GET READY TO BEAT THE ISA DEADLINE Time to give your financial future a boost? ADULT SOCIAL CARE CHARGING REFORM What will the government’s proposals mean for the social care system? IT MAY BE TIME TO INVEST YOUR CASH Is your wealth protected from the damaging e!ects of inflation? NEW YEAR’S TAX SAVING RESOLUTIONS Make full use of your relevant tax planning opportunities JANUARY/FEBRUARY 2022 Inside this issue JANUARY/FEBRUARY 2022 The content of the articles featured in this publication is for your general information and use only and is not intended to address your particular requirements. Articles should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough examination of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of any articles. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts. Levels and bases of, and reliefs from, taxation are subject to change and their value depends on the individual circumstances of the investor. The value of your investments can go down as well as up and you may get back less than you invested. Past performance is not a reliable indicator of future results. C O N T E N T S 04 CREATE A BETTER WORLD TO LIVE AND RETIRE IN Pension investments to harness a more sustainable planet 05 TIME TO BRING YOUR PENSIONS TOGETHER? 3.6 million Britons have lost track of their pension savings 06 IMPROVE YOUR FINANCIAL LIFE Setting a financial New Year’s resolution you’ll actually keep 08 BEYOND PROFIT How green is your pension? 09 GET READY TO BEAT THE ISA DEADLINE Time to give your financial future a boost? 10 NEW YEAR’S TAX SAVING RESOLUTIONS Make full use of your relevant tax planning opportunities 12 IT MAY BE TIME TO INVEST YOUR CASH Is your wealth protected from the damaging e!ects of inflation? Welcome to our latest edition. Inside, we look at New Year’s tax saving resolutions to make sure you are fully utilising your relevant tax planning opportunities. With the tax year end (5 April) on the horizon, taking action now may give you the opportunity to take advantage of any remaining reliefs, allowances and exemptions. On page 10 we have provided some key tax and financial planning tips to consider prior to the end of the tax year. Now is also the perfect time to take a wider review of your circumstances and plan for the year ahead. Is it time to give your financial future a boost? Then get ready to beat the ISA deadline. Savers and investors have less than three months to use the £20,000 they can put into their tax-e"cient Individual Savings Account (ISA) before the end of the financial year on 5 April. With interest rates still at very low levels, you might be looking at investing for the potential to achieve a bigger return from your savings. Read the full article on page 09. The government has set out its vision for the future of adult social care. On page 28 we explain the new plans announced for adult social care reform in England. This includes a lifetime cap on the amount anyone in England will need to spend on their personal care, alongside a more generous means test for local authority financial support. We all want the best possible long-term care for ourselves or our loved ones. Planning for the long term can help ensure you have su"cient income to pay for any care you, or an elderly relative, might need in later life. Is your wealth protected from the damaging e!ects of inflation? Many people underestimate the damaging e!ect of low interest and high inflation on their cash savings. A continued period of low interest rates on cash savings and rising inflation could pose a real risk to savers in 2022, even if the Bank of England (BoE) moves to increase interest rates further in the coming months. Read the full article on page 12. A full list of the articles featured in this issue appears opposite.  TIME TO TAKE STOCK OF YOUR CURRENT FINANCIAL POSITION? You’ve probably made some New Year’s resolutions. Now you need to figure out how to keep them. Heading into 2022, it’s time to take stock of your current financial position and to ensure its aligned with your financial goals. Your goals and ambitions are unique to you and we want to help you get there – to discuss how we can help, please contact us. 02 INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM, TAXATION ARE SUBJECT TO CHANGE. THE VALUE OF INVESTMENTS MAY GO DOWN AS WELL AS UP, AND YOU MAY GET BACK LESS THAN YOU INVESTED. 03 C O N T E N T S 13 MIND THE PENSION GENDER GAP Women are being urged to think about their long term savings 14 THE IMPORTANCE OF FINANCIAL PROTECTION Millions battling with financial hardship, relationship stress and sleepless nights 16 ACROSS THE GENERATIONS Pandemic forces people to reassess their finances 18 COULD EQUITY RELEASE FUND YOUR FUTURE? Freeing up funds or releasing money tied up in your home 19 MISSING MIDLIFE WORKERS Redundancy pushes over 50s out of the workforce 20 WHAT’S YOUR MAGIC NUMBER? Keeping up your current lifestyle and enjoying your golden years 22 LIVE SUSTAINABLY: HOW TO BE A CONSCIOUS CONSUMER   The everyday choices we make all have impacts on our planet 24 SAVING FOR A RAINY DAY What’s the right emergency fund amount for you? 26 HOW MUCH INCOME WILL YOU RECEIVE FROM YOUR STATE PENSION? Knowing what to expect can be an important part of planning for life after work 28 ADULT SOCIAL CARE CHARGING REFORM What will the government’s proposals mean for the social care system? RETIREMENT Almost two-thirds (64%) of UK pension holders say that didn’t know their pension could be invested in ways to help fight climate change. One in six (17%) of UK pension holders currently invest their pension responsibly, but 41% say they would like their pension to be invested responsibly, new research has revealed[1]. COLLECTIVE POWER Over three-quarters (77%) of UK adults class themselves as ‘climate conscious’. Three out of five (59%) UK adults are familiar with the term ‘responsible investment’, but only 26 per cent actually know what it means and understand its collective power to protect the planet. Men are more likely to be familiar with the term ‘responsible investment’ than women (69% vs 50%). More than half (56%) of pension holders said they would consider investing a portion of their pension responsibly. Around a quarter (23%) were willing for at least half their pension to be invested responsibly, with one in ten (11%) wanting between 90% and 100% of their pension invested responsibly. PROTECTING THE ENVIRONMENT With over half (57%) of 18-24-year-olds wanting their pension investments to harness a more sustainable planet, compared to just over a quarter (29%) of 65-year-olds and over, it’s clear there is still more that can be done to build a better understanding of inter-generational financial resilience for the future. Pension holders were also asked what criteria they would like a responsibly invested pension to consider, with climate change and protecting the environment (42%) being highly rated. Social factors such as health and safety (29%) and use of plastic (28%) followed closely behind. The research also found that more than half (53%) of pension holders do not know how their pension funds are invested.  Source data: [1] Royal London commissioned survey by Opinium between 18 and 22 October 2021, with a sample of 2,000 nationally representative UK adults. 04 DOING THE RIGHT THING FOR A SUSTAINABLE FUTURE Ethical investing has a positive impact on the world while also aiming to make a profit. It also means you receive a financial return without sacrificing your social, moral or religious principles. Many pension providers o!er ethical funds for their investors – meaning you can save for retirement with a clear conscience. Please contact us for more information. CREATE A BETTER WORLD TO LIVE AND RETIRE IN Pension investments to harness a more sustainable planet Few people are aware of what their workplace pension invests in, let alone how their pension provider incorporates Environmental, Social and Governance (ESG) matters into the process. /// Over three quarters (77%) of UK adults class themselves as ‘climate conscious.’ Three out of five (59%) UK adults are familiar with the term ‘responsible investment,’ but only 26 per cent actually know what it means and understand its collective power to protect the planet 05 RETIREMENT 3.6 million Britons have lost track of their pension savings The more old pensions you have, the easier it is to end up losing one. Tracing pensions from years ago can be a hassle. Over 3.6 million Britons admit they have no idea how many pensions they have and risk paying more in fees than necessary, according to new research[1]. The number of workers with small pension pots of under £1,000 has surged dramatically in recent years, as auto enrolment has allowed millions of people to benefit from workplace pensions for the first time. PAYING FEES TO MULTIPLE PROVIDERS However, with the average employee now changing jobs 11 times[2] in their working life, people are increasingly building up many small pots and are often losing track, misplacing paperwork or forgetting about previous schemes they are invested in. The Pensions Policy Institute (PPI) predicts the number of small pots will triple by 2035 to 27 million[3]. Although the government’s Pension Dashboard will allow people to see all of their pensions in one place when it comes into e!ect in a few years’ time, it will not solve the problem of savers paying fees to multiple providers across all their pensions. CONSOLIDATE SMALL PENSION POTS While savers already have the option of combining their pensions, one in ten (10%) have no idea how to do this, while 12% say it’s just too much hassle. As a result, more than two-fifths (44%) say they’ve never bothered to track down savings from a previous employer. Almost three-quarters (72%) of Britons now support the introduction of a new system that would automatically consolidate small pension pots as they move jobs, reinforcing strong support from the industry for the change. This would make it easier for people to manage and keep track of their retirement savings, while making the system more e"cient and e!ective for the UK’s 33 million[4] pension holders. COMPARE THE FEATURES AND BENEFITS Even if you have not had that many jobs, you may still have a number of di!erent pensions to keep track of. Pensions can be confusing, but there is an alternative way to help keep on top of them. Pension consolidation may allow you to combine some or all of your defined contribution pensions in one place. Consolidating your pensions means fewer statements to keep an eye on, along with fewer and potentially lower management charges. However, not all pension types can or should be transferred. It’s important that you know and compare the features and benefits of the plan(s) you are thinking of transferring. It can be a complex decision to work out whether you would be better or worse o! combining your pensions, so it’s essential to obtain professional financial advice.  Source data: [1] The research was carried out online by Opinium across a total of 5,010 adults aged 18+. Data is weighted to be representative of the GB population. Fieldwork was carried out between 12–18 March 2021. [2] https://assets.publishing.service.gov. uk/government/uploads/system/uploads/ attachment_data/file/945319/s mall-pots- working-group-report.pdf [3] https://www.pensionspolicyinstitute.org.uk/ media/3545/20200723-deferred-members-final- report-for-the- website.pdf [4] Finder,Pension Statistics 2021 A PENSION IS A LONG-TERM INVESTMENT NOT NORMALLY ACCESSIBLE UNTIL AGE 55 (57 FROM APRIL 2028 UNLESS PLAN HAS A PROTECTED PENSION AGE). 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, TAX LEGISLATION AND REGULATION WHICH ARE SUBJECT TO CHANGE IN THE FUTURE. YOU SHOULD SEEK ADVICE TO UNDERSTAND YOUR OPTIONS AT RETIREMENT. HELPING YOU STAY ON TRACK FOR THE FUTURE YOU WANT Deciding whether to combine your pensions can be a complex decision and is not for everyone. Whether you want to consolidate into an existing pension you have with us, or you want to combine your existing pensions in a new pension, we are here to help. Speak to us today and make sure your plans are on track for the future you want. TIME TO BRING YOUR PENSIONS TOGETHER? 06 Setting a financial New Year’s resolution you’ll actually keep Heading into the New Year, it’s the perfect time to take stock of your budget, liabilities and investments – and check them against your financial goals. The New Year brings an opportunity to reflect on the past year and to set new goals for the year ahead. But before setting financial goals, it helps to understand your financial priorities and your overall plan to achieve the financial life you want. Think about your financial plan, and what you are hoping to accomplish, not only this year, but in years to come. Think about what you can do this year to help reach your longer-term goals. SECURE YOUR FINANCIAL FUTURE Whatever situation you find yourself in, it’s important to be realistic about your goals. We all have di!erent financial goals and aspirations in life. Yet often, these goals can seem out of reach. In today’s complex financial environment and with the challenges of the COVID-19 pandemic, achieving our financial goals may not be that straightforward. This is where financial planning is essential to help secure your financial future. The benefits of setting financial goals all work together to boost your financial health. You’ll gain more confidence in your money management decisions and significantly decrease money-related stress. If you want to take control of your money and create more security, you need to set some financial goals. KEEP YOUR GOALS REALISTIC A financial plan seeks to identify your financial goals, prioritise them, and then outline the exact steps that you need to take to achieve your goals. Figuring out your objectives and matching them with timelines are the keys to setting financial goals. Your financial goals are specific and unique to a number of factors related to you, like your age, your interests, your current financial situation and your aspirations. Based on these, you need to develop your goals and establish a plan to achieve them. Any goal (let alone financial) without a clear objective is nothing more than a pipe dream, and this couldn’t be more true when setting financial goals. However, it’s important to keep your goals realistic as it will help you stay the course and keep you motivated throughout your journey until you get to your destination. MONETARY VALUE TO THAT GOAL You need to be crystal clear about why you are doing what you’re doing. This could be planning for your children’s education, your retirement, that dream holiday or a property purchase. Once the objective is clear, you need to put a monetary value to that goal and the time frame within which you want to achieve it. The important point is to list all of your goal objectives, however small they may be, that you foresee in the future and put a value to them. SHORT, MEDIUM AND LONG-TERM Now you need to plan for where you want to get to, which will likely involve looking at how much you need to save and invest to achieve your goals. The approach towards achieving every financial goal will not be the same, which is why you need to divide your goals into short, medium and long-term time horizons. As a rule of thumb, any financial goal which is due within a five-year period should be considered short-term. Medium-term goals are typically based on a five-year to ten-year time horizon, and over ten years, these goals are classed as long-term. DEVELOPING A CLEAR PICTURE This division of goals into short, medium and long- term will help in choosing the right savings and investments approach to help you achieve them, IMPROVE YOUR FINANCIAL LIFE FINANCIAL PLANNING 07 and it will also make them crystal clear. This will involve looking at what large purchases you expect to make, such as purchasing property or renovating your home, as well as considering the later stages of your life and when you’ll eventually retire. Creating and implementing a comprehensive financial plan will enable you to develop a clear picture of your current financial situation by reviewing your income, assets and liabilities. Other elements to consider will typically include putting in place a Will to protect your family, thinking about how your family will manage without your income should you fall ill or die prematurely, or creating a more e"cient tax strategy. ITERATIONS AS LIFE CHANGES There is little point in setting goals and never returning to them. You should expect to make iterations as life changes. Set a formal yearly review at the very least, to check you are on track to meeting your goals. We will help you to monitor your plan, making adjustments as your goals, time frames or circumstances change. Discussing your goals with us is highly beneficial as we can provide an objective third-party view, as well as the expertise to help advise you with financial planning issues. FINALLY, MAKE SURE YOUR FINANCIAL GOALS ARE SMART Thinking about ‘SMART’ goals can help give direction to your financial aspirations and make those goals more achievable. Specific – Rather than pledging to ‘save money’ or ‘reduce debt’, thoroughly analysing finances and targeting specific areas for improvement could boost your chances of reaching your end goal. Measurable – Having benchmarks can help you track your progress, letting you make changes if you need to. Attainable – Setting a realistic goal can help keep your confidence up as you feel the achievement of getting close to your desired result. Relevant – Ensuring your goals are appropriate to what you are trying to achieve can help you avoid wasting time. Time Sensitive – If you know when you want to achieve your goal, this can allow you to pace savings and ensure you put the right amount of money aside.  FINANCIAL PLANNING /// Once the objective is clear, you need to put a monetary value to that goal and the time frame you want to achieve it by. The important point is to list all of your goal objectives, however small they may be, that you foresee in the future and put a value to them. BEEN PUTTING OFF PLANNING FOR YOUR FUTURE? For many people, the New Year often brings around an opportunity for change. We’re here to help you achieve your money resolutions and plan for the financial future you want. The start of 2022 is the ideal time to review your financial situation. To discuss your plans or for further information, please contact us. 08 RETIREMENT Devastating wildfires ripping through several countries, the aftermath of Storm Ida that caused unimaginable flooding across the northeast of the US, storm Arwen that brought disruption to the UK in November and last August’s 7.2 magnitude hurricane in Haiti – all are examples of natural disasters due to climate change. Increasingly more and more pension savers are asking where their funds are invested. Many people are no longer just concerned about getting the best returns, they also want their money to be used in a way that helps society and the planet. CLIMATE RISKS A survey finds that a third of pension schemes have already set targets to reduce their exposure to climate related risk[1]. 61% of schemes have considered setting a target to reduce their exposure to climate risks, but four in ten schemes have yet to consider climate risk targets and 28% say they will not be setting a target. Of the 33% of schemes that have set or are in the process of setting a target, half have included an emissions-based target with the majority (70%) of these being a ‘net zero’ target. PENSIONS INDUSTRY UK pension schemes are a massive influence on the financial services industry, including how the climate-related risks and opportunities are identified, assessed and managed. This survey shows that the pensions industry is rising to the defining challenge of our age. In another survey, two-thirds (67%) of consumers surveyed believe that it is important to consider Environmental, Social and Corporate Governance (ESG) factors before investing, and this figure rises to almost three in four (72%) for those respondents with a pension[2]. RESPONSIBLE INVESTING ESG is an evaluation of a firm’s collective conscientiousness for social and environmental factors. Interestingly, females are more likely to consider ESG investing at 70.4% than males at 63.9%, and its importance is broadly similar across all age cohorts. While 51% of those with pensions would like to increase their investment in companies that are tackling climate change, some 70% of those respondents acknowledged the need to better understand the benefits of responsible investing, highlighting the fact that there is an onus on the industry participants to educate consumers in this space. INVESTMENT DECISION More than half (53%) of those surveyed believe that it is important that a company has a positive record of social responsibility and good corporate governance, rising to 60% of those with a pension. The survey also explored the factors that are important to consumers when considering investing sustainably. Most respondents (75%) indicated that they would need good financial advice before making their investment decision, rising to 78% for those with a pension. PENSION SUSTAINABLY Two-thirds (67%) said they would only invest their pension sustainably if the returns were the same or better (71% of pension holders), and 64% said they would only consider doing so if they are not paying higher fees and charges (68% for pension holders). Some 51% of those pension holders surveyed said they would like to increase their pension savings into companies helping to combat climate change, and only 20% of all respondents (17% of those with a pension) said that investing sustainably is more important than investment returns.  Source data: [1] The Association of Consulting Actuaries 2021 Pension trends survey was conducted in the summer of 2021 and attracted 212 responses from employers of all sizes, running over 400 di!erent schemes [2] Aviva Life & Pensions Ireland DAC (Aviva), research of the 1,200 people surveyed 20.08.21 A PENSION IS A LONG-TERM INVESTMENT NOT NORMALLY ACCESSIBLE UNTIL AGE 55 (57 FROM APRIL 2028 UNLESS PLAN HAS A PROTECTED PENSION AGE). 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, TAX LEGISLATION AND REGULATION WHICH ARE SUBJECT TO CHANGE IN THE FUTURE. YOU SHOULD SEEK ADVICE TO UNDERSTAND YOUR OPTIONS AT RETIREMENT. MAKE SURE YOU’RE INVESTING IN THE FUTURE AS WELL AS YOUR FUTURE Do you want to align your financial goals with your values? Your retirement savings could be funding climate change. Investing in socially responsible investments can help you to achieve your goals while focussing on the environment, social values and good governance. To discuss your options or any retirement concerns you may have, please contact us. BEYOND PROFIT How green is your pension? The consequences of inaction on climate change are now impossible to ignore. Every company has an impact on the world around us. And by investing in them, so do we. INVESTMENT Time to give your financial future a boost? Savers and investors have less than three months to use the £20,000 they can put into their tax-e"cient Individual Savings Account (ISA) before the end of the financial year on 5 April. The current tax year started on 6 April 2021 and ends on 5 April 2022. ISAs enable you to minimise the amount of tax you pay on your hard-earned cash. Some ISAs give you instant access to your money and can be used to plan your finances for the short term. On the other hand, if you have longer-term savings goals, you can invest in an ISA for your future. DON’T LOSE YOUR ISA ALLOWANCE There is a limit you can pay into ISAs each tax year and this is called your ISA ‘annual allowance’. For the 2021/22 tax year, your ISA annual allowance is £20,000 and you have until midnight on 5 April 2022 to use this allowance. If you don’t use your ISA allowance, you will lose it as it cannot be carried forward. However, you will have a new annual ISA allowance available from 6 April 2022 in the 2022/23 tax year, so if you have already put £20,000 into an ISA in the 2021/22 tax year, you could put another £20,000 away on or after 6 April 2022. You can only pay into one of each type of ISA in a tax year, within the ISA annual allowance. ISA OPTIONS CASH ISA If you are a UK resident over the age of 18 (age 16 for a Cash ISA only), you can open one of each type in a tax year, providing you don’t exceed the annual allowance. Cash ISAs are suitable for your short-term savings goals as they don’t invest in the stock market but, with current low interest rates, your savings won’t grow much and you might not be keeping up with inflation. You might consider a Cash ISA as your ‘emergency’ pot of money for any unexpected expenses or a last-minute holiday. STOCKS & SHARES ISA This is a tax-e"cient investment that allows you to invest your money in shares, government bonds (gilts) and property with peace of mind that you won’t pay any capital gains tax or income tax on the proceeds. This type of ISA is more suitable for your longer-term goals as it has the potential to out- perform Cash ISAs over the medium to long term, but with varying levels of risk. The three main factors to consider when choosing between a Cash ISA and a Stocks & Shares ISA is the length of time you’ll be saving or investing, your appetite for investment risk and the impact of inflation over time. INNOVATIVE FINANCE ISA This is a type of investment account that allows you to lend your money through peer-to-peer lending platforms to receive tax-e"cient interest and capital gains. You could be lending money to serve personal loans, small business loans or property loans, or a combination of these. Interest rates can often be much more attractive than Cash ISA rates, but peer-to-peer lending is a higher-risk form of investing and your capital is entirely at risk as there is no protection from the Financial Services Compensation Scheme (FSCS). LIFETIME ISA If you are aged 18 to 39, and are looking to save for your first home or for later life, you could consider a Lifetime ISA. You can hold cash in a Lifetime ISA or choose to invest it just as you would with a Stocks & Shares ISA. You can put in up to £4,000 each year up to and including the day before your 50th birthday but remember that this £4,000 allowance contributes to your full annual ISA allowance. The government will pay a 25% bonus on your contributions (£1 for every £4 you put in), up to a maximum of £1,000 a year but you must be aware that a charge of 25% will be applied to any withdrawal if it is for any reason other than buying your first home, at age 60 or if you are terminally ill. JUNIOR ISA A Cash or Stocks & Shares ISA account, or both, can be opened for a child subject to the annual Junior ISA (JISA) allowance which is £9,000 for the 2021/22 tax year. The account must be opened by the child’s parent or guardian, but anyone can contribute once the account has been opened. Savings in a JISA account cannot be withdrawn until the child reaches 18. Any child owning a Child Trust Fund (CTF) can’t hold a JISA unless the CTF funds are first transferred to a JISA and the CTF closed.  INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM, TAXATION ARE SUBJECT TO CHANGE. THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED. PAST PERFORMANCE IS NOT A RELIABLE INDICATOR OF FUTURE PERFORMANCE. GET READY TO BEAT THE ISA DEADLINE READY TO MAKE THE MOST OF YOUR ISA ALLOWANCE BEFORE ITS TOO LATE? With interest rates still at very low levels, you might be looking at investing for the potential to achieve a bigger return from your savings. For more information about how we can help you invest to enjoy a brighter future – please contact us. 09 10 TAX PLANNING NEW YEAR’S TAX SAVING RESOLUTIONS Make full use of your relevant tax planning opportunities With the tax year end (5 April) on the horizon, taking action now may give you the opportunity to take advantage of any remaining reliefs, allowances and exemptions. We have provided some key tax and financial planning tips to consider prior to the end of the tax year. Now is also an ideal opportunity to take a wider review of your circumstances and plan for the year ahead. CHECK YOUR PAYE TAX CODE It’s important to check your tax code. Your tax code is based on the amount of tax you should be paying and the amount you can earn before tax applies. The tax code is the identifier that tells your employer how much tax should be deducted from your salary each time you get paid. If you have multiple employers or pension providers, you may get more than one tax code. If you’re on the wrong one, you could be paying HM Revenue & Customs (HMRC) more than you ought to be. On the other hand, you risk getting penalised if you’re paying too little. TRANSFER PART OF YOUR PERSONAL ALLOWANCE Married couples and registered civil partners are permitted to share 10% of their personal allowance between them. The unused allowance of one partner can be used by the other, meaning an overall combined tax saving. The amount you can transfer is £1,260 for 2021/22 and a transfer is not permitted if the recipient partner pays tax at a rate higher than the basic rate of 20% (higher than the intermediate rate of 21% for Scottish taxpayers). CONTRIBUTE UP TO £9,000 INTO YOUR CHILD’S JUNIOR ISA The fund builds up free of tax on investment income and capital gains until your child reaches age 18, when the funds can either be withdrawn or rolled over into an adult ISA. Relatives and friends can also contribute to your child’s Junior ISA, as long as the £9,000 limit for 2021/22 is not breached. TAX-FREE SAVINGS AND DIVIDEND ALLOWANCES For 2021/22, savings income of up to £1,000 is exempt for basic rate taxpayers, with a £500 exemption for higher rate taxpayers. The tax-free dividend allowance is £2,000 for all taxpayers. Married couples and registered civil partners could save tax by ensuring that each person has enough of the right type of income to make use of these tax-free allowances. INDIVIDUAL SAVINGS ACCOUNTS (ISAS) You can put the entire amount into a Cash ISA, a Stocks & Shares ISA, an Innovative Finance ISA, or any combination of the three (or up to £4,000 out of the overall £20,000 allowance into a lifetime ISA if aged between 18 to 39). Usually when you invest, you have to pay tax on any income or capital gains you earn from your investments. But with an ISA, provided you stick to the rules on how much you can pay in, all capital gains and income made from your investments won’t be taxed. Every tax year you have an ISA allowance, which is currently £20,000 for the 2021/22 tax year. UTILISE ANY CAPITAL LOSES If you realise capital gains and losses in the same tax year, the losses are o!set against the gains before the capital gains tax exempt amount (£12,300 in 2021/22) is deducted. Capital losses will be wasted if gains would otherwise be covered by your exempt amount. Consider postponing a sale that will generate a loss until the following tax year, or alternatively realising more gains in the current year. MAXIMISE PENSION CONTRIBUTIONS The annual allowance for 2021/22 is £40,000. To avoid an annual allowance tax charge, the pension contributions made by yourself, and by your employer on your behalf, must be covered by your available annual allowance. If you haven’t used all your allowances in the last three tax years, it might be possible to pay more into your pension plan by ‘carrying forward’ whatever allowance is left to make the most of the tax relief on o!er, though bear in mind that your own personal tax-relievable contribution amount is still capped at 100% of your earnings. However, di!erent rules apply if you’ve already started to take money flexibly out of your pension plan and you’re a!ected by the Money Purchase Annual Allowance, or if your income when added to your employer’s payments are more than £240,000 and your income less your own contributions is over £200,000. PAY PENSION CONTRIBUTIONS TO SAVE NICS If you pay pension contributions out of your salary, both you and your employer have to pay 11 National Insurance Contributions (NICs) on that salary. When your employer pays a contribution directly into your pension scheme, the employer receives tax relief for the contribution and there are no NICs to pay – a saving for both you and your employer. You could arrange with your employer to cover the cost of the contributions by foregoing part of your salary or bonus. You must agree in writing to adjust your salary before you become entitled to that salary or bonus and before the revised pension contributions are paid for this arrangement to be tax-e!ective, although pension contributions are not caught by the clampdown on salary sacrifice arrangements. MAKE A WILL AND REVIEW IT If you die without making a Will, your assets will be divided between your relatives according to the intestacy rules. Your surviving spouse or registered civil partner may only receive a portion of your estate, and Inheritance Tax will be due at 40% on anything else above £325,000 (up to £500,000 if the Residence Nil Rate Band is available). LEAVE SOME OF YOUR ESTATE TO CHARITY Where you leave at least 10% of your net estate to charities, as well as the gift to charity being free from Inheritance Tax, the Inheritance Tax on your remainder estate is charged at 36% instead of 40%. The exact calculation of your net estate is quite complicated, so it’s important to receive professional advice when drawing up or amending your Will. MAKE REGULAR IHT-FREE GIFTS As long as you establish a pattern of gifts that can be shown to be covered by your net income, without reducing either your capital assets or your normal standard of living, these gifts will be free of Inheritance Tax. The recipients of the gifts need not be the same people each year. USE THE IHT MARRIAGE EXEMPTION If your son or daughter is about to marry, you and your spouse can each give them £5,000 in consideration of the marriage, and the gift will be free of Inheritance Tax. The marriage exemption can also be combined with your £3,000 a year Inheritance Tax exemption to allow you to make larger exempt gifts. You can make an Inheritance Tax-free gift of £2,500 for a grandchild’s wedding. Registered civil partnerships attract the same exemptions. Make IHT-free gifts each tax year These gifts are free of Inheritance Tax and, if you forget to make your £3,000 gift one year, you can catch up in the next tax year by giving a total of £6,000 but you can only carry forward the £3,000 allowance for one tax year and must fully use the current year’s allowance as well. Remember, you and your spouse or registered civil partner can each give £3,000 out of your capital every tax year, in addition to gifts you make out of your regular income.  INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM, TAXATION ARE SUBJECT TO CHANGE. THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED. PAST PERFORMANCE IS NOT A RELIABLE INDICATOR OF FUTURE PERFORMANCE. DO I NEED PERSONAL TAX ADVICE? It is crucial that year-end tax planning reviews are undertaken as soon as possible, as you will need time to consider all the options available. Many of the allowances and reliefs cannot be applied retrospectively after 5 April 2022. We can provide a comprehensive review, tailored to your individual needs and circumstances. Don’t delay, please contact us if you require further information. TAX PLANNING /// Have you maximised your pension contributions? The annual allowance for 2021/22 is £40,000. To avoid an annual allowance tax charge, the pension contributions made by yourself, and by your employer on your behalf, must be covered by your available annual allowance. 12 INVESTMENT CONCERNED ABOUT HOW INFLATION IMPACTS ON YOUR SAVINGS? After years of staying relatively low, it looks like inflation is on the up. So what does that mean for your money? To discuss how to mitigate the impact of inflation on your financial plans, please contact us – we look forward to hearing from you. IT MAY BE TIME TO INVEST YOUR CASH Is your wealth protected from the damaging e!ects of inflation? Many people underestimate the damaging e%ect of low interest and high inflation on their cash savings. A continued period of low interest rates on cash savings and rising inflation could pose a real risk to savers in 2022, even if the Bank of England (BoE) moves to increase interest rates further in the coming months. Savers with large amounts of money sitting in cash should not be lulled into a false sense of security if interest rates creep up, because of the threat of higher inflation throughout 2022. The damaging e!ects of high and rising inflation will likely more than wipe out any uplift a higher interest rate will give to the value of cash savings. Currently, 8.6 million consumers hold over £10k of investable assets in cash[1]. INTEREST ‘BASE RATE’ INCREASE Inflation is expected to average over 4% this year, peaking at over 5%[2]. The BoE may look to dampen the e!ects of soaring prices by further increasing the interest ‘base rate’. While this may o!er some relief if passed on to savers, the average easy access savings account is currently sitting at just 0.19%[3] and any upward change is expected to be small. As the economy continues to recover from the COVID-19 pandemic last year, we are experiencing a sharp rise in the cost of living. During a period of high inflation people will notice a dramatic decrease in their purchasing power over time, particularly if their wages don’t keep pace or if they have savings in cash. DAMAGING HIGH INFLATION The threat of inflation this year and beyond could far outweigh any small changes in interest rates for those with large amounts of money in cash savings. Following many years of low inflation, people may have forgotten how damaging high inflation can be. But in the coming months and years, savers should think carefully about where they put any additional cash that is not needed in the short term. For money beyond your emergency fund, you may want to consider investing, which o!ers the potential for inflation-beating returns. If appropriate to your particular situation, you should be prepared to take some risk to preserve the value of your money if inflation continues to eat away at the value of your cash in savings accounts. We are best placed to recommend the best investment option based on your attitude to risk.  Source data: [1] https://www.fca.org.uk/publications/corporate- documents/consumer-investments-strategy [2] https://obr.uk/overview-of-the-october-2021- economic-and-fiscal-outlook/ [3] https://moneyfacts.co.uk/news/savings/ savings-rates-continue-to-rise/ INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM, TAXATION ARE SUBJECT TO CHANGE. THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED. PAST PERFORMANCE IS NOT A RELIABLE INDICATOR OF FUTURE PERFORMANCE. 13 Women are being urged to think about their long term savings Imagine reaching retirement age and discovering that, despite years of saving, you don’t have enough money to get by. Worse still, suppose you’re unable to pay for the right kind of care in your old age. MIND THE PENSION GENDER GAP RETIREMENT If you and your partner separate or your spouse dies unexpectedly – will you have su"cient funds to see you through retirement? Now, all of these might sound like worst-case scenarios but, unfortunately, for women right across the UK one or more of them could become a reality. EARNING TRENDS Women are still behind men when it comes to retirement savings. The ‘Women and Retirement’ report[1] has found that if current work and earning trends continue, young women today will need to save an average of £185,000 more during their working life to enjoy the same retirement income as men. The colossal gender pension gap is made up of a savings shortfall, plus the need to fund a longer retirement because women on average live longer than men. This also leads to higher care costs. Many women will naturally take time o! to start a family – resulting in gaps in their work history. And even if women remain in the workforce, some still tend to earn less than men, on average. VULNERABLE SITUATION 21% of women surveyed said they plan to rely at least partly on their partner’s income in retirement. However, this can leave women in a particularly vulnerable situation should they separate from their partner. Right now, it’s rare for divorce settlements to account for pension assets, which means that women could end up in particularly unstable financial situations following divorce. FUNDING RETIREMENT Also, women tend to live longer than men – two to three years, on average. Indeed, this continued rise in longevity means that a 25-year-old man today can expect to live to 86, while a woman can live to 89. And while rising longevity is of course a good thing, it does raise specific challenges – especially when it comes to funding retirement and old age. LIVING LONGER Together with living longer, women are also more likely to need care when they’re older. In fact, of the 6 million people in the UK over the age of 60 currently living with a disability, 3.5 million of them are women. And those women who do need care spend on average a year longer in care homes than men. Right now, the average cost of care is £679 per week, which means women would need an extra £35,000 during retirement for residential care costs. Moreover, as women can expect to live two to three years longer than men, they would also need around £50,000 for their retirement – bringing the total amount needed to match a man’s retirement income to £185,000.  Source data: [1] Scottish Widows 2021 ‘Women and Retirement’ report – research carried out online by YouGov Plc across a total of 5,059 adults aged 18+. Data weighted to be representative of the GB population. Fieldwork was carried out between 23 March and 3 April 2021 through an online survey. 5,059 interviews were carried out. The sampling criteria were based on four key metrics: age, gender, region and social grade. A PENSION IS A LONG-TERM INVESTMENT NOT NORMALLY ACCESSIBLE UNTIL AGE 55 (57 FROM APRIL 2028 UNLESS PLAN HAS A PROTECTED PENSION AGE). 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, TAX LEGISLATION AND REGULATION WHICH ARE SUBJECT TO CHANGE IN THE FUTURE. YOU SHOULD SEEK ADVICE TO UNDERSTAND YOUR OPTIONS AT RETIREMENT. CONCERNED ABOUT THE PENSION GAP? As a women, your pension is a key part of your retirement planning. How much you put away now, how you invest for the future and how you choose to access your pension once you’ve stopped working, are all key considerations for anyone hoping to enjoy a long and happy retirement. If you have any concerns or questions about your retirement plans, please contact us for more information. FINANCIAL PROTECTION 14 THE IMPORTANCE OF FINANCIAL PROTECTION Millions battling with financial hardship, relationship stress and sleepless nights Fear, worry and stress are normal responses to perceived or real threats, and at times when we are faced with uncertainty or the unknown. So it is normal and understandable that people are experiencing fear in the context of the COVID-19 pandemic. FINANCIAL PROTECTION The pandemic and the resulting economic impact have negatively a!ected many people’s mental health. Nearly half of UK adults (47%) have experienced mental health challenges during the pandemic, with millions battling with financial hardship, relationship stress and sleepless nights. LIFE INSURANCE OR CRITICAL ILLNESS COVER New research reveals that only a small proportion of people notify their insurer of a mental health condition in the mistaken belief that it will a!ect their ability to take out life insurance or critical illness cover. This means they might not have adequate cover or access to support provided by their insurer. Three in ten (30%) people report that they currently have a mental health condition or have experienced this previously. However, only four in ten 44% have informed their insurer. There remains confusion around what can, or should, be said to an insurer when it comes to physical and mental health. INELIGIBLE FOR PROTECTION COVER Of those who did not disclose a mental health condition, nearly two-fifths (37%) thought their provider would only be interested in physical illness. Over a quarter (26%) felt it was personal and so would rather not share their condition with their provider. Almost one in five (18%) worried they would not qualify for a policy or would be charged more. Contrary to these misconceptions, declaring a mental health condition does not necessarily mean higher premiums and it is unlikely to mean someone is ineligible for protection cover. Being open with an insurer means those with mental health conditions are more likely to receive the right support. GETTING THE RIGHT SUPPORT Some people are confused about how mental health conditions a!ect their critical illness cover or life insurance, which prevents them from getting the right support. Insurers aren’t trying to catch people out – they are there to help. The challenges of the last 20 months have highlighted the value of protection policies for families and individuals in di"cult times.  Source data: [1] Research carried out online by Opinium Research across a total of 2,002 UK adults (Booster sample of 502 self-employed workers and 1,015 Renters. Fieldwork was carried out between 21 and 27 October). 15 COULD YOU AND YOUR FAMILY FACE SIGNIFICANT FINANCIAL HARDSHIP? Personal protection is a key part of any successful financial plan. Without adequate protection, you and your family could face significant financial hardship if you or your partner died unexpectedly or you couldn’t work due to an accident or illness. Having personal protection means that you do not have to worry about money during a di"cult time. To find out more, please contact us. /// New research reveals that only a small proportion of people notify their insurer of a mental health condition in the mistaken belief that it will a!ect their ability to take out life insurance or critical illness cover. FINANCIAL PLANNING 16 ACROSS THE GENERATIONS Pandemic forces people to reassess their finances The COVID-19 pandemic has a%ected every part of our lives and continues to have a widespread impact across all aspects of financial life. This includes retirement plans. Life in lockdown prompted many people to adjust their priorities, for example, to move nearer to family, take staggered retirement or retire earlier. Over the past twenty months, life has looked and felt very different for many of us. A lot of what was previously taken for granted and routine has been challenged and changed in unanticipated ways. The pandemic has also forced many people to reassess their finances, access their pension pots and bring forward or change their retirement plans. POLARISING IMPACT OF THE PANDEMIC More than half (54%) of UK adults say the impact of the COVID-19 pandemic has a!ected their plans to retire, according to new research[1]. The findings lay bare the polarising impact of the pandemic and its stop-start e!ect on people’s future plans. While some people envisage retiring earlier and have gained confidence about living comfortably once they retire, nearly one in five (18%) feel less secure about their financial future, peaking at more than one in four (27%) aged 35 to 44. LOCKDOWNS USED TO SAVE MORE FOR RETIREMENT Across the generations, the 35 to 44 age group are the most likely (68%) to have felt some impact on their retirement plans from the pandemic. This has been positive for some, including one in ten who used the lockdowns to save more for their retirement. But almost one in six people (14%) aged between 35 and 44 anticipate their retirement date may be pushed back, while 16% have lost confidence in their ability to live comfortably once they have retired. PEOPLE QUESTIONING WHAT’S IMPORTANT IN LIFE The findings show nearly three in five (59%) people feel the pandemic has made them question what’s important in life, while half said it has changed their priorities. However, the research reveals a nation polarised when it comes to deciding its own destiny. While 41% say the pandemic has made them feel they can take more control of their priorities, the same proportion (41%) say they have less control than they did before. SUSPENDED OR CANCELLED A PLANNED LIFE EVENT When it comes to their finances, more than two in five UK adults (41%) say life during COVID-19 has encouraged them to build more long-term savings. People aged between 35 and 44 are most likely to feel compelled to save more for their futures (54%), followed by 51% of those aged 25 to 34. However, 27% overall say they feel less comfortable about coping with unforeseen events than they did before the pandemic. This includes 29% of those aged 44 to 54 and 24% of over-55s. The findings also show more than half (53%) of UK adults have suspended or cancelled a planned life event during the pandemic. SEEKING TO PROGRESS FUTURE AMBITIONS MORE QUICKLY Among those a!ected, almost one in six (16%) have held back from starting a new job; 13% have postponed buying a new house; 12% have thought twice about starting a new business; one in ten (10%) have pressed pause on trying for a baby; and the same (10%) have postponed getting married. Despite more than half (54%) of people feeling that life has been ‘put on hold’ during the pandemic, many are now seeking to progress more quickly with their future ambitions. Among this group, 19% are fast- tracking a move to a new job; 13% will start a new business; and 13% are trying for a baby. MAKING LIFE-CHANGING FINANCIAL DECISIONS It’s always important to think ahead to retirement and plan for the future, and even more so now that we have to deal with the impact on our finances due to the coronavirus crisis. It’s important not to rush into making life- changing financial decisions before obtaining professional financial advice first. Making the right investment decisions can help you increase your financial security and provide income that you can use to live comfortably after you stop working. If you don’t have an income strategy or are unsure of what it is, now is the time to talk to us.  Source data: [1] Research carried from Aviva, 24 November 2021 17 FINANCIAL PLANNING TIME TO REVIEW YOUR PENSION AND RETIREMENT PLANS? When was the last time you reviewed your pension? Do you know how much you’ve put aside for your retirement and do you know how well those investments are performing? We will ensure you are making the best informed decisions for your situation and retirement plans. To discuss how we can help you, please contact us. /// While some people envisage retiring earlier and have gained confidence about living comfortably once they retire, nearly one in five (18%) feel less secure about their financial future, peaking at more than one in four (27%) aged 35 to 44. RETIREMENT 18 UNLOCKING CASH FROM YOUR HOME AND ENJOY A MORE COMFORTABLE RETIREMENT Needing an extra financial boost in retirement is becoming more and more common. Releasing equity from your property is a big decision. We understand that and we’re here to support you.To find out more, please contact us for more information. COULD EQUITY RELEASE FUND YOUR FUTURE? Freeing up funds or releasing money tied up in your home For some people, using their home in the future to fund their retirement is likely to become more commonplace, whether that’s by downsizing to free up funds or releasing money tied up in their home through products like lifetime mortgages. Homeowners could release some of the equity from their property to top up their retirement savings, through a process known as ‘equity release’. Using equity release for retirement income isn’t an equal replacement for pension savings, but if you’ve got a shortfall, then releasing money from your home may help you reach your retirement goals. HOME VALUE Analysis has highlighted that homeowners in 53% of areas in England & Wales could access more from the value of their home than is saved in the average pension pot (£61,930)[1] by using equity release, according to analysis and based on median local house price data from the O"ce for National Statistics (ONS)[2]. Homeowners in England and Wales could release on average £72,988 worth of equity from their homes, an average increase of £14,000 in just five years due to a 24% increase in median house price values since 2016. PRICE GROWTH Ongoing house price growth has led many homeowners to consider the role their property might play in their long-term financial planning. One in seven pre-retired over-50s (16%) plan to use their property wealth to boost their finances via products like lifetime mortgages, a type of equity release, or via downsizing. However, an additional 13% said a significant increase in the value of their property could also persuade them to do so. In recent years, we have seen house prices increase to the extent that they will have become the most significant asset available to many UK homeowners. The average UK property price has hit a new record high of £272,992, with growth now at 15-year high[3].  Source data: [1] Refers to an average pension pot of a pre-retired person over 50. Opinium survey of 2,160 UK over-50s in the UK who have not retired between the 9 and 13 August 2021 [2] O"ce for National Statistics, House price statistics for small areas in England and Wales: year ending March 2021, Nov 2021 [3] The Halifax House Price Index (IHS Markit), November 2021 THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR MORTGAGE IS SECURED ON YOUR HOME, WHICH YOU COULD LOSE IF YOU DO NOT KEEP UP YOUR MORTGAGE PAYMENTS. EQUITY RELEASE MAY INVOLVE A HOME REVERSION PLAN OR LIFETIME MORTGAGE WHICH IS SECURED AGAINST YOUR PROPERTY. TO UNDERSTAND THE FEATURES AND RISKS, ASK FOR A PERSONALISED ILLUSTRATION. EQUITY RELEASE REQUIRES PAYING OFF ANY OUTSTANDING MORTGAGE. EQUITY RELEASED, PLUS ACCRUED INTEREST, TO BE REPAID UPON DEATH OR MOVING INTO LONG-TERM CARE. EQUITY RELEASE WILL AFFECT THE AMOUNT OF INHERITANCE YOU CAN LEAVE AND MAY AFFECT YOUR ENTITLEMENT TO MEANS-TESTED BENEFITS NOW OR IN THE FUTURE. CHECK THAT THIS MORTGAGE WILL MEET YOUR NEEDS IF YOU WANT TO MOVE OR SELL YOUR HOME OR YOU WANT YOUR FAMILY TO INHERIT IT. IF YOU ARE IN ANY DOUBT, SEEK PROFESSIONAL FINANCIAL ADVICE. Redundancy pushes over 50s out of the workforce The economic fallout from the coronavirus pandemic has made Britain’s workforce smaller, with a sharp rise in early retirement among older workers MISSING MIDLIFE WORKERS 19 RETIREMENT The disappearance of the older worker presents a serious challenge to employers. Not only are they the fastest- growing employee population but they also have a wealth of experience that UK employers will miss out on if this trend continues. AGE DIVERSITY As we all adjust to new ways of working in the wake of COVID-19, where ‘retirement’ will be di!erent for many people, it’s crucial that older workers are not forgotten. But more than one in ten (11%) over-50s have disappeared from the workforce in the past five years as a result of being made redundant, according to new research[1]. Among the 177,000 over-50s made redundant on an annual basis during this timeframe, 20,000 are estimated to have left the workforce. The ‘Working Late’[1] report, which looks at the experiences of the over- 50s, raises concerns about the impact of redundancy and employment-related changes on the age diversity of the UK workforce. CONTRIBUTING FACTOR Among the over-50s experiencing redundancy in the past five years, nearly two-thirds (62%) felt that their age was a contributing factor in this decision. The study shows that older workers have been 17% more likely to face redundancy than younger workers on average[2]. Despite a higher redundancy rate, according to data from the O"ce for National Statistics (ONS) Labour Force Survey, unemployment rates for over-50s tend to be lower than for the rest of the working population. MADE REDUNDANT In part, this is likely impacted by the number of people who leave the workforce once being made redundant. The report found that 2,000 of the 15,000 over-50s made redundant each month on average over the last five years are estimated to have left the workforce. More than a third (39%) of older workers who were made redundant in the past five years have had to change their retirement plans. This was also the case for those who experienced a reduction in their working hours (34%) or had their salary reduced (33%). Meanwhile, 15% of those being placed on furlough since the start of the COVID-19 pandemic decided to change their retirement date as a result. RETIREMENT SAVINGS The resultant impact of redundancy on retirement savings is significant. Older workers who have been made redundant are expected to save £29,000 less for retirement than the average employee aged 50 and over. According to the findings, the gap between estimated annual retirement income and the minimum level of income required for a comfortable lifestyle reduces by 18%, or £1,900 annually, for those who have been made redundant, compared to those who have not. ADDITIONAL FUNDS For employees over 50 who have experienced one or more of reduced hours (9%), a salary cut (7%), furlough (12%) or redundancy (8%), an annual reduction of £3,100 is estimated. The government’s planned investment of additional funds to get over-50s back into work is a step in the right direction, but there is much more to be done to promote an age-diverse workforce. We are living and working longer than ever before and the reality is, many of us will be relying on working longer to save for retirement.  Source data: [1] Legal & General Retail Retirement (LGRR) and the Centre for Economics and Business Research (Cebr) – Over-50s in the labour market 2021 primary sources: Opinium survey of 2,000 over-50s in the UK, ONS Labour Force Survey and ONS Wealth and Assets Survey. [2] From 2007 to Q2 of 2021, the average redundancy among under 50s has been 0.5%, compared to 0.6% among the over 50s. Since the year following the start of the pandemic, the average rates have risen to 0.7% and 0.8%, respectively. This contrasts with the experiences of the last economic crisis in 2008-09, when the redundancy rates among under 50s (0.9%) exceeded that among over 50s (0.8%). ITS GOOD TO TALK Retirement should be an exciting milestone that you look forward to. But that doesn’t mean concerns aren’t present as you plan for and live a retired life. To discuss how we could help with your needs and financial journey, please contact us. RETIREMENT 20 SIGNIFICANT FINANCIAL DECISIONS MAGNIFY YOUR NEED FOR QUALITY ADVICE Obtaining professional financial advice is important to consider your options and ensure you achieve the retirement you want. We recognise that increasingly complex and significant financial decisions magnify your need for quality advice. To discuss how we can help with your plans, please call us. WHAT’S YOUR MAGIC NUMBER? Keeping up your current lifestyle and enjoying your golden years People planning for retirement should think hard about what they want to do when they eventually stop work. It is helpful to have a good idea of the lifestyle you want, how much it will cost and how you are going to pay for it. With so much going on in your life – from family and work to pursuing your passions – retirement planning may not have been your priority. But now you want to make sure your pension and overall financial situation will allow you to keep up your current lifestyle and enjoy your golden years. The more enthusiastic you are about retiring, the more likely you are to develop a robust retirement plan. DIY APPROACH TO RETIREMENT Obtaining professional financial advice is key to ensuring you achieve the retirement you want. But 8 million people are planning a DIY approach to retirement and many don’t know how to avoid running out of money, avoiding a big tax bill or leaving an inheritance, new research has highlighted[1]. Millions of people don’t understand their retirement options when they stop work. More than a third (35%) of pension holders admit they know nothing about the product options at retirement and the pros and cons of each option. PRODUCT OPTIONS AT RETIREMENT And more than one in five (22%) of those planning to retire in the next five years know nothing about the product options at retirement. And they don’t understand some of the big risks in retirement. Worryingly, 35% of pension holders know nothing about how stock market falls can a!ect retirement savings. Of those surveyed, 34% commented they don’t know how to ensure they will not run out of money in retirement. Half of people with a pension over £100,000 didn’t know a good amount about how to take money from their pension in a tax-e"cient way. TAKING PROFESSIONAL FINANCIAL ADVICE Only 34% of married people understand how to ensure their spouse will be left with enough pension if they die. Although people are unclear about their options, worryingly many are not considering taking professional financial advice. Only 39% of pension holders are planning on taking financial advice when they retire, with 31% planning to DIY their retirement. Only half (52%) of mass a#uent people – those with assets of between £100,000 and £500,000 excluding property – are planning to take professional financial advice. SERIES OF BIG DECISIONS TO MAKE The top occasions where mass a#uent consumers feel that people should seek professional financial advice are: choosing to invest a large lump sum (43%), Inheritance Tax planning (44%) and deciding how to access a pension (40%). People have a series of big decisions to make as they approach the end of their working life and each one can make a huge di!erence to their retirement. For example, should you drawdown your pension in one go or over a period of time? Should you take your 25% tax-free cash or leave the money in your pension fund to grow? Should you buy an annuity to guarantee an income for the rest of your life or go for drawdown? These are questions your professional financial adviser will help answer.   MAKING BIG FINANCIAL DECISIONS Obtaining advice compensates for the emotional biases people have when they make big financial decisions. A DIY approach to managing large pension funds at retirement is fraught with risk. People can easily buy the wrong products, incur unnecessary tax bills or simply exhaust their retirement funds too quickly, whereas an adviser will provide an impartial, cool-headed approach to their client’s finances and o!er solutions that the client will not even have considered.   Source data: [1] The LV= Wealth and Wellbeing Monitor is a quarterly survey of 4,000+ consumers which examines their attitudes to spending, saving and retirement. The Monitor also surveys the attitudes of mass a#uent consumers, those with assets of between £100,000 and £500,000 excluding property, who are a key target market for financial advisers. LV= surveyed 4,000+ nationally representative UK adults via an online omnibus conducted by Opinium in June  2021.   A PENSION IS A LONG-TERM INVESTMENT NOT NORMALLY ACCESSIBLE UNTIL AGE 55 (57 FROM APRIL 2028 UNLESS PLAN HAS A PROTECTED PENSION AGE). 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, TAX LEGISLATION AND REGULATION WHICH ARE SUBJECT TO CHANGE IN THE FUTURE. YOU SHOULD SEEK ADVICE TO UNDERSTAND YOUR OPTIONS AT RETIREMENT. 21 RETIREMENT /// Millions of people don’t understand their retirement options when they stop work. More than a third (35%) of pension holders admit they know nothing about the product options at retirement and the pros and cons of each option. FINANCIAL PLANNING 22 LIVE SUSTAINABLY: HOW TO BE A CONSCIOUS CONSUMER   The everyday choices we make all have impacts on our planet Our changing climate is making it harder to live in many parts of the world, often a!ecting some of the most disadvantaged communities. People are starting to realise that change is imminent and necessary. LOOKING TO MAKE A POSITIVE CONTRIBUTION TO THE SOCIETY OR ENVIRONMENT? If you are seeking to make a positive contribution to society or the environment you have a range of options to consider. We will listen and take the time to understand your personal financial goals, whether it’s working out when you can retire, how to minimise Inheritance Tax or getting the most out of your savings and investments. To find out more, please contact us. Every little thing we do daily has an impact on the planet, from our dietary choices to the cars we drive. The good news is that every small change to our lifestyle can contribute to having a less negative impact on the environment. POSITIVELY IMPACT SOCIETY New research has highlighted that many UK adults admit they would live more sustainably if it was more a!ordable[1]. Seven in ten (71%) UK adults surveyed say they would live more sustainably if they knew it wouldn’t cost them any more money. Those surveyed as part of the in-depth study, which looks at the conscious decisions individuals make to positively impact society, found that three in five (61%) UK adults say they do spend money on goods or services that they know are ethical or sustainable. Of these, 43% can put a price tag on how much they are spending, which is on average of £51.90 per month – the equivalent of £622.80 per year. MORE SUSTAINABLE CHOICES Almost a quarter (23%) say they spend up to £50 per month per person. While one in five (20%) say they spend more than £50, and one in ten (10%) spend more than £100 every month. When asked whether living consciously should cost more money, or whether individuals should be incentivised or rewarded to live in this way, more than a fifth (22%) felt they should be rewarded and/or incentivised. More than a quarter (28%) believe everything is expensive enough. And one in five (19%) simply can’t a!ord to pay any more. One in five (21%) think we should all pay to protect the planet for future generations, while 9% admitted they would be happy to pay a higher price for goods and services if it meant more sustainable choices and products would be available. MAKE ETHICAL PURCHASES Those aged between 25 and 35 are more likely to make ethical purchases despite it being more expensive, compared to any other age group. While those aged 55 to 64 are the least likely (15% vs 3%). Those who earn a larger income are also more likely to make ethical purchases, with 48% of those earning more than £100k happy to spend more on sustainable brands in comparison to 5% of those earning less than £20k. When it comes to parents, there are also interesting patterns, with those who have children under 18 spending £91.70 per month per person more to make sustainable choices. This is in comparison to parents with children over 18, who spend an extra £21.20. SUPPORT THE PLANET In the UK, billions of pounds are held in pensions and savings. Looking more closely and asking where your savings are being invested, and what they are supporting, can go a long way to ensuring you’re investing responsibly. Doing this could help if you want to do more to support the planet and make a positive impact, without it having to cost you the earth.  Source data: [1] Pru, part of M&G plc, ‘Power of Sustainable Living’ report – research was carried by Opinium among a UK representative sample of 2,000 consumers – UK adults spend £51.90 per month. Multiplied by 12 months is £622.80 – 13 November 21. 23 FINANCIAL PLANNING /// New research has highlighted many UK adults admit they would live more sustainably if it was more a!ordable[1]. Seven in ten (71%) UK adults surveyed say they would live more sustainably if they knew it wouldn’t cost them any more money. SAVING 24 SAVING FOR A RAINY DAY What’s the right emergency fund amount for you? An emergency fund is money you put aside to cover a financial shock. This could be losing your job, or a large, unexpected expense. Building an emergency fund can help prevent your needing to borrow money or make di"cult financial decisions in those moments, by giving you savings to fall back on. Worryingly, one of the things the COVID-19 pandemic has demonstrated is that anyone could find themselves in financial di"culties. But three out of ten (30%) working people in the UK could only manage for up to a month financially if they had to rely on their savings to cover their outgoings, research reveals[1]. FINANCIAL WELLBEING A quarter (26%) of workers said they had less than £500 in savings. The results also highlighted that the issue a!ects younger people most severely, with 40% of 18-to-34- year-olds in work unable to manage more than a month if they found themselves without their salary. The COVID-19 pandemic has intensified issues around financial wellbeing in the working population. As well as one-fifth (21%) admitting to saving nothing on a monthly basis, more than one in ten (15%) have increased the amount of debt they have over the previous 12 months, and a quarter (26%) have had to borrow from family or friends during the period. UNEXPECTED BILLS Almost half of working Britons (49%) said they feel stressed about their financial situation. This doesn’t just cause problems with meeting unexpected bills or dealing with a loss of income due to sickness or unemployment. Money worries can a!ect all aspects of people’s lives, which is why it is important for people to build a healthy savings pot and improve their financial wellbeing to protect themselves from any sudden and unexpected changes to their situation. There’s also clear evidence that low financial resilience can also have an impact on mental health. FINANCIAL DIFFICULTIES If you have money set aside for emergencies, you’re far less likely to experience financial di"culties or have to borrow at a high interest rate if things go wrong or your circumstances change. Knowing you’ve got some money you can access is essential. Typically, you should aim to have enough money in your emergency fund to cover your expenses for at least three to six months. Saving regularly is a good way to build up an /// Almost half of working Britons (49%) said they feel stressed about their financial situation. This doesn’t just cause problems with meeting unexpected bills or dealing with a loss of income due to sickness or unemployment. HOW MUCH SHOULD YOU SAVE? How much you need, and what an ‘emergency’ is, will depend on your situation. It’s best to split your savings, so you’re keeping some to hand for emergencies and putting the rest where it can work harder for you. To find out how we could help, please contact us. emergency fund. You’ll find that if you get into the habit of saving each month your savings will soon mount up. ILLNESS OR INJURY If you are also worried an illness or injury could leave you without enough to pay bills, there are ways to protect your income. To protect you and your family comprehensively, you should consider insurance – especially if your employer does not have an occupational sick-pay scheme. The four most common types of insurance that protect your income are income protection insurance, critical illness cover, life insurance and payment protection insurance.  Source data: [1] Yorkshire Building Society research, 06 July 21 25 SAVING 26 Knowing what to expect can be an important part of planning for life after work How much do you think you’ll need to fund your retirement? Of course, the answer to that question will depend on what you want to do when you stop work. Worriedly almost half of non-retirees (46%) are unable to identify how much annually they believe retirees receive from their state pension according to a survey[1]. HOW MUCH INCOME WILL YOU RECEIVE FROM YOUR STATE PENSION? RETIREMENT 27 RETIREMENT Only 53% knew that retirees receive around £9,000 per year from their State Pension, with those aged 55 and over being more likely to identify correctly how much retirees receive (70%), compared to only 40% of those aged between 18 and 34. SAVING IN A PENSION The survey also showed that over half of non- retirees with a pension are worried that they are not saving enough for their retirement (56%), with only one in five (21%) confident that the amount they are saving in a pension is enough to let them live the lifestyle they want when they stop working. In fact, three-quarters (75%) of non-retirees say they believe they could save extra into their pension to boost their pension savings, with the average additional contribution being £68 per month. ADDITIONAL CONTRIBUTIONS One in six (17%) say they could only pay in less than £25, just over a quarter (26%) say they could pay in £25 to £50 in additional contributions, while a further quarter (25%) say they could pay in between £51 and £200 in additional contributions. Seven per cent say they could pay in more than £201 per month in additional contributions. Most people in the UK who work or undertake caring responsibilities will be eligible for a full State Pension if they have worked and paid National Insurance contributions or been a carer for 35 years. In 2021/22, the full level of the new State Pension is currently £179.60 a week (£9,339.20 a year). RELY ON THE STATE PENSION But the research finds that the majority of the public (78%) do not know how much new retirees with a full State Pension will receive. As could be expected, older people and those who are retired tend to have the highest awareness, with almost half (46%) of those aged 65 and over and two in five retirees (43%) saying they are aware how much retirees will receive from a full State Pension. However, even among these groups, many are unaware of the amount that retirees receive (54% of those 65+ and 57% of those who say they are retired). When asked if savers plan to rely on the State Pension come retirement, just over a third (36%) said that they expect to rely on it as their main source of income, especially those aged between 55 and 64 (49%). However, one in five said that they remain unsure what they will rely on in retirement (18%). ADEQUATE INCOME IN RETIREMENT Furthermore, younger people (those aged between 18 and 34) and those with other types of pension are less likely to say they will rely on the State Pension as their main source of income (26% and 31% respectively). For many people, the best way to provide an adequate income in retirement is to save gradually throughout their entire working life and save what they can a!ord. However, depending on their financial circumstances, some may prefer to save less when they are younger and more when they are older, especially if they expect to receive an inheritance before they retire. OPTIONS TO ADD TO YOUR NEST EGG Unfortunately, many of us struggle to put enough into our pension pot during our working lives because the costs of buying a house, raising a family and covering day-to-day living expenses eat into disposable income. The earlier you start retirement planning, the better. However, with the demands of managing a busy working and personal life, this is something that can understandably be neglected. But it’s never too late to think about saving for retirement – even if you are planning to give up work in just a few years’ time, you will have options to add to your nest egg.  Source data: [1] Pensions and Lifetime Savings Association (PLSA) – a total of 2,075 people took part in the nationally representative survey, carried out by Yonder Consulting. The survey took place between 25 August and 26 August 2021. A PENSION IS A LONG-TERM INVESTMENT NOT NORMALLY ACCESSIBLE UNTIL AGE 55 (57 FROM APRIL 2028 UNLESS PLAN HAS A PROTECTED PENSION AGE). 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, TAX LEGISLATION AND REGULATION WHICH ARE SUBJECT TO CHANGE IN THE FUTURE. YOU SHOULD SEEK ADVICE TO UNDERSTAND YOUR OPTIONS AT RETIREMENT. LEFT YOUR PENSION UNTIL THE LAST MOMENT? Retirement need not be at a fixed time. A growing number of people are opting to phase their retirement, whether by reducing working hours at their existing job, by moving to a new part-time job or by starting their own business. To find out more about how we can help you plan for the retirement you want, please speak to us – we look forward to hearing from you. /// Only 53% knew that retirees receive around £9,000 per year from their state pension with those aged 55 and over being more likely to identify correctly how much retirees receive (70%), compared to only 40% of those aged between 18 to 34. Published by Goldmine Media Limited Basepoint Business & Innovation Centre, 110 Butterfield Green Road, Luton, LU2 8DL. Content copyright protected by Goldmine Media Limited 2022. Unauthorised duplication or distribution is strictly forbidden.  What will the government’s proposals mean for the social care system? The government has set out its vision for the future of adult social care. New plans were announced on 7 September 2021 for adult social care reform in England. This included a lifetime cap on the amount anyone in England will need to spend on their personal care, alongside a more generous means test for local authority financial support. From October 2023, the government will introduce a new £86,000 cap on the amount anyone in England will need to spend on their personal care over their lifetime. In addition, the upper capital limit (UCL), the point at which people become eligible to receive some financial support from their local authority, will rise to £100,000 from the current £23,250. MEANS-TESTED SUPPORT As a result, people with less than £100,000 of chargeable assets will not be required to contribute more than 20% of these assets per year. The UCL of £100,000 will apply universally, irrespective of the circumstances or setting in which an individual receives care. The lower capital limit (LCL), the threshold below which people will not have to pay anything for their care from their assets, will increase to £20,000 from £14,250. To allow people receiving means-tested support to keep more of their own income, the government will unfreeze the Minimum Income Guarantee (MIG) for those receiving care in their own homes and Personal Expenses Allowance (PEA) for care home residents, so that from April this year they will both rise in line with inflation. PEOPLE IN CARE HOMES The cap will not cover the daily living costs (DLCs) for people in care homes, and people will remain responsible for their daily living costs throughout their care journey, including after they reach the cap. For simplicity, these costs will be set at a national, notional amount of £200 per week. DLCs are a notional amount to reflect that a proportion of residential care fees are not directly linked to personal care, for example, rent, food and utility bills, and would have had to be paid wherever someone lives. KEEPING INCOME AND ASSETS This is in line with the Commission on Funding of Care and Support’s 2011 recommendation. The £200 level is £30 less than a proposal set out in 2015, ensuring people get to keep more of their income and assets. At this stage, it is too early to say what the end result may be for the proposed adult social care reform in England. As the bill now moves forward to public consultation this year, we’ll be watching closely and will be providing further updates to ensure you are kept fully up to date.  GET FINANCIAL ADVICE ON HOW TO FUND YOUR LONG-TERM CARE We all want the best possible long-term care for ourselves or our loved ones. Planning for the long term can help ensure you have su"cient income to pay for any care you, or an elderly relative, might need in later life. Speak to us to find out how we can help you. ADULT SOCIAL CARE CHARGING REFORM /// From October 2023, the government will introduce a new £86,000 cap on the amount anyone in England will need to spend on their personal care over their lifetime. SOCIAL CARE