Why planning for the unexpected is important in retirement

During your working years, you may have actively planned for the unexpected. Perhaps you set aside some of your income each month to cover emergencies or took out a protection product to act as a safety net. However, some find as they enter retirement these good habits fall to the wayside, but it’s still important to continue to plan for the unexpected.

It’s easy to see why some retirees don’t have a plan. As you approach retirement, you hopefully thought very carefully about your plan for life after work, from how you’ll take an income to what your goals are. It’s true that life in retirement is often more settled and you may want it to follow the path you’ve already set out. But it’s still worthwhile having a plan B and some form of buffer in place.

If you need some reasons why planning for the unexpected is still important, here are five.

1. Unexpected events can still occur

Even the best-laid plans can go off course. Your retirement life may be less hectic and less likely to be influenced by outside factors when you compare it to your working life, but the fact is, unexpected events can and do still happen.

Do you know how your lifestyle would be affected if your investments were to underperform? Or whether you have access to liquid assets to cover essential house repairs if needed? Planning for the unexpected, even in retirement, can help give you peace of mind.

Not all unexpected events should be viewed negatively either. You may find that you have more disposable income than planned in retirement following an inheritance, for example.

2. Your aspirations may change

While your financial plan may have been the best option when you entered retirement, is it still? Over the years, your aspirations and goals may have changed. It can lead to some unexpected outgoings and a need to adjust the decisions you’d made.

For some retirees, the shift in focus can be unexpected in itself. Realising what this means for your finances can be challenging. Planning how changes may impact your income when you reach retirement can help give you the certainty you need to follow the path to the retirement that you want now and in the future.

3. Financial risks may still be present

How much financial risk you’re exposed to will depend on the retirement choices you made. If, for example, you used your pension savings to purchase an Annuity, you’ll be less exposed. However, if you opted to use Flexi-Access Drawdown, where your pension usually remains invested, or rely on an investment portfolio to deliver an income, it’s wise to prepare for the value of your savings fluctuating.

Over the long term, investments typically deliver better returns than alternatives such as cash. However, it does mean that your savings, and in some cases your income, will be affected by short-term volatility. If your pension decreased, could you still afford to pay for essentials and the luxuries to maintain your lifestyle?

4. You may want to offer support to loved ones

While an unexpected event may not happen to you, it’s likely your loved ones will experience one at some point. Parents and grandparents are increasingly using their retirement income to provide financial support to the younger generation. If your loved ones faced an unexpected bill or were not able to work for an extended period of time, would you be in a position to help? Having reserves can help safeguard both your future and that of those you care about.

5. The potential need for care

Rising life expectancy means more of us need some form of care as we reach our later years. For many, the burden of meeting care costs will fall to them. It’s an outgoing that can cost tens of thousands of pounds each year. If it’s not something you’ve anticipated, it can place you under financial pressure. It could mean that some of your aims are now out of reach and increase stress.

Of course, there’s often a lot of uncertainty when determining if you may need care in the future. As a result, it’s also wise to have a plan for what you’d like to happen to the money set aside for care costs if you don’t need to use it.

How does financial planning help safeguard against the unexpected?

Financial planning helps you understand your finances in relation to your aspirations and goals. It’ll help you see the steps you can take to maximise your wealth and get the most out of it, with your lifestyle in mind. However, to be effective, it also needs to look at the unexpected.

Financial planning can help you visualise how your finances may change, and, as a result, how your lifestyle would be affected should something unexpected occur. Cashflow planning can help give you a visual representation of how your money and ability to achieve goals would change. For example, if you’re worried about how your partner would cope financially should you pass away, financial planning can demonstrate the impact it will have. This puts you in a position to plan for events that are outside of your control using relevant data and information to create an accurate picture as possible.

If you’d like to discuss your retirement, please get in touch. We can help you understand how your current retirement plan protects your future, including those unexpected events.

Please note: 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. Your pension income could also be affected by the interest rates at the time you take your benefits.

What should you consider when weighing up your investment risk profile?

One of the key decisions you need to make when investing is how much investment risk you want to take.

Weighing up the level of risk you’re willing to be exposed to can be challenging. It’s often one that’s ruled by emotions and your personal attitude to risk. While these factors should play a role, they aren’t the only areas you should be considering. Whether you’re reviewing your pension or building a personal investment portfolio, balancing risk is a crucial part of the process.

If it’s a step you’re taking, keeping these six points in mind can help.

1. Investment goals

Your investment goals should be at the centre of any decision you make. If your goal is to ensure your savings keep pace with inflation, for example, you may be able to achieve this with a relatively low-risk profile. If, on the other hand, you want to grow your money as much as possible, taking a greater amount of risk could help you achieve your aims.

As a general rule of thumb, the greater the level of risk an investment poses the higher the potential return. However, you do, of course, have a greater risk that your investment will decrease in value.

Your motivation for investing will undoubtedly have an impact too. If you’re investing to help pay for your child or grandchild’s education, you might want to take a more cautious approach. In contrast, if investment returns will be used to fund luxuries in retirement, taking on more risk may be appealing.

2. Investment timeframe

How long will your money be invested for? This is a factor that is likely to be linked directly to your investment goals, and it should also influence the level of risk you’re willing to take.

Stock markets do fluctuate. However, when you look at the long-term trend, investments have risen at a pace above inflation. Ultimately, the more risk you take on, the more volatility you should typically expect. So, if you’re investing for a short period of time, a more cautious approach might be advisable. However, if you’re looking to invest for a longer period, you’re in a better position to overcome the dips.

Generally, you should look to invest for a minimum of five years.

3. Capacity for loss

When you think about the money you want to invest, what would happen if it decreased in value or you lost it? Your capacity for loss should play a crucial role in deciding how much investment risk you want to take.

Clearly, if you’re in a position where you have enough disposable income to invest and don’t have to worry about the immediate impact volatility might have on your lifestyle, you’re likely to be in a better position to take more risk.

4. Diversify

The saying ‘don’t put all your eggs in one basket’ certainly applies to investing. Diversifying your portfolio can be important. As a result, taking a look at the existing investments you hold should inform your decision.

Diversifying gives you an opportunity to create a balance that suits you. If you hold potentially high-risk global equities, for example, you may choose to partially invest in bonds that are usually deemed lower risk. This might offer more stable growth, that could help to offset stock market uncertainty.

If you’d like help reviewing your current investment portfolio to understand how to diversify, please contact us.

5. Other assets

On top of your existing investments, take some time to look at your other assets. From savings accounts to your home, understanding your wider financial position can help you see whether investing is the right option for you and, if it is, the level of risk that’s appropriate.

If your finances and lifestyle are relatively secure, you may find that you’re in a better position to take greater investment risk. However, if your comfort would be affected should investment values fall, or you want to withdraw your money in the short term, taking a more cautious approach or an alternative route entirely may serve you better.

Remember that investing isn’t your only option. Depending on your circumstances and goals, you may find that alternatives, such as using a Cash ISA (Individual Savings Account), is more appropriate for your needs.

6. General attitude

While thinking about how much you can afford to invest and what your other assets are, consider your general attitude to risk. Some of us are more inclined to take a large risk for the chance of a larger reward at the end. Others will prefer a more cautious approach to life and their finances.

You need to feel comfortable and confident in your investment decisions, including the level of risk you’re exposed to. Your risk profile should reflect both your situation and your goals.

If you’d like help to understand risk profiles and the options open to you, please get in touch. We’re here to help you weigh up the pros and cons of taking investment risk and what it could mean for your finances.

Please note: The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

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Matching saving goals with products crucial for maximising returns

As interest rates remain low and the cost of living continues to rise, it’s important to get the most out of your savings. While many of us are diligently saving and have saving goals, if you haven’t chosen the right product with your goals and needs in mind, you could be missing out.

Despite figures from the Office of National Statistics (ONS) indicating that saving is a habit that’s falling out of fashion, a new survey suggests the average saver does build up their fund annually. The ONS figures found that the average UK household spent or invested around £900 more than they received in income in 2017, amounting to almost £25 billion. It marked the first-time annual outgoings outstripped income since 1988.

But a survey conducted by Charter Savings Bank suggests that, on the whole, people end the year with more than they started with; even when they raid savings.

On average, savers put away £2,906 but withdraw £924 of this for a range of purposes. While the figures signal a positive trend in saving, it also highlights why choosing the right saving product is important. One in eight savers raid their account every month and two-thirds make a withdrawal from their saving accounts at some point during the year.

  • On average, savers estimate they withdraw about a third of their savings
  • But 21% admit to taking out at least half of the total
  • Just 9% never touch their savings

The reasons for using money stashed away varied:

  • Purchasing big ticket items (30%)
  • Covering unexpected bills (27%)
  • For an emergency (25%)
  • Running out of money at the end of the month (12%)
  • Reaching their saving goal (6%)

For the most part, using your savings isn’t necessarily ‘bad’. After all, you may have been saving to cover unexpected bills or pay for a holiday in the first place. But it does highlight the need to think about where you save. An emergency fund that needs to be readily accessible should be held in a different product to a fund you’re building up to travel the world when you reach retirement age. Choosing the wrong product could mean you’re missing out on valuable incentives and interest.

Some accounts, including regular saving accounts, for example, may cut the interest you receive if you dip into your savings. As a result, separating your finances and holding multiple saving pots can be more efficient. It’s a move that can help you reach your goals too.

The way that you save should be tailored to your goals and the timeframe you plan to achieve them. While every savings strategy should be tailored, they can be broken down into four broad areas.

Emergency fund: An emergency fund should be built-up to help you cover the unexpected, from an unanticipated bill to a loss of income. Ideally, this should be between three and six times your monthly expenditure. This money should be in an account that is readily accessible should you need it. As a result, it’s unlikely to benefit from competitive interest rates.

Short-term savings: Covering expenses that you’re saving for in the short term, such as a city break or home furnishings, a short-term savings account is likely to need to be easily accessible. As with an emergency fund, interest rates are likely to be relatively low.

Medium-term savings: If you’re not going to need to use the money in the near future, you may want to consider using a fixed rate account. You won’t be able to access your money for a defined period of time, but the interest rates are higher as a result. If you’ll be contributing to your savings regularly, a regular savings account can also be beneficial.

Long-term savings: If you’re investing for the long term, you’ll have access to the more competitive interest rates. One place to start looking is ISAs (Individual Savings Accounts), as they are tax efficient. You can deposit up to £20,000 a year into an ISA. As you’re planning for the future, you’re in a position to lock money away for a longer period of time, boosting the rates you can choose from too.

Should you consider investing?

While savings are an important part of every financial plan, it’s just as important to look at other options too. If you’re at the point where you have a comfortable safety net built up in cash reserves, it may be time to consider investing.

With interest rates still low for most accounts, cash savings may actually be losing value in real terms. This is because inflation is higher than the returns interest rates are generating. Investing in stocks, shares and investment funds can offer an alternative that allows you to outpace inflation, albeit with added risk. Investing isn’t the right choice in all circumstances but it’s an area that’s worth thinking about once you have a good level of savings.

If you’d like support organising your finances, including savings and investments, please get in touch. We take the time to understand what your aspirations are and how your money can help you achieve these, picking out the right financial products for you.

Please note: The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

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Do you know your State Pension age?

Retiring is a milestone many of us look forward to as it draws near. The prospect of leaving the world of work behind and having more free time to dedicate to the things you enjoy is certainly appealing. But research suggests that many of those approaching retirement don’t know when they can expect to receive their State Pension, putting their financial security and plans at risk. Do you know your State Pension age?

The State Pension age has gradually been increasing for women over the last few years and it’s now increasing for all. Yet research commissioned by Age UK, suggests that many of those approaching retirement aren’t aware of the changes. The poll found:

  • One in four people aged between 50 and 64 don’t know when they can claim their State Pension
  • Almost a fifth found their State Pension age was higher than expected
  • Three in ten people have never checked their State Pension age

Caroline Abrahams, Charity Director at Age UK, said: “Clearly, there is still much confusion about the age at which people can expect to receive their State Pension and our worry is that many who have few resources to fall back on are in for a nasty shock.”

While you can choose to retire before collecting your State Pension, it’s important to understand the level of income you can expect to receive and how it will change over time. As a result, knowing your State Pension age and how much you’re entitled to should be considered a priority.

The State Pension has changed a lot in recent years.

In 2010, the State Pension age was 65 for men and 60 for women. However, women’s State Pension age has gradually been increasing and in November 2018 equalised with men. Gradual increases mean that by October 2020, both men and women will need to be 66 before they’re entitled to the State Pension. Further plans mean it’s expected to reach 67 in the next decade. As life expectancy rises, it’s likely that further increases to the State Pension age are on the horizon.

There have also been changes to the State Pension itself. The new State Pension system affects those reaching State Pension age on or after 6 April 2016. The amount you receive under the new system is dependent on the number of National Insurance (NI) credits you have.

Checking your State Pension

Luckily, it’s relatively simple to check your State Pension.

The government’s calculator lets you check when you’ll reach State Pension age and your Pension Credit to calculate your income. You can find the tool here.

There have been several news stories recently that have highlighted the importance of understanding your State Pension.

Women born in the 1950s have been affected by the equalising of the State Pension, leaving some struggling financially as they were unprepared or uninformed of the changes. It’s led to a campaign group representing women affected urging the government to give women born in the 1950s the State Pension they would have received if the changes had not occurred. It’s a situation that’s currently under judicial review following a High Court ruling.

You may also have heard of parents having less NI credits than expected due to not applying for Child Benefit when they were taking time off work or working reduced hours to raise children. To maintain a NI record when bringing up children, parents must apply for Child Benefit, even if they know they’re not eligible to receive it.  It means some parents could receive less State Pension than anticipated.

As a result, keeping track of your State Pension age and projected income is crucial for effectively planning your retirement.

Why your State Pension age is important

Even when you’ve made other retirement provisions, your State Pension age is crucial.

For many, the State Pension offers a foundation to build your retirement income on. It can provide a base level of income and security as you enter retirement. Your State Pension is likely to be an important part of your financial plan as you give up work, whether you want to wait until your State Pension age, retire early, or even continue to work. It’s a factor that should inform the decision you make about other income streams and your overall retirement aspirations.

If you’d like to discuss how your State Pension age affects your retirement plans, please contact us. We’ll help you put your projected State Pension income into the context of your wider retirement goals and other provisions you’ve made.

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Pension cold calling ban: What does it mean for scams?

The long-awaited pension cold calling ban came into effect on the 9th January 2019. In a bid to protect pensioners being targeted by fraudsters, the ban has now been approved into law. It’s a move that should help the Financial Conduct Authority (FCA) and other organisations reduce pension fraud.

Previous figures released by the FCA and The Pensions Regulator (TPR) have shown how devastating pension scams can be. On average, victims lost £91,000 in 2017. It’s a significant sum that could have a long-lasting effect on retirement plans, as well as causing stress.

Pensioners and those approaching retirement are often targeted by scammers through unsolicited contact. In fact, Citizens Advice previously suggested 97% of scam cases about pension unlocking services stemmed from cold calls.

Attempting to entice pension savers, scammers will often offer ‘a free pension review’, the ability to unlock a pension early or suggest investments that are ‘high return, low risk’. These suggestions should be a red flag. However, a poll found almost a third of those aged 45 to 65 wouldn’t know how to check if they’re speaking to a legitimate pension adviser or provider. 12% would also trust an offer of a ‘free pension review’.

Highlighting the scale of the problem, TPR recently revealed it’s investigating six people for pension fraud. It’s believed around 370 people have been persuaded to transfer around £18 million.

An attractive target for criminals

It’s easy to see why criminals are targeting pensions. Some savers may find pensions complex, meaning they’re far more likely to be duped into giving away their pension or personal details. On top of this, a pension is often one of the largest sums of money people have saved over their working life, and many don’t regularly check it. As a result, it’s thought many pension scams go unreported.

This, combined with the way criminals target pensions, has led to increasing calls for pension cold calling to be banned. After delays, it’s a step that’s now been taken. So, what does this mean for you?

Firstly, it does offer you more protection. You know that if you’re receiving a cold call from someone wanting to talk about your pension, you should hang up. Reputable providers and advisers that you want to work with will take note of the ban and cut out this form of contact if they’ve been using it previously.

But that doesn’t mean you should let your guard down. A ban on cold calling doesn’t mean fraudsters will stop using this tactic if it continues to work. Awareness of the ban and giving pension holders the confidence to step back from unsolicited contact is crucial. There are also loopholes that criminals will try to exploit to pose as genuine advisers and providers.

  1. Calling from abroad: The cold calling ban only applies to UK phone numbers. As a result, it’s thought that fraudsters will call from abroad, allowing them to navigate around the ban.
  2. Contact via email and text: The new legislation only covers calls, not unsolicited contact via email or text. While this is an area that’s covered to some degree by EU regulations, it’s still something to be cautious of.

Six steps to prevent pension scams

The risk of being targeted by scammers wanting to get their hands on your pension is still very real. These six steps can help you reduce the risk.

  1. Understand your pension: The more you understand about your pension, the better the position you’re in to safeguard it. For instance, scammers may suggest they can help you access your pension before the age of 55. However, this is only possible in very rare circumstances and should be done by contacting your pension provider directly.
  2. Don’t make any quick decisions: Pension decisions can affect your income and financial security for the rest of your life. As a result, you should take your time. Reputable professionals will understand this, while criminals will try to pressure you into making a snap decision.
  3. Be cautious of all unsolicited contact: While the cold calling ban does offer some protection, you may still be targeted by unsolicited contact. Be cautious when responding to any type of communication you’re not expecting.
  4. Check the authenticity of who you’re speaking to: The FCA Register offers a simple, effective way to check if you’re speaking to a regulated person or company. Be aware that criminals may use the genuine details of an adviser or firm. So, if you’d like to talk to a professional, call them directly using the details listed on the register.
  5. Ask questions: Scammers rely on you taking them at their word. Asking questions can help you uncover the lies they’re telling. From investment risk to legislation, genuine providers will be happy to answer your questions, understanding that any pension decision is a big one.
  6. Be realistic: The golden rule ‘if it sounds too good to be true, it probably is’, certainly applies to pensions. There’s no simple way to significantly boost your pension savings or access it early. If there were, more people would be doing it.

If you’d like to discuss your pension, whether you think you’ve been targeted by scammers or not, please get in touch. We’re here to help you understand what your pension options are.

Please note: 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. Your pension income could also be affected by the interest rates at the time you take your benefits.

scottish budget 2018 autumn budget

Scottish Budget 2018: Were you a winner or a loser?

Scottish Budget 2018: Winners and Losers

Against a backdrop of Brexit uncertainty, Derek Mackay, Finance Secretary of Scotland, delivered his draft budget.

It’s perhaps unsurprising that Brexit and the potential effects featured heavily in the Budget speech, with the Finance Secretary declaring that ‘any kind of Brexit will make us poorer. He then added: “This Budget delivers for the Scotland of today, and invests for the Scotland of tomorrow.”

In what was a relatively quiet Budget for personal finance, will you be better or worse off?


Low earners

Building on the Income Tax changes that were made during February’s Budget, tax rates will remain the same for 2019/20. The starter and basic rate bands will increase in line with inflation, maintaining spending power.

Public sector workers

Many public sector workers will benefit from a pay rise, following years of a 1% pay cap. For 2019/20, public sector employees earning £36,500 or less, a pay policy with a 3% rise will be welcomed. For public sector workers earning between £36,500 and £80,000, the pay increases will be capped at 2%, while those earning more than £80,000 will be capped at 1%.

Business owners

Whilst business rates will be increasing by 2.1%, it is below inflation, cushioning the blow somewhat. The very positive news for some, however, is that the Small Business Bonus Scheme which provides business rate relief is being maintained through the next financial year.


High earners

Where low earners benefit from Income Tax changes, the higher rate threshold has been frozen at £44,274. This is unlike in the rest of the UK, where it will increase to £50,000 in April 2019. The move aims to raise an extra £68 million revenue.

Council tax payers

Those responsible for paying council tax could see their bill increase in the new financial year. Local authorities will be allowed to increase council tax levels by a maximum of 3%.

Second home and Buy to Let

Those looking at buying a second home or investing in a buy to let property will face a higher Land and Buildings Transaction Tax. The tax will increase by 1%, taking it to 4%.


Do you want to discuss how you’ve been affected by the Budget? If you have any questions or just want to get an understanding of what the changes mean for you, please get in touch with us.

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Scottish Budget 2018: Everything you need to know

Scottish budget 2018: As Brexit and economic uncertainty continues, Scottish Finance Secretary Derek Mackay set out the tax and spending agenda for the year ahead at Holyrood on Wednesday 12th December.

Beginning his delivery, Mackay outlined a vision of building a ‘strong and stable’ government that would ‘safeguard’ Scotland during the Brexit process. While Chancellor Phillip Hammond declared that austerity was coming to an end just months ago in the Autumn Budget, Mackay stated this wasn’t the case and the price Scotland was paying is ‘economic and social vandalism’.

On the divisive topic of Brexit, he concluded: “Any kind of Brexit will make us poorer.” Before noting that any measure announced during the Budget would have to be reassessed should a no deal Brexit happen and change priorities.

Below are the key points outlined in the Scottish Budget 2018, which focused heavily on public services.

Economy and fiscal

As usual, the Scottish Budget 2018 started with an assessment of Scotland’s fiscal forecasts of economic growth for the coming years. Again, Brexit was noted to have a significant impact on the projections.

The Scottish Fiscal Commission predicts economic growth of 1.4% this year, followed by 1.2% in 2019. Looking further ahead, GDP growth of 1% in 2020 and 2021, 1.1% in 2022 and 1.2% in 2023 is expected.


Health was a key focus during the budget. The proposed spending on health and care services will increase by £730 million; £500 million in real terms. It will bring the total spending on the NHS in Scotland to £13.9 billion following a 5.5% increase. Much of the money is being passed on as a result of the Chancellor’s increased NHS budget earlier this year.


Education was also another winner. Among the educational commitments made were an extra £500 million to support early learning and childcare, and £180 million to raise attainment in schools.

For further education, £600 million has been pledged to colleges, support for universities and free higher education will be maintained. Apprenticeships will also receive £240 million boost.

Income Tax

Following a shake-up in Income Tax earlier this year, it’s unsurprising that there aren’t any big changes to the new bands. However, the starter and basic rate tax bands will rise with inflation, helping those on the lowest incomes. Moving away from the rest of the UK, the higher rate tax bracket will not increase in April next year, a huge blow to higher earners.

While we’re on the subject of pay, many of those working in the public sector will benefit from the 1% pay rise cap being lifted. Public sector workers earning £33,600. Will benefit from a 3% pay increase in 2019/20.


Business rates are set to increase in 2019/20 by 2.1%, a rise below inflation. However, small and medium sized businesses (SMEs) will continue to pay a lower rate than they would in other parts of the UK.

High street businesses are also set to receive a boost. Mackay announced a £50 million fund designed to regenerate high streets that have been struggling in the digital age. This forms part of a wider commitment to invest £5 billion to improve Scotland’s infrastructure.

What happens now?

The plans outlined in the Budget will now have to pass through the final vote. This is expected to take place in February. As the Scottish National Party (SNP) is a minority administration, it will be relying on the support of opposition to get the plans through the vote. If you would like more information or to discuss the contents of this blog please contact us.

scottish budget 2018 autumn budget

Autumn Budget 2018: Were you a winner or a loser?

Will you be better or worse off because of today’s Autumn Budget?

In a relatively quiet Autumn Budget our summary answers that question, please read on to find out.



The personal allowance and higher rate threshold will increase earlier than expected to £12,500 and £50,000 respectively from April 2019. The income tax rates and bands for Scottish taxpayers will be announced in the Scottish Budget on 12 December.

There are no other changes to income tax bands or allowances.


Main residences will remain exempt from Capital Gains Tax (CGT), ensuring families that sell their home don’t face a tax from the sale of their property.

Furthermore, all shared equity purchases of up to £500,000 will be exempt from Stamp Duty.

Small businesses and self-employed

The threshold for VAT registration will remain unchanged for the next two years despite speculation that it would drop. The fact the current £85,000 turnover threshold remains in place will be a relief to many people who are self-employed or run small businesses.

Businesses occupying property with a rateable value of less than £51,000 will have their business rate cut by a third over the next two years. The amount businesses pay in rates has been a longstanding issue for many, particularly those in retail as the high street attempts to compete with online businesses. The changes will mean savings for 90% of shops, restaurants and cafes.

Finally, a £695 million initiative that will help small businesses to hire apprentices was also announced. Those firms taking on apprentices will have the amount they need to pay halved.

People paying into pensions

Despite concerns ahead of the Budget that there would be some changes to tax relief on pensions, no changes were announced in the speech. For those paying into a pension, it provides some level of certainty, at least for a further year.


Technology giants

There will be a new tax targeting digital businesses. The UK Digital Services Tax will target specific platform models and technology giants. It will only be paid by firms that generate £500 million in revenue globally and will come into effect in April 2020. Digital tech giants will be taxed 2% on the money they make from UK users.

Tax avoiding businesses

Once again, the Chancellor accounted that there would be a clampdown on large companies that avoid paying the correct level of tax. The Chancellor aims to raise £2 billion over the next five years by targeting tax avoidance and evasion.


If you want to discuss how you are affected by today’s Budget or have any questions, please contact us to speak to one of our finance professionals.

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Autumn Budget 2018: Everything you need to know

Autumn Budget 2018: Just after 3.30 pm today the Chancellor, Philip Hammond, stood up to deliver the first Budget on a Monday since 1962 and the last before Brexit.

He started by saying this would be a Budget for “hard-working families … who live their lives far from this place … and care little for the twists and turns of Westminster politics”.

Nevertheless, he soon turned to Brexit although, as usual, he started with a review of the state of the UK economy.

The economy and public finances

The Chancellor said growth would be “resilient” and improve next year from an Office for Budget Responsibility (OBR) forecast of 1.3% to 1.6% in 2019, then 1.4% in 2020 and 2021, 1.5% in 2022 and 1.6% in 2023.

He also reported that the OBR predicts real wage growth in each of the next five years.

Turning to borrowing Mr Hammond reported that it will be £11.6 billion lower than forecast earlier this year. He then said it would fall from £31.8 billion in 2019/20 to £26.7 billion in 2020/21, £23.8 billion in 2021/22, £20.8 billion in 2022/23 and £19.8 billion in 2023/24, which would be its lowest level for more than two decades.


The Chancellor said we are at a “pivotal moment” in the Brexit talks with a deal leading to a potential “double Brexit dividend”.

However, he also went on to say that amount spent on ‘no deal’ planning will be increased to £2 billion. He also made it clear that the Spring statement might be updated to a full Budget, depending on the Brexit outcome.

Alcohol, tobacco and fuel

It was announced in October that fuel duty will be frozen for the ninth consecutive year.

Tobacco duty will rise by an amount equal to inflation plus 2%. However, beer, cider (except white cider) and spirits duty will be frozen for a year. Duty on wine will rise in line with inflation.

Living Wage

Mr Hammond announced that the National Living Wage will be increased, rising from 4.9% from £7.83 to £8.21 from April 2019. He said this would benefit around 2.4 million workers.


The personal allowance and higher rate threshold will increase earlier than expected to £12,500 and £50,000 respectively from April 2019. The income tax rates and bands for Scottish taxpayers will be announced in the Scottish Budget on 12 December.

There are no other changes to income tax bands or allowances.

He also reconfirmed his commitment to an individual’s main residence remaining exempt from Capital Gains Tax (CGT). However, he announced a reduction from 18 to nine months in the period a home continues to qualify for CGT relief once the owner has moved out.


In a relief for many small business owners, the Chancellor announced that VAT threshold will remain unchanged for the next two years.

Universal Credit

The Chancellor announced a further £1 billion over five years to help with the transition as existing welfare claimants move to Universal Credit.


Mr Hammond announced that the number of first-time buyers was at an 11-year high.

He went on to confirm that the Stamp Duty exemption announced in the 2017 Budget would be extended to first time buyers who buy shared ownership properties. This change will be backdated to first-time buyers who purchased a share ownership property after the last Budget.

No other changes to Stamp Duty were announced.

He also announced a further £500 million for the Housing Infrastructure Fund to support the building of 650,000 new homes.

Pensions & ISAs (Individual Savings Accounts)

Despite the usual pre-Budget speculation, the Chancellor made no mention of pensions in the Budget.

There had also been some people who suggested the Chancellor would make changes to Lifetime ISAs (Individual Savings Accounts). However, nothing was mentioned in his speech about Lifetime ISAs, or indeed any other type of ISA.

However, it has subsequently been confirmed that the maximum annual ISA subscription will remain unchanged at £20,000.

Premium Bonds

While not in the speech, it has been revealed that the minimum investment for Premium Bonds will be reduced £25 from £100.

Furthermore, other people not just parents and grandparents will be able to purchase Premium Bonds for children under 16.


The Chancellor said a package of measures would show that Britain is “open for business.”

The most headline-grabbing of these was perhaps a new Digital Services Tax targeting established tech giants. Mr Hammond was keen to point out this would not be an online sales tax stating it would only be paid by profitable companies with a worldwide turnover of at £500 million.

Starting in 2020 he said it would be expected to raise over £400 million per year.

Turning to smaller businesses, the Chancellor announced that business rates for businesses occupying commercial properties with a rateable value of £51,000 or less will be cut by a third over two years.

He also announced a new £695 million initiative to help small firms hire apprentices with the amount they pay being cut by 50%.

Finally, he announced a £650 million package to help ailing high streets.

Health and education (England only)

The Chancellor confirmed the injection of capital into the NHS announced by the Prime Minister earlier this year describing it as a £20.5 billion real terms increase for the NHS.

He also announced at least £2 billion per year, by 2023/24, of extra funding for a new mental health crisis service.

At the same time, he announced a one-off £400 million for schools to help them pay for “the little extras they need”. Mr Hammond said that would be the equivalent of £10,000 for every primary school and £50,000 per secondary school.

Plastic tax

Finally, a new tax on packaging which contains less than 30% recyclable plastic was announced. Although the Chancellor resisted the temptation to impose a direct tax on single-use plastic cups.


If you have any questions about the Budget and how it might affect you please do not hesitate to get in touch.


stock market

Stock market fluctuations: Keeping the declines in context

The Stock market declines have once again made headlines.

The FTSE 100 fell for a second day on Thursday 11th October, taking its shares more than 10% below their peak in May; the definition of a market correction. Reflecting market wide turbulence, it’s understandable if the fall has prompted a sense of uneasiness where your investments are concerned.

But this shouldn’t be the case.

“All equity market declines are temporary and eventually give way to resumption of the permanent advance.  Permanent loss in a well-diversified portfolio is always a human achievement of which the market itself is incapable.” Source: Nick Murray

If you’re tempted to act on the current volatility and accompanying sensationalist headlines with a knee-jerk reaction; it’s time to take a step back.  A calm, balanced approach that looks at the dips in context is needed.

Investing should form part of your long-term financial plan. And if your goals and aspirations have remained unchanged, the current stock market fluctuations should have little bearing on that. A glance at the historical data of stock markets will show you that shares falling is simply part of the process.

Rarely, if ever, should you let short-term stock market volatility drive your decisions behind a long-term financial plan. We know that it can be tempting when your investment value has decreased to panic and take your money out. But seldom is that the best course of action.

At times when the stock market declines, it’s important to remember the fundamental principles of investing:

  1. Over the long-term, investors have enjoyed attractive real returns from the stock markets. With interest rates low, savings accounts have delivered a real-term loss for many years now, in contrast.
  2. Volatility is to be expected occasionally. There are a whole host of factors that can lead to falling prices, even when economies are strong, but prices will typically bounce back almost as quickly as they fell.
  3. Trying to time the market is near impossible. Looking for the optimal moment to invest and withdraw your capital is highly unlikely to yield the results you want. Instead, long-term investment is the answer.

Now is the time for clear thinking and sticking to your chosen course. Deviating from your long-term financial plan because of a temporary fluctuation in the stock market isn’t something any financial planner should be recommending.

So, with this in mind, how should you be reacting to the current stock market turbulence?

In short, you shouldn’t.