Private Health
Posted by Nigel on Wednesday 8th of November 2023
Should I consider private medical insurance?
Life can be full of surprises. You can’t be prepared for everything. You may have some insurance to support you financially if the unexpected happens, but have you considered how private medical insurance might offer you and your family the peace of mind you need if your health takes a turn for the worst?
A growing trend
According to data published by The Telegraph, close to half a million people have taken out private medical insurance over the past year, as NHS waiting lists hit record l...
Interest rate
Posted by Nigel on Thursday 2nd of November 2023
The hold in the BoE rate at 5.25% was predicted in the markets and comes on the back of ECB (European) and Fed (US) rate holds.
In changing times, investors should keep a cool head and a well-diversified portfolio. Omnis spread your investments across different asset classes, global regions and styles which can smooth returns and reduce the risks to which you are exposed.
Staying Invested
Posted by Nigel on Thursday 26th of October 2023
Three Important Reasons for Staying Invested through Market Downturns
It’s been a difficult year for investors so far. Inflation and political uncertainty have led to market volatility. Market volatility can be scary, especially if the value of your investments drops, but it’s important not to let fear guide your decision about whether to stay invested in your portfolio.
Here are three reassuring reasons for staying invested in the stock market during uncertain times.
The best financial decisions are not based on emotion
Emotions c...
Cancelling Financial Protection
Posted by Nigel on Friday 20th of October 2023
Cancelling your financial protection during the cost of living crisis could be a bad idea
Centuries ago, Benjamin Franklin said that...
“By failing to prepare you are preparing to fail.”
This is especially true when it comes to ensuring your personal finances are protected from the rainiest of days. If the rising cost of living is likely putting pressure on your spending, you may be considering cancelling your cover, even when this could leave you more vulnerable than before. Read on to discover some of the reasons you should con...
Why Planning is Crucial!
Posted by Nigel on Wednesday 11th of October 2023
Making your retirement savings last a lifetime
To help ensure a sustainable income, you first need to understand how much you’ll need to live on.
• On the go – during the early stages of retirement, there’s a strong likelihood that you’ll spend more on travel, hobbies, or home improvements
• Slowing down – while you may be slightly less active, you’re still busy with hobbies, but you may be less inclined to long-haul travel
• Coming to a stop – in later life, your mobility may be more limited, which risks increasing costs due to needing care
Structuring a sustainable income
The most efficient retirement income strategy should be planned well in advance and ensure that:
• Allowances and exemptions are used to their full capacity
• Married couples plan together so income and assets are allocated effectively of Cost Living “You first need to understand how much you’ll need to live on.
“You first need to understand how much you’ll need to live on.”
When it comes to withdrawing funds, you may want to consider using cash first, followed by taxable investments, ISAs, and finally pensions.
Tax efficiency is key
While tax-efficient savings helps enhance your wealth for retiring in style, tax-efficient withdrawals helps preserve your capital and increases the chance of having money to leave to your loved ones.
So, maximise all your tax allowances including:
• Income Tax allowances
• The Dividend allowance
• 5% return of capital allowance from investment bonds
• Personal savings allowance
• ISA allowance
• Capital Gains Tax allowance
By planning together, couples can use these allowances to maximise the amount of tax-free income available.
Consider spending excess cash first
Ideally, you should hold an emergency fund to cover around six months of regular expenditure. If you have more cash available, consider using this before withdrawing from pensions. Using excess cash allows you to leave funds invested, which may provide enough time for funds to recover any lost value.
Think twice before drawing on your pension
While you may consider your pension as the foundation of your retirement plan, if you have other income that uses your tax allowances, it may be prudent to defer drawing on your pension. Since pension funds benefit from tax free growth, interest, and dividends, leaving your pension invested is especially useful for maintaining capital value. Plus, pension funds are usually not subject to IHT.
Leaving your pension fund intact while drawing on other investments may help to reduce your IHT liability.
Enjoy flexibility from ISA savings
ISAs are considerably more flexible than pensions. Growth, interest, and dividends are all free of tax and you can withdraw money tax-free without restriction. As for IHT, ISAs can be passed between spouses on death, which preserves the tax-efficient treatment.
Useful in reducing tax in retirement, you can use your ISA to:
• Fund large, one-off purchases
• Top up your income – especially useful if your pension exceeds your tax-free allowance
• Make your portfolio more efficient over time, by gradually moving taxable funds across
Take a savvy approach to investment accounts
A basic and flexible wrapper, investment accounts can hold funds, shares and investment trusts. Interest and dividends are taxable at your marginal rate and selling assets can incur Capital Gains Tax (CGT) if your profit exceeds your annual exemption (£6,000 for 2023/2024 or, for a couple, £12,000).
The following strategies can help reduce tax:
• Move your taxable investment accounts into ISAs
• Use your annual CGT exemption to avoid large gains rolling up
• Structure your investments depending on the type of income they generate
The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.
Past performance is not a guide to future performance and should not be relied upon.
An ISA is a medium to long-term investment, which aims to increase the value of the money you invest for growth or income or both.
HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen. Tax concessions are not guaranteed and may change in the future. Tax free means the investor pays no tax.
Get in touch
If you’d like help to create a financial plan to structure a tax-efficient income in retirement, we can help. Please get in touch to arrange a time to chat.
Approved by The Openwork Partnership on 04.10.2023
The Chancellor of the Exchequer Rachel Reeves outlined planned reforms to the welfare system, boosts to investments in economic growth and heightened focus on closing the tax gap.
Amidst growing uncertainty over the conflict in Ukraine and the impacts for European security, alongside rising instability caused by Donald Trump’s tariff war, the Spring Statement 2025 built on the government’s announcements last autumn with a renewed commitment to financial stability.
In laying out the Spring Statement, Rachel Reeves said: ‘the global economy has become more uncertain, bringing insecurity at home as trading patterns become more unstable and borrowing costs rise for many major economies.’
She added that the UK was ‘one of the world's largest economies, an ally to trading partners across the globe and a hub for global innovation. These strengths and the progress that we have made so far mean that we can act quickly and decisively in a more uncertain world to secure Britain's future and to deliver prosperity for working people.’
Reeves' last announcement, made in October 2024, included boosts to minimum wages, an increase in the state pension and a reduction to the headline rate for National Insurance. Now, however, the government has opted for an alternative strategy with major initiatives aimed at courting homeowners and small business owners, among others.
So, ultimately, who wins and loses? Let's explore which groups could be most affected by these changes.
WINNERS
Builders and Property Developers.
The Chancellor made a firm commitment to solving the housing crisis. Changes to the National Planning Policy Framework alone are slated to help build over 1.3m homes in the UK over the next five years.
Education Secretary Bridget Phillipson also pledged more than £600m to train 60,000 construction workers and address widespread skills shortages in the construction sector. This measure and others could benefit home builders, architects, town planners and other associated professions through government aid and streamlined planning permission regulations.
Property Owners.
Reeves’ planning reforms aim to boost house building to a 40-year high and stimulate more activity in the housing market. The Office for Budget Responsibility (OBR) predicts these reforms could permanently increase real GDP by 0.2% in 2029/30, translating to an additional £6.8 billion for the economy.
That kind of economic stability could drive increases in property values and benefit homeowners looking to sell in the next five years.
The Defence Industry.
Defence spending will increase to 2.5% of GDP, putting an extra £6.4bn into the sector by 2027. This uptick will be funded by cuts to the overseas aid budget, bringing it down to 0.3% of GDP.
The Chancellor suggested this would save approximately £2.6bn in day-to-day spending in 2029/30 and help to fund more capital investments. Expect a boost to defence sector growth in the years to come.
Certain Tech Companies.
Technology companies in the defence sector stand to benefit significantly from Reeve’s plans. The Ministry of Defence will spend at least 10% of its equipment budget on cutting-edge technology thanks to a dedicated £400m innovation pot.
Elsewhere, Reeves pledged to up investments into artificial intelligence (AI) to modernise government services and increase efficiencies.
Unemployed Young People.
The Spring Statement also included a clear message that if young people can work, they should be given the opportunity to do so. The Chancellor unveiled a series of measures designed to help get young people into work, including the establishment of 10 new technical excellence colleges across every region of the country and new opportunities for skills development.
LOSERS
Benefits Claimants.
The government plans to reshape the benefits system and focus on getting people into work. The Universal Credit Standard Allowance for a single person aged 25 or over will see a modest increase from £92 to £106 a week by 2029/30.
Offsetting this, however, are planned cuts and freezes to other aspects of Universal Credit. The health element will be frozen for existing claimants until 2029/30. It’ll be reduced to £50 a week for new claimants in 2026/27 and then frozen until 2029/30.
These changes are part of a broader strategy to reduce welfare spending as a share of GDP. The government emphasises that the reforms will make the system more sustainable while pushing more people into employment. However, for many current and potential benefit recipients, this means navigating a more challenging landscape with potentially reduced financial support.
Healthcare Workers.
Reeves reiterated her commitment to dismantle NHS England, stating: ‘the Prime Minister set out plans to abolish the arms-length body NHS England and ensure that money goes directly to improving the service for patients [...] the Health Secretary is driving forward vital reforms to increase NHS productivity, bearing down on costly agency spending to save money so that we can improve patient care.’
Proponents say the decommissioning will remove inefficiencies and unnecessary bureaucracy, but others claim the measures could result in the loss of up to 30,000 jobs.
Civil Service Workers.
The Chancellor outlined significant reforms to reduce the size and cost of the civil service. The government will introduce voluntary exit schemes to allow employees to leave their positions voluntarily, reducing overall staff numbers without mandatory redundancies.
Additionally, the government will invest in AI to increase efficiency and reduce civil service running costs by 15% (amounting to £2bn in savings) by the end of the decade. While Reeves framed these changes as part of a broader strategy to create a leaner state, they could represent a threat to job security for civil service workers.
What’s Next?
The 2025 Spring Statement included several key initiatives to level up Britain's defences, address the housing crisis and crack down on taxation fraud.
The Chancellor appeared confident that these measures combined with agile responses to global instability would drive growth and see the average British household £500 a year better off than this government compared to the last.
It’s clear that appetite for economic and policy reform is strong on the Labour frontbenches. These changes combined with the raft of measures announced last October are shifting the way many people approach their finances.
Feel free to get in touch if you have any concerns about the impact of these changes on your situation or if you want to explore the opportunities they might create.
The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.
HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.
Approved by The Openwork Partnership on 26/03/2025