Turning financial visions into reality – Investment planning

No two people are alike with each of us having a unique set of objectives. A professional adviser’s starting point is always to take the time to truly understand goals and aspirations and to turn visions into reality to create sustainable solutions.

Whether it be accumulated wealth after many years in a successful career, from the sale of a business or receiving a substantial inheritance. Whatever the origins, there are options for even greater growth opportunities.

Individuals have specific goals that reflect their risk tolerance, time horizon or asset class preferences. When it comes to building an investment portfolio, there are many types of investment to consider depending on your evolving circumstances.

Through regular reviews a good advisor will keep you frequently informed of your affairs and offer continual advice accordingly.

It’s down to each investor to be comfortable with the perfect balance for them, and this will vary depending on how much you have to invest, what stage of life you’ve reached and what you’re trying to achieve.

Clarke Nicklin Financial Planning provide tailored professional advice and solutions designed around you and your family to enable you to build a goal-based financial plan that reflects what’s most important to you.

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.


The importance of personal protection

Life cover, mortgage protection and health insurance, income protection….do you have it and why is it important?

Many of us don’t like to think about covering living expenses if we die or are unable to work through long term sickness. However, the people that you love the most would be affected the greatest financially if something happened to you and suitable protection was not in place.

If you have family or dependents who rely on your salary, it’s vital not only to have a policy in place but to have a policy that gives you the correct cover. There are a variety of policies available to suit you and your personal and family circumstances, ranging from those which purely pay off debts to providing an ongoing income, with a variety of circumstances protected by different products and different policies.

As Independent Financial Advisors and being experts in the field, Clarke Nicklin Financial Planning will assess the most appropriate policy and type of cover for your needs by getting to know in detail you and your circumstances, and will offer best advice on choices available as well as finding the best rates available for the protection you need.

Tough new measures on Pension cold calling

New tough measures that have recently been announced by the Government have been commended by Independent Financial Planning firm Clarke Nicklin Financial Planning.

The new measures, which will mean cold calling to sell pensions (including emails and texts) will be banned, are being enforced to protect pension savers from unscrupulous operators. No date has been set as yet for this to come into force. Companies will face heavy fines if they contact savers who either do not give prior permission or whom have no existing relationship with them.

Scott Herbert, Partner and IFA comments ‘This is another step in the right direction towards protecting consumers from unprincipled companies. This follows on from the banning of mortgage cold calls a few years ago. As a firm we pride ourselves that the vast majority of our new clients comes from referrals from existing clients who are very happy with the advice they have received and how they have been looked after, and therefore are very pleased to refer us to friends, family and colleagues.’

Mortgage switching inertia – many losing hard cash as a result

Once mortgage borrowers come to the end of their fixed discounted rate, they could see themselves paying a hefty price as they are automatically moved onto the lenders Standard Variable Rate (SVR).

Recent industry assessments suggest that the SVR charged by the big six lenders who account for 69% of the market collectively was around 2.5% higher than the cheapest fixed rate. *

Inertia and lack of awareness tend to be the main factor preventing borrowers from re-mortgaging to a new deal.

Reviewing options is time and effort well spent, though. Around 2 million borrowers who are eligible to re-mortgage to a new deal could save a vast amount of money. Industry assessments suggest timely re-mortgaging could save over £3,000 a year comparable to a fixed rate.

Take action now, check when your fixed rate is due to end and make a note when to action it.

A good mortgage advisor will help you through the process, and ensure you are advised on your most suitable options.

At Clarke Nicklin Financial Planning our focus is ensuring we provide a proactive, tailored service to our clients to ensure you are aware of your options and able to make the right decisions at the right time.  We fully assess needs, objectives and affordability over the short, medium and long term, and as part of our relationship we ensure our advice is tailored as needs change.

Important information

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it. Think carefully before securing other debts against your home.

Past performance is not a reliable indicator of future performance.

* Source Trussle Mortgage saver review May 2017

Passing on wealth without further tax charges

On 6 April 2017, a new additional main residence nil-rate band (RNRB) was introduced, which allows for less Inheritance Tax to be paid in situations when a family home is left to children, grandchildren or certain other ‘qualifying beneficiaries’ – including stepchildren and foster children.

Previously, if an estate of a married couple was left to any descendant, anything above the £650,000 combined threshold would have been taxed at 40% Inheritance Tax.

However, from 6 April 2017, the RNRB has been introduced with an RNRB of £100,000 per person, taking the total maximum individual personal allowance for Inheritance Tax from the current level of £325,000 to up to £425,000, or a total of up to £850,000 for married couples and registered civil partnerships.

The allowance for the family home is set to increase by £25,000 per tax year, so by 6 April 2020 onwards a couple with a family home may potentially be able to leave their children or other direct descendants a combined estate of up to £1 million without any Inheritance Tax to pay.

However, if the same couple were to leave their family estate to a sibling, the Inheritance Tax of 40% would apply on the difference between £650,000 and £1 million, leaving an Inheritance Tax bill of up to £140,000.

You may need to amend your Will

The majority of the people surveyed (72%) don’t know of or understand the changes that have come into force in this new tax year. If appropriate, you may need to amend your Will to ensure your estate can benefit from the increased allowance.

Even among those who do know about the changes, half (53%) didn’t realise that the increased tax-free amount can apply to cash proceeds from the sale of the home if you downsize or have to go into care.

Well-thought-out estate plan

Worse still, many people living ‘as married’ with partners – who would want their wealth passed to each other – don’t have Wills (44%). Therefore, unless assets are jointly owned as ‘joint tenants’, their estate will pass to their children who would have no obligation to provide anything to their father or mother’s partner.

It has never been more important to have a well-thought-out estate plan; complete with an appropriate Will and supporting documentation, to ensure your assets can pass to your loved ones in a tax-efficient manner.

The RNRB rules can be complex. Getting the right professional advice and amending your Will could take a few hours, but with potential to save a lot of money it’s time well spent.


Source data: LV= commissioned Opinium Research to conduct bespoke research among a sample of 1,000 UK residents who are over 55 years of age. Surveys were conducted online between 8 and 14 December 2016 and are nationally representative.


New Lifetime ISA – save for a new home and or retirement

The start of the new tax year on 6 April 2017 saw the launch of the Lifetime ISA (LISA). A new type of Individual Savings Account (ISA) to help save for a first home or towards retirement at the same time. To be eligible, you have to be aged between 18 and 39 years old.

You can save up to £4,000 which will be supplemented by a government bonus of 25% of the money you put in up to a maximum bonus of £1,000 each year.

You’ll obtain a bonus on any savings you make up until you reach 50 years of age, at which point you won’t be able to make any more payments into your account.

If you already have a Help to Buy: ISA, you’ll be able to transfer your balance into a LISA at any time if the amount doesn’t exceed £4,000. In the tax year 2017/18 only, you’ll be able to transfer the full balance of your Help to Buy: ISA – as it stood on 5 April 2017 – into your LISA without affecting the £4,000 limit. Alternatively, you could keep your Help to Buy: ISA and open a LISA, although you’ll only be able to use the bonus from one of these accounts towards buying your first home.

You will be able to use funds held in a LISA after 12 months to buy a first home valued up to £450,000. You must be buying your home with a mortgage.

Alternatively, after your 60th birthday, you will be able to take out all your savings from your LISA tax-efficiently for use in retirement.

A LISA can be accessed like a normal ISA at any time for any reason, but if not used as above, you’ll have to pay a withdrawal charge of 25% of the amount you withdraw (being the government bonus plus a penalty of 5%). However, this withdrawal charge won’t apply if you decide to cash in your account during the first 12 months after its launch.

If you want to use your LISA to save for a property as well as for retirement, once you’ve bought your first home, you will be able to continue saving into your LISA as you did previously. You’ll continue to receive the government bonus on your contributions until you reach the age of 50.

LISAs can hold cash, stocks and shares qualifying investments, or a combination of both. The option that is right for you will depend on your approach to risk, your investment time frame and how confident you are making your own investment decisions.






Pension freedoms – Retirement savers say they are still confused by the rules

It was over two years ago that the pension freedoms reforms took effect. Some retirement savers say they are still confused by the rules and want no more changes.

The changes of April 2015 represented a complete shake-up of the UK’s pensions system, giving people much more control over their defined contribution pension savings than before. There are now more options, enabling some people aged over 55 to have greater freedom over how they can access their pension pots.

Still confused by the reforms

Independent research* from Prudential highlights that two thirds of over-55s – the age from which retirement savers can utilise the new rules – say they are still confused by the reforms.

Government figures** highlight the cost of this confusion for retirement savers, as tax bills related to the pension freedoms are now greater than anticipated.

It was initially estimated that the changes would mean a total of £900 million being paid in both tax years 2015/16 and 2016/17. In fact, a total of £2.6 billion in tax is now expected to be paid.

Having an impact in other ways

Nearly one in ten over-55s say they have made changes to their retirement plans as a result of the reforms.

However, concerns that pension rules may change again in the future persist, with a high percentage of over-55s worried that the State Pension might be reduced or abolished.

Nearly two thirds also believe that tax relief on pension contributions will be reduced at some time in the future.

Increased flexibility brought about by the reforms

Nearly 550,000 people have accessed more than £9.2 billion in funds since the launch of pension freedoms***, demonstrating that there is popular demand for the increased flexibility brought about by the reforms.

Importance of advice and guidance

This widespread confusion underlines the importance of advice and guidance in ensuring that the pension freedoms are a long-term success, and many savers recognise how advice can help them to make the most of their retirement pot.

How you take your pension could have many consequences, including putting you in a higher tax bracket – even if that is not normally the case.

First step towards having sufficient income for a happy retirement

The pension freedoms provide a framework of rules, but it is down to individuals to seek help where needed to enable them to plan how to meet their financial goals. Saving as much as possible as early as possible during your working life is the first step towards having sufficient income for a happy retirement.

Source data:

* Consumer Intelligence conducted research on behalf of Prudential between 17 and 24 February 2017 among a nationally representative sample of 867 people aged 55-plus






Untying the knot – Divorcees twice as likely to have no savings

A daunting part of a separation or divorce for most couples is sorting out the finances. Financial disputes can be a major stumbling block in the divorce process and could take longer than the divorce itself.

The choices and decisions that you make will have an important influence on your financial well-being for many years to come. Divorced or separated people are twice as likely to have no savings or investments compared with those who are married (32% vs. 14%), according to research by Zurich UK.

Post-divorce financial considerations

1. Create a new budget
With your household income being impacted, it’s essential to go through your finances. Creating a budget sheet will help you to keep track of your in-comings and outgoings.

2. Protect your credit score
You’ll be surprised at how many financial products and agreements you share with your ex-partner, from utility bills to mortgage repayments and credit cards, so it’s worth checking your credit record. Your credit report will list the details of every financial agreement you have. This will help protect your credit score from anomalous payments on the part of your former spouse.

3. Close joint accounts and open new ones in your name
It’s really important to make sure that all joint credit cards and accounts are closed, paid off in full or at the very least changed to either your name or your former partner’s.

4. Think about your pension
Your pension is probably the last thing on your mind, but it’s essential for your future that you plan ahead. You and your partner may have built up a strong pension pot, so it’s important to pay particular attention to how this is divided, to make sure you are getting the best outcome. It’s particularly important for women who may depend on their husband’s provisions for their retirement, as they could be in for a nasty shock.

5. Make the most of your protection cover
Many protection policies contain valuable support or counselling benefits that can provide vital help or advice if you are going through a divorce. This support can cover areas from financial to legal to emotional support. Protection can also play a key role in covering any maintenance liabilities for an agreed period, such as when children reach 18, in the event of severe illness or even death.

7. Update your Will
Once you are divorced or separated, your existing Will is unlikely to be appropriate to your new circumstances. Make sure you update this as soon as possible to ensure that your wishes are followed.

Taking a long-term view
Divorce can be an incredibly challenging time, both emotionally and financially. Understandably, the focus is naturally on splitting immediate assets, but it’s important that the long-term is also part of the planning. In fact, after the family home, a pension can actually be the biggest asset at stake, so protecting this in the first instance is crucial.

Source data:
All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,073 adults. Fieldwork was undertaken between 25 and 26 October 2016. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+).
900 adult participants (19-55+) who are representative of the general population took part in the Mindlab experiment in the UK from 25-26 October 2016.

Career kick-start – Parents feel it is their responsibility to support their children

Despite footing the bill for further education, almost a quarter of parents worry their children’s qualifications won’t be valuable in the workplace.

Parents in Britain are spending on average £17,400 to help kick-start their children’s careers, new research from Scottish Widows’ think tank, the Centre for the Modern Family (CMF), has found.*

Footing the bill

Spurred on by concerns that their children will struggle to find a secure job, almost half of parents claim to have paid for smart clothing for their children to wear to interviews, while almost a quarter have paid for additional training courses and 17% helped their offspring with student loans.

Whilst over a third of parents provided this support because they believe it is their responsibility, one in seven admits to helping their children due to concerns they won’t be able to find a job otherwise.

University tuition fees

Parents with one or more children contribute on average more than £6,000 to university tuition fees in total, with almost four in ten also funding their children’s accommodation while studying, costing £5,000 on average. This is despite the fact that almost a quarter are worried their children will gain qualifications which won’t be valuable in the workplace.

The research shows that young people entering the world of work need more practical support and parents feel it’s their responsibility to offer this, therefore adding an additional layer of financial and emotional pressure.

To ease the burden on parents and the next generation of Britain’s workforce, we need to find ways to offer more support, such as improving access to career support and financial guidance and, crucially, at a younger age than it’s currently offered.

Source data:

* Among those who have paid for something for their children towards their future career. The £17,400 figure was calculated by adding up the mean amount that parents said they spent on each of the following for their children: university degree tuition fees, additional training courses, student loan, smart clothes for job interviews, accommodation while they were studying, practical equipment to help with studying and training e.g. books. This was then divided byte average number of children amongst respondents, 2.205, to arrive at a figure of £7,900 per child.

This report is based on both quantitative and qualitative inputs, including a nationally representative YouGov survey of 2,305 adults, with an added boost of 16–18 year olds, interviews and discussions with the Centre for the Modern Family panellists and a series of focus group sessions also conducted by YouGov. Fieldwork was undertaken between 23 May and 2 June 2016.


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