Economic Insights

EB Retirement Income Strategies (EBRIS)

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EB Retirement Income Strategies (EBRIS)

In 2023, in response to client demand, we developed our EB Retirement Income Strategies (EBRIS). EBRIS is a combination of our Income and Growth portfolios:

Income Portfolios Growth Portfolios

Every fund focuses on a yield return.

A ‘slow and steady’ approach, usually with lower volatility.

Often more mature businesses than high growth options.

Return some profits immediately through dividends.

Mix of near- and long-term rewards with income and some capital growth.

More focus on capital appreciation in 5-10 years or more.

Businesses that can grow quicker by retaining profits.

Less emphasis on near-term rewards than long-term potential.

Will naturally hold more volatile investments.

No constraint on mandate of funds, other than overall return of the portfolio.

Returns can come from anywhere.

Our default EBRIS approach is an equal (i.e. 50/50) split between the Income and Growth portfolios. Depending on your individual circumstances and preferences, together we can personalise elements of the strategy – for example:

  • A greater allocation to one portfolio (e.g. Income or Growth) over the other.
  • Replacing the Growth allocation with our Socially Responsible Investing (SRI), Passive or Multi-Asset portfolio.
  • Investing in EBRIS alongside one of our Product Panel solutions.

Why the Standardised Approach?

Research shows that many individuals have not saved sufficiently for their retirement, so they are becoming increasingly reliant on stock market returns to maintain their lifestyle after they finish working. However, volatility in the markets post-COVID has raised concern over expectations of market returns in the years ahead. This leaves investors vulnerable to market shocks.

In these conditions, single solutions can present a heightened risk to investors, due to the possibility of a single solution focusing on a particular investment style.

EBRIS allocates investments across different asset Investment, investment styles, geographic regions, industries/sectors, fund houses and individual companies, among other categories, which helps to mitigate risk. At the same time, we believe that the combination of Income and Growth assets will give a higher probability of meeting your income requirements over the course of retirement, and avoid running out of savings (based on a 4% income requirement).

That said, there will be clear situations where a different mix of strategies, or even a single strategy, will be appropriate for you because of your unique circumstances. If you want to find out more about what would be the best solution for you, then please get in touch with your Financial Advisor.

Ethical Investing

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By Kim Holding, Portfolio Manager

The world of ethical, responsible and sustainable investing is very fast moving and becoming increasingly complex. Not a day seems to go by without a new regulation or piece of legislation being proposed or enacted, to further promote sustainable practices, and hold businesses accountable for their impact on the environment and society.

How, then, can investors successfully navigate the landscape, and make sense of the information overload?

At Ellis Bates, our Investment Team has been managing Socially Responsible Investing (SRI) portfolios since 2008, demonstrating our deep roots in this area. To keep up to date with developments and filter out funds most worthy of our clients’ investment and trust, our investment process has naturally evolved over the years, more recently with the development of our SRI Framework. This Framework is a highly detailed tool that allows us to carry out an in-depth analysis on many factors including a fund’s alignment with the latest standards, investment philosophy, experience of the management team and engagement policies, to ensure the fund really is as ‘good’ as it says it is. As a living, breathing document, the Framework has undergone many developments and refinements since its implementation, and further revisions will be necessary as the landscape continues to evolve.

Utilising our Framework has allowed us to pinpoint several funds requiring further assessment. The most effective approach to clarify this information is to engage in discussions with the management teams – our well-established relationships with these teams significantly improves our access to valuable insights, enables constructive dialogues, and keeps us informed about their strategies and decision-making processes.

By way of illustration: this summer, our Framework brought attention to a fund in our SRI portfolios that exhibited notable exposure to UK water companies. Investors are no doubt aware that these companies have faced scrutiny in recent months due to their involvement in polluting rivers with sewage, and we recognise that addressing such negative environmental impacts is of utmost importance.

From our interactions with the fund’s management team, we established their beliefs and perspectives: a combination of events including outdated infrastructure (much of which dates to the Victorian era) and population growth (thus putting increased demand on this infrastructure) have contributed to these events. This can raise questions among observers as to why infrastructure dates back several decades, when investment in the industry has doubled since privatisation in 1989[1].

One area of criticism is that directors have allowed larger pay-outs to investors than on infrastructure investment. In economics, capitalism and socialism are opposing schools of thought: when capitalism is left unchecked, this can lead to inequalities and social injustices stemming from firms’ pursuit of profit. On the other hand, an anti-profit culture can result in a lack of dynamism in an economy, while failure by directors to make investor payments could violate their legal obligations under the Companies Act (which says, among other things, that they must act in shareholders’ best interests).

When capitalism or socialism is taken to an extreme, from an economic perspective, it can become necessary to restore balance. Indeed, water companies, regulators and government are responding positively to feedback from the Industry and Regulators Committee[2] who, following an investigation, have recommended measures to tackle these concerns. One example is providing new powers to regulator Ofwat, to closely monitor investment by the industry, and to hold firms to account[3].

Meanwhile, the fund’s management team is engaging with water companies to issue ‘use of proceeds’ blue bonds, where money raised is dedicated to specific projects such as upgrading infrastructure. The team – and we – continue to monitor the situation regarding pollution, while holding what they consider to be the most impactful names within the water sector, all of which should improve water security, and deliver better environmental and social outcomes.

We are reassured by the amount of time and research that the team has clearly dedicated to understanding this issue. Further, they have experience of engaging with companies on Environmental, Social and Governance (ESG) matters, thus fostering positive change and promoting sustainability.

Is it time to build a more ethical portfolio?

As awareness and interest in ESG factors continue to grow, the trend towards responsible investing will only strengthen. Starting a portfolio and filling it with environmentally, socially and governance-minded investments doesn’t need to be difficult. To find out more, please speak to us today.

[1] Ofwat, March 2022. Investment in the water industry. Retrieved from (Accessed: August 2023)
[2] UK Parliament, March 2023. Failures of regulators, water companies and Government leaving public and environment in the mire. Retrieved from (Accessed: August 2023)
[3] GOV.UK, March 2023. Government supports new Ofwat powers to tackle water company dividends. Retrieved from (Accessed: August 2023)

Consumer Duty: Principle 12

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The Consumer Duty legislation has been put in place to focus on ensuring fair value, providing products and services designed to meet client needs, delivering high levels of client service and improving consumer confidence and client understanding.

Client Principle

  • A firm must act to deliver good outcomes for clients

Cross-cutting rules

  • Firms must act in good faith
  • Firms must avoid foreseeable harm
  • Firms must enable and support clients to pursue their financial objectives

Four outcomes

  • Products and services
  • Price and value
  • Client understanding
  • Client support

For more information on the legislative backdrop to the new regulations, watch our consumer duty video by Director of Financial Planning, Ben Clapham.

What is Consumer Duty?

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Director of Financial Planning, Ben Clapham, explains the legislative backdrop to the new consumer duty regulations that were introduced by the Financial Conduct Authority (FCA) in August 2023.

Consumer Duty

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by Ben Clapham, Director of Financial Planning

The Consumer Duty is a package of measures introduced by the Financial Conduct Authority (FCA) and comprises of a new Consumer Principle (Principle 12) that provides a high-level expectation of conduct and associated outcomes and a definitive set of overarching cross-cutting rules which develop and amplify the standards of conduct the FCA expects under the Consumer Principle.

Consumer Principle

States that a company must act to deliver good outcomes for all retail clients.

Cross-cutting rules

The cross-cutting rules strengthen the standards of conduct the FCA expect under the Consumer Principle. They develop the FCA’s overarching objectives for firm behaviour through three common themes applying across all areas of a firm’s conduct. They are also intended to inform and help firms interpret the four outcomes. The cross-cutting rules require firms to:

  1. Act in good faith toward retail customers
  2. Avoid foreseeable harm to retail customers
  3. Enable and support retail customers to pursue their financial objectives

The four outcomes

The four outcomes represent the key elements of the firm-client relationship, with the behaviour and actions of firms in relation to each of these outcomes being instrumental in enabling clients to meet their financial needs and improve their financial wellbeing.

  1. Products and services
  2. Price and value
  3. Consumer understanding
  4. Consumer support

The FCA have placed an expectation that all firms within the financial services sector will:

  • Review their current approaches to bring them in line with the Consumer Duty requirements
  • Ensure they can evidence outcomes
  • Make sure any outcomes are reviewed and monitored on an ongoing basis
  • Ensure any issues identified are remedied or mitigated

For the full regulation see

At Ellis Bates our mission is to enhance people’s lives by delivering peace of mind, enabling financial freedom and helping clients achieve their financial goals. We take great pride in leading the way in having these four key outcomes already well and truly embedded in how we look after our clients, both old and new,  and continue to work relentlessly on our client experience and outcomes.

Over the last 12 months in the build up to the introduction of the legislation, we have worked closely with the FCA at each stage and worked through each of the firm expectations above. Our teams have collaborated to check and re-check our existing systems and used the new legislation as an opportunity to think even more holistically on how we can improve our client journey and experience still further.

I am very proud of the enthusiasm and energy our teams have shown in embracing Consumer Duty, both as a platform to showcase the good outcomes we consistently deliver already but in challenging ourselves to go even further to achieve the exceptional outcomes our clients readily feedback through the Vouchedfor platform

Spring Budget Pensions

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2023 Spring Budget on Pensions

Jeremy Hunt delivered his first budget as Chancellor of the Exchequer on 15th March and announced the following changes to pension legislation. 

Pension Lifetime Allowance

The Lifetime Allowance charge will be removed from April 2023 before it is abolished entirely from April 2024.

Pension Annual Allowance

The Annual Allowance will be raised to £60,000.

Spring Budget 2023

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How will the Spring Budget impact pensions?

Jeremy Hunt delivered his first budget as Chancellor of the Exchequer on 15th March, announcing key changes to pension legislation for the 2023/24 tax year.

Changes to Pension Lifetime Allowance

The headline measure was the change Pension Lifetime Allowance. Currently, the Lifetime Allowance stands at £1.0731m, this is the total amount of pension savings you can build up without incurring a tax charge over your lifetime.

If you exceed this figure, tax is charged at 25% if this excess is drawn as income, and 55% if this is taken as a lump sum.  

From 6th April 2023 the Pension Lifetime Allowance charge will be reduced to 0%, with the government intending to potentially scrap this Lifetime Allowance altogether. This will dramatically simplify pension savings for many people with assets close to the Lifetime Allowance amount.  

As part of these changes the maximum tax-free cash lump sum individuals can continue to draw will be a quarter of the current Lifetime Allowance, which equates to £268,275.  

Changes to Annual Allowances

The Chancellor has also announced key changes to the Pension Annual Allowance. The Annual Allowance currently stands at £40,000 or 100% of earnings. This allowance is to be increased to £60,000 or 100% of earnings, whichever id the greater.  

Whilst this will not affect the majority of the UK tax paying population, it does impact high earners and those who are more able to contribute larger sums into their pension savings. Increasing the Pension Annual Allowance is a move by the government towards simplifying pensions, making them appealing and attractive to the working population and is hoping to entice higher earners back to work or to stay in employment longer.  

Along with the Pension Annual Allowance, the Chancellor has also increased the Money Purchase Annual Allowance which currently stands at £4000 to £10,000. The Money Purchase Annual Allowance is generally triggered for those who have accessed their pensions flexibly, and their Annual Allowance is reduced from £40,000 to £4,000. From the 6th April 2023 this will increase to £10,000 per year.  

These significant changes made by the Chancellor in the Spring Budget have come under immediate scrutiny from opposition parties and already there have been rumours circulating that potential new Governments could well reverse these changes.

However, it is important to plan your finances based on current legislation and not hold off on making important financial decisions.

Your Ellis Bates Financial Adviser can guide you through any impact the Spring Budget may have had on your pension. If you are not currently an Ellis Bates client and are looking to review your pension in light of the Spring Budget, please do get in contact with us for an initial discussion on your particular circumstances. 

Cost of living crisis

UK Cost of Living Crisis

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Cost of living crisisFunding the retirement lifestyle you want vs the cost of living: time to get your retirement plans in motion!

One of the most common concerns among those approaching retirement is whether they will have enough money to last them with only 25% of retirees feel very confident they’ve saved enough for retirement.

The cost of living crisis

As food prices continue to soar and petrol costs reach an all-time high in the UK, the rising cost of living is without doubt having an impact on many people’s financial plans, both short and long term.

If you’re approaching retirement or have already started taking money from your pension or other retirement savings, you wouldn’t be alone in feeling a little anxious about the effect the cost-of-living crisis might have on your lifestyle in retirement. While it’s impossible to predict the future with complete certainty, there are a few things you can do to feel more confident about spending your money in retirement.

Add up all sources of income

Your main source of retirement income may well be your pension plan. But when it comes to planning your finances in retirement, it’s important to think beyond this. Consider other potential sources such as Individual Savings Accounts (ISAs) and other investments, as well as any rental income you receive from rental properties you let.

Don’t forget the State Pension, which is currently £185.15 a week (£9,628 a year) for a single person with a full entitlement. Although the State Pension’s annual increase is currently below inflation, every little helps and the total of all your savings and income might add up to more than you think.

Watch out for unnecessary tax bills

Paying too much tax in retirement is a common pitfall for some retirees, and one that could be potentially avoided with having the right plans in place. If you’re already taking or plan to take income from multiple sources, you need to consider how that will be taxed. When and how you take your money can make a big difference to how much tax you pay and how long it will last. Taking money little and often could make all the difference when it comes to reducing your tax bill.

When it comes to your pension savings, you can typically take 25% tax-free from age 55 (age 57 in 2028), either in one go or spread out over a longer period. After this, any money you take from your pension savings, as well as your State Pension, is taxable just like any other income.

That means you’ll need to pay income tax on anything over your tax-free cash limit and any annual personal Income Tax allowance you get. It’s likely that the more money you take, the more tax you’ll have to pay, although how much will depend on which tax band your income falls into. So if you take all of your pension savings at once, or in big lump sums, you could be paying more tax than you need to. But by taking your pension savings over a number of years and taking just enough to stay in the lowest tax band you can, you could keep more of your money overall.

Make the most of your individual savings accounts (ISA)

Another way to avoid an unnecessary tax bill is to make the most of your ISA savings. You don’t pay tax on any investment growth or interest you earn, or on the proceeds you take from an ISA. So it’s a very tax-efficient way to save.

You could consider using any ISA savings you have first and delay accessing your pension savings, giving them more time to stay invested and potentially grow in value. Remember though, the value of all investments can go down as well as up, and you may get back less than you paid in.

Or, if you’ve already started taking an income from your pension, you could use your ISA savings to supplement that income. This could allow you to take smaller payments from your pension and avoid overpaying Income Tax on them. Getting to grips with tax implications can be a bit overwhelming as there’s a lot to consider.

Tax rules and legislation can change, and personal circumstances and where you live in the UK also have an impact on your tax treatment. On top of that, tax varies for other sources of income like property, state benefits, or even your salary if you’re planning on working in some capacity for a little longer.

Keep track of your investments

Where your money is invested could have the biggest impact on how long it will last in retirement. It’s important to regularly review your investments to make sure they remain on track and remain aligned with your plans and attitude to investment risk. For example, your pension savings may be invested in fairly high-risk funds that have the potential to grow significantly in value, but also are more likely to be impacted, particularly during periods of market volatility.

Moving to lower-risk investments means that you’re less likely to see big ups and downs in the value of your pension savings. However, if you’re relying on your pension savings to provide you with a comfortable income for the rest of your life, you also need to make sure that your investments will provide enough growth potential. This is particularly important in the current climate where your money faces the double challenge of rising inflation and potentially having to last for many years.

Want to review your retirement plans?

If you have specific questions about funding your retirement lifestyle, or if you’re feeling anxious about spending money in retirement, speak to us to discuss your options

Key Tax and Pension Changes from the Autumn Statement

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Last week Jeremy Hunt unveiled his Autumn Statement aimed at tackling inflation and stabilising UK finances. The Chancellor detailed issues such as tax, government spending and energy as part of his plan to navigate the impending recession.

Your Ellis Bates team are busy reviewing your situation given these changes and you will be discussing the implications and actions with your Financial Adviser in your next review.

If you are not currently a client with Ellis Bates and feel now is the time to discuss your tax allowance maximisation, your new CGT position and pension planning in light of these changes, please do not hesitate to book a chat as we are here to help.

Pension Changes

  • State pension triple lock has been retained meaning the state pension will rise by 10.1% in April 2023. Those on the new state pension will receive £203.85 per week (up from £185.15)
  • Pension Annual Allowance (100% of earnings or £40,000) and Pension Lifetime Allowance (£1,073,100) have both been frozen until April 2026.

Your Ellis Bates Financial Adviser will work with you to determine if you need to consider alternative ways to save towards your retirement in light of these changes at your next review.

Income Tax Changes

  • From 6th April 2023, the 45% Additional Rate of Income Tax threshold will be brought down to £125,140 (from its current rate of £150,000)
  • Income tax allowances will be frozen until April 2028 – Personal allowance will remain at £12,570 and the threshold for a higher rate of income tax (40%) will remain at £50,270

National Insurance thresholds will remain frozen until April 2028.

Inheritance Tax

The nil rate band will remain at £325,000, the residence nil-rate remains at £175,000, and the residence nil-rate band taper will still start at £2 million.

Capital Gains Tax Changes

In April 2023 Capital Gains Tax (CGT) annual exempt amount will be reduced from £12,300 to £6,000. It will be reduced further to £3,000 from April 2024

Your Ellis Bates team are busy reviewing your situation given these changes in CGT and will be in touch over the coming weeks.

There will be no change to the rate of Capital Gains Tax:

Tax Band Tax rate for Property Sale  Tax rate for other Asset
Basic Rate 18% 10%
Higher Rate 28% 20%

Stamp Duty

There will be no immediate change to Stamp Duty Land Tax (SDLT), the increases which were implemented on 23rd September 2022 (SDLT nil-rate threshold was increased from £125,000 to £250,000. The nil-rate threshold paid by first-time buyers was increased from £300,000 to £425,000) will remain until March 2025, after which the allowances will revert to their previous levels.

Are you a business owner?

If you are a business owner, a number of changes and support systems were announced:

  • Business Rates multipliers will be frozen in 2023-24 at 49.9p (small business multiplier) and 51.2p (standard multiplier)
  • A Transitional Relief scheme will be implemented to support and help up to 700,000 properties adapt to their new bills from April 2023
  • The Retail, Hospitality and Leisure relief scheme is being extended and increased from 50% to 75% for 2023-24, offering up to £110,000 per business
  • Supporting Small Business From 1st April 2023, the Supporting Small Business (SSB) scheme will cap bill increases at £50 per month (£600 per year) for the next 3 years. This will affect an estimated 80,000 properties.
  • Improvement Relief will now be introduced from April 2024 (originally intended for 2023)
  • Dividend Allowance will be reduced from £2,000 to £1,000 and reduced further, to £500, in April 2024.
  • Entrepreneurs Relief (Business Asset Disposal Relief) remains at 10% CGT if you sell all or part of your business (or its assets) on the profits you’ve made, up to £10m in total.

If you would otherwise pay higher rate CGT (20 per cent), this means you can save up to £1m in your lifetime through entrepreneurs’ relief.

If you are a business owner and an Ellis Bates client, your dedicated Financial Adviser will discuss these changes and how they may affect you and the actions needed in your next annual review meeting.

Stay updated: we update our Financial Advice hub with the latest financial news and insights, so hit the link to stay informed and up to date

If you do not currently receive financial advice from Ellis Bates, please Book a Chat to discuss this raft of tax changes and how we can help.


Top Financial Tips

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In these uncertain times, it’s more important than ever to make sure your finances are in order. We have 10 practical steps to ensure your money is working hard for you.