Please click the link below for our latest monthly figures for the five model portfolios. The figures show the performance of our model portfolios versus various indices over the month of March.
Last month our Managing Director Adam Katten gave his second lecture in financial education to final year students at the British College of Osteopathic Medicine.
The college are offering students the opportunity to gain a better understanding of financial planning before they leave and step into the world of work, either through joining a current osteopathic practice or setting up as self-employed consultants.
The first lecture that Adam gave late last year focused on financial and protection planning; March’s lecture concentrated on pensions and investment opportunities to help students make informed decisions on maximising tax efficiencies and starting to save for their futures as early as possible.
With financial education now part of the secondary school curriculum, children are starting to learn the basics of budgeting, savings and getting to grips with bank accounts, however it isn’t until they leave home for university, or to work, that the responsibility of paying rent and bills becomes a reality. Combine this with potentially running your own business, thinking about pensions with or without auto-enrolment and tax implications, the fact that the College are providing financial education is a great way to increase students’ preparation and awareness.
One student commented “I felt Adam’s lecture was really interesting and gave useful information for financial planning. I would certainly trust him for information or advice in the future!”
With the average pension pot for people aged 45 years currently at only £60,000, it’s critical that young people start saving as early as possible and learning how to make their money work efficiently and NLP Financial Management are delighted to be involved in initiatives such as these.
After a busy few weeks for our advisers, Saturday 6 April marked the start of a new tax year.
Here are some of the key tax changes from a financial planning perspective:
- The personal allowance is now £12,500 per annum.
- The threshold at which higher-rate tax kicks in has also increased to £37,500.
- Therefore, the higher-rate tax band will apply once income exceeds £50,000 per annum.
- The annual capital gains tax exempt amount for individuals now stands at £12,000 per annum. Trusts get half this limit.
- The lifetime allowance limit has increased to £1,055,000. Pension savings above this limit will be subject to pension tax charges.
- The Junior Individual Savings Account limit has increased to £4,368 per annum.
An essential part of our service which our clients value is helping them stay on top of these changes and ensuring their affairs are managed as tax-efficiently as possible.
Looking at the changes, our view is that given the generous uplifts in thresholds from an income tax point of view, now may be the time to deliberately generate more income from portfolios and we will be considering such planning for our clients. This could be done by increasing income from taxable sources such as pensions and Investment Bonds.
At the same time, certain rules remain unchanged and require careful planning, such as
- The additional-rate threshold also stays unchanged at £150,000, bringing even more clients into the top tax rate of 45%.
- If your income exceeds £100,000 per annum, your personal allowance will reduce by £1 for every £2 of income above the £100,000 limit.
- The National Insurance contribution thresholds have been increased by nearly 8%, so the upper earnings limit for employees and the upper profits threshold for the self-employed is rising to £50,000.
- Individuals with earnings in excess of £110,000 gross per annum need to keep an eye on Tapering rules in terms of pension contributions.
It is never too early in the tax year to check and plan and we will be reviewing our clients’ affairs and considering suitable planning at regular reviews. However, please do not hesitate to get in touch if you would like a review now.
Please click the link here for our latest monthly figures for the five model portfolios. The figures show the performance of our model portfolios versus various indices over the month of February.
It’s something none of us want to think about, but unfortunately there are two certain facts in life – we’ll all pay taxes and we’ll all die at some point, however, we may also fall seriously ill so we need to consider protecting ourselves and our families should the worst happen.
Life expectancy in the UK steadily improved throughout the 20th Century, meaning we now have a larger and older population, which is mainly due to people looking after themselves more, smoking less and improvements in the treatments of illnesses. However, in the last few years life expectancy in the UK has slowed down and virtually ground to a halt, according to ONS data (Office for National Statistics) *. The data showed that as of 2016, a female baby born in the UK would on average be expected to live until 82.9, while a boy would be predicted to live until 79.2.
Although cancer survival is at a record high and smoking rates are at an all-time low, every 2 minutes someone in the UK is diagnosed with cancer and every 4 minutes someone in the UK dies from this disease**. Shocking as these statistics are, this is now the harsh reality of cancer in our day and age and despite on-going research, there are more than 360,000 new cancer cases reported in the UK every year – nearly 990 every day (2013-2015).
Whilst most of us don’t think twice about insuring our homes and our cars, worryingly, only one in four UK “main household earners” have a life insurance policy in place according to the Association of British Insurers ***. We may all feel that “it’ll never happen to me” but if something does, the impact of not having insurance can add to the stress and shock of receiving that news.
The research by comparison website MoneySupermarket.com showed that more men than women have Life cover, with 45% having a policy in place compared to 38% of women. Women often work part-time or opt to take a career break and stay at home to bring up children, so if they fall ill, or worse, this could effectively wipe out the family childcare, meaning the father would need to take time off work to look after his children. This is especially significant when a child is ill or has a long-term medical condition that requires full time care. Critical Illness (CI) insurance can provide a form of security as it pays out a tax-free lump sum on the diagnosis of one of a number of serious illnesses; this can apply to both the parents and children, as a parent can add their children to their own CI policy providing some financial peace of mind at such a difficult time.
Just one in five women have CI cover in place, compared to one third of men, according to research by comparison website ActiveQuote.com**** with only 13% of women with dependent children choosing to be covered, according to insurer Scottish Widows. They found 40% of mothers have life insurance cover, yet a critical illness claim is far more likely. The importance of taking out private CI cover grows with more women working part-time, not at all or being self-employed meaning they won’t have protection benefits through an employer.
With regard to Life cover, your policy pays a one-off payment to your dependents when you pass away and there are no income tax or capital gains tax liabilities on the proceeds. However, all proceeds that fall into your estate attract potential inheritance tax liabilities. This is chargeable at 40% after the nil rate band is taken into consideration. it is therefore recommended to set up a life insurance policy within a trust so that the proceeds do not form part of your estate.
One particular use of life assurance is for the payment of inheritance tax. For a married or co-habiting couple, this is set up on a “joint life second death” basis and placed in trust for the beneficiaries. The type of policy used for this purpose is usually a “Whole of Life plan”. By covering the expected amount of inheritance tax with this policy, the entire value of the estate can pass to the designated beneficiaries.
It is always recommended to seek independent financial advice when planning critical illness cover, life assurance cover and for estate planning. Protecting your family is critical as no-one knows what is around the corner for them health wise.
If you would like financial advice on the different Life Cover and Critical illness policies or Whole of Life policies covered in this article; please contact us at [email protected]
NLP Financial Management Limited is authorised and regulated by the Financial Conduct Authority. Estate planning is not regulated by the Financial Conduct Authority.
Please click the link here for our latest monthly figures for the five model portfolios. The figures show the performance of our model portfolios versus various indices over the month of January.
The Professional Adviser Awards, now in their 14th year, celebrate the knowledge, skills and commitment of financial advisory businesses throughout the UK.
Last night (7th February) saw NLP Financial Management (NLPFM) receiving our certificate for being named “Best Financial Advisers to Work for 2019”. There were only 14 companies in the whole of the UK who received this accolade, underpinning our commitment to providing the best possible environment and services for our staff, as well as for our clients.
We were also shortlisted for “Adviser Firm of the Year – London” which is now our 6th year in a row, and we are delighted to be the only firm in London to be consistently shortlisted for such a long period of time!
Adam Katten, Managing Director, commented “This was the 1st year that we were nominated for 2 awards and that in itself is a great achievement. Thanks to everyone who has helped in enabling us to obtain these achievements and rest assured that we will keep on striving for continuous improvements throughout the NLPFM business.”
Pictured is Consultant Elliot Gothold, Managing Director Adam Katten and Finance & Operations Director Lee Pittal.
JW3 (www.jw3.org.uk ) is the first Jewish Community Centre and arts venue of its kind to exist in London, opening on Finchley Road in 2013.
The aim of JW3 is to transform the Jewish landscape in London by helping to create a vibrant, diverse and proud community, inspired by and engaged in Jewish arts, culture and community.
As part of its desire to create a lively and informative community offering a wide range of classes, activities and events, JW3 have asked NLP Financial Management (NLPFM) to work with them in delivering some key financial educational sessions. The first one took place in October 2018 and more are planned throughout 2019.
These sessions are focused on Inheritance Tax planning and Financial Planning post-retirement, including gifting assets to family members, life insurance, equity release and the use of trusts. The tax benefits of leaving a legacy to charity are also covered and to support this, NLPFM are working on this JW3 project alongside a highly respected local firm of solicitors, Manuel Swaden (www.manuelswaden.co.uk), who deal with Trusts, wills and powers of attorney.
We will continue to provide our time and expertise to JW3 this year in the form of financial planning and collaboration encouraging members of both the Jewish and wider community in London to feel better equipped and confident to manage their money more effectively.
Please click the link here for our latest monthly figures for the five model portfolios. The figures show the performance of our model portfolios versus various indices over the month of December.
The British College of Osteopathic Medicine, located 50 yards down the road from our offices in Finchley Road, is internationally renowned as a leading specialist learning institution in osteopathy. It was one of the first educational establishments to be accredited, meeting the quality standards set by the General Osteopathic Council – the industry’s main governing body (GOsC).
Earlier this year NLP Financial Management were approached by BCOM to take part in their Undergraduate Masters in Osteopathy Course for their last year students, being both award winning and local Independent Financial Planners.
BCOM offer a course for their final year students to assist them in their financial education, before they branch out as associates in osteopathy practices or become self-employed. Receiving hands-on financial knowledge before they are qualified will give students a better understanding of how to plan not only their own personal finances but also how to run their business in a tax-efficient way and take advantage of pension and other financial planning opportunities.
This was the first time NLPFM had worked with the college and Adam Katten (Managing Director) is delivering two detailed lectures, the first one in October advised on the importance of financial planning and protection planning including critical illness and life insurance, the second lecture in March focused on pensions and investment opportunities.
Annie Osborne, BCOM final year student said “Adam’s lecture really opened my eyes to some important considerations for financial planning into the future. He helped us to reflect on factors such as income and critical illness protection that we hadn’t necessarily considered before. Thank you Adam, I’m really looking forward to part 2!”
The more educational institutions – and companies – that can provide this form of learning, the easier students will find it to manage their money and make it work for them. As they develop both their careers and their lives, fewer people will be left with extensive gaps between their current wages versus their projected retirement income, so can look forward to enjoying their later years.