5 lesser-known European holiday destinations for 2022

Narrow streets of Setenil de las Bodegas

Europe is packed with great tourist destinations. There are so many to choose from, you could go away every month and still never run out!

But, sometimes it’s even more fun to visit authentic destinations that have been largely untouched by the travel industry. Read on for five lesser-known European destinations that you can visit in 2022.

1. Setenil de las Bodegas, Spain

This small town is carved into the cliffs of southern Spain. As you approach, the first thing that’ll strike you is the contrast between the dark cliff faces and the white-painted houses underneath. In addition to its beauty, Setenil de las Bodegas has some attractions that are worth seeing.

Nazari Castle was built in the 13th century and can be found right at the top of the hill. Following various sieges, much of the castle is in ruins now. However, the views of the town below alone make the castle well worth the visit.

Another site to go on the list is the Church of La Encarnación. Built in the early 1500s, it’s a beautiful example of late Gothic architecture. The building – and its ambience – is understated and quiet. It offers a taste of olden days’ villages in Spain.

2. Perast, Montenegro

Perast is a small coastal village just north of Kotor. It is certainly off the beaten track, but is peaceful, pretty, and one of Europe’s real hidden gems.

Fewer than 300 people live here and it has only one main road. Given these details, it’s surprising that the Perast was a strategic port between the Venetian Republic and the Ottoman Empire, back in the 15th century.

These days, the few tourists that visit do so for the royal palaces, collection of churches, and islets. The village boasts a whopping 16 churches which, for its size, is no mean feat. Perhaps the most impressive is St. Nikola Church, a 17th-century Baroque work of art.

Another attraction near Perast – just a short ferry trip away – is a human-made island named Our Lady of the Rocks. People say that it was created 500 years ago by sailors, who piled up old shipwrecks and rocks. Incredibly, this mound is home to a small chapel in which you’ll see a 15th-century Virgin Mary and a selection of 17th-century paintings.

3. Brisighella, Italy

Just south of Bologna, lucky tourists will find Brisighella. This little medieval town is lovely and quaint, but not many people have heard of it.

Nestled between three impressive hills, which feature a 14th-century castle (La Rocca), a 16th-century clock tower (La Torre), and an 18th-century church (Il Monticino), the town offers lots in the way of culture and authenticity.

As you might expect, walking in the hills is a top thing to do in Brisighella. In the summer especially, hiking up one – or all – of these hills will reward you with spectacular views and a sense of achievement. If you’re not a big walker, however, you can take life easy in the town’s cafes and restaurants, eating local cuisine and drinking wine.

4. Mittenwald, Germany

Mittenwald is a friendly place with old, colourful houses, snowy mountains, and the very best in Bavarian beer and food. However, this fairy-tale town isn’t popularly spoken about in the tourist industry, so remains relatively authentic.

Mittenwald is, in many ways, a typical German town. While relaxed and historical, it has an undeniable energy. A wander through Altstadt, or Old Town, will give you a flavour of what the town is really about. You’ll see 250-year-old homes and shops, plenty of murals along the streets, and a small stream that runs through the centre.

The town’s heritage in violin making also makes it stand out from other places. In fact, it is frequently referred to as the “Village of a Thousand Violins.”

The Karwendel Alps provide great opportunities for hiking and skiing, depending on the season, and a dramatic backdrop to the town, year-round.

5. Varna, Bulgaria

Varna isn’t a village – it’s actually a cosmopolitan Bulgarian city. One of the great things about Varna is that it’s coastal, boasting stunning beaches and an energetic nightlife.

Varna has plenty of historical attractions, including a huge Roman bath complex and archaeological museum. You’ll also find an array of quirky bars, cafes, and restaurants.

Varna is a great place to visit for a weekend, whether you’re travelling solo or are taking your friends or family along.

What will happen to house prices in 2022?

smiling family moving boxes into new house

It’s difficult to predict what will happen in the future, especially when it comes to something as complex as the UK housing market.

According to Which?, house prices rose by 10% in the year to March 2022, but experts expect the housing market to slow as this year unfolds. However, there are many differing opinions. In this article, you’ll read about some of the predictions for house prices in 2022.

What’s been happening in the property market?

In the second half of 2021, house prices started to soar. This has continued through 2021 and into the first half of 2022.

The huge growth in 2021 was largely thanks to the government’s temporary cut in Stamp Duty and a release in pent-up demand following successive lockdowns.

The Stamp Duty cut meant that homeowners could save up to £15,000 if they purchased a property before 1 July 2021, or up to £2,500 if they completed before the end of September.

There was a surge of transactions around these two dates. Despite experts predicting that the end of this Stamp Duty holiday, along with the end of furlough in October 2021, would lead to a significant slow in house sales, demand has remained strong.

Factors that could affect the house prices in the UK in 2022

Several factors could affect the UK housing market in the coming year. These include:

Interest rates

Low interest rates have cut the cost of borrowing in recent years, making mortgages more affordable for many.

However, now interest rates have started to rise, this could put pressure on house prices. This is because mortgage payments will rise, making it harder for many people to afford the loan they need to buy.

The economy

Office for National Statistics (ONS) figures show that GDP in the UK fell by 0.1% in March after no growth in February. A slowing economy is likely to lead to uncertainty and job losses, making people less confident about buying a home.

This could slow house price growth or, in the worst-case scenario, bring down prices.

Supply and demand

House prices are largely determined by the desirability of the local area and how many similar properties are currently on the market.

Following the 2020 pandemic lockdowns, there was a shift in people wanting to move out of the cities and into the country. Many rural locations saw huge growth in housing demand, which drove up the property prices in those areas.

Changes in working patterns are likely to support demand.

House price predictions

As you might imagine, predicting the future of house prices is a difficult business, and experts have mixed views.

Estate agent Hamptons predict a rise of 3.5% in 2022  while the property portal Zoopla has similar projections, forecasting a 3% rise this year.

Halifax has suggested that prices could remain flat during the year, or grow by as little as 2%.

Russell Galley, the managing director of Halifax, says: “With the prospect that interest rates may rise further in 2022 to subdue rising inflation, and with government support measures phasing out, greater pressure on household budgets suggests house price growth will slow considerably.”

A note of caution

Overall, most experts expect the housing market to continue its growth in the short term.

However, the rises in inflation will lead to further increases in interest rates which, when combined with the cost-of-living crisis, could mean house price growth slows considerably as we reach the end of the year.

It’s important, though, to remember that price predictions aren’t always accurate. For example, the Times reports that, in June 2020, the Centre for Economics and Business Research (CEBR) forecasted that house prices would drop by 8.7% in 2020. According to the Office for National Statistics, however, they actually grew by 8.5%.

Forecasts are helpful but must be taken for what they are. No one can know for sure what will happen to the housing market!

Get in touch

While we can’t control the value of your home, we can help you to build a financial plan that will help you to reach your life goals. To find out more, email [email protected] or call us on 0345 505 3500.

Please note

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.

Why high inflation could be hitting your children and grandchildren the hardest

Mother helping young daughter put coins in piggy bank

The latest inflation figures from the Office for National Statistics (ONS) show that prices rose 9% in the year to April 2022 – the highest level of increase in four decades.

While you may be concerned about meeting the costs of rising prices, spare a thought for your children and grandchildren.

Research published by Moneyfacts shows that pocket money over the last couple of years has stagnated, with the average weekly pocket money received by a child in the UK standing at £6.14 in 2021, down from £6.18 in 2020.

Meanwhile, the prices of popular children’s goods like LEGO and PlayStation items have risen over the last year, according to the financial analysts.

While it’s unlikely that inflation will impact your children and grandchildren in quite the same way as you, it illustrates how rising prices can lead to challenges if your money is not keeping pace.

The unknown theft of inflation

In simple terms, inflation is when prices go up. This means that the items we buy every day – food, clothes, petrol – cost more over time.

In the UK, inflation is measured by the Consumer Prices Index (CPI). The CPI measures the cost of a basket of common goods and services, such as food and fuel. The Office for National Statistics (ONS) publishes the CPI every month and, according to the latest ONS data, the CPI rose 9% in the year to April 2022.

Inflation can be good for the economy as it encourages people to spend rather than save. However, when inflation is too high, it can be bad for savers as it reduces the value of their money in real terms.

Worryingly, many cash savers are unaware of the impact inflation will have on their money.

Indeed, recent research from Legal & General found that more than half of cash savers (52%) don’t know what rising prices mean for their cash savings.

Better start increasing your child’s pocket money allowance

When inflation is high, each pound you or your child has in their pocket will not be worth as much as it was in the past.

For example, if inflation is running at 9% as it is now, then a chocolate bar that cost £1.00 a year ago will cost £1.09 today. This doesn’t seem like much, but it soon adds up.

In the long term, inflation can have a very damaging effect on your child’s pocket money, as well as yours. If inflation remained at 9%, here is what the price of the chocolate bar would look like:

  • Year 1: £1.00
  • Year 2: £1.09
  • Year 3: £1.19
  • Year 4: £1.30
  • Year 5: £1.41

As you can see, the price of the chocolate bar has risen by more than a third in just five years.

To combat the effects of inflation, you need to try and make sure that your own savings (and your child’s pocket money allowance!) keeps pace with inflation.

How to avoid inflation devaluing your money

As adults, there are a few things that you can do to help save your own pocket money from devaluing.

Move longer-term cash savings into equities

It is generally considered sensible to keep some cash – perhaps three to six months’ salary – in an easy access savings account by way of an emergency fund.

If you have more cash than you need, though, you could consider moving some into investments that could offer better long-term growth.

For example, equities typically provide a return that outstrips the interest you’d receive on cash savings.

For example, the chart below shows the annual performance of major stock market indices in the UK, US, and Europe over the 10 years to 2021.

Source: JP Morgan. FTSE, MSCI, Standard & Poor’s. All indices are total return in local currency. Past performance is not a reliable indicator of current and future results. Data as of 30 April 2022.

You can see that, with the odd exception, markets produced positive, inflation-beating returns during this period, helping your wealth to retain its purchasing power over time.

We can help you to create a portfolio aligned with your long-term goals and attitude to risk.

Maximise tax efficiency

Another way of ensuring your savings are working as hard for you as possible is to make sure you’re saving and investing as tax-efficiently as you can.

ISAs allow you to put away as much as £20,000 in the 2022/23 tax year, and you won’t pay any Capital Gains Tax or Income Tax on returns.

In addition, saving into a pension could provide Income Tax relief of up to 45%, depending on your marginal tax rate.

Get in touch

We can help you put together a diversified portfolio tailored to meet your goals and circumstances. For advice on alternatives to cash saving, please contact us.

Email [email protected] or call us on 0345 505 3500.

Please note

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future results.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts.

How your clients could use Business Property Relief to reduce tax

Business Property Relief is a tax relief that can help business owners reduce the amount of Inheritance Tax (IHT) they have to pay when they die. This can be a huge help for business owners who want to pass their business on to their beneficiaries.

In this article, you will discover how Business Property Relief can help your clients reduce their Inheritance Tax bills.

Why Business Property Relief exists

Business Property Relief (BPR) originated in the 1976 Finance Act, and has changed a lot since.

Initially, its aim was to ensure that, after a business owner’s death, a family-owned business could continue to survive and trade, without needing to close or be sold to pay IHT. Over the decades, UK governments have continued to value protection of businesses of this kind.

How Business Property Relief works

If your client has a business or an interest in a business, whether a sole trader, partnership, or limited company, they can claim 100% relief provided it’s inherited as a going concern. This means it is exempt from Inheritance Tax.

Clients can get 100% relief on:

  • A business or interest in a business
  • Shares in an unlisted company

They can get 50% relief on:

  • Land, buildings, plant or equipment they own and that is wholly or mainly used by the business
  • Shares controlling more than 50% of the voting rights in a listed company
  • Land, buildings, plant or equipment used in the business and held in a trust that it has the right to benefit from.

Note that clients must have owned the business or asset for at least two years to claim the relief.

Conversely, there are some instances where the relief is not available. For example, the following businesses do not qualify if more than half of the business involves:

  • Dealing in stocks and shares
  • Dealing in land or buildings
  • Making and holding investments.

How to qualify for Business Property Relief

To qualify for Business Property Relief, the property must meet certain criteria. First, it must be “business property” as defined by the Inheritance Tax Act. This includes things like shares in a trading company or business premises.

Second, the property must be used for business purposes and must have been owned for a certain period, usually two years.

If your client meets these criteria, they may be able to use Business Property Relief to reduce their Inheritance Tax bill.

If your client owns a business, it’s important to discuss Business Property Relief so they can take steps to protect their beneficiaries.

How Business Property Relief can benefit your clients if they are investing in a business

Your clients can take advantage of this valuable relief even if they are not a business owner themselves.

For example, perhaps your client is aware that they have an Inheritance Tax liability, but:

  • They find trusts too complicated
  • They don’t want to give away large sums of money
  • Their beneficiaries are too young to inherit now
  • They want to retain access to their money in case they need it.

Investing in shares that are expected to qualify for Business Property Relief means your client could pass these on free from IHT on death, as long as they have held the shares for at least two years at that time.

Additionally, the investment would stay in your client’s name, meaning they should be able to access the capital later on if they need it.

The benefits of a Business Property Relief qualifying investment include:

  • Clients can pass such an investment free of IHT after two years (a client would normally have to wait seven years after making a gift for it to fall outside their estate)
  • The client retains control as the wealth remains in their name
  • Such an investment does not use the IHT nil-rate band, meaning clients can use this band on assets which are difficult to place outside of the estate for tax purposes.

It’s worth remembering that investments that qualify for Business Property Relief can’t be listed on a main stock exchange. So, they are likely to be smaller, riskier companies where the value could fall, and clients could get back less than they invest.

In addition, tax rules could change in the future and so there is no guarantee an investment will continue to qualify for the relief in the future.

Get in touch

If you have clients who own a business, or have potential IHT issues they are looking to address, Business Property Relief could be a useful way of mitigating a tax bill.

If you have clients who may benefit from our advice, or for more information, please contact us. Email [email protected] or call us on 0345 505 3500.

Please note

The Financial Conduct Authority does not regulate estate planning, tax planning or will writing.

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

Why no-fault divorces mean it’s important for clients to work with a financial planner

April 2022 saw a landmark moment for divorce law in the UK with the introduction of the new “no-fault” process. Now, couples can end their marriages without having to go through the lengthy and often contentious process of assigning blame.

While no-fault divorces can be less emotionally charged than traditional divorces, they still present their own unique challenges – especially when it comes to pensions. In this blog post, read about how financial planners can help your clients to ensure that they’re protected during and after a divorce.

How no-fault divorces affect pensions

Failing to consider pensions during divorce can cause problems for couples who have been married for a long time and have accumulated significant pension benefits. In many cases, pensions are simply ignored during separation – even though they may be a couple’s biggest single asset.

Indeed, a 2021 survey by interactive investor found that almost half (49%) of divorced people admitted to not discussing pensions during their divorce proceedings.

There are two key reasons why many experts believe no-fault divorces could result in fewer pension shares.

Firstly, no-fault divorces can also be filed quickly without much notice. This can make it difficult for the other party to organise a solicitor and pursue the legal channels to come to an agreement about pensions ahead of the divorce concluding.

Former pensions minister, Sir Steve Webb, highlights another key concern, in that separating couples under the new “no-fault” process may be reluctant to raise issues surrounding the division of pension assets for fear of being seen as “obstructive” or “difficult”.

Sir Steve said: “It is entirely understandable that divorcing couples focus on other matters, but the risk is that people simply do not understand the value of pensions.

“While there is much to commend the new divorce law, it would be very unfortunate if a by-product was that even fewer divorces were accompanied by a fair sharing of the couple’s overall wealth, and in particular of pensions.”

For these reasons, your clients are likely to find working with a planner highly beneficial – especially if they have significant pension assets.

The role of financial professionals in no-fault divorces

Given the complexities of no-fault divorces, couples need to work with a financial planner who can help them to navigate the process and protect their interests.

A financial planner can help by:

  • Ascertaining which assets may be relevant to the division
  • Assessing the value of each spouse’s pension benefits
  • Helping to create a financial plan
  • Guiding how to divide assets in a no-fault divorce
  • Setting up a pension to accept any pension share that is agreed.

In addition, a financial planner may also be able to provide protection advice. Often, life insurance and other types of cover will be in joint names. One party taking on this cover, or policies being cancelled, could leave one or both parties underinsured.

3 common ways pension assets are split

There are three main ways that pensions are usually split.

Offsetting

With this method, a pension’s value is offset against a couple’s other assets. For example, if a couple owned a £400,000 house and a pension worth £400,000, one person may keep the house while the other person keeps the pension.

This way of splitting isn’t without its problems. Owning a property is likely to come with many running and maintenance costs, and the person who owns the house may need to sell it later in life to generate a retirement income. Pensions, conversely, generally come with very low fees and substantial tax benefits.

Earmarking

Sometimes referred to as a “pensions attachment order”, in this approach an agreement is made that the partner without the pension will claim a proportion of it in the future, whether that’s in a lump sum or as a regular income.

The downside to earmarking is that the person without the pension will have to wait until their ex-partner retires or dies before they can claim their part of the pension.

Pension sharing

This approach splits the pension benefits between the two parties, and a proportion of the pension savings are transferred to the person without a pension.

The advantage of pension sharing is that both spouses know the size of their pension shares when the agreement is drawn up – this provides a clean break.

Get in touch

If you have divorcing clients who would benefit from financial planning, or would like some guidance on pension sharing, please get in touch.

Email [email protected] or call us on 0345 505 3500.

The top 10 sporting events coming to the UK in summer 2022

It’s fair to say that the UK is addicted to sport.

After two years of events being affected by the Covid pandemic to some extent or another, there’s more of an excited air of anticipation than usual as we approach the summer. So, here’s a guide to 10 amazing sporting events you should put in your calendar for the coming months.

From The Derby to the Commonwealth Games being held in Birmingham, there are plenty of ways sports fans can fill their schedule this summer.

Whether you want to see if Emma Raducanu will win at Wimbledon in front of a home crowd, or see if Lewis Hamilton’s duel with Max Verstappen continues into the Formula 1 2022 season at the British Grand Prix, there’s something for everyone on this list.

Find more information, tips, and details about tickets by downloading “The top 10 sporting events coming to the UK in summer 2022” now.

3 interesting pieces of data that show why you shouldn’t panic during market volatility

A woman holding a takeaway cup of coffee.

Over the last two years, investors have experienced a lot of volatility. If you’ve been tempted to change long-term plans, data can highlight why you shouldn’t panic.

At the start of the Covid-19 pandemic, markets fell sharply, and investors continued to experience volatility as the situation and restrictions changed. Just as things were slowly getting back to “normal”, tensions with Russia began to rise and stock markets reacted strongly when Russia invaded Ukraine in February.

Seeing the value of your investments fall can be nerve-racking, so much so that you may be tempted to make withdrawals or changes to your portfolio.

While there are times when it may be appropriate to change your investments, changes should reflect your personal circumstances. They shouldn’t be a knee-jerk reaction to periods of volatility.

Tuning out the noise and looking at long-term investment trends can be easier said than done. So, these three pieces of data can help you see why, in most cases, sticking to your investment strategy is the best option.

1. Stock market risk falls the longer you invest

All investments carry some level of risk, and the value of your investments can fall.

However, over the long term, the ups and downs of investment markets can smooth out. This means that the longer you invest, the less risk there is that you will lose money when you look at the long-term outcomes. This is why you should invest for a minimum of five years.

The below graph shows how the risk of losing money overall falls when you invest for a longer period. This compares to holding cash, which can lose value in real terms as the cost of living rises, which interest rates are unlikely to keep up with.

Source: Schroders

So, while you may think about withdrawing your money amid volatility, leaving your money invested could reduce the risk of your portfolio falling in value.

Your investments should reflect your risk profile, which considers several factors, such as your goals and capacity for loss.

2. Markets have historically bounced back

When you’re experiencing volatility, it can seem like a one-off event. Yet, if you look back over the years, you’ll see there are often events that can seem like reasons not to invest or to change your investment strategy.

In the last decade alone, there’s been the Brexit vote, Trump’s inauguration, trade wars, and protests in Hong Kong.

During these periods, your investments may have fallen in value. Yet, if you review the long-term trend, markets have historically bounced back and gone on to deliver returns.

The graph below highlights how negative world events can cause stock markets to fall.

Source: Bloomberg, Humans Under Management. Returns are based on the MSCI World price index from 1988 and do not include dividends. For illustrative purposes only.

While there have been sharp falls, the general trend of stock markets has been upwards over the last 30 years.

Data from Schroders shows that stock market corrections, where there is a 10% drop, are not as rare as you might think either. The US market has fallen by at least 10% in 28 of the last 50 calendar years. Yet even with these dips, the market has returned 11% a year over the last 50 years on average.

3. Trying to time the market could cost you money

As stocks rise and fall, it can be tempting to try and time the market.

Everyone wants to buy stocks at a low price and sell them when the value is high. But it’s incredibly difficult to consistently predict how the markets will change.

Even if you miss out on just a handful of the best performing days of the market, you could lose out. The below table shows the returns from an investment of £1,000 between 1986 and 2021 based on leaving your money invested and missing some of the best days.

Source: Schroders

If you had invested in the FTSE 250, missing just the 30 best days over these 35 years would cost you almost £33,000.

The findings highlight why “it’s time in the market, not timing the market” is a common saying when investing. Staying the course and having faith in your long-term investment strategy makes sense for most investors.

Creating an investment strategy that’s right for you

The above graphs and table highlight why you shouldn’t panic when investment markets experience volatility.

That being said, it’s important to remember that investment performance cannot be guaranteed, and that past performance is not a reliable indicator of future performance.

Building an investment portfolio that reflects your goals and takes an appropriate amount of risk is crucial. If you’d like to talk about investing, whether you have concerns about market volatility or want to start a portfolio, please contact us.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

33% of couples say they’re financially incompatible. Here are 7 tips for creating financial harmony

A smiling couple going through paperwork together.

How often do you talk about money with your partner? The way money is handled in a relationship can sometimes make or break a couple, and research suggests it’s something many people struggle with.

According to a survey from Royal London, 62% of couples in the UK say they have argued with their partner about money. The most common reason is that one partner is deemed to be “spending too much”.

While disagreements are part of every relationship, a worrying third of couples say they’re incompatible with their partner when it comes to spending and saving. And a quarter considers their partner to be irresponsible with money.

How you handle finances now affects your long-term plans, so finding a way to create financial harmony as a couple is important. It can not only reduce arguments but mean you’re both working towards the same goals.

If money decisions can cause some friction in your relationship, here are seven tips that could help.

1. Make money topics a part of your normal conversation

Despite money playing a huge role in your life, the research found that couples often find it difficult to talk about finances.

Making money topics part of the conversation in your home is an important first step. Sometimes, disagreements may occur due to a misunderstanding that being more open can solve. In other cases, a conversation can help you understand your partner’s view so you can minimise financial challenges.

2. Be open about your financial situation

If you currently keep your finances largely separate from your partner, they may not be aware of your situation, and vice-versa.

Being open about debt, outgoings, and other areas of finance can mean you’re both in a better position to understand the financial decisions being made. It can also give you an insight into how your partner views money and where your differences may lie.

Understanding your partner’s financial situation is particularly important if you’ll be making a financial commitment with them, such as opening a joint account or taking out a mortgage.

3. Create a joint household budget

If you share household expenses, understanding how they will be split and what they will cover is important.

For some couples, simply splitting expenses 50-50 makes sense. For others, taking income differences into account may be better suited.

What’s important is that you find an option that works for you and create a plan that matches your needs. This may mean depositing a set amount into a joint account every month or each of you taking responsibility for different outgoings.

4. Give yourself and your partner a discretionary budget

How your partner spends money can be a cause of conflict, especially if you don’t agree with their purchases. If this is something you argue about within your relationship, giving yourself and your partner a set budget to use however you like can avoid this.

It means you can both indulge in what’s important to you while knowing that you’ll still be on track to cover essentials and other financial goals you may have.

5. Set out clear saving and investing goals

With a day-to-day budget organised, it’s time to start thinking about other goals you may want to set aside money for. This could be to buy a house, start a family, go on holiday, or build a financial safety net.

Having clear saving or investing goals means you’re both working towards the same things.

Knowing that you both need to put money away at the beginning of the month means you know where you stand, and it can minimise arguments.

6. Don’t overlook long-term goals

Saving goals looking ahead for the next few years are important, as are ones that will affect your life in several decades.

The sooner you start thinking about areas like retirement planning, even if it seems a long time away, the more manageable your goals will be.

If you haven’t discussed how much you and your partner are putting away in your pension each month, for example, it can be difficult to calculate if you’re on track for a financially secure future as a couple.

So, when setting out a budget and what you want your future to look like, don’t put off long-term planning.

7. Work with a financial planner

Balancing different goals and views on money can be a challenge. By working with a financial planner, you can create a plan that you can both have confidence in and incorporates both of your aspirations to provide long-term security.

The financial planning process can help make sure you’re both on the same page, from discussing what your long-term goals are to reviewing your risk profile when investing. These steps can mean your financial decisions reflect what you both want from life with a clear blueprint to follow.

If you’d like to arrange a meeting with us, please contact us.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

Why it pays to use your 2022/23 ISA allowance right now

A woman depositing a coin into a piggy bank.

The 2022/23 tax year has only just started, but you should already start thinking about how you’ll use your allowances over the next 12 months. It can help maximise your assets.

In the 2022/23 tax year you can deposit up to £20,000 into ISAs. If you don’t use this allowance before the end of the tax year, you lose it. You can save or invest tax-efficiently through an ISA, so making full use of your allowance can help your money go further.

The period from February to the beginning of April is sometimes dubbed “ISA season” as savers and investors scramble to find the best rates to make use of their allowance before the end of a tax year.

If you left using your 2021/22 ISA allowance until the deadline was near, don’t let your ISA slip your mind now. It’s worth thinking about maximising it earlier in the 2022/23 tax year. Here’s why.

Drip-feeding your deposits can make your ISA goal part of your budget

If you want to maximise your ISA allowance or have a goal for how much you want to put in, making regular deposits a part of your budget can help.

Depositing £1,666 into your ISA each month can be more manageable than adding a lump sum at the end of the tax year. If you don’t have a lump sum to add to your ISA, breaking down your end goal can make sense.

It can help ensure that the money doesn’t get used to cover other expenses and keep you on track.

If you’re thinking about breaking down your ISA deposits over the year, setting up a standing order can simplify it.

In addition to making deposits more manageable, drip-feeding your money can be useful if you’ll be investing through an ISA.

Investment markets will rise and fall throughout the year. So, by spreading out deposits, you’ll be buying at different points throughout the market cycle. It’s an approach that can remove the temptation to try and time the markets.

Depositing a lump sum now means you have longer to earn interest or returns

If you already have a lump sum available to deposit, doing so now means you could have an extra 12 months of interest or returns than you would if you waited until April 2023.

If you’ll be saving through a Cash ISA, the extra interest added to your account over the year can really add up. Using your ISA allowance now can help you make the most of your money.

Adding a lump sum if you’ll be using a Stocks and Shares ISA to invest means you can potentially benefit from an additional 12 months of investment returns.

The graph below shows how investing £5,000 each tax year delivers different returns if you invested on the first working day of the tax year compared to the last working day.

Source: Hargreaves Lansdown

While both options have done well and returned over 99% growth, you would be better off by investing at the start of the tax year overall.

However, you should keep in mind that investment performance cannot be guaranteed.

Some years, investing at the start of the tax year could mean you end up with less if investments perform poorly. You should consider your investment time frame and risk profile when making investment decisions and reviewing performance.

Should you save or invest through your ISA?

If you want to use your ISA allowance for the 2022/23 tax year now, you should think about whether a Cash ISA or a Stocks and Shares ISA is right for you.

A Cash ISA is a useful way to save. Your savings will benefit from interest, however, as the interest rate is likely to be lower than inflation, your savings may be losing value in real terms.

Over the long term, the effects of inflation add up. As a result, a Cash ISA may be right for you if you’re building an emergency fund or are saving for short-term goals.

If you’re putting money away with long-term goals in mind, a Stocks and Shares ISA may be appropriate.

Investing provides a chance for your wealth to grow at a pace that matches or exceeds inflation. But this cannot be guaranteed, and market volatility can mean investment values fall.

Investing for a longer period can smooth out the ups and downs. As a result, you should invest with a minimum time frame of five years.

As well as time frame, you should also assess which investments are right for you. All investments carry some risk and the decisions you make should reflect your wider financial circumstances.

Are you ready to think about how to maximise your ISA allowance for the 2022/23 tax year?

Please contact us to discuss your options and the steps you can take to help your money go further, including using your ISA and other allowances this tax year.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Why good retirement planning is about more than your pension and money

A mature couple enjoying the view of an ancient amphitheatre.

If you’re nearing retirement, you may be starting to think about planning the next stage of your life.

What steps spring to mind? You may prioritise organising your pension, claiming your State Pension, or reviewing how much you have in a savings account. These steps are important for creating security, yet good retirement planning goes further than your finances.

So, what should retirement planning include? Setting out lifestyle goals is crucial for building a retirement plan that means you get the most out of your life.

Here are five questions that you should think about as you approach retirement. They can also help you get the most out of the financial planning process by ensuring your aspirations are at the heart of any decisions you make.

1. What are you looking forward to in retirement?

If you’re nearing retirement, you may be excited about the next stage of your life. Setting out what it is you’re looking forward to can help you make decisions that are right for you.

According to the Great British Retirement Survey from interactive investor, 49% of people that haven’t yet retired are looking forward to greater freedom and 42% see retirement as an opportunity for a new business or hobbies.

3 in 10 people still working think their life will improve when they retire. Pinpointing what it is that will make retirement an exciting milestone for you is crucial.

2. How will you fill your days when you retire?

While you may have big plans for your retirement, it can be easy to overlook the day-to-day when you set out your lifestyle.

Going from working full-time to having freedom can be overwhelming at first. Some retirees can find they don’t know how to fill their days initially and you may need a period of adjustment. By setting out how you’d like to spend your time before you retire, you can start building a retirement lifestyle that you find fulfilling.

3. What will give you purpose in retirement?

Much like filling your days, retiring can pose a challenge for some retirees if they feel like they’ve lost their purpose and drive when giving up work.

According to an Aegon report, just 4 in 10 people think about what gives their life joy and purpose.

Considering your driving force is a useful exercise at any point in your life and reviewing this as you retire is an important task.

4. How will you maintain social connections in retirement?

Work can play a pivotal role in your social life. So, when you retire, it can leave a gap.

Thinking about how you’ll maintain or create new social connections can improve your retirement lifestyle. That may mean making sure you stay in touch with family and friends or planning ways to get out of the house to meet new people, like joining a club that interests you.

Research from the National Institute for Health Research found that 1 in 3 people aged 50 years and over in the UK report feeling lonely. A lack of social connections can harm your mental health and has been linked to depression, so your social life in retirement is vital for your overall wellbeing and happiness.

5. Do you have any concerns about retirement?

While you may be looking forward to retirement, it’s natural to have some concerns too.

From worries about your finances to being anxious about the lifestyle change, thinking about your concerns is as important as setting out what you’re looking forward to.

It means you can address any worries that you have and put a plan in place to deal with them. By being proactive, you can really focus on enjoying your retirement to the fullest.

Using your lifestyle goals to shape your financial decisions

Lifestyle aspirations play a crucial role in effective retirement planning, but getting to grips with the finances remains important.

Having a clear idea about what you want to get out of retirement can help shape your financial decisions so they reflect your priorities.

If you want to see more of the world when you initially retire, taking a larger income from your pension during the first few years could make sense. Or if you hope to make workshops, classes, and hobbies a regular part of your schedule, including these costs in your budget can ensure you’re able to fill your days how you want.

By combining lifestyle and finances when you’re retirement planning, you can have confidence in the decisions you make. Please contact us to discuss your retirement and the lifestyle you’re looking forward to.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

Delaunay Wealth Management Limited is authorised and regulated by the Financial Conduct Authority (806635). Registered in the UK at: Wey Court West, Union Road, Farnham, Surrey, GU9 7PT. Company Registration Number: 08107472 The Financial Conduct Authority does not regulate taxation and trust advice and employee benefits.

Should you have cause to complain, and you are not satisfied with our response to your complaint, you may be able to refer it to the Financial Ombudsman Service, which can be contacted as follows: The Financial Ombudsman Service, Exchange Tower, London, E14 9SR www.financial-ombudsman.org.uk

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