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On Balance...

By Balance team, Dec 12 2017 01:07PM

We are delighted to announce that we have recently added five new employees to the team, and are recruiting currently recruiting for three as we celebrate completing our third year of business!

Jon Thorpe and Tina Winter have both joined the team as Financial Planners, with Jon based out of Derby and Tina predominately being based in Nottingham. Both new employees bring with them an abundance of experience and have really embraced the Balance: Wealth Planning Ltd ethos. We specialises in giving holistic wealth planning advice to clients who are working towards, or have already experienced, a big financial change. The experience that Jon and Tina bring is already making a significant difference to their clients’ lives, with many now retiring from work sooner than planned, and booking exotic holidays to celebrate!

We are also delighted to welcome a trainee Financial Planner, Andrew Padgett to the team. Andrew has over 10 years of experience working for London based hedge funds focusing on European equities and has recently returned from a sabbatical which included travel and charity work.

To support the expansion of the team, a further two employees have joined the local firm. Dani Nicholls, who has been working within the Financial Planning profession since 2012, has joined as a Paraplanner. Her role includes supporting the financial planners to ensure the best the advice is provided to clients and to act as a sounding board and second opinion in the planning process. Her input has already proved incisive and valuable.

Finally, we have welcomed Christine O’Dowd as an Administrator for the company. Christine has a passion for organisation and will support all members of the team in providing the best service to all clients. Christine deals with the day-to-day processing and updating of financial transactions.

As mentioned before, we are still actively recruiting. One position has already been filled, with details to be announced next year, and we are also looking for a Paraplanner and Financial Planner to operate out of the Derby office. Anyone interested should visit

Managing Director, Rebecca Aldridge, said “I am so pleased to be welcoming the new members to our team. With such a combined wealth of experience and knowledge, as well as enormous passion for holistic financial planning, I know we will work well together and have an exciting journey ahead”. She added, “It’s really pleasing to reflect on all that we have achieved in the last three years – particularly the impact our advice has had on so many clients who have felt confident to make what are often significant, life-changing decisions, as a result. I very much look forward to seeing what the next three years has in store.”

By Balance team, Dec 12 2017 12:02PM

In the recent Autumn Budget, the Chancellor Philip Hammond reported slow productivity, which may be cause for some to worry about what the effect would have on their UK investments. As you would expect, there have been a lot of opinions being expressed both in the media and at a political level. So, this week, we decided to explore this subject further by giving investors an insight into this area…

Productivity and GDP

Productivity is linked directly to GDP (Gross Domestic Product); this is the best way to measure output in terms of both labour and capital and measure a country's economy. Essentially, it determines the standard of living, i.e. how people can get what they want faster, or more of what they want in the same time.

Over the long term, improving productivity – the amount of output produced per hour worked – is the best way to boost pay and increase living standards. When measuring productivity and predicting forecasts, economists will look at revenues, labour growth, wage levels and technological improvements. When physical productivity causes the value of labour to increase, wages will tend to increase too. In simple terms, the greater the gains in productivity, the greater the growth in GDP.

However, accurately measuring productivity is very complex. With the increase of service-based businesses, outputs are more effectively measured as inputs. Some economists suggest that we are not measuring the quality of such inputs properly, i.e. enhancements to services. There is no simple solution to increasing productivity, but there is an increasing urgency to grow GDP.

So, how does productivity affect your investments?

Companies have tough decisions to make in how to deploy their revenues. For example, choosing between increasing their workforce or investing into new technologies. When a company struggles to raise capital to invest into their business, this can have a knock-on effect on company infrastructure, profits and growth. This affects shareholder dividends, as well as the company share price. When a company is investing into growth, they are seen in a better light by investors. The more efficient a company is, the more likely stocks and share prices will rise. However, in our current complicated economic climate, there are a lot of other factors that will affect the amount of investment into a company, i.e. the level of confidence in the country’s governing system and interest rates.

Strategic investing

The most sensible approach to investing should always be in making sure you that have a diverse portfolio, not just in terms of asset type like equities or bonds, but also different geographies. In today’s globalised economy there can often be significant divergence in countries’ respective economic performance. This performance obviously has a significant effect on the firms operating within that country and their capacity to generate profits and shareholder returns.

Investing across different regions or geographies is the easiest way to limit risks of economic downturn.

Here are a few tips for you to consider:

Spread your wealth – don’t put all of your money into one stock, sector, region or asset type.

Check that your financial planner that any investment portfolio is suitably structured for your risk tolerance and financial situation.

Review your investment strategy with your financial planner.

If you would like a review of your current investments or you would like to create a safer investment strategy, please speak to one of our financial planners.

By Balance team, Dec 6 2017 09:26AM

What if the worst does happen? We all try to avoid thinking about any nasty surprises that may affect us, but nothing in life is certain except death and taxes. Unexpected changes to our lifestyle can have a knock-on effect on both our own future and our family’s future too. Don’t give in to worry - instead of fearing the worst, there are many ways you can prepare and protect against such events. We explore a few different scenarios below…

Relationship breakdowns

Many people today live together for longer periods before they decide to marry – or, they may choose not to marry at all. When a couple separates, if they have children, this can have drastic consequences. Firstly, if they have not updated their Will and they pass away, there can be complications. If a person remarries and has children with a second partner, any children from the first marriage or relationship may find themselves disinherited. Never assume your money will go to all your children. If the couple have a share in a property and then separate or divorce, should one person pass away, there can also be complications surrounding ownership. The deceased may have wanted a share of the property to go to someone else, i.e. their children or a sibling. Always update your Will and any Life Insurance, if you do separate or remarry to ensure that your chosen beneficiaries (those who will inherit or receive benefits from your Will or Life plan) are legally recognised. Remember, with a Will, there is peace of mind for you and your family.

Business losses

The UK has one of the largest number of owner-run businesses in Europe. Small and medium-sized businesses (SMEs) account for 60% of all private sector employment (YouGov). If you are a business owner or director-shareholder, it’s a good idea to start preparing for the uncertainty surrounding Brexit. If your business trades with the EU, there may be changes to customs and tariffs on the horizon, so it’s well worth having a thorough business review to see how you could be affected. Now is the time to create a sound financial buffer for your business to offset any potential economic impact.

Ill health and sickness

There are so many factors that can contribute to illness and it’s worth remembering that illness can be mental as well as physical. Unfortunately, few of us can predict whether we will suffer from a chronic condition, such as a stroke, heart attack or even dementia, and mental illness, stress or anxiety can creep up on us. When people fall ill this affects every area of their life including family relationships, their job or business, and their income. When we are used to living a certain lifestyle, it is an added pressure to cut back and live frugally when we are coming to terms with ill health. There are various forms of insurance available including critical illness cover and income protection. It is well worth investigating these options, and perhaps consider taking out a plan, so you can secure funds for your partner/spouse and children.

We also strongly recommend setting up Lasting Powers of Attorney, so if you lose mental capacity, you have a legally recognised family member who can manage your affairs on your behalf. If you have any questions relating to protection, our financial planning team are happy to advise you on suitable options.

Safeguarding your future

Ultimately, your aim should be to create a sound financial buffer to protect against any eventuality. This should be more than just a ‘rainy day fund’. Having a good mix of protection, pensions, savings, and a diverse portfolio of investments, can provide you with a more secure way to manage your money.

If you would like more information on protection, pensions and savings, please get in touch to speak to one of our team. We would be happy to carry out a financial review to help you safeguard your family’s future.

By Balance team, Nov 25 2017 08:48PM

On Wednesday 22 November, Chancellor Phillip Hammond delivered the 2017 Autumn Budget. The main highlights include changes to stamp duty for first-time buyers, updates on the economy, and increased investment into technology. We have pulled together a high-level summary below:

Stamp duty to be abolished for first-time buyers

To stimulate the housing market, first-time buyers purchasing a property with a value up to £300,000 will no longer need to pay stamp duty. In pricier areas such as London, the first £300,000 will be exempt on properties worth £500,000 - first-time buyers would only pay the stamp duty on the remaining property value. This change will come into effect immediately in England, Wales and Northern Ireland, and Scotland will then need to decide whether to apply the same approach.

Land development and empty properties

Although the government has committed £44bn in capital funding to support the UK housing market, property investors and developers beware! Councils have been given new powers to charge 100% council tax on empty properties. Plus, there will be a compulsory purchase of any land banked by developers for financial reasons. However, small building firms should get a £1.5bn share of the annual target for delivering 300,000 new homes. £400m has been set aside to regenerate housing estates, as well as £1.1bn to “unlock strategic sites” for development. The government are looking to:

“…support more housebuilding, raising housing supply by the end of this Parliament to its highest level since 1970, to make homes more affordable in the long term

and help those who aspire to homeownership”

UK economy and employment

Although GDP growth has remained fairly solid, it has slowed, so an overall gloomy outlook was given by the Chancellor with regards to productivity - the growth forecast was downgraded to 1.5% from 2%. To prepare for the UK leaving the EU, £3bn has been set aside, and it is hoped this money will alleviate any potential problematic outcomes. However, on a brighter note, the government have forecast that an extra 600,000 people will be in work by 2022, with employment having risen to a near record high by 3 million since 2010.

Business – VAT, technology and training

The VAT threshold has risen to £85,000 and it will stay at this level for the next two years. Rises to business rates will now be pegged to the Consumer Prices Index (CPI) instead of the Retail Prices Index (RPI), resulting in a cut of £2.3bn. These measures have been designed to ease the pressure on growing businesses. The government will be investing £500m into full fibre broadband, 5G mobile networks and artificial intelligence, as well as £540m into electric cars to support this growth area (this will include things like creating more charging points). Along with increased investment into R&D (£2.3bn) to expand the National Productivity Investment Fund (NPIF), this move is designed to “establish the UK as a world leader in new technologies”. What’s more, the government are seeking to create a National Retraining Scheme in areas such as science, technology and engineering.

Changes to Personal Tax, the Living Wage and Welfare

The higher-rate tax threshold has risen to £46,350 and the tax-free personal allowance on has risen from £11,500 to £11,800. The National Living Wage is set to rise in April 2018 to £7.83 (currently £7.50). The controversial Universal Credit system has been promised a £1.5bn package to “address concerns about the operation of the system”, which has been met with some disappointment.

Health and Pensions

The Chancellor announced there will be £2.8bn in extra funding for the NHS and promised £350m to ease looming winter pressures. Although there won’t be any extra funding for nurses, a capital investment fund of £10bn has been budgeted for hospitals (up to 2022).

Some pensioners will be better off, as there will be a 3% increase to pension credit. More well-off pensioners with additional private pensions may see a decent increase due to the reduction on income tax liabilities. If you need a pension review, please speak to our financial planning team for advice.

For more information, The Guardian has an excellent article with comparisons for different scenarios – read more.

Other budget announcements

• The fuel duty rise set for April 2018 has been scrapped, but there will be a one-off tax increase for new diesel cars that don’t meet emissions standards for the first year of road tax. Proceeds of the diesel tax will go towards a new clean air fund. The company car tax diesel supplement for has been increased by 1% (3% - 4%). From April 2018, fuel benefit charges and van benefit charges will increase in line with the Retail Prices Index (RPI).

• Education will see £40m invested into underperforming schools in England, as well as the recruitment of 8,000 new computer science teachers (£84m).

• Tobacco will rise by 2% above inflation (RPI), i.e. an extra 28p per pack of 20 cigarettes, but duty on alcohol (beer, wine, ciders and spirits) will be frozen (duty on high-strength ‘white ciders’ will be subject to new legislation in 2019).

Please see the Autumn Budget - Executive Summary for more information.

If you have any concerns or you would like advice on how you may be affected by the Autumn Budget, then please get in touch to speak to one of our financial planning team.

By Balance team, Nov 14 2017 11:19AM

Last week, the Bank of England raised interest rates from 0.25% to 0.5%. This is the first time in over 10 years we have seen such a rise. Over the next 3 years, it has been predicted that interest rates will rise twice more too. So, how does this affect you?

Higher mortgage payments?

Unless you have a fixed-rate mortgage, you may be one of a probable 4 million householders who will now have to pay higher interest on their mortgage payments. Variable rate mortgages or ‘tracker rates’ will be greatly affected by the recent rise in interest rates. For example, if you’re on a variable rate mortgage and have an outstanding balance of £200,000 to pay, and your payments are £900 per month, the increase will see you paying an extra £25 per month, which is an additional £300 per year. On the other hand, if you have a fixed rate mortgage, which is due to finish in the next 12 months, you may be facing a steep increase in your monthly mortgage payments after you reach the end of your term.

Higher returns on savings and ISAs?

It’s not all doom and gloom! For those of you who are savers with variable rate mortgages, you may find that your increased mortgage interest payments could be offset by the increased interest on your savings accounts. Many banks and financial organisations have stated they will be passing the increased interest rate onto customers, which means you should expect better returns on your savings accounts. For example, if you have £10,000 saved in an ISA, you will have a better income, rising from £30 to £55.

Higher threat for investments?

Interest rates will have an impact on the stock market, but this could turn out to be more of a correction rather than a major hit. Some investors may see less attractive income streams, some may rush to sell, whereas others may choose this time to buy. Strategic bond funds can be a better way to minimise risk as fund managers have more freedom to invest into a mix of high-yield, better quality government bonds. Please talk to a professional if you are looking to change or review your existing investment strategy.

Higher income for pension annuities?

As interest rates helps providers decide on the annuity rates for retirees, the recent rise may lead to more income. However, this is still yet to be determined and the effect may only be very slight. Some providers increased their annuity rates before the expected interest rate rise to compensate for this. There could be costs, risks or benefits by delaying the purchase of your annuity. Therefore, if you’re looking to buy an annuity with your pension, and you’re unsure how the recent rise will affect you, please talk to one of our financial planners as soon as possible.

High time to create a sound financial plan

The recent rise in interest rates offers some opportunities for savers, despite the effect on mortgage payments. Therefore, now is a really good time to look at your savings and investment strategy to make sure you have a sound plan in place to take you to where you want to be in the future. Your savings and investment strategy will depend on the type of savers account(s) you have, your level of risk, as well as the number and diversity of fund options in your portfolio. Make time for a financial review today, so you can make the most of your hard-earned money.

If you’re concerned about the recent rise in interest rates and how this will affect your savings and investment strategy, please get in touch to speak to one of our team.

Regular news and views from the Balance team. You'll find our thoughts about pensions, investments, ways to save tax, facts about finances and plenty more.


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