Some good news
Wednesday 7th September 2022
Katy Baxter
In these times of doom and gloom finding something to cheer about can be more difficult but I have found something. The so called 'triple-lock' guarantees that the state pension will rise in line with inflation, average wage growth or 2.5% - whichever is highest. The measure was paused in 2022 due to the impact of COVID on public finances but it is going to be being reinstated in April 2023 which is good news and will result in a large rise for those receiving state pensions. Inflation of more than 10% will see the basic state pension rise to more than £155 a week, while those who have reached state pension age since 2016 could see their weekly payments…
What a Senior Market Strategist just told me……
Wednesday 10th August 2022
Katy Baxter
One of the great advantages of the role I have is not only speaking to my lovely clients and their families, but also talking with fund managers and market strategists. You might think that sounds quite dull, but it really isn't! Our media have a fascination in focusing on the dour and negative aspects of almost everything, including of course the state of our economy, but having a more balanced and insightful view can provide reassurance. It is always good to be able to reflect on the conversations I have with my clients, the concerns, and the financial planning priorities they have, and think about the economy/market information I receive, from their perspective. It's no good hearing from these…
Diversification remains key to investors
Friday 15th July 2022
Katy Baxter
People who hold investment portfolios are currently experiencing an extended period of volatility and it is highly likely that the value of their portfolio has reduced since the end of 2021. Primarily the reasons behind this are the supply chain problems post COVID and the war in Ukraine, both of which have led to an increase in inflation, the raising of interest rates and the ongoing worry of the major economies of the world falling into recession. Now more than ever there is a need for investment portfolios to be well diversified and in line with a client's appetite for risk, which is why at Montgomery Estate Planning we favour Multi-Asset and Multi-Manager funds. Multi-Asset funds typically include a wide…
Making up their minds
Friday 17th June 2022
There is much being said in the financial press about market volatility and the stock markets, so we wanted to try and find an article that was not too deep in technical language, and echoed our own views. The following comment from 7IM, one of the fund managers included within the Montgomery Estate Planning panel, is we feel worth reading. "As of December 2021, markets thought the Bank of England (BoE) would raise rates to around 1% by the end of 2022. What's striking is that the markets believed, at the time, this would be enough to bring inflation under control, leaving the BoE free to spend 2023 CUTTING rates. Six months into the year, we can see how well…
The importance of an up to date Will when estate planning
Wednesday 27th April 2022
Katy Baxter
Few of us want to spend time talking about what happens to finances on our passing and therefore matters can be left and are not reviewed which can prove costly in terms of loved ones making hefty inheritance tax payments to the government. This has been shown clearly as the latest HMRC data reveals that IHT receipts for the period April 2021 to February 2022 now stand at £5.5bn; £0.7bn higher than the same period last year. Also, almost half (47%) of Brits who have a Will haven't updated it for more than five years, meaning nearly half of wills in the UK are likely to be out-of-date. Of those, a third (33%) haven't updated it for over 7 years, and a…
Upcoming client events in April 2022
Thursday 17th March 2022
Katy Baxter
Seminar & Webinar agenda - 12 and 14 April 2022 1. Limiting the amount of Inheritance Tax payable by loved ones remains more important than ever as property prices increase and the government freezes tax allowances. Katy will give an insight into the strategies available to reduce tax bills and will also discuss how to use charitable trusts to leave a lasting legacy and allow your loved ones to work with charities that are close to your heart. 2. Having an up-to-date Will and Lasting Power of Attorney form the core of estate planning so we will talk through how to do this and the pitfalls to avoid. 3. The geopolitical landscape continues to be impacted by significant shocks so our guest…
Leaving a legacy using a Charitable Trust
Thursday 3rd March 2022
Katy Baxter
Nearly all charities in England and Wales have experienced some negative impact from Covid-19, reports the 2021 Government Charity Commission Covid-19 survey. According to the figures, 85% of charities have had their services, and delivery of services, impacted, and 72% are dealing with a change in their financial position. This could mean that they have had to draw on their valuable reserves, or reduce the services they can provide. Restrictions to 'in-person' fund raising events have had an impact on fundraising levels, as we would of course expect, and 62% of charities consequently anticipate a threat to their charity's financial viability in the next 12 months. All of this obviously makes it extremely difficult for charities to be…
New Year’s resolutions are notoriously hard to maintain
Thursday 20th January 2022
Katy Baxter
There are countless theories out there about how long it takes to form a habit, but it seems to be between 21 and 66 days. If you are already slipping, maybe it is a good time to double down. If you commit to your New Year's resolution now, by the end of March 2022 you'll be doing it in your sleep. We believe you can help yourself with some simple financial New Year's resolutions. But where to begin? Warren Buffett famously said, "Do not save what is left after spending, but spend what is left after saving" and whilst these are wise words, if you're anything like me, you need to read it three or four times till the…
Property values and equity growth
Thursday 11th November 2021
The overall value of UK housing stock has risen from £5.67trn to £6.42trn over the last year, with private property wealth reaching a new high of £4.87trn, according to figures released by the Equity Release Council. While the level of mortgage debt has reached unprecedented levels, now above £1.5trn, fast rising property prices mean that for every £1 of mortgage debt, there is more than £3 of equity in our homes. The recent national lockdowns turned borrowers into a nation of savers as households repaid more than £19bn of mortgage capital during both Q1 and Q2 2021, having never repaid more than £18bn in any previous quarter. The Equity Release Council figures suggest that more than three quarters of…
UK Onshore Investment Bonds
Wednesday 13th October 2021
Katy Baxter
When you buy an investment fund, you may choose to do so via a wrapper which helps confer certain tax benefits on the income and capital gains which you receive. A UK Onshore investment bond is one of the wrappers you can choose. UK Onshore Investment bonds are generally available for a single premium - that is, a one-off lump sum. You can choose how that money is invested from a range of options that combine a variety of different asset classes within the one fund. Life companies offer external links to fund management houses, increasing your scope to mix, match and specialise within your portfolio. Funds within a UK Onshore investment bond benefit from a non-reclaimable 20% tax credit.…
Tax hikes to raise money for social care
Tuesday 14th September 2021
In a move designed to fund the spiralling cost of social care, the Government announced a controversial increase to National Insurance contributions (NICs) in the form of a 1.25% "Health and Social Care Levy". Although pensioners do not pay NICs, workers of state pensionable age will have to pay the levy, which will take effect from April 2022. The Government announced an increase of 1.25% in tax on dividend income. This means that tax on dividend income will increase from 7.5% to 8.75% for basic rate taxpayers, from 32.5% to 33.75% for higher rate taxpayers, and from 38.1% to 39.35% for additional rate taxpayers. At present, there appears to be no change to the annual tax-free dividend allowance of…
Inheritance Tax (IHT) bills on the rise – especially if you live in the South
Tuesday 24th August 2021
Katy Baxter
The human cost of COVID has been huge and will have an impact on families and people's lives forever. The financial impact has also been felt by many and although likely to be temporary, the government finances have been hit hard and somehow this debt will need to be repaid in the years to come. To not hinder economic recovery and growth, Rishi Sunak has limited fire power at his disposal. However, in March this year he already showed part of his intent by raising money via taxes when he froze two IHT thresholds for the next five years. This means the IHT Nil-Rate Band is remaining at £325,000 and the Residence Nil-Rate Band will be kept on…