is to consider your financial situation and your reasons for investing.

For example, you might be:
Looking for a way to achieve higher returns than on your cash savings
Putting money aside to help pay for a specific goal such as your children’s or grandchildren’s education or their future wedding
Planning for your retirement

Determining your reasons for investing now will help you work out your investment objectives and influence how your investments are managed in future.

Decide on how long to invest
If you’re investing with a specific financial and lifestyle goal in mind, you’ve probably got a date in mind too. If you’ve got a few goals, some may be further away in time than others, so you’ll need to have different strategies for your different investments. Investments rise and fall in value, so it’s sensible to use cash savings for your short-term goals and invest for your longer-term goals.

Short term
Most investments need at least a five-year commitment, but there are other options if you don’t want to invest for this long, such as cash savings.

Medium term
Committing your money for at least five years opens up a selection of investments that might suit you. Your investments make up your ‘portfolio’ and, if appropriate, should contain a mix of funds investing in shares, bonds and other assets, or a mixture of these, which are carefully selected and monitored for performance.

Long term
Let’s say you start investing for your retirement when you’re fairly young. You might have 25 or 35 years before you need to start drawing money from your investments. With time on your side, you might consider riskier funds that can offer the chance of bigger returns in exchange for an increased risk of losing your money.

As you approach retirement, you might sell off some of these riskier investments and move to safer options with the aim of protecting your investments and their returns.

How much time you have will have a big impact on creating your investment portfolio. As a general rule, the longer you hold investments, the better the chance they’ll outperform cash – but there can never be a guarantee of this.

Establish an investment plan
Once you’re happy and have set your financial and lifestyle goals, the next step is to get your investment portfolio in place. We’ll help you identify the right type of investment options suitable for you.

Build a diversified portfolio
Holding a balanced, diversified portfolio with a mix of investments will help protect it from the ups and downs of the markets. Different types of investments perform well under different economic conditions. By diversifying your portfolio, you can aim to make these differences in performance work for you.

Diversifying your portfolio in a few different ways through funds that invest across:
Different types of investments
Different countries and markets
Different types of industries and companies

A diversified portfolio is likely to include a wide mix of investment types, markets and industries. How much you invest in each is called your ‘asset allocation’.

Make the most of tax allowances
As well as deciding what to invest in, think about how you’ll hold your investments. Some types of tax-efficient account mean you can normally keep more of the returns you make. It’s always worth thinking about whether you’re making the most of your tax allowances too.
You also need to bear in mind that these tax rules can change at any time, and the value of any particular tax treatment to you will depend on your individual circumstances.

Review your portfolio periodically
Periodically checking to see if your portfolio aligns with your goals is an important aspect of investing.

These are some aspects of your portfolio you may want to check up on annually:

Changes to your financial goals
Has something happened in your life that calls for a fundamental change to your financial plan? Maybe a change in circumstances has changed your time horizon or the amount of risk you’re willing to handle. If so, it’s important to take a hard look at your portfolio to determine whether it aligns with your revised financial goals.

Asset allocation
An important part of investment planning is setting an asset allocation that you feel comfortable with. Although your portfolio may have been in line with your desired asset allocation at the beginning of the year, depending on the performance of your portfolio, your asset allocation may have changed over the period in question. If your actual allocations are outside of your targets, then perhaps it’s time to readjust your portfolio to get it back in line with your original targets.

Along with a portfolio with a proper asset class balance, you will want to ensure that you’re properly diversified inside each asset class.

Consider if there are certain aspects of your portfolio that need re-balancing. You may also want to consider selling to help offset capital gains you might take throughout the year.

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Looking at the bigger picture

Admin : June 30, 2020 7:25 am : Articles, Blog, Financial Advice, Financial Planning, Working Women

Creating plans of action to ensure you reach your financial goals

To be prepared for the road ahead, it’s critical to think about having a plan. For many people it’s not clear where their money will come from when they no longer receive a salary. And that can be stressful. When you add in the pressures of today’s bills and basic living costs, not to mention the nice things like holidays, the thought of the future can seem a bit overwhelming.

Planning for the future means making conscious decisions now. And even though we fill our lives with plans for our future selves, we’re always preoccupied with day-to-day events so we forget how important it is to take the time to take a step back and look to the bigger picture.
With our help, you can create a plan of action to ensure you reach your financial goals.

Will a plan really help me? Put simply, ‘yes’.

Where is my money going now?
The first step of your financial planning process is to determine your current financial situation in relation to income, savings, living expenses, and debts. Preparing a list of current asset and debt balances and amounts spent for various items will give you a clearer picture of where you stand financially. A monthly budget is an important step towards your financial fitness and should form the foundation of your financial planning process.

Have I built up a rainy day emergency fund?
The number one reason you should establish a rainy day fund is because, unfortunately, things unexpectedly do go wrong in life. So you also need to make sure you have an emergency fund and work towards saving six months worth of living expenses. This is money that you set aside for the unpredictable and unplanned and to cover expenses such as being made redundant or a sudden change in your income.

What are my financial goals in life?
Specific financial goals are vital to your financial planning. It’s time to consider now what matters to you. You need to decide what’s within reach, what will take a bit of time and what must be part of your longer-term strategy. Apply a SMART- goal strategy to this process. That is, make certain your ambitions are specific, measurable, achievable, relevant and timely. You should also periodically analyse your financial goals to make sure you’re always on track.

Have I prepared for unexpected events?
There are certain times when life-changing events happen. So it’s essential to protect both your and your family’s financial future. It may be difficult to think about, but if something were to happen to you or your partner, you’d want to know you are both protected financially. Think about how much money your family would need to maintain their current lifestyle if you weren’t around. This will give you a better idea of how much protection you need should different events occur – whether this is your ill-timed death, or suffering from an illness or disability.

What big moments do I need to plan for?
Life has a habit of surprising us, disrupting the best-laid financial plans. Having a plan will help you prepare for whatever comes your way, while saving for the things you care about. Whether it’s buying a property, starting a family, changing your career or life after you’ve finished work – whatever your vision for the future, having more money will help to make it rosier.

Are my financial plans still on track for success?
The financial planning process is dynamic and does not end when you take a particular action. You need to regularly reassess your financial decisions. Changing personal, social and economic factors may require more frequent assessments. When life events affect your financial needs, this financial planning process will provide a vehicle for adapting to those changes. Regularly reviewing this decision-making process will help you make priority adjustments that will bring your financial goals and activities in line with your current life situation. τ

Source data:
[1] The research for Royal London was carried out by Research Without Barriers (RWB) between 12/04/2019 and 15/04/2019 amongst a sample of 1,012 UK adults who have been married and separated, divorced and/or widowed. All research conducted adheres to the MRS Code of Conduct (2014).
[2] There were 101,669 divorces in the UK in 2017, according to the ONS

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Money lessons

Admin : June 22, 2020 3:18 pm : Articles, Blog, Financial Advice, Financial Planning, Parents, Protecting What Counts, Starting A Family, Working Women

5 tips that add up to teaching your child about money matters

Understanding how money works is an essential life skill. Unfortunately, for a lot of people, these lessons come later than they should, and often as the result of something going terribly wrong.

Not enough people make financial education a priority for children, which results in young adults entering a surprisingly complex financial world without the tools necessary to survive and thrive. Even if your children are very young, remember that the sooner you start teaching them money and personal finance skills, the more adept they’ll be at applying those skills when the time comes.

Instilling a few basic principles early on
Educating, motivating and guiding children and grandchildren to become regular savers and investors will enable them to keep more of the money they earn and do more with the money they spend. Everyday spending decisions can have a far more negative impact on children’s financial futures than any investment decisions they may ever make.

Finance is often perceived as complicated and remote, but this can be a costly impression. Understanding money matters is a valuable life skill. What children learn about money in childhood will shape their own attitudes and behaviour later on. By instilling a few basic principles early on, you could help influence for the better how they manage their money in adulthood.

1. Communicate with children as they grow older about your values regarding money
Financial lessons – how to save money, how to make it grow and, most importantly, how to spend it wisely – must be age-appropriate to be meaningful and beneficial. Young children are not miniature adults. Lessons should be tailored for their age, rather than just made simpler.
Start as soon as they are able to count, and make money the topic of regular family discussions. Time these around dates (for example, a birthday or Christmas) when they are due to receive a cash gift so that you can talk about saving versus spending.

2. Help children learn the differences between needs, wants and wishes
Help your children avoid spontaneous purchases by setting goals and prioritising what they spend their money on. This will prepare them for making good spending decisions in the future.
While a child will naturally ask for the latest games console, making them understand the difference between needs and wants will help them make sensible spending decisions from a very young age.

If they want the latest Pokémon video game that costs nearly £400, explain how long it would take an adult to earn that amount of money. Create a specific example to put it into perspective.

3. Setting goals is fundamental to learning the value of money and saving
Help your children to set a goal and track their savings and their spending. Young or old, people rarely reach goals they haven’t set. Nearly every toy or other item children ask their parents to buy them can become the object of a goal-setting session.
Such goal-setting helps children learn to become responsible for themselves. A great way to visualise goals for children is to create a savings chart you can display somewhere prominent (for example, on the fridge).

Create a table and put a picture of what they are saving for. Then, each week, they can colour in the box as they move closer to their savings goal. That way, they can track their own progress easily by simply counting the number of boxes filled in, to see how much they have saved up to that point and the number of weeks still to go.

4. Introduce children to the value of saving versus spending
Explain and demonstrate the concept of earning interest income on savings. Consider paying interest on money children save at home. Children can help calculate the interest and see how fast money accumulates through the power of compound interest.
Later on, they will also realise that the quickest way to a good credit rating is a history of regular, successful savings. You could even offer to match what your children save on their own.

5. When giving children a ‘pocket money’ allowance, give them the money in denominations that encourage saving
Providing pocket money in lower denominations makes it easier to allocate a proportion of income to different goals. Labelled jars work to separate money – one for saving, one for spending and one for donating.

Any time they make money by doing chores or receiving birthday gifts, encourage your child to divide the cash equally among their jars.
It’s not a huge act, but it does show that it’s okay to spend some money, as long as you’re saving as well. Once they’re older, their bank and investment accounts can mirror the split. Keeping good records of money saved, invested or spent is another important skill young people should learn..

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Get-rich-quick schemes

Admin : June 15, 2020 2:10 pm : Articles, Blog, Financial Advice, Financial Planning, Working Women

Financial fraud nets millions for organised crime scammers

Fraudulent get-rich-quick schemes are netting millions for organised crime. But investment scams can be difficult to spot because they’re designed to look like genuine investments, with most scammers having a professional-looking website and documents.

In the first six months of this year, across all categories of financial fraud, a total of £207.5 million was stolen from almost 60,000 people, according to UK Finance, an industry body. Increasingly, they are using sophisticated and effective tactics to get you to part with your money. Even though some investment scams may look like a real deal, there are some red flags you can spot to help you steer clear of them.

The scammer’s offer will sound legitimate
You may receive a telephone call or email from a scammer claiming to be a stockbroker or portfolio manager and offering you financial or investment advice. They may claim what they are offering is low-risk and will provide you with quick and high returns, or encourage you to invest in overseas companies. The scammer’s offer will sound legitimate, and they may have resources to back up their claims. They will be persistent and may keep calling you back.

Some investment scams may even claim to be regulated by the relevant authorities to mislead you. In the UK, a firm must be authorised and regulated by the Financial Conduct Authority (FCA) to perform most financial services activities. A growing number of scams, often promoted on social media websites, involve foreign exchange trading and cryptocurrencies.

According to the FCA, the number of scams involving these two more than tripled in 2018/19, meaning they should be treated with particular caution. Many scams will try to use social proofing, using fake online reviews or fraudulent adverts to look credible.

How to protect yourself
The FCA has recommended four simple steps to help protect yourself from investment-related scams:

Reject unexpected offers – if you receive a call or email concerning an investment opportunity out of the blue, there is a very high chance that it is a scam. The best thing to do is to hang up the phone or ignore this kind of correspondence

Check who you are dealing with – literature and websites may appear authoritative, but don’t assume it’s real. You can easily verify a firm’s identity on the Financial Services Register. Use the contact details on the Register, not the details given to you, to avoid ‘clones’ of companies you trust

Don’t be rushed – common strategies employed by fraudsters include pressure to invest before a false deadline or on special terms. Sales tactics like this should always ring alarm bells. Any investment company you would want to deal with won’t pressure you into making important financial decisions

Seek impartial information or advice – rather than take advice from an outfit that has approached you unexpectedly, consider seeking professional financial advice to plan your investment decisions. While you will be charged a fee for this service, it could end up being money well spent

Remember the old adage: if the opportunity sounds too good to be true, it probably is.


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Gender gap in retirement savings

Admin : June 11, 2020 7:06 pm : Articles, Blog, Financial Planning, Retiring, Working Women

Women say they will have £100,000 less in retirement than men

For women, the salary gap they face during their careers eventually turns into a retirement savings gap. While our country has come a long way on gender equality, the pay gap remains a prominent issue. It’s felt in many aspects of women’s lives, most significantly in retirement savings.

Women are saving less than men for their retirement, with only 15% saving for the future compared to 20% of men[1]. The previously unpublished figures show that women are worried they will not have enough in their pension pot in time for their retirement, with 25% saying this is because they didn’t start saving for their retirement early enough.

Saving enough to ensure a comfortable standard of living
When it comes to how much they think they will hold when they reach retirement age, women anticipate they will have £168,006. This is almost £100,000 less than men who think they will have £255,328.

In addition, only 22% of women believe they are saving enough to ensure a comfortable standard of living for the future, compared to 33% of men. Data shows that women are saving less of their net income each month than men, with women putting aside 9.4% of their net income compared to the 11.4% saved by men.

Not knowing what to do with a pension pot at retirement
The findings reveal that more men have plans for their retirement pot than women, with 38% of women claiming that they don’t know what to do with their pension when they retire compared to 32% of men.

While 21% of men said they planned to withdraw it as a lump sum, only 13% of women said they planned to do the same. Furthermore, 21% of females said they would be relying on a State Pension in their retirement compared to just 13% of men.

Start early when it comes to saving and investing
The latest figures from HM Revenue and Customs[2] show that while the gender split of numbers of Individual Savings Account (ISA) subscribers is broadly equal, males accounted for a marginally higher proportion of the higher value ISA holders. Males accounted for 52% of ISA holdings worth £50,000 or more, while 52% of females’ own holdings are worth up to £2,499.

Factors such as longevity and career breaks can negatively affect a woman’s long-term financial situation. ‘Start early when it comes to saving and investing’ is the adage, and its importance should not be underestimated. But for some, it is even more important, including women and anyone who might take a career break.

Source data:
[1] Brewin Dolphin 23 May 2019
[2] 30 April 2019

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‘No, thanks’ to downsizing

Admin : June 8, 2020 8:36 am : Articles, Blog, Financial Planning, Saving and Investing, Starting A Family, Starting Out

More baby boomers plan to stay in their own home

A growing number of ageing baby boomers are saying, ‘No, thanks’ to downsizing, choosing instead to remain in the same house in which they raised their family and created lifelong memories.

Over two thirds of people say they plan to stay in their own home during their retirement, according to new research[1]. The findings suggest nearly 14 million people plan to remain in their current home when they retire. Typically, people look to downsize or move to retirement housing following a negative event, such as health issues or the death of a spouse.

Generating income through equity release
Of those who say they will stay, an increasing percentage will use their property to generate income through equity release. The research highlights that 69% of adults say they will remain in their current home in old age when asked what they are most likely to do with their main property in retirement.

There has been a 5% increase in three years, compared to when the survey was last carried out in 2016. The second most popular option was downsizing at 24%, with less than 4% of those surveyed saying they would sell or rent their house when they retire.

People who want to grow older in their homes
Of the respondents who said they would remain in their home, 6% plan to release cash from the property, up from 5% in 2016. This increase is in line with the growing popularity of equity release options, which includes lifetime mortgages.

The latest figures from the Equity Release Council[2] reveal that in the first two quarters of 2019, £1.85 billion was lent to customers using equity release, more than double the amount in the first two quarters of 2016 at £908 million. Equity release may be an option to consider for some people who want to grow older in their homes and need to make improvements to make life more comfortable and their property more accessible.

An increasingly popular form of equity release
Lifetime mortgages are an increasingly popular form of equity release because, for many people, a large proportion of their wealth is tied up in the value of their home. A lifetime mortgage involves taking a type of mortgage that does not require monthly repayments. However with some plans, rather than rolling up the interest, you can opt to make monthly repayments if you wish.

You retain ownership of your home, and interest on the loan is rolled up (compounded). The loan and the rolled-up interest is repaid by your estate when you either die or move into long-term care. If you are part of a couple, the repayment is not made until the last remaining person living in the home either dies or moves into care, meaning that both you and your partner are free to live in your home for the rest of your lives.

Source data:
[1] Canada Life 08 October 2019
[2] The latest edition was produced in Autumn 2019 using data from new plans taken out in the first half of 2019, alongside historic data and external sources as indicated in the report. All figures quoted are aggregated for the whole market and do not represent the business of individual member firms.



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‘Sleepwalking’ into retirement

Admin : June 5, 2020 6:32 pm : Articles, Blog, Entrepreneur, Estate Planning & Wills, Financial Advice, Financial Planning, Protecting What Counts, Retirement, Saving and Investing, Starting Out, Wills

How much will you need to save to afford a comfortable retirement?

There is a widespread and common-sense-based perception, backed to some extent by evidence, that planning and preparing for later life is associated with increased well-being in older age. Despite this, it’s concerning that some people at mid-life have not thought much about their later life nor taken fundamental future-oriented actions, such as engaging in financial planning or writing a Will.

New research[1] highlights the fact that millions of mid-life UK employees are sleepwalking into retirement. The study, which looked into mid-life[2] employees’ financial preparedness for later life, revealed that 64% of employees aged 45 and over – equivalent to nearly nine million people – do not know how much they will need to save to afford a comfortable retirement.

Eligible for the State Pension
In addition, over five million mid-life employees (37%) do not know how much is already saved in their pension. Question marks also hang over the State Pension, with two in five (43%) respondents unaware of how much support they will receive from the Government. A further 26% do not know at what age they’ll be eligible for the State Pension.

If you’re entitled to the full new single-tier State Pension currently valued at £168.80 per week, this adds up to a retirement income of £8,777.60 per year[3]. Most employees (62%) aged 45 and over also do not know what the pension freedoms mean for them, while 37% do not know what type of pension scheme they have – for example, whether it’s a defined contribution or defined benefit scheme.

Never too late to save
The analysis highlights that it is never too late to plan. But without a clear picture of what they currently have saved or might need to save for a comfortable retirement, the findings show that many UK employees are approaching retirement with their eyes closed – with no realistic idea of how near or far they are from their retirement destination.

As a first step, mid-life employees who are mystified by their pension savings should try to get a clear picture of what they have saved so far and how much of an income this can provide them with over the course of retirement.

Pensions in need of a boost
For some, this may be a pleasant surprise, while for others, it could be the wake-up call that’s needed to spur them to take action. People whose pensions are in need of a boost shouldn’t be disheartened, however, as it’s never too late to save. Your retirement should be something to look forward to, so it’s good to make sure you’ll have financial security for when you decide to stop working.

There are various ways to save for your retirement. Putting your money into a pension is one of the most tax-efficient ways to save for the kind of life you want in retirement. With the tax breaks you receive, it can mean that building up your retirement savings could cost less than you might think. What’s more, your pension is invested, which gives your money the potential to grow.

Source data:
[1] Research of 1,036 UK employers and 2,020 employees aged 45+, conducted on behalf of Aviva by Censuswide, January 2019. All figures are based on this research unless otherwise stated. 8.9 million figure scaled up according to the latest ONS Labour Market Stats – calculated as 64% of UK employee population aged 45+
[2] Employees aged 45+ are defined as ‘mid-life employees’ throughout the release
[3] UK State Pension Allowance – weekly allowance of £168.80. £168.80 multiplied by 52 = £8,777.60





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