The 2022/23 tax year ends on Wednesday 5 April. After this date, many allowances reset, and it could be your last chance to use some of them.

Allowances can help your money go further by reducing your tax liability. Reviewing your finances before the deadline could help you identify some allowances that could be right for you.

This guide explains how seven useful allowances work:

  1. Marriage Allowance
  2. ISA allowance
  3. Dividend Allowance
  4. Capital Gains Tax annual exempt amount
  5. Pension Annual Allowance
  6. Inheritance Tax annual exemption
  7. Gifts from your income.

Download your copy of ‘The 2022/23 end of tax year guide: 7 allowances to make use of before 5 April 2023’ to find out more.

If you have any questions about your financial plan and which allowances make sense for you, please get in touch.

A close-up of a board game on a table.

The festive season is almost here, and it’s the perfect time to stay in the warmth and get out board games. Whether you’re planning a cosy night in with your partner or having your family over for party games, these excellent options will guarantee a fun evening.

Games that are perfect for 2 players 

1. Pandemic

You’ll have to work together in this game to control a disease. You play the role of a specialist whose mission is to treat disease and pioneer cures. You’ll need to come up with a strategy that uses your strengths to be successful, but watch out for “Epidemic!” cards that could accelerate or intensify the game. Up to four players can play Pandemic, but it’s a great option for two people. 

2. Patchwork 

If you want a relaxing night in, Patchwork is a great choice. It’s not overly competitive and is easy to pick up. You’ll need to purchase Tetris-like pieces known as “patches” to complete a patchwork and earn buttons. As each patch has a different price, you’ll need to be strategic – should you splash out more now, even if it could limit your options later in the game?

3. Codenames: Duet

Codenames has become known as a great party game. This version tweaks the original to deliver an excellent cooperative game. You’ll need to correctly identify assassins by communicating in coded messages. As you progress, the game becomes more challenging as restrictions are added. It can quickly become addictive as you try to beat your previous record. 

Board games that are ideal for large groups 

4. Chameleon

Up to eight people can play Chameleon, a fun word association game. You’ll pick a category, like school subjects or fairy tales, and a table filled with associated words. Everyone except for the “chameleon” knows the chosen word. Could you spot who is bluffing? Or can you think quickly and make your friends believe that you know the chosen word if you’re the chameleon? 

5. Telestrations 

This game is sure to have you all laughing at the miscommunication it causes. Think of it as a game of Chinese whispers except you draw. Each player is given a sketchbook, marker and word card – you’ll then have 60 seconds to draw your word. You pass the picture to the next player, who tries to guess what your word was, which is then passed on to the next person. Telestrations is suitable for up to eight players. 

6. Taboo

You play Taboo in two teams, so it’s perfect if you have a large group to entertain. You’ll take turns trying to describe a word for your teammates to guess. The catch is that you can’t use some of the most obvious clues and the opposing team is armed with a squeaker in case you slip up. How would you describe Houdini without using the words magic, escape, or Harry? 

Fun games that will get you on your feet 

7. Cranium

If you want a board game that has lots of different activities suitable for the whole family, look no further than Cranium. There are five different categories you’ll have to work through to move around the board, from “fun fact” trivia questions to “sketch and sculpt” that will encourage you to get creative. If it becomes a family favourite, you can buy booster boxes to add even more activities. 

8. The Crystal Maze 

Relive the 90s TV show The Crystal Maze with this fantastic board game. There are four themed zones to work through, from medieval to futuristic. The game is packed with mental, mystery and other challenges that get you thinking and, in some cases, moving around too. 

9. Taskmaster

Another game inspired by a TV show, Taskmaster will have you and your family completing crazy tasks. There are more than 200 cards in the game that will take you across the board and through different zones that fans of the show will recognise, such as the garden, kitchen, and lab. Could you build a bridge in the garden? Or make the most surprising cup of tea to win points? 

Classic board games with a twist

10. Cluedo: Treachery at Tudor Mansion

This new version of Cluedo combines the classic game with an escape room experience. You’re a guest at Mr Black’s mansion when you hear a shriek and find him dead. Who killed Mr Black, where did they do it, and what weapon did they use? You’ll need to move around the board to solve puzzles, uncover clues, and unlock rooms. 

11. Monopoly: Mega Edition

If Monopoly is a family favourite, this mega edition is perfect for you. There are 12 extra spaces, including eight new streets, around the board. It means there are more opportunities than ever to buy properties and build skyscrapers. There are new ways to move around the board and you could double your rent by building depots on railway stations.

12. Trivial Pursuit: Bet You Know It 

You don’t have to know all the answers to win this version of Trivial Pursuit. Instead, what you really need to understand is what your family and friends know. You’ll need to bet on whether players will get the answer right to earn chips, which you can use to buy wedges. As every player plays each turn, it’s fast-paced and will get you all talking. 

A man opening a letter.

Mortgage repayments for thousands of homeowners are rising. Understanding what affects the rate you’re offered when applying for a mortgage could help you secure a better deal.

As a mortgage is often one of your largest outgoings, it’s not surprising that people are worried about the cost rising. A survey conducted by Unbiased found that more than half of Brits are more worried about their mortgage repayments than anything else.

If you’re applying for a new mortgage, it can be useful to understand what could affect the rate the lender offers you. Here are four factors you need to know. 

1. The Bank of England’s base rate

The Bank of England’s (BoE) base rate is the reason why many homeowners are finding their outgoings have unexpectedly increased.

Throughout 2022, inflation has been high. To tackle this, the BoE has increased its base rate. At the start of 2022, it was 0.25%, but by November 2022 it had increased to 3% through a series of rises.

So, homeowners that have a variable- or tracker-rate mortgage, where the interest rate can change during the term, have seen their mortgage repayments rise several times over the last 12 months.   

While a rise of 2.75% may seem low, it can have a significant effect on outgoings and the total cost of borrowing. The below table shows how repayments may change for a 25-year repayment mortgage. 

Source: MoneySavingExpert 

While homeowners with a fixed-rate mortgage may not have been affected by the rising base rate yet, outgoings could increase sharply when their current deal ends.

2. Your credit score

Your credit score can affect whether a lender approves your mortgage application and the interest rate you’re offered. So, whether you’re a first-time buyer or are remortgaging, it’s worth going through your credit report before submitting your application.

Lenders use your credit report to assess how likely you are to default on mortgage repayments. If you’re considered high risk, the interest rate you’re offered is likely to be higher to balance this. 

Mortgage providers will look at whether you’ve missed payments in the past, as well as other financial commitments, such as loans or credit cards. They will also review your application history, so it’s best to avoid applying for other forms of credit when you’re getting ready to apply for a mortgage. 

There may be other simple steps you can take to improve your credit score, such as registering to vote and removing inaccurate addresses. 

3. Your loan-to-value ratio

Despite being worried about mortgage repayments, the Unbiased research found that half of homeowners didn’t know how much they still owed. Yet, it’s a crucial figure that could affect your interest rate.

Lenders will look at your loan-to-value (LTV) ratio when assessing your application, and it can have a direct effect on your repayments.

The LTV compares how much you owe compared to the value of your property. As you make repayments or the value of your property rises, the equity you hold will increase, and your LTV will fall.

Typically, the lower your LTV, the better the interest rate you can access. This is because, as your equity increases, you’re viewed as less of a risk. 

So, when you remortgage, understanding how much you have left to pay off and your lender’s LTV bands can be useful. Making overpayments or paying off a lump sum to move into a lower band could save you money overall. 

The LTV applies to first-time buyers too. While it’s common to put down a 10% deposit, if you can boost this by just 1% you could move into a lower LTV band to secure a lower rate and help your monthly budget stretch further. 

4. The type of mortgage you choose 

The type of mortgage you choose could also affect the interest rate you’re offered.

A fixed-rate mortgage means the interest rate will remain the same for a set period, often two, three, or five years. This can provide you with some certainty and means you don’t need to worry about rates potentially increasing, although you also wouldn’t benefit if they fell.

In return for this security, you will often find that a fixed-rate mortgage deal has a higher interest rate than a comparable tracker- or variable-rate deal. 

Remember the interest rate isn’t the only thing to consider when choosing a mortgage. While a fixed-rate deal may have a higher interest rate, the stability it provides may mean it still makes sense for you.

Contact us to talk about your mortgage application 

Whether you’re a first-time buyer or are remortgaging your home, please contact us. We can help you search the mortgage market for a deal that’s right for you and could secure you a competitive interest rate. 

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 father and two children playing with a kite.

Two-thirds of families could find themselves in financial difficulty if they face a shock because they don’t have enough saved in an emergency fund, research suggests. Do you have enough saved to cover potential emergencies? 

An emergency fund is an important part of creating financial resilience. It means you could maintain financial commitments and your lifestyle even if something unexpected happens. Building an emergency fund can improve your financial wellbeing too, as it can offer peace of mind about the future. 

As inflation is high – it was 11.1% in the 12 months to October 2022 – and the UK is expected to fall into a recession in 2023, an emergency fund is more important than ever. It could help create a buffer as costs rise and mean you’re more secure amid the uncertainty. 

The average working household has £2,400 in savings

A survey conducted by Legal & General found that the average working household has less than a month’s worth of expenses in an emergency fund – the average is £2,400. 

Due to the cost of living rising, more than half of families said they plan to use their rainy day fund to meet everyday costs. 1 in 4 households is already dipping into their savings.

As well as depleting how much is an emergency fund, inflation means families are less likely to continue adding to one. 30% said they have stopped putting money into a savings account as they struggle to meet spiralling costs.

Yet, the research found that having an emergency fund is an important part of having confidence about the future. On average, families said they would need £12,100 in the bank to feel financially secure.

Reaching this goal would not only help families weather financial shocks but could improve wellbeing too. Knowing that you have a financial safety net can ease anxiety. 

4 useful tips for building an emergency fund

If you don’t already have an emergency fund, it can be a daunting goal. Here are some tips that could help.

1. Set a target for your emergency fund

While the survey suggested that families would like to have around £12,000 in the bank, you should set your own target based on your circumstances. 

Often, it’s advisable to have between three and six months of expenses in your emergency fund. This means you can cover short-term outgoings even if your income stops. So, take a look at what your regular outgoings are. You can then set a target that makes sense for your family.

2. Make a monthly deposit into your savings account

With a target in mind, break your goal down into smaller chunks. It can help make building your emergency fund seem more manageable and easier to incorporate into your budget.

Set a minimum amount you want to add to your savings account each month. Then, make it part of your regular expenses. Setting up a standing order, so the money is moved out of your current account automatically, means you’re less likely to accidentally spend it. 

While your overall goal could take a while to reach, celebrate the smaller milestones along the way. It can help keep you motivated and give you confidence that you’re taking active steps to improve your financial wellbeing. 

3. Get the most out of your savings

Your emergency fund might be sitting there waiting for a rainy day, but that doesn’t mean you should put it in any account. Shopping around to find an account with a competitive interest rate means your money works harder and you could reach your goal sooner. 

As you want to be able to access the money at short notice in case of an emergency, an easy access savings account often makes sense. However, as interest rates have increased this year, it’s still worth looking at what’s available.

Some banks and building societies may also offer you an incentive to move your savings account. 

4. Review alternatives before you dip into your emergency fund

Your emergency fund is there for when you face an unexpected shock. If you’re thinking about dipping into it for another reason, review the alternatives first. Could you cut back in other areas? Or delay purchasing until payday?

In some cases, your emergency fund may be your only option, but exploring the alternatives first can help you preserve your savings.

If you are thinking about accessing your savings to cover ongoing costs, you should consider if it’s sustainable. While it could help you cover a soaring energy bill now, how long will your savings last? Relying on your savings could mean you’re in a worse position in the future. 

Contact us to talk about improving your financial resilience

An emergency fund is an important first step in improving financial resilience, and there are often other steps you can take too.

Depending on your goals, you may want to consider financial protection or increase your pension contributions. Contact us to talk about your goals and the steps you can take to improve your financial security. 

Please note:

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

A busy high street in the UK.

Experts are predicting that the UK will face a recession in 2023. While it can be tempting to react to this news by changing your investment strategy, sticking to your long-term plan makes sense for most investors. Read on to find out why.

Several factors are contributing to economic uncertainty, including high inflation and concerns about energy supply. The long-term effects of the Covid-19 pandemic and the ongoing war in Ukraine are two of the reasons for these challenges.

In its November report, the Bank of England said the economic outlook was “very challenging”. It expects the economy to be in “recession for a prolonged period”, adding that inflation was forecast to remain high until mid-2023 when it is expected to fall sharply. 

Other predictions also paint a gloomy picture of the UK economy. 

According to the EY ITEM Club, the economy will contract by around 0.2% each quarter from the final quarter of 2022 until the second quarter of 2023. Overall, it expects the economy to contract by 0.3% in 2023. This compares to a previous forecast that indicated the economy would grow by 1%. 

The organisation noted this is shallow when compared to previous recessions thanks, in part, to the government’s intervention on energy bills. 

Hywel Ball, EY UK chair, added: “There are very significant risks to the forecast, with the potential for further surprises or global instability creating additional drags on growth. Businesses will need to think very carefully about their resilience and plan for different scenarios, while also being mindful of the support they provide to their customers and employees.” 

Similarly, Goldman Sachs has downgraded its growth forecast for the UK, according to a Guardian report. The investment bank now expects the UK economy to shrink by 1% in 2023. 

A recession could lead to market volatility, but history indicates it recovers in the long term

While these predictions can be alarming to an investor, remember, that markets have recovered from previous downturns.

Economic uncertainty can lead to businesses and households tightening their belts, which has a knock-on effect on business profitability and markets. While it’s impossible to predict the markets, history shows us that they have recovered from recessions in the past. 

Take the 2008 financial crisis. In the UK, the recession that followed lasted for five consecutive quarters. During this time, the markets fell, but they went on to recover and grow. Investors that panicked and sold amid the downturn would have turned paper losses into real losses and missed out when markets began to rise. 

Over the next year, your investment portfolio may experience volatility or a fall in value. While all investments carry some risk, looking at how markets have responded to similar events over the long term in the past can give you confidence. 

If you’re tempted to make changes to your investments, here are five things you should do.

1. Focus on your long-term goals

As highlighted above, investment markets have historically delivered returns over the long term. Rather than responding to short-term economic challenges, focus on why you’re investing. 

2. Don’t make knee-jerk decisions

It can be easy to make knee-jerk decisions, especially during investment volatility. But the decisions you make can have a long-lasting effect, so it’s important that they are measured. Taking some time to weigh up the pros and cons can highlight where you could be making a mistake by reacting to short-term volatility. 

3. Review investments alongside your financial plan

Don’t think of your investments in isolation, they should play a role in your overall financial plan. So, if you’re tempted to make changes, review your options in the context of your wider finances and goals.

4. Consider your risk profile before you make changes

Before you make any investment decisions, you need to consider how they could change your risk profile. Choosing risk-appropriate investments is important. Taking too little risk could mean you don’t reach your goals, while taking too much could mean you’re exposed to more volatility. 

5. Speak to us

If you have any questions about the current economic situation or would like to discuss your investment plan, speak to one of our team. We’ll help you understand the effect on your lifestyle and your goals. Whether you want reassurance that your plans are still on track or you’re considering making changes to your investments, we’re here to help. 

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.

Someone looking at investment performance on a phone.

When you need to process information, it’s common to take shortcuts and rely on bias. It’s an approach that can be useful in some situations, but it can also lead to decisions that aren’t right for you.

If you’re making financial decisions, you know you should focus on facts, but emotions and other influences can creep into the decision-making process. 

Last month, you read about some of the ways bias may affect your financial decisions. From herd mentality to confirmation bias, it can have a larger effect than you may think.

So, what can you do to reduce bias? Here are five effective ways you can focus on what’s important. 

1. Learn to recognise when bias could be affecting you

One of the first things you can do to reduce the effect of financial bias is simply be aware that it could happen.

Understanding why bias happens and when it may affect your decisions means you’re more likely to take your time to think things through.

Asking yourself questions can be useful:

  • Is this investment appealing just because others are buying shares?
  • Am I dismissing information because it doesn’t paint the picture I want?
  • Have I researched my other options?

Sometimes just remembering that bias could occur is enough to make you take a closer look at your decisions. 

2. Take your time when making financial decisions

While making quick decisions can be useful in some aspects of your life, taking a step back and giving yourself some time is often valuable when making financial ones.

Decisions around investing or your retirement could affect your wealth for years to come. So, it’s worth giving them the attention they deserve and thoroughly researching your options. 

You’re more likely to overlook important information if you make a snap decision. To compensate for this, you may instead rely on biases or gut feelings. While it may feel right at the time, it means you could be making decisions that don’t make financial sense for you. 

3. Tune out the short-term investment noise

One of the reasons that biases can affect investing is that it can be all too easy to focus on short-term market movements.

A company’s shares soaring or tumbling dramatically in a day makes a great headline or talking point among friends. But rarely is it something you should act on and it’s easy to attach too much importance to these short-term results. 

When you first create an investment strategy, you should set out your long-term goals and how you’ll achieve them. Investment decisions should focus on the long term to reflect this. While looking at long-term performance may not be as exciting, as the peaks and troughs often smooth out, it can help you stick to your plan. 

While it can be difficult, tuning out the noise and market volatility can help you focus on your investment strategy. 

4. Scrutinise the decisions you make

When making financial decisions, playing devil’s advocate can be useful. It can help you question why you’re making certain choices and fully explore alternatives. 

If someone else was asking for your advice, what questions would you ask? Would you be satisfied with the way they interpreted the data? Trying to look at your decisions from an outside perspective can be valuable. It allows you to re-evaluate the information and see if you draw the same conclusion. 

5. Work with a financial planner

Sometimes, simply having someone to discuss your decisions with can help highlight where bias may be occurring. 

As financial planners, we can work with you to create a financial plan that focuses on facts and long-term goals. Having a tailored financial plan can give you confidence and mean you’re less likely to act on bias. 

We’re here to answer your questions too. So, next time you see an investment that you’re tempted by, but you aren’t sure if it’s right for you, you can contact us. Having someone to turn to can reduce the chance that you react to news or information quickly, rather than giving yourself time to process it. 

If you’d like to arrange a meeting with us to discuss your investments or overall financial plan, 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 person typing on a laptop keyboard and using a mouse.

The rules around filling in a gap in your National Insurance (NI) record are changing. From 5 April 2023, you will only be able to make voluntary contributions for the past six years. If you have gaps in your record, filling them in now could boost your retirement income. 

There are many reasons why you may have gaps in your NI record, from taking time away from work to care for children to moving abroad. Even if you were working, you may have a gap in your record if you were on a low income or self-employed.

Under the current rules, if you’re eligible, you can make voluntary contributions to fill in gaps between April 2006 and April 2016. However, when the 2023/24 tax year starts, you will only be able to make voluntary contributions for the last six tax years. 

As a result, you may have just months left to fill in some of the gaps in your NI record. But why should you?

Your National Insurance record affects how much State Pension you will receive

The number of years you have paid National Insurance contributions (NICs) can directly affect your income in retirement. 

To receive the full State Pension, you will usually need 35 years on your NI record. If you have fewer than 35, you will typically receive a portion of the full amount. 

For the 2022/23 tax year, the full new State Pension is £185.15 a week, adding up to £9,627.80 a year. So, while it may not be your only source of income in retirement, it’s often an important part.

The State Pension also rises each tax year under the triple lock. This makes it a valuable way to maintain your spending power in retirement. As the rise is calculated as a percentage, pensioners that aren’t entitled to the full State Pension won’t benefit as much. 

Under the current rules, you can make additional voluntary NI payments to fill in the gaps if you have any. It will cost around £800 to purchase an additional year, but it could boost your State Pension income by £275 a year. As a result, you’d need to claim the State Pension for just three years to make it worth your while financially. 

The current State Pension Age is 66. According to the Office for National Statistics, the average man aged 66 can expect to live for another 19 years. An extra £275 a year over 19 years adds up to £5,225. For women aged 66, the average life expectancy is two years higher.

So, while it may seem counterproductive to make voluntary contributions as you near retirement, it could mean you receive thousands of pounds more from the State Pension. 

How to check your National Insurance record 

Before you buy additional NI years, you should make sure it’s the right decision for you. In some cases, buying extra years wouldn’t boost your income in retirement.

You can use the government’s State Pension forecast tool to check when you’ll reach State Pension Age and your NICs record.  

Even if you have gaps in your record, don’t jump straight into making voluntary contributions – you should consider your retirement plan first. If you have 30 years on your record but plan to work for another 10 years, you still have an opportunity to add the extra five years you need to receive the full State Pension. 

What’s important is that you understand whether you’re on track to receive the full State Pension ahead of the April 2023 deadline. If you have gaps in your NICs record, you can then take steps to fill them if necessary. 

If you’ve taken time off work, you may be able to claim NICs, which will mean you don’t have gaps in your record.

For example, you’ll be credited with NICs when you claim Child Benefit until the child is 12. This can help ensure parents don’t face a significant gap in their NI record. Carers claiming the Carer’s Allowance can also receive credits to their NI record.

Understanding what you’re entitled to is important for your financial security in retirement. 

Contact us to talk about your State Pension and retirement plans 

If you have any questions about whether you should make voluntary NICs and how your State Pension fits into your plans, 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.