Author: richard

Running a car can be one of your biggest and most frequent outgoings, so driving can leave a serious hole in your pocket.

Thankfully, there are some really simple and straightforward ways to reduce the cost of being a motorist, which don’t detract from the convenience and enjoyment that driving can offer.

Choose a fuel-efficient vehicle
The first step is to select a car with good green credentials. Not only does that mean you aren’t using or paying too much for fuel, it can also help you save money on road tax and congestion charges in towns and cities.

Start by looking for vehicles with high miles per gallon (MPG) ratings, or perhaps consider alternatives such as hybrid or electric vehicles.

Drive sensibly
Your driving habits directly affect how much fuel you use, and in turn, the amount you’re paying at the pump.

So take simple steps such as sticking to speed limits, keeping your tyres properly inflated and turning your engine off if you’re likely to be at a standstill for over a minute. That way, you can enjoy more fuel-efficient trips.

Shop around for insurance
Many motorists make the mistake of just accepting the first insurance quote they’re given, but it’s well worth researching the market to find the best deal.

Shopping around also allows you to make sure you’re choosing a policy that reflects your specific circumstances, so you’re only paying for what you actually need.

Maintain your vehicle
Your car will be much more fuel-efficient if it’s well looked after, and getting it regularly serviced and MOT’d has multiple benefits. Your vehicle will run more reliably at peak performance for much longer, so you’re less likely to have to fork out for costly repairs or replace your vehicle completely.

You could also save a few extra pounds by learning how to perform fairly basic tasks such as checking your oil levels yourself.

Plan your journeys
Planning your route, the time you set off and combining errands to reduce the number of trips you take could pay off handsomely.

There are plenty of tools and apps available, such as Google Maps, that can help you identify the best time to set off and which routes to take and avoid, as well as get real-time information on traffic conditions.

Driving can be essential in many aspects of your day-to-day life, so it’s easy for costs to mount up and even become something of a burden.

But by following these five simple steps, you could make considerable savings and free up cash that could be far better spent, saved or invested elsewhere.

Clothes can be one of our biggest outgoings, even if you wouldn’t exactly call yourself a fashionista.

You need day-to-day wear for home and work, formal clothes for events and occasions, going out outfits, utility wear, holiday clothes…the list goes on.

At the same time, clothes are a vital way of expressing ourselves, showcasing our personalities, creating our identities and boosting our confidence.

But being ready for every occasion and feeling good at the same time doesn’t always come cheap, particularly if you’re also buying clothes for growing children.

So what can you do to cut the cost of this basic essential, at a time when prices seem to be rising across the board?

Buy pre-loved clothes
We’re in a world where many people go through clothes at an alarming rate, often to keep up with the latest trends and because they refuse to be seen in the same outfit twice, both in real life and on social media.

But this trend of buying and disposing of clothes so regularly and on such a massive scale has led to huge concerns about the fashion industry’s environmental impact.

As consumers become more conscious of their own carbon footprints, many are now actively looking to source clothes in a more sustainable way, such as by buying second-hand clothes.

Purchasing pre-loved items can tick multiple boxes for environmentally conscious and hard-pressed shoppers.

Firstly, it reduces the level of demand for new clothing production, and therefore means there’s less waste and pollution.

Secondly, it can be extremely affordable, with even designer goods often available at knockdown prices.

And finally, buying pre-loved clothes allows people to express their own unique style, rather than conform to the trends dictated by big brands in the shops.

Where can I buy pre-loved clothes?
Scouring your local charity shops is a great way to find some stylish and affordable bargain clothes, and support a good cause at the same time.

If you thought charity shops were full of old-fashioned, dowdy and worn-out clothes, then think again, as many will be full of exciting options for people of all ages.

Of course, you can never be sure exactly what you’ll find when you start looking through the clothes racks, so it’s worth being patient in your search to find the right items for you.

Spending time browsing can also open your eyes to items that you might not ordinarily consider. What’s more, since charity shop clothes are so affordable, you’ll have a bit more freedom to experiment with different styles and mix things up a little.

Online marketplaces such as Vinted, Depop and eBay can also be a treasure trove for anyone searching for great clothes at low prices.

Simply set up an account and you can then search for the items you want to see. You can also use filters to narrow down your options even further, and then easily make a purchase.

Many of the items listed on apps such as Vinted will be as good as new, maybe even still with their shop tags on, yet on sale at ridiculously low prices, so it’s a really affordable way to refresh your wardrobe.

Declutter your wardrobe first
A good way to make the most out of charity shops and online marketplaces is to go through your own cupboards beforehand.

Are there any items of clothing that are in perfect condition that you’d forgotten all about and could be put back in rotation?

Could an item in perfect condition that you don’t wear any more be sold on an online marketplace and make you a few extra pounds?

Are there items in your wardrobe that have seen better days and need replacing?

If money is tight, you don’t want to be purchasing items you don’t really need, so it’s well worth making sure you know what you’ve already got and what you need to look for.

Style doesn’t have to be costly, either to your wallet or to the environment, so next time you’re in the market for some new clothes, why not start by looking for pre-loved items?

In 2005, then-chancellor Gordon Brown launched a new scheme to encourage parents to save money for their children.

Under the Child Trust Fund (CTF) policy, every child born between September 1st 2002 and January 2nd 2011 was eligible to receive at least £250, which they’d be able to access once they turned 18.

But many young people who are now old enough to claim their money are yet to do so.

In fact, a new report by the Public Accounts Committee (PAC) estimates that more than four in ten 18 to 20-year-olds have not claimed the savings in their matured accounts.

Figures also show that more than £1.7bn is currently waiting to be claimed by nearly a million young adults.

So what’s gone wrong?

Some of those who haven’t claimed the money will have simply lost track of these accounts, while others might not even know they have a CTF in their name.

The PAC has therefore called on HMRC to do more to find and get in touch with anyone who hasn’t claimed money they’re entitled to, and has criticised the organisation for a “failure in long-term planning”.

Trust providers were also singled out for criticism, with the PAC noting that although they’re charging fees for managing CTFs – and potentially earning up to £100m a year through these charges – they’re doing little to connect dormant accounts with their owners.

Figures showed that just four out of 55 providers have proactively and voluntarily worked with the Tracing Group to find people who may have forgotten about their account.

The fact that so much money is going unclaimed by young people is especially worrying given that this same group are among those hit hardest by the cost of living crisis.

As the PAC notes, about half of all CTFs were for children in low-income families – and many of these could be among those failing to claim this money now.

The CTF policy was designed with the idea that young people would have a pot of money available upon reaching adulthood, and understand the wisdom of saving.

But if those who would benefit don’t know about it then they’re at an instant disadvantage.

Keeping track of different accounts can be difficult enough, but if so many people turning 18 don’t know about CTFs or how much money they’re sitting on, it’s clear that the ball has been dropped.

Let’s hope that HMRC acts on the PAC’s recommendations and helps young people access this money, as it could make a very real and tangible difference to them at a crucial point in their lives.

The Bank of England has increased interest rates for the 14th month in a row – meaning they now stand at 5.25 per cent.

Members of the Monetary Policy Committee have been hiking rates in an effort to tackle inflation, which remains well above the Bank’s target of two per cent.

But while high inflation is putting many people’s finances under strain, raising interest rates causes its own pressures for hard-pressed households.

So what does this latest rate hike mean for you and your finances?

Higher mortgage payments
Interest rate rises will be deeply felt by anyone with a mortgage, as anyone on a variable rate mortgage is likely to face higher monthly repayments.

According to estimates from the Bank of England, nearly a million households are set to see mortgage payments go up by at least £500 a month by the end of 2026, while more than two million households will pay between £200 and £499 more each month.

The Bank also believes that the average household coming off a fixed rate deal in the second half of this year will see their monthly repayments go up by £220 if they refinance at current rates.

Needless to say, the impact of these increased payments could be devastating for some, and at least strongly impact on the budget and disposable income of others.

Higher Cost of Borrowing
Interest rate hikes can be costly if you’re borrowing money, perhaps if you have a credit card or have taken out a personal loan.

That makes it more vital than ever for anyone with multiple debts to prioritise their repayments, perhaps working to pay off high interest debts as soon as possible.

Less disposable income
Your mortgage is one of your biggest financial commitments, so if your monthly repayments become more expensive, you’ll have less money to spend elsewhere.

This can impact on countless aspects of your life, from the amount you’re able to spend on essentials such as groceries to how often you’re able to go on holiday or eat out.

Homeowners having less disposable income would also have a wider effect on the economy, as consumer confidence will fall, people would spend less and businesses would see a drop in demand and custom.

According to figures from KPMG, more than half of consumers have cut non-essential spending in the first half of 2023, with many cutting back on luxuries such as eating out, choosing to buy more own brand and value food instead of branded alternatives, or opting to holiday in the UK rather than overseas.

More than a third of those polled cited their mortgage as their main reason to cut back on their spending, as many were worried about their current costs and others were concerned about their monthly repayments going up in the near future.

Not saving as much
On the face of it, higher interest rates are good for savers. But in reality, increased borrowing costs can push short-term concerns to the top of the agenda, and saving to the bottom.

For instance, if a person has debts, they’ll be more likely to prioritise repaying them instead of putting money into their savings.

As a result, many will miss out on the interest they could have got on their savings, and perhaps find themselves with a smaller pot of money further down the line.

Dipping into savings
In a climate of higher interest rates, many businesses will be forced to pass on many of their extra costs to consumers.

That, in short, means basic goods and services can end up costing more and consumers are under greater financial pressure. It’s therefore no surprise that many people are resorting to accessing their savings.

Figures from KPMG show that a quarter of people are currently having to use savings to help them cover essential household costs. This is particularly common among younger adults, with 43 per cent of 18 to 24-year-olds using their savings in this way.

With soaring interest rates having such a profound and wide-ranging effect on people’s finances, it can be easy to get knocked off course as you work towards your long-term financial goals.

That makes it more important than ever to speak to a professional financial adviser, who can take an informed, objective look at your financial situation and offer advice that suits you and your circumstances.

If you have any questions on managing your finances in the current climate without losing sight of your goals, please get in touch and we’ll be happy to speak with you.

nheritance tax has been hugely controversial for many years, with some arguing it needs to be reformed, and others saying it should be scrapped completely.

But the noise of the debate has recently gone up a notch, as more than 50 Conservative MPs, part of the Conservative Growth Group, are now actively calling on the government to abolish inheritance tax before the next general election.

Among the members of the group are former Chancellor of the Exchequer Nadhim Zahawi, who wrote in The Telegraph that scrapping this “morally wrong” tax would show that the government “backs families in their desire to pass on their hard-earned savings to the next generation”.

Others include former Business Secretary Jacob Rees-Mogg, who said inheritance tax is “unfair and economically damaging”, and former Home Secretary Priti Patel, who insisted that people should be able to “determine the future of the assets they have worked hard to save and build up”.

This is significant as all three were, until very recently, senior figures in government, and the current administration has – far from scrapping it completely – instead committed to freezing inheritance tax thresholds at their current levels until April 2028.

The inheritance tax threshold is currently £325,000, or £650,000 for a married couple. So if your estate is worth more than this amount, you will be liable to pay inheritance tax, with the part of the estate above the nil rate band being taxed at a rate of 40 per cent.

While many people won’t have to worry about paying this charge, as their estates will be worth less than £325,000, rising house prices mean that more of us are getting caught up in the inheritance tax net.

And as Paul Johnson, Director of the Institute for Fiscal Studies, notes: “The very wealthy pay an average rate half, or less, (than) that paid by the moderately wealthy.”

“If all you leave is the family house, it’s hard to avoid. If you have millions, it is absurdly easy to avoid,” he commented.

Mr Johnson has therefore called for inheritance tax to be reformed rather than scrapped, as he believes the current system is “genuinely unfair”.

Similar concerns have been raised by Dan Neidle, Tax Lawyer and Founder of the Tax Policy Associates, who stated that while most people believe the 40 per cent rate is “unfair”, the wealthiest people only have to pay “about 20 per cent thanks to over-generous exemptions”.

Mr Neidle believes scrapping or limiting the exemptions is “the obvious answer” to this problem, as the revenues raised could be used to reduce the rate to around 20 or 25 per cent.

“Make it a fair tax, applying at a fair rate to the upper-middle class, and at that same rate to the very wealthy,” he said.

“If we abolish it, we’re losing £6 billion of tax revenue to benefit the wealthiest four per cent.”

With prominent Conservative politicians on one side of the debate and the current government on the other, perhaps the only thing we can be sure of for now is that the issue of inheritance tax looks set to feature in more column inches than it has for quite some time.

Who do you think is right? What do you think about the current system? Should it be scrapped or reformed?

As the debate rumbles on, rest assured that we’re here to offer you expert guidance on how to manage your estate and mitigate your inheritance tax liability.

If you have any questions on these issues, please don’t hesitate to get in touch.

You won’t have failed to notice the ongoing debate about artificial intelligence and how it’s transforming the world of work in countless sectors.

But did you know you could use tools such as ChatGPT to help with tasks at home too? And we don’t mean helping your children cheat at their homework.

AI could help make countless household tasks easier or speed up those jobs that can be time-consuming.

Here are just a few ways it could make a difference to you…

Holiday recommendations
Do you have a favourite type of holiday, such as sunning it on a beach or enjoying a city break?

If you know what you like, but fancy visiting a destination you’ve not been to before, then asking AI for alternatives could be a good option.

It might throw up a few recommendations that you’ve previously overlooked, and highlight attractions you haven’t thought of before.

Plan your holiday itinerary
Once you’ve picked your destination, AI can help you plan your itinerary. This could be really helpful if you’ve got limited time in your destination and want to make the most of every hour.

For example, if you’re spending three days in Paris rather than a week, and you want to make sure you don’t miss any landmarks, ask AI to put together a plan that takes in all the main sights and how you can travel between them.

Get recipe suggestions
Do you have random ingredients in your kitchen cupboard and not know what to do with them? You could ask AI what to do with them, and will give meal suggestions and even the recipe.

That could have the dual benefit of introducing you to new meal options and preventing food waste.

Plan your meals for the week
Meal planning can be an arduous task, particularly if you have fussy eaters in the house or a limited budget. You could make this job easier by telling AI what type of food you all like and how much you have to spend, before asking it to put together a plan for the week of what you’re going to eat.

You could even ask it to write a shopping list that reflects your meal plan, so you’ll be less likely to waste food at home.

Write packing lists
If you’re heading away for work or a holiday, ask AI to put together a list of essential items that you’ll need in your suitcase.

Not only could that save you a little bit of time before you depart, it should make sure that nothing important gets forgotten.

Of course, there are limits to what tools like ChatGPT can do, and it’s not infallible.

Since you don’t necessarily know where it draws information from, it can sometimes throw up incorrect data or present certain opinions as fact.

Add to that the fact that many people want genuine human insights and experiences to guide their decisions.

For example, how many of us check customer reviews online before buying a certain item or booking a holiday to a certain destination?

We do that because we care what other people think and value firsthand accounts.

So while AI can be a good starting point for some tasks, it’s important that you don’t take what it tells you at face value.

Start with AI and then turn to respected, authoritative sources of information for a second opinion, and then you can be confident you’re making the right decisions.

Skipton Building Society recently hit the headlines after announcing that it was offering a deposit-free mortgage, aimed at first-time buyers currently living in rented accommodation.

This type of home loan used to be easy to find, but 100% mortgages were taken off the market in the wake of the 2008 financial crisis.

However, 15 years later, the situation is very different, with many people facing staggeringly high rents, and finding the prospect of getting on the housing ladder increasingly distant.

According to figures from RightMove, average monthly rents in London are now £2,500, and in the rest of the UK, tenants are paying about £1,190 a month.

Skipton believes its new mortgage will therefore help those who are “trapped in rental cycles”, don’t have access to the so-called Bank of Mum and Dad, and as a result, aren’t in a position to save up for a deposit on a house.

The building society’s 100% mortgage is for a five-year term at a rate of 5.49%. In order to be accepted, borrowers must demonstrate they have a good credit history and have been able to pay their rent on time for the last 12 months. Furthermore, they don’t need to have a guarantor in order to secure the home loan.

Concerns have been raised, however, by no less than the Bank of England governor himself – Andrew Bailey.

Speaking to the BBC, he said: “I’m not going to say no to 100% mortgages, but both lenders and borrowers have to be very careful about this.

“You can get quite a few problems. People can often get stuck with mortgages for a long period of time which they can’t trade out of. I think we have to watch it very carefully.”

First-time buyers unsure about 100% mortgages
Interestingly, many first-time buyers also appear to be hesitant, even as they grapple with issues such as soaring house prices, rising interest rates and being unable to pay prohibitively high deposits to make a purchase.

According to research by gradual homeownership provider Wayhome, just 26% of those who bought their first home in the last year would have considered taking out a 100% mortgage when buying their current property.

Meanwhile, only 21% said they’d be willing to make bigger mortgage repayments each month to secure a 100% mortgage.

And notably, just 28% of those polled actually knew how much more a 100% mortgage would cost them every month.

Nigel Purves, chief executive of Wayhome, acknowledged that many “beleaguered” first-time buyers will “welcome the prospect of a 100% mortgage”.

However, he insisted that “the devil is very much in the details”, and that anyone considering a 100% mortgage should be “fully aware of just what they are signing up for before taking the plunge”.

“Not only are you unlikely to qualify for a mortgage on the house you actually want due to income limitations and lending caps, but those that do make the cut face a far higher monthly repayment cost as a result,” Mr Purves said.

“With the market also showing signs of cooling in recent months, there’s a very real chance you could find yourself falling into negative equity at the slightest sign of a house price downturn.”

Of course, we are not here to tell you that you definitely shouldn’t take out a 100% mortgage. Depending on your circumstances, it could be the perfect option for you and help you achieve your dream of getting on the property ladder.

But the return of 100% mortgages to the market is a reminder to first-time buyers to look beyond the headline statement in an advert, read the small print and consider their specific situation before committing to anything.

If this seems a daunting task, remember you can always speak to a professional financial adviser, who is able to take a holistic look at your finances and offer advice that genuinely reflects your needs, circumstances and goals.

Please don’t hesitate to get in touch if you have any questions.

Wanting to look after your family is one of the most natural impulses in the world, and that’s one reason why you’ll want to make sure your finances are in order, so you can provide for them after you’re gone.

But another way to help your loved ones is to instill good financial habits into them early on in life, so they’re in a stronger position to achieve their goals in the future.

So where do you start?

Start early
Your children will start gaining an awareness of what money is early on in life, perhaps because they’ve pestered you for a toy or gadget and you’ve told them you can’t afford it.

This is the perfect opportunity to start teaching them in more detail about the value of money, saving and how you manage your various expenses, from paying household bills to paying for luxuries and non-essentials.

Encourage them to save
You can get your children actively saving money from an early age, from giving them a piggy bank or opening a Junior ISA.

Set a good example
If you want to instill good financial habits into your children, you’re in a position where you can give them a positive example to follow.

If they can see you actively setting a household budget, weighing up how to spend your money and thinking about the choices you make, it will hopefully become second nature to your children, and they’ll grow up emulating your actions.

Set financial goals
You’ll have various financial goals in mind, from making sure you can afford a family holiday to paying for a future wedding.

You can encourage your children to get used to doing this by suggesting they set goals for whatever they want to buy. It doesn’t have to be on a large scale. For instance, it could be a holiday with friends, a night out, a new smartphone or a laptop. But even so, it will get them used to the idea of making sure they’re able to pay for things before they buy.

Teach them budgeting skills
When your children are starting to earn their own money, perhaps because they have their first Saturday job, sit down with them and teach them how to budget.

Show them ways of tracking their income and outgoings, so they can see what spending must be prioritised and how much money they have left for discretionary purchases.

If you have any questions about managing your finances and helping your family become more confident about managing their money, please feel free to get in touch and we’ll be happy to speak with you.

Average house prices rose by 5.5 per cent in the year to February 2023, according to the latest official figures, taking the average price of a property to £288,000.

That’s £16,000 higher than it had been a year earlier – and this surge in house prices has had wide-ranging consequences, most notably, pricing many people out of buying a property.

But it’s also having a huge impact on those who are already on the property ladder in one area that most homeowners may have overlooked – inheritance tax.

The current inheritance tax threshold is £325,000, so there’s nothing to pay if the value of your estate falls below this amount.

Worryingly, this threshold has remained frozen now for more than a decade – despite soaring house price inflation over this period.

As a result, more and more people are finding themselves liable to pay inheritance tax, which has led to many labelling it a stealth tax.

In fact, the government raised £7.1 billion from inheritance tax during the last financial year, according to HM Revenue and Customs. This is £1 billion more than the amount collected in 2021-22.

These figures will almost certainly reignite the debate about inheritance tax and whether the current system is fair.

At the same time, they highlight exactly why it’s so important for people to get their finances in order if they wish to avoid getting caught up in the inheritance tax net.

The Treasury has insisted the “vast majority” of estates do not pay inheritance tax, saying that “more than 93 per cent of estates are forecast to have zero inheritance tax liability in the coming years”.

But with inflation remaining high and the inheritance tax threshold staying frozen until at least 2028, how long this line can hold remains to be seen.

For now, those who are concerned about how the rising value of their home might affect their inheritance tax liability should seek professional financial advice.

You’ll undoubtedly want to leave the bulk of your wealth to your loved ones or good causes that mean something to you.

So speaking to a regulated specialist in this field could help you achieve this ambition and not be left paying too much to the state.

Please get in touch with us if you have any questions about how to reduce your inheritance tax bill and we’ll be happy to discuss this with you.

Many of us don’t like to think about what will happen after we’re gone, and that’s perfectly understandable. But it’s really important to overcome this psychological hurdle if our wishes are to be carried out and our loved ones get the inheritance they deserve.

According to new figures from the National Will Register, more than four in ten adults haven’t yet spoken to anyone about what should happen to their estate when they pass away.

A quarter of people said this is because they find the subject too morbid to think about, while almost one in five admitted they simply weren’t concerned about what happens to death.

Interestingly, even people aged over 55 are apparently reluctant to discuss this issue, with three in ten people in this age group not having spoken to anybody about their estate.

Similarly, almost half of those polled said their parents hadn’t discussed any instructions or details or a will, and only a third said their parents had informed them where a will could be found.

Of course, the simple reluctance to discuss or think about death is at the heart of this issue, but there will be many other factors influencing these worrying trends.

For example, many people who cohabit but aren’t married may have mistakenly assumed that if they die without a will, everything will automatically go to their partner, when in fact it would go to their closest living blood relatives.

As a recent study from the Women and Equalities Committee showed, 46 per cent of people in England and Wales wrongly believe that cohabitants living together form a common law marriage, automatically gaining rights equal to a marriage or civil partnership.

Others, meanwhile, simply assume they don’t need to have a will. The National Will Register survey found that nearly one in three people don’t believe they have enough assets to warrant making one, and one in ten felt their estate was too simple.

All this suggests that much more needs to be done to educate people about estate planning, as they can end up making costly mistakes that don’t reflect their actual wishes.

More effort to show people how to make a will could also be necessary, as a staggering one in ten said they didn’t know how to go about it.

How many people have a will?
Figures from the National Will Register show that just 44 per cent of adults in the UK have made a will.

Notably, men were found to be more likely to have a will in place than women (50 per cent of males, compared with 39 per cent of females).

Similarly, men were also more likely to be willing to discuss what happens to their estate. Some 62 per cent of men were found to have raised the issue with their loved ones, compared with just 55 per cent of women.

Two-fifths of those who haven’t yet made a will said they just hadn’t got around to making one yet.

But sadly, we can never be sure when we’ll pass away and how quickly that will might be needed.

You really shouldn’t delay getting your affairs in order, so you can be confident that your wishes will be carried out and your loved ones will be well cared for, if the unthinkable happens.

If you want any advice on making a will, estate planning and managing your wider financial affairs, please don’t hesitate to get in touch with us.

Our professional, regulated specialists will be happy to discuss these important issues with you, so you can be properly set up for the future.