Reasons to Seek Financial Advice in 2020

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By Craig Croft-Rayner

Now that January is out of the way and the evenings are getting lighter, most people turn their minds to spring cleaning. In our case, prospective new clients are looking at their finances, perhaps thinking of retirement or worrying about inheritance tax. It costs nothing to have a conversation with us to see if you are likely to benefit from our expert advice. Here are a few reasons someone might want to consider seeking our advice;

1. Pension Consolidation

You have lots of different pension pots with different amounts all invested in different funds. This can make it hard to keep track of your likely pension income and make it hard to plan for retirement. There may be advantages in consolidating a number of different pension pots. We will review the individual pension plans to see if that could be the case for you

First of all, it is important to know what your existing pensions are. Some might have enhanced benefits which, if transferred, would be lost. It is also important to consider any exit charges from your current plans.

We can review all your existing pensions and provide a full report along with a specific, tailored recommendation based on your retirement goals.

2. Planning for Retirement

You’ve worked hard all your life and built up pension savings. How do these pension savings translate into retirement income? What is the best and most tax efficient way to use your pension? After the pension freedoms reform in 2014, retirees now have lots of different options when it comes to retirement income. We will have detailed discussions with you and devise an income plan which can be monitored and, if necessary, adjusted over time.

We work with you to regularly review your pension savings and investments to ensure that you won’t run out of income in retirement.

3. Inheritance Tax Planning

The inheritance tax rate is current 40% of the value of a person’s estate over £325,000, or £650,000 for a married couple. This threshold will continue up until at least the end of April 2021.

The average inheritance tax bill in the UK is £179,000, according to a recent article in the Financial Times. By planning now, you could save your loved ones most, or all of the tax bill. There are different ways of managing an inheritance tax burden on your loved ones and Milestone can provide advice on the various options available, based on your needs ensuring that more of your estate is left to those intended.

The first step is to consider whether you will be caught by inheritance tax. We can obtain details of the total value of your estate, speak to you about how you want to leave your estate to loved ones and make specific recommendations.

4. You’ve Received a Sum of Money

It’s great to come into some cash, however it can be daunting knowing how best to use a lump sum and whether there are any tax implications. It depends on your own objectives, but usually you would want a lump sum to grow as much as possible and reduce any tax that might be payable.

The HMRC is constantly changing tax rules and any benefits would depend on your circumstances and other assets. We can make sure that you make the most of any tax reliefs. We’ll also consider whether you want an income from the lump sum, growth or a bit of both and make tailored recommendations for you.

5. Personal Biases and Behavioural Coaching

You might already be a keen investor, managing your own money. You’re keeping costs down – which is great, but each of us has our own personal biases and investors are prone to make knee jerk decisions, which could cost in the long term. You might have heard of the technology stock bubble of early 2000s and have avoided technology shares since – if you have you would have potentially missed out on some years of significant growth that technology shares have seen since the crash.

Contrary to popular belief, more often than not, selling shares in a falling market is probably the worst thing you could do. The stock markets ebb and flow like the tides, by selling shares in a falling market you are locking in the loss and not allowing an opportunity for the loss to recover.

We can help you mitigate the risk of your investments by creating a well-balanced and diversified portfolio tailored to you, which aims for sensible growth, and peace of mind that you always have an expert hand on the wheel.

This article is provided for information purposes only. It is not an offer to sell, or a solicitation of an offer to buy, any security, nor enter into any agreement or contract with Milestone Financial Planning. Please note that all investment information provided is indicative, subject to market conditions and availability, and not intended as individual advice.

Not all financial products are suitable for all investors. Before entering into any transaction you should take steps to ensure that you understand and have made an independent assessment of the suitability and appropriateness of the transaction into which you are entering and the nature and extent of your exposure to risk of loss in light of your own objectives, financial and operational resources and other relevant circumstances. You should make such independent investigations and take such professional financial advice as you consider necessary or appropriate for such purpose. Past performance is not necessarily an indicator for future success.