Price Ferguson https://www.priceferguson.com/financialnews Latest Financial News Thu, 01 Nov 2018 13:52:01 +0000 en-GB hourly 1 Avoid the mad March rush https://www.priceferguson.com/financialnews/avoid-the-mad-march-rush/ https://www.priceferguson.com/financialnews/avoid-the-mad-march-rush/#comments Thu, 01 Nov 2018 13:52:01 +0000 http://www.newsfin.co.uk/news/?p=2508 Read more »]]> Get a head start on your tax planning resolutions
Although the current tax year does not end until 5 April 2019, tax planning shouldn’t be a mad

March rush. Now is the perfect time get a head start on your tax planning resolutions to enhance your own, your family’s or your company’s tax-efficient plans for the future.

We have set out some tax tips and actions that may be appropriate to certain taxpayers. Reviewing your tax affairs now will ensure that available reliefs and exemptions have been fully utilised, together with future planning which could help to reduce your tax bill.

It is important to ensure that, if you have not done so already, you take the time to carry out a review of your tax and financial affairs to identify any tax planning opportunities and take action before it’s too late. Personal circumstances differ, so if you have any questions or if there is a particular area you are interested in, please contact us.

Here are our tips to help you get ahead on managing your tax affairs in 2018/19

Pension contributions – spouses and children – consider contributing up to £2,880 towards a pension for your non-earning spouse or children. The Government will add £720 on top – for free.

Individual Savings Accounts (ISAs) – fully utilise your tax-efficient ISA allowance. The allowance for 2018/19 is £20,000 per person, whilst the Junior ISA allowance is now £4,260 for children under 18.

Capital gains – use the capital gains annual exemption of £11,700 (2018/19) to realise gains tax-free. The allowance cannot be transferred between spouses or carried forward.

Pension contributions – maximise contributions amount and tax relief. Take full advantage of increasing pension contributions by utilising the annual allowance, which is £40,000 (tapered if you earn over £150,000) or the value of your whole earnings – whichever is lower. Unused annual allowances may also be carried forward from the previous three tax years.

Remuneration strategy – if you run your own company, it’s a good idea to determine your pay and benefits strategy sooner rather than later. For 2018/19, the dividend nil-rate band is reduced from £5,000 to only £2,000 – it’s really important to consider the tax implications of your chosen approach to salary, benefits, pensions and dividends.

Gifting – you can act at any time to help reduce a potential Inheritance Tax bill when you’re no longer around. Make use of the Inheritance Tax annual exemption that allows you to give away £3,000 worth of gifts outside of your estate. If unused, the exemption can be carried forward one year.

Transfer income-producing assets – consider transferring income-producing assets between your spouse or registered civil partner in order to use the Income Tax personal allowance and lower Income Tax bands of the transferee.

Overpayment and capital loss claims – submit claims for overpaid tax and capital loss claims for the 2014/15 year before 5 April 2019, after which such claims will be time-barred.

Landlords – for 2018/19, the restriction on deductibility of mortgage interest and other finance costs doubles from 25% to 50%. If you plan to take steps to mitigate the impact (such as incorporation, for example), you may save more tax by taking those steps earlier on in the year. In future years, the restriction will apply to 75%, and then from April 2020, 100% of finance costs incurred by individual landlords.

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.

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Festive gifts https://www.priceferguson.com/financialnews/festive-gifts/ https://www.priceferguson.com/financialnews/festive-gifts/#comments Thu, 01 Nov 2018 13:51:41 +0000 http://www.newsfin.co.uk/news/?p=2506 Read more »]]> Building wealth for a solid financial future
As a parent, guardian or grandparent, you’ll want to provide the best future for your children or grandchildren that you can. Christmas is an excellent time to encourage children to start thinking about the value of money. Many children have hundreds of pounds spent on them at Christmas. But could that money be put to better use? Rather than buying yet more toys for your children or grandchildren, why not consider setting up a tax-efficient Junior ISA for them?

With today’s kids likely to need thousands of pounds to get them through university and onto the property ladder, a Christmas gift that will help with some of these expenses is well worth considering.

If the investment is allowed to grow, it could build up into a sizeable sum. The money could then be given to the child as an adult. Depending on the amount invested, the capital may be enough to cover tuition fees and possibly board and lodging as well, or a deposit for their first property.

Junior Individual Savings Account (JISAs)
A JISA is a tax-efficient children’s savings account where you can make contributions on the child’s behalf, subject to an annual limit. Any gains do not incur Capital Gains Tax and they will not be considered part of the parents’ or grandparents’ estate for Inheritance Tax purposes.
Nevertheless, the child will automatically get access to the money when they turn 18 and can choose what to do with it.

There are two types of JISA – a Cash JISA and a Stocks & Shares JISA:

Junior Cash ISAs – these are essentially the same as a bank or building society savings account. But Junior Cash ISAs come with one big advantage: your child doesn’t have to pay tax on the interest they earn on their savings, and you don’t have to either

Junior Stocks & Shares ISAs – with a Junior Stocks & Shares ISA account, you can put your child’s savings into investments like shares and bonds. Any profits you earn by trading shares or bonds are tax-efficient

A child’s parent or legal guardian must open the Junior ISA account on their behalf. Money in the account belongs to the child, but they can’t withdraw it until they turn 18, apart from in exceptional circumstances. They can, however, start managing their account on their own from age 16.
The Junior ISA limit is £4,260 for the tax year 2018/19. If more than this is put into a Junior ISA, the excess is held in a savings account in trust for the child – it cannot be returned to the donor. Parents, friends and family can all save on behalf of the child as long as the total stays under the annual limit. No tax is payable on interest or investment gains.

When the child turns 18, their account is automatically rolled over into an adult ISA. They can also choose to take the money out and spend it how they like.

Pensions
A pension is one of the greatest gifts you could give children this Christmas. Children’s pensions benefit from the same advantages as adult pensions. That means the pension fund benefits from the favorable tax treatment, in terms of tax relief on contributions along with the tax advantages of the fund.

Investment account
For tax reasons, this approach may best be suited to grandparents. A grandparent can set up a designated account for a grandchild and invest a capital sum in it. The account remains under the full control and ownership of the grandparent, with any income and gains taxed as the grandparent’s own.

When the grandparent deems appropriate, the account can be gifted or assigned to the child. Where this occurs, the grandchild is legally entitled to the money at age 18, and can use it as they see fit – which may not necessarily be for education purposes. The transfer of ownership of the monies would be treated as a Potentially Exempt Transfer (PET). The value of the gift will be outside the grandparent’s estate after seven years. Many parents and grandparents want to set up their children or grandchildren to enjoy a secure financial future. Yet paying down student debt is not necessarily the best option if they have a spare capital sum to invest. They could also consider helping their children or grandchildren to save towards a deposit for a property or start a pension for them so that they have security in later life.

THE VALUE OF INVESTMENTS AND THE INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED.

A PENSION IS A LONG-TERM INVESTMENT, WHICH IS NOT NORMALLY ACCESSIBLE UNTIL AGE 55.

LEVELS, BASES OF AND RELIEFS FROM TAXATION MAY BE SUBJECT TO CHANGE, AND THEIR VALUE DEPENDS ON THE INDIVIDUAL CIRCUMSTANCES OF THE INVESTOR.

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You have one life, so invest wisely https://www.priceferguson.com/financialnews/you-have-one-life-so-invest-wisely/ https://www.priceferguson.com/financialnews/you-have-one-life-so-invest-wisely/#comments Thu, 01 Nov 2018 13:51:24 +0000 http://www.newsfin.co.uk/news/?p=2504 Read more »]]> Identifying multiple risk profiles for multiple goals
Throughout our lives, we will have many different lifestyle and financial goals that we would like to achieve. Although we all have different goals, there are some key goals that we’ll have in common, especially when it comes to retirement.

What do you want from your investments? Supplementing your income? Building your retirement pot? It’s essential we tailor your investments to suit your goals. To understand your personal investing goals, you need to take into account all the needs and preferences that may shape your financial life.

When setting goals, you are forced to think hard about the various life aspects you care about and how much they will cost in future. This helps to put your expectations in perspective, so that you can align your savings with future requirements. It also prevents you from underestimating the amount of money you require for the future or being misled about your savings ability.

Increasing your chances of achieving your goals

The simple act of writing your goals down and sharing them with others increases your chances of achieving them. What are your objectives for the money you’re investing? Do you want to accumulate money for a longer-term goal, such as a child’s or grandchild’s university education, or perhaps a comfortable retirement for yourself?

You might even have several goals, and each of those goals may require different investment approaches to achieve them. Before you decide to invest your hard-earned money, it is important to fully understand why you are investing and what you want to achieve.

Prioritising your investment goals

Growth: how much investment growth is appropriate and realistic to accomplish your objectives and meet your needs?

Cash flow: your portfolio ideally must sustain the ability to generate sufficient cash flow throughout your retirement.

Combination of growth and cash flow: you would like your portfolio to have the necessary growth to provide consistent cash flow. As with the pure growth goal, it’s vital to understand what potential returns to expect.

Capital preservation: this aspect of goal-based investing refers to preserving the nominal value of your assets. Nominal values aren’t inflation-adjusted, and this goal may be more appropriate for shorter-term cash flow needs than for longer time horizons, as capital preservation over a long period can mean watching your purchasing power diminish.

Capital preservation and growth: these two goals are inherently at odds. Realistically, these cannot be pursued at the same time, as terrific as that may sound. Growth cannot be achieved without putting investment capital at risk. It will be necessary to segment the investment monies to nominate the required amount to be set aside with a view to capital preservation, with an amount being maintained separately for investment with a view to achieving growth potential.

Maintain or improve lifestyle: you have worked hard for your retirement and may wish to maintain or enhance your current lifestyle in your retirement years. This means growing your purchasing power over time. Ultimately, this goal requires a growth strategy that must offset the erosive effects of inflation.

Depletion, or spending every pound: although spending every pound before you die isn’t a common goal among retirees, it does exist. But as you might guess, it is a risky proposition. There is no way to accurately predict your lifespan. And should you live longer than you expect, you could run out of money sooner than you had planned.

With your goals in place, you then need to know how much risk you can tolerate. Along the way, there will inevitably be periods of ups and downs – and while the former are celebrated, the latter can be frightening, even to the most seasoned investor.

When you know exactly what the money is for, the time you have to achieve those goals and your tolerance for risk, you can construct your investment portfolio accordingly.

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Relationship breakdowns https://www.priceferguson.com/financialnews/relationship-breakdowns/ https://www.priceferguson.com/financialnews/relationship-breakdowns/#comments Thu, 01 Nov 2018 13:51:04 +0000 http://www.newsfin.co.uk/news/?p=2502 Read more »]]> A pension could well be the biggest single asset in the relationship
What is likely to be a divorcing couple’s most valuable asset? The family home will spring to most people’s minds first. But the value of a pension could well be the biggest single asset in the relationship.

When and how pensions are divided on divorce depends on the circumstances of you and your family. If your marriage has been short and both of you are in your twenties or thirties, then your pensions may not need to be divided formally at all, although their value may still be taken into account in other ways.

Central part in negotiations
If you and your partner are in your 50s, pensions are likely to play a far more central part in your negotiations or the decision a court has to make. It will be necessary to look at them within the overall context of your family finances.

New research[1] shows that a fifth of people with pensions in the UK (20%) have no idea who will inherit their pension pot when they die. Surprisingly, 17% of divorcees don’t know who stands to inherit their pension, even though this could be their ex-partner. This figure rises to 28% among people who are separated from their partner.

Update personal information
Of those who were formerly in a relationship that has since broken down, just 24% say they updated their pension policy immediately, while half (50%) said they had no idea they needed to update their personal information. A further 16% did eventually update their policy, but waited for over three months to do so, with men more likely to update a pension policy when a relationship ends. More than a quarter (28%) of men do so straight away, compared to just 20% of women. Three fifths of women (60%) don’t know they should be updating a policy, compared to 42% of men.

Co-habitees are also leaving themselves exposed, as there is no guarantee a partner would receive pension savings if they are not named as a beneficiary on the policy. Over a quarter (28%) of co-habitees are unsure who will inherit their pension if the worst were to happen.

Sorting out your pension
A relationship ending can be a really stressful time, and sorting out your pension may not be the biggest priority. However, it is important that you know who stands to inherit a pension when you die – for all you know, it could be an ex from many years ago.

Likewise, just because you and your partner live together and are in a committed relationship, there is no guarantee they’ll receive your pension savings when you die unless you make specific requirements.

Staying on top of your finances
1. Make sure you know who stands to inherit your pension pot when you die.
2. If you are co-habiting, many pension policies will require you to name that person on your policy as the beneficiary upon your death.
3. Periodically check all finances, including pension pots, bank accounts and insurance schemes, and ensure the right dependents and beneficiaries are named.

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Wealth Navigator https://www.priceferguson.com/financialnews/wealth-navigator/ https://www.priceferguson.com/financialnews/wealth-navigator/#comments Thu, 01 Nov 2018 13:50:43 +0000 http://www.newsfin.co.uk/news/?p=2500 Read more »]]> Planning the BEST route for the next generation
You have worked hard to build your wealth. Passing it on to the next generation fairly, safely, effectively and efficiently takes skill and careful preparation. But some people find the idea of discussing inheritance uncomfortable and subsequently put off estate planning until, in some instances, it may be too late to make a difference.

Seeking early professional financial advice and guidance about the options to mitigate your liability is a sensible move, and there are lots of different options to be considered depending on your individual financial and personal circumstances and preferences.

Future needs and asset review
By looking at your future needs and reviewing all your assets, including investments, property, businesses, pensions and life assurance – and by gifting and utilising investment reliefs – we can advise you how to plan the most effective way to pass on your wealth. Inheritance Tax is an unpopular and controversial tax, coming as it does at a time of loss and mourning.

But as property prices make Inheritance Tax more of a reality for many in the UK, it can impact on families with even quite modest assets – including those who have been basic-rate taxpayers all their lives. It’s important to note that Scottish law is different and applies to the estates of people who die domiciled in Scotland, which differs from the rest of the UK.

Failing to put your financial affairs in order
It can be difficult to accept that you have to pay tax on your estate – which has usually been accumulated out of taxed income – and that your heirs will not reap the full rewards of your hard work. However, many people who end up paying Inheritance Tax do so because they have failed to put their financial affairs in order in advance. If you plan proficiently, neither you nor your heirs may have to pay Inheritance Tax at all.

How much the tax bill might be
The first step in Inheritance Tax planning is to work out how much the tax bill might be. This isn’t easy, bearing in mind the ever-changing values of property and other assets, plus changing legislation. Inheritance Tax is levied at a fixed rate of 40% on all assets worth more than the £325,000 nil-rate band threshold per person.

Your tax rate may be reduced to 36% if you leave 10% or more of your estate to charity. Your estate (including any gifts made by you) can pass Inheritance Tax–free to a spouse or registered civil partner living in the UK. This can give you a joint allowance of £650,000.

Family home allowance
From 6 April 2017, a family home allowance (known as the ‘residence nil-rate band’) was added to the Inheritance Tax threshold. This is currently £125,000, increasing to £175,000 by 2020/21, and applies where a home is left to direct descendants (such as children or grandchildren) of the deceased. Like the nil-rate band, any unused portion is transferable between spouses and registered civil partners.

There are effective and legitimate ways to mitigate against the impact of Inheritance Tax. But some of the most valuable exemptions must be used seven years before your death to be fully effective, so it makes sense to consider ways to plan for Inheritance Tax sooner rather than later.

Mitigating against Inheritance Tax

Make a Will
One of the most important things you can do to help reduce the amount of Inheritance Tax you could be liable to pay is to write a Will. If you die without a Will, your estate is divided out according to a pre-set formula, and you have no say over who gets what and how much tax is payable. Dying intestate (without a Will) means that you may not be making the most of the Inheritance Tax exemption which exists if you wish your estate to pass to your spouse or registered civil partner.

If you don’t make a Will, then relatives other than your spouse or registered civil partner may be entitled to a share of your estate, and this might trigger an Inheritance Tax liability. You also need to keep your Will up-to-date. Getting married, divorced or having children are all key times to review your Will. If the changes are minor, you could add what’s called a ‘codicil’ to the original Will.

Make lifetime gifts
Gifts made to an individual or to a bare trust more than seven years before you die are free of Inheritance Tax, so it might be wise to pass on some of your wealth while you are still alive. This will reduce the value of your estate when it is assessed for Inheritance Tax purposes, and there is no limit on the sums you can pass on. You can gift as much as you wish, and this is known as a ‘potentially exempt transfer’ (PET).

If you live for seven years after making such a gift, then it will be exempt from Inheritance Tax. But should you be unfortunate enough to die within seven years, then it will still be counted as part of your estate if it is above the annual gift allowance. You need to be particularly careful if you are giving away your home to your children with conditions attached to it, or if you give it away but continue to benefit from it. This is known as a ‘gift with reservation of benefit’.

You can make certain gifts that are given favourable

Inheritance Tax treatment:

Charitable gifts made to a qualifying charity during your lifetime or in your Will
Potentially exempt transfers (PETs). If you survive for seven years after making a gift to someone, that gift is generally exempt from Inheritance Tax
You can give away up to £3,000 each year, and you can use your unused allowance from the previous year
You can make small gifts up to £250 to as many people as you like Inheritance Tax–free
Weddings and registered civil partnership gifts are exempt up to a certain amount
You can make regular gifts from surplus income after tax, but these need to be documented and lead to no reduction in standard of living for you as donor

Set up a trust
Some people who make gifts to reduce Inheritance Tax are concerned about losing control of the money. This is where trusts can help. When you set up a trust, it is a legal arrangement, and you will need to appoint ‘trustees’ who are responsible for holding and managing the assets. Trustees have a responsibility to manage the trust on behalf of, and in the best interest of, the beneficiaries in accordance with the trust terms. The terms will be set out in a legal document called the ‘trust deed’.

You need to bear in mind that there might be tax consequences if you set up a trust. The rules around trusts are complicated, so you should always obtain professional advice.

Insurance policy
If you don’t want to give away your assets while you’re still alive, another option is to take out life cover, which can pay out an amount equal to your estimated Inheritance Tax liability on death. It’s essential that the policy is written in an appropriate trust, so that it pays out outside your estate.

One option could be to purchase a whole-of-life assurance policy, designed to provide funds to the beneficiaries of your estate in the event of your death, to meet the cost of any Inheritance Tax bill payable.

Business property relief
Business property relief can be a very effective way to remove assets from your estate but still have full access to the funds if needed in the future. You can hold shares in the portfolios of certain companies; they are considered business assets and attract 100% relief from Inheritance Tax. You’ll only need to hold these shares for two years to qualify for business property relief. Qualifying companies include most of those trading on the London Stock Exchange’s Alternative Investment Market.

Investments eligible for Business Property Relief are generally considered higher-risk investments and may not be considered suitable for all types of investors. You could lose some or all of your capital.

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.

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Work pressures https://www.priceferguson.com/financialnews/work-pressures/ https://www.priceferguson.com/financialnews/work-pressures/#comments Thu, 01 Nov 2018 13:50:23 +0000 http://www.newsfin.co.uk/news/?p=2498 Read more »]]> The greatest strains on physical and mental health
There is an increasing trend for people to work for longer and delay their retirement, with some staying in work out of financial necessity. But one of the primary concerns people have about working beyond their 50s is the impact this could have on their health, or whether any health concerns might prevent them from working.

Nearly two in five (37%) workers aged above 50 – equivalent to 3.8 million people[1] – anticipate that problems with their health will be the main factor that forces them into retirement, according to new research[2].

Health and well-being problems
Though the number of workers in this age bracket has risen by more than one million people in the past five years[3], the findings suggest the longevity of this trend is at risk, with many indicating that health and well-being problems are caused or aggravated by the workplace itself.
Work pressures are described by those surveyed as one of the greatest strains on their physical and mental health (21%), alongside money issues (35%) – which are also often linked to working life – and pre-existing medical conditions (24%).

Achieving fuller working lives
Worryingly, more than half (53%) of workers aged over 50 do not feel supported by their employer when it comes to their well-being – a feeling which is much less prevalent among younger colleagues (falling to 34% of workers aged 16–49). As an indication of the type of support employees need to achieve fuller working lives, one in five (21%) agree employers should offer workshops or seminars on health and well-being in later life.
The research also reveals improved health and well-being in the workplace could be achieved by encouraging employees to reassess their priorities, as almost two in five (37%) over-50s workers admit they often put their job above their health and well-being.

The two biggest health challenges
While few people say they do not feel confident about their long-term career plans (27%), 38% are not confident about long-term plans for their health. Greater communication is also needed, as more than a quarter (27%) of those surveyed do not feel comfortable telling their employer about any health issues they face as they grow older.

While the onus is partly on employers to do more to promote health and well-being within the workplace, employees also have a role to play. The two biggest health challenges among employees in the 50-plus age group – weight and diet (24%) and physical fitness (18%) – are both issues that individuals can take steps to improve through lifestyle changes.

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Inflation matters https://www.priceferguson.com/financialnews/inflation-matters/ https://www.priceferguson.com/financialnews/inflation-matters/#comments Thu, 01 Nov 2018 13:50:03 +0000 http://www.newsfin.co.uk/news/?p=2496 Read more »]]> Impact of rising prices on investments
A pound saved is a pound earned. But thanks to inflation, over time, the value of the pound saved could be much less than when it was earned. One cannot ignore the corrosive impact of rising prices on investments.

Investors can easily fail to prepare for the risk of inflation eroding the purchasing power of money, especially in a low-inflation environment. Therefore, it is wise for portfolios to include assets that help offset the effects of inflation.

Maintain the purchasing power over time
After two years when consumer prices in the UK barely rose, there are signs that inflation may be about to return. If it does, how should you prepare? To help maintain the purchasing power over time, your savings need to grow at least as quickly as prices are rising.

The Bank of England forecasts that consumer price inflation will remain above 2% in each year until 2021. While nowhere close to historic highs, higher inflation stands in contrast to near-record-low interest rates offered on cash savings. Higher inflation represents a hike in the cost of everyday living – and the higher it rises, the less your cash will be ultimately worth.

Biggest enemy of cash savers
Keeping enough cash aside to cover any foreseeable costs you might face is always sensible (typically three to six months of your monthly outgoings). However, relying solely or overly on cash might prevent you from achieving your long-term financial goals, which may only be possible if you accept some level of investment risk.

Worse, in an environment where the cost of living is rising faster than the interest rates on cash, there is a danger that your savings will slowly become worth less and less, leaving you worse off down the road.

Seeking higher investment returns
If you are prepared to take on some investment risk, you could look at investing in a bond fund to look for higher returns. Bond funds invest in a basket of IOUs issued by governments and/or companies looking to raise cash. When someone invests in a bond, they are essentially lending the bond issuer their money for a fixed period of time.

Investor income rising in line with inflation
Protection against this threat is offered by inflation-linked bonds, whose coupons and principal will track prices. By linking coupons to prices, the income that investors receive will rise in line with inflation, so they should be left no worse off – unless, of course, the bond issuer fails to keep up with repayments (an unavoidable risk for bond investors).

If prices fall, however, so would the value of inflation-linked bonds and the income from them – in contrast to bonds whose principal and coupons are fixed and which would therefore be worth more in real terms. If inflation falls, protection from it rising can therefore come at a price.

Protection during inflationary periods
To beat rising prices, the total returns from any investment – being the combination of capital growth and any income – must be greater than the rate of inflation. As a result, company earnings may have the potential to keep up with inflation, all things being constant, but there can be no guarantee of this – some companies may fail in inflationary times.

However, company shares (or ‘equities’) do potentially offer long-term investors a degree of protection during inflationary periods. Ultimately, shares are claims to the ownership of real assets, such as land or factories, which should appreciate in value if overall prices increase.

income stream as well as capital growth
Equity returns, in theory, should therefore be inflation-neutral, so long as companies can pass on any higher costs they face and maintain their profitability. In turn, a company’s ability to make money will typically be reflected in its share price and its ability to provide investors with an income in the form of a dividend.

Opting for a fund which invests in a wide spread of stocks is less risky than putting your money into just a handful of shares.

Higher inflation squeezes purchasing power
These vehicles invest in the shares of dividend-paying firms, or companies that tend to share their profits with their shareholders, and investors can opt to either take the income or instead re-invest it. It is vital to understand that dividends are not guaranteed: they depend on companies’ profits, and those companies can decide to cut or cancel their payouts altogether – all of which can also cause share prices to fall.

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Protecting your identity https://www.priceferguson.com/financialnews/protecting-your-identity/ https://www.priceferguson.com/financialnews/protecting-your-identity/#comments Thu, 01 Nov 2018 13:49:39 +0000 http://www.newsfin.co.uk/news/?p=2494 Read more »]]> Common ways fraudsters can steal your personal information
As individuals, throughout our lifetime we exchange personal information with a vast number of institutions including banks, credit card suppliers, utility companies, supermarkets, government organisations and retailers. This may be to receive important services, but also to allow us to do the fun things like shopping, eating out or going on holiday.

Fraudulent or stolen identities being used to make false applications for credit cards or loans, to obtain goods and services, or even to access money or other assets is naturally something that concerns us all. Worryingly, it is not untypical for a victim to first become aware of this when they receive a letter of demand for payment.

Of course, there are a number of basic things we can all do as individuals to protect ourselves against identity crime and reduce the risk of our personal information falling into the wrong hands. If you discover your identity has been stolen, act immediately. Following these steps will help to minimise the impact and prevent additional issues from arising.

1. Check your credit reports
At a small cost, you can check your credit file with a credit reference agency such as Call Credit, Equifax or Experian to help identify any activity that you are not aware of.

2. Monitor your mail
Make sure you receive all post that you are expecting. If you think post is missing, contact the Royal Mail. Also, arrange for the Royal Mail to re-direct post to your new address if you have moved house, and inform companies that you deal with regularly that you have moved.

3. Review bills and bank statements
Check bank, credit card and other financial statements frequently, and look out for transactions that you do not recognise. Check for fraudulent charges or suspicious activity. Report issues immediately. Consider receiving statements and bills electronically, setting up direct deposits, and using online bill pay.

4. Identity theft protection
Identity theft protection providers monitor your credit reports, as well as online debit and credit card number(s). If suspicious activity is detected, you will be notified and will receive identity recovery assistance.

5. Shred documents
Carefully dispose of documentation that contains personal details rather than just throwing them away. Use a cross-cut shredder to destroy envelopes and documents.

6. Secure your computer(s) and mobile devices
Whether a desktop, laptop, netbook, tablet or smartphone, your computer contains critical personal information.

To help protect your electronic devices, you should also:
Password-protect your device
Install and update operating system, antivirus and anti-spyware software. For smartphones, also install a ‘wiping’ program to erase all data remotely if it is lost or stolen
Use a personal firewall
When using a wireless network, activate WPA encryption and any other security features available. Change your router’s default password and SSID
Beware of ‘smishing’ – text messages containing links capable of downloading malware to your smartphone
Do not leave your device unattended or your screen visible to others
Close your browser when you’re finished with a secure session
Log off when you leave or step away

Use caution online
Only access personal and financial information from a computer you ‘trust’
Only do business with financial institutions and online merchants you know and trust. Watch out for copycat sites, and confirm the email address is correct
When accessing financial information or ordering online, be sure the site is secure. Look for a URL that begins with ‘https://’ and the ‘closed padlock’ symbol
Never reply to an email or pop-up message that requests you provide or update your personal information

On social media sites, it’s always a good idea to:
Review the privacy policy
Choose a challenging password
Don’t reveal your physical address, date of birth, school names or phone numbers
Use privacy settings

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Generational finances https://www.priceferguson.com/financialnews/generational-finances/ https://www.priceferguson.com/financialnews/generational-finances/#comments Thu, 01 Nov 2018 13:49:17 +0000 http://www.newsfin.co.uk/news/?p=2492 Read more »]]> Job prospects, savings, safety nets and life expectancy
Rising housing costs, soaring student debt and low wage inflation have left many millennials with stretched budgets. They may get regularly mocked as Generation Snowflake obsessed with spending on luxuries, but new research[1] shows they are focused on saving for retirement and want more support.

We know how the generational finance argument goes. Older Brits are hanging on to all the cash, property and pension deals. Younger Brits are discouraged by student loan hangovers and house prices and are avoiding the need to save for anything at all. With retirement a lifetime away, they are blowing any extra cash at the bar.

Unfair representation
But this is an unfair representation of the majority of millennials. The study found nearly seven out of ten (69%) of under-35s are saving into pensions either through work or in personal schemes, but they are struggling for help.

Over half (53%) wish their employer would explain pensions and benefits, and nearly a quarter (24%) say they find pension rules very confusing.

Success of auto-enrolment
Two thirds (66%) have signed up for workplace schemes, underlining the success of auto-enrolment. However, many recognise they are not saving enough, with 23% saying their current workplace or personal pension contribution is not high enough.
Just 24% admit to not having a pension fund currently, and 27% say pensions either do not motivate them or are not relevant to their generation.

Responsible attitude to retirement
It all adds up to a responsible attitude to retirement planning from millennials – over a quarter (26%) have found out more about their financial options and current situation, and say they see a financial adviser regularly.

Millennials are often under a lot of pressure to get on the housing ladder and pay off their student loans at the same time as trying to prioritise pension savings. Rules can be confusing, especially when you are early into your career, which is why we advise most savers to seek financial advice when possible. Employers can help to ensure they provide information and support around their workplace scheme.

Pension rules and the options available
Over a third (37%) of millennials believe that they are saving as much as they can but still don’t think it is enough for a comfortable retirement. An additional 16% don’t think they are ever going to be able to afford to retire.

However, millennial attitudes to retirement could stem from them not knowing enough about pension rules and the options they have available. Over two fifths (23%) admit that they do not know if they are on target for retirement saving, and a further 28% do not feel confident with money and financial matters.

Source data:
[1] Consumer Intelligence conducted an independent online survey for Prudential between 20–21 June 2018 among 1,178 UK adults

A PENSION IS A LONG-TERM INVESTMENT.

THE FUND VALUE MAY FLUCTUATE AND CAN GO DOWN, WHICH WOULD HAVE AN IMPACT ON THE LEVEL OF PENSION BENEFITS AVAILABLE.

PENSIONS ARE NOT NORMALLY ACCESSIBLE UNTIL AGE 55. YOUR PENSION INCOME COULD ALSO BE AFFECTED BY 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.

THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED.

YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

ACCESSING PENSION BENEFITS EARLY MAY IMPACT ON LEVELS OF RETIREMENT INCOME AND IS NOT SUITABLE FOR EVERYONE. YOU SHOULD SEEK ADVICE TO UNDERSTAND YOUR OPTIONS AT RETIREMENT.

TAX TREATMENT DEPENDS ON INDIVIDUAL CIRCUMSTANCES AND MAY BE SUBJECT TO CHANGE IN THE FUTURE.

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Self-employed finances https://www.priceferguson.com/financialnews/self-employed-finances/ https://www.priceferguson.com/financialnews/self-employed-finances/#comments Thu, 01 Nov 2018 13:48:55 +0000 http://www.newsfin.co.uk/news/?p=2490 Read more »]]> Looming pension saving crisis on the horizon
The number of people running their own businesses has soared since the financial crisis, with a significant number being set up by someone aged over 50. But an unhealthy number of self-employed workers in the UK do not currently save into a pension.

New research[1] has highlighted that self-employed workers are heading towards a pension saving crisis as they cannot afford to save for their retirement. Starting your own business and becoming self-employed is exciting. But being your own boss can have some challenges – saving for retirement is certainly one of them.

The nationwide study found that more than two fifths (43%) of those working for themselves admit they do not have a pension, compared to just 4% of those in employment. A key reason is that 36% of the self-employed say they cannot afford to save for retirement.

Less comfortable retirement
Self-employed workers now make up 15.1% of the UK workforce, with more than 4.8 million people working for themselves[2], but the research found they are heading for a less comfortable retirement, with many not planning to stop work.

Around one in three (31%) say they will be relying entirely on the State Pension worth around £8,545 a year to fund their retirement, while 28% will be reliant on their business to provide the income they need.

Day-to-day emergencies
Self-employed workers are savers, but the research found they are more focused on day-to-day emergencies than the long term of retirement. Two thirds (64%) of the self-employed save to build up a safety net in case of an emergency, in comparison with 57% of those in employment.
Just one in ten self-employed people see a financial adviser regularly, despite having potentially more complex requirements than someone in employment. One in five (19%) are not confident with money and financial matters, while a quarter (24%) worry that they do not know enough about money.

Pensions for the self-employed
All this adds up to an education gap when it comes to the importance of pensions for the self-employed, as 20% admit they do not take pension saving seriously as they do not think it applies to them.

Saving for retirement is tougher when you are self-employed, as there is no one to organise a pension for you and no employer making contributions on your behalf. On top of that, self-employed workers often don’t have a regular income, so many will focus on setting aside money as a safety net if they cannot work.

Funding a comfortable retirement
Saving for a pension is still important, as no one wants to work forever. And no matter what your employment status, having money to fund your retirement is essential, as the State Pension is unlikely to be enough to fund a comfortable retirement.

If you leave an employer and become self-employed, you should continue to pay in to your workplace pension if possible. Some workplace pension schemes allow you to carry on saving once you have left your employer and become self-employed.

Source data:
[1] Consumer Intelligence conducted an independent online survey for Prudential between 20–21 June 2018 among 1,178 UK adults
[2] https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/articles/trendsinselfemploymentintheuk/2018-02-07

A PENSION IS A LONG-TERM INVESTMENT.

THE FUND VALUE MAY FLUCTUATE AND CAN GO DOWN, WHICH WOULD HAVE AN IMPACT ON THE LEVEL OF PENSION BENEFITS AVAILABLE.

PENSIONS ARE NOT NORMALLY ACCESSIBLE UNTIL AGE 55. YOUR PENSION INCOME COULD ALSO BE AFFECTED BY 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.

THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED.

YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

ACCESSING PENSION BENEFITS EARLY MAY IMPACT ON LEVELS OF RETIREMENT INCOME AND IS NOT SUITABLE FOR EVERYONE. YOU SHOULD SEEK ADVICE TO UNDERSTAND YOUR OPTIONS AT RETIREMENT.

TAX TREATMENT DEPENDS ON INDIVIDUAL CIRCUMSTANCES AND MAY BE SUBJECT TO CHANGE IN THE FUTURE

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