Investments & Inheritance Tax Planning: Keeping More in the Family

Why inheritance tax matters

Inheritance tax is charged at 40% on estates worth more than the current allowances. For many families — particularly those who own property or have built up sizeable investments — it’s a real issue. Without planning, a large chunk of your wealth could end up going to HMRC instead of your loved ones.

Where investments come in

A balancing act

Why take advice?

The post Investments & Inheritance Tax Planning: Keeping More in the Family appeared first on Alice Douglass.

While “to err is human”, it’s important to learn from these missteps to avoid repeating them, as doing so can prove costly in the long run.

The idea of making errors over and over again is the theme of the revered film, Groundhog Day. In the 1993 classic, Bill Murray’s character relives the same day stuck in a loop until he learns to change his behaviour.

Financial blunders can feel just like this cycle and be just as hard to break.

Since 2 February 2025 so recently marked Groundhog Day, the event that shares its name with the film, this could be the ideal time to take a closer look at five financial mistakes that are best avoided… and certainly not to be repeated.

1. Not “paying your future self first”

While budgeting is one of the cornerstones of good financial planning, it can be surprisingly challenging to get right.

As an example, imagine you have £5,000 to spend each month. After covering your mortgage and bills (£2,500, say), paying for essentials such as food and travel (£1,000), and indulging in discretionary expenses (another £1,000), you’d be left with £500.

You may intend to save or invest this £500 at the end of the month, but this approach could backfire. It’s easy to overspend and find you have little left to put aside.

As such, you might want to “pay your future self first” by contributing regular amounts to your savings as soon as your pay lands in your account, rather than at the end of the month.

This ensures that your financial goals take priority, all while helping you to build a consistent saving habit. Over time, this could make a significant difference in helping you reach your financial milestones.

2. Paying only the minimum into your pension each month

If money is tight, or funds are required elsewhere, you might find that you regularly pay only the minimum amount into your pension each month.

While you’re at least contributing something, it might not be enough to secure the retirement lifestyle you dream of.

Increasing your contributions now could give your fund an initial boost while allowing you to benefit from increased tax relief.

The Annual Allowance is the total amount you can contribute to your pension tax-efficiently in a single tax year; it includes personal and employer contributions, as well as tax relief.

For 2025/26, it stands at £60,000, or 100% of your earnings, whichever is lower.

Tax relief sees the government “top up” pensions when you contribute, so a £100 contribution would only “cost” basic-rate taxpayers £80.

Meanwhile, it would only “cost” higher- or additional-rate taxpayers £60 or £55, respectively, so long as they claim the extra relief through their self-assessment tax return.

Taking proactive steps to increase pension contributions now could bolster your fund, helping to support your ideal lifestyle in retirement.

3. Relying on borrowing when the unexpected strikes instead of saving an emergency fund

You can’t ever know when an unexpected expense is right around the corner. Whether it’s a sudden car repair, a broken boiler, or even lost income during a period of illness, you may find that you rely on borrowing to cover costs if you’re unprepared.

But high-interest debt from credit cards, for example, can quickly snowball, resulting in financial stress and eroding your peace of mind.

Instead, it might be prudent to build an emergency fund of between three and six months’ worth of essential household expenses in an easy access savings account.

If you’re self-employed, retired, or have many dependants, you might want to save between one and two years of expenses.

This financial safety net means you’re more able to handle unexpected costs without needing to rely on debt or dipping into savings and investments.

Beyond the practical benefits, your emergency fund can offer invaluable peace of mind, knowing you’re prepared for the future.

4. Panic-selling during periods of downturn

Even though volatility is an inherent part of investing, you might be tempted to follow your emotions during periods of downturn and sell your investments.

This could be due to a desire to cut your losses, but remember that it’s “time in the market, not timing the market” that counts. A knee-jerk sale of shares during a market dip could inadvertently affect the long-term performance of your portfolio.

Take the chart below, for example, which shows the 20 best (represented by cyan bars) and worst (the orange bars) trading days since 1 January 1980.

Source: Vanguard

As you can see, the market’s best and worst days often occurred close together, so if you rush to sell shares after a downturn, you won’t be invested when the markets recover.

While it’s normal to feel concerned during periods of downturn, it’s often wise to remain invested and stay the course.

5. Staying silent about financial worries rather than discussing them

Money remains a taboo topic for many in the UK, even though communication can help you deal with your worries.

Research from Virgin Money UK shows that only 56% of Brits feel comfortable discussing money with their friends.

Even if you feel awkward bringing up your concerns, or shame at the mistakes you’ve made, you shouldn’t let this deter you from speaking with friends, family, or peers.

A simple chat could actually lift a weight from your mind, allowing you to see things from a new perspective. Otherwise, worries could just build up in your head until they seem impossible to deal with.

Similarly, you might also want to talk through your worries with a financial planner. They could help you deal with the issues that cause you the most concern and suggest ways to tackle the errors you constantly find yourself making.

If you’d like this invaluable support, email me on a.douglass@grosvenorconsultancy.co.uk or call my office on 01793 766 123. Alternatively, call my mobile on 07525 177 046.

While I offer high standards of service and will work with you to ensure any plan is right for you, I’m also a busy mum, so work Mondays and Tuesdays only.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

The post <em>Groundhog Day</em>: 5 ways to stop repeating the same financial mistakes appeared first on Alice Douglass.

What’s more, as the cost of living crisis has made times tight for a number of UK families, worries over financial losses have become even more prevalent. 

According to the Mental Health Foundation, the cost of living crisis has contributed to 30% of adults having “poorer quality sleep”, and 23% are even meeting with friends less often to help cut costs. 

With this in mind, you may be preoccupied with “timing the market” in order to feel certain that the investments you make will return impressive profits.

Yet the truth is, there’s no such thing as the “perfect” time to invest. And, perhaps even more surprisingly, history tells us that staying put through market fluctuations can help you meet your targets over the long term.

Keep reading to find out two surprising reasons why doing nothing at all could actually be a more successful strategy for investors, even in volatile times.

1. Selling your investments during times of unrest can lead to significant losses

One essential way that sitting back and doing nothing can benefit your investments is that this approach can help avoid panic-selling.

Sadly, panic-selling is a common investment mistake that can result in significant losses. It describes becoming worried about the value of a holding when it decreases and deciding to cash in before its value dips any further.

Although tempting, panic-selling obliterates your chances of regaining what you invested in that particular asset. This is called “crystallising your loss”, and can cause you to make the temporary dip in your holding’s value permanent.

Ultimately, sometimes inaction is preferable to action. 

It’s understandable that you may not wish to witness your investments lose value before your eyes, but history tells us that markets typically recover after short-term dips. 

In fact, the stock market’s best-performing days have often happened just after, or during, significant downswings. 

As CNBC reports, the US stock market’s highest-returning day between 2002 and 2022 was 13 October 2008 – right in the middle of the worldwide financial crisis. On this day, markets returned 11.6%.

In a similar vein, the report also states that the third best day for the US stock market within that time frame was 24 March 2020. On this day, markets gained 9.4%, despite experiencing an overall decline due to panic surrounding COVID-19.

Sadly, not everybody held out for markets to improve during the turmoil of March 2020. According to Magnify Money, 42% of investors sold stock at the very beginning of the pandemic when markets became volatile. By September of the same year, 88% said they regretted the decision.

As such, even when the world seems to be turning itself upside down, your long-term goals are what matter most. If you’re tempted to panic-sell, remember that markets typically bounce back after periods of unrest.

2. Holding investments for longer has historically improved the chance of positive returns

Constantly chopping and changing your investment portfolio may not be conducive to favourable performance. Alternatively, holding onto your investments and building up a diverse portfolio over time could help you see more consistent returns.

In fact, a study by Nutmeg, spanning the time period between January 1971 and July 2022, shows the clear financial advantage investors would have seen if they held their investments for longer.

The below graph shows how the chance of positive returns increased in correlation with the length of time over which an investment was held.

The study revealed that: 

• If you invested your money on any random day within the given time frame and held it for 24 hours, your chances of positive gains would be 52.4% – around the same odds as a coin toss.
• Furthermore, if you held this same investment for a whole quarter, your chance of positive returns would rise to 65.6%. 
• Keep the investment for a year, and your chance of seeing profits reached 70%.
• Finally, holding onto the asset for 10 years would push the chance of returns up to 94.2%.

Of course, no matter the time frame over which they are held, it is essential to remember that the value of your investments can fall as well as rise. Past performance is not a reliable indicator of future performance. 

Nevertheless, these historical examples clearly show how advantageous it could be to keep hold of your investments.

Rather than micro-managing your portfolio and causing yourself more stress, sitting back and leaving your existing holdings alone could actually make you a more successful investor.

Looking to expand your investment portfolio? Discuss your ideas with a financial planner

Whether you’re a first-time investor or you’re well-versed in the ups and downs of the stock market, creating an investment plan with a financial planner can help put your life goals into action.

I can listen to any worries you may have about market volatility, and provide expert advice on creating a diverse portfolio of assets over a time frame that suits you.

To learn more, email me at a.douglass@grosvenorconsultancy.co.uk or call my office on 01793 766 123. Alternatively, call my mobile on 07525 177 046. 

While I offer high standards of service and will work with you to ensure any plan is right for you, I’m also a busy mum, so work Mondays and Tuesdays only.

Please note

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

The post 2 surprising reasons why doing nothing could make you a more successful investor appeared first on Alice Douglass.

It might be that the start of the year is when you normally assess your financial strategy, but there are other times when reviewing your investments and pensions might be a shrewd idea. Doing so at these times could help boost growth potential, ensure you’re as tax-efficient as possible, or help you avoid a financial decision you later regret. 

So, if you’re wondering: “should I carry out a review of my investments and pension?”, read on to discover five times you probably want to consider it, and how a financial planner could help.

1. You’re dealing with a life change

Whether planned or not, significant life changes can have an effect on your wealth, which includes your investments and pensions. These events could include:

• Having children
• Getting married
• Getting divorced
• A major promotion at work or a new job.

Having children, for example, may mean you stop working full-time to bring them up. As a result, you may not continue to make pension contributions at the same level as you have been previously.

This could reduce the value of your pension pot when you eventually retire and may reduce your standard of living when you stop working. Speaking to a financial planner could help you understand your options so that you can keep your pension on track, allowing you to enjoy the retirement lifestyle you want no matter what the future holds. 

2. You’re paying more Income Tax

According to the Telegraph, millions of workers may be liable to the 40% higher rate of Income Tax after the chancellor froze the threshold at £50,270 until 2028. As salaries are likely to increase because of the rising cost of living while the tax threshold remains static, it’s expected that many workers will be pushed up into the higher-rate tax band.

If you’re one of them, a financial planner might be able to help reduce your liability back down to the 20% basic rate of Income Tax. If you’re a high earner, a planner may also be able to reduce your liability from the 45% additional rate of tax back down to the 40% higher rate. 

One way a planner may be able to achieve this is through “salary sacrifice”. This is where your employer agrees to reduce your salary in exchange for them making higher contributions to your workplace pension. 

While this could provide tax benefits, salary sacrifice also carries risks. For example, it could reduce your ability to secure a mortgage or reduce any death-in-service benefits you may have. This is why it is important to speak to a financial adviser who will be able to confirm whether it’s right for you. 

3. You’re approaching retirement

A study by retirement specialists Just Group reveals that 53% of pensioners who accessed a defined contribution (DC) pension – otherwise known as a “money purchase scheme” – for the first time in 2021/22 did so without financial advice.

Doing this could result in you paying too much Income Tax on your retirement earnings, or even worse, could mean that you exhaust your pension pot earlier than expected. Working with a financial planner as you approach retirement can help you understand the level of income you can draw from your pension pot without inadvertently depleting it.

This could ensure that you can enjoy the lifestyle you want in retirement, safe in the knowledge that you are financially secure. Furthermore, a planner could help ensure that you take your income in the most tax-efficient way possible.

If your pension pot will not support the lifestyle you want, a financial planner could also provide options to help get it on track to achieve your retirement goals.

4. You fear that your investment fees are high

If you’re worried that the fees associated with your pension pot or investments may be excessive, a financial planner could help. They can explain how much you’re paying, the level of growth your money is enjoying after fees have been taken, and whether this is affecting your pension or investment’s ability to meet your financial goals.

A planner can also confirm whether switching to another pension or investment provider could help boost your money’s growth potential. As a result, you may be able to achieve your aspirations earlier than expected.

5. You’re interested in “sustainable” funds

The effects of climate change are becoming increasingly apparent. According to the Guardian, provisional figures by the Met Office reveal that 2022 was the UK’s warmest year ever. With this in mind, you might be looking to switch to Environmental, Sustainable, and Governance (ESG) funds, which aim to reduce businesses’ impact on the planet.

If this is something you are considering, a financial planner can review your investments, pensions, and wider financial strategy to confirm whether switching to ESG funds is right for you. Furthermore, they can help you avoid “greenwashed” investments, which is where companies held within ESG funds have made unsubstantiated or misleading claims about their sustainable credentials.

Reviewing your financial strategy with an adviser provides peace of mind that you could achieve your financial and lifestyle goals while you’re doing your bit for the planet.

Get in touch

If you’re wondering: “should I review my investments, pensions, or financial strategy?”, I would be happy to discuss it with you. Please email me at a.douglass@grosvenorconsultancy.co.uk or telephone 01793 766 123, and I’ll be happy to help. Alternatively, call my mobile on 07525 177 046. 

Please note that while I offer high standards of service and ensure any solution I recommend is right for you, I’m also a busy mum, so work Mondays and Tuesdays only.

Please note

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

Tax levels and reliefs could change and the availability of tax reliefs will depend on individual circumstances.

A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation, and regulation, which are subject to change in the future.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

The post 5 really important times to review your pension and investments appeared first on Alice Douglass.

While surging energy prices is likely to be affecting you, a survey by YouGov suggests that you probably still feel it’s important to deal with the environmental challenges now facing the world. The study, carried out in 2021, revealed that 72% of Britons think climate change is a result of human activity, up from 49% in 2013.

One way you could help the planet is to consider placing your money into “sustainable” investments, better known today as Environmental, Social and Governance (ESG) funds. While they have become increasingly popular in recent years, you may not have invested in them thanks to myths that exist around them.

If you’re wondering: “should I invest in ESG funds?”, discover four common misconceptions and why they may not stand up to scrutiny. Before you do, let’s consider ESG funds in more detail.

ESG funds aim to reduce businesses’ impact on the planet

Environmental, Social and Governance (ESG) funds refer to the main three criteria that are used to determine a business’s impact on the planet and society. The following is a summary of each:

• Environmental – this looks at how the company’s operations affect the environment, which could include energy use and whether it manages waste responsibly.
• Social – this considers how the company treats its workers and whether it works with its supply chain to ensure the ethical treatment of suppliers and their staff.
• Governance – this criteria looks at how a business is run. This might include the transparency of its accounting methods, its tax strategy and whether shareholders are allowed to vote on key issues.

By providing evidence of a company’s impact in these areas, it’s possible for investors to select companies they feel are more responsible. As such, ESG funds can help reduce the impact businesses’ activities could have on the environment.

While this may sound like a good idea, scepticism around ESG still remains. One reason for this might be because of several popular myths which may not be as robust as you think. We’ll look at some of them next. 

1. ESG funds are “greenwashed”

According to MoneyAge, one in four consumers who would not invest in ESG funds said it was because of fears of “greenwashing”. This is where the companies held within ESG funds have made unsubstantiated or misleading claims about their sustainable credentials. 

While this can happen, it would be wrong to suggest that all ESG funds are greenwashed. There are authentic funds as well, and a financial planner who is experienced in ethical investments will be able to locate them for you.

A word of warning though. As some advisers do not have extensive experience in dealing with ESG funds, they may not spot when they’ve been greenwashed. Thanks to my background in dealing with ESG funds, I can help ensure your money goes into bona fide funds.

2. Growth potential is reduced

According to a report by Morningstar from February 2022, in the five years up to the end of 2021, ESG funds had performed on a par with or better than conventional funds. Furthermore, the European Securities and Markets Authority (ESMA) revealed that in the 10-year period ending in 2020, ESG funds outperformed conventional investments and were also overall cheaper.

As you can see, assuming that ESG funds will always reduce your money’s growth potential may not be correct. Please remember, past performance is no guarantee of future performance, and ESG funds can go down as well as up. 

3. ESG funds won’t make a difference

An article by PensionsAge shows that investing in ESG funds could be an extremely effective way of helping the planet. It refers to analysis from Make My Money Matter (MMMM), Aviva and Route2 in 2021, which revealed that ESG funds could be 40 times more powerful in tackling climate change than switching to a renewable energy provider.

Furthermore, it could be 20 times more effective than driving an electric car and 21 times more powerful than stopping flying.

4. It’s a fad that will pass

As the YouGov survey highlighted at the beginning of this blog shows, there is a growing awareness of humanity’s impact on the planet. With increasingly severe weather here in the UK – such as 2022’s heatwave that led to the highest temperature ever recorded and wildfires across the nation – concerns about climate change are unlikely to go away anytime soon.

As a result, interest in ESG funds may not end any time soon either. This dovetails into a report from the Nasdaq, which reveals research suggests demand remains strong for ESG funds in 2022. 

Furthermore, it added that 80% of investors could be planning to increase exposure to them during the next two years.

Get in touch

If you are wondering: “could ESG funds be for me?”, please email me on a.douglass@grosvenorconsultancy.co.uk or telephone 01793 766 123, and I’ll be happy to help. Alternatively, call my mobile on 07525 177 046. 

Please note that while I offer high standards of service and ensure any solution I recommend is right for you, I’m also a busy mum, so work Mondays and Tuesdays only.

Please note

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

The post ESG investing – 4 common myths that you may have heard, busted appeared first on Alice Douglass.

This is particularly true with women, the article adds, because they often don’t know where to start when it comes to investing, and are more concerned about scams.

Britons preference to keep wealth in cash is also backed up by government statistics, which reveal that 75% of all ISA accounts subscribed to during the 2019/20 tax year were in cash. Yet keeping your money in cash as inflation soars could significantly reduce its value in real terms.

As investing typically provides greater growth potential, if you are interested in the tax benefits offered by ISAs and want to inflation-proof your cash, you might want to consider a Stocks and Shares ISA instead.

Read on to discover more, and how you could give the growth potential of your Stocks and Shares ISA a boost with one simple step.

Investing could help inflation-proof your wealth

According to the Office for National Statistics, inflation reached 7% in March 2022, up from 6.2% the month before – the highest since 1992.

While the Bank of England has increased its rate to 0.75% to tackle soaring inflation, Moneyfacts reveals that the best easy access account in April 2022 offered an interest rate of just 1%.

It also shows that the best fixed-term rate, which would mean locking your money away for five years, offered 2.4%. When you consider these are significantly below the rate of inflation, you can see how your money could lose value in real terms.

Compare this to the average Stocks and Shares ISA, which, according to the above Independent article, returned 6.92% between February 2021 and February 2022.

Further evidence investing could provide greater growth potential can be found in the 2019 Barclays Equity Gilt Study, which tracked the nominal performance of £100 invested in cash, bonds or equities between 1899 and 2019.

It found that if you invested the money in cash, it would have been worth just over £20,000 in 2019. If you had put the money into the stock market, it would have been worth around £2.7 million.

Always remember, past performance is no guarantee of future performance, and you may not get back the full amount you invested.

While investing in a Stocks and Shares ISA might be an effective way to inflation-proof your money, you need to be aware of a useful tip that could increase its growth potential. Let’s consider this now.

Many invest in ISAs at the end of the tax year

In 2025/26, you can place up to £20,000 into an ISA, or up to £9,000 into a Junior ISA (JISA). This means you could build a significant amount of tax-efficient money relatively quickly.

That said, many people tend to invest in the weeks leading up to the end of a tax year, as they want to use their ISA allowance before losing it when the next tax year starts on 6 April.

Waiting until the end of the tax year, however, means that your money misses months of potential tax-efficient growth.

As such, the long-term value of your Stocks and Shares ISA could be significantly reduced.

Always aim to invest at the start of the tax year

To demonstrate how much more growth your money might enjoy if you invest at the start of the tax year, consider the following example. It was featured in Investor’s Chronicle and uses data from the MSCI World Index, which tracks the performance of a basket of companies in developed nations.

It reveals that if you had invested £20,000 at the beginning of the tax year for 10 years leading up to April 2021, your investment would have been worth £356,353.

If you had invested at the end of each tax year, it would have been worth just £329,316 – a drop of £27,037.

Please note, the calculations are for illustrative purposes only, and don’t consider the effects of charges on any investment. For ease, it also assumes £20,000 was put into the ISA every year despite the ISA allowance being below this amount in some years.

That said, the illustration highlights that investing at the start of the tax year could provide your money with a significant boost.

A Stocks and Shares ISA could also help the planet

Investing your money may not only help you inflation-proof your wealth, but it could also be better for the planet if you invest in “sustainable” funds.

According to Pensions Age, placing your money into sustainable investments, which are today known as “Environmental, Sustainable and Ethical” (ESG) funds, could be 40 times more powerful in tackling climate change than switching to a renewable energy provider.

Get in touch

If you would like to invest to help inflation-proof your money, but don’t know where to start, please get in touch. I would be happy to discuss your options and identify the best strategy for you.

You can contact me by emailing a.douglass@grosvenorconsultancy.co.uk or calling 01793 766 123.

Alternatively, call my mobile on 07525 177 046. Please note that while I offer high standards of service and ensure any plan is right for you, I’m also a busy mum, so work Mondays and Tuesdays only.

Please note

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

The post How can you boost your ISA’s growth potential? Here’s what you need to know appeared first on Alice Douglass.

You can also address any underperforming investments and potential threats to your wealth, such as inflation or not being as tax-efficient as possible.

If you want to take stock of your finances, you might be asking yourself: “what do I need to include in a financial review?” If so, discover five key areas you need to consider.

1. Inflation-proof your wealth

The Office for National Statistics recently revealed that inflation stood at 5.1% in November 2021, the highest rate for 10 years. Inflation is the rising cost of living, which means your money could lose value in real terms, as £100 in the future is likely to buy you less than it would today.

Interest rates were predicted to rise in 2022, which could help inflation-proof your money. That said, the media has reported that interest rates are likely to remain significantly below inflation.

One way to protect your money might be to invest, as over the long term, stocks and shares typically offer greater growth potential than savings. This is backed up by the 2019 Barclays Equity Gilt Study, which tracked the nominal performance of £100 invested in cash, bonds or equities between 1899 and 2019.

It found that £100 invested in cash in 1899 would be worth just over £20,000 in 2019, yet if the money had been put into stocks and shares, it would have been worth around £2.7 million.

2. Check your pension is on track

Regularly checking the value of your pension and the income it might provide in retirement is key to good financial planning. Not only can you see if your retirement fund is underperforming more quickly, but you can also take action earlier to get it back on track.

Speaking to a financial planner is always a good idea, as they can confirm how your pension is performing and provide options if it’s falling short of your goals.

They can also make sure you are maximising the tax relief you receive on contributions. According to the Telegraph, 80% of higher-rate taxpayers don’t claim all of their pension tax relief, meaning they are collectively missing out on an estimated £810 million of unclaimed tax relief each year!

Reviewing your pension – or wider investments – might also be an ideal opportunity to consider switching your pension to sustainable funds. Today these are better known as “Environmental, Social and Governance” (ESG) funds, and according to Pension Age, could be extremely effective in tackling climate change.

Whereas investing with a conscience historically meant reduced growth potential, this need not be the case nowadays. A financial planner could help confirm whether switching your pension is right for you, and ensure any ESG fund you’re considering provides the level of growth potential you’re looking for.

3. Make sure you’re taking the right level of risk

While exposing your investments and pensions to too much risk can be harmful to your wealth, so can not exposing them to enough. This is because the riskier funds within them typically provide the growth, meaning too little risk could cause underperformance.

A financial planner could help you to understand how much risk is right for you and your circumstances. This could help ensure your investments or pensions are exposed to as much growth potential as possible, while maintaining a level of risk that’s acceptable to you.

4. Protect your lifestyle if the unexpected happens

Protecting your income is all too often missed during financial reviews, and yet it’s vital.

While your employer may continue to pay your salary if you are diagnosed with an illness, they are not obliged to do so. If you do not have another source of income, you may have to rely on savings and other assets to support yourself financially.

If these then run out, you might not be able to meet your mortgage repayments or pension contributions, which could put your home and long-term financial security at risk.

The good news is that you can protect your earnings if you’re diagnosed with an illness and cannot work. Income protection could provide a tax-free amount every month that would allow you to meet your financial commitments and maintain your lifestyle both now and in the future.

5. Ensure you’re as tax-efficient as possible

Making use of all the tax breaks available to you could save you money both now and in the future. Not only could you use allowances to reduce your exposure to Capital Gains Tax (CGT), Dividend Tax and Income Tax, but you could also reduce your exposure to future taxation, such as Inheritance Tax.

This could save you significant amounts over the long term.

Another way to be as tax-efficient as possible is to use all of your ISA allowance. As ISAs are not liable to CGT or Income Tax, ensuring you put as much money into them as possible can be a shrewd move.

In 2025/26, you can put a total of £20,000 into ISAs, whether that’s in cash, stocks and shares or a mixture of both. Remember that you cannot carry forward unused ISA allowance to the next tax year.

A financial planner can help

If you are wondering “what do I need to include in a financial review?”, speaking with a financial planner could help. They can ensure the review covers every aspect of your wealth to protect it from the unexpected, maximise growth potential, and make sure it’s as tax-efficient as possible.

Get in touch

If you would like to carry out a financial review or discuss your wealth or pension more generally, please email me at a.douglass@grosvenorconsultancy.co.uk or call my office on 01793 766 123. Alternatively, call my mobile on 07525 177 046.

While I offer high standards of service and will work with you to ensure any plan is right for you, I’m also a busy mum, so work Mondays and Tuesdays only.

Please note

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

The post 5 ways to ensure you get the most from a financial review appeared first on Alice Douglass.

If you have children who have asked for cash, or are likely to receive it from family members, it might be an ideal opportunity to teach them about being savvy with money. Discover 10 lessons that you could teach your children or grandchildren using the cash they receive as presents, or existing savings.

1. Teach them responsibility

Allowing your child to make decisions about the cash they receive will help build financial responsibility and boost their sense of pride. While you can encourage and advise them by talking to them about their options, give them the freedom to say how they use the money. This will help develop their confidence around finance.

2. Budgeting is essential

Chat to them about budgeting with their pocket money. You might want to encourage them, for example, to commit to buying something regularly out of their pocket money, such as a magazine. They will then get into the habit of using what’s left for other things they may want. This teaches your child the concept of budgeting for a commitment and saving for the pleasures in life.

3. Help them understand the value of saving

Encourage them to save their money, perhaps by encouraging them to put it towards a more expensive item that they want. Make sure you don’t buy it for them, as the aim of the exercise is to develop the habit of saving. This could ensure they build an emergency fund when they’re older or avoid getting into debt just to have what they want immediately.

4. Teach them how debt works

Teach your child about “good” and “bad” debt. You could do this by explaining the difference between a mortgage to buy a home that could increase their net worth, and debt created by overspending. The latter is expensive and probably won’t increase their net worth.

One way of doing this could be to charge interest on any money your child borrows from you, so that they understand the cost of borrowing and having debt.

5. To spend, you need to earn

Helping children to understand that money is earned is fundamental. It not only teaches your children a work ethic, but also an appreciation of the value of money. You can do this by encouraging them to do jobs around the home for their pocket money or taking a Saturday or weekend job if they’re older.

The app Gimi offers a pocket money and chores manager, as well as education around earning, saving, and spending.

6. Virtual money is still money

An important lesson to teach your children is that payment apps and online accounts still require money in the first place. One way to help them understand this could be to let your children buy things when they have their own bank account, so they can see the balance reduce and then go up again as they deposit money into it later.

7. Compound returns can work for or against you

Albert Einstein is said to have called compound interest “the eighth wonder of the world”. While compounding can help boost your money’s growth, it can also result in debt mushrooming. Teaching your children to understand the principle of compounding is key, as it could help them make better decisions when they’re older.

8. Introduce older children to investing

As your children get older, consider teaching them about investing. One way of doing this is to open a Stocks and Shares Junior ISA (JISA), which allows you to invest £9,000 in the 2025/26 tax year. An additional advantage of a JISA is that your child cannot access the money until they reach age 18. This could be an effective lesson in long-term financial planning as well as how the stock market works.

9. How to handle a bank account

If your child or grandchild is older, encourage them to open a bank account so that they get used to running one. Teach them to regularly check the balance and what monies are coming into and leaving the account. This will develop a habit of knowing what their financial situation is at any given time, enabling them to make better and quicker decisions about money.

10. The importance of getting professional help

If you use a financial planner, explain to them why you use a professional to help you make better decisions with your money. You might also want to let your children see you talking to your planner so that they can fully understand the value of taking professional advice.

Many financial planners are committed to the financial education of youngsters and will be happy to explain key aspects of finance and investing to your children. This could help take the mystery out of investing.

Get in touch

If you would like to discuss your wealth, or ways you could help your children financially, please email me at a.douglass@grosvenorconsultancy.co.uk or call my office on 01793 766 123. Alternatively, call my mobile on 07525 177 046.

While I offer high standards of service and will work with you to ensure any plan is right for you, I’m also a busy mum, so work Mondays and Tuesdays only.

The post 10 powerful money lessons to develop your children’s financial skills appeared first on Alice Douglass.

If you are, the Covid pandemic and subsequent lockdown has provided some valuable lessons about investing that could help you decide and become a shrewder investor. Read on to discover what they are.

1. Have an emergency fund

Nothing highlights the fact that you never know what tomorrow holds like the Covid pandemic! The impact it and lockdown had on millions of people shows how vital it is to have an easily accessible pot of money for emergencies.

You could have been one of the millions of people who relied on their emergency funds while making ends meet on a reduced income. That said, it’s not only unforeseen pandemics that could create this situation.

An illness or injury might cause an unexpected loss of income, which is why it’s essential to have a sufficient emergency fund before you consider investing. It provides a financial safety net that could significantly reduce the need to cash-in your investments if life throws you a curve ball.

Typically, you should have three to six months’ worth of living expenses in your emergency fund, to help cover any urgent one-off bills or provide an income if you can’t work.

2. Beware of panic selling – it could cost you dear

Investments go down as well as up, and one of the most common reactions to seeing your investments drop in value is to sell. It’s a well-documented reaction within the financial industry, backed up by behavioural science that tells us that the desire to avoid losses is natural.

During lockdown some investors panicked and sold their investments, although it probably deprived them of the future growth that might have recovered the losses.

To demonstrate this consider the following chart, which shows the performance of the MSCI World index since January 2020. The index shows the performance of a basket of companies from 23 developed nations and reveals how the value of the index has broadly increased since the initial drop in 2020.

As you can see, those who panicked during the early days of Covid and sold their investments in April 2020 could have missed out on the subsequent growth. Resisting the urge to panic sell could be critical to the success of your investments.

Please remember, past performance is no indicator of future performance.

3. The markets don’t always follow the economy

While GDP across the world fell during 2020, after the initial downturn at the beginning of 2020, the markets broadly performed strongly despite the global economy continuing to struggle.

An example of this is the Nikkei 250. It was 22.9% higher in January 2021 than January 2020, despite Japan’s economy shrinking by 4.8% over the same period. The Nikkei 250 reached its highest level in 30 years in February 2021.

This means Covid and the subsequent lockdown shows us that it’s not only worth considering investing when economies are strong. It might also be worth investing when they’re weaker too.

4. Diversification is key

A major lesson from the pandemic has been diversification. Diversifying your investments means your returns are not reliant on a single stock, or the performance of one sector in the market.

Another way to diversify is to invest in different regions across the globe. The graph below shows how stock markets in different regions performed during the pandemic up to January 2021.

Source: BBC

As you can see, if you were invested in Asia’s Nikkei and Shanghai indexes, their stronger performance would have offset the downturn in the FTSE 100 if you were invested in that too.

5. Always invest for the long term

The lockdown highlighted the importance of a long-term investment strategy, as having one could have helped investors ride out the market downturn in 2020. This is why financial planners typically suggest you invest for a minimum of five years.

Research by Nutmeg looked at the chances of generating returns from investing over different periods of times. To do this, it used global stock market data from between January 1971 and May 2020.

It found that if you had picked a day at random during that time and invested for one day, you would have had a 52% chance of making a profit. If you had invested for any 10-year period during that time, you would have had a 94% chance of making a profit.

As financial professionals will typically tell you: it’s time in the market, not timing the market, that matters.

Get in touch

If you’re asking: “should invest now?”, speaking to a financial planner could help you decide. They will help you understand the growth potential, the risks involved and whether investing might be right for you.

If you would like to discuss investments or your wealth more generally, please email me on a.douglass@grosvenorconsultancy.co.uk or call my office on 01793 766 123. Alternatively, call my mobile on 07525 177 046.

While I offer high standards of service and will work with you to ensure any plan is right for you, I’m also a busy mum, so work Mondays and Tuesdays only.

Please note

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

The post 5 really important lockdown lessons you must know if you’re asking “should I invest now?” appeared first on Alice Douglass.

An ethical/green/SRI/sustainable investment is one which not only considers the financial returns of a company but also their ethical/SRI credentials.

Such investments can either positively or negatively screen companies (or both).

Positive screening

Positive Screening is where a fund manager will opt to invest in a company based upon (amongst other things) the Company’s positive social or environmental impact. For example, Companies involved in helping to promote sustainability.

Negative screening

Negative screening looks a certain sector such as tobacco production and will avoid this type of company. Even considering their potential financial returns, such companies will be excluded from an ethical portfolio based purely on the ethics.

With negative screening, you can therefore avoid whole areas of the investment market. For instance alcohol, gambling, energy companies, oil companies and so on.

How does it work?

With positive screening, fund managers will go through a much more vigorous process of selecting which companies they invest into. They will also often engage more with the companies to understand what they are doing and potentially encourage them to improve their behaviour.

With negative screening companies will be excluded based purely upon the sector they operate within.

Does this impact investment returns?

 There has been a long-held belief that by investing responsibly will mean sacrificing investment returns. The table below (taken from MoneyFacts July 2019) shows that over the shorter term (up to 10 years), this isn’t necessarily the case.

Over 15 years, the returns from “non-ethical funds” have been superior. Although it could be argued that over 10 years ago ethical investing was a more niche market with fewer funds and less sophisticated procedures than there is now.

It is also important to note that short term investment returns between ethical and non-ethical funds can vary massively. For example with good/bad performance in oil – an area traditionally excluded from ethical investments.

Taken from MoneyFacts July 2019

How do you know where ethical funds are investing?

When looking at and assessing ethical investments, it is important to understand whether the fund is operating a positive or negative screening approach. It is also important to look at whether the approach of the fund manager is aligned to your preferences. For example, some may negatively screen tobacco but not gambling. Sometimes, it is possible to complete an ethical questionnaire which a fund manager can then use to create a bespoke portfolio aligned to your values. If this is not possible, it is wise to get under the bonnet and do some digging. If you would like assistance with this, do get in touch.

To read more about this topic, click here.

The post What is an ethical investment? appeared first on Alice Douglass.