Failing to set out your wishes in a will could mean your assets aren’t passed on to the loved ones you’d like to benefit from your estate. As a result, this could have a significant effect on your legacy. 

A will is one of the main ways to ensure your assets are passed on to your loved ones according to your wishes. So, if you don’t have a will in place, what will happen?

Intestacy rules are applied if you pass away without a will

If you pass away without a valid will, also known as “intestate”, the way your estate will be distributed will follow strict rules, which could be very different from your wishes. 

In England and Wales, if you’re married with no children, everything will go to your spouse or civil partner. If you’re married with children, your spouse or civil partner will inherit:

• Your personal possessions
• The first £322,000 of your estate, and
• Half of your remaining estate, with the other half being shared equally among your children. 

If you’re not married and have children, your entire estate would be divided equally between your children.

If you’re not married and don’t have any children, your estate would be shared equally among one of the following groups of people in this order:

• Parents
• Siblings, or nieces or nephews if your siblings have passed away
• Grandparents
• Aunts and uncles. 

Finally, if no living relative can be found, your estate will pass to the Crown. Most of these funds go to the Treasury. According to the BBC, as of November 2023, there were more than 6,000 people on the government’s list of unclaimed estates.

As you can see, intestacy rules might mean some family members or friends who you’d like to benefit from your estate are overlooked. It’s not just about wealth either, as you may have sentimental items you want to go to a particular person. Perhaps you’d like your granddaughter to inherit your jewellery, or pass on your record collection to a music-loving nephew. 

Intestacy rules also don’t consider whether you’d like a portion of your estate to go to organisations or charities you might wish to support.

By not writing a will, you’re missing out on an opportunity to set out exactly who you’d like to benefit from your estate.

Despite this potential impact on your legacy, research from the IRN Legal Wills and Probate Consumer report suggests just 36% of UK adults have a will. 

5 other practical reasons to write your will

Ensuring your assets are passed on to your intended beneficiaries isn’t the only reason to prioritise writing a will if you haven’t already. Here are five other practical reasons.

1. Name a guardian for your children

If you have children under the age of 18 or other dependants, you can use your will to name their appointed guardians if the worst should happen and you pass away. A guardian would take full responsibility for your children until they reach adulthood. If you have not named a guardian, the court will appoint one, who may not be the person you’d choose. 

2. Set out your funeral wishes

While funeral wishes listed in a will aren’t legally binding, they can be very useful for your loved ones. Organising a funeral while grieving and putting affairs in order can be stressful, and your family may worry about making the “wrong” decision. Making a note of your preferences could provide much-appreciated guidance. 

You might also decide to set money aside to pay for your funeral in your will too. 

3. Potentially reduce an Inheritance Tax bill

If your estate exceeds the nil-rate band, which is £325,000 in 2024/25, it could be liable for Inheritance Tax (IHT). In some cases, your will could be used to potentially reduce the bill.

For example, if you leave your main home to your children or grandchildren, you’ll usually be able to use the additional residence nil-rate band, which in 2024/25 could increase the amount you can pass on before IHT is due by £175,000. 

There are often other ways you can reduce an IHT bill. If you’d like to discuss estate planning that considers IHT, please contact us.

4. List the executor of your will

An executor is responsible for carrying out the instructions in your will and handling your estate. It can be a time-consuming task, and one that some loved ones may find difficult. So, you might want to take some time to consider who would be suited to the role and name them as the executor in your will.  

You can choose a family member or friend to be an executor. Alternatively, you may appoint a professional executor, such as a solicitor or accountant, which could be especially useful if your estate is large or complex.

5. State who you’d like to care for your pets

If you have pets, you can use your will to set out your wishes regarding their care, including who will look after them. While you can’t leave assets directly to your pets, you might want to set aside some money for the person who will care for them to cover the costs. 

Understanding your estate could be valuable when you’re writing a will

If you need to write a will, understanding your estate could be a valuable place to start. Considering your assets and how the value of them might change during your lifetime could affect how you wish to pass them on. 

Please get in touch to talk about your estate plan, from what you want to include in your will to how to mitigate a potential IHT bill. 

Please note: This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.

The Financial Conduct Authority does not regulate estate planning, Inheritance Tax planning, or will writing.

When you received your last promotion or pay rise, your first instinct might have been to celebrate by splashing out on a new gadget, booking a holiday or allocating more of your money to your disposable income. However, if you overlook reviewing your finances, “lifestyle creep” could affect your ability to reach long-term goals, including your retirement plans.

Lifestyle creep leads to your regular expenses rising

Lifestyle creep refers to your regular expenses rising in line with your income. So, after you’ve received a pay rise, your outgoings would start to creep up.

It can be more difficult than you expect to spot lifestyle creep. It might be as simple as choosing a more expensive bottle of wine when you’re at the supermarket or stopping by a café on the way to work each morning to pick up a latte. It could include larger expenses too. Perhaps you start to upgrade your phone every year instead of every three years, or eating out becomes a regular habit rather than a treat. 

Over time, lifestyle creep can lead to former luxuries becoming your new essentials. If you don’t keep an eye on your budget, the amount you spend could rise much further than you expect. 

According to a survey carried out by Aqua, 89% of Brits say they exceed their social budgets every month. The average person is spending around £61 more on social activities than they plan for. 

When you consider how lifestyle creep could affect other areas of your spending, it’s easy to see how it could lead to your regular outgoings rising by far more than you initially thought.

On the surface, lifestyle creep might seem like it’ll have little impact. After all, the £3.50 you might spend on a coffee during your commute is small change. Yet, grab a coffee three times a week, and you’ve added almost £550 to your expenses over a year.

Increased spending means you can become dependent on a higher income. Once you’ve established a habit of spending more, it can be difficult to go back to your original budget. 

Lifestyle creep could mean you don’t save as much for your retirement 

Small rises in your regular outgoings might seem relatively small in isolation, but when they’re combined, they could add up to thousands of pounds unwittingly spent every year.

As a result, you might divert a smaller portion of your new income to your retirement. Contributing less to your pension, investment portfolio, or savings could have a much larger effect than you first believe, especially once you calculate the returns you’ve potentially missed. 

Another way lifestyle creep could affect your future is by changing your desired retirement income.  

According to a 2022 survey published in FTAdviser, the top retirement aspiration among those nearing the milestone is to maintain their standard of living. If your regular expenses have crept up during your working life, your pension might need to provide a greater income than you’ve previously calculated.

As a result, some retirees could find they face an income shortfall in retirement or risk using their pension too quickly and running out of money later in life. 

A financial plan could help you strike a balance between enjoying today and securing your future 

While lifestyle creep may be harmful to your long-term plans, you don’t have to put all your new income to one side for the future – it’s about striking a balance that suits you.

From planning an annual holiday to an exotic location to days out with your family, there are lots of ways you might plan to spend a pay increase. Making these expenses part of your overall financial plan could help you assess what’s right for you. 

It may be worth considering which expenses add joy to your life when you’re prioritising them. For example, a cup of coffee on the way to work might become a habit that doesn’t improve your mood or outlook. On the other hand, regularly buying a coffee as you catch up with friends could be an important part of your social routine that you look forward to. 

Creating a financial plan and being aware of lifestyle creep is about more than cutting back your expenses. It’s about being intentional with how you use your wealth now and in the future.

Contact us to talk about your finances and how to avoid the negative effects of lifestyle creep 

If you’ve received an income boost or would like to review your finances, we could assist you in formulating a financial plan that could help secure the lifestyle you want. Please contact us to arrange a meeting. 

Please note: This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.

The value of pensions and any income from them can fall as well as rise. You may not get back the full amount invested.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance. 

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.  

It doesn’t matter how much you prepare; sometimes unexpected life events could mean your carefully laid plans go awry. While you can’t know what’s around the corner, you can change how you respond to unpredictable events to help keep your financial plan on track.

A life event could have a huge impact on your wealth, both now and in the future. Circumstances outside of your control might even lead to you changing your long-term goals. So, even if you already have a robust financial plan in place, a review following major life events could be helpful. 

Here are four unpredictable life events you might have experienced that could mean you’d benefit from updating your financial plan. 

1. Experiencing redundancy

Redundancy could have a huge effect on both your short- and long-term finances.

In the short term, you might need to dip into savings or other assets to cover your essential outgoings. As you may stop contributions towards your long-term goals, such as adding to your pension for retirement, it could also mean you face an unexpected shortfall in the future. 

You might also receive a redundancy payout, which you want to understand how to use to improve your financial security. 

According to data from the Office for National Statistics, around 3.4 employees in every 1,000 were made redundant between March and May 2024. A separate poll from SurveyMonkey also found that 58% of employees feel uncertain about their future job security. 

If you’ve been made redundant, a financial review could help you identify ways to manage your finances while you search for employment, and then assess the potential long-term impact. 

2. Taking time off work due to an accident or illness

Needing to take a long time off work due to an accident or illness could leave you in a financially vulnerable position. Much like redundancy, it could affect both short- and long-term finances. 

You might think the chances of you being unable to work for an extended period are slim. However, figures released at the start of 2024 and published in the Guardian, highlight how many people are affected by unexpected illnesses. According to the data, 2.8 million people were not working due to long-term sickness at the start of the year. 

If you’re unable to work, a financial review could help you assess how to use your assets to create a regular income to cover essential outgoings. It might also consider how you could keep long-term goals on track. 

3. Separating from your partner

Whether you’re married or not, separating from your partner may have large implications for your financial security. Separating when your finances are intertwined could have a substantial impact on your household income, regular expenses, and even long-term wealth creation. 

Indeed, research led by the University of Bristol found that equal division of joint assets, including property and pensions, was not the norm during divorce. It only occurred in around 3 in 10 cases. This means that one person was likely to miss out financially.

Working with us to assess your financial plan following a separation could help you understand how your assets have changed and what steps you might need to take to improve your financial resilience. 

A financial review isn’t just useful for assessing your assets. Following the breakdown of a relationship, your lifestyle goals and long-term aspirations might have changed too. So, updating your financial plan could ensure it continues to reflect the future you want. 

4. Receiving an inheritance 

Unexpected events don’t always harm your finances. Indeed, if you receive an inheritance or a windfall, it could provide you with greater financial freedom than you previously had.

Receiving a large lump sum out of the blue might feel overwhelming, especially if it’s through an inheritance and you are dealing with the loss of a loved one. When you’re ready, seeking tailored financial advice could help you understand how to use the wealth in a way that aligns with your goals. 

Have you experienced an unexpected life event? Contact us to review your financial plan

Whether you’ve experienced one of the four unexpected life events listed above or you’ve been affected in another way, we could help you assess your financial plan to ensure it continues to reflect your new circumstances. Please contact us to arrange a meeting with one of our team. 

Please note: This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance. 

The value of pensions and any income from them can fall as well as rise. You may not get back the full amount invested.

Interest rates and inflation continued to affect markets around the world in April 2024. Read on to find out what else may have affected investment markets and your portfolio in April.

Expectations of interest rate cuts were good news for gold. Investors who feared falling interest rates would lead to lower returns on cash and government bonds purchased more gold. It led to the asset hitting a record high on 8 April at $2,535 (£3,171) an ounce.

Yet, while many experts are predicting that interest rates will fall, Kristalina Georgieva, the managing director of the International Monetary Fund, warned that central banks must resist pressure to cut them too soon.  

UK

The UK ended 2023 in a technical recession – defined as two consecutive quarters of economic contraction. The latest figures suggest the UK is already out of the recession. According to the Office for National Statistics, GDP grew slightly by 0.1% in February 2024, following 0.3% growth in January.

UK inflation data was also positive. Inflation in the 12 months to March 2024 was 3.2%. While there’s still some way to go before reaching the Bank of England’s (BoE) 2% target, it’s the lowest figure recorded since September 2021. 

Clare Lombardelli, the newly appointed BoE deputy governor, tempered the news by adding that inflation is likely to be “bumpy” as pricing behaviour isn’t smooth. However, she added that the overall experience for people should be lower and more predictable inflation. 

On the back of good news and with a general election looming this year, chancellor Jeremy Hunt told the Financial Times that he’d like to cut taxes in the autumn fiscal statement “if we can”. 

While inflation overall is falling, business group British Chamber of Commerce has warned that new Brexit fees and checks could lead to higher food prices in the UK. Importers of animal products from the EU will face an additional charge from 30 April 2024 and new checks will be applied from October.

Data from S&P Global’s Purchasing Managers’ Index (PMI) also indicates that growth will continue. The service sector continued to expand in March and the construction industry returned to growth thanks to increased work in infrastructure projects. 

Official data shows average wages, excluding bonuses, increased by around 6% between December 2023 and February 2024. Once inflation is factored in, average wages increased by 2.1% in real terms.

Yet, other information suggests many households will continue to financially struggle. A BoE report suggests it expects the number of households and small businesses to default on debt to rise this summer. 

A report from consultancy firm KPMG also found that half of consumers are cutting back on non-essential spending. In fact, just 3% of consumers said they had been able to spend more in the first quarter of 2024. Eating out is the most likely expense to be cut from budgets, which could negatively affect the hospitality sector. 

In April, the FTSE 100 proved why investors need to be prepared to weather market volatility.

On 12 April, the index of the 100 largest companies on the London Stock Exchange closed at the highest level for over a year. News that the UK is likely to have exited a recession led to the index rising by 0.9%. 

However, just days later, on 16 April, the index tumbled by 1.95% and almost every stock on the index was in the red, with mining companies and banks suffering the largest falls. The downturn was linked to a market adjustment after the US Federal Reserve said it may not cut interest rates as soon as it hoped.

Then there was another turn as the FTSE 100 hit a record high of 8,068 points on 23 April due to expectations that the BoE will start cutting interest rates this year and fears about escalating tensions in the Middle East eased.

The ups and downs serve as useful reminders to focus on the long-term performance of investments rather than short-term market movements. 

Europe

Inflation across the eurozone fell by more than expected to 2.4% in the 12 months to March 2024. Despite optimism that interest rates would be cut, the European Central Bank opted to hold rates. Yet, the bank did signal that, if inflation continues to fall, it could cut them in the summer. 

PMI data indicates that the eurozone economy returned to growth for the first time since May 2023. The positive figures were driven by stronger than expected output from the service sector, with Spain and Italy providing the strongest boost. However, the two largest economies in the bloc, Germany and France, contracted. 

Some EU countries, including Italy and France, could be put under an infringement order procedure for operating budgets with deficits that breach the EU’s rules. Usually, governments have to keep budget deficits below 3% of GDP. The cap was set aside during the Covid-19 pandemic but could be implemented again, which might place pressure on public spending plans. 

Similar to the UK, European indexes suffered on 16 April when the Federal Reserve indicated it wouldn’t cut interest rates soon. France’s CAC index fell 1.8% and Spain’s IBEX was down 1.2%. 

US

The US private sector added 40,000 more jobs than expected in March 2024, with businesses hiring an additional 184,000 employees. Job growth is one of the measures the Federal Reserve will consider when deciding whether to cut interest rates, so the data led to speculation that rates would fall soon. 

Yet, when the rate of inflation was released, it dampened the optimism. In the 12 months to March 2024, inflation was 3.5%, an increase when compared to the 3.2% recorded a month earlier. 

Investment markets did benefit when fears that Iran’s attack on Israel would lead to an escalation in the Middle East didn’t materialise. On 15 April, the Dow Jones saw a rise of 0.9%, while the S&P 500 increased by 0.7%, and tech-focused index Nasdaq was up 0.6%. 

Asia

China beat its GDP forecast when it posted growth of 5.3% for January to March 2024 when compared to a year earlier. However, China’s National Bureau of Statistics recognised that growth could be hampered. The organisation said the external environment was becoming more “complex, severe, and uncertain”. 

Indeed, the country faced several headwinds in April.

First, credit rating agency Fitch has cut the outlook of China’s debt from “stable” to “negative”, as it said the country was facing uncertain economic prospects. 

Then, US treasury secretary Janet Yellen voiced concerns that China’s excess manufacturing capital could cause global fallout. She said China was too big to rely on exports for rapid growth and excess capacity was putting pressure on other economies.

While Yellen didn’t make any announcements about trade tariffs on Chinese goods, she said she would not rule out taking more action to protect the US economy from Chinese imports. 

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The value of your investments (and any income from them) 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. 

Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.

The taxation of the investment is dependent on the individual circumstance of each investor, and may be subject to change in the future.