Category: News

Economies around the world continue to struggle with high inflation and weakening demand affecting GDP. Read on to discover some of the factors that may have affected your investment portfolio in September 2023.

When reviewing short-term market movements, remember to focus on your long-term investment goals.

UK

Official data shows the UK economy contracted by 0.5% in July. The Office for National Statistics (ONS) attributed the poor performance to strike action and poor weather.

However, there was some good GDP data. The ONS said the UK economy reached pre-pandemic levels earlier than thought in the final quarter of 2021. The revision is good news as economists previously believed the UK was lagging behind other countries.

Inflation is falling but remains above the Bank of England’s (BoE) 2% target. In the 12 months to August 2023, it was 6.7%.

Despite high inflation, the BoE’s Monetary Policy Committee voted to hold its base interest rate of 5.25%. The Bank’s governor, Andrew Bailey, said he believes inflation will fall “quite markedly” by the end of the year. However, he added, it would be premature to cut interest rates now.

Quarterly data from the central bank shows the public is dissatisfied with the strategy for controlling inflation. Public satisfaction was at its lowest since records began in 1999.

While interest rates didn’t rise in September, households are struggling.

The Resolution Foundation warned average working household incomes are on course to be 4% lower in 2024/25 in real terms when compared to 2019/20 thanks to high interest rates, steep tax rises, and a stagnant economy.

The number of mortgages in arrears also demonstrates the pressure some families are facing. According to the BoE, the number of mortgages in arrears hit the highest level in almost seven years.

Businesses are feeling the strain from rising interest rates too. Think tank Cebr predicts that 7,000 businesses will fail every quarter in 2024.

Statistics from the Insolvency Service indicate some businesses are already struggling to balance costs.

Company insolvencies jumped by almost a fifth in England and Wales in August when compared to a year earlier. However, it’s important to note that insolvencies were at a historic low during the pandemic as businesses benefited from government support.

Despite some negative statistics, the FTSE 100 recorded its best day of 2023 so far – the index gained 1.95% on 14 September.

Europe

GDP data for the eurozone was revised downwards. Statistics show GDP expanded by only 0.3% in the second quarter of 2023, which has led to concerns that the bloc could fall into a recession in the second half of the year.

Inflation in the eurozone fell to 5.2% in the 12 months to August. However, there’s a big difference between economies across the bloc. Hungary had the highest rate of inflation at 14.2%, while Spain and Belgium saw prices increase by 2.4% when compared to a year earlier.

In response, the European Central Bank raised its three key interest rates by 25 basis points.

Purchasing Managers’ Index (PMI) data indicated that business output is still contracting as new orders fell and firms were forced to pay more for raw materials and other costs. Germany and Austria were among the worst-performing nations in the eurozone.

As the largest economy in the eurozone, Germany is often used as a barometer for the economic area.

Unfortunately, signs suggest Germany’s economy could be faltering. The European Commission said it expects the country’s GDP to fall by 0.4% this year as energy price shocks due to the war in Ukraine hit the country hard.

Sentix’s index for the eurozone also suggests Germany’s performance is leading to pessimism among investors.

While many countries are struggling to manage soaring inflation, Turkey’s is among the highest. In the 12 months to September 2023, inflation was 61.5% and its base interest rate was 25% in September.

US

Inflation in the US is lower than in some other developed economies. However, at 3.7% in the 12 months to August 2023, the figure is higher than it was a month earlier.

Similar to countries in Europe, PMI data suggests business productivity flatlined in September. S&P Global said the service sector lost momentum in August, while manufacturers reported a drop in sales.

Towards the end of the month, there was a risk that the US government could partially shut down. A group of Republican members of the House of Representatives refused to compromise with their own party’s leadership.

Credit rating agency Moody’s warned a shutdown could threaten the US’s triple-A rating and cause market volatility.

It would follow Fitch downgrading the US government’s credit rating in August due to a “deterioration of standards”.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

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

When you’re facing big life decisions, it can be difficult to know which choice to take. Read on to learn some simple tips that could improve your decision-making.

According to Eva Krockow, a lecturer at the University of Leicester, the average person makes a staggering 35,000 decisions every day.

Of course, many of these decisions will be unconscious. You probably give little thought to how quickly to walk when you’re heading to the shop or whether to smile at a stranger you meet on the way.

A lot of the decisions you make you will do on autopilot rather than deliberating the different options. Even those that you make consciously, many will be relatively unimportant in the grand scheme of things.

Yet, everyone will face decisions that they need to carefully weigh up and could have a long-lasting effect on their life. You might be deciding whether you should take a new job offer, or if you should invest a lump sum you’ve received rather than place it in a cash account.

At these times, you might worry about making the wrong choice. So, here are five simple tips that could help you.

1. Imagine yourself in the future

If you find yourself unable to make a decision or you keep changing your mind, visualising yourself in the future can be effective.

Go through each of your options and consider how the choice would affect your life in one or five years. It can be valuable for a few key reasons.

First, it can identify the decisions that aren’t going to have a long-term effect on your life that you might be needlessly worrying about.

Second, it could help you get away from the immediate results of your decisions and focus on the bigger picture. You might find that when the long-term outcomes are weighed up, your decision is more straightforward than you initially thought. 

2. Write down your goals

Your goals should be at the centre of your decisions. So, being clear about what you want to achieve can give you a sense of direction and something to balance “good” or “bad” decisions against.

Writing down your aspirations might be useful when you’re defining what’s important to you. It also provides you with something to refer back to when you’re making a decision.

3. Set yourself a deadline

Timing is important when you’re making a decision, so give yourself a deadline.

On the one hand, you don’t want to be pushed into making potentially life-changing decisions quickly. You might benefit from taking a step away to gain some perspective or to allow yourself to think through the options carefully.

On the other hand, it can be all too easy to procrastinate and put off important decisions when you’re struggling.

Giving yourself a deadline can help you make decisions in a timely manner.

4. Figure out what you don’t know

For some decisions, you might benefit from extra information. So, figuring out what you don’t know is an important skill that could improve the outcomes.

Noting down what you need to find out could help direct your research. In some cases, a quick search online will yield the answers you want and help you make an informed decision.

Don’t be afraid to seek help either. Sometimes speaking to a professional could be right for you. For instance, if you’re deciding which mortgage suits your needs, a mortgage broker might be able to explain the different options to you.

5. Learn from your mistakes

Finally, use your mistakes to your advantage.

Everyone makes errors, and there will be times when you look back with the benefit of hindsight and wish you’d done some things differently. While you might regret some of the decisions you’ve made, learn from them to improve in the future.

Ask yourself what led to you making the “wrong” decision. You might have been led by other people or maybe you simply didn’t have the experience you do today.

Understanding what led to certain decisions can help improve your judgement and allow you to create a process that works for you.

When your current mortgage deal comes to an end, your lender will usually offer you a new interest rate to encourage you to remain with them. This is often called a “product transfer”.

While choosing this option does have some advantages, you could be missing out on a more competitive deal that may save you money. Read on to discover the pros and cons of a product transfer.

Mortgage deals will typically last for two, three, or five years. Once the deal ends, you’ll normally have three options:

1. Stay with your current lender using a product transfer: If you’re up to date with your monthly repayments and aren’t looking to borrow more against your home, your lender may offer you a new mortgage deal, which is known as a “product transfer”.
2. Remortgage your home: You can take out a new mortgage on your home, either with your existing lender or a new one. You’ll need to go through the mortgage application process.
3. Do nothing: You don’t have to use a product transfer or remortgage. If you do nothing, you can continue to make mortgage repayments. However, your lender will usually move you on to their standard variable rate (SVR), which is often higher than comparable deals.

According to This Is Money, soaring interest rates and uncertainty around affordability have led to product transfers gaining popularity.

During the first half of 2023, data suggests half of mortgage borrowers used a product transfer when their deal ends. In comparison, just a quarter remained with their current lender in the first half of 2022.

3 practical reasons homeowners are choosing a product transfer

1. A product transfer usually involves fewer checks

When you take out a new mortgage, the lender will assess how likely you are to maintain your mortgage repayments by carrying out affordability tests. Often, they will consider how you’d cope financially if interest rates increased.

As interest rates are already higher than they were two years ago, some homeowners may be worried they’ll no longer pass affordability tests even if they’ve kept up with repayments.

A product transfer usually involves fewer checks. So, if you’re worried about meeting lenders’ criteria, a product transfer could be a useful option.

2. There will typically be less paperwork if you choose a product transfer

If you take out a new mortgage deal, you’ll need to go through the application process. This will include filling out paperwork and providing evidence that you can meet the repayments.

In contrast, a product transfer will typically be a quicker process as your lender will already have the key information, along with your repayment history.

3. A product transfer could help you avoid fees

Taking out a new mortgage could mean you face additional charges, such as an arrangement fee. By opting for a product transfer, you could avoid these costs – although there may still be fees associated with a deal you take out through your existing lender.

A product transfer could mean you pay a higher rate of interest

While a product transfer may be an attractive option, it’s a decision that could mean you pay more in interest. Over a full mortgage term, a higher interest rate could add up to thousands of pounds, so shopping around might be valuable.

 There are two key reasons why switching your mortgage to a new lender may reduce your outgoings.

1. A different lender may offer a lower interest rate than your current provider

Interest rates have increased over the last two years. Yet, they are starting to fall and there is a substantial difference in the rates offered by different lenders.

You may find that the rate you’re offered through a product transfer isn’t as competitive as the rate you’d receive if you switched to a new lender.

2. A product transfer may not include a re-valuation of your home

The value of your home may have a direct effect on the interest rate you can access.

Lenders will calculate your loan-to-value (LTV) ratio when assessing your mortgage application. The LTV measures how much money you’re borrowing compared to the value of your home.

If your home was worth £300,000 and you were borrowing £200,000 through a mortgage, your LTV would be 66%.

Typically, the lower your LTV the more competitive the interest rate a lender will offer you as you pose less of a risk.

If you have a repayment mortgage, your LTV will gradually fall as you make repayments. The value of your home rising would also reduce your LTV.

When choosing a product transfer, your existing lender may not re-value your home. So, your lender could place you in a higher LTV bracket than you would be in if you decided to remortgage with a different provider. This may mean you don’t benefit from lower interest rates available elsewhere.

Is your current mortgage deal ending? Contact us to discuss your options

If your current mortgage deal expires soon, the decision you make could affect your budget and long-term finances. We can help you understand your options and provide expert guidance, whether you decide to stay with your current lender or take out a new mortgage deal with another provider.

Please contact us to speak to one of our team.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.

Figures suggest more families are gifting to avoid Inheritance Tax (IHT). While passing on assets to loved ones may seem like a clear solution, it isn’t always so simple.

More estates are becoming liable for IHT as thresholds for paying the tax are frozen. The Office for Budget Responsibility predicts HMRC will collect £8.4 billion from IHT receipts in 2027/28, compared to £7 billion in 2022/23.

The portion of your estate that exceeds IHT thresholds could be taxed at a standard rate of 40%. So, it’s not surprising that families are looking for ways to mitigate a potential bill.

According to a Telegraph report, the number of people who have gifted assets that would become exempt from IHT if they survived a further seven years increased by 48% between 2009/10 and 2019/20.

If the value of your estate exceeds the nil-rate band, which is £325,000 in 2023/24, your estate may be liable for IHT. You might also be able to use the residence nil-rate band, which is £175,000 in 2023/24, if you leave your main home to direct descendants.

You can pass on unused allowances to your spouse or civil partner.

Both the nil-rate band and residence nil-rate band are frozen until April 2028. So, if the value of your estate is nearing the threshold, you may find your estate could become liable for IHT as the value of your assets could rise. 

Gifting assets to your beneficiaries now can be advantageous. It may allow you to help loved ones reach life milestones.

However, if you’re gifting for IHT purposes, there are some things you may want to keep in mind.

1. Gifting may affect your financial security later in life

Before you hand over a gift, assessing the effect it could have on your later life may provide peace of mind. Could gifting leave you financially vulnerable in your later years? Could it affect your ability to overcome a financial shock?

Making gifts part of your wider financial plan means you can understand how your decision may affect your wealth over the short and long term.

Understanding the potential implications before you make a gift might help you to feel more confident about your finances.

2. Not all gifts are considered immediately outside of your estate for Inheritance Tax purposes

When you’re gifting to minimise an IHT bill, considering longevity may be important.

Gifts might be considered “potentially exempt transfers” (PETs) and included as part of your estate when calculating IHT for up to seven years after they were given.

As a result, if the entire value of your estate exceeds IHT thresholds, your estate could be liable for IHT on assets you’ve already passed on.

Once seven years have passed, gifts will not be included when calculating IHT liability.

3. There are gifting allowances you may want to make use of

If you want to gift assets to reduce an IHT bill, there are some allowances you could make use of.

These gifts would be considered immediately outside of your estate for IHT purposes:

• The annual exemption, which is £3,000 in 2023/24
• £1,000 to someone getting married, rising to £5,000 for your children and £2,500 for grandchildren
• Unlimited gifts of up to £250 to any individual who has not received a gift using another allowance.

Regular gifts that are made from your income may also be exempt from IHT. These gifts must be made regularly. For instance, you may pay the rent on your child’s home or your grandchild’s school fees.

Making use of these allowances and exemptions could provide a tax-efficient way to pass on wealth during your lifetime.

There are others steps you could take to reduce a potential Inheritance Tax bill

Gifting isn’t the only option if you want to reduce a potential IHT bill. Other solutions might include:

• Leaving 10% or more of your estate to charity, which would reduce the IHT rate from 40% to 36%
• Passing on wealth through your pension, which is usually considered outside of your estate
• Using a trust to pass on assets tax-efficiently.

It’s important to weigh up the pros and cons of these options. It may also be useful to take both financial and legal advice in some cases, as estate planning can be complex.

You might also want to consider taking out a whole of life insurance policy. This wouldn’t reduce the amount of IHT your estate is liable for, but loved ones could use the money it pays out to settle the bill.

It’s essential that life insurance is written in trust. Otherwise, the payout could be considered part of your estate and result in a higher IHT bill.  

An estate plan can help you set your affairs in order and minimise Inheritance Tax

An estate plan can help you set out what you’d like to happen in your later years and how you’d like to pass on assets when you die. Setting your affairs in order can be emotional, but it’s an important task. 

We can help you create an estate plan that reflects your wishes and considers concerns you may have, such as whether IHT will affect the assets you leave behind. Please contact us to arrange a meeting.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The Financial Conduct Authority does not regulate estate or tax planning.

Remember that taper relief only applies to gifts in excess of the nil-rate band. It follows that, if no tax is payable on the transfer because it does not exceed the nil-rate band (after cumulation), there can be no relief.

Taper relief does not reduce the value transferred; it reduces the tax payable as a consequence of that transfer.

Opening up about your finances can be difficult. Yet, talking about money could improve your financial security and boost your wellbeing.

Every year, the Money and Pension Service (MaPS) hosts Talk Money Week, an initiative encouraging more people to start financial conversations. This year, it takes place between 6 and 10 November, and it asks everyone to do one thing that could improve their financial wellbeing, and inspire others to do the same.

So, if you’ve been putting off financial discussions, now could be the perfect time to tackle them.

Money plays an essential role in your overall wellbeing. Indeed, a Financial Conduct Authority report found that more than half of adults feel more anxious or stressed due to the rising cost of living.

Despite this, money conversations can still be seen as taboo, and some people struggle to communicate effectively when discussing finances. It can be particularly difficult if you have different views on how to manage money.

In fact, 26% of people in a relationship said they argue with their partner about money at least once a week, an Aviva survey found.

Making finances a regular part of your conversations could ease some of the pressure you may feel and help you see a different perspective.

To mark Talk Money Week, here are five useful conversations you could have with people in your life.

1. Speak to your partner about your retirement plans

Have you had a serious conversation about your retirement plans with your partner? From when you’d like to retire to the kind of lifestyle you want to live, having a detailed plan for the next chapter of your life could mean your dream is more achievable.

A clear idea about retirement can also help you work towards shared goals.

So, if you’ve only made vague plans, sitting down to really talk about what you’re looking forward to in retirement might be valuable. With a clear idea about what you want your future to look like, you can start to understand how much you need in your pension or how to use other assets.

2. Discuss life goals with your children

If you have children, Talk Money Week is a great opportunity to pass on your knowledge and money lessons.

During your life, you’ve no doubt picked up tips from both positive and negative money experiences. Sharing these with your family could help them embrace good money habits and avoid pitfalls.

As well as day-to-day finances, ask them about their long-term plans. You might be able to offer guidance as to how they could achieve their goals, or point them in the direction of professional advice if it may be beneficial to them.

Their response might also affect your financial plan. For example, if your child hopes to buy a home soon, would you want to lend some financial support?

3. Chat with your co-workers about your employer’s perks

Money can be a difficult topic to talk about at work, but discussing how to make the most of your employer’s perks could be a good way to start. Plus, you might discover some workplace benefits you’ve overlooked.

Perhaps your workplace offers discount shopping vouchers that could help reduce grocery bills? Or maybe your employer matches pension contributions to make saving for retirement even more efficient?

A quick chat about how you use workplace benefits could help you and your co-workers get more out of them.

4. Ask elderly relatives about how they manage their finances

Some people struggle to manage their finances as they get older. So, checking in with elderly relatives could provide you with peace of mind.

Some challenges could be simple to solve, such as if they find it difficult to manage online utility accounts. Others might benefit from professional advice, for instance, if they don’t feel confident using assets they’ve built up to create an income or worry they’ll run out.

Scammers are more likely to target the elderly too. Helping loved ones get to grips with their finances or taking over certain tasks could reduce the risk of them falling victim to fraud.

In addition, you may want to ask if they’ve taken steps like naming a Lasting Power of Attorney, which could provide security if they’re unable to make decisions in the future.

5. Talk to your financial planner about your concerns for the future

Even when you have a financial plan in place, it’s normal to worry about the future sometimes. If you have concerns about your long-term finances, discussing them with your financial planner could put your mind at ease.

You might have already taken steps that could calm your fears after a conversation. Or your financial planner could help you identify how to reduce risks in a way that suits your overall financial plan.

If you’d like to talk to us about your financial plan, or you want to understand how a financial planner could support you, please get in touch.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits.

Creating a financial plan is just the first step to reaching your goals. While you may have carefully set out what you need to do, financial reviews are still essential. 

Often, it’s advised that you review your financial plan once a year or following major life events. Over the next few months, you can read about why reviews are a part of your financial plan and the times when you might want to make changes.

Here are three reasons why you shouldn’t skip reviews. 

1. You can use your review to check you’re on track to meet your goals

Even the best-laid plans can go awry.

A whole host of outside factors could affect the outcome of your financial plan, from interest rates to financial shocks. Financial reviews can provide a snapshot of your finances and help you understand if everything is still on track.

A review is a chance to look at things like how your investments have performed and what the projected long-term returns mean for your future.

Financial reviews mean you could identify potential obstacles in your plan sooner than you might if you didn’t carry one out. It may give you a chance to respond to possible risks and limit the effect they’ll have.

Going through your plan regularly may also help you feel more in control and boost your wellbeing overall. Knowing that a professional is handling your finances with your aspirations in mind could help you focus on other areas of your life.

2. You can update your financial planner about changes in your life

Your circumstances and goals should be a central part of your financial plan. What you want to achieve with your money may affect which decisions are right for you.

While you’ll often set out long-term goals when you first make a financial plan, things can change.

As part of your financial review, we’ll not only discuss how your assets have performed but whether your plan is still suitable. So, talking about your aspirations is essential.

Perhaps since your last review you’ve decided you want to:

• Receive a higher income in retirement because your lifestyle or financial commitments have changed
• Take time away from work to raise children or care for a relative
• Retire earlier
• Gift a lump sum to your child to help them reach their goals
• Start your own business.

New goals might also affect your long-term finances.

For instance, if you want to take time away from work, you may pause pension contributions, which could affect your retirement income. By making these decisions part of your financial plan, you can understand both the short- and long-term effects and how you could keep other goals on track.

3. Reviews provide a great opportunity to ask questions or address concerns

Your financial reviews are the perfect time to ask any questions or bring concerns you might have to your financial planner.

Perhaps a period of investment volatility means you’re worried about how market ups and downs could affect your income in the future? Or maybe a news story about retirees running out of money has made you worried?

Feeling anxious about your finances could cause unnecessary stress or even lead to you making decisions that aren’t right for you. So, using your review to talk to your financial planner about what’s on your mind could help you stay on track and feel comfortable when handling your finances.

Of course, if you have any questions or concerns, you don’t need to wait until your review to bring them up. You can contact us to speak to one of our team when you need to.

Do you have questions about your financial plan or review?

Whether you’d like our support in creating a financial plan that suits you, or you have questions about your review, you can contact us.

Our goal is to help you have confidence in your finances and make the most of your money in a way that aligns with your aspirations.

Next month, read our blog to discover two key reasons why you might want to make changes to your financial plan following a review.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

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

The “great resignation” is set to continue. If you’re searching for a new job, the salary is probably crucial when deciding if an offer is right for you. Yet, there are non-salary work benefits that could boost your wealth that you may be overlooking when you weigh up an opportunity.

The Global Workforce Hopes and Fears Survey from PwC found that the cost of living crisis is pushing more workers to search for a pay rise. In fact, in the UK, 23% of employees say it’s likely they’ll change jobs in the next 12 months.

Globally, the study found workers who are struggling to pay their bills are among the most likely to seek a new job, second only to those who feel overworked.

So, for many workers, the salary on offer at a new job could influence their decision. If improving your long-term financial wellbeing is your goal, there could be other factors that are just as important.

Here are five non-salary benefits that may boost your wealth or improve your financial security.

1. Matched pension contributions

Under auto-enrolment, most employees are automatically enrolled in a workplace pension scheme, which their employer must also contribute to.

The minimum contribution level for employers is 3% of your pensionable earnings.

As a workplace benefit, some employers may match your contribution up to a certain point.

While you wouldn’t benefit immediately from the additional pension contributions, they could add up to provide more freedom in retirement.

Your pension is usually invested with the aim of delivering returns over the long term. So, as well as more money going into your pension, it has an opportunity to grow even further.

2. Enhanced sick pay policy

If you were unable to work due to an illness, how would your finances fare?

In 2023/24, Statutory Sick Pay (SSP) is just £109.40 a week and is paid for up to 28 weeks. For many people, SSP isn’t enough to cover essential outgoings, and taking time off work could place a real strain on their finances.

An enhanced sick pay policy could provide you with peace of mind. Sick pay can vary between companies, so checking how much you’d receive if you were ill and for how long may be useful.

While you hope you won’t be too ill to work, it’s a benefit that could prove to be valuable.

If you have income protection in place, which would pay out a regular income if you were too ill to work, an enhanced sick pay policy may mean you could choose a longer deferment period, which might reduce your premiums. 

3. Group life insurance

If your family relies on your income, life insurance could improve their financial resilience.

Life insurance would pay out a lump sum to your loved ones if you pass away. It is possible to take out life insurance yourself to protect your family. However, some employers will offer group life insurance to employees as a benefit.

Often, life insurance provided by an employer will be linked to your salary. So, if you pass away, your family may receive three times your annual salary. You should check the details with your prospective employer as the level of protection offered can vary.

While you may benefit from life insurance through work, taking out further protection yourself could still be valuable.

4. Salary sacrifice opportunities

Salary sacrifice involves taking a lower salary in return for another benefit. For example, you may accept a lower income in favour of higher pension contributions.

As your income will be lower, salary sacrifice could reduce your tax bill now. Depending on the benefit you receive in return, it could also improve your long-term financial security.

When you’re weighing up the pros and cons of salary sacrifice, it’s important to consider both the short- and long-term impact it could have on your finances. If you’re not sure if salary sacrifice is the right option for you, we could help.

5. A development or training plan

An employer that’s willing to invest in your development could set you up to secure a higher salary in the future.

The PwC survey asked employees to rank skills that are important to their future careers. Interestingly, skills like adaptability, critical thinking, and creativity were ranked higher than technical ones.

Setting out your career goals could help you identify which skills or experiences you want to focus on. It may help you choose an employer that will support your aspirations and provide the opportunity you need to develop.

Employers that offer a training budget or in-house development scheme could help to support your career prospects.

A financial review could help you get the most out of workplace benefits

Whether you’ve switched jobs to secure a higher income or for development opportunities, a financial review could help you stay on track to reach your goals.

If your new employer offers workplace benefits, we could assess how they fit into your wider financial plan and which ones may be valuable to you. Please contact us to arrange a meeting.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor.

Workplace pensions are regulated by The Pension Regulator.

Note that financial protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse. Cover is subject to terms and conditions and may have exclusions.

New research suggests more people will be living with a major illness in the future and it could place pressure on health services. It may also have implications for household finances over the long term.

A report from the Health Foundation’s REAL Centre suggests 9.1 million people will be living with a major illness by 2040 – 2.5 million more than in 2019.

The four-year study analysed 20 health conditions and projected how their prevalence would change. Researchers expect 19 out of the 20 health conditions to affect more people by 2040, including a significant 30% rise in the number of people living with cancer, diabetes, and kidney disease.

Around 80% of the projected increase is due to an ageing population, but other factors, such as obesity, will also have a negative effect.

The researchers expect some health improvements, including fewer people smoking and lower cholesterol rates, but other concerns outweigh them.

The research estimates that almost 1 in 5 people will be managing a major illness in 2040. It could have significant implications for the NHS, care services, and household budgets.

Facing health challenges in your family can be difficult, but there may be some steps you could take that might provide peace of mind.

1. Assess if health insurance could be right for your family

Anita Charlesworth, director of the REAL Centre, explained the growth in major illness will place “additional demand on all parts of the NHS, particularly primary care”.

It could mean patients face longer wait times to see a professional or for tests they need. For some families, taking out health insurance may provide comfort. If you or your family is worried about health issues, it could mean you’re able to access services quicker.

You’ll need to pay regular premiums for health insurance. The cost will depend on a range of factors, including the provider you choose, your health, and what cover you’d like.

You should ensure you understand how comprehensive your health insurance would be when you’re comparing different options.

2. Calculate your financial resilience

A serious illness doesn’t just affect your health, it could harm your finances too.

Depending on your circumstances, being diagnosed with an illness could affect your income. It may mean you need to take time off work to recover or that you decide to retire early. How would your finances cope if you suffered from a serious health condition?

Financial protection could provide you with a regular income or lump sum if ill health affected you. It could mean you can meet essential outgoings and even keep your long-term plans on track.

There are several different types of financial protection, which would pay out under different circumstances. The level of cover will also vary between providers, so, if you decide to take out financial protection, it’s crucial you understand what’s included.

You’ll need to pay premiums or the cover from financial protection will lapse. A variety of factors affect the cost of financial protection, from your age to the size of the potential payout. The cost can vary between providers, so shopping around may be useful.

3. Consider your care plan

The report suggests an ageing population will contribute to more people living with an illness. As a result, an increasing number of people may need support later in life.

While it can be challenging to consider needing to rely on care services in the future, creating a plan now may be beneficial. It could mean you have more choices if care is necessary and improve your wellbeing. Setting out what your preferences would be could help you and your family choose care that’s right for you.

As most people need to pay for at least a portion of their care costs, it may also be wise to consider the potential bill. Earmarking some of your wealth for possible care costs may be a practical step you could take in case you face health challenges in the future.

Contact us to talk about your long-term plan

If you have questions about how you could use your wealth to provide peace of mind if you or your family face health challenges, please contact us. We can arrange a meeting to talk about your concerns and the steps you may take as part of a wider financial plan.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

Note that financial protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

A Lasting Power of Attorney (LPA) could provide you with protection when you’re most vulnerable by giving someone you trust the ability to make decisions on your behalf. Yet, a survey in the Independent, found that less than half of married couples have an LPA. 

If it’s something you don’t have in place, here are seven reasons to make it a priority.

1. The unexpected happens

No one wants to think about losing the mental capacity to make decisions themselves. Yet, it’s something that many people experience during their life.

According to the Alzheimer’s Society, someone in the UK develops dementia every three minutes. It may not be something you can change, but you can be in control of how prepared you are.

LPAs don’t have to be permanent either. If you suffered an accident or illness, you could use an LPA to allow someone to temporarily manage your affairs while you focus on recovering.

2. You can name someone you trust as your LPA

By naming an attorney through an LPA, you can choose someone you trust to act on your behalf. It means you have control over who may make decisions for you.

Without an LPA, your family could apply to the Court of Protection. However, the judge will decide who is most suitable to make decisions for you, and it might not be the person you would choose.

3. It ensures someone who cares about you can make health decisions

There are two types of LPA. The first is an LPA that covers health and welfare decisions. It would allow your attorney to make decisions about your daily routine, medical care, and moving into a care home.

Without a health and welfare LPA, it could be difficult for your loved ones to ensure you receive care or treatment if it’s needed.

4. It allows a trusted person to manage your financial affairs

The second type of LPA covers your financial affairs. If you’re unable to make decisions, it may not take long for your affairs to fall into disarray. For example, bills could go unpaid or you may not be able to collect your pension or other sources of income.

An LPA giving someone you trust the power to make decisions about your financial affairs could help with this. They may also be able to make larger decisions, such as selling your home.

5. It may provide an opportunity to set out your wishes

When you name your attorney in an LPA, you have an opportunity to prepare an advance statement of wishes and care preferences.

The document isn’t legally binding, but it could be useful for your attorney to refer to. You could provide information about the care home you’d prefer, views on life-sustaining treatment, or possessions you’d like to pass on to a loved one.

6. It could help protect you from fraud in the future

A report from UK Finance found in 2022 £1 billion was lost to fraud – that’s the equivalent of around £2,300 stolen every minute. While criminals use a variety of tactics, targeting vulnerable people is a common one.

Having a property and financial affairs LPA in place means someone you trust can manage your bank accounts, savings, and more. It may mean fraud is spotted sooner or even prevented.

7. An LPA may form part of your wider estate plan

As part of your estate plan, you may be thinking about how you’d like to manage and pass on assets. Having an LPA in place may ensure your wishes are followed even if you can’t make decisions yourself.

Get in touch to discuss the steps you could take to improve your security

Putting an LPA in place could provide you with security if you lose the ability to make decisions yourself. As part of your financial plan, there might be other steps you may take to prepare for the unexpected too.

Please contact us to talk about your concerns and priorities. We’ll work with you to create an estate plan that suits your needs.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The Financial Conduct Authority does not regulate estate planning.