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A will is an important way of outlining what you’d like to happen to your assets when you pass away. Yet, figures suggest will disputes are on the rise. If you’re worried about potential conflicts when you pass away, read on to discover some useful steps you might want to take.

According to a report in the Guardian, thousands of families have been embroiled in disputes dubbed “ruinously expensive” by solicitors. As well as the potential legal costs, court cases can be emotionally draining and place pressure on your loved ones.

In 2021/22, 195 disputes went to court, up from 145 in 2017. While the figure is low, it’s thought to be just the tip of the iceberg as many cases are settled out of court. Indeed, the report suggests that as many as 10,000 families in England and Wales are disputing wills every year.

A dispute could mean your assets aren’t passed on in a way that aligns with your wishes, or even that someone who you wanted to benefit from your estate is overlooked. If it’s a situation you’re worried about, here are seven steps you could take to reduce the risk of your will being overturned.

1. Speak to loved ones about your wishes

Speaking to your family about your wishes can be difficult. Nonetheless, it could be an important conversation and mean there are no surprises when your will is read, which could reduce the chance of a dispute arising.

If someone in your life discovers they will inherit less than expected or are not a beneficiary in your will after your passing, they may be more likely to react negatively – especially if they’re also grieving your loss. Discussing it during your lifetime could give them time to come to terms with the decision, as well as allow you to explain your reasons. 

2. Write a letter of wishes

Similarly, you can write a letter of wishes that could be read alongside your will. This provides an opportunity to explain why you’ve made certain decisions, which could be useful for beneficiaries, the executor of your estate, and, if a dispute arises, the court.

You should take care that the letter of wishes doesn’t contradict what’s written in your will – you may want to ask a solicitor to review it to minimise mistakes.

3. Include a no-contest clause in your will

You could choose to add a no-contest clause to your will. It doesn’t mean that someone can’t raise a dispute, but it can act as a deterrent. Essentially, the clause means that if someone did challenge your will and lose their dispute, they would forfeit any inheritance they may have been entitled to.

So, if you’re worried that a beneficiary could challenge your will to try and receive a larger proportion of your assets, adding a no-contest clause might be useful.

4. Hire a solicitor to write your will

You can write your will yourself without any professional legal support. Yet, a solicitor could provide essential guidance and check the language of your will.

For example, if you’ve used vague or contradictory phrases, there could be a greater opportunity for disputes to arise. It could be particularly important if your estate or plans are complex. Choosing to hire a solicitor may help you feel more confident that your wishes will be carried out.

5. Ask a medical practitioner to witness your will

For your will to be valid, it must be made or acknowledged in the presence of two witnesses. To act as a witness, a person must:

• Be aged over 18 (16 in Scotland)
• Have the mental capacity to understand what they are signing
• Not be related to the person making the will or have a personal interest in the will.

However, if you’re worried that your will could be contested on medical grounds, you might want to ask a medical practitioner, such as your GP, to witness it. This could prevent later accusations that you weren’t of sound mind when writing your will. 

6. Regularly review your will

One of the reasons why a dispute may occur is that your beneficiaries don’t believe your will reflects your circumstances when you pass away. So, a regular review might be useful.

Going over your will every five years or following major life events could ensure it remains up-to-date. For example, you might want to make changes after you welcome a new grandchild into the family, remarry, or your wealth changes significantly.

7. Store your will in a safe place

Finally, make sure your will is stored in a safe place and your executor knows where it is. If you’ve rewritten your will, be sure to destroy previous ones to avoid potential confusion.

Understanding your estate could help you make decisions about your will

If you’re deciding how to distribute your assets or need to update your will, understanding your estate could be an important step. Calculating the value of various assets and how they might change during your lifetime could alter how you want to pass them on. Please contact us to talk about your will and wider estate plan.

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.

The State Pension is often a useful foundation when you’re creating an income in retirement. Yet, a survey from Just Group found that a third of people didn’t check their State Pension forecast before stopping work.

While the State Pension might not be your primary income in retirement, it’s often valuable because it’s reliable – you’ll receive a regular income when you reach State Pension Age for the rest of your life. In addition, under the triple lock, the State Pension also increases each tax year, which could help maintain your spending power throughout retirement.

So, if you’ve been neglecting your State Pension, it might be worth giving it some attention. Here are three practical reasons to check your State Pension before you retire.

1. The State Pension Age is rising and could be later than you expect

The State Pension Age is the earliest date you can claim your State Pension, and it depends on when you were born.

Currently, the State Pension Age is 66 for both men and women. However, it is slowly rising. For those born after 5 April 1960, there will be a phased increase in State Pension Age to 68. So, the date you can claim the State Pension might be later than you expect.

While further increases haven’t been announced by the government, there are expectations that the State Pension Age will rise again in the future as life expectancy increases. Indeed, the International Longevity Centre calculates the State Pension Age will need to rise to 71 by 2050 to maintain the current ratio of workers to retirees. 

Checking your State Pension forecast before you plan to retire could help you avoid a potential financial shock if you can’t claim it when you expect. 

2. You might want to fill in National Insurance gaps to increase your State Pension

In 2024/25, the full new State Pension is £221.20 a week – more than £11,500 a year. However, to receive the full amount, you will normally need to have made at least 35 qualifying years of National Insurance (NI) contributions. If you have fewer qualifying years, you’ll often receive a portion of the full amount.

If you’re not entitled to the full new State Pension due to gaps in your NI record, you may be able to buy additional years. In some cases, this could boost your income during retirement.

Typically, a full NI year costs £824 and could add up to £302.64 each year to your pre-tax State Pension income. So, you may not need to claim the State Pension for long before you benefit financially.

Before you fill in the gaps, you may want to consider your retirement plans. If you’re still several years away from retirement, you might reach the 35 qualifying years you need without making voluntary contributions.

You can usually only fill in the gaps in your NI record for the last six tax years. So, checking your State Pension forecast before you retire could identify a way to boost your income.

If you want to make voluntary NI contributions, you’ll need to contact HMRC to get a reference and find out exactly how much filling in the gaps could cost you. 

3. Your State Pension could affect your wider retirement plan

Understanding how much you’ll receive from the State Pension and when you can claim it might play an important role in your wider financial plan.

While the money you receive from the State Pension might not be your main source of income in retirement, it could provide a useful foundation to build on. By factoring it in, you might find that you’re on track for a more comfortable retirement than you expected, or that you could afford to withdraw a lump sum from your pension at the start of retirement to tick off bucket list items.

Checking your State Pension forecast could mean you’re in a better position to make retirement decisions, including how you’ll use other assets to support your lifestyle goals.

You can check your State Pension forecast quickly online

Checking your State Pension forecast is often simple. You can use the government tool here or the HMRC app. You can also contact the Future Pension Centre if you’d prefer to receive the information by post, so long as your State Pension Age is more than 30 days away.

Get in touch to talk about your retirement income

The State Pension is often just part of the income you’ll receive in retirement. We could help you create a retirement plan that brings together the different sources of income you might have, including workplace pensions, annuities, investments, property, and more.

Please contact us to talk about your retirement plans and the support we could provide as you prepare for the next chapter of your life.

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 not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.

Pensioners have benefited from an 8.5% increase in the State Pension. While the boost is likely to be welcomed by many, the full new State Pension is nearing the Personal Allowance threshold. As a result, some retirees might need to consider their Income Tax liability for the first time or could be pushed into a higher tax bracket.

The full new State Pension is £221.20 a week in 2024/25

Under the triple lock, the State Pension increases each tax year by the highest of the following three measures:

• Average wage growth
• Inflation
• 2.5%

The triple lock plays an important role in preserving the spending power of pensioners. If your State Pension income remained the same throughout retirement, it would gradually buy less as the cost of goods and services increased. As you could claim the State Pension for several decades, the triple lock might play an essential role in maintaining your lifestyle.

For 2024/25, the full new State Pension increased by 8.5% (the average wage growth measure) to £221.20 a week, or £11,502 a year.

To be entitled to the new full State Pension, you need at least 35 qualifying years of National Insurance contributions or credits. If you have fewer qualifying years, you’ll usually receive a portion of the full State Pension but you still benefit from the triple lock. 

If you reached the State Pension Age before 6 April 2016, your State Pension is based on the old rules that existed at that time. You might receive a lower amount if you were contracted out of the Additional State Pension.

You can use the government’s State Pension forecast if you’d like to understand how much you could receive through the State Pension and when you can claim it.

Frozen allowances could mean your tax bill increases in retirement

The government has frozen key Income Tax thresholds at 2021/22 levels until April 2028. As a result, more people are expected to pay Income Tax in the coming years as wages and the value of benefits such as the State Pension rise.

Indeed, the Office for Budget Responsibility (OBR) predicts the freeze will lead to 3.2 million new taxpayers and 2.1 million new higher-rate taxpayers by 2027/28. It’s not just an issue for workers – it could affect retirees too.

The Personal Allowance – the amount of income you can earn before tax is usually due – is £12,570 in the 2024/25 tax year, and it’s expected to remain at this level until 2028.

The latest rise under the triple lock means most of your Personal Allowance could be used by the State Pension if you’re entitled to the full amount. You’d only need to receive around £90 a month from other sources before you become liable for Income Tax. As a result, some people who haven’t paid Income Tax since retiring could now face an unexpected bill.

Similarly, the tax thresholds for paying the higher and additional rate of Income Tax are frozen until 2028. So, even if your income from other sources doesn’t increase, you could find yourself in a higher tax bracket due to the State Pension rise.

For 2024/25, the Income Tax bands are:

How to manage your tax liability in retirement

To manage your tax liability in retirement, one of the first steps is to track your income – are you nearing any thresholds that could lead to a higher bill than expected?

You might have several different income streams you need to consider, such as the State Pension, annuities, or flexible withdrawals from your pension.

Once you’ve set out your income, you can start to create a tax strategy that suits your needs.

For instance, you can usually take up to 25% of your pension as a tax-free lump sum (for most people this will be capped at a maximum of £268,275 in 2024/25), which you may spread across multiple withdrawals. This could be a useful way to access large amounts without increasing your tax bill. However, once you exceed the tax-free amount, the money you withdraw as a lump sum would usually be added to your other taxable income and could be taxed. 

As a retiree, you may be in control of your income sources and could adjust them to reduce your tax liability. For example, if you take an income from your pension using flexi-access drawdown, you might choose to lower the amount so you remain below an Income Tax threshold.

You might also choose to supplement your income from other tax-efficient sources, like an ISA. An ISA offers a tax-efficient way to save and invest, so you might make withdrawals to support your day-to-day costs without increasing your tax liability.

Contact us to talk about how to improve your tax efficiency in retirement

If you’d like to understand what steps you could take to improve tax efficiency in retirement, we could help. We’ll take the time to understand your goals, lifestyle, and assets and then work with you to create a retirement plan that’s tailored 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.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts. 

Embarking on a holiday is about more than simply sightseeing – it’s also your chance to experience new and tantalising local dishes from around the world.

An increasing number of people worldwide enjoy exploring exotic flavours during their time abroad. Acorn Tourism Consulting states that food tourism is one of the world’s largest and fastest-growing tourism markets today, with 95% of travellers seeking a positive food activity while on holiday.

If you’re a self-proclaimed foodie who savours any opportunity to sample local delicacies and immerse yourself in culinary delights, there are several destinations that promise to deliver on your desires. Continue reading to discover six potential locations for your next getaway.

1. Hanoi, Vietnam

If you’re seeking an array of south-east Asian street foods that use fresh and healthy ingredients, then Hanoi in Vietnam could be your ideal destination.

The city is a culinary haven, as each street corner is brimming with vibrant food stalls that promise to leave you satisfied.

For instance, a holiday to Hanoi wouldn’t be complete without tasting “bun cha”, a savoury combination of grilled pork and noodles, or “banh mi sandwiches”, baguettes loaded with marinated tofu and pickles.

Of course, this could also be the perfect chance to try Vietnam’s signature dish, “pho”, a warm noodle soup brimming with flavour.

2. Sevilla, Spain

Sevilla is a city steeped in history and tradition, and its culinary scene is certainly something to marvel at too.

Indeed, during a visit to Sevilla, you can wander through narrow cobblestone streets adorned with lush orange trees. While meandering, you’re guaranteed to pass plenty of eateries that exemplify Andalusian cuisine.

For example, you could visit one of the city’s many tapas bars, which would allow you to experience a wealth of Spanish flavours and delights, such as patatas bravas or fried calamari.

You could even indulge in some local specialities, such as the thinly sliced cured ham known as “jamon iberico”, or shrimps cooked in plenty of garlic, called “gambas al ajillo”.

3. Marrakesh, Morocco

If you are looking for a city that promises an exciting adventure as well as a new culinary experience, then Marrakesh in Morocco could be the perfect destination for you.

The bustling streets of the Red City’s walled medina contain more than tourist sites and exotic wares, as the alleyways are also home to a range of delicious Moroccan cuisines. 

You would certainly be missing out if you didn’t try several varieties of tagines while in Morocco, the slow-cooked stew that is loaded with spices and flavour.

If you have a sweet tooth then you’re also in luck, as there are several traditional Moroccan sweets, such as “baklava” and “maamoul”, that promise to leave you satiated.

To ensure you experience all the culinary delights Marrakesh has to offer, it may be worth visiting Le Trou au Mur, a restaurant that is famous for its grandmother-style Moroccan dishes, or the Royal Hotel Mansour, which is host to a number of must-visit dining spots.

4. Tokyo, Japan

While Tokyo is home to the world’s highest concentration of Michelin-starred restaurants that serve a wide range of foods, perhaps the best reason to visit the bustling metropolis is to sample its top-end sushi.

In many of Tokyo’s sushi bars, you’re guaranteed dinner and a show, as you can watch the masters at work crafting delicate rolls in an intimate setting.

Interestingly, sushi etiquette is unique in Japan, and many restaurants practise “sushi omakase”. In this style, the expert chefs select, prepare, and serve the sushi as they see fit, regardless of your interests.

However, you should see this as an honour, as you’ll be able to watch sushi masters practising an ancient culinary art.

In addition to the bustling streets and fascinating culture, it is worth visiting the Sushi Saito or Sukiyabashi Jiro restaurants in Tokyo. However, you may need to plan ahead if you do wish to visit these famous sushi bars, as they often have long waiting lists!

5. Texas, USA

It’s fair to say that in Texas, barbecue is much more than just something to eat: it’s a way of life. Indeed, unlike many people in the UK, Texans see barbecue as their opportunity to celebrate meat, smoke, and flavour, all of which are rooted in local culinary traditions.

If you’re considering a trip to the Lone Star State, a must-see culinary site is Franklin Barbecue in Austin. Here, you can sample a range of smoked meats, such as pulled pork, sausages, and, of course, brisket.

Though, just be aware that locals line up for hours to taste the meats on offer here, so you may need to arrive early!

6. Naples, Italy

Italian food is perhaps unparalleled, and while Naples could be the perfect destination for pasta fiends, pizza lovers should also consider the Mediterranean city as somewhat of a pilgrimage site.

This is because the famous margherita was reportedly first made in Naples, and eating pizza here is much like a religious experience. To ensure you taste the best pizza possible, it may be worth visiting Di Mareo, one of the oldest establishments in the city.

Even if you aren’t the biggest pizza fan, there is certainly something for everyone in Naples. Indeed, you could try some classic pasta dishes, such as “spaghetti ale vongole”, a recipe that boasts baby clams in a white wine sauce, or “orecchiette alla Genovese”, a meaty pasta delight.

And, of course, no trip to Naples would be complete without a taste of creamy gelato ice cream after every meal.

Setting goals is part of creating an effective financial plan. They can motivate you, keep you on the right track, and help you define what “success” is for you. As your plan might cover decades, it can be difficult to know if your goals are realistic. Read on to discover five practical tips that could help make your financial objectives achievable.

1. Take steps to build a strong financial foundation

One of the challenges of meeting financial goals is that the unexpected can happen and derail even the best-laid plans.

You might set out to add an extra £200 each month to your pension so that you can retire early. But an emergency repair to your home or an illness preventing you from working for several months means you need to halt contributions.

Having appropriate financial foundations in place could mean you’re in a better position when you face challenges.

For example, building up an emergency fund could improve your financial resilience if you face an unexpected bill, such as repairs to your car or home. How much you might want to have in an emergency fund will depend on your needs, but a general rule is between three and six months of essential expenses.

Despite the security it could offer, many people in the UK don’t have an emergency fund. According to a report from the Financial Conduct Authority, almost a third (30%) of UK adults, the equivalent of 15.9 million people, do not have a savings account. 

Similarly, taking out appropriate financial protection could keep your long-term plans on track if you had an illness or accident that prevented you from working. Depending on the type you choose, financial protection may pay out a regular income or lump sum under certain circumstances.

Having a strong financial foundation could help you minimise risk to your long-term goals, and mean they’re more realistic.

2. Start with a review of your current finances

Before you start setting goals, a complete review of your current finances could be valuable.

Setting out your income, assets, and expenditure might play an important role in understanding how you could use your wealth to reach your goals, and whether they’re realistic. It could highlight where you could manage your wealth more efficiently or where you’d be happy to make adjustments if it meant you’re more likely to secure the future you want.

3. Make your goals specific and measurable

A vague goal might seem like it gives you more flexibility, but it could mean the steps you need to take are unclear.  

Rather than stating, “I want to build a nest egg for my child”, you could change it to, “I want to build up a £20,000 nest egg for when my child is 18”. By making it more specific, you could set out a clear plan to make it achievable.

In this scenario, you might consider:

• How much you should contribute to the nest egg each month
• Whether you should save or invest
• The best vehicle for building the nest egg, such as a Junior ISA
• How interest rates or investment returns could help you reach your goal.

A clear goal could make it simpler to understand if you’re on track when you review your target and decide if adjustments should be made to your plan. It might also help you identify if you’re being unrealistic. For example, if the monthly contributions to your child’s nest egg don’t fit into your day-to-day budget, you may choose to revise your expectations.

4. Ensure your assumptions are backed by evidence

Often, factors outside of your control will play a role in reaching your financial aspirations. For instance, you might assume a certain interest rate or investment return when making a plan. It’s important that the assumptions you make are realistic, or it could mean you unexpectedly fall short of your goals.

Of course, interest rates or returns cannot be guaranteed, but you can base your expectations on facts.

Let’s say you’re investing and calculate you’ll need to achieve returns of 8% each year to reach your goal – historical data might show that these returns are improbable, or that you’d have to take more risk than is appropriate for you.

Instead, you might find that returns of 5% are more likely. So, you could adjust your goal to make it more realistic or make changes to your plan, such as increasing how much you invest each month.

5. Work with a financial planner

A financial planner could bring together your current finances and long-term goals to help you understand if you’re being realistic and what steps could support your aspirations. A tailored financial plan may help you turn goals into a reality and give you confidence about the future.

Please contact us to arrange a meeting and talk about your financial and lifestyle objectives.

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 investments (and any income from them) 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.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

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. Definitions of illnesses vary from product provider and will be explained within the policy documentation.

The gains you can make before potentially paying Capital Gains Tax (CGT) have halved for the 2024/25 tax year. If you plan to dispose of assets, the change could affect you. Read on to find out when you could be liable for CGT and some steps you might take to manage a bill.

CGT is a tax on the profit you make when you sell certain assets that have increased in value. CGT could be due when disposing of a range of assets, including:

• Shares that aren’t held in a tax-efficient wrapper
• Property that isn’t your main home
• Personal possessions that are worth £6,000 or more, excluding your car. 

The amount of profit you can make during the year before CGT is due has fallen significantly over the last couple of years.

The Annual Exempt Amount has fallen to £3,000 in 2024/25

According to research from the University of Warwick, less than 3% of UK adults paid CGT in the decade to 2020. In fact, in any given year, just 0.5% of adults were liable for CGT. Yet, the total amount paid through CGT tripled between 2010 and 2020 to £65 billion.

The government has substantially reduced the amount of profit you can make before CGT is due, so the number of people paying the tax could soar over the coming years.

In 2022/23, the amount you could make before CGT was due, known as the “Annual Exempt Amount”, was £12,300. This was reduced to £6,000 in 2023/24, and from 6 April 2024, it is reduced further to just £3,000.

If your total profits during the tax year exceed the Annual Exempt Amount, your CGT bill will depend on which tax band(s) the taxable gains fall into when added to your other income. In 2024/25, if you’re a:

• Higher- or additional-rate taxpayer, your CGT rate will be 20% (24% on gains from residential property)
• Basic-rate taxpayer, you may benefit from a lower CGT rate of 10% (18% on gains on residential property) if the taxable amount falls within the basic-rate Income Tax band.

So, if you have assets to sell, considering how to mitigate a potential bill could be valuable.

6 practical ways you could reduce your Capital Gains Tax bill

1. Time the sale of your assets

The Annual Exempt Amount cannot be carried forward to a new tax year if you don’t use it. Timing the disposal of your assets could help you make use of the allowance to minimise your bill. For instance, you might hold off selling an asset until a new tax year starts if you’ve already exceeded the Annual Exempt Amount in the current year.

2. Pass assets to your spouse or civil partner

The Annual Exempt Amount is an individual allowance, and you can pass assets to your spouse or civil partner without tax implications. So, if you’ve used your Annual Exempt Amount, transferring an asset to your partner before you dispose of it to use their allowance might be an option you want to consider.

3. Use your ISA to invest tax-efficiently

An ISA is a tax-efficient wrapper for saving or investing. Returns and profits made on investments held in an ISA are not liable for CGT. So, if you want to invest, choosing an ISA may help you mitigate a tax bill.

If you already hold investments outside of an ISA, you could sell the investments and immediately buy them back within your ISA. This strategy of moving your investments to a tax-efficient account is known as “Bed and ISA”.

In the 2024/25 tax year, you can add up to £20,000 to ISAs.

4. Use a pension for long-term investments

Like ISAs, pensions offer a tax-efficient way to invest – investments held in a pension are not liable for CGT.

In the 2024/25 tax year, the pension Annual Allowance is £60,000 for most people. This is the maximum amount you can pay into your pension during the tax year while still benefiting from tax relief. However, you can only claim tax relief on up to 100% of your annual earnings.

If you’ve already taken an income from your pension or are a high earner, your Annual Allowance could be as low as £10,000. If you’re not sure what your Annual Allowance is, please contact us.

The Annual Allowance can be carried forward for up to three tax years. So, if you’ve used all your Annual Allowance in 2024/25, you may want to review your pension contribution in previous tax years.

Before you boost your pension, considering your investment goals and time frame might be essential. You cannot usually access the money in your pension until you’re 55, rising to 57 in 2028, so it isn’t the right option for everyone.

5. Manage your taxable income

As mentioned above, basic-rate taxpayers may benefit from a lower rate of CGT if the gains fall within the basic-rate tax band. As a result, managing your taxable income to stay below Income Tax thresholds once expected profits are included could slash a CGT bill.

6. Deduct losses from your gains

It is possible to deduct losses from the profits you make. You must report the losses to HMRC by including them on your tax return. When you report a loss, the amount is deducted from the gains you make in the same tax year.

If your total taxable gain is still above the tax-free allowance, you can deduct unused losses from previous tax years. If the losses reduce your gain to the tax-free allowance, you can carry forward the remaining losses to a future tax year.

Contact us to talk about your tax liability

Whether you’d like to understand how you could reduce a potential CGT bill or you want to review your financial plan with tax efficiency in mind, please contact us. We could help you identify ways to cut your tax bill in 2024/25 and beyond.

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

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The value of your investments (and any income from them) 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.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

The Financial Conduct Authority does not regulate tax planning.

If you’re concerned about running out of money during retirement, you’re not alone. In fact, it’s one of the top financial concerns in the UK. Being proactive and working with a financial planner to create a retirement plan could offer you peace of mind. Read on to find out why.

In an Aegon survey, 7 in 10 financial advisers said their clients’ number one concern was outliving their savings. The good news is that by seeking the support of a finance professional, you can understand what income is sustainable for you and the lifestyle it might afford.

High inflation is playing a role in fears of running out of money

When you retire, you may have a pension pot that you could use to create an income. However, as you may be responsible for managing withdrawals, you might worry about taking too much too soon.

It can be difficult to know what a sustainable income is. After all, you don’t know exactly how long your pension will need to provide an income for, or what unexpected expenses you could face. 

Recent economic circumstances have also highlighted how factors outside of your control could affect the income you need to maintain your lifestyle.

The effects of the Covid-19 pandemic and the war in Ukraine led to prices rising. Many countries have experienced a period of high inflation as a result. In the UK, inflation peaked at 11.1% in October 2022 – the highest rate recorded in 40 years.

Inflation has since fallen, but is still above the Bank of England’s target of 2%. According to the Office for National Statistics, in the 12 months to February 2024, inflation was 3.4%.

As the cost of goods and services increased, some retirees may have taken a higher income from their pension to meet their outgoings. Some could be on track to deplete their assets quicker than expected as a result, which may fuel concerns about running out of money.

Given the circumstances, it’s not surprising that the Aegon survey found that 64% of financial advisers also said inflation was a major concern for their clients.

With so many different factors to consider when deciding how to create a sustainable income from your pension, it can feel overwhelming. Financial planning that’s tailored to you could offer you the reassurance you need to feel confident about your finances and the decisions you make.

A tailored financial plan could address your fears

As you might expect, creating a bespoke financial plan involves assessing your assets, but also includes understanding your goals and fears to give you confidence about the future.

Cashflow modelling could be a valuable financial planning tool if you’re worried about running out of money in retirement.

Based on data like the value of your assets and outgoings, it can create a visual representation of your wealth and how it could change during your lifetime. It will also include some assumptions, like the returns your investments are expected to generate and the rising cost of living.

After inputting the data, you can change information to model how your decisions might affect your financial security. For example, you could create a visualisation of how your assets may change if you took an annual income of £35,000 from your pension, and then see how your financial security would change if you increased it to £40,000.

Cashflow modelling may also be used to answer questions that you’re worried about, such as:

• Would a period of high inflation mean I’d run out of money during my lifetime?
• Could my pension provide a reliable income if I lived to 100?
• Would I have enough to cover the cost of care if it’s needed later in life?
• Could I sustainably increase my income each year to reflect the rising cost of living?

Cashflow modelling isn’t just useful for understanding what level of income is sustainable either. It can factor in one-off outgoings so you can review their impact on your financial resilience.

For instance, the Aegon survey suggests travelling or living overseas is an aspiration for many. So, you might want to model what would happen if you withdrew a lump sum to fund a bucket list trip, or whether you could afford to buy a holiday home.

Similarly, many people want to lend financial support to the next generation. As a result, you may want to incorporate gifting assets during your lifetime to help your family reach milestones, like getting on the property ladder or pursuing further education.

We could help you create a long-term retirement plan

A retirement plan could help you enjoy the next stage of your life and feel confident about your finances. Please get in touch to arrange a meeting to talk about how you might create a sustainable income using your pension and other assets.

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 cashflow planning.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available.

Past performance is not a reliable indicator of future performance.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts. 

Effective retirement planning often involves weaving together lots of different threads. As you think about your retirement, you might be unsure how to bring everything together, but a bespoke financial plan could put your mind at ease.

Over the last few months, you’ve read about the importance of deciding how you’ll retire, why you should set out your goals, and your options for accessing your pension. Now, read on to discover the challenges of bringing together these different strands of retirement planning and why a tailored financial plan could provide a solution.

The challenges of retirement planning you could face

A common concern among those approaching retirement is whether they have enough money to retire. Even after the milestone, you might worry about running out of money too soon.

Understanding what a sustainable income is for your circumstances can be difficult. After all, you don’t know how long you’ll spend in retirement and you might need to factor in a range of influences outside of your control, such as the effect inflation will have on your expenses.

As a result, you might not be confident in your ability to live the lifestyle you want once you give up work.

Uncertainty could mean you spend too much too soon, which could leave you in a financially vulnerable position in your later years. Alternatively, it might lead to you being more frugal than necessary and missing out on retirement experiences.

There could be other challenges too. Perhaps you’re considering taking a lump sum out of your pension or using assets to fund a one-off expense but you’re unsure about the long-term effect it may have. Or you want to ensure you leave an inheritance behind to support loved ones after you’ve passed away.

While pensions are often the main source of income in retirement, retirees will often have other assets at their disposal too. You might be unsure how you could use your savings, property, or investments to support your retirement goals, but financial planning could help.

A financial plan will bring together your aspirations and finances

When you think about what financial planning involves, your mind might turn towards understanding your assets. However, an effective financial plan starts by understanding what you want to achieve.

At retirement, this might be the lifestyle you want to enjoy for the rest of your life. You may have other priorities too, such as lending support to your family or ensuring your partner is also financially secure.

Once you’ve set out your lifestyle goals, you can start to review your assets and how they might make these objectives achievable.

One of the benefits of working with a financial planner is that they may help you bring together these different goals. So, a retirement plan that’s tailored to you may consider what a sustainable income is, but it might also include:

• Gifting assets to your loved ones during your lifetime
• Putting assets aside for your family to inherit when you pass away
• Financial protection that could provide for your partner if the worst happened
• A safety net that may give you peace of mind
• Provisions in case you need care in the future.

Using a tool called “cashflow modelling”, we could help you visualise how to use your wealth to reach your goals.  

By adding details about your assets, cashflow modelling could show how your wealth will change over time depending on the decisions you make. For instance, it could demonstrate how long your pension may last if it was used to provide an annual income of £35,000 or £45,000. Or how using your investments to supplement your income might provide you with greater financial freedom.

Cashflow modelling could also highlight potential risks. You can model different scenarios, including those that are outside of your control, to understand how they might affect your lifestyle and financial security.

For example, could the rising cost of living place pressure on your finances 20 years after you’ve retired? By identifying potential risks at the start of retirement, you may be able to take steps to mitigate them or create a safety net. To manage the effect of inflation on your outgoings, you may plan to increase the income from your pension each year to preserve your spending power.

As a result, working with a financial planner could help you realise your retirement goals and give you financial confidence as you start the next chapter of your life.

Contact us to talk about your retirement plans

If you’re preparing for retirement, whether it’s a milestone you hope to reach this year or it’s a decade away, we could offer you support. Please contact us to talk about your retirement aspirations and how your finances may provide you with security once you give up work.

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 cashflow planning.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available.

Past performance is not a reliable indicator of future performance.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts. 

You might have considered what you’d like to happen when you pass away as part of your long-term plan. Perhaps you’ve written a will or spoken to your loved ones about your funeral wishes. Yet, you may have overlooked the costs associated with dying, and it could place financial pressure on your family.

Indeed, a worrying report from SunLife found that 20% of families experience “notable financial concerns” when paying for a funeral.

Of those who are worried about money, a third use their savings or investments to cover the costs. However, a quarter have turned to credit cards and 14% borrowed money from a loan provider. Others turned to family or friends for financial support or even sold belongings to pay for a funeral.

Worrying about how they’ll pay for a funeral at an already difficult time could harm the wellbeing of your loved ones. So, while it can be difficult to think about, considering how much your funeral will cost and how to pay for it could take a weight off your family’s mind.

The average cost of dying is nearly £10,000 in 2024

According to the SunLife report, the average cost of dying is £9,658 in 2024 after a 5% increase when compared to a year earlier.

The cost of dying figure is calculated by considering the fees of administering an estate, a basic funeral service, and some extras, such as a wake and flowers. A basic funeral alone costs more than £4,000.

Many people recognise the potential burden the associated costs of a funeral could place on their loved ones. The report found that 7 in 10 people have made some provisions specifically to pay for their funeral. However, only 54% are putting enough aside to cover the total.

It’s not just financial hardship that could affect loved ones you leave behind either. Of family members who experienced notable financial difficulties, three-quarters said it affected their mental health.

Even those in a financially secure position might struggle to arrange a funeral. As well as dealing with grief, they may worry about making the “right” decisions and ensuring the service aligns with your wishes.

So, taking steps to set aside money for your funeral and write your wishes could ease the burden your loved ones feel. Here are four steps you may want to consider taking.

1. Plan your own funeral with a pre-paid option

Funeral directors may offer a way to plan and pay for your funeral during your lifetime. As well as handling the financial side of the funeral, a pre-paid funeral plan could mean you’re in control and that your family won’t need to make decisions.

The SunLife report found that 37% of people who made provisions for their funeral used a pre-paid funeral plan. However, you should note that pre-paid plans often won’t cover all the associated expenses. For example, the cost of a burial plot or headstone may be excluded. Make sure you understand what’s covered before you proceed.

2. Take out life insurance that will pay your family a lump sum

A life insurance policy would pay out a lump sum to a beneficiary when you pass away. This could be a useful way to ensure your loved ones have enough to cover the cost of a funeral.

The SunLife report found that a fifth of funerals that are paid for using provisions set aside by the deceased are done so through a life insurance payout.

You’ll need to pay premiums to maintain the cover. The cost of life insurance premiums will depend on a range of factors, including your age and health. If you don’t pay the premiums, the cover will lapse. It’s worth considering your life expectancy and how premiums may add up during your lifetime.

If your estate could be liable for Inheritance Tax (IHT), you may want to place a life insurance policy in trust. Otherwise, the payout could be considered part of your estate when calculating IHT.

Similarly, a further 23% of funeral provisions used an over-50s life insurance plan. You will usually need to be aged between 50 and 80 to take out an over-50s plan, which would pay out a lump sum to your family when you pass away. Again, you’d need to pay regular premiums to maintain the cover. However, unlike life insurance, you don’t usually need to answer medical questions.

3. Earmark assets to pay for your funeral

You could set aside assets for your family to use to cover funeral costs. As funerals typically happen within weeks of death, earmarking assets that are easy to access, such as cash savings, could be useful.

Funeral expenses can usually be paid from your estate after you pass away. For some expenses, it may be possible for a bank to release money directly to a funeral director if your loved ones provide them with a copy of the death certificate and funeral bill.

However, in some cases, your loved ones would have to wait until the probate process has been completed for the funds to become available. For complex estates, probate could take up to 12 months, so your family may still need to cover the expenses in the short term.

4. List your funeral wishes in your will

It’s not just bills that can make planning a funeral stressful. Your loved ones might also be unsure about your wishes and worry they’re not doing your memory justice.

You can use your will to set out your funeral wishes. For instance, you might state whether you’d prefer a burial or cremation, or list songs that you’d like played during the service. This wouldn’t be legally binding, but it could provide useful guidance to your loved ones.

Contact us to talk about your estate plan

A funeral plan is just one part of an effective estate plan. Depending on your circumstances, you might also want to consider how you’d like to distribute assets, minimise a potential Inheritance Tax bill, or pass on gifts during your lifetime.

Please contact us to talk about how we could offer guidance when you’re creating an estate 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 life insurance 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.

The Financial Conduct Authority does not regulate Inheritance Tax planning.

You may already have your estate in order and have written your will accordingly, but have you overlooked the value of speaking to your beneficiaries?

A new report by PIMFA suggests that 58% of people in the UK have never discussed inheritance with their family members.

Not doing so could mean that your beneficiaries may be unprepared for receiving an inheritance, or they perhaps expect to inherit a substantially different amount than you intend. It may also mean that far more of your estate may be liable for Inheritance Tax (IHT).

The research also revealed differing generational attitudes towards talking about finances. 49% of Generation X and 63% of baby boomers said they never talk about their finances with friends. Conversely, more than 80% of millennials and Generation Z said they do so at least once a year.

So, what are the benefits of speaking to your beneficiaries?

Understanding your beneficiaries’ goals

Your beneficiaries may have goals and ambitions that they have not yet shared with you or other family members. Speaking with them about your estate plan could allow you to make adjustments that better suit their goals.

Perhaps one of your beneficiaries has dreams of starting their own business, in which case you could consider investing in their business now rather than leaving them a lump sum later? Or maybe a beneficiary wants to send their children to a particular school or university and would rather the money be kept in a fund for when the children are old enough?

Your beneficiaries may also want to use their inheritance to boost their own pension fund or buy a property.

In each case, you may find that there are better ways to use your wealth and align your beneficiaries’ goals with your estate, provided you are given ample time to plan for it.

Reducing potential Inheritance Tax liabilities

In the 2023/24 tax year, individuals can usually pass up to £325,000 on their death without IHT being due. The threshold can increase by £175,000 if a direct descendant inherits your main residence. With married couples or those in a civil partnership able to transfer any unused allowance, you could leave up to £1 million before IHT is due.

If your estate is valued above the nil-rate bands, your beneficiaries could be liable to pay IHT on everything they inherit above that figure.

If you make gifts to your beneficiaries at least seven years before your passing, they may not have to pay IHT on the value of these gifts. This is known as a “potentially exempt transfer”.

So, talking to your beneficiaries about transferring wealth intergenerationally may mean you can make gifts sooner. You’re much more likely to survive for seven years after making a gift at the age of 50 than at the age of 90.

Clarifying expectations

Speaking to your beneficiaries about their potential inheritance also gives you a chance to ensure they are clear about what to expect. It can remove any shock or surprise when your loved ones receive less or more than they anticipated.

For example, if you have chosen to leave some of your estate to charity or a friend, you may want to inform your family about it before they read your will. It might also smooth over any potential misunderstandings as you can explain the decisions you have made.

Ensuring your beneficiaries are prepared

Talking openly with your beneficiaries about your estate plans may provide them with peace of mind that they’ll be in a good position to manage an inheritance.

In preparation, they may want to open new accounts, begin exploring different investment options, or start looking for properties within their budget.

Encouraging them to seek sound financial advice

Speaking to your beneficiaries is a good opportunity to encourage them to seek ongoing financial advice that may improve their long-term security.

It might be useful to ask them to consider using financial advisers you have already spoken to and who you trust. It can even be useful for the whole family to work with the same firm or adviser so they can align their interests and ensure the tax-efficient transfer of wealth.

Speaking to your beneficiaries can be an important part of planning your estate, though many families overlook the benefits. Get in touch to find out how we can help you and your family.

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, Inheritance Tax planning, or will writing.