Author: Rob Bowers

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

Thank you for your continued generosity in recommending us to your family, friends, and colleagues. It means that, once again, we’ve made more donations to BillyChip, helping to support the work they do in delivering kindness to rough sleepers and homeless people.

Naomi is on a roll and has passed another financial planning exam

Naomi Davidson is firing on all cylinders in 2023. In January, she passed her R03 exam, which tested her knowledge and understanding of personal taxation. Now, just three months later, she’s passed the R05 exam, testing her knowledge on everything to do with financial protection.

Naomi tells us more…

Taking this exam on the back of the R03 exam must have been a lot of work – how did you find the revision and study needed for the R05 compared to the earlier exam?

I found it a lot easier to go straight into the next exam, as I was used to studying regularly and had established a good routine. I also don’t like to procrastinate too much as I find it hard to pick things back up after a while.

I did have a couple of weeks’ break over Christmas and the new year, though, which was nice.

How did you celebrate your success?

I’m waiting to pass my final exam before I celebrate properly! But I was relieved to be able to relax at home afterwards.

How do you manage your time between work and study?

I would usually study on one of my weekend days, and then pick a couple of evenings after work to do some mini sessions.

Are you already plotting your next exam, or are you taking a well-earned break before cracking on?

I’ve got R06 booked for 25 April. This is a case study based exam which, by the time this is published, I’ll already be studying for.

How many exams do you still have to pass before you gain your Diploma in Regulated Financial Planning?

Just one to go, which is the final written exam and all booked in.

There are six modules to the diploma, but I did the R04 exam a couple of years ago at my previous job, as it was about pensions and the one they felt was most important for me to have. So I sat that ahead of the others, which is why I ended up doing them slightly out of order.

Nathan celebrated his 10-year work anniversary

This month marked Nathan Jones’ 10th year with Blue Wealth. We acknowledged his achievement with a celebratory lunch and a voucher to his favourite restaurant – Pasture, a great steak house in the Bristol.

Here, Nathan shares more about how he came work with Rob and the changes he’s seen over the decade.

What were you doing before you joined Blue Wealth?

I was working in a compliance role for the network that Blue Wealth was authorised under. Part of my job was checking Rob’s files, which is how Rob and I knew each other. Rob reached out as he was starting to get to a stage where support was required.

Do you remember your interview and what was the role you were first hired for? 

Rob hired me as Blue Wealth was starting to grow. The business was at the very early stages, so me and Rob both took a gamble on each other. I’d like to think it has paid off!

How has your job changed over the last 10 years?

The business has gone from just Rob and I, to a business with three financial planners and a team providing support to the planners.

My initial role was to provide support to Rob as the sole planner, but as the business has grown, I now manage the whole support team as well as still providing technical and paraplanning support, too.

It has been quite a learning curve, from just having to manage myself and my own workflow, to now managing a team.

What’s been the most significant change during your time with Blue Wealth?

The growth of the business in general. We started in a small office just big enough for two of us and have moved premises twice more to accommodate the growing business.

For me, personally, it’s the changing mindset, from just managing myself to now managing a team.

What do you consider your biggest professional achievement, to date?

Three things stand out.

1. Helping grow the business to what it has become today and being an integral part of that team
2. Achieving Chartered Financial Planner status
3. Winning the Personal Finance Society “Paraplanner of the Year” award 2021/22.

What advice would you give to someone looking to work in the financial services industry?

I would always promote the financial planning industry to someone looking to get into it. There are a number of varied roles to suit differing traits in a person and it can be a very rewarding career.

What do you love most about your job?

The problem-solving element to our work. It’s satisfying to be given a complex piece of planning work for a client, which I have to analyse and provide solutions for.

The outcome of this work can also have a very positive impact on our client families’ lives, which is also very rewarding and the reason we do what we do!

Last month, Jeremy Hunt delivered his spring Budget. In it, he set out his plans to get the economy back on track and inflation under control.

His focus was on economic growth, and a large part of his plan – delivered at the very end of his hour-long speech – was to encourage people to return to work – including retirees.

To achieve this, he introduced several major changes to pension allowances.

The key pension changes announced in the spring Budget

• The pension Annual Allowance has increased from £40,000 to £60,000.
• The tapered Annual Allowance has been updated.
• The Money Purchase Annual Allowance (MPAA) has increased from £4,000 to £10,000.
• The Lifetime Allowance has been removed.

Here’s how these changes could affect you.

The Annual Allowance increase means you can now receive tax relief on up to £60,000 of pension contributions

In the 2023/24 tax year, the Annual Allowance for pension contributions will increase from £40,000 to £60,000. This means that you can now receive tax relief on pension contributions up to £60,000, or 100% of your annual earnings, whichever is lower.

You can continue to pay into your pension once you hit this limit, but you would no longer be able to do so in a tax-efficient way – any contributions over your Annual Allowance may incur a charge.

The “Annual Allowance charge” essentially claims back any tax relief you receive on contributions over this limit.

Tax relief can be an easy and valuable way of boosting your pension contributions, so it’s important that you make sure you’re not missing out.

While most basic-rate taxpayers benefit from “relief at source”. This requires pension providers to claim basic-rate tax relief of 20% on behalf of their customers and put it in their pensions.

However, if you’re a higher- or additional-rate taxpayer, you have to claim the additional 20% or 25% relief from HMRC. You will normally do this through your annual self-assessment – even if you’re employed.

The tapered Annual Allowance will be increased to £10,000

If you’re a high earner, you may have come across the Tapered Annual Allowance (TAA). The TAA gradually reduces the amount you can save into your pension fund each tax year, depending on your earnings.

This allowance has increased to £10,000 and “adjusted income” has also been increased to £260,000. This means that very high earners will be able to save £10,000 into a pension tax-efficiently rather than just £4,000.

If you think this change may affect you, please get in touch to discuss how you can make the most of the new, increased allowance.

The MPAA increase could benefit those taking a phased retirement

The MPAA has increased from just £4,000 to £10,000. This is good news if you are planning a phased retirement and wish to continue working and contributing to your pension pot.

This £6,000 increase is an important change, but triggering the MPAA could still lead to an unwelcome tax bill.

Generally, the MPAA won’t be triggered if:

• You only access your tax-free lump sum, usually 25%
• You buy an annuity
• You move your pension into a Flexi-Access Drawdown scheme but don’t withdraw an income
• Your pension is valued at less than £10,000.

The MPAA rules can be complex. If you’re unsure if your plans could cause you to trigger the MPAA, please get in touch.

Jeremy Hunt has removed the Lifetime Allowance and plans to abolish it entirely

The Lifetime Allowance (LTA) is the total amount you can accrue across your pension savings during your lifetime without facing a tax charge when you come to draw on your funds.

Previously set at £1,073,100, the chancellor announced that the LTA would be removed completely from 6 April 2023, with legislation to abolish the LTA set to come at some point in the future.

If your pension savings exceeded the LTA, you’d need to pay a tax charge on anything over the allowance, or “excess”.

However, Labour are opposing this change and said they will reverse this decision, so time will tell if this change remains in place.

In the meantime, where previously you would have faced a tax charge of 25% if you drew your pension as income, or 55% if taken as a lump sum, this change means that there is no cap on what your pension can be worth to enjoy the full tax benefits. So, now you can save without fear of breaching the limit and being hit with a painful tax bill.

The catch to watch out for

While the removal of the LTA is good news for high earners, there is a catch.

The maximum Pension Commencement Lump Sum (PCLS) will be retained at its current level of £268,275 (25% of the current LTA of £1,073,000) and will be frozen thereafter.

This means that, unless you have existing rights, it isn’t possible to amass a £2 million pension pot and take 25% as a tax-free lump sum.

These significant pension changes also present opportunities elsewhere in your financial plan

From a planning perspective, these changes could present a valuable opportunity for your estate planning.

If you have other assets that you can use for your retirement income, the pension rule changes could help you to save on any potential Inheritance Tax (IHT) liability. This is because pensions normally fall outside your estate for IHT purposes.

In addition, while these changes were announced with the aim of keeping older, more experienced people in work, you could now save really hard and accrue a larger pension pot quicker than you would have previously been allowed. Ultimately, this may mean that you can save for a shorter time frame and be able to afford to retire sooner.

Get in touch

If you are interested in discussing all the ways you could benefit from the new pension rules and how they may affect your life goals and 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.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The value of your investments (and any income from them) can go down as well as up, 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 tax implications of pension withdrawals will be based on your individual circumstances. Levels, bases of and reliefs from taxation may change in subsequent Finance Acts.

Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor.

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

Just six months ago, Kwasi Kwarteng stood up in the House of Commons and delivered his controversial “mini-Budget”.

The announcements ultimately brought down the short-lived Truss administration, with current chancellor, Jeremy Hunt, announcing a series of policy measures in November 2022 aimed at calming the markets.

Having taken “difficult decisions to deliver stability and sound money”, the chancellor has delivered the next part of his plan: “a Budget for growth”.

Read on to find out who were the winners and losers from the 2023 spring Budget.

Winners

Over-50s returning to work

In his speech, the chancellor said that “older people are the most skilled and experienced people we have”. So, he announced steps to make it easier for those over 50 to work for longer.

Firstly, the government announced an enhancement to the “midlife MOT” strategy – offering reviews to help individuals take stock of their finances and wellbeing to prepare for a more secure retirement.

Hunt also introduced a new kind of apprenticeship – called a “returnership” – aimed at over-50s who want to return to work.

The chancellor also announced some significant pension reforms aimed at encouraging more over-50s to remain in work, or to return to work. This brings us to…

Pension savers

The Lifetime Allowance (LTA) restricts the amount of tax-efficient pension savings an individual can accrue in their lifetime.

Having reached a peak in 2012, the LTA has been frozen at £1,073,100 since 2020.

To encourage people to remain in work, rather than retiring to avoid punitive tax charges for exceeding the lifetime limit, Hunt made the unexpected decision to abolish the LTA. The government will remove the LTA tax charge from April 2023, and completely abolish it in a future Finance Bill.

In addition, the Annual Allowance that restricts the amount that you can save tax-efficiently in any one year will also rise, from £40,000 to £60,000 in April 2023. You will also continue to be able to carry forward unused Annual Allowances from the three previous tax years.

Finally, many high earners are also affected by the Tapered Annual Allowance. The chancellor announced that the minimum Tapered Annual Allowance will increase from £4,000 to £10,000 from 6 April 2023.

In addition, the adjusted income threshold for the Tapered Annual Allowance will also be increased from £240,000 to £260,000 from the same date.

These are major steps that will allow pension savers to accumulate significantly more tax-efficient pension savings over their lifetime, and reduce some tax disincentives to work.

In addition, once an individual flexibly accesses their defined contribution pension savings, the total tax-relieved pension savings they can make each year is restricted to the level of the Money Purchase Annual Allowance (MPAA).

To support those who have left the labour market to return and supplement their income, or build up their retirement savings, the government will also increase the MPAA to £10,000 from April 2023.

Parents with young children

In what is likely to be a key battleground ahead of the next election, the chancellor announced an expansion of free childcare.

In an attempt to boost growth and get more people into work, working families will have access to 30 hours of free childcare each week for children aged between nine months and four years.

This is alongside boosts to subsidised childcare for parents on Universal Credit including upfront support.

Support will be phased in until every single eligible working parent of an under-five gets this support by September 2025.

Households with high energy bills

Back in November, Hunt announced that the government’s Energy Price Guarantee – an initiative of the Truss administration – would continue in its present guise until April 2023.

Under the guarantee, for six months from 1 October 2022, the average household has been paying energy bills equivalent to around £2,500 a year.

In April 2023, the guarantee was set to rise to £3,000, however the chancellor announced that the Energy Price Guarantee would be extended by a further three months.

This is designed to keep bills at £2,500 on average and the Treasury says this will save the average family £160 on top of the energy support measures already announced.

Drivers

With inflation remaining high, the chancellor argued that now is not the right time to uprate fuel duty with inflation, or increase the duty.

So, he announced a one-year extension of the 5p cut in fuel duty, saving the average driver £100 on top of the £100 saved so far since last year’s cut.

In addition, the chancellor announced an increase of £200 million to the “potholes fund”, taking the annual amount allocated to £700 million. The increase is expected to fix the equivalent of up to 4 million additional potholes across the country.

Swimmers

Hunt talked about the risk to swimming pools and other community facilities of rising costs.

In response, he announced a £63 million fund to keep public leisure centres and pools afloat.

Pubgoers

In a populist measure, Hunt announced his “Brexit pubs guarantee”.

While duty rates of all alcoholic products produced in, or imported into, the UK will increase in line with inflation, from 1 August, draught relief in pubs will be up to 11p lower than the relief for supermarkets. This is in addition to changes already due to come into effect in August.

As Hunt said: “British ale is warm but the duty on a pint is frozen.”

Losers

Businesses with larger profits

Back in 2021, when he was chancellor of the Exchequer, Rishi Sunak announced that Corporation Tax would rise in April 2023 for businesses making more than £250,000 in profits.

The Budget confirmed that this increase will proceed in April as planned – with around 10% of companies paying the top rate.

Companies with profits of less than £50,000 will continue to pay Corporation Tax at 19%.

However, businesses will be able to offset 100% of their UK investment in IT equipment, plant, and machinery against profits to reduce their tax bills. This is an effective cut to Corporation Tax of £9 billion a year, and the government aim to make the scheme permanent when it is responsible to do so.

Taxpayers

In his November statement, the chancellor reduced the Income Tax additional rate threshold from £150,000 to £125,140, increasing taxes for those on high incomes.

He also announced that Income tax, National Insurance, and Inheritance Tax (IHT) thresholds would be maintained at their current levels for a further two years, to April 2028.

Over the next five years, this is likely to see many people pay more Income Tax, as rising earnings push them into a higher tax bracket.

In addition, as house prices and asset values rise, it is likely that more and more estates will face an IHT bill over the next five years.

Savers

While it may now be possible to contribute more to your pension tax-efficiently, the subscription limits for tax-efficient ISAs were frozen at:

• £20,000 for an adult ISA
• £9,000 for a Junior ISA.

Smokers

In the Budget document, the Treasury confirmed that duty rates on all tobacco products will increase by RPI plus 2% from 6 pm on Budget day.

The rate on hand-rolling tobacco will increase by RPI plus 6% and the minimum excise tax will increase by RPI plus 3% this year.

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 and the government’s spring Budget bulletin.

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.

On Wednesday 15 March 2023, chancellor Jeremy Hunt presented his spring Budget.

Focusing on the government’s aims to halve inflation, reduce public debt, and boost economic growth, Hunt delivered his first official Budget alongside the latest economic and fiscal outlook from the Office for Budget Responsibility (OBR).

“Despite continuing global instability, the OBR report today that inflation in the UK will fall from 10.7% in the final quarter of last year to 2.9% by the end of 2023.”

Hunt opened his speech by admitting that, in the autumn, the government “took difficult decisions to deliver stability and sound money”.

Today, he promised “a budget for growth”.

“Not just growth from emerging out of a downturn. But long-term, sustainable, healthy growth that pays for our NHS and schools, finds good jobs for young people, provides a safety net for older people […] all whilst making our country one of the most prosperous in the world.”

Here are the key points of the spring Budget, and what they might mean for you.

Encouraging early retirees back into work

Jeremy Hunt’s primary focus with his spring Budget is to encourage Britain back to work. Around 7 million working aged adults are classed as “economically inactive”. Of these, more than a million people have taken early retirement.

To address this issue and to stop pension limits “from acting as a barrier to remaining in work”, the chancellor announced increases to pension allowances and abolished the Lifetime Allowance.

Pensions Lifetime Allowance abolished

Following conversations with senior doctors in the NHS and other experienced professionals, the pensions Lifetime Allowance (LTA) has been abolished.

The LTA is the maximum amount of tax-efficient pension savings you can accrue in your lifetime and includes the total value of your pensions, including your contributions, your employer’s contributions from your workplace pension, tax relief, and investment returns.

From April 2023, there will be no limit on the amount of total tax-efficient pension savings you can accrue.

Pensions Annual Allowance increased

The chancellor announced that the Annual Allowance will increase from £40,000 to £60,000 from 6 April 2023.

The Annual Allowance is the amount that you can save into your pension each tax year (6 April to 5 April) while still being able to benefit from tax relief. In the 2023/24 tax year, this will now be £60,000.

Money Purchase Annual Allowance to increase

Another useful incentive to encourage experienced people to return to work, the chancellor announced an increase to the Money Purchase Annual Allowance (MPAA).

The MPAA limits the amount of money you can save tax-efficiently into your pension after you have started drawing flexibly from your defined contribution pension savings.

The MPAA will increase from £4,000 to £10,000 from April 2023.

Tapered Annual Allowance to increase

From April 2023, the minimum Tapered Annual Allowance will increase from £4,000 to £10,000. The adjusted income threshold for the Tapered Annual Allowance will also be increased from £240,000 to £260,000 from 6 April 2023.

These announcements have increased the amount people can put aside for their pensions

In abolishing the LTA and increasing the Annual Allowance, MPAA, and Tapered Annual Allowance the government has increased the amount people can put aside for their pensions each year and save over their lifetime, all while minimising tax. The hope is that this will also dissuade people from retiring early.

Savers and investors see key subscription limits frozen

The annual subscription limit for adult ISAs will remain at £20,000.

Junior Individual Savings Accounts (JISA) and Child Trust Fund accounts will also remain static at £9,000.

No changes to planned Corporation Tax rises, but a new incentive to invest

From April 2023, Corporation Tax will increase from 19% to 25%. In acknowledgement of this move and to limit the impact of the increase, Hunt will allow businesses to offset 100% of investments in infrastructure and factory and machinery assets against profits for tax purposes.

The full force of this tax rise will hit those businesses with profits exceeding £250,000. Meanwhile, companies with profits of between £50,000 and £250,000 will get marginal relief.

For those with profits of less than £50,000 there is no change. They will continue to pay Corporation Tax at 19%.

Plan for business growth

As part of the Treasury’s plan to stimulate the UK’s sluggish economic growth and to spur regional activity outside London, up to 12 successful investment zones will receive funding of £80 million each over five years. This money can be directed towards tax relief for businesses, training, and infrastructure.

Eight places in England have been shortlisted to host investment zones. These are:

• East Midlands
• Greater Manchester
• Liverpool
• North East
• South Yorkshire
• Tees Valley
• West Midlands
• West Yorkshire

A further four zones will sit across Scotland, Wales and Northern Ireland.

Energy price guarantee extended

The energy price guarantee (EPG) that limits the typical annual bill to £2,500 has been extended.

The EPG had been due to change in April, with the ceiling increasing to £3,000 a year, but now the present level will remain for a further three months, until the end of June 2023. Hunt said: “This temporary change will bridge the gap and ease the pressure on families, while also helping to lower inflation too.”

The chancellor added, “This measure will save the average family a further £160 on top of the energy support measures already announced.”

Fuel duty

As petrol and diesel prices continue to be volatile, the chancellor announced continuing support for households and businesses by extending the temporary 5p fuel duty for a further 12 months.

“That saves the average driver £100 next year and around £200 since the 5p cut was introduced,” Jeremy Hunt said.

This one-year extension will cost £6 billion.

Draught Relief

In good news for beer drinkers, Hunt announced that he would “significantly increase the generosity of Draught Relief”. From 1 August, the duty on draught products in pubs will be up to 11p lower than the duty in supermarkets.

As the chancellor said, “British ale may be warm, but the duty on a pint is frozen.”

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 document and the government’s spring Budget bulletin.

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.

Despite the importance of having a will, you may be surprised to hear that many in the UK are yet to write one.

Indeed, according to a recent survey from MoneyAge, an alarming 51% of UK adults don’t have a will, and, of those who do have one, 43% haven’t updated their wishes since it was first written.

It’s of the utmost importance that you have an up-to-date will, as it remains one of the best ways to ensure that your estate is distributed according to your wishes when you die. Doing so can reduce your Inheritance Tax liability, diminish the chance of disputes, and even alleviate stress on your family.

Even if you already have a will, you should update it regularly to ensure that it remains appropriate for your current needs and that your assets are passed on to the right people.

So, read on to discover six important reasons it’s essential that you write, and regularly update, your will.

1. You can identify guardians for your children

While your will is a means of allocating your estate to your next of kin, it also allows you to express direct wishes about what will happen to your children after you die.

If your dependents are below the age of 18, you can use your will to appoint appropriate legal guardians for them.

The ramifications for not doing so can be serious, as a family court would likely need to decide what happens to them, and they could assign a guardian you usually wouldn’t have chosen.

2. It could mean less hassle for your family

When you die, your family typically needs to deal with your estate, all while dealing with the grief of your passing. So, writing or reviewing your will could make it easier for your family to make any necessary arrangements.

Without a will, this entire process can often be more stressful and time-consuming, and it could take longer for your assets to pass on to your loved ones.

3. It ensures nothing is left behind after you die

If you don’t have a will when you die, your family may struggle to deal with all the paperwork relating to your finances. When dealing with your estate, they could easily miss a previous pension, any protection you had, and even old savings accounts.

With an up-to-date will, you can clearly identify all your assets and allocate these to your chosen beneficiaries. This will ensure that your family doesn’t miss out on any wealth you would’ve otherwise wanted them to have simply because they didn’t know it existed.

Also, as you progress through life, your wealth will likely change. If you don’t regularly update your will, there could be a chance that some of your assets will be missed when your estate is divided.

4. It can help avoid disputes after you pass

When you pass away, it’s common for your family to go through a period of heightened stress and grief. So, dividing up an estate can sometimes be the perfect storm of stress and emotions, leading to disputes and arguments amongst your beneficiaries.

In fact, information from IBB Law shows that 75% of people are likely to experience a will or inheritance dispute case at some point in their life.

If your next of kin start to argue about your estate after you die, it can permanently damage their relationships and cause schisms in the family. It could also potentially cost thousands in legal fees.

If you have a well-written and up-to-date will, these disputes can potentially be avoided, and the process of dividing up your estate can be as painless as possible.

If your will isn’t regularly updated, disputes could potentially become more common. As an example, if you remarry and forget to update your will, your estate could potentially pass to the wrong people, resulting in a potential challenge and arguments and disputes after you die.

5. You could potentially mitigate Inheritance Tax

The total value of your estate will dictate the amount of Inheritance Tax (IHT) your next of kin will pay after you die.

As of the 2022/23 tax year, the IHT threshold rests at £325,000. You also have an additional £175,000 nil-rate band if you leave your home to a child or grandchild.

Anything left above this value is typically subject to the standard IHT rate of 40%.

Fortunately, a well-written will can often reduce your IHT liability. For instance, if you clearly specify you want to leave your home to a direct lineal descendent, such as a child or grandchild, you can make full use of the additional residence nil-rate band. This could substantially reduce the IHT liability on your estate.

With a will, you can allocate certain assets to your beneficiaries to ensure your estate plan is as tax-efficient as possible.

6. It gives you peace of mind

Above all, having an up-to-date will in place can give you the peace of mind that your affairs will be dealt with in a way that aligns with your wishes. The thought that your loved ones’ future is secure can take a weight off your shoulders and allow you to enjoy the present.

If you die without a will, the law will rule on issues from the guardianship of your minor children to the distribution of your estate. By putting a current will in place now and updating it after significant life events, you can take back control and rest assured that the right people will receive your wealth after you die.

Get in touch

We can discuss your will and your wishes and help to ensure you have peace of mind that your beneficiaries will be well looked-after in the unfortunate event of your death.

To find out more, please email hello@bluewealth.co.uk or call us on 0117 332 0230.

Please note

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

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 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.

This month, Adrian Thorley is celebrating achieving his Chartered status and our charity partner, BillyChip has been saying lovely things about us in their social feeds.

It’s official, Adrian is now a Chartered financial planner

When we caught up with Adrian late last year, he had submitted his coursework for the AF8 qualification and was nearing the end of his journey to become a Chartered financial planner.

We grabbed a few minutes with Adrian to find out what happened next…

What did the final step(s) of reaching Chartered status involve?

The last piece of the jigsaw for me was completion of the AF8 Retirement Income Planning coursework module. This is a three-part process, based around a fictional client scenario.

I had submitted all three parts in order, with success in parts one and three. So, it was frustrating to have initially fallen short in respect of part two, and to need to resubmit that for reassessment.

I found the feedback from the CII open to interpretation, so it was a case of going back to the drawing board and hoping for the best!

How did it feel to find out that you’d made the grade?

A huge sense of relief! You’re never sure exactly when you’ll hear back, and results are communicated by email which, on the one hand, I was keen to receive, until it actually arrived!

It’s then a case of diving in and hoping for the best. Thankfully, it was second time lucky.

How many qualifications do you now have under your belt?

Not including a qualification that I took and passed when working in Guernsey, I have four vocational qualifications – and it has taken 18 exams to get them.

What are you looking forward to focusing on now that you’ve achieved this major professional milestone?

Focus is the word. Now that the exams are out of the way, I can concentrate on providing ongoing support for my existing clients, while acquiring and providing similar help for new ones.

It will be great to devote 100% of my time to doing that, without the distraction of study.

For those who aren’t clients, what areas do you specialise in and how can you help them realise their financial goals?

I’m the oldest of the three Financial Planners at Blue Wealth. I think people identify more readily with those of a similar age and experience, simply because you have more in common.

I specialise in dealing with those who are nearing retirement or have already retired.

Once I’ve taken the time to really understand where they are, what their concerns are, and what they want to achieve, we can work together to create a plan of action, to get them on track, and to provide ongoing support and advice.

I also have a background in life assurance and income protection, so enjoy the very different challenges that arranging cover for individuals and businesses provides.

Get in touch with Adrian

If you or someone you know could benefit from working with Adrian, he’d love to hear from you. Email adrian.thorley@bluewealth.co.uk or call 0117 332 0230.

Blue Wealth and BillyChip continue to make a great partnership

As many of you will know, BillyChip has been our charity partner since August 2022.

For every initial meeting we have that comes from a client recommendation, we donate £50 to BillyChip. Whether the meeting takes place in person or remotely, we donate – even if they don’t end up becoming a client.

In February, thanks to your generosity in recommending us to your family and friends, we made more donations. And BillyChip reciprocated by giving us a shout out on Twitter and LinkedIn.

The message they posted on LinkedIn, on 1 March, said:

“We want to say a big thank you to the team at Blue Wealth who will continue to support us in 2023💙

“Throughout 2022, they made a £50 donation to BillyChip for every initial meeting that comes from a client recommendation and we can gladly say they will be continuing this into 2023.

“Each donation makes a big difference to how we operate and means we can continue to do the work that we love and expand the BillyChip into new areas to help support our community💙

“You’re fabulous and don’t you ever forget it”

Meanwhile, on Twitter, they said: “Thank you Blue Wealth for choosing us as your 2023 charity partner💙 You supported us in 2022 and we can’t wait for this partnership to continue🌟”

Do you have multiple pensions? It could make it difficult to manage your pension savings during your working life and when you retire. In some cases, consolidating them could be beneficial.

This guide explains what you need to know about transferring your pension savings, so you have fewer pots to manage. It could help you feel more in control of your retirement and, in some cases, reduce the amount you’re paying in fees.

However, there are reasons why consolidating your pension may not be right for you:

• You have a defined benefit pension
• Your pension has additional benefits
• You may need to pay an exit fee
• You could benefit from using “small pot” privileges.

Download “Your guide to pension consolidation: The pros and cons you need to know” now to read more about pension consolidation and understand if it could be the right decision for you.

If you have any questions about your pension or retirement, please get in touch.

Your finances and your physical health may appear to be two very different topics, but if you ever want to improve your skills in either area, you will have to heed much of the same advice.

For example, a financial planner and a personal trainer will both take a similar approach. In order to tailor a plan to your needs, they will both need to know your current situation, as well as what you want to achieve.

According to a study by Aviva, more than twice as many people rate financial health as the toughest element of their wellbeing to manage compared to their physical health.

The research also revealed that your health can affect your finances, so if you are struggling with your financial or physical health, here are four key tips to keep in mind.

1. Plan your approach

Making the decision to improve your health is the most important step on your journey. Once you’ve set your mind to the task, the best thing you can do to propel yourself towards your goal is to create a comprehensive plan of what you need to do to succeed.

A holistic attitude is important when plotting out what you intend to do. If you only tackle one problem area, you’re unlikely to achieve the desired result.

For example, to lose weight, you must work out and eat healthily, otherwise you will undo any progress you may have made.

Similarly, spending more money than you can afford to or ignoring issues such as poorly managed debt can destroy your hard work.

A financial planner can help you to identify any areas that might cause problems, as well as offering solutions to ensure that you aren’t hindered by any mistakes.

It is also important to prepare yourself for unexpected events.

With fitness, an injury may mean that you aren’t able to train for an upcoming marathon. Similarly, with your financial health, an unavoidable expense may arise that requires you to draw money from your savings.

Having safeguards in place will allow you to deal with these potential catastrophes with minimal setbacks.

Having a clear course of action during an emergency also lessens any worries you may have about worst-case scenarios.

The Aviva study concluded that a person’s physical and mental health predicts 23% of their financial health, so prioritising your wellbeing is crucial if you want to improve your financial health.

2. Stick to your plan

The hardest part of committing to any long-term goal is taking the first step. But with your plan in place, you can begin to build up your skill slowly by creating new habits.

Making small daily decisions, such as choosing to go on a run every morning or spending 15 minutes a day looking into your finances, won’t drastically change your routine. Over time, however, these small sprints of working towards your goal will snowball into large rewards.

Our director, Dan Britton, knows the power of consistency all too well. It took 12 months of intense coaching with a personal trainer to reach the end of the Stafford Ironman event last summer, but a mammoth swim, bike ride, and 13-mile run later, he reached the finish line and all of his hard work paid off!

3. Pay attention to the details

Expanding your knowledge is another important factor in improving your physical and financial health.

Knowing which foods to eat to increase your energy and which exercises will strengthen which muscles are a key part of improving your physique. Likewise, reading up on finances will allow you to have a better understanding of what to do with your money.

If you are struggling to understand these new concepts or apply them to your own life, working with a professional is vital.

A financial planner will advise you on the best course of action to protect and grow your wealth. Similarly, a personal trainer will tailor workouts to your current health standards in order to get you where you want to be.

Once you’ve started your health journey, you also need to keep a record of all the steps you have taken towards your goal.

Tracking your calories and making a note of the workouts you’ve completed is as important as budgeting your finances and being aware of where your money is going so that you aren’t accidentally undermining all the good work you’ve done.

Although it may seem unnecessary, paying attention to every detail will also lessen the chance of you making a mistake. Careful attention can help protect your finances or help you to avoid any sport-related injuries.

4. Focus on the long term

Sometimes, the effort required to improve your health can be hard to muster. That’s why resilience is important when making long-term plans.

When you are feeling stuck or discouraged by the lack of instant gratification, it is important to remind yourself of what led you to start this quest.

Perhaps you want to be fit enough to compete in a sporting event, or you want to save money to gift to your children when they are older.

Whatever your goal may be, determination is key to success.

Discipline is also an important factor. Staying focused on your long-term goals means that you are less likely to fall for a fad diet or a get-rich-quick scheme that may harm your health rather than improve it.

Both personal trainers and financial planners want you to succeed. So, take the time to make sure you choose your adviser well.

Having the right person in your corner while you embark on this difficult but rewarding health journey – whether physical or financial – will give you substantial support.

Working with an expert who can remind you of how far you’ve come and how close you are to reaching your goals could be the factor that finally allows you to live the life you’ve always dreamed of.

Get in touch

If you are interested in improving your financial health or you know someone who would benefit from our expertise, 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 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.

Naomi Davidson is on course to complete her level 4 Diploma in Regulated Financial Planning

Trainee paraplanner Naomi has passed her R03 exam. Another core unit for the Diploma in Regulated Financial Planning, the exam tested her knowledge and understanding of personal taxation.

Having passed R02 in the autumn, it’s only two months since Naomi was last tested on her knowledge – more specifically, her understanding of investment products and the application of the investment advice process. You can read what Naomi said about the last exam in November’s team update.

Having already secured a pass in this latest exam, Naomi now has just three more steps to achieve her goal to complete the diploma by the end of 2023.

Thanks to your generous support, we have made more charity donations to BillyChip

In the last couple of months, we’ve had three more successful referrals from existing clients. And BillyChip has benefited from more Blue Wealth donations.

Thank you so much for your ongoing support and your willingness to tell your family and friends about what we do. Every referral we get helps us to add financial value and provide peace of mind for another individual or family.

Throughout 2023, we will continue to 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.

As we grow our business through your kind support, knowing that our work is also helping a great cause simply adds to the feel-good factor.

If you know of anyone that would benefit from our help, please pass on our details, or forward the newsletter to them so they can understand a bit more about the work we do.

You’ll probably work hard for many years to build your wealth and achieve your long-term goals.

You may be investing for a comfortable retirement, saving to buy a home, or securing a nest egg to leave to your loved ones. Whatever your goals, having a clear strategy can give you a greater sense of control and confidence. Yet an unexpected event could jeopardise your plans.

So, one important part of your financial plan is to be prepared for unexpected shocks that may hamper your goals – ensuring you have the right cover in place should never be an afterthought.

There are a variety of ways you and your family could benefit from financial protection. Read on to find out three important reasons to take out protection now.

1. Protection can help cover household expenses if you’re too sick to work

What would happen if you were injured or fell ill and were unable to work for an extended period? This could prove incredibly harmful to your finances, especially if you’re the main breadwinner in your household.

Hopefully, you’d have an emergency fund that you could use, but it may not last as long as you need. Plus, although you’re legally allowed to claim up to 28 weeks of Statutory Sick Pay (SSP), in the 2022/23 tax year the maximum SSP sum you could claim is £99.35 a week.

This is unlikely to be enough to maintain your lifestyle, especially if you face additional expenses due to your illness.

Without enough money to live on, you might have to resort to use your savings to help ends meet, which could harm your financial goals.

Income protection could save a lot of stress. A policy will make regular monthly payments, which will usually continue until you’re able to go back to work or retire. This should enable you to relax and focus your energies on regaining your health, instead of worrying about money.

Generally, the policy will pay out a percentage of your usual salary and can be used to help you meet financial commitments if you become ill or involved in an accident.

Equally important, an income protection plan could give you access to rehabilitation services that might help you return to work sooner.

2. Critical illness cover could provide invaluable peace of mind to you and your family

Every year thousands of people in the UK are diagnosed with a critical illness.

If you were diagnosed with an illness or experienced a stroke or heart attack, critical illness cover will pay out a lump sum on the diagnosis of an illness that is named in the policy.

You can choose the level of cover you’d receive to fit your lifestyle and commitments. We can help you understand which policy might be right for you and assist you in avoiding paying expensive premiums on insurance that isn’t what you expected.

The money from critical illness cover could buy you some breathing space and allow you time to come to terms with the news without having to worry about immediate finances.

Alternatively, you could use the money to pay for private medical treatment, or to buy medication not available through the NHS. It might also help you repay your mortgage or other debts, modify your home if necessary, or provide an income.

The cost of the premiums will depend on factors such as your age, medical history, and risk associated with your job.

Ultimately, protecting yourself against the potential for unexpected healthcare expenses could be essential to preserving your financial wellbeing.

Another option to consider is buying private medical insurance (PMI). This would cover costs of private healthcare, including diagnoses, treatment, and everything in between.

While this only covers healthcare costs, having access to private healthcare when faced with potentially devastating news may be useful.

Many employers provide PMI as an employee perk, and often includes family members, so it may be worth checking to see if this is the case for you.

Also, PMI policies can vary enormously between providers, so be careful to read the small print. Alternatively, speak to us and we can help you understand exactly what you are buying before you sign on the dotted line.

3. Life insurance could prevent your family from facing financial ruin

While it may be uncomfortable to consider, have you paused to think about how your family would maintain their current lifestyle if you were to pass away in the near future?

With a life insurance policy in place, your family could receive a payout in the event of your death.

The money could help them to:

• Keep up with mortgage repayments so they won’t have to uproot their lives and move house if you passed away
• Cover living costs such as school fees, travel, and day-to-day expenditure
• Cushion the blow of an Inheritance Tax (IHT) bill.

As well as providing your family with crucial financial support on your death, life insurance can also play an important role in protecting your legacy from IHT.

While there are opportunities within the current IHT rules to minimise or mitigate a tax liability, there may be circumstances where it’s not possible, appropriate, or cost-effective. This is where life insurance can help.

Insuring against a likely IHT liability could allow you to pass on all your accumulated wealth to loved ones.

It’s essential that you write the life insurance policy in trust, to be paid to a named individual. Failing to do this would mean that the payout would be added to your estate and increase the IHT liability – negating any benefit you hoped to achieve.

We can help you understand how financial protection fits into your life goals

When the unexpected strikes it can be devastating. Having the right financial protection in place should mean that money worries are one less thing to deal with.

The cover you need will depend on your own financial situation and circumstances. Whether you want peace of mind in unexpected circumstances or to mitigate tax liabilities, we’ll help to ensure you have the right protection in place.

Get in touch

If you would like to discuss your financial plan, review your protection requirements, or mitigate IHT, 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.

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.

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

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