Pensions and retirement still remain a taboo

When it comes to marriage and money, it’s good to talk.

Millions of married couples have no idea about their spouse’s pensions and retirement plans, according to new research[1]. More than three-quarters (78%) of non-retired married[2] people do not know what their spouse’s pensions are worth.

Nearly half (47%) of non-retired married people have not spoken to their spouse about their retirement plans and 85% of non-retired married people are not aware of the tax-efficiencies of planning retirement together.

Retirement finances

Wealthy people aren’t doing much better. Mass affluent people (those with assets of between £100,000 and £500,000 excluding property) are more likely than average to be aware of the value of their spouse’s pension, but the majority (60%) aren’t going to plan their retirement finances with their spouse and 78% aren’t aware of the benefits of planning retirement together

The research indicates that millions of married people are not talking to their partners about their pensions and retirement plans. That’s a mistake because couples who jointly plan their retirement can be much better off when they stop working.

Lifetime of saving

Most people have a good idea of what their house is worth, and the same attitude should apply to their retirement funds. After a lifetime of saving, the value of a retirement fund can be worth as much as a property so it’s important that people know how much their retirement savings are worth and the potential death benefits they offer.

The best way for people to ensure they have the retirement they want, their pension income lasts throughout their retirement and that they avoid unnecessary tax bills is to obtain professional financial advice. This is especially true for people who plan to retire within the next five years.

Pension tips for couples

Pay into your partner’s pension: A higher-earning partner approaching the Lifetime Allowance or Annual Allowance could pay additional contributions into their partner’s pension. The contributions will attract tax relief.

Don’t forget the death benefits and Inheritance Tax benefits of pensions: Pensions won’t normally form part of the estate for Inheritance Tax purposes and, on death before age 75, they can usually be paid out tax free (on death after 75, they are taxed as the beneficiary’s income). It can make sense to discuss when and how to access a pension and if it would be better to spend any other savings first.

Avoid unnecessary large withdrawals from a pension fund: Couples should consider how much money they need to withdraw from their pension funds. Drawing too much too quickly can lead to large tax bills.

Make sure your partner knows who to contact about your pensions if you die: You may have carefully arranged all your finances so that they can be passed to your loved ones in the most tax-efficient way possible. However, if your partner hasn’t been part of the conversation they may make uninformed decisions. It’s worth remembering that any adviser/client relationship you have ends on death. Data protection rules mean your financial adviser won’t necessarily know what is happening. This can lead to irreversible and costly mistakes being made.

On retirement, many people’s first instinct is to request their full tax-free cash entitlement. However, unless a large lump sum is needed for a specific purpose, this is not always the wisest course of action.

If flexibly accessing a pension, it can often make sense for couples to retain most of the tax-free cash entitlement until a later date, looking to utilise the personal allowance (and potentially the basic rate tax band) to draw tax-efficient income instead.

Source data:

[1] LV= surveyed 4,000+ nationally representative UK adults via an online omnibus conducted by Opinium in June 2021.
[2] Includes couples in civil partnerships. UK population stats from ONS. Total UK adult population is 52.7m UK adults (aged 18+).

How can I protect my money from inflation?

Five questions to ask before inflation really takes off.

‘How can I protect my money from inflation?’ is a question that many people may be asking themselves right now. In the current economic climate, rising inflation is becoming a concern for people with savings and investments.

The effect means you’re potentially earning less money due to your hard-earned cash becoming worth less as time goes by. The negative impact of inflation upon the real value of an investor’s portfolio will be a concern, particularly for the older generation with not enough investments, who may live mostly or entirely off their savings and pensions. It can be even worse if they have a decrease in income at the same time as a loss of value on their assets.

If you’re middle-aged or young, it’s also important to consider how much inflation will affect you and your investments. Many savers may currently be receiving very low returns on their cash deposits, but with many households sitting on more cash than ever following COVID-19, protecting cash from inflation is becoming vital.

Five questions to ask to protect your cash from inflation:

1) Is the amount you have in cash appropriate for your circumstances?

The first thing we would say here is that the amount of cash you have should be appropriate for your personal circumstances. What we mean by this is that the amount of cash someone else has may not be appropriate for you, because we all have different needs and wants.

The amount of cash savings that a person has should always match their circumstances and income level. Since we don’t know what life will bring next, we need to be able to take care of ourselves and our families – even the unexpected – without having to resort to or depend on credit cards or loans from others. It’s important to build an emergency fund.

This should contain at least three months’ worth of expenses – those are the bare minimum. It could be more, but not less than three months’ worth. But since this will be at the mercy of inflation, some savers may opt to hold the bare minimum amount in cash to avoid incurring losses on the value of their money.

2) Should you consider investing some of your cash?

As a general rule, the answer to this question will depend on your cash flow needs and investment preferences. But you should consider investing some of your money, even though this may seem counterintuitive.

Ultimately building a diversified investment portfolio rather than putting all your eggs into one basket, so having some cash savings and some investments for growth, is likely to suit most people’s risk profiles.

While past performance is no guarantee of future performance, investing some of your cash savings may be worth considering. If you’re saving for a long-term goal, like retirement, then it’s really important to factor in inflation. If you don’t it could erode the value of your money and jeopardise your plans for the future.

3) Have you maximised your pension savings in recent years?

How much money you get in retirement depends on how much you put in, and when. When you retire, the money you have saved up in your pension will provide an income. The bigger that pot is, the more you’ll get each year to help pay for your living expenses. On average, people retiring today may need to replace about half of their pre-retirement income with savings and investments (income from pensions or other savings).

Obtaining professional financial advice is important to make sure you’re putting enough away so your retirement savings last longer. To give yourself the best chance of a comfortable retirement, you need to make sure as much as possible goes into your workplace or personal pensions as early as possible.

It is important to maximise pension contributions to receive tax relief as this helps you save more money for your retirement goals. Pensions are still a very tax-efficient investment for the majority of people, with tax relief on contributions, as well as tax-free growth within the fund.

4) Have you made use of your ISA allowance this year, and those of your family (assuming you’re feeling generous)?

Do you have an ISA allowance? Have you made use of this year’s allowance and do you plan to make any changes in the future to your ISA savings strategy? Have you made use of your family’s ISA allowance this year?

Everyone aged 18 and over can invest £20,000 per annum into an ISA; those under 18 can invest £9,000 each year. ISAs grow tax-efficiently, whether invested in cash or other asset classes like stocks and shares, and the long-term effects of this tax-efficient growth can be significant.

5) Are you making the most of your income allowances?

You work hard to make a living, and you should take advantage of how much money you have been able to earn. Personal income allowances give you the ability to control how much or how little tax you pay on money that has been earned over the year.

Often, we find people squander the opportunity to use a spouse’s or partner’s lower Income Tax rate, or even their Personal Savings Allowance (currently £1,000 for 2021/22), by holding investments or cash balances in the higher earner’s name. This could mean, for example, paying tax on interest at 45% when the spouse would pay just 20%, or even no tax at all. There is no limit on the amount of money that can be transferred between spouses, so you might want to consider whether transferring holdings to or from your partner would benefit your family.

Few savers will be untouched by inflation in the near future. But by asking yourself the questions above, you can mitigate the effect of inflation by making sure your money is working as hard as possible to earn inflation-beating returns.

INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM, TAXATION ARE SUBJECT TO CHANGE.

THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED. PAST PERFORMANCE IS NOT A RELIABLE INDICATOR OF FUTURE PERFORMANCE.

Change to the state pension triple lock

Pensioners ‘deeply disappointed’, particularly women and self-employed.

The earnings benchmark of the State Pension triple lock will be temporarily set aside for next year. The Department for Work and Pensions (DWP) confirmed on 7 September that the State Pension triple lock rule will not be applied for the 2022/23 financial year over concerns of the potential costs involved.

It comes after the Office for Budget Responsibility (OBR) said in July that pensioners could see their payments rise by as much as 8% due to the guarantee. The triple lock guarantees that pensions grow in line with whichever is highest out of earnings, inflation or 2.5%.

Average earnings component disregarded

Work and Pensions Secretary, Therese Coffey, said the average earnings component would be disregarded in the 2022/23 financial year. ‘I will introduce a Social Security Uprating and Benefits Bill for 2022/23 only,’ she told the Commons.

‘It will ensure the basic and new State Pensions increase by 2.5% or in line with inflation, which is expected to be the higher figure this year, and as happened last year, it will again set aside the earnings element for 2022/23 before being restored for the remainder of this Parliament.’

Skewed and distorted statistical anomaly

Ms Coffey said the figures had been ‘skewed and distorted’ by the average earnings rise, which she described as a ‘statistical anomaly’.

She said the change meant that pensions would still rise, but less quickly. The triple lock would return the following year, she added.

Bedrock of many pensioners’ retirement income

Many pensioners will be deeply disappointed that the triple lock has been scrapped for next year, as the State Pension is still the bedrock of many pensioners’ retirement income. Women and those who are self-employed are among those who will be particularly affected by the temporary scrapping of the triple lock, as they are more likely to rely on the State Pension in retirement.

However, it is encouraging that the government hasn’t abandoned its longer-term commitment. The 2.5% minimum rate has been used on a number of occasions, and is having the effect of slowly increasing what people receive in real terms. The long-term trajectory of the State Pension will also be more important to younger people, more than a one-off hike in line with earnings this year.

Festive gifts that teach children the value of money

Why parents should look to Christmas investment gifts instead of toys.

With the festive season approaching, have you thought about gifting your children or grandchildren something different this year? Giving them a good start in life by making investments into their future can make all the difference in today’s more complex world.

Lifetime gifting is not only a good way to set up children for adulthood but is also a way of mitigating any Inheritance Tax concerns.

However, what’s clear is that not all saving products for children are made equally. With interest rates at historic lows, if you are looking to put money away for a child to enjoy when they grow up investing is by far the best way to maximise your gift.

Significantly higher returns

Some people remain worried about the volatility of investing but, with an 18-year horizon, putting money to work in the market can give significantly higher returns than products such as Premium Bonds.

One option to consider is a Junior Individual Savings Account (JISA). These were introduced in the UK on 1 April 1999 as a long-term replacement for Child Trust Funds (CTFs). If a child was born between 2002 and 2011, they might already have a Child Trust Fund, but these can be transferred into a JISA.

Save and invest on behalf of a child

If the CTF is not transferred, when a child reaches 18 they’ll still be able to access the money. Or they can choose to transfer it into a normal Cash ISA. A JISA is a long-term savings account set up by a parent or guardian and lets you save and invest on behalf of a child under 18 without paying tax on income or gains.

With a Junior Stocks & Shares ISA account, you can put your child’s savings into investments like funds, shares and bonds. Any profits you earn by trading investment funds, shares or bonds are free from tax.

Investments are riskier than cash but could give your child a bigger profit, and the value of a Junior Stocks & Shares ISA can go down as well as up.

Money in the account belongs to the child, but they can’t withdraw it until they turn 18, apart from in exceptional circumstances. They can start managing their account on their own from age 16.

Financial education from a young age

The Junior ISA limit is £9,000 for the tax year 2021/22. If more than this is put into a Junior ISA, the excess is held in a savings account in trust for the child – it cannot be returned to the donor. Friends and family can also save on behalf of the child as long as the total stays under the annual limit.

When your child turns 18, their account is automatically rolled over into an adult ISA . They can also choose to take the money out and spend it how they like. It is therefore important to ensure that children are given financial education from a young age so that when they can get their hands on the funds they use them wisely.

INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM, TAXATION ARE SUBJECT TO CHANGE.

Pandemic triggers shift to saving

People thinking more about their spending and financial priorities.

The coronavirus (COVID-19) pandemic has lead to more people re-thinking how they spend and manage their money, with more than half (51%) now prioritising saving for an unexpected event or loss of income, research published suggests[1].

A third (32%) are setting aside money. This reflects Bank of England[2] estimates that more than £200 billion of savings have been built up during lockdown, but only 10% of these are expected to be spent over the next three years.

Spending and financial priorities

The findings show that while just under half (46%) of households are spending less generally on a day-to-day basis, the pandemic is clearly making people think more about their spending and financial priorities.

Nearly two-thirds (65%) said they are now very mindful about their money, with 38% giving more consideration to financial planning, and savings and investments. When asked what they would do with an unexpected £2k windfall, 40% said they’d save it compared to just over a quarter (26%) who said they’d spend it right away.

Battening down the hatches

Unsurprisingly, people’s savings are being offset in part by increases in grocery and household bills (for 37% and 36% respectively). And with more time at home for many, it seems we’re battening down the hatches and spending more on premium food and take-aways, while 39% are looking to invest in home improvements and DIY as we look to enhance our space.

Importance of our livelihoods

The good news for the advice sector is that nearly one in five (19%) are thinking more about seeking professional financial advice, a quarter of people are giving more thought to Wills and inheritance planning, and nearly one in five are thinking about protection products such as critical illness cover.

The past 19 months really have brought into sharp focus the importance of our livelihoods and finances, with many concerned about their health and financial security. But despite these tough times, it’s reassuring to see people taking stock and thinking positively about how they can bolster their situations, with one in five people considering professional financial advice.

Source data:

[1] 204 respondents to Zurich’s research panel made up of 88% target customers/12% customers May 2021.
[2] https://www.bankofengland.co.uk/bank-overground/2021/how-have-households-spending-expectations-changed-since-last-year

Property wealth boost

Older homeowners receive £1.94 billion.

Older homeowners received a £1.94 billion property wealth boost in the first half of 2021, data shows[1]. More than half of the proceeds of equity release (52%) were used to clear mortgages (45%) and manage unsecured debts (7%) while 23% was used to help family and friends – notably for help with house deposits as buyers rushed to beat the end of the Stamp Duty holiday.

These ‘big ticket’ expenses saw an average of £74,894 in borrowing being repaid and £72,520 being gifted. Over half of people who used their equity to support wider family and friends used it to provide a house deposit (52%) or an early inheritance (59%) – some of which was no doubt also put towards property purchase.

Invaluable source of cash

Equity release can be an invaluable source of cash for some over-55s. It enables homeowners to unlock the value locked up in their home as a tax-free lump sum without having to sell it, downsize or relocate.

Your home must have a minimum value of £70,000 and be your permanent main residence in the UK, which you live in for more than six months of the year. With equity release you don’t have to make monthly payments, unless you choose to. It’s usually repaid when the last borrower moves into long-term care or dies.

What types of equity release plans are there?

There are two main types of equity release:

Lifetime Mortgage: This is the most common type of equity release. You borrow money secured against your home. The mortgage is usually repaid from the sale of your home when you die or move permanently into residential care.

Home Reversion Plan: You raise money by selling all or part of your home while continuing to live in it until you die or move into permanent residential care.

Total value released

The data revealed an increase in the amount of money used for property purchases – around 7% of the total value released went towards buying homes with the average customer taking out £115,068 to boost their buying power.

Around 71% of people took out drawdown plans in the first half of the year, taking an initial average amount of £56,744 and reserving another £666.4 million for future use.

Double digit gains

The data reflects the whole market and shows that every region apart from Northern Ireland saw the value of property wealth released increase. London recorded the biggest increase at 74% while Wales recorded a 42.1% rise and another seven regions saw double digit gains.

Wales recorded the biggest rise in plan sales at 24.1% followed by London on 22.6% and a total of seven out of the 12 regions saw increases in plan sales.

The strength of the housing market in the South East and London meant those regions accounted for just over £1 billion of all equity released – more than half the total across the UK during the six months – despite accounting for only 34% of plans sold.

Source data:

[1] Key Market monitor Equity release performance in the UK Half year 2021

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR MORTGAGE IS SECURED ON YOUR HOME, WHICH YOU COULD LOSE IF YOU DO NOT KEEP UP YOUR MORTGAGE PAYMENTS.

EQUITY RELEASE MAY INVOLVE A HOME REVERSION PLAN OR LIFETIME MORTGAGE WHICH IS SECURED AGAINST YOUR PROPERTY. TO UNDERSTAND THE FEATURES AND RISKS, ASK FOR A PERSONALISED ILLUSTRATION.

EQUITY RELEASE REQUIRES PAYING OFF ANY OUTSTANDING MORTGAGE. EQUITY RELEASED, PLUS ACCRUED INTEREST, TO BE REPAID UPON DEATH OR MOVING INTO LONG-TERM CARE. EQUITY RELEASE WILL AFFECT THE AMOUNT OF INHERITANCE YOU CAN LEAVE AND MAY AFFECT YOUR ENTITLEMENT TO MEANS-TESTED BENEFITS NOW OR IN THE FUTURE.

CHECK THAT THIS MORTGAGE WILL MEET YOUR NEEDS IF YOU WANT TO MOVE OR SELL YOUR HOME OR YOU WANT YOUR FAMILY TO INHERIT IT.

IF YOU ARE IN ANY DOUBT, SEEK PROFESSIONAL FINANCIAL ADVICE.

Significant impact on retirement prospects and planning

£5.3 billion lost from over-50s’ retirement pots throughout the course of the pandemic.

Over-50s workers in the UK could have a £5.3 billion hole in their collective pension pot due to cutbacks on retirement savings over the course of the pandemic, according to new research[1].

The new findings estimate that approximately 10% of pre-retired over-50s – 1.4 million people[2] – are continuing to save less every month when compared to before the pandemic. At present, those over 50 saving less have reduced their monthly savings by £155 a month. However, at the peak of the pandemic this was an average of £219 less a month.

Saving less towards retirement

Overall, over-50s saving less towards retirement will have contributed £3,283 less on average over the course of the pandemic than they otherwise would have. Over-50s workers who are continuing to save less are doing so for a variety of reasons, such as pay decreases (39%), redundancies or job losses (22%) and the impact of being furloughed (13%).

One in five over-50s saving less (20%) have also had to reduce their retirement contributions in order to provide more monetary support to their loved ones.

Significant impact on retirement

It’s completely understandable that those who have faced financial hardship as a result of the pandemic may have looked for opportunities to cut back on their outgoings. However, the research shows that saving less, particularly for those in their 50s, could have a significant impact on retirement prospects and planning.

As we look ahead towards a period of recovery, the best thing people can do is commit to spending a day sorting through their affairs to better understand the options at their disposal, rather than burying their head in the sand.

Source data:

[1] Opinium survey of 2,160 UK over-50s in the UK who have not retired between 9 – 13 August 2021, 224 of which are saving less towards retirement, compared to before the pandemic.
Opinium and L&G ran two studies amongst pre-retirees aged 50+, and asked them how much less they were saving, if at all. Up to Jan, the average amongst all in this group were saving £27.01 less per month. Up to August, the average was £16.17. Applied across the relevant months from April 2020 onwards, this means this group on average saved £383 less overall. £383 x 13,944,731 = £5,344,851,289 or £5.3 billion.
[2] Opinium estimates there are currently 13,944,731 over-50s who are not retired in the UK. 224 out of 2,160 pre-retirees aged 50+ said they are saving less towards their retirement. 224 / 210 * 13,944,731 = 1,446,120 or 1.4 million.

A PENSION IS A LONG-TERM INVESTMENT NOT NORMALLY ACCESSIBLE UNTIL AGE 55 (57 FROM APRIL 2028 UNLESS THE PLAN HAS A PROTECTED PENSION AGE). 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, TAX LEGISLATION AND REGULATION WHICH ARE SUBJECT TO CHANGE IN THE FUTURE. YOU SHOULD SEEK ADVICE TO UNDERSTAND YOUR OPTIONS AT RETIREMENT.

ACCESSING PENSION BENEFITS EARLY MAY IMPACT ON LEVELS OF RETIREMENT INCOME AND YOUR ENTITLEMENT TO CERTAIN MEANS-TESTED BENEFITS AND IS NOT SUITABLE FOR EVERYONE. YOU SHOULD SEEK ADVICE TO UNDERSTAND YOUR OPTIONS AT RETIREMENT.

How has COVID-19 affected retirement plans?

Attitudes and aspirations of this year’s retirees.

The coronavirus (COVID-19) pandemic has impacted on every aspect of our lives, affecting individuals’ financial situation and for many, their plans for retirement. If you are approaching retirement in the next 12 months, your plans should be under continuous review.

We take a look at new research which has highlighted the attitudes and aspirations of this year’s retirees[1].

Shifting attitudes

The pandemic has shifted attitudes and priorities across almost all aspects of people’s lives, but specifically, the timing of retirement is one thing that has changed for many. The research uncovered that 37% of people have sped up their retirement date in the past 12 months. The opportunity to work from home and escape the daily commute, has freed up time to enjoy other things.

It has provided a glimpse into what retirement might look like and many like what they see. Some may have found themselves forced into an early retirement due to a change in work circumstances or redundancy. While others were doing the opposite with 12% deciding to delay retiring.

When you choose to retire is important, the timing of it can limit or increase your earning potential prior to retiring. If you are considering changing your retirement date, it is important to discuss with us your updated plans so we can help you understand any impact this may have.

Flexible retirement

Traditionally when we think of retirement we think of the departure from working life. Although people often look forward to giving up work as part of their retirement plans, others have no intention of doing so fully.

Whether it be a financial or emotional driver, the growing trend of working in retirement is clear from the research. Just 44% see retirement as giving up work completely.

The rise in flexible working as a result of COVID-19 has also been a contributing factor; making stepping back rather than stepping away much more achievable than ever before with 22% planning a more flexible retirement by simply reducing their hours.

Financial impact

Unsurprisingly traveling remains a key aspiration. However, research shows that 30% of people have had to reconsider their travel or holiday plans in retirement.

As a result of COVID-19, uncertainty around safety and travel restrictions has led to more and more people choosing a ‘staycation’ or investing in a UK based holiday home over heading overseas.

Whether you’re swapping the Côte d’Azur for the Cornish coast or simply delaying your travel plans, it’s important to consider the financial impact, if any, that changing your original plans may have.

Cross-country moves

Lockdown living forced many of us to reassess what is important. With 51% worrying about not being able to do the things they want to in retirement.

As mentioned, travelling is one concern However, for 43% of people, not being able to spend time with family and friends has been a worry. For the peace of mind that another national lockdown won’t hinder the opportunity to visit loved ones, there has also been a trend in cross-country moves to be nearer to children and grand-children.

A move in retirement may not have been on the cards prior to the pandemic, however, this may now have become a priority for many.

Reviewing your plan

In times of uncertainty, making a plan can seem like a waste of time. However, it’s important to think ahead to retirement and review your plans for the future, and even more so as we face up to the protracted coronavirus crisis.

It’s concerning to see some individuals accessing pension funds earlier than planned with others thinking about this option. While this may alleviate short term financial pressures, it leaves less of a retirement fund to provide an income throughout what can be decades of retirement.

It’s important not to rush into making life changing retirement decisions without first seeking professional financial advice.

Source data:

[1] Research by Standard Life Aberdeen, carried out in February 2021 by 3Gem – 1000 adults, aged 55+ and still working.

Coping with life-changing events

Plan for tomorrow, live for today.

Change is the only constant in life. It inevitably involves twists and turns, with some that are expected while others may be entirely unplanned. When this happens, it’s important to feel secure with the knowledge that you have the right contingency plan in place.

None of us can predict exactly what a life-changing event will be or when it will occur, and many of them will take you by surprise, whether good or bad. Here, we consider some major life events you may wish to discuss with us.

Divorce and managing finances

Managing your finances after divorce can sometimes feel like an impossible task, especially if the amount of money coming into your household is much less than when you were married. For some people, divorce can mean financial devastation or hardship.

You may lose half of what you have saved over the course of your adult life, and go into debt paying lawyer’s fees and other expenses. Yet as messy and painful as divorce can be, it is often both necessary and ultimately a good thing – and it is possible to recover both financially and emotionally after a divorce.

When you’re facing a divorce, you need to know where you stand financially. We can help you plan for a sound financial future, to give you security and peace of mind, allowing you to move forward with your life.

Thinking about financial planning for long-term care

More people in the UK are living for longer, which is good news. However, this longevity brings certain challenges, such as how we will fund any long-term care that may be needed in the future. If you are one of the many people faced with helping a parent or another loved one find long-term care, then you are probably grappling with a lot of questions.

Among them: How can I bring this up in a way that won’t upset them? How are they, or how are we, going to pay for this?

What type of living situation is best?

Ageing comes with many joys and challenges. We can discuss with you the options to help cover your loved ones’ care needs now and in the future.

Dealing with your finances in widowhood

Coping with the death of a loved one can be extremely hard. You may be dealing with lots of different emotions, finding it hard to process them and having difficulties moving on. Losing your loved one, whether expected or sudden, can prove almost too much to bear.

But it’s surprising how uninformed some spouses can be about each other’s financial lives. Even in marriages that consciously attempt to integrate finances (joint bank accounts, both names on the mortgage), a lot of financial activity is specific to one spouse, for example, a credit card, retirement planning, an ownership interest in a business, investments, a car with only one name on the finance agreement.

After the death of a spouse, your financial situation will likely be a major concern. We will take the time to understand your needs and recommend solutions personally tailored to you.

What to do and not do with an inheritance

Losing someone you care about is one of the hardest experiences in life. Receiving an inheritance probably means coping with the death of a loved and cherished member of your family or a friend. The emotion associated with bereavement often makes taking decisions about both their estate, and what you stand to inherit, difficult.

Most estates are settled within six to nine months in the UK, but it depends on the complexity of the estate. If it isn’t handled appropriately, the pressure of the proceeds can be stressful, upset your relationships and complicate your finances.
During this difficult time we can help you to consider your options, assess any tax implications and decide how this inheritance could be used to provide you with financial security in the years ahead.

The importance of financial planning

Financial planning helps you determine your short and long-term financial goals and create a balanced plan to meet those goals. The coronavirus (COVID-19) pandemic has demonstrated unequivocally that such unforeseen and unplanned-for events can wreak havoc on our personal finances.

Establishing clarity around your finances is arguably one of the most critical things you can do for your overall financial success. It is important to understand your financial needs and then create a financial plan to meet them. Tax planning, prudent spending and careful budgeting will help you keep more of your hard-earned cash.

We know you’ll have different priorities for your wealth at different points in your life. Whatever your financial aims, we can help you achieve them for both you and your family.

How to trace multiple old pension pots

Over time, pension schemes close, merge or become renamed.

Changed job? Moved house? It’s not always easy to keep track of a pension, especially if you’ve been in more than one scheme or have changed employers throughout your career. Over time, pension schemes close, merge or become renamed. So even if you remember the name of your scheme, it could now be called something else.

With more of us changing jobs regularly throughout our working lives, it has become harder to keep track of old company pensions. This is particularly the case for people who have moved home and whose pension providers no longer have their correct contact details.

With the disappearance of the job-for-life and with more people moving jobs several times throughout their working life and accruing multiple pension pots along the way, it can be all too easy to lose track of the pension funds built up.

So how can you go about tracing any pension schemes you have paid into at some point in the past?

Get in touch with former employers

If your forgotten pension scheme was run by a company you worked for, you should contact them first. In some cases, individuals may not have been aware they were actually paying into a pension, especially if no monthly salary deductions were being made.

Most pension schemes must send you a statement each year. These statements include an estimate of the retirement income that the pension pot might give you when you reach retirement.

First, check to see if you have any old paperwork that might have the name of your employer or pension scheme. This will give you a good starting point. If you’re no longer getting these statements – perhaps because you’ve changed your address – to track down the pension you can contact the pension provider, your former employer if it was a workplace pension, or The Pension Tracing Service.

Contact pension providers

Even if your pension was linked to your job, it may have been run on your employer’s behalf by a pension company. In this case, you should get in touch with the provider rather than your previous employer.

The same applies if you set up your own personal or stakeholder pension, for example. The Pensions Advisory Service, which is sponsored by the Department for Work and Pensions, can also help you look for a personal pension.

You’ll need to provide information about the name of your old employer or pension provider, and potentially further information such as the dates you worked at the company and your National Insurance number.

If you know which provider your pension was with, your first step is to contact them. However you contact them, you should provide as many of the following details as possible: your plan number, your date of birth, your National Insurance number and the date your pension was set up.

By asking the following questions, you’ll get a thorough overview of your pension pot:

Q: What is the current value of my pension pot?

Q: Have I nominated a recipient for any death benefits?

Q: How much has been contributed into my pension pot?

Q: What charges do I pay for the management of my pension pot?

Q: How much income is the pension pot likely to pay out at my chosen retirement date?

Q: How is my pension pot being invested and what options are there for making changes?

Q: What are the charges if I wanted to transfer the pension pot to another provider?

Q: What are the death benefits – in other words, how much money would be paid from the pension if I died?

Use the Pension Tracing Service

An alternative way of tracking down a lost workplace or personal pension is by using the Pension Tracing Service. This is a free government scheme which can be accessed via the government website. Again, you will need to provide as much information as possible about yourself and the dates you were a member of any scheme.

You can phone the Pension Tracing Service on 0800 731 0193 or submit a tracing request form to the Pension Service via the GOV.UK website.

Stick to official services

Be warned though, from time to time, businesses are set up to offer similar tracking services to people who have lost pensions. Although they are not necessarily doing anything illegal and often offer assistance for free, they may try to give the impression that they are official services.

In fact, they could be trying to obtain the personal information of people who have substantial pension savings so they can persuade these individuals to make investments or pay for financial advice, for example.

To reduce the risk of losing track of a pension in future, ensure you let providers know whenever you change your home address or any other details, such as your email address.