60 years ago, the Beatles celebrated their first UK number one single – ‘From Me to You’. The Fab Four went on to spend an incredible seven years in the UK top 40.

The band has influenced musicians for decades, but what you might have overlooked are some of the financial planning lessons in their lyrics.

From a young man thinking about and planning his later years in ‘When I’m Sixty-Four’ to ‘Taxman’, which protests the high rates of progressive tax the band paid in the mid-60s, there are essential money lessons hidden in the Beatles’ albums.

Download your copy of ‘10 really fab things the Beatles can teach you about successful financial planning’ now to discover what you could learn from the Fab Four’s lyrics.

As inflation persists, central banks were forced to announce further rises to interest rates in March.

Coupled with the collapse of Silicon Valley Bank, it has been an uncertain few weeks in the world economy.

As an investor, remember that volatility in the markets is normal. Take a long-term view of your portfolio’s performance and focus on your overall goals rather than short-term market movements.

Here are some of the factors that affected markets in March 2023.

UK

After hitting a new record high in February 2023, the FTSE 100 fell back in March. Indeed, in mid-March, the index suffered its worst day of trading since the start of the Covid-19 pandemic.

Overshadowing the spring Budget and sparked by fears over the health of the global banking sector, the FTSE 100 closed 292.66 points lower – around 3.8% – on 15 March.

In a Budget the chancellor called “a plan for growth”, the key announcements included:

• An extension of the Energy Price Guarantee scheme until the end of June 2023
• The removal of the pensions Lifetime Allowance (LTA) tax charge from 2023/24, with plans to abolish the LTA in a future Finance Bill
• A year-long extension to the 5p cut to fuel duty on petrol and diesel, due to end in April
• Rises in various pension allowances to encourage more tax-efficient retirement saving
• Plans to create a dozen new investment zones that could become “12 potential Canary Wharfs”
• A policy of “full capital expensing”, initially for the next three years, which will allow firms to write off all investment against their tax bills.

While the UK remains the only country among the G7 major economies that has yet to fully recover its lost output during the Covid-19 pandemic, it is defying predictions of a recession.

The UK economy grew by 0.3% in January with the largest contributions to growth coming from education, transport and storage, and arts, entertainment and recreation activities, all of which have rebounded after falls in December 2022.

Inflation unexpectedly rose in the year to February 2022, with the Office for National Statistics reporting that rises in restaurant and cafe, food, and clothing costs pushed the annual rate up to 10.4%.

This led to the Bank of England increasing the base interest rate for the 11th consecutive time, to 4.25%.

Europe

Recession fears continue in the eurozone, with GDP growth revised down to 0.0% in the fourth quarter. Household consumption in the fourth quarter of 2022 saw the largest decline since the start of the eurozone in 1999, with the exception of during the Covid-19 pandemic.

Headline inflation in the eurozone remains high – it stood at 8.5% in February – and this led the European Central Bank (ECB) to increase interest rates by 0.5 percentage points in March. This pushes the bank’s main rate up to 3.5%, while the rate paid on eurozone bank deposits left at the ECB increases to 3%.

Christine Lagarde, the president of the ECB, said the central bank would treat the heightened tensions in financial markets separately from its strategy for bringing down inflation.

As with the leading UK and US indices, the STOXX 600 index fell in the aftermath of the SVB crisis, and has remained uncertain due to ongoing economic concerns.

US

The economic headlines in the US in March were dominated by the collapse of Silicon Valley Bank (SVB) – the country’s 16th largest bank.

Since the pandemic began, SVB had been buying lots of what are often considered “safe” assets such as US Treasury bonds and government-backed mortgage bonds. When interest rates started to rise sharply, their fixed interest payments didn’t keep up with rising rates.

Those assets were then no longer worth what SVB paid for them, and the bank was sitting on more than $17 billion in potential losses on those assets as of the end of last year.

In early March, SVB then faced a wave of $42 billion of deposit withdrawal requests. As it wasn’t able to raise the cash it needed to cover the outflows, regulators were forced to step in and close the bank.

While both the US and UK governments ensured that customers of the stricken bank were protected, it has raised fears of another global banking crisis. Indeed, Credit Suisse, one of the world’s oldest banks, was bought by rival UBS in a Swiss government-backed deal in March after regulators worked frantically to secure a deal for the loss-making bank.

Fears of another banking crisis have led to volatility in US markets, with some economists modestly lowering their forecasts for economic growth this year because of the SVB crisis as smaller banks restrict lending in an already weak environment.

Inflation in the US fell to 6% in February 2023, down from an annual rate of 6.4% in January and significantly lower than the 9.1% peak of inflation seen in June 2022.

Despite the uncertainty in the markets, the Fed raised interest rates by 0.25 percentage points in March, taking the upper limit of US interest rates to 5%, the highest level since 2007.

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.

A strong financial plan will help you to stay on course to meet your long-term goals, as you navigate your way through life towards your eventual retirement. The aim is that when that day arrives, you’ll be in a position to live the kind of lifestyle you desire.

It can be easy to focus on the financial aspects of your retirement and lose track of what that life will actually entail. After possibly spending decades of your life working on your career, you might find yourself a little lost when your days are suddenly filled with free time.

One of the many lessons we can learn from the world’s “blue zones” – the regions in which people have the longest life expectancies and tend to live healthy, active lives throughout their 80s and 90s – is the concept of “purpose”.

This notion takes many forms. In two of the blue zones, they have words that conceptualise this idea. In Nicoya they call it “plan de vida” and in Okinawa “ikigai”, both roughly translating as “why I wake up in the morning”.

Having a positive mindset and things to do with your days can benefit your emotional wellbeing during retirement.

Read on to discover six ways you can keep yourself active in both mind and body, and ensure you get the most out of your retirement years.

1. Consider embracing your creative side and taking up an artistic hobby

According to AgeUK, one of the many unexpected outcomes of retirement is the sudden loss of identity. You might find yourself feeling emotionally drained, isolated, and unsure of how to fill your time.

Picking up a creative hobby could be a potential solution. It might not have been something you considered in the past, but it could benefit your mental health. You could try:

• Painting
• Writing poetry
• Photography
• Learning an instrument
• Acting

The Mental Health Foundation champions arts as a way for people, especially those later in life, to overcome isolation and rebuild social connections.

You don’t have to discover your inner Van Gogh or Brando. Simply taking the time to switch off and pursue something creative can help your mind stay active and healthy.

2. Unleash your “green fingers” and adopt gardening as part of your daily routine

The blue zones teach us many lessons about how to go about later life. In all five of these regions, exercise is built into daily routines, rather than as a dedicated goal.

People in these zones typically don’t play physical sports or hit the gym on a daily basis. Instead, they allow physical activity to naturally feature throughout their days.

One of the ways they do this is by tending to their land. Gardening not only keeps your body active as you shovel, water, plant, and oversee your grounds, but can also benefit your diet and your mind.

Fresh vegetables, fruit and herbs can do wonders for your health, so why not consider growing them yourself in your garden?

It’s also great for your mental health and could help you unwind.

3. Become a leader in your local community

Taking an active role in your local community can do wonders for your health and emotional wellbeing.

You can not only leave your mark on other people’s lives and build upon your legacy, but also foster new connections and friendships that might open up all sorts of new avenues of interest for you to pursue during your retirement.

Community engagement can take many forms. You might decide to help with programmes for young people, coach a sports team, help with a charity, or support efforts to revitalise your local area.

4. Take the time to exercise your mind and body

As part of continuing globalisation, Asian exercise and mindfulness concepts have slowly filtered over to the West.

You will probably be familiar with yoga, meditation, and perhaps even t’ai chi. Once seen as hobbies of the free-spirited fringes of society, they have become increasingly mainstream.

The benefits of these activities aren’t just physical, but also mental.

Stress is well-known to be one of the leading contributors to heart disease and other life-threatening ailments. Staying active in a way that not only keeps your body healthy but also your mind could mean you get the most out of retirement.

5. Reflect on your life and write down your story

The idea of writing your memoirs might be daunting, but it can be an excellent way to acknowledge your achievements and reflect on your favourite memories.

The exercise helps keep your mind active. It is also an opportunity for you to share your story with your loved ones and descendants.

You don’t need to write your magnum opus and seek out a publishing deal. You can simply use it as a means for your children, grandchildren, or great-grandchildren to get to know you better.

6. Stay productive with a part-time job

It might seem counterproductive to take on a job when you’ve only just retired. But part-time work can be very beneficial for maintaining a structure in your daily life.

It can also help with giving you purpose and a challenge that will keep you active and feeling productive.

This can take many forms; you might opt to take up consultancy for your old profession or look into a teaching position. Otherwise, you might want to turn a long-gestating idea into reality and start up a new business.

The new tax year has only just started. Yet, making the most of your allowances now, rather than waiting until March 2024, could make sense. Read on to find out why.

When a new tax year starts on 6 April, many allowances reset, such as the:

• ISA allowance
• Pension Annual Allowance
• Capital Gains Tax annual exempt amount
• Dividend Allowance

Using allowances could reduce your tax liability and improve your long-term financial security. So, they should be part of your financial plan.

In the past, you may have waited until the end of the tax year to calculate how much of your allowances you’ve used and then potentially made the most of remaining allowances. However, taking some time to assess how you’ll use appropriate allowances now could be useful – here are four reasons why.

1. Avoid making last-minute decisions

If you wait until the end of the tax year, you may find you need to make decisions quickly. It could mean you overlook potential opportunities or choose an option that isn’t right for you. By going through your allowances now, you can give yourself plenty of time to understand how your decisions could affect your short- and long-term finances.

Making use of allowances now also means you don’t have to worry about delays and a looming deadline. 

2. Benefit from an extra 12 months of returns or interest

Do you want to boost your savings or investments over 2023/24? Thinking about how allowances could help you reach your goal now could mean you benefit from an extra 12 months of interest or returns.

The ISA allowance, for instance, allows you to save or invest up to £20,000 tax-efficiently in the 2023/24 tax year. You don’t need to pay Income Tax on interest or Capital Gains Tax (CGT) on returns if your assets are held in an ISA. As a result, they could form an essential part of your financial plan.

Analysis from Hargreaves Lansdown has highlighted that when you deposit money in a Stocks and Shares ISA could affect the value.

If you invested £5,000 each tax year in the UK stock market between 1999 and 2022, you’d be more than £10,000 better off if you invested at the start of each tax year, rather than waiting until the end. So, if you have a lump sum to invest, you may want to consider using your allowance now.

Source: Hargreaves Lansdown

Of course, investment returns cannot be guaranteed, and you should remember that markets experience volatility. As a result, investing with a long-term time frame and choosing investments that suit your risk profile is essential.

Similarly, if you use your ISA allowance to boost savings, doing so sooner means you’ll likely benefit from more interest. As interest rates have increased over the last year, it’s worth checking if your Cash ISA rate is still competitive. Transferring your ISA to a provider with a higher interest rate could boost your savings even more.   

3. You can spread out contributions over the tax year

If you don’t have a lump sum available to use your allowances now, a plan at the start of the year can still be valuable. It means you could spread out contributions and make it part of your budget.

Let’s say you want to add an extra £5,000 to your pension from your take-home pay this tax year. Rather than depositing a lump sum, setting a direct debit of around £420 each month can ensure you stay on track as it will become part of your regular outgoings.

As your pension is usually invested, spreading out contributions throughout the year means you’ll be investing at different points of the market cycle. This can help balance market volatility, as investing when the market is high could be offset by a contribution that’s made when it’s low.

The same principle also applies if you’re investing in other ways too, such as through a Stocks and Shares ISA.

4. Ensure your decisions reflect your goals throughout the year

Setting out how you want to use tax breaks this year can help ensure your financial decisions reflect wider goals. Reviewing your finances now is an opportunity to see what steps you can take to move closer to aspirations like retiring early, purchasing property, or lending financial support to loved ones.

Contact us to talk about your plan for the tax year ahead

If you want to discuss how you could make use of 2023/24 tax allowances now or throughout the year, please contact us. We can help you understand which allowances could support your long-term goals.

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.

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. 

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.

The benefits of having a will in place are well-documented, although if you don’t have a will, or haven’t updated it in some time, you’re not alone. A recent survey from MoneyAge has found that 51% of adults in the UK currently don’t have a will in place.

Of those with a will, 43% haven’t updated it since it was first written.

A will can be a fantastic way to:

• Allocate your assets to loved ones
• Nominate legal guardians for your children
• Divide your estate as painlessly as possible
• Reduce your liability for Inheritance Tax.

If you don’t have an up-to-date will, there’s a chance your loved ones won’t receive the wealth you intended for them. So, continue reading to discover why having an up-to-date will is vital.

It ensures your assets pass to the people you want them to

Perhaps the most obvious benefit of having an up-to-date will in place is knowing your assets will pass to the people you wish.

If you die without a will in place, or “intestate”, you’ll have no say over how your assets will be distributed. Instead, the laws of intestacy will dictate how your estate is divided.

This is especially important if you have a partner and you’re not married. While your blood relatives and/or spouse will usually inherit according to the laws of intestacy, a cohabiting partner and any stepchildren you have will likely not.  

Your will is the perfect way to dictate where you want your money to go after you pass away, giving your loved ones more financial security after you die.

It could mean less hassle for your family

After you die, your family will need to administer your estate. This can be a stressful process, especially while they’re dealing with the grief of your passing. So, having a will in place that clearly outlines your wishes may make it easier for your family to make any necessary arrangements.

For instance, if you don’t have a will, dividing your estate could be incredibly stressful and time-consuming, and it could take longer for your assets to pass to your loved ones.

It could help avoid disputes

As mentioned, it’s a common occurrence for families to experience periods of heightened stress and grief after you die. As such, the dividing of an estate can be the perfect storm of stress and emotion, which can, unfortunately, often lead to disputes.

Indeed, data from IBB Law shows that 75% of people are likely to experience a will or inheritance dispute case at some point in their life.

Disputes can have lasting adverse effects on your family – they could permanently damage relationships or even cause schisms in the family, not to mention costing thousands in legal fees.

With a will in place, these disputes could potentially be avoided, making the process of dividing your estate as simple and painless as possible.

Even if you already have a will, you’ll need to update it regularly as your circumstances change. For example, if you remarry your existing will is automatically revoked. So, if you don’t write a new one, your estate could pass to the “wrong” people and cause arguments or disputes.

You can assign guardians for your children

While you may think your will is only used to allocate your estate, it can also be used to express your wishes about what will happen to your children after you die.

If your dependents are below the age of 18, you can use your will to nominate legal guardians. If you don’t nominate a guardian in your will, a family court would need to decide what happens to your children and their care could be left in the hands of a person you wouldn’t have chosen.

Even if you do have a will, it may be worth updating it regularly to fit your current circumstances – for example, as you have more children.

You could potentially mitigate an Inheritance Tax bill

When you die, the total value of your estate will dictate the amount of Inheritance Tax (IHT) that will be payable.

As of the 2023/24 tax year, the IHT threshold stands at £325,000, though you can also benefit from the additional £175,000 “residence nil-rate band” if you leave your home to a direct descendant, such as a child or grandchild.

Then, anything left in your estate above this threshold will typically be subject to the standard IHT rate of 40%.

With a well-written will, you can often reduce your IHT liability. For example, suppose you specify that you want your home left to a direct lineal descendant. In this case, you could make full use of the additional residence nil-rate band, substantially reducing the IHT liability of your estate.

Wills can help you to make your estate plan as tax-efficient as possible.

It ensures that nothing is left behind

After you die, there will be plenty of paperwork relating to your finances that your family will need to deal with.

If you haven’t clearly outlined your assets in your will, your family could miss something they didn’t know existed, such as a previous pension, an old savings account, or even any protection you had.

When your will is in place, you can clearly identify your assets and distribute them to your beneficiaries. This could ensure that your family doesn’t miss out on any of your hard-earned wealth.

This is another great reason to update your will regularly. If you have acquired assets later in life and fail to update your will to include them, they could be missed out entirely when your estate is divided.

It can give you peace of mind

Another beneficial reason to have a will in place is that it gives you the peace of mind that your affairs will be dealt with in the way you desire after you die. You can rest assured that your loved ones’ future is secure, and you can start living in the present.

For instance, if you die without a will, the intestacy laws will rule on issues ranging from the guardianship of your children to the dividing of your estate. If you write a will now, you can regain control and relax, knowing that the right people will receive your assets after you die.

Please note

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

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

Do you find pension information confusing? You’re not alone; 50% of people in the UK describe the information they receive about their pension as “overwhelming”, according to a Standard Life study.

Fortunately, there are places where you can seek guidance or advice. The survey found 83% of people think financial advisers offer useful support.

If you’re not sure if your pension is on the right track, a financial planner could help put your mind at ease. Here are four reasons why.

1. A financial planner can cut through jargon

Pension information can be filled with jargon that makes it difficult to understand exactly what it is saying.

From “annuities” to the “Tapered Annual Allowance”, a financial planner could help you cut through confusing terms and take the time to explain what they mean and, more importantly, whether they’re relevant to you.

Having someone you can turn to for answers that you know you can rely on is invaluable.

2. A financial planner can help you make sense of pension statements

Your pension provider will provide a statement each year; this may come in the post or be online.

It will cover pension contributions, including your own, those made by your employer, and tax relief. These figures can help you understand how much is going into your pension.

As your pension will usually be invested, the statement is likely to include investment performance too. As investments can be volatile, it can be difficult to know whether your investments are performing well or not, and it’s also essential to ensure they match your risk profile and goals. As financial planners, we can help you get to grips with pension investments.

In addition, your pension statement will include a forecast. This is a projection based on assumptions that the provider makes, including your retirement date and investment performance, so it’s not a guarantee.

The pension forecast can be incredibly useful when thinking about how your savings will add up to deliver a retirement income. But understanding if it’s “enough” is another challenge.

3. A financial planner can help you calculate if you’re saving “enough”

Calculating how much you should be saving into your pension can be complex. There’s no one-size-fits-all figure, so you’ll need to consider your circumstances and goals to understand what is “enough”.

Not only will you need to calculate potential investment returns, but also the income you need to create the retirement lifestyle you want. As a result, setting a pension target often means pulling together different pieces of information, from life expectancy to other assets you’ll use to create an income, like savings.

A financial plan can help you understand what is “enough” for you to retire on, and, importantly, the steps you can take to reach the goal. With a clear blueprint, you’re more likely to retire with enough savings to live the lifestyle you want.

4. A financial planner can create a plan that means you can enjoy retirement

A financial plan can help you get the most out of your money, and allow you to really enjoy your retirement.

There’s strong evidence that taking control of your finances could boost your wellbeing. In fact, 93% of people that planned for retirement with an income of less than £20,000 say they are enjoying life after giving up work. However, only 66% of people that didn’t plan could say the same.

Despite this, 7 in 10 people are doing very little, if anything, to plan for their retirement.

So, arranging a meeting now to create a plan for when you give up work means you’re more likely to enjoy the next stage of your life. It’s never too soon to start retirement planning, and doing so earlier could grant you more freedom in the future.

Contact us to talk about your pension

If you want to talk about your pension and start thinking about what it means for your retirement, please contact us. We’ll work with you so you can have confidence in your retirement savings and look forward to the milestone.

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 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.