How to recognise a financial scam

During recent Cyber Security training at Penn Barn, all the staff found the Hive Systems Password Table insightful, so we thought it was worth sharing with our clients.

It shows the number and type of characters used in passwords and how long it would take a hacker to crack the password.  There is a huge difference between it taking two seconds to hack a 7-character password (numbers, upper or lowercase letters) compared to 53 years when you add five more characters or 779 million years when your password is 16-characters. 

Here are five password tips:

1. Use 3 random words joined by punctuation and numbers e.g. Train_Chelsea_Bucket
2. The longer the password the safer it is
3. Setup dual or multi factor authentication
4. Use a different password for each account
5. Use a password manager – a program that stores passwords in an encrypted space, so you don’t need to remember them.

Stay alert!  We are here to help, so if you are ever unsure please contact us first.

By Philip Harper  |  January 2025

Act now to boost your State Pension

You have until the 5th April 2025 to fill in missing national insurance contributions, which could make a difference to your retirement.

Normally, you can fill in gaps going back six years, but until the 5th April 2025, those who reached or will reach state pension age after April 2016 can fill in gaps dating back to 2006-07, meaning that you can make up for a total of 16 years of missed contributions.

The official retirement age
You receive your state pension when you reach the Government’s official retirement age. When this is will depend on when you were born. It is increasing to 67 for men and women by April 2029, with a further rise to 68 expected between 2037 and 2039. Although recently there has been discussion about bringing this forward to save money.

Buy ‘extra’ pension years
If you’ve had a career break, a low income or worked abroad, you may not have paid national insurance. new state pension rules, you need 35 qualifying years for a full rate pay-out. If you’ve spare savings, it’s possible to replace some missing NI qualifying years. This could lead to a significant increase in your basic state pension pay-out over your retirement. In a nutshell, you pay a one-off lump sum to buy a higher state pension sum. Assuming you live long enough, the extra cash you earn from a higher weekly state pension could be worth £1,000s over a lifetime. However, they need to be considered carefully.

 How to check that you are on track

1. Request a state pension forecast from gov.uk to see how much you are on track to receive and at what age you will get it. It should also advise you if there is anything you can to do to increase the amount.
2. Call the Future Pension Service helpline on 0800 731 0175 to make sure filling in gaps in your national insurance record will boost your pension. It is worth double-checking – as always with pensions – there are some tricky rules!
3. If you top up your national insurance contributions by paying HMRC online or by cheque or bank transfer, include your national insurance number as a reference. For help, call the national insurance helpline on 0300 200 3500.

To determine whether it’s worthwhile, see how many NI years you already have. If gov.uk shows you’ll receive £185.15 per week, then this is a full pension, and you don’t need to do anything.

Is it worth it?
The rate is £17.45 per missing week of NI contributions – £907.40 for a full year. Paying £9,074 to make up a ten-year gap could give you an additional £2,750 a year – this would be worth £55,000 extra over a 20-year retirement without taking inflation into account. So, if you live at least four years after retiring you’ll earn back what you paid, which is an investment return very hard to find elsewhere!

The calculations above are based on the cost of buying contributions for 2024-25 and 2023-24.  The cost changes depending on the year you are looking to buy.  Gov.uk lists the amounts.

By Philip Harper  |  February 2023 (Updated January 2025)

Bring your cash ISAs to life

Millions of pounds still sit inside cash ISAs earning modest rates of return and this situation is likely to get worse as the expectation of lower interest rates becomes reality.

The question is, was it a mistake by investing in the first place?  The answer in many cases is no. The reason is having the option to organise an ISA transfer, which is effectively moving the tax-free ISA value across to a product that might be more appropriate and with the potential for better returns.

This can involve increasing the investment risk, however, is does not necessarily mean moving from low to high risk. The most popular choice is for retirees to move cash ISAs across to an income portfolio and although this does mean introducing higher volatility, the income stream from a well-managed portfolio can be extremely consistent, currently delivering tax free monthly income between 4% and 5%.

Alternatively, for those not requiring income, an option to invest into a risk graded model portfolio often provides an attractive solution using the following fund profiles:

• Cautious
• Moderately Cautious
• Balanced 
• Moderately Adventurous
• Adventurous.

What makes this opportunity even more viable follows the introduction of the new Personal Savings Allowance (PSA). This is the amount of interest which can be earned tax free and for a basic rate payer this amounts to £1,000 per annum. A deposit account can be seen as an extension to the cash ISA allowance, leaving your proper ISA open to find a better home.

By Philip Harper  | January 2025

Budget Summary

Following the long-awaited Labour Party Autumn Budget, please read our summary which we hope you find helpful.

Unlock a better retirement

There has never been so much choice available to homeowners looking to use the equity in their home, so taking independent financial advice is crucial. A Lifetime Mortgage is the most popular way to release a tax-free lump sum; a way to make the most of the huge increase in property wealth in
the UK. Here are the 6 most common reasons why people release equity:

1. Increase income for a better retirement
2. Home/garden improvements
3. Paying off an existing mortgage/debts
4. Financial help/gifts for family members
5. Holidays/new cars
6. Buying a new home/ buying out an ex-partner
Equity Release via a Lifetime Mortgage has become more mainstream in recent years, as household
names, such as Standard Life and Legal & General are now offering flexible, good value options.

If you think it could be for you, don’t be put off by the myths that still exist to some extent.
Know the facts:

• You will continue to own your home – this is just a mortgage
• You could pay the interest if you chose; this is optional, and common for those replacing their existing mortgage
• Moving house: you have the option to move the mortgage with you or pay it off fully/partially
• No hidden costs and a Lifetime Mortgage is often cheaper to set up than a normal mortgage

We do not charge a fee, whether you proceed with a Lifetime Mortgage or not. Vanessa’s priority is to help you understand and assess whether equity release is the best solution for you, and to find the best Lifetime Mortgage from the whole of the market.

How to recognise a financial scam

UK fraud prevention groups are warning individuals to be extra vigilant as these scams increase in sophistication, we are all vulnerable.

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. Use the FCA’s Scam Smart to check investments and pensions.

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

• Stop and check the domain name of the sender’s email address. Fraudsters draw you in with an email that looks remarkably legitimate, so a close match but with something slightly off. Think @amaz0n.co.uk. If you are still unsure, it is good practice to go to the website directly rather than click on any links in the email.
• Do not click on links or open emails from senders you do not know.
• Be wary of special offers and deals that sound too good to be true. Avoid the pressure to act quickly.
• Avoid shopping on public Wi-Fi networks such as the railway station. They rarely have the safety protocols such as passwords in place, so easier for hackers to piggyback and steal unsecured banking details without you knowing.
• Be careful of fake websites designed to look identical to an official one. Every website should have a valid security certificate and you can tell by the little padlock icon next to the URL. If the website doesn’t have one, don’t give any personal details.
• Apple Pay and Google Pay are good payment options as they protect your bank details.
• Keep an eye on your bank account and if you see anything unusual get in touch with them.
• If you think any of your online accounts have been compromised, change the password, and try to have a unique password for each retailer.
• Another classic is a text message suggesting you have a parcel waiting with DHL, Royal Mail or some other delivery provider. A good indicator that something is amiss is if the text asks you for payment and includes a bit.ly link. Do not click on these.
• Investment opportunities found through search engines are not necessarily authorised or regulated by the FCA.
• Always check who you are dealing with before changing your pension arrangements or transferring money to another account.
• 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  |  September 2024