5 ways to look after your finances in a recession

Here are our 5 tips for taking care of your finances during a recession and possibly avoiding financial stress in the future.

1) Sort your savings:

In these days of very low interest rates (the Bank of England base rate is just 0.1% at present), it can be difficult to find a way to grow or even protect the buying power of your savings. However, you can shelter them from tax by opening an Individual Savings Account – an Isa. There are various types, the main ones being the Cash Isa, which keeps your money as cash, or a Stocks and Shares Isa, which can be slightly more risky, but with the potential for better returns. Also, if you’re prepared to lock your cash into a Fixed Rate Isa for up to 5 years, you can get an even better savings rateI

2) Be ‘pension savvy’:

Even in bleak financial times, it’s crucial to keep up our retirement savings. Remember, a pension gives you tax relief: if you’re paying basic rate tax at 20%, then for every £80 you save into your pension, HMRC tops it up by £20, making it a great option for long-term saving for retirement. The sooner you start pension saving, the longer your money has to grow. The motto is: the earlier, the better – you could reap the benefits of 40 years of growth!

3) Review fund investments:

Your financial plan is flexible, which means you can always review the funds you’re invested in. This is especially important if you’ve invested your money yourself, ie, without financial advice. That’s because, in any given year, many funds, including some of the largest, fall short of their investment targets. Your advisor can take a look inside your fund investments, and if necessary, switch you into better performing funds, ‘tweaking’ your finances to restore your money to top performance and ensuring it’s reaching its maximum potential.

4) Protect your family:

How would your loved ones fare if they were to lose your income through serious illness or even worse? Life insurance is something many of us think of when we start a family, with good reason: it can provide our dependants with financial security, or even pay off the mortgage, if the worse were to happen. Then there’s critical illness insurance, the insurance you take in case you don’t die. It can pay a once-off, tax-free lump sum if you are struck down by a serious illness such as cancer, heart attack, MS or a stroke. This would provide a financial safety net for you and your family and give you peace of mind to help you recover.

5) Take good advice:

In their report ‘What it’s Worth – Revisiting the Value of Financial Advice’, pensions company Royal London found that those who took advice were, on average, £47,706 better off when they retire. This included pensions, savings accounts and Isas, insurance products and shares investments. The rules around financial products, and pensions in particular, have never been more complex. If you want to avoid unexpected tax bills and unsuitable investments, advice has never been more necessary!

This article does not constitute financial advice, and should not form the basis for financial decisions, which should be taken only in consultation with a qualified financial adviser. The value of investments can fall as well as rise, and you may end up with less than you invested.

Ascot Wealth Management Limited is authorised and regulated by the Financial Conduct Authority reference 551744. Our registered office: Scotch Corner, London Road, Sunningdale, Ascot, Berkshire, SL5 0ER. Registered in England No. 7428363. www.old.ascotwm.com Unless otherwise stated, the information in this document was valid on 3rd February 2017. Not all the services and investments described are regulated by the Financial Conduct Authority (FCA). Tax, trust and company administration services are not authorised and regulated by the Financial Conduct Authority. The services described may not be suitable for all and you should seek appropriate advice. This document is not intended as an offer or solicitation for the purpose or sale of any financial instrument by Ascot Wealth Management Limited. The information and opinions expressed herein are considered valid at publication, but are subject to change without notice and their accuracy and completeness cannot be guaranteed. No part of this document may be reproduced in any manner without prior permission. © 2017 Ascot Wealth Management Ltd. Please note: This website uses cookies. To continue to use this website, you are giving consent to cookies being used.

October 27, 2020January 26, 2022

Could there be a link between investing and wellbeing?

Money is of course top of the list when it comes to issues most people worry about.

Whether it’s regarding short-term finances or our long-term future, financial insecurity can cause serious anxiety and low self-esteem.

But even though it often seems tempting to ignore money worries, recent research suggests that tackling the issues head-on can actually make people feel better than not doing it at all.

And by this they mean something as simple as opening an investment account.

In Blackrock’s Global Investor Pulse, which each year asks what people think and feel about their financial health, they report that once people start investing, 43% feel happier about their financial future, 36% of people have a higher feeling of wellbeing and 19% feel less stressed.

The results say this is true regardless of wealth, age, gender or life stage. Even more encouraging is that new investors say the improvement in their mood is immediate.

For those of you who already have a financial plan, this may simply be interesting to note. I’d love to know if you feel you are happier as a result of knowing that you have a plan in place. And even more interesting would be whether – as the research suggests – this feeling was immediate.

But it may be more meaningful to people you know who aren’t currently investing their money. Currently 63% of British adults hold no market-based investments at all. The reasons range from finding it too difficult to understand and feeling as if ‘investing is just for experts’.

However, now might be as good as any to enter the market for the first time. And tiny steps can have a huge impact. Even investing small amounts of money can lead to a greater return than just having it in a savings account where interest rates are at an all-time low.

Whether you are a current AWM client or someone just looking to get some advice, please do contact us by licking the button below or giving us a call on the number at the top of the page.

If you think it would be helpful for me to talk to anyone in need of a financial second option, then please pass on my details – I’d be happy to give them a call. Afterall, the results also say that 76% of investors who use a financial adviser report having a positive sense of wellbeing, and who am I to argue with that?!

September 17, 2020January 26, 2022

What is Intergenerational Planning?

Many of you will be thinking of your children’s futures alongside your own and looking for tax-efficient ways of creating a legacy.

However, as we live longer, there is often more than one generation in any one family. This means it’s worth considering how grandchildren and great grandchildren can also benefit from your estate.

This is what we mean by intergenerational planning

The standard inheritance tax rate is 40% of anything in your estate (property, possessions and money) over the £325,000 threshold. For example, if you leave behind an estate worth £500,000, the tax bill will be £70,000.

In 2018 the UK government made a record amount in inheritance tax receipts as it broke the £5billion mark for the first time.* With the right planning, you can significantly reduce your inheritance tax liability.

You can make use of tax allowances, use trusts and different types of investments, and you can also gift your money to reduce your wealth.

Trusts aren’t as complicated or costly as you may imagine, and you can still retain an element of control over your money. There are a number of trusts to choose from, from bare trusts to discounted gift trusts to loan trusts and gift trusts. The kind of trust you choose depends on what you want it to do.

However, intergenerational planning isn’t just about inheritance tax planning

With increased longevity and social change, many people are now considering ways of using their wealth to support their family during their lifetimes.

Whether it’s helping with school fees, paying for a wedding or helping grandchildren get on the property ladder, intergenerational planning is about ensuring the right amount of money goes to the right people at the right time.

Your property is another thing to consider, such as transferring it into your children’s name and paying a rent, or selling your house and gifting your children the proceeds.

The best thing to do is to start this kind of planning early

We can help you understand your options, prioritise, and to see how you might spread your wealth throughout your family in the best way possible.

We can also help you to broach the topic with your loved ones. It’s often important for families to be able to discuss their own opinions and it helps them to feel more responsible in their role as an inheritor of the family wealth.

September 16, 2020January 26, 2022

Good Debt Versus Bad Debt – Understanding The Grey Area

Debt is due for a rebrand. So often when we hear about debt in the news, it’s within the context of “bad debt” – households in over their heads with credit card bills and interest payments; students working three jobs to chip away at college loans; house-poor millennials saddled with mortgage payments because they tried to get in on the market before it moved even further from reach.

But not all debt is bad. There are ways to leverage it in order to open up economic opportunities that will advance your financial plan. The key is to learn how to talk about it and cut through the noise.

While mortgages, student loans and investing in your business are often classified as good debt, and cars, credit card debt and vacations are commonly seen as bad debt, it’s a bit more complicated than that. For instance, what if that car helps grow your business opportunities or what if you’re living beyond your means with the mortgage?

It’s time to re-calibrate the way we look at debt and see how it can be used to your advantage.

Understanding the grey area

We often look at the dividing line between the two as if it increases your net worth or has future value, it’s good debt. And if it drains your wealth and decreases your value, it’s bad debt. But this also negates the point that all debt comes at a cost and that cost of borrowing needs to be considered. Further to that, the cost of your debt should be considered in your financial plan.

Ask yourself: Are you borrowing money at the best possible rate and are you prepared if interest rates rise in the future? How will leveraging this debt improve your finances in the future? And what’s your response if things go awry?

Part of keeping good debt from turning into bad debt is stress-testing the different scenarios, knowing your comfort level, and developing a plan.

Using debt to your advantage

Our role as your financial planner is to set you up for the future, and part of that is managing debt. Together we can identify strategies that help you use debt to your advantage – from mapping out your cash flow and identify the debt problem areas to prioritising expensive delinquent accounts over lower interest and less pertinent debts. Debt can be restructured into more beneficial vessels that allow you to draw equity or consolidate the amounts you owe.

Although this may work for some, others may encounter a different situation so it’s very important to speak to us or a professional adviser regarding your debt and how to manage it effectively. Debt can also have a negative impact on your credit score which I another reason to have a professional look into your unique situation.

So don’t let debt’s bad rep get in the way of a good strategy. Talk to us about how it can fit into your plan.

September 16, 2020January 26, 2022

Your child turned 18 – What happens to their Child Trust Fund now?

This month will see the first Child Trust Funds (CTFs) turn 18 and thus reaching maturity. This means that many 18-year olds, some of whom will be heading off to university, others potentially embarking on a gap year, are about to receive full, legal entitlement over their plans.

For those lucky enough to be born between 1 September 2002 and 2 January 2011 they were enrolled in a CTF, which has since been replaced with a Junior ISA (JISA). The CTF was set up by the government to kickstart good saving habits, with every account credited with up to £500. Around 25% of these were automatically set up by HMRC if parents did not set up the account before the child’s first birthday. This has meant that there are currently 6 million young people across the UK with a CTF, however, research suggests that at least 1 million of them have either lost track or are not aware that they have one registered to their name. This means that you/your child could have a pot worth £1,000, or potentially even more if parents added additional contributions. If you think your child was entitled to a CTF they can track it here

What happens now?

If the legal owner does nothing then;

If it’s in a stocks & shares (investment) CTF, it’ll be converted to an adult stocks & shares ISA.
If it’s in a cash CTF, it’ll be converted to an adult cash ISA.

What can I do with the cash?

As stated above, if the legal owner leaves the CTF as is, it will convert in to one of two ISAs. Ultimately the proceeds of the CTF are up to the decision of the legal owner. Here we suggest some options.

Put it towards a first home

Consider opening a Lifetime ISA account. This is a special tax-free savings account which gives you a 25% bonus on up to £4,000 saved a year (so a max £1,000/year bonus). You can then use this towards buying your first home.

Invest it for a future need.

As the CTF will automatically transfer into an ISA, consider making this a Stocks and Shares ISA and investing it

Move it to a savings account.

If you wish to access the funds within two years, place the funds into an instant access cash savings account.

If you wish to discuss the best option regarding the proceeds of a Child Trust Fund, please contact your adviser.

For expert advice book your free, no-obligation meeting today.

Did you miss out on the Child Trust Fund? Why not open a Junior ISA for a loved one? You can start with as little as £10 a month. Junior ISAs attract no tax on the earnings up and you are now eligible to save up to £9,000 per year they are a great vehicle to start your young one’s savings journey. Contact your adviser today.

Source: BBC

September 8, 2020January 26, 2022

AWM Performance Monitor : August 2020

AWM Performance Monitor – August 2020

Note From The Managing Director.

The advisory portfolios had a strong August, all posting positive numbers in what was a muddling month for asset classes overall. Mid-month there was a lot to digest for investors with I would say the first signs of volatility coming back into the various markets for bonds, equities and commodities. This has split into September but comments will stay focused on this month’s overview.

The biggest battle we see currently is in the direction of inflation with mid-month deferrals of the second US stimulus bill looking like being the end of September at the earliest. This meant sell-offs in asset classes such as gold and inflation-protected bonds, Gold had reached a peak close to 2100 but has dropped and seems to be trading in a range of around 1950. We have held our overweight position as we still sit on the inflation risk fence that low long term inflation. I think this theme was somewhat reflected at month-end and I have a deeper view that as much as some sales chains, such as our own with video meetings have been officiated I see short to medium term issues with the supply of goods and this will likely lead to inflationary pressure. Just this week in the FT (Financial Times) there was a good example of this applied to a rabbit purchase. The journalist’s pet rabbit had died during the lockdown and she set out to replace it but could not find one due to the sudden demand for small pets. She ended up paying triple the standard amount to replace her furry friend. This theme resonated with me and this is why we will keep our gold overweight for the time being. There was continued out-performance in many sectors for actively managed funds and this is something adopted into thinking in the Cape Berkshire equivalents. Early October will see the realignment of these AWM portfolios to their Cape Berkshire led equivalents, performance-wise there has not been too much difference Q3 to this point.

Positives on the month were the small and midcap UK positions we hold as part of our UK allocation. The FTSE had a torrid month finishing sub 6000, at a time the Nasdaq the US tech index was running away higher. The service-based nature of the UK economy has hurt our domestic recovery but there must come a point where there are some attractive fund or investment trust-based value plays. Either way, the Merion UK Smaller Companies fund up 6.68% was a real star performer on the month. Of other note was the resignation after a long period of governance of Prime Minister Abe in Japan which we will see the fallout in the coming months. We remain underweight Japan vs benchmark, not with mass negativity but as I always remind clients the overweight’s must be funded from somewhere. Of note, we again saw a good recovery of the Indian Alquity fund where like the UK mid and small caps outperformed.

Our next note will be our quarterly update where we will look further to BREXIT and the pending US election in quarter 4. Enjoy the month.

AWM Portfolio Performance

These tables simply indicate AWM’s portfolio’s over the stated time periods up to 31/08/2020.

Market Update

Yet another very encouraging month all portfolios showing a solid performance (on average +1.43% over the month). This is greater than both the FTSE100 (returning +1.12%) and the UK Government Gilt sector (returning -3.60%). As these two benchmarks are seen as opposite ends of the risk spectrum, this gives evidence that the AWM portfolios have generated considerable risk-adjusted returns for the month.

Over a 3 month period, the advisory portfolios have returned between 5.58% and 7.77% (mean of 3.64%), largely outperforming their FTSE UK Private Investor benchmark counterparts. As I author this note, since the COVID-related portfolio lows of 23rd March, the portfolios have returned between 12.15% (AWM1) and 31.29%. This strong continuing performance beyond the initial recovery maintains our confidence in the management of the portfolios.

Click through to the performance graphs for longer-term overviews and versus world indices.

Performance Graphs

Best and Worst Performing Funds

This table simply indicates a portion of the AWM’s chosen invested funds, which are either the best performing or worst performing, over the stated time periods up to 31/08/2020.

This information is correct and up to date as of 10/09/2020.

This Performance Monitor has been created from multiple sources as well as our own views and this should not be taken as investment advice. If you require financial advice then please contact us by email or phone so that you can speak to a qualified financial adviser. Any information provided/gathered will be subject to the General Data Protection Regulation (GDPR). You may be assured that we and any company associated with Ascot Wealth Management will treat all personal data and sensitive personal data and will not process it other than for a legitimate purpose.

August 31, 2020January 26, 2022

Stamp Duty Holiday – Not just an under £500k thing!

As you may have already heard, the government has temporarily increased the stamp duty threshold to £500,000 for property purchases in England and Northern Ireland, until 31 March 2021. In other words, there will be no stamp duty charged on properties costing up to £500,000.

Some good news – statistics show that the average stamp duty bill will fall by £4,500 and nearly 90% of people will benefit by paying no stamp duty at all as a result of the stamp duty holiday. This holiday is not just applicable for purchases under £500,000. If you, for example, purchase a property for £600,000 you will only pay stamp duty on the portion above £500,000, so in this scenario £100,000.

Not only that, but those looking to purchase a buy-to-let or second home/investment property will also benefit from this payment holiday. Only 3% stamp duty is due for properties up to £500,000 (previously £125,000). So with depressed price levels vs last year, record-low borrowing costs, ability to use retirement income and a stamp duty holiday, has there been a better time for a long term property investment with a mortgage?

We have 2 in-house brokers who together with your financial adviser will help you decide if this is a good option for you. Contact us today for an obligation-free quote.

This is only for purchases that complete before 31st March 2021.

The full table is shown below.

Explore your options

August 31, 2020January 26, 2022

Meet the new faces

Meet the new faces!

We would like to introduce you to the AWM new starters. Every year we have placement students join us for the year to get experience in the industry by taking them through AWM’s proven training whilst learning the ropes in all aspects of business and how we as a company operate. Claire, Matt and even our compliance manager, Maddie, have all started their careers at AWM through the placement program. We also have people joining us in both the UK office and the SA support office which hold a more permanent role and we are delighted to welcome them to the team.

We would like to extend a warm welcome to all our new starters. It has certainly been a strange introduction to the company given the current global circumstances but the adjustment has set in and they are well on our way in learning more about the AWM. We wish them all the best in their new roles and we look forward to them growing personally and of course within Ascot Wealth Management.

August 31, 2020January 26, 2022

Have you claimed for the second self-employed support grant?

For those whose trade has been affected by the Coronavirus can now apply for the second wave of support from the government. The new Self-Employment Income Support Scheme (SEISS) will pay up to £6,750 and will be the final hand-out for those whose business has been affected due to the Coronavirus.

Businesses that have traded for all three years with profits no more than £50,000 are eligible for the scheme.

The claims window is initially open for a four-day period but anyone who thinks they may be eligible and hasn’t been contacted by HMRC has until October to make a claim.
The first grant in May saw £7.8billion in taxable grants claimed by 2.7million people.

To apply, this time around you will need to confirm your business has been affected by the virus since July 14. If you think you are eligible and have not been contacted by the HMRC, you can go online which will tell you if you are eligible. Click the button below to be redirected to the website.

Am I Eligible?

August 28, 2020January 26, 2022

Catriona’s foster dog makes her a better Financial Adviser

How Catriona’s foster dog makes her a better Financial Adviser

Today, we dive into the life of one of our superwomen Advisers, Catriona aka Cat. Cat has been a part of AWM for over 5 years now (Insert Applause) and is an important asset to the AWM Team. She is an AWM Superstar and now dog foster mum, read her article on how her Dog, Datsun, enriches her ‘work from home’ life.

Did you spot this article on the citywire website earlier this month?

Owner: Catriona McCarron, wealth manager at Ascot Wealth Management

Name of pet: Datsun

Breed: He’s a rescued Mastin cross (no idea what he’s crossed with!)

Age: 15 months

Funniest thing he’s done? We have family in Whitstable, which is along the Kent coast. We took Datsun there when the lockdown began to ease, and it was his first time seeing the sea. At first, he was really unsure about whether he should go in, but with a bit of persuasion and following us in he eventually did. When he did get in however, he decided all of the seaweed in the water needed to be back on the beach. He spent a good twenty minutes pulling it all out and dredged this small part of the Kentish coast! It was fun, until we had the job of throwing it back in…

How has your pet made you a better wealth manager? Datsun has kept me company since working from home became my norm in March. He’s made me a better wealth manager by encouraging me away from my desk at lunchtime and getting out for walks. Taking time to reflect on the day is so important, and some of my best ideas have been thought up on a lunchtime dog walk. Additionally he’s been a great tool for combating loneliness. My partner works for the NHS, so it has been business as normal since lockdown. It’s easy to find yourself talking to appliances when working alone, so at least I can talk to Datsun instead!

source: citywire.co.uk

5 ways to look after your finances in a recession

1) Sort your savings:​

2) Be ‘pension savvy’:

3) Review fund investments:

4) Protect your family:

5) Take good advice:

Could there be a link between investing and wellbeing?

What is Intergenerational Planning?

This is what we mean by intergenerational planning

However, intergenerational planning isn’t just about inheritance tax planning

The best thing to do is to start this kind of planning early

Good Debt Versus Bad Debt – Understanding The Grey Area

Understanding the grey area

Using debt to your advantage

Your child turned 18 – What happens to their Child Trust Fund now?

AWM Performance Monitor – August 2020

Note From The Managing Director.

AWM Portfolio Performance

Market Update

Click through to the performance graphs for longer-term overviews and versus world indices.

Best and Worst Performing Funds

Stamp Duty Holiday – Not just an under £500k thing!

Meet the new faces!

Have you claimed for the second self-employed support grant?

How Catriona’s foster dog makes her a better Financial Adviser

1) Sort your savings: