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Category Archive Retirement Planning

Bymapfinancesadmin

MAP Autumn 2021 Budget Highlights

Check out our highlights of the Autumn 2021 Budget from 27th October 2021 using the reader below.

2021-Autumn-Budget

If the above reader does not display correctly, you can access the guide by clicking here.

Bydylanharper95

Work with Us

If you are an Independent Financial Adviser or tied/restricted financial adviser who wants to work in the independent sector and be able to provide clients with a full financial planning service, we would like to talk to you.

We are looking for self-employed individuals who are generating an income of £100,000 or more and want to grow their business without the continual burden of regulation and change management that impacts so heavily on advisers today.

To find out more about the opportunities to work with Money Advice & Planning, please download our Recruitment Brochure, or alternatively, contact our Business Development Manager Ian Clisby on 07788 566 547 or email ian.clisby@mapfinances.co.uk.

Bydylanharper95

What kind of pension can you expect from your pension fund

One of the big challenges that people have is trying to figure out what they “might” come out with a pension when they retire, and the problem here is that this can be over a long time – hence the confusion. M A P has developed a simplified cash flow model which is usable as long as you use reasonable parameters – which is what M A P is here for.   

What we can do for you is use your current value of pension and calculate annual growth of 5% a year (because we think that that is pessimistic enough) and so build up a total pension figure that we think is achievable at your retirement age. We then work out form this what we reckon you could safely withdraw form your pension fund each year – and this is your taxable income. 

We invariably extract your tax free cash from the pension before we start doing this, because everyone is allowed to take out up to 25% of your total pension pot as tax free cash, and this is worthwhile doing because it gives people a cash buffer to fall back on and you can always take a regular income from it as well – with no tax implications.

Finally, we encourage clients to contact the DWP to get a pension forecast and this will tell everyone how much State pension they will get and when it starts.

Collecting all of this information together then allows us to show what kind of pension income you are looking at, and this then  

  • Helps you plan 
  • Monitors your progress to achieve your target/goal 
  • Is adaptable to changing circumstances  

Moreover, we will then update that cashflow every year with actual growth achieved – and so allow you to keep on top of things. 

M A P will do this for all clients that use our retirement planning service and that can help you plan, after all we are Money Advice & Planning. 

The material is for general information only and does not constitute investment, tax, legal or other form of advice.  You should not rely on this information to make (or refrain from making) any decisions.  Links to external sites are for information only and do not constitute endorsement.  Always obtain independent professional advice for your own particular situation.  Money Advice & Planning Ltd is authorised and regulated by the Financial Conduct Authority.  For any enquiries, contact Andrew on 07957 836211 or enquiries@mapfinances.co.uk  

Bydylanharper95

What does planning actually mean?

When someone thinks of planning, they may very well imagine that this involves a lot of technical stuff that is beyond them, but I would suggest that this is where an IFA comes in.     It never ceases to amaze me how many people do not do any planning and are then surprised when they get a tax bill, and ask me IN ARREARS what I can do to make it go away.  You won’t be surprised to know that in many cases I can do very little because actions needed to have been taken BEFORE certain events. 

INCOME TAX –  you should always use the personal allowances that we all have, and the main example is husband and wife.   If for example, a husband has got all the household income taxed on him – he may very well be taxed at 40%, whereas his wife might not even be taxable at all.      If a couple actually planned things out, certain income streams could be hived off to a wife and that would then allow here to use her personal allowances of £12,500 a year.   There is also the £2,000 dividend allowance, and also the personal savings allowance of £1,000.      If one spouse is taxable at 40% and the other at 20% with room to spare, then they can save tax of 20% by moving some income from the higher rate taxpayer to the lower rate – if it is possible to move of course.  

PARTNERSHIPS – Don’t forget that if you have joint income with your spouse, this doesn’t need to be shared 50/50 – it can be shared basically how you like.   It’s not the first time I have shared this 99%/1% because one spouse is paying tax at 40% – and the other 20%.

INHERITANCE TAX –  yes I know fine well that most people don’t look at this until it is far too late, but instead of Inheritance Tax read Voluntary tax.   Given a bit of time, I can invariably get a couple’s potential tax bill down from hundreds of thousands to nil – or close to nil as is possible.     If you PLAN for IHT, you can reduce it quite considerably, and the alternative is true – because if you do nothing about it and wait until it hits you in the face, then you will pay dearly for it.    I have seen this so many times.      

All we are doing with these tips is using the allowances that have been given by HMRC – use them to the full or lose them. It’s as simple as that.

There is one of these sayings that I have seen on banners from motivational people – that says “Failure to plan is planning to fail”, and you know what – IT’S CORRECT.

Don’t wait for a disaster to happen – contact MAP now and start your planning.

The material is for general information only and does not constitute investment, tax, legal or other form of advice.  You should not rely on this information to make (or refrain from making) any decisions.  Links to external sites are for information only and do not constitute endorsement.  Always obtain independent professional advice for your own particular situation.  Money Advice & Planning Ltd is authorised and regulated by the Financial Conduct Authority.  For any enquiries, contact Andrew on 07957 836211 or enquiries@mapfinances.co.uk

Bydylanharper95

Pensions and Tax

It’s easy enough to recommend a pension to people and mention the fact that the Govt gives you tax relief on all contributions, but when it’s time to start withdrawing from your pension when you retire – they start to take it all back, and this is what a lot of people don’t take into account.

The ideal situation is to take £12,500 a year from your pension as that would mean that you don’t pay any tax at all on it. However, not a lot of people would be able to live comfortably from this, so what do you do then ? Well, there are two alternatives as follows :-

  1. When we activate a person’s pension, we invariably always extract the 25% tax free cash that is available from the pension, and if this is not needed at the time, then we put this into a savings package that can then be accessed at any time thereafter. In quite a few cases, where people need something in excess of the £12,500 a year but perhaps not that much, then we can setup a monthly withdrawal from the savings and of course this would be tax free. We have had quite a few situations of clients getting £18,000 – £20,000 a year all tax free, with £12,500 being taken form pension and the balance being taken from savings.
  2. Where the total pension needed is in excess of this, then more can be taken form the pension but any amounts in excess of £12,500 will be taxable, so you need to bear that in mind.

As you can probably imagine, there are all sorts of alternatives here especially when you take the taxable State pension into account as well, but as financial advisers, M A P can quite easily plan things out for you at commencement and then monitor them on an ongoing basis. That way, when you have got tax relief on paying into your pension, and you are minimising the amount of tax you are paying when taking it out, can make an enormous difference to the end result, and give you so much value for money – which is what we always try and do.

The last thing that you want to do is merely take out x amount every year and pay the tax WITHOUT planning, as that could cost you a great deal.

This is what I have mentioned before when discussing cash flow models – where we update them every year as you go through life. This then gives you something to work to each and every year and gives you a great deal of comfort knowing that you are looking after your money to ensure it lasts as long as possible and that the taxman doesn’t take a bigger share than is necessary.

We work closely with clients to show them what their pension can achieve, and also to reduce tax wherever possible – why don’t you let us help you.

The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Links to external sites are for information only and do not constitute endorsement. Always obtain independent professional advice for your own particular situation. Money Advice & Planning Ltd is authorised and regulated by the Financial Conduct Authority. For any enquiries, contact Andrew on 07957 836211 or enquiries@mapfinances.co.uk

Bydylanharper95

What can your pension achieve?

Many people stumble through saving for their retirement probably because it is such a blurry picture. Imagine this – trying to save for a retirement – don’t know when, don’t know how much you are going to need, don’t know how long you will live for – and so it goes on. Saving for a pension is vague at the best of times, but because it is a long term contract, then most people lose sight of the end, and so struggle to cope with it all.

Simply put – a pension is just a long term savings contract with tax relief – that’s it. Yes there are complications with what you can and cannot put in, what you can take out and how you can use the pension, but it is simply a long term savings contract designed to be used for retirement purposes and it gives you greater flexibility than ever before due to changes in pension legislation.M A P have developed an estimated cash flow projection that can give you a ballpark figure of what you might come out with and more importantly if you are a M A P client we will update it each and every year and so give you your updated estimate as you go along life’s way. Wouldn’t that be better for you because at least you would have something to work to, and that’s a world away from doing it all blind and hoping for the best.

M A P’s retirement planning does exactly that by looking at what you have saved each year and projecting it forward. What we do is remove the guess work, it is our aim to give you an accurate picture of your long term savings. We work closely with clients to show them what their pension can achieve – why don’t you let us help you. The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Links to external sites are for information only and do not constitute endorsement. Always obtain independent professional advice for your own particular situation. Money Advice & Planning Ltd is authorised and regulated by the Financial Conduct Authority. For any enquiries, contact Andrew on 07957 836211 or enquiries@mapfinances.co.uk

Bydylanharper95

Pension Planning

When it comes to planning for a pension, it is easy enough for us as advisers to say this that and the next thing, but nothing is better than giving people some kind of estimate to work to. Admittedly estimates like this have to be used with caution because you will be trying to give someone a figure projected over long long periods – and who knows what will happen there, BUT, in my view if you have a figure to work to, it is far better than not having a figure.

What we do at M A P is produce what is called a cash flow and this attempts to give people a ballpark figure of what they might come out with. We will update this figure every year when we review someone’s portfolio, and so we are always trying to make the figure relevant – so what can be better than that ? At least this gives someone a figure to plan for the future and whilst it is an estimate – it is a best estimate.

We normally use what we believe is a pessimistic rate of growth of 5% p.a. and we can project this through until a persons chosen retirement age – so say for example someone has a fund today of £150k and they contribute £5k a year, then by the time they get to age 65 with a growth rate of 5% a year – the fund “should” be about £425k. Now if we extract the 25% tax free cash to savings – so that it can be used as and when desired, the remaining fund should provide a pension to age 90 of around £21,000 a year before tax.

Now if this was your pension and you had this best estimate for what you might come out with, what could be better than an estimate like this, that would then be updated each and every year thereafter in line with actual investment performance – so that you always get an up to date estimate. Bear in mind that at the end of the day it is an estimate but at least it is something to work to as opposed to sweet nothing.

QUESTION Can you tell me what pension you are likely to receive from your pension funds when you retire ? If you can answer this, then you are the exception to the rule, otherwise you should enlist for the MAP projection.

The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Links to external sites are for information only and do not constitute endorsement. Always obtain independent professional advice for your own particular situation. Money Advice & Planning Ltd is authorised and regulated by the Financial Conduct Authority. For any enquiries, contact Andrew on 07957 836211 or enquiries@mapfinances.co.uk

Bydylanharper95

Planning your Finances

When someone thinks of planning, they may very well imagine that this involves a lot of technical stuff that is beyond them, but I would suggest that this is where an IFA comes in. An individual can then do the framework of what he or she wants, and the IFA would then be able to fill in all the details and suggest what needs to be done and when.

It never ceases to amaze me how many people do not do any planning, and are then surprised when they get a tax bill, and ask me IN ARREARS what I can do to make it go away. You won’t be surprised to know that in many cases I can do very little because actions needed to have been taken BEFORE certain events.

If you just leave something to happen, how do you know what the end result is ? Is it going in the same direction that you were hoping. Planning starts to get things moving in the right direction, and then you can tweak things on an ongoing basis when it isn’t, but the main thing is that you keep your eyes on it and do what is necessary to steer it in the right direction.

The old saying is failure to plan is planning to fail. It’s true !!

So why don’t you sit down today and list your objectives for savings, for pensions and even life insurance, and then have a chat with your IFA to see what you need to do to try and achieve those objectives. MAP advisers are only too willing to sit down with you and your plans.

The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Links to external sites are for information only and do not constitute endorsement. Always obtain independent professional advice for your own particular situation. Money Advice & Planning Ltd is authorised and regulated by the Financial Conduct Authority. For any enquiries, contact Andrew on 07957 836211 or enquiries@mapfinances.co.uk

Bydylanharper95

What is a fund?

A Managed Fund is run by an investment manager and usually concentrates on something specific – whether it is UK equities, global equities, a technology fund etc. All the investments that they make will be along the same theme.

The investment fund will in many cases have a good spread of different companies it is invested in, and the majority go for something like 50 to 60 underling investments. Needless to say, the bigger the fund the more investments it will have.

If you are investing your own money and you pick company ABC Ltd then you are focussing on just one company which means that you need to do a lot of research on that company. On the other hand, if you invested in a fund, and that fund has 50 to 60 underlying investments, then your money will be better spread throughout those 50 to 60 companies and that will eliminate some of the risk.

If something goes wrong in one company, then in many cases it could be no big deal whereas if you only invested in one company on its own then that could be an enormous problem. By investing in a fund therefore you can accommodate one or two companies not working terribly well but balanced out by others that are doing well so you get a far better spread of risk.

This is why we invest in funds as opposed to individual companies. At MAP Finances UK our dedicated team support clients by managing your investments using our recommended funds list, whilst always allowing you complete transparency and oversight of your investments.

To explore investing, or indeed to discuss taking control of your existing investments contact us today.

The value of your investment is not guaranteed and can fall as well as rise.

The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Links to external sites are for information only and do not constitute endorsement. Always obtain independent professional advice for your own particular situation. Money Advice & Planning Ltd is authorised and regulated by the Financial Conduct Authority. For any enquiries call 0345 241 1808 or contact enquiries@mapfinances.co.uk

Bydylanharper95

2021 Budget Review

After a year of Covid-19 restrictions, the 2021 Budget had a lot of ground to cover. There has been considerable speculation over how the extra expense of the furlough scheme, funding the NHS and supporting those out of work would be paid for.

It was also questionable whether the current package of support for individuals and businesses could be sustained.

So what are the plans for recovering from the pandemic and rebuilding the economy? Read about the Chancellor’s budget overview in our latest publication, download it here.


If you would like to find out more information or would like to start investing today, please contact Money Advice & Planning Ltd on 0345 241 1808 or e-mail us at enquiries@mapfinances.co.uk.

The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Links to external sites are for information only and do not constitute endorsement. Always obtain independent professional advice for your own particular situation. Money Advice & Planning Ltd is authorised and regulated by the Financial Conduct Authority.