Financial Planning Archives - monetarysolutions

The “what if” scenarios

2 May 2022 by Vivian Slattery

Restrictions are now disappearing and life is quickly returning to normality. I think it’s important to look back and reflect on this and on the impact of it all. When I have talked to people about the pandemic it seems to have made many people realise how quickly things can change.

When you think the first news of the virus was at the end of December 2019/January 2020 and by the end of March 2020 we were in lockdown, it has certainly made me realise the quick impact of the crisis. When we are planning for a long healthy life it’s important to remember that things can happen along the way and this has shown how quickly our lives can be affected.

During the pandemic we saw that unfortunately many individuals died, suffered from job losses and from sickness. I do believe we have all had different experiences of the virus and I am sure some people who are reading this article may still be suffering.

For the lucky ones it’s important to realise that it really was pot luck if you were in an industry that was not badly affected.

When we plan finances we use what we call “what if” situations to see how individuals’ finances would fare, given certain situations. So if you have not been badly affected by the pandemic why not sit back and use it as a “what if” scenario for your own finances, based on the stories of others who did not fare as well as yourself during this time.

So, when you look at these “what if” situations and realise that you would have issues coping financially during this time, and if your circumstances were different maybe you should consider insuring yourself in case this happens again in the future.

If you would like some help considering what insurances would be appropriate for you, why not give us a call and book a free, without obligation consultation.

Reviewing our goals

28 March 202215 May 2020 by Vivian Slattery

Life in recent weeks has changed for us all, with some affected worse than others especially those who have lost loved ones. I do think it will change the way we approach life – at least I know it will for me. I never thought I would see the day that I would be restricted from leaving my home but grateful, because I am not ill and safe in the knowledge that unlike some I don’t have to leave my house to work. Also I have never been so grateful to the key workers who are ensuring that people are receiving the care they require and that we receive the basic essentials we need.

I have read a lot in the last few weeks and the one thing that has really made me stop and think were the comments saying that we all want our lives to return to normal. But take a moment and work out what parts of normal life you want to rush back to.

I do believe that we need to stay positive during what is a stressful time for many of us and take some time to work out any changes we would like to make when life is back to normal. I can think of a number of changes that I will make. Coming out of this is not going to be easy for any of us and financially many of us have had to face some losses. I have always been a firm believer that having goals gives us direction, focus and the strength to get through tough times. This may not be the answer for everyone but for many of us it could help us to get through the hard times ahead.

Many goals will need a financial plan in place to help us to achieve them. You may be setting new goals, or your progress towards existing goals may have been affected. If you need a hand with these please give us a call.

Allowances, limits and thresholds correct at the time of writing, but are subject to change in the future. Please confirm the current position before taking any action

Keep calm and carry on

28 March 202217 March 2020 by Vivian Slattery

Well just as we thought things were going to settle down after Brexit the coronavirus hit. There’s been so much information it’s hard to know the truth and the markets have gone mad because like us all, they have no idea how it’s going to affect us. I have been amazed by the panic buying and one of the best marketing tools I have seen this week is a stationery company giving out sanitiser with every order. But what would our advice be as Financial Advisers?

My thoughts follow that it is the virus that’s causing the financial market to go down and I do believe that when life gets back to normal so will the markets. But no one knows what’s going to happen in the markets.

Many disasters in the past have had similar looking knock-on effects, for example 9/11 caused the Dow Jones (US stock market index) to plummet: having closed on the 10th September, 2001 at just over 9600*¹, it fell following the attack and closed on the 1st October at just over 8800*².However, it rebounded quickly and on the 9th November, 2001 it closed at just over 9600*³.

There was a similar story with the Gulf war: on the 17 July, 1990 the FTSE closed at just over 2400*4, falling to just over 2000*5 on 1st October, but closing at just under 2500*6 on 15th March, 1991.

But when the markets fall they can also rebound within days: as I am writing this the market has had huge falls within the last week but the Dow Jones surged nearly 200 points yesterday*7 (13th March 2020). Although this was not back to its high of over 29,500*8 on 12th February 2020 it was still a big increase for one day.

This is why investors have to be careful when markets tumble, if they take money out of the market and the market then has a big increase they will lose out. The same goes for switches and transfers, most will take funds out of the market for a few days until they are completed. So our advice is always to sit tight.

Also, the last few weeks have reminded us that we never know what’s around the corner and the importance of planning ahead as markets can turn very quickly.

It is at worrying times like this, that financial advice can be essential. As I have said many times before I see the most important role for us is being a sounding board, and as the saying goes “a problem shared is a problem halved”. So if you would like to review your investment please give us a call. We offer a free without obligation consultation.

*1Dow Jones opened 10th Sept 2001: 9603.36, and closed: 9605.51
*2Dow Jones opened 24th Sept 2001: 8,242.32, and closed: 8603.86
*3Dow Jones opened 9th November 2001: 9586.96, and closed: 9608
*4FTSE 100 opened 17th July 1990: 2407.60, and closed: 2415
*5FTSE 100 opened 1st Oct 1990: 2006.30, and closed: 2030.90
*6FTSE 100 opened 15th March 1991: 2500.50, and closed: 2494.20
*7Dow Jones opened 13th March 2020: 21973.82, and closed: 23185.62
*8Dow Jones opened: 12th Feb 2020: 29406.75, and closed: 29551.42

Allowances, limits and thresholds correct at the time of writing, but are subject to change in the future. Please confirm the current position before taking any action

Lifetime Allowance

28 March 202216 May 2019 by Vivian Slattery

I have said many times that it’s so important to have all your cards on the table for financial planning. Recently, I’ve seen a couple of clients who are making contributions to their pension and do not seem aware that due to the size of their pension pots, they could end up paying a Lifetime Allowance tax charge when they take their benefits.

I’m not necessarily saying that this is an issue, but it is wise to understand the tax charge and plan for it. So what is the Lifetime Allowance tax charge? Currently when you take pension benefits in excess of £1,055,000, and you do not have any form of protection, you have to pay a tax charge of 55% if you take the benefits in the form of a lump sum, or 25% if you take the benefits in the form of an income.

When it was introduced in 2006, the Lifetime Allowance was set at £1.5m, and I know as an adviser I didn’t feel that many clients would be affected. However, having reached its highest level of £1.8m in 2010/11 it was later reduced again to £1m by 2016/17, and it’s slowly increasing again.

Many of you may think that this figure is high but as previously mentioned I have spoken to
individuals who are unaware that they have an issue. When you look at how it is calculated you may understand why. For example, individuals with a defined benefits scheme would multiply their annual pension by 20 and add the lump sum entitlement.

You may think that you could try to avoid this by not taking all the benefits, but any benefits which have not been taken will still be assessed at age 75 and the excess above the Lifetime Allowance will be taxed.

Also, there are other situations where pension benefits are measured against the Lifetime Allowance. So if you want to know more about Lifetime Allowance, the Lifetime Allowance charge, any solutions and whether you could apply for protection please do give us a call.

Disclaimer: Allowances, limits and thresholds correct at the time of writing, but are subject to change in the future. Please confirm the current position before taking any action.

Allowances, limits and thresholds correct at the time of writing, but are subject to change in the future. Please confirm the current position before taking any action

‘Tis the Season to be Jolly

28 March 202216 November 2017 by Vivian Slattery

The Christmas season is one of my favourite times of the year, as it is for many people.
However, it is easy to get caught up with the madness of Christmas spending.
Many of us have probably over-spent around Christmas-time (or know someone who has), and financial concerns can make us feel very unjolly.

I know if I leave my Christmas shopping until the last minute, I can get caught up in the panic and spend far too much. As with most events, planning is key. Here’s some useful advice.

Set your budget
It’s important to know how much you can afford before you have spent it.
The best time to sit quietly and work out your budget is before the mad festive rush begins. It doesn’t mean you have to be tight – it just means you can sit down to your Christmas meal and not have to worry about how you can afford it. Good planning also means there is less waste, otherwise, it is all too easy to stock up the fridge and throw away unused food later.

Be creative
I’m sure you’ve heard the saying “It’s not the price, it’s the thought that counts.” This is so true! It’s not the most expensive presents which are the best ones.

“It’s not the price, it’s the thought that counts” – This is so true! It’s not the most expensive presents which are the best ones

Spread your spending
If you are paid early in December, it is tempting to use this income to fund your Christmas spending. But if your next pay cheque is not until the end of January, you’ll find you’ve run out of money and will have a bleak New Year. Again, this is something to budget for.

Plan for 2018
Over the festive period, after all the madness has calmed down, it is a good time to think. Look back over the past year and set resolutions for the coming year to help you move towards your financial goals.

At Monetary Solutions, we can help you achieve your goals by putting a financial plan together. So, if you have never seen an adviser (or haven’t updated your plans for a number of years) why not book our free initial consultation and see how we may be able to help you?

Meanwhile, we wish you a merry Christmas and prosperous New Year.
At Monetary Solutions Ltd, you can book a free initial consultation about any
financial matters, so please call us on 020 8655 8488.

Allowances, limits and thresholds correct at the time of writing, but are subject to change in the future. Please confirm the current position before taking any action

020 8760 9940

The “what if” scenarios

Reviewing our goals

Keep calm and carry on

Lifetime Allowance

‘Tis the Season to be Jolly

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