Spotting and avoiding financial scams feature in the news a lot. But as scammers become more sophisticated, the number of victims continues to rise.

While many of us think we’d easily spot the red flags, it’s easy to fall victim, especially if you’ve got other things on your mind. Reviewing the warning signs can help you avoid scams should you be targeted. In many financial scams, it’s impossible to reclaim what’s been stolen. It can devastate your long-term financial plans if a scammer is able to get their hands on your savings, investments or pensions. Being vigilant is crucial.

This year the Financial Conduct Authority (FCA) has issued 80% more scam warnings than it did in 2019. Over the last five years, the figure has increased by more than 300%.

One trend among scams is the rise of clone firms. These scammers use the name and details of legitimate financial services firms to dupe victims. With emails that look trustworthy and advertised products that appear legitimate, it can be hard to spot a clone firm. Combined with number spoofing, where a criminal can make it look as though they’re calling from a different number, they can make you believe you’re speaking to a finance professional.

Since 2015, scams involving an impersonation now constitute 45% of all FCA warnings. As a result, it’s more important than ever that you’re cautious when making financial decisions.

5 steps that can help you avoid scams

1. Be cautious of unsolicited contact

If you’re contacted out of the blue, whether through email, text, social media or a call, be cautious. Cold calling is one of the most common ways a scammer will try to engage with victims initially. They’ll attempt to build a rapport and lull you into a false sense of security. There is a ban on cold calling in relation to pensions.

Even if you’re expecting to be contacted, don’t feel too embarrassed to ask for verification if you have some concerns. Legitimate financial services firms will understand why you’re asking.

2. Always check the credentials of those you speak to

Never hand over your personal details without checking who you’re speaking to. One of the first steps to take is to check the FCA register. This register contains all the firms and individuals that are involved in regulated activities. It will also show you what permissions each firm has and their contact details.

As mentioned above, some scammers will pretend to be from a legitimate firm, so don’t just check the register. Verify the contact details and get in touch with the firm using the information on the register directly.

3. Don’t rush into making financial decisions

Scammers rely on you making quick decisions without fully thinking through the consequences. They may use high-pressure tactics to get you to make a snap decision, such as time-limited offers or sending documents to be signed immediately.

The financial decisions you make can have a long-term impact on your situation and plans. Take the time to fully understand what your options are and don’t feel rushed to make a quick decision. Again, if you need more time or would like to discuss opportunities, a legitimate financial services provider will understand this.

4. Focus on your long-term plans

When you’re approached by someone offering appealing opportunities, it can be tempting to take them. However, keep in mind that if something sounds too good to be true, it probably is. Investment opportunities that claim to be low risk but high return, for instance, are a red flag.

While quick opportunities to increase wealth or access assets can be attractive, understanding your finances and long-term plan can help you spot those that are too good to be true. 

5. Speak to us

Speaking to someone else about the offer you’ve been made can help you see red flags that you’ve previously overlooked. This may include a partner or someone else you trust. Another pair of eyes can help you identify a scam.

As well as loved ones, as your financial planner, we’re here to offer you support when making financial decisions too. If you’re approached with a financial opportunity, whether a ‘free pension review’ or a high return investment, you can contact us to discuss this. We’ll help you check that it’s a legitimate opportunity as well as reviewing how it fits into your wider plans.

If you have any concerns or would simply like to review your financial plan, please get in touch.

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

If you’ve yet to finish your Christmas shopping and simply don’t know what to buy for a child, a financial gift can last far longer than the latest fad. It might not be as exciting as unwrapping a toy, but at a time of year when they’re going to receive plenty of presents, money can be the perfect gift.

As a parent, you may have already purchased some presents and know they have plenty to keep their attention over the festive period. Giving money at Christmas can mean the gift can be useful in the coming months or even saved until they’re an adult.

Your child may also receive money from family and friends who aren’t sure what to purchase too. Last year, 45% of Brits planned to give cash as a Christmas gift, according to research from the Post Office. While children may be eager to spend it in the sales, putting some of it away for a rainy day can be beneficial.

Whether family and friends have gifted money, or you want to set some aside rather than splurging on toys, here are three options you may want to consider.

1. Savings account

A general savings account in a child’s name is a great option if you want flexibility.

Adding Christmas money to a savings account means it’s there for when they want to use it later, whether that’s to buy a toy in a few months, pay for a school trip or save it. It’s a step that can help instil good money habits and show how saving can mean gifts can add up.

While interest rates are low, children’s accounts are typically more competitive than their adult counterparts. So, it’s worth shopping around to get the most out of their money. Accounts with restrictions will usually offer the highest interest rates. Restrictions may include limiting withdrawals and contributions. Make sure any account you pay into gives you the flexibility you need.

2. Junior ISA

Start building or add to a nest egg by adding Christmas money to a Junior ISA (JISA). It might not be as fun as the latest toy, but they’ll really appreciate it when they’re older and can use the money for university, buying a car or travelling.

A JISA is an option when you want to save for the future. The money won’t be accessible until the child turns 18, at which point they can use it how they wish. Adding to a JISA can help make reaching milestones and goals as a young adult easier. Each tax year, you can add up to £9,000 to JISAs per child. It can add up to a sizeable sum for their 18^th birthday.

If you plan to add Christmas gifts to a JISA, the first thing to consider is the type of account. You can choose from a Cash JISA and a Stocks and Shares JISA.

With a Cash JISA, the account will benefit from interest. Like savings accounts, Cash JISAs usually offer higher interest rates than standard ISAs. So, searching for a competitive rate is important. However, you should keep in mind that current interest rates are unlikely to keep pace with inflation. As a result, the savings can fall in value in real terms.

A Stocks and Shares JISA will invest the money. This gives the gift an opportunity to grow at a faster pace. But it also comes with investment risk. The money will experience volatility and could fall in value. The time frame is an important consideration when investing. You should plan to invest for a minimum of five years, as this provides a chance for volatility to smooth out.

If you’re not sure which JISA account is right for your plans, please get in touch.

3. Premium Bonds

A different option to consider is purchasing Premium Bonds. Anyone can buy Premium Bonds for a child and they can hold up to £50,000 worth.

Premium Bonds are the UK’s biggest savings product, with around £88 billion saved in them. But they work differently to your usual savings products. Rather than paying out interest, Premium Bonds are entered into a prize draw each month. The more bonds you buy, the more times you’re entered into the prize draw. Prizes range from £25 to £1 million. When you withdraw the money, you’ll get back the same amount you deposited.

So, while Premium Bonds are advertised with an average interest rate, you’re not guaranteed this. In fact, most people will receive less than the rate advertised, but there is a small chance you’ll receive a larger prize too. Whether it’s the right choice for your child’s savings will depend on your goals.

Christmas gifts can be used to start a nest egg, but you may also want to make regular contributions. Setting aside money for children can mean they have a helping hand as they reach adulthood. Please get in touch if you’d like to discuss how you can create a savings or investment plan for your children. 

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.

The Financial Conduct Authority does not regulate National Savings & Investment products.

When you’re looking forward to retirement, working out your life expectancy may not be something that’s on your mind. Instead, you’re likely to be planning how you’ll spend your time now you’ve reached the milestone. But life expectancy is an important part of retirement planning.

Life expectancy is rising. And while pension age has increased too, today’s retirees are likely to be spending far longer in retirement than previous generations. According to the Office for National Statistics, a 67-year-old male has an average life expectancy of 85 years, and a one in four chance of reaching 92. For a 67-year-old female, the average life expectancy is 87, with a one in four chance of reaching 94. The average person can now expect to receive their State Pension for twenty years.

When we think about how long we live for, we often underestimate. It’s also important to note that while the average person of 67 is reaching their mid-80s, there’s still a significant chance that you’ll celebrate your 90^th or even 100^th birthday.

Why does this matter when planning for your retirement? While your State Pension will provide a reliable source of income for the rest of your life, your other assets will need to be carefully managed to ensure they last.

The risk of spending too much too soon

Most retirees will need to make important decisions about how and when they access their pension. Since 2015, retirees have had more choice. This means you have more flexibility, but it also means you’ll need to be responsible for ensuring pensions and other assets can provide the income you need over a retirement that could last 30 or 40 years.

Without careful financial planning that considers life expectancy, there’s a real risk that you could spend too much too soon.

Let’s say you retire at 67 and have a pension worth £250,000. You take advantage of the option to take a 25% tax-free lump sum from your pension and want to withdraw an income of £2,000 per month. Assuming your pension grows at a rate of 4% after charges, it’d last until you reach 76. This leaves a very real chance that your pension will run out during your lifetime.

As a result, you’d need to review the tax-free lump sum and monthly income to provide certainty throughout retirement.

If you didn’t take a tax-free lump sum and reduced monthly withdrawals to £1,500, you’d reach 86 with £17,960 left in your pension, assuming the same rate of growth as above. While an improvement, it could still mean you run out of money in your later years.

Understanding life expectancy can help you balance having enough income in early retirement with caution so you know you’ll have enough in your later years too.

Of course, on the flip side of this, some retirees are too cautious with their money. After a lifetime of saving, it can be difficult to switch to a financial plan where you deplete assets. It can mean a retirement you’ve worked hard for doesn’t live up to expectations, despite having the capital to tick off aspirations and goals.

How much income do you need in retirement?

One of the first steps to understanding how your pension can help you achieve lifestyle goals is by calculating how much you need.

In most cases, retirees find they need less income than the amount they were earning to achieve the same lifestyle. This is because the costs associated with working are gone and debt, such as your mortgage, may also paid off. However, you’ll need to consider what you want your retirement lifestyle to be like and the cost of it.

Don’t forget, this income won’t all need to come from your Personal Pensions either. You will likely also receive an income from the State Pension and may have other assets that can support you throughout retirement.

With an income figure in mind, you’re able to calculate whether your pension could run out too soon. Recognising this before you start taking an income from your pensions means you’re in a position to change your plans to bridge the gap.

Making life expectancy part of your retirement plan

When you work with us, we’ll help you make life expectancy a part of your financial plan. It’s a step that can give you confidence in your long-term finances, allowing you to enjoy retirement.

As well as how much you withdraw from your pension, life expectancy can impact your financial strategy in other ways too. For instance, it may play a role in whether you take a tax-free lump sum at the start of retirement or how much investment risk you take once you give up work. Please get in touch if you’d like to review your retirement plans.

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

A pension is a long-term investment. The fund value may fluctuate and can go, which would have an impact on the level of pension benefits available. Your pension could also be affected by the interest rates at the time you take your benefits.

The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation which are subject to change in the future.

In October, there were signs of economic recovery from the impact of Covid-19. However, during the month, many countries have reimposed restrictions and, in some cases, full lockdown, to stem the spread of the virus. As a result, it’s expected that volatility and uncertainty will continue into the winter.

The International Monetary Fund’s (IMF) Managing Director Kristalina Georgieva warned that the Covid-19 crisis is far from over despite the world economy looking better. The IMF also added that it’s too early for governments around the world to end support schemes.

UK

The latest economic growth figures for August show the economy is slowing, despite the Eat Out to Help Out scheme designed to boost spending. The economy grew by 2.1% but failed to meet expectations.

On Halloween, Prime Minister Boris Johnson announced the country would be entering lockdown for four weeks. It’s a move that is set to have a severe impact on the economy and businesses. The UK borrowed £36.1 billion in September 2020, a record and far more than economists were expecting. With a new lockdown to support, this figure is likely to climb even further.

One of the areas of concern is the unemployment rate. The jobless rate hit 4.5% in the three months to August, a three-year high. There are warnings this will increase much further too. The Centre for Economics and Business Research (CEBR) warns that at least 1.25 million people are at risk of losing their job before Christmas. This would take the number of unemployed to almost three million and the rate to 8% for the first time in a decade.

The findings over the last few months point to a tough winter with economic uncertainty at the centre.

The entertainment industry has been particularly affected by the lockdown restrictions. One of the big names to speak out this month was Cineworld, which has closed all UK venues. The firm said it can’t stay open without major new films as studios push back release dates. The company’s shares halved in value following the announcement. Odeon followed this by saying it also planned to close a quarter of its cinemas.

According to a CBI report, UK retail sales fell sharply, as did orders placed on suppliers, as restrictions increased.

Some firms have benefitted from the social distancing restrictions though. Asos has seen its profits quadruple by adding three million customers as demand for online shopping soared. However, the firm has remained cautious, citing Brexit as a risk area.

Following falling high street footfall and spending, online shopping is providing opportunities for retailers. One business keen to take advantage of this is John Lewis, which has committed £1 billion to an online push.

While Covid-19 continues to dominate headlines, the UK’s economy will also be affected by Brexit. When Boris Johnson signalled a no-deal Brexit could be on the horizon, the pound fell as a result. However, both the UK and the EU have since said that a deal is still possible. The outcome of the negotiations remains to be seen as the deadline draws nearer.

Europe

The Eurozone posted record growth of 12.7% between July and September but the figure is marred by further statistics that suggest hardship ahead.

After factory figures suggested the eurozone was recovering, the pace is now slowing. In August, production across the area increased by 0.7%. However, this still leaves production 7.2% lower than a year ago, highlighting the impact Covid-19 has had on economies.

The private sector is also shrinking again. In October, a PMI of 49.4 was recorded, where a reading below 50 signals contraction. Germany was described as the only bright spot.

This is linked to rising unemployment. The economic area saw unemployment rise for the fifth month in a row in August to 8.1%. The has disproportionately affected some countries, with Spain recording an unemployment level of 16%.

The European Central Bank (ECB) left its policy unchanged in October but has hinted it will act if needed. The next ECB meeting will take place in December. 

While challenging, the current climate has presented an opportunity for investors too. The European Union launched the first of its new coronavirus related bonds, which will fund Europe’s recovery efforts. There’s been high interest from investors, with reports that the bonds are 14-times oversubscribed.

US

At the beginning of the month, President Donald Trump tested positive for Covid-19, impacting markets around the world. However, as he went on to make a full recovery, they did stabilise.

One of the headline figures from the US is its GDP as the country returned to growth. In the third quarter, the US posted an annualised rate of 33.1%, the strongest quarterly growth on record. The figure indicates the economy is taking steps towards recovery, but other statistics show this may not be the full picture.

The US trade deficit, for example, reached a 14-year high. The gap between imports and exports rose by $67.1 billion, a jump of almost 6%.

Of course, the key thing that will affect markets and the US economy in the coming months is the upcoming election. As Trump has said there will be no stimulus package until after the election is concluded, so many businesses could be left struggling.

Remember, while your investment portfolio may experience volatility, it is important to focus on the long term. Carefully think about your wider financial plan before you make changes to your investment strategy. If you’d like to discuss what recent changes mean for your investments, please get in touch.

Keep an eye on our blog to discover the latest markets and financial news.

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.

When you think of your childhood home, what technology did it boast? While we don’t think too much about how homes change from year to year, tech and gadgets do influence our personal spaces and how we use them.

It wasn’t too long ago that it was unheard of to have a computer in your home, let alone laptops, mobiles, and tablets too. As the pace of new technology speeds up, homes over the next decade could include far more tech than they do already, Smart devices are already used in some homes. Throughout the 2020s, expect this to become commonplace.

These technology trends could be working their way into your home in the next few years.

Smart appliances will connect to make your life easier

Technology has already transformed household chores, but products coming to the market will take it one step further.

You can already purchase appliances that connect to the Internet, but these are set to become far more prevalent. Imagine walking into the kitchen to find a cup of tea (just the way you like it) ready for you or a heating system that automatically knows when it should turn on and off.

These devices won’t just follow pre-defined commands, they’ll learn from you too. The idea is that the more you use them, the more convenient they will become as they learn your preferences.

Your mobile will become a remote for your home

Mobiles are already an important piece of tech, many of us would be lost without ours. This decade, expect it to become even more essential to your life.

Intuitive apps will allow your mobile to act as a single remote for your home. It’ll link to smart appliances, control your lights, monitor your security system and much more. You’ll be able to control everything without having to move – just be careful not to misplace your phone!

Energy efficiency will become more important

Climate change risk means that energy efficiency will become an important topic over the next decade. Technology is already playing a role in this, with smart meters rolled out across the country. However, energy-efficient technology and the means to track consumption will become more commonplace.

Your car might tell you when it needs filling up or the oil changing. Or you’ll be able to access information on the energy consumptions, cost, and carbon footprint for every appliance in your home. With more information at your fingertips, you’ll know which appliance could benefit from an upgrade and be more mindful of energy use.

Entertainment hubs to use throughout your home

How we receive entertainment in our homes has changed enormously in the last decade. You’re now just as likely to stream TV shows through subscription services as you are to tune in to the BBC. At the moment, you have to sign in on every device and use a variety of apps to find what you want.

A centralised entertainment hub will make it easier to pull all these different services together. You’ll be able to find something to watch, listen to and learn about, all from a single place anywhere in your home and on any device.

Health sensors will become the norm

There are already some health sensors available and frequently used, like exercise trackers. However, these will slowly become part of your home, letting you know when you’re ill or should visit a doctor.

If that seems like science fiction, it’s closer than you think. In Japan, there are already toilets that will perform a urinalysis and will alert users to a range of red flags, including when they’re at risk of developing diabetes. It might be some time before technology of this level is in every home, but it shows the direction we’re progressing.

For the elderly living alone, smart health sensors could help them strike the right balance between security and independence, alerting loved ones when they need support or there’s an emergency.

Home security systems will need upgrading

Technology has already influenced home security. With systems linked to your phone, you can control alarms, camera and more, even using it to see inside your home when you’re out. But one of the drawbacks to increased technology in homes is that the devices you use can, in themselves, pose a security risk and more of your information is online. As a result, the security we have for our home and possessions will need to be upgraded to mitigate cybersecurity risks.

We’ve been debating a cashless society and the challenges for years in the UK. But as card payments overtake notes and coins, could it be something that becomes a reality in our lifetime?

For many of us, not having access to cash seems alien, even if we rarely handle money. While there aren’t any societies that are truly cashless yet, some are moving towards it at a faster pace. In Sweden, for example, only around 2% of transactions consist of cash. Many shops and restaurants in Sweden will only accept card or mobile payments and, in some places, banks have stopped handling cash too.

It can be difficult to imagine never having notes in your wallet or a pocketful of change, yet it could be closer than you think.

Cash payments have declined 59% in a decade

It wasn’t too long ago that cash was king in the UK, with plastic reserved for larger purchases.

Today though, you’re far more likely to use your card or mobile to make a payment than you are to use money. Many trends have influenced this shift, including online shopping and contactless payment options.

According to a report from the National Audit Office, there has been a 59% decline in the volume of cash payments between 2008 and 2019. Between 2018 and 2028, it’s expected that there will be a further 65% reduction in the use of cash. By the end of the decade, using cash for payment could be rare.

The fact that The Royal Mint is set to go a decade without making any 2p or £2 coins due to demand slumping highlights this.

In recent months, the Covid-19 pandemic has had an impact too, with many shops, restaurants and bars protecting staff by only taking card payments. Statistics show there was a 71% decline in the market demand for notes and coins between early March and mid-April 2020. This coincided with the limit for contactless card payments rising from £30 to £45 in April.

Figures from UK Finance show card payments are overtaking cash. Some 51% of the £40 billion payments made in 2019 were made via credit, debit or charge card. The use of cash fell 15% and made up less than a quarter of all payments.

So, while a cashless society may seem like it’s some way off, it is something we could be moving towards.

Cashless society could leave vulnerable and rural communities behind

The Access to Cash Review warned at the beginning of the year that the cash system is reaching a ‘tipping point.’ It added that moving towards a digital future could leave millions of people behind, with the elderly and those in rural communities particularly affected.

In 2018, Access to Cash published its final report and the review assessed the recent steps and where gaps remain. The review noted some initiatives have started but questions whether they have gone far enough, stating that the situation for consumers is deteriorating. One example used is that 25% of ATMs now charge customers to withdraw their money, up from just 7% a year earlier. Collectively, this cost consumers £29 million.

Natalie Ceeney, Independent Chair of the Access to Cash Review, said: “The UK is fast becoming a cashless society – without knowing what this really means for consumers or the UK economy. Many people may want a completely digital future, but we need to make sure that this shift doesn’t leave millions behind or put the economy at risk.”

It won’t just affect those highlighted in the report either. Using cash for transactions is often recommended as a way to help those struggling to get a grip on their finance. Physically handing money over can make sticking to budgets easier. Even if budgeting isn’t a challenge for you, you may prefer using notes and coins to keep better track of where your money is going.

Bank of England: Cash is still important

Despite innovations and statistics pointing towards a cashless society in the future, the Bank of England has maintained that cash still plays an important role.

There is over £70 billion worth of notes in circulation. Despite the rise of cards, this is roughly twice as much as there was a decade ago.

Reinforcing the bank’s view that physical money remains important is the recent investment in switching to polymer notes that are more durable than the traditional paper ones. The first plastic £5 entered circulation in 2016, with £10 and £20 plastic notes following in 2017 and 2020 respectively. A polymer £50 will follow.

The Bank of England adds: “While the future demand for cash is uncertain, it is unlikely that cash will die out any time soon.”

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