We certainly choose our moments to bring some slightly more upbeat financial updates! Yes, we are coming to the end of another year in which we have continued to see the ongoing financial impact of the COVID-19 pandemic, furloughed staff, panic hitting the petrol forecourts, and fear of potential food shortages during the festive season for various reasons. But research from Q3 2021 shows that dividend payments are headed in the right direction once again in all major markets. Indeed, there is evidence of a global dividend recovery, with dividends expected to reach pre-pandemic levels before the clock strikes midnight on New Year’s Eve.

In early 2021 we saw the next step in the UK government’s plans to reform social care. And since our November post around means-testing for social care provisions, further detail has been revealed around how the social care cost cap will work in practice.

Currently, one in ten of those aged 65 in England are likely to be hit with social care costs of £100,000 or more during their lifetime. But September brought the Prime Minister’s announcement that from 2023, the government propose a social care cost cap of £86,000.

Still taking on board some of the announcements coming out of the Autumn Budget and Spending Review? Are you wondering what the updates will mean to you and your family for the coming months and years?

Well, with this first Autumn Budget in three years, there is certainly some positive news. And although not completely post-pandemic, there were hints that the dramatic economic impact felt during the past 18 months might be, in some way, eased.

Unemployment has reduced to 2.5%, with over two million less registered unemployed than had been anticipated. And although expectations of an increase next year to 5.2%, this is still drastically below the earlier forecasts of 11.9%.

And then came The Office for Budget Responsibility (OBR) statement that inflation is likely to rise once again from the September figure of 3.1% to an average of 4% over the coming 12 months.

But it was clear that the Chancellor wanted to bring about some immediate benefit for households and businesses, along with the usual longer term focus, both in local and national investment.

Since our recent post about saving for retirement and pension planning, the office for National Statistics (ONS) has released further information highlighting how the retirement income gap has been dramatically impacted through COVID. Although it may be decreasing slowly, as long as the gender pay gap continues to live on, so too the gender pension gap will also continue.

Are you heading for your older years, but want to free up some equity to enjoy life while you are still fit and healthy? Or even an ‘elderpreneur’ (indeed, that word does exist!) who wants to start your own business, and would be grateful for some funds to set you up? If you do not want to break into your savings or alter your pension plans, you might have considered a lifetime mortgage.

We last spoke about mortgages, more specifically remortgaging, back in February. But we know an awful lot could have changed in your lives since then. With energy bills rising, a growing shortage of fuel and supplies, and more impact from the pandemic gradually coming to the fore, we certainly have plenty to think about day to day.

One area in which Simpson Financial Services can take care of all the thinking for you, is if you’re considering mortgaging a property in later life.     

Your family have possibly flown the nest. You could be nearing retirement. And many things around you just look as though they could do with an update. Or you might feel you need a fresh start as you go through separation, divorce, bereavement, or starting life with a new partner.

Further to our ‘Saving for Retirement’ post in July, we now have a more definitive and updated post pandemic cost of retirement to share with you.

With additional (dare we say, more realistic and modern) goods in your basket, the latest update from the Pension and Lifetime Savings Association (PLSA) includes everything from hand sanitisers to a higher personal grooming allowance, an increased socialising and eating out budget, right down to the pandemic favourite for binge watching across all age ranges – your monthly Netflix subscription!

I am sure you could think of other ways to spend your retirement, but at least you will be able to keep occupied in the deepest and darkest of winter evenings, knowing you are still comfortably within your retirement budget.

We were certainly led to believe that Boris Johnson had means-tested social care high on the agenda when he first entered ‘Number 10’ over two years ago,

“My job is to protect you or your parents or grandparents from the fear of having to sell your home to pay for the costs of care. And so, I am announcing now – on the steps of Downing Street – that we will fix the crisis in social care once and for all, and with a clear plan we have prepared to give every older person the dignity and security they deserve.”

Yet, here we are, having come through one of the biggest crises of our generation, and regrettably means-tested social carehas been replaced with other ‘more pressing’ matters. Not exactly surprising if you have been following the issue of social care funding, for which a Royal Commission in 1999 also fell flat, other than a few enquiries, reports, and more proposals since.

There is some apprehension in the air around cuts to the Pension Lifetime Allowance following the Budget earlier this year. In a bid to recoup some of the Government’s 2020/2021 losses, following the Budget deficit, it could mean you will end up paying more tax in your retirement, or even sooner than that.

£300 billion in losses are going to be slowly but surely clawed back through one means or another. This could mean changes to Pension Tax relief or Pension Lifetime Allowance (LTA). And although they may not be announced until the November Budget, we want you to be ahead of the game, with plans in place to avoid any nasty financial shocks.

Are you heading for retirement? Have you gone through a divorce, separation, or a bereavement and you need to think about financial plans for later life? Do you have elderly relatives who are worried they might not have sufficient income to see them through retirement? It is almost a year since our last retirement blog, and along with potential personal economic impact following the pandemic, some interesting research findings around pension planning theory have been released, so we thought this might ease your concerns. To put it very simply, whenever you start saving for retirement it is never too late!

You might think you need to start planning and making pension contributions as soon as you start work, and it could be too late for you if you have eaten into your savings, without considerations for a pension pot. Indeed, that was what we were taught by the older generations. And we always did what we were told, didn’t we?!

As if 2021 wasn’t life changing enough with the pandemic, there was also the small matter of BREXIT thrown into the mix. For some, there will be an insignificant impact. Certain items may take longer to appear on the supermarket shelves or could disappear altogether. But we’ll soon find alternatives. Some employees may have been impacted to a greater degree, as with some business owners. For others, it could create a challenge, or an opportunity, to reconsider life in the UK and whether that is what they want for their future. Here, I’m talking about tax rules for living abroad, how they have changed, what it means for residency, and how we can assist in your financial planning if living abroad is something you are considering.

There has never been a more important time to be on top of your finances than now. The uncertainty of the past 12 months or so has given the entire world a shake up, and we all know that a testing time lies ahead whilst we recover from the COVID fall out in one way or another. So, perhaps now is also the time for you to start considering seeking guidance around your own finances, to ensure you and your family are secure, and you can survive financially if, God forbid, anything similar were to happen again. Here, I am going to talk through how to find the right financial adviser, and why it is important to find a service which suits your individual circumstances, what to look for and what to expect from a reputable financial adviser, and why Simpson Financial Services could fit the bill and guide your financial planning securely into the future.

This continuation from our tax planning blog is primarily based around financial planning for business in the 2021-2022 tax year. Again, it is general information with tips to gain tax advantages, and is for reference only. It is not provided as bespoke advice or guidance for your individual business.

If you require more detailed information and calculations in relation to any of these tips, our team of Independent Financial Advisors here at Simpson Financial Services can assist with financial recommendations to meet your individual needs and those of your business.

Just recently, I have discussed how the 2021 Budget has impacted various elements of financial planning. Having spoken about ISAs in our last blog, and how we can assist you in getting the most ‘bang for your buck’ during the 2021-2022 tax year, our next couple of blogs are going to share with you some of the top personal and family, property, and business tax planning tips, covering a wider range of scenarios.

With tax comes certain complexities though, so to aid your tax planning, I am going to highlight just some of the ways you can benefit from certain tax reliefs and avoid some of the associated penalties.  

Please note this is not definitive guidance for your individual financial circumstances. To gain the most appropriate and relevant personal financial advice, our team of expert Independent Financial Advisors are on hand to run through a review of your entire financial portfolio, savings, and investments, and future plans. So, please use these tips purely as an overview for your tax planning and not formal financial advice.

Individual Savings Accounts, or ISAs, have changed dramatically since they were first introduced over 20 years ago. From the only two ISA options in 1999, the cash ISA and Stocks and Shares ISA, there are now various other choices, including Junior ISAs for the under 18s, Lifetime ISAs for 18-39s (£4,000 maximum deposit per tax year), Help to Buy ISA (recently partially replaced by the Lifetime option), and the Innovative Finance ISA (specifically for crowdfunding investors).

The cash ISA used to be considered the best of all traditional savings accounts, but as time has progressed and interest rates are now lower than they have been for many years, ISAs overall are being questioned by some for their efficiency, and indeed if they are still worth considering at all as a savings solution.

Whether you decide to go ahead with a cash ISA or any other savings or investment, it should be considered a long-term investment and included within your wider financial planning. The value of your investments can go up or down, and you cannot rely on past investments as an indicator of future financial security.

The economic uncertainty resulting from the pandemic is likely to manifest in various ways over the next few years. One area that we already know has been greatly affected and for which some may even say the timing of the pandemic was ‘advantageous’ from major companies’ perspective, is that of dividend payments.

During 2020, many companies decided the time was right to make the move to cut or completely shelve dividend pay-outs. This was possibly on the cards for some time but was prompted by the Bank of England’s decision to effectively stop all the major UK banks, including those mainly focused overseas, from paying out on almost £8bn worth of dividends and shareholder payments.  

This resulted in UK dividend payments being far less satisfactory than those on a global scale, where during the latter half of the year 12% of global companies cancelled dividends with a further 22% cutting them. The latest edition of Janus Henderson’s Global Dividend Index highlighted the difference between the global and UK figures, with UK seeing a much higher cancellation rate from 32% of companies, in addition to 23% cutting payments altogether.