What Is Estate Planning?

Estate Planning

Whether you realise it or not, you have an estate. Lots of people are unaware of what makes up an estate, and therefore are under the impression that they don’t have one. However, most people do in fact have one even if it is a small one. Have you ever heard of estate planning? If not that’s okay, because we are going to be discussing it down below.

What Is An Estate?

An estate is made up of everything you own. This could be a house, any sort of real estate, a car, personal possessions, any investments, life insurance policies and so on. There are a number of contributing factors that all add up to make your estate and whether it is large or small, it still exists.

What Is Estate Planning?

To put it simply, it is planning for what happens once you die. After you pass away, you want to know that all of your stuff is being passed on to those who you love. Each person gets what you have decided, and you need to make it clear who gets what of your estate. After reading this explanation of estate planning, this might be ringing a bell in your mind that you have heard this before. That is because many people talk about this through their life, what happens to their items when they are no longer around. If you want to have some control over what happens to your estate, it is vital that you start your estate planning soon.

Who Needs Estate Planning?

Everyone. Too many people think that this is only for people who are in their elder years, or in their retirement stage. You never know when your time is going to come, and you need to have planned for it no matter what age you are. It is also the case that you should be estate planning even if you only have a small estate. It is important that you have a plan in place for your death and that is why as soon as you have something to give, you should start your estate planning process.

What Does Estate Planning Include?

Your house, your car, your savings, your investments, your personal items and everything like this all needs to be taken into consideration. But, this is not the extent of it. You also need to be leaving instructions for cases such as care for if you become disabled, an inheritance manager if younger children are involved and a life insurance policy to take care of your loved ones. Further still, you need to consider looking after people in the long term, especially those who are not very good with money.

This should be changed and updated constantly depending on how your relationships and your health evolve. This should not be a one-time thing that you do and then forget about, it should be a process.

We hope that you have found this article helpful, and now have a better understanding of what estate planning is and why you need it.

The Financial Conduct Authority does not regulate Estate Planning.

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What Is A Pension Review?

Pension Review

Are you starting to prepare for your retirement? You may wish to complete a pension review. A pension review is typically an essential part of retirement planning and allows you to make sure that you will be secure financially when you lose your permanent income.

What Is A Pension Review?

Simply put, a pension review is a way to check how well your pension is performing. Is it generating the level of finances that you had hoped it would and are you on track for the level of pension you wanted by the time you retire?

Pension reviews can include various different pieces of information including:

  • Total annual fee
  • Level of growth
  • Type of investments
  • Ability to provide the right retirement

As you can see, a pension review will essentially show you whether changes need to be made during the pension planning stage. For instance, if the type of investments that you are currently using is not providing the level of growth that you need, then it may be worth looking at different investment options that could generate better results.

Who Completes A Pension Review?

A pension review can either be completed by an individual or a company working for an individual. Ultimately, this will be to make sure that the pension is providing the benefits that they require.

What Can You Learn from a Pension Review?

You can learn a lot from a pension review. The best and simplest way to look at this is through an example. Remember, you can start a pension review at any age, assuming you are already planning your pension. For instance, someone at thirty could theoretically conduct a review. This would provide them with a great start for their pension.

They might find that their annual fees are quite low and that they are currently involved with low-risk investments. However, by moving to high-risk investments, they would have lower annual fees. There could also be a good chance that the funds would grow at a faster rate too.

I had a private pension not working for me and an old works pension that was frozen. Tim put them both together and got them working for me. It is working well, just wish I met Tim 20 years ago. He is doing a great job. Tim has been my adviser for 4 years and my pension has increased by almost 50%. Thanks Tim.    Janice P, Birmingham – Client Since 2015

A pension review does not mean that you have to make these changes. It simply provides you or the company with all the information so that an informed decision can be made

Other Benefits of a Pension Review

There are various benefits of a pension review that you should keep in mind. First, you might have your pension spread across several different plans. With a pension review, you can begin the process of transferring all your pensions to a single provider. This will mean that keeping track of your pension and your finances will be easier. You’ll be able to see more clearly whether your pension is on target.

You might also find that your current pension plan is simply outdated and not in line with the economy of today. With a pension review you or the company can work to change your pension and ensure that it provides the benefits that you need. Ultimately, you can make sure that it is performing at the level you want or at least, increase the chances that it will.

If you would like an Independent Financial Advisor to do a pension review for you, please do get in contact with us through our contact page. 

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

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How Does Investment Planning Work?

Investment Planning

If you are keen to protect the health of your finances, you need to think in terms of investment planning. Investment planning is an essential part of financial planning. Indeed, it is near impossible to have one without the other. Let’s look at what this is and why it is important.

What Is Investment Planning?

This is the basic process of matching financial objectives and indeed goals with the resources you have. It takes into account your budget and the levels of finance that you have to put towards potential investments. It will typically be completed with a financial planner who will help you lay out your finances correctly to reach your expectations.

To begin with investment planning, you first must formulate your unique set of goals and objectives. Only then you will be able to make sure that you can match your resources to these.

Once you have laid out your objectives, you can then start to look at the different investments available to you. There are various types of investments to consider including property, bonds, equities and of course cash.

Each individual investment option has different characteristics. An investment plan will ensure that these characteristics are always taken into consideration before you move forward.

How Does Investment Planning Work?

When you communicate with a financial planner, they will help you match the investments available to your goals and also your resources. Be aware that as your circumstances change, so to could the essential elements of your financial plan. Investment planning will also usually ensure that you are meeting standard regulations that could be relevant to your individual choices.

Benefits And Goals of Investment Planning

The ultimate goal of investment planning is to make sure that you do gain financial rewards and a solid ROI from every investment. However, investment planning also provides numerous other benefits that you should not dismiss.

For instance, with investment planning, you can gain access to an increased cash flow. Investment planning will typically involve monitoring all expenses as well as spending planning. It will ensure that you are budgeting correctly and not overspending in any areas. As well as this, you will also be managing your income. You will have a greater understanding of exactly how much needs to be used for tax payments and manage monthly or even annual expenditures far more effectively.

Investment planning can also ensure a higher quality of life and standard of living. You will be successful saving and investing money in the right areas. This will provide you with financial safety if, for instance, the economy suffers a downturn. You will have various incomes that you will be able to fall back on. You will also be guided on the right investments that will provide the greatest benefits to your financial wellbeing.

Investment planning is typically not a one-day solution. Instead, you will gain a relationship with a financial advisor and constantly be provided with the expertise you need to make the right decisions with your investments. You will also be able to create and develop a full plan customised specifically to suit your requirements.

if you are looking for help with investment planning, please do get in touch by using our contact page

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.

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What does an Independent Financial Adviser Do?

What does an Independent Financial Adviser Do

Financial advice can be invaluable. With the right financial advice, you can decide how to manage your money and fulfill your goals, whether you’re trying to save, invest or even decide how to spend your money. You might be unsure about whether you should be using a financial adviser or even what a financial adviser does. An independent financial adviser can give you advice across a range of products, with no attachment to any particular bank or financial institution. If you’re looking into financial planning, you’re thinking about how to afford retirement or perhaps you want to make arrangements for your estate, a financial adviser can help you.

When to Use a Financial Adviser

There are many times in life when you can benefit from the help of a financial adviser. A financial adviser can help you to make financial decisions both big and small so that you can manage your money and get more from it. Some things that you might want to use a financial adviser for include:

  • Financial planning – creating a financial plan for the future to make the most of your money
  • Pension advice – get the right advice to choose or change your pension and prepare for retirement
  • Investment planning – receive help on making the best investment decisions for your financial goals
  • Estate planning – preparing your finances for after your death to protect your family and more

Independent Advice

When you work with an independent financial adviser, you get independent advice, as the name suggests. Other financial advisers may be restricted, meaning that they can only offer you advice on a limited selection of financial products. Some might be restricted to certain products, while some might only be able to recommend products from a particular provider. An independent financial adviser can help you with anything and everything.

Save Time and Money

Using an independent financial adviser delivers several benefits. You could save yourself a lot of time, money and headaches by getting professional advice from someone who can understand and help you to reach your financial goals. Choosing financial products and financial planning can get complicated and confusing. Even if you are well-versed in financial matters, you can find it difficult to use your head and not let your emotions drive your decisions. Independent financial advisers not only offer advice independent of any financial providers, but they also help to give you an objective opinion on your financial decisions.

Different Ways to Receive Financial Advice

There are different ways that you might receive financial advice from an independent financial adviser. Some advisers will meet with you in person, while others provide advice over the phone or even via email. You can also receive a report of your current financial situation with advice for actions that you can take. Before you choose which financial adviser is for you, make sure you check how you will receive their advice.

Taking advantage of the services offered by an independent financial adviser will help you to plan your finances for a brighter future.

If you are looking to use a financial advisor, please do contact us through our website, email contact@tkvfm.co.uk or call 01384 671947.

Investments carry risk. 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 Estate Planning.

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How Can I Reduce the Amount of Tax I Pay on My Investments?

How Can I Reduce the Amount of Tax I Pay on My Investments?

Everyone’s searching for ways to pay as little tax as possible in order to keep more of their hard-earned money and investments are often a great place to start. So in this post, we’re going to guide you through a couple of strategies to help you pay less on your own investments.

Transfer Your Investments to a Spouse

One strategy that you can use to lower the amount of tax you pay on investments is to transfer them to a spouse. Married couples often have their investments and savings in joint names, but there are times when shifting investments around could actually be more tax-efficient.

However, this does mean that the investments will be in your spouse’s name and they will be given full control of your money, so don’t do this unless you are extremely confident and trust your spouse with that responsibility.

Let’s use an example.

Mary works at a well-paying job that puts her into a higher tax rate band, but she also invests her money into shares. She wants to dispose of her shares in a company, resulting in a potential capital gain of £40,000.

Since she’s in a higher rate tax band, this subjects her to 20% tax on her capital gains. After the allowance of £11,700 during the 2018/2019 tax period is dedicated, the chargeable gain is £28,300. This means she has to pay £5,660 in capital gains tax due to her higher tax band.

Client 1

Gain £40,000.00
Allowance £11,700.00
Chargeable Gain £28,300.00
CGT Rate 20%
CGT Charge £5,660.00

That’s quite a hefty amount of tax to pay, so let’s imagine she uses this strategy and transferred half of her shares to a spouse who is a basic rate taxpayer.

This means that the chargeable gains would be £8,300 for both her and her spouse after allowance deductions on capital gains tax. This means Mary would only be paying 20% of £8,300 in capital gains tax and her spouse would be paying 10% of £8,300. This is a total of £2,490 – a saving of £3,170.

Client 1 Client 2
Gain £20,000.00 £20,000.00
Allowance £11,700.00 £11,700.00
Chargeable Gain £8,300.00 £8,300.00
CGT Rate 20% 10%
CGT Charge £1,660.00 £830.00
Saving £3,170.00

Even if her spouse was also in a higher rate tax band, it would still be £3,320 total and a saving of £2,340.

Client 1 Client 2
Gain £20,000.00 £20,000.00
Allowance £11,700.00 £11,700.00
Chargeable Gain £8,300.00 £8,300.00
CGT Rate 20% 20%
CGT Charge £1,660.00 £1,660.00
Saving £2,340.00

It’s worth mentioning that you can also transfer up to 10% of your personal income tax allowance to a spouse. This is known as Marriage Allowance and you must earn a certain amount of money in order to be eligible.

Using Annual Individual Savings Accounts Allowance

The ISA allowance amount has been frozen at £20,000 since the 2018/2019 tax year, meaning you can shelter money from investments in ISAs. This means that your potential returns could be completely free of income tax and capital gains tax.

You’ll be able to split your ISA allowance between a Stocks and Shares ISA or a Cash ISA, but you can also just use a single one if you prefer. If you invest outside of an ISA, you will need to pay tax if your dividends go over the £2,000 dividend allowance.

Personal Savings Allowance

There’s also an additional £1,000 in personal savings allowance whereas higher rate taxpayers have a £500 allowance. However, you won’t be eligible for this if you are an additional rate taxpayer.

If you are looking to get help with your investments please do contact us here ar TKV Financial Management Ltd through our website, email contact@tkvfm.co.uk or call 01384 671947.

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. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.

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Who Can Do A Pension Review

Who Can Do a Pension Review?

Retirement planning has become a major financial responsibility that many of us are trying to tackle as early as possible. It’s becoming clear that State Pensions will no longer be able to provide us with anything but the bare necessities, and many people find this to be unacceptable after working for a large majority of their lives. As a result, people are starting to take their pension into their own hands by conducting regular reviews to ensure that they are optimising the amount of money being stored in it.

But who exactly performs a pension review for you, and what does it entail?

What does a pension review involve?

Pension reviews typically involve examining your pension to see how healthy it is. This usually involves checking the growth of your pension, finding lost and neglected pensions that you have forgotten about from previous employers, and optimising the pension with different investments. It will also check that your pension fund will be able to provide you with a healthy retirement.

Here are some examples of pension reviews and why they’re useful:

A 55-year-old person could have changed jobs several times and accumulated several pensions, resulting in multiple annual fees of differing rates. A pension review could identify the exact rates and there could be a possibility of consolidating these funds in order to reduce the amount paid in fees.

Another example could be a 60-year-old that wants to access their pension pot. A review might show that the pot hasn’t grown as expected due to a high amount of fees being paid. As a result, withdrawing from the pot might not be a desirable option, but the pension review could look for alternatives.

Who performs a pension review?

Pension reviews are performed by financial advisors from companies that are regulated by the Financial Conduct Authority (FCA). The FCA’s website has an approved list of authorised companies that are permitted to perform your pension review.

It’s important not to trust any companies that cold contact you via phone, email, SMS or with other similar methods. Pension review scams attempt to persuade you to move your pension pot into a higher risk scheme that will likely take your money and run with it. They will claim they are approved by the FCA or may state that approval is not required since they are not the ones offering the advice.

How do I request a pension review?

A pension review can be requested at any time, but it’s important to seek out a financial adviser that works for a firm that is approved by the FCA to offer financial advice. The FCA has a register on its website that is a public record of firms, individuals and other bodies that are or have been regulated by the PRA and/or FCA. This will ensure that the financial advice you receive is impartial. The FCA register can be found at https://register.fca.org.uk/.

Pension reviews are important especially if you’re uncertain about the situation of your current pension, but it’s vital that you seek out financial advice from experts that are approved to do so.

If you are looking to get a pension review done, please do contact us through our website, email contact@tkvfm.co.uk or call 01384 671947

A pension is a long-term investment. 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 performance.

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