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  • Financial advice usually relates to a particular financial problem or area on which you are looking for help or guidance on and in the majority of cases, the advice relates to an individual financial product or investment.

    Financial planning however is more holistic and is the process of properly managing your finances in a way that allows you to achieve your life goals. The process assesses your financial situation as a whole and provides you with direction and control over all of your financial decisions.

    Financial planning enables you to see the ‘big picture’ and find answers to important questions such as:

    • How much do I need to earn/save in order to maintain my current lifestyle in retirement?
    • When will I be in a position to work because I want to, not because I have to?
    • Am I able to pass on money to my family, or create a legacy and still be sure I’ll never run out?

    Quite simply, how much is enough?

    As we all know, things in life do not always go as expected. Your financial plan can be tweaked to incorporate these changes and see how they impact your goals both short and long-term and what action needs to be taken in order to get you back on track.

    Read more about Financial Planning here

  • Those of you who have read my blogs before will know how passionate I am about protecting what is important. I have previously explained the benefits life cover can bring together with a whole manner of other bespoke protection solutions.

    Every financial plan we produce is only as robust as the foundations it is built upon. One of the cornerstones of our plans is ensuring that sufficient savings are in place to cater for life’s emergencies.

    Despite the continued economic improvement, consumer savings levels have remained low, the latest Lloyds Bank Savings Index shows that half the population have less than two months income (£4,308) in savings.

    The bank’s poll of 3,446 people in July, August and September 2014 also found 35 per cent have less than one month of income (£2,154) saved.

    Only 16 per cent have more than four months’ of income in savings, which equates to savings in excess of £8,616, based on the average full time salary.

    Despite low levels of savings, people understand the importance of saving more for a rainy day; with 87 per cent saying it is important to have a minimum amount to protect against unexpected costs.

    Half said they would need at least two months’ worth of income for emergencies, with this figure being made up of 22 per cent who would need four months’ income or more.

    Some 32 per cent said they cannot save due to a lack of spare money, yet despite this figure being the main reason for not saving, it has reduced significantly in the last year.

    In the third quarter of 2013 this figure was 11 percentage points higher at 43 per cent.

    Philip Robinson, savings director of Lloyds Bank, said: “Although confidence in the economy is improving, one in three of us still have less than a months’ income in savings. People do recognise the importance of saving and if they are able to get in the habit of putting away small amounts each month, the rainy day savings pot will grow as their circumstances improve.”

    At FMB, we recommend that our clients retain 3 to 6 months expenditure in their ‘emergency fund’. This money should be available easily, without access restrictions, however, still earning a reasonable return so it does not necessarily need to be held in your current account. Easy access savings accounts, Cash ISA’s or offset mortgages are just some of the places we believe are suitable options for this money.

  • People could be forgiven for switching off when news of changes in pension legislation hits the media. It’s certainly not the most interesting of subjects and of late it appears that rules change nearly as often as the weather. However, the latest raft of proposals have definitely favoured the plan holder - not the insurance companies and certainly not the tax man.

    Changes in pension legislation earlier this year greatly increased the advantages of these long term saving vehicles. Newer additional changes have probably made saving via a pension the single most tax efficient method of accumulating a pot of money for future use. Nothing major has altered regarding the accumulation of benefits. These still receive an uplift via tax relief on contributions going in and also on the beneficial tax treatment of the underlying investments within the plan.

    However, the major changes are on the removal of restrictions previously applied to certain methods of drawing benefits. The options are clearer, simpler and believe it or not fairer to the pension plan holder. In addition, harsh ‘death tax’ penalties that applied to certain forms of residual pension pots will either be reduced or removed completely from next April. Again this provides far greater flexibility and added value to the saver, who utilises all the benefits that pension plans can provide.

    Cynics would argue that consecutive governments only make legislation changes to encourage people to make their own pension provision. As this potentially reduces the government burden of footing the bill for old age further down the line. I cannot argue with this point of view although I would look past the reasons for legislation change and just take full advantage of what’s on offer!

    The real message is not legislation change or tax relief or even pensions for that matter, the real point I am trying to make is that on retirement people can easily live the next 20 years or more in very good health. It is at this stage of life with proper financial planning that these years can be some of the most enjoyable and fruitful of one’s life. Doing all the things you never had the time or money to do.

    If you would like to speak to a qualified financial planner about planning for your future please don’t hesitate to get in touch.

  • 28 October 2014

    When can I retire?!

    How old will you have to be before you are entitled to a State Pension?

    The State Pension system in the UK is fairly straight forward. You must have paid sufficient National Insurance contributions (usually done by completing 30 years of qualifying contributions), then attain a certain age (currently 65). At this point, you are entitled to a State Pension. Simple right?!

    At the moment, that would mean that the Government will pay for me to retire at 65 – which is great, however, the State Pension age is on the rise and will increase to 66 between November 2018 and October 2020, to 67 between 2026 and 2028 and to 68 has been pencilled in for completion by 2046, but is likely to be brought forward.

    Will it stop there? I doubt it.

    People in the UK are living longer, at a good rate too. According to the Office of National Statistics (ONS) the average man aged 65 can expect to live another 18.3 years and a woman of the same age will live a further 21 years.

    As the State Pension is such a drain on the budget, I can’t see the age settling for long at 68. Some experts suggest the age should already be at 73 to keep pace with rising mortality rates.

    So what is the answer? Means test the State Pension? Put the age up? Higher Taxes?

    The best way to ensure YOU can retire when YOU want is through private savings. The new Pension flexibility rules, the tax relief incentives and tax efficient growth environment are making Pensions a very attractive place to save.

    Start early, make some solid plans and begin saving.

    So, “When can I retire?”

    It is up to you!

  • The 7IM Asset Allocation Committee met again recently to discuss their short term views on global economies. Their objective is to identify suggestions for short term tactical changes to reflect our current view of the market and economic outlook. The aim is to enhance investment returns by making controlled adjustments over relatively short periods, rather than to fundamentally alter the portfolio’s long term risk and return profile.

    These views go some way to outlining their strategy for  portfolios for the next 3 to 12 months. A summary is available below to download.

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