Avoid this common pension tax trap

| Pensions | No Comments

Many people like the idea of drawing from their pension from the age of 55 (or 57 from 2028, when the rules change). Perhaps you envisage continuing to work – albeit with fewer hours – whilst supplementing your income using funds from your pension pot. This can work for some people, yet drawing early…

How to protect against serious life events

| Protection | No Comments

The COVID-19 pandemic has been a stark reminder of our own vulnerability. Here in the UK, after so many years of peace and a rising standard of living for many people, it has been easy for lots of us to forget that life can be frail. How can you prepare your household finances to weather the worst, even as you plan…

Using equity release to open cash from property

| Financial Planning | No Comments

It is common for people to assume that they can only access cash from their property if they sell it or downsize. There is, however, another option – equity release, which allows homeowners to access a lump sum from your property’s value whilst continuing to live in it. This can sound ideal and certainly is a…

Should I pay off my mortgage using savings?

| Savings & Investments | No Comments

From a young age we are taught that “debt is bad”. As such, we should seek to stay away from it as much as possible – or clear it quickly. Although this is a good principle for personal loans and credit card debts, it often becomes confusing when people look to get onto the property ladder. For most people, this will involve…

Make the best from your 2021-22 allowances

| Tax Planning | No Comments

At the time of writing, the 5th April deadline marking the end of the 2020-21 financial year has now passed. Hopefully, you made the most of your allowances, since doing so can save you £100s (maybe £1,000s) in unnecessary taxes – thus putting money back into your pocket. If you did not, however, then all is not lost…

Should you spend investments before your pension?

| Financial Planning | No Comments

As a person approaches retirement it is common for them to have a wide range of investments, pensions and savings. These might include capital in ISAs (individual savings accounts), SIPPs (self-invested personal pensions), regular savings, various defined contribution pension pots and maybe even a…

Possible taxes rise in 2021: how you can prepare

| Tax Planning | No Comments

COVID-19 has hugely damaged the UK economy, adding over £400bn in public debt over a 12 month period. For some time now, many commentators have anticipated the announcement of tax rises to help address this. One of the big surprises of March 2021, therefore, was that these failed to materialise…

Why making a Will beats dying Intestate

| Wills & Estate Planning | No Comments

Intuitively, most of us know that it is best to have a Will in place for an estate plan. Yet what are the concrete benefits of doing so? How, exactly, is it better than doing nothing? Below, our team at Elmfield Financial Planning in Padiham, Burnley, Lancashire answer by specifying how the UK’s rules work. We hope you…

How the March 2021 Budget affects your financial plan

| Financial Planning | No Comments

The long-awaited March 2021 Budget has now been revealed, with its details still being pored over by media pundits. As financial planners here in Padiham, Burnley, Lancashire, our team at Elmfield are keen to communicate how the new budget may affect your wealth and finances in the coming months and years…

What should you do in a stock market sell off?

| Savings & Investments | No Comments

A “sell-off” is easy to see when it happens. A high number of securities (e.g. stocks and bonds) are sold in rapid succession – perhaps hours, days or weeks. The spiral downwards often goes faster as investors feel pressure to sell due to everyone else doing so. The overall psychology of the marketplace turns…

Navigating capital gains in 2021

| Tax Planning | No Comments

Capital gains tax refers to the levy on certain investments, property or possessions when you sell them for a profit. If you buy a second house for £100,000, for instance, and later sell it for £150,000, then you have made a capital gain (profit) which will likely be taxed. Yet how does capital gains tax (CGT) work, exactly, in the UK in 2021?…

The pension lifetime allowance: a guide

| Pensions | No Comments

Did you know there is a limit to how much you can save into a pension? It is called the lifetime allowance, and in 2020-21 it is set at £1,073,100. This may sound like an unattainable goal for many readers (especially those on lower salaries starting in their careers), yet it is not unheard of for individuals to inadvertently exceed this limit – without even realising. Should this happen…

Get the most from your ISA before April 2021

| Financial Planning | No Comments

The end of tax year is fast approaching (April 5th 2021) and marks an important moment when various tax allowances refresh. Failing to make the most of them could represent hundreds – if not thousands – of lost pounds, so it’s worth taking stock of your own case. In particular, are you making the most of your ISAs (individual savings accounts)? In 2020-21…

How a financial adviser helps at each stage of life

| Financial Advice | No Comments

Our financial goals and needs usually change as we get older. Each stage of life brings distinct challenges and opportunities as we seek to bring greater control to our finances. Yet how do you navigate the transitions to each stage of life successfully – particularly when it comes to your wealth? Here at Elmfield in Padiham, Burnley, Lancashire, our financial planners believe…

Negative interest rates -are annuities still a good idea?

| Pensions | No Comments

Early in February, headlines reacted with shock as news broke that banks had been asked to prepare for negative interest rates. The Bank of England (BoE) have given six months to get their IT systems ready, although it was quick to reassure people that negative interest rates will certainly be introduced. The possibility, however, does leave important questions…

Self-employed: avoid overpaying tax in 2021

| Business Planning, Tax Planning | No Comments

Self-employed people, contractors and freelancers deserve a lot of respect. They are seeking to build wealth and a future for themselves through their business, often without the security of an employed role. Sadly, many of these people have been especially hard-hit by the pandemic in 2020-21, receiving less UK government support (e.g. due to having insufficient…

Inflation in 2021: how might it affect my financial plan?

| Financial Planning | No Comments

Inflation is sometimes known as the “silent killer” of savings. Your bank statement, for instance, will likely show the interest generated from your regular savings account (e.g. 0.5%) – yet it will probably not tell you the rate of inflation during that period. Inflation refers to the rising cost of living – i.e. goods and services – and thus gradually reduces the spending power…

What the 57 state pension age means for your retirement

| Pensions | No Comments

Two key announcements on pensions have been made in the last 4 months. First of all, from October 2020 the UK state pension age was raised from 65 to 66. This was announced in the Pensions Act 2014, of course, so does not come as a surprise – yet it will have significant implications for pension planning going forwards. The state pension age (SPA) will later rise to 68 in 2028…

Investing in tech revolutions: lessons from the past

| Savings & Investments | No Comments

Did you know that, in 2020, the US stock market would have hardly grown – had it not been for the presence of the “Big Five” tech companies (Amazon, Google, Facebook, Microsoft and Apple). The S&P 500 in the USA, for instance, has continued to increase in value over the last twelve months despite COVID-19 – largely because it is very tech-heavy…

Sterling fluctuations: should I worry?

| Savings & Investments | No Comments

Even with an occasional look at the headlines, you’re likely to see that the pound changes value regularly. Vaguely, you may think this affects you somehow – but how exactly? Naturally, if the pound lessens in value against other currencies then it means your overseas holiday is likely to be more expensive (since a pound “buys” fewer Euros, dollars etc.)…