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  • 31 October 2017

    When can I retire?

    Your financial freedom awaits but when is YOUR financial freedom day?

    Clearly thousands of people are looking on Google for the answer. Many people assume they will retire at state pension age, or the age which has been defined by a scheme to which they or their company have paid in.

    Shouldn’t that day be defined by YOU?

    Some people can’t wait for freedom. To others work is not a burden, it is a pleasure which they don’t want to give up.

    At FMB we use cashflow modelling software to give you a clear picture of when your financial freedom day could be. The sooner you find out, you can make steps to bring that closer. You do not have to wait for an arbitrary day, if you can find another way to fund the gap.

    Your financial plan evolves as the years go by, but using the cashflow model we have created with all your assets and liabilities we can begin to build a picture of when that day could be. As it gets closer we can be more specific and really close in on the wonderful day!

    But hold on….you get there and actually that freedom no longer seems as important. You are still healthy, happy and enjoying work. Maybe you can afford to go part time, work in another role or take on some voluntary work.

    Now it is a CHOICE! Not something dictated to you by the government or a pension scheme.

    Wouldn’t that be great….

    If you want to find out your state pension age you can use an online calculator we recommend you ask for a state pension forecast NOW no matter what age you are. You need to make sure you are paying or have paid the right National Insurance contributions so you can get your full state pension.

    Read more about how cashflow modelling at FMB works, if you think this could help you plan for your financial freedom get in touch today. There is no charge for an initial discussion with a Financial Planner.

  • 26 September 2017

    Labour Pension Vote Winner?

    I’m following the Labour Party conference this year with interest to see what thinking is emerging regarding tax, spending and state benefits and pick out the things that might perhaps impact on our clients.

    Shadow Work and Pensions Minister Debbie Abrahams spoke yesterday and this is what she said;
    “We promised in our Manifesto to provide pension credit and additional support to the two and a half million 1950s women still waiting to retire. As a starter, I can announce today that a Labour Government in power now would allow these women to retire up to two years early”

    Quite a vote winner you would think. There is no doubt that women in this age bracket feel cheated out of something they had always imagined they would receive and for those completely reliant on state benefits these are difficult times. But let’s just unpick what Abrahams has said; up to 2 years early is not defined and there is little meat on the bones. Many of the women in question will already have retired by the time of the next election, if indeed Labour can make it to number ten. The time it takes to pass a bill and arrange the administration of such a complex initiative would mean the whole thing would be irrelevant.

    The pressure group WASPI, representing the affected women did not agree anything short of full reinstatement would be acceptable so it will be interesting to see if they think this halfway measure is palatable.

    Sir Steve Webb former Liberal Democrat Pensions Minister under the coalition government, pointed out the flaws in the Labour manifesto in May this year before the general election when a drop in the pension age was mooted.

    "The cost of cancelling planned state pension age increases is astronomical. These are eye-watering sums of money which would either have to be found from somewhere or added to the national debt. As we live longer, it is inevitable that state pension ages will have to rise, as they are around the developed world. It is unrealistic to suppose that as a nation we can afford to ignore the fact that we are all living longer."

    He also makes the argument that having different retirement ages for men and women does not fit with equalities legislation, meaning this promise would also have to apply to men!

    Sir Steve Webb to speak in Kendal

    Sir Steve Webb is now policy director at Royal London and we are fortunate to have persuaded him to give up some time in his busy schedule to come and talk to us on Thursday 19th October at the Castle Green Hotel, Kendal at 4pm.

    The event is for business owners and professional connections and is available to book via Cumbria Chamber of Commerce.

  • Well, somebody has been!

    In February, the Financial Conduct Authority (FCA) said it had received 11,650 enquiries regarding scams between 1 December 2015 and 30 November 2016.  13% of all their dealings with consumers were about scams.

    You might be reading this thinking, I’m a grown up, I can handle myself. I would never fall for a scam. What about your more elderly family members who weren’t brought up with the online dating and over-egged linkedin profiles (not me ?), who genuinely trust people to be who they say they are?

    If any of your family could be vulnerable to scammers, you could really help them out by reassuring them it’s okay to question someone’s motives when they ring you out of the blue!

    Thanks to a campaign initially started by a Financial Advisor from Derbyshire, Darren Cooke, the huge issue of cold calling pension scams was drawn to the attention of Chancellor Phillip Hammond who pledged to stamp it out.

    Last week the Government published it’s consultation on a proposed ban of cold calling. You can find it here.

    The report says, “In 2013, 97% of pension fraud cases brought to Citizens Advice stemmed from cold calling.” It lays down a three pronged approach to stopping the problem; banning cold calling and tightening up on the transfer from pensions and the creation of new pension schemes to make it harder for scammers.

    Research from other financial institutions has revealed the problem was more widespread than expected and from my own experience I noticed a growing number of calls springing up after the last Chancellor announced the new freedom to take out your pension early. There are always unintended consequences, but this was not one we couldn’t see coming like a freight train!

    The problem with pensions is that by the time the fraud occurs there is no time to earn more money. These are people’s life savings quite literally.

    Just a little story; I did speak at length with a pension’s scammer on the phone who knew more about me than I was comfortable with. After a while, I confessed that I worked in finance and how dare people like him try it on like this, giving the whole industry a bad name. Obviously he hung up, but I looked up the number online using this useful website called I discovered the name of the company and traced them to a residential address in the midlands where 44 other companies were registered!

    This applies to any phone call, if you at are unsure- no matter how bona fide it sounds- there is no such thing as an emergency that can’t wait a few minutes. You can google the number and check that they are who they say they are.

    Interestingly while I have been writing this I have two numbers call my mobile, usually I don’t answer unless I recognise the number (they'll leave a message if it's important), but in the interests of research I picked up!

    “Hello is that Rebecca Bailey?”…no it’s not. A classic scammer technique. They are calling a random number and you’re about to tell them who you actually are. DON’T!

    Followed very closely by a second call, also a Manchester number, possibly the same call centre using a different number.

    “Hi it’s Paul here from DirectClaims”…Just. No.

    After checking on I discovered 12,000 people have searched for this number and many had left comments warning of a scam, sometimes asking about PPI, sometimes Accident claims and often asking for the wrong person.

    "This will never happen to me?" well it happened to somebody...

  • There are lots of reasons people don’t want to give away a slice of their hard earned cake! However, it could help you reduce your estate and therefore your Inheritance Tax liability.

    1) I don’t know the rules, I don’t want to cause a problem with the tax man.
    2) Don’t you have to live 7 years for it to be tax free?
    3) I don’t know if I will need it myself.
    4) I don’t want to spoil my family, they should wait. I had to.

    There are perfectly legitimate ways to give money away every year regularly which very few people use.

    As long as  you can prove the gift is from surplus income and does not affect your living standards then this is immediately outside your estate. You do not have to wait seven years and there is no limit provided all conditions are met! The gift does have to be habitual though.

    If you want to give away cash (i.e. an asset that is not income/interest/dividends) you can still do that, but there is a £3000 limit. In addition to these gifts, possibly given on birthdays or Christmas, there are other situations where you can make a lump sum gift, such as up to £5000 for a child’s wedding, or up to £3000 to a charity. Even if you had two children marry in the same year (heaven forbid!) it is possible to make the total £10,000 gift in the same tax year. You can also carry £3000 forward from the previous year if you’ve got behind.

    The rules are a little complicated I grant you, but with a good financial plan showing income and expenditure, and a little record keeping it can be easily managed. We help our clients keep track of the gifts they make as well as provide the evidence for HMRC that they meet the requirements in the time period they were given.

    On point 2, yes we are agreed, if you make a substantial gift (over £3000 and from capital assets) generally you have to wait seven years until the gift is no longer eligible for Inheritance tax. There is no giving away everything on your death bed! Unfortunately people do tend to leave it rather late to think about these things, bringing me to point 3.

    The reason people tend not to address this until the 11th hour is because they don’t know how much money they will need for themselves. Here at FMB we use cashflow modelling with our clients to work out how long their money will last, what their needs will be and whether they are likely to have surplus funds towards the end of their life. We have enabled people to help their children with house deposits and university fees, in full knowledge that they CAN afford it. Obviously we don’t have a crystal ball, but we can make some common sense assumptions which will help you make decisions about how much money you can afford to gift. Giving gifts from income and using the allowances available each year can chip away at your IHT liability without giving too much away in one go.

    As to point 4, this is a very personal decision but I would say this:-

    Why not enjoy watching your family enjoy the fruits of you labour?
    Often children receive an inheritance when they are financially established themselves why not give them some money when it could have really made a difference?
    You can suggest the money is for a specific purpose such as a home improvement or new car. Or the money can be placed in a trust or pension to delay the gift.

    I have explained the rules simply here, you need to take advice from a financial planner or accountant to ensure you have complied correctly with gifting. To look further at the rules HMRC have a page on their website which explains it all. Cick here.

    This advice is not regulated by the Financial Conduct Authority. FMB always suggests clients use a tax advisor to submit tax returns.

  • Liz taking part in the St Begas Ultra Trail Race in 2014
    Caption: Liz taking part in the St Begas Ultra Trail Race in 2014

    For years I have looked on with awe and envy at the people who have participated in the Brathay 10in10. The first time I learned of this event was on the day that I took part in my first marathon; The Brathay Windermere Marathon back in 2010. The 10in10 eventers set off about an hour before us, and I remember watching them, struggling to get my head around the fact that they had already completed 9 of these in the nine days before the main Windermere Marathon day – and still looked rather enthusiastic!

    In years to follow, whenever I have driven through the Lakes when the 10in10 has been on, I have always beeped encouragement to the participants and have felt complete admiration and astonishment for what these people were achieving. Over the next few years I built up to doing some, I suppose, slightly more hardcore events myself but nothing on that scale.

    I have got to know the team at Brathay a little better over the last seven years, mainly thanks to my husband, Wayne. Not only have I been able to see how much hard work and determination goes into holding these events, but also the amazing things they do at Brathay and the positive changes they make to young people’s lives within the community. There is a magic at Brathay that I have never felt anywhere else and you can see how passionate everyone is that is involved with their fantastic charity!

    All of the above have made the urge to enter the 10in10 get stronger and stronger. This year’s application had been sat on my desk for weeks while the deadline crept closer and closer. My running hasn’t been great of late, as I have been suffering from calf pain when running and walking which I have been receiving treatment for. Doubting myself (and my legs), I decided that I wasn’t going to enter this year; what if they don’t improve, what if I can't do it, what if I let everyone down, what if I don’t get selected? But then an email popped into my inbox from Ally, the events coordinator, with the clear message “you won't know if you don’t try!” How true. So now they have my application, and the waiting begins.

    I know it will be a tough challenge and I will have to put in hours and hours of training, come rain or shine. I know I will have to juggle my training with my already manic schedule, and I’m going to have to work even harder on the fundraising, but I am really excited for the challenge.

    So what exactly is the Brathay 10 in 10?

    The Brathay 10in10 has been described as the UK's ultimate endurance running event. 10 laps of Windermere, 262 miles, in 10 days.

    When: 11th May 2018
    Where: Brathay Hall, Ambleside, LA22 0HP

    Back in 2007, Sir Christopher Ball suggested that the ASICS Windermere Marathon incorporated a '10 marathons in 10 days' endurance running event. Ten years later the event is known as one of the "UK's toughest running events".

    "The event itself is fantastic. It's amazing. It's painful. It's scary. It's wonderful. It's dreadful. It's my proudest achievement ever. You just don't know what you can do until you try. When I first heard about the 10in10, I couldn't get my head round it. Why on earth would you want to do it? But a tiny seed was planted, and by 2012 it was an unstoppable force. Who would have thought that a middle-aged, slightly overweight, not very fast woman would be able to complete such an event?

    I remember turning up at the January training weekend for the 10in10 and being in total awe of the other runners in the room. I felt enveloped by optimism. We were called "athletes"; there was a team to support us. No-one ever doubted we would succeed and because of that you start to believe it yourself." Eleanor Tillotson, 10in10 runner

    If you would like to find out more about The Brathay Trust, you can visit their website here.

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