Monthly Archives

October 2022

Oct 19
0

Tuning out the noise

By | Financial Planning

You may have noticed that in our monthly newsletter a regular slot is given to a short video about ‘tuning out the noise’.

We usually reference this with “Watch this video and discover how partnering with the right financial planner plays a vital role in keeping investors on their financial plan and what really matters.”

 
The video is just under 4 minutes long. Even if you’ve seen this before, it’s worth re-watching as a timely reminder.

The message to ‘tune out the noise’ is particularly important at the moment, with all that is going on in the World, not least within our Government, the rising cost of living, and how interest rates are affecting bond markets.

At times like these there are a number of things that you can do to feel calmer and more in control:

  1. Read, watch or listen to less financial press and commentary.
  2. Accept that investing is always a two steps forwards, one step back journey.
  3. Try not to dissect your portfolio statement line by line – look at the big picture.
  4. Look at portfolio outcomes over the longest time frame you have available.
  5. Remember that a fall in value is not a loss unless you sell.
  6. Higher bond yields and lower equity prices point towards higher expected returns.
  7. Attempting to jump in and out of markets is simply guesswork, and likely to be costly.
  8. Place 2022 in the context of your multi-year, or even multi-decade, investment horizon.
  9. Keep your eyes on the prize of building future purchasing power over the longer term.
  10. Keep the faith – stay invested.

Invitation

Interested in finding out how we can optimise your financial plan and investment strategy? Get in touch today to arrange a free, no-commitment consultation with a member of our team here at WMM.

You can call us on 01869 331469

This content is for information and inspiration purposes only. It should not be taken as financial or investment advice. To receive personalised, regulated financial advice regarding your affairs please consult us here at WMM (financial planning in Oxfordshire).

Oct 10
1

April 2023 deadline: Can I, and should I, boost my State Pension?

By | Pensions

When the new State Pension was introduced from 6 April 2016, the Government also temporarily extended the normal six-year window which allows you to pay Voluntary (Class 2 or 3) National Insurance Contributions (NICs) to fill in gaps as far back as 6 April 2006.

This extension ends on 5 April 2023, meaning that you now have less than 6 months to take advantage.

After the deadline passes, the standard last 6 years restriction will apply.

You may already have seen mention of this in the media, with some articles claiming you can boost your pension by up to £55,000. This is, of course, the best case scenario, for someone topping-up ten years of NICs.

How do I know if this applies to me?
The first step is to request a State Pension forecast and your National Insurance payment history. Both of which are available to download online, via your Government Gateway login.

If your State Pension forecast shows that you are already on track to claim £185.15 per week, this is the maximum or ‘full’ pension for 2022/23. You cannot increase your State Pension above the current ‘full’ pension of £185.15 per week.

The HMRC helpline (0800 731 0175 if you are not yet State Pension age, and 0800 731 0469 if you are already at State Pension age) has also proven to be very useful for several of our clients already, but do be prepared for a wait to get through!

How much will I get?
This depends on your personal situation. However, in our experience the State Pension top-ups offer a very good, secure return. It’s always worth checking to see if you can increase your pension, and by how much, so that you can make an informed decision.

Things to consider before proceeding:

  • You may be able to claim NIC credits
    Some people may be able to claim credits, rather than buy them. For example, time spent as a carer, or if you’re on certain benefits.
     
  • Not all NIC years need the same amount of money to complete them, some will be cheaper
    For example, where you have worked a part year, and paid some NI in that year, the top-up required to complete that year will likely be lower than for a year where you didn’t pay any NIC at all.
     
    This is where the HMRC helpline can come in handy, advising you of how much a top up of a particular year will affect your pension.
     
  • Some years won’t count
    This is particularly relevant for years prior to 2016 and if you were a member of a ‘Contracted Out’ pension scheme, and already gained 30 years by April 2016. Again, the helpline will be able to tell you if this is the case.
     
  • If you’re self-employed, you could pay less to top-up
    The current self-employed rate of Voluntary contributions is £163.80 per year, where Class 3 is £824.20 per year.
     
  • Not everyone will be better off by topping up
    If the additional State Pension from topping-up pushes you into higher rate tax, the benefit from the top-up will be reduced. You’ll still be better off, but it will take you longer to break even.

    •  
    If you are expecting to receive certain benefits in retirement, this may be reduced by increasing your State Pension, so you may not end up better off.
     

Invitation

The best place to start with this particular decision is with the Future Pensions helpline as mentioned above.

If you’d like to discuss this in context to your wider financial planning, get in touch today to arrange a free, no-commitment consultation with a member of our team here at WMM.

You can call us on 01869 331469

This content is for information and inspiration purposes only. It should not be taken as financial or investment advice. To receive personalised, regulated financial advice regarding your affairs please consult us here at WMM (financial planning in Oxfordshire).