Have you thought about how you’ll pass wealth on to those who are important to you? Traditionally, this has been done through inheritance, but it’s becoming more common to gift during your lifetime.

Our latest guide explains why more families are choosing to gift during their lifetime and the pros and cons of each option. Whichever option you decide is right for you, our guide will enable you to fully understand your situation and make sure your wishes are carried out, and will explain everything from writing a will to calculating the long-term impact of gifting.

It can be difficult to think about how you’ll pass on wealth to loved ones, but it’s important to set out a plan.

Download Leaving an inheritance vs gifting during your lifetime to discover the steps you should take.

If you have any questions about passing on wealth, please contact us. 

A woman using a laptop while also checking her phone

When you think about what your most precious resource is, you might say money or even time. Yet an author recently proposed a different resource that you may be overlooking: your attention. With so many distractions in modern life, attention has become important. How often have you intended to focus on a TV show, but found your phone in your hand? Or put off your to-do list in favour of something that seems far more exciting?

Losing your attention can be annoying on a day-to-day basis. It may mean you don’t do everything you want or affect your enjoyment of activities if your mind is elsewhere. These distractions can add up and affect your longer-term plans and goals too.

Distractions have always had an impact, but today it’s far easier to distract yourself than ever before. All you need to do is pull out your phone to catch up on the news, scroll through social media, or even stream a film. And, of course, your phone isn’t the only distraction in your home. As well as material items, it’s just as easy for your mind to wander when you should be giving something your full attention.

There are many reasons for creating distractions. You may be putting off doing something or fear missing out. On top of this, we’ve become used to multi-tasking. While that can be useful in some scenarios, it can be a challenge to give something the attention it deserves.

5 ways to improve your attention

1. Pinpoint why you lose attention

Your first step should be to figure out why your attention slips. Is it because you’re worried about something or trying to put off a task? Knowing why you’re not giving something your full attention can mean you’re able to make a meaningful change.

2. Set out a to-do list

If you find distractions mean you don’t achieve everything you want, a to-do list can be incredibly helpful. It can help keep you on track and leave you feeling more accomplished at the end of the day. A to-do list may include things like completing work tasks or household chores, but, if you struggle to carve out dedicated time for the things you enjoy, make these part of the to-do list too. That could include spending time with your family without technology distractions or dedicating an hour to reading a good book.

3. Stop multi-tasking

When something is important to you, give it your full attention. Multi-tasking can seem efficient, but it can mean your tasks take longer or that mistakes are more likely to happen. If it’s something you’re looking forward to, multi-tasking can mean you don’t get as much out of it as you’d hoped.

4. Spend time exercising

If you struggle to concentrate, exercising can help you regain your focus. It doesn’t have to involve hitting the gym for a workout – even a walk around your local area can boost your attention span and mean you’re able to focus on the task at hand.

5. Practice meditation

Meditation is the practice of focused concentration where you focus on the now. Taking just five minutes a day to practice meditation can help you focus and improve your concentration by taking this mindset into other parts of your day. When you meditate, you don’t need to try and clear your mind, but rather pay close attention to the present moment, particularly your own thoughts and emotions.

How financial planning can help you focus on what’s important

While financial planning helps you understand your finances, it also involves spending time deciding what’s important to you. That may be spending time with your family, progressing your career, or travelling more. It’s a step that can provide some clarity about where your time is best spent and what to focus on.

Financial planning can also help your attention in another way, by giving you confidence in the future. If you’re worried about something or are uncertain about your future, it can affect your focus and even enjoyment. One of the biggest things families worry about is money. From whether you have enough in an emergency fund to cover the unexpected to planning for retirement, finances can be a cause for concern.

Financial planning can provide you with confidence that you’re taking the right steps to achieve your long-term goals, allowing you to focus on what’s important now. If you’d like to speak to us, please get in touch.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

A family and a pet dog walking along a beach

Travel restrictions this summer mean more Brits have been choosing to book a staycation. The UK is filled with stunning destinations to explore, and you may be thinking about buying your own holiday home to escape to in 2021 and beyond. But with so many locations to consider, where should you search for the ideal property? Here are just five options that are worth thinking about.

1. Lake District

The Lake District is one of the most popular places to have a break in the UK, and for good reason. It’s the ideal place to head if you want to get away from day-to-day stress and get back to nature. Its abundance of water sports to try your hand at means it’s a great place for families and those that like to get active too. As it’s a national park, there are restrictions in terms of housing so finding the ideal property could be a challenge if you have a clear idea about what you want. If you decide that the Lake District is the right place for you, there are lots of picturesque towns to consider.

2. Cornwall

If your idea of a perfect holiday is to relax on the beach, Cornwall might just be the place to purchase a second home. Of course, there are opportunities to get out on the water and surf too. The beach isn’t all Cornwall has to offer either; there are plenty of historic sites to visit, including the famous Tintagel Castle that’s linked to the legend of King Arthur. If you’re buying a property in Cornwall you can choose to be close to the coast, a bustling town centre, or a rural location. St Ives and Padstow are great options for holiday homes, but you will pay a premium for a property. Other options to consider include Looe, Praa Sands, and Fowey.

3. South Wales

South Wales boasts a stunning, rugged coastline, as well as beaches to explore, making it an excellent place for a holiday home. With miles of hiking trails to walk along, it’s perfect for families that like to enjoy the great outdoors. You also have the Wye Valley, an Area of Outstanding National Beauty, as well as Cardiff, offering the best of both urban and rural places to visit. Average house prices in South Wales have exceeded national growth in the last year but are still priced below the national average, so you could get more for your money here.

4. London

If you prefer the hustle and bustle of city life, London has a lot to offer. From shopping to the theatre and plenty of museums, London has enough attractions to keep you entertained, however often you visit your holiday home. If you want to escape for the day, there are lots of day trips options too, including Bath, The New Forest, and Oxford. Of course, choosing a holiday home in the capital comes with a price tag. The average home in London is over £500,000.

5. The Scottish Highlands

If you really want to escape from a hectic schedule and urban life, the Scottish Highlands is ideal. From the mountains to the sea, you’ll be surrounded by beautiful landscapes and stunning castles. If you enjoy the outdoors and nature, there are lots of remote locations to choose from. But, if you prefer to have the amenities of a town or city, you’re also spoilt for choices, from Inverness to Fort William. There’s a huge range of properties to suit all needs too.

What you need to know if you need a mortgage for a holiday home purchase

If you’ll need to take out a mortgage to purchase a holiday home, the basics work in the same way as a traditional mortgage. However, there are a few key differences to keep in mind:

  • You will usually need a deposit of at least 20% for a second mortgage. The more you can put down, the more competitive the deals you’ll have on offer.
  • The lender will calculate affordability based on your income and outgoings. If you’re still paying the mortgage on your main home, this will affect the amount you can borrow.
  • Lenders will assess your track record of repaying your mortgage on your main home when reviewing your application.
  • As this will be a second property, you will need to pay a 3% Stamp Duty surcharge, which can increase costs significantly.

If you hope to let the property out, you’ll need to use a holiday let mortgage, which is a special type of buy-to-let mortgage.

Comparing mortgage deals can be time-consuming and confusing. If you’re ready to buy a holiday home, we’re here to help you find the right mortgage deal for you. Please contact us to discuss your needs.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

Hand holding house keys

When you submit your mortgage application, it can be a nerve-wracking experience. Being rejected by a lender could mean you lose the house you’ve put an offer on. Understanding what banks and other lenders are looking out for can give you confidence when you submit your application.

As a first-time buyer, one of your first steps should be to understand how much you’ll be able to borrow. This can help you set a target for your deposit and search for a property that’s within your budget. Many things can affect how much you’re able to borrow. As a general rule of thumb, you can borrow 4.5 times your annual income.

Applying for a mortgage in principle, which will usually not affect your credit score, can give you an idea of whether a lender would accept your application and the amount they would lend. But keep in mind this isn’t a guarantee. If you’d like some help applying for a mortgage in principle, and the rest of the house buying process, please contact us.

Why having confidence in your mortgage application is important

Once you’ve saved a deposit and found the home you want to buy, having confidence that your mortgage will be approved is important.

A rejection can slow down the process and it could even harm your chances of being approved by another lender. This is because the lender will carry out a hard credit check, which will show up on your credit report. This could put off other lenders and make it more challenging to get the money you need to buy your first home.

So, what does a mortgage lender look for?

1. Income and affordability

One of the key things a mortgage lender will look at is simply whether you can afford to keep up with the mortgage repayments. As well as looking at your income, they’ll also assess your outgoings and what your existing financial commitments are. As a result, you’ll probably need to provide payslips covering several months, information of any benefits you claim, and bank statements.

2. Payment history

Your credit report shows your payment history, from your mobile phone to utility bills. If you’ve paid late or defaulted in the past, it could have an impact on their decision. If you have missed payments, it doesn’t automatically mean your application will be rejected, but you may need to approach specialist lenders or be prepared to accept a higher interest rate on your mortgage as a result.

3. Stability

Lenders want a borrower to be stable, indicating that they’ll be able to meet mortgage repayments over the long term. There are several things they may look at, including whether you’re registered in the electoral roll at your current address and how long you’ve been in your job. Mistakes can occur on your credit report, so it’s worth checking that your current and previous addresses are correct. Rectifying mistakes on your credit report can provide an easy win when looking for ways to boost your credit score.

4. Credit utilisation

How much of your available credit are you currently using? Having too much debt could put off lenders as it means your financial commitments are likely to be higher and could indicate that you need to borrow to get by. Generally, it’s recommended that you keep your credit utilisation below 30%.

5. Red flags

As part of the application process, you’ll usually have to provide bank statements to demonstrate your income and outgoings. When reviewing these, lenders will keep an eye out for red flags that could lead to your mortgage application being rejected. Frequent outgoings to gambling firms or deposits from payday lenders, even if the balance is repaid on time, could harm your plans. It’s worth being more cautious with your spending than normal in the months leading up to submitting a mortgage application.

Keep in mind that it’s not just your finances a lender will look at, but the property too. If the lender doesn’t believe the property is worth the amount you’ve offered for it, they may reject your mortgage application based on this. With a fast-moving property market, it can be tempting to increase your offer, especially if other buyers are interested. Before going above the asking price, take a look at what other properties nearby have sold for and be cautious.

Helping you find the right mortgage for you

There are lots of different mortgage lenders to consider, some of which don’t have a high street presence. Lenders set their own criteria and it can be difficult to know whether your mortgage application has a good chance of being approved. This is where we can help. We’re here to help you find a mortgage that matches your needs and offers a competitive interest rate to save you money. If you’d like to discuss buying your first home, please contact us.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

Silhouette of mother kissing her son on the head

The Independent reports that 76% of parents and guardians in the UK are saving money for their children under the age of 18. Helping your child step into adult life with some savings could prove vital for their mental wellbeing and financial stability and could help them further down the line.

But, of those saving, 83% do so exclusively in cash. While perhaps the easiest and simplest option, it may not be the best way to generate a nest egg for your child. In an environment of low interest rates and rising living costs, the cash you have saved now will likely not have the same value in 5-, 10-, or 15-years’ time.

One alternative to saving in cash is to invest your money. Making an investment may seem daunting, but it could prove to be the most efficient way to save for the future. Read on to find out why investing your money might be the best way to save for your children.

Inflation reduces the value of cash over time

The purchasing power of your savings will reduce over time thanks to inflation. Inflation represents the average rise in the prices of goods and services and stands at 2.5% as of June 2021 when compared to a year earlier. Simply put, something that cost £100 in June 2020 cost £102.50 in June 2021.

If the money you are saving for your child is kept in a savings account, you may gain a little interest on the amount, but it’s unlikely to keep up with inflation.

As of the start of August 2021, Moneyfacts states that the junior savings account with the highest interest rate pays an Annual Equivalent Rate (AER) of 3%. This is the only account that pays a rate that beats the rate of inflation. If your money is in any other account, it’s likely losing money in real terms.

Saving for your children is a long-term project as you’re likely to be putting money aside for 10 years or more. Because of this, it could be worth investing your money for better returns.

Investing could provide higher returns than savings accounts, but it isn’t without risk

As interest rates are so low, if you’re setting money aside for a period of five years or more, it could pay to invest the cash instead.

Online investment manager Nutmeg looked at available market data between January 1971 and May 2020 and found that long-term investing dramatically increases your chances of returns.

For example, investing for one day during that period gives an investor a 52% chance of generating a profit, but investing for 10 years raises this to 94%.

And the longer you’re invested, the better. Nutmeg found that “an investor that invested in the stock market for more than 13 and a half years at any point between January 1971 and May 2020 never lost money.”

In a 2020 blog, Financial Expert reported that if you had put £1,000 in a 2% interest savings account in 2010, that money would have been worth £1,148 in 2020. However, if you had invested £1,000 in the FTSE 100 in 2010, that money would have been worth roughly £1,579 in 2020.

However, returns cannot be guaranteed, and all investments carry some level of risk. Investment values can fall as well as rise. It’s important to weigh up the risks when making investment decisions. If you have any questions, we’re here to help.

A Stocks and Shares Junior ISA is a tax-efficient, hassle-free investment opportunity

There are a few ways to go about investing for your children. One of the most tax-efficient methods is through a Stocks and Shares Junior ISA (JISA), where you don’t pay Income Tax or Capital Gain Tax on your returns. When you contribute to a Stocks and Shares JISA, your money is typically invested in a range of assets across the globe, from shares to government bonds.

You can contribute up to £9,000 into a JISA in the 2021/22 tax year. Remember that the money cannot be accessed before your child turns 18 and your returns will be based on the performance of the underlying investments.

Research from Schroders, published by City AM, show that saving money into a Cash ISA between 2000 and 2018 returned four times less than a Stocks and Shares ISA. However, remember that the past performance of an investment is not necessarily indicative of the future.

Investing could help you build up a bigger nest egg for your child

If you’d like to see the money you’ve worked hard to save for your child increase faster than the rate of inflation, saving in cash may not be the best idea. Though riskier, investing your money may generate higher returns.

While it is important to remember that the past performance of a stock is not indicative of the future, stock market investments tend to outperform cash savings accounts in the long term.

The method of saving that you choose should be personal to you depending on your situation, so be sure to contact us and speak to a financial adviser when weighing up your options. We can help plan for you and your children and come to a decision on the best course of action for your situation.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance

iPhone 7 screen with TikTok and Instagram apps in the corner

Financial advice is a complex topic and often requires a professional planner to get right. The very idea of seeking it can seem daunting, with many people unsure of where to start or who to go to.

A recent trend has seen an increase in the viewership and production of content on social media that gives various forms of financial advice.

CNBC report that nearly half of teenagers are learning about investing from some form of social media. The trend, which is especially prevalent on TikTok and Instagram, is thought to have been partly linked to the GameStop saga in January 2021.

Since the events in January, the subreddit responsible (r/WallStreetBets) now has a userbase of more than 10 million, more than double what it was at the start of 2021. Investment News report that TikTok videos tagged with “#personalfinance” have accumulated a total of 3.5 billion views.

But with TikTok themselves banning the promotion of various financial services on their platform, and warning users over taking any financial advice on social media, is taking such advice really such a good idea?

Social media financial advice does have some positives

The very nature of social media is that it is public domain and, thus, freely accessible. This also means that any available information on social media is typically broken down and easy to understand.

For a younger audience, this is especially important, as the world of finance is complex at the best of times. Social media allows for small, easily digestible chunks of information to be delivered in a snappy video format, which is usually more memorable than learning it from a book or newspaper.

It fills a void that is typically left empty throughout the education system. According to the Young Persons’ Money Index 2021-21 from the London Institute of Banking & Finances, just 8% of young people said they learned the most about money skills in school, as opposed to learning from their parents or their own experiences. 83% of students said that they wanted to learn more about money in school.

These informative videos can then act as building blocks from which a substantial amount of knowledge can be added with further research. In developing this knowledge of finance, it may spark an interest or make someone consciously aware of how important financial decisions are.

At the very least, even if the advice or information isn’t entirely accurate, it spreads awareness of the importance of your financial wellbeing. It may prompt an individual to review and understand their own financial situation or seek out professional financial advice.

You should always be careful when following advice from social media

Financial or otherwise, social media advice isn’t known for its reliability. First and foremost, the easy-to-understand nature of information provided tends to mean that a topic’s complexities have been removed.

This could prompt you to make a financial decision or investment without the necessary knowledge to do so. Not only is it important to know the intricacies of every decision when your finances are involved, but it’s also vital to understand how it will affect your personal situation.

No two people are in the same situation with their finances, so it’s important to distinguish when a piece of advice may not be relevant or beneficial for you. General advice, when not tailored to your needs, may end up hurting your finances.

Also, it is impossible to verify the credentials of an individual on social media. There is no way to prove that the person you are watching is actually qualified, or even knowledgeable on the subject that they give advice on.

Compounding this is that social media is often riddled with sponsorships and product placements. It won’t take long to find a TikTok that recommends a certain investment platform or service thanks to a paid promotion.

In this case, the content creators giving these endorsements may not even believe in their own advice. This may make it difficult to determine what services are genuinely recommended and worthwhile, and which have simply paid to be promoted.

Lastly, and perhaps most importantly, social media is an international medium for communication. Why is this important? Because every country has completely different rules, laws, and regulations when it comes to finance.

Each country operates with vastly different levels of Income Tax and Corporation Tax. They may use different methods of financial regulation or have different options for financial protection. Advice that may be relevant to an American audience may be incorrect and even harmful for UK and other international viewers. Tax allowances, restrictions, and payments will vary hugely.

As a simple example, a basic-rate taxpayer in the UK will pay 20% tax. In the US, the federal tax rate is 10%, with the other various factors possibly increasing this number. Taking the advice of an “adviser” who is based outside of the UK could be dangerous, since their country and yours may operate differently.

Social media is great for raising awareness…

… but maybe not too much else. At the very least, if you plan on taking the advice of a social media influencer, be sure that you are aware of all the possible associated risks. Be sure to consider any legal differences if they are based internationally and do your research to make sure they are qualified, and that their advice is correct.

It’s undeniable that social media has raised the awareness of the importance of personal finance among the younger generation. Awareness, however, does little if you don’t understand the complexities around finance.

If you are seeking financial advice but you are unsure where to start, consider speaking to a financial planner before heading to social media. Not only can they provide professional, relevant advice for your personal situation, but they can also advise you of any risks involved with the process. If you’d like to discuss your finances or have any questions, please contact us.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

Senior couple sitting in a colourful park

From ditching the car to recycling your waste, you probably take a range of steps to help protect the environment and our planet. As the world slowly moves towards sustainable, green energy, perhaps you want to do even more to help fight climate change?

You might think you’re doing everything you can to go green, but did you know that you can help the environment with your pension? By investing your pension into a sustainable, or ethical fund, you could significantly reduce your impact on the environment.

The Financial Times reports that a pension worth £100,000 invested in a sustainable fund could be the equivalent of taking five or six cars off the road a year.

Ethical pensions have recently risen in popularity, alongside many other funds with a focus on ESG principles. ESG stands for “environmental, social, and governance”, which cover some of the factors sustainable portfolios may consider, alongside financial factors, when making investment decisions. And investing through ESG funds doesn’t mean your investments will yield lower returns either.  

Read on to find out more about sustainable pensions.

Switching to a green pension could be 57 times better for the environment than going vegan

With the power to tackle climate change by simply switching your pension, there’s no need to drastically overhaul your lifestyle.

As Pensions Age report, your pension pot alone could do more for the environment than 57 people switching to a vegan diet. In fact, a sustainable pension could be 21 times more effective than giving up flying, becoming vegetarian, and switching to a renewable energy provider combined.

They even claim that a sustainable pension could be 20 times better for the environment than switching to an electric car, which is already one of the other most effective methods of tackling climate change.

Euronews reports that transitioning an average-size pension pot (around £30,000) to a sustainable pension could reduce as much as 19 tonnes of carbon emissions a year.

If you have a pension pot of £100,000, you could be cutting as much as 64 tonnes of carbon emission each year. That is the equivalent of nine years’ worth of the average citizen’s carbon footprint.

A sustainable pension is a way to fund ideas you believe in

Which? states that there is an estimated £3 trillion in UK pensions that are used to fund everything from wind farms to essential government services. However, only 22% of pension holders know the types of company that their pension is invested in.

A sustainable pension avoids putting your investments into certain companies, depending on the policies of the specific fund you choose. For example, they may not invest in the assets of oil companies and instead invest in electric motors.

If you don’t like the thought of your money going towards tobacco producers, weapons manufacturers, or high-emission companies, a sustainable pension may be right for you.

From climate change, to education, and gender equality, there are plenty of options for your investment. After all, the main goal of an ESG pension is to represent the views of those invested in it.

A significant number of pension providers have announced their plans to make their default pension services have net-zero carbon emissions by 2050. For some providers, this is the goal with their entire portfolio.

Investing in a sustainable pension helps both your future, and the planet’s

One concern is that there is too much focus on sustainability instead of profitability. With more than 200 pension funds already being labelled as “sustainable”, do they really perform as well as those without such a strict focus?

The data suggests that yes, they do. Which? reported the findings of a Morningstar analysis, which found that three-quarters of ESG funds performed above average when compared with similar, standard funds.

They may also provide greater longevity and security, as 77% of ESG funds available from 2009 were still going in 2019. This is compared to just 46% of non-ESG funds.

The pressure of well-performing ESG funds is also encouraging firms to improve their pension policies. The more sustainable pensions that are made available, the more widespread the positive impact.

Sustainable pensions are a step forward

It is no doubt that sustainable pensions are a step forward. Switching to a sustainable pension is a great way to help support ideals that you believe in while also supporting yourself in later life.

A sustainable pension fund invests in the ideas you believe in. And, with the returns often just as positive as traditional pension funds, sustainable funds provide a beneficial alternative for pension contributors.

Are you interested in learning more about sustainable investments? We’re here to help you understand how ESG factors can be incorporated into your portfolio.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits.

The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation, which are subject to change in the future.