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By Balance team, Jun 21 2018 09:47AM

Summer is nearly here, and the school holidays are just a few weeks away. So, have you booked your summer break or are you still considering what to do? Whether you’re an intrepid adventurer or a sunseeker, nowadays, there are so many interesting ways to spend your time, so how do you choose? If you haven’t booked your holiday yet, we’ve pulled together 10 ideas for you to consider:

Sun worshippers’ paradise

If you’re looking for sun, surf and sand overseas, the UK summertime can be problematic unless you stay within the Mediterranean. It’s monsoon time across most of Asia, but there are a couple of exceptions…

1. Bali, Indonesia – despite recent volcanic activity, Bali boasts a stunning array of tropical beaches, especially if you travel across to the exquisite Gili islands. Stay in luxury huts and cabins, unwind on powdery white sand beaches, and swim through warm turquoise seas – sheer bliss!

2. Mauritius – whether you like to sunbathe on stunning white sand beaches, or snorkel around glittery coral reefs, this island has a range of hotels from standard accommodation to luxury resorts. There’s also plenty of activities, if you do get bored – why not play a round of golf, or head inland to discover waterfalls and tropical birdlife?

Temple hunters

Whether you’re an archaeology buff or you’re a wannabe Indiana Jones, if you’re inspired by ancient temples and ruins, Greece, Turkey and Asia have a vast amount of incredible historical sites and landmarks – here’s just a few to whet your appetite:

3. Knossos, Crete – just outside of Heraklion lies the palace of Knossos. This important historical site was once home to the ancient Minoan civilisation and is famed for its mythical Minotaur and labyrinth. Klados Travel offers an exclusive augmented reality tour of the site where you can see computerised images of how the city once looked whilst standing in front of the ruins. Make sure you take a sun hat and plenty of sun cream; Crete temperatures can hit 40 degrees in the summertime!

4. Ephesus, Turkey – despite being on Turkish soil, this incredible ancient citadel is considered to be one of the best preserved historical sites of Ancient Greece, which occupied this area thousands of years ago. Ephesus was one of the most important trading centres in the Old Mediterranean world and the site is truly stunning. Stay locally at Kusadasi, which is a charming seaside town full of restaurants and cafes.

5. Angkor Wat, Cambodia – nothing prepares you for this breathtaking temple complex, which boasts a range of different temple styles and endless opportunities to explore. The nearest town to Angkor Wat is Siem Reap – stay here and you will enjoy a range of gastro delights ranging from tasty Cambodian curries to high-quality international cuisine too. There are endless shops selling everything from cheap souvenirs and clothing right through to high-end boutiques. Although the best time to travel is during the dry season, November through to May, if you’re prepared to take a brolly, you can find some great deals during the wet season from June to October too.

Animal magic

If you’re passionate about nature and wildlife, there are some amazing locations where you can get up close to the animals. These two locations are perfect for this time of year:

6. Orangutans in Borneo – a trip to the Sepilok Orangutan Centre near Sandakan in the Malaysian part of Borneo will allow to you see these majestic animals in their diminishing natural environment. Sadly, orangutans are close to extinction due to deforestation. Whilst you are in this area, you can also take a canoe safari up river and into the jungle, where you will see the funny long-nosed proboscis monkeys, and you may just see a snake or crocodile too!

7. Big cats in Namibia – it’s the dry season in many of the southern countries on the African continent, so it’s a great time of year to enjoy a safari. With its varied landscape, Namibia offers you the chance to track cheetahs, desert lions, leopards, elephants and rhinos, whilst being guided by expert conservationists. Steppes Travel offers a range of high-quality tailored tours across this region.

Sightseeing in the UK

If you’re someone – or a family – who enjoys staying on home soil, the UK has so much to offer, you won’t even need to step on a plane. There are many boutique hotel websites where you can get great deals on luxury accommodation including Mr and Mrs Smith, The Hotel Guru and Secret Escapes, and a growing number of gastro pubs and restaurants offering a vast range of culinary delights.

Here are three beautiful places to visit in Great Britain:

8. Cornwall – our own mini Mediterranean; as well as enjoying its own micro-climate in many areas such as St Ives, this region has something for everyone. Cornwall boasts a sprawling coastline full of superb beaches, rock pools and quaint harbours. There are various high-quality adventure playgrounds for children and the excellent Eden project has a range of activities for the young and old alike. There are also various walking trails across the county if you’re a budding rambler, as well as a wide range of physical activities including watersports – why not learn how to surf?

9. Dorset – if Cornwall is a bit too far to drive, and you’re interested in natural history and fossils, then the Jurassic Coast is a great place to explore. Starting at the Lyme Regis Museum, take a guided walking tour across the fossil beach and you are highly likely to pick up a fossil or two as a memento. There’s plenty to do in this area for children and adults including a Marine Aquarium where you can handfeed the fish. The town boasts a beautiful harbour and beach area, as well as delicious gastro fish and chips.

10. Scotland – this country has a vast amount to offer and a surprising amount of beaches – see this article ‘12 of the best beaches in Scotland’. But, above all, this area is famed for its glorious lochs and there are plenty to boot. If you enjoy a long trek or a gentle ramble, there are some stunning walks around Loch Lomond (which has luxury hotels close by) and the famous Loch Ness. You can also hire boats on many of the lochs too. If you’re an active person, why not try your hand at some Highland Games? There are plenty of experiences available and, if you’d prefer to just watch, why not check out the summer events by reading the Highland Games guide?

Whether you choose to laze away on a sun-scorched beach or you’re planning an Alpine hike, don’t forget to do some financial planning to help your money stretch a little further...

Happy holidays!

If you’re interested in creating a successful savings and investment strategy for the long term, please get in touch and speak to one of our financial planners.

By Balance team, Jun 11 2018 02:08PM

This is the question on many people’s minds – what should you do when you retire? Some of you may have firm plans in mind – for example, you know where you’re going to live, what you’re going to do and how you will spend your days. However, many people reach retirement without having any planning in place. Often, this can result in situations such as retirees not being able to afford that last-minute luxury cruise they had in mind...

Why is it so important to plan for your retirement? The sooner you plan, the better your retirement will be. Planning in advance allows you to save for longer and helps you make sensible plans for how you will spend your hard-earned money. After all, none of us really knows how long we will live could be 100! So, in this article, we look at some examples of retirees who chose some interesting ways to spend their golden years.

“Getting old is a fascinating thing. The older you get, the older you want to get!”

Keith Richards

Debbie & Roger – living on the canals

Having worked hard all their lives in professional corporate roles, Debbie and Roger reached their late 50s and decided to make use of the “pension freedoms”, which allowed them to draw down from their pension income to set up home on a narrowboat. The couple decided to sell their home and split the profits into ISAs, investments and high-rate saving accounts. Currently, they are blissfully winding their way along The Grand Union Canal!

Narrowboats are an increasingly popular way for people to spend their retirement. One of the reasons is due to the cost of a narrowboat, which is far cheaper than the cost of a house – you can buy a good quality narrowboat for less than £50,000. Many people view this as an idyllic way to see the country, constantly touring across the UK’s canal systems. Some people rent their homes out while they’re on the water, but many sell up completely and move their money into savings and investments. This can help to ensure they maximise any potential returns on their money, rather than pennies being trapped in bricks and mortar.

Kim & Linda – living ‘Down Under’

This same sex couple only found each other at a later time of life and they decided to push forward their plans for retirement, so they could enjoy their remaining time together. As they are both in their late forties and without any children, they decided they wanted to live in Australia by the time they were both 55 years of age. Due to their current age, this is only a short window of time, but as they both have good pensions and a mix of savings and properties, they decided to reorganise their money. Kim and Linda chose to invest some of their savings and transfer the rest of their money into financial products that will achieve higher rates of interest over the long term. If this is something you’re interested in doing, then please talk to our team who will be able to advise you.

Living abroad is another popular theme for retirement, especially in nearby countries such as Spain, France or Portugal where it’s easy to make the trip back home to the UK. If you’re considering buying property abroad, always check the regulations of that country in terms of whether you will have full ownership of the land and property. If you’re considering selling up to achieve your dream, then make sure you have suitable ways to manage any profits from your house sale in terms of savings and investments. It’s important to create a sound financial buffer, just in case your plans fall through or you change your mind.

Rakesh & Alisha – living to travel

Although this couple are only in their thirties, they decided to start making plans for their retirement as soon as they were married 10 years ago. Rakesh has family members located across the world and Alisha’s family are based in the UK and India. The couple were inspired by the idea of travelling across the globe when they were older to visit their relatives and possibly even live abroad. Rakesh and Alisha have three children, so they wanted to create a plan for their futures too. They decided to save as much money as they could to create a way for them to support their family and travel extensively once they retire. They decided to build a robust financial strategy that included a small yet diverse investment portfolio, which they could increase over time, they set up pension schemes for every family member and a Life policy through Rakesh’s small business, as this gives them some tax relief. They also decided to use the Help to Buy ISA to purchase their first home, making use of the 25% government top up.

By creating a varied portfolio of savings and investments earlier on in life, Rakesh and Alisha have made a good start towards funding their retirement. Should they choose to travel the world or stay in the UK when they retire, it really doesn’t matter - they will have the choice to do exactly what they want due to the money they have saved.

So, whether you’re planning to conquer Mount Everest, create a new life Down Under, or you’re looking to set sail across the high seas, the earlier you save in life the more choices you will have when you retire.

“Old age is like everything else. To make a success of it, you've got to start young.”

Theodore Roosevelt

If you would like help creating a successful retirement plan, then please get in touch to speak to one of our financial planners. We will look at your income, lifestyle, pensions, savings, investments, property, assets, and any business interests you might have to help you create a suitable retirement plan for a better future.

By Balance team, Jun 11 2018 01:59PM

Pension schemes can seem like a minefield to most people. We believe that pensions should be kept as simple as possible and this includes the way that people are being encouraged to save. In 2015, the Treasury published a paper looking at ways to encourage people to save more into their pensions. The former Chancellor, George Osborne, started this consultation to find out whether changes to the existing pension system could incentivise people to save more into their pension schemes. The purpose was to determine whether there were any better ways than the current system, which included looking at the amount of tax relief for different tax rate payers.

The need for better pension incentives

As the amount of tax relief received on your contributions is linked to your income tax rate, the current system favours higher-rate taxpayers. Incentives for additional-rate taxpayers have changed due to the new annual allowance - however, could there be a better system for basic tax rate payers? If the current system was simplified, would this lead to an increase in people saving more into their pensions? The government consultation raised questions around whether a simpler system might encourage people to take more responsibility when it came to saving enough money to fund their retirement, and this included better ways to plan for when people start using their pension savings.

As a financial planning firm, we welcome this consultation; we are firm believers in the creation of robust retirement plans that incorporate pension savings. Our aim is to help people achieve a comfortable or luxurious retirement, so we believe that simplifying the existing pension system could be highly beneficial for everyone in the long run.

Controlling your own pension pot

Due to a growing population and a dwindling state pension, the government is fully signed up to encouraging individuals to create suitable plans for their retirement. When the consultation paper was published, Osbourne said, “The government’s interest is in a lasting system that stands the test of time.” However, unless the system is changed to make it easier and more incentivising for people to save into their pension pots, such government aims may fall short.

“If people are to take responsibility for their retirement, it is important that the support on offer from the government is simple and transparent, and that complexity does not undermine the incentive for individuals to save.”

Former Chancellor, George Osborne

At the time, the government pension consultation received a lot of feedback from think tanks, financial firms and individuals, and it was proposed that changes to tax relief might be on the cards. However, asides from the “pension freedoms” which were brought in at the start of the financial year 2015/16 and a new tapered allowance for additional-rate taxpayers, little has changed to incentivise people to save into their pensions.

In a recent report published by the Royal Society of Arts called ‘Venturing to Retire’, it was proposed that only radical changes to the pension system would increase long-term savings, especially the retirement security of the self-employed, who are not included in the current auto-enrolment regulations. The Royal Society of Arts are considered thought leaders when it comes to areas such as pensions. They highlighted the fact that most self-employed people are using property and business assets as their retirement strategy, as well as relying on their partner’s pension scheme. The self-employed seem to be excluding pensions from their retirement plans for, which is very worrying indeed.

“No challenge is more acute than their lack of preparation for retirement. The self-employed are excluded from auto enrolment and they have no employer to top up their pension contributions. While the proportion of employees making payments into a personal pension leapt from 51 percent in 2010/11 to 62 percent in 2015/16 (largely owing to auto enrolment), participation among the self-employed fell from 23 percent to just 17 percent.”

Source: Royal Society of Arts - ‘Venturing to Retire’

The lack of incentives for the self-employed to save into a pension scheme is a growing concern for the government. The Royal Society of Arts report suggests that instead of using a ‘multi-tiered’ tax relief system, the government would be better off implementing a single flat-rate at 30%, which could lead to as many as 75% of pension savers being better off. Of course, this would not be a simple system to implement, especially as this would have a big impact on defined benefit pension schemes. However, the Royal Society of Arts also stated if the government reduced the annual pension allowance, this might help with any changes to the system.

Many financial firms and economists have argued that if all pension savers had the same tax relief rate and allowances, more people would be incentivised to save into their pensions.

At Balance: Wealth Planning, we believe that a fairer overhaul of pension tax relief needs to happen sooner rather than later.

If you need a pension review, please get in touch and speak to one of our financial planners. We will look at your existing pensions and your projected pension income, and help you create a suitable pension strategy for a better retirement.

By Balance team, Jun 4 2018 12:20PM

What do you need to consider when you write a Will? Do you know exactly what to include? Without an accurate and legal Will in place, your wishes may not be reflected when you pass away, so it’s important to check that it’s correct. If you already have a Will, but you haven’t updated it in a while, are you sure that it accurately reflects your current situation?

We’ve pulled together a list of the common things to consider when writing a Will:

1. Check whether your Will is out of date

If you already have a Will, when did you last update it? Ideally, they should be reviewed every three years, but more often if you’ve had a major lifestyle change – particularly getting married or divorced. Lots of people forget to update their Will, and this can cause big problems in the future including needless family disputes.

2. Using a DIY or ‘free’ Will

Your Will is a legal document and needs to be carefully drafted to suit your particular needs. Beware of cheap, online DIY Wills or templates, which can easily be incorrect or miss important points relating to your estate. Always bear in mind that any ambiguous language could also invalidate aspects of your Will. If you die without a valid Will in place, you will have died “intestate” – which would mean that intestacy laws would then determine how your estate is distributed after your death. And that can easily mean that your wealth does not get passed on to the people you would want it to, particularly if you are not married or in a civil partnership.

3. Check whether you have included everything in your Will

This is the trickiest part of writing a Will and the reason why we always recommend speaking to a lawyer. As well as your property, possessions, investments and savings, your pensions should be taken into account. Although your instructions about what should happen to your pension after your death won’t appear in your will, your lawyer and financial planner will need to understand the whole picture when giving you advice. Overseas properties need special treatment so far as your will is concerned, and business interests also need extra consideration, particularly if you are not the only owner.

4. Provisions for a gift should the beneficiary pass away

Sometimes a situation arises where your beneficiary dies before you and, therefore, the gift fails after you pass away because there wasn’t any provision written into the Will to cover this. You need to be really clear in your Will about what you would like to happen to a gift in these circumstances. For example, you might decide that if this were to happen, the gift is passed onto their children or spouse.

5. Appoint trusted Executors and Guardians

When you choose Executors for your Will, often people just name obvious members of the family like siblings or children. However – and this is a common sticking point – sometimes people are just not right for this role due to either living overseas or being incapable of handling the level of responsibility. Being an Executor involves a lot of responsibilities and tasks including paying off debts and any inheritance tax liabilities. Sometimes, people include an additional and objective Executor to help manage the estate after they pass away; this could be a trusted friend, solicitor, or another party. We have a trustee company for that purpose, so we can act as Executors for you if needed. If you have children, then you need to appoint a Guardian to care for them, should the very worst happen and you pass away while they’re still under the age of 18.

6. Your Will must be correctly signed and witnessed

Unfortunately, this is one of the biggest mistakes people make and without the correct people present to both sign and witness your Will, your Will could be completely invalid. A Will is legally binding, so your signature must be witnessed by TWO people – these people must not be named as beneficiaries (and must not be their spouses) and they must be UK citizens over the age of 18.

7. Check whether you wish to exclude anyone from your Will

Sometimes, due to family disputes or long-standing issues, you might decide that you want to exclude someone who has a legal claim to your estate. Usually, this happens in blended families where people have remarried and/or there are multiple children from different partners. If people are not written into the Will, or they have not been excluded, this can lead to disinheritance issues and the wrong people inheriting from your estate. So, if you feel there is even the slightest chance of this happening, you need to ensure this is written into your Will. For more information on this, please read our blog, ‘Could you be disinheriting a family member?’ or speak to our financial planning team for advice.

There are many other factors to consider, but the most important factor of all is making sure you actually HAVE a legal and valid Will. Without a Will in place, your family or friends could be left to face high probate and solicitor fees to organise your money, property and possessions after you die. Some people have even ended up in severe debt because they were unable to pay the deceased’s bills or because money was locked away in a bank account due to the absence of a Will. A Will gives you peace of mind that your estate will go to the right people when you pass away, so always ensure sure that yours is fully up to date.

If you need advice on writing or updating your Will, please get in touch and speak to one of our financial planners. We can help you with the financial planning aspects and recommend a lawyer who can help you put everything into action.

By Balance team, May 14 2018 09:26AM

There are a lot of things to consider when you’re looking at financial planning for your business. Whether you’re a single director or you run a successful large business, there are many ways to maximise your tax-savings and help you build your own wealth in the long term. In today’s volatile economy, it’s always a sensible approach to keep a close check on your business finances, especially when you consider the collapse of corporate giants, such as Carillion and BHS. In this article, we share some practical tips to help you make better decisions when it comes to financial planning for your business.

Short and long-term planning

First, set some firm business objectives and Key Performance Indicators (KPIs), so you can measure your progress. For example, this could include setting targets to save on resources or systems to streamline your operations, which could increase your profit margin. Perhaps you need to improve your cash flow management and financial reporting, so you can stay one step ahead when it comes to monitoring money in your business. Next, consider your long-term plans. Do you have a vision for your business? Do you have any retirement plans? Do you want to sell the business when you retire? If so, what do you need to do before your business is ready for sale? These are all important factors to help you build a robust business for the long term.

Dividends vs. Salaries

The money you take out of your business to live on is another important factor. Due to the recent changes in company dividends, many businesses are seeking more tax-efficient ways to manage their profits. The tax-free dividend allowance was slashed by £3,000 earlier this year, which means if you earn more than £2,000 in dividends, you will be liable for tax on them. If you run a family business and two of you are director-shareholders, then you could reduce your tax liabilities by structuring your income between you carefully. Before you change the way you use your profits, always seek professional advice from your accountant, and it may also be useful to speak to our financial planning team, in case there are any other tax implications.

Pensions and Commercial Property

Did you know that some pensions - a Self Invested Pension Plan (SIPP) or a Small Self Administered Scheme (SSAS) - allow you to use funds (subject to rules) to purchase commercial property, which could be your own business premises? In simple terms, the property is owned by your pension then leased back to your business, which pays rent into the pension. Better than paying a third party landlord, and it’s tax-deductible as an expense of the business too.

If you are interested in making the most out of your pension schemes in this way, please speak to one of our financial planners for more details.

Key Person and Shareholder Protection

Do you rely on specific people to manage important aspects of your business? What would happen if a key person was to fall ill or pass away? What would be the effect on your business operations? It’s important to protect your business as well as your wealth. If you do have key people in your business – and this could include yourself – then it’s well worth considering Shareholder and Key Person protection.

• Key Person insurance – this is a type of Life and Critical Illness policy, which pays out a lump sum to your business, should one of your ‘key people’ pass away or they become critically ill and are unable to work. If your business relies on a highly effective sales person or a financial director, this is a good way to protect your business from their absence and the effects on your operations. For example - the lump cash sum could be used to recruit someone else to manage their role.

• Shareholder protection - this policy varies from Key Person protection because as the name suggests, it only applies to someone who has shares in your business. This could be an important investor or maybe a spouse, if you run a family-owned business. Should one of your shareholders pass away without this type of policy in place, company shares could be inherited by their next of kin, which can lead to difficulties, such as unwanted interference in your day-to-day operations by the deceased’s beneficiary.

Succession planning

This is often one of the key areas business owners forget about and yet, without any succession planning in place, your business could be at great risk. What if you were to suddenly pass away? What would happen to your business? Sometimes, a spouse is in line to inherit company shares, but very often that person does not have the experience or desire to run the business. Such situations can spell disaster, especially if you have multiple shareholders. We advise pulling together a plan of how your business will be managed after you pass away, and make sure any wills and trusts are updated accordingly – please get in touch for more advice on this.

The most important piece of advice we give to our clients is to plan for the future as early as possible.

If you would like advice on financial planning for your business, then please get in touch.

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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