Month: April 2019

What to know about ISAs in 2019/20…

April 15, 2019

The rules around ISAs (or individual savings accounts) change relatively often and different types of ISA rise and fall in popularity depending on where savers consider the most competitive place to put their hard earned money.

ISAs are a great way to save because of their tax efficiency. You don’t pay income tax or capital gains tax on the returns and you can withdraw the amount any time as a tax free lump sum. Because of their tax efficiency, there are set limits on how much you can save using ISA accounts.

The 2019-20 tax year is an interesting year for ISAs because the main annual allowance isn’t increasing. The yearly total you can invest in an ISA remains at £20,000. This means that the ISA limit remains unchanged since April 2017.

Remember that all ISAs don’t have the same allowance. For Help to Buy ISAs, you can only save a maximum of £200 a month, on top of an initial deposit of £1,200. Lifetime ISAs (LISAs) have a maximum yearly allowance of £4,000, on top of which you benefit from a government top-up of 25% of your contributions.

One ISA allowance that is rising (slightly!) is the Junior ISA, increasing from £4,260 to £4,368. This means that relatives can contribute slightly more to a child’s future, in a savings account that can only be accessed when they reach 18. Junior ISA accounts are rapidly gaining in popularity, with around 907,000 such accounts subscribed to in the tax year 2017/2018. Great news for the youngest generation!

Stocks and Shares ISAs are also gaining more popularity, with an increase of nearly 250,000 in the last tax year. On the whole, though, the number of Adult ISA accounts subscribed to in the last year fell from 11.1 million in 2016/17 to 10.8 million in 2017/18.

For investors with Stocks and Shares ISAs, Brexit uncertainty has understandably created cause for concern. In this scenario, your best course of action is to make sure that your investments are properly diversified around the globe. Speak to your financial adviser if you are unsure about what you can do to reduce risk during any post-Brexit turbulence. They’ll be more than happy to help.

Why cruise holidays are booming for retirees…

April 15, 2019

The cruise market offering has changed enormously in recent years, where once it was purely the domain of cabaret cheese and bad karaoke, now there’s something on offer for everyone (don’t worry, though, if you love cabaret and karaoke, that’s still an option). Whatever your tastes and priorities, you won’t be hard pressed to find a cruise to suit your needs.

Cruises have always been a popular choice for retirees but with the new potential for personalisation, they’re more popular than ever, with over 26 million passengers carried worldwide in 2018 alone. So what is it that makes taking to the seas such an attractive prospect?

1) Flexibility

Cruises have the potential to be a catch-all for whatever kind of holiday you’re looking for. Whether you’re after a romantic getaway, a family break over the school holidays, or a round-the-world trip that ticks off everything that’s left on your bucket list; it’s all possible when you’re on a cruise liner.

2) Activities

There really is a cruise out there for everyone. Some people want to lay on the deck and bathe in the sun, some people want to hone their rock-climbing skills, while others want to kayak alongside breaching whales. The possibilities are endless: if your priority is trying the food of critically acclaimed chefs, or even having a go at cooking the dishes yourself, fine dining can now be found onboard in some of the most remote corners of the world’s oceans.

3) Modern life can be stressful

Taking a cruise is not just about the food and entertainment available on board and the chance to see some fantastic locations. It’s also about taking the hassle of too much planning away from the holiday goer. Being able to relax and take a breather while you’re travelling the world is becoming a bigger priority for people and this has been reflected in the incredible attention and investment given to spa and wellness facilities on cruise ships. Plus it’s a great chance to unplug and really experience the world around you.

4) Value

Despite historically being a pursuit of the highest luxury with the pricetag to match, there are plenty of choices available for more budget conscious passengers. All-inclusive cruise holidays are a smart way to enjoy all the bells and whistles whilst remaining price savvy. Pick the right vessel and you can experience entertainment of broadway quality included in your price.

If you want to enjoy your retirement to its fullest but can’t decide on the best way to do that, considering a cruise trip is a great place to start.

What does the auto-enrolment increase mean for you ?

April 15, 2019

From 6 April 2019, minimum contributions from employers and staff increase. This applies to all employers with staff in a pension scheme for automatic enrolment. If you aren’t enrolled in an automatic pension scheme or you and your employer are already paying above the increased amounts, this increase doesn’t apply to you.

The old minimum rates were 2% of your pre-tax salary from your employer and 3% of your own pre-tax salary, a total of 5% of salary. This has risen to 3% from employers and 5% from staff, totalling 8% of overall salary. Your employer may already be contributing more than the minimum, meaning your own contributions won’t have to be upped so much to make the minimum 8% contribution.

While this will mean slightly less take-home pay, you are effectively getting a pay rise as your employer will be giving you more money than you would otherwise have got. This said, you won’t be able to use this money until you are 55, in most cases.

By doing nothing, you’ll automatically be saving towards your pension. You’ll be making a long-term decision to improve your financial security in later life without actually doing a thing. This is great for those of us guilty of sacrificing the future for more money in the short term. Usually, remaining in such schemes is the best financial decision as many of us face a future where the state pension won’t be enough to live off alone.

Of course, you can opt out…

In most cases, it makes sense not to opt out of the auto-enrolment scheme. However, there can be exceptions. If you already have a large pension, there’s a risk that auto-enrolment could push you over the lifetime allowance, which currently stands at £1,055,000 as of April 2019. If this sounds like it could affect you in this way, it’s best to talk to an independent financial adviser to decide what the best course of action is for you.