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PostHeaderIcon Budget 2015 - Our reaction

George Osborne delivered his 6th Budget on 18th March 2015. We have summarised the key announcements from a personal financial planning perspective:

  • Pensions - Lifetime Allowance to drop to £1m.
  • Pensions – Second hand annuity market to be developed?
  • ISAs – allowance keeps increasing!
  • Inheritance Tax – deeds of variation to be reviewed.
  • Income tax – allowances changed as expected.

It should also be noted that with a General Election coming in May it seems likely that a further budget will be announced later in the year.

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PostHeaderIcon Inheriting pensions becomes a reality

bill s

Bill Skinner is a Chartered Financial Planner at Evolve, based in Manchester. Bill has a number of clients for whom inter-generational financial planning is a key part of their approach to money. In this blog, Bill looks at the pension changes in April 2015 and how they might allow pension funds to pass through the generations.

Much of the recent comments on the forthcoming Pension reforms have focussed on the new freedoms available for taking benefits and the avoidance of having to purchase an annuity. This of course is a natural headline grabber. We have also seen debate over whether pension plan holders will be sensible enough to avoid the temptation to’ spend, spend, spend’ and the obvious ramifications for the State if they run out of money too soon.

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PostHeaderIcon 55% Tax Charge on Pensions Abolished

We wrote about Pension Freedoms earlier in the year and, to summarise, from April 2015 anyone over 55 can take out as much or as little as they want. The latest political language is “treat your pension like a bank account”. If you’ve got enough money in your pension and fancy a Lamborghini, the rules won’t stop you.

The catch, of course, is that you’ll pay lots of Income Tax and, more importantly, might run out of money.

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PostHeaderIcon Why a valid Will is so important

Let’s be honest, writing a Will rarely reaches the top of people’s to-do list.

In fact, a recent survey found that 57% of UK adults didn’t have a Will.

The main functions of a Will are to:

  • Name your Executors – the people who will deal with your estate
  • Name your Beneficiaries – the people who will inherit your assets
  • In some cases to try to minimise Inheritance Tax (IHT)

Most people know where they want their money to go and who they trust to deal with the estate. The barrier to getting it done is often a fear of the legal documentation and legal costs.

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PostHeaderIcon Why markets are efficient

The price of BP is the price of BP.

Every day millions of shares are bought and millions of shares are sold.

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PostHeaderIcon Why does Evolve exist?

We started the business from a blank sheet of paper back in 2004. We had no clients and no financial backers but we had an exciting vision. We wanted to change people’s financial futures, to give them confidence about their finances, to help them make the right decisions for themselves and for their families. We believed that helping clients make the right financial decisions wasn’t just about numbers.

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PostHeaderIcon 2015 Pension Changes

In our Budget 2014 newsletter we discussed the Government’s proposed overhaul of pension rules. The Chancellor has now produced his response to the 'freedom & choice' consultation, which provides some of the detail about the changes that come into play in April 2015.

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PostHeaderIcon Why we won’t be buying Neil Woodford’s new fund

Given the amount of free publicity that Neil Woodford and his new CF Woodford Equity Income Fund have received over recent weeks, it would be easy to assume that the fund is an odds on cert to beat its peers. There hasn’t been this much hype about a new fund launch since Anthony Bolton of Fidelity Special Situations fame launching his China fund.

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PostHeaderIcon The role of fixed interest - why hold a bond fund in the current environment?

Interest rates around the world are at historic lows. They can only go in one direction from here, right? And aren’t rising interest rates bad for bond investors?

Firstly, we should remind ourselves why we hold fixed interest in portfolios. It’s all about diversification and volatility management. Most of our clients, for all sorts of different reasons, aren’t comfortable having 100% of their money in risky investments and this is understandable.

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PostHeaderIcon Are you missing out on valuable tax relief?

Research from Prudential has suggested that approximately £229m a year is being unnecessarily kept by the tax man because more than 182,500 people have not claimed the correct tax relief on pension contributions.

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PostHeaderIcon Market timing – does it work?

One of the consequences of the Retail Distribution Review, which requires advisers to hold better qualifications and charge fees for advice rather than receiving commissions, is that many High Street banks have now closed their doors to personalized investment advice.

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PostHeaderIcon Financial Planning - It's a marathon not a sprint

This Sunday I will be joining 37,499 other people and competing in the London Marathon. To those standing on the roadsides, or watching at home on TV, the event might involve just a few hours out of their lives. For those people competing, the journey to that finish line began many months ago.

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PostHeaderIcon 10 Questions to ask a financial adviser

All advisers operate in a different way but ultimately their job should be to provide you with Peace of Mind that your finances are “on track” and that you are making the most of the financial position that you find yourself in.

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PostHeaderIcon Five popular investment excuses

People who make bad money and investment decisions can often rationalise them. We’ve put together some thoughts on some of the most common excuses but there are plenty more. These arguments are often elaborate short-term excuses that we use to justify behaviour that runs counter to our own long-term interests.

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PostHeaderIcon ETFs versus Mutual Funds – where do we stand?

Exchange Traded Funds (ETFs) have been around since 1990 but it’s in the last 5 years or so that they seem to have become more of a mainstream investment solution, as increasing numbers of investors have become disillusioned with high cost actively managed funds and have moved towards a passive strategy.

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PostHeaderIcon The top 5 regrets of the dying

Earlier this year, Australian nurse Bronnie Ware published “The Top Five Regrets of the Dying - A Life Transformed by the Dearly Departing”. A number of newspapers ran articles about her findings and judging by the number of social media interactions (over 400 comments, 115,000 Facebook “likes” and 11,000 retweets on just the Guardian’s article), it seems that this emotive subject got the reaction it wanted.

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PostHeaderIcon What is the value of advice?

A question we often ask ourselves as advisers is, how can we communicate the value we add for our clients? Although this article is written from a Financial Planner’s perspective, the same theory holds true for people who are more comfortable taking the DIY approach to their finances. How can they feel comfortable that they are making the right decisions?

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PostHeaderIcon Flexible Drawdown a year on - was all the fuss worthwhile?

Historically, one of the misgivings people had about pension funds was that you had to buy an annuity at retirement and then if you died early, the insurance company pocketed your hard-earned pension fund.

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PostHeaderIcon Should investors be fearful of equities?

One of the key aspects of our investment philosophy is that we are not market timers, in other words we do not try to predict stockmarket movements to guess the best time to invest or disinvest.  In fact, we positively discourage this approach in the firm belief that beating the market with any regularity is almost impossible.

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PostHeaderIcon Junior ISAs – red hot or red herring

Our clients often ask us for advice about putting money away for their children and grandchildren and the introduction of Junior ISAs in November 2011 has made this something of a hot topic with financial journalists. In this article we will start with a reminder of the Child Trust Fund and Junior ISA rules and then provide our view on how best to use these.

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PostHeaderIcon Best and worst funds of 2011

Figures from Morningstar show that UK gilt funds dominated the top 10 performers for 2011. In fact, only one fund in the top ten didn’t fall into the gilt sector, the Legg Mason Japan Equity Fund. Few people would have predicted that Japanese equities and UK gilts would have made up the top 10. In fact, these asset classes would perhaps have been described by many as “boring” or “overvalued” back in January 2011.

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PostHeaderIcon You get what you don't pay for

Three investment articles have caught our attention recently. The first, “Shopping for Alpha: You get what you don’t pay for” (May 2011) is a detailed research document looking at ways of identifying superior funds. The second is “Keeping the cost monsters at bay” by Patrick Collinson in Fund Strategy (7th November 2011) and the third, “Last refuge of overblown management fees” by David Stevenson in the Financial Times (12th November 2011). In this article we will look at some of the conclusions from these pieces.

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PostHeaderIcon Pension planning interview with The Motley Fool

Evolve Financial Planner Jason Witcombe was recently interviewed by Owain Bennallack at The Motley Fool.

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PostHeaderIcon Five Pension Tips

Find out where you are

First of all, figure out what you have currently got as without this information you’ll never know whether you are on track to a secure retirement or not.  Many of us have “bits and pieces” of pensions from previous employers but lose track of their values. In particular, if you have an old final salary scheme, this might be a lot more valuable than you think. A deferred pension of one or two thousand pounds a year at retirement might not sound like much but you would need a five figure sum in a pension to generate that sort of income.

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PostHeaderIcon Is it a problem if one spouse pays into a pension and the other doesn’t?

Something we always stress to our clients, and in particular to married couples/civil partnerships, is that they should treat their finances as one unit rather than seeing themselves as two individuals. That way, they can make their combined finances more tax-efficient.

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PostHeaderIcon When a drop from £255,000 to £50,000 is a good thing!

On 14th October it was announced that the pensions annual allowance is to be cut to £50,000 from April 2011. The allowance is currently £255,000 but there are very few circumstances where contributions of this level can actually be made.

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PostHeaderIcon Lifetime Allowance to drop to £1.5m

When so-called Pension Simplification was introduced in April 2006, a limit was placed on the amount of money that savers could build up in their pensions before being hit by a punitive “Recovery Charge”. This amount was set at £1.5m in 2006/07, rising to £1.8m in 2010/11.

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PostHeaderIcon Evolve MD interviewed by Motley Fool

Evolve Managing Director Antony Williams was recently interviewed by David Kuo of The Motley Fool.

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PostHeaderIcon Five ways to improve your finances

Some of the most effective financial planning strategies are the easiest to implement. In this article we look at five simple ways to improve your finances.

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PostHeaderIcon Reducing investment costs

Any good negotiator will know that real power comes from knowing what you want and being prepared to walk away from the table.  If the deal is worth doing, it is worth doing right. If someone is too eager to sign on the dotted line, the chances are that the terms reached will be poor. This analogy is remarkably true of investing too.

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PostHeaderIcon How to make the most of employer-sponsored benefits

Many employers offer their staff a range of benefits as well as salary and bonus but these are often not communicated as well as they could be. We have a number of clients who had been missing out on excellent opportunities until we helped them to clarify what was available to them. With some benefits you may have to make an active decision to join whereas with others, enrolment could be automatic.

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PostHeaderIcon Is it possible to time markets?

Markets will always have their volatile periods and no one can predict which weeks or months will generate good or bad returns and how long those periods will last. However, being out of the market for even short periods can markedly affect long-term portfolio performance.

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PostHeaderIcon Do we believe that stockmarkets are efficient?

The efficient market hypothesis, which was developed in the 1960’s, states that an efficient market for equities, or indeed any other market is one where, given the available information, actual prices represent a very good estimate of intrinsic values.  Prices are always changing as new information is coming to the market.  This information may relate to specific shares or the economy more generally.  But when news does become available, prices react rapidly.

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PostHeaderIcon Why we still believe in tracker funds

All clients of Evolve will be well aware that our investment strategy is based on using low cost index tracking funds.  We are passionate about keeping the cost of investment as low as possible and very much hope the entrance of Vanguard into the UK market will force other fund managers to reduce their charges.

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PostHeaderIcon Why delaying pension contributions can make sense

This might sound counter-intuitive but it can be a valuable financial planning tactic in certain circumstances.

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PostHeaderIcon Inheritance tax planning strategies

"Inheritance Tax is a voluntary tax, paid by those who distrust their heirs more than they dislike the Inland Revenue!" Lord Jenkins.

"The only certainties in life are death and taxes" Benjamin Franklin.

It is ironic that the most punitive of taxes becomes payable after we have died!

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PostHeaderIcon Annuities - explaining your options

Annuity purchase is possibly the most difficult financial decision that you will make in your life. It is a one-off choice and if you get it wrong, there is no turning back. If you are approaching retirement, it is vital that you take professional advice to ensure that you fully understand the implications of your actions. 

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PostHeaderIcon What insurance do you need?

Many of us do not like to think about serious illness or death but spend a minute or two imagining the financial impact of this and the results can be quite sobering. Could you support your family, whether financially or by running the family home? Would your spouse or partner be able to run the family home without you? In fact, would he or she be forced to move house? Would your children still be able to get the education you want for them?
If you are single, how quickly would you run out of money if you couldn’t work?

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PostHeaderIcon Redundancy - what action should you take?

In the current economic climate it is inevitable that many firms are looking to tighten their purse strings and the economic data is by no means encouraging. There is an abundance of information on the internet about the redundancy process, what constitutes unfair dismissal and so on, so we don’t propose to cover all of that here.

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PostHeaderIcon The truth about commission

As the saying goes, there is no such thing as a free lunch and there is certainly no such thing as free financial advice. The vast majority of investment advisers work on a commission rather than fee basis and whilst you do not physically write out a cheque for the advice, you are paying for it out of the investment plans/policies you buy. You may be paying too much.

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PostHeaderIcon Financial implications of divorce

Divorce has been in the news a good deal recently, partly due to the handing down of two judgments by the House of Lords: Mr Miller was ordered to pay his wife a lump sum of £5 million after a marriage of just under three years with no children.  Mr and Mrs McFarlane had three children and had been married for sixteen years.  They agreed to divide their capital equally, and Mr McFarlane will be paying spousal maintenance of £250,000 per annum to Mrs McFarlane for the rest of their joint lives, unless she remarries or the Court makes a further order.

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