Saying a little prayer

Saying a little prayer

This may be of little help if your loved one dies without a will…

Aretha Franklin joins Jimi Hendrix, Bob Marley, Amy Winehouse and Prince on a list of celebrities who have died intestate. It is a common misconception that if you die without a will, your closest relatives will decide how assets are split. This is not the case. There are rigid rules and in some cases the government can collect the lot.

About 30 million adults in the UK do not have a will and, more worryingly, this includes 54 per cent of people with children, and 64 per cent of unmarried couples, according to Will Aid, a charity that encourages people to make a will. Yet failing to make provision for your loved ones when you die can lead to confusion and heartache. Your wealth could go to people you did not intend it to go to, depriving those you cared for most. We answer your questions on what happens if you die intestate.

What happens if we have children?
The surviving spouse would inherit the first £250,000 of the estate, all personal items and half of whatever remains. The other half is inherited by the children and is divided equally between them, although they cannot gain access to the estate until they are 18. This applies to all children of the parent who has died, even if they come from different relationships. A quirk of this is that the share of any estate that does go to children may be subject to inheritance tax.

We are an unmarried couple living together, with children. What happens when one of us dies?
The key thing is that the surviving partner does not inherit anything, because the term “common-law partner” has no legal standing. Therefore, it is so important for couples in this position to make wills. Under the intestacy rules, the deceased person’s estate would be shared equally between the children.

What if we don’t have children?
The estate will pass to the deceased person’s parents, if one or both are alive. Failing that, it would be divided equally between any surviving brothers and sisters, or failing that, to any half-brothers and half-sisters.

Next in line come any grandparents. Followed by aunts and uncles, then half-aunts and half-uncles. If there are no surviving relatives in these categories, the estate passes to the Crown.

If there are no surviving blood relatives, what happens then?
The estate passes to the Crown under a process known as bona vacantia. The Crown can grant shares in the estate to those who can prove that they have an entitlement, although it is under no obligation to do so.

When a parent dies intestate, does care of any dependent children pass automatically to the surviving spouse?
It doesn’t, and more than half of those with dependent children do not realise this. This is another example of how importance of making a will goes well beyond simply disposing of an individual’s wealth.

What happens if both partners die at the same time?
The same rule applies: custody of the children will not go automatically to the relatives or individuals whom they intended it to go to if they have not made their wishes clear in a will.

By Kelly Wilkes |  November 2020

Buckinghamshire Building Society

Buckinghamshire Building Society

Being independent allows Financial Management to continue to form new professional partnerships to ensure we meet all our client’s financial needs and allowing us to provide bespoke, often preferential, terms for our clients. We are delighted to announce we have recently formed a business partnership with the Buckinghamshire Building Society (BBS). Buckinghamshire Building Society are based in Chalfont St Giles, one the longest standing building societies left in the UK, with an ethos similar to us; it is recognised as a respected and trusted building society renowned for exceptional service and community support.

We work hard with our partners and within our own office to streamline administration procedures, so it is easy for our clients to manage their finances, while still meeting the regulations and exceptional customer service. The Society are working with us to reduce the paperwork for account opening and lending procedures for our clients. Our relationship with them enables us to work very closely with them to tailor solutions to individual requirements.

Here are a few of the areas where the BBS can potentially help you:

Savings: A range of different accounts designed to help with long term savings and easy access. There are specific accounts for companies, charities, clubs & societies, children, young adult (16-18) plus their cash ISA and Junior Cash ISA.

Loans: Winner of the Mortgage Product Innovation Award and Best Local Building Society in 2019, they offer a wide selection tailored to deal with a variety of circumstances, alongside prime mortgages, and re-mortgages. A few examples are listed below:

  • Family Assist mortgage allows the applicant to borrow up to 100% of the purchase price by taking a collateral charge on the parent’s or grandparent’s property we can use equity in their property to help their children get on the property ladder with smaller deposits.
  • Buy to Let and Ex Pat Buy to Lets
  • Self-Build and Custom build
  • Lending into retirement
  • Non-standard credit and impaired credit

We will of course keep you up to date with the terms available, however if you have any immediate enquiries please call us to discuss further.

If you would like to discuss mortgages, please call Paul Wakefield. He can look at your own situation and find the best solution for you. 

fmmortgage t/a Mortgage Management Professionals Ltd is an Appointed Representative of PRIMIS Mortgage Network, a trading name of First Complete Limited which is authorised and regulated by the Financial Conduct Authority (FCA).

By Philip Harper  |  October 2020

Savers should plot their escape from zombie funds?

Savers should plot their escape from zombie funds?

Over many years there has been a huge reduction in the number of product providers within the financial services industry, one of the major drivers for this has been the offloading existing policies by large insurance companies who have decided that these clients no longer suit their business strategy. These polices are purchased by specialist providers known as ‘consolidators’ who in turn wish to squeeze the maximum profit from these policies for as long as possible. Tagged as ‘zombie funds’ they are left on the shelf until policyholders either transfer away, retire or die.

The Financial Times ran the headline “More than €1tn of investor money is stuck in ‘zombie’ funds” in February 2020. Many household names including Standard Life, AXA, Scottish Amicable, NPI, Sun Alliance, Legal & General, Old Mutual, Royal Life and Friends Provident have gone down this particular road.

Why should this matter?
Our experience of dealing with consolidators is we see an immediate deterioration of service levels. There is no incentive for the consolidator to develop existing products to reflect legislative and market changes. Investment performance can often be affected by fund manager departures. The assessment by Reviewyourwithprofits.co.uk, a specialist website, found billions of pounds languishing in poor performing “with-profits” funds. If you are affected by any of these changes, we have a variety of options which can help them find a solution.

By Philip Harper  |  September 2020

How fm can help make your life better

How fm can help make your life better

We believe the best way we can help the happiness and financial health of our clients is by helping them to create a plan focused on their life goals.

A recent survey by psychologist Robert Epstein found that 25% of our happiness hinges on how well we’re able to manage stress. The next logical question is, of course, how best can we reduce our stress?

The stress management technique that worked best, according to the survey? Planning.

In other words, “fighting stress before it even starts, planning things rather than letting them happen,” says Epstein. “That means planning your day, your year and your life so that stress is minimized.”

“Money doesn’t take care of itself, and that fact can create a lot of anxiety,” says the Chair of the Institute of Financial Advisers. “If you don’t plan where you’re going with your money, you may not end up where you want to be. A financial plan can get you on a path toward your goals, which can give you greater peace of mind—and likely, a better night’s sleep.”

Since I started the firm in 1991, my best experiences are when I see plans materialise into reality. It’s also important to be able to reassure a client faced with an unexpected event that their plan is flexible enough to deal with these new circumstances.

We are experienced in helping you think through your issues, opportunities and future goals to create a personalised financial plan and investment portfolio. Working with us gives you the confidence that comes with a better understanding of your financial position. We’ll help you understand your options and build a plan to meet your personal ambitions and aspirations. Your personalised plan will need to respond to changes in your circumstances and financial markets, we help with this too. This is why we do what we do; we believe a plan has the greatest benefit to our clients and is the best way, we can make their life better.

Some people feel comfortable developing their own financial plan, which is fine, but you may prefer to work with a financial planner. Just like an architect helps design a house and a travel agent helps map out a trip, a financial planner can help guide your financial life. There is no ‘one size fits all’ solution for financial planning, our service is personal to you.

By Philip Harper  |  September 2020

How to recognise a financial scam

How to recognise a financial scam

UK fraud prevention groups are warning individuals to be extra vigilant following a huge increase in the number of scams seeking to exploit the pandemic. As these scams increase in sophistication, we are all vulnerable. Fraudsters can be articulate and financially knowledgeable, with credible websites, testimonials and materials that are hard to distinguish from the real thing.

The Financial Conduct Authority (FCA) reminds consumers that like anything valuable, your pension or investments can become the target for illegal activities, scams or inappropriate investments. Scams can take many forms and often appear to be a legitimate investment opportunity.

We have pulled together a list of tips on how best to recognise and avoid a financial scam.

  • Reject offers that come out of the blue.
  • Check who you are dealing with before changing your pension arrangements or transferring money to another account.
  • Be wary of special offers and deals that sound too good to be true.
  • Never give out personal details and passwords.
  • Avoid the pressure to act quickly.
  • Do not click on links or open emails from senders you do not know.
  • Investment opportunities found through search engines are not necessarily authorised or regulated by the FCA.
  • Take time to make checks and seek financial guidance.
  • The FCA helpline is 0800 111 6768 and all investment and pension providers should be registered. Financial Management is registered as Philip Harper LLP and everyone should have a unique number – ours is 485423. Search for the FCA page via Google, do not click on a link within an email.

If you get cold-called, the safest thing to do is to hang up. If you receive unexpected offers by email or text, it’s best to simply ignore them. You can register with the Telephone Preference Service and Mailing Preference Service to reduce the number of letters and cold calls you receive. Callers may pretend they aren’t cold calling you by referring to a brochure or an email they sent you that’s why it’s important you know how to spot the other warning signs.

We are here to help If you are unsure about any financial approaches, please contact us first.

By Philip Harper  |  Aug 2020

Budgeting for retirement

Budgeting for retirement

“Many of our clients have been with us for decades. We have helped them through the evolution of their pension schemes, from inception to maturity. We understand each stage and the associated responsibilities.”
Philip Harper Financial Planner

If you’re prepared financially and physically healthy, retirement can last decades.  Retirement is both an event and a process. In one plausible scenario, your benefits and savings must cover your expenses for three decades or more. The expenses at each stage of retirement are associated with how you choose to spend your time, where you decide to live, and how your health holds up. If you take these factors into account and evaluate how they will change throughout retirement, you can budget accordingly.

To help with this process, we have identified four stages of retirement, each stage has different expenses and requires distinct approaches to budgeting. Here’s what those stages look like and how to handle your finances accordingly.

Pre-retirement Stage
Pre-retirement is the stage just before retirement.  You are still working, but retirement is approaching and you’re finally getting a clear picture of what your income, and expenses will look like. You’re also getting closer to figuring out what you’ll do with your days once you’re free to fill them as you please. What seemed merely theoretical earlier in your working life now starts to seem real.

At this stage, assess your likely income and expenses after you exit the workforce?  Will you have paid off your mortgage, and if not, how much do you still owe and for how long?  You may be in a strong enough position financially to seriously evaluate whether you can afford to retire early.  If you run a family business, this is a good time to create a succession plan.

Pre-retirement is also a good time to re-evaluate your monthly and annual expenses and cut back on costs that have crept up over the years.  Eliminate any wasteful spending and give your retirement budget some breathing room. Also, at this stage (as well as, possibly, the early stages of your retirement), you may still have major expenses like putting your children through further education, helping them with a deposit for a property, or paying for a wedding.  Finally, you might want to replace your usual vacations with trips to places you’ve envisioned yourself moving to during retirement.

Early Retirement
Some of the biggest changes in your budget will occur when you first retire. You’ll no longer receive a regular salary and you’ll need a plan for managing your income during retirement. You might also lose employer-sponsored health insurance.

You may be tempted to go on a spending spree at this early stage of retirement. You’ll have a lot of free time, while still healthy and energetic. In this phase, you might want to buy that sports car you’ve always dreamed of, take an extended European vacation, go to culinary school, or take up sailing. With more freedom to travel, you may want to buy a holiday home to escape the British winters. you can however quickly deplete your savings if you treat retirement like winning the lottery.

One way to manage new expenses in early retirement is to consider a part-time or seasonal job, start a business that gives you flexible hours. Earning £20,000 a year when you need £40,000 is a serious problem, but once you’ve retired, it looks better than earning nothing, and at this point, it’s more about personal satisfaction, anyway. You can also balance the expensive activities you want to spend time on with inexpensive or free ones: volunteer to train service dogs, teach a photography class at your local community centre, or lead biking excursions.

Middle Retirement
By middle retirement, you’ll likely be receiving State Pension.  In addition to receiving more income in this stage, you might be tired of some of the travel and new activities you pursued during early retirement, so your expenses might decrease. You might want to travel less and stay home more, or your travel might be centred around less expensive trips to visit your grandchildren and other friends or family. With luck, your children are established enough in their careers that they no longer turn to you for money.

Late Retirement
You might have new expenses in late retirement if you move to an independent or assisted living facility or if your health means you need to move to a nursing home or hire a home health aide.

You’ll want to reassess your savings and decide whether you should be withdrawing money at a faster or slower rate. If you’re running low on cash and you still live in your home, you might consider Equity Release as a source of funds. Looking at what you have left, you’ll need to think about what you want to spend during your lifetime and what you want to leave to others.

Complete our Budget Calculator and we will send you a report.  This will help you see your current expenditure.

By Philip Harper  |  July 2020