Author: Rob Bowers

April is Stress Awareness Month, which aims to raise awareness of the causes and potential coping strategies for feelings of stress. So, it’s an ideal time to get to grips with your anxieties about money.

Feeling overwhelmed by financial concerns and constantly worrying about money can be exhausting and it may affect your ability to enjoy life.

Whether you’re anxious about funding your retirement, or confused about how best to protect your wealth, taking practical steps to tackle your financial stress could boost your physical and mental health.

Read on to learn five simple ways to reduce your financial stress and start feeling happier.

1. Understand the causes of your financial stress

Identifying the triggers of your financial stress could be an important first step towards feeling calmer and more in control.

There might be many potential causes, such as worries about paying for later-life care or concerns about the performance of your investments if the market is volatile.

A lack of confidence and financial literacy could also be a factor. Indeed, the Financial Capability Survey has revealed that 39% of adults in the UK don’t feel confident managing their money.

To gain a clear picture of what’s causing your financial stress, you might find it helpful to write down your main concerns.

Talking to someone you trust, be that a family member, a friend, or a financial planner, could allow you to explore these concerns in more depth and prioritise which issues to tackle first.

One significant benefit of speaking to an impartial financial professional is that you won’t need to worry about the potential impact of your concerns on their wellbeing, as may be the case if you choose to speak to a family member.

A financial planner can provide a logical perspective based on their knowledge, experience, and the data you share with them.

For example, if you’re anxious about a short-term dip in the value of your investments, a financial planner could help you adopt a long-term view. They might also suggest opportunities for diversifying your portfolio to balance the level of risk you’re exposed to.

Once you have a clear understanding of what’s causing your financial stress, you can start taking action to reduce it.

2. Review your budget and create a financial plan

Understanding your financial situation by reviewing your budget and creating a plan for managing your money in the short-, medium-, and long-term, might help you feel more in control and reduce feelings of overwhelm.

You could start by looking at your income, expenditures, and debt. Are there any areas where you may be able to cut back on spending? Are you saving regularly? Reviewing your budget in this way might ensure that it aligns with your current circumstances and financial goals.

Additionally, creating a long-term financial plan could provide valuable guidance and reassurance. This in turn may reduce stress and allow you to focus on enjoying other areas of your life.

3. Build your emergency fund

Having to find money for an unexpected problem could be stressful. Conversely, building a contingency fund that you can fall back on may provide invaluable peace of mind.

Additionally, having an emergency fund might allow you to avoid or minimise expensive borrowing, such as using credit cards.

Experts suggest saving somewhere between three- and six-months’ expenses, although you may need more if you’re self-employed or your circumstances demand it.

Automating your savings can be a clever way to develop a regular and effortless saving habit. By setting up a recurring monthly transfer from your salary to your emergency fund, you could accumulate a nest egg to cover any unexpected costs that may arise.

4. Make sure you’re well protected

Putting sufficient protection in place to ensure that you and your family are taken care of if the worst happens could help to reduce your financial stress, both now and in the future.

Your emergency fund may cover short-term unexpected costs, but it might not be enough to provide a sustainable income if, for example, you become ill and unable to work.

On the other hand, financial protection tailored to your specific needs could help to pay for ongoing costs such as mortgage repayments, school fees, and other essential living costs.

The type and level of cover you need will depend on your unique circumstances. Life insurance, income protection, and critical illness cover could all provide valuable financial support during times of crisis.

Your insurance needs may also change over time, for example, if you move house or get married. So, it’s worth regularly reviewing your financial protection.

You might benefit from speaking to a financial planner about the options available and how to factor protection into your budget.

Read more: 3 important reasons to properly protect your financial plan

5. Seek professional financial advice

Whether you’re reviewing your budget or seeking out the best type of protection for your family, the choices available could be overwhelming – which may compound your financial stress.

Working with a financial planner can provide you with access to invaluable advice, information, and guidance.

What’s more, research by Royal London has shown that consulting a financial professional regularly might boost mental wellbeing and reduce stress.

Those surveyed said that working with a financial planner helped them feel more in control of their finances, less anxious about money, and more financially secure and stable.

Get in touch

If you’d like to create a long-term plan that helps you feel more in control of your finances, we can 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.

Blue Wealth Ltd is not responsible for the accuracy of the information contained within linked sites.

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

Note that life insurance plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.

In March, several of the Blue Wealth team are heading off for family holidays. Here, they share their plans, tell us about their dream holidays and more…

Nathan is jetting off to sunny Rhodes in May

Nathan is looking forward to spending a week with his family on the beautiful Greek island of Rhodes in May.

While he loves his role as Technical and Financial Planning Support Manager at Blue Wealth, Nathan is excited to spend some quality time with his wife and children away from the distractions of their busy day-to-day lives.

Now that his children have reached their teenage years, Nathan anticipates a peaceful flight reading a good thriller novel while his 18-year-old son and 13-year-old daughter keep themselves entertained with their phones and iPads.

However, Nathan’s family are rarely alone when they jet off abroad. They love large family holidays with parents, siblings, cousins, nieces and nephews. So, they’re usually a group of around 13, and Nathan wouldn’t have it any other way!

Every holiday Nathan’s family takes is different. They love all types of getaways, from relaxing beach trips to action-packed adventures. As long as they’re spending time together and creating memories, the Jones family is happy.

That’s not to say they don’t have a favourite holiday memory. All four 100% agree that their 2022 trip to Orlando, Florida was their best family holiday to date.

Visiting Disney World and Universal Studios was an incredible experience. And the trip was extra special as it was the first time the family ventured abroad after the Covid restrictions were lifted.

If Nathan won the lottery, he’d like to take his family somewhere they haven’t explored yet, and Asia is top of the list. In particular, Thailand, Cambodia, and Vietnam.

Happy holidays Nathan!

Sarah and Dan are taking their young family to picturesque Majorca

Sarah and Dan can’t wait to hit the beach and enjoy the sunshine in beautiful Portocolom in Majorca. They went as a family two years ago and have been itching to revisit.

While flying with an eight-year-old and a five-year-old isn’t always easy, luckily, Sarah and Dan’s children are happy to trade snacks and time watching their favourite programmes on their tablets for a little peace.

As soon as the family steps off the plane, relaxation is the order of the day.

From getting out and about to see the sights and experiencing the local restaurants, Sarah and her family enjoy taking a leisurely pace while they’re on holiday. If she gets the chance, Sarah enjoys losing herself in a crime novel while she soaks up the sun.

Sarah and Dan’s favourite family holiday was to Marbella in 2023. They rented a villa with friends – who have children of a similar age – just two doors down from some other friends lucky enough to live there.

This was a perfect arrangement as all the kids could play together, and all three families could easily meet up as a group as and when they wanted to.

If Sarah won the lottery, she’d take her family to a five-star hotel – which could be anywhere in the world – that offers plenty of activities to keep the children entertained.

But for now, Sarah and Dan are very excited to return to Portocolom with their family.

Join us for lunch and a round of golf on our annual golf day

Finally, we’d like to remind you about our annual golf day on Thursday 18 April at Bristol and Clifton Golf Club. A light buffet lunch will be served before play in the afternoon and it’s always a fantastic day out.

Please email hello@bluewealth.co.uk to register your interest.

In April 1974, a Swedish foursome took to the stage at the Eurovision Song Contest. Performing eighth on the night, ABBA introduced themselves to a global audience, romping to victory with their hit ‘Waterloo’.

In the intervening five decades ABBA – made up of Agnetha Fältskog, Anni-Frid Lyngstad, Björn Ulvaeus, and Benny Andersson – has become one of the world’s best-selling and most enduring artists.

To celebrate five decades of fantastic Swedish pop, this guide looks at what you can learn about managing your money from 10 iconic ABBA songs. From focusing on your long-term goals so you can have the “time of your life” to the importance of balancing risk when you “take a chance” on investing, you might be surprised at the lessons you could learn.

Download ‘10 things you can learn about your financial plan from these ABBA hits’ now to find out more about ABBA and what their catchy lyrics could teach you about managing your finances.

If you’d like to arrange a meeting with us to talk about your financial plan, please get in touch.

With one eye on a forthcoming general election, the chancellor has announced a Budget aimed at generating long-term growth, with “more investment, more jobs, better public services and lower taxes”.

While the headlines will inevitably focus on Jeremy Hunt’s cut in National Insurance contributions (NICs), many less headline-grabbing messages will affect millions of families and businesses.

Read on to find out who were the winners and losers from the 2024 Spring Budget.

Winners

Working people

The chancellor said that his Budget gave “much-needed help in challenging times”, adding “if we want to encourage hard work, we should let people keep as much of their own money as possible”.

Calling NICs a “penalty on work”, Hunt announced a cut in Class 1 NICs, from 10% to 8% from 6 April 2024. These cuts follow a similar reduction in the rate of NICs announced in the 2023 Autumn Statement.

The chancellor says that these cuts, in conjunction with the reductions announced in the 2023 Autumn Statement, would mean the average worker on £35,400 would benefit from a tax cut of more than £900 a year.

He also announced that, instead of falling from 9% to 8% as previously announced, Class 4 self-employed NICs would fall from 9% to 6% from 6 April 2024. This is in addition to the removal of the requirement to pay Class 2 NICs from the same date.

He added that 2 million self-employed people would benefit, with the average self-employed person earning £28,000 seeing a tax cut of around £650 a year.

The Treasury say that this means UK taxpayers face the lowest combined basic rate of Income Tax and NICs since the introduction of the modern structure of National Insurance in 1975.

Parents earning Child Benefit

The chancellor highlighted the “unfairness” in the current Child Benefit system that means a household with two parents each earning £49,000 a year will receive Child Benefit in full, while a household earning less overall but with one parent earning more than £50,000 will see some or all of the benefit withdrawn.

Consequently, he announced a plan to move the High Income Child Benefit Charge to a “household” system from April 2026.

In the interim, from April 2024, the High Income Child Benefit Charge threshold will rise from £50,000 to £60,000 while the top of the taper will rise to £80,000. This means that the full amount of Child Benefit will not be withdrawn until individuals earn £80,000 or more.

The government estimates that nearly 500,000 families will gain an average of £1,260 in 2024/25 as a result.

The hospitality industry and their customers

In a move designed for “backing the Great British pub”, the chancellor has extended the freeze on alcohol duty. The freeze was due to end in August 2024 but has been extended to February 2025, benefiting 38,000 pubs across the UK.

The Treasury says that this results in 2p less duty on an average pint of beer than if the planned increase had gone ahead.

This measure will cut costs for breweries, distilleries, restaurants, nightclubs, pubs, and bars.

Motorists

The chancellor argued that lots of families and sole traders depend on their cars and so wanted to continue supporting motorists.

Consequently, he maintained the temporary 5p cut in fuel duty and froze the duty for another 12 months.

Hunt said that this would save the average car driver £50 in 2024/25.

Small businesses

In a boost to small businesses, Hunt announced that, from 1 April 2024, the VAT threshold would increase from £85,000 to £90,000 – the first increase in seven years.

ISA and National Savings and Investments savers

To encourage investment in small British businesses, the chancellor announced his intention to launch a new “UK ISA”.

This will enable savers to invest an additional £5,000 in a tax-efficient wrapper, increasing the total ISA subscription limit to £25,000 – assuming these additional monies are invested exclusively in UK firms.

The government will consult on the details.

The chancellor also announced that National Savings & Investments (NS&I) will launch a British Savings Bonds product that will offer consumers a guaranteed interest rate, fixed for three years.

This new NS&I product will be brought on sale in early April 2024.

Creative industries

From film to theatre and music to art, UK creative excellence is unmatched.

To support the UK’s creative industries, the chancellor announced a further £1 billion package of additional tax relief over the next five years, to boost inward investment and attract production companies from around the world.

Hunt also confirmed £26.4 million of support for the globally renowned National Theatre.

Pensioners

The Spring Budget also committed to supporting pensioner incomes by maintaining the State Pension “triple lock”.

In 2024/25, the Treasury say that the full yearly amount of the basic State Pension will be £3,700 higher, in cash terms, than in 2010.

Sellers of second homes

Capital Gains Tax (CGT) is often due when an individual sells a second home – such as a buy-to-let property or holiday home.

In a move designed to increase the number of transactions, and consequently increase the revenue from the tax, the chancellor announced he would reduce the higher rate of property CGT from 28% to 24%.

The lower rate will remain at 18% for any gains that fall within an individual’s basic-rate band.

Losers

Vapers and smokers

In an attempt to discourage non-smokers from taking up vaping, and to increase revenue for the NHS, the chancellor announced a new duty on vaping.

The Treasury says this will raise £445 million in 2028/29.

There will also be a one-off tobacco duty increase of £2 per 100 cigarettes or 50 grams of tobacco from 1 October 2026 to maintain the current financial incentive to choose vaping over smoking. The government say this will raise a further £170 million in 2028/29.

Non-economy airline passengers

The chancellor announced that rates for individuals flying premium economy, business, and first class and for private jet passengers will increase by forecast Retail Prices Index (RPI) and will be further adjusted for recent high inflation to help maintain their real-terms value.

Some “non-doms”

In a move borrowed from Labour, the chancellor announced the abolition of the “remittance basis” of taxation for non-UK domiciled individuals (“non-doms”) and a replacement simpler residence-based regime.

Individuals who opt into the new regime will not pay UK tax on any foreign income and gains arising in their first four years of tax residence, provided they have been non-tax resident for the last 10 years.

This new regime will commence on 6 April 2025 and applies UK-wide – and transitional arrangements will apply.

The Treasury says that this measure will raise £2.7 billion in the year 2028/29.

Owners of holiday lets

The chancellor said that the current tax regime creates distortion, meaning there are not enough properties available for long-term rental.

Consequently, he intends to abolish the Furnished Holiday Lettings (FHL) tax regime from 6 April 2025, meaning short-term and long-term lets will be treated the same for tax purposes.

Anyone subject to fiscal drag

Freezing tax thresholds increases the amount of tax that individuals and businesses pay without nominal tax rates actually increasing. Called “fiscal drag”, this results in additional revenue to the government as more taxpayers are “dragged” into paying tax, or into paying tax at a higher rate.

Freezes in a range of thresholds mean that millions of individuals and businesses will face “fiscal drag” in the coming years.

For example, while the increase in the threshold at which small businesses and self-employed people have to register for VAT will be welcome to many businesses, the fact that the threshold had been frozen for seven years means that more businesses will likely have been forced to register for VAT than if the threshold had risen each year in line with the cost of living.

Similarly, freezes to the Income Tax Personal Allowance and thresholds mean more people will either start to pay tax, or pay more tax at a higher rate, than if these thresholds had risen in line with inflation.

Get in touch

If you have any questions about whether you are a winner or a loser from the Spring Budget, and how it will affect you and your finances, please get in touch.

All information is from the Spring Budget document published by HM Treasury.

The content of this Spring 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.

The 2024/25 tax year is just a month away, and chancellor Jeremy Hunt has delivered his 2024 Spring Budget, outlining the government’s plans for the next fiscal year and beyond.

With a general election looming – prime minister Rishi Sunak has said he will call it before the end of the year – the chancellor claimed that the government had met the prime minister’s three economic priorities laid out at the start of 2023, having:

• Halved inflation, down from highs of 11% last year to 4% in January 2024
• Kept debt falling in line with fiscal rules
• Grown the economy, fully 1.5 percentage points higher than expected.

Amid this backdrop, the chancellor called this a “Budget for long-term growth”, with goals to “deliver more jobs, better public services, and lower taxes”.

Read on for a summary of some of the key measures and announcements from this year’s Spring Budget, and what they might mean for you.

National Insurance will be reduced by another 2%

Arguably the biggest announcement from the chancellor’s Budget this year is that the main rate of Class 1 National Insurance contributions (NICs) will be reduced by a further 2%.

During the Autumn Statement in November 2023, the chancellor reduced the main National Insurance rate by two percentage points, falling from 12% to 10% from 6 January 2024.

Now, this main rate will fall a further two percentage points to 8%. Meanwhile, the main rate of Class 4 self-employed NICs will fall to 6%. Both changes will take place from 6 April 2024.

According to the OBR, an employed individual with average earnings of £35,400 will save £450 a year thanks to this cut, and £900 when including the previous cut in November 2023.

Furthermore, there will be no further requirement to pay Class 2 NICs from 6 April 2024, as outlined in the 2023 Autumn Statement.

However, offsetting these tax cuts is the news that the Income Tax Personal Allowance and tax bands will remain frozen until 2028.

As wage inflation increases, this could see many taxpayers pulled into a higher tax band over the next four years, an effect known as “fiscal drag”.

The High Income Child Benefit Charge will be reformed

Having been a contentious issue for some time, the chancellor confirmed reforms to the High Income Child Benefit Charge.

This tax taper effectively reduces the amount received from Child Benefit for those earning £50,000 or more. Those earning £60,000 or more must repay all Child Benefit or opt out from payments entirely.

Crucially, this rule only applies to one higher earner per household. So, a household with one person earning £55,000 and the other £10,000 would be affected by the charge, while two people each earning £49,000 would not be affected at all.

So, by April 2026, the government will introduce a household income charge, assessing both earners’ income against the threshold, rather than just an individual higher earner’s.

Furthermore, from 6 April 2024, the £50,000 threshold will be raised to £60,000, and the top taper to £80,000. According to the government, this will see half a million families gain an average of £1,260 in 2024/25.

The higher-rate Capital Gains Tax charge for residential property transactions will be reduced

To promote the housing market and encourage more property transactions, the chancellor announced a reduction in the higher rate of Capital Gains Tax (CGT) for gains on residential property, excluding main residences.

Under the current rules, the standard higher CGT rate is 20%, with an additional 8% charged on residential property transactions. This will be reduced from 28% to 24% from 6 April 2024, encouraging landlords and second-home owners to sell their properties, with the aim of increasing the housing supply for first-time buyers in particular.

The 18% charge for gains made in the lower rate band will remain unchanged.

On top of this, the chancellor also abolished the Furnished Holiday Lettings (FHL) tax regime, removing an incentive for landlords to offer short-term holiday lets rather than long-term residential lets, and Multiple Dwellings Relief, a bulk purchase relief in the Stamp Duty regime.

Changes to how and where pension funds are invested

As part of the chancellor’s goal to channel more capital into UK equity markets, the government is working alongside The Pensions Regulator (TPR) and Financial Conduct Authority (FCA) on the “Value for Money” pensions framework to “ensure better value from defined contribution (DC) pensions, by judging performance on overall returns, not cost”.

This looks to address where pension schemes prioritise short-term cost savings at the expense of long-term outcomes, as well as where savers may be prevented from receiving value because of a scheme’s current scale.

The FCA and TPR will have full regulatory powers to close schemes from new employer entrants or wind them up entirely if the schemes are “consistently offering poor outcomes for savers”.

The government will also seek to work with the FCA to increase UK equity allocations in DC pensions, asking pension funds to publicly disclose where this money is invested. These requirements will also extend to Local Government Pension Scheme funds.

Furthermore, the chancellor confirmed the government’s commitment to exploring a lifetime provider model for DC pensions, previously referred to as the “pot for life” in the 2023 Autumn Statement.

This would give pension savers the right to choose the pension scheme that their employer pays into, rather than being auto-enrolled into a scheme chosen by the employer.

Investments in UK-focused assets will be encouraged with the new “UK ISA”

As well as expanding pension investments into British businesses, the chancellor intends to create a new UK ISA, offering an additional tax-efficient allowance of £5,000 for investment in UK-focused assets. This is another move that aims to channel more investment into UK equities.

This will be on top of the existing ISA allowance, which remains at £20,000 for the 2024/25 tax year.

Other key changes

Fuel and alcohol duty remain frozen

Fuel duty will remain frozen for another 12 months instead of increasing in line with inflation, and the 5p cut to fuel duty, originally set to expire on 23 March, has been extended for a further 12 months. Government figures claim that this tax cut will save an average car driver £50 in 2024/25.

Meanwhile, the alcohol duty freeze will be extended until February 2025, benefiting 38,000 pubs across the UK.

Tax rises will bolster the government’s coffers

While this Budget has seen many tax cuts, the chancellor also announced measures that will see certain taxes increase.

Firstly, the government is abolishing the current tax system for UK non-doms, and replacing it with a “simpler and fairer” residence-based system.

From 6 April 2025, anyone who has been resident in the UK for more than four years will pay UK tax on any foreign income and gains, provided they have been non-tax resident for the last 10 years. In 2028/29, this will raise £2.7 billion. There will be transitional arrangements for those who have already benefited from the previous system.

There will also be a new levy on vaping products from October 2026, raising £445 million in 2028/29. Meanwhile, to encourage vaping over smoking, tobacco duty will also increase in October 2026, raising a further £170 million in 2028/29.

Household support fund extended

There will be an extra £500 million to extend the Household Support Fund in England from April to September 2024. This fund provides support with essentials such as food and utilities to vulnerable households.

Full business expensing extended, and increased to VAT thresholds

After initially making full business expensing permanent in November 2023, the chancellor announced plans to extend this to leased assets, when fiscal conditions allow for it. Draft legislation is to follow.

Furthermore, the chancellor increased the VAT registration threshold for small businesses from £85,000 to £90,000, and the deregistration threshold from £83,000 to £88,000 from 1 April. These thresholds are frozen at these levels.

Get in touch

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

All information is from the Spring Budget documents on this page.

The content of this Spring 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.

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

Blue Wealth has been shortlisted for a prestigious industry award!

We are delighted and enormously proud to announce that Blue Wealth has been nominated for Adviser Firm of the Year (South West and Wales) in the prestigious Professional Adviser annual awards.

Now in their 19th year, these awards recognise the best financial firms and product providers in the UK, based on their successes and achievements over the last 12 months.

As a team, we’re committed to delivering consistently excellent advice and service that helps you achieve your financial goals – being shortlisted for this award is a sign that we’re doing something right!

Far from resting on our laurels, we want to grow and expand our offer so that we can help more people feel confident about their finances.

Rob and Dan can’t wait to attend the awards evening in March. And look out for more news on our awards journey in future team updates.

Join us for lunch and a round of golf on our annual golf day

We’ll be holding the Blue Wealth annual client golf day on Thursday 18 April at Bristol and Clifton Golf Club. A light buffet lunch will be served before play in the afternoon.

Come and join us – it would be great to see you.

Please email hello@bluewealth.co.uk to register your interest.

Adrian Thorley – diary of a holiday dog sit

Cooper’s mum comes to stay

Our dog, Cooper, had his mum, Shannon, come to stay with us for a week in late January.

Cooper is 11 and “little mummy” is still going strong at 15. We call her “little mummy” as she weighs 9kg and Cooper is about 17kgs. This probably explains the emergency caesarean poor Shannon had to have when Cooper’s litter was born.

Shannon snuggles up for a snooze

We’ve remained in touch with Jenny and Dave, the breeders, since we had Benson from them in 2008. Benson was Shannon’s brother and, very sadly, we lost him to cancer at the age of six, so it’s lovely to know that his sister is still going strong.

When she had her litter in 2012, we had one of the pups – Cooper – and it was a delight to have Benson and Cooper together, though for nowhere near as long as we would have wished.

Cooper and Shannon enjoy a nap and a roast dinner together

Cooper is pretty ambivalent about other dogs.

He and Benson were great playing together but, since Benson has gone, Cooper has never been bothered about other dogs.

He makes an exception for Shannon – and they are still great together – although at 11 and 15 there is more sleeping going on than there is playing.

No other dog would get away with sharing his bed (or taking his place in mine).

Shannon is stone-deaf, not that anyone would have known as I was still talking to her.

She’s also showing signs of dementia, which needs careful management. She has to stay on her lead when she goes out now because she gets easily confused and can still run, despite her age.

Quite how she is still only 9kgs is a bit of a mystery – she eats just as much as Cooper as evidenced by the queue for roast chicken on Sunday evening.

Farewell Shannon, see you soon!

Shannon has gone home now, but Cooper will enjoy staying with her for a few days when we go away in April.

Thanks to the advances of modern medicine and decades of public health research into longevity, living until 100 is now a real possibility for many people.

By adopting a healthy lifestyle that includes eating a balanced diet, keeping physically active, and getting enough sleep, you could boost your chances of living to a great age.

In fact, despite recent falls in life expectancy – due in large part to the coronavirus pandemic – new data published by A J Bell reveals that the number of centenarians in England doubled to more than 15,000 between 2002 and 2022.

While the prospect of a longer life might be enticing, it could affect your financial plans both now and in the future. So, read on to discover how to prepare financially for a 100-year life.

1. Factor your life expectancy into your retirement plans

According to research published by Canada Life, many people aged 50 and over underestimate how long they’ll live. This could potentially lead to a gap between retirement reality and expectations.

And yet, with the number of 100-year-olds on the rise, preparing financially for a lengthy retirement could become increasingly necessary.

The below chart from the Office for National Statistics (ONS) shows the number of UK centenarians each year between 1921 and 2021. The sharp rise in the past 50 years is plain to see.

Source: ONS

If you’re fortunate enough to reach the age of 100, research published by MoneyAge suggests you might need an extra £240,000 in your pension pot – compared to a 65-year-old man living to their current average life expectancy of 84 years old – to achieve a comfortable retirement.

Of course, how much retirement income you’ll need will also depend on how you plan to spend your time.

But underestimating your life expectancy, or failing to factor it into your retirement plans altogether, could put you at risk of not saving enough to fund the lifestyle you want.

2. Consider how your retirement income needs may change over time

Your income needs probably won’t remain static throughout your retirement. So, factoring in a degree of fluctuation in your spending could help you prepare financially for a longer life.

It might be helpful to think about your spending in three stages that form a “retirement smile”:

• Active years – you might spend more during the early years of your retirement when you live out the big plans you’ve been dreaming about, such as travelling or renovating your house.
• Middle years – after the initial rush to make the most of your newfound freedom, you may begin to slow down and spend less. This could be a good opportunity to save.
• Later years – as you get older, your expenditure may rise to cover medical and care costs. According to Age UK, in 2023 it cost around £800 a week on average to live in a care home and £1,078 a week for a place in a nursing home.

A financial planner can use cashflow modelling to help you factor in the effect of the retirement smile when making your long-term financial plans.

3. Continue working for longer to boost your savings

Delaying your retirement and working for a few more years could allow you to continue growing your savings, including saving tax-efficiently into your pension. If you have a workplace pension, you’ll also benefit from ongoing employer contributions.

Indeed, working later in life is becoming more common. According to the Guardian, British workers are increasingly likely to work into their 70s.

If you do decide to delay your retirement, you might choose to leave your pension untouched for longer, giving it more potential to grow. Over time, the impact of compounding – earning interest on previous interest accrued – could have a powerful impact on the size of your pension pot.

The Lifetime Allowance

The removal of the Lifetime Allowance (LTA) charge, on 6 April 2023, means that you’ll no longer incur an additional tax charge if you exceed the previous LTA amount of £1,073,100.

So, if you previously stopped making pension contributions because you were nearing the LTA, it might be worth considering resuming payments.

Remember, though, that you’ll only be able to make contributions within your Annual Allowance – £60,000 to £10,000 (2023/24) – without facing an additional tax charge. Your Annual Allowance may be lower if your income exceeds certain thresholds.

Also, you might want to consult a financial planner to help you understand how much you can withdraw from your pension without incurring a heavy tax charge.

The Money Purchase Allowance

It’s important to note that if you do start making flexible withdrawals from your pension, this could trigger the Money Purchase Annual Allowance, which reduces your Annual Allowance from £60,000 to £10,000 (2023/24).

If you continue working for longer you could delay dipping into your pension pot and continue making tax-efficient contributions up to your full allowance.

4. Delay taking your State Pension

You don’t automatically receive your State Pension, you must claim it. If you don’t, it will automatically be deferred.

The benefit of delaying taking your State Pension is that you could receive higher payments when you do decide to claim it.

For example, if you reach State Pension Age after 6 April 2016, your payments increase by 1% for every nine weeks you defer. So, if you receive the full State Pension of £203.85 a week (2023/24), by deferring for 52 weeks, you’d receive an extra £11.82 a week or £614.64 a year.

5. Create a financial plan for drawing a tax-efficient and sustainable income

Having a financial plan is crucial when you enter decumulation – the process of drawing on your accumulated assets during retirement – and start to spend your wealth.

After spending years building your pensions, ISAs and other savings and investments, how you draw on your accumulated assets during your retirement requires careful consideration to ensure that your wealth lasts you for a 100-year life or longer.

A financial planner can help you structure a sustainable income by making the most of available tax allowances and exemptions, including:

• Income Tax allowances
• The Dividend Allowance
• Personal Savings Allowance
• ISA allowance
• Capital Gains Tax allowance

If you’re a couple, planning together and combining your allowances could help you to maximise your tax-free income.

6. Ensure your wealth is passed on tax-efficiently to loved ones

After working hard to accumulate and decumulate your wealth tax-efficiently over your lifetime, it makes sense to put an estate plan in place that ensures your loved ones receive as much of your wealth as possible after you’re gone.

If you haven’t planned how to pass on your wealth, your beneficiaries may have to pay more tax on their inheritance than they need to.

Inheritance Tax (IHT) is charged at 40% for estates worth more than £325,000 (2023/24). If you choose to pass on your main residence to direct descendants (children or grandchildren), you could benefit from an additional allowance of £175,000.

So, you could potentially pass on up to £500,000 without your beneficiaries needing to pay IHT, or up to £1 million if you and your civil partner or spouse combine your individual allowances.

However, IHT rules can be complex, so you might benefit from receiving professional financial advice.

7. Seek financial advice to help you plan for a 100-year retirement

Living longer means planning further ahead, which can be complicated.

A financial planner can use cashflow modelling to help you understand how much money you need to cover a lengthy retirement – including factoring in inflation, life expectancy, and fluctuations in your expenditure over time.

Get in touch

If you’d like help planning your long-term finances, 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.

Blue Wealth Ltd is not responsible for the accuracy of the information contained within linked sites.

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

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

Workplace pensions are regulated by The Pension Regulator.

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.

The Financial Conduct Authority does not regulate estate planning, cashflow planning or tax planning.

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

This Christmas, Naomi flew to the US to get married while Rob surprised his children with a trip to Lapland to meet Santa Claus.

Rob took his children on a magical Christmas trip

Quite probably winning him a top-rated Dad of the Year award, Rob Bowers organised the best Christmas trip ever for his two children.

Aged nine and six, Jasper and Piper discovered that they were going to Lapland to visit Santa just 20 minutes before arriving at the airport – though they were given a small clue in the shape of an “elf on the shelf” when they woke up that morning.

Visiting in the week leading up to Christmas Day, Santa was busy preparing for his very important deliveries, but they managed to schedule a meeting with both the big man himself and Mrs Claus, too. But Santa’s elves stole the show and were “absolutely fantastic from start to finish”.

Rudolph and his friends were also busy keeping to a rigorous training schedule for their crucial annual tour, but the Bowers did enjoy a sleigh ride through the snow.

And the snow fun didn’t stop there – they also had a speedy husky ride, an even faster jaunt on snow mobiles, and plenty of tobogganing, too.

The Bowers were also lucky enough to see the Northern Lights. Reliable sources said it was the best display seen for a couple of years. With specific conditions required for aurora borealis to happen, this was something even Rob couldn’t have planned for.

Highlight of the trip? For Jasper and Piper, it was finding Santa hiding out in a winter cabin in the woods on the last day. For Rob and his wife, it was seeing their children’s faces light up when discovering Santa, and the Northern Lights.

If you’re interested in visiting Lapland, Rob organised the family holiday through Canterbury Travel, who specialise in arranging holidays, short trips, and Arctic Santa adventures.

To find out more, please get in touch and Rob will be happy to share his experience and pass on any info you need. Please email hello@bluewealth.co.uk or call us on 0117 332 0230.

Naomi and Saul tied the knot

You may recall reading about Naomi’s engagement back in the autumn. At the time, she thought that it may take a while to organise a wedding in the US.

In fact, she fully expected her engagement to last up to a year while she sorted everything out. Turns out, Naomi can organise a state-side wedding faster than she imagined!

Back in the UK, she’s here to share her wedding story…

“We got married in San Diego, at the registry office in Santee.

“It was a small, fairly relaxed event with some of Saul’s family. Unfortunately, my family couldn’t make it due to short notice and the long-distance, but my parent’s joined us on a video call.”

“The weather was lovely. Although it was forecast to rain, it ended up being bright and sunny. There was a thunderstorm later in the day, but we were lucky enough to miss that.

“Later in the year, we’re planning to have a bigger celebration with family and friends, giving everyone enough time to arrange to travel from other countries.

“Although we don’t have a honeymoon planned, we are going away in May – it’ll be our first holiday not in the UK or US – so we’re looking forward to that.

“With our marriage official, before Saul can move over here, we need to go through the visa application process. I’m just hoping it won’t take too long!”

When was the last time you discussed your finances?

Talking about money and our long-term financial plans are often seen as a taboo subject. In fact, according to research published in UK Adviser, 57% of high net worth Brits don’t feel comfortable talking about money with their families.

Yet breaking down this barrier could help you and those who are important to you make better money decisions.

Some of the money conversations you should be prepared to have include a:

• Sharing and caring “what’s mine is yours” declaration of love and commitment
• Difficult but important “I can’t afford to keep bailing you out” conversation
• Frank “what should I do with your finances if you’re not capable?” talk.

If any of these are conversations you’d like to be prepared to have with your loved ones, read on.

1. Talk honestly about the current state of your finances

Before becoming financially entwined with anyone else, it’s important to know all the facts. So, If you currently lead separate financial lives, carve out some time to discuss the current state of your finances.

Certain circumstance may make such conversations uncomfortable, but it’s important to be open and honest about your current situation. In particular, be sure to tell your partner about any debts or loans you have, your credit history, spending habits, and personal money goals.

Don’t try to whitewash it. Share the good, the bad, and the ugly. This will help ensure that you’re both primed to manage your shared finances effectively.

This initial conversation is crucial. And it’s equally important to keep an open dialogue and continue to communicate about money and financial decisions on a regular basis. Doing so could help to prevent issues arising and, hopefully, avoid either of you experiencing a nasty surprise down the line.

Understanding each other’s financial situation is particularly vital if you’re intending to make a joint financial commitment, such as opening a joint account or taking out a mortgage.

2. Face up to your own relationship with money

Are you super careful about how and when you part with your money or do you tend to spend without much thought?

Either way, it’s important to think about your own relationship with money. Being honest about your own approach can help form the foundations of a good relationship with your partner – and could lead to a healthier bank balance.

Whether you’re a spender, a saver, or land somewhere in the middle, make sure you own up to your attitude to finances.

Should you find you and your partner have opposite attitudes, this needn’t be a deal breaker and certainly shouldn’t prevent you from “getting into bed” financially.

In fact, two opposing approaches could bring some financial balance to your relationship. If one of you is a spender and the other a saver, you may find advantages in sharing saving habits and smart spending tactics.

3. Own up in the “how much do you earn?” conversation

Debt isn’t the only financial area that you may instinctively prefer to keep private. How much you earn is also something you may be wary of sharing.

Yet being secretive, or even lying, about what you earn will only bring problems later on, and doesn’t bode well when you’re planning your financial future together.

Whichever way you try and smudge things, if you fabricate what you really earn, you’re building a relationship on shaky ground.

Long-term relationships and money are integral to one another and, if you’re going to form a successful union, trust is paramount.

4. Pull on your kid gloves for the sensitive “future you” conversation with ageing parents

Talking to ageing parents about their finances is among the most sensitive money conversations you may need to have.

It’s crucial that you handle things with kid gloves, and be highly sensitive to your parents’ feelings.

Maybe broach the topic over something topical, such as an ailing family friend or the current economic climate.

Another possibility is to share something about your own financial situation – maybe that you’re working with a financial planner, for example. This can demonstrate that you’re thinking about and preparing for the future, helping to make it a more inclusive conversation.

Frankly, it’s never going to be easy for you or your parents to talk about their mortality, potential need for long-term care talk or failing mental capacity to handle their own affairs.

But tackle the subject carefully and you’ll most likely find these sensitive conversations could help other family members to think ahead too.

You can’t possibly know what’s around the corner, but talking things through before eventualities overtake could go a long way to helping you – and your parents – feel that bit more prepared. Any you’ll likely all benefit from some extra reassurance and peace of mind.

5. Include your financial planner in conversations

Coming together and balancing different financial views and money goals can prove challenging.

No matter which financial relationship you’re talking about, bringing a financial planner into your conversation can help.

Your Blue Wealth financial planner can mediate key conversations between you and your spouse and family to make sure you are on the same page and help you create a positive vision for your future.

Get in touch

If you would like to discuss your finances as a family, 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.

Blue Wealth Ltd is not responsible for the accuracy of the information contained within linked sites.

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

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

Thank you for your positive feedback and reviews

We’d like to say a huge thank you to everyone who has taken the time to write about the service they have received from us this year.

At Blue Wealth, we’re constantly looking to improve the service we provide. We want to grow bigger and better so that we can help more people achieve their financial goals, whether that’s a dream retirement or the comfort and security of a first family home.

There are several ways we can grow the business, including recommendations, referrals, and positive reviews posted online – which is where you come in.

Leaving a review only takes five minutes and your feedback can help us attract new clients, grow the business, and expand the services we offer.

If you haven’t had a chance to leave a review yet, your support would be greatly appreciated.

Please click here to leave a review on Google.

Alternatively, our Charity Incentive is another way you could show your support. For every initial meeting we have that comes from a client recommendation, we make a £50 charitable donation.

Whether the meeting takes place in person or remotely, we’ll donate. There’s not even a requirement for them to become a client!

This year, our charity partner (who you helped us choose) is Mothers for Mothers – a brilliant charity offering maternal mental health and wellbeing support, advice, and information to women, birthing people, and their families.

Nathan successfully completed his 100 push-ups a day charity challenge

Remember reading about Nathan’s push-up challenge in our last update? Well, he is thrilled to have achieved his goal.

Having successfully completed 100 push-ups everyday throughout November, he helped Cancer Research UK raise a grand total of £1,220,303.

While the challenge is complete, Nathan has decided to keep up the good work and stay in shape by sustaining 100 push-ups a day for the foreseeable future. Though he may give himself weekends off!

Plus, he’s planning to mix things up and add some variety with squats and burpees. Now he’s started, there’s no stopping him.

Rob, Dan, Adrian, and Nathan went to Wales and attended a future-focused national conference

The annual Personal Finance Society conference focused on how advisers and planners could become truly diverse and inclusive.

Among a variety of fascinating seminars and keynote speakers, Dan and Rob particularly enjoyed hearing from Claire Williams of the F1 team. She talked about how she kept a high-performing team motivated against the big manufacturers, as well as the challenges she faced as the first female boss in modern times.

Second best highlight was a presentation on artificial intelligence (AI), which revealed how a brand new planning firm had harnessed the power of AI to help them to thrive with speed and define their strategy. Hearing their story made us think about the interesting opportunities AI may bring and help us to improve our efficiency in future.

On top of the fascinating learning helping us to keep an eye on developments, the conference was also a great opportunity to catch up with peers.

We invited some guests to watch the Bristol Bears

At the beginning of the month, we invited some guests to watch the Bristol Bears play against Gloucester Rugby.

It was a bitterly cold day, but we all wrapped up well and were delighted to see the Bears win, with a very respectable final score of 51-26.

Thanks to all those who came along, it was a great day.

Happy holidays

Over the Christmas period, we want to let the whole Blue Wealth team spend as much time as they can with their family, friends, and loved ones. This means that the physical office will close on 22 December and reopen on 2 January.

Emails will be monitored throughout the holidays and phone messages will be picked up between Christmas and new year, so please don’t hesitate to get in touch if you need our help.

Instead of sending Christmas cards this year, we’ll be donating to charity.

We wish you all a very happy Christmas and a healthy and prosperous new year.