Vivian Slattery

I am sure many are aware of the interest rate rises over the last few months. The Bank of England base rate started to increase in March 2022 when we saw it rise from 0.25% to 0.5%, currently the Bank of England base rate is 5%. In turn the average standard variable mortgage rate is currently 8.45%*¹.

Again, as I am sure many are aware the reason for the rate hikes is due to inflation. The Government inflation rate target is 2%. For the year ending May 2023 the Consumer Price Index measure of inflation in the United Kingdom held steady at 8.7%*², unchanged from the previous month’s 13-month low, above market expectations of 8.4% and significantly higher than the 2% goal.^*3

The Monetary Policy Committee (MPC) sets the Bank Rate, they sit once a month and their aim is to help the Government to reach their target inflation rate.

| think most of us understand the rationale around this, increasing interest rates means in turn mortgage payments increase, which means we have less money to spend.

However the impact can be delayed because for fixed rate mortgage holders the rate rises will not impact their mortgage payment straight away. Also not everyone has a mortgage.

According to data from the English Housing Survey^*4, just over one third of households rent their home (36%); another third own their own home outright (35%); and just under a third own their home with a mortgage (30%), in the UK.

So what would our advice be if your fixed rate period is coming to an end soon? We would recommend that you look at your situation as early as you can and do not bury your head in the sand. We offer a free without obligation consultation so if you would like some advice on this matter please pick up the phone today.

_{*¹ www.uswitch.co.uk
*² Forbes
*³ Office for National Statistics*3
*⁴ NimbleFins}

I am sitting here having just recovered from covid which has brought back memories, and the importance of protection. Over the years the amount of protection policies taken out has decreased rather than increased, in 2021 there were 20.4 million policies taken out, which is 30% less than in 2014 (29.3 million).*

When I started my career in the financial advice industry there were still companies selling insurance policies door to door and although I did not necessarily agree with this method, it did mean that more people were likely to consider their protection needs at this time.

I don’t think people necessarily wake up one morning and say, “I need to take out life insurance”, but at the same time we are not all going to lead a long and healthy life. So, what sort of protection do individuals need? The answer to this will of course vary considerably, but where to begin!

Covering liabilities is a good starting point, for example a mortgage. Mortgage companies usually insist that your house is insured, but do you think you would cover this if they didn’t? Surely it’s just as important to take out adequate protection cover if you have financial dependents?

There are many different types of insurance policy and many have their own quirks, so even though there are many comparison websites available today, I still feel that you can benefit from seeking professional advice to suit your individual requirements.
So if you would like to consider the protection options why not pick up the phone today and book a free, without obligation consultation.

_{*Source: https://www.finder.com/uk/life-insurance-statistics
Analysis conducted by finder.com}

My previous article was written before the last UK government budget announcement, it detailed the basis of a budget and was written on the eve of the budget revelations. I highlighted the fact that there is often speculation prior to the speech but until the announcement has been revealed it is only guess work. Also, I pointed out there have been many decisions over the years that have been memorable and for me this budget was one of those.

This time the speculation was around the Lifetime allowance increase, but for me the big surprise was that this was removed, although there were a few conditions put in place. So what does this mean? Prior to the budget if you built up over a certain amount in a Pension you would be subject to a tax charge unless your Pension had a form of protection from this charge. The budget removed this rule but there are still restrictions with regard to the amount of tax free lump sum which can be enjoyed. I know I was not the only one surprised by this announcement.

But this may not be the end of the Lifetime allowance. Labour have said if they were to get back into power they will reintroduce the rule. So care still needs to be taken, especially if you have protection in place, which due to the changes may not seem to be relevant at this stage but may be important in the future. This could mean that if you break the terms of your protection now, you may regret it later.

This was not the only Pension announcement, the government also increased the annual allowance from £40,000 to £60,000pa. Now all has been revealed, should you need some help understanding the implications of the latest UK budget and how this is likely to affect you personally, do not hesitate to call us for a free, without-obligation consultation.



_{The content included on this page is based on our understanding of the UK tax
law at the time of publication. It may be subject to change and may not be applicable to your circumstances.}

I am writing this column on the eve of the UK’s ‘Government Budget’, and so I thought it would be an ideal subject to reflect upon. So what is The Budget ? In simple terms it is a projection of the Government’s revenue and spending for a particular period of time, often referred to as a financial or fiscal year. It is no different to a household budget where we look at the amount that is coming in and whether there are ways we can increase this, and then decide how we are going to spend it.

Some of the decisions or announcements have been more memorable than others and not necessarily for the right reason. I am not sure anyone is going to forget the budget of Liz Truss’s reign last September.

For me, the one that was most memorable was the 2014 Budget when the term ‘Pension Freedom’ was announced, when individuals no longer had to annuitise (secure an income from) their Pension at any stage. I heard someone refer to this as a “JFK moment”, and saying that if you ask the majority of our parents what they were doing when they heard about the assassination of JFK they can clearly remember. There have not been many events like this where we clearly remember exactly what we were doing when we heard about something significant, but I do believe that when ‘Pension Freedom’ was announced IFAs would remember when they first heard this news.

There is a lot of history surrounding the Budget which originates from the 1720’s. The red briefcase which carries the papers has been used for over a century and the chancellor is even allowed to consume alcohol whilst delivering it, which is the only time during a parliamentary debate that ministers may consume alcohol in the House of Commons.

There’s always plenty of speculation around what’s going to be in the Budget announcement, but only time will tell. Once all has been revealed, should you need some help understanding the implications and how this is likely to affect you personally, do not hesitate to call us for a free without-obligation consultation.

The content included on this page is based on our understanding of the UK tax law at the time of publication. It may be subject to change and may not be applicable to your circumstances.

During Covid, I feel we saw a higher level of camaraderie that has now somewhat dissipated as life returned to normal, and keeping an eye on loved ones and neighbours is so important, to ensure they are managing through the winter months, particularly with the current cost of living crisis. It’s thought that one of the contributing factors for more elderly people dying in the winter months is due to them not wanting to turn expensive heating on, or even not eating properly as they may avoid venturing out in the cold.



So often, the need for care comes suddenly and the first priority has to be where and how to provide care. However, don’t overlook the need to plan finances, because if you are the one needing care, and you are self-funding, your savings may go down fast.



Too many people approach us for advice when their money is already running out, by which time it’s too late to do anything about it.



As soon as the right care is in place, that’s the time to make sure the ability to pay for it is guaranteed, and if you can plan ahead, that’s even better. You may be eligible for Local Authority financial support, but if you’re not paying the bills, you may have less choice about where you are cared for. If you start out paying for your care, and the Local Authority are required to step in later, the risk is that they may not be prepared to pay the fees for where you are currently placed. What happens then?



This is a worry for some people, but with the right advice from a specialist financial adviser, you can plan your financial affairs so that your money will last as long as possible. It’s even possible in many cases to buy a guaranteed income for the rest of your life, which could remove the risk of your money running out.



So if this is an area you would like to research further why not pick up the phone today and book a free, without obligation consultation.

A New year and a fresh start, but what will 2023 bring?
As usual I am writing this article prior to Christmas and to begin with I opened the piece I wrote last year with the realisation, little did I know what 2022 would bring. It has certainly been an interesting year: The Ukraine war, cost of energy increasing sharply, three Prime Ministers and the very unfortunate passing of our Queen.

When you look at the statistics I think it’s fair to say that we didn’t think it was going to be an easy year. Statistics showed only 36% of the UK public expected to see their personal financial situation improve over the course of 2022, whilst half of the population (50%) thought it unlikely. Younger people were more hopeful, 51% of under 35s thought their situations were likely to improve compared with 28% of 35-75 year olds.*

However I do think we need to consider the positives as well. This is the first Christmas for two years that I will be having a normal Christmas, whereas last year our Christmas party was cancelled because people were still worried about COVID. Also in 2022 I was able to start travelling again as holidays had been hard for me during the pandemic. Although at the same time many of my clients said that during the pandemic, when our lives slowed down, that they would not allow their lives to become hectic again, unfortunately I have observed that many of them have done just that.

So what then for this year?
I don’t think it is going to be very easy but I always love January when you have closed the door on last year and start afresh. I do consider that times are not at all easy for many, and goal setting and budgeting is probably even more important than it has ever been. I believe that goal setting gives direction, strength and purpose in uncertain times. With soaring bills, and high inflation, budgeting has it’s own importance.
As I have said many times before if you need help with goal setting or budgeting pick up a phone and book a free without obligation consultation.

*www.ipos.com

The answer to this will be different for everyone and it will depend upon each individual’s circumstance, but it may be the right time to consider this if your Pension is in drawdown. A Pension annuity provides an income for life and is taxed as income. As the market in the last few years has been volatile and if you are taking income from drawdown it may have been concerning you, even causing sleepless nights. If this is the case it may be worth getting an annuity quote, even if only to confirm this is not the right course of action for you.

An annuity based on a level, single life annuity for a 65 year with a purchase price of £100,000 is up a record 47% or £2,400.00 during 2022 reaching a 14 year high. This is due to the central bank base rate rises and the mini budget uncertainty. Based on the same example in Feb 2008 £100,000 bought you an income of nearly £8,000pa, in Aug 2016 it reached an all time low of less than £5,000pa. In June this year it had gone up to just under £6000pa and in October it had gone up to over £7,000pa*.

Obviously no one knows how long the uncertainty or higher interest rates will last, so we don’t know how long annuity rates are going to remain as attractive as they are now, they may even improve further as providers may not have factored all the points in. The above is also based on a level Pension with no guarantees. I would always recommend that you look at all the options available to you including guarantees.

With a guarantee, the annuity will pay out whether you are dead or alive for a predetermined time (usually either 5 or 10 years), but continues afterwards if you are still living. Often when we have quoted there is very little difference in the amount when we have included a 5 or 10 year guarantee and including this can be beneficial.

If you would like to see what annuity rates are available for you please pick up the phone today. We would always recommend that advice is sought for this as once you have bought an annuity you will not be able to change it.

<sub>*Sharing Pension 31st October 2022 based on annuity rates on the 15th October 2022

The content included on this page is based on our understanding of the UK tax law at the time of publication. It may be subject to change and may not be applicable.</sub>

Many new clients are often embarrassed about how little they know about their current investments, but I would say that often clients have very little financial knowledge so I thought it could be useful to go through some typical scenarios.

Retirement planning is a key area that we work in and many clients who have approached us at this stage have a collection of different policies with very little knowledge about them or how they can take the benefits. Often they are looking to consolidate Personal Pensions.

Individuals often don’t realise that care needs to be taken when consolidating Personal Pensions as each Pension is different and it could have a guaranteed investment growth or guaranteed annuity rate which are worth keeping. But with Pensions it’s not just about the underlying Investment funds, there is often the tax implication to consider when deciding how to take the benefits. Yet it’s not just income tax but also lifetime allowance charges, so sometimes the simplest route is not the most tax efficient.

The starting point with retirement planning has to be how much income you need at retirement and then projecting ahead and ensuring that this level is sustainable with the current investments. Annuities are often ruled out but another of my key phrases is that when you make any financial decision you should look at all the options and I think annuities can still have their place for covering basic expenditure needs in retirement. The guaranteed income they provide can also give a person some peace of mind, especially in times of market volatility.

Looking at the entire portfolio of holdings is key and then putting the equivalent of a business plan together about how to fund your income needs. Also it doesn’t stop there, reviewing them and tweaking them on an ongoing basis is also important, for example in the current climate of market instability, if you are taking income for a drawdown pension and have a large amount on deposit, one consideration may be to use your funds on deposit instead to fund your income needs. If you are approaching your retirement and would like to have some help why not pick up the phone today and book a free without obligation consultation with us.