Record number of LPA registrations in 2023

The number of Lasting Power of Attorney (LPA) registrations rose to a record high last year, new figures have revealed.

According to data from the Family Court, there was a 37 per cent rise in the number of LPA registrations in 2023, taking the overall figure past one million for the first time.

An LPA means you can give a person you trust the legal right to make decisions on your behalf, concerning your property, finances and health.

So it’s hugely welcome that more people are thinking of and preparing for a possible future where they lack the capacity to make decisions for themselves.

But what’s driving this increase in the number of registrations. Well, there are three main factors…

The Covid-19 pandemic

Covid restrictions forced many of us to sit back and evaluate our lives, possibly for the first time ever, and seek to get our affairs in order.

As a result, there was a surge in demand for LPAs, so people could prepare for a situation if they couldn’t make decisions for themselves.

Similarly, Covid triggered an increase in demand for wills, as more people were prompted to make sure their wishes would be fulfilled if they passed away.

Earlier diagnosis of dementia

According to the Alzheimer’s Society, 900,000 people in the UK are currently living with dementia, and this is expected to rise to 1.6 million by 2040.

Figures also show that 70,800 British people who are living with dementia developed symptoms before the age of 65.

With dementia becoming so much more common and having a devastating impact, a growing number of people are taking steps to ensure their interests are represented if they lose capacity in the future.

Speaking to Moneyweek, Katie de Swarte, Wills and Probate Partner at Osbornes Law, said: “Earlier diagnosis of dementia will be a contributory factor {to the increase in registrations], with doctors now routinely advising their patients to make LPAs.”

Streamlined online application process

Many parts of the LPA application process can now be carried out online, which means a person no longer has to go through a solicitor in order to set up this document.

Thinking about a time where we can’t make decisions for ourselves or live independently can be extremely difficult.

But since none of us can really know what’s coming down the line, it’s really important to be prepared for the worst.

Setting up an LPA is one of the best ways to do that, as it effectively serves as an insurance policy, giving you the certainty and confidence that difficult decisions have already been taken, and that your future is in safe hands.


Why clearing debt should be your top financial goal

Debt can be a huge drain, both financially and emotionally, so clearing your outstanding debts should be a priority.

By paying down any sums you owe, you’ll be in a much stronger position to save up for those things that matter to you, from holidays abroad to a larger property.

According to a survey by HSBC, clearing debt is the main long-term financial goal among people in the UK, ahead of saving up for big purchases, taking early retirement, paying off the mortgage and saving for a property.

However, just half of those polled said they know how much interest they’re paying on their current debts, which means many could be paying more than they need to in repayments by failing to pay off high-interest debts first.

Similarly, only 11 per cent were found to have combined their debts into one place to make them easier to manage.

The peace of mind that comes with paying down debt can’t be understated, as the constant worry about minimum payments and deadlines can take a huge toll on your mental health.

When that worry is taken out of the picture, you can feel a tangible sense of control over your finances and security about your future.

You also won’t have a sense of panic if anything unexpected happens, as you can build a cash reserve in case you’re hit with sudden expenses, such as a leak in the roof or replacing a damaged appliance.

This sense of freedom can help you take a look at the bigger picture and focus on achieving your larger ambitions.

From booking a luxury holiday to setting up a business or saving for your retirement, these goals are far more doable and realistic if you’re not battling monthly debt repayments at the same time.

According to the HSBC study, six in ten people are confident in their financial resilience and feel able to handle surprise expenses over the coming year. Furthermore, over half said they feel confident they’re in a position to achieve their financial goals for the next 12 months.

But with so many failing to take steps to pay down their debts, you have to wonder whether some of this confidence could be misplaced.

If you’re struggling with your debts, the best course of action is undoubtedly to speak to a qualified financial planner.

A professional specialist can help you make the right financial decisions, so you can be sure that your money is working hard for you and that you’re on course to achieve your objectives.

When will interest rates come down?

The Bank of England raised interest rates 14 times between December 2021 and August 2023, as part of an effort to tackle soaring inflation.

So as the rate of price increases has moderated, members of the Bank’s Monetary Policy Committee (MPC) have changed course, and recently opted to keep interest rates on hold at 5.25 per cent for the fifth time in a row.

The debate has now turned from how high interest rates will go, but to how quickly they will come down, especially as they’re currently at a 16-year high.

Andrew Bailey, Governor of the Bank of England, has acknowledged this discussion, stating that rate cuts could actually be on the way before inflation reaches the Bank’s target of two per cent.

Speaking to BBC News, he said: “We don’t have to actually get inflation all the way back to target… to cut rates for instance. What we have to do is be convinced that it is going there.

“We should act ahead of time in that sense because we have to be forward looking.”

However, Mr Bailey would not be drawn on either when interest rates might come down or how much they could be cut by.

“We do need to see further progress,” he continued.

“But I do want to give this message very strongly. We have had very encouraging and good news, so I think you know we can say – we are on the way.”

What do analysts think?

Market analysts, observers and commentators are largely agreed that interest rates will come down before the end of the year, but split on exactly when this will be.

Ruth Gregory, Deputy Chief UK economist at Capital Economics, believes that inflation will fall “further and faster” than the Bank of England is expecting over the next few months.

“That’s why we think a rate cut in June is possible and why we think rates will fall to three per cent in 2025 rather than to 3.75 to four per cent as priced into the market.”

By contrast, Marion Amiot, senior European economist at S&P Global Ratings, told Reuters that it is expecting the first rate cut to come in August.

“The Bank of England will need to see a lot more moderation in wages and services prices before it starts cutting rates,” she said.

Gabriella Dickens, G7 economist at AXA Investment Managers, was somewhere in between the two positions, saying: “A decision of when to ease will be finely balanced between June and August.

“But on balance, we now see the first move as more likely in June. We continue to expect two further 25 basis point cuts in November and December.”

Colin Asher, Senior Economist at Mizuho Bank, adds that a rate cut in May “seems off the table”, stating that while June is possible, August is still the “most likely” date.

Meanwhile, the Bank of England’s wider strategy has been criticised by Carsten Jung, Senior Economist at the IPPR, who said the MPC has “tightened the screws too much, which is squeezing much-needed future growth”.

“Inflation is coming down more quickly than many predicted just a few months ago,” he said. “This is largely due to global supply chains recovering and energy costs falling. But also domestic price pressures are falling quicker than the Bank had anticipated.

“The Bank should thus cut rates more quickly than its current plans.”

Suren Thiru, economics director at ICAEW, added that while the cycle of hiking interest rates is “firmly in the rear-view mirror, the long delay between tightening policy and its impact on the wider economy means that the heavy toll of 14 rate rises has yet to fully crystalise”.

“The Bank of England remains overly cautious on the prospect of rate cuts given the startling inflation slowdown and an economy in recession, increasing the risk they prolong our economic struggles by keeping policy too tight for too long,” he commented.

Amid this uncertainty, it’s important that clients keep a sharp eye on their savings and on the interest rates they are receiving.


What is loud budgeting?

Money can often be something of a taboo subject, so many of us stay tight-lipped even if we’re desperate to say something.

But a new trend, termed “loud budgeting”, suggests that attitudes could be changing.

This trend, which is growing in popularity on platforms such as TikTok, encourages open discussion about your finances and why you might choose not to spend money.

For example, imagine you have a very clear financial goal in mind, such as paying off your credit card debt, saving for your summer holiday or putting money aside for a deposit on a house.

Then one day you’re invited out to an expensive restaurant, or to go to a hen or stag do abroad for several days.

By embracing loud budgeting, you can say no to these expensive offers, and simply explain that it’s because you want to use this money to meet other priorities.

This is quite different to saying you don’t have the money in your account, so there’s no feeling of shame about not being able to afford something.

Instead, it’s explaining your reasoning for not spending on certain things, and being transparent about your boundaries and financial goals.

By being open in this way, you can confidently and positively say no, hopefully without feeling judged by your friends.

Loud budgeting has many advantages that can enable you to stay on course to achieve your objectives.

Firstly, sharing your goals with others can help you keep your goals in mind and hold yourself accountable. As a result, you can stay motivated and be less likely to spend money on impulse purchases.

Secondly, if your friends are aware of your aims and ambitions, you’ll be less likely to face peer pressure and be more confident saying “no”.

Finally, being open and transparent with your social group could encourage others to do the same, and you may find yourself with a regular source of encouragement, advice, support and motivation.

But of course, loud budgeting can come with some drawbacks. For instance, there’s no guarantee that you won’t receive a degree of judgement and negativity from others.

And if you’re being open on a digital platform such as TikTok, it’s really important that you don’t reveal sensitive details.

Even if you think loud budgeting is a good idea, you should think about the platform and the audience you’re speaking to before sharing any personal financial information.

How can I help my child save money?

A key aspect of being a parent is helping your child become an independent, self-sufficient citizen.

One way you can do this is by helping them understand money and giving them a headstart with saving.

Not only can this help your child become comfortable managing and talking about money, it can also help them begin their adult life with a healthy amount already in the bank.

Open a savings account for your child

Many high-street banks offer dedicated savings accounts for children, each with their own unique features and selling points.

It’s therefore well worth researching the market and thinking about which accounts offer the most competitive interest rates.

You should also think about the various restrictions that different products offer, as some will require minimum monthly deposits and others will have limits on the maximum balance allowed.

Another consideration should be how easily you and your child will want and need to be able to access the account. Some will require you to visit the bank branch to deposit or withdraw money, whereas others may offer online banking functionality and even debit cards for young people.

Choosing the right savings account for your child depends on many different factors, in particular their age, so ask yourself what you want to achieve by opening this account, what you believe is appropriate for them and how much parental control you might need.

Start by saving small amounts

Once you’ve set up a savings account for your child, encourage them to start putting money away regularly. This doesn’t have to be a large amount, as even just a few pounds a week can make a difference in the long run and get them into good habits.

Open a Junior ISA

Junior Individual Savings Accounts – or ISAs – offer tax-free savings and can yield higher returns than traditional accounts.

There are two types of Junior ISAs, each with their own pros and cons.

Cash Junior ISAs are a good, steady option if you want to invest in low-risk assets such as cash and bonds and are very easy to access. However, they do sometimes offer lower interest rates than savings accounts.

Alternatively, Stocks and Shares Junior ISAs could be the right option for you. These allow you to invest in the stock market and generate larger returns.

But the nature of this type of investment means it naturally carries a certain level of risk, so it’s worth thinking beforehand about how much exposure to risk you and your child can withstand.

You can contribute £9,000 a year to Junior ISA, while any interest and gains you earn in this account will be tax-free.

Once your child turns 18, you can then transfer Junior ISAs to adult ISAs, so they can begin adulthood with money in the bank.

Set up Premium Bonds

Premium Bonds are an investment product issued by National Savings and Investment (NS&I) where you’ll be entered into a monthly prize draw.

The more bonds you have, the better chance you have of winning a prize worth anything from £25 and £1 million – and any winnings are tax-free.

Put coins in the piggy bank

A piggy bank is perhaps many people’s first introduction to the idea of saving, and while there’s more financial products for children on the market than ever before, it’s still a great option for young kids in particular.

With a piggy bank, children can see firsthand how a little bit of money regularly put aside can grow into a much larger amount, and develop a healthy attitude to saving long-term.

What a technical recession means for your money

The economy shrank by 0.3 per cent in the final three months of last year, following a fall of 0.1 per cent in the previous quarter. That means that the UK fell into a technical recession in the second half of 2023.

And although figures for the year as a whole showed that gross domestic product actually rose by 0.1 per cent last year, 2023 was the weakest year for the economy since 2009 (excluding 2020, when activity was hit by the pandemic).

So what does this mean for you, your finances and your efforts to plan for the future?

Well, the UK appears to be stuck in a pattern of little to no growth right now, and that’s having very real effects on people’s pockets.

As James Smith, Research Director at the Resolution Foundation, notes: “After accounting for population growth, the UK economy hasn’t grown since early 2022, and fallen far behind its pre-cost of living crisis path, with an equivalent loss of around £1,500 per person.

“The big picture is that Britain remains a stagnation nation, and that there are precious few signs of a recovery that will get the economy out of it.”

Suren Thiru, Economics Director at the Institute of Chartered Accountants in England and Wales (ICAEW), agrees, saying: “Though the shallowness of this recession provides comfort, these figures also confirm that our economy remained locked in a cycle of persistent stagnation throughout 2023 as a myriad of headwinds, including high inflation, weighed heavily on activity.”

Dr Roger Barker, Director of Policy at the Institute of Directors, adds that the UK falling into a technical recession is “a psychological blow for business”, following a slight improvement in business confidence over the last few weeks.

Chancellor Jeremy Hunt has sought to be upbeat in response to the latest economic figures, telling BBC News that “if we stick to our guns now, we can see light at the end of the tunnel”.

And the ICAEW is correct to point out that this latest recession is not as severe as previous slumps.

But nevertheless, this latest data will be a concern to many hard-pressed consumers and businesses, for whom strong and steady growth looks to be a far-off prospect.

A recession can bring with it several specific concerns, including:

Market jitters

A slump in the economy can trigger a degree of volatility in the stock markets. However, panicking in the face of short-term swings is the worst thing an investor can do.

Stay calm, don’t act impulsively and stick to your long-term investment strategy, regardless of how volatile it might seem right now.

Job security

A recession might lead to many people worrying about their job prospects. But we should stress that the labour market is performing strongly at the moment, with the unemployment rate across the UK falling to 3.8 per cent in the final quarter of 2023, down from 3.9 per cent in the three months to November. This was the lowest level recorded since November 2022 to January 2023.

Of course, that might not mean much for you personally, so now would be the perfect time to make sure you’re performing at work as well as you can and keeping your skills and industry knowledge sharp and up-to-date.

Rising living costs

The rate of inflation has, thankfully, come down significantly over the last year or so. But that doesn’t mean prices have fallen too.

Furthermore, inflation remained stuck at four per cent in January. That’s the same as in the previous month and double the Bank of England’s target of two per cent.

Households and businesses alike should therefore be looking at where they can either cut costs or use their resources more efficiently.

Interest rates

The Bank of England has been raising interest rates in a bid to tackle inflation, and in the last few months, they’ve remained on hold at 5.25 per cent – a 15-year high.

With inflation now being much lower than it was a year ago, the question is no longer how high will interest rates go, but when will they start to come down?

This decision will directly affect how much you’re charged for loans, the size of your debt repayments and the interest you’ll get on savings. So it’s well worth making sure you’re not paying more than you need to at a time when rates are higher than you’ve been used to before.

For example, if you have high-interest debts to repay, it could be worth prioritising these ahead of other debts with lower interest rates.

While news of a recession can be alarming, an economic slump doesn’t have to knock your financial plans off course.

A financial planner can work with you to help you make informed financial decisions, respond to economic headwinds, and build a strategy that reflects your specific needs, circumstances and goals.

With the help of a professional specialist in this field, you can be confident of weathering this storm and coming out stronger on the other side.

Do you know how much income you’ll need in retirement?

We all want to look forward to a happy and fulfilling retirement, but that doesn’t happen by itself.

It’s the result of careful planning and making the right decisions throughout your working life, so you can have the financial means to enjoy the lifestyle you want and deserve.

But shifting economic sands and events entirely beyond your control means your retirement plans can’t be set in stone.

For example, how many of us saw the credit crunch coming in 2008 or the recent cost of living crisis?

According to the Pensions and Lifetime Savings Association (PLSA), a single person will need £31,300 a year to enjoy a moderate income in retirement. This is £8,000 up on the figure calculated last year.

Similarly, the report estimated that a couple will need £43,100 for a moderate income in retirement, up £9,000 on last year’s figure.

At the same time, a new report from the International Longevity Centre has found that a British person born after April 1970 could have to work until they are aged 71 – five years beyond the current age threshold for drawing a state pension.

Les Mayhew, the author of the report, believes the state pension age may need to change to 70 or 71 in order to “maintain the status quo of the number of workers per state pensioner”.

So what does all this mean for you as you plan for the future, hoping to achieve a real sense of financial freedom in later life?

Well, you need to be prepared to adapt your retirement plans when circumstances demand it.

It’s so important that you proactively respond to significant economic changes and financial realities, such as the increase in food and energy costs over the last few years, and factor these into your retirement planning.

Societal changes and attitudes are also evolving, so that’s something to consider too. For instance, the PLSA also notes that the Covid-19 pandemic has led to a change in people’s priorities, as many of us place more importance on spending time with friends and family out of the home.

Planning for the future can be incredibly complex and overwhelming, and that’s before you consider the possibility of the economic landscape transforming around you.

That’s why it’s so important to get professional advice on retirement planning, so you can be confident you’re making the right decisions in the here and now, and that you’re in a position to react and make changes if the situation evolves.

A regulated financial planner is ideally placed to guide you through this process and talk you through all the options that are open to you, such as pension saving, investing in different asset types and managing your exposure to risk.

You can also be confident that they’re keeping a close eye on the latest market movements and changes in rules and regulations, so they can advise you accordingly on what to do next to make your money work as hard as possible for you.


What to do at the start of the new tax year

When the end of the tax year approaches, financial experts rightly urge people to take control of their tax affairs ahead of the looming deadline.

But why do so many people always leave it to the last minute?

With the new 2024-25 tax year having started on April 6th, now is the perfect time to get on the front foot, assess your finances and get your money working hard for you right away.

Understand your tax allowances

Tax-free allowances can change over time, and this new year brings several changes that you might need to be aware of. For example, the Capital Gains Tax allowance has been cut from £6,000 to £3,000.

If you’re aware of how much you can earn before paying income tax and any other allowances you might be eligible for, you can get a clear picture of your overall tax liability and avoid having to pay more than is necessary.

Get saving

Individual savings accounts, or ISAs, are a hugely popular and tax-efficient way to save and invest money, but new rules on ISAs have come into effect this year.

For example, savers are now free to split their ISA allowance across multiple ISAs of the same type, whereas in the past, you could only contribute to one ISA of a specific type, such as a Cash ISA or Stocks and Shares ISA, in a single tax year.

It’s important to be aware of these changes so you can maximise your savings throughout the tax year and find ISA options that best align with your goals.

Step up your pension saving

Now is the perfect time to either open a personal pension scheme or increase your contributions if you can afford to do so.

Putting money into a pension scheme is one of the most tax-efficient ways to save for later life, as the amount you put away is deducted from your taxable income. As a result, you can end up paying less income tax in the current tax year.

Furthermore, if you start pension saving early, it will generate more compound interest – and your pension pot will get bigger over time.

Basic rate taxpayers can enjoy an automatic 20 per cent tax relief on pension contributions, while higher and additional rate taxpayers can claim even more tax relief.

Reassess your budget

As your circumstances and priorities evolve, the amount of money you have at your disposal will change. Perhaps you’ve had a pay rise or moved into a better paid job. Or maybe you’ve had a baby, taken out a new mortgage or got married?

Look at your income and expenses so you can get a clear picture of where your money is going and how much you can afford to save or invest elsewhere.

Review and set financial goals

Setting clear objectives can help you stay motivated throughout the tax year, and avoid making rash financial decisions that can knock you off course.

Get on top of the paperwork if you’re self-employed

If you’re self-employed, the deadline for filing your tax returns can be a source of panic and anxiety. But that’s often because you might find yourself with little time to assemble and go through all your paperwork.

So as the new tax year begins, gather your receipts straight away and make sure you have clear, accessible and organised records of your income and expenses.

If you do this routinely throughout the tax year, you’ll thank yourself later on when the time to fill in the dreaded tax return form arrives, and the whole process will be so much easier.

Stay up to date

As we stated earlier, various rules, regulations and tax allowances have been revised for the 2024-25 tax year.

Make sure you’re informed and up-to-date with any changes, so you can be sure you’re making the best financial decisions and maximising your tax allowances.

You could do this by keeping a close eye on the government website, but it’s perhaps easier for you to speak to a qualified financial adviser, whose job it is to be on top of any changes that might affect you.

Should I sign a pre-nup?

In the past, pre-nuptial agreements would once have been seen as the sole preserve of the mega-rich, from movie stars to owners of multinational corporations.

But they’re slowly becoming increasingly popular among couples from all financial backgrounds who want to protect their wealth in the event their marriage goes wrong.

Nevertheless, opinion on taking out a pre-nup remains hugely split across the UK.

According to YouGov data, 42 per cent of people in the UK believe having a pre-nup in place is a good idea.

However, just 22 per cent of those polled said they’d prefer to have a pre-nup if they were getting married for the first time today.

Interestingly, women were found to be more likely to favour pre-nups, with 47 per cent saying they’re a good idea, compared with 38 per cent of men.

So what’s the case for getting a pre-nup?

Safeguard your wealth

If you entered the marriage with significant personal wealth, a pre-nup allows you to protect it in the event of a marital breakdown.

With this legally binding document in place, both you and your spouse can clearly define and safeguard your assets, and ensure there’s no room for dispute over money if you ever part company.

Another benefit of drawing up a pre-nup is that it encourages open and honest communication about financial matters, and that can stand you in good stead for the future.

It’s easy for couples to treat money almost as a taboo subject. But by sitting down and creating this document, you’ll feel far more confident talking with each other about your finances.

What to think about before signing a pre-nup

The first step is to seek professional advice.

A financial planner can help you take a holistic look at your finances and determine what you want to protect if your marriage breaks down. They can also help you ensure full disclosure, as failing to be honest about your assets could render your pre-nup invalid.

It’s also important to make sure that when you’re creating a pre-nup, you and your partner both have independent legal representation.

That means you can be confident that the document is fair and would withstand a possible legal challenge, as courts can disregard it if it’s deemed unfair or it doesn’t meet certain legal requirements.

Of course, nobody wants to contemplate the idea of getting divorced when they first get married.

But if you enter a marriage with considerable wealth in your name, it’s well worth considering every eventuality. It’s almost like an insurance policy – hopefully, you’ll never need it, but if the worst happens, you’ll be glad it’s there.


More people falling victim to romance scams

Falling victim to a scam can be very traumatic, but romance scams in particular can be incredibly damaging and upsetting for the victim.

People who are looking for love can often be emotionally vulnerable, and that makes them very appealing targets for financial fraudsters.

These criminals will use dating apps and social media to target possible victims, hiding behind fake names and photos to shower the person with affection over several months.

After winning their trust and devotion through an online relationship, the scammer will, at some point, ask the victim for money and give a plausible reason for doing so.

For example, the unsuspecting target may be desperate to meet the other person face-to-face, so will be happy to pay if the scammer claims they can’t afford to travel to meet them in person.

Once they’ve received a modest sum of money, they might ask for cash again, perhaps after claiming they have family issues to deal with, which apparently prevent them from meeting face-to-face.

Sadly, more and more people are being targeted by romance scammers, with data from Lloyds Bank showing the number of victims rose by more than a fifth in 2023.

So what steps can you take to protect yourself?

Verify identities before getting involved

Scammers often use fake profiles and stolen photos to create a believable persona, and will refuse to show their face on video.

Use reverse image searches and consider asking for additional photos to confirm the authenticity of the person you’re speaking to – and if they consistently refuse to speak with you over video call, treat this as a red flag that something isn’t quite right.

Don’t share personal information

Be careful about sharing any personal details, such as your home address or bank account information with anyone online.

If the person you’re speaking to is being pushy, then that again should be treated as a warning sign that they aren’t who they claim to be.

Be wary of sob stories

Romance scammers often try to elicit sympathy, perhaps by claiming there’s a sudden family emergency, to persuade their target to send them money.

It’s important to be vigilant for sob stories that end with you being asked to help financially, no matter how close you may feel to the other person.

Take your time getting to know someone

While many successful relationships begin online, scammers will work quickly to establish a deep emotional connection with their target.

It’s therefore really important to be level-headed when you’re engaging with strangers online and not let yourself get swept away by feelings that are hard to control.

If your online partner seems to be trying to progress the relationship very quickly and pressure you into making immediate financial commitments, take a step back and consider that all may not be as it seems.

Report suspicious activity

If you recognise any red flags and believe you could be dealing with a fraudster, contact the relevant authorities and the dating platform you’re using.

By making your experiences known, you can help to make sure that scammers are identified and that other people aren’t similarly targeted.

Familiarise yourself with fraudsters’ methods

You’ll be in a much stronger position to defend yourself against financial scammers if you know what tactics they use. Make a point of educating yourself and understanding the methods they employ, so you can recognise causes for concern and avoid falling prey to scammers yourself.

Who is falling victim to romance scams?

According to the Lloyds Bank research, men accounted for 52 per cent of romance scam victims in 2023.

Men and women aged between 55 and 64 were found to be most likely to be defrauded by romance scammers, as the number of cases among this age group increased by almost half last year.

However, people in the age group above are losing the most money, with figures showing 65 to 74-year-old victims were tricked out of £13,123 on average.

The study also revealed that across all age groups, women are reporting higher losses, losing £9,083 on average, compared with £5,145 for men.