Category: news

In the past, passing on wealth to loved ones usually involved leaving an inheritance. However, more parents and grandparents are choosing to give financial gifts during their lifetime. It can help family members achieve milestones, but it also needs careful consideration around how it’ll affect your financial security.

Older generations are gifting billions of pounds each year

Research shows that older family members are gifting billions of pounds each year to provide day-to-day support for loved ones.

According to Legal and General nearly half of older people provide some sort of financial support to family members. Around four in ten (39%) of young adults receive regular support that helps cover monthly outgoings. The average amount provided is £113 per month, collectively adding up to £372 million each month. This amount increased even further in 2020 as families faced financial pressures caused by the pandemic. It’s estimated that an extra £1.9 billion was gifted to younger family members in 2020.

Rising costs and stagnant wages may mean some younger family members are struggling to make ends meet. As a result, you may want to help by providing a regular gift to supplement their income.

Many parents and grandparents are also providing a lump sum gift to help younger generations reach milestones. As house prices have increased, it’s become common for first-time buyers to rely on the Bank of Mum and Dad. According to Legal & General, one in two house purchases among under-35s are made with the support of family. It’s expected that older generations will lend £2.1 billion to support homeownership plans in 2021 alone.

On average, the Bank of Mum and Dad provides £19,000, with 71% of first-time buyers saying they would not have been likely to buy without financial support. In most cases, this support is a gift – just 30% are expected to pay some of it back.

Why lifetime giving could be valuable

1. It could help loved ones tackle challenges they’re facing now

The appeal of giving during your life is that it can help loved ones overcome the challenges they face now and set them up for greater financial security in the future.

Giving a house deposit is a good example of this. A lump-sum gift during your lifetime can mean children or grandchildren can get on the property ladder. It could help reduce monthly outgoings if they’re currently paying rent and mean they’re mortgage-free sooner in life. Helping pay for educational costs can also make sense and help loved ones achieve career aspirations.

Giving during your lifetime also means you get to see the benefits your wealth brings to loved ones.

2. It could reduce Inheritance Tax liability

If Inheritance Tax (IHT) is a concern, gifting during your lifetime can also form part of the solution.

If the value of your estate, which includes all your assets, is over £325,000, IHT may be due. An additional allowance can increase this threshold to £500,000 if you leave your main home to children or grandchildren, so it’s important to think about who you’d like to inherit assets when considering IHT. In some cases, gifting to reduce the value of your estate can make sense from a tax perspective.

However, it’s important to keep in mind that not all gifts will be considered outside of your estate for Inheritance Tax purposes immediately. Some may still be included for up to seven years after they are given. If IHT is one of the reasons you want to gift during your lifetime, it’s important to understand allowances and rules. Please get in touch to discuss your options.

Drawbacks to consider before gifting

1. It could affect your financial security later in life

Before you gift money, it important to understand how it could affect your plans. Taking a lump sum out of your pension to act as a deposit for a child’s house, for example, could mean you’re not able to achieve goals in your later years. Before deciding to provide gifts, you should take some time to assess the impact it will have. This step means you can lend support while safe in the knowledge that your plans are still on track.

You should also assess the impact if something unexpected were to happen. Even the best-laid plans can be affected by unforeseen circumstances. For example, would you still be able to afford the type of care you’d prefer if it were needed after gifting? Or would your pension now be able to stretch for another ten years if you lived longer than expected? Answering these questions can be difficult, but we’re here to help.

2. It could affect the inheritance you leave behind

It’s also important that you keep in mind how gifting now could affect the inheritance you leave to loved ones. In some cases, gifting now could have a significant impact on your assets later in life. Deciding what your priorities are before gifting can help ensure that the decisions you make reflect your goals.

If gifting now will affect the inheritance you leave, you should consider speaking to your beneficiaries. They may be expecting an inheritance to help them achieve goals later in life, such as providing a more comfortable retirement. Knowing what they can expect can help loved ones create a financial plan that suits them.

Balancing family support and your plans

When you want to lend financial support to loved ones but aren’t sure how it’d affect your plans in the long term, it can be difficult to know what to do. Financial planning can give you confidence in the decisions you make. Using cashflow planning, we’ll help you see how making regular or one-off gifts will affect your security, including if something unexpected happens. It can mean you’re able to support the people important to you while knowing your own plans are secure.

Please contact us if you’re thinking about financially supporting your family and would like to understand the long-term implications.

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

Levels and bases of, and relief from, taxation are subject to change.

The Financial Conduct Authority does not regulate estate and tax planning.

The current tax year will end on 5 April 2021, a date when many allowances and tax breaks will reset. In some cases, it will be your last chance to use them. Making use of appropriate allowances can help you get the most out of your money.

Our guide explains seven key allowances you should consider to ensure you’re ready for the 2021/22 tax year. This includes:

1. Marriage allowance
2. Pension Annual Allowance
3. ISA allowance
4. Gifting allowance
5. Gifts from your income
6. Capital Gains Tax
7. Dividend allowance

Click here to download your copy of the guide.

Keeping on top of allowances and how to use them can be challenging. But creating a financial plan that helps you get the most out of your money can put your mind at ease. Please get in touch to discuss how you can make the most of allowances in the current tax year and put a plan in place for 2021/22.

Amid the Covid-19 uncertainty, figures suggest people are turning to cash rather than investing. But it could mean they’re missing out on potential, long-term returns. So, if you’re weighing up cash vs investing, which option is right for you?

In the first six months of 2020, UK households placed £77 billion in cash accounts, according to research from Janus Henderson Investment Trusts. In total, it takes cash reserves in the UK to £1.5 trillion. Saving more is certainly a positive habit. However, by choosing cash over investments, the same research estimates that households have missed out on £38 billion in returns, instead they’ve received just £5.7 billion in interest.

Why cash isn’t always a ‘safe’ option

There are many reasons why households have chosen to place their savings in a cash account. However, concerns over stock market volatility and feeling they need to keep their money ‘safe’ in the current climate are likely to have played a role for many.

While cash savings aren’t affected by investment risk, they don’t always make financial sense. Interest rates are at a historic low. This means, once you calculate inflation, cash savings are likely losing value in real terms. If you’re saving for a long-term goal, inflation can have a real impact on your savings.

The Bank of England’s inflation calculator highlights how inflation can erode cash value in the long term.

Let’s say you saved £10,000 in 1980. During the last four decades, inflation has averaged at 3.8% annually. This means that for your savings to have the same spending power as they did in 1980, they would need to have grown to £43,204.40. When interest rates were more competitive this may have been possible. But with many saving accounts offering rates far below the pace of inflation, your savings could effectively be losing money.

That’s not to say cash accounts shouldn’t be used. If you have short-term saving goals, they are often an appropriate option. Readily accessible accounts are also important for other reasons, such as an emergency fund.

However, the Janus Henderson Investment Trusts research indicates that some households are relying too heavily on cash accounts. To create an emergency fund of three months of income for households, this would amount to around £370 billion across the UK. Yet, there is almost an extra £1.2 trillion in cash accounts.

Could investing be right for you?

3 questions to ask when weighing up cash vs investing

1. Do you have an emergency fund?

Before you start investing, it’s important to create financial security. Setting up an emergency fund can create a buffer should anything unexpected happen.

Ideally, you should have three- to six- months of expenditure in a cash account. This means the money is readily accessible should you need it. It’s a step that can improve your ability to face financial shocks. It also means that should investments experience short-term volatility, you have other reserves that can be used rather than making withdrawals when values have fallen.

2. What are your goal timeframes?

Your goals and when you want to achieve them are incredibly important when balancing cash vs investing.

For short-term goals, cash accounts are usually more appropriate. This is because volatility is part of investing. With a short-term timeframe, you’re more likely to be affected by dips in the markets as you have less time to benefit from a recovery.

In contrast, investing for long-term timeframes (a minimum of five years) could be right for you. Longer timeframes provide an opportunity for the peaks and troughs of market movements to smooth out. While you’ll still experience volatility, there’s less risk that it will have a significant impact on your goals. This can mean if you’re saving for retirement or other aspirations that are still some way off, investing can potentially deliver higher returns than you’d see if you used cash accounts.

3. What is your tolerance for risk?

Finally, all investments come with some level of risk. You need to take this into account when deciding between cash and investing.

Your risk tolerance will need to take many factors into account. This includes what your goal is, but it should also weigh up other aspects, such as other assets that you hold, capacity for loss, and overall attitude to risk. By understanding these factors, you can not only decide whether investing is an appropriate option for you, but which investments you should select. These should reflect your situation but also need to consider things like diversifying.

If you have money and you’re not sure what to do with it or how to invest, we can help as your financial planner. Please contact us to discuss your goals and how we can help you achieve them.

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.

If your estate could be liable for Inheritance Tax (IHT), gifting is one solution for passing on wealth while reducing the bill that could be appropriate for you. Our latest guide explains the basics of IHT and what you need to consider if you want to make gifting part of your long-term financial plan.

The guide covers:

• What Inheritance Tax is and when it has to be paid
• What Potentially Exempt Transfers (PET) are and how they affect IHT
• Gifting allowances that allow you to pass on wealth or assets to loved ones free from IHT
• How a charitable legacy can reduce an IHT bill
• Reliefs that allow you to gift certain assets free from IHT

Click here to download your copy of our Inheritance Tax and gifting guide.

IHT can significantly reduce what you leave behind for loved ones, but there are often things you can do to reduce the bill. If you’re worried about IHT, please contact us. We’ll help you put a plan in place that considers your legacy, including gifting where appropriate.

Please note: The Financial Conduct Authority does not regulate estate or tax planning.

Chancellor Rishi Sunak has unveiled the government’s spending plans for the coming year in his Spending Review given on Wednesday 25 November.

A Spending Review sets out how the government plans to spend money and what each department will receive. It covers a range of areas, like health, policing, and education. It also covers public sector pay and money for the devolved administrations of Scotland, Wales, and Northern Ireland.

Usually, a Spending Review will cover several financial years, allowing the government and departments to plan. However, Rishi Sunak set out spending plans for the 2021/2022 tax year only due to the economic uncertainty caused by the Covid-19 pandemic.

Covid-19 impact: Economy predicted to contract by 11.3% this year

The Spending Review was delivered against a backdrop of challenges. The Office for Budget Responsibility (OBR) predicts the government will borrow £394 billion in 2020/21, far higher than in previous years as a result of the pandemic.

This figure represents around a fifth of UK GDP and means borrowing is at its highest levels in peacetime history. While the Chancellor committed to supporting Covid-19 support schemes, he notes that this level of borrowing is unsustainable in the medium term.

Economic forecasts from the OBR also paint a gloomy picture. The economy is forecast to contract by 11.3% this year, the largest fall in output for 300 years. While the economy is expected to grow by 5.5% next year and 6.6% in 2022, Rishi Sunak said the economic damage would be lasting. Output is not expected to return to pre-crisis levels until the fourth quarter of 2022.

Due to the economic challenges, the OBR predicts unemployment will reach a peak of 7.5% in the second quarter of 2021.

Rishi Sunak described the economic emergency as ‘only just beginning’. He added the immediate priority was to protect people and livelihoods, but the Spending Review also delivers ‘stronger public services’ and a ‘once in a generation investment in infrastructure’.

Covid-19 response

Unsurprisingly, the cost of responding to the Covid-19 crisis was top of the agenda. The government is providing £280 billion to get the country through Covid-19, the Chancellor said.

Next year, he has set aside an initial £18 billion to spend on testing, PPE, and vaccines.

Public sector pay

Rishi Sunak argues that, compared to private sector workers, public sector employees have benefited from higher pay rises and more security during the crisis. As a result, he said he cannot justify across the board pay increases.

One million nurses, doctors, and other NHS employees will receive a pay rise. Other public sector workers that earn below a median wage of £24,000 (around 2.1 million people) will receive a guaranteed pay rise of at least £250. All other public sector employees will have pay rises paused next year.

National living wage

Around two million people will benefit from a 2.2% national living wage increase, taking this to £8.91 per hour. The increase will apply to all workers over the age of 23, as previously the national living wage was only available to those aged 25 and over.

Overseas aid

Sunak confirmed claims that the UK will abandon the 0.7% overseas aid target and spend 0.5% of national income on aid next year. This will amount to £10 billion.

The Chancellor argued that spending so much on international aid is difficult to justify while borrowing is so high. The government plans to return to the 0.7% target once borrowing is lower.

Departmental spending

Total departmental spending will increase by 3.8% in real terms, the fastest growth rate in 15 years. Headline announcements for departmental spending include:

• The NHS benefiting from an extra £3 billion
• £1 billion is also allocated to tackle treatment backlogs and enable delayed operations to go ahead
• £300 million extra grant funding for councils for social care
• A multi-billion pound increase in annual defence spending over the next four years, creating 40,000 jobs
• An extra £2.2 billion for schools
• A new £4.6 billion package to help people get back to work
• £2 billion extra for public transport, including subsidies for the rail network
• £4 billion over four years to provide 18,000 new prison places.

Infrastructure and ‘levelling up’

Investment in infrastructure will total £100 billion next year, with plans to deliver the highest sustained investment in four decades. This is supported by plans to launch a new infrastructure bank, which will be based in the north of England.

The Chancellor also announced a ‘levelling up’ fund of £4 billion. Local areas can bid for the funding to support local projects.

Questions?

Please contact us if you have any questions about the Spending Review and what it means for you.

At some point in our lives, most of us will need to take out a mortgage if we aspire to own a home. Yet, mortgages and the process of securing one can still be filled with jargon and other complexities. Our guide aims to provide you with all the information you need when searching for a mortgage, whether as a first-time buyer or you’re hoping to move up the ladder.

In the guide you’ll find information on:

• Deposits and LTV ratios
• The different types of mortgages available
• Why interest rates are important when selecting a mortgage
• Other factors you should consider when choosing a mortgage

Click here to download your copy of our mortgage guide.

Scammers are taking advantage of the uncertainty and stress caused by Covid-19 to approach more people. Figures show financial scams are on the rise and falling victim could affect your long-term security. However, there are warning signs to keep an eye out for to protect your assets.

Since the start of the pandemic, research from Aegon, suggests a fifth of the population have faced approaches by scammers, with 2.8 million falling victim. With some people feeling the pinch due to lower incomes and others wanting to make the most of savings amid a climate of low-interest rates, financial scams are on the rise.

While many financial scams involve smaller sums of money, fraudsters target larger savings too. Information released by the Financial Conduct Authority (FCA) revealed scammers have successfully accessed more than £30 million from pensions in three years since 2017. Some of these victims lost as much as £500,000. Financial scams can not only have a devastating impact on your financial security but your wellbeing too.

The 5 most common financial scams

We often think we’d be able to spot a scam. But scammers are becoming more sophisticated and when you’re already under pressure it can be easy to overlook the warning signs. The first step to protecting your assets is to understand how scammers operate.

The FCA has identified the top five financial and bank scams as:

1. Boiler room schemes: These types of scams will often start with a call out of the blue. Scammers will typically offer high investment returns and use high-pressure sales tactics to try and push you into quick decisions, such as moving your money to another account.
2. Phishing scams and smishing scams: Phishing scams refer to emails you may receive that appear to be from legitimate sources, such as your bank. They will contain a link which the email will say you need to click on to verify your account, confirm a transaction or something similar. Instead, you’ll unwittingly give them your account details. Smishing scams are similar but the scam begins with a text.
3. Pension liberation schemes: Pensions are usually among our largest source of savings and so present a tempting target to scammers. Unsolicited contact claiming they can help you access your pension early or have high-return investment opportunities should act as red flags.
4. Homebuying fraud: When buying a property, we typically have a lot on our mind and scammers take advantage of this. Homebuying fraud involves a fraudster monitoring emails between a solicitor and a client intending to get you to transfer the sale money to them. As they’ve been monitoring communication, these emails can be convincing and lead to you sending large sums to the wrong account.
5. Freebie scams: A freebie or free trial can be tempting. But if you need to enter your card details you may be signing up for an expensive monthly subscription that can be difficult to get out of. Once you approve this type of billing, payments can occur without any further contact. Of course, many businesses use a free trial model. Before supplying card details, make sure the firm is legitimate and manage payments carefully.

In many cases, if you fall victim to a scam it will be the last time you see your money, so remaining vigilant is important. If you think you’ve fallen victim to a financial scam, contact your bank or provider and Action Fraud, they may be able to stop the release of funds or recover the money.

6 things you can do to protect your money

1. Be wary of all unsolicited contact

While unsolicited communication can be tempting, it’s often the first sign of a scam. If you receive a call, text or email about your finances out of the blue, be cautious. Fraudsters using this tactic will usually be offering high-return investment or saving accounts to tempt you. Phrases such as a ‘free pension review’ or ‘pension unlocking’ are often indicators too. A ban on cold calling about pensions came into effect in 2019.

2. Verify who you’re speaking to

If you don’t recognise the person you’re talking to, take the time to do some due diligence. This should include checking the FCA register, which will show you if a firm or person is authorised. Keep in mind that number spoofing is becoming more common. This is where a criminal will manipulate the caller ID to suggest they are from a legitimate business, such as your bank. If you’re unsure, hang up the phone and call the firm directly on another phone where possible.

3. Don’t make quick decisions

Financial decisions can have a huge impact on your life and goals. Don’t rush into making them. A fraudster will try to push you into making snap decisions, so you don’t have the time to weigh up your options. They may do this by offering time-limited deals or even sending a courier to your house with documents to sign. Always take some time to think about your decisions. A professional will understand this and give you the time and space you need without pressure.

4. Understand your financial assets

Criminals often use a lack of understanding of financial assets to their advantage. For instance, they may suggest complicated investment opportunities or that you can access your pension sooner than possible. By understanding your assets, you’re in a better position to spot those trying to scam you.

5. Ask questions

Financial decisions can have a huge impact on your life, don’t be afraid to ask questions if you need more information or clarification. A scammer may try to brush you off, but a professional will understand why it’s important and be happy to answer questions.

6. Be realistic

High returns can be tempting. After all, you want to get the most out of your money. But if someone is offering low-risk, high-return investments, take a step back and ask if it’s realistic. As the saying goes, if it sounds too good to be true, it probably is.

We’re here to help our clients with their financial plans, and that includes being aware of scams that could pose a threat to you. If you’d like to discuss your assets and how to get the most out of them with your aspirations in mind, please get in touch to arrange a meeting.

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

Back in July, Chancellor Rishi Sunak announced a second range of measures designed to protect the economy through the Covid-19 pandemic.

His next update was scheduled to be the Autumn Statement in the coming weeks. However, given the newly imposed Covid-19 restrictions and economic uncertainty, the Budget has been cancelled.

In a statement sent to the BBC, a spokesperson for the Treasury said: “As we heard this week, now is not the right time to outline long-term plans – people want to see us focused on the here and now.

“So, we are confirming today that there will be no Budget this autumn.”

Instead, on Thursday 24^th September, the Chancellor unveiled his winter economy plan, setting out the next phase of the economic response to the Covid-19 pandemic.

Introducing his new measures, the Chancellor acknowledged that the virus will be a fact of life ‘for at least the next six months’ and so the economy will need ‘a more permanent’ adjustment.

Here are the main points announced in Rishi Sunak’s latest speech.

A new Job Support Scheme

The Chancellor announced the Coronavirus Job Retention Scheme, dubbed the ‘furlough scheme’, in March just as the scale of the pandemic was becoming clear. The aim was to prevent a rise in unemployment when businesses were forced to shut down to slow the spread of Covid-19.

The furlough scheme initially paid 80% of the wages of workers that were unable to work, up to a maximum of £2,500 per month. As the economy reopened, employers had to pay 10% of the wages of those on furlough and workers could return part-time, with the government making up the hours not worked.

With the furlough scheme ending at the end of October, the Chancellor was keen to continue to support at-risk jobs.

A new Job Support Scheme means that the government and employers will jointly cover the cost of those having to work fewer hours. Under the scheme, businesses will have the option of keeping employees in a job on shorter hours, rather than making them redundant.

To be eligible for the scheme, an employee will have to work a minimum of 33% of their hours, in order that the scheme only protects ‘viable’ jobs.

For the remaining hours not worked, the government and employer will each pay one-third of the employee’s wages. It means that employees working 33% of their hours will receive at least 77% of their overall pay.

The scheme will begin on 1 November 2020 and last for six months.

It’s important to note that, while all small and medium-sized firms are eligible, large firms are only eligible if their turnover has fallen in the pandemic.

The Job Support Scheme can also be used in conjunction with the Job Retention Bonus that the Chancellor announced in his Summer Statement.

CBI director-general Carolyn Fairbairn says: “These bold steps from the Treasury will save hundreds of thousands of viable jobs this winter. It is right to target help on jobs with a future but can only be part-time while demand remains flat.”

An extension to the Self-Employed Income Support Scheme

The Chancellor has been keen to provide the same support to self-employed workers as to employed staff.

In his statement, he revealed that he would extend the Self-Employed Income Support Scheme to 30 April 2021, although at a much-reduced rate.

The extension will support viable traders who are facing reduced demand over the winter months, covering 20% of average monthly trading profits through a government grant.

More flexibility with government loan schemes

Sunak announced that, under his Pay as you Grow Scheme, he will offer more than one million businesses, which have borrowed under the Bounce Back Loan Scheme, the choice of more time and greater flexibility to make their repayments.

For example, businesses can now extend their loans from six to ten years, and businesses can choose to make interest-only repayments – or suspend repayments for up to six months – without affecting their credit rating.

Lenders who have been enabled to offer the Coronavirus Business Interruption Loan Scheme will also offer borrowers more time to make their repayments where needed.

The Chancellor also extended the application deadline for all coronavirus loan schemes – including the future fund – to the end of 2020.

Tax deferrals

Sunak announced that businesses who deferred their VAT this year will no longer have to pay a lump sum at the end of March 2021.

Instead, they will have the option of splitting it into smaller, interest-free payments over the course of 11 months. This will benefit up to half a million businesses.

The Chancellor also announced that any of the millions of self-assessed income taxpayers who need extra help can also now extend their outstanding tax bill over 12 months from January 2021.

VAT reduction extended for hospitality sector

In his Summer Statement, the Chancellor reduced the VAT rate applicable to hospitality businesses from 20% to 5%.

In his address, Sunak announced that he will extend this VAT cut to the end of March 2021. Sunak says that this will continue to support more than 150,000 businesses and protect 2.4 million jobs.

Get in touch

If you have any questions about how these measures might affect you or your business, please get in touch.

Financial advice can add real value to your life.

Our guide looks at the ways financial advice can help you reach your goals and improve wellbeing. From improved financial security as assets grow to confidence in your long-term plans, financial advice can deliver numerous advantages. Research shows that financial advice benefits those that take it. Through considering the value advice brings, it can be viewed as an investment rather than a cost.

Click here to download your copy of the guide.

If you’d like to discuss how financial advice can benefit you, please get in touch on 0117 3320230. We aim to not only improve your financial situation but your life through the advice we give.

The Covid-19 pandemic caused market volatility earlier this year and, while there has been a recovery, investment values may still be lower than they were at the beginning of 2020. In addition, knock-on economic concerns are also weighing on the minds of investors. So much so that some are considering changing their retirement plans as they’re worried they can’t afford to retire.

Almost one in five (18%) of people now plan to delay retirement, according to a survey from Aegon. Seeing pension values fall and the possibility of further volatility on the horizon can make it seem as through retirement plans have gone off track. However, this isn’t necessarily the case and you may still have enough to retire on.

Before you access your pension or delay your plans, it’s important to assess your own circumstances.

How has the market volatility affected your pension and other assets?

You no doubt saw headlines about stock markets ‘crashing’ and ‘sharp falls’ earlier this year. It can be alarming to read these, especially if you’re nearing retirement.

However, these headlines focused on the stock market alone, and investment portfolios typically hold a range of assets, including bonds and cash. As a result, these assets can act as a buffer when stock markets are volatile. Most pension funds will automatically reduce investment risk as you approach retirement age too. So, you may have been less exposed to the volatility than you first thought.

While your pension and other investments may have dipped, it’s unlikely they did to the extent headlines suggest. The first step should be to review your own pensions and their current value.

Knowing that your investments are lower in value than at the beginning of the year can be disheartening. However, when you take a long-term view, you’ve still benefited from saving into a pension, thanks to investment returns, tax relief, and employer contributions.

Before you make any changes to retirement plans, you should take stock of pension values.

How much is enough to retire on?

The next step is to understand what you need so you can afford to retire.

There are numerous factors to take into consideration here, including your desired lifestyle and life expectancy. You need to calculate how much you need annually throughout retirement.

Often retirees find their general outgoings fall, as they are no longer commuting to work and may have paid off the mortgage, for example. However, there may also be big one-off expenses to consider too. Perhaps you’re hoping to travel more, help children financially or renovate your home?

This is a time to think about what kind of retirement lifestyle you want and the goals you’d like to reach.

Once you’ve thought about your lifestyle, you should consider how this matches up with your pensions and other assets. It can be difficult to understand how the lump sum in your pension will provide a regular income and whether it’s enough.

This is where financial planning can help. We’ll help you see how your savings over the years translate into a retirement income that you can rely on for the rest of your life – whatever your lifestyle and aspirations.

Considering market volatility when you’re retired

Since 2015, Pension Freedoms have given retirees more choice. You can now access Defined Contribution pensions in several ways.

This includes drawdown, where you can make withdrawals when it suits you and the remaining amount stays invested. Your pension remains exposed to the market thereby giving your savings a chance to grow further while you’re retired. While this flexibility has proven a popular option among retirees, it also means you need to consider potential market volatility while in retirement.

The recent market activity has highlighted how volatility could affect retirement plans. If you intend to remain invested throughout retirement, it’s important to understand the impact and how you should manage short-term volatility. Again, this is an area we can help you with. It’s a step that can give you confidence as you head into retirement.

If you’d like to discuss your retirement plans in light of the current situation and what it means for your future, please contact us on 0117 3320230 or email hello@bluewealth.co.uk.

Please note: The above is offered only for general informational and educational purposes. It is not offered as and does not constitute financial advice. You should not act or rely on any information contained in this comment without first seeking advice from a professional.

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,