Blog Fullwidth

Bymapfinancesadmin

Current developments in our recommended funds

Working funds from across the worldEvery quarter we carry out a review and analysis of investment funds that are available. What we look for are funds of a decent size – usually £100 million invested and above – and have a good consistent performance over the last five years. We aren’t interested in those that are brilliant only in the short term.

Once we have identified funds we are comfortable in using, we divide these into risk category, and there are five categories in total although we generally only use three of them:

  1. No Risk – no risk usually has no return, so we don’t tend to use these.
  2. Low Risk – there is a small chance of both losing and making money with these.
  3. Middle Risk – middle of the road where you could lose or make some money with these, and there is no definition of “some”.
  4. High Risk – you could lose a lot of money here but also make a lot of money.
  5. Very High Risk – you could make huge gains or lose everything here, so we don’t use these much either.

Once all funds have been categorised into one of the above, this makes up our Recommended Fund List (RFL) and is what we use for new investments going forward. For existing investments, we review those with funds that have fallen out of the RFL, and ask the investor for their permission to move them into those which are in the RFL. So we are always monitoring and keeping a watchful eye on our clients’ money. Not only that, we will give you 24/7 access to how your funds are performing on the MAP Investment Portal.

This process is ongoing and we are constantly monitoring external factors, be they political or economic. At the moment, the economy is in what at best can be called a transition phase. We have reasonable growth in the UK, but we have Brexit looming, and at this stage no-one knows how that is going to affect us. What we at MAP will do is watch all the funds our clients are invested in to make sure that they keep on track.

If you would like to find out more about the MAP investment process or our RFL, please call us on 0345 241 1808 or email us at: enquiries@mapfinances.co.uk.

Please remember that the value of an investment and the income from it could go down as well as up. The return at the end of the investment period is not guaranteed and you may get back less than you originally invested.

Bymapfinancesadmin

The MAP investment process has reached a milestone and its great news

Getting growth from your money

Recently at MAP we had what we think of as a success story, and no it didn’t happen overnight.

A couple who have used the MAP investment platform since 2011 found themselves this month, after a good period on the stock markets, having total gains over the total time of their investment period in excess of £½million.

The couple had followed a fairly balanced investment strategy of 30/40/30 – which is investing in three funds at 10% each in cautious low risk, four funds at 10% each in middle risk and three funds at 10% each in high risk.

We had monitored this money every quarter since inception, and had received the clients’ permission to switch funds as and when we thought it necessary. The clients admitted early on that they had no knowledge of all of these funds, and so basically let us get on with it, which is what we did.

Calculations show that we have managed to get them 7.88% per year every year since we started in 2011. Bear in mind that whilst the FTSE100 achieved an index figure of 7,500 in August 2017, it started off in 2011 at about 5,700. At February 2016, it had fallen to 5,700 from around 7,000 in April 2015, so there have been some lows as well as highs.

The MAP investment process aims to hold clients investments in solid funds which perform consistently well. That is all we are trying to do – it’s not rocket science, but, with rigorous research and hard work, we can deliver strong returns.

If you have money to invest, why not try the MAP way; it really works. Call us on 0345 241 1808 or e-mail us on enquiries@mapfinances.co.uk.

Bymapfinancesadmin

Does raising the female state pension age affect you?

Saving for retirementOne of the things that has happened recently and has probably gone unnoticed by many is that the female State pension age has been raised. This will have a profound effect on many people’s pension planning – both individuals and married – and we would guess that not many people actually know about it, let alone do anything about it.

Pensions are basically a long-term savings plan with tax relief, and because of this long-term effect, you cannot change things easily. A person should put away as much as they can afford into a pension and get the relevant amount of tax relief. If this satisfies what you are likely to need when you get to retirement age, fine.

But what is satisfactory? Here is a sample estimation:

Say your parents and older siblings died at age 90, meaning you could very well need 25 years of pension if you retire at 65. Furthermore, you are likely to £15,000 per year in retirement. This means you will need a pension pot of about 25 x £15,000 = £375,000.

You then need to do a cumulative growth calculation for the years you will be saving and how much you can save per year. Using our cumulative growth tables, if someone aged 23 put £3,000 away per year and got 6% growth on this, at age 65 they should have around £375,000.

Pension planning is something everyone should do but is not a straightforward process. So why not contact MAP and we can assist. You can call us on 0345 241 1808 or e-mail us at enquiries@mapfinances.co.uk.

Bymapfinancesadmin

Making the most of your tax allowances each year

Dealing with tax

Since we know that we will always get taxed, what we should always do is plan. Now planning can cover a variety of situations, like reducing tax overall, or perhaps even take yourself out of tax altogether. The one thing everyone should do is plan things so you get the smallest tax bill you can. You owe it to yourself and your family.

The key area of planning we would like to cover here is the use of tax allowances. Bear in mind most allowances are given for a specific year, and if you don’t use them, you lose them. It is therefore only common sense to use as much of them as you can.

“There are only two things certain in life – Death and Taxes” (Benjamin Franklin)

The main one is the personal allowance which everyone gets. In an ideal world, we would like to see all household income split 50/50, but that is not possible with PAYE income of course. For all investment income in a household, it is down to each couple as to who this belongs to, so couples can split this according to their situation. If both spouses are working, it can get split 50/50; if only one works, it can be split 1/99, i.e. whatever uses up unused allowances. Buy to let property income is an ideal example as well.

In the current tax year, each individual can have dividends up to the value of £5,000 non-taxable, and savings income up to £1,000. This is reduced to £500 for higher rate tax payers and nil for additional rate tax payers. So, once again the argument is there to split such income between spouses as suits you and not HMRC. Even if dividends are higher than £5,000 per year, bear in mind that if someone is liable at basic rate tax, then dividends over £5,000 per year are taxed at 7.5%; for someone liable at higher-rate tax, dividends over £5,000 are taxed at 32.5%, so there are still some savings to be made.

Self-employed people should also consider employing their spouses as this is a good way to “spread” income. It’s not just a case of putting this into a set of accounts – there does have to be some substance behind the figures, so some planning and logistics should take place before you automatically just jump in. PLAN!

Remember that for most allowances it is a case of use them or lose them.

If you would like help with tax planning, please call us on 0345 241 1808 or e-mail us on enquiries@mapfinances.co.uk.

The Financial Conduct Authority does not regulate tax advice