How to Grow Your Wealth and Save the World

For many there is a fine line between personal-gain and contributing to the world around us. We all have our own needs, wants and hopes, and it’s often not viable to sacrifice our own wellbeing to help others, despite an urge to do so. But what can you really do? Can one person really make a difference, yet still ensure their personal needs are met?

Thankfully, investment houses have taken note of this dichotomy and are providing a solution.

Do you remember a time when the world laughed at electric cars? The imaginings of these futuristic ‘robots’ felt a little like you were peering into the obscure and incongruous mind of a sci-fi writer; what would be next? Flying microwaves?

But jump to the present day and electric cars are very much a reality; so much so that I’ve got two charging on my driveway! Electric cars are just one way people are saving money (personal gain) and helping others (benefitting the wider world).

We are starting to pay heed to the warnings over global warming and are now fervently fighting to save our planet. Being ‘green’ and socially responsible is more than a fad; it’s becoming a way of life that is crucial to the future of our planet. And, most importantly, people are genuinely passionate about it. It’s not that we’ve suddenly learned compassion, it’s that we now have more opportunities to play an individual role in the battle to save our surroundings.

Over the last 3 years, an investment trend known as ‘Ethical Investing’, or ESG (Environmental, Social and Governance), has provided one such opportunity for people to grow their own personal wealth whilst sustainably investing and acting with social responsibility. Ethical Investment incorporates environmental and social factors when selecting funds, but also aims to provide a competitive financial return.

Whilst it would not be prudent to try and compare the returns from the ‘old stock’, such as tobacco, alcohol and arms, with the new ‘green kids on the block’, many experts are suggesting that Ethical Investing is on the brink of something big. The Financial Times stated that “Investors are finding that if they are good to the planet and to people, they also end up, on average, benefiting themselves. There is mounting evidence that funds which observe environmental, social and governance (ESG) standards in their strategies tend to outperform those that don’t by a significant margin.” [1]

It is important to note here that Ethical Investing can increase your investment risk, and can potentially reduce the investment returns. Why is that? Because by limiting your investments to only ethically focused companies, you limit the pool of investments that can be selected from. Particularly when the Investment Manager is selecting funds, there are far less options to choose from.

That said, since the UN Principles for Responsible Investment were introduced in 2006, we have started to see the likes of the Vanguard Group and Fidelity Investments increasingly offering Ethical Investing; a trend which doesn’t show signs of slowing. Guido Fürer, the chief investment officer for Swiss Re, has also said that “It is more than doing good — it makes economic sense,”[2]

It is not our job to influence you as to which way you want to invest, but to give you the options so that you can make the right decision for you. So I wanted to let you know that your Discretionary Investment Managers, PortfolioMetrix, have added a selection of Ethical Portfolios as part of their offering. You can maintain the same risk level as you currently have with your portfolios, the only difference being that the underlying holdings will then meet the criteria for and ethical portfolio.

This isn’t an all or nothing choice either. I would not necessarily recommend you move your entire portfolio over to the ethical portfolios, however if this is an area that is important to you, you may wish to change the strategy on one of your accounts (e.g. your ISA) so that some of your money is being pushed towards more ethically minded operations.

If you would like to know more about how you can elect to invest in the portfolios that are more in line with your social and environmental views, we would be delighted to discuss your options with you.

Please get in touch by calling 01572 898060 or emailing [email protected]

[1] Financial Times- 3^rd September 2017

[2] Financial Times- 3^rd September 2017

What Legacy Will You Leave?

Why do we want to build wealth? Is it so we can buy plush homes, drive fast, sleek cars or sun ourselves in exotic climes? Or is actually for a far more personal reason: So that we can give our loved ones a comfortable, secure and enriched life?

For some people, filling our lives with luxury is a key motivation to make money; however, most of us also want to help those who we love by leaving behind a legacy that will give them the best start in lives, or enable them to continue to live out their lives with confidence and certainty.

But is just making money enough to guarantee this?

Inheritance Tax is currently sat at 40%, meaning that, if your estate exceeds the threshold (currently £325,000 for a single person and £650,000 for a married couple) you could end up giving away nearly half of your wealth to the Government. Yes, the Tory government increased the limits by introducing the Residential Nil Rate Band, but it certainly isn’t the £1m allowance they promised, and if you don’t play your cards right, you may not get any of it at all. Your hard-earned wealth could be quickly eroded by tax and may end up lining the Treasury’s coffers, rather than the pockets of your loved ones.

I’m sure that you don’t want the Government to become the single largest beneficiary of your hard-earned money! That’s why protecting your wealth in later life is becoming more and more poignant.

Historically, Inheritance Tax has been the preserve of the super-wealthy, but this is changing. The ever-evolving world of tax, especially Inheritance Tax, is not just targeting the very rich; in fact, it is beginning to hit the average family too. HM Revenue and Customs collected £5.2 billion in IHT in 2019, so what can you do to prevent them becoming the largest beneficiary of your estate?

Careful planning around your finances is one of the key steps to take now in order to protect your wealth for the benefit of your loved ones.  To use a palatable analogy, this planning is very much like baking a cake- there are multiple layers, which take a great deal of care to construct. Firstly, you need to identify what could damage your creation; in this case, Inheritance Tax could ‘spoil the mix’. Next you need to choose the best ‘ingredients’ that will help you to minimise the amount of tax you pay and ensure that your loved ones will receive the most they can. Only then can you ensure that you are in the best position to financially feed your own future as well as that of your loved ones, so you can have your cake and eat it!

Any planning around tax can be confusing, time-consuming and controversial! In the UK, we all have to pay tax in some form, so it is important that any plans you make are lawful, accurate and fair. Achieving the balance between what you want to do and what you have to do is a little bit of a minefield, so we will be launching a free online webinar to help with this topic in early 2021.

If you would like details of this webinar, please visit www.efficientportfolio.co.uk or email [email protected]

LPAs: Crucial Estate Planning

The Covid-19 pandemic has starkly demonstrated the importance of having Lasting Powers of Attorney (LPAs) in place. Any of us could find ourselves temporarily incapacitated and in need of help so it is important to know that your wishes for your property, finances, health and welfare will be carried out.

Those are benefits for you – but have you also considered the potential benefits for  your loved ones?

Not only will they have the peace of mind of knowing they are carrying out your wishes, but an LPA may also prevent them finding themselves in a position where they cannot effectively manage their own lives. For example, if any of your household bills, bank accounts, insurance, etc. are in solely in your name, if you were to become temporarily or permanently incapacitated then your partner wouldn’t be able to access them…not an ideal situation!

Although the benefits of the standard LPA speak for themselves, if you run your own business are you confident that your wishes regarding the running of the business would be carried out if you became unable to deal with them yourself? If not, there     are two simple ways that you can ensure this. If your attorneys and wishes are identical to those in your standard Property and Finance LPA, it can simply be specified that the document covers both your business and your personal affairs. However, if there is a distinction between the two, it may be worth setting up a separate Business and Commercial LPA.

If you want to make changes to your existing LPAs, or if you are considering setting up new ones, one of our advisers will be more than happy to help arrange this.

Beware – Online Fraud on the Rise

As we have spent the last month in lockdown, not really knowing if normality will return, many of us have turned to online shopping to make sure there are Christmas presents under the tree this year. Sadly, this has resulted in more opportunities for fraudsters to target those looking to bag some bargains in the run-up to Christmas.

UK Finance has said social media platforms, online marketplaces and auction websites are increasingly being used by criminals to carry out these purchase scams, where a customer pays in advance for goods or services that do not exist and are never received. These payments are taken off the integrated payment platform and are made through a bank transfer instead, which means people are unlikely to be refunded.

It has also warned that purchase scams may involve home improvement and DIY purchases, such as patio heaters and sheds, as fraudsters adapt to more people staying at home.

The Take Five to Stop Fraud campaign is urging people to:

Stop: Taking a moment to stop and think before parting with your money or information could keep you safe

Challenge: Could it be fake? It is OK to reject, refuse or ignore any requests. Only criminals will try to rush or panic you

Protect: Contact your bank immediately if you think you've fallen for a scam and report it to Action Fraud

Charlie’s Mini Blog

Thank goodness that’s over! What a year 2020 has been. Being a business owner is stressful at the best of times, but 2020 certainly takes the biscuit for creating the most insane emotional rollercoaster. With the sharpest stock market crash in modern times, back in March we were fielding calls from concerned clients that their retirement pots would be worth a fraction of their former selves.

Back in March I said a few times that, despite a 35% fall in the markets, it isn’t beyond reason that 2020 ends up being a positive year from a performance point of view. Whilst there is still time for all this to change, it seems remarkable that regardless of how much risk you take in your portfolio, you are set to have grown your wealth through your investments this year.

If ever there was an example of how the market plays games with you, 2020 is up there as a classic. I’ve repeatedly said that the secret to long term growth is withstanding short term losses, and that in times of market crisis you put your tin hat on, and ride out the storm, so well done for listening and for doing exactly that. I realise it is scary, but it really does pay off, so pat yourself on the back.

This year has been a great lesson for us all, so remember it, because at some point it will happen again, and these same feelings will crop up again.

Have a wonderful Christmas, and let’s hope 2021 is a prosperous and slightly more normal year!

The chart above shows the relative performance of the seven points on the risk spectrum we track versus that of just the pure asset allocation (i.e. no active management). Whilst early on in the pandemic portfolios underperformed relative to the market as a whole, as the recovery pushed ahead, all portfolios ended delivering a positive return relative to passive, net of costs, by the end of the year.

To give an explanation of what happened, at the start of the pandemic all assets fell as the markets were swept up in a panic of selling. Lower risk profiles, with more exposure to credit and corporate debt suffered initially, but recovered well thanks to Quantitative Easing.

Medium to Higher Risk Profiles have more equity content (shares). At the start of the pandemic, the active selections in these funds underperformed compared to their passive alternative; however, smaller companies began to make a steady recovery over the year as we learnt to live with the pandemic. Then towards the end of the year, with the news of a vaccine on the horizon, caused value investments to perform well. Value companies are ones that have fallen out of favour and are priced lower than their peers, therefore sectors that were hit hardest by the pandemic started to see light at the end of the tunnel.

What Does This All Mean?

• The active return on an investment (Alpha) can often be erratic and doesn’t perform on demand.
• Just because we pay for extra performance doesn’t guarantee it will outperform its passive alternative; however, over time we should hopefully see the results if we can suffer some underperformance in the short term.
• It’s important to stay diversified. As an example, PortfolioMetrix (one of our Investment Managers) ensure their portfolios are well diversified across large and small companies, value vs growth/quality, currency exposure, asset classes and geographical location.
• If we believe in a particular fund or investments strategy, we shouldn’t give up on it due to a period of underperformance, quite the opposite. PortfolioMetrix rebalanced back into the hardest hit funds in March and that added to performance over the year.
• Passive has its place and if you want to reduce costs it’s a sure-fire way to go, but if we can deliver extra returns net of costs over time then that could be a worthwhile endeavour.

Understanding the best investment strategy for your needs can often be confusing, so we encourage you to speak to your Financial Planner at Efficient Portfolio if you have any concerns with performance, management type or risk associated with your portfolio.

Please get in touch on [email protected]  or call 01572 898060 if you have any concerns.

How Can You Best Save for Retirement?              

Saving enough for retirement is a huge financial hurdle that you need to be able to get over to be able to live out a comfortable and secure future. As a firm, the one question we are asked time and time again is ‘How can you best save for retirement?’ It’s a great question, however there is so much more to saving than knowing just how much enough is. The place to start is to firstly ask yourself a number of key questions:

1. How Much Should I Save for Retirement?

The answer is it depends on how old you are. The simplest method of calculation, which is a useful tool for those people in their twenties and possibly their thirties, is to save ½ your age as a percentage of your earnings. So if you are 24, saving 12% of your earnings for your retirement is a good guide.

This is a good starting point, but the closer you get to retirement, the more scientific you need to be. This is where a Lifetime Cash-Flow Forecast can give you much greater clarify, as you can take account of your actual spending habits, growth rates of your investments and time in retirement.

2. What Investments Should I Pick for My Pension?

The further you are from retirement, the more risk you can afford to take. You are likely to have a rockier road to retirement the more risk you take, but in the long run, you are likely to end up with more. That said, if you take too much risk, you might end up with nothing, so it is a fine balance.

Select an investment strategy that gives you a good asset allocation, i.e. a good spread of investments, such as equities, bonds, property and commodities. The blend of these should be determined by the level of risk you are willing to take, but needs to be balanced in line with the ‘Modern Portfolio Theory’ to ensure you get the best returns possible for a level of risk you are comfortable with.

3. When Should I Start Saving for Retirement?

Ideally yesterday! Seriously though, if you look at a standard piece of paper (0.05mm thick) and folded it in half 50 times, it would reach about 100 million kilometres high, which is about two-thirds of the distance between the Sun and Earth. Amazing, isn’t it? That is compound growth at work. The sooner you start the further you will get.

4. How does this help your pension?

The longer you can leave your money to grow, i.e. the sooner you can start, the more impact doing so will have on your savings, because you will benefit from growth on the growth. Let’s look at an example:

Mr. Jones is 40 years old and he decides he is going to save £100 per month until he retires at age 65. He invests in a fund that grows at 6% each year. Over that 25 years, he has invested £30,000, but with the growth on the growth on the growth, his fund would actually be worth £107,000. That’s growth of 360% over the 25 years—not bad.

What if Amy Jones, his daughter, also decides to start a pension at the same time? She is 20 years old, and can only afford £56 per month into the same 6% fund. Coincidentally, this means she also invests £30,000 between 20 and 65. So she has put in exactly the same amount of money as her Dad, but over 45 years instead of 25. Instead of the £107,000 that Mr. Jones’ pension reaches, Amy’s pension will be worth £153,000. That is 510% growth instead of 360%. To look at it another way, that’s 43% more than her Dad had for saving the same amount, because her money is invested over a longer period of time. The sooner you can start saving, the better it will be. Even if your monthly savings don’t seem like large amounts, over time the money will grow.

5. Is a Pension the Best Place to Save for Retirement?

Quite simply, yes. It is currently the most tax efficient place to save to generate an income for later in your life. Effectively you are deferring tax today to pay less later on, whilst benefiting from tax free growth in the meantime.

So if you aren’t already saving for your retirement, get started now- this is how you can best save for retirement.  If you are saving, but it isn’t enough, take action now. If you don’t know where the money is invested, make it your week goal to find out. Take a huge stride towards your dream retirement.

Is Now the Time to Review Your Protection Portfolio?

The pandemic has changed the way we work forever and forced many of us to reconsider how we work, where we work and who we work for. However, if this sounds like you, are you confident that you have considered what you could stand to lose? And are your certain that your standard of living, and the security of your family, won’t be negatively impacted?

One upshot of the last year is that many people’s view on their working life has changed.  Whilst this might have been forced on some through redundancy or an extended period of time on furlough, others working from home might now have reflected that the daily grind of commuting into a dreary office is no longer for them, and as the market recovers they are considering a change in their role, going part-time, or even switching career to protect the newly found ‘me-time’.  The more entrepreneurial might even have found time in lockdown to set up their own business, which they hope will flourish once we’re all allowed out again.

At times like this it’s important to consider the benefits that are provided by your employer that you might have lost.  Often employers offer death in service benefit, which is valuable for both covering debts and providing a nest-egg for loved ones if you’re no longer around. However, the benefit is usually linked to your salary, so if it’s reduced the level of cover will fall accordingly.  In addition, some larger employers might offer higher levels of sick pay, which again will shrink if your working hours fall, or disappear completely if you leave to set up on your own.  Another consideration you need to bear in mind if you’re thinking of leaving your current role is pension contributions, which all employers now provide at least 3% of your salary towards- if you leave, or take a salary reduction, these contributions will fall or be lost all together.

Whilst it is important to weigh up the pros and cons of changing your working arrangement, especially if you are considering becoming self-employed, the loss of benefits does not necessarily need to be a reason to stay put.

Ultimately, all these benefits can be replicated privately, through Life Assurance Polices, Income Protection Plans and Personal Pensions, so there are plenty of options available to make sure you and your loved ones remain protected both now and in the future.

Protection is a cornerstone of financial planning for many people, so whether you are considering making a significant change to your employment, or if your situation has recently changed, we strongly encourage you to review your cover before making any final decisions. Protection can act as your ‘safety net’ for the future, so now is the opportune moment to ensure that there aren’t any gaps or snags in your current arrangements.

If you would like to look at your options, we would be delighted to help. Please email [email protected] or call 01572 898060 to speak with one of our Independent Financial Planners.

LPAs Go Online

In the August 2020 Wealth Management Update we mentioned the possibility that the administration of LPAs would move online and it seems all the hard work by the Office of the Public Guardian (OPG) (likely urged forward by the need to be more online during the pandemic) has paid off!

The OPG has been working closely with a range of organisations, including HSBC UK and the Department for Work and Pensions (DWP), to develop the service and has announced the ‘Use a Lasting Power of Attorney’ service. This allows donors and attorneys to give organisations access to view an online summary of an LPA.

Once an LPA is registered, attorneys and donors will be sent an activation key. They can create an account  online  at https://www.gov.uk/use-lasting-power-of-attorney and use the activation key to add LPAs to their account. A donor or attorney can then create an access code which they can give to organisations.

Anyone who has had to register an LPA with an institution will know how long it takes to get through to the right department, to send in the original LPA, to wait for it to be loaded on to their system and for them to process it, then to wait for the original LPA to be returned to you before you can tackle the next institution, all the time not being able to access or manage the donor’s assets … it is making me tired just thinking about it.

These long turnaround times should hopefully be reduced to days using the online service, resulting in the Lasting Power of Attorney being registered much faster and without having to rely on original documents making it safely to their destination.

I hope institutions will see this as a leap forward in the use of LPAs and a vast improvement on any existing system. With luck they will all adopt the new system and start using it immediately to make donor and attorney lives easier.

Currently you can only use this service for LPAs registered in England and Wales on or after 17 July 2020. However, as we mentioned last year, this is likely to be extended to those registered in previous years … watch this space.

Inheritance Tax – Chargeable Penalties

Now more than ever it is important to be on the ball with any outstanding inheritance tax. HMRC have imposed an initial deadline of 12 months from the date of death for you to submit the relevant inheritance tax account. In the current climate it is important to factor in additional delays caused not only by the postal system and institutions but also potential delays within HMRC itself.

If you submit the inheritance tax account 12 months or more after the initial 12-month deadline, the fine can increase from the standard £100–£200 late filing penalty to up to

£3,200 in total. The main penalties that you may need to be aware of are:

Please contact your adviser if you want to ensure that you avoid incurring any unnecessary late fees.

House Prices See Highest Growth in Six Years

House prices rose by 7.5% throughout 2020 – surprising in the current circumstances but welcome news for homeowners.

The furlough and self-employment income schemes provided vital support to the market and the cost of borrowing remained low because of a whole host of factors and so kept available credit flowing. Coupled with the fact that lenders were able to offer payment holidays to borrowers to help them remain in their homes meant that the property market ended 2020 on a high.

Without doubt, the stamp duty holiday has also been a stimulus to the market, as lenders approved more than 100,000 mortgages in November – the most in 13 years! However, it has also been helped by the public’s desire to have more space for their families, both inside and out, as the pandemic has restricted people to their homes for most of 2020 and potentially a chunk of 2021.

Competitive mortgage rates are still available and lenders are starting to allow smaller deposits again, having increased the minimum required during the height of the pandemic. However, both lenders and conveyancers are struggling to keep up with demand and all currently have a backlog of requests. This means that some buyers may potentially miss out on the stamp duty holiday they were hoping to get.

Whilst the outlook for 2021 remains uncertain, especially after the end of the stamp duty holiday on 31st March, hopefully as the vaccine continues to be rolled out there will be increasing stability across all markets.

NS&I Complaints

As a result of poor service levels from NS&I in recent months MPs have ordered NS&I to investigate because of the anxiety caused to many of its customers.

When NS&I recently slashed the chances of winning on Premium Bonds and dramatically cut interest rates across all products, consumers were eager to move their funds to higher paying providers. However, when customers attempted to withdraw their funds, they were met with long delays and reduced service, in part because of the pandemic but also because of poor management that was already evident before the pandemic struck.

NS&I have recruited almost 200 additional customer service staff to try to improve their call capacity and overall service levels and hopefully this will help with future interactions. However, those who suffered difficulties during a time when their interest rates were drastically reduced may not be quick to forget their experience.

Please note: NS&I have decided to stop paying Premium Bond winners via cheque as of Spring 2021. Winnings will be paid directly into bank accounts in the future.

Do Not Forget Self-assessment!

The deadline for submitting your 2019/20 self-assessment tax return is midnight on 31 January 2021.

Those who are late submitting their return face a penalty of £100, even if there is no tax to pay or if tax owed is paid on time. Additional penalties are due for continued late filing and late payments.

Charlie’s Mini Blog

Yesterday I was watching a brilliant presentation by Mark Robb on driving employee engagement. A couple of things he said really struck a chord with me. The first was that your team need to be constantly growing, something the team at Efficient Portfolio certainly understand, as part the ‘P’ of the The EP Code (our company culture) stands for ‘Pursue Growth and Learning’. Mark’s point is that if any employee is not getting better and better each year, they are actually going backwards, because everyone else should be improving.

The same could be said for our money and many other aspects of our life. If we leave our money in the bank, whilst it stays the same value, everything else is gradually getting more expensive, so what you can buy with it is going down. If we don’t try and gradually improve our health and fitness, it will inevitably go backwards due to aging. So pursue growth and learning in everything you do.

The second point that really struck home was, to steal his words, ‘don’t try and teach a pig to sing!’ To put it another way, you wouldn’t send Lionel Messi for goalkeeping lessons, far better for him to focus solely on his strengths. We try and apply this approach to our team, trying to all work to our own unique abilities, but do you do the same in your life? Do you get bogged down doing something that isn’t your unique ability, when you could be spending your time doing the activity or role that is, delegating that task to someone else who’s unique ability it might be. If you don’t, you may be just trying to make a pig sing!

Pension Myths Debunked

When it comes to saving for our futures, pensions are often the first port of call on our financial checklists, but do you understand them? With so many complex and confusing rules, it’s no surprise that many people don’t know their Lifetime Allowance or understand the tax-reliefs available to them, but this is made even more complicated and ever-changing rules and regulations.

So, what’s a myth and what can you rely on?

Myth 1: You Will Be Able to Retire on Your State Pension

The new state pension pays £175.20 per week, or £9,110.40 per annum. And that’s if you even qualify for the full amount! Your working history dictates how much of the State Pension you will be eligible to receive, so  some individuals could end up with an even smaller sum.

Unless you live an incredibly modest and sheltered lifestyle, this small sum is unlikely to give you sufficient security in the future, especially if you have high hopes of enjoying your time in retirement.

Myth 2: Annuities Are Extinct

The introduction of ‘Pension Freedom’ in 2015 brought with it greater flexibility and options for pension holders. Prior to this time, annuities were seen as the only way to take your pension, but with greater opportunities now available, annuities have become increasingly unpopular due to their rather restrictive natures.

However, annuities are certainly not extinct. In some cases they are still a viable and useful option for pension savers, especially due to the guaranteed income for life that they offer.

Myth 3: You Can Take 25% of Your Pension as Tax Free Cash

One of the defining features of the pensions freedom movement was the ability to take up to 25% of your pension pot as a tax-free lump sum. However, what many overlooked was that some older-style pension schemes can provide an even larger percentage of protected cash to draw upon. Many people in occupational schemes, for example, are not even aware of their options or how much of their pot they can take without being penalised by tax.

It is always worth enquiring about your pension’s benefits, rather than assuming they are the same as other schemes. Please contact us if you would like one of Financial Planners to help clarify your situation and ensure you don’t lose valuable benefits.

Myth 4: You Can’t Exceed Your Lifetime Allowance

Currently, the Lifetime Allowance is set at £1,073,100 for the 2020/21 tax year, but strictly speaking it is not the absolute maximum limit. The truth is that you can save more than this into your pension, but be warned- you may face a tax charge.

The amount of tax will depend on how you draw the money, but can amount to 55% on the excess funds if you take it as a lump sum. However, if this money is held to age 75, or drawn as an income, the surcharge can be as low as 25%. Like pensions, any planning around tax can be complicated, and getting it wrong can cost you more than you intended. If you need guidance, please get in touch and one of our Financial Planners will be able to guide you through the best strategy.

 Myth 5: You Can’t Take Your Pension Before You’re 65, Without Being Penalised

Technically this statement isn’t a myth, however the penalty faced by taking your pension early could be worth it.

The type of pension you have will determine if taking your pension early could beneficial. As an example, if you take benefits early from Final Salary Scheme, there may be a reduction in available income, but you would be receipt of your pension for a longer period of time. Ultimately, this could reduce your tax bracket, or take you below the Lifetime Allowance threshold.

As a general rule, we would recommend that clients who need an earlier retirement income utilise their other investments first (for example, their ISA), but drawing from your pension early can be a viable strategy.

Myth 6: Default Lifestyle Funds with Protect My Income

Default funds certainly have a place, but will often lead to lower rates of return. Traditionally, as you near retirement, pension funds will be moved into ‘less risky’ asset classes (such as cash or bonds), in order to preserve your capital and reduce volatility, which is fine if you want the same amount year-on-year in retirement.

However, if your retirement spending is likely to fluctuate, or if you want flexibility over your pension drawings, it may be prudent to deploy a strategy that encourages more long-term growth. Your lifestyle and goals will determine  how much income you are likely to need, and when you will need it, so it is crucial that your pension is invested in funds that will support your aims.

At Efficient Portfolio we utilise Lifetime Cash-Flow Forecasting to help plot out your future expenditure needs. Using a tool like this will help to determine how your pension savings should be invested, so it’s a valuable part of your overall financial planning.

Myth 7: My Pension Dies with Me

With some pensions, such as a Final Salary Scheme, you will only be able to leave a percentage of your pension to your spouse or dependent, and the rest of the pot is effectively lost. However, most personal pensions give you the ability to leave your residual pension to any nominated beneficiary, meaning that you can ensure your children, grandchildren, or any other loved one can benefit from your legacy.

If you die before age 75, pension benefits can usually be passed on tax-free. However, it is important to consider that your remaining pension can form part of your estate, so may be subject to Inheritance Tax.

Myth 8: Your Workplace Pension Will Provide Everything You Need for the Future

Auto-enrolment is undoubtedly a positive step forward and has encouraged more and more people to save for their futures. However, unless you pay in a significant amount each month, your company pension scheme is unlikely to provide a fertile nest-egg for the future.

Simply contributing your minimum amount will give you some funds for the future, but it is important to seek guidance on what your expected retirement income could look like. If it’s lacking, it may be worth considering how you can bridge the gap and ensure that you have a comfortable retirement.

Stamp Duty Land Tax (SDLT)

The Stamp Duty Holiday, which came into effect in July 2020, has already proved to be a great stimulus in what has been a declining property market. In the first half of this year (2021) we have already seen the tax threshold increase to £500,000 for both home movers and First Time Buyers, which is a shift from £125,000 and £300,000, respectively.

As a result, the market felt a significant shift and very quickly transactions became the strongest that they had been in over a decade. Sales increased by 10% in the year previous and to date, and approximately 600,000 buyers have benefitted from the SDLT holiday.

However, it wasn’t all good news. In these unprecedented times and with a thriving and unexpected market, the SDLT holiday has resulted in mounting pressure on Conveyancers, Lenders, Surveyors and Advisers. Transaction periods increased from an average of 14 weeks to an average of 22 weeks.

With such increased demand and the end of the SDLT holiday fast approaching; 31st March 2021, the Government are now under increased pressure to offer an extension to the holiday, which will ensure that with the approximate 120,000 – 160,000 transactions in progress, buyers will still be eligible and not end up facing unexpected tax bills.

The Guild of Property Professionals recently revealed that should an extension not be announced, 31% of buyers are likely to cancel their purchase due to Stamp Duty become payable.

The announcement is expected in the Spring budget on 3rd March 2021 as to whether such an extension will be applied and where the cut offline must be. Rumours circulating indicate that there is consideration that there will be an announcement to offer a six-week extension to those transactions already going through.

As soon as more details come to light, we will let you know how any extensions could impact your mortgage planning.

What is the Reflation Trade?

If you have been following the financial press recently then you might have come across something called the ‘reflation trade’, but what does this mean?

Essentially, this is the expansion in the early part of a business, but in this context, it’s being used in a wider economic sense. Having gone through the economic uncertainty of the past year, there is now talk about a widespread expansion in the global economy. This is based on a few factors:

• Vaccine Rollout
• Pent up demand for consumer spending
• Unprecedented levels of government stimulus

In terms of the USA, with the democrats in power, the country has already seen bond yields pushed higher and prices of bonds lowered. There is a feeling that further stimulus will follow.

The expectation is here that more stimulus, not just in the US, but here in the UK, will result in higher inflation going forward. This could make it quite a tough time for bonds, which have been on a 40 odd year bull run.

Bonds at current rates would suffer more if inflation were to creep up higher moving forward; this would hurt bond prices as the real returns will be less, or even negative. However, high inflation would help erode the levels of debt that governments are currently taking on in real terms.

Whilst we don’t think this is reason for alarm, or a call to sell out entirely of bonds, it might be worth revisiting your risk profile and having a discussion with your Financial Planner, so we can look to position your portfolio accordingly, depending on the time frame of your investment. With the majority of our clients investing for the long term, and particularly for their retirement, holding equities might provide a better chance of hedging against inflation, albeit at the cost of some increased volatility in the short term.

Changes to your portfolio will depend heavily on your personal circumstances, tolerance to risk and your individual goals, so it is worth seeking guidance before making any changes. Please get in touch with us if you’d like to book in for a call with your Financial Planner on 01572 898060 or email [email protected].

Charlie’s Mini Blog

At the start of 2021, it felt like there was renewed enthusiasm and then, almost as quickly as it came, it was taken from us on 4^th January.

During Lockdown Part 1, we were getting inventive, having Zoom quizzes and embracing a novel approach to life; this time around, it felt like people’s energy had waned and they’d swapped the creativity for binge watching Netflix. Combined with the bad weather and the dark nights, it was all getting too much, and the general wellbeing of people was in decline. Then suddenly, the weather gets better, Boris gives us a path out of lockdown and optimism has started to return.

This is like investing money. There are darker times, and when they come it is easier to do what feels easy and safe, like sell your investments, instead of what’s difficult, like investing more. It is, however, the most important time to do the right thing. I’ve taken to reading more, learning the guitar and taking a course called ‘The Artists Way’ to ensure I have the right mindset through the dark times, and this has stood me in good stead through this lockdown. When we emerge, I’ll be a better person for it.

If we can take the time and energy to improve our finances and take some brave steps in the scary times, when the shoots of recovery appear (and they always do) then you can be positioned perfectly to benefit. So, invest time in yourself, and invest time if improving your finances, and when we are allowed to party, you’ll be in the perfect place to maximise the enjoyment!

British Standards

At Efficient Portfolio we have always prided ourselves on being truly independent. In the world of finance, independence means that we are able to place our clients’ needs at the heart of everything we do, and offer an unlimited range of solutions from across the market. It also means that we’re not tied to certain products or providers, and have freedom to adapt your planning if we feel it’s not delivering the best outcomes.

However, like any private company, our independence has also provided some challenges over the years. We founded our company in 2006, and built it from the ground up. Having the freedom to build a business as we saw fit was liberating, but it meant that there was no corporation overseeing our inception; no guidebook to determine our processes; and no overriding ‘head office’ to approach with our problems. We shaped the business ourselves, and have had to adapt, innovate and refine everything we do over the years.

So, how can you be sure that our internal practices are up to scratch?

Everything we do has been crafted to deliver the best level of client service, and as an FCA regulated firm, we act in a compliant, ethical and legal fashion. We are confident in the business we have built, but we wanted to test our processes against the national benchmark, so in 2019 embarked on our British Standards journey.

British Standards, in this case the BS 8577, are designed to assess and award financial planning firms who can demonstrate that they have the operational framework in place to deliver a first-class service to their clients.

The service that we provide to our clients is of the upmost importance and in order to benchmark our service and internal processes against the British Standard of best practice the business entered into a rigorous process of assessment.

On 2^nd March 2021 we were officially awarded our BS 8577 certification, making us one of a small but growing group of financial planning firms in the UK to have achieved this prestigious award.

Our clients’ needs are at the heart of our business and this is why we are committed to a programme of ongoing assessment, ensuring that our processes and services will be continually assessed by an independent certification body on an annual basis.

We are incredibly proud to have been awarded this accolade, as it demonstrates that the business we have built operates at the highest possible level. We thrive on innovation, and the British Standards programme gives us constructive feedback and support, so that we can continue to grow and improve everything we do.

We are excited to be a part of this journey and look forward to continuing to grow a business that provides valuable services for our clients and provides an enriching home for our team.

Budget Update

It probably came as no surprise that this month’s Budget Announcement (3^rd March 2021) had a core focus on the pandemic and the Government’s plans for economic recovery. But what impact will the announcement have on your personal finances, and what opportunities could now be available for your financial planning strategy?

It is fair to say that Sunak’s tenure as Chancellor has certainly been testing, and one that most of us would certainly not relish! His second Budget has, understandably, been shaped by the Covid-crisis, so his pledges to do “whatever it takes” to support businesses and jobs were certainly welcomed and justified; however, the borrowing (£355bn) that has been required to sustain the country’s workforce will undoubtedly come at a cost.

The Treasury has announced the launch of tax consultations on 23^rd March 2021, which we will be reviewing in our next newsletter. It is unlikely that the outcomes will be easy reading, as these consultations are expected to roadmap significant tax rises to pay for the enormous cost of the pandemic.

However, until we receive that news, there are still some important factors to consider in your financial planning, and a few opportunities to maximise.

Income Tax and National Insurance

The Chancellor announced that although Personal Allowances and higher-rate tax thresholds will increase in April 2021, they will then be frozen until 2026. The National Insurance Contribution (NIC) threshold will rise to £9,568 for the 2021/22 tax year before being frozen.

The Personal Allowance, which is the amount you can earn each year before you start paying Income Tax, will increase from £12,500 to £12,570 from in April. 2021

The basic rate tax band will increase to £37,700. The higher-rate tax threshold will also rise from £50,000 to £50,270. .

The freezing of thresholds is projected to raise around £6bn to help plug the current deficit; however, many look at this tactic as a ‘stealth tax’, as more money will be silently taken as the cost of living rises.

There certainly could be some opportunities here: those who are employed, you might look to reduce your taxable income by making pension contributions, either through salary sacrifice or as a personal contribution.  Directors of limited companies could also look to divert funds to their pension rather draw it as salary.  Alternatively, you might look to defer drawing an income from your company until a time when you are earning less, ergo fall into a lower tax bracket (i.e., when you are retired).

Pension Lifetime Allowance

The Chancellor has also frozen the Pension Lifetime Allowance, which is the total amount you can save into your pension before incurring tax charges. Recently, the lifetime allowance has increased each tax year in line with inflation; however, for the 2021/22 tax year, it will remain at £1,073,100 until 2026.

Any lump sum withdrawals from your pension above the limit are likely to incur a 55% tax charge and any income taken will face a 25% charge, with the remainder subject to Income Tax at your marginal rate. Once again, this could be seen as ‘stealth tax’, as it is likely that more people will pay more tax on their pensions.

Careful consideration should be made on when you access your pension savings, as you may wish to draw upon other investments or savings to help support your income needs. Every situation will be different, so it may be worth discussing your options with your Financial Planner.

Capital Gains Tax

Finally, some marginally good news! Capital Gains Tax (CGT) walked away unscathed in this Budget announcement, and the rates remained the same. For 2021/22, the annual exemption will remain at £12,300 for individuals and £6,150 for trustees. Furthermore, the exemption will be frozen until 5 April 2026. However, it is predicted that CGT will be the next target in future Budget announcements.

ISA Allowance

Some even more positive news was that ISA allowances will also be unchanged for the 2021/22 Tax Year. This means that investors can still invest up to £20,000 per annum into a Cash or Stocks and Shares ISA, or combination of both; or £9,000 for Junior ISA savers. Whether or not this will be reduced in Budgets to come remains unseen, but for now, investors can still take advantage of this Government-backed incentive.

As always, our general guidance is that maximising your annual ISA allowance is a sensible way to save in a tax-efficient way. This will of course vary from client to client, so please speak to your Financial Planner to see if this is an appropriate strategy for your personal situation.

Pensions Tax Relief

Another feature to be left untouched in this month’s Budget was Pensions Tax Relief.

The current system benefits higher earners the most by providing them greater amounts of tax relief of up to 45%.  If only basic rate tax relief at 20% was for everyone, it would create substantial savings for the Chancellor, and therefore the chances of future reforms is reasonably high. However, the reassuring news is that changes will not be fast-moving, as pension schemes will need adequate time to adapt.

Inheritance Tax

Another frozen tax was Inheritance Tax (IHT), which will remain untouched until 2026. Under current rules, the personal allowance for each individual is £325,000 (or £650,000 for a married couple), which means that this amount can be passed to your beneficiaries IHT free. This amount can also be increased by utilising the residence nil-rate band, for passing on a property to a direct descendant, which remains at £175,000 per person for the 2021/22 tax year.

As a business we have seen an increase in the number of clients wishing to kickstart their Estate Planning during the pandemic. COVID-19 has meant that many of us now feel uncertain about the future, and many of us are concerned about the financial impact it could have on our family’s future security. Whilst life may feel rather precarious at the moment, it is in fact the perfect time to reflect upon what you have in place and look to implement a suitable strategy to ensure that your wishes are brought to life.

If you would like to know more, we will be hosting a free webinar in conjunction with Buckles Solicitors of Stamford in May. If you would like to attend or find out more, please contact us on [email protected].

Corporation Tax: Will Business Owners Pay for the Pandemic?

This month’s Budget announced a significant rise in Corporation Taxes, which were deemed to be ‘fair and necessary’ if we want to see an economic recovery.

Corporation Tax will rise from 19% to 25% from April 2023, and is expected to raise around £12bn to aid recovery. This 6% rise may seem steep, but it is in fact amongst the lowest in the G7. As an example, rates in the USA with hike from 21% to 28%.

This news may have some business owners alarmed, but the encouraging news is that companies with profits of up to £50,000 will continue to pay Corporation Tax at the current rate of 19% and a taper above £50,000 will be introduced. Sunak has indicated that only 10% of businesses will pay the new, higher rate of tax, so, on the whole, most of our business owner clients should be largely unaffected by this shift.

Some other slightly encouraging news is that there will also be an extension (from the exiting one year to three years) to the loss carry back for businesses to help historically profitable business which have been forced into  a loss-making position. This feature will be available for both incorporated and unincorporated businesses for up to £2 million of losses in each of 2020-21 and 2021-22.

If you are a business owner and are concerned about how tax changes could impact your business, or would like to know more about what opportunities are available to you, please get in touch and we will be able to recommend one of our tax experts to review your situation.

Charlie’s Mini Blog

I was chatting to a potential new client yesterday who has a somewhat unusual dilemma in one way, but perhaps less unusual in another. He is a successful business owner that has a keen interest in the markets and in investing. He has successfully managed his own investments for many years and also now manages a substantial amount for his family too. Why, you might ask, is he then coming to us for our assistance?

Three things were the core of our conversation; firstly, the admin involved in executing each decision across multiple platforms and multiple people takes up a huge amount of his time and secondly, he wants our guidance on reducing the Inheritance Tax exposure. However, it is the third point that is both common and uncommon. Not often do we see an individual managing this degree of wealth across so many family members, however we do frequently see people with the need to, as I call it, ‘pass the baton’.

We often see couples where one person takes care of all of the finances; historically this would have been the man, but in younger families this varies more. My question to him was, what happens if you are no longer here, or here but unable to carry out this work? No one in his family is in a position to organise all the admin, let alone select the underlying investments. There is currently no one that could pick up that baton.

Probably his most important role in the coming years is not to manage the investments and execute the transactions, but instead to ‘pass the baton’. This doesn’t mean teaching his family to be interested in the markets, as most people will not be comfortable taking on that level of responsibility, but rather in this example, to get the wealth into a simpler solution, and to have an investment solution that manages most of the money, so that if something were to happen, that management can continue. We can still create a ‘gambling pot’ to enable him to enjoy his passion for the markets, and to do so unconstrained by the responsibilities of holding the family’s financial future in his hands.

Leaving a Legacy in Your Lifetime

Leaving a legacy to our loved ones is a common goal for many of us, but have you considered what you could pass on during your lifetime? With increasing unemployment and tough economic times, many clients want to help out their younger family members, so what is the best way to pass on some of your wealth now rather than after you’ve gone?

Lifetime gifting can be a rewarding way for you to see the impact your legacy can have. For example, you may want to help a loved one buy their first home, go to university, or simply enable them to have some security during these difficult times. But be warned- there are some rules in place that should be considered, so that you don’t end up eroding your gift through tax or lose some of your wealth to divorce, as an example.

 Gifting

Current legislation states that you can give away £3,000 per year free from Inheritance Tax (IHT). In addition, you can also give up to £250 to any number of people each year and parents can give £5,000 to each of their children as a wedding gift, grandparents can give £2,500, and anyone else £1,000.

However, there is an exemption to this. If the gift is regular and comes out of your income, and does not impede your standard of living, any amount of money can be given free of IHT. Larger gifts may also be covered by the Potentially Exempt Transfer (PET) rules. As long as you survive seven years after making the gift, and no longer receive any benefit from it, then the gift is outside of your estate for IHT purposes. If you pass away within seven years and the gifts are valued at more than the nil-rate band (£325,000 in the 2020/21 and 2021/22 tax years), taper relief may apply and is calculated on a sliding scale, if the gift was made between three and seven years before death.

Can You Trust Your Gift?

Gifting can be a good way of helping put your loved ones, and, in some cases, reducing your overall tax bill; however, once gifted, you relinquish all control over what happens with that money. You may be gifting to money to someone who you don’t trust to act responsibly, or may be concerned that a divorce will mean that your gift is lost to a non-family member.

To protect your gift, and retain some control, Trust planning can be an effective solution. There are many types of Trust available, and your personal needs and circumstances will dictate which is appropriate. Trust planning can be complex, and there are many legal requirements to consider, so it’s crucial that you speak to an expert before going ahead.

Your Needs

Before giving any money away, it’s important to consider what you may need in the future, and how much you can afford to give away. This is where Lifetime Cash-Flow Forecasting can be incredibly powerful, as this tool enables you to plot out various scenarios, potential issues and possibly purchases, to help you see how much you could gift without it having a detrimental impact on your own financial security.

How We Can Help

Estate and legacy planning is an incredibly rewarding exercise, which can benefit your family and loved ones for generations to come. It’s something we’re passionate about, so we have created a new webinar and online course, to give you an in-depth overview of everything you should consider. It’s free to access and can be found here

Alternatively, if you’d like to speak to one of our expert Financial Planners about your personal circumstances and needs, please get in touch.

Mortgage Update: Interest Rate Predictions

The pandemic has undoubtedly shaken our economy, reflected in the Bank of England’s decision to slash the base rate  to 0.1% in March 2020, just a week after being cut to 0.25%. In March 2021, the Bank of England said that this rate would remain in force. So what could this mean for mortgage rates? Theoretically, mortgage rates should have reduced in line with the base rate drop; however, the reality is that mortgage rates have been rising rather than falling. So, will this trend continue?

The Pandemic Mortgage Landscape

The coronavirus outbreak and two cuts to the base rate in quick succession in 2020 saw lenders withdraw thousands of mortgage deals, with riskier low-deposit mortgages becoming biggest casualties. A year on from the second base rate cut, there are 3,939 mortgages on the market – a drop of 31% on the 5,723 recorded last March.

Although we have recently begun to see some deals return to the market, the number of low-deposit mortgages available to first-time buyers remains 66% lower than a year ago. The average rate on a two-year fix is currently 2.57%, up 0.14% on last year, while five-year fixes have risen by 0.01% to reach 2.75%.

The difference in rates may appear to be inconsequential, but for borrowers with small deposits, the  impact has been dramatic.

Negative Interest Rates?

In June 2020, the Bank of England stated that it was considering introducing a negative interest rate to help boost the UK economy in the future. In October 2020, they then went on to send a letter to lenders, questioning if they were prepared for a zero or negative interest rate, which seemed to indicate that a negative rate was still on the cards. In February 2021, the Bank of England compounded this idea by saying high street lenders should be ready for negative interest rates in July 2021, just in case they’re needed. However, if the vaccination programme leads helps to drive economic recovery, rates may keep their heads above that zero mark.

If a negative base rate were to be introduced, it would be the first time the rate had dropped below zero in the country’s history and it would have wide-ranging effects. Potentially, it could even mean you’d have to pay your bank to hold your cash; however, mortgage borrowing could become cheaper, which would be good news for people with mortgages.

Predictions

The Bank of England’s Credit Conditions survey found lenders expected increased appetite for house purchases and re-mortgages in the three months to May after reported declines in Q1. Meanwhile lenders said overall spreads on secured lending to households had narrowed in Q1 and were expected to continue shrinking over the next quarter, suggesting rates would fall.

A net balance of –21.9 lenders indicated the demand for purchase loans dropped in the first three months of the year while demand for re-mortgages recorded a net balance of -29.3. This was compared to scores of 31.5 and 2.3 respectively in Q4 2020, marking a significant quarterly drop. [1]

For the next three months, a net balance of 42.8 was given for projected purchase demand in Q2, while re-mortgages were scored 14.4.

[1] Survey results are measured in net percentage balances between -100 and 100, weighting responses based on lender market shares.

Should I Switch Out of Bonds?

In our eyes, diversification is the key ingredient when it comes to investing, as it helps you to maximise the returns generated in a portfolio whilst limiting the losses. Putting ‘all of your eggs in one basket’ can prove to be highly detrimental to your overall investment strategy, especially at the moment if all of those eggs are bonds, accordingly to some schools of thought.

Historically, bonds have been regarded as a ‘safe bet’; an asset class that can help to reduce the level of risk in a portfolio and offer steady, if unspectacular returns. However, like any asset, they too, under certain circumstances, can fall in value and become riskier. We all understand that the value of bonds can ebb and flow, but if we look at historical figures, bonds have been good value over the last 40 years, as their prices have steadily risen, but are things now changing? There are a lot of mutterings that bonds are no longer a safe haven, but is this just a reflection of post-pandemic recovery?

The Context

In the first quarter of 2021 we saw a sell-off of Corporate Bonds, sparked by inflation fears in the US. Over the years, politicians have largely managed to quell inflation, but there are now many people who believe that it is in fact a necessary evil if we want to chip way at the huge debts created by the pandemic.

The suspicion that intentional inflation is on the cards was only intensified when the US 10-Year Treasury, arguably the most important interest rate in the world, rose to a recent high of 1.78% from 0.9% in January. As yields rise, the price of treasuries and bonds falls. The speed of this change has certainly unsettled the markets.

Fluctuations are of course normal, and we see them all of the time, for example, the UK government’s gilt yields rose sharply in October 2016 due to concerns over a hard Brexit. However, when something, i.e. bonds, are perceived as being low risk suddenly become a lot riskier in the first quarter of this year, we do start to question if they are still play a valuable in a portfolio.

It’s Not the First Time

In 1994, bond investors were caught off guard when the Fed interest rate shot from 3% to 5.5%, causing yields to shoot up, and bond values to fall. Dubbed as ‘The Great Bond Massacre’, the casualties of this rate shift were numerous.

It is unlikely that these events will be repeated, but in our current world of record-breaking interest rate lows, coupled with massive fiscal stimulus, markets will continue to fret about the return of inflation and its effect on bonds. Whilst interest rate rises, and inflation, are not on the cards yet, the murmurs of these prospects has already caused concern.

Are Bonds Still Valuable?

Despite recent fluctuations, a diversified portfolio, which could include bonds, is likely to still be the best strategy to help you meet your financial goals. It would be incredibly remiss, and inaccurate, to say that one particular asset class is ‘wrong’ or ‘bad’, as everyone’s individual circumstances shape their individual portfolios.

Yes, it is fair to say that bonds have demonstrated more risk in recent months, but like all asset classes, there will always be volatility to some degree. If you are concerned, or feel that your portfolio is too bond-heavy, please get in touch and we will happily review your situation.

Golf Day 2021

On Friday 7th May 2021 Efficient Portfolio is looking forward to hosting our Annual Golf Day. This event is our way of thanking you for your continued support of Efficient Portfolio and to give you the opportunity to meet and network with likeminded people. Sadly, we are restricted by numbers, so places are allocated on a first-come, first-serve basis.

Please join us with a guest from 1200 at Luffenham Heath Golf Club for a full round of golf, refreshments and a late afternoon/evening meal. Please note that the format for 2021 will see all players allocated their own individual tee-time and your meal will be served on a rolling basis.

To secure your spot, please email Charlotte Colton on [email protected] or call 01572 898060.

The Building a Better Business Webinar with ESP

When it comes to the financial side of your business, hiding from your problems could lead to its demise, whether that is you not realising the true worth of your efforts, or you having to work longer and harder than you should. So, what should you be considering?

Chartered Financial Planner, Charlie Reading of Efficient Portfolio, and Chartered Accountant, Wayne Searle of ESP Business Solutions, have joined forces to bring you the ‘Building a Better Business Webinar’: A free, interactive talk on Tuesday 4th May at 3pm that will give you the crucial steps all business owners need to take to achieve clarity, confidence and certainty over their finances.

Find out more and register here

Charlie’s Mini Blog

This month’s book recommendation may not seem very financial, but it couldn’t be further from the truth. Climate Change is probably the investment world’s greatest threat, and its greatest opportunity. If we continue to see temperature rises, we will see mass migrations from areas of the world that are no longer inhabitable, we will see devastation in cities as a result of rising sea levels, and we will see continual increases in natural disasters like wildfires and storms. This would be devastating for businesses, and Bill Gates predicts that it would be the economic equivalent of the COVID pandemic every 10 years - not a pretty picture.

That said, it is also the investment world’s greatest opportunity. Companies forming part of the solution, helping us get to net zero carbon emissions by 2050, will receive more government support, more private investment and also attract more of the limelight.

When you read ‘How to avoid a climate disaster’ (and I hope you do) you will realise that, whilst this is a massive problem to solve, there are key strategies that can make net zero possible. When I read it, I immediately wanted to focus more of my investments on helping the solutions, but I soon realised that, by finding specific companies to target, I could barely scratch the surface of the problem. However, by investing in a well-constructed portfolio ethical portfolio, like the PortfolioMetrix Sustainable World, which creates a risk managed investment solution investing in companies that are part of the solution, I can actually make a much greater impact.

I am no expert in renewables or carbon capture - who am I to be picking individual companies to back? But by funding the solutions through the guidance of investment analysts, I can very much be a part of the solution. A solution that couldn’t be more important for our children or our planet.

What Should You Consider When Selecting a Mortgage?

Whether you are looking for a brand-new mortgage or wanting to remortgage your existing property, the range of lenders and products can be confusing. So, what should you be considering? And how can you reduce your costs?

Cost of Funds

The first thing to consider is how the lender is funding their mortgages. The cheaper costs are for the lender, the lower their rates can be. The ways a lender funds its loans can vary enormously: while some will rely on raising deposits from savers, others get their funding through wholesale markets, and some go for a blend of the two.  While the Bank of England base rate does play a part, there is not really a clear link between the base rate and what lenders must pay to get their funding.

Loan-to-Value (LtV)

The larger the deposit you have, the lower the interest rate you will be able to secure. If you are buying with a 40% deposit, then you will qualify for much better rates than if you’re buying with a 10% deposit. It comes down to a question of risk. If you are borrowing at a high loan-to-value ratio (LtV) then you won’t have much equity in the property. As a result, if you default on the loan or the property value drops, the lender is more likely to make a loss.

Competition

Another factor in the pricing of interest rates will be the level of competition in the market, and a lender’s own business targets. If a lender wants to be a dominant player in the mortgage market for that year, it will look at how its competitors are pricing their loans and use that to work out what interest rate it's comfortable lending at. Equally, if the lender feels that its lending is already ahead of schedule, then it's likely to start increasing its rates in a bid to attract fewer borrowers.

Your Credit History

Your record as a borrower in the past will have a significant bearing on the mortgages you might qualify for. For example, if you have missed payments in the past, whether on credit cards, personal loans or even your mobile phone bill, black marks will be left on your credit report.  Not all lenders will consider borrowers who have these black marks in their credit history, and those that do will often charge a higher interest rate because of the perceived additional risk of lending to you.

To see what is available to you and look at the most cost effective options for your mortgage needs, please get in touch with our Mortgage Adviser Andrea Harrison, who will be more than happy to discuss your options, on [email protected] or by calling 01572 898060

Is Cash Always King?

For many individuals looking to save for the future, the ISA is generally a sensible first port of call, but what type should you consider? Cash? Stocks and Shares? Or even the LISA of JISA?

With a few choices on the market, inexperienced investors often have to take an uneducated guess and plump for the ISA that feels safest, or the type of ISA utilised by their family or friends. But is basing your savings strategy on pre-conceived notions, or the preferences of your loved ones, the best plan for your future?

Recently published statistics from HMRC indicate that in 2019-2020, over £300bn was invested in Cash ISAs, despite ultra-low interest rates. These subscriptions into cash were more than twice as high as those into their Stocks and Shares ISA counterparts.

We believe this trend indicates, at least in part, that investors are not seeking professional guidance and are instead making decisions about their wealth without knowing the full facts.

As Financial Planners, we often work with individuals who are just starting out on their financial journey and have very little experience of investing. Some are also highly fearful of ‘playing the stock market’, as they believe that it’s akin to gambling and they will lose all of their hard-earned money.

The most important message here is that investments should only be as risky as your feel comfortable with. Your preferences and tolerances should be considered before committing to any type of saving- whether that’s in cash or in stocks and shares. Ultimately, you decide what level of risk to take. Investing does not (and frankly should not) be a high-octane, nail-biting experience of panic buying and selling- it should be a long-term strategy that fits within your comfort zone and delivers what you need.

Of course, investing money isn’t riskless: market fluctuations, tax and a reduction in interest rates can all damage the return on our investments; however, it’s also important to consider how risk can also make an impact. Keeping money in cash may feel like the solution here, but in reality, cash is not riskless, and its value will also fall over time due to inflation, thus reducing your purchasing power and jeopardising your future goals.

So, how can you make your cash work harder and reduce the amount of risk you are exposing your wealth to?

Diversification is key here. Putting all of your eggs in one basket, for example one asset-class, could mean that all of your hard-earned money can be wiped out in one fell swoop. By electing to employ a diversified strategy, in this case within your ISA, you may still experience losses on some of your assets, but you could also see gains in other areas, hence your overall performance will be smoothed over time and the impact of losses is greatly reduced. However, it’s crucial to keep your investments continually under review, so that suitable adjustments can be made as required.

The same can be said for risk. An unreviewed investment will become riskier overtime, so making sure that it is calibrated to a level that you are both comfortable with, and one that will help you to facilitate your goals, is incredibly important.

ISAs are a very tax-efficient way of saving for the future, so will be suitable for most people. However, the key message is that the type of ISA that is suitable for you and your goals, whether that’s Cash, Stocks and Shares, JISA or LISA, will be individual to you and should be selected with the support and guidance of an experienced Financial Planner.

If you would like any help with choosing the best solution for your needs, please get in touch for a free call with one of our Chartered Financial Planners on 01572 898060 or email [email protected]

Jargon Buster!

Time is our most precious commodity. But are you maximising the time you’ve got?

The world of finance is punctuated with technical terms and jargon, so I wanted to take a moment to explain some areas to you, which all share common themes of time and growth. This information can also be called the ‘rationale’ of saving, and it is the technical theory behind what factors impact your money and the approach we take at Efficient Portfolio. It’s the ‘inside knowledge’ that will explain why some people make millions and others lose it all.

Timing the Market 

The great Warren Buffet said that ‘time in the market is better than timing the market’, and we couldn’t agree more. But what does this really mean, and when is the best time to invest?

Investing holds many negative connotations, mainly, in my view, because inexperienced investors have tried to guess when they should buy and when they should sell. This is when saving becomes risky. If you’re trying to guess what investments will do well, and are constantly moving money around, not only will you get yourself into a tangle, you’re likely to get burnt.

Even Mr. Buffet, who has been given the moniker of ‘the most successful investor in the world’, has not always timed the market correctly. He even said, ‘The only value of stock forecasters is to make fortune tellers look good’!

People often assume that investing is a high-octane environment of ‘buy, buy, buy’ ‘sell, sell, sell’. The very 80’s image of caffeine fuelled, overly animated people shouting down huge mobile phones may be over 30 years behind us, but this type of investing does still exist; however, it is one I would strongly warn you against.

The problem with this strategy is that people try to ‘time’ the markets, by waiting until they change in their favour. They dip in and out of investing, trying to only purchase investments when they are doing well. The truth is, when investments are performing well they are expensive, because everyone wants them!

Pound Cost Averaging 

A better approach is to employ an ongoing strategy that means you don’t miss out and don’t pay over the odds. As an example, let’s say that you save on a regular basis into a Self-Invested Pension Plan. Because you make regular contributions, you will be continually invested in the market, ensuring you don’t miss out on the ‘best days. When prices are high you to go against the grain and buy fewer units, but when prices are low, you buy more.  This reduces the risk that you pay too much when the price is unusually high, and benefit from buying more when the price has fallen. This is Pound Cost Averaging.

In short, the investments you ‘purchase’ actually work out cheaper than if you were to buy them in isolation, as you don’t need to time the market.

Of course, you will experience ups and downs, but a diverse, smooth and constant strategy can offset the lows and give you better returns overall. You also tailor the plan to your chosen level of risk, so you never feel that you are out of your comfort zone.

Pound Cost Averaging is a slow and steady strategy. As Paul Emerson once said, ‘Investing should be like watching paint dry or grass grow; if you want excitement, take $800 and go to Las Vegas’. Pound Cost Averaging works when you save a steady, regular sum, rather than bluing wads of cash at irregular intervals.

Compound Interest 

So, what is the consequence of investing in a slow and steady strategy? This can be best explained with the principle of compound growth, which is the growth upon the growth upon the growth that you receive from your investments. Generally speaking, the sooner you start to save, the more you will get back. More than that, the earlier in life you start to save, the less you have to regularly put away in order to achieve your desired goal.

Factors such as compound growth will work better over time and should deliver higher levels of growth, if money is invested in a suitable and diverse strategy. Financial planning offers a whole host of advantages, most importantly giving you the ability to live more comfortably and confidently, which, I’m sure you will agree, are values we all strive towards.

It may take time to start to see your goals playing out, but I hope that this explanation of some key financial concepts will help to clarify how important time is in your planning and how our approach can help to deliver your goals.

Keep CALM and Carry On

Efficient Portfolio’s chosen charity to support for this year is CALM. The Campaign Against Living Miserably (CALM) is leading a movement against suicide, and with the 18 months we have all endured, our team couldn’t think of a more important topic to help support. Every week 125 people in the UK take their own lives, and early indications suggest that the pandemic has caused a significant rise in this figure.

Charlie Reading, our Managing director lost his brother-in-law to suicide a few years ago, so was keen to do as much as possible to raise money for this amazing cause. As a result, he will attempt Ironman Tallinn (Estonia) on Saturday 7^th of August to raise money for CALM.

For those that aren’t aware of what an Ironman involves, it is a 2.4-mile (3.86 km) swim, a 112-mile (180.25 km) bike ride followed immediately by a marathon 26.22-mile (42.20 km) run. I am sure you will agree, this will be a tough day at the office, however the more support he has behind him, the easier it will be from a mental perspective, even if the physical challenges remain.

If you would be willing to sponsor Charlie on this epic journey and help us raise money for a charity supporting the single biggest killer of men under 45, you can sponsor him here. Charlie, EP Team and CALM will all be incredibly grateful for your support.

Charlie’s Mini Blog

I am writing this as we drive back from Cornwall after an amazing family holiday. It seems that the rest of the UK has woken up to the fact that you don’t need to go abroad to enjoy an incredible holiday. Admittedly we’ve been spoilt with Mediterranean like weather, but when the weather is good, in my opinion you will struggle to beat Cornwall. With coastlines that would rival New Zealand or Thailand, food that rivals the Italian Lakes and activities that would give Centre Parks a run for their money, it really does have everything.

I’ve been singing the virtues of Cornwall for a few years now, and will continue to do so. I wrote a guide to Cornwall a couple of years that you can read here. Our trip this time has been a much-needed tonic, but this year it has certainly busier than ever and with restaurants fully booked, short staffed or caught by the ‘pingdemic’, knowing your options has never been more important. We didn’t get caught in traffic and we didn’t struggle to park, but we have the benefit of experience.

In order to make the most of any trip, you are wise to seek the advice of an expert as well as do research yourself and your finances are no different. We encourage our clients to learn more about their finances, so that they can make more informed decisions, while also providing them expert advice when they need it. I hope you too can enjoy a much-needed holiday to recharge after a treacherous 18 months, and when you return, if you need to refresh your finances too, please just ask.

Bereavement benefit changes for cohabiting couples

In July, on behalf of the Department for Work and Pensions, Baroness Stedman-Scott set out plans to extend bereavement support to cohabiting couples with children. Under the plans, Widowed Parent’s Allowance and Bereavement Support Payments will be extended to surviving cohabiting partners with children who were living with their partner at the time of death where previously a surviving parent could only claim the financial support if they had been married or in a civil partnership at the time of their spouse or civil partner’s death.

The change is estimated to extend the right to claim to more than 22,000 families, totalling an additional £320 million in support for bereaved children over the next five years. Once approved by Parliament, the changes will apply retrospectively from 30 August 2018, with any backdated payments being made as lump sums.

Baroness Stedman-Scott summarised; “The death of a loved one is devastating and can also come with significant financial implications.” The additional support will be a lifeline to many families during difficult times.

The economic impact of a Pingdemic

As we inch closer towards normality in our everyday lives, it seems everyone is either planning to or is taking a holiday this month, however, now a new threat looms poised to scupper plans – a Pingdemic! The same government track and trace technology that once optimised and rolled out allowed us to keep a metaphorical lid on the number of knock-on exposures to Covid-19 has, now that most of us are double-jabbed and behaving sensibly, proven to be, in the opinions of some, too overbearing.

In the week to 14th July, over 600,000 people in the UK were told by the NHS Covid-19 app to self-isolate, a number so high that it threatened to disrupt food and fuel supplies, leaving British business leaders agitated about the impact on their staffing and access to products and services. An impact further exacerbated by the existing problems caused by Brexit and a shortage of lorry drivers.

Pictures of empty supermarket shelves quickly spread on social media and news websites, forcing the government to accept shortages were becoming an issue. Kwasi Kwarteng, Secretary of State for Business, Energy and Industrial Strategy confirming the government were “very concerned about some developments”.

By the following Thursday, Boris Johnson backed an emergency plan to avoid further disruption to UK supplies. Measures included rolling out a testing regime to as many as 500 food-related workplaces so that contacts who would otherwise be self-isolating can instead take daily tests. Jeremy Hunt, former health secretary, said the self-isolation rule should be scrapped immediately for people who had been double jabbed, warning: “Otherwise we risk losing social consent.”

Figures from the health department show the number of people using the NHS Test and Trace app to register at pubs, shops and other venues is continuing to fall. The fall suggests more people may have deactivated or deleted the app to avoid being put into isolation if they came close to someone who later tested positive for the virus.

With children returning to schools in September and fears of a third wave of the virus circulating we’ll likely see more strategies put in place to balance economic impact and public health. Let's hope that the holiday you might be considering will still be on the cards!

Deadline set for early pension access

As the government sets out plans to raise the minimum access age to pensions from 55 to 57, Savers looking for early access to their pension pot may need to act by 2023 to maintain early access.

The current rules to the defined contribution pension pots allow savers to take their pension savings as they wish from age 55. However, the government has now confirmed this “normal minimum pension age” (NMPA) will raise to 57 by April 2028, at which point the state pension will also rise from 66 to 67 in line with life expectancy increases.

Those predicted to be most impacted by the change are those born after April 6, 1973, who are aged 48 and younger. They will have to wait an extra two years to take either a lump sum or income from their pension. To mitigate this, the government is allowing savers who take action by 2023 to keep to the current NMPA rules provided they transfer pots to a scheme where the 55 years pension age is built into the scheme rules.

Taxing times for the young saver

We’re real advocates of teaching strong financial habits at a young age, after all, that’s why we wrote the book SMART Money which you can download for free here. Good financial habits established early on in a career will set plans in motion for a strong foundation for the future. As such, it’s a concern for many to hear rumours that the government may be looking to cut higher rate tax relief on pensions in order to pay off some of the huge Covid-19 related debts accumulated.

Tax relief is currently paid on pension contributions at the highest rate of income tax a person pays. This translates to basic rate taxpayers getting 20 per cent pension tax relief, higher rate taxpayers able to claim 40 per cent and additional rate taxpayers getting 45 per cent. If younger higher rate taxpayers were to lose out on the 40% they would lose out on both the higher rate contributions and any investment growth that might come with it.

Whilst the government is yet to confirm or deny the rumours of the above, any changes to the levels of relief are likely to disincentivise younger generations from building their pension pots now for the future. It’s here where we as advisers have a place to help people understand their options and separate fact from fiction and fear, so if you know someone that needs help or guidance, please don’t hesitate to ask.

Charlie’s Mini Blog

In my new book The Life Legacy Gift, I talk about the impact of passing on our stories and life’s learning to the next generation. When you have a life changing experience, tick off a major bucket list item or hit an important goal, you usually come away with some significant life lessons. Aspects that change the way you think for the rest of your life that, without care, can be lost when you are gone.

Wouldn’t it be a shame if your loved ones had to make the same mistakes that you’ve made in order to progress in their life? Imagine if Edison hadn’t shared his life lessons and we all had to invent 1000 light bulbs before we could ditch the candles! That’s why creating the best legacy possible actually takes some effort.

Take my recent attempt to raise money for the charity, CALM. Having had glorious sunshine in the days before and after, Tallinn treated me to torrential rain and 40mph winds for the duration my Ironman which made for a tough day, and an extra 1/2 mile run at the end of the marathon caught me by surprise, so there were many lessons learnt.

I wanted to complete the Ironman in under 11 hours, so I was chuffed with 10.52 given the conditions. For those that are interested, my splits were 1.13 for a choppy and murky 2.4-mile lake swim, 5.24 for a wet and windy 112-mile bike (avg 20.5 mph), and 4.02 for a 26.74-mile run. A huge thank you to those that have sponsored me already. If you haven't, you can still help me raise money for suicide prevention here.

Importantly, I have documented what went well, and what didn’t so that not only can I learn from my mistakes, but others can too. If you ever want to do an Ironman, feel free to ask! If you’d like a free copy of The Life Legacy Gift, either for you or for perhaps your parents, email [email protected] as we will be giving away a limited number of paperback copies. You never know, you might get lucky and be able to create an even better legacy!

The Cost of a Comfortable Retirement Rises

The Pensions and Lifetime Savings Association (PLSA) has warned that the cost of retirement has risen – seeing an increase in the cost of 4.9% since 2019.

The PLSA industry report predicts an extra £40,000 will be needed to fund a comfortable 20-year retirement. The PLSA breakdown their calculations into three tiers: minimum, moderate, and comfortable. At the top end, for a comfortable retirement, single people’s annual budget has increased by £600 to £33,600, while a couple’s budget rose by £2,000 to £49,700, roughly 4.9% more expensive than in 2019. The ‘comfortable’ tier would include luxuries such as routine beauty treatments, theatre trips, and three weeks per year of European holidays.

A large proportion of the increase relates to rising transport costs, which have seen a sector increase of 10% since 2019.

Nigel Peaple, the PLSA’s Director of Policy and Advocacy commented:

“It is important that the retirement living standards remain relevant by reflecting real-world price changes and real-world expectations about lifestyles in retirement. We hope the updated standards will encourage people to think about whether they are saving enough for the retirement lifestyle they want and, in particular, whether they are making the most of the employer contributions on offer in their workplace pension.

“The lockdowns caused by the pandemic have given many workers a foretaste of being retired and made people think about the activities and experiences they truly value. The pandemic has emphasised the importance of economic security as well as social and cultural participation in retirement.”

Shop Safe Online

As well as being the season of goodwill, unfortunately, it is the time of year that fraudsters seek to exploit. One of the most prevalent methods to financially defraud is via a cyber-attack, of which the most common, affecting both individuals and organisations, is Phishing.

Phishing attacks can take many forms, but they all share a common goal – getting you to share sensitive information such as login credentials, credit card information, or bank account details.
There are a few phishing attacks to be aware of:

Phishing

In this type of attack, hackers impersonate a real company to obtain your login credentials. You may receive an e-mail asking you to verify your account details with a link that takes you to an imposter login screen that delivers your information directly to the attackers.

Spear Phishing

Spear phishing is a more sophisticated phishing attack that includes customised information that makes the attacker seem like a legitimate source. They may use your name and phone number in the e-mail to trick you into thinking they have a connection to you, making you more likely to click a link or attachment that they provide.

Whaling

Whaling is a popular ploy aimed at getting you to transfer money or send sensitive information to an attacker via email by impersonating a real company executive. Using a fake domain that appears similar to a legitimate domain, they look like normal emails from a company and ask you for sensitive information (including usernames and passwords).

Shared Document Phishing

You may receive an e-mail that appears to come from a file-sharing site like SharePoint alerting you that a document has been shared with you. The link provided in these e-mails will take you to a fake login page that mimics the real login page and will steal your account credentials.

What You Can Do
To best avoid these phishing schemes, you can observe the following email best practices:

• Do not click on links or attachments from senders that you do not recognise. Be especially wary of .zip or other compressed or executable file types.
• Do not provide sensitive personal information (like usernames and passwords) over email.
• Watch for email senders that use suspicious or misleading domain names.
• Inspect URLs carefully to make sure they’re legitimate and not imposter sites.
• Do not try to open any shared document that you’re not expecting to receive.
• Be especially cautious when opening attachments or clicking links if you receive an email containing a warning banner indicating that it originated from an external source.

Being mindful of the above should stand you in good stead.

New HMRC reporting requirement for Trusts

From April 2022, HMRC are changing their reporting requirement for trusts. Previously, only trusts with a tax event required registration, however, the new rules require more types of trusts to be registered online using the new HMRC Trust Registration Service (TRS). All named trustees are equally legally responsible for the trust, but you must nominate one person to act as ‘Lead trustee’ for trust registration. The person nominated as Lead trustee will be the point of contact for HMRC.

Registration is the responsibility of the Lead trustee and is carried out yourself via HMRC’s TRS. There will be a requirement to keep the information updated annually. Further information on what type of trusts need to be registered and the registration process can be obtained here: https://www.gov.uk/guidance/trust-registration-extension-an-overview

Perhaps unsurprisingly, it isn’t an easy read, but you do not need to register any trusts that we have set up through Solidus or The Will Company unless we contact you directly. If you have an investment which is written into trust, we strongly suggest that you complete your own investigations or contact us to determine if your trust needs to be registered.

UK House Prices Continue to Rise

The last three months have seen a continuation in the rise of UK house prices, with the growth pace hitting a 15-year high.

The rise has been driven primarily by a shortage of housing stock combined with low lending rates. Figures reported by Halifax in November 2021, put the average price of a UK property at a record high of £273,000, with a rise in the average value of homes up 1% October-November now sitting 8.2% higher than the same period in 2020.

Whilst the London market lags behind, nationally average property prices rose sharply as homebuyers continue to look for larger, less crowded locations to set up home. With October marking the end of the stamp duty holiday, many expected the trend to slow; however, to date, that has not been the case.

Whilst the Omicron coronavirus variant brings uncertainty, if previous months any indication, the rises might just continue.

IHT Reform Ruled-out by Treasury

In late November the government held its ‘Tax Administration and Maintenance Day’. A day in which they considered plans to create a more simple and effective tax system. However, upon consideration, Inheritance Tax reforms were rejected.

The plans discussed are part of the Treasury’s 10-year plan, part of the Tax policies and consultation update launched in March this year. The plan centres around establishing a real-time and third-party tax administration system designed to make the taxpayer experience for individuals and businesses more straightforward.

HMRC’s Chief executive, Jium Harra said:

“As we continue our work to improve the tax system for UK taxpayers and clamp down on avoidance and evasion, we know that an open dialogue with our stakeholders is vital.

“With thanks to the tax profession for their views, we can now announce the next steps for how we will simplify the legislative framework and raise standards in the tax advice market. We are also announcing new areas on which we are inviting views, including reforming Income Tax Self-Assessment registration for the self-employed. These announcements will contribute to creating a modern, trusted tax administration system.”

The Office of Tax Simplifications (OTS) had previously made a recommendation that the lifetime gift exemptions and scope of IHT relief be simplified as part of the HMRC review; however, these recommendations were mostly ruled out by the treasury during their Tax Administration and Maintenance Day.

The 11 OTS recommendations included increasing the £3000 annual gifting allowance exemption which has been frozen since 1980, if it would have risen with inflation it would now sit at over £13,000. Wedding gift exemptions have not changed since 1975 either. Furthermore, they recommended the reduction in the length of time it takes for gifts to leave the estate from seven to five years to improve record-keeping and forward planning.

Of all the recommendations the OTS made, just one related to IHT will be implemented – from January 1st 2022. 90% of non-taxpaying estates will not have to fill out IHT forms for deaths when probate or confirmation is required.

The Future of Our Efficient Wealth Update

As many readers of our Efficient Wealth Update will now be aware, 2021 saw Efficient Portfolio review the platforms and technologies that we utilise to service our clients. Due to these changes, many of clients have now moved over to the True Potential Platform.

True Potential have an extensive marketing team with much better economies of scale and one of the areas where they have really impressed us is with their weekly e-newsletter, their monthly portfolio update as well as their quarterly magazine. Given the high quality of these publications, and the fact that most of our clients will now receive these updates, we have decided to stop producing our own Efficient Wealth Update so that you are not swamped with financial news, which would likely repeat itself.

This means that this December edition of our Efficient Wealth Update will be our last, but we will still be sending out more personal and relevant news, as and when we believe it will be useful to you and Charlie’s Friday Footnotes will also continue.

If you have not yet received the True Potential newsletter, and would like to, please get in touch with your Client Relationship Manager and they will organise this for you.

Charlie’s Mini Blog

We have been sending out The Efficient Wealth Update for over 15 years and whilst it has generally been well received by clients, time moves on. One of the best non-financial newsletters I receive is called Futureloop, a newsletter created by artificial intelligence that aggregates news from around the world.

Over the years we have had lots of great feedback from clients that they preferred the more blog like articles, the book recommendations and the health and wellbeing pieces from us so a few years ago we created the Friday Footnotes email, which is a much better way of delivering this type of information - if you don’t already receive this and would like to, you can subscribe here. For financial updates that also specifically relate to how you invest your money, the True Potential communications far exceed what we’ve ever been able to deliver, so drop your Client Relationship Manager a line if you don’t already get them.

I hope over the time you have received The Efficient Wealth Update it has proved thought provoking, enlightening and useful and that you’ll continue to enjoy the Friday Footnotes as an entertaining and interesting continuation of our non-financial updates.

I hope you have a wonderful Christmas, and that none of your plans are curtailed by positive tests, Boris or cancellations. The most important thing about Christmas is how you spend it with the people you care most about, so with any luck you’ll get to do significantly more of that than you did last year.

Wishing you a very merry Christmas and a healthy, wealthy and happy New Year!