Category: news

Blue Wealth update – Here’s the latest news from the Blue Wealth team

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.

7 ways to prepare financially for a 100-year life

Woman blowing out a 100 birthday candle

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 yearsyou 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 yearsafter 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 yearsas 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.

Blue Wealth update – all the latest news from the Blue Wealth team

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!”

5 important money conversations you should be ready to have

Senior couple having a conversation together while relaxing on the couch.

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.

Blue Wealth update – Here’s the latest news from the Blue Wealth team

Blue Wealth professional team photo

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.

New year, new you: 5 practical financial resolutions for a positive start in 2024

Senior woman at home, writing notes on the kitchen table with cut fruit on a chopping board beside her

As 2023 draws to a close, your attention might be turning to what the new year may have in store, making now the perfect time to think about your goals and resolutions.

New year resolutions typically revolve around healthy habits such as improving your diet or doing more exercise. But as well as focusing on your physical wellbeing in 2024, there are some useful resolutions you could make to give your financial wellbeing a healthy boost, too.

Keep reading for five practical financial resolutions that could help you to enjoy a prosperous new year.

1. Set up an emergency fund, or top up an existing one

Do you have a pot of savings you can fall back on in an emergency? If you haven’t, now is the time to fix that. If you have, take the time to check how much you have and ensure you’re holding the funds you need.

Ideally, your emergency – or rainy day – fund should have enough money to cover normal expenditure for three to six months. With the rising cost of living, you may find your household bills have risen. So, it’s wise to check whether your emergency fund needs topping up to reflect this.

If you’re self-employed, or have many dependants, it may be worth keeping more in your emergency fund, perhaps as much as 12 months’ worth of household expenditure.

Keeping a pot of savings in an easy access savings account can be a reassuring financial safety net in the event of an unexpected expense. Whether your boiler breaks down, or you’re injured and unable to work for several weeks, your emergency fund could help you meet these unforeseen costs without hampering progress towards your long-term financial goals.

2. Define your long-term financial goals

It’s all too easy to focus on the present and forget to think ahead for the future.

Yet, having clear long-term plans can help to keep your financial resolutions on track and motivate you to make certain that your money is working for you.

Long-term financial goals could focus on saving for retirement, building a healthy deposit for a new home, or funding a trip of a lifetime. Alternatively, there may be a combination of things you want to plan to achieve.

Once you’ve defined your goals, you can plan for how and when you’ll reach them.

3. Top up your pension and pay your future self first

If you’ve yet to retire, and happen to be in the fortunate position of having extra disposable income, resolve to use it to pay your future self first, by increasing the amount you’re contributing to your pension.

Pensions are one of the most tax-efficient ways to save for your future, because the contributions you make are usually topped up with tax relief from the government.

For the 2023/24 tax year, the Annual Allowance – the limit on how much you can contribute to your pension while receiving tax relief – stands at £60,000, or 100% of your earnings, whichever is lower.

In effect, this means that, as a basic-rate taxpayer, a £100 contribution would only “cost” you £80, while the additional £20 would be supplied by the government. If you’re a higher- or additional-rate taxpayer, you could benefit from an extra 20% or 25%, respectively, by claiming it through your self-assessment tax return.

With this in mind, the start of 2024 could be the ideal time to claim any additional tax relief you’re entitled to, as the deadline for completing your self-assessment tax return is 31 January 2024.

4. Review your investment portfolio

Saving money is just one element of growing your wealth. You also need to make sure your money is working as hard as it should be.

If you have large sums of money in a cash savings account, although it may be generating more interest than in many recent years, it may still be growing at a lower rate than inflation.

Read more: 14 rate rises in a row: How rising interest rates could affect your savings

Achieving the right balance between risk and reward is crucial if you want your wealth to reach its full potential.

By diversifying your money across a range of assets, including shares, bonds, property, and cash, you can reduce the impact of stock market falls on your overall portfolio.

The appropriate amount you invest in each asset will depend on several factors, including your long-term goals, your investment horizon, and your individual risk profile.

We can help ensure that you have the right asset allocation for your long-term goals, and that it is updated and rebalanced as required.

5. Write or update your will

The new year is a good time to write your will and set out your desires and wishes for your estate after you pass away.

If you already have a will, check to make sure it’s up to date. This is especially important if your circumstances have changed, as your current will may no longer reflect your wishes.

For example, significant life events, such as the birth of a child, marriage, or divorce, can shift your priorities, and you may decide that you wish to make some changes to your will.

While you’re thinking about your will, take time to review your wider estate plan and check that it still aligns with your circumstances and desires.

Most people want to leave a legacy to children or grandchildren but, if you don’t plan carefully, your estate could be subject to a potentially hefty Inheritance Tax bill, which could put an unhelpful dent in the wealth you pass on to your family and loved ones.

Read more: 5 ways estate planning can help you leave more for your family

We can help you evaluate different strategies to preserve your legacy, including charitable giving, using lifetime and annual allowances, setting up trusts, and taking out insurance.

Get in touch

If you’re resolving to form some good financial habits and increase your financial wellbeing in 2024 and beyond, 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.

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation, which are subject to change in the future.

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

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

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.

Everything you need to know about the 2023 Autumn Statement

Big Ben

On 22 November 2023, chancellor Jeremy Hunt delivered the Autumn Statement against a backdrop of a cost of living crisis and a looming general election.

It’s been a challenging year with inflation dominating headlines. While inflation has fallen, it’s still higher than the Bank of England’s 2% target at 4.6% in the 12 months to October 2023.

Ahead of his speech, Hunt faced pressure to reduce the tax burden on both households and businesses while there was speculation about a potential Inheritance Tax cut, which didn’t materialise.

In his speech, Hunt said the plan for the British economy was working as the UK avoided a previously forecast recession this year. However, he cautiously added that the “work is not done” as he set out 110 measures to “reduce debt, cut taxes, and reward work”.

Here are the key points of the Autumn Statement, and what they might mean for you.

National Insurance cut for employees and self-employed workers

The chancellor cut National Insurance (NI) for 29 million working people.

The main rate of employee NI will be reduced by two percentage points from 12% to 10% from 6 January 2024. The new rate will save the average employee earning £35,400 a year more than £450 annually.

In addition, Class 2 National Insurance contributions (NICs), which are mandatory for self-employed workers earning more than £12,570 a year, will be abolished from April 2024. It’s estimated this will save the average self-employed person £192 a year. The good news for self-employed workers is they’ll retain access to contributory benefits, including the State Pension.

In 2024/25, Class 4 NICs paid by self-employed workers on earnings between £12,570 and £50,270 will fall from 9% to 8%.

Combined, these two changes will result in an average self-employed person earning £28,200 saving £350 a year from 2024/25.

The State Pension “triple lock” will remain in place

After weeks of uncertainty, Hunt confirmed during the Autumn Statement that the State Pension “triple lock” will be honoured.

Under the “triple lock”, the State Pension increases each year by the higher of:

  • Inflation, as measured by the Consumer Prices Index (CPI) in September (of the previous year)
  • The average increase in wages across the UK from May to July (of the previous year), or
  • 2.5%.

Wage growth of 8.5% means someone on the full new State Pension will receive more than £900 a year extra in 2024/25.

Similarly, Pension Credit will also rise by 8.5% in April 2024.

Abolition of pension Lifetime Allowance confirmed

While the chancellor didn’t make any new announcements related to pension allowances during the Autumn Statement, he did confirm that the previously reported abolition of the pension Lifetime Allowance will take effect from 6 April 2024.

Hunt also announced plans to consult on a pension “pot for life”. Under the plans, pension savers would have the legal right to choose the scheme their employer pays pension contributions to. This move could help workers manage retirement savings and reduce the number of people with multiple small pensions.

ISA holders will benefit from more flexibility

The annual subscription limits for ISAs (£20,000), Junior ISAs (£9,000), Child Trust Funds (£9,000), and Lifetime ISAs (£4,000, excluding government bonus) will remain the same in 2024/25.

However, changes could provide savers and investors with more flexibility.

First, ISA holders will be able to deposit money into multiple ISAs of the same type each tax year from April 2024. They will also be able to partially transfer money between providers.

Second, investors with an Innovative Finance ISA will be able to invest their money in a greater range of assets, including long-term asset funds and open-ended property funds with extended notice periods.

Other measures

National living wage

Hunt announced the largest increase to the UK’s national living wage. It will rise by 9.8% to £11.44 an hour. In addition, the new rate, which comes into force in April 2024, will be expanded to include 21- and 22-year-olds for the first time.

It’s estimated the increase will benefit almost 2.7 million people, with full-time workers earning the national living wage receiving a boost of more than £1,800 a year to their income.

Benefits uprated

In line with September 2023 inflation figures, Hunt announced an increase in benefits of 6.7%. He also added an increase to the Local Housing Allowance, providing 1.6 million households with an average of £800 of support next year.

A shake-up of the benefits system was also unveiled. Benefit claimants who fail to find work for more than 18 months will have to complete a work experience placement. Long-term unemployed who are deemed to be not adequately looking for jobs will also face stricter penalties.

Business rates discount to continue for another year

The 75% business rates discount for retail, hospitality and leisure firms has been extended for another year in a welcome boost for high street shops, pubs, and more.

The multiplier for small business premises is also frozen.

Freeze on alcohol duty

In further positive news for pubs, the chancellor announced a freeze on all alcohol duty until 1 August 2024.

Full expensing

Businesses will continue to benefit from full expensing. It allows firms to offset spending on plant and machinery against profits.

The measure was previously set to expire in March 2026 but has been made permanent.

Enterprise Investment Scheme and Venture Capital Trusts

To support early-stage, innovative companies, both the Enterprise Investment Scheme and Venture Capital Trusts, which provide a tax break to investors, have been extended to 2035.

Get in touch

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

Please note:

All information is from the Autumn Statement 2023 document and the government’s Autumn Statement news bulletin.

The content of this Autumn Statement 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.

Blue Wealth update – Here’s the latest news from the Blue Wealth team

Blue Wealth professional team photo

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

Nathan is powering through 100 push-ups a day

This November, Cancer Research UK is asking supporters to sign up and complete 100 push-ups everyday throughout the month. The challenge commenced on 1 November 2023 and Nathan was among those primed to pump.

Nathan explains what prompted him to say “yes” to this fitness challenge…

“Since returning from a summer holiday, any exercise had been lacking to say the least and I felt out of shape. This seemed like the perfect way to get back into things as well as raise money for a worthwhile cause.

“So far, I’m getting on well with the challenge. Fortunately, I started early and slowly worked my way up to 100 press ups a day. So, by 1 November I was primed and ready.”

While he could no doubt power through them all at once, Nathan is taking the “sensible” option of spreading 100 push-ups throughout the day. Breaking things down into manageable sessions, he’s doing 30 as soon as he wakes up and another 30 when he arrives at work. Later in the day, he does two lots of 20 push-ups during the evening before hitting the hay.

It seems that he’s caught the fitness bug as he’s already on the lookout for a similar challenge to help him continue to stay in shape.

To show your support, donate through Nathan’s official giving page and help raise funds for Cancer Research UK.

Love is in the air for Naomi

Earlier this autumn, Saul popped the questions and Naomi said “yes”.

Here’s a short but lovely summary of their engagement story…

Who’s the lucky man and how did you meet?

His name is Saul. We met online on a video game a few years ago and instantly became friends. When we met in person, we got on really well and decided to try and make it work – despite the long distance (he’s from the US).

How did he pop the question?

We were walking through the woods, and he asked me when we stopped for a short rest by a river.

When do you hope to tie the knot?

Hopefully towards the end of next year but it depends on how good my organisation skills are! We will be getting married in the US, so I need to do a bit more research into how that will work.

What are you looking forward to the most?

He’s moving over to the UK after we’re married and I’m really looking forward to that as it means we won’t be so far apart anymore.

3 simple ways to give children the gift of financial security this Christmas

Grandfather with excited granddaughter opening Christmas gift, sitting in front of a Christmas tree.

As the Christmas period is almost upon us, you may have started thinking about your Christmas gift list.

While buying and wrapping presents to put under the tree for the children in your life may bring you joy, you may not relish the idea of having to choose what to buy for them – especially if they already have a fully stocked playroom.

If the idea of buying more “stuff” for your children has lost its lustre, you could consider gifting money instead. While popping some money or a gift voucher inside a card is an easy solution, making an investment on their behalf could make a big difference to their financial futures.

Give your children and grandchildren a healthy financial start to adulthood

In fact, investing for children is one of the best presents you can give to the young people in your life. Crucially, because time is key to growing wealth through compounding, the earlier you start investing for children the better.

Giving your children or grandchildren a healthy financial start to adulthood could help them:

  • Fund further education
  • Travel the world
  • Buy their first car
  • Take a firm step onto the property ladder.

Apart from the invaluable financial freedom they might enjoy, investing for children is also a fantastic way to help them learn important money lessons. As they get older, you can involve them in conversations and decisions about how and where their money is invested.

So, here are three possible ways you could invest for the children in your life this Christmas.

1. Invest into a child’s ISA

A Junior ISA (JISA) needs to be opened by a parent or guardian, but once that’s done anyone can pay into it. And you can invest up to £9,000 a year (2023/24).

By investing in a Stocks and Shares JISA when your child or grandchild is young, the money you put away for them may enjoy greater long-term potential for growth.

In fact, according to data from Fidelity International, if you invest just £30 a month into a JISA, by the time your child turns 18, you could have accrued £9,742. Invest £178 a month and you could amass more than £57,000.

Once they reach 18, they can withdraw the money – free of Income Tax or Capital Gains Tax. Alternatively, they can opt to transfer the account to an adult ISA, allowing them to keep the funds invested. They can then continue to make further payments into it on a regular or ad hoc basis.

2. Start contributing to a pension

Saving into a pension may seem an odd idea, especially if your child or grandchild is still very small. Yet, commencing pension contributions when they are young can be one of the best ways to set your child up for the future.

Although they won’t be able to access the money in their pension until they reach retirement, the tax relief on offer, alongside the potential for investment returns over a long period, makes pensions an effective vehicle for providing your children with a future income.

One of the main advantages of a child’s pension is that there is huge potential for the fund to enjoy compound growth. If your child is still a tot, the money could be accumulating for 50 years or more, which allows excellent scope for long-term growth.

Initially, the pension must be set up by the child’s parent or guardian. Once in place, you can pay money in and receive tax relief on payments.

The government automatically tops up contributions by 20% – even for a child – so an annual payment of £2,880 automatically becomes £3,600.

As with all pensions, children’s pensions have an Annual Allowance. In 2023/24, this limit is the lower of either £3,600 gross or 100% of the child’s earnings, if they have any.

You can contribute more than this, but you won’t enjoy the same tax relief on contributions above the Annual Allowance.

Read more: How you could help your child become a pension millionaire

According to calculations from Times Money Mentor, if you invested £300 a month (including the tax relief from the government), you’d be contributing the maximum £3,600 each tax year, from birth until the age of 18, you would have invested a total of £64,800.

Assuming you take away 0.75% for charges and add an average investment return of 4.5% a year, for example, your child’s pension fund could be worth £91,800.

Of course, they can’t access it until retirement so if that £91,800 remained invested for a further 42 years, applying the same charges and investment returns in the example above, the pension pot would be worth around £425,000.

These calculations assume that contributions cease at age 18, but once your child reaches age 18, or starts working, they can, of course, continue to contribute to the same pension fund.

3. Give them a chance to win cash prizes with Premium Bonds

If you fancy giving a financial gift with a difference, you could give your children or grandchildren Premium Bonds this Christmas.

Premium Bonds provide the potential to win tax-free prizes, giving them the opportunity to win anywhere between £25 to £1 million every month.

Once purchased, if the Premium Bond wins, your child can opt to claim the cash prize or use the winnings to purchase more Premium Bonds – potentially increasing their chances of winning more money.

You can invest anywhere between £25 and £50,000 in Premium Bonds for a child. Initially, a parent or guardian will need to be responsible for the account. When your child turns 16, they become responsible for the bond and can register with NS&I to manage the account.

Get in touch

If you’d like to give the children you know the gift of a lifetime this Christmas and would like to discuss all the available options, 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.

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

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

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

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.

How a financial planner could help you enjoy a long and happy retirement

An adult hipster son repairing bicycle with his father outside on a sunny day.

Life expectancy is increasing and with more research into longevity, you could expect a long retirement. The secret is how to ensure that it’s also a happy one.

Even without adopting healthy lifestyle changes to lengthen your lifespan, according to the Office for National Statistics, the average life expectancy for a British man aged 55 today is 84, and there’s a 1 in 4 chance that you could reach 92.

Meanwhile, if you’re a 55-year-old female, the average life expectancy is 87, and there’s a 1 in 4 chance that you could live to celebrate your 94th birthday.

Thoughtful lifestyle changes could help you increase your longevity

With growing interest in the subject, there are more and more news articles about how lifestyle changes can improve your longevity. If you subscribe to Netflix, there’s even a four-part documentary covering the subject: Live to 100: Secrets of the Blue Zones.

There are five Blue Zones:

  1. Japan
  2. Costa Rica
  3. Italy
  4. Greece
  5. California

From adapting your diet to taking the right kind of exercise, there are now multiple science-backed ways that could make a positive difference to how long you live, and how healthy you are in retirement. A report from Insider revealed top lifestyle tips from the Blue Zones, including:

  • Stick to a primarily plant-based diet
  • Move regularly – this needn’t be exercise; small energetic bursts throughout the day can help your overall fitness
  • Have purpose – having a clear life plan has been associated with fewer strokes. Science has also revealed that a strong sense of purpose can help people living with heart disease reduce the risk of heart attacks.

A healthy lifestyle is only one aspect of ensuring a long and happy retirement

Most people hope to enjoy a long and happy retirement. Living longer means you get to spend more time with friends and family, and have more time to enjoy both simple pleasures and adventures that you dreamed of while you were working.

Yet, a longer life will also influence your finances, as your pension and savings will need to last longer, too.

When thinking about your retirement plan, you’ll need to ask yourself some important questions, including:

  • When do I want to retire?
  • How do I want to retire?
  • How long might my retirement last?
  • What do I plan to do in retirement?
  • How much will my retirement lifestyle cost?

As with all aspects of financial planning, it’s crucial to have a goal in mind.

Answering these questions will help you understand how much money you need to fund your desired lifestyle in retirement and the amount of risk you’re willing to take to fund your dreams.

Knowing how you’d like to spend your retirement will also influence the amount of money you’ll need.

If you have an adventurous spirit and want to enjoy world travel, that will prove more costly than if you prefer to stay close to home. You may prefer to spend time with family and friends, take up a new hobby, or become involved in your local community. You may want to enjoy a little of both worlds.

Of course, the choice is entirely yours but knowing in advance will help you plan your finances accordingly.

Plan for all stages of your retirement

The years immediately after you finish work are likely to be more active. You’ll likely find you spend more on travel, weekends away, or days out.

After a few years, as your energy levels change, your outgoings might begin to decrease. Instead of spending on long-haul travel, once-in-a-lifetime experiences, or meals out, you may see a rise in household bills as you spend more time at home. You may find more pleasure in pottering around your garden, reading, or looking after your grandchildren.

Then, as you begin to age, you may find your costs rising again. And one downside of rising life expectancies is that the number of years spent in ill health is increasing.

So, when planning for your retirement, you’ll also need to factor in potential care costs. It’s also a good idea to have an opposing optimistic plan for what will happen to the money you’ve earmarked to pay for care if you don’t end up needing it.

According to The Good Care Group, residential care typically costs between £27,000 and £39,000 a year. If you need nursing care, fees may run as high as £55,000 a year. Over time, inflation could see these costs climb ever higher.

While you may receive some government support, if you have more than £100,000 in assets, you’ll need to cover these costs yourself. This is something we can help you plan for.

Get in touch

We can help you draw up a long-term financial plan aligned with your retirement goals. We use sophisticated cashflow modelling tools to help you visualise how much money you might need in retirement.

We can then help you plan towards saving enough to make your dream lifestyle a reality, however long your retirement lasts.

If you would like to discuss saving for retirement, or you have questions on any other aspect of your long-term financial plan, please email hello@bluewealth.co.uk or call us on 0117 332 0230.

Please note

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Your pension income could also be affected by the interest rates at the time you take your benefits. Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor.

The Financial Conduct Authority does not regulate cashflow planning.