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Monthly Archives :

October 2021


Scared of running out of money in retirement?

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Scared-of-running-out-of-money-in-retirementAre you scared of running out of money in retirement?

It has been well recognised that many are simply not saving enough into their pension pots for retirement. To avoid unwanted stress if you are planning to retire, you need to be absolutely sure your money is going to go the distance. Concerns you may have are:

  • Do I have enough to retire?
  • Will I run out of money, and when?
  • How can I guarantee the kind of retirement lifestyle I want?

Firstly, it is never too early to start saving for your future, and the earlier you start the better.

Pensions have a tremendous compound effect so the basic principle is the more you put in, the more you get out. The way you accumulate your retirement money and how you use it during your retirement will have a big impact on how long it will last – and also the amount of tax you pay.

Here are just some of the steps you can take to improve your pension pot size:

Making the most of pension tax relief

The Government encourages you to save for your retirement by giving you tax relief on pension contributions. This means some of the money that you would have paid in tax on your earnings goes into your pension pot rather than to the government. Tax relief has the effect of reducing your tax bill and/or increasing your pension fund. For a more detailed look at pension tax relief visit https://www.gov.uk/tax-on-your-private-pension/pension-tax-relief

Know your state pension

The State Pension is a weekly payment from the Government that you can receive once you reach State Pension age (66). The current state pension amount is £179.60 a week (2021-22), but you may get more or less than this.

To qualify for the State Pension you need a minimum of 10 years of National Insurance contributions. To find out more on how much State Pension you could receive and when visit https://www.gov.uk/check-state-pension

Investing during retirement

When it comes to investing during retirement, it is important not to view your portfolio with an element of finality. Your investment risk profile and strategy will almost certainly need to adjust to look at ways of making your money work as hard as possible, but with a view to generating earnings to boost your retirement income.

This is a time to look at how balanced your investments are and whether you are exposed to more risk than you are comfortable with. It is a time to review all your investments and decide how much you can afford to withdraw each year and whether this balances with your needs.

Let us take the fear out of your retirement planning?

It is always important to think ahead to retirement and not rush into making life-changing financial decisions. We can help you determine which retirement income approaches may be best for you based on your personal needs and goals. If you are scared of running out of money in retirement and would like to talk to us about your retirement requirements, then please get in touch.

Focus on your future fair

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We were delighted to support the careers fair at Lawnswood School last week, as part of our wider socially responsible programme of creating opportunities for younger people.

The school were offering a range of career ideas for 12 to 18 year olds, encouraging them to learn about different job roles and types of companies.

The pupils were full of great questions about the financial services industry and the range of job roles available. We have already offered, and are looking forward to one student joining us for a week of on-site work experience!

To keep up to date on other events and causes the Social Responsibility Team support, visit our news and insights page.

Unlimited futures for all young women

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We are always looking for ways we can enhance people’s lives as a financial services provider, an employer and as a community-based business. The Social Responsibility Team involves dedicated Ellis Bates employees who have a passion for the environment and for supporting local communities. One of our Team Leaders, Bethany Irwin, is actively involved with and recently attended an event run by The Girls’ Network:

Q. Tell us a little bit about what The Girls’ Network is all about?

The Girls Network is a national charity started in 2013 by two teachers who had a desire to empower their female students and to teach them they can achieve their goals. The charity is split across 8 regions and has recently expanded further in the North East to include Northumberland and County Durham. For more information on The Girls’ Network, please visit https://www.thegirlsnetwork.org.uk/

Q. What made you want to become involved in The Girls’ Network?

I’ve always been extremely passionate about helping young people in the local community. I have led a Brownie unit for over 7 years – the same one I attended when I was younger and noticed the difference just one conversation can make to the girls’ outlook on what they can achieve.  I have previously volunteered for a non-profit called ‘This is Creative Enterprise’, a fantastic organisation that specialise in mentoring students on creative careers and providing them with real-life experiences.

I wanted others to know that there is more than just one route to a successful career. Therefore, I contacted local schools and colleges to arrange to go in and talk about my own experiences and to answer any questions about what apprenticeships are and how they work.

Q. How can people support The Girls’ Network?

There are numerous ways people can get involved. They can donate, take part in a sporting event, fundraise, become a corporate partner or become a mentor. Mentoring is the route I am currently undertaking so I can share my own experience and skills with a girl that might not benefit from this support otherwise.

Q. What does the mentoring process look like?

Once you have enrolled and are accepted onto the programme you attend training sessions and an information evening. Once you have passed a DBS (Disclosure and Barring Service) check you can attend a matching event at the local school, where every mentor can speak with each of the girls. Once you have been matched to someone there are 10 mentoring sessions, 1 per month, and the programme concludes with a celebration event. There is the opportunity to join the Ambassador programme where you can continue to mentor on an on-going basis.

Q. What was the reason for the event you recently attended and what did you take away from it?

The event was an insightful and inspiring session comprising of talks from experienced mentors who had been through the process already.

There was one particularly moving story by a lady who talked about how much she learned from her mentee and how she had been made redundant within the last year. Instead of withdrawing from the programme entirely, she founded her own company, Positive About Inclusion, an equality, diversity and inclusion consultancy.

The rest of the session covered discussions with others at different stages of the process. There were those who loved mentoring so much they were now veterans, holding a wealth of useful information.

I think it is important for young people to not have the added pressure of worrying about what others think about them. The fact that everyone is so different is amazing and there is so much you can learn from others. If I could give any advice to my younger self the message I would express is that the most important thing is just be yourself!

Q. What is next in your journey with The Girls’ Network?

I’m currently waiting for my DBS check to come back. Once that has been completed, I can choose a school and attend a match event to meet my first mentee.

To keep up to date on other events and causes the Social Responsibility Team support, visit our news and insights page.

Would you love to retire early?

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Craving a better work/life balance? Wanting to spend more time with family and friends? Yearning to get on with that bucket list that you haven’t quite finished or even started?

You are not alone. The pandemic has many of us look at life in a different manner, having been forced off that daily treadmill and now we just don’t want to get back on.

You may now be one of the many actively seeking early retirement options.

The key is to be in a financial position to enjoy this time of your life, while, making sure you don’t outlive your retirement savings. Whilst creating a retirement plan so you don’t run out of money sounds like an obvious choice, it may not be as straightforward as it sounds. For all you cannot know exactly how much money you will spend when you retire, you can know what your lifestyle costs are now to know if you are financially ready to retire.

Equally, with living costs rising and interest rates fluctuating, you may also need to factor in or consider generating additional income, to boost your state and private pensions.

Grandparents with family on beach after thinking they would love to retire earlyWould you love to retire early

The key imperative is to create a plan and to ask a qualified Financial Adviser to develop a living cash flow model for you, so you can see exactly the impact of income vs expenditure, where the income gaps are and put an action plan in place together.

Here at Ellis Bates, we will discuss the best ways to bring your early retirement plans to life. We want you to be able to enjoy the things in life that mean the most to you and your family.

So, we are ready when you are, to listen to you and help you plan.

Make your money work harder

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Has lockdown lifted your savings?

A lot of people have shifted the way they think about life due to Covid-19. Families have focused on staying healthy and having a healthier work/life balance. These are now top of their priorities to protect themselves and their loved ones.

Some have saved that little bit extra during lockdown by not going out or on holiday. Investing your money wisely could be an option for you to consider. Investments could grow your capital and income and generate another income stream.

There is a lot of nervousness around finance and investments as a result of Covid-19. Key questions you may be considering are:

  • How will the markets perform with interest rate fluctuations?
  • How will I gain a good return?
  • How will we protect ourselves and our families against an uncertain future?

A regulated Financial Adviser can help answer these questions and guide you on a suitable investment strategy, based on your individual situation.

You work hard for your money and your money should work hard for you. 

Ellis Bates has a holistic view of financial planning. We understand that no two people have identical financial circumstances. We create a tailored plan that meets your individual needs and investment objectives. Your goal could be to make your cash work harder, fund education fees, contribute to a wedding, buy a new property or save for retirement.

If you like the idea of investing but are unsure where to start, get in touch for a free initial consultation today.

Evolution of ESG Investing

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Changing Face of Investor Ethics and Behaviours

The coronavirus (COVID-19) pandemic has prompted an evolution of ESG investing. It has caused the desire to move into ethical and sustainable investing for more than half (51%) of advised UK adults, according a new report[1]. And while the trend is common across the generations, it’s Millennials who are leading the charge.

The report, which looks at intergenerational planning and wealth transfer between advised families amid the financial volatility and insecurity of the pandemic, found that 61% now care more about the environment and the planet than they did before the pandemic.

Financial Returns with a Positive Contribution

Investing sustainably means putting your money to work on issues ranging from adapting to and mitigating climate change, and improving working conditions and diversity, to tackling inequality. More and more, investors want to invest sustainably and they want to combine investing for a financial return with a positive contribution to the environment, society or both.

More than a quarter (26%) of respondents admit they are more concerned than they’ve ever been. One in five (21%) say they are more worried now that they have children and grandchildren.

Appetite for Sustainable Investments

The pandemic has undoubtedly fuelled investor demand for sustainable investing and this is trickling down through the generations – 60% of Millennials, 44% of Gen X and 35% of Baby Boomers confirmed that COVID-19 has increased their appetite for sustainable investments. And many investors go further: 45% confirmed that since the pandemic they now only want to invest in sustainable companies and funds.

Despite the desire for ethical and sustainable investing, more than a third (36%) of UK adults admit they actually have no idea what their current investments – including workplace and private pensions – are invested in, as they have little to no control.

Beginning an ‘Investment Journey’

For many, the crisis has shifted their financial priorities, prompting more to seek professional financial advice. One in two (53%) respondents said they had either already sought advice – or were planning to because of the pandemic. And just over one in five (21%) were seeking advice to begin their ‘investment journey’, potentially fuelled by individuals who had built up savings not having the traditional outlets for spending their income.

With £5.5 trillion in personal wealth due to be passed to the next generation by 2047[2], the role that intergenerational planning advice played prior to the pandemic was already a significant one. Yet the crisis has reframed financial priorities. Not just for those in later life with Inheritance Tax liabilities, but for all generations.

Planet, Environment and Society

Once perhaps viewed as a fad, ESG investing is becoming normalised, making it a fundamental building block within intergenerational financial planning. It also enables parents to leave their children more than just a financial legacy in terms of planet, environment and society.

Two in five advised clients surveyed confirmed they expect to increase the amount they invest in Environmental, Social and Governance (ESG) investments over the next five years.

If you would like to discuss  more on socially responsible investing, please get in touch.

Source data:
[1] Research was carried out by Opinium for Prudential UK & Europe, part of M&G plc, among a UK representative sample of 1,000 advised families. The study was completed in November 2020.
[2] Kings Court Trust’s Inheritance Economy Research Papers: Passing on the Pounds and Wealth Transfer in the UK. Research conducted by the Centre for Economics and Business Research.

National Work Life Week

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The Importance of Work-Life Balance

National Work Life Week runs from 11 – 15 October and has been successfully operating for the past 10 years, courtesy of national charity Working Families. It is an opportunity for employers and employees to focus on good work-life balance and wellbeing at work.

Research carried out by Working Families for their #FlexTheUK campaign has shown 69% of working parents would choose to apply for a new job advertised as flexible over one that isn’t, and 83% want employers to do more to create flexible jobs without waiting for the government to intervene.

Covid-19 has had many unsettling effects, not only on the financial environment but also on emotional and physical wellbeing. This has forced many to reflect on their own work-life balance and personal health.

Supporting a Great Work-Life Balance

As part of our commitment to supporting employees at Ellis Bates, we have taken a variety of measures to help improve their time both at work and home, this includes:

  • Offering a combination of home and office working.
  • Providing wellbeing modules on our internal training system, Evolve.
  • Access to the Employee Assistance Programme which is available 24 hours 7 days a week, providing debt counselling, legal and financial advice and up to six sessions per year of confidential face-to-face counselling.
  • Publishing links through our internal intranet to charities and websites such as Mind, Citizen’s Advice, British Nutrition Foundation and Carers UK.
  • Access to financial wellbeing benefits such as the company sick pay scheme, health insurance and life insurance.
  • Help with the cost of a basic eye test due to working with Display Screen Equipment and a contribution towards the cost of lenses.
  • Three employee-based teams:-
    – Colleague Engagement, to help with ongoing suggestions and improvements to our work-life balance.
    – Social Responsibility, to encourage engagement and a sense of achievement in helping others with our volunteering and charitable support programmes.
    – Client Engagement, to bring life to our core mission of ‘enhancing people’s lives’ at every stage of the client’s journey.

For more information on our employee wellbeing and the company benefits we offer visit https://www.ellisbates.com/careers/

Building a better world

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Time for pensions to contribute towards building a better world

New landmark report from the United Nations on the state of climate science.

As we have been witnessing in recent years and months, climate changes are occurring in every region and globally. A new landmark report from the United Nations on the state of climate science has highlighted modern society’s continued dependence on fossil fuels, which is warming the world at a pace that is unprecedented in the past 2,000 years. Its effects are already apparent as record droughts, wildfires and floods devastate communities worldwide.

Put simply, net zero refers to the balance between the amount of greenhouse gas produced and the amount removed from the atmosphere. We reach net zero when the amount we add is no more than the amount taken away. The UK became the world’s first major economy to set a target of being net zero by 2050.

Greenhouse Gas

The Intergovernmental Panel on Climate Change report published on 9 August emphasises there is still time to act, but it must happen immediately. Limiting climate change demands strong and sustained reductions in greenhouse gas emissions from human activities such as burning fossil fuels.

One of the main areas where change can make a significant difference to all of our futures is how and where our pension money is invested. But the facts are, if money is invested in a standard, default pension, it could be doing more harm than good.

Climate Change

Your pension is more than just a retirement fund, it can also contribute towards building a better world. However, one in four pension scheme members have never even heard of net zero, while three in ten can’t explain or understand the connection with their pension pots and climate change.

According to new research[1], almost nine in ten Defined Contribution (DC) scheme members were not aware of the importance of having their pension scheme aligned with a net zero goal. But, encouragingly, members were overwhelmingly in favour of their pensions moving towards net zero when the term was explained.

Collective Power

The survey also uncovered that one in four (25%) further three in ten (31%) have heard of it but could not say what it means. In fact, 70% of DC members prefer remaining invested and using their collective power to engage with companies to align their businesses with global climate change efforts, or prepare them to thrive in a low-carbon economy.

Two-thirds (64%) of all members have become more concerned about the impact of human actions on the planet following the COVID-19 crisis. Rather than deprioritising environmental issues in favour of immediate concerns, the pandemic has thrust them into sharper focus as members explicitly linked them with their current situation.

Performance Impact

Millennials are the strongest supporters of engagement, with 79% of them supporting providers’ stewardship activities. Their attitude also helps to explain their change of heart towards outright divestment. While still the most radical cohort of the three generations on this issue, half of Millennial members would consider divesting if it had no performance impact, while only two in five of them would divest no matter what.

Baby Boomers are twice as likely as Millennials to want to keep pensions as diversified as possible, even if that meant investing in fossil fuels, but the proportion has dropped from 30% to 25% over the past 18 months. The research also shows that more than a fifth of ‘Boomers’ (22%) are now happy to divest into a greener pension regardless of performance. This follows increased coverage of climate in the mainstream media and real concern about the impact of climate change on their children and grandchildren.

Younger Views

Millennial men are the most likely to want a net zero pension irrespective of the impact on financial performance. The proportion who feel this way (40%) is double that of the group showing the least interest, female Baby Boomers (20%).

As Baby Boomers move steadily into their retirement years, the balance of power will shift as Gen X starts to hold the largest share of pension assets. Younger views will be an  important factor in shaping the direction of travel over the next ten years. This new cohort can no longer be assumed to be simply chasing maximum financial returns regardless of the impact on the planet.

What good could your money do?

Humanity has its work cut out to create solutions to the many complex problems of the 21st century. We help you assess the risks – and opportunities – posed by companies’ and countries’ performance in critical areas, such as climate change, executive remuneration, and diversity and inclusion. Please speak to us for further information – we look forward to hearing from you.

Source data: [1] Survey conducted in April 2021, based on a population of 3,056 adults currently contributing to a workplace pension. Legal & General Investment Management published 14 June 2021.

A pension is a long-term investment not normally accessible until age 55 (57 from April 2028 unless you have a plan with a protected pension age). The value of your investments (and any income from them) can go down as well as up 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. 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. You should seek advice to understand your options at retirement.
Collectively Reducing our Carbon Footprint for World Habitat Day

World Habitat Day

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Collectively reducing our carbon footprint

World Habitat Day was created by the United Nations to reflect on the state of our habitats, and on the basic right of all to adequate shelter. This year’s theme is “accelerating urban action for a carbon-free world”. Cities are accountable for approximately 70 percent of global carbon dioxide emissions through areas such as transport, buildings, energy and waste management.

World Habitat Day began in 1985 and is held on the first Monday of October every year. It explores how national, regional and local governments, communities, and all other relevant stakeholders can collectively work together for the future of the human habitat.

The United Nations have identified 17 goals to transform our world for the better, called the Sustainable Development Goals. Essentially, these goals provide a ‘to-do’ list for all governments, companies and other organisations in addressing a range of global challenges. The Race to Zero campaign is set to achieve net zero carbon emissions by 2050 at the latest.

Socially Responsible Investing

A step towards helping you reduce your carbon footprint could include contemplating Socially Responsible Investing (SRI). SRI is an investment strategy that seeks to consider both financial return and sustainable social/environmental good to bring about positive social change, without causing harm to current or future generations.

SRI has always been at the heart of our investment philosophy at Ellis Bates, since we launched our first SRI portfolio in 2008. We screen and choose all our funds, not just SRI portfolios, against a range of Environmental, Social and Governance (ESG) factors so you can see the impact your investments are having.

If you would like to know more about Socially Responsible Investing then please do get in touch to see how we can help you to reduce your own carbon footprint.

A hard-earned retirement

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Helping you look forward to a hard-earned retirement – with a whole of life financial plan

A potential client approached Ellis Bates with several clear goals in mind, namely to ensure she had cash to live on for her foreseeable future, that she invest and grow her long term savings and to mitigate her inheritance tax liability, and so protecting her daughter’s future position.

During the meeting, the client outlined that she wanted to focus on and achieve long-term growth on her cash savings, in excess of inflation but also needed access to and control over these liquid funds. The Adviser recommended she invest recent monies received from the sale of a buy to let property in an ISA and GIA as step one to achieve a much better return on her cash.

With regards to understanding the structure of inheritance tax (IHT), the Adviser worked with the client to fully understand all her property and land assets, including her smallholding of over 25 acres and for example the agricultural property relief available on her renting out of these facilities.

The Adviser recommended the client boost her pension funds with a SIPP (Self Invested Personal Pension), so that funds were moved outside of her estate from an IHT unfriendly environment to help further reduce her IHT liability.

Together they agreed an affordable monthly figure and budget (based on typical income and expenditure) and established a Whole of Life plan written in trust (within said budget), to provide her daughter with a tax-free lump sum to pay HMRC in relation to her future inheritance tax bill.

The client will meet with her Adviser every year, to review progressively moving more funds across to the SIPP and ISA each new tax year for example, thus utilising her annual pension allowance to boost her pension pot and progressively reduce her future IHT liability, whilst also being in control of all of her funds.

Like all clients, circumstances change and annual reviews of estate planning are vital, and this particular client is due to inherit further substantial funds from her mother at some point but will be able to seek expert and timely advice.

Following on from all the discussions, planning and reporting, our client expressed just how much happier she was and how in control of her finances she felt, giving her peace of mind that any complications due to future inheritance or unforeseen changes will be reviewed and assessed with her Adviser and she will be given options and solutions to meet her future needs.

She feels more relaxed about current income, her family’s financial future and is looking forward to a hard-earned retirement.