As the end of the tax year draws near, it’s time to put your financial house in order. While it might feel like a bit of a chore, getting your finances in shape before the tax year end is not only smart—it can also save you a significant amount of money. In this blog, we’ll walk you through some top tips for financial planning and why you should pay attention to the tax year-end deadlines. Think of it as a spring clean for your finances!

Why Is the Tax Year-End Tax Planning So Important?

In the UK, the tax year runs from 6th April to 5th April the following year. The end of the tax year marks a crucial point in time when your financial situation is assessed, and the actions you take before the 5th of April can have a huge impact on your tax liabilities.

So, why should you care? Well, making sure your finances are in order could help you reduce your tax bill, boost your savings, and ensure you’re maximising the allowances available to you. Plus, it’s a chance to take stock of your overall financial health—something we can all benefit from!

Top Tips for Financial Planning Before the Tax Year-End

1. Use Up Your ISA Allowance

Individual Savings Accounts (ISAs) are a fantastic way to save tax-free, so it’s important to make sure you’re using your full allowance. For the 2025/26 tax year, the ISA allowance is £20,000 per person. If you don’t use it by the 5th of April, you’ll lose it—so why not make the most of this opportunity?

You can choose between a Cash ISA, Stocks & Shares ISA, or an Innovative Finance ISA, depending on your financial goals and risk appetite. Just be mindful of the deadline, and don’t leave it until the last minute!

2. Consider Contributing to Your Pension

One of the best ways to reduce your taxable income is by contributing to your pension. Pension contributions come with tax relief, so if you’re looking to reduce your tax liability, this is a strategy worth considering. You can contribute up to £60,000 per year into your pension (or 100% of your earnings, whichever is lower), but be aware of the rules around annual allowance and the carry-forward option if you haven’t maximised contributions in previous years.

The end of the tax year is a great time to boost your pension pot if you’ve got the means to do so. After all, you’re not just saving for your future, you’re saving on your taxes, too!

3. Make Use of Your Capital Gains Tax Allowance

Every tax year, you’re allowed to realise up to £3,000 worth of capital gains before you have to pay any tax on them (for the 2025/26 tax year). If you’ve made any profits from selling investments, property, or other assets, consider selling them before the tax year-end to make use of your annual exemption. You could also think about transferring assets to a spouse or civil partner, as they have their own allowance.

By carefully planning your asset sales, you can reduce your overall capital gains tax bill and keep more of your hard-earned money.

4. Review Your Tax Code and Check for Errors

It might sound tedious, but reviewing your tax code can help you avoid paying more tax than necessary. Mistakes happen, and your tax code could be wrong without you realising it. If you think something’s amiss, get in touch with HMRC before the year ends to get it sorted. The sooner you spot an error, the quicker you can rectify it and avoid overpaying.

5. Charitable Donations: A Win-Win

If you’re feeling generous, making charitable donations before the end of the tax year can also be a clever way to reduce your tax bill. Donations to charity are tax-deductible, and if you’re a taxpayer, you can claim Gift Aid on top of that.

You could donate to a cause close to your heart, and at the same time, benefit from a reduction in your taxable income. It’s a win-win!

Other Tips

Keep Track of Your Business Expenses

For those running a business, the tax year-end is a great time to take stock of any business expenses you’ve incurred. Be sure to claim all allowable expenses for the year, as they will reduce your taxable profit and, therefore, your tax bill. Think office supplies, travel expenses, or any work-related purchases. Keeping detailed records throughout the year will make this process far easier when it comes to tax time.

Organise Your Documents

As you prepare for the end of the tax year, it’s crucial to get your paperwork in order. Gather all relevant documents, such as your P60, P45, payslips, bank statements, and receipts for any business expenses. Having everything in one place will help you stay on top of your finances and make filing your tax return much smoother.

Start Early: Avoid the Last-Minute Rush

As tempting as it is to put things off, starting early can save you a lot of stress in the long run. Procrastination can lead to missed deadlines, rushed decisions, and potentially lost opportunities. Set aside some time each week leading up to the 5th of April to ensure you’re on top of everything.

Final Thoughts on Year-End Tax Planning: Get Ahead of the Game!

The end of the tax year is a great opportunity to reassess your financial situation, maximise your allowances, and reduce your tax bill. By following the tips above, you’ll not only be better prepared for the year ahead but also take advantage of opportunities to save money.

Financial planning doesn’t have to be overwhelming—just a little organisation can go a long way. So, why not get a head start and make sure you’re ahead of the game before the 5th of April? Your future self will thank you!

Do you have any tips for making the most of the tax year-end? Share your thoughts in the comments!

Get in touch here if you could benefit from the expertise of a friendly financial adviser.

The post Financial Planning and Year-End tax planning: A Guide to Getting Organised appeared first on Alice Douglass.

If that isn’t bad enough, according to the BBC, experts have warned that inflation could reach 18% in 2023. According to pension provider Standard Life, which questioned more than 2,500 customers, 93% said they were feeling the impact of increasing costs and soaring fuel prices.

This could be particularly significant if you’re retired or about to retire, as higher inflation could jeopardise your long-term financial security as your pension pot may run dry earlier than expected.

So, if you’re asking yourself: “how can I ensure inflation does not ruin my retirement?”, read on to discover more. But before you do, we need to consider what “inflation” is.

Inflation reduces your money’s real terms value over time

In short, inflation is the rising cost of living over time. It means that £100 today is likely to buy you more than it will in the future.

If you use an inflation calculator, you will see that you would need £197 in August 2022 to have the same spending power as £100 in August 2002. This means your money would have to increase in value by 96.5% during the period to keep pace with inflation, which averaged 3.4% over the two decades.

This is significantly below the 10.1% inflation rate for July.

Another risk with inflation is that, as prices rocket, you have to spend more just to maintain your standard of living. According to a study by Canada Life this is already happening, with 55% of UK adults saying they are looking to increase their income to deal with the cost of living crisis.

This is something that could have dire implications for pensioners, which we will look at next.

You may take more from your pension to maintain your lifestyle

As the cost of living rises and you take a higher level of income from your pension pot to maintain your standard of living, you could be at risk of depleting your retirement fund more quickly.

To demonstrate this, you may want to consider the following illustration, which was featured in a Telegraph article.

It shows that if your pension is £100,000 and you took £5,000 a year in income on top of your State Pension, your pot is likely to run out after 37 years if inflation averages 0% during the period. If inflation averaged 7% and you took the same amount of income in real terms every year, the pot would run out at around 15 years – that’s 22 years earlier!

Bear in mind also that inflation is currently even higher than the 7% assumed in this article, so you could deplete your fund even more quickly. All that said, there are ways you may be able to extend your pension’s longevity. Let’s consider three:

1. Reassess your income needs

Reviewing how your expenses have changed over the last year could help you create a realistic budget, especially if you look closely at the outgoings that have increased the most in price. This could help reduce the amount you need to take from your pension pot, which in turn could stop you from taking too much now.

This could help preserve the value of your pension pot over the long term.

2. Assess your pension’s investment performance

If you have a defined benefit (DC) pension and take an income using flexi-access drawdown, the rest of your pension pot will typically remain invested. You may want to look at how the investments within your pension pot are performing, as greater growth could help inflation-proof your retirement fund.

A financial planner can confirm the performance of your pension’s investments, and what your options might be. They will also explain the risks associated with changing your investments.

3. Consider investing your cash

If your cash savings are part of your retirement strategy, you may want to consider the long-term effects of keeping it in savings accounts.

While the Bank of England has increased its base rate to 1.75%, Moneyfacts reveals that the top easy access savings account offers 1.86% (25 August 2022), significantly below July’s inflation rate of 10.1%.

One way you could inflation-proof your money is to consider investing it, as it may provide greater growth potential over the long term. According to research by Schroders, between the start of 1952 and the end of May 2022, UK equities returned 11.7% a year on average despite significant downturns during the period.

Cash returned an average of 6% a year.

That said, always remember that 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.

Get in touch

As this is not a complete list of the actions you could take to extend the longevity of your pension, please contact me if you are asking yourself: “how can I inflation-proof my pension?”.

You can email me on a.douglass@grosvenorconsultancy.co.uk or telephone me on 01793 766 123. I’d be very 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 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. Your pension income could also be affected by the interest rates at the time you take your benefits. Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor.

The post 3 positive ways to stop soaring inflation jeopardising your retirement appeared first on Alice Douglass.

The government have confirmed that the age at which you are allowed to take benefits from your pensions will increase to age 57 from 55.  This will be implemented from 6th April 2028. This means that for some, we will have to wait an extra 2 years to access our pension.

The pension age increase is intended to retain the 10 year age gap between the ages at which you can access your State and Private pensions.

Why the change?

“That announcement set out the timetable for this change well in advance to enable people to make financial plans and will be legislated for in due course.”

How will the pension age increase affect you?

• People born before 6th April 1971 can continue to be able to access their pensions from age 55
• Those born after 5th April 1973 will have to wait to age 57
• Those born between these two dates will have the option to access their pension from their 55th birthday to 6th April 2028. If they do not, they will have to wait until they are 57.

Protection scheme

Pension Age Increase – a summary

Data from the Office of National Statistics (ONS) found that between April 2016 and March 2018, 16% of those between 55-59 had a private pension in payment. The changes in rules mean that 509,426 people (16% of 3,183,915 people) could potentially be impacted by this change.

The pension rules are complex and if you are thinking of transferring you pension or would like to know how this could impact your financial plans, speak to an Independent Financial Adviser.

The post Pension Age Increase appeared first on Alice Douglass.

An article published by Pensions Age talks about research carried out by the Money and Pensions Service (MaPS). The research was conducted by Research Without Borders for the Money and Pensions Service. It surveyed 2,001 UK adults aged 50-70. It revealed that over 37% of workers will leave planning their retirement until two years before or not at all.

That’s the equivalent of 3 million workers who leave their retirement plans hanging in the balance!

Your pension is a big part of your retirement plan

When should you plan for retirement, then? If you’re employed as soon as you’re enrolled into a pension, you start contributing towards your retirement, regardless of how far away that is. It takes the best part of a lifetime to make sure you have enough to live on in your later years. This can be aided by regular reviews of your pension to ensure everything is kept in order.

50 might be the age to think about how to spend your retirement funds. It is, however, a good idea to start thinking about how you’re going to accumulate those funds as early as possible. This will give you the best chance at a positive financial outcome in retirement.

Why you should start planning early on

After all, who knows what can happen in a lifetime? According to the same research carried out by MaPS, nearly 18% of people have decided to delay accessing their pension, while 14% are accessing it sooner to aid their day-to-day finances or to help a relative or friend. It’s worth remembering too that you can take only benefits from most pension plans when you’re 55, rising to 57 in 2028. It’s always a good idea to seek independent financial advice beforehand.

Over fifty percent of retirees (up to the age of 70) have stated that they would encourage the ‘Gen X’ generation to start planning towards their retirement finances earlier.

The earlier the better. You can speak to an Independent Financial Adviser to go through your pension or you can seek guidance from places like Pension Wise. Speak to somebody about making sure you’re putting away money each month towards a retirement fund. We typically tend to think of these things during milestones in life. Marriage, children, buying a home. With the introduction of auto-enrolment, it’s important to make sure you’re focusing on saving for retirement as soon as you start to contribute to your pension.

If you’ve accumulated multiple pensions over the years

Talk to an Independent Financial Adviser or visit sites like www.pensionwise.gov.uk to find out whether you should look at bringing it all under one plan, or whether it’s worth splitting some into different investment options. It’s not unusual nowadays to accumulate different pensions from different employers. Sometimes these can be really small amounts in the grand scheme of things, and over the years, they can be forgotten about altogether.

Are you on top of your pension contributions? Do you know how many pension schemes you have and what kind of funds they are invested in? If not, it’s sensible to find out.

Getting Guidance

Finding somebody to talk to about your plans for retirement can seem like a daunting task, but the reality is, any trained professional will have plenty of experience in this area and will be able to guide you through the process. Too many of us avoid tackling these important tasks because we’re not sure we understand exactly what we’re supposed to be doing about them in the first place. That’s not a good enough reason to let it fester – especially not until two years before you retire!

Whether you seek free guidance and advice or prefer to seek independent financial advice, this tends to lead naturally onto other topics which involve your finances. It is therefore important you get along well and feel comfortable with the person you’re speaking with. Ultimately, you’re making important financial decisions and commitments to your future, so it pays to make sure you’re working through that with somebody you feel is ‘on the same page’ as you are.

Retiring soon?

Have you reviewed your pension or pensions, and do you know what you’re going to be entitled to when you’re no longer working? Will it be enough to cover your lifestyle and financial commitments like property maintenance or rent/mortgage payments?

If not, don’t panic. Set aside some time for yourself to back over your pension contributions and dig out any paperwork you have. As I’ve already mentioned, there are plenty of ways for you to be able to seek advice on the best way forward, as well as how you can make sure you have a robust retirement plan in place.

Not sure whether you’ve got a pension?

If you’re employed, your HR department can usually help or point you in the right direction if you’re unsure whether you have a workplace pension. If you need to find out about previous pension(s) or you’ve spent some time being self-employed, contributing to a private pension, it can feel like a wild goose chase trying to figure out what you actually have.

You can use services like the Pensions Tracing service provided by the .GOV website which will tell you whether you have a pension or what value it is. You need the name of your employer or your pension provider to be able to carry out the search.

Still stuck? Talk to an Independent Financial Adviser about your situation. They will be able to work through everything on your behalf before suggesting which ongoing options are available to you.

Start planning for retirement now

In conclusion, it’s never too early to start planning for your retirement. After all, it could be the difference between having a comfortable retirement or having to work just to get by.

Review your retirement plans annually to make sure everything is on the right track. It might seem unnecessary, but regulations and legislation change over time, we’ve seen that with the increase in retirement age. It’s important to keep yourself up to date with everything that’s happening on a yearly basis.

By putting your efforts in now, it means you can start to plan what your retirement will look like knowing you have a pretty sum ready to access when you retire.

If you want to find out more and discuss your retirement plans in more detail, you can contact me and I’ll get back to you soon.

The post Plans for retirement: When should you do it? appeared first on Alice Douglass.

As a new mum to be myself, here I go through each financial aspect I think you should investigate when you are expecting.

Maternity Pay

 The first thing to find out is how much you will receive while on maternity leave.

In terms of Statutory Maternity pay, you are entitled to up to a year of maternity leave from your employer, but this doesn’t mean you will get paid for the full time. You will be eligible for 39 weeks’ pay as follows:

First 6 weeks               90% of your average weekly earnings before tax

6-39 weeks                  £187.18 (2025/26) or 90% of your weekly earnings (whichever is less)

39-52 weeks                Unpaid

In order to qualify, you need to earn at least £125 per week (2025/26) and have been with your employer for at least 26 weeks.

Your partner will also be entitled to Paternity pay.

Your employer may pay more in terms of maternity pay. To find out if this is the case, you will need to have a conversation with your employer or HR department. This may well dictate how long you can afford to take off work when your little one arrives.

If you are self-employed (sole trader), you cannot get Statutory Maternity Pay. You may however, be entitled to Maternity Allowance. You could get:

• £27-£187.18 a week for 39 weeks (2025/26)

To find out more, click here.

Budget

Next, budget. Not only for everyday spending but also for that all-important baby paraphernalia.

In terms of everyday budget, once you know what your maternity pay will be calculate all you monthly income considering any reduction in maternity pay after a period of time and any benefits you may be entitled to (see below).

Then, look at your current outgoings – include everything from insurance to pet food. Once you know what your current spending is, you will then need to estimate additional baby expenses such as nappies, milk formula, baby clothes and so on. You will then have an idea of how much income you need to sustain your new lifestyle.

You may need to start saving some of your current income to support you whilst on maternity leave.

It would also be a good idea to think beyond maternity leave. You may need to consider nursery/child-minder costs for when you return to work.

For the big one-off expenses, such as a new travel system investigate what you want and the cost of these. Tot these up and see if they are affordable. Sometimes excited grad-parent to be will want to help.

If new items are not affordable, look at second-hand sources. We bought a lovely travel system (excluding Car Seat) from Ebay – good as new. £900 new, we paid £100. Do note, some things are advised not to be bought second hand e.g. Car seats and mattresses.

Don’t get into debt just to buy the newest and best – all baby needs are love and to feel safe.

Child support

 On having a baby, everyone is entitled to claim Child Benefit.

You can claim child benefit if you have a child who is under 16 or 20 in Full time education. It is £26.05 per week for the first child and £17.25 for an additional child (2025/26).

The benefit may be taxed if you or your partner earn over £60,000 per annum and if either of your earnings are over £80,000 you will have to pay back 100% of your entitlement (2025/26).

If you are not working or you do not earn enough to make National Insurance Contributions, and your child is under 12, Child Benefit gives you National Insurance Credits. These could towards the State Pension, so you do not have gaps in your record.

If you would like to claim Child Benefit – follow this link.

Don’t forget, you also get free NHS dental care and free prescriptions while you are pregnant and for a year afterwards.

To find out more about Financial Help if you have children, click here.

Protection

Reviewing your protection

Even if you have life cover and critical illness cover in place, it is worth reviewing this when you are expecting a child. You may wish to consider the following:

• Is the current level of cover enough if something should happen to you or your partner? Will the amount of cover in place cover lost income/childcare/enough peace of mind that you can spend time with your children without worrying about finances should the worst happen?
• Does your critical illness cover include Children’s Critical Illness cover? Many modern policies will now include cover for children as an optional extra providing c£25,000 worth of cover should a child be diagnosed with a certain Critical Illness.

If you have no protection

If you do not have any protection in place, it is worth thinking about what you would do if you/you partner:

• Were unable to work for a prolonged period due to illness, accident or injury. How would you pay the bills? Such as the mortgage, electricity, food and so on. Even if you have savings, how long realistically would they last?
• Died – would the surviving partner be able to maintain their current standard of living and afford to pay the mortgage and bills? Keep the family roof over your head. If the worst did happen, the last thing you would want is having to move to a new house as you cannot afford to maintain your previous lifestyle. Even if you could afford the bills, would you like to be able to reduce working hours to spend more time with the children considering their loss?
• Were diagnosed with a critical illness – would you want to be able to focus fully on recovering and spending time with family rather than worrying about finances?

To find out more about what is Life Cover, click here.

More about Critical Illness Cover, click here.

To find out more about Income Protection, click here.

If you are unsure of where to start or how much cover you might need, it is worth speaking with a financial adviser who will be able to assist.

Planning for your Child’s future

 If you want your baby to go to a fee-paying school or to university or you want to buy them a car at age 17, you would be well placed to start planning and saving for this as soon as possible. There are many savings and investment plans which could be suitable to use for these goals. It is worth starting with having a rough idea of how much you would need for each objective as this can give you an idea of how much you need to start saving today. You may also want to consider what interest you may get on your savings, or what return on investment may you get over the number of years of the investment. You should take into account how much investment risk you wish to take with the money.

This is the type of thing a financial adviser can help with, so do get in touch if I can be of assistance.

Opening a JISA

 It may be worth considering opening a Junior ISA for your baby. This can be held in either Cash or Stocks and Shares. Unfortunately, the Government no longer make payments into these however, you can save up to £9,000 each year tax free (2025/26). It is worth remembering that this will be in the baby’s name so they will be entitled to access the money from the age of 18 so you may have little control over what they spend the money on.

If you would like to find out more information about JISAs, click here.

Most financial Advisers would be happy to advise on Stocks and Shares JISAs for your child alongside your own financial planning.

Pension

Within the UK, there is a huge gap between what men save for their retirement compared to women. Among other things, one of the reasons for this is career breaks taken by women where they do not pay into pension or other retirement saving vehicles.

If you can afford to, it is worth maintaining pension contributions throughout your maternity leave.

 If you plan to be a homemaker on the birth of your baby, it is a good idea to claim Child Benefit so any gaps in your State Pension credits are plugged. It is also worth remembering that even if you aren’t earning an income, you can still pay £2,800 net, £3,600 gross (with £720 tax relief) into a pension (2025/26).

It is worth reviewing your pension to ensure that you understand the implications of reducing or stopping pension contributions on when you may be able to retire and the income you may generate in retirement.

To find out more about pensions, click here.

Writing your will

 It is really important that you review and update or write your will if you have a family. This will enable you to stipulate what you would like to happen should you die in terms of your finances and also, should something happen to both of you, guardianship for your baby.

Financial Planning when having a baby – checklist 

These are the key things to make sure you review when looking at your financial planning when having a baby:

• Check maternity pay entitlement
• Do a budget planner
• Claim Child Benefit
• Understand other benefit entitlement
• Review or set up protection
• Plan for your baby’s future
• Open a JISA
• Review your pension and retirement planning
• Review or write your Will

Financial Planning when having a baby

There are so many things to consider when you are having a baby. But don’t forget to add Financial Planning when having a baby to your list.

If you would like assistance with this, I can help with your budget planning, protection, planning for your baby’s future, opening a JISA and reviewing your pensions and retirement planning so do please get in touch.

The post Financial Planning when having a baby appeared first on Alice Douglass.

Are you retired and getting divorced? Now is the time to consider your financial arrangements.

December to March can put a strain on all of us. But it can be especially challenging if you have been having ongoing relationship problems with your spouse. While festivities in December probably meant higher than average spending activity for your household and plenty of social events with friends and family, like many of us, a quiet January is a time to pause and reflect on areas of your life which you aren’t happy with.

You’re Not Alone

And you’re not alone. January 6th has been dubbed ‘Divorce Day’ by Solicitors and Lawyers. And January 24th is supposedly ‘the most depressing day of the year – with bills and finances, short, darker days and relationship & career issues to blame.  Valentines Day is just behind us too, so it’s easy to see how this time of year can be the breaking point for rocky relationships.

Divorce among the over 65’s has been steadily rising for the last 15 years. According to the Office of National Statistics, their publications on Divorce show that between 2005 and 2015 the number of women over the age of 65 getting divorced rose by over twenty percent, while the number of men at retirement age increased by around eight percent.

Retired and Getting Divorced – The Reality

If you’re over 65, retired and getting divorced, it’s likely that at least part of your married life was spent with one person as the sole breadwinner or one of you earned significantly less than the other. Or it may be that you retired early while your partner continued working or vice versa. Perhaps you’re both approaching retirement and have decided that divorce is the best option for you both, which is why you’re considering how this will impact you when you do retire.

Either way, while things like custody of children or agreeing on how to support them financially might not be an issue anymore because they are usually living independently at this point, the question of how you or your spouse will be able to live independently following the divorce becomes the most concerning factor at this stage in life.

It’s not all doom and gloom, though. If you’re reading this, you’re already taking a pragmatic approach to your situation by starting to figure out how your financial income and assets as a married couple will be divided in your divorce.

First things first – will I need a Financial Adviser for my divorce?

During your divorce, you can use the help of a few specialist advisers. Solicitors for the divorce proceedings themselves. Mortgage Advisers to help ascertain income requirements and a mortgage. And Financial Advisers who can help with looking at cash flow and your future.

This is a difficult and emotional time which can be eased a little by having a team who can assist you in the various moving parts of the process. It’s not pleasant to have to consider your future following your divorce proceedings and how that can be achieved. A Financial Adviser will work with you to figure out how much income you need, as well as how this could be generated from assets which were shared when you were married.

Most Financial Advisers will offer an initial complimentary meeting and will be sympathetic to your circumstances. This means if you think you might need or want to work with a Financial Adviser during your divorce proceedings, you should ask if they will be able to offer you a complimentary meeting to talk about your situation. It’s important you feel comfortable with everybody you work with during this difficult time and an initial meeting will help you to decide who you think is best for you.

Splitting Assets in a Divorce – What do I need to think about?

How much income do you need?

You will need to figure out how much income you need now and in the future. When divorcing or separating, it is important not to just think about assets, but to think about income requirements too. It’s important to ensure expectations are fair and the amount you receive is also fair to support your income needs.

This could be to:

• Pay the mortgage (if you take on the remaining mortgage on the family home or have a small mortgage on your new home).
• Pay bills.
• Maintain a reasonable lifestyle.
• Support your retirement.

How will this income be generated?

It is also important to consider how income could be generated from your joint wealth.

Maintenance

Would your ex-spouse need to pay you maintenance and how long will this last for? How would you generate income after the maintenance ceases?

Assets

Do you have assets that could generate an income? For example, investments or property? How much will these generate and how much will you be entitled to?

Cash Flow & Money Management

If you receive a lump-sum payment, how will this generate an income for you and how much income will it generate? You will also need to think about the implications of income not being paid for a period of time and how this will impact you, such as rental voids or falls in the stock markets. How could you do this?

Your Living Arrangements

Look at the housing market – see what’s out there and how much you will need. You could talk to a mortgage adviser regarding how much you could reasonably afford to borrow or how much income you would need to get a house that suits your requirements. You could also plan to take over the mortgage on the family home.

Remember it’s not all about property.

Most separating couples will turn to the obvious tangible assets to start with, like the house, additional properties you may have and any other high-value assets you own together. But did you know your pensions are likely to be worth more?

In the latest release of Household Wealth in Great Britain published by the ONS, it showed that total private pension wealth in Great Britain made up 35% (2025) of total wealth (or £4.48 trillion). While these numbers might seem too big to wrap your head around, they show just how much wealth is tied up in pensions.

It’s understandable why you might feel like avoiding pensions or other aspects which seem complex and instead figure out assets like property which are simpler to value and divide in a divorce. But this goes to show pensions mustn’t be ignored and are becoming increasingly relevant in divorce proceedings – especially with the increase in divorces for those in retirement. Despite the fact the majority of the United Kingdom’s wealth is tied up in pensions, my blog last year on Financial Advice & Divorce revealed that research by Scottish Widows showed pensions were only discussed in 30% of divorce cases.

Final Thoughts

If you can, seek individual advice as early as possible so that analysis can be carried out as thoroughly as possible on your finances. Pensions are really complex. It’s important that a professional is involved especially if there are multiple schemes or large values. It’s also worth remembering that for defined benefit schemes with a value of over £30,000 a Financial Adviser will have to provide any advice to you.

Would you like to know more about pensions or the other financial implications of going through a divorce? There is more guidance and insight for you on my blog. You can also contact me via the website to arrange a complimentary initial meeting or email me at a.douglass@grosvenorconsultancy.co.uk. It’s okay if you’d like to explain your current circumstances to see if I can help before we arrange to meet.

I hope this article has helped you to begin to form a clear list in your mind of what needs to be considered during your divorce and if we don’t meet, I hope you have a content and financially stable future ahead of you once your divorce proceedings are over.

The post Retired and Getting Divorced? Time to Consider Financial Arrangements appeared first on Alice Douglass.

People getting divorced will often engage with a Lawyer to assist with sharing assets and agreeing custody of their children. They don’t always think about engaging a Financial Adviser. But do you need a Financial Adviser when getting divorced?

According to New Model Adviser (Jan, 2018) “Statistically, January is the most popular month to commence divorce proceedings”. Maybe because everyone has been cooped up for Christmas or they cannot go on another year. Whatever the reason, it is important that on divorce, a holistic view of assets is taken.

Why are pensions important?

According to the Office of National Statistics, 42% of marriages in England and Wales end in divorce. The fastest growing age bracket for divorce is the over 60s. Again according to the ONS, in 2017 and 9% (over 9,000) of divorces involved couples who were over 60.

As my previous blogs highlighted, there is £12.8 trillion amount of wealth in the UK. £4.48 trillion (35%) is in private pensions (excluding defined benefit pensions) and £5.12 trillion is in property (40%). People often get fixated on assets when they divorce. It is however vital for separating couples and their professional advisers to consider not just how they will fund their lifestyle now but also how they will fund their retirement.

The fact that a large amount of the UKs wealth is in pensions and with the increase in divorce in over 60’s, shows that pensions shouldn’t be ignored. They are an increasingly relevant consideration. However, research shows that pensions are still being overlooked (research by Scottish Widows showed they were only discussed in 30% of divorce cases).

Important considerations when splitting pensions

 An important consideration as a lawyer is whether you have the knowledge, experience and authorisation to advise on pensions. I will cover off the things you may want to think about.

How would you analyse whether the transfer value offered by a scheme is good value and  whether your client is getting their fair share?

In defined contribution pensions, this might be easy, the plan will have a value. The value will be based on where the money is invested, the number of units held and the unit price. There are other factors that may need to be considered. Such as whether the plan has guaranteed annuity rates, guaranteed growth rates, greater than 25% tax free cash and so on. These should be considered in how the assets are split.

Defined benefit pensions are more complex. The Cash Equivalent Transfer Value provided will be resultant from a complex actuarial calculation. This is based upon the promised pension built up, revalued to retirement age and scaled back based upon expected investment returns.

In the calculations, actuaries use certain assumptions, these may or may not lead to a generous transfer value. Small changes to the assumptions can vary the transfer value hugely. It is therefore important to engage specialists as early as possible to see if the value is generous or not. Certain types of defined benefit schemes do not offer transfer values that are aligned to the market. In such cases, an independent transfer value would be essential. For these reasons, it is important to engage a Financial Adviser in the process as early as possible.

It is difficult to establish whether the transfer value provided is generous and a complex analysis is required. Transfers where the CETV is greater than £30,000 cannot go ahead without financial advice from a pension specialist.

Where would you start analysing your client’s risk profile and how would you recommend where a pension share should be invested?

On splitting pensions, the result is often that the money needs to be housed in a separate pension for the receiving spouse. There are countless pension providers and products available. How would you go about carrying out the due diligence on the providers and be able to assist in ensuring the money is moved to a suitable arrangement?

Would you or your client know how to establish where their money should be invested? How will you measure their attitude to investment risk and select investments appropriate to this? Financial Advisers do this all the time and are well versed in discussing these issues with their clients and ensuring that they are invested appropriately.

How would you look at multiple asset and income streams to establish if your client will have sufficient income now and in the future?

By utilising cash flow modelling, Financial Advisers are able to demonstrate how capital and income could be utilised. Based on tax, performance (investment returns) Cash Flow can illustrate how long capital will last based upon how much income is drawn. This enables clients to visualise how their assets can generate an income and for how long it may last. It can also help them to look comparatively not only at a figure now but also its potential value well into the future.

Do you need a Financial Adviser when getting divorced?

Should Financial Advice and Divorce go hand in hand? For me in a lots of cases, the answer to this question would be yes. Financial Advice and Divorce is especially required if there are pensions involved or you want to understand how assets can generate income post-divorce.

If you would like to find out more, read my previous blogs here – Financial Considerations on Divorce Pensions and Divorce.

Or if you are a Lawyer, contact me, I would love to meet. If you are an individual going through a divorce, contact me for a no obligation complimentary initial meeting.

The post Financial Advice and Divorce appeared first on Alice Douglass.

Pensions

Have you been collecting pensions from various employers? Do you know where they are invested and whether this is in line with your attitude to investment risk? Do you even know how much they are worth and if they are on track to provide you with your desired lifestyle when you retire?

Don’t leave it too late and bury your head in the sand – if you discover you have too little retirement provision the year before you wish to retire, you may need to make some very difficult decisions at that time.

Investments

Do you have money in savings and investments? Do you know how they are invested and whether they are on track to realise your financial goals. Have you utilised your ISA allowance this tax year? Are you invested as tax efficiently as you can be?

Protection

Do you have sufficient cover should anything happen to you? Do you have any at all? What would you do if you were diagnosed with a critical illness or worse still, died? Do you need the peace of mind that cover is in place?

Take action

Reviewing our finances is something that we often put off – life gets in the way. Don’t put it off until it is too late.

If you haven’t had a review of your finances for the last 2 years and you are unsure of how your money is working for you, now could be the ideal time to review whether you are on track to achieve your goals and your financial plan is still right for you.

Contact me for more details or to arrange a no obligation complimentary initial meeting.

The post New Year – Time to review your finances? appeared first on Alice Douglass.

In this article, we look at How can I take an income from my pension?

Firstly we will look at how a pension is taxed when you take benefits.

How is the pension taxed?

With a pension fund, you can take 25% tax free with the remaining 75% taxed as income. Traditionally, people took their tax free amount as a lump sum with the balance used to provide an income. Today this isn’t always the case.

When can you take benefits?

You can take benefits from your pension any time after age 55 (rising to 57 in 2028). There are some instances when benefits could be taken before this however, I am not going to cover those here.

How can I take an income from my pension?

There are several options for how you can take benefits and I will cover each on in turn:

Take a tax free lump sum with no income

You can take your 25% tax free amount as a lump sum and leave the balance invested. You may wish to do this if for example you wanted to pay off your mortgage or another debt but didn’t need additional income.

When you take a tax free amount that “crystallises” that amount. To illustrate this, let’s say for example, you have a pension fund of £100,000. If you took your tax free amount of £25,000, the whole fund would be crystallised. This means that even if your £75,000 grew to £80,000, you would not be able to take an additional 25% from the £5,000 growth.

If you had a fund of £100,000 and you took £10,000 tax free, this would crystallise £40,000. £10,000 would be paid out. £30,000 would remain invested but would be crystallised. £60,000 would also remain invested but would be uncrystallised. You could take 25% tax free from the uncrystallised amount in the future. You cannot take any more tax free amounts from the crystallised element.

Lump sum – some tax free and some taxable

This is known as uncrystallised pension lump sum (UFPLS). It allows you to take a lump sum from the pension with 25% of it tax free and the rest taxed as income. Let’s say you had your £100,000 and you wanted £10,000 as a lump sum. Rather than the whole lump sum being tax free you could have 25% (£2,500) tax free with the balance (£7,500) taxed as income. Leaving the rest to be taken at a later date.

In this instance, if your earnings are below the personal allowance (currently £11,850), there would be not additional tax to pay on the taxed element. A basic rate tax payer would pay £1,500. A higher rate tax payer would pay £3,000 tax. By taking the tax free element and income at the same time, it can allow you to take an amount but minimise the tax paid without taking all of the tax free element at once.

In some instances, pension providers will apply emergency tax to such withdrawals. This can be reclaimed by using a P55 form which can be accesses here. However, this is something to be aware of.

The whole £100,000 could be taken as a lump sum however, it would incur up to £33,750 tax. Unless there is a very good reason for doing so, I would rarely recommend doing this.

Taking an income

You can use your pension to take income flexibly or you could purchase a guaranteed income.

Taking income flexibly

Income can be taken flexibly via drawdown. This allows you to take lump sums and or income payments. To start, stop, increase or decrease payments. It is important to be aware that your money will remain invested therefore, you will be taking on the investment risk and there is no guarantee that your money won’t run out.

You can take income by either crystallising:

• The whole amount – taking 25% tax free lump sum and using the balance to provide an income
• A small amount e.g. £40,000, taking £10,000 tax free and using the rest to provide an income or
• Small amounts each time you take an income payment so each withdrawal you take has a tax free element and an income element.

If you would like to find out more about taking a flexible income, read my blog here.

Taking a guaranteed income

You can use your pension fund to purchase an annuity. An annuity would provide you with a guaranteed income for the whole of your life or a fixed period of time. The amount that you receive will depend upon the fund value, your age, your health, whether you smoke, if you require a guarantee period, if you would like a spouse’s pension included and whether you want the income to increase. This can provide peace of mind that you will never run out of money. If you would like to find out more about annuities, read my blog here.

Things to be aware of

Not all pension plans will offer all options for taking benefits. Your provider will be able to let you know which options they offer.

Taking money out of a pension to put into your bank is not usually a good idea.

This is a complex area and there are lots of things to consider. If you are unsure, about your options, Pension Wise  will be able to offer guidance but not advice. Here is the link to Pension Wise.

Taking too much money out of your pension could mean you pay more tax than you need to.

Taking too much out of your pension could deplete the fund entirely.

You will remain invested with all of the options above other than the annuity. It is therefore important that you ensure that you are invested appropriately for your risk profile and manner in which you are taking benefits.

Speak to a financial adviser.

If you would like a no obligation initial meeting, please contact me.

The post How can I take an income from my pension? appeared first on Alice Douglass.

“Some researchers trace the origin of spring cleaning to the Persian New Year, which falls on the first day of spring. Others suggest spring cleaning dates back to an ancient Jewish practice of thoroughly cleansing the home in anticipation of the springtime festival of Passover. The Catholic Church thoroughly cleans the church altar and everything associated with it on Maundy Thursday, in the spring. In North America and northern Europe, March was often the best time for dusting. This is because it was getting warm enough to open windows and doors, and the high winds could carry the dust out of the house.”

Whatever the origin, spring is a good time to get organised and spring-clean your finances.

Why should I review my finances?

If you have a financial aspiration for the future, it is a good idea to ensure that you are on track to achieve your goal. Many people pay into pensions and collect investments and feel that because they are saving money, they are doing enough to fund their retirement, for example. The reality is that if you do not review the tax wrapper into which you are investing, the product itself, the amount you are paying in and where it is invested on a regular basis, it is possible you will not achieve your financial goals. It is easier to make adjustments to your planning in the early years. Otherwise, if you leave it too late, you could find that you have to work for longer or compromise on the retirement that you desire, for example.

When should I review my financial plans?

Changes in legislation/regulation

Pension freedoms came into effect 3 years ago, which enabled people to access their pensions more flexibly from age 55. The reforms also introduced changes to the death benefits. Although a lot of companies have updated their pensions, some older-style contracts do not offer these flexibilities. It may not be important if you are a long way off from retirement; however, if the company has not updated their contracts, it could impact how the money in your pension is passed on to your loved ones in the event of your death.

Changes in your circumstances

When something changes in your personal circumstances, it is a good idea to review your finances. This is because something that happens in your life could affect your financial plans or how much risk you are willing to take with your investments, for example. Even changes such as having a pay rise or changing jobs could impact your financial plans.

At a life event

An obvious life event would be when you are at retirement, although 30% of people going into drawdown do not seek financial advice (Professional Adviser, 2018). I find this very surprising and, quite frankly, worrying.

I recently met with a client who had received a letter from their pension provider saying that he was approaching retirement and should make a decision about how he wished to draw his pension. He came to see me with a view to taking the whole pension as a lump sum so that it was “his”. The client had no intention of stopping working. He was earning £40,000 a year and had a pension valued at £180,000.

If he had taken the pension as a lump sum, he would have received 25% tax-free, and the rest would have been taxed as income. Thus, he would have paid £51,946 tax on the withdrawal in the 2025/26 tax year. He was planning on putting the £128,054 of his £180,000 after tax in his bank account. By working this through and reassuring him that the pension remains his and by understanding his objectives, I was able to save him this huge tax bill. Plus potentially more by not taking his money out of a tax-free (including inheritance tax-free) tax wrapper.

Other life events where you should seek financial advice:

• Buying a house
• Changing jobs
• Receiving an inheritance
• On divorce
• Having children

And many more

On a regular basis

If you receive financial advice on an ongoing regular basis, you can build up an ongoing relationship with your adviser. They can really get to know you and your financial plans, which can be altered and amended to address any of the circumstances above and many more.

My clients know that they can phone me if something happens in their lives that could affect their financial plans. I would much prefer to know something even if it feels inconsequential, as it could impact our planning.

If you review your plans regularly, you can ensure they are on track to achieve your goals and make adjustments accordingly if needed.

If you haven’t reviewed your plans within the last 2 years, now would be a good time to do so.

One for the Ladies

According to a recent study by Zurich (Professional Adviser 2018) we are less likely to be engaged in our finances. It could be due to instances such as those experienced by the lady in my recent blog, which you can read here. By being less engaged than our male counterparts, we could find ourselves less well off in retirement, with men having an average pension pot size of £212,000 compared to women’s £132,000 (Read the full article here). There could be many reasons for this, but don’t let the fact that you haven’t sought financial advice be one of them.

Other blogs of interest

If you are considering taking financial advice but are unsure of how it can benefit you, read my previous blogs What is the value of Financial Advice? and The value and benefits of financial advice.

If you would like to have a no obligation initial complimentary consultation, please do contact me.

The post Spring clean your finances appeared first on Alice Douglass.