As a self-employed worker, it can be more difficult to manage your finances. Your income may vary or not be as reliable as those who are employed.

According to a study from Scottish Widows, almost half of self-employed workers said their income fluctuates.

The research suggests that self-employed people could be more susceptible to income shocks, such as an unexpected bill or the need to take time off work due to illness.

That doesn’t mean you should change your work, but taking extra steps to create financial security could be beneficial. This is particularly true in the current economic climate.

In the 12 months to July 2022, inflation was 10.1%. As the cost of living rises, your outgoings may have increased, which could affect both your personal and work expenses.

Uncertainty means that consumers and businesses are more likely to reduce their spending. In turn, this could have a knock-on effect on your income.

If you’re worried about your long-term financial security, here are five important steps you can take.#

1. Build up your emergency savings

The Scottish Widows research highlighted how important savings are for self-employed workers.

57% of people said they’d rely on their savings if they could not work. Creating an emergency fund means you have a safety net to fall back on if you experience an income shock.

Despite this, 24% said they only had enough money to cover the cost of essentials for three months.

Creating a substantial emergency fund can seem like a huge task, but contributing regularly when your income is stable can provide peace of mind.

As interest rates are beginning to rise, it’s worth shopping around for a competitive cash account for your savings to make your money work as hard as possible.

2. Take out appropriate financial protection

Your emergency fund is valuable when you need to cover short-term income gaps or unexpected outgoings. However, if you need to take an extended period off work, it’s unlikely to provide the security you want.

This is when financial protection can be useful.

Critical illness cover would provide you with a lump sum if you were diagnosed with a serious illness covered by the policy, such as serious types of cancer. It could mean you have the financial security to take time off work to recover or even retire.

If you have a family, you may also want to consider life insurance, which would pay out a lump sum if you passed away during the term.

Financial protection can provide a cash injection when you need it most.

However, many self-employed workers are overlooking financial protection. According to the Scottish Widows research, 31% don’t consider financial protection a priority and 25% said they were prepared to risk not being covered.

3. Don’t neglect your long-term plan

If your income is uncertain, it can be easy to focus on your financial needs now. However, neglecting your long-term plans could mean you face much larger challenges in the future.

Whether you want to buy a house in the next five years or retire at age 65, you should have a plan for reaching these goals.

Understanding your goals and the steps you need to take now means you can look forward to the future with more confidence.

4. Make the most of allowances

Making your money go further means you’re in a better position to create financial security.

There may be allowances and other incentives you could use to boost your finances. For example, are you adding retirement savings to a pension so you can claim tax relief? Or are you claiming back expenses to reduce your Income Tax liability?

Which allowances are right for you will depend on your circumstances and goals. We’re here to offer advice about the steps you can take to reduce your tax burden.

5. Work with a financial planner

As a self-employed worker, your financial situation may be more complex. Yet, the research found that 81% of self-employed workers aren’t seeking financial advice.

Effective financial planning can help you put a long-term plan in place that will consider a range of things, like what your goals are, how to make the most of tax breaks, and how to create security in case you face an income shock.

Financial planning doesn’t just help you make the most of your assets. It can provide an emotional boost by giving you confidence about your future.

If you’d like to talk about the steps you can take to improve your financial security and reach your goals, please give us a call.

Please note: This blog is for general information only and does not constitute advice. 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 value of your investments (and any income from them) can go down as well as up, which would have an impact on the level of pension benefits available.

Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances. Levels, bases of and reliefs from taxation may change in subsequent Finance Acts. 

Note that financial protection typically has no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

If you’re guilty of ignoring your pension, a review ahead of Pension Awareness Day on 15 September can help make sure you’re on track for the retirement you want.

Here are five important things to check.

1. How is your pension invested?

The money held in your pension is usually invested.

This provides an opportunity for your savings to grow over your working life. Over the decades you’ll be saving, investing your pension contributions can really add up. It means you could look forward to a more comfortable retirement.

So, understanding how your pension is invested and how well it’s performing is important.

If you haven’t selected how your pension is invested, it will usually be through your provider’s default fund.

Many providers offer a selection of funds for you to choose from. The funds will have different risk profiles and criteria. Going through the different options with your goals in mind is useful, and we’re here to answer any questions you may have.

When reviewing investment performance, keep in mind that you should focus on the long-term outcomes, rather than short-term fluctuations.

2. Are you claiming all the tax relief you’re entitled to?

When you contribute to a pension, you can often claim tax relief. This means some of the tax you would have paid is added to your retirement savings. It can deliver a valuable boost to your pension.

Assuming your contributions are below the Annual Allowance, you can claim tax relief at the highest rate of Income Tax you pay.

Your pension provider will often collect tax relief at the basic rate of 20% automatically. However, you should check this is being added to your contributions.

If you’re a higher- or additional-rate taxpayer, you will usually need to complete a self-assessment tax form to claim the full amount of tax relief you’re entitled to.

3. When is your retirement date?

Often, pension providers will change how your savings are invested as you near your retirement date. This will usually mean taking less risk to reduce the chance of volatility affecting your retirement plans.

As a result, you should check when your retirement date is set for. This is often linked to the State Pension Age, however, you may plan to retire sooner or later than this.

In addition, changing your investment strategy may not be right for you as you near retirement. For example, if you plan to use other assets to fund your lifestyle initially, you may want to maintain your current risk profile for longer.

4. What income is your pension projected to deliver in retirement?

While you may know how much is going into your pension each month, it can be difficult to understand what this will mean for your retirement income. This is particularly true if the money is invested.

If you have a defined benefit (DB) pension, you will know what income it will deliver and when. This is normally dependent on how long you’ve been a member of the scheme and your salary.

However, if you have a defined contribution (DC) pension, you will need to factor in how the value of your pension could change during your working life. Your pension provider will give a projected value, but keep in mind this isn’t guaranteed.

You will also need to consider how you’ll use your pension to create an income for the rest of your life, assessing things like life expectancy and one-off costs.

Calculating the projected income of your pension now means you can make adjustments if you could face a shortfall. If you’re not sure where to start or have questions about your retirement income, we’re here to help.

5. Are you maximising contributions from your employer?

If you’re employed, your employer will usually be contributing to your pension on your behalf.

Under auto-enrolment rules, they must contribute a minimum of 3% of your pensionable earnings. However, some employers may contribute more as a perk, so it’s worth checking if you’re maximising what’s on offer.

Your employer may increase their contributions in line with yours, for instance. While this would mean you need to contribute more to your pension, it also boosts how much “free money” is being added to your retirement savings too. As these additional contributions are typically invested, they can deliver a significant boost to your pension over the long term.

Checking your employee handbook or speaking to your employer can highlight how you could maximise employer pension contributions.

Contact us for a full pension review

Getting to grips with your pension is essential for reaching retirement goals. If you have questions about your pension or how it could create an income in retirement, we can answer them and carry out a review that you can have confidence in.

Please note: This blog is for general information only and does not constitute advice. 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 value of your investments (and any income from them) can go down as well as up, which would have an impact on the level of pension benefits available.

Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances. Levels, bases of and reliefs from taxation may change in subsequent Finance Acts. 

It’s often said that moving house is one of the most stressful experiences. So, it’s natural that some of the tasks you should tick off slip your mind.

According to a study covered in Metro, more than half of homebuyers say the process is even more stressful than they thought it was going to be. From worrying about a sale falling through to becoming stressed about the amount of admin required, there’s a lot that can make moving home taxing.

If you’ll be one of the thousands of families that will move this year, completing these seven tasks can make it that bit easier and help you to settle into your new home.

1. Update your GP and dentist details

While switching your details with utility providers is often a priority, doing the same for your medical practice and dentist can slip your mind. You may not realise it’s a step that’s been overlooked until you need to use a service, which can delay getting an appointment.

If you’ll be staying with the same provider, make sure your details, including address and phone number, are up to date. If you’ll be switching to a GP or dentist closer to your new home, register as soon as you can.

2. Review your insurance

If you’ll be taking out a mortgage to buy your home, it’s often a requirement that you take out adequate building insurance.

You will normally need to have insurance in place before the property transfers to you. In addition, contents insurance can provide you with peace of mind.

When buying a new home, you’ll often be taking on more financial responsibility. So, assessing if income protection, critical illness cover, or life insurance is right for you is also an important task.

Insurance policies can provide you or your family with financial security if something unexpected, such as needing to take time off work due to an illness, happens. We can help you with your financial protection needs and answer any questions you may have.

3. Set up a mail redirection

It’s easy to miss some accounts when you’re updating your address. Having your mail redirected when you first move can make sure you don’t miss important letters and serve as a reminder to update your details.

Royal Mail offers a redirection service that lasts for 3, 6 or 12 months so you don’t need to worry about missing mail.

It can also reduce the risk of fraud by helping to prevent your personal details from being seen by others. There is a cost to using the service, but it can be well worth it.

4. Take meter readings

To make sure that your utility bills are accurate and that you don’t overpay, taking meter readings before you leave your old home is essential.

Note down and submit readings for gas, electric, and water so that your final bill reflects your use. Taking a photo of the meters can also be useful in case there is any discrepancy.

Once you’ve received the keys to your new home, do the same to avoid paying for some of the last owner’s usage. 

5. Update your driving licence

While updating your address for bills and other services, don’t forget about your vehicle and driver’s licence.

You can change the address on your driver’s licence for free online or by post. It’s easy to overlook but you could be fined up to £1,000 if you don’t notify DVLA of an address change.

You should also update the details on your vehicle registration certificate and tell your car insurer that you’ve moved.

6. Change your details on the electoral roll

Amid moving house, updating your details on the electoral roll can be missed until an election is around the corner, but it’s something you should do straight away.

You’ll need to register to vote when you change your address, even if you’re already registered at a different property. You can do this online or using a paper form.

Registering on the electoral roll can also improve your credit score, which can make borrowing more accessible and affordable in the future. 

7. Pack an essentials box

Packing up your home and preparing to move can be stressful, and sometimes things don’t go to plan.

A delay in handing over the keys or signing contracts can mean you don’t arrive at your new home until much later than expected. Being prepared and having your essential items in one box that stays with you can make the process easier if this does happen.

Are you planning to buy a new home?

If you’re planning to purchase a new home, choosing the right mortgage for you is important. We’re here to help you understand the options and navigate the mortgage process.

If you have any questions or are ready to start applying for a mortgage, please contact us.

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

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.

Note that financial protection typically has no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

This summer the Queen will celebrate an incredible 70 years on the throne. Since her reign began in 1952, the world has changed a lot – who in the 1950s would’ve thought it’d be normal to carry a computer in your pocket that lets you make calls, access the internet, and a whole lot more?

During that time, money has changed enormously too, from how it looks right through to how we use it. Here are some of the ways money has changed during the Queen’s reign.

The changing portraits of the Queen

The Queen’s portrait has been a common feature on money for almost 70 years and there have been several changes over the decades.

It wasn’t until 1960 that the Queen’s portrait appeared on a note. The image of the young queen was used on £1 notes, and then a 10 shilling note in 1961. The portrait was criticised for being severe and having an unrealistic likeness.

An updated portrait used for £5 notes in 1963 received a more favourable response.

The current image on notes and coins has been used since 1990 and shows the Queen aged 64.

Adding the likeness of the monarch isn’t just for tradition. The Bank of England (BoE) explains that using a familiar image is a useful anti-counterfeiting feature. People can detect changes in pictures of faces, especially well-known ones, much more easily than in other types of patterns.

Modern polymer notes also use the Queen’s portrait on a small, see-through window with “£5 Bank of England” printed twice around the edge as a security feature.

Images: portraits of the queen used in 1960, 1963, and 1990.

Decimalisation day: Adopting a base-10 currency in 1971

Perhaps the biggest change to money in the last 70 years occurred on 15 February 1971, dubbed “decimalisation day”.

For centuries Britain had used a coinage system of pounds, shillings and pence – 12 pennies made a shilling, and 20 shillings made a pound.

After more than 50 years of dealing with a currency based on units of 10, it can be hard to appreciate the mental arithmetic older generations were adept at doing every time they made a purchase.

The debate of changing to a simpler currency had been going on since 1847.

An MP at the time, Sir John Bowring said: “Every man who looks at his 10 fingers, saw an argument for its use, and evidence of its practicability.”

A year later, the nation’s first decimal coin appeared – the florin, which was one-tenth of a pound. But that’s as far as decimalisation went until more than a century later.

While decimalisation day on 15 February 1971 was a milestone and represented a huge change, the transition was a little more gradual than the name suggests.

5p and 10p coins had entered circulation in 1968 and had the same value as shillings and florins. The last pre-decimal coin, the florin, wasn’t pulled from circulation until 1993. To help customers, some shops also ran dual prices for a while.

Even with a transition, it was vital that everyone knew about the change and how the new coins would work. So, the government commissioned performer Max Bygraves to record a song for the occasion.

The lyrics included: “They have made it easy for every citizen, cos all we have to do is count from 1 to 10.” And if you want a trip down memory lane, you can listen to the decimalisation song online.

The rise of cashless payments

In recent years, the shift towards not using money at all has accelerated, particularly during the last two years due to the pandemic.

Barclays issued the UK’s first credit card in 1966, with debit cards following in 1987. These first cards required a signature and used a magnetic strip that could be swiped.

This trend evolved over the decades, with chip and PIN introduced in 2003 and contactless payments in 2007.

With customers now able to make contactless payments up to £100, a life without physical money is already a reality for many people in the UK.

According to the latest figures from UK Finance, more than a quarter of all payments in the UK are made using contactless methods. In contrast, cash is falling out of favour. In 2010, it accounted for 56% of all payments, although by 2020 that had reduced to 17%.

While cash is likely to play an important role for years to come, its use is becoming rarer.

Average annual inflation of 5.1% has affected how far your money will go

It’s not just the appearance of money and how we pay for goods that have changed – the value of the money in your pocket has too.

Over the last 70 years, the rate of inflation has differed. Inflation is currently higher than it has been in recent years, reaching 9% in March and April. And older generations will well remember inflation entering double digits in the 1970s. 

Inflation means the cost of goods and services rises. Day-to-day, you may not notice how much costs are rising, while over 70 years it’s clear the effect inflation has.

Annually, between 1952 and 2021, inflation has averaged 5.1%. The BoE’s inflation calculator finds that if you had £1,000 when Queen Elizabeth II began her reign, you’d need more than £30,000 now to have the same spending power.

Money has changed hugely over the last 70 years, but what remains important is setting out your goals and getting the most out of your assets. If you’d like to talk about your financial plan, please contact us.

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