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

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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

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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?

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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?

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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.)…

Christmas: the perfect time to health check your taxes

| Tax Planning | No Comments

Material gifts are often welcome at Christmas time – but what about more disposable income in your pocket, especially after a tumultuous year in 2020? Taking a few hours to check your tax plan can be the perfect opportunity to do so – especially the quieter moments of the December break. This is especially since the average UK household can expect to pay…

How to keep building your retirement plan in 2020

| Pensions | No Comments

COVID-19 has overshadowed almost all aspects of life in 2020 – including retirement planning. How might the pandemic affect your plans (and ability) to retire, especially for those looking to start accessing their pension savings within the next 12 years? Undeniably, events this year have presented additional challenges to these people. These will need to be carefully…

8 areas where financial planning beats accounting

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What’s the difference between a financial planner and an accountant? Why might you use one over the other? In short, the latter helps with auditing and financial statements – such as your tax self-assessment leading up to the financial year (April in the UK). The former helps you with the big questions of how to build and protect your wealth, covering areas such as…

A 6-point checklist when choosing financial protection

| Protection | No Comments

Taking out a policy for life insurance, critical illness cover (CIC) or income protection is a big decision. Not only is there a monthly cost to factor into your finances, but there is also a range of checks which are required to ensure that the protection in question meets your needs. In this article, our team here at Elmfield Financial Planning…

Pound cost averaging vs. lump sum investing

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Should you invest your money gradually or all at once? That is the core question at the heart of the debate about “pound cost averaging” and “lump sum investing”. It might sound like a simple matter of choosing whichever suits your preferences, but the decision can have a huge impact on your returns and the long-term growth of your portfolio…

What is a good diversification ratio?

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Many people are aware that it is a good idea to invest in a range of assets (e.g. cash, equities and bonds). Yet what, exactly, should the balance be not only between them – but within them. After all, there are many currencies, companies and governments which one could invest in. All of them hold different risks and potential for returns depending on the time and circumstances. In this guide…

A short guide to pension drawdown

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You may have already spent years putting money aside into a pension. Yet how, exactly, do you eventually use it to generate an income in retirement? It isn’t the same as living off cash savings since pension pots are typically invested in assets such as stocks and bonds, which carry higher investment risk but also more growth potential. In 2020-21, moreover, you cannot start taking money out of your pension…

2020 probate backlog: make sure your estate is in order

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COVID-19 is now recognised by the Office of National Statistics (ONS) as the seventh leading cause of death in the UK. Thankfully, so far NHS hospitals have not been flooded in the manner widely feared at times earlier in 2020. Yet the pandemic is causing problems in other areas such as funeral services and – for the purposes of this article – probate, where families are waiting months for inheritance tax cases…