A grandfather and granddaughter on an autumn walk.

As the nights draw in, it’s normal to want to spend more time indoors where it’s warm. However, if it affects your mood and motivation, you could be suffering from the winter blues. Luckily, there are often steps you can take to overcome it. 

The NHS estimates that around 2 million people in the UK are affected by the winter blues or seasonal affective disorder (SAD). Symptoms of SAD may include:

  • Depression
  • Sleep problems
  • Lethargy
  • Overeating
  • Irritability
  • Feeling down and unsociable.

According to the NHS, the cause of SAD is not fully understood, but it’s thought to be linked to reduced exposure to sunlight during the winter months. This may affect the production of certain hormones that play a role in your tiredness, mood, and body’s internal clock. 

If you’re feeling down this winter, here are seven practical ways you could boost your mood. 

1. Keep your home warm

Being in a cold environment can make you feel more depressed and miserable. It might affect your sleep and mean you don’t take joy in the things you normally do. 

It’s recommended that you try to keep your home between 18C and 21C throughout winter to stave off the blues. As well as putting your central heating on, hot drinks, hearty meals, and cosy clothing might make you feel more comfortable as the temperature drops. 

2. Don’t reach for the junk food

When it’s cold, you might not be in the mood to eat healthily – comforting junk food that’s high in carbohydrates, like pasta and potatoes, can seem far more tempting. 

However, making an effort to balance cravings with fresh fruit and vegetables could leave you feeling much better overall. Having your favourite fruit on hand when you fancy a snack and ensuring your main meal always has a healthy portion of fresh vegetables could help your body get the vitamins it needs.

3. Make time for your family and friends

When the mercury falls, you might want to shut yourself away at home. Yet, socialising is good for your mental health and could help you ward off the winter blues.

As much as you might be looking forward to settling on the sofa with a gripping TV show, accept invitations and make plans to catch up with loved ones too. Often, once you’re out you’ll feel more enthusiastic about the plans and glad you made the effort – even if you had to pause the box set on a cliffhanger. 

4. Take up a new hobby

Some people struggle in the winter months because they can’t carry on with their summer routine. If that sounds like you, try taking up a new hobby to keep yourself occupied. It might give you something to look forward to and add structure to dark evenings. 

If you thrive on social activities, try joining a club to meet new people. It could be just what you need to enjoy winter. 

5. Make the most out of the daylight and get outdoors

The NHS recommends getting outdoors for a one-hour walk in the middle of the day if you can. 

It’s also a simple way to keep active. Exercising can boost your production of endorphins, also known as the “feel good hormone”, so regular walks could help you feel refreshed and in a far better mood. 

6. Use a light box

While the exact causes of SAD aren’t known, some people find that light therapy eases the winter blues. 

Light boxes are around 10 times brighter than ordinary home or office lighting. It’s thought this type of light may cause a chemical change in your brain that lifts your mood and reduces symptoms like sleeping more than usual. A dawn simulator, which mimics the sunrise to gradually wake you up, could also be useful. 

You can purchase a light box from a range of retailers, and online. Usually, the recommended intensity of light is 10,000 lux, and you may want to consider an option that filters out most or all UV light. 

7. Seek medical help if you’re struggling

SAD is a recognised type of depression, and there is help available if you’re struggling with the associated symptoms – don’t put off seeking support. 

You can contact your GP. They will usually ask you about your mental health and lifestyle, including seasonal changes. There are often treatments available that you can try that may alleviate the symptoms.

A couple reviewing paperwork.

If your current mortgage deal is coming to an end, you might be unsure whether choosing a fixed-rate mortgage is right for you. Read on to discover the advantages and drawbacks you may want to weigh up.

The Bank of England has increased interest rates to tackle rising inflation 

Over the last two years, the Bank of England’s (BoE) base rate has increased from 0.1% to 5.25% (as of October 2023) in a bid to reduce high levels of inflation. 

According to the Times, experts believe interest rates are nearing their peak. Analysts expect a slight rise to 5.5% by the end of 2023.

However, that may not provide relief for homeowners who are struggling with rising mortgage repayments. Economists expect interest rates to remain around the same level throughout 2024, even as inflation starts to come down. 

So, if your mortgage deal is coming to an end, your repayments could be substantially higher than they were. 

When taking out a new mortgage, one of the choices you’ll need to make is whether to choose a fixed-rate option, where the interest rate you pay will remain the same for a defined period.

The other two common options are a variable- and a tracker-rate mortgage. With both of these types of mortgages, the interest rate could rise and fall.

There are pros and cons of each option and which is right will depend on you. 

A fixed-rate mortgage could provide you with certainty 

One of the main benefits of choosing a fixed-rate mortgage is that you’ll know how much your repayments are throughout the deal, which is often two, three, or five years.

This could provide you with some certainty and can be particularly useful if you’re worried about budgeting. 

As your interest rate will remain the same, you’re protected from rises. So, if the Bank of England increased its interest rate again, you would benefit by having a fixed-rate mortgage in place. 

You wouldn’t benefit if interest rates fell if you had a fixed-rate mortgage

On the other hand, if interest rates fell, you wouldn’t benefit if you had a fixed-rate mortgage. 

While a variable-rate mortgage could increase further, it might also fall. If you choose a fixed-rate option, there’s a chance you could miss out on lower rates if this happened.

In addition, fixed-rate mortgages typically have a higher interest rate than the initial rate of comparable variable-rate mortgages. Even if interest rates remain the same, there’s a chance you could pay more by choosing a fixed-rate mortgage. 

Setting out what’s important to you may help you choose the right mortgage 

While economists predict that interest rates will remain stable over the next year, it’s impossible to guarantee how they’ll change. It’s possible something unexpected could happen that leads to the BoE increasing or decreasing their base interest rate.

As so many factors affect the economy and inflation, focusing on your finances when you’re making a decision about your mortgage may be useful. 

If you’re weighing up whether to choose a fixed- or variable-rate mortgage, start by setting out what’s important to you. 

If you prefer to know what your outgoings will be and would worry if your repayments could change with little notice, a fixed-rate mortgage might be right for you.

However, if you believe interest rates will fall during the term of your mortgage deal and are comfortable with repayments potentially rising, a variable-rate option could be suitable.

Whichever option you choose, searching the market for a lender that suits your needs could help you secure a better deal, which could save you money over the long term. 

Contact us to discuss your mortgage options 

It’s not just the way interest is calculated that’s important when you’re taking out a new mortgage deal. You might also want to consider other factors like the mortgage term, whether you can make overpayments, or the option to borrow more against your home.

Understanding the mortgage market and comparing deals can be difficult, but we’re here to help.

We’ll work with you to understand what your needs are and identify the lenders that could be right for you. Please contact us to arrange a meeting to talk about your mortgage. 

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 crowd at a concert.

The health of the economy can affect your finances. A strong economy could lead to the value of investments rising, or the need to raise public finances may mean your tax liability increases. However, predicting how the economy will perform can be difficult as numerous factors can have an impact. 

When you think about what affects the economy, sunny weather and Taylor Swift concerts might not be the first thing that comes to mind. Yet, data shows they could both deliver an important boost to GDP. Here are just four examples of events that might influence economies. 

1. Taylor Swift’s tour is projected to generate $5 billion of consumer spending in North America alone

Taylor Swift’s current Eras Tour is the perfect example of how music can have a huge effect on the economy.

The tour has almost 150 concert dates and will cover five continents. According to TIME, it’s projected to gross $2.2 billion (£1.79 billion) in North American ticket sales alone.

It’s not just Swift that’s benefiting, but local economies too.

In the US, the Eras Tour is projected to generate close to $5 billion (£4 billion) in consumer spending. Typically, every $100 (£81) spent on live performances in the US generates an estimated spend of $300 (£243) of local spending on hotels, food, transportation, and more. Swift fans are spending far more – an estimated $1,300 – $1,500 (£1,056 – £1,218) – resulting in significant boosts to local economies. 

The first UK stop on the tour will be in Edinburgh in June 2024, and it could provide a welcome lift in sales for local businesses. 

Swift is far from the first musician to benefit local economies. 

In fact, the International Monetary Fund previously referred to the Beatles as Britain’s “secret weapon” in the 1960s. The band’s “invisible export” helped to stave off devaluation. Almost 50 years after the Fab Four split up, the Beatles still bring in millions of pounds every year to Liverpool’s economy as fans flock to where it all started. 

2. The government estimates an extra bank holiday would cost £1.36 billion 

This year, the UK enjoyed an extra bank holiday on 8 May to mark the coronation of King Charles III. While you might have enjoyed the day with family and friends, it may have affected the economy more than you think. 

For some businesses, the extra day off meant a lower output. However, others benefited from workers having more free time and using the bank holiday to go out. 

In May, the Office for National Statistics (ONS) said: “A range of manufacturing industries and businesses within construction cited the bank holiday for the coronation of King Charles III on Monday 8 May as reason for reduced output.

“On the positive side, we had comments suggesting industries in the arts, entertainment, and recreation sector benefited from the extra bank holiday. There were also comments on both increased and reduced output received in the accommodation and food services sector.”

In 2022, when the UK had two extra bank holidays, to mark the Platinum Jubilee and the Queen’s funeral, government modelling put the cost of an extra bank holiday at £1.36 billion due to business closures, disruptions to production schedules, and premium payments for employees.

However, according to the BBC, consultancy firm PwC says, once the benefits are considered, the cost would be lower at around £831 million. 

3. Wimbledon fortnight delivered a £200 million boost to London in 2023

It’s not just the world’s biggest pop stars that get people spending more money – sporting events have a similar effect. 

More than 11 million people tuned in to watch Spanish star Carlos Alcaraz’s victory over Novak Djokovic in the Wimbledon men’s singles final this summer. Many tennis fans weren’t just watching the game, but spending too. 

The Evening Standard reported that Wimbledon fortnight delivered a £200 million boost to the London economy, making it the most valuable annual sporting event in Britain. Local restaurants, cafes, and shops in Merton reported takings were up between 20% and 200% during the tournament. 

Plans by the All England Club to increase capacity through development could mean the economic boost to the capital may rise to £268 million in 2031. 

Despite controversies, Qatar proved how global sporting events can drive economic growth when it hosted the FIFA World Cup at the end of 2022. 

S&P Global reports Qatar’s real GDP grew by a strong 8% in the final quarter of 2022 on a yearly basis.

Hosting events like the World Cup and Olympics can have a long-lasting effect too. For example, countries may benefit from increased tourism or foreign spending. 

4. The Great British weather has a direct effect on GDP

Talking about the weather is often considered a British pastime. Yet, you might be surprised how much economists discuss rain and sunshine. 

Gloomy, rainy weather can harm some industries. Construction sites might have to pause work and people are more likely to stay home rather than venture out. In the summer months, outdoor events and trips to a pub garden may deliver a boost. Yet, on the flip side, warmer weather could reduce productivity as families plan holidays.

Releases from the ONS often comment on the weather and the effect it’s had on the economy. 

In fact, in June 2023, the ONS noted that increased output from accommodation and food services was partly due to “good weather”. 

Contact us to talk about a financial plan that can weather economic ups and downs 

The economic outlook may seem uncertain at times, and it might mean you feel anxious about your own finances. Having a long-term financial plan that considers the potential ups and downs of the economy could put your mind at ease. 

Contact us to arrange a meeting to talk about your finances.

Please note:

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

A business meeting taking place around a large table.

Eccentric Willy Wonka boasts a lot of enviable skills as a businessman – he’s innovative, understands his target audience, and inspires loyalty from his employees. But his skills at succession planning left a lot to be desired. 

Over the years many actors have taken up the role of Roald Dahl’s iconic chocolatier Willy Wonka. The character is getting a new lease of life in December when Wonka releases in cinemas.   

While the new movie looks at how Wonka became the owner of a successful business selling fantastical sweets, the original novel, Charlie and the Chocolate Factory, focuses on his succession plan.

With no children to leave his business to, Wonka hides five golden tickets in chocolate bars to win a tour of his world-famous chocolate factory. He plans to pass on his company to one of the lucky winners.

Despite the risky approach, the competition pays off when Charlie Bucket secures one of the golden tickets. 

While Wonka’s method might be perilous, research suggests some business owners could also be taking a risk when it comes to their firm’s future. 

According to a report in FTAdviser, more than a third of businesses have no succession plan in place, and a further 10% haven’t thought about it.

Yet, what will happen to their business is a concern for many business owners. 21% said they were most worried about seeing their business fail and 18% were concerned about their employees’ prospects. 

Without an effective succession plan, there’s a chance your business’s legacy doesn’t live up to your expectations or pass to the person you want to hand the reins to. 

Creating a succession plan can seem daunting and involve a lot of work. However, if it’s something you’ve been putting off, here are seven reasons to make it a priority. 

1. It provides a chance to think about your different options 

There’s more than one way to step away from your business when you’re ready. You might plan to pass it on to your children, or you may want to sell it to fund your retirement. 

Going through your preferences now provides an opportunity to explore the different options and consider which would be right for you. 

2. The process could help you identify potential leaders and skill gaps

Handing over his business to someone with no experience might work well for Wonka, but it’s not advised.

As part of your succession plan, you may review the skills and expertise of your current team to identify where there could be gaps in the future. You might then create a training development programme to upskill existing employees or seek to hire someone who fits your needs.

It’s a step that may improve the long-term security of your business and give you peace of mind. 

3. Preparing your business may be a lengthy process  

Depending on your plans, preparing your business to hand over could be a process that takes years. Perhaps you need to dedicate time to training existing employees to take over some of your tasks, or you might want to sell the business with an established customer base that you need to build.

Setting out your succession plan now could mean you have more options, reduce stress, and give you a chance to overcome potential obstacles. 

4. It could improve processes in your business now 

When creating a succession plan, you’ll often want to consider how the business would operate if you weren’t there and how to make processes as efficient as possible.

So, even if passing on your business is years away, a succession plan can be a useful exercise. You might find ways to increase productivity, cut costs, or help your team work more efficiently. It could improve your business now and mean it’s in a better position in the long term too. 

5. A succession plan could boost confidence in your business 

When Wonka announced he’d be handing over his business to an 11-year-old boy, we’re sure not everyone was thrilled about the decision or optimistic about the firm’s prospects. 

A lack of a succession plan could harm confidence in your business. For instance, customers might worry about whether you’ll be able to fulfil orders over the long term. A succession plan could also give your employees more confidence in their security. 

6. A succession plan may be useful if the unexpected happens 

A succession plan isn’t just useful if everything goes according to plan, it might also be valuable if the unexpected happens.

If you fall ill, having processes and a leadership team in place that you can trust could make the difference between your business continuing to run smoothly or facing challenges. Knowing that your business is in safe hands might mean you’re able to focus on your recovery. 

A robust succession plan could also make it easier to step back from your business sooner than initially planned if you decide to. 

7. Your decision may influence your long-term plan

As a business owner, your firm is likely to affect your lifestyle and finances. 

Your business plans and when you hope to move on might influence areas like your pension or investments. So, understanding how and when you want to move on from your business could mean you’re able to make informed decisions about your personal life and assets.

Contact us to talk about your succession plan and what it means for your future 

If you’d like help with your succession plan, we may be able to offer support and could make your decisions part of your personal financial plan too.

Please contact us to arrange a meeting to talk about your aspirations. 

Please note:

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

A couple walking in a park and pushing a bike.

Households are paying more in taxes, research suggests. At a time when high inflation may be affecting your outgoings, finding ways to reduce your tax bill could be valuable. If you’re married or in a civil partnership, planning with your partner could help you get more out of allowances. 

According to the Institute for Fiscal Studies, at the time of the last general election in 2019, UK tax revenues amounted to around 33% of the national income. By the time of the next general election in 2024, the figure is predicted to have increased to 37%.

Only during the immediate aftermath of the two world wars have government revenues grown by as much.

The think tank notes the response to the Covid-19 pandemic explains some of the increased tax burden. However, it adds higher government spending on things that pre-date the pandemic also plays a role. 

On average, the changes mean households are paying an extra £3,500 each year in tax. Yet, the tax rise isn’t shared equally and some families may have seen their tax bill rise much further. 

HMRC collected £19.8 billion more in tax between April and August 2023 than a year earlier 

Figures released by HMRC support the claim that taxes are rising. 

Between April and August 2023, HMRC receipts were £331.1 billion – £19.8 billion higher than the same period in the previous year. 

Some of the receipts in the HMRC data are paid by businesses, but others come from individuals. For example, the amount of Income Tax paid was £9.5 billion more than a year earlier. 

So, how could planning with your partner potentially reduce your tax burden?

Many of the tax allowances available are for individuals. As a result, passing assets to your husband, wife, or civil partner to utilise both of your allowances could be useful. 

Here are five allowances you might want to consider as part of your financial plan. 

1. Personal Allowance

The Personal Allowance is the amount you can earn before you’re liable for Income Tax. For 2023/24, it is £12,570. 

If your spouse or civil partner doesn’t earn above this threshold, they may be able to pass on some of their unused allowance to you under the Marriage Allowance.

£1,260 of the Personal Allowance can be transferred to the partner with the higher income, which could reduce your annual income Tax bill by up to £252 each year.

The higher-earner must be a basic-rate taxpayer to use the Marriage Allowance.

2. Personal Savings Allowance

The Personal Savings Allowance (PSA) is the amount you can earn in interest before it could become liable for Income Tax.

As interest rates have increased over 2022 and 2023, you might face an unexpected tax bill if you don’t review how much your savings are earning.

Crucially, your PSA depends on the rate of Income Tax you pay. Basic-rate taxpayers can earn up to £1,000 in interest before paying tax. The PSA falls to £500 for higher-rate taxpayers, and additional-rate taxpayers don’t benefit from a PSA at all. 

So, if you could exceed your PSA or you’re an additional-rate taxpayer, transferring savings to your partner may help you get more out of your money. 

3. ISA allowance

In addition to the PSA, the ISA allowance may be useful to avoid paying tax on your savings.

Each individual can contribute up to £20,000 in the 2023/24 tax year to ISAs. You can choose a Cash ISA, where the money would earn interest, or a Stocks and Shares ISA, where your money would be invested and potentially deliver returns. 

The interest or returns earned on money held in an ISA aren’t liable for Income Tax or Capital Gains Tax (CGT). Using both your and your partner’s ISA allowance could help you save or invest more efficiently. 

4. Dividend Allowance

Dividends may be a helpful way to boost your income. 

You might take dividends if you own a company or you could receive them through some investments. In 2023/24, you can receive up to £1,000 in dividends before tax is due.

If you might exceed this threshold, transferring dividend-paying assets to your partner could effectively double the amount you could tax-efficiently receive as a couple.

The rate of tax you pay on dividends above the allowance depends on your Income Tax band. So, if your partner pays a lower rate of Income Tax, transferring dividend-paying assets to them could also mean you benefit from a reduced tax bill. 

You should note that the Dividend Allowance will fall to £500 in the 2024/25 tax year. 

5. Capital Gains Tax annual exempt amount

CGT may be due when you dispose of certain assets, including investments that aren’t held in a tax-efficient wrapper, second properties, and some material items.

The annual exempt amount means that in 2023/24, you can make profits of up to £6,000 before CGT is due.

Similar to dividends, transferring assets to your partner could mean you’re able to use both of your annual exempt amounts and potentially benefit from a lower rate of CGT as your tax band affects the rate you pay.

In 2024/25, the annual exempt amount will fall to £3,000 for individuals. 

Arrange a meeting with us to discuss how you could potentially reduce your tax bill

If you want to make the most out of your money and reduce your tax bill, please get in touch. We could help you create a long-term financial plan that cuts how much tax you pay with your goals in mind. 

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.

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.

The Financial Conduct Authority does not regulate tax planning. 

Two people looking at financial documents.

Regular financial reviews may help keep you on track to meet your goals and give you confidence in the steps you’re taking. As well as reviewing your assets, you might also want to make changes to your plan.

Last month, you read about why you shouldn’t skip your financial reviews and how they could help you reach your goals. Now, read on to discover two reasons why you might want to make changes to your financial plan during a review. 

Updating your plan in response to short-term movements could harm your goals

While there are times when it’s appropriate to update your financial plan, you should be aware of the risks of responding to short-term movements or bias.

Stock market volatility can be nerve-wracking. If you’ve read about the value of shares falling, it can be tempting to withdraw money from the market to preserve your wealth. However, it could have a negative effect on your progress towards your long-term goals.

Historically, markets have delivered returns over the long term, and investors who weather the ups and downs have benefited in the long run. By taking money out of investments during a downturn, you turn paper losses into actual ones.

Of course, investment returns cannot be guaranteed and do carry risks. Understanding which investments align with your circumstances and objectives may help you take an appropriate level of risk.

Similarly, after speaking to a friend about how they’re investing in a certain asset that’s going to deliver “great returns”, you might want to follow suit. Behavioural biases, like following the crowd, could lead to you making unnecessary changes to your plan, which could harm the projected outcomes. 

Remember, your goals and circumstances should be at the centre of your financial plan. If changes are tempting, taking a step back to calculate what’s driving the decisions could be useful. 

So, following a financial review, why might you make changes? There are several reasons why it may be appropriate, including these two.

1. Your goals or circumstances have changed

Your financial plan should be built around your goals and circumstances. Over time, these may change, and altering your plan may ensure it continues to reflect your lifestyle.

Perhaps you want to bring forward your retirement date, so you increase pension contributions as a result to provide you with financial security? Or becoming a parent might mean taking out life insurance would provide peace of mind, or you’d like to build a nest egg for your child. 

A financial review is a chance to let your financial planner know about changes in your life.

It means they can offer advice that’s suitable for you and your aspirations. In some cases, it could mean altering your plan so that it continues to align with your life. 

2. Government changes will affect your plans

Sometimes government announcements will affect what’s suitable for you. Changes to allowances, tax hikes, and more could mean adjusting your financial plan would help you get more out of your assets. 

The recent announcement that the government will abolish the pension Lifetime Allowance is a good example.

From 2024, there’s expected to be no limit on how much you can save into your pension over your lifetime. It might mean it’s appropriate to increase your pension contributions or it could alter your retirement date. 

Keeping on top of the latest news and then understanding what it means for you can be difficult.

Your financial reviews provide an opportunity for your financial planner to explain what announcements mean for you. Tailored advice can help you identify potential risks or opportunities that may lead to changes in your long-term plan. 

Contact us to discuss your financial plan

If you have any questions about your financial plan or would like to understand how we could support you, please get in touch.

Next month, read our blog to find out why financial reviews may help you reduce impulsive financial decisions and focus on your long-term aims. 

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.

When you start to access your pension, how will you take an income? One of your options may be to withdraw a flexible income that suits your needs through flexi-access drawdown.

A flexible income puts you in control and means you can adjust how much you withdraw from your pension if you need to. However, you also need to consider what income is the “right” amount to balance your short- and long-term needs.

As a result, there are some factors you may want to think about when managing pension withdrawals if you’re using flexi-access drawdown. This guide covers seven important considerations, including:

  • How long does your pension need to provide an income?
  • How could inflation affect your income needs?
  • What tax could your pension withdrawals be liable for?

Download your copy of “7 useful questions if you plan to take a flexible income from your pension” to understand some of the areas you might want to consider if you plan to use flexi-access drawdown.

If you have any questions about your pension or how to create an income in retirement, please contact us to arrange a meeting. 

A man writing notes in a planner.

When you’re facing big life decisions, it can be difficult to know which choice to take. Read on to learn some simple tips that could improve your decision-making. 

According to Eva Krockow, a lecturer at the University of Leicester, the average person makes a staggering 35,000 decisions every day.

Of course, many of these decisions will be unconscious. You probably give little thought to how quickly to walk when you’re heading to the shop or whether to smile at a stranger you meet on the way.

A lot of the decisions you make you will do on autopilot rather than deliberating the different options. Even those that you make consciously, many will be relatively unimportant in the grand scheme of things. 

Yet, everyone will face decisions that they need to carefully weigh up and could have a long-lasting effect on their life. You might be deciding whether you should take a new job offer, or if you should invest a lump sum you’ve received rather than place it in a cash account.

At these times, you might worry about making the wrong choice. So, here are five simple tips that could help you. 

1. Imagine yourself in the future 

If you find yourself unable to make a decision or you keep changing your mind, visualising yourself in the future can be effective.

Go through each of your options and consider how the choice would affect your life in one or five years. It can be valuable for a few key reasons.

First, it can identify the decisions that aren’t going to have a long-term effect on your life that you might be needlessly worrying about.

Second, it could help you get away from the immediate results of your decisions and focus on the bigger picture. You might find that when the long-term outcomes are weighed up, your decision is more straightforward than you initially thought.  

2. Write down your goals 

Your goals should be at the centre of your decisions. So, being clear about what you want to achieve can give you a sense of direction and something to balance “good” or “bad” decisions against. 

Writing down your aspirations might be useful when you’re defining what’s important to you. It also provides you with something to refer back to when you’re making a decision. 

3. Set yourself a deadline

Timing is important when you’re making a decision, so give yourself a deadline.

On the one hand, you don’t want to be pushed into making potentially life-changing decisions quickly. You might benefit from taking a step away to gain some perspective or to allow yourself to think through the options carefully.

On the other hand, it can be all too easy to procrastinate and put off important decisions when you’re struggling.

Giving yourself a deadline can help you make decisions in a timely manner.

4. Figure out what you don’t know

For some decisions, you might benefit from extra information. So, figuring out what you don’t know is an important skill that could improve the outcomes.

Noting down what you need to find out could help direct your research. In some cases, a quick search online will yield the answers you want and help you make an informed decision. 

Don’t be afraid to seek help either. Sometimes speaking to a professional could be right for you. For instance, if you’re deciding which mortgage suits your needs, a mortgage broker might be able to explain the different options to you. 

5. Learn from your mistakes

Finally, use your mistakes to your advantage.

Everyone makes errors, and there will be times when you look back with the benefit of hindsight and wish you’d done some things differently. While you might regret some of the decisions you’ve made, learn from them to improve in the future.

Ask yourself what led to you making the “wrong” decision. You might have been led by other people or maybe you simply didn’t have the experience you do today.

Understanding what led to certain decisions can help improve your judgement and allow you to create a process that works for you. 

A couple filling in paperwork in their kitchen

Are you considering how to access the wealth that’s locked away in your home? There’s more than one way you could release property wealth later in life. 

There are lots of reasons why you may want to access the money that’s tied up in your home. Perhaps you want to use the money to fund retirement or help grandchildren get on the property ladder? 

Your home may be one of your largest assets, so it could play an important role in your long-term finances. In fact, according to the Halifax House Price Index, the average home was worth almost £280,000 in August 2023. 

If you want to unlock property wealth as you near retirement you usually have two main options – downsizing and using equity release. Both choices have pros and cons that you might want to weigh up. 

2 useful advantages of downsizing

  • You can unlock property wealth without taking on debt

If you sell your current property and purchase a cheaper one, you could gain access to a lump sum without having to take on debt. If you have an outstanding mortgage, you’ll need to factor paying it off into your calculations.

  • You may be ready to search for a new home

As your needs change, you might be looking forward to moving to a new home. Perhaps a property with fewer bedrooms makes sense once children have moved out?

A smaller property could also be more manageable later in life or better suit your needs. 

2 drawbacks of downsizing you may want to consider 

  • You may not want to move out of your home and away from your community

For some, moving home can be a difficult prospect. You might have an emotional attachment and fond memories associated with your home. You may also be reluctant to start again in a different community or move further away from your family and friends. 

  • You may need to pay costs associated with moving 

There are often associated costs with buying a new property.

You might need to pay Stamp Duty, conveyancing fees, and general moving costs. Factoring these expenses in when weighing up whether downsizing is the right option for you could be useful. 

Equity release could allow you to unlock property wealth while remaining in your home

If downsizing isn’t right for you, equity release may be an option you want to consider. However, it could affect your finances for the rest of your life, so it’s important to understand how it works.

The most common type of equity release is known as a “lifetime mortgage”. It’s essentially a loan that’s secured against your home.

Unlike traditional loans, you don’t have to make repayments. Instead, the money you access, along with the accrued interest, is usually paid when you pass away or move into a care home.

So, equity release could give you access to a lump sum while allowing you to remain in your home without increasing your day-to-day costs. 

Figures from the Equity Release Council show the total lending through equity release in the second quarter of 2023 was £664 million. The average customer accessed almost £60,000 when using equity release for the first time.

How much you can access through equity release will be dependent on the value of your home. The minimum age for using equity release is usually 55.

You don’t have to own your home outright. However, you’ll need to pay off your mortgage, along with any early repayment charges, with the money you release. 

Of course, there are potential disadvantages to using equity release you need to balance against the pros, including these:

  • The amount you owe can increase significantly 

As you don’t have to make repayments when using equity release, the amount you owe when you pass away could be much higher than the amount you borrowed. 

If you don’t make interest repayments, the interest is added to the original loan. The following month or year, depending on your plan, the interest will be calculated based on the amount you borrowed, plus the interest already accrued.

This compounding effect means the amount of interest added can rise even if the interest rate remains the same.

Some equity release providers allow you to make repayments or pay off the interest, which may help you manage the debt.  

  • Equity release could affect the inheritance you leave loved ones

Using equity release will reduce the value of your estate and may affect the inheritance you intend to leave behind for loved ones. So, considering who you’d like to benefit from your estate and whether you want to pass on your home is important. 

Often, equity release providers offer a “no negative equity guarantee”. This means the amount you owe cannot exceed the value of your home and other assets are preserved to pass on. 

  • It may limit your options in the future

You cannot secure other loans against your home after using equity release. As a result, it may limit your options in the future.

In addition, it could make moving home more complicated. It might be worth thinking about your long-term plans before you proceed with equity release. 

  • It can affect means-tested benefits

If you currently receive means-tested benefits, or could in the future, equity release could affect your eligibility. 

Get in touch to discuss if equity release could be right for you

If you’re interested in accessing property wealth and would like to know more about how equity release works and whether it may be an option for you, 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 lifetime mortgage is a loan secured against your home. To understand the features and risks, ask for a personalised illustration. Equity release will reduce the value of your estate and may affect your entitlement to means-tested benefits. Your home may be repossessed if you do not keep up repayments on your mortgage.

A man withdrawing money from an ATM.

High inflation over the last year has collectively cost savers billions of pounds in real terms, according to an Independent report. Have you considered the effect the rising cost of living could have on your wealth?

While inflation may not reduce how much you have in your savings account, in real terms, the value may fall. 

As the cost of goods and services rises, what you could purchase with your savings falls. Usually, this happens at a gradual pace. However, as inflation has been higher than the Bank of England’s (BoE) 2% target for two years, the effect has been more noticeable. 

If the interest rate your savings earn doesn’t keep pace with inflation, the value of your money decreases.

Inflation could reduce the value of your savings in real terms, but cash may still be useful

The BoE calculations suggest £10,000 in 2021 would have to have grown to £11,774 in August 2023 just to have the same spending power. So, your savings would need to have earned £1,774 in interest during that time.

Even though interest rates have started to rise as the BoE has increased its base rate to tackle high inflation, it’s unlikely your savings have grown at the same pace. 

The analysis published in the Independent suggests up to £113 billion has been wiped off the value of savings in the last year in real terms. 

While the value of your money may fall in real terms in a savings or current account, there are still times when they might be the right option for you, including these three:

  • Handling your day-to-day finances: If you’re using money held in your account to pay for utility bills or other regular expenses, inflation will have little effect. 
  • Saving for short-term goals: Investing could make sense when you’re saving for a long-term goal. However, if you’ll be saving over a shorter period, volatility might mean investing isn’t the right option. So, when you’re saving for a holiday next year or home improvements for example, a cash account could be right for you. 
  • Creating an emergency fund: While you may not want to access your emergency fund now, you want to be able to easily make a withdrawal if the unexpected happens. As a result, a cash savings account could make sense. 

So, it’s important to set out what you want to use your money for. It can help you select an appropriate place for your wealth that aligns with your goals. 

Inflation is starting to fall, which could ease the burden for some savers. However, the value of the money held in a savings account could still fall in real terms. Meanwhile, investing might provide a way to grow your wealth. 

Investment returns may outstrip inflation 

It’s impossible to guarantee investment returns. Yet, investing does present an opportunity to potentially grow your wealth in real terms. 

Historically, markets have delivered returns over long time frames. If you’re saving for a goal that’s more than five years away, from buying a property to retiring, investing might be an option you want to consider. 

Market volatility is a normal part of investing. The value of your investments will rise and fall at different points. So, it’s often not appropriate if you’re investing with a short-term time frame, as a dip in the market could mean you lose money.

If you want to invest, considering risk is important.

All investments carry some risk. However, investment risk varies significantly and you can choose options that are appropriate for you.

There are many factors you may want to weigh up when deciding how much investment risk to take, including the reason you’re investing and the other assets you hold. We can help you create a risk profile and an investment portfolio that reflects your wider financial plan. 

Get in touch to talk about how to make the most of your money

Getting the most out of your money is about understanding your goals and how to use your assets to reach them. If you’d like to talk about your tailored financial plan, including whether investing is right for you, 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.