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  • Earlier this week I was talking to friends when someone reminded me that this coming Monday was the summer bank holiday; spelling the end to our summer... well what we've had of it anyway! After that, we’re into September, and it is then only a matter of time until the countdown to Christmas starts. It will be 116 days or 16 weeks and four days just in case you're wondering.

    This got me thinking… when did bank holidays come about and why did banks get ‘extra’ holidays in the first place? Working in the financial industry I thought I should probably try and find an answer and thanks to the wonders of Wikipedia and the BBC, it turns out that they have been around much longer than I thought.

    In the early nineteenth century, the Bank of England had observed around 33 saints' days and religious festivals as holidays. By 1834, this had been reduced to just four; 1st May, 1st November, Good Friday and Christmas Day.

    In 1871, Liberal politician and (as you guessed it...) banker, Sir John Lubbock, introduced the Bank Holidays Act which recognised an additional four holidays*; Easter Monday, Whit Monday, the first Monday of August and Boxing Day. It was suggested that these were named 'bank' holidays as opposed to public holidays as it gave them more importance. But why did he choose these dates? Allegedly Sir Lubbock was an avid cricket fan and he chose them to coincide with when the village matches were played in his home county.

    A century later, the Banking and Financial Dealings Act 1971 was passed which specified the majority of the bank holidays we have now. New Year's Day and May Day, however, were not introduced throughout the whole of the UK until 1974 and 1978 respectively. The August bank holiday was changed from the first Monday in August to the last Monday in August, and the Whitsun bank holiday (Whit Monday) was replaced by the Late Spring Bank Holiday, which occurs the last Monday in May.

    Since this time there has been further debate as to whether further changes to the bank holidays could be made, such as moving the ‘May Day’ bank holiday to October to be a "UK Day", or to St George's Day. This appears to be a matter that the British public are split upon, so perhaps we should just leave well alone and just enjoy the holidays for what most people see them as... a longer weekend in which to spend time with good friends and family!

    * Bank Holidays in England

  • Annuities have received quite a lot of press in recent years but for all the wrong reasons. Pension providers have been criticised for offering low annuity rates (considerably lower than they were ten years ago) which can seem to be a rather poor value for money option for retirees.

    Following the pensions freedom legislation changes earlier this year, the Government is considering a change in the law which would give the 5.5 million people already taking an income from their pension, the right to sell their annuities. This would provide them with the same flexibility on how they wish to spend their pension savings, as those who have not yet retired.

    It is expected that insurance companies will not have access to this second-hand annuity market and so third parties would be able to buy them. These companies are likely to insist on medical underwriting and charging substantial fees for re-selling meaning annuitants could be disappointed with the amount they're offered. That said, according to research by YouGov on behalf of investment manager Tilney Bestinvest, 17% of the 1,800 surveyed would consider swapping their guaranteed income for a cash lump sum. 33% of those surveyed said that they did not plan to sell their annuity, and 50% were unsure. (source: YahooFinance UK)

    We're yet to hear from the Chancellor if and when this will be introduced - which might keep us waiting until the next budget to find out more.

    If you have any queries regarding your pension or preparing for retirement, please give one of our friendly planners a call on 01539 725855

    or click here to complete our enquiry form and someone will be in touch with you as soon as possible.

    Read more about retirement planning...

  • 21 July 2015

    Family Planning…

    (L-R) Liz Singleton, Justin Urquhart Stewart & Ruth Power
    Caption: (L-R) Liz Singleton, Justin Urquhart Stewart & Ruth Power

    As a fairly new Granddad, I was flicking through some photos the other day, (well actually scrolling through my camera memory card - but you know what I mean!) when I came across this picture of FMB friend, Justin Urquhart Stewart with FMB Directors, Liz Singleton and Ruth Power.

    It brought back some great memories of a fantastic cruise we had on Lake Windermere during one of Justin's visits to The Lake District some years ago. It then reminded me of a great piece of advice he gave to families in a recent blog of his...

    “If you are planning to invest – don’t! Invest in planning. It may sound trite but from personal experience I can clearly say that it’s true. Before you part with a single pound, sit down quietly and do some clear thinking as to what you to want to achieve, as well as how and when. After all, none of us would set up a business without a business plan, so why wouldn’t the same apply to your private life as well. In fact, the only thing that most of us actually plan is our holiday, and the rest we leave to good fortune – if we are lucky."

    He's right. As financial planners, we often hear about people wanting to invest, but what are you investing for? Without determining that, how do you know whether it is going to achieve its purpose?

    Financial Planning is all about getting to the heart of what’s important to you; quantifying your goals and objectives and finding a way to help you achieve them. With a family, this could be supporting your children with their education fees or helping them buy their first home or could be provision for retirement or long-term care costs for yourself or your partner. As a nation, we often tend to plan far too late, and we hear the phrase "I wish I had..." all too often. The thing is; it is never 'too early' to plan.

    Statistics released by The Guardian recently (07.07.15) showed that people sometimes massively underestimate when it comes to their finances:-

    • Their statistics showed that the cost of raising a child in Britain from birth until age 21 was shockingly underestimated by a staggering £179,000 - with the average guess being £50,000 when the actual cost was £229,000.
    • Another statistic showed that, when asked how much you would need to have in a private pension savings pot to get a total income of around £25,000 a year after stopping work (assuming that they were claiming a full state pension) - this was miscalculated by £191,000 with the average guess being £124,000 when the actual figure was £315,000.

    But how are you meant to know how much is enough? And how can it be calculated? We are able to use an extremely powerful cashflow modelling tool to demonstrate this. The tool can determine whether you are likely to achieve your goals or what changes need to be made to keep you on track.

    If you would like to have a chat about your finances, call one of our friendly planners today.

  • 13 July 2015

    Local Heroes!

    We have taken a conscious decision over the last few years to use local suppliers where possible. We understand that national firms bring employment to the region too, but as an independent Kendal business we need people to trust that local can be just as good as national and sometimes even better.

    We’re lucky enough to have a stable economy in South Lakes with unemployment significantly below the national average. That’s not to say we don’t have our challenges, but how can a firm like ours help? For a start, we employ 37 local people, but we can do more than that.

    We have been using local suppliers more consciously over the last few years. It’s surprising just how many services you use as a business and the majority can be found right on your doorstep. From design to pest control, from catering to security, how does this really help though? When you are a local independent, you can be more flexible in order to help your business survive even when the going gets tough. I think it’s the strength of our SMEs that meant this area got off relatively lightly during the recession in terms of employment at least. You can’t deny the huge influence of massive employers like BAE systems and Asda for example, but what I’m saying is we need a healthy mix of both. We support local because we want to encourage that healthy mix.

    But can we really find the services we require on our doorstep? We’re in a specialist sector and inevitably, for some of the financial expertise we require, we have to look further afield. But generally it’s easy to find excellent quality services right here in Cumbria, and that’s what we want. SERVICE! Excellent customer service is much easier for small local companies to get right, and that is where the SMEs like us will excel. Not where cheapest matters, but where service is paramount.

    So, because of this desire to support local business and our local economy, we have joined The Brewery Business Club. In doing so, we support the Brewery Arts Centre and all the other members by spreading the word about their great businesses. It’s a growing, vibrant community and a great idea to merge the creative arts with business to further promote the sustainability of a wonderful local resource. As part of our sponsorship, we will be holding some competitions on social media to win tickets for the Brewery Cinema so be sure to follow us on Facebook and Twitter to join in!

     

  • 10 July 2015

    The Budget...

    This week’s budget was always going to be interesting as the first Conservative budget since November 1996.

    In many ways, the focus was not on investors this time and more about welfare reform and tweaking the system to “make work pay”.

    The most significant measure for us was the change to the Inheritance Tax threshold. Much of our planning is around helping clients pass wealth on to their families. This measure will be very welcome to many people, as it is not hard to fall foul of the current limit, especially in South Lakeland where property prices have always been high in proportion to wages.

    Over the years, we have helped hundreds of clients reduce their exposure to IHT. The truth is, in real terms this tax, which at the outset was supposed to be a tax on the wealthy, was increasingly becoming a middle-income tax as the threshold slipped behind inflation. The rise to £1 million is a fulfilment of a promise the Conservatives have been making to their core voters for many years. Until the recent relative upturn in the economy, it was politically hard to deliver. The inclusion of the family home softens the blow for any detractors, who could argue that you should not be able to pass on a relatively modest family home free of tax? I suspect this will remain the limit now for a very long time. It will be difficult to justify any concessions on this going forward when the government is constantly looking for sources of income to pay for our increasing pension and long-term care bill as the population ages.

    As we meet with clients over the coming year, it will be time to take stock and review how this affects people on an individual basis. The beauty of having a relationship with a financial planner is that we can respond to changes and make sure your plan is still fit for purpose. The financial landscape has changed dramatically over the last 18 months and we strongly recommend an ongoing review of financial plans to ensure people take advantage of changes to financial legislation as well as looking at how changes to personal circumstances affect your goals and objectives.

    For more on the budget, check out the BBC summary or see how the budget changes will affect you with the BBC's Budget Calculator.

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  • Top 5 financial planning tips for accumulators

    If you are in your thirties or forties now could be a good time to review your finances. We have compiled our top 5 tips for small tweaks that can make a big difference to your long term financial plans. See the top 5 tips here

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