Articles

Things to do during the stay home period

By Tim Benson | 11th June 2020

As UK lockdown measures are still in force, and you may  find yourself with some available downtime during this period, it may be a worthwhile exercise to put your basic wealth planning “house in order” with the help of the simple checklist below. The list is not extensive and not all will be relevant to you, but anything you can do to put your house in order, as it were, must be a good thing.

Collate lost pensions arrangements

Are you aware of all your existing pension arrangements? Even from that short-term employment you took up many years ago? Any pension funds which you have accumulated in your working life could make a real difference to your overall pension savings when you reach retirement.

Research carried out by The Association of British Insurers in October 2018 estimates that there is nearly £20 billion held within 1.6 million pension pots with an average size of £13,000 which have been forgotten.

If you suspect that you have an old pension pot from a previous job, you are now able to track down the pension scheme’s contact details by using the ‘Pension Tracing Service’ which is a free government service on the following address:

https://www.gov.uk/find-pension-contact-details

State Pension

In 2016 the UK Government introduced the new single-tier State Pension. Under the previous system it was difficult to understand exactly what you may have been entitled to until you reached your state retirement age, however the new system is designed to make this far simpler.

The new State Pension is based on your National Insurance record, requiring an individual to have 35 qualifying years to be eligible to receive the full amount. A qualifying year can include years where you have been in full time employment, or where an individual has received National Insurance credits given to those who have caring responsibilities (i.e. those receiving Child Benefit).

The majority of individuals are unaware of how much they may be eligible to receive as their State Pension, or at what age they will qualify for it. The link below provides further information on how much you could stand to receive and at what date it could become payable. The State Pension could form a valuable part of your retirement income, so understanding your entitlement is essential.

https://www.gov.uk/check-state-pension

Charitable donations

You only have to hear the story of Captain Tom Moore, the 100 year old war veteran who has raised an enormous amount for NHS Charities Together by setting out to walk 100 lengths of his garden before he reaches 100, to realise how many people are making charitable donations during the lockdown. You may be making donations to a charity close to your heart at this time too.

If you are a UK tax payer, when you make these donations, you are usually able to elect to apply Gift Aid to these contributions meaning the charity you are donating to receives an extra 25%, at no cost to you.

In addition, if you pay tax above the basic rate, you can claim the difference between the rate you pay and basic rate on your gross donation (i.e. the donation amount after gift aid is applied). You should therefore remember to make a note of the donations you make so that you can apply for the additional relief on completion of your self-assessment tax return.

Budgeting

With all this extra time on our hands, now could be a good time to go through the rather boring (and sometimes frightening) exercise of seeing what you normally spend. This may be especially important if you are currently facing a cut in pay or income as a result of the pandemic. While in lockdown you are likely to save costs on some expenses, such as parking, petrol, train fare, coffees, eating out and entertainment.

You may also have been able to put certain monthly subscriptions on hold such as gym memberships. As such, a good start point would be to review your expenditure prior to lockdown to determine how much is available in disposable income to start a new savings arrangement, make gifts out of income to a loved one or, to your chosen charity.

Log your assets

It was all very easy in the ‘old’ days. You invested in a Savings account, got a book from the Building Society and put this in the top drawer. When it was needed, everybody knew where it was. Things, of course, have changed with so much being done online, and a lot of documentation being sent on email. This can be a good thing but will also cause issues.

Let me give you an example. A client of ours recently bought some Premium Bonds. As he already had an account, he simply went online, bought the Bonds and received an email to confirm that he was to be entered in the February Prize Draw. I wished him luck with his investment, but also suggested that he logged this somewhere, so that others would be aware of them on his death. Only then did it occur to him that he had other accounts that had solely been purchased online.

Therefore, I suggest to you what I suggested to him. Set up a brief log with all your assets, including provider, policy number and whose name it is set up under. It will help your Executors enormously when managing your Estate.

In Case of Emergency (ICE) document

Do your family members know where all your important documents are held, who your wealth manager, accountant or solicitor is, and do they have their contact details? Has one member of the family historically controlled all the family finances? Now would be a good time to put all the important information into one document, including the location of your will, and anything else you think would be relevant if something were to happen to you.

Recent articles

Pound coins

Spring Budget March 2020

By Tim Benson | 12th March 2020

Key Points for Savers & Investors Income tax Personal Allowance remains unchanged at £12,500. The threshold above which higher earners start paying 40% tax is also unchanged at £50,000. They are due to increase in line with Consumer Price Index (CPI) in future years. Pension changes Standard lifetime allowance The standard lifetime allowance for pensions…

Pre Budget comment – February 2020

By Tim Benson | 25th February 2020

Harold Wilson once stated that ‘a week is a long time in politics’, and this has been highlighted clearly recently. The first draft of this article is now in the bin, as it discussed the thoughts and expectations of the first ever Budget delivered by the Chancellor, Sajid Javid, promising an ‘infrastructure revolution’. However, after…

Personal Allowance Tax Trap

By Miles Burr | 9th January 2020

With the Budget due on 11th March and the UK having a majority Government for the first time in many years, people are starting to look at some of the anomalies in the tax system and wondering if now is a time when things may change. Whilst most people accept that paying tax is a…

We live in interesting times. But let us worry about that….

By Tim Benson | 6th September 2019

We have had a new Prime Minster for only a matter of weeks and Mr Johnson has already polarised opinion nearly as much as the topic that has been front and centre of the nation’s thoughts since David Cameron announced the Referendum back in 2016. ‘Brexit’ has become such a familiar term that it has…

Is it the start of the end for Buy to Let?

By Miles Burr | 12th April 2019

For many years investment into buy to let property has generated very good returns as the housing market has risen inexorably and this has clearly attracted many people. However, are we now beginning to see the end in sight for this type of investment? There is clearly a housing shortage and in order to help…

A chance to make a difference as the new Tax Year arrives

By Miles Burr | 12th April 2019

The new Tax Year is upon us and we have a few allowance changes to consider, not least the continued tapering of the Residence Nil Rate Band. This was introduced in 2017, honouring a key commitment in the Tory Manifesto back in 2015 to improve the opportunity of leaving the family home to your children in your will…

Timing the Market or Time in the Market

By Miles Burr | 18th February 2019

Until such time as an investment proposition is created that has all the potential performance of stock market related funds but with the downside risk of a Building Society account, we have to accept that fluctuating stock markets are part and parcel of medium to long-term investing. Whilst market downside volatility creates unease, it is…

The Modern Personal Pension

By Miles Burr | 14th February 2019

Pension Freedoms have now been with us since 2015 although it’s only more recently that many people are starting to recognise that the modern Personal Pension plan can probably describe itself as one of the most tax efficient and flexible investment plans ever! Before 2015, the traditional Personal Pension had strict requirements as to how…

Pound coins

Autumn Budget 2018 – Key Points for Savers & Investors

By Tim Benson | 20th November 2018

Autumn Budget 2018: Key Points for Savers & Investors Income tax Personal Allowance will be increased to £12,500 on 6 April 2019 for the 2019-2020 tax year. The threshold above which higher earners start paying 40% tax is being increased to £50,000. These allowances will remain the same for 2020/21 and then increase in line…

Hands linked together

The Value of Financial Advice – Independent Research that supports our work

By Tim Benson | 18th July 2018

We work closely with our clients to help them achieve their financial objectives. We have always believed in the value of good financial advice and it is encouraging when independent research supports our opinion. The International Longevity Centre recently produced some research, they are a charitable organisation focusing on some of the biggest challenges facing…

Employee Benefit Solutions Ltd. - Logo

Employee Benefit Solutions Ltd.

St. Johns House,
18 St Johns Road,
Penn,
Buckinghamshire,
HP10 8HW

T: 01494 817161
E: info@ebsfs.co.uk
W: www.ebsfs.co.uk

Personal finance society logo

Authorised and regulated by the Financial Conduct Authority.