Why Lighthouse Group and Tavistock Investments formed a strategic alliance

Lighthouse Group (LON:LGT) and Tavistock Investments (LON:TAVI) announced today a strategic relationship with Lighthouse taking a 5.3% holding in the company. CEO’s Malcolm Streatfield and Brian Raven join DirectorsTalk to discuss the news.

Brian explains what it is that Tavistock do, how it will be using the proceeds and the rationale behind the partnership, while Malcolm tells us how Tavistock is going to further develop the Luceo Asset Management range of investment solutions, what it means for advisers and customers and also what we can expect to see from the relationship over the coming 12 months.

Lighthouse Group and Tavistock strategic alliance from DirectorsTalk on Vimeo.

Lighthouse Group Plc has been listed on AIM since 2000 as an integrated financial services company for investors, coupled with significant scale in terms of distribution through financial advisers and wealth managers and its fully diversified business model.

As one of the UK’s largest autonomous financial advice and wealth management groups, Lighthouse provides a comprehensive range of services to businesses and individuals and is retained by most of the major trades unions and other affinity groups to advise their combined memberships of over 6 million members.

The Group aims to increase its relationships with, and the benefits it derives from, its affinity group and professional partners.

In addition to a wide range of financial advice, the Group has developed innovative products to meet the specific needs of its retail and corporate customers.

Lighthouse operates from its headquarters in London as well as having principal operating offices in Stockport and Woodingdean, near Brighton.

Lighthouse Group plc: A very healthy 26% increase to EBITDA

Lighthouse Group’s CEO Malcolm Streatfield talks to DirectorsTalk about the interim results for the six months ended 30 June 2018. Malcolm discusses the highlights for the first half of the year, how LFA and affinity partners are progressing and the strategy for LFA. Malcolm also explains about how the second half of the year has started and the expectations for the year.

Lighthouse Group plc has been listed on AIM since 2000 as an integrated financial services company for investors, coupled with significant scale in terms of distribution through financial advisers and wealth managers and its fully diversified business model.

As one of the UK’s largest autonomous financial advice and wealth management groups, Lighthouse provides a comprehensive range of services to businesses and individuals and is retained by most of the major trades unions and other affinity groups to advise their combined memberships of over 6 million members.

The Group aims to increase its relationships with, and the benefits it derives from, its relationships with affinity groups and professional partners.
In addition to a wide range of financial advice, the Group has developed innovative products to meet the specific needs of its retail and corporate customers in the asset management and workplace solutions sectors.

Malcolm Streatfield discusses the Lighthouse results for the first half of 2018

Lighthouse Group’s main focus is on providing financial advice to ‘Middle Britain’ and is differentiated by contracts with 21 affinity partners. In this interview CEO Malcolm Streatfield discusses the results for the first half of 2018, highlighting good overall progress with revenues up by 5% from H117, PBT 12% and earnings per share 13%. The interim dividend was increased by 67%. Malcolm also outlines the group’s dividend policy, progress in the affinity business, an increasing level of recurring income and a positive start to H218.

 

ISAs, Lifetime ISAs (LISA) and Junior ISAs – what’s the difference?

ISAs LISAs Junior ISAs
Age criteria. Anyone over the age of 18 (over 16 for cash ISAs) Anyone aged between 18 and 40 Anyone under 18.
Allowance
for
18/19
tax
year
£20,000 £4,000. The amount paid into a LISA counts towards the account-holder’s ISA allowance. £4,260
Bonus None The government adds a bonus of 25% to the amount paid in each year until the account holder turns 50. None
Conditions You do not have to keep an ISA for a specific duration, although some accounts have a fixed or minimum term. Account holders can continue paying in until they are 50. They can use the money at any time as a deposit for their first home costing less than £450,000. They can withdraw money for retirement purposes at age 60. The child can take control of the account when they reach the age of 16 but can’t withdraw the money until they are 18.

ISA facts

Transfer savings or investments you have

If you have investments or savings that are not already tax-efficient you should consider cashing them in and transferring the proceeds into an ISA. However, it is essential to consult a professional financial adviser before you do so.

One ISA every tax year

You can take out one ISA every tax year, so if you don’t take out an ISA by 5 April 2019 you will lose the opportunity to shelter up to £20,000 from tax. The allowance applies to all adults resident in the UK for tax purposes, so a couple can shelter up to £40,000 from tax in this tax year.

CEO Malcolm Streatfield talks to Edison Investment Research about the Lighthouse divisions.

Lighthouse Group’s main focus is on providing financial advice to ‘Middle Britain’. Contracts with 21 affinity partners are a differentiating feature and make an important revenue and profit contribution. Wealth management serves a high net worth client base, while Luceo Asset Management provides an in-house fund offering.

Chief executive Malcolm Streatfield introduces the business and discusses the opportunities in its markets and the group’s strategy for growth.

Malcolm Streatfield talks to DirectorsTalk: “Affinity business progressing exceptionally well”

Lighthouse group Plc (LON:LGT) CEO Malcolm Streatfield talks to DirectorsTalk about its new agreement with The Public and Commercial Services Union. Malcolm explains what will be provided for these type of organisations, how well this side of the business is progressing, how they plan to grow further and how trading has been so far this year for the company.

Gifts with added benefits

Did you know that when you help your family financially you could also be reducing the inheritance tax that may be payable when you pass away?

With the inheritance tax threshold, which includes the value of your home, currently £650,000 for married couples and £325,000 for single people, many families are now finding that there is inheritance tax to pay when their loved ones pass away. However, it is possible to reduce the likely bill.

The annual gift allowance

You can give away cash and items worth up to a total of £3,000 a year and the amount will immediately be exempt from inheritance tax. You can carry forward up to £3,000 of unused allowances from the previous year. If you give away more than £3,000 a year, the excess amount will only be exempt from inheritance tax if you live for a further seven years.

Other gifts that are exempt:

  • Gifts of up to £250 to as many people as you want, although not to anyone to whom you have given the £3,000 gift allowance in that year.
  • Wedding gifts to your child worth £5,000 or less, to your grandchild or great-grandchild worth £2,500 or less, or to another relative or friend worth £1,000 or less.
  • Money that pays the living costs of an ex-spouse, elderly dependant or a child under 18 or in full-time education.
  • Excess income, over and above your normal outgoings, that you give away.

Find out more

There are many ways you may be able to reduce the amount of inheritance payable when you pass away. This is a complex area and it is easy to get things wrong. If you are concerned that you may leave your loved ones with an unnecessary tax bill you should talk to one of our professional financial advisers.

Tax advice which contains no investment element is not regulated by the Financial Conduct Authority.

Imagine living on roughly half your current income

It may come as something of a shock to realise that when you retire, your income could fall – perhaps by nearly half – even if you have been paying in to a pension scheme for all your working life.

The need for people, and especially younger people, to take personal responsibility for building their pension pot is becoming ever greater. This is particularly true for people in public sector pension schemes that have moved from final salary to career average benefits.

A recent survey by BlackRock* found that the average person in the UK says they would like an income of around £26,000 a year when they retire. What many don’t realise is that to generate this they will need a pension pot of £525,000, even when the state pension is taken into account.

The truth is that if you don’t make additional contributions you are likely to see your income drop significantly when you retire.

Pension – a highly tax-efficient way of saving

Pensions are one of the most tax-efficient ways of saving. Your employer pays into your pension on your behalf (unless you have opted out, which is generally not a sensible thing to do), your statutory contributions are deducted directly from your salary at source and the government tops them up.

The government tops up your contributions

You receive tax relief on the money you pay into your pension scheme. What this means is that the government gives back the tax you have paid on your contributions, paying the equivalent of basic rate tax directly into your pension pot. So if you are a basic rate tax-payer it only costs you £80 to save £100. Higher rate tax-payers can reclaim the additional tax they have paid via their self-assessment tax return.

How much can you pay in?

The maximum you can pay in to a defined contribution pension in the current tax year is £40,000. However, if you have already started drawing your pension you can only pay in up to £10,000.

Start boosting your pension pot now

  • Do not opt out of your employers’ scheme.
  • Try to pay in more than the minimum contribution each month. Set up a standing order. Even paying in just £5 or £10 a month can make a considerable difference over the years.
  • Work out how much you need in your pension pot when you retire to give you the income you need.
  • If your pension scheme is investment-based and offers a choice of investment options make sure your money is invested in funds aligned with your circumstances and objectives.

Get professional advice – one of our professional financial advisers can help you work out how much income you are on track to get from your pension and how much more you need to save to give you the chance to achieve your target income. They will look at all options, beginning with your workplace pension. Also, if you are in an investment-based pension that offers a choice of funds, they can recommend funds that are suitable for your specific requirements.

The value of your investments, and the income you receive from them, can go down as well as up, so you could get back less than you put in. A pension is a long-term investment and inflation will reduce how much your income is worth over the years. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation.

* Source:https://www.blackrock.com/uk/individual/insights/investor-pulse/retirement?siteEntryPassthrough=true&locale=en_GB&userType=individual

Inflation and the £ in your pocket or savings account

Between Jan 2015 and Jan 2018 average inflation was 2.44% per year. This means that, on average, prices are 7.5% higher now than they were in January 2015*.

Therefore, for your savings to have maintained their value they need to have grown by 7.5% since January 2015 and for their value to have increased they need to have grown by more than 7.5%. To have achieved this you need to have been getting at least 2.44% interest or growth on your savings each year.

If you have savings in cash accounts, even if they are in cash ISAs, they will have fallen in value in recent years, as average interest rates on such accounts have been well below 2%, with some paying less than 1%. The rate of inflation in January 2018 was 3.10%*.

If you have savings of more than three month’s expenditure (“rainy day” money) in cash accounts, irrespective of whether or not it is in an ISA, you should talk to one of our professional financial advisers as soon as possible to discuss whether you should move your hard-earned savings to a more suitable home.

If you have savings in cash accounts or want to make additional savings you should talk to one of our professional financial advisers as soon as possible.

*“£1 in 2015 → 2018 | UK Inflation Calculator.” FinanceRef Inflation Calculator, Alioth Finance, 29 Jan. 2018, http://www.in2013dollars.com/2015-GBP-in-2018?amount=1.

Finding a “nISA” home for your savings

ISAs are an increasingly popular form of savings plan, because they give your money the potential to grow more or less free of tax and there is no tax to pay when you take money out. But it is important to choose an ISA that offers the potential for real growth and suits your particular circumstances.

If you have savings you should consider holding them in an ISA – there is no tax to pay on any income or interest you receive from them or on any gains you have made when you cash them in. This makes them an attractive way of saving for the future – whether to pay for your children or grandchildren’s education, or to boost your income later in life. Plus, you can take money out whenever you want.

Which type of ISA?

There are ISAs to suit most people – cash, investment funds (known as stocks and shares), or a mixture. Cash ISAs are like savings accounts but with the tax advantages of an ISA. However, with interest rates still very low and inflation relatively high, the value of your savings is likely to fall. In the past, investments in stocks and shares ISAs have provided a better way of achieving growth that outstrips inflation over the longer term.

An ISA designed to help you achieve your financial goals

There is, of course, a risk attached to investing, but choosing a suitable fund and investing for the longer term gives your money more chance to perform as you expect. Funds which invest in a diverse selection of investments have the advantage of giving you instant access to a wide range of holdings within a single fund. It is also important to consider funds that are specifically designed to help you achieve your financial goals.

The value of your investments can go down as well as up, so you could get back less than you invested.