Can your money work harder in 2020?

Can your money work harder in 2020

Now could be the perfect time to consider whether your savings, investments and pensions are working as hard for you as they could with three resolutions for the New Year.

  1. Pay Less tax

Less tax means higher returns for you.  You could pay less tax with a carefully constructed financial plan and by making the most of your tax allowances.

  1. Seek better returns with investment choices tailored to you

Much has happened in 2019 and your investments may look different from a year ago. You could now be taking too much risk, or holding poor-performing investments.  Independent Investment Advice can help you make sure your investments are positioned to seek the best returns for your financial goals.

  1. Make it easier for yourself

With a bit of help you can make your investments easier to look after and reduce your paperwork.  This New Year could be an excellent time to bring all your pensions, ISA’s and investments together. Saving you time, effort and paperwork.  We recommend you seek independent financial advice before moving any type of pension plan or investment product.

The New Year is always a good time to seek advice to improve potential returns and to pay less tax.  We can help you do this.

Contact us today on 01384 671947 for advice.

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The value of investments can fall as well as rise, and you may not get back as much as you put in. Please note tax rules may change.and benefits depend on individual circumstances.

 

What Are The Benefits of Financial Planning?

What are the benefits of Financial Planning?

Have you ever thought about financial planning? Creating a financial plan for yourself should be essential, and more people need to start doing it. Contrary to what you might imagine, it’s not just a case of creating a weekly budget and restricting your spending.

With proper financial planning, you can see your short and long term financial goals, which helps you develop a plan to ensure you achieve them.

As such, here are the main benefits that financial planning will bring to your life:

Become more tax efficient

Being tax efficient means that you only spend as much money on tax as you need. With financial planning, you will lower your tax expenditure and limit the cash leaving your accounts.

This is done by looking for tax-efficient investment options that ensure you aren’t paying income tax on certain earnings – like ISAs. By being more tax efficient, it ultimately allows you to keep more of the money that you earn every year.

Manage your income to save more money

One of the vital benefits of a financial plan is that it lets you get more out of your income. You can manage the money you make and understand how much of it needs to go on essential payments.

This provides you with an insight into how much money is left over to put in savings accounts or investments. As such, you waste less money, save more, and start living a more comfortable life.

Be more financially stable

Following on from the point above, putting together a financial plan will enable you to be more financially stable. Your plan should include introducing regular and consistent savings, placed into a savings account each month and by doing so will ensure that you always have these funds to fall back on if ever you need them, and this could be as a reward each year of a nice holiday or indeed should an emergency arise at any time then these savings will cushion the impact and enable you to avoid falling into debt.

Reach your specific goals

It was mentioned in the introduction, and the whole purpose of financial planning is to help you achieve specific financial goals. If you’re hoping to save up for a new car or house, then it’s crucial to have a financial plan in place that allows you to reach this aim in as little time as possible.

If you’ve got a more personal goal of earning a specific amount of money through investments, financial planning creates an environment where you will achieve this. Plans are tailored to each individual based on your long and short-term goals. If there’s something you want to aim for – financially speaking – then you need a plan to create the framework for you to follow.

There’s no denying that financial planning presents some very impressive benefits. Anyone that wants to gain control of their finances and make the most out of their money needs to consider it.

Consulting with financial advisors and developing a financial plan will help you achieve stability and security. It’s an excellent way to help improve your current financial situation while also setting you up for a stronger future as well.

Levels of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor.

If you are looking for an Independent Financial Advisor, please do get in touch.

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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 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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Do you know the value of your pension pot?

Do you know the value of your pension pot?

The new pension freedoms place even greater responsibility on individuals to take control of their own finances. Since April 2015, individuals have been able to spend their accumulated pension savings in way that suits them.

Yet despite this most radical of changes to pensions in a generation, we regularly see people who do not know the value of their pension savings.

If you don’t know the size of your pension pot, you should initially speak to your pension provider and get a statement.  Taking control and knowing what you have can help you plan to make your savings work harder for you in retirement.

The new pension freedoms place a huge amount of responsibility on people to manage their own financial affairs and to make choices that will impact their standard of living in retirement.

This is not something that people can be complacent about.  So if you have any doubt, I recommend that you seek proper independent financial advice before making any decisions.

If you need our help finding out about your pension – Contact Us on 01384 671947.

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The value of your investment can go down as well as up and you may not get back the full amount you invested.