Ellis Bates Financial Advisers
Financial Planner, Amy Burge, explains what pension drawdown and the lifetime pension allowance is and the pension planning services we offer.
Kim Holding, Portfolio Manager, explains why sustainable investing is an important part of our investment philosophy.
We spend time building our SRI portfolios by carefully considering various environmental and social elements of every fund before we invest. Our SRI portfolios avoid unethical companies, while supporting those making a positive contribution to the environment and/or society.
For more information on our socially responsible investing proposition, please get in touch to speak to one of our socially responsible investment advisors.
Estate Planning Specialist, Michelle Barker, explains how a Property Protection Trust can help your family and the benefits of putting one in place.
While it’s impossible to predict the future with complete certainty, there are a few things you can do to feel more confident about spending your money in retirement:
Carl Hasty, Financial Adviser at Ellis Bates discusses the funding your retirement vs. the cost of living crisis, what you should do with your pension contributions and the alternatives to consider instead of taking money out of your pension.
Funding the retirement lifestyle you want vs the cost of living: time to get your retirement plans in motion!One of the most common concerns among those approaching retirement is whether they will have enough money to last them with only 25% of retirees feel very confident they’ve saved enough for retirement.
As food prices continue to soar and petrol costs reach an all-time high in the UK, the rising cost of living is without doubt having an impact on many people’s financial plans, both short and long term.
If you’re approaching retirement or have already started taking money from your pension or other retirement savings, you wouldn’t be alone in feeling a little anxious about the effect the cost-of-living crisis might have on your lifestyle in retirement. While it’s impossible to predict the future with complete certainty, there are a few things you can do to feel more confident about spending your money in retirement.
Your main source of retirement income may well be your pension plan. But when it comes to planning your finances in retirement, it’s important to think beyond this. Consider other potential sources such as Individual Savings Accounts (ISAs) and other investments, as well as any rental income you receive from rental properties you let.
Don’t forget the State Pension, which is currently £185.15 a week (£9,628 a year) for a single person with a full entitlement. Although the State Pension’s annual increase is currently below inflation, every little helps and the total of all your savings and income might add up to more than you think.
Paying too much tax in retirement is a common pitfall for some retirees, and one that could be potentially avoided with having the right plans in place. If you’re already taking or plan to take income from multiple sources, you need to consider how that will be taxed. When and how you take your money can make a big difference to how much tax you pay and how long it will last. Taking money little and often could make all the difference when it comes to reducing your tax bill.
When it comes to your pension savings, you can typically take 25% tax-free from age 55 (age 57 in 2028), either in one go or spread out over a longer period. After this, any money you take from your pension savings, as well as your State Pension, is taxable just like any other income.
That means you’ll need to pay income tax on anything over your tax-free cash limit and any annual personal Income Tax allowance you get. It’s likely that the more money you take, the more tax you’ll have to pay, although how much will depend on which tax band your income falls into. So if you take all of your pension savings at once, or in big lump sums, you could be paying more tax than you need to. But by taking your pension savings over a number of years and taking just enough to stay in the lowest tax band you can, you could keep more of your money overall.
Another way to avoid an unnecessary tax bill is to make the most of your ISA savings. You don’t pay tax on any investment growth or interest you earn, or on the proceeds you take from an ISA. So it’s a very tax-efficient way to save.
You could consider using any ISA savings you have first and delay accessing your pension savings, giving them more time to stay invested and potentially grow in value. Remember though, the value of all investments can go down as well as up, and you may get back less than you paid in.
Or, if you’ve already started taking an income from your pension, you could use your ISA savings to supplement that income. This could allow you to take smaller payments from your pension and avoid overpaying Income Tax on them. Getting to grips with tax implications can be a bit overwhelming as there’s a lot to consider.
Tax rules and legislation can change, and personal circumstances and where you live in the UK also have an impact on your tax treatment. On top of that, tax varies for other sources of income like property, state benefits, or even your salary if you’re planning on working in some capacity for a little longer.
Where your money is invested could have the biggest impact on how long it will last in retirement. It’s important to regularly review your investments to make sure they remain on track and remain aligned with your plans and attitude to investment risk. For example, your pension savings may be invested in fairly high-risk funds that have the potential to grow significantly in value, but also are more likely to be impacted, particularly during periods of market volatility.
Moving to lower-risk investments means that you’re less likely to see big ups and downs in the value of your pension savings. However, if you’re relying on your pension savings to provide you with a comfortable income for the rest of your life, you also need to make sure that your investments will provide enough growth potential. This is particularly important in the current climate where your money faces the double challenge of rising inflation and potentially having to last for many years.
If you have specific questions about funding your retirement lifestyle, or if you’re feeling anxious about spending money in retirement, speak to us to discuss your options
A staggering 3 in 5 UK adults do not have a valid Will in place, which is 60% of the adult UK population. Making a Will is an important part of financial planning.
Last week Jeremy Hunt unveiled his Autumn Statement aimed at tackling inflation and stabilising UK finances. The Chancellor detailed issues such as tax, government spending and energy as part of his plan to navigate the impending recession.
Your Ellis Bates team are busy reviewing your situation given these changes and you will be discussing the implications and actions with your Financial Adviser in your next review.
If you are not currently a client with Ellis Bates and feel now is the time to discuss your tax allowance maximisation, your new CGT position and pension planning in light of these changes, please do not hesitate to book a chat as we are here to help.
Your Ellis Bates Financial Adviser will work with you to determine if you need to consider alternative ways to save towards your retirement in light of these changes at your next review.
National Insurance thresholds will remain frozen until April 2028.
The nil rate band will remain at £325,000, the residence nil-rate remains at £175,000, and the residence nil-rate band taper will still start at £2 million.
In April 2023 Capital Gains Tax (CGT) annual exempt amount will be reduced from £12,300 to £6,000. It will be reduced further to £3,000 from April 2024
Your Ellis Bates team are busy reviewing your situation given these changes in CGT and will be in touch over the coming weeks.
There will be no change to the rate of Capital Gains Tax:
| Tax Band | Tax rate for Property Sale | Tax rate for other Asset |
| Basic Rate | 18% | 10% |
| Higher Rate | 28% | 20% |
There will be no immediate change to Stamp Duty Land Tax (SDLT), the increases which were implemented on 23rd September 2022 (SDLT nil-rate threshold was increased from £125,000 to £250,000. The nil-rate threshold paid by first-time buyers was increased from £300,000 to £425,000) will remain until March 2025, after which the allowances will revert to their previous levels.
If you are a business owner, a number of changes and support systems were announced:
If you would otherwise pay higher rate CGT (20 per cent), this means you can save up to £1m in your lifetime through entrepreneurs’ relief.
If you are a business owner and an Ellis Bates client, your dedicated Financial Adviser will discuss these changes and how they may affect you and the actions needed in your next annual review meeting.
Stay updated: we update our Financial Advice hub with the latest financial news and insights, so hit the link to stay informed and up to date
If you do not currently receive financial advice from Ellis Bates, please Book a Chat to discuss this raft of tax changes and how we can help.
Sources: https://www.which.co.uk/news/article/capital-gains-and-dividends-tax-changes-in-the-2022-autumn-statement-ac6kT0e7yZ4X
https://www.gov.uk/government/publications/autumn-statement-2022-documents/autumn-statement-2022-html#:~:text=The%20Autumn%20Statement%20sets%20out%20a%20package%20of%20targeted%20support,bill%20increases%20following%20the%20revaluation.
We discuss The United Nations 17 Sustainable Development Goals and how we align our investment portfolios to one or more of these, whilst breaking these down into environmental issues, social issues and governance issues.
We are delighted to confirm that Ellis Bates Financial Advisers have been included within FT Adviser’s Top 100 Financial Advisers again.
The judging criteria is based on a number of factors including assets under management, gross inflows throughout the year, client retention and the number of Chartered or certified Financial Planners.
There are currently around 5,500 Adviser firms in the UK so to be in the Top 100 is a fantastic achievement and we’d like to thank everyone for their contribution towards this.
“These standards are a decent indication of a firm trying to do the right thing by its customers.
This year marks 10 years since the introduction of the Retail Distribution Review; seven years since pension freedoms came into force and six years since the Financial Advice Market Review highlighted serious issues that needed to be addressed.
And over that time, businesses have adapted to change, whether this be tax policy turning on a pin, dealing with the after-effects of the pandemic or embracing the digital transformation.
But finding the right balance between face-to-face advice and online services – as well as developing robust succession plans to future-proof the advice industry – could yet result in some significant changes to business models.”
– FT ADVISER, https://www.ftadviser.com/your-industry/2022/10/21/who-are-ftadviser-s-top-20-financial-advice-firms/