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By Balance team, Jan 17 2018 12:39PM

The BHS pension has hit the news again last week. Dominic Chappell, Director of Retail Acquisitions, the company that previously bought BHS for just £1, is being questioned in court after failing to provide pension scheme information to The Pensions Regulator.

Dominic Chappell acquired BHS from retail billionaire Sir Philip Green, who also faced harsh questions about a £571m pension deficit back in 2016. Eventually, The Pensions Regulator issued a notice to Sir Philip to pay towards helping to plug the enormous pensions gap, which left around 20,000 BHS employees facing cuts to their pensions.

How did the BHS Pension Scandal happen?

The £571m BHS pension deficit that’s often quoted in the press is how much it would cost to have an insurance company take on the liability for all those current and future pension payments. Now, it’s not uncommon for companies to have a pensions deficit, but as the organisation was in steep decline due to falling sales, the company lacked the funds to assure they could pay out in the future. When the company went into administration, the Pension Protection Fund became involved, but they only provide compensation of up to 90% of the amount BHS employees had been promised (and the amount can be capped for higher pensions too). Sir Philip Green then agreed to pay £363m towards the deficit. The Pensions Regulator is still investigating the two BHS pension schemes and the sale from Sir Philip to Dominic Chappell.

What does this mean for final salary pension schemes?

Final salary pensions – also known as defined benefit pensions – used to promise a secure income based on a percentage of an employee’s final salary on retirement, and they were often inflation proofed. However, due to increased pension regulation and a fluctuating economy, many businesses are closing their final salary schemes as they are proving too costly to provide. Instead, many organisations are moving their employees into personal, or ‘defined contribution’ pension plans, where there are no promised incomes involved and the employee simply builds up a pot of money for the future. The Pensions Regulator has also expressed great concern that other large organisations could find themselves in a similar predicament as BHS. Last year, the government proposed cuts to defined benefit pensions to ensure that schemes are still sustainable once people retire – for more information, please read our article, Cuts Announced for Defined Benefit Pensions.

It’s becoming increasingly important that employees fully understand the type of company pension scheme they have. If you need help checking your pension, then please talk to one of our financial planners for advice.

What can I do about my own final salary pension scheme?

If you have a final salary pension scheme, you may want to review whether it provides what you need. Ask your pension scheme administrators for more details (some of the bigger schemes have a dedicated pension scheme website which can be useful), or speak to a professional financial planner.

What are some of the differences between final salary and personal pensions?

• A final salary pension scheme (defined benefit pension) guarantees a secure pension income for the rest of your life, which usually rises with inflation. After your death, it will pay an income to your spouse (and children/dependants). Generally, the pension income is not flexible – once you’ve started taking your pension, you can’t change it. Tax-free lump sums are sometimes lower than a personal pension plan. You are relying on your employer to ensure the pension plan is well-funded.

• A personal pension plan tends to be more flexible in terms of accessing your pension income. Broadly speaking, you can take out what you want, when you want in retirement. This gives you the ability to take more income in your early retirement while you are fit and healthy, and less later in life when you may not need as much. It also gives you the ability to manage how you take money out of the plan so you keep your taxes down. And any money left in the pot when you die can be passed to who ever you wish, including children or charities. However, there is no lifetime income guarantee and if you don’t regularly review what you’re taking out of the pot, there is the risk it will run out. With a personal pension it’s essential to have sound financial plan that you review at least yearly.

For a direct comparison, please download our one-page final salary vs personal pension guide.

If you are worried about your final salary pension, please get in touch to speak to one of our financial planners. Our team can carry out a full pensions review and will provide expert advice to help put your mind at rest.

By Balance team, Jan 15 2018 09:00AM

Did you know that travel bookings tend to peak on Boxing Day? For many of you, the new year can be the perfect time to think about next year’s holidays. If you look in the right places, you can also find some great promotions on offer this time of year, especially if you’re interested in boutique holidays. So, we’ve pulled together a simple guide to help you both save and spend, so you can make the most of your holidays.

“A vacation is having nothing to do and all day to do it in.”

Robert Orben

1. Set your budget before you start looking

Whether you’re looking to book a few mini breaks, or you’ve set your heart on a luxury cruise, start by setting a realistic budget for your holiday – and agree this with your partner! Don’t forget to include enough spending money to cover food, drinks, day trips and any other activities you’re planning. If you’re travelling to an exclusive resort, such as the Caribbean, and you fancy a spot of sea fishing or sailing, activity costs can soon add up. Sometimes you can get more for your money if you book an all-inclusive holiday. This doesn’t need to be based at a resort – this could include an African safari or a specialised tour. Many travel companies now offer tailored, personalised holidays, which include full meals, activities and tours - all you have to do is fly to your destination and everything will be taken care of. This means you don’t have to spend your precious time trying to organise travel itineraries, tours and visas, etc.

2. Check the time of year for your holiday

This is one of the most common mistakes people make when they book a holiday. Carefully check the average weather patterns for the month you’re planning to travel (not just the average temperature). For example, if you’re looking to stay in the Florida Keys, it might be best to avoid August and September as this is hurricane season. If you’re flying to the Southern Hemisphere, remember it’s winter there, while we’re enjoying summer and vice versa, so you may find Bondi Beach a little chilly in August too. Asia is a great destination for winter and summer, depending on which region to travel to. For example, you should experience hot and dry weather in India and Thailand from December to February, but this area can be incredibly humid and wet during our spring and summer. If you’re not tied to the school holidays, you will find the best holiday deals out of term-time – for example, the Mediterranean is still very warm in mid-September, and you will avoid busy tourist periods too.

3. Start your holiday planning as early as possible

Unless you are booking your holiday with an organised travel company, you may find that you need to apply for visas for certain countries. Usually, this needs to be done in advance, so allow plenty of time before your holiday to make sure you have all the documents you need. You can find out whether you need a visa by checking the Foreign Office website, which also gives useful up-to-date travel information too.

Early holiday planning will give you access to better flights and sometimes a better rate on your accommodation. Don’t rely on good deals for last minute flights as you will rarely save any money – you are more likely to spend more on flights as the demand increases nearer your travel dates.

Another benefit of early holiday planning is the fact that you can create a solid savings strategy. If you’re booking up to a year in advance, you might decide to save your money in a tax-free ISA or a high interest savings account. An obvious benefit here is that your money will be away from your main bank account, so your money won’t be spent on day-to-day things. Or, you might choose to invest some of your savings pot to see if you can get a good return on your money. Please speak to one of our financial planners if you’re looking to review your savings and investment strategy.

Whether you’re planning a boutique hotel break in the UK, or a trek across the tropics, a little extra planning goes a very long way. Combine this with a steady savings strategy and you can sit back and look forward to that dream holiday, free from any stress or worry. Enjoy…

If you would like advice on more strategic ways to save for your holiday, please get in touch with one of our financial planners. We would be happy to help you make the most of your money and your holidays.

By Balance team, Jan 11 2018 09:09AM

2017 has been an interesting year in terms of both politics and economics. Following the Autumn Statement (for a summary, please read our recent blog), there could be some changes that may affect you in the next financial year. This includes changes to stamp duty and fuel duties, and a slight increase in tax rates and the VAT threshold.

From Brexit to Trump, we take a look at what’s been going on this year and what might be in store for 2018:

• Brexit and trade negotiations with the European Union

Brexit is still a big talking point, and this is set to continue long into next year, as negotiations continue on the UK’s departure from the European Union. New trade deals are being sought from international partners, and discussions continue on how we can avoid costly tariffs and duties as a result of leaving the European Single Market and Customs Union. It is estimated that 50% of imports to the UK are from the EU and 45% of UK exports go to the EU, which hopefully gives the UK some bargaining power.

The government are seeking clear customs agreements to avoid companies having to pay costly tariffs and duties, which could result in an increase in the cost of goods and services. The government is also trying to avoid a ‘hard border’ between Northern Ireland and the Republic of Ireland, which would cause great turmoil across this region.

Our advice – if you’re running an import/export business that trades with the EU, watch the negotiations carefully and make sure you have a sound financial buffer in place for your business. If you need advice, please speak to one of our financial planners.

• UK Growth, GDP and Interest Rates

In November, the Bank of England raised the base interest rate by 0.25% - this was the first rise in over a decade, and two further rises are expected in the next three years. If the rate of inflation stays high above the 2% target, this may happen sooner rather than later. The consumer prices index (CPI) rate of inflation rose to 3.1% - the highest level for five years.

Our advice - now is a good time to check any cash savers accounts, as you should have received higher interest on your savings. However, some providers haven’t yet passed on the recent interest rate rise to customers, so talk to one of our team if you are unsure.

Overall, we have seen a slower rate of growth in 2017 at around 1.5%, and some economists are predicting this to decrease to 1.4% in 2018. Slow economic growth is very much on the political agenda, and the government are seeking better ways to increase productivity as this is directly linked to GDP (for more information on this relationship, read our recent blog on Productivity and Investments). To boost productivity growth in the UK will rely on increased investment (both private and public) in housing, transport, technology, skills and innovation. The government has pledged to spend £2.3bn on R&D (research and development) funding to stimulate growth, as well as a national retraining scheme to encourage more employment in certain industry areas (construction, engineering, technology and science).

Our advice – if you run a business in one of the above areas, check out possible funding opportunities and schemes that may benefit your company and employees.

• Trump and Global Markets

This year saw Trump mania reach fever pitch. If we forget the hype and scandals for a moment, how has the Trump administration affected the US economy? Currently, the economic outlook for the US is healthy, with a strong stock market. US GDP is between the ideal range of 2 - 3% and there is little inflation or deflation. President Trump had promised economic growth to hit 4%, although many economists suggest this would not be a healthy aim as it may cause a ‘boom and bust’ situation. However, it has been predicted that US GDP growth will continue at around 2.5% in 2018, and is then expected to fall in 2019 and 2020 as a result of Trump’s policies (including the controversial “America First” Energy Plan).

In other news, President Trump continues to rock relations with other major global powers, such as Russia and China. The US has a complex relationship with China, as both countries have economies that are intrinsically interlinked. Trump is also trying to juggle public relations with China to tackle the looming threat of North Korea, after missiles were fired across Japan. A political threat such as this can have consequences on neighbouring economies – for example, back in the August, Japan’s Nikkei Index fell to a 4-month low after the missile launch by North Korean leader, Kim Yong Un. Although more recently the Nikkei managed to shrug off the more recent missile launch, until this threat dissipates one can expect continued market volatility.

Our advice – if you have invested in foreign stocks and are worried about how you might be affected by political wranglings overseas, then please get in touch with one of our team. We always advise our clients to hold a diverse mix of investments within their portfolio to reduce the level of risk.

If you have any concerns on recent economic issues and the impact they may have on your savings and investments, then please get in touch. We’re always happy to advise you on any questions you may have.

By Balance team, Dec 18 2017 12:05PM

With only a week to go until Christmas, no doubt many of you are feeling under pressure to buy last minute gifts. We all know someone who is impossible to buy for! So, this week, we thought we would take a look at some interesting festive gifts to give to family and friends:

1. For timekeepers and business leaders: watches

A watch can be a beautiful gift that can last a lifetime. Many people own a collection of high-quality watches including brands such as Omega, Tag Heuer and Hublot. A classic Breguet could set you back around £15,000! And, if you’ve got the budget, Leicester-based jewellery, Lumbers even has a watch made from pieces of the Titanic (valued at $250,000).

2. For someone special: bespoke jewellery and art

Thanks to the Internet, if you want to buy someone a really unique piece of jewellery, or a work of art, you can now access specialist makers from around the world. Etsy is an ‘artisan’ website where you can buy directly from the makers or artists themselves. You can also find unusual handmade gifts for the home, as well as clothing and accessories.

3. For those who have everything: gift experiences

If you have run out of ideas, then why not consider a gift experience? There are many companies that offer a range of adventures and activities including Red Letter Days, Buy A Gift, and Virgin. When it comes to choosing an experience, the world really is your oyster! For the more daring, why not buy a flying or supercar driving experience? If you want to spend time with someone special, then why not consider afternoon tea or a sightseeing experience?

4. For those who need a bit of pampering: spa days

This is a great gift for someone who’s stressed and overworked. As well as the more famous spa centres, such as Champneys or Ragdale Hall, many hotels now offer spa gift vouchers too. Twilight spa sessions are another option – usually, these sessions run from around 6pm to 10pm, and offer full use of spa facilities and a meal. And, if you buy a voucher valid for two people, you can go along as well, so you can also enjoy a relaxing spa day!

5. For those who enjoy a tipple: whisky barrel

Buying a share of a whisky barrel is a more unusual gift that is growing in popularity. This is a great way for someone to nurture a single malt whisky over a period time, and it can also be bought for a group of people to lower the cost. Once the whisky has matured, they can enjoy a bottle from their own barrel or potentially sell this back to the distillery. And, of course, if they choose an Islay single malt, they can even visit their whisky barrel and have a Scottish holiday at the same time!

6. For gourmet lovers: high-quality hampers

Choosing a hamper and its contents can be a fun way to give a gift to food-lovers. Although you can buy ready-made hampers from companies such as John Lewis and Fortnum and Mason, why not choose all the elements yourself from a local delicatessen? You could go for a festive theme, or you could choose all their favourite foods, such as a variety of cheeses or a sweet-hamper.

7. For those with a sweet tooth: designer chocolate

Chocolatiers are making a comeback! Asides from the more well-known chocolate brands, such as Hotel Chocolat, there are also a growing number of independent chocolatiers appearing around the country including companies like Cocoa Amore, who also offer chocolate and truffle making workshops. Handpicked chocolates made with flavours you know people will enjoy, can be a much better option than a standard high street box of chocolates.

Balance: Wealth Planning would like to wish all of our clients a very Merry Christmas and a very prosperous New Year!

If you would like to speak to one of our financial planners, please get in touch.

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.”

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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