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ISA ? …NISA ? …. Change is here …. Welcome to the new rules

In March this year the Chancellor announced a series of changes to the way in which people can save. As of today you can now put up to £15,000 into your individual savings account (ISA). In addition to this increase from £11,880, the government also added some flexibility to the way in which your ISA allowance can be used.

Previously only half your allowance could be saved in cash, whereas now you can put your entire allowance in cash. Another added benefit is that you can now switch between cash and stocks and shares whenever you like!

It’s not just about adult ISA’s – Junior ISA allowance increases from £3,840 to £4,000 !

 

ISA Rules 2014 2015

Some things about ISA’s you may not know ….

  • Only 26% of individuals earning between £100k – £150k maxed out their ISAs
  • 2012/13 subscriptions Cash £40 billion, Stocks ‘n’ Shares £16billion
  • £443 billion was held in ISAs (as at April 2013) split 50:50 cash/stocks ‘n’ shares

Source – A National Statistics publication

 

 

‘Changing lives one client at a time’

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Annuity review highlights importance of advice and shopping around

The startling headline finding from The Financial Conduct Authority’s (FCA) recent review of the annuities market proved to be the fact that some 80% of people who purchased an annuity from their pension provider could have received a better deal from an alternative source.

The report found that the annuities market was not working as it could for consumers, with many reporting that they found it difficult to review the suitability of the annuity offered by their pension provider, when compared to the alternatives available.

In monetary terms, the FCA found that, on average, retirees who buy an annuity from their pension provider miss out on around £71 per year. With the average length of retirement being around 19 years, that figure works out to meaning retirees are over £1,300 worse off: a figure that could represent a very nice holiday for many, an investment on behalf of the grandchildren or one of several other very rewarding ways to spend a retirement income.

As part of their findings, the FCA have launched a more in-depth review of competition within the annuities marketplace to assess how it could be better organised with consumers in mind.

The message though is clear: shopping around when purchasing your annuity can really benefit you in your retirement years and, if you find the marketplace too complex to navigate on your own, a financial planner may well be able to assist.

Taking account of your retirement goals and your current financial situation, we’ll look at your various options for living your desired lifestyle in retirement, including whether purchasing an annuity would be a suitable solution and, of course, then assessing which annuity would be best for you.

We’ll also be keeping a close eye on the FCA’s further review of the market, to see how it will impact annuities in the future and how that would work for consumers.


Sources: fca.org.uk

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I’m not a Magician !

Blog by Adrian Elliott

Would you visit you Doctor and say the following?

Patient: “Doctor I don’t feel well, please make me feel better”
Doctor: “What are your symptoms?”
Patient: “I’m afraid I can’t tell you that.”
Doctor: “May I ask why?”
Patient: “I am not prepared to disclose any of my personal details to you.”
Doctor: “OK??…………!!! ”

What would your Doctor Say?

Recently the same scenario happened to myself (‘No, I wasn’t giving any Medical advice before you start getting concerned!’).

A perspective client called and wanted us to provide advice. Prior to any appointment we send our clients a ‘welcome pack’ with a covering letter confirming their appointment. Within the welcome pack we include a fact find and we kindly ask our clients to complete this prior to their introduction meeting and give a rationale why this is important.
The new clients I was due to meet, prior to their appointment rang to inform us that they found the fact find intrusive and they would not be completing it.
When I met the clients, they asked me for advice on investing a lump sum of money.
When we ask them for details about themselves they weren’t prepared to disclose anything as they did not believe that this was relevant.
Now with the best will in the world, I am not a magician ….. There are some many factors that need to be considered;

  • Tax circumstances – income tax / inheritance tax to name but 2 !
  • Used allowances for the tax year?
  • Risk they are willing to take
  • Their capacity to loss
  • Do they have any debts?

So many things that need to be answered and facts revealed

The doctor would never prescribe any tablets or drugs without all the information and a full examination and nor would I be willing to give professional advice without knowing all the facts – it’s dangerous for your wealth !

Take a look at our past blog ‘The trouble with facts is that there are so many of them!’

Adrian Elliott

Certified Financial Planner

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The Year of Hard Truths – A Look Ahead to the 2014 Budget

Chancellor of the Exchequer, George Osborne, will deliver the 2014 Budget on Wednesday, 19th March – little more than three months after he delivered the Autumn Statement.

When Osborne delivered his Budget in March 2013, the news for the UK economy wasn’t particularly good – in fact, many commentators were worrying about the UK slipping back into a ‘triple-dip recession.’ Since then, the forecasts and figures are much improved and in December, the Chancellor was able to predict growth of 1.4% in 2013 and 2.4% in 2014.

These figures have since been confirmed by the IMF, which recently gave a very positive assessment of the outlook for the UK. The anticipated growth of 2.4% is higher than for any other European country, and the economy is now growing at its fastest rate since 2007. Inflation was down to 2% in December and the latest figures show that unemployment has fallen sharply to 7.1% (much lower than most economists were anticipating).

So with the Chancellor surely in buoyant mood when he stands up to deliver his speech, can we look forward to some Budget handouts? After all, there is a General Election only 15 months away and the European elections are in May of this year, at which the Conservatives risk coming a poor third behind UKIP and Labour. After four years of pain, it must surely be time for the Chancellor to place less emphasis on austerity…

Sadly, the answer is ‘no’.

In a speech on January 6th, George Osborne warned that 2014 would be “a year of hard truths.” He stressed that the UK economy “still had a long way to go” and that difficult decisions would have to be made. Significantly, he still requires another £25bn of savings (or ‘cuts’ depending on your political standpoint) and is looking to the welfare budget for the majority of this, particularly targeting young people of working age.

The Budget speech will be one that George Osborne will enjoy giving – he will claim the credit for the improvement in the economy and a further fall in the UK budget deficit. But the mood will remain sombre and the message simple: the UK economy has come a long way and is doing better than a great many of its competitors – but we cannot relax now.

The Budget Deficit

The UK’s budget deficit narrowed sharply in December, when there was a net deficit of £1.03bn compared to the £3.58bn in the previous month. Historically (taking the period 1995 to 2013), the budget deficit has averaged £1.23bn per month. George Osborne will welcome the reduction and look ahead to further falls in the deficit, but to many right-wing commentators it will remain far too large for comfort.

Welfare Spending

As noted above, this is the area where the Chancellor will look for the bulk of his savings. He will argue that it is absurd not to target the huge welfare budget, given that savings would otherwise have to come from more (politically sensitive) areas such as schools. However, Osborne is likely to resist calls from some of his backbenchers to make cuts in NHS budgets. That money is likely to remain ring fenced.

Housing

Figures released by the Bank of England revealed that £12.4bn in new mortgage loans was approved in December, putting mortgage lending at a six year high. The housing market rose by between 8% and 10% in 2013 (depending on which survey you use) but this included some notable ‘hot-spots’ such as London and the South East, and Manchester.

When George Osborne announced his help-to-buy scheme in the last Budget many commentators worried that it would create a ‘housing bubble’ and these latest figures will have done nothing to calm those fears. The Chancellor – backed by a recent study from the Institute for Fiscal Studies – will refute them and claim the help-to-buy scheme as a resounding success.

Unemployment

As above, unemployment came down significantly in December. Most economists were expecting a fall to 7.3%: instead unemployment came in at 7.1%. The Chancellor will anticipate further falls in 2014 and don’t be surprised to see further measures to encourage employers to take on staff, particularly in sectors like manufacturing and engineering.

Interest rates

An unemployment rate of 7% is the Bank of England’s ‘forward guidance threshold’ at which it was theoretically going to consider interest rate rises. However, no sooner had the figures been announced than Governor Mark Carney was declaring that rate rises were unlikely at the current moment, the UK economy being “well short of escape velocity.” Expect to hear the Chancellor use a phrase like, ‘this Government has overseen the longest period of sustained low interest rates since…’

That then is the background to the March Budget and a look ahead to some of the points we expect to see in it.

As usual, we will be writing our own Budget Summary on March 19th and we’ll aim to have this with our clients the following day.

Should you have any questions on how the planned changes in the Budget – or the outlook for the UK economy – might impact on your financial planning then as always, don’t hesitate to contact us.

 

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Eastbourne the Sunshine Coast !

My First Week in Eastbourne – by Adrian Elliott – ISO Certified Financial Planner

Finally the paint has dried on the walls and the office is now open!

So how has my first week been?

We had a number of client meetings organised for this week and the reaction and feedback has been brilliant, they all loved the new office, especially the corporate colour chairs.  Oh and yes, the chocolate helped!

There have been a few teething problems, like deciding on cups, hence our company colour paper cups! Eco friendly of course, provided by Tidmas Townsend – shameless plug ! but thank you Mark !

Normally our business is generated from referrals, however, this week we were surprised that we had a couple of potential clients just walk in and ask for advice after seeing our signs courtesy of X-treme Print – yes I know another plug – but thank you Kerry

We’re all delighted with the response, mainly through social media and the people who have seen the project unfold and the journey I have been on leading from Reigate to Eastbourne – we always had the plan that Concept would have a new office in Eastbourne (who says planning does not work!)  Can I just take this opportunity to thank all those involved in making this happen – especially the team – without the team there is no dream !!

Finally ……..The commute to work now takes me 9 minutes as opposed to 90 minutes! Albeit I’ve now started canoeing to work!  Who says Eastbourne is the sunshine coast !!

We are looking forward to welcoming more people in to our new office and introducing our ‘Award Winning Firm, Concept Financial Planning.’

Adrian

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photo 1 photo 2

Why Directors and Business Owners Fail to Plan their Retirement

Company directors and owners of SMEs make plans and do forecasts all the time. Cash flow forecasts, SWOT analyses, plans for renewals and refurbishment; there’s hardly a day when they’re not eyeball to eyeball with a spreadsheet.

So why do so many of them fail to plan their own retirements? With studies suggesting that only 1 in 3 directors and business owners has a comprehensive retirement plan in place – and that only 1 in 2 of those with a plan see that plan succeed – there is clearly a need for more directors to plan properly. Why do so many of them fail to do so?

Over the years we’ve probably been given half a dozen answers when we’ve asked that question. As you’ll see, none of them really hold water…

“I haven’t got time.” The simple fact is that no one ever has time. And yet planning your retirement is one of the most important jobs you’ll ever do. As the old saying goes, a director or owner of a small business will either walk out of his business or be carried out of it. Assuming your preferred course of action is the former, then there needs to be enough money waiting when you do eventually walk out – and the only way you can make sure of that is to plan for it.

“It’s too early/too late.” It’s not too early if you’re in your twenties or thirties and it isn’t too late if you’re in your fifties or sixties. We know that in your twenties and thirties you’re working all the hours in the day to build your business: but trust me, you will get older – rather more quickly than you think. And yes, of course it’s easier to achieve savings targets if you have more time but the simple fact is that there is need for financial planning at all ages, as personal circumstances and financial planning goals are always changing.

“I’m going to keep working.” There seems to be a trend amongst some business owners and directors at the moment to declare that they’ll never stop working, that nothing is as satisfying as working so why would you ever want to stop? Unfortunately your health, your family and your competitors may eventually play a part in this decision. In our experience, there comes a time for every entrepreneur and director when ‘enough is enough’ and when that time comes it needs to have been planned for.

“It’s boring/not worth it.” In some ways this is one of the easiest objections to understand. Many directors and entrepreneurs – especially younger ones – have seen their own parents dutifully save for retirement and then not be very well off when they do finish work. Unfortunately, everyone now working faces a very simple fact: the population is getting older and the Government simply won’t be able to fund the retirement you want.

“The numbers are too big/too frightening.” Sadly, this is a reflection of proper financial planning. If we’re going to plan for the retirement you really want then the numbers will be big – and they will be challenging. But there is no point in us preparing a financial plan which provides less than you want – and it’s surprising what can be achieved if you save consistently and keep your savings and investments under regular review.

“My business is my pension.” Despite the fact that virtually no businesses are sold at exactly the right time for exactly the right amount of money, many directors and business owners still say this. Of course the answer is to build your business but you also need to build cash outside your business as well. That’s what gives you choice and control and, ultimately, that’s what allows you to dictate the timing and the quality of your retirement.

We’re always happy to talk about a client’s retirement planning. Directors and business owners can plan for their retirement very tax efficiently – and they enjoy flexibility which certainly isn’t available to normal employees. It makes sense to explore the options: we promise you that it isn’t too late and if there is one thing we will guarantee you – it won’t be boring … !!

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1268-FA_L&P_Winner_2013_OL_Individual Pensions Adviser

 

 

How do the new pension proposals affect you ?

On 14 January 2013, the Government published a White Paper [‘The single-tier pension: a simple foundation for saving’] outlining proposals to reform the State Pension into a single-tier State Pension. The White Paper also includes proposals for a regular and structured mechanism with which to consider changes to the State Pension age in the future:

 

http://www.dwp.gov.uk/policy/pensions-reform/state-pension/

 

Source:  DWP.GOV.UK

 

Should you require further information please do not hesitate to contact us on 01737 225665 or advice@conceptfp.com

 

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New boy in town – he’ll keep us on our toes !

We are delighted to announce Adrian Elliott joins Concept as our new Financial Planner. His passion lies in ‘being the best he can be’! This is shown through his dedication to his sporting passion as a top amateur GB Triathlete. He follows this through in his professional career as a Financial Planner.

Adrian has over a decade of experience in financial services coming from a Bancassurance background. He has had a successful career working for 2 major banks for over eleven years as a Senior Financial Planning Manager. Due to the changes in the profession and banking sector Adrian decided it was time to broaden his horizon and further his career.

Paul Richardson comments ‘ With Adrian’s experience, personality and drive for success we felt he would be a fantastic asset for Concept Financial Planning and I am very pleased to welcome him to the team’

Adrian passion for financial planning has served his clients extremely well over the years, where the planning, preparation and implementation has driven him, to get it right delivering first class service. This is mirrored in his main interest outside of work – Triathlons.

In 2011, due to his success in national races, Adrian was invited to represent GB in the Olympic distance triathlon at the World Championships in Beijing, China, at an amateur level. Adrian finished 7th overall and the 2nd GB athlete in his age group.

In October 2012, he competed at the World Championships in Auckland, New Zealand. Adrian finished as the 3rd GB athlete.

In 2013 Adrian has been invited to compete at the following events:

  • Friday 14th June ETU European Championships Alanya, Turkey.
  • ITU World Championships Grand Final London

Adrian also finds time to compete and supports local events in an around Sussex and Surrey area when he is not training !

Adrian commented ‘I am looking forward to working as part of the team at Concept. I am very impressed with the high quality advice and services offered and I am very proud to accept a position as a Financial Planner and will keep Concept on their toes !’.

To contact Adrain please call 01737 225665 or email adrianelliott@conceptfp.com

Follow Adrain on Twitter @adrianmelliott or view his profile HERE