If you want some festive cheer, a Christmas market is perfect. 

From stalls filled with seasonal treats to entertainment like carol singers, they can really put you in the mood for the holidays. Whether you want to visit an event locally or combine it with a weekend away in Europe, there are hundreds of Christmas markets to choose from. 

Download our latest guide to discover some of the best Christmas markets to visit this year and what sets them apart. From the St Nicholas Fair in picturesque York to Strasbourg France, which is dubbed the “Capital of Christmas”, there’s something for everyone.

A woman looking at emails on a phone.

How you communicate with everyone from your family to colleagues has changed enormously over the last few decades. While the tools we use to connect have changed, what’s remained important is communicating effectively. Read on to discover some tips for doing so in the digital age.

On 3 December 1992, Neil Papworth sent the very first text message – simply reading “Merry Christmas”. Just a year later, Nokia introduced an SMS feature on its handsets.

Today, millions of texts are sent every day and it’s strange to remember a time when you couldn’t send a simple message to your family and friends with just a few taps.

Since then, how we communicate has evolved even further. Emails have become commonplace, there are numerous instant messaging services, and video conferencing has replaced some face-to-face meetings.

The evolution of technology and communication means it’s easier than ever to get in touch with someone, but it can also lead to miscommunication and things being lost in translation. 

Here are eight tips for effective communication in the digital age.

1. Prioritise your responses

With communication so easy, you probably get hundreds of emails and messages every week. It can be overwhelming.

Organising your inboxes so it’s clear which messages you need to respond to, those that can wait or be deleted could help you take control. A system that works for you means you’re less likely to miss important things. 

2. Set out which channels you’ll use

You probably use several different channels of communication for each person, and it can mean things get lost.

Keeping conversations in one channel, whether that’s email or instant messaging, can make it easier to follow. This is particularly true in the workplace where you may be passing important details or documents to colleagues or clients. 

3. Make your communications clear 

Another side effect of lots of emails is that people will often skim read. It can mean they overlook things. So, making your messages concise and clear is vital.

Before you send something, go through it, and ask yourself if you would understand what you need to do in response if you were the person receiving it. A couple of extra minutes of reviewing can make sure the recipient has everything they need to accurately complete tasks straightaway.

4. Be mindful of your tone

One of the challenges of digital communication is that it can be hard to get your tone across. It can be all too easy for the recipient to read something in the tone of a message that you didn’t intend.

If you’re providing feedback, does your message sound encouraging or frustrated? The tone of a message can make a huge difference in how people respond, so it’s something you should be mindful of. 

5. Give feedback regularly

If you’re working remotely, you may overlook providing feedback. When you’re meeting in person and have an opportunity for more informal conversations, feedback is often given naturally. 

You should try to do this when you’re communicating digitally too. Taking a moment to recognise great work can help establish better relationships and boost morale in a team.

6. Make use of visual channels

It’s often said that more than half of communication is non-verbal – your body language and facial expressions play a role too. As a result, making use of video calls can help you connect and get your message across better. 

If you need to pass along instructions or provide training digitally, tools like Loom, which records your screen, can be invaluable. It means the recipient can clearly see what they need to do and rewatch the recording if they’re unsure about the process. 

7. Don’t forget to check the information before you send

From autocorrect to just being in a rush, mistakes can creep into digital communication. It’s always worth giving your messages a review before they’re sent to avoid errors that could cause confusion or even prove costly. 

8. Recognise when to do away with technology 

Sending a quick text or email from your phone is simple, but that doesn’t mean there’s no value in getting rid of technology now and again. Scheduling face-to-face meetings, whether in your personal or working life, is important for building relationships. 

A woman looking at mortgages on a tablet.

As house prices reach record highs, assessing affordability when you’re buying is more important than ever. It can help you search for properties within your budget and ensure your long-term finances are secure. 

Over the 12 months to August 2022, the average house price increased by 11.5%, according to the Halifax House Price Index data. The value of a typical property in the UK now exceeds £290,000.

Whether you’re a first-time buyer or are looking to move up the property ladder, it’s vital you consider how rising house prices may affect affordability. A mortgage is often one of the largest loans you take out and you’ll likely be making repayments for decades.

So, having confidence in your ability to meet this financial commitment is essential. 

Lenders will assess your affordability when reviewing your application 

When you apply for a mortgage, lenders will carry out affordability tests. This will include looking at your income and other outgoings.

Lenders may also assess how well you’d cope if your mortgage interest rate increased. Interest rates are still low but high levels of inflation mean that they are gradually rising. As a result, if you choose a variable- or tracker-rate mortgage the interest rate, and your repayments, may increase too. 

Before you apply for a mortgage, it’s a good idea to consider what information a lender will use when conducting an affordability check. This can help you flag potential issues and resolve them.

Providers will use your credit report to assess the likelihood that you’ll default on your repayments. You can review your own credit report for free without affecting your score. Make sure all the information is correct and assess if it contains any negative factors.

A low credit score or negative factors don’t automatically mean you can’t take out a mortgage, but you may need to approach a specialist lender. 

Lenders may also check your bank statements. They will check for red flags, such as frequently using your overdraft, using a payday lender, or spending on gambling. 

Assessing your affordability can give you confidence 

While a lender may carry out affordability tests, conducting your own can be useful and give you confidence. 

You should consider what disposable income you need to live the lifestyle you want, and how paying a mortgage could affect this. By doing your own affordability test you can ensure your finances reflect your priorities and other long-term goals.

It also means you can understand your position before you apply for a mortgage.

A good place to start is to apply for a “mortgage in principle”. 

A mortgage in principle gives you an idea of how much you can borrow. You can fill in an application with a lender and it usually won’t affect your credit rating. It means you can get a rough idea of how much your repayments will be and how the amount you want to borrow will affect them. It can also help you understand what interest rate you’re likely to pay.

Keep in mind that a mortgage in principle isn’t a guarantee, as lenders won’t carry out a full credit check and may request more information when you apply for a mortgage.

You can also use online calculators to see how changing the mortgage term or interest rate would affect your ability to make repayments. This can mean you’re able to plan better for future rate rises and know you have room in your budget to accommodate them if necessary. 

Taking some time to assess affordability yourself, rather than relying solely on a lender’s test, is useful. Not only can it give you confidence, but it can also ensure your budget can stretch far enough to meet other goals that a bank may not consider. For example, you may want to put money away for retirement or create a holiday fund. 

This step can help you balance home ownership goals with other things that may be important to you. 

Do you want help understanding your affordability?

Navigating buying a new home can be difficult and it means making large decisions. If you’d like some support, we’re here to help.

We can work with you to understand what would be affordable and, once you’ve found your next home, assist with applying for a mortgage. Our team can help you approach the lenders that are right for your circumstances and could secure you a more competitive interest rate to cut your repayments. 

Please contact us if you’d like to discuss your mortgage needs. 

Please note:

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

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.

A group of employees in an office meeting.

Salary sacrifice schemes could offer employees a tax-efficient way to boost their retirement savings. It could benefit your business too, so they are well worth considering. 

If you’ve been thinking about salary sacrifice pensions or want to explore how you could expand your workplace benefits, read on to discover what they could mean for your business. 

What is a “salary sacrifice” pension?

In simple terms, salary sacrifice means that an employee gives up some of their salary in exchange for a benefit. In this case, that benefit would involve you, as their employer, making higher contributions to their pension. 

From the employee’s perspective, a salary sacrifice has two key benefits:

1. It increases their pension savings. As you will contribute more to their pension each month, their pension pot will grow faster.

2. It could reduce tax liability. As their income will be lower, Income Tax and National Insurance could deductions fall. In some cases, the income difference is negligible due to the savings. 

As a result, employees choosing a salary sacrifice pension are often financially better off in the long term, while giving up relatively little now. 

For employers, offering this option can deliver both financial and non-financial benefits. 

The financial benefits of providing a salary sacrifice pension 

From an employee’s perspective, the additional pension benefits could outweigh the salary sacrifice they’re making. In some cases, they may be better off financially day-to-day too, as their Income Tax and National Insurance contributions will fall. 

The extra pension contributions benefit from tax relief, boosting retirement savings further. As the money will usually be invested, it has the potential to deliver long-term returns too. 

So, it’s easy to see why, for an employee, a salary sacrifice pension can make sense financially. But how does it financially benefit employers?

While you’ll be contributing more to your employee’s pension, your employer NICs will fall, which could deliver a saving overall.  

Salary sacrifice could boost employee satisfaction 

As well as tangible financial benefits, salary sacrifice options could boost employee satisfaction.

Having more options to choose what’s important to them and an opportunity to save more efficiently for retirement can improve employee wellbeing. A salary sacrifice pension could help your team to feel more confident about their retirement and long-term financial security.

This step could also make your business more attractive to talent in a competitive job market. 

To make the most of this benefit, it’s important that you effectively communicate what salary sacrifice means to your employees and how they could benefit from it. Including the details in documents like an employee handbook, regularly mentioning it during team meetings, and including it in job adverts can help.

Working with a finance professional to engage with employees can also increase how many people make use of salary sacrifice options. For instance, we could speak to your employees to help them calculate exactly how salary sacrifice would affect their income now and what it would mean for their retirement. 

If you’d like to work with us to improve financial education and wellbeing in your business, please contact us. 

What steps do you need to take to set up a salary sacrifice scheme?

As an employer, it’s likely you already have a pension scheme in place for your employees under auto-enrolment. So, setting up a salary sacrifice scheme could be easier than you think and it’s something we could help with.

If an employee agrees to take a salary sacrifice, you will need to update their contract. You can usually do this by adding a clause that explains the details of the scheme. You will also need to update your payroll process to include the new figures for gross salary and tax.

Tax savings you make through a salary sacrifice scheme are instant – you don’t need to claim them back. 

Do you want to learn more about salary sacrifice and employee financial education?

Whether you want to discuss the pros and cons of salary sacrifice with an expert or arrange for a financial adviser to talk to your team, we can help. Please contact us to discuss your business needs and how we can work together. 

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 not normally accessible until 55 (57 from April 2028). The value of your investments (and any income from them) can go down as well as up, 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. Levels, bases of and reliefs from taxation may change in subsequent Finance Acts.  

A mature couple looking at something together on a laptop.

Money and financial goals are still sometimes viewed as taboo subjects, even within relationships. If you’ve been putting off conversations about finances, creating a plan together could have many benefits.

Talk Money Week takes place between 7 and 11 November, so it’s the perfect time to think about who you discuss your finances with, and how you approach the topic.

Actively talking about money can be positive for both you and your loved ones, and research suggests it’s something younger generations are more likely to do. According to Royal London, 76% of 18- to 24-year-olds spoke to their parents about money matters when they were growing up. In contrast, this falls to 43% for those over 65. 

If money wasn’t openly discussed during your childhood, it can be hard to change your mindset around the topic. Yet, when you’re planning a future with your partner, your finances will play a critical role. So, if you currently keep your financial planning separate, working together could be useful.

That doesn’t mean you have to share everything or combine finances completely if it’s not right for you. Instead, you could set out how you want to work together with a financial planner. 

Bearing all this in mind, here are five reasons you should create a financial plan with your partner. 

1. Understand what you both want to achieve

While you may have talked about your goals in your relationship, setting out a financial plan provides a good opportunity to talk about your priorities and understand if you’re on the same page as your partner.

This may include when you’d like to retire, and what your lifestyle will look like when you give up work. Or it could be how you’ll support your wider family or bucket list destinations you want to visit. 

Making these goals a clear part of your financial plan means you’re far more likely to achieve them. Without a plan, it can be all too easy for aspirations to fall to the wayside. 

2. Discuss your attitudes to financial decisions 

When dealing with finances, it’s important that you’re comfortable with the decisions you make. This applies to both you and your partner if you’re working towards shared goals.

For example, how does your partner feel about taking investment risk? Or what is their attitude to using credit? Talking about these issues can help you create a financial plan that you’re both comfortable with. 

3. It could improve your wellbeing

Money is often linked to stress, and it can affect your overall wellbeing too. 

Research shows that financial stress can increase later in life. This is understandable as, on top of considering things like mortgage repayments and day-to-day costs, you may also be thinking about retirement or supporting other family members. According to Aviva research, more than 40% of 55- to 64-year-olds say they are “struggling financially”.

A long-term financial plan that incorporates your and your partner’s circumstances and goals can deliver peace of mind. 

4. Have confidence in the future

One of the reasons that the topic of money can be stressful is that you may have questions about the future or wonder what will happen in some circumstances. For example, you might be concerned about the consequences of you or your partner losing your income, or how one of you would cope financially if the other passed away.

Financial planning helps you set out a blueprint, but it also considers how you’d cope if the unexpected happens. By doing this, you can take steps to provide security in these circumstances.

By planning together, you can have confidence in both your and your partner’s long-term financial security. 

5. It could help make your money go further

Planning as a couple can make financial sense. Working together could mean you’re able to make the most of tax breaks or allowances.

Which ones are right for you will depend on your circumstances and goals but may include using the Marriage Allowance to reduce Income Tax liability, making use of both of your annual ISA allowances, or contributing to your partner’s pension. If you have any questions about which allowances could be suitable for you, please contact us.  

Contact us to create a financial plan for you and your partner 

We are here to help you navigate the challenges of creating a financial plan, from tax breaks to understanding your goals. If you’d like to arrange a meeting with 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.

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.

A family enjoying dinner together.

More people are choosing to gift wealth during their lifetime rather than leaving assets as an inheritance. There are benefits to choosing a living legacy, but there are things you need to consider too, including your long-term financial security and the potential tax implications. 

According to an Aviva survey, more than half of those over 55 want to give a living legacy. It’s a trend that suggests a move away from leaving money to your family when you pass away. 

There are many reasons why you may want to create a living legacy, including:

1. You can see the benefit of your gift

One of the key benefits of a living legacy is that you can see the joy and security that your gift brings to loved ones. For some people, this may be a motivation for creating a living legacy. 

2. Help family members when they need it most

Longer life expectancy means that many people won’t receive an inheritance until they’re retired. As younger generations face financial security challenges, like struggling to buy their first home, a living legacy can have a much larger effect. A gift earlier in life can help your family reach their goals.

While there are benefits to a living legacy, there are some key areas you need to consider first. 

Will a gift now affect your long-term security?

Taking a lump sum or assets out of your estate now could affect your financial security. To have confidence in the steps you’re taking, you need to think about how they could affect your long-term plans.

According to the Aviva survey, 33% of people said they would be uncomfortable helping a family member get onto the property ladder without knowing how much money they’d need for retirement. For many, this worry is likely to apply if you’re helping loved ones achieve other goals or simply want to provide a gift.

Gifting some assets can have a larger effect on your plans than you think. For instance, if you took money out of an investment portfolio, you would also lose the potential returns you could earn from those investments. So, it’s important you review your entire financial plan when gifting.

Longer life expectancy is one of the reasons people are turning to living legacies, as it can help family when they need it most. However, it also means you need to consider the long term and what could happen if you face financial shocks.

Making gifts part of your financial plan means you can hand over assets to loved ones with confidence.

A robust plan will help you understand how your wealth and income needs may change over the years. You can also take steps to protect yourself from income shocks – for example, by taking out appropriate financial protection or having emergency assets you can fall back on.

How will a gift affect your Inheritance Tax liability?

If your estate could be liable for Inheritance Tax (IHT), it may be a reason you’re considering gifting assets now. However, not all gifts are outside of your estate for IHT purposes.

If the value of all your assets is more than £325,000, your estate could be liable for IHT. With a standard rate of 40%, IHT can significantly reduce what you leave behind for loved ones.

Gifting to bring the value of your assets under the threshold can seem like a straightforward way to reduce IHT but it’s not that simple.

Some gifts are considered immediately outside of your estate for IHT purposes. This includes up to £3,000 each tax year known as the “annual exemption”, the small gift allowance of up to £250 for each person, and gifts that support someone’s living costs.

However, other gifts may be considered “potentially exempt transfers” (PET). PETs can be included as part of your estate for IHT purposes for up to seven years.

So, if you gifted assets and died within seven years, the IHT bill could be more than you or your family expect.

If IHT is a key reason why you’re considering a living legacy, it’s important you understand the effect this could have. 

There are things you can do to increase how much you can leave behind before IHT is due, including making use of the residence nil-rate band. We can answer any questions you may have about IHT and the steps you could take to reduce liability. 

Contact us to discuss living legacies

If you’d like to gift your loved ones cash or assets during your lifetime, please contact us. We can help you understand if it’ll affect your long-term security and what other implications you may need to consider, such as a tax liability. 

Please note:

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

The Financial Conduct Authority does not regulate estate or tax planning. 

Someone looking at investment performance on a phone.

You should base financial decisions on logic and facts. But psychology can have a much larger effect than you think, and it can lead to you making decisions that aren’t right for you. Read on to find out more about what behavioural finance is and how it could affect you.

“Behavioural finance” was first coined in the 1970s by economist Robert Shiller and psychologists Daniel Kahneman and Amos Tversky. They used the term to refer to how unconscious biases and heuristics affect the way people make financial decisions. 

It can be used to explain why investors can make knee-jerk decisions or invest in opportunities that aren’t in their own best interest. Rather than relying purely on facts, investors often have biases that affect how they react to certain situations. 

In this article, find out more about where biases can come from and why they can have such a large effect on your mindset. Over the next few months, we’ll explore specific examples of how financial bias can affect your decisions and what you can do to make better choices. 

Finance bias can lead to “irrational” decisions through shortcuts

There’s a reason why people often make decisions based on biases: they can make the decision-making process quicker.

If you imagine how many decisions you need to make every single day, it’s easy to see why this kind of decision-making can be useful. From what to eat for breakfast to which way to travel to work, it’d take up all your time if you carefully went through the facts for each decision you make. So, you make shortcuts by using biases. 

However, while it can be a useful process in your day-to-day life, bias can have a negative effect when you’re making important decisions, including financial ones. 

Behavioural finance covers five concepts:

1. Mental accounting

Mental accounting can be incredibly useful when you’re managing a budget. However, inflexibility could mean you miss out on opportunities.

The concept refers to how people may designate money for certain purposes. So, you may have different savings accounts for various goals. It’s a process that can help you manage your outgoings and work towards goals.

However, it can also lead to irrational decision making.

You may not dip into a savings account that you’ve allocated to buying a new car even when you face an emergency and it’d make sense logically.

How you receive the money may also affect how you use it. For instance, you may put off using money that was given as a gift in an emergency because you believe it should be used for something special. 

2. Herd behaviour

Herd behaviour is something that’s often seen in investing. When you hear that lots of people are selling certain stocks or buying a specific share, it can be easy to be led by this and follow suit. 

It can lead to you making decisions that, while possibly right for others, don’t suit you or your circumstances. 

It’s not just investing where herd behaviour can have an effect. You may be tempted to purchase an item after a friend has or choose a savings account because someone you know has. 

3. Anchoring

When you have some information, you may focus on this – anchoring your views to this data.

Setting a benchmark can be useful, but it can mean you don’t take in other information, especially if it’s contradictory.

So, you may hold on to investments even after the value has fallen because you’ve anchored its worth to a previous valuation. 

4. Emotional gap

Emotions often play a role in financial decisions. You may sell a stock because you fear that the price will fall, or make an impulse purchase because you’re happy.

Being comfortable with your financial plan is important, but an emotional gap can fuel irrational decisions as you’re more likely to overlook data.

5. Self-attribution

This concept refers to how investors are likely to have overconfidence in their abilities. 

You may believe you can reliably time the market to maximise profits when the markets are unpredictable. In this case, it’s common to see “wins” as being down to your knowledge, while “losses” are attributed to things outside of your control.

Unconscious bias may affect your decisions in ways you don’t expect.

Next month, read our blog to understand some of the common ways that biases could affect how you think about money and respond to circumstances. Learning more about how bias may affect your financial decisions can help you make better choices in the future. 

If you have any questions about your finances and the decisions you need to make, 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.

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.

Humans are hard-wired to make poor financial decisions. It’s just in our DNA.

Financial wellbeing is a broad topic, covering all aspects of the relationship between money and our long-term happiness. It covers a wide variety of subjects, including how to manage money better, and how to use money to generate wellbeing.

In some ways, financial wellbeing is about getting out of the bad habits we have acquired by linking money with success.

If you want to improve how you make financial decisions, this guide covers six steps to take:

  1. Understanding why you are bad with money
  2. Understand the sources of wellbeing
  3. Identify your objectives
  4. Don’t be a financial wellbeing junkie
  5. Connect with your future self
  6. How to give.

Download your copy of “Financial wellbeing: 6 ways to help you make better financial decisions” to learn more.

If you have any questions about your financial plan and how to improve your wellbeing, please contact us.