Your Financial Journey with BlueSKY
We work with business owners, executives and professionals, typically aged 45+. As well as offering the full range of financial planning services, we have a specialist expertise in pension sharing arrangements during divorce. Although many of our clients are capable of managing their own affairs they often don’t have the time or inclination to do so. Understanding personal objectives and goals is fundamental to our role.
Holding the status of Chartered Financial Planners means that our advisers have achieved some of the highest qualification levels in our industry and adhere to a strict code of ethics and standards. It is the most widely accepted 'gold standard' qualification available for professional financial planners/financial advisers in the UK.
BlueSKY offer a range of services to assist in the Divorce process. We specialise in the technical work around pension sharing for divorcing couples providing specialist reports, and assisting both solicitors and their clients in a way that is clear and straightforward. This is a vital part of the divorce process, especially when financial assets are significant or of a complex nature.
Pensions – Start saving now!
The Sunday Times reveals some interesting figures on the cost of delay when starting saving towards your retirement.
If you want an annual income in retirement of the national average earnings (about £27,000), you might get around £8,300 from a State pension (dependent on your National Insurance record), so will have to save for the difference.
Figures produced by the Prudential estimate that if you are 25 and retire at age 68, you will need to save £262 each month to reach this target.
If you delay starting to age 35 then this figure increases to £437 per month.
If you delay starting to age 45 then it’s £794 per month.
Unless you have other plans for an income in retirement, pensions are one of the most effective way to save due to the tax advantages.
It’s never too late to start, but it will cost you more the longer you leave it!
What is sustainable income?
In an endeavor to simplify a complex area some financial institutions publish what they believe to be the ‘safe’ withdrawal rate that can be made from investments before funds are exhausted. Typically, this is of relevance to retiring individuals who have accumulated savings and need to know how long they will last. Although not an exact science by any imagination many studies in the past have indicated that a return of 4% per annum is sustainable in retirement.
Aegon have recently published a report that has downgraded the 4% to 3.23%. A sign of perhaps a less certain future and increasing longevity.
This does of course depend on many factors and the only way to understand withdrawal rates that are relevant to you as an individual is to seek further advice.
Look no further!
Transferring from your company pension – or not….
Recent changes in the way many final salary pension schemes are valued have led to a significant increase in the resulting values. This has resulted in an increase in inquiries from clients considering transferring out of their pensions. Approach with caution!
While there are some compelling reasons why a transfer out of a final salary pension might be in your interest, the loss of guarantees in particular needs careful consideration.
I’m afraid that the world of pensions is a complex one and although personal pensions are now enjoying greater flexibility, simplicity and lower charges than ever, the same cannot be said for final salary pensions.
Pensions investment policy expert and economist, Ros Altmann has written an article on this subject at:-
State Pension Triple Lock – A guarantee that might not be!
Introduced in 2010 the Triple lock guaranteed to increase the State Pension each year by the higher of:-
It seems now though that this might be unsustainable due to the expense of providing this guarantee. It’s currently a political football.
To our minds it was a pretty generous guarantee in the first place. Better than most final salary schemes. It was perhaps a bit of political positioning during the coalition years.
It does, of course, highlight that nothing is guaranteed. Recently, nothing in the world of pensions has stayed the same for very long, which we find frustrating!
Taking ownership, understanding the issues and planning for the future seems to be the best course of action. You can’t rely on anyone else!
Student Loans – Investment or Millstone?
Now that the RPI figure for March has been set at 3.1% it means that student loans from September 17 will be 6.1%, an increase from 4.6% and now higher than the average standard variable mortgage rate of just under 5%.
From a standing start where student loans were interest free, this has crept up on many unsuspecting parents (and students!) . Linking the debt to RPI has scary consequences if inflation increases further as well as the compounding effect of interest on interest. A student accumulating a £50,000 debt during a 3 year course, with a starting salary of £30,000 that grows at 5% a year would end up paying over twice the initial loan over the 30 year repayment term, after which, any remaining balance would be wiped out.
Depending on circumstances, financial planning can offer cost efficient alternatives.
In any case, it does focus the mind on whether University is a good investment or future millstone.
The new Lifetime ISA (LISA)
From April 6th you will be able to start saving in to the new LISA (if you can find a provider that offers one!). Contributions to it will form part of the ISA limit which will be £20,000 from April 6th. The benefit of a LISA is that the Government will top up your contributions. You can pay a maximum of £4,000 per year and the Government will add 25% to this. To open one you must be between 18 and 40 and the proceeds must be used to buy your first property or for retirement, otherwise a penalty applies. A complex but potentially beneficial savings plan. Read more here:- http://www.bbc.co.uk/news/business-37318001
Is now a good time to invest?
A regular question being asked by clients considering end of year pension and ISA contributions. We don’t have a crystal ball! But we do have evidence that investing in a diversified portfolio helps to weather turbulent markets. So our view is, don’t try to time the markets, invest now and stick with it!
For those wanting to do a quick ‘Stocks & Shares’ ISA themselves, The Sunday Times reports that Cavendish Online are one of the cheapest at a charge of 0.25% for an investment of up to £25,000. This years’ allowance s £15,240 per individual. This increases to £20,000 after April 6th. This service does not provide individual advice regarding fund selection.
Do contact us if you don’t want to do it yourself!
One of our brilliant and long standing administrators is moving home so will be leaving us! 🙁
We are looking to replace her with another organised and capable individual who must have at least 2 years experience in financial services and working with financial advisers.
We would love to hear from suitable candidates.
Click here for one of the many Budget summaries we have been sent. There’s more to it than the news grabbing NI increase for the self-employed….
Help to Buy ISA’s
Tax-Free Savings for prospective first time buyers
Save up to £1,000 when account opened and then up to £200 per month
25% bonus from the Government (up t0 £3,000) when you buy your first home
Check this link for more details
Does your loved or trusted one know your log-in details and passwords? In this internet driven era sharing this detail with a trusted person can save financial and other inconveniences should you be ‘unavailable’ through absence, illness or worse!