Autumn Budget – November 2017 Overview

Autumn Budget – November 2017 Overview

Introduction Since the Spring Budget, the UK has held a General Election, the negotiations to leave the European Union have...

Autumn Budget – November 2017 Overview

Autumn Budget – November 2017 Overview

Introduction

Since the Spring Budget, the UK has held a General Election, the negotiations to leave the European Union have continued – not always at breakneck pace – and there has been the usual collection of mixed news for the UK economy.

The General Election started as an expected coronation for Theresa May and ended as an embarrassment, with the Conservative party now dependent on Northern Ireland’s DUP for a working majority in the Commons. The Prime Minister remains committed to delivering Brexit on March 29th 2019 and currently appears ready to offer the EU more money in the ‘divorce settlement’ to kick-start the talks on trade. But with negotiations on the coalition government in Germany having failed over the weekend, it is difficult to see how any talks can make much progress with the EU’s largest net contributor facing what the BBC’s Andrew Neil called the “biggest political crisis since the 1940s.”

In March, Philip Hammond’s nickname was ‘Spreadsheet Phil’ (with continued murmurings of discontent on the backbenches that has given way to much ruder epithets) and as he stood up to speak, the Chancellor would need to restore confidence in both the Government and his own personal credibility – otherwise his first Autumn Budget may well be his last.

The Chancellor’s speech started with the usual collection of numbers and statistics. In truth, the news on the UK economy is mixed. The Swiss Bank UBS has just raised its forecast for UK growth in 2018 from 0.7% to 1.1% and all three sectors of the UK economy – manufacturing, services and construction – reported encouraging figures in October. But for most people, the fact is that wages continue to lag behind inflation, which the Bank of England believes will stay high for some time to come. With Christmas coming, the British electorate doesn’t want fiscal facts and figures from the Chancellor, it wants a feelgood factor.

What were the rumours?

In ‘the old days’ it was very simple. The Budget was delivered in March. The Chancellor stood alone outside 11 Downing Street and held aloft his battered red despatch case which contained the speech – the contents of which were known only to the Chancellor and his Cabinet colleagues.

Now the Budget is delivered in November and the Chancellor will stand outside 11 Downing Street flanked by his entire ministerial team. The rumoured contents of his speech? This year – in what must be the most-leaked Budget speech ever – they seem to be known to anyone who can click ‘news’ on the BBC website.

Although these early rumours were swiftly replaced by the realities of the speech, it is worth detailing them here. Philip Hammond does not have a reputation as an imaginative man and anything that didn’t turn into reality today may crop up again in the future.

More money for research and development was widely expected and for transport links in and around major cities as he continues to wrestle with the UK’s poor productivity. Also revealed prior to the speech was news on the roll out of 5G connectivity across the UK and investment in the infrastructure for driverless cars, which are now expected to appear on our roads by 2021.

The number of small businesses and self-employed people has risen rapidly over the last five years. By and large, they are natural Conservative voters and you would think a Conservative Chancellor would do everything he could to help them. Instead, SMEs and the self-employed may have been waiting for the Budget with some dread, following the Chancellor’s ill-thought out raid on Class 4 National Insurance contributions in March and what freelancers in the public sector considered punitive changes to the IR35 regulations.

Prior to the speech there were rumours of plans to lower the VAT threshold. The most extreme suggestion would see a lowering of the threshold to £25,000 which could even catch hobbyists selling through eBay.

The ‘takeaway tax’ had also clearly been discussed in the run up to the speech. Following the success of charging for plastic bags, the Chancellor was clearly considering a tax on single-use plastic items such as packaging, bubble-wrap and the polystyrene boxes used for takeaways.

Finally, it was widely expected that we’d see a shake-up in business rates – or at least the promise of one.

The Speech

After what seemed a rather lengthy Prime Minister’s Questions, the Chancellor finally rose to speak at 12:39pm. He hitched up his trousers and launched into the good news about a British economy “which continues to confound those who seek to talk it down.” He was – as he had to be – bullish about the future and determined that the UK should “seize the opportunities” offered by Brexit. Expressing a desire to make the negotiations with the EU a top priority, the Chancellor nevertheless tossed the pro-Brexit wing of his party a £3bn bone with a commitment to prepare for every possible eventuality.

Confirming some of the leaks regarding support for the technology sector, he said that Britain was at “the forefront of a technological revolution” (cue raised eyebrows in Silicon Valley and the Far East) and that business and government must invest to secure that future.

Despite this, the Budget would also take a balanced approach, protecting and promoting the interests of families as the Chancellor declared that he wanted the UK to “be a force for good in the world” as we build “a country fit for the future.” With the ‘mention key strapline’ box well and truly ticked, he took a sip of water, politely declined the Prime Minister’s offer of a cough sweet and launched into the numbers – or as he described it, “the part containing the long economicky words…”

The Numbers

Despite the fact that the Chancellor was optimistic about the forecasts from the Office for Budget Responsibility (OBR), the simple fact is that the forecasts are down from those in the March budget – although it should be pointed out that the OBR is currently being more pessimistic than the Bank of England.

Growth in the UK economy was forecast to be 1.5% in 2017 (down from an earlier forecast of 2%) and 1.4% in 2018: it would then fall to 1.3% for the next two years before rising to 1.5% in 2021 and 1.6% in 2022. The OBR also saw inflation peaking at 3% “in this quarter” before falling again to nearer the 2% target figure. Forecasts for productivity and business investment were also revised downwards but the OBR did expect another 600,000 people to be in work by 2022.

The State of the Public Finances

The Chancellor said that annual borrowing would be £49bn this year – £8.4bn lower than forecast in March. Borrowing should now fall in every subsequent year until it reaches £25.6bn in 2022/23. Public sector net borrowing is forecast to fall from 3.8% of GDP last year to 2.4% this year – and eventually to 1.1% in 2022/23. Debt will peak at 86.5% of GDP this year and then start to fall, reaching 79.1% of GDP in 2022/23. All of this, said the Chancellor, “was testament to the hard work of the British people” and meant that he could “choose to use the headroom” to invest in the economy, thereby helping families and businesses.

The Chancellor said that he wanted to put a “dynamic and innovative economy at the heart of Britain” and that this would require both public and private investment. As a first step, he announced that the National Productivity Investment Fund (NPIF) would be extended for another year and increased to £31bn, with a specific £2.3bn for investment in research and development in 2021/22. He then turned to other specific measures.

Personal Taxation and Allowances

This was a Budget short on specific measures that impact either an individual’s ‘debit’ or ‘credit’ columns, as the Chancellor chose to address ‘larger’ topics such as infrastructure and Brexit. However, there was still a single nugget to take note of when it came to the personal allowance and higher rate tax threshold.

What The Personal Allowance will rise to £11,850 from April 2018 and the threshold for paying higher rate tax will rise to £46,350. The current figures are £11,500 and £45,000 respectively.
When From April 2018
Comment These were announcements that were expected and are staging posts on the way to the pledge to increase the thresholds to £12,500 and £50,000 by 2020.

Pensions and savings

What The main ISA limit will remain unchanged at £20,000, whilst the Junior ISAs and Child Trust funds limit will rise in line with inflation to £4,260.
When April 2018
Comment A fairly minor change, not mentioned by the Chancellor in his speech, the Junior ISAs and Child Trust fund limit got an increase, whilst the main limit remained unchanged. After a few years of sizeable ISA rises, this could well be the norm for the next few Budgets.
What The lifetime allowance for pensions will get a rise in line with the Consumer Price Index (CPI), going up to £1,030,000.
When April 2018
Comment Although this is a small rise in line with inflation, which will only impact those with large pension savings, the real term difference could be significant. If the whole £30,000 increase is taken as a lump sum after April 2018, for example, that’s a tax saving of 55% and a real-term increase of £16,500 extra in income for the retiree.
What Employees on maternity and parental leave will be able to take up to a 12 month pause from saving into their Save As You Earn employee share scheme.
When From 6th April 2018
Comment This is an increase from 6 months currently.

Business Investment & Business Taxation

What The announcement of over £500m of extra investment for technology investment, including 5G, broadband and Artificial Intelligence.
When Ongoing over the next several tax years
Comment This was a widely trailed move and continues the government’s commitment to spending on digital infrastructure and technology projects.
What A commitment to a total £540m investment in initiatives that will support the growth in electric vehicles.
When From next April
Comment Another widely expected move and one which was coupled with the announcement that from next April, diesel cars which do not meet air quality standards will be hit with an additional tax. Meanwhile, those who charge electric vehicles at work will not be taxed on a benefit in kind.
What The VAT threshold remained unchanged.
When N/A
Comment Despite the fears of the small business community and the Chancellor’s dark mutterings about the registration threshold in Germany only being £15,000, the VAT threshold will remain unchanged at £85,000 for the next two years. “A banana skin dodged,” as the BBC’s economics correspondent put it.
What Business rates will now be based on CPI, rather than the Retail Price Index (RPI).
When April 2018
Comment There was good news on business rates, with the Chancellor bringing forward the move to have business rates based on CPI as opposed to RPI. He brought the change forward by two years which he estimates will save businesses £2.3bn. Revaluation periods were also changed from every five years to every three years. The £1,000 discount for small pubs was also extended to March 2019.
What The abolition of the so called ‘staircase tax’.
When The government will publish draft legislation shortly
Comment Under ‘staircase tax’ rules, companies operating over several floors within the same property were handed separate business rates assessments for each occupied floor, as opposed to one bill for the entire premises. The backdated tax was initially introduced after a landmark Supreme Court ruling in August 2017. Thousands of small business owners will be celebrating following the announcement that this tax system will be abolished.

The Chancellor also announced that further action would be taken to combat tax avoidance and evasion, continuing a Budget trend over the last few years. Mr Hammond clearly continues to have the multinational digital companies in his sights as he announced that from April 2019, UK income tax will be applied to digital economy sales made here, but where the proceeds are paid to a ‘low tax jurisdiction’. This, he estimated, would raise “£200m a year of additional revenue.”

Other measures

The Housing Market

This appeared to be the real meat of the Chancellor’s speech: you suspect that more than one backbench ‘colleague’ had starkly pointed out to him that ‘young people won’t vote Conservative if you don’t give them anything to conserve.’ He started, though, by allocating a further £28m in support of the victims of the Grenfell fire disaster, and a similar amount as part of a commitment to half the number of people sleeping rough by 2022.

His main thrust, however, was in helping young people – both to buy property and to find affordable rented property. The Chancellor pointed out that the number of people aged 25-34 owning their own home has dropped from 59% to just 38% over the last thirteen years.

The Chancellor announced several measures, including increasing the supply of land for building and help for SME housebuilders, plus plans to train workers in the construction sector. In total, the package was worth £44bn over the next five years.

There was also the announcement of a raise to the empty homes premium, designed to encourage owners of empty homes to bring them back into use. Previously 50%, local authorities are now able to increase this to 100%.

When the dust had settled though, the commitment was to build 300,000 net additional homes a year by the mid-2020s: perhaps not the news that many had been hoping for, as the Chancellor confirmed his commitment to maintaining the green belt. There would, however, be investment in the Cambridge/Milton Keynes/Oxford corridor, ultimately leading to the building of 100,000 new homes in Oxfordshire by 2031. But he kept the biggest housing rabbit in his hat until the end of the speech…

What An abolition of stamp duty for first time buyers on properties with a value up to £300,000 – and on the first £300,000 of a property with a value up to a £500,000.
When Immediately
Comment It is not often that middle-aged Conservative MPs shout “whoop!” but this was the positive news they had been waiting for. The Chancellor said that he had dismissed ideas for a stamp duty holiday and decided on a move that “will see 80% of first time buyers pay no stamp duty and save those buying a house between £300,000 and £500,000 an immediate £5,000.”

Education and Skills

The Chancellor confirmed the commitment to three million apprentice starts by the year 2020, thanks to the apprentice levy, and announced £20m of funding for Further Education colleges who were introducing the new T (technical) level exams. There would also be extra funding to boost the teaching of maths at higher levels and a commitment to upskill a further 8,000 computer science teachers (at a cost of £84m) to a total of 12,000 teachers, as well as the establishment of a National Centre for Computing.

Finally, the chancellor announced a collaboration between the Government, the CBI and the TUC to support training in the construction sector and more broadly, digital skills.

Universal Credit and the Living Wage

Following widespread criticism of the implementation of the new system of Universal Credit, the Chancellor announced a series of measures – costing £1.5bn in total – designed to make it fairer and more in line with what he described as a “modern welfare system.” He then moved on to the National Living Wage and personal taxation.

What The National Living Wage (NLW) will rise by 4.4% to £7.83 from the current £7.50.
When From April 2018
Comment There will also be a commensurate increase in youth rates, part of the Chancellor’s commitment to a ‘fairer Britain’ and equivalent to about a £600 annual pay rise for someone receiving the NLW.

Help for the Regions

As expected, the Chancellor announced a £1.7bn city region transport fund, to be shared between six regions with elected mayors and the rest of the UK: this appears to be primarily aimed at improving transport links within our cities. There was a further devolution of powers to Greater Manchester plus up to £35m to improve rail passenger communications, including a trial to improve communications on the Trans-Pennine rail route. Over the period through to 2020/21, there were increases in budgets earmarked for the Scottish government of £2bn, £1.2bn for Wales and £660m for the Northern Ireland executive.

Alcohol, Tobacco and Travel

“Happy Christmas, Mr Deputy Speaker,” beamed the Chancellor, announcing that there would be no increase on the duty on beers, wines and spirits as he sought to support “the great British pub.” The only exception to this would be an increase on the duty on white cider.

Owners of private jets may well be used to drinking something rather more refined than white cider, but they were hit in the Budget as the Chancellor announced that fuel duty on short haul flights would be frozen, as it would be for economy seats on long haul flights. However, this would be paid for by an increase on the duty applicable to premium seats and to private jets.

All but a few private jet owners may also be too old to qualify for the new young person’s railcard. Again, the move was widely trailed, with the chancellor confirming the introduction of a railcard for those aged 26-30.

The price of cigarettes is set to rise with duty on tobacco going up by 2%, plus inflation. There will also be an additional 1% duty on hand-rolling tobacco.

The NHS

As expected, the Chancellor announced extra money for the NHS, a £10bn increase in annual funding by 2020. There would also be an extra £2.8bn of resource funding over the next three years, with an immediate cash injection of £335m this year: £1.6bn between 2018/19 and a further £900m between 2019/20.

Conclusion

The Chancellor finished on a high and, like all good actors, he got off the stage with the cheers ringing in his ears. Britain was at “a turning point,” he declared, “but we will be looking forwards, not backwards.” Having spoken for just over an hour, he remembered his strapline one last time – “It is a Budget fit for the future and I commend it to the House” – and sat down to a better reception than he had probably expected at 12:30.

In truth, there was little within this Autumn Budget for each of us individually to either celebrate or bemoan. Most of the headline writers picked out the boost for Brexit or the cut in growth forecasts, perhaps dependent on political persuasion. There was coverage too for the housing pledges and on the internal political angle to the speech when it comes to the machinations of the Conservative party.

Having proposed cash to support Brexiteers and to those who felt a boost was needed to attract younger Conservative voters, the consensus seemed to be that Mr Hammond had presented a Budget most of his party would be content with. That may well be enough to mean that we see him at the despatch box at least one more time, though whether he is considered “fit for the future” beyond that, only time will tell.

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How to combine work/life balance, job satisfaction and retirement

How to combine work/life balance, job satisfaction and retirement

Two of the biggest concerns faced by workers when they reach their 50s and 60s are those of achieving job satisfaction and a...

How to combine work/life balance, job satisfaction and retirement

How to combine work/life balance, job satisfaction and retirement

Two of the biggest concerns faced by workers when they reach their 50s and 60s are those of achieving job satisfaction and a work/life balance. Recent studies have offered fresh insight into the reasons behind these issues and the best ways to tackle them.

One study conducted by economists at the University of Southern California and California State University explored how work/life balance issues affected those aged between 51 and 79. 14% of women in this age bracket who retired earlier than they intended to did so because they had to care for a spouse or other family member who experienced a health scare. However, this was far less often the case in men, perhaps due to them being more likely to ‘outsource’ the care their spouse needed. In contrast, women nearing retirement age make more adjustments than men when it comes to the health of a partner, taking on more of the caregiving role themselves.

The report also found that a poor work/life balance was also more likely to make women retire than men. Men are also more likely than women to continue working part-time beyond retirement age if their spouse is still working. Women stated they were more likely to continue working full-time in this age bracket if their employer offered health insurance, to the point that researchers described it as a ‘critical pull factor’ in women.

A second study looked at issues around job satisfaction and its relationship to working conditions. The research, carried out in collaboration between Harvard University’s Medical School, the University of California and the nonpartisan RAND Corporation, found that workers nearing retirement age valued other elements of job satisfaction aside from pay and benefits.

Most prominently, those over 50 look for work flexibility, meaningful work, the chance to develop transferable skills, and a work environment which feels supportive. The researchers found that these intangibles were more important than money in older workers’ decisions on whether to continue working: having a flexible working schedule had the same impact as a 9% pay increase, whilst a switch from a physically demanding job to one which involved only moderate physical work was equivalent to a 20% pay increase.

If you’re still employed and nearing your 50s or 60s, or you’re already there, think about what’s most important to you when making decisions about whether you want to retire or carry on working full-time. It’s likely that money will be further down your priority list at this stage of life, so let flexibility, job satisfaction and the chance to spend time with your loved ones take precedence.

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Too late to start saving?

Too late to start saving?

Not beginning to save towards your retirement until you reach your fifties would not so long ago have been considered leaving...

Too late to start saving?

Too late to start saving?

Not beginning to save towards your retirement until you reach your fifties would not so long ago have been considered leaving matters far too late to put anything meaningful away for your life after work. Previous generations saw building a pension as something to do over an entire career, with contributions throughout your working life coupled with investment growth being the only way to ensure your retirement pot was substantial enough to provide for you throughout your retirement.

However, whilst compound interest still means that anything put away at the start of your career will see some serious growth by the time you need it much later in your life, the reality today for many young people is that they simply have very little to invest when they first begin work. Many may find that they won’t be able to begin saving seriously until they reach middle age.

The reasons for this are several. First of all, your wages are statistically likely to reach their peak for women during their forties and for men in their fifties. Secondly, as the average mortgage term is twenty-five years, most people who bought their home in their twenties are likely to have finished paying it off by the time they reach their fifties. A third key reason is the declining cost of raising children. Whilst it’s unlikely that you’ll stop giving them financial support completely, if you’ve had kids in your twenties or thirties it’s probable that the cost of providing for them will have gone down a great deal by the time you’re heading towards 50.

With considerable tax relief on both ISA investments and pensions, it’s now possible to build a healthy retirement fund even if you only start saving in your fifties. For example, someone with no existing savings, earning £70,000 annually, who started saving the maximum permitted yearly amount of £40,000 at age 50 could amass a pension pot of £985,800 by the time they turn 67, assuming a 4% annual return after charges.

£40,000 a year might sound like a huge amount to save every year, but this amount includes the generous tax relief enjoyed by pension savings. Our £70,000 earner would only need to put away £27,000 of their own money in order to reach the £40,000 contribution, whilst a basic rate taxpayer would need to contribute £32,000 to achieve the same.

So, whilst it’s sensible to begin saving as early as you can, it is possible to begin putting money away when you reach middle age and ensure you have enough to provide for yourself later in life. The last ten years of your working life can reasonably be seen as some of the most important in terms of preparing for your retirement.

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Why retirement is worrying millennials and what steps they are taking

Why retirement is worrying millennials and what steps they are taking

A recent study by HSBC has revealed the main financial worries of the ‘millennial’ generation, recognised as those born...

Why retirement is worrying millennials and what steps they are taking

Why retirement is worrying millennials and what steps they are taking

A recent study by HSBC has revealed the main financial worries of the ‘millennial’ generation, recognised as those born between 1980 and 1997. As its title suggests, the ‘Future of Retirement’ survey focuses primarily on how millennials feel about how they are preparing for life after work, but also delves into the wider issues around money and modern life which are inherently linked to the subject.

In general, millennials see themselves as less fortunate than the generations which have come before them. Over half (52%) felt that they had seen weaker economic growth than previous generations, whilst 60% said they saw themselves as experiencing the consequences of decisions made by those older than them, including rising national debt and the global financial crisis. In relation to retirement, 65% of respondents are worried that they will run out of money when they retire, whilst 46% were concerned that employer pension schemes would collapse without any payout for their generation.

The average age that millennials begin saving for their retirement is 27, with just 13% admitting to not having begun putting money away for their pension yet. 76% said that curbing their current spending was difficult but necessary to save for later in life, whilst 68% are willing to do so. When it comes to investment, nearly half of those surveyed (48%) said they would go for a risky opportunity which had the potential for greater returns further down the line.

Expanding out to look at the concerns of all those currently working, which includes both Baby Boomers (those born between 1945 and 1965) and Generation X (born between 1966 and 1979), the survey found that only 17% were worried they wouldn’t be financially comfortable in retirement based on their current savings, with a worrying 14% admitting to having not been able to save anything. However, over half (52%) said they felt that due to the constantly changing financial climate, their current retirement plans would not be relevant.

When asked about back-up plans, around two thirds (67%) of working people said they would continue working in some way after they reached their retirement, whilst more than four fifths of people (82%) said they were intending to retire two years later than originally planned in order to give themselves greater financial stability. 41% also said they wouldn’t mind taking on a second job or working for longer to supplement their pension pot.

The key guidance from HSBC’s research is that starting to save early is the best way to ensure you have sufficient savings to support yourself after you’ve retired. Another key message is the importance of seeking advice, with many people now using technology to plan their retirement: almost half of those surveyed (49%) have used the Internet to research their options, 35% have used online retirement calculators and 27% have contacted advisers online. Online savings accounts are also popular, with 41% saying that they are using one to put money away.

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Falling house prices in the UK for the third month in a row

Falling house prices in the UK for the third month in a row

Recent figures have shown that house prices in the UK fell again in May this year, making it the third month in a row which has...

Falling house prices in the UK for the third month in a row

Falling house prices in the UK for the third month in a row

Recent figures have shown that house prices in the UK fell again in May this year, making it the third month in a row which has seen prices go down. Nationwide, the UK’s biggest building society which carried out the research, stated that this is the first time house prices have fallen in three consecutive months since 2009. Following the drop of 0.3% seen in March and 0.4% in April, May saw prices decrease by 0.2%, making the average house price £208,711. The annual rate of price growth also hit 2.1%, down from 2.6% in April and the slowest pace seen since June 2013.

“It is still early days, but this provides further evidence that the housing market is losing momentum”, said Nationwide’s chief economist Robert Gardner. “Moreover, this may be indicative of a wider slowdown in the household sector, though data continues to send mixed signals in this regard.” The building society also warned that it is too soon to know whether the recent downturn can be considered to be more than a “blip”.

Considering whether the slowdown could be a result of the snap general election being called, Gardner was confident that the two were not linked: “Housing market trends have not traditionally been impacted around the time of general elections. Rightly or wrongly, for most homebuyers elections are not foremost in their minds while buying or selling their home.”

Nationwide have also suggested that house prices will continue to slow, and that inflation rises will put pressure on household budgets, leading to weakened household spending. However, the building society has predicted that house prices will increase by around 2% overall throughout 2017, buoyed by a shortage in the supply of housing across the UK. Whilst this offers some reassurance, this figure is considerably lower than the 4.5% rise seen in 2016.

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How good financial planning enables a career change

How good financial planning enables a career change

James Kemp knows how to pace himself. He should do. He’s a keen runner and has been an organiser and participant in Park Runs...

How good financial planning enables a career change

How good financial planning enables a career change

James Kemp knows how to pace himself. He should do. He’s a keen runner and has been an organiser and participant in Park Runs since their early days. However, when it came to saving for his pension he didn’t know whether the pace he’d set would take him through the retirement line comfortably or leave him and his family short of the lifestyle goals he’d targeted.

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Selling Your Business – It’s Not About Timing

Selling Your Business – It’s Not About Timing

Ernie the entrepreneur wants to retire. Ivor the investor offers him £5 million to buy his business. That’s a whole lot of...

Selling Your Business – It’s Not About Timing

Selling Your Business – It’s Not About Timing

Ernie the entrepreneur wants to retire. Ivor the investor offers him £5 million to buy his business. That’s a whole lot of money to Ernie but he decides to wait just in case he can get a better price from someone else. Next year, Ernie is offered £4 million by Connie the competitor. It’s still a lot of money to Ernie but he wishes he’d taken Ivor’s offer.

If you are trying to time the sale of your business so you get the highest possible price, you are likely to be left in one of two camps: either wondering if you could have got more if you’d waited longer or wishing you’d taken an earlier offer. A simple shift in mind-set could banish these musings.

If you went into the sale of your business knowing exactly how much you needed in order to live the personal lifestyle you desired, the decision would not only be much easier, it would follow the kind of logic on which sound business decisions are made.

When Chris Daniels received an unexpected offer to sell his £25 million turnover import and distribution business, his solicitor sent him to Freedom Financial Planning’s Andy Nevett.

“Over the years I’d had three or four different independent financial advisers but my experience and my feeling towards the whole industry was not very positive.” Said Chris. “I was looking for someone I could trust who would do more than a one off meeting, who would actively manage what would hopefully be some more significant investments.”

Andy and the team at Freedom Financial Planning take a different approach when it comes to managing wealth. Long before there any discussions about their unique approach to actively managing investments, Andy gets to know what is important to his clients, what their dreams are and how they like to live their lives. Knowing this he works out how much money his clients will need to keep this lifestyle for the rest of their lives. He calls this ‘knowing your number’.

Andy explained how he armed Chris with enough information to decide whether the offer he had received was worth taking:

“We worked out the cost of his lifestyle, not just for this year, but next year and the foreseeable future, so that Chris knew his number. Once he knew how much he needed for his lifestyle, for him and his family, he could confidently go away and negotiate the sale of his business.”

After almost 25 years spent building the business, Chris was keen to devote more time to his family, buy a yacht and travel the world. The sale of his business would allow him to do this. However, the decision to sell had to make financial sense too.

“Most business owners do it because they enjoy their business but it comes a point where you want to get away from the desk, want to not have to answer that email at 7 o’clock in the morning or take that call at 9 o’clock at night. But you’ve got to have the confidence that you’ve got the funds to do that and Freedom Financial Planning just gave us that confidence to make that decision.”

If you are looking to sell your business sometime in the next five years, ask Freedom Financial Planning to work out your number, as you never know when you will get an offer. Call Andy and the team on 01663 747000.

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Retiring in England? Here are the top destinations

Retiring in England? Here are the top destinations

Whilst the impact of Brexit is yet to be known, one thing that may become trickier is relocating to the continent after Britain...

Retiring in England? Here are the top destinations

Retiring in England? Here are the top destinations

Whilst the impact of Brexit is yet to be known, one thing that may become trickier is relocating to the continent after Britain leaves the EU. It’s a change that will affect those at the end of their working life as well as those near the start, as in the past many have chosen to live outside the UK for their retirement years. Thankfully, whether your plans to move to Europe have to be shelved, or you were always intending to spend your retirement in the UK, there are plenty of popular retirement destinations throughout England to consider.

North Yorkshire’s rural district of Craven is a popular retirement choice. Taking in the market town of Skipton, together with the larger towns of High Bentham and Settle, as well as a sizeable area of the Yorkshire Dales, Craven offers the best of both town and country living. The high street in Skipton is a past winner of the ‘greatest street in England’ from the Academy of Urbanism, which considers such factors as environmental and social sustainability, local character and distinctiveness and user friendliness. The average house price is around £205,000, with a detached house costing about £310,000.

West Devon is another area to consider. The variety of landscapes is by far the most attractive feature of this part of England, with chocolate box villages, agricultural landscapes and Dartmoor National Park providing a picturesque backdrop to your retirement. Average house prices come in at just over £250,000, although you can find semi-detached properties for under £200,000. One drawback is that travel can be an issue, with no mainline stations in the area and at least a three hour train ride into London from the nearest stations Exeter and Plymouth, so bear this in mind if you have reason to venture out of the county regularly.

If you’re looking for somewhere with a name as evocative as the place itself for your retirement, then Eden in Cumbria could be the right choice. A rural haven, Eden offers you part of the Lake District National Park, the lakes and mountains of Ullswater, the beautiful countryside of the Eden Valley and the breathtaking landscape of the North Pennines. Eden also has only 63 people per square mile, making it the place with the lowest population density out of England’s 324 local government districts. The average house price is a remarkably low £190,000, and you could easily pick up a flat for under £125,000.

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4 steps to keeping track of your pension

4 steps to keeping track of your pension

A recent study has revealed the worrying statistic that over a fifth of all people with multiple pensions have lost track of at...

4 steps to keeping track of your pension

4 steps to keeping track of your pension

A recent study has revealed the worrying statistic that over a fifth of all people with multiple pensions have lost track of at least one, with some admitting to have forgotten the details of all of them. With around two thirds of UK residents having more than one pension, this amounts to approximately 6.6 million people with no idea how much they’ve put away for their retirement. Double the amount of people admit to not knowing how much their pensions are worth.

It’s an undesirable side effect of the modern working world. Whereas in previous generations someone might stay at a single employer for their entire working life, the typical worker today will hold eleven different jobs throughout their career, which could potentially mean opting into the same number of pensions through as many different providers. The new legal requirement for all employers to offer a pension scheme through auto-enrolment is likely to add further complexities.

As a result, the Pensions Dashboard is set to launch in 2019 in the hope that it will make it easier for savers to keep track of their pensions in one place. Until then, however, there are four relatively simple steps to help you track down information on any pensions you’ve forgotten about:

  1. Find your pension using the DWP Pensions tracing service at www.gov.uk/find-pension-contact-details. Start by entering the name of your former employer to discover the current contact address for them. You’ll then need to write to them providing your name (plus any previous names), your current and previous addresses and your National Insurance number.
  2. In the case of a pension scheme which hasn’t been updated for a while, you’ll be required to fill out an online form to receive contact details. You’ll be required to give your name, email address and any relevant information to help track down your pension details. This could include your National Insurance number and the dates you worked for the company.
  3. You can also receive a forecast of your State pension either online or in paper format by going to www.gov.uk/check-state-pension. After entering a few details to confirm your identity, you’ll be told the date you can access your State pension and how much you’ll receive.
  4. Finally, and most importantly, once you’ve managed to track down all of your pension information, get some advice. Consolidating your pensions might be tempting to make managing your savings easier, but you also want to make sure you don’t lose out on any benefits by doing so. Before you make any decisions regarding your pensions, seek professional independent advice on what to do next.
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Women face gender gap in pension contributions as well as pay gap

Women face gender gap in pension contributions as well as pay gap

Whilst the pay gap experienced by women in comparison to men is most likely a problem you’ve heard about, another gender gap...

Women face gender gap in pension contributions as well as pay gap

Women face gender gap in pension contributions as well as pay gap

Whilst the pay gap experienced by women in comparison to men is most likely a problem you’ve heard about, another gender gap has emerged which is just as concerning. Recent figures suggest that, on average, women are receiving smaller pension contributions from their employers than men. Between 2013 and 2016, women benefitted from pension contributions at a rate of 7% of their yearly salary, considerably less than the 7.8% received by men.

The gap between men’s and women’s average annual pension contributions also widens as the age bracket increases. Men under 35 received £217 more towards their pension than women of the same age, a figure that increases to £594 for those aged 35 to 44. This then increases again to £1,287 between men and women aged 45 to 54, and again to £1,680 for those between 55 and 64.

Over the four year period examined, the average woman therefore received £2,489 from their employer towards their pension, over £1,000 less than men who received an average of £3,495. Worryingly, if these figures remained constant throughout a typical woman’s working life, this could result in a shortfall of £46,689 compared to the pension typically earned by a man. This figure becomes even more worrying when factoring in the statistic that women on average are still living longer than men, meaning that most women will be faced with making a smaller pension stretch over a longer period of time than many men.

The study, one of the largest ever conducted into workplace savings and taking in over 250,000 pension plans, has revealed three key factors in the significant difference between men’s and women’s pension pots. The first is that women are still more likely than men to opt for a break in their career to raise a family. Secondly, men still typically work in sectors where pension schemes are either more generous or better established. The third is linked back to the issue of the gender pay gap: as women are still earning less than men on average, this leads to employer contributions as a percentage of salary being lower.

The fact that there were significantly more men (154,999) than women (95,262) in the UK-wide study also suggests that a larger number of men are receiving pension contributions at all than women. The Department for Work and Pensions has responded to this figure stating that auto-enrolment will help to redress the balance; but has also conceded that, in light of the study’s findings, more needs to be done to bring pension contributions for women in line with those enjoyed by men.

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