Posts by: john

Need advice about long term care

How will you pay for your long-term care?

By on 23rd February 2021

The longer we live the more likely we are to need long–term care later in life – and most of us are now likely to live longer than we would have in the past. While many of us have watched the older generation grow old and need long-term care, the inevitability of ageing is generally not something we like to think about in advance.

Long-term care will come with a cost for most of us, if we are lucky to live long enough to need it. In our sophisticated and advanced UK society, we seem largely to have lost a culture of expecting to provide care within the family across the generations. Very few of us would see it as an honour and natural obligation to look after the elderly within the family home – unlike many in less advanced and materialistically poor countries. This option for most families is a last resort rather than the first consideration. This means that each of us should individually prepare to finance our own future long-term care – because clearly no-one else is likely to and it appears the ‘welfare’ state increasingly can’t afford us later in life!

An excellent information resource is The Society of Later Life Advisers, also known as SOLLA.

The Society’s aim is to ensure that consumers are better informed about the financial issues of later life and can find a fully accredited adviser quickly and easily. SOLLA is a not-for-profit organisation, created in 2008, to meet the need of consumers, advisers and those who provide financial products and services to the later life market. You can find more information about SOLLA’s free support services and guides by following this link to their website here.

Broadly, there are three main care options:

NHS Continuing Care: If you have a high level of care needs, say as a result of disability, accident or illness, you may be eligible for free Continuing Care, a package of healthcare that’s arranged and funded solely by the NHS and provided for you at home, or in a hospital, nursing home or hospice. You’re more likely to qualify if you have mostly healthcare needs rather than social care needs, relying on a qualified nurse, rather than a carer.

Local-authority funding for long-term care: Your local council may be able to assist you with the costs of residential care or help you stay in your own home by providing support for carers, equipment and specialist services. Exactly how much funding you receive will depend on your individual needs (based on a care-needs assessment) and how much you can afford to pay towards the costs of care yourself (based on a financial assessment). Your local authority or trust can arrange care services for you or you can opt to receive direct payments and organise things yourself.

Self-Funding: the biggest fear about funding your long-term care is likely to be that you’ll be forced to sell your home. Firstly, it’s important to claim any benefits you’re entitled to. Attendance Allowance and Disability Living Allowance (now replaced by Personal Independence Payment) are the most common but there are many more you should be aware of.

Your self-funding options depend to a great extent on your circumstances. You may not qualify for funding from the NHS or your local authority. Even if you do, the amount you receive may not be enough to completely cover your care costs. If this happens, you’ll need to think about how you are going to top up any contributions, or pay for it all yourself. Whilst we might not like to think about it, long-term care is another area of finance where it pays to be prepared!

  • John L Taylor DipPFS, Certs CII (MP & ER)
  • Whitehall Partnership
  • 01384 946 000
  • 07977 985 306
  • john@whitehallpartnership.co.uk

Successfully planning your retirement

By on 10th July 2020

How much money do you need in retirement? The UK’s population is getting richer and life expectancy is getting better. More than one third of the UK’s population is aged over 65 and the proportion is growing. Figures from The Department of Work and Pensions estimate that by 2050, there will be just two working people for every person aged over 65. This means living longer is going to get more expensive and increases the pressure to save more during our working lives.

Having enough money in retirement is a challenging question – how much is enough? Undoubtedly, this will force many people towards two extremes; either running out of money or amassing a huge fortune having been too afraid to spend it.

Many investors (& their financial adviser!) often overlook ‘free tax breaks’ by focussing on investment performance or fancy pension products. However, the best kept secret for successful retirement planning is the creative use of personal tax allowances.

HM Revenue & Customs receive vast sums of money through subtle tax mis-management, because investors unwittingly focus on ‘where’ they should invest rather than ‘what’ allowances are available, leaving their wealth exposed to unnecessary taxation.

Shrewd use of allowances and exemptions coupled with tax management provide a compounded benefit for investments. It means less reliance on growth, which reduces the need to expose assets to risky investments.

The best way to achieve security in retirement is straightforward, but many wealth managers and private banks get it wrong. St James’s Place, Barclays Wealth and Hargreaves Lansdown amongst other notable firms place too much emphasis on investment products, which often carry high charges and contain speculative investments.

It would be counterproductive to achieve superior income and growth from investments if they are lost through poor tax planning.

The starting point is to establish ‘what’ personal allowances can be exploited to maximum effect and what strategy offers greatest tax-efficiency for growth and income in your pocket.

Clients usually approach Whitehall Partnership with three things on there mind: improving income and growth, lowering investment risk and paying less tax. In many cases, this is accomplished by fully utilising personal allowances and exemptions first. It is only after maximising tax efficiency we consider the underlying investments and ways to improve performance.

  • John L Taylor DipPFS, Certs CII (MP & ER)
  • Whitehall Partnership
  • 01384 946 000
  • 07977 985 306
  • john@whitehallpartnership.co.uk

The popularity of equity release is growing, but is this a good move?

By on 8th June 2020

Equity release is no longer the niche lending area it once was. More and more homeowners over 55 are choosing to release cash tied up in their homes and there are few signs of this trend subsiding.

Lending in 2018 increased by 27% compared to the previous year and is now nearly double what it was in 2016. It’s likely that the UK’s growing elderly population, where many don’t have the pension security of generations past, is partly behind this expansion. The growing variety of equity release products on the market could also be a factor. Newer products mean that homeowners are able to gradually release money from their property, rather than taking it as a lump sum.

Is it a risky option?

Equity release doesn’t exactly have a squeaky clean reputation. There have been past accusations of mis-selling and there are occasions where relatives find themselves receiving less inheritance than they might have expected.

Whether equity release is a suitable solution really depends on a person’s individual financial and personal circumstances. The Equity Release Council is a good place to find an adviser with the right qualifications.

As well as getting sound financial advice beforehand, it’s always best to be open with loved ones about releasing equity from your property. Two in three complaints to the Financial Ombudsman about equity release come from relatives of people who have died or gone into care. It can save a lot of upset later on to be open about releasing cash from a property when you do it, rather than further down the line.

The bottom line is that equity release can play a crucial role in supporting a full retirement, alongside pensions, savings and other assets, for the right homeowner. Since homes are most people’s largest asset, it makes sense to at least consider how this asset can be used to fund retirement. Downsizing in later life is another way of releasing money from your home. If you have any questions about ways you can increase your financial security in later life, please get in touch with us directly.

With over 25 years’ experience, Whitehall Partnership are truly independent and we’ll help you find the best equity release solution from all providers across the UK. We’ll take time to understand your personal needs and circumstances before we make any written recommendations. We also offer free home visits and with your consent, happy to include your friends and family members in our discussions together.

  • John L Taylor DipPFS, Certs CII (MP & ER)
  • Whitehall Partnership
  • 01384 946 000
  • 07977 985 306
  • john@whitehallpartnership.co.uk

Understanding active vs passive investment strategies

By on 31st January 2020

The debate about whether a passive or an active investment strategy produces a better return for investors is one that has rumbled amongst financial planners for as long as passive strategies have been in existence. For you as a client, the method favoured by your adviser can have a major impact on your investment experience, so understanding the two different approaches is important.

An active strategy is one in which the investor – possibly a fund manager or other investment professional – will make investment choices on a regular basis, buying or selling holdings when they think it is necessary, often when they believe they can make a peak profit. An active strategy is highly involved and requires constant management.

A passive strategy meanwhile is one which requires hardly any trading whatsoever. Instead, money is invested into funds linked to indexes, such as the FTSE 100, by way of just one of many possible examples. Relying on the market to make your gain, passive investing is typically seen as a longer term strategy and, although it may sound easier than active from a management point of view, there is still a lot to do in terms of selecting the right funds and creating a well-balanced portfolio of asset classes that meet client’s needs.

On the active side, proponents claim that such a strategy is the only way to generate better-than-average returns; the only way to ‘beat the market’. After all, passive strategies, though divested across indexes and asset classes, are by their very design market-linked. If the index your passive strategy invests in goes up, so will your investments, with the negative being true if the index falls. Your investment may never outperform the market but it will also never lose more than the market as a whole.

Passive proponents, meanwhile, point out that active investment strategies typically cost more in fees, with these fees potentially impacting on the ability of the strategy to produce a better return. Those who favour passive investments also point out the increased volatility of active strategies, stemming from the higher frequency of investment movements and the timing of those movements, which also produce the potential for market-beating gains.

  • John L Taylor DipPFS, Certs CII (MP & ER)
  • Whitehall Partnership
  • 01384 946 000
  • 07977 985 306
  • john@whitehallpartnership.co.uk