Sustainability has become a key topic for governments, businesses and communities around the world. If you want to reduce the impact your lifestyle has on the environment, it can be difficult to know where to start. Our latest guide looks at 10 changes you can make to your life to reduce your carbon footprint, limit waste, and support sustainable projects.

Among the steps the guide covers are:

  • Making your home more energy-efficient
  • Choosing a renewable energy supplier
  • Changing your diet
  • Investing sustainably
  • Offsetting your emissions.

Download 10 ways to lead a more sustainable life to learn more.

If you’d like to discuss making your finances more sustainable, please contact us.

A woman wearing headphones as she sits on a sofa

When you put on music, you may choose tunes that suit your mood. But have you ever considered how the music you choose can impact how you’re feeling too? Research suggests music can have a much greater impact on mental wellbeing than you have considered before.

During Covid-19 lockdowns, mental health was affected. Not being able to meet loved ones and restrictions on what you could do affected wellbeing. On top of this, worries about the risk of illness, work, and other things may have meant people’s mental health suffered.

While spending longer in homes, more than a fifth of people said live-streaming and music was the biggest support to their mental health, according to an Evening Standard report.

During lockdown, artists used technology to bring gigs and interviews into the homes of their fans. From live music concerts to collaborations with other artists around the world, it helped people experience music even as events were being rescheduled. Some 16% of people also said knowing others were tuning into live streams with them made lockdown much less of a lonely experience.

Restrictions are lifting and the UK is gradually getting back to normal, including reopening live music venues. But music can still have a profound impact on your mood and wellbeing. Here are five ways music can affect your mood and excellent reasons for turning up your favourite songs.

1. Music can bring back happy memories

Listening to a song can take you back to another time. Whether a song brings back memories of a fantastic holiday or spending time with a loved one, music is a great way to access happy memories.

The nostalgia music can induce is one of the reasons we often put on songs from the past. The research found that 73% of people said they enjoy listening to music from artists who were in their prime decades ago. So, if you often find that you put on music from your youth, you’re not alone; turning up the classics from a bygone decade can take you back in an instant.

2. Music can boost your mood and reduce stress

Research has shown that music can reduce stress and anxiety by helping you to relax. In fact, music therapy is sometimes used in the treatment of depression and anxiety.

Sometimes after a tough day, putting on an uplifting song is all you need to create a better mindset and improve your mood. Having a list of happy songs to go to when you need it most can help you improve your overall wellbeing and mental health.

3. A good song can help you process your emotions

It might be a cliché that people blast out songs about heartbreak when they’ve gone through a break-up themselves, but music can help you process your emotions and experiences. Emotional songs can help you deal with what you’re feeling and can be especially therapeutic if you’re going through a difficult time.

Much like listening to music during lockdown, the right song when you’re struggling can help you feel less alone and bring a sense of comfort.

4. Some music genres can improve your focus

When you’re working or are concentrating on a task, background music can improve your focus on what you’re doing. Putting on the latest pop tunes may not help in this case, but instrumental, classical or ambient music has been shown to improve concentration. It’s thought to have this impact by making you feel calmer and helping to filter out distractions.

A 2007 study from Stanford University in the US suggests that the right music can help you retain new information more easily. So, next time you’re practising a presentation or learning something new, turning on classical music could really help.

5. Music can get you moving

It’s well known that being active and exercising is good for both your physical and mental health. Music with a good beat can get you tapping your foot and moving in no time at all.

When you’re exercising, choosing high-energy music for your playlist can help you push yourself that bit further and enjoy your workout more too.

Plastic red house sitting on a pile of money

Over the last year, house prices have continued to rise rapidly. Figures show that house prices have reached record highs, but is it a trend that will continue?

Even the challenges the pandemic presented to the housing market did not stop house prices from increasing. In fact, the pandemic may have contributed to their rise. After spending more time indoors and embracing working from home, many families have been seeking more floor space and a larger garden to enjoy.

A temporary Stamp Duty holiday was introduced when there were concerns that the pandemic would slow the housing market down. However, this came to an end in September 2021 and, so far, prices remain high.

According to the Halifax House Price Index, the average property in the UK was priced at £267,587 in September 2021. That’s after house prices experienced growth of 7.4% in just a year.

Forecast: House prices will slow but they won’t fall

While expert forecasts suggest that the pace of growth in the housing market will slow, house prices are still expected to rise.

According to Hamptons, as reported in the Guardian, between 2022 and 2024, house prices will increase by up to 3.5% a year. While that might be lower than the rise over the last year, it’s still a significant amount. On an average property, that’s a rise of just under £10,000 a year. 

If you’re already a homeowner, rising house prices can help make the cost of your mortgage cheaper. As house prices rise, the more equity you’ll own in your home. As a result, you can often access more competitive interest rates. If you’re remortgaging, it’s worth checking how much your home is now worth to take advantage of prices rising, and keeping this in mind for the future too.

3 things that could affect the housing market

While house prices are expected to continue rising, the yearly increases are predicted to slow. A variety of reasons could play a role in this trend, including these three.

1. Interest rates are expected to rise

The UK has had low interest rates since the 2008 financial crisis. For borrowers, including those with a mortgage, this has meant the cost of servicing debt has been lower. When taking out large loans, for instance, to buy a home, even a small difference in the interest rate can add up.

Before the pandemic, it was suggested that the Bank of England would begin to raise interest rates. Now, interest rates could be used as means to slow the high levels of inflation the UK is experiencing. It means the cost of paying a mortgage will rise and could slow the market down.

2. Inflation is placing pressure on household budgets

As mentioned above, inflation in the UK is high. The Bank of England has a target of 2% inflation a year. For 2021, it’s expected inflation will be around double this goal.

Inflation means the cost of goods is rising, from household essentials to luxuries. As the cost of living increases, some households will find that their budgets are tighter, especially if salaries fail to keep pace. This could have a knock-on effect on the housing market if families decide to stay in their current homes to feel more secure.

For existing homeowners, it may mean families don’t want to take on larger mortgages and move up the property ladder. For aspiring first-time buyers, budget pressures could mean they find it much harder to save the deposit they need or access a mortgage.

3. First-time buyer support schemes are coming to an end

Finally, in the next few years, some of the support schemes put in place to help first-time buyers will be ending.

The Help-to-Buy Equity Loan Scheme, for instance, will close in 2023. This scheme has provided loans to thousands of first-time buyers in England to lower the deposit they need to save and the mortgage they need to be approved for. Similarly, the Help-to-Buy Scheme in Scotland will close in April 2022.

These schemes have played a vital role in the housing market by providing first-time buyers with much-needed support. If first-time buyers struggle in the coming years to take that first step onto the property ladder, it could affect the whole market.

Of course, these schemes could be extended or new schemes brought in to fill the gap, but for now, their future remains uncertain.

If you need help securing a mortgage, whether you’re buying a new home or remortgaging your existing 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.

Paper showing a graph and the text “Dividends” with a calculator and pen

Dividend Tax rates are set to rise, and it could affect the amount of tax you pay.

The chancellor announced a hike in Dividend Tax rates, along with the introduction of a new Health and Social Care levy, to help plug the gap in public finances after the pandemic. The government has said that some of the money raised through the increase will be used to clear the backlog the NHS is experiencing and to support social care costs.

A dividend is a regular payment of profit made by a company. If you’re an investor, some of your investments may be in dividend-paying companies. If you’re a company director, you may also choose to pay yourself in dividends.

Understanding if you could be affected by the new tax rates is important, as it can allow you to take steps to reduce the additional tax due.

Will you be affected by the Dividend Tax rate rise?

From the 2022/23 tax year, Dividend Tax rates will increase by 1.25 percentage points.

The Dividend Allowance will remain the same. So, if you receive £2,000 or less from dividends during a tax year, you will not have to pay tax on this income. If your dividends exceed £2,000, your tax band affects the rate you pay. The table below shows how your Dividend Tax rate will change.

How the rate hike will affect you will depend on the dividends you receive. The government estimates that affected taxpayers will pay on average £150 more on their dividend income from 2022/23. For higher-rate taxpayers, the estimated additional tax is £403.

5 steps that could reduce your Dividend Tax liability

1. Make full use of your Dividend Allowance

Making full use of your Dividend Allowance each tax year can help you generate an income that is free from tax. Keep track of the dividends you receive. In some cases, delaying taking dividends until a new tax year if you have control of this can help.

2. Plan as a couple

Each individual receives a Dividend Allowance, so planning as a couple can maximise the amount you can receive in dividends before tax is due. Passing on some dividend-paying stocks to your spouse or civil partner can effectively mean you’re able to receive up to £4,000 through dividends without paying tax.

3. Maximise your ISA allowance

If you’re making an income from investments, an ISA is a tax-efficient way to invest.

Dividends on shares within an ISA are tax-free and won’t impact your Dividend Allowance. Any profit you make when selling investments held in an ISA won’t be liable for Capital Gains Tax either. As a result, using an ISA to hold your investments can make sense from a tax perspective in the short and long term.

For 2021/22, you can place up to £20,000 a year into an ISA. You must use this allowance during the tax year as it cannot be carried forward. Again, the ISA subscription limit is for each individual. So, if you plan as a couple, you can add up to £40,000 into ISAs collectively.

4. Consider growth investments

When investing, you can do so to deliver an income or for growth. If your investment income exceeds the dividend allowance and you don’t need the income for day-to-day spending, switching to growth investments may be right for you.

Rather than paying out, a growth investment strategy will focus on investments that are expected to go up in value to deliver a return when you sell them. This strategy can reduce the amount you receive in dividends, so you don’t exceed the tax threshold.

However, keep in mind that you could still pay tax on these investments. When you dispose of an asset for a profit, Capital Gains Tax may be due. For the 2021/22 tax year, the Capital Gains tax-free allowance, known as the “Annual Exempt Amount”, is £12,300.

As with the Dividend Allowance, making full use of the Annual Exempt Amount each tax year, and planning as a couple, as the allowance is per individual, can help reduce tax liability.

5. Speak to a financial planner

Tax rules can be complex and while you may take steps to mitigate Dividend Tax, you could find your tax liability increases overall. We’re here to help you understand what steps you can take to reduce Dividend Tax and make the most of your money. There may be other steps that are appropriate for you, and we will explain the options you have.

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 on a bench in a park

Your State Pension may only make up a relatively small portion of your retirement income, but it’s an important part of it, and so it’s crucial you understand your entitlement. The recent news of underpaid State Pensions shows that many people don’t know how much they should receive.

More than £1 billion unpaid to pensioners

While the State Pension can seem straightforward, in reality, it can sometimes be complex. Despite efforts to simplify the State Pension system, recent reports of pension underpayment to women have highlighted how many people still don’t understand what they’re entitled to.

Earlier this year, it was revealed that thousands of women had been underpaid by the government. It’s also estimated that around 134,000 pensioners haven’t been paid what they should. While the government is correcting the mistake, it could take years to distribute the £1 billion of underpayments. Those affected will receive an average payout of £8,900 each.

The error has mostly affected elderly, widowed or divorced women due to the complexities around married women claiming a basic State Pension based on their husband’s record of National Insurance contributions (NICs).

While the Department of Work and Pensions have said human error played a role in the mistakes made, the scandal does highlight how complicated it can be to calculate how much State Pension you should receive.

So, why do you need to know how much State Pension you’re entitled to?

  1. Mistakes happen. As the recent underpayment highlights, mistakes do happen. If you understand how the State Pension works, you’re far more likely to notice if errors do occur and ensure these are rectified sooner.
  2. You can spot gaps in your NICs record. How much State Pension you’re entitled to will depend on your NICs. In some cases, you may have an opportunity to fill in gaps on your record, which could increase the amount of State Pension you receive.
  3. The State Pension provides a retirement income foundation. The State Pension provides a reliable income throughout retirement. As a result, it can play a valuable role in your long-term financial plan by providing security if other income sources are affected by things like investment market volatility.

Understanding the State Pension means you’re in a better position to create a long-term financial plan that helps you reach your goals.

How does the State Pension work?

If you reached the State Pension Age before 6 April 2016, the old State Pension rules will apply. However, most people planning for retirement now will qualify for the “new State Pension”, which sought to make the State Pension simpler.

Under these rules, you need at least 10 qualifying years on your NI record. They do not have to be consecutive years. To receive the full State Pension, £179.60 each week (£9,339.20 annually) in 2021/22, you’ll need 35 qualifying years on your NI record. If you have between 10 and 35 qualifying years, you’ll receive a proportion of the State Pension.

If you have fewer than 35 years on your NI record, you can often buy additional years to increase how much you’ll receive from the State Pension.

In addition to the amount you’re eligible to receive, you need to know when you can claim it. The State Pension Age for men and women has now equalised and is gradually rising. In October 2020, the State Pension Age hit 66 and will reach 67 by 2028. It is being kept under review and could rise further in the future.

To understand what you’re entitled to under the State Pension, you need to know your State Pension Age and how many qualifying years you have on your NI record. The government’s State Pension forecast can help you understand what to expect.

How the State Pension can help you maintain your spending power

While other sources of income in retirement may fluctuate depending on your circumstances or investment performance, your State Pension is valuable because it’s reliable. It also rises each tax year, helping to maintain your spending power.

As the cost of living rises, an income that remains the same will gradually buy less. Over a retirement that could span decades, even small increases in inflation can have an impact on the lifestyle you can afford. So, an income that rises alongside this is important.

Usually, the State Pension annual rise is protected by the triple lock. This means that the State Pension will rise by the highest of:

  • Average earnings growth year-on-year for the May–July period
  • Inflation in the year to September, measured by the Consumer Price Index
  • 2.5%.

However, average earnings growth will not be included when measuring how the State Pension will increase for the 2022/23 tax year. In 2020 during the May–July period, the country was in lockdown due to Covid-19. Many people experienced reduced wages due to receiving 80% of their usual salary under the Job Retention Scheme when they were unable to work. As the economy began to reopen, this inflated earnings figures, and the triple lock meant that pensioners would have received a record 8.8% boost.

The government has argued the earnings growth for this period don’t reflect reality and will not use this measure when calculating the State Pension increase for the 2022/23 tax year. As a result, the new State Pension will increase by 3.1% for the 2022/23 tax year and pensioners will receive £185.15 a week (£9,627.80 annually).

If you need help understanding how your State Pension fits into your wider retirement plans, we’re here to help. Please get in touch to arrange a meeting.

Please note:

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

A care worker serving dinner to an older man

Accessing and paying for care have become big issues. As more people reach old age, more people will inevitably need some level of support as they get older. Now, the government has taken steps to fund social care and limit the cost to individuals.

So, how does the new care cap work and who will benefit from it?

Social care reform: A National Insurance hike and care cap

In September 2021, the government announced some key changes to social care and how it’s funded.

Among the changes is a National Insurance (NI) hike. NI contributions will increase by 1.25 percentage points from April 2022 to allow the government to invest more in health and care. From 2023, the Health and Social Care Levy will be a separate contribution.

The government estimates the new levy will lead to a record £36 billion invested in the health and care system over the next three years. Some of this will go towards helping the NHS tackle Covid backlogs, as well as reforming adult social care.

Most individuals need to pay for at least a portion of their care costs should they need support. According to Which?, the average weekly cost of residential care was £681 in England in 2019/20. This figure increased to £979 a week if nursing care was required. Over a year, that would lead to bills of £35,412 and £50,908 respectively.

You may have heard from family and friends, or even in the news, of people needing to sell their home or other assets to fund their later-life care. As a result, you may be worried about the future.

The government has now introduced a care cap. From 2023, no one will pay more than £86,000 for the care they need for daily tasks. It said the reform will end “unpredictable and catastrophic care costs” to make the system fairer. However, the cap isn’t as straightforward as it seems.

What does the cap cover, and who will benefit?

Crucially, the cap will cover care costs only. It will not cover daily living costs, such as accommodation, energy bills, or food.

For care home residents, it can be difficult to understand how much of their current fees go towards care, as bills are not usually itemised. However, the Telegraph reports that a typical person in residential care costing £1,100 a week can expect just £350 of this to go towards care.

In this scenario, just £18,000 of a total £60,000 annual bill would contribute towards the cap. As a result, the person would only start to receive government support after five years, while during this time they would have spent £210,000 of their own money on non-care items.

In addition, few care home residents will survive long enough to reach the cap. As care is often a last resort or only used when an individual needs round-the-clock care, half of people do not survive longer than a year after they move into a care home.

The care cap could benefit those who remain in care for several years. However, they will still need to be aware of how they’ll pay for non-care costs, whether from their assets or income.

60% are considering an alternative to care homes

It’s not just the cost of care homes that worries people. Some 60% of UK adults, the equivalent of 31.6 million people, said they worry about moving into a care home after seeing how Covid-19 spread in them, according to an LV= survey. This number increased to 65% among the over-55s.

Around the same proportion (61%) said they’d prefer to stay in their own home.

While this can seem like a cheaper option, it does still come with costs. You may need to adapt your home to make it suitable for your needs or need a carer to visit regularly to lend support, even if family can help. These costs can still add up to thousands of pounds every year and it’s important to understand how you’d pay for them and the impact it could have on your income.

No one wants to think about becoming ill or needing more support in old age. But by making a plan and setting aside some of your money to fund it if needed, you can have greater confidence in your future. Being proactive can also mean you have more choices. For example, having your own care fund to draw on may mean you’re able to choose a care home that’s close to loved ones and has facilities you’ll enjoy.

If you haven’t thought about your care preference or how to use your assets if you need care, please contact us. We’ll help you put a plan in place that can deliver peace of mind.

Please note:

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

Senior couple sitting on a park bench in autumn

Retirement planning as a couple can be difficult. You may have very different ideas about when you want to retire and how you want to spend your time. While it’s something of a taboo subject, understanding what you both want out of retirement and how you’ll create an income can help you get the most out of it.

A survey conducted by LV= found 78% of married people have no idea what their spouse’s pensions are worth. In fact, almost half (47%) have not spoken to their spouse about their retirement plans. While you may not have discussed how much you’re putting away for retirement, planning together often makes sense.

4 reasons to plan your retirement as a couple

1. Create the retirement lifestyle you want

When you think about your retirement, what does it look like? When do you hope to retire?

Without a clear picture of what you want retirement to be, it can fail to live up to your expectations. Setting out what you want your lifestyle to look like can help you get the most out of the next chapter of your life. If you’re planning with a partner, it is just as important to understand what they are looking forward to in retirement as well.

You may have very different goals, from the date you’d like to give up work to the life you’ll build. A conversation about what retirement will look like now can help you create a plan that suits both of you.

It’s common to focus on the big things when thinking about retirement, like a once in a lifetime trip or other big-ticket expenses. However, the day-to-day lifestyle you create in retirement is crucial for long-term happiness and fulfilment too.

2. Understand how to create a retirement income

In retirement, will you pool both your incomes to pay for essential outgoings? Will you share a disposable income?

Many couples will share income and expenses while they’re working and continue this into retirement. If you’ll pay for retirement as a couple, it’s important that you understand the steps you’re both taking to create an income when you give up work. It can help ensure you identify gaps sooner, enabling you to take steps to close them where possible. You could also find that collectively you’ll have more saved for retirement than you thought, allowing you to retire sooner or increase your planner income.

3. Make the most of allowances as a couple

Planning together can reduce your tax bill and help you make your money go further. The LV= survey found that 85% of non-retired married people are not aware of the tax efficiencies of planning retirement together. By not planning together, they could be missing out on reducing their tax liability.

While you’re still saving for retirement, adding to your partner’s pension can make sense. The Annual Allowance limits how much you can tax-efficiently save into your pension each tax year. This is usually £40,000 or your annual income, whichever is lower. If you may exceed this threshold, adding to your partner’s pension can increase how you’re saving tax-efficiently.

Once you’re retired, planning together continues to make sense. Money withdrawn from your pension may be subject to Income Tax when you exceed the Personal Allowance (£12,570 in 2021/22). Spreading withdrawals across both your pensions can help you make use of you’re your Personal Allowances to reduce the amount of tax paid.

Depending on your assets and goals, there may be other allowances that can help you create a long-term income that minimises tax. Please get in touch with us if you’d like to discuss how to save for retirement efficiently.

4. Ensure the long-term security of you and your partner

While it can be difficult to contemplate, it is important to consider how financially secure you would be if your partner passed away, and vice versa. Not planning as a couple can leave a surviving partner in a vulnerable position and potentially struggling financially.

By considering what could happen, you’re in a position to take steps to ensure long-term security for both of you, even if the unexpected happens. This could include ensuring your partner will inherit your pension by completing an expression of wishes, or purchasing a joint annuity so they would still receive a regular income if you passed away.

Start building your retirement plan as a couple

It can be difficult to know where to start when planning your retirement, especially if you have different goals for your partner. We’re here to help you put a long-term plan in place to help you get the most out of your retired life, whether you’re ready to retire now or are still saving for the milestone.

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.