DISCOVER THE MERITS OF LONG-TERM INVESTING

DISCOVER THE MERITS OF LONG-TERM INVESTING

by | Feb 15, 2022 | Planning, Retirement, Uncategorized

Discover The Merits of Long-Term Investing

Being interested in and engaged with your investments is to be applauded. But there’s a potential danger in becoming too involved with day-to-day movements and how funds are performing, worrying over the latest share price shift or market panic. Markets move up and down – that’s the very nature of stock market investing.

When markets fall it’s natural to worry about what that means for the value of your own investments.

But it’s worth remembering that losses are only on paper unless you sell. The bottom line is that historically, markets always recover and that the most dependable way to create wealth is to take a long-term approach.

There are a number of benefits of long-term investing. Here’s a few of those benefits at a glance:

THE PROFESSIONALS HAVE GOT YOUR BACK

Some speculative investors choose to invest in individual companies, known as stocks. Yet choosing steady winners is not always easy, so you may decide instead to invest in a pooled fund, such as a unit trust, open-ended investment company (OEIC), or investment trust, that spreads risk across a wide variety of shares.

This way, you pass the responsibility of choosing where to invest to a qualified, professional fund manager who will do all the legwork and selection on your behalf.

The point of buying funds is to let the professionals worry about market movements – that’s what they’re paid to do.

All you need to do is adopt a buy and hold strategy. The main idea behind buy-and-hold is that you stay invested throughout market cycles, as even missing just a few of the best days can have a major impact on your long-term returns. It is said that the golden rule is that the stock market rewards patient investors.

THE MAGIC OF COMPOUNDING

Compounding is another reason to hang on to investments for the long-term, as it can seriously turbocharge your returns.

In simple terms your money earns a return in the first year, in the second year both the original cash and the return benefit from any growth in the second year. In the third year your investment is further enhanced by any returns achieved. This snowball effect is called compound growth.

Many companies pay dividends quarterly or half yearly which means that compounding can get to work more quickly. Reinvest those returns rather than take them as income, and the growth will compound. This means you’ll see your money grow – as long as positive markets mean the income being earned continues over the long term.

“The best way to achieve your long-term investment goals is to have a diversified portfolio.”

IT’S ALL ABOUT TIME IN THE MARKET – NOT TIMING THE MARKET

If you are investing for 10, 20 or even 50 years it’s likely there will be bad years along the way. Yet calling the top or the bottom of the market during any time period is not possible without a crystal ball. No bell rings for investors when it’s time to invest. Instead, by investing regularly through the cycle and sticking to your long-term plan, you can hope to reap the rewards.

Remember, it’s time in the markets, not timing the market that counts.

COST SAVINGS

Long term investing could also help you cut costs. Changing your portfolio regularly can mean you incur lots of dealing charges as you will pay a fee every time you buy and sell a stock or fund. These charges can eat into your returns.

GET INVESTED

The best way to achieve your long-term investment goals is to have a diversified portfolio.

Getting professional advice on how to do this can go a long way towards growing your savings into a meaningful fund.

PROVIDING NEWS AND VIEWS TO SUIT ALL NEEDS

This Blog is published and provided for informational purposes only. The information in the Blog constitutes the author’s own opinions. None of the information contained in the Blog constitutes a recommendation that any particular investment strategy is suitable for any specific person.

Tavistock Partners Limited is authorised and regulated by the Financial Conduct Authority. Tavistock Partners (UK) Limited is authorised and regulated by the Financial Conduct Authority. Tavistock Private Client Limited is authorised and regulated by the Financial Conduct Authority. The Tavistock Partnership Limited is authorised and regulated by the Financial Conduct Authority. Abacus Associates Financial Services is a trading style of Tavistock Partners (UK) Limited which is authorised and regulated by the Financial Conduct Authority. Duchy Independent Financial Advisers is a trading style of Tavistock Partners Limited which is authorised and regulated by the Financial Conduct Authority, All subsidiaries are wholly owned by Tavistock Investments Plc.

Show your wealth some love this Valentine’s Day

Show your wealth some love this Valentine’s Day

by | Feb 7, 2022 | Uncategorized

SHOW YOUR WEALTH SOME LOVE THIS VALENTINE’S DAY

Protecting your wealth can go a long way to protecting the ones you love. The golden rule is not to delay on making sure the money you have worked hard for is preserved for you and your family.

Here are five ways you can help safeguard your wealth:

Insure yourself

It’s easy to make the mistake of thinking you’re too young or ‘it’ won’t ever happen. But life insurance, critical illness cover and income protection can all help when times get tough. Payouts from life cover ensures that finances are taken care of, if a personal tragedy occurs.

Other kinds of protection insurance mean you don’t have to dip into savings and investments to cover certain costs if your income drops due to illness.

If you already have cover, you might be able to get a better value policy by switching to a newer one, so a review might be in order.

Make a Will

It may not sound like an act of love, but making a Will ensures your assets and possessions are passed on to the people you choose.

Without one your wealth will be passed according to the “laws of intestate” – and not your wishes. Writing a Will can save on inheritance tax too, meaning more of your money goes to the people you hold dear.

If you’re not clear about how you want your money to be split up, particularly if you were planning on distributing it unevenly or have remarried and have stepchildren, then acrimony can ensue. 

You are never too young to make these decisions, so it’s a good thing to get sorted whenever you’re ready. Don’t forget that Wills need updating where marriage or divorce happens.

Trusts and Will Writing are not regulated by the Financial Conduct Authority.

“Professional advice can go a long way to provide peace of mind that you are addressing the needs of you and those of your family.”

Consider estate planning

Inheritance tax (IHT) is charged on an estate, which is the property, money and possessions left behind to loved ones who will pay 40% anything above the threshold.

There’s plenty you can do to ensure as little as possible goes to the taxman after your death. There are exemptions to make use of on gifting money to family and friends, as well as being able to hand over all types of assets, including cash, property and shares tax-free, as long as you live for seven years after making the gift.

You might also consider arranging a trust that can help minimise IHT. You can retain control of money set aside, perhaps where grandchildren are still young, for example. There are several types of trust, and specialist advice is vital to ensure the right trust is chosen for you.

Don’t hand over your money to fraudsters

Fraud happens every day and there’s a chance you might be caught with your guard down.

In many cases fraudsters can be very professional in their approach to convince you their proposition is genuine, offering you access to a sophisticated investment that offers sky high returns.

Yet it won’t necessarily be the most elaborate scam that catches you out. In a new WhatsApp con, parents are being bombarded with messages from criminals posing as their children and pleading for money.

Scammers pretend to the parent that their child has lost their phone and is using a new number.

The reasons the fraudsters give for needing money are also often sensitive — such as for an embarrassing medical issue that needs urgent, private treatment or an urgent bit of home repair.

Protect yourself by assuming that anything out of the ordinary could be a scam. Do whatever it takes to check out any request for money whether it appears to be from a loved one or a genuine professional promising eye-watering returns on an investment. And remember, if it sounds too good to be true, then it probably is.

Seek trusted advice

Professional advice can go a long way to provide peace of mind that you are addressing the needs of you and those of your family.

There are plenty of areas of financial planning worth exploring that could benefit you and loved ones.

PROVIDING NEWS AND VIEWS TO SUIT ALL NEEDS

This Blog is published and provided for informational purposes only. The information in the Blog constitutes the author’s own opinions. None of the information contained in the Blog constitutes a recommendation that any particular investment strategy is suitable for any specific person.

Tavistock Partners Limited is authorised and regulated by the Financial Conduct Authority. Tavistock Partners (UK) Limited is authorised and regulated by the Financial Conduct Authority. Tavistock Private Client Limited is authorised and regulated by the Financial Conduct Authority. The Tavistock Partnership Limited is authorised and regulated by the Financial Conduct Authority. Abacus Associates Financial Services is a trading style of Tavistock Partners (UK) Limited which is authorised and regulated by the Financial Conduct Authority. Duchy Independent Financial Advisers is a trading style of Tavistock Partners Limited which is authorised and regulated by the Financial Conduct Authority, All subsidiaries are wholly owned by Tavistock Investments Plc.

Beware the scammers who want your pension

Beware the scammers who want your pension

by | Feb 2, 2022 | General Investing, Managing Risk

BEWARE THE SCAMMERS WHO WANT YOUR PENSION

08

FEBRUARY, 2022

Pension Scams
Investments

Pension fraud has been on the rise ever since pension freedoms was introduced in 2015, allowing the over 55s to access money in their retirement pots.

Since introduced, more than £37 billion1 of taxable flexible withdrawals have been made from defined contribution pensions.

Scammers have seized the opportunity to help themselves to a chunk of this money, offering fake services to individuals who believe they are making lucrative investments.

Sadly, their money often disappears, never to be seen again. Despite campaigners raising the alarm about the scams for years, fraudsters continue to thrive, constantly resorting to new tricks to stay one step ahead.

The numbers are worrying. Action Fraud reported a doubling of the average amount lost by pension scam victims in 2021 to £50,000 from around £23,689 in 2020, with the Pension Scams Industry Group (PSIG) estimating 40,000 people lost around £10 billion to fraudsters since 20152.

Progress is being made, however, with new measures3, introduced in November 2021, which require pension providers to ask basic questions that can identify tell-tale warning signs of scams before customers transfer money out.

Previously, providers could face Ombudsman penalties if they delayed transfers, as this breached customers’ statutory rights.

“With more people organising their finances online, fraudsters now use the internet and social media”

If the questions about customer reasons and plans for transferring their pension indicate red warning signs of a scam, the statutory right to transfer can be over-ridden and the transfer banned.

Should a red flag be raised, the saver will need to take official scams guidance from Pension Wise before proceeding.

THE SCAMS EXPLAINED

There are two types of investment cons. The first involves fraudsters posing as a legitimate firm and vanishing the moment you hand over your money.

The second is where victims are persuaded to get involved with fake or real investments which fail to deliver the promised returns or are so high risk you stand to lose everything. Many of these are long-term pension investments – which mean people who transfer in don’t realise something is wrong for years.

Pension scams have focused on things such as overseas property investments, airport car parks, storage units and renewable energy bonds. They can be dressed up to sound attractive, yet in reality the investments are highly risky or completely fictitious.

Pension scammers are also known for offering would-be victims a free ‘pension review’, or advice on how to cash in their savings. But this isn’t always what it seems. Though such moves are possible, they often leave savers with a huge tax bill, which of course the scammers don’t flag. So through a different channel, they wave goodbye to their hard-earned savings.

With more people organising their finances online, fraudsters now use the internet and social media. All they need is an online advertisement and fake website.

WARNING SIGNS OF A PENSION SCAM

While it is hoped that the latest measures will have a positive impact, it’s still crucial to remain vigilant.

Tell-tale signs it’s a scam include phrases such as “loophole”, “pension liberation” or “guaranteed returns”, all of which should spark concern. Should you be offered a pensions review, never give your personal details, especially if someone offers to help you release cash from your pension and you’re under 55.

Other things that should ring alarm bells are high-pressure sales tactics – the scammers may try to pressure you with ‘time-limited offers’ or even send a courier to your door to wait while you sign documents. They might even ask you to grant them remote access to your devices.

If you’re worried about a financial scam you can report it to Action Fraud, the UK’s national reporting centre for fraud.

You can also contact the FCA’s helpline on 0800 111 6768 or use its reporting form: https://www.fca.org.uk/consumers/report-scam-unauthorised-firm

Be aware, though, it’s notoriously difficult to get your money back, so take great care.

KEEN TO REVIEW YOUR PENSIONS?

If you want to review your pension arrangements, talk to one of our trusted financial adviser today.

Source:

[1] https://www.gov.uk/government/publications/pension-freedoms-a-qualitative-research-study-of-individuals-decumulation-journeys/pension-freedoms-a-qualitative-research-study-of-individuals-decumulation-journeys#fn:1 (in the summary)

[2] https://www.moneymarketing.co.uk/opinion/why-pension-scammers-must-be-tackled-this-year/ 

[3] https://www.thepensionsregulator.gov.uk/en/media-hub/press-releases/2021-press-releases/new-regulations-empower-trustees-to-halt-suspicious-transfers 

PROVIDING NEWS AND VIEWS TO SUIT ALL NEEDS

This Blog is published and provided for informational purposes only. The information in the Blog constitutes the author’s own opinions. None of the information contained in the Blog constitutes a recommendation that any particular investment strategy is suitable for any specific person.

Tavistock Partners Limited is authorised and regulated by the Financial Conduct Authority. Tavistock Partners (UK) Limited is authorised and regulated by the Financial Conduct Authority. Tavistock Private Client Limited is authorised and regulated by the Financial Conduct Authority. The Tavistock Partnership Limited is authorised and regulated by the Financial Conduct Authority. Abacus Associates Financial Services is a trading style of Tavistock Partners (UK) Limited which is authorised and regulated by the Financial Conduct Authority. Duchy Independent Financial Advisers is a trading style of Tavistock Partners Limited which is authorised and regulated by the Financial Conduct Authority, All subsidiaries are wholly owned by Tavistock Investments Plc.

PENSIONS AND RETIREMENT – STILL TABOO?

PENSIONS AND RETIREMENT – STILL TABOO?

by | Jan 19, 2022 | General Investing, Planning, Uncategorized

PENSIONS AND RETIREMENT – STILL TABOO?

15

FEBRUARY, 2022

How to fund retirement is not an ideal topic for a quiet evening in. But it’s an important one which is being overlooked by millions of married couples.

According to a recent study1, almost half (47%) of working married people have not spoken to their spouse about their retirement plans.

Wealthy households aren’t doing much better. The study revealed that those with assets of between £100,000 and £500,000 excluding property – are more likely than average to be aware of the value of their spouse’s pension, but the majority (60%) aren’t going to plan their retirement finances with their spouse.

Those couples who don’t tend to talk about finances might be more likely to do so if they realised that those who jointly plan their retirement can be much better off when they stop working.

Indeed, 85% of non-retired married people are not aware of the tax-efficiencies of planning retirement together.

There are many ways in which couples can maximise the tax breaks jointly available to them and find the most tax-efficient way of generating income in retirement, together.

For example, on retirement, taking the full tax-free cash entitlement from a pension is not always the smart choice- unless a large lump sum is needed.

It can make sense for couples to instead retain most of the tax-free cash entitlement until a later date, looking to utilise the personal allowance (and potentially the basic rate tax band) to draw down tax-efficient income instead.

“Talking about money and financial security is a must in any relationship since it’s such a big part of planning a future. “

An adviser can unveil the many other ways in which a couple can use the rules to their advantage and minimise tax bills. This is particularly useful where retirement happens before the State pension kicks in.

Making use of each other’s allowances is also worth investigating. A higher earning partner approaching the Lifetime Allowance or Annual Allowance could pay additional contributions into their partner’s pension. The contributions will attract tax relief and the couple will be able to draw a tax-free combined income of more than £30,0002.

That’s got to be worth talking about.

However, it’s not only married couples that are guilty of failing to communicate on retirement money matters later in life.

Previous research3 suggests the failure to talk finances starts much earlier on in the relationship cycle. People admitted they would say ‘I love you’ five months into a relationship, but wouldn’t talk about money until nine months – and a quarter are simply uncomfortable talking about money with their other half.

The research also found 18% are more likely to move in together before they talk about money.

Talking about money and financial security is a must in any relationship since it’s such a big part of planning a future. Sharing decisions about spending and saving – and discussing money openly – will help avoid arguments and tension.

Having an adviser on hand to help put in place ways to reach retirement goals – and others – can prove invaluable.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

Source:

[1] LV= surveyed 4,000+ nationally representative UK adults via an online omnibus conducted by Opinium in June 2021

[2] LV= surveyed 4,000+ nationally representative UK adults via an online omnibus conducted by Opinium in June 2021

[3] https://bank.marksandspencer.com/explore/media-centre/overview/press-release/2020/02/financial-language-of-love/PR100410/

 

 

PROVIDING NEWS AND VIEWS TO SUIT ALL NEEDS

This Blog is published and provided for informational purposes only. The information in the Blog constitutes the author’s own opinions. None of the information contained in the Blog constitutes a recommendation that any particular investment strategy is suitable for any specific person.

Tavistock Partners Limited is authorised and regulated by the Financial Conduct Authority. Tavistock Partners (UK) Limited is authorised and regulated by the Financial Conduct Authority. Tavistock Private Client Limited is authorised and regulated by the Financial Conduct Authority. The Tavistock Partnership Limited is authorised and regulated by the Financial Conduct Authority. Abacus Associates Financial Services is a trading style of Tavistock Partners (UK) Limited which is authorised and regulated by the Financial Conduct Authority. Duchy Independent Financial Advisers is a trading style of Tavistock Partners Limited which is authorised and regulated by the Financial Conduct Authority, All subsidiaries are wholly owned by Tavistock Investments Plc.

Equity release on the rise

Equity release on the rise

by | Jan 18, 2022 | General Investing, Planning, Uncategorized

EQUITY RELEASE ON

THE RISE

15

FEBRUARY, 2022

EQUITY RELEASE

The impact of the pandemic means over-50s are now more likely to stay in their current home for life, having formed a greater attachment to living in the same space as fond memories.

New research1 predicts that as a result we could be set to see an increase in people opting to take out equity release products to fund home improvements, with 17% saying they would rather spend money to make their house more accessible than relocate.

An equity release loan is designed for the over 55s, and works differently to standard mortgages. On some Equity Release products you do not have to make monthly payments. Instead, the interest rolls up and is repaid (together with the original loan) on the sale of the house, either when you move into care or upon death.

With families wanting home comforts more than ever and soaring property prices, homeowners have been taking advantage of having even greater equity at their disposal.

The latest house price figures2 show that the UK house prices grew at the fastest pace in 15 years over the past three months, with the average home valued at £20,000 more than this time last year.

Prices rose by 3.4% in the quarter to the end of November, which is the highest quarterly rate since late 2006 and brought the average price of a home to a record of £272,992.

During the first half of 2021 homeowners unlocked £2.3 billion of property wealth to support their finances3 using equity release loans.

Yet releasing cash from a property was a growing trend even before the pandemic with more and more people taking advantage of the money locked up in their homes.

“For newcomers, it’s worth exploring equity release with an adviser.”

It’s not just home improvements that trigger the need to raise cash. Homeowners take out equity release to boost their income in retirement where pensions haven’t quite met the living standards they wanted.It’s also commonly used to clear debt or to help out family4.

GETTING THE RIGHT DEAL

Equity release loans are becoming more competitive and more flexible.

For example, more than two thirds (68%) of equity release loans allow customers to make voluntary capital repayments with no early repayment charge5. This reduces the final interest payment due when the property is sold, leaving more money for long-term care or to leave as inheritance.

Increasingly savvy customers are focused on competitive interest rates, fixed early repayment charges and penalty-free repayments.

The growth in the market is not just about new equity release loans, however. It’s expected that equity release business will be driven by growing numbers of people interested in switching existing deals to take advantage of the increased flexibility there has been in products over the last few years. This includes the ability to make monthly repayments to cut overall interest charges.

Almost half (47%) of advisers reported6 an uptick in customers proactively contacting them regarding switching loans, suggesting that consumers are more conscious than ever of the wider product innovations in the market.

Interested in learning more?

For newcomers, it’s worth exploring equity release with an adviser. The need for clear information is apparent as 36% say they are confused about what mortgages are available to people in later life7.

It’s also worth discussing alternatives, which include downsizing or asking your lender to extend your mortgage term if you’re still repaying it.

An adviser can help you explore alternatives and help decide the most appropriate route to raising cash, since equity release is not right for everyone.

The Equity Release Council recently highlighted8 that ‘one of the great benefits of the equity release advice process is that it frequently unearths other solutions, from savings or investments to unclaimed pensions or benefit entitlements’.

With people living longer now, their needs change over time and the questions prompted by considering equity release can help identify the best way to use different sources of wealth at different stages of life.

It’s also smart to discuss an existing equity release loan with an adviser to see if there’s a better deal available that could save you money on interest payments. There could be penalties to pay for leaving your current lender’s deal early, but it’s worth exploring. Even if you’re on an expensive loan rate, you might still be better off moving to a cheaper loan, factoring in the charges. You may even want to switch to a more flexible loan.

Think carefully before securing other debts against your home. Your mortgage is secured on your home. Check that this mortgage will meet your needs if you want to move or sell your home or you want your family to inherit it. If you are in any doubt, seek independent advice.

Source:

[1] https://www.onefamily.com/our-story/media-centre/2021/forever-home/ 

[2] https://www.halifax.co.uk/assets/pdf/november-2021-halifax-house-price-index.pdf 

[3] https://www.equityreleasecouncil.com/news/autumn-market-report-2021/ 

[4] https://www.keyadvice.co.uk/about/press-release/equity-release-heads-for-record-after 

[5] https://www.equityreleasecouncil.com/news/autumn-market-report-2021/ 

[6] https://www.propertyreporter.co.uk/finance/equity-release-market-predicted-for-further-growth-in-2022.html

[7] The Equity Release Council, December 2021 (press release not online)

[8] Equity Release Council, November 2021 (press release not online)

 

PROVIDING NEWS AND VIEWS TO SUIT ALL NEEDS

This Blog is published and provided for informational purposes only. The information in the Blog constitutes the author’s own opinions. None of the information contained in the Blog constitutes a recommendation that any particular investment strategy is suitable for any specific person.

Tavistock Partners Limited is authorised and regulated by the Financial Conduct Authority. Tavistock Partners (UK) Limited is authorised and regulated by the Financial Conduct Authority. Tavistock Private Client Limited is authorised and regulated by the Financial Conduct Authority. The Tavistock Partnership Limited is authorised and regulated by the Financial Conduct Authority. Abacus Associates Financial Services is a trading style of Tavistock Partners (UK) Limited which is authorised and regulated by the Financial Conduct Authority. Duchy Independent Financial Advisers is a trading style of Tavistock Partners Limited which is authorised and regulated by the Financial Conduct Authority, All subsidiaries are wholly owned by Tavistock Investments Plc.

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