Starting a family? Get your finances on track

There’s a lot to think about when you’re expecting a new baby. Exciting preparations for your little one’s arrival, such as decorating the nursery, buying prams and other necessities, and selecting new clothes and toys, can make for a long to-do list. Amid this whirlwind of activity, financial planning can easily get forgotten. However, while it might not feel like the most interesting of tasks, it’s definitely one of the most vital and certainly should not be put off.   

Assess your needs

Raising a child to the age of 18 is expensive and with young people now often living with their parents well into their 20s and even their 30s, it’s becoming an increasingly costly business. Take some time to consider what your outgoings will be, factoring in expenses such as childcare and school fees. You may also need to modify your plans to account for a reduced household income if, for example, one parent plans to be a stay-at-home parent. 

Save, save and save some more

Before starting your family, it’s wise to open a savings account to accumulate the funds you’ll need to cover your initial expenditure and provide you with extra funds during the months following the birth, when new parents typically take a hit to their income. Making a concerted effort to pay off any existing debts will also help to take the strain off your finances once your baby has arrived and will save you money in the long run. 

Think ahead

While it’s tempting to concentrate solely on raising funds to meet your short-term costs, there are a number of financial planning decisions you should also be considering that will make life easier in the long term. With a brand-new family member to look after, you may need to think about reviewing your protection policies, drafting a new Will, or opening a savings account (such as a Junior ISA) in your child’s name. You could even consider paying into a private pension on your child’s behalf, although they wouldn’t be able to access this until they are 55 under current legislation.

Here to guide you

Whether you’re considering parenthood or already have a new baby on the way, it’s a good time to take stock of your financial situation. We can review the current state of your finances and put plans in place that will help you towards a secure future for yourself and your growing family. 

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.  Tax advice with no investment element is not regulated by the Financial Conduct Authority. The Financial Conduct Authority does not regulate Will Writing or taxation and trust advice

How we helped Claire get her financial well-being back on track

In these challenging times we are all facing growing demands on our time and energy, which can have knock-on implications for our finances. Taking financial advice now can make the difference between just about managing and having a more comfortable life and in due course enjoying the retirement you deserve.

Take Claire, a 48-year-old supermarket employee from Bristol. She works full-time and has two children at school. In addition to being a parent, she also spends time looking after her ageing mother who is in the early stages of dementia. Claire earns enough to cover her monthly outgoings, but not much is left at the end of the month, especially now she is unable to work overtime due to her increased caring responsibilities.

Prioritising you

“With increasing demands on my time, energy and money, I‘ve been struggling to think about my finances. I’ve been concerned that I don’t have life insurance and I haven’t really thought about retirement or reviewing my mortgage. Meeting my adviser, Tom, set me on the right path. He assessed my finances and helped me set realistic financial goals, enabling me to feel in control. Taking out financial protection was much more affordable than I expected. My policies cover death and critical illness, and provide an income if I’m unable to work, protecting my mortgage payments. Having them immediately gave me peace of mind in these uncertain times.”

TIP

With family members young and old depending on your support, it’s vital to have the right sort of protection policies so if an unexpected event occurs, a policy would pay out to help ease the financial burden.

Mortgage savings

“Tom checked my mortgage; I hadn’t realised that the rate I was on wasn’t very competitive. As my fixed term came to an end a while ago, I was able to switch to a better rate. The savings I’ve made have enabled me to top up my savings each month, pay the protection premiums and top up my pension.”

Retirement reality

“As far as my retirement is concerned, I have a pension with my current employer to which I contribute. I also have pensions from previous employers but didn’t know what these were invested in and how much they were worth. Tom found out their value and whether they were invested in a way that is suitable for me. He talked me through the types of pensions I have – I now understand the differences between defined benefit and defined contribution schemes. I know how much my pensions are worth and the importance of paying in more when I can, so I can enjoy a more comfortable retirement.”

TIP

Even if it seems like years away, you need to save for your retirement, so find out about your pension. It’s important to know how much it’s likely to be worth, so that you can make plans to save more if you need to.

We can help

In these challenging times we are all facing growing demands on our time and energy, which can have knock-on implications for our finances. Taking financial advice now can make the difference between just about managing and having a more comfortable life and in due course enjoying the retirement you deserve.

Book a no obligation initial telephone consultation

To book a financial review (which will be conducted over the phone) with one of our professional financial advisers call 08000 85 85 90, email appointments@lighthousefa.co.uk or contact your usual Lighthouse Financial Adviser.

 

The initial consultation is designed to discover whether or not you would benefit from financial advice and there is no obligation on either side to proceed further. Any advice related fees will be clarified with you before any commitment to proceed.

* We have changed real names and other details to preserve anonymity. All financial details reflect the circumstances.

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. As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.

Coping with the financial impact of coronavirus

The coronavirus pandemic has quickly changed the way we live our everyday lives and, while the main concern is safeguarding people’s health, many are already feeling the financial impact of the situation.

Having a degree of financial certainty can alleviate some of the stress you may be feeling. We can help you and your family understand the financial impact of the pandemic and recommend action you could take. Here are some of the issues with which we may be able to help:

  • What is a mortgage holiday, are you entitled to one and if you are, should you take advantage of it?
  • Are you paying too much for your mortgage? With interest rates at an all-time low, could you save money by re-mortgaging?
  • Do you need to access your savings? If your money is locked away for a fixed length of time, you will be pleased to know that you may be able to access it without having to pay the normal penalties.
  • However, if you have money in fixed rate accounts it might be best not to take any out if you can possibly avoid it. As you will know, interest rates have fallen and the chances are you will be earning a higher rate of interest than is currently being offered.
  • If you have life insurance and income protection insurance, the good news is that they are likely to pay out if you do need to make a claim due to coronavirus. It is still possible to take out life insurance and income protection policies, although you will be asked questions such as whether you have had COVID-19 or tested positive for it.
  • If you are a member of a traditional, public sector defined benefits pension scheme the good news is that your pension income remains guaranteed.
  • If you hope to retire in the next year or two and have defined contribution pension schemes (most private sector pension schemes are now defined contributions, as are all personal pension plans, including SIPPs), you are probably worried that the value of your pension pot will have fallen. Remember, you may have other pension pots from previous employers. A professional financial adviser will be able to check that your funds are invested appropriately and recommend changes if they aren’t.
  • If you are more than five years away from retiring, it is probably best to leave your defined contribution pensions as they are, assuming that you have already taken financial advice about the way they are invested, and sit out the crisis in the hope that values will rise again.
  • If you are already taking your defined contributions pension via what is known as drawdown you should assess whether you need to reduce the amount of regular income you take. If you are taking out more than the 3.5% a year recommended by the Institute and Faculty of Actuaries1, you should consider taking out less, hopefully just for the short term. Maybe you have other savings you could use. A professional financial adviser can help you decide on a suitable course of action.
  • If you are being made redundant and are over 55 could this be an opportunity to take early retirement? Whether this is feasible will depend on how much you have built up in various pension schemes and other savings during your working life. A professional financial adviser can help you with the rather complex calculations required to work out whether this is a viable option.
  • People who don’t pay their income tax through the PAYE system and instead file self-assessment tax returns and pay their tax in January and July, won’t be obliged to make the July payment – the government has announced that they can defer paying income tax until 31 January 2021.

Finally, if the family income has dropped, perhaps because you or your partner are no longer able to work you should find out if there may be allowances you can claim. If you are self-employed, could you claim a grant through the coronavirus Self-employment Income Support Scheme? If you are renting and fall into arrears you should explain the situation to your landlord immediately. You are still obliged to pay the rent at some stage, but they may give you more time to pay.

Source:
1. https://www.actuaries.org.uk/system/files/field/document/Policy%20Briefing%20-%20Helping%20Consumers%20-%20WEB.PDF

Book a no obligation initial telephone consultation 

To book your personal telephone consultation, which will take place at a time that suits you, call 08000 85 85 90 or email appointments@lighthousefa.co.uk or contact your usual Lighthouse Financial Adviser.

The initial consultation is designed to discover whether or not you would benefit from financial advice and there is no obligation on either side to proceed further. Any advice related fees will be clarified with you before any commitment to proceed.

The value of your investments can go down as well as up, so you could get back less than you invested. A pension is a long-term investment. The fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation. Trusts and tax advice which contains no investment element is not regulated by the Financial Conduct Authority. 

Reflecting on Coronavirus uncertainty

 

Reflecting on Coronavirus uncertainty

We understand the evolving Coronavirus situation can be unsettling for investors. Whilst there is some uncertainty regarding the economic and market impacts of the virus it is important to remember the basic principles of long-term investing remain unchanged and in particular that short-term falls do not necessarily impact long-term goals.

Unsure or concerned?

If you do have any concerns regarding the ongoing suitability of your investments, your financial planner is best placed to discuss these with you.

Our preparedness in the event of a widespread outbreak

If a widespread outbreak occurs and has the potential to disrupt businesses, we are well positioned with robust business continuity processes, and we are well placed to continue to service clients and advisers. We actively rehearse to mitigate multiple scenarios that could impact our operations, so our business is as resilient as possible.

Virus dominates Spring Budget agenda

The story of the Spring Budget 2020 has been long and complicated, with further measures likely in the coming months in response to unfolding events. The Budget was originally scheduled for delivery on 6 November by former Chancellor of the Exchequer, Sajid Javid, as his predecessor Philip Hammond had moved the annual occasion from spring to autumn.

With the 12 December general election announced shortly before Budget Day, a delay was inevitable and the new date chosen was 11 March; but on 13 February Mr Javid resigned unexpectedly and deputy Rishi Sunak was appointed Chancellor. With little time to prepare, Mr Sunak faced exceptional challenges: not just Brexit but also the developing threat from COVID-19, which spelt disaster for struggling UK airline Flybe.

Pre-Budget rate cut

Support measures began ahead of the Budget speech. Firstly, the three waiting days to qualify for Statutory Sick Pay (SSP) were axed to help keep COVID-19 from the workplace. Then, on Budget Day morning, the Bank of England announced a cut in its base rate, from 0.75% to 0.25%, and a new Term Funding Scheme to encourage lending. So, even before Mr Sunak rose to speak, underpinning the economy was clearly on the agenda.

Asserting that ‘’we will get through this together’’, the Chancellor outlined a £30bn fiscal stimulus package. This included a £5bn emergency response fund for the NHS and social care services, plus a £1bn Coronavirus Business Interruption Loan Scheme to assist affected firms. Business rates would be suspended in 2020-21 for retail, leisure and hospitality firms with rateable values under £51,000; many smaller businesses could qualify for £3,000 cash grants and SSP refunds.

National Insurance threshold rises

Whist the £12,500 personal allowance for Income Tax and the £50,000 higher-rate threshold are unchanged for 2020-21 in UK nations where the tax is not devolved, the National Insurance threshold rises from £8,632 to £9,500 UK-wide. The new State Pension rises 3.9% from £168.60 weekly to £175.20 and the older basic pension from £129.20 to £134.25. There is a £90,000 uplift to tapered Annual Allowance thresholds for pensions; and the Lifetime Allowance rises with inflation to £1,073,100. 

On matters affecting investors, the £20,000 ISA allowance (and £4,000 Lifetime ISA allowance available within it) remains unchanged for 2020-21, but the Junior ISA and Child Trust Fund annual limits rocket from £4,368 to £9,000. The annual Capital Gains Tax exemption increases from £12,000 to £12,300 (£6,150 for trusts). However, Entrepreneurs’ Relief on eligible gains is cut from £10m to £1m, effective 11 March 2020.

Virus forces £350bn post-Budget measures

The post-Budget week saw coronavirus cases escalate and economic prospects worsen, as the public were advised to avoid pubs, restaurants and other places of social contact. On 17 March, Mr Sunak announced urgent measures to help firms and individuals through the crisis. His plan included £330bn in loan guarantees and £20bn in other support, with grants for firms in worst-affected sectors, more business rates holidays and possible help for airlines and other transport operators. A three-month mortgage holiday was promised for strapped homeowners, with help for renters also on the radar. On 18 March, the pound fell sharply against the US dollar and euro.

Mr Sunak said he would take further action if necessary in the ensuing weeks and the general expectation was that more would indeed be required.    

Written on 18th March 2020. 

Sandwich generation: The ultimate juggling act

Are you supporting financially dependent children while simultaneously taking care of an older family member? If so, welcome to the sandwich generation – a group of adults ‘sandwiched’ between the dual challenges of caring for younger and older relatives.

Plan for your financial future too

For the many people in this situation, it can be difficult to put in place the right plans for their own financial future, while taking care of others. Increased life expectancy, coupled with starting families later in life, means that more of us than ever are facing growing demands on our time and energy, which could be leading to implications for our finances too.

Provide and protect

In your middle years, the chances are that looking after your growing family means that the important things like everyday living costs, family holidays and possibly school fees, will all be taking a sizeable amount out of your disposable income. At this stage, you may also find yourself needing to take more financial care of your ageing parents too. 

With family members young and old depending on your support, it’s vital to have in place the right sort of protection policies so that if one of life’s unexpected events were to occur, there would be a pay out from a policy to help ease the financial burden. 

Engaging with your retirement planning 

Although retirement could be a while away yet, at this point in your life, these are likely to be your peak earning years, so it’s important to make sure you are on top of your financial situation. 

Even if it seems like years away right now, you’ll need to have a retirement plan in place; it will come around quicker than you think, so prioritise your pension. It’s important to know how much it’s likely to be worth, so that you can make plans to save more if you need to. 

Regular reviews

This is also the time to focus on your savings and investments. The significant outgoings associated with twin caring duties can have a direct impact on their ability to save for your own future.

Ensuring you review your portfolio regularly will mean your investment strategy remains in line with your goals and takes account of your attitude to risk, which may change over the years. 

There’s plenty to think about, taking financial advice at this stage of your life can make the difference between just about managing in your later years or enjoying the retirement you deserve.

How we can help

At Lighthouse we can continually review your finances as you confront new challenges such as this stage of your life. We aim to develop and adapt your financial strategies to cope with changes in life circumstances and keep your financial goals on track, even if you are time-poor. Get in touch to see how we can help.

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

A pension is a long term investment.

Some protection products may include an investment element. The value of your investments can go down as well as up, so you could get back less than you invested.

CEO Malcolm Streatfield discusses a positive year for Lighthouse Group

CEO Malcolm Streatfield talks to DirectorsTalk about its final results for the year ended Dec 2018. Malcolm talks us through the year highlights, how LFA is progressing and plans for growth, Tavistock progression, the rationale behind the auto-enrollment business disposal and 2019 progress.

A Positive Year for Lighthouse Group from DirectorsTalk on Vimeo.

Lighthouse Group 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 th 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.

Edison Research: Strategic agreement to broaden product offering

Lighthouse (LGT) has announced a strategic agreement with Tavistock Investments (TAVI) that will provide it with access to Tavistock’s investment solutions. This will help deliver the broader offering Lighthouse seeks for its in-house asset management arm, Luceo. In conjunction with this agreement, Lighthouse has subscribed £1m to Tavistock’s £1.25m equity fund-raising giving it a 5.3% stake. Our valuation (c 44p) and estimates are unchanged at this stage.

Strategic agreement to broaden product offering

Lighthouse launched Luceo Asset Management in 2016 to offer in-house funds of funds tailored to a range of risk profiles. Octopus acts as investment adviser to the funds. In H118, the AUM of the five funds increased from £37m to £53m, with one fund reaching the break-even level of c £20m. Lighthouse has been considering broadening the fund range further and was introduced to Tavistock recently, leading to the strategic agreement which will be formalised in the coming months. This will give Lighthouse access to Tavistock investment solutions, including in particular two recently launched capital protection funds. These funds are mainly invested in BlackRock iShares, and the guarantee is provided by Morgan Stanley and scales with the value of the fund. Tavistock also has a risk-graded fund range, a model portfolio service and plans to launch an app next year allowing consumers to buy a guaranteed fund provided by a large investment bank. Lighthouse sees a good opportunity here to provide products that meet common customer requirements and help Luceo funds reach a profitable scale.

Subscription to Tavistock fund-raising

In conjunction with the agreement, Lighthouse has subscribed £1m to a £1.25m equity fund-raising by Tavistock (at a 10% discount to the previous day’s closing share price). The issue is designed to facilitate the replacement of an expensive loan with an interest cost of 9% due for repayment in April 2019. The £1m investment in Tavistock deploys part of the c £5m free cash Lighthouse has available and at the same time reduces the potential requirement for seed capital that would arise if Luceo launched new funds itself. Tavistock appears to be at an inflexion point in terms of profitability. At end September it had FUM of £941m (up 26% over a year) and total assets under advice of £3.5bn. Half-year gross revenue was £14m (+14%), EBITDA £0.5m (+227%) and there was a small operating loss. It is also in the process of implementing a £0.5m cost reduction programme and this, together with the increase in FUM, is supportive of the consensus expectation of a sustained move into net profit.

The full article is available to view here

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.