Author: Rob Bowers

Historically, the main source of financial advice value has been anchored in investment performance and returns.

For example, a study carried out by Royal London and the International Longevity Centre (ILC), revealed that people who enjoyed a long-term relationship with their financial adviser were up to 50% better off than people who only received professional advice once.

In fact, over a 10-year period (which included the 2008 financial crisis) people who had sought financial advice were, on average, £47,000 better off than those who had made decisions without expert advice.

It probably won’t surprise you to learn that we believe passionately in the benefits of financial planning. So, read on to find out why financial advice works and the added value your planner can deliver over the long term.

What to expect from your financial planner

Financial advice can provide value in ways you may not have considered. Some examples of how a financial planner can add value include:

• Being a trusted source of professional expertise and an impartial sounding board with a clear focus on helping you reach your goals
• Helping you to recognise your goals and establishing a clear financial road map to help you attain them
• Managing your investment portfolio to maximise returns, simultaneously controlling risk, and reducing potential tax charges
• Preparing you to deal with unpredictable outcomes you may not have considered, such as premature death, or life events that change income, savings, or retirement dates that could have a detrimental impact on your desired lifestyle
• Keeping on top of your changing life and needs ensuring your plans stay on course
• Saving you time by performing complex, tedious, or time-consuming tasks
• Offering emotional support and guidance to provide peace of mind.

Areas of expertise you can benefit from

While investment returns are undoubtedly important, they are only one aspect of how a professional planner can help you achieve your financial goals.

There’s a whole range of financial planning strategies we provide to help ensure you are prepared to meet the challenges you and your family may face in life.

The true value a great planner will deliver can be broken into four distinct parts:

1. Financial value

Investment returns are important in helping you achieve specific financial objectives.

An adviser will take a holistic view of your finances, including saving and spending, income planning, tax planning, and planning for bad outcomes and unexpected changes in circumstance.

2. Portfolio value

Portfolio value is delivered through building a well-diversified portfolio that generates tax-efficient investments that match your appetite for risk while delivering the kinds of returns needed to reach your long-term goals.

3. Emotional value

Emotional value covers areas of support that arise naturally from a long-term and trusted relationship.

For example, extreme market conditions can create anxiety. When faced with poor market performance, it can be tempting to reduce your equity allocation or sell your investments altogether. On the flip side, when the market is doing well, you may get over-excited and enthusiastic about equity performance and be tempted to take on more risk than you should.

A financial planner who knows you and understands your specific circumstances can help provide reassurance and peace of mind.

4. Time value

Your financial planner performs tasks that you might not have the time, inclination, or ability to perform yourself. This alone can remove a whole load of hassle and time-consuming tasks from your shoulders.

The more personal an advice plan is, the more value it can potentially deliver

Successful financial advice starts with you. An initial meeting helps us to gain insight into your aspirations – for your life and your financial future.

We will challenge you to set goals, both financial and otherwise. This will ensure that you protect your family now while growing your wealth for the future.

These first steps of your financial planning journey are essential in achieving your long-term goals. The better we understand your aspirations and circumstances, the more confidence you’re likely to have in the advice and planning that we undertake.

Expect to form a long-lasting relationship

We proactively monitor your needs and investment portfolios and recognise when changes are needed. To be successful, it’s essential that we earn your trust – one of the primary drivers of a successful client/adviser relationship.

Find out more about how we achieve this from existing Blue Wealth clients. Several of our clients have generously shared their stories about how we have helped them achieve their goals.

As an independent firm, we offer unrestricted options. This means that we can create plans specifically suited to you. This personal approach also helps us to achieve the best results for you.

We use financial modelling software to build interactive plans. So, no two plans are identical, and you benefit from truly bespoke financial planning advice.

Review at regular intervals

Knowing that life can get in the way of even the best-laid plans, we have annual review meetings to help you stay on track.

Regular audits will help make sure your actions and investments remain aligned with your goals.

At your review, we’ll often use cashflow planning tools to explore the financial impact of various scenarios. This helps ensure that you’ve thought about all aspects of your financial future, including inflation, so that whatever the future holds, you won’t come unstuck down the line.

Get in touch

Whatever stage of life you’re at, we can provide financial planning advice to support you and help you meet your goals.

Whether you’re thinking about your retirement, worried about whether you can afford the lifestyle you want, or worried about passing on your wealth to younger generations, we can help.

If you would like to find out more or you know someone who could benefit from our help, please email hello@bluewealth.co.uk or call us on 0117 332 0230.

Please note

The content of this newsletter is offered only for general informational and educational purposes. It is not offered as, and does not constitute, financial advice.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

Blue Wealth Ltd is an appointed representative of Best Practice IFA Group Ltd, which is authorised and regulated by the Financial Conduct Authority.

Here, we share some of the highlights of what’s been happening in and around Blue Wealth.

BillyChip donations top £1,000

Following the decision to support BillyChip, a national charity which allows people to engage and offer help to a homeless person, your generosity has helped us donate £1,030 in just three months.

This includes donations that we’ve made on receiving client referrals – several of which have led to meetings.

For those who didn’t know, we make a £50 donation to BillyChip for every initial meeting we have that comes from a client recommendation.

However the meeting takes place – in person or remotely through video call – we’ll donate. So, if you recommend your friends, family or colleagues to us and we meet with them, we’ll make a £50 donation on your behalf.

Along with successful client referrals, we’ve also raised funds through various sporting activities, most recently Dan Britton completed the Bristol half marathon…

There’s no stopping Dan Britton

Straight off the back of the gruelling 66-mile Great Exmoor Ride that Dan and Adrian took part in last month, Dan’s latest physical challenge was running in the Bristol half marathon.

Dan says: “It was a pretty warm day, which made for slightly hot running conditions. Although I ran alone, there were crowds of people cheering everyone on. In all, I think I was one of around 10,000 runners – some of whom were running the 10K course through the city.

“That’s probably it for a while. I’ve nothing else planned at the moment and the winter months are a good time to reflect and do some indoor running, swimming, and cycling in preparation for next year.”

If you’d like to support BillyChip, our JustGiving page is open for donations until the end of October.

A great golf day at the Bristol and Clifton Golf Club

Last month, we held a client golf day at the beautiful Bristol and Clifton Golf Club.

20 players, made up of Blue Wealth team members and clients, took to the course in relatively fine weather. It tried to drizzle for all of two minutes, but we saw any heavier showers off and enjoyed a great day on the course.

Many thanks to all who attended – you made it a brilliant day!

Halloween was originally an ancient Celtic festival called “Samhain” that was celebrated to ward off any ghosts on their trip to the afterworld.

Despite being an ancient tradition, Halloween is still massively popular today – Statista forecasts that Halloween retail expenditure in 2022 in the UK could reach as much as £687 million.

While you may get into the Halloween mood by scaring yourself with spooky films, there are also some financial mistakes that can make your blood run cold.

So, forget ghosts and ghouls; here are five frightening financial fumbles that are enough to send a chill down your spine.

1. Not having an emergency fund

When it comes to your finances, being prepared for the unexpected is paramount. For example, if your car broke down would you have the disposable cash to have it fixed? Or, if you lost your job, would you be able to support your family until you managed to find new employment?

All of this, and more, can be prepared for with an emergency fund.

Simply put, an emergency fund is a pot of money you have saved for a rainy day and is designed to be used to cover any unexpected financial scenarios that may arise.

You should ideally save up to three to six months’ worth of monthly household expenses in your emergency fund. However, if you are self-employed, or have a large family, you may want to consider saving even more.

And, since this money will need to be accessed easily and instantaneously, you should ideally keep it in an easy access savings account.

Thankfully, This is Money reports that around three-quarters of Brits have an emergency fund. If you’re not one of these people, then never fear – you simply need to start making regular monthly contributions that you can afford and build up to the amount you wish to save.

2. Not making the most of your ISA allowance

ISAs allow you to build up savings in a tax-efficient way, so not making the most of them is the second scary mistake on this list.

ISAs allow you to save and invest your money free from Income Tax and Capital Gains Tax (CGT).

Some ISAs are even purpose-built for certain situations. Take the Lifetime ISA, for example – these allow 18- to 39-year-olds to deposit up to £4,000 every tax year, and the government will add a 25% bonus for contributions up to the value of £1,000 each year.

You should ideally use your ISA allowance each year if you’re to make the most of the tax efficiency on offer to you. In the 2022/23 tax year, the yearly ISA allowance stands at £20,000, and this is spread across all different types of accounts.

If you don’t use your ISA allowance, then it’s gone; it doesn’t carry over to the next year.

3. Failing to plan for your retirement

No matter how young you are, it’s never too soon to start planning for your retirement. While you may think it more prudent to be worried about the current economic climate, it’s still important to look to the future.

Long before you’ve reached your retirement, you should think about what you want to do with your well-deserved time to relax. You might want to spend your days lounging on a beach in Spain, or simply wish to support your family.

Whatever you want to do when you retire, you’ll need to save enough money to live comfortably.

When you know how much money you need to live your desired lifestyle, you can then figure out how to effectively save.

If you don’t properly plan for retirement, you could run the risk of not being able to live the life you’ve always wanted when you stop working. After all, when you fail to prepare, you’re preparing to fail.

4. Remaining on your lender’s standard variable rate

Another hair-raising financial mistake, this time for those with a mortgage, is staying on your lender’s standard variable rate (SVR).

If you’re on a fixed-, discounted variable- or tracker-rate mortgage, your deal will eventually expire. When this happens, you will typically revert to your lender’s SVR.

This may not sound so scary at first, but the interest rates offered by these SVRs are usually quite uncompetitive compared to other deals in the marketplace.

So, in an ideal world, you should avoid remaining on your lender’s SVR for long periods of time, or you could end up out of pocket.

Indeed, you could save a significant sum by switching from your lender’s SVR. The MoneySavingExpert states that 370,000 borrowers could save £1,250 a year on average over a two-year period if they were to switch from their lender’s SVR.

The good news is switching is relatively simple, especially when you seek the help of a professional. Mortgage brokers can scour the market for you to find you the best deal, and they even have access to exclusive deals not available on the high street.

5. Working with a professional can help you avoid making financial mistakes

As you can see from this list, there’s a plethora of different mistakes that can be made when you’re managing your finances.

The good news is that enlisting the help of a professional can help you to manage your money and avoid any critical blunders.

We can help you make the most of your pension and ISA allowances each year, help you avoid paying excess tax on your savings, advise you on the best way to manage your money and save for your emergency fund, and more.

Working with professionals like us won’t just make managing your finances easier, but it can also lift a weight off your shoulders by reducing the stress and hassle of understanding your money and long-term financial future.

Get in touch

The world of personal finance can get frightening at times, so we can help you manage your money to alleviate some of the fear involved. If you would like to find out more, please email hello@bluewealth.co.uk or call us on 0117 332 0230.

Please note

The content of this newsletter is offered only for general informational and educational purposes. It is not offered as, and does not constitute, financial advice.

A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.

Think carefully before securing other debts against your home.

Blue Wealth Ltd is an appointed representative of Best Practice IFA Group Ltd, which is authorised and regulated by the Financial Conduct Authority.

With a new prime minister having taken office earlier this month, the government has begun to announce its plans for stimulating the UK economy during the cost of living crisis.

Kwasi Kwarteng delivered what has been called a “mini-Budget” in an aim to drive economic growth, against the backdrop of the Bank of England (BoE) reporting that the UK economy is already in recession.

The chancellor set out the three priorities of the government’s Growth Plan:

• Maintaining responsible public finances
• Reforming the supply side of the economy
• Cutting taxes to boost growth.

Paul Johnson, the director of the Institute for Fiscal Studies (IFS) called the mini-Budget “the biggest tax-cutting event since 1972”.

Before you read about the main points of the mini-Budget, there were two further major fiscal announcements this week that could affect you.

Energy help for businesses announced with a cap on prices

The government has already announced that the average household’s energy bills will be capped at £2,500 a year for two years, in addition to a £400 contribution towards bills this winter.

Additionally, a new Energy Bill Relief Scheme will provide support for non-domestic customers with discounts applied to energy usage initially between 1 October 2022 and 31 March 2023.

The government will provide a discount on gas and electricity unit prices for businesses, voluntary sector organisations, such as charities, and public sector organisations such as schools, hospitals, and care homes.

Essentially, the government has capped the cost of gas and electricity (a “government supported price”) at £211 per megawatt hour (MWh) for electricity and £75 per MWh for gas.

For comparison, wholesale costs in England, Scotland and Wales for this winter are currently expected to be around £600 per MWh for electricity and £180 per MWh for gas.

Suppliers will apply reductions to the bills of all eligible non-domestic customers. Businesses do not need to take action or apply to the scheme. The government website contains more details about the scheme, along with some examples of potential cost savings.

Interest rates rise for the seventh consecutive time

To combat soaring inflation, the BoE has increased the base interest rate by 0.5%, to 2.25%.

The decision by the Bank’s Monetary Policy Committee (MPC) takes rates to the highest level since 2008.

The BBC reports that borrowers on a typical tracker mortgage will have to pay about £49 more a month, while those on standard variable rate (SVR) mortgages will see a £31 increase.

Corporation Tax rise will not go ahead

The chancellor announced that a planned move to raise Corporation Tax from 19% to 25% in April 2023 will be cancelled.

This results in the UK having the lowest rate of Corporation Tax in the G20. Kwarteng said: “That’s £19 billion for businesses to reinvest, create jobs, raise wages, or pay the dividends that support our pensions.”

1p cut in Income Tax brought forward to 2023

From April 2023, the basic rate of Income Tax will be cut from 20% to 19%.

This represents a tax cut of more than £5 billion a year. It will mean 31 million people will be better off by an average of £170 a year.

Abolition of additional-rate Income Tax

One of the surprise measures of this mini-Budget was the abolition of the 45% additional rate of Income Tax from April 2023.

This will apply to the additional rate of non-savings, non-dividend income for taxpayers in England, Wales, and Northern Ireland.

“From April 2023 we will have a single higher rate of Income Tax of 40%. This will simplify the tax system and make Britain more competitive,” said Kwarteng.

Health and Social Care Levy scrapped

Ahead of the mini-Budget, Kwarteng announced that the government will reverse the 1.25% National Insurance increase, introduced by Rishi Sunak in April 2022. The Health and Social Care Levy, which was to replace the 1.25 percentage point rise in April 2023, has also been scrapped.

The chancellor said: “Taxing our way to prosperity has never worked. To raise living standards for all, we need to be unapologetic about growing our economy. Cutting tax is crucial to this.”

The change will take effect on 6 November 2022.

This will reduce tax for 920,000 businesses by nearly £10,000 on average next year, the government says, as they will no longer pay a higher level of employer National Insurance.

Workers will also see a cut in their tax bill. The BBC reports that somebody earning £20,000 will save about £93 a year, and somebody earning £100,000 will save £1,093, compared to now.

Dividend Tax rise reversed

As well as reversing the National Insurance increase, the government will also reverse the 1.25 percentage point increase in Dividend Tax rates applying UK-wide from 6 April 2023.

The ordinary and upper rates of Dividend Tax will be reduced to 2021/22 levels of 7.5% and 32.5% respectively.

Due to the abolition of the additional rate of Income Tax, dividend income that was previously charged at the additional rate, will now be charged at the upper rate of 32.5%.

This will benefit 2.6 million taxpayers with an average benefit of £345 in 2023/24, and additional-rate payers will further benefit from the abolition of the additional rate of Dividend Tax.

A cut in Stamp Duty

The government believes that cutting Stamp Duty will encourage economic growth by allowing more people to move, and enabling first-time buyers to get on the property ladder.

So, the chancellor announced that, with immediate effect, no Stamp Duty will apply to the first £250,000 of a property purchase.

This will save a second-time buyer £2,500 when they buy a house valued at more than £250,000.

The chancellor also increased the threshold at which first-time buyers will start paying Stamp Duty to £425,000, and increased the value on which they can claim relief from £500,000 to £625,000.

He says: “The steps we’ve taken today mean 200,000 more people will be taken out of paying Stamp Duty altogether. This is a permanent cut to Stamp Duty, effective from today.”

Creation of new investment zones

The chancellor announced that the government will work with the devolved administrations and local partners to introduce “investment zones” across the UK. Early discussions have been held with almost 40 localities such as Tees Valley and south Yorkshire.

Businesses in these designated zones will benefit from accelerated tax reliefs for structures and buildings and 100% tax relief on qualifying investments in plants and machinery.

There will be no Stamp Duty to pay on newly occupied business premises, no business rates to pay on new premises and, if a business hires a new employee in the investment zone, the employer will pay no National Insurance whatsoever on the first £50,000 they earn.

Removal of the bankers’ bonus cap

In a politically controversial move, the chancellor announced that the Prudential Regulation Authority will remove the current cap to bankers’ bonuses.

Mr Kwarteng said: “All the bonus cap did was to push up the basic salaries of bankers, or drive activity outside Europe. It never capped total remuneration, so let’s not sit here and pretend otherwise. So, we’re going to get rid of it.”

Other measures

• Venture Capital Trusts (VCTs) and the Enterprise Investment Scheme (EIS) extended
• The government will wind down the Office of Tax Simplification
• The Annual Investment Allowance will remain £1 million permanently, rather than returning to £200,000 in March 2023. This gives 100% tax relief to businesses on their plant and machinery investments up to the higher £1 million limit
• IR35 rules will be simplified, and the government will repeal the 2017 and 2021 reforms
• The chancellor cancelled the planned rise in alcohol duty and confirmed that reforms to modernise alcohol duties will also be taken forward.

Get in touch

If you have any questions about how the mini-Budget will affect you and your finances, please get in touch.

All information is from the Growth Plan 2022 document.

The content of this “mini-Budget” summary is intended for general information purposes only. The content should not be relied upon in its entirety and shall not be deemed to be or constitute advice.

While we believe this interpretation to be correct, it cannot be guaranteed and we cannot accept any responsibility for any action taken or refrained from being taken as a result of the information contained within this summary. Please obtain professional advice before entering into or altering any new arrangement.

Here, we share some of the highlights of what’s been happening in and around Blue Wealth.

Dan Britton and Adrian Thorley take part in the Great Exmoor Ride and raise funds for BillyChip

Following on from our commitment to support our nominated charity BillyChip last month, two of our Financial Planners, Dan and Adrian, took part in the gruelling 66-mile Great Exmoor Ride to help raise funds. 

The Great Exmoor Ride took place on Sunday 11 September. Running from Taunton to Blue Anchor on the West Somerset coast, Dan and Adrian were blessed with glorious weather for their first experience of the annual cycle challenge.

Both active cyclists, other than a few long rides together neither Dan nor Adrian did any additional training in preparation for race day. And, having only recently trained for the half ironman competition in the summer, Dan in particular was already in good shape. 

Explaining how nutrition plays into training, performance, and endurance, Dan says: “One of the keys to race days like this is to have a good breakfast with slow GI foods, like oats. Also, make sure you drink plenty of water, around one litre every hour with electrolytes for hydration, and take around 60 to 90 grams of carbohydrate each hour through high-carb gels, energy bars or other food.  

“You can burn nearly 1,000 calories an hour so it’s vital to replace them, otherwise you run out of energy.”

Talking about the race day itself, the race set off at 8am on Sunday morning. The weather was pretty good – “misty in Somerset and pretty chilly but it was okay”.

Dan goes on to say, “It was very hilly, and the mist meant we couldn’t see the Somerset levels. We did 1,700 metres of climbing in 65 miles which is a lot. There were some very short sharp climbs interspersed with some longer ones. The climbing was definitely the hardest part.

“The route took us through the Somerset countryside, country lanes, over some of Exmoor and down to the coast, it was never flat for very long.”

Asked if they would do it again, the answer was “maybe”. “If we’d known how much climbing was involved, we might have been put off!”

While the Great Exmoor Ride isn’t suitable for beginners, if you want a bit of a challenge and some nice scenery, Dan and Adrian would both recommend the ride to other keen cyclists.

So far Dan and Adrian have raised £350 and the JustGiving page is still available for donations. Every penny raised goes straight to BillyChip to support their work in delivering kindness and helping the homeless. 

It’s not too late to join us at the Bristol and Clifton Golf Club

If your diary allows, it would be great to see you at Bristol and Clifton Golf Club on Thursday 22 September, when we are holding our client golf day.

Arrive from 12.30pm onwards and take advantage of full access to the club’s practice areas, including the driving range, which has eight undercover bays allowing you to practise in comfort, no matter the weather.

Tee times begin from 2pm, following a light lunch.

After an afternoon on the course, dinner and drinks will be served in the Clubhouse.

To help stabilise the energy market, Ofgem, the body that regulates energy in the UK, has decided to review the energy price cap every three months, instead of six months. 

Ofgem has said that this move should help to minimise the number of suppliers going bust, after dozens have failed in the past couple of years.

But with energy bills soaring, understanding what’s going on in the energy market – and how that affects your payments – has never been more important.

Read on to find more about what the price cap is, why energy prices have gone up, and how your gas and electricity bills might be affected. 

Why is energy getting so expensive?

Although the price of energy is one of the hottest topics around, prices have been creeping up for months.

Energy prices have soared in the UK and globally for a number of reasons. Demand for energy plummeted during the pandemic. But, as we returned to the new normal, demand has rocketed – not only in the UK, but around the world.

Russia’s invasion of Ukraine has also worsened energy prices considerably. 

While the UK isn’t massively dependent on Russia for natural gas, Europe used to import 40% of its gas from Russia and 29% of its oil from Russia.

What is the energy price cap?

The price cap sets the maximum amount that energy companies are allowed to charge households for each unit of energy they use (the kilowatt hour or kWh on your bills). It also limits the standing charge, which is the standard fee you pay for being connected to the energy grid.

So, the cap is the maximum price per kilowatt hour (kWH) of energy, plus standing charges, that providers can charge you for gas and electricity.

In her first week on the job, new prime minister, Liz Truss has fixed the energy price cap at £2,500 a year for a typical home for two years.

This cap will come into place on 1 October and is expected to save the average household £1,000 a year. 

How might the energy price rise affect me?

The most important thing to remember is that the amount you’ll actually pay depends on the amount of energy you use. 

If you use more energy, you will pay more, use less and you’ll pay less.

You won’t be affected by the price cap if you are on a fixed tariff and your usage hasn’t changed dramatically, or you are on a standard variable green tariff, which Ofgem has not included in the cap.

If your payments are rising, your energy company must tell you before any increase is made. They should also explain why this is happening.

An increase may be due to the higher price cap, but it could also be due to estimates of your energy consumption by the supplier. If you think you’re overpaying, you can challenge these with meter readings.

If you’re on a fixed tariff, your unit rates and standard charge won’t change for the duration of your contract. However, your payments can change if your consumption increases or isn’t in line with the estimates provided when you first signed up with your supplier.

Don’t assume that what you’re being charged is correct

Even if your usage is in line with what’s expected, mistakes can and do happen. This could be due to a variety of reasons, including computer errors or providers simply making incorrect estimates of energy consumption.

At Blue Wealth, we’ve heard from several people who have received bills with estimate readings that have proved to be far more than the energy that’s actually used. 

If you receive an estimated bill from your energy company, it’s wise to check your meter readings for your actual use and share these with your supplier before you pay the bill.

In light of the new price cap, officials estimate that the annual saving is likely to range from an average £650 for a well-insulated purpose-built flat – where typical bills will be cut from an expected £2,400 to £1,750 – to £1,400 for a detached home – where the cost will fall from an expected £3,800 to £2,650.

5 ways to reduce your energy bill

1. Look for ways to use less energy

Small changes to energy habits can help reduce bills, such as taking quicker showers and hanging clothes to dry instead of using a tumble dryer. Washing your clothes on a 30-degree cycle instead of higher temperatures can also make a difference to your energy usage.

2. Switch to more efficient forms of energy 

Look for ways to use less energy where possible. For example, avoid energy waste by turning off lights when you leave a room and use more energy-efficient LED bulbs. 

The chart below is a useful measure of where you may find it possible to make savings through changing your usage habits.

Source: Energy Saving Trust

3. Pay by direct debit 

Prepaid meters charge customers a lot more for electricity, so consider moving to a direct debit option, which could help reduce your tariff costs. 

4. Use a smart meter 

Smart meters help you monitor your energy usage and its corresponding costs in real time. This may allow you to see where your biggest spending happens and adjust how you use energy in your home, which can help to keep your bills low.

5. Check for any competitive fixed-term deals still available

If it’s been a long time since you changed your tariff, or you’re on the default standard or variable tariff, you’re probably paying more for your energy. Check comparison sites such as uswitch.com to find a competitive fixed-term tariff that can fix the amount you pay for up to two years.

What is the government doing to help?

On top of Liz Truss fixing the energy price cap at £2,500, all UK households will be given a one-off £400 discount on their fuel bills from October. This will take the form of monthly payments over six months from October to March 2023.

There’s no need to take any action – payments will be applied to your bills by your electricity supplier. However, if you haven’t received the first instalment by the end of October 2022, you should get in touch with your energy supplier.

Meanwhile, £650 will be paid to more than 8 million low-income households who receive benefits or tax credits. And further payments of £300 will go to pensioner households and £150 to disabled people.

Get in touch

If you’re concerned about the rising cost of living and how this might affect your current and long-term financial plan, please get in touch. Email hello@bluewealth.co.uk or call us on 0117 332 0230.

Please note:

The content of this newsletter is offered only for general informational and educational purposes. It is not offered as and does not constitute financial advice.

As a parent, it is important to understand what expenses students face, how they will repay student loans in the future, and how you could offer support.

If your child will be going to university this year or is planning to further their education in the future, you undoubtedly feel proud. However, you may also worry about what it means for your child financially.

As a parent, it is important to understand what expenses students face, how they will repay student loans in the future, and how you could offer support. This could put your mind at ease and mean you could take steps that will allow your child to focus on their studies.

In this guide, read more about:

• The cost of going to university, including tuition fees and living costs
• How student loans work
• How students can fund postgraduate education
• What to consider if you want to make your child’s education part of your financial plan
• And more…

Download your copy of “The parents’ guide to paying for university and student loans” to learn more.

If you’d like to talk about how you can make education part of your financial plan and support your child while they study, please contact us.

While dealing with the loss of a loved one, organising their affairs can be overwhelming.

You may also need to make decisions and provide information to authorities and services. This guide is designed to help you understand what action you may need to take and what you need to consider, from whether Inheritance Tax is due to how the probate process works.

This guide can help you answer questions like:

• What steps need to be taken immediately after a death?
• How does the probate process work?
• What happens if the deceased hasn’t written a will?
• What steps do you need to take if you’re an executor of a will?
• Do you need to consider Inheritance Tax?
• And more…

Download “Your guide to organising affairs after a loved one passes away” to learn more.

If you have questions about the guide, how to deal with the affairs of a loved one, or the steps you can take to make managing your affairs easier, please contact us.

Here, we share some of the highlights of what’s been happening in and around Blue Wealth.

This month, congratulations go to Mason Harrison who has been certified as a Chartered financial planner. Also, following the poll we put to you about which charity we should support, you have spoken, and the winner is clear…

Read on to find out which worthy cause got your vote and hear what Mason has to say about his latest professional achievement.

Mason Harrison is now a certified Chartered financial planner

Following on from our chat with Mason in June, 2022, when we learned about his promotion to financial planner, Mason has now achieved his Chartered financial planner certification from the Chartered Insurance Institute.

Here, Mason tells us more about what was involved…

How long have you been working towards becoming a Chartered financial planner?

I started a training course with an external provider – NextGen Planners – in January 2019. That was the first time I had enrolled in any financial planning exams, although I joined Blue Wealth five months prior to this.

The training course ran to November 2020, by which point I had passed my diploma in regulated financial planning.

I jumped straight into my Chartered exams and began taking them as soon as possible. I had my last result published on 22 July.

All in all, the journey from zero to Chartered took three and a half years.

What did the process involve?

The training provider, NextGen, have been brilliant. They provided support throughout both my diploma and Chartered-level exams.

They delivered weekly webinars, practice exams, and a constant stream of hints and tips to help guide me through each exam.

Also, about a fortnight before each exam, they held a two-day intensive webinar as a final push towards the exam. This focused on making sure we were revising the right topics that were likely to come up and giving pointers on frequently asked questions.

A lot of the work also revolved around technique for these exams, which can be equally as important as the knowledge needed.

Of course, all of this happened alongside my own revision, which I did in the office after work for months on end – I’m glad that’s finished now!

What will this mean for you professionally?

This is something I have been working towards for so long, it felt miles away at some points.

The excitement of passing one exam quickly meant my attentions were turned to the next one, so to achieve the end goal has been brilliant.

It has also coupled with my role developing into a financial planner from April and having the Chartered badge has given me a massive boost in terms of the knowledge and skills I’ve developed while studying.

At Blue Wealth we look for all advisers to be Chartered to coincide with our chartered firm status, so it was also great to be in keeping with this.

Are you taking a break now, or are you already pursuing a fresh challenge?

Study-wise, a bit of break definitely!

The goal now is purely towards financial planning and finally being able to do the role I have been working towards for so long.

I have been itching to get out and see clients for a long time, so it’s great to finally be at that stage. I’ve loved speaking with new clients and it’s safe to say it was all worth it.

The hard work definitely starts now and I’m looking forward to helping lots of people take control of their financial future.

Is there anything else you wish to add?

I’m really happy that I managed to get through each exam without experiencing a single fail.

This achievement is largely due to the support from my colleagues at Blue Wealth and the training provider NextGen, who Rob (Bowers) and Dan (Britton) decided would be a great route for me back in 2019.

The guidance they have given me filled me with a massive amount of confidence going into each exam, which only grew as time went on!

With your help, Blue Wealth will support homeless charity BillyChip

From the shortlist of eight local charities that we thought deserved our support, you voted resoundingly in support of BillyChip.

About BillyChip

Set up in 2018, BillyChip works to continue the legacy of Billy Abernethy-Hope, a 20-year-old ambulance driver from Bristol, who was the inspiration and idea behind the BillyChip.

After helping support the homeless one Christmas, Billy felt disheartened at how little support the public gave to local homeless people. Although many people donate to charity on a regular basis, Billy was surprised by how few donations were given directly to homeless people, living rough on our streets.

Billy put this down to the fact that people can feel awkward engaging with a homeless person, even when offering a donation of food or a drink.

The BillyChip is a small act of kindness that helps break down barriers

The BillyChip allows people to engage and offer help to a homeless person.

The small act of kindness of giving a homeless person a BillyChip not only helps the person in need, but also helps to build better communities within our towns and cities.

The BillyChip can be given to those sleeping rough and/or homeless to allow them to purchase food and drink from takeaways and coffee shops. This helps people give money directly to those who need it, without fear of how it’s being spent.

How it works

We will make a £50 donation to BillyChip for every initial meeting we have that comes from a client recommendation.

However the meeting takes place – in person or remotely through video call – we’ll donate.

So, if you recommend your friends, family or colleagues to us and we meet with them, we’ll make a £50 donation on your behalf.

There’s still time to join us at the Bristol and Clifton Golf Club

As you may already know, we are holding a client golf day at Bristol and Clifton Golf Club on 22 September.

It’s not too late to add your name to the list of attendees and it would be great to see you.

Arrival starts from 12.30pm, when you can take advantage of full access to the club’s practice areas, including the driving range, which has eight undercover bays allowing you to practise in comfort, no matter the weather.

Tee times begin from 2pm onwards, after a light lunch.

Following a pleasant afternoon on the course, dinner and drinks will be served in the Clubhouse.

According to data from the Financial Conduct Authority (FCA), 15.6 million UK adults have investible assets of £10,000 or more. Of these, 37% hold their assets entirely in cash, and a further 18% hold more than 75% in cash.

With current stock market uncertainties caused by the war in Ukraine and the economic turbulence of rising inflation and interest rates, it’s easy to see how some investors may feel safer to leave their money in the bank.

Retreating to cash might provide some comfort in turbulent times

Since cash is easily accessible, it’s great for your emergency fund. However, while retreating to cash might provide some comfort – especially during turbulent times – holding on to too much cash could actually be bad for your long-term financial health.

3 reasons not to hold too much cash in the bank

Here are three reasons to avoid holding too much of your money as cash.

1. Other assets can provide greater long-term returns

Numerous studies have proved that, over time, returns on assets such as equities far outweigh those you see from cash.

The 2019 Barclays Equity Gilt Study compared the performance of £100 invested in cash, bonds, and equities between 1899 and 2018. The report revealed that:

• £100 invested in cash in 1899 was worth just over £20,000 in 2018
• £100 invested in gilts in 1899 was worth close to £42,000 in 2018
• £100 invested in equities in 1899 was worth around £2.7 million in 2018.

While few of us are likely to want to invest for more than a century, the same study showed that even with a shorter investment term, equities will still outperform cash.

Also, as long as the time horizon is long enough, history shows that the timing of a new investment is relatively unimportant when it comes to enjoying long-term returns.

The tables below compare the returns of investing in the UK stock market (as represented by the FTSE All Share Index) with dividends re-invested and the returns of investing in cash deposits with interest re-invested.

Since the beginning of 2000 to 31 March 2022 (just over 21 years)

Since the beginning of 2010 to 31 March 2022 (just over 11 years)

Source: FE fundinfo – data as at 31 March 2022.

Bear in mind, the value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

The returns in the two tables above are very different. This is because the longer, first period includes the two bear markets. Following the “dotcom bust” in 2000, UK equities fell by 48% between September 2000 and March 2003.

Similarly, UK equities fell by 46% between October 2007 and March 2009 during the 2008 financial crisis. However, despite these two significant declines, equities have still outperformed cash deposits by more than 100% since the beginning of the century.

Of course, both periods also include the 35% fall in UK equities between January and March 2000 as the Covid pandemic took hold.

2. Savings rates struggle to beat inflation

According to data from Moneyfacts, the best rate of interest you can currently find from an easy access savings account is 1.67%. With inflation at 10.1%, if your money is in an instant access account, returns are not keeping up with rises in the cost of living.

Many accounts pay even less.

Even if you somehow manage to find a fixed-rate bond or similar limited access account that pays a higher rate, there’s slim chance that it will keep up with inflation. The problem with this is that if the returns you get on your savings are lower than the inflation rate, your money is losing value in real terms.

This is another excellent reason not to hold too much cash.

Read more: What is inflation and what does it mean for you and your wealth?

3. You could be taxed on interest

While we recommend you keep an emergency fund in an easy access savings account so you always have available cash should you need it, avoid holding more than you need.

Generally, it’s wise to have between three and six months net income for a “rainy day” fund. With average monthly earnings in the UK around £2,000, that could mean having an emergency fund of £12,000 or more.

If you’d like to know more about the importance of maintaining a “rainy day” fund, watch this video from Mason on LinkedIn.

Cash savings are protected by the FSCS up to £85,000. If you hold more than this amount in any one account and the financial institution holding your funds fails, you could lose everything over this threshold amount.

Large cash savings can also attract tax on the interest you make. Your Personal Savings Allowance is based on the rate of Income Tax you pay.

Source: Gov.uk

If you are a basic-rate taxpayer, you’ll pay tax on interest over £1,000. For higher-rate taxpayers, the threshold is halved to £500.

Get in touch

If you’d like to talk to us about the balance of your assets, or you’re concerned about inflation affecting your cash savings, please get in touch. Email hello@bluewealth.co.uk or call us on 0117 332 0230.

Please note

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.