How to Prepare for the End of the Tax Year

With the end of the financial year fast approaching, here are our tips on maximising your assets to make the most of your tax efficiency.

With the end of the financial year fast approaching, here are our tips on maximising your assets to make the most of your tax efficiency.

As always, the tax year ends on the 5th April in 2022. What does this mean for you? There are a number of steps you can take to make the most of your assets and boost your financial portfolio before the new tax year begins. Here, we outline some easy ways you can make sure you’re making the most of your investments.

Use your ISA allowance

Perhaps the most important thing to note is your ISA allowance. In the 2021/22 tax year, this personal allowance stands at a maximum contribution of £20,000. Not using this allowance might hinder your portfolio, as all income and investments from your ISA are completely tax free.

Before the end of the tax year, make sure to use your entire allowance – if you can. Feel free to get in touch with your Financial Advisor at Hamnett Wealth to discuss your options, or to see how much allowance you have remaining.

Boost your pension

Don’t forget about your pension. Your annual allowance for your pension remains at £40,000 for the 2021/22 tax year. This references the limit on contributions which can be made and which qualify for tax relief.

It’s worth noting that your personal allowance might differ, and we recommend that you get in touch with your pension provider or Financial Advisor for more information or advice on making the most of your pension.

Make the most of your capital gains tax allowance

Capital Gains Tax is a tax on the profit when you sell something that’s increased in value. It’s the gain you make that’s taxed, not the amount of money you receive. This includes the sale of goods, shares, investment funds and second or inherited properties.

As an individual, you are entitled to a capital gains tax allowance of £12,300 for the current tax year. For those with a larger investment portfolio, you may need to ensure you’ve used as much as you can of your capital gains allowance before the tax year is up.

Making the most of your allowance can make a notable difference in your portfolio size. We recommend that you get in touch with your Financial Advisor at Hamnett Wealth to discuss making the most of your allowance.

Inheritance tax

In any given tax year, individuals are currently allowed to give away a total of £3,000 worth of gifts without them being added to the value of your estate. This is known as your ‘annual exemption’.

This allowance doesn’t have to be for one person; you’re allowed to split this across a number of your family and friends. Plus, don’t forget you can carry any unused annual exemption forward to the next tax year – but only for one tax year. At this point, it’s important to remember that last year’s allowance will be lost if not used by the 5th April.

Generally, if a gift is made more than seven years before your death to an individual, there will be no tax payable. It’s important to make the most of this allowance, so your family and friends can benefit.

Advice on your allowances

If you’re interested in receiving any advice on how to maximise your allowances before the end of the tax year, feel free to get in touch with your advisor at Hamnett Wealth. We’re more than happy to help!

How to avoid pension scams in 2022

How can you be scam aware in the digital age? Here are our top tips for avoiding pension scams.

Scammers are becoming increasingly intelligent in the digital age. By designing attractive offers, they trick you into sending them money and personal details. Because of this, pension scams are on the rise.

More and more individuals are falling victim to advanced pension scams. By asking you to withdraw or transfer your pension pot, scammers can steal a large proportion of your savings.

According to the Financial Conduct Authority, scammers can persuade you to transfer your pension pot to them in a number of ways. From here, it’s then invested in unusual and high-risk investments – or even stolen outright.

Common methods include pension review scams or early pension release scams. For pension review scams, users are contacted out of the blue and offered a free pension review. Usually you’ll be contacted by phone, email or advert.

When it comes to early pension release scams, scammers claim to offer you early access to your retirement funds – before you’re 55. If you’re contacted with this information, it’s almost certainly a scam, so be vigilant. In these cases, you’re still liable to paying added tax on money you withdraw from pensions – even if you’re doing so as a victim to a scam.

Here’s how to avoid pensions scams in 2022.

Ignore cold calls or unusual attempts to contact you

If you receive a telephone call out of the blue regarding your pension, hang up immediately. According to the FCA, it’s almost always likely to be a scammer trying to obtain your details. It’s recommended to report these calls to the Information Commissioners Office, to protect others from falling victim to the same scams.

Equally, the same applies if you receive unsolicited offers via email or SMS. It’s incredibly uncommon for your pension provider or financial advisor to contact you in this way – especially if it’s out of the blue. If you’re still unsure, contact your provider directly using the number listed on their website.

Additionally, if a close friend or family member recommends abnormal pension advice to you, always be aware that they may also have fallen victim to a scam.

Check they’re FCA-certified

Most pension scammers falsely claim to be FCA-certified. Frequently, scammers even claim to be acting on behalf of the FCA. However, this isn’t always the case.

The Financial Services Register (FSR) lists all information regarding financial firms which are FCA-certified. Always check this register before making any decisions regarding your finances.

Additionally, be careful that the contact number used to get in touch with you is correct. It’s best practice to use the contact details listed on the FSR.

Get in touch with your financial advisor

Before making any decisions regarding your finances, we recommend getting a second opinion from a trusted financial advisor. By having a second pair of eyes on your decisions, you’re better equipped to make choices which further your personal wealth.

At Hamnett Wealth Management, we’re trained to stay scam aware. We can provide you with independent, impartial advice which helps you reach your financial goals. If you’d like to find out more about our services, you can get in touch here.

What to do if you’ve been scammed

If you sense you’ve fallen victim to a pension scam, contact your pension provider immediately. In some cases, they might be able to prevent a transfer from taking place.

It’s recommended to report the scam to the Financial Conduct Authority by contacting their Consumer Helpline on 0800 111 6768, or by using their reporting form.

As you’ve already been successfully scammed, it’s commonplace for scammers to target you once more. In some cases, they may even sell your details to others. Make sure to follow the tips outlined above and be extra cautious when it comes to your finances.

World Alzheimer’s Month

Every year World Alzheimer’s Month takes place in September. It’s an opportunity for organisations and individuals around the world to raise awareness, highlight issues faced by people affected by dementia and demonstrate how we can overcome them to help people live well with dementia.

The theme for World Alzheimer’s Month in 2021 is ‘Know dementia, know Alzheimer’s’. This World Alzheimer’s Month, the Alzheimer’s Society is encouraging everyone to learn more about dementia. They have factsheets and booklets about dementia available to read online, download or order to your door.

Globally, dementia is one of the biggest challenges we face, with nearly 50 million people living with dementia worldwide. People living with dementia may have always managed their own or their family’s finances. But at some point, they may need extra support to help them. You can find more information about the help and support available at: www.nhs.uk/conditions/dementia/finances/

Hamnett Wealth Management are working towards becoming a dementia-friendly business. All of our staff have completed online training that covered three key areas – people, processes and places.

Some areas of finance can be complex but we always speak in plain English and explain everything comprehensively. We encourage clients to ask as many questions as they need to until they are comfortable and able to make an informed decision.

Pension Awareness Live 2021

Pension Awareness Live is back and for the second year running, the Pension Awareness Campaign will be brought to you virtually. 

Between the 13th and 17th September, you can join live webinars, Q&A sessions and 121 talks with friendly experts – all with the aim to help you make sense of your savings.  Topics covered will include pension basics, ethical investing and how to feel good about your money.  To join the thousands who have got involved with the campaign and now feel much clearer and happier about their futures, visit Pension Awareness Live 2021

If you would like pension advice, Hamnett Wealth Management are your local Independent Financial Advisers.  We can look at whether your current pension arrangements are likely to help you achieve your retirement goals. If not, we will recommend actions to take and the likely effect of them in order to secure your financial future.

We ensure that you fully understand all of your numerous retirement options and that you don’t have to take the first offer from your existing pension provider. There is nearly always better value to be had from the open market when considering annuities and the new flexible pension option should also be fully considered.

Our impartial advice takes into account all of this as well as the latest retirement and pension legislation, including the new limits on lifetime allowances. If necessary, we will also recommend any steps you can take to limit your tax liabilities.

We’re operating as normal but can also offer appointments by telephone or Facetime, Microsoft Teams and Zoom. Please call 0114 235 3500 to arrange a free review meeting or visit www.hamnettwealth.com

Confusion provides little incentive for pension saving

“Constant tinkering” and a confusing system provide little incentive for pension saving, leaving millions at risk of poverty in old age, new research suggests.

This is despite the government giving out ‘free’ money in the form of tax relief.  These tax reliefs cost the government £40bn a year, yet just one in three savers say they are the reason they save into a pension, according to a recent article in the Independent, while more than half have no idea how pension tax relief works or how much they get.

You can read the article here: Jargon and confusion mean millions miss out on ‘free’ old-age cash | The Independent

Many people see the pension system as complex. Savers are expected to know their annual allowance and tax rate, national insurance reliefs in salary sacrifice, the lifetime allowance, and whether tax reliefs are given at source or through a net-pay agreement.  At Hamnett Wealth Management, we always speak in plain English and explain everything comprehensively. We encourage clients to ask as many questions as they need to until they are comfortable and able to make an informed decision.

If you would like pension advice, we can look at whether your current pension arrangements are likely to help you achieve your retirement goals. If not, we will recommend actions to take and the likely effect of them in order to secure your financial future.

We ensure that you fully understand all of your numerous retirement options and that you don’t have to take the first offer from your existing pension provider. There is nearly always better value to be had from the open market when considering annuities and the new flexible pension option should also be fully considered.

Our impartial advice takes into account all of this as well as the latest retirement and pension legislation, including the new limits on lifetime allowances. If necessary, we will also recommend any steps you can take to limit your tax liabilities.

We’re operating as normal but can also offer appointments by telephone or Facetime, Microsoft Teams and Zoom. Please call 0114 235 3500 to arrange a free review meeting or visit www.hamnettwealth.com

What’s Important to You?

When we are asked about what is important to us, our priorities will be driven by our past experiences, our present position, or a mixture of the two. Knowing what matters and why is an important part of planning for your future.

So, when do you want this future to become a reality? Are you looking to retire at 45 and travel the world or are you happy to work till you are 65 so you’re mortgage-free and secured enough to help your children in the future? If you don’t have a specific time frame in mind, another approach is to ask yourself, what kind of legacy do you want to leave behind? How do you want to be remembered and by whom?

There are some useful concepts and actions that may be helpful to consider as part of that process. Ines Uwiteto, Private Client Manager at 7IM, has shared her thoughts on this matter:

What’s important to you? | Private clients | 7IM

Whatever stage of life you are at, we offer unbiased expert pension and retirement planning advice. Our professional, qualified Independent Financial Advisers will look at whether your current pension arrangements are likely to help you achieve your retirement goals. If not, we will recommend actions to take and the likely effect of them in order to secure your financial future.

We ensure that you fully understand all of your numerous retirement options and that you don’t have to take the first offer from your existing pension provider. There is nearly always better value to be had from the open market when considering annuities and the new flexible pension option should also be fully considered.

Our impartial advice takes into account all of this as well as the latest retirement and pension legislation, including the new limits on lifetime allowances. If necessary, we will also recommend any steps you can take to limit your tax liabilities.

We can also review all of your existing arrangements and look at the performance of the underlying funds, the charges being levied and assess the projected income at your chosen retirement date.

Call us now on 0114 235 3500 or email us at: advice@hamnettwealth.com to arrange a free consultation.

Choose to invest in green and ethical funds

Money is powerful and we can use it to shape the companies and businesses that do well in today’s society. We can influence our economies every day with what we buy and where we buy products from.  Whether it’s cutting back on meat and dairy, or switching to a green energy company, people are increasingly looking for ways to reduce their impact on the environment. However, most people are unaware that they are typically propping up the fossil fuels industry through their workplace pension.

According to a recent article in the Guardian, each year the average UK pension pot finances 23 tonnes of COemissions through the businesses it invests in – the equivalent of running nine family cars each year or burning 1,100 coal fires annually.  You can read the full article on the Guardian website: Do you want your pension to invest in companies harming the planet? | Pensions | The Guardian

Ethical investments are moving into the mainstream marketplace. Putting your money where your morals are is on the increase. When you choose to invest in green and ethical funds, there is a choice of funds that can be used to fit your individual requirements. The majority of families that we deal with use our portfolios which have worked well. The risk of these funds changes depending on the risk each individual wishes to take and the funds are monitored on a 6-monthly basis. These portfolios can be used for ISAs, onshore and offshore bonds and pensions.

Our service is very focused on the individual so we can set up bespoke investment solutions to suit you. We are a member of the Ethical Investment Association which means we’re committed to increasing access to green and ethical investment advice. 

Interested in finding out more? Please give us a call on 0114 235 3500 or email us at advice@hamnettwealth.com for more information.

How much do you need for a happy retirement?

New research revealed today states that couples typically need £26k a year and single people need £19k a year to have a comfortable retirement.  This amount would cover essential bills plus regular short-haul holidays, leisure activities, alcohol and charity donations.

In order to achieve this, a couple would have to save private pensions worth £154,700 between them whilst an individual would need to build a pot worth £192,290 according to the study by consumer group Which?

You can read more about the study at This is Money: https://www.thisismoney.co.uk/money/pensions/article-9640827/Couples-need-26k-single-people-19k-year-happy-retirement.html  It’s worth bearing in mind that this model overlooks issues such as care costs and declining homeownership.

There are several ways that you can look to boost your pension:

• Check for missing funds: The Department for Work and Pensions estimates that there could be 1.6m lost pension pots, containing a total of £19.4bn. The government offers a scheme to track down lost pensions at: gov.uk/find-pension-contact-details.

• Make use of pension freedoms: From the age of 55 you can do what you want with your retirement savings: you can draw an income, buy an annuity, take a cash lump sum or a combination of these options. Making the best use of a mixed approach to your retirement income could boost your income, and an adviser can help with this.

• Inform your pension provider: If you are considering delaying your retirement, tell your workplace pension provider in plenty of time. This will prevent your pension moving into lower-risk assets and missing out on further opportunities for growth.

There are plenty of free resources out there that can help you plan for retirement. For example, you can speak to the government-backed free guidance service Pension Wise about any concerns. You can find out what you are on track to receive from the state pension, and when it will be paid, by using the government’s online forecast tool at: gov.uk/check-state-pension.

Whatever stage of life you are at, Hammett Wealth Management offers unbiased expert pension and retirement planning advice. Our professional, qualified Independent Financial Advisers will look at whether your current pension arrangements are likely to help you achieve your retirement goals. If not, we will recommend actions to take and the likely effect of them in order to secure your financial future.

We ensure that you fully understand all of your numerous retirement options and that you don’t have to take the first offer from your existing pension provider. There is nearly always better value to be had from the open market when considering annuities and the new flexible pension option should also be fully considered. Our impartial advice takes into account all of this as well as the latest retirement and pension legislation, including the new limits on lifetime allowances. If necessary, we will also recommend any steps you can take to limit your tax liabilities.

We can also review all of your existing arrangements and look at the performance of the underlying funds, the charges being levied and assess the projected income at your chosen retirement date.

Please call us on 0114 235 3500 for a free initial meeting. Our office is operating as normal but we can also offer appointments by telephone or Facetime, Microsoft teams & Zoom.

Dementia Action Week 17th – 23rd May

Led by Alzheimer’s Society, Dementia Action Week is a national event that sees the public coming together to take action to improve the lives of people affected by dementia. The word ‘dementia’ describes a set of symptoms that may include memory loss and difficulties with thinking, problem-solving or language. These changes are often small to start with, but for someone with dementia they have become severe enough to affect daily life. As dementia progresses, there may come a time when the person will struggle to manage their finances and affairs.  You can find more information about the help and support available at: www.nhs.uk/conditions/dementia/finances/.

Hamnett Wealth Management are working towards becoming a dementia-friendly business. All of our staff have completed online training that covered three key areas – people, processes and places. 

We have also committed to the Financial Vulnerability Taskforce Charter which sets out how professionals are expected to work with customers in vulnerable circumstances. You can find out more about the Financial Vulnerability Taskforce at: www.fvtaskforce.co.uk

Our Director Jonathan Rowley is also a SOLLA Accredited Later Life Adviser.  SOLLA (Society of Later Life Advisers) helps people in finding trusted accredited financial advisers who understand financial needs in later life.  For more information on SOLLA, please visit their website: www.societyoflaterlifeadvisers.co.uk.

Few of us think about the possibility of long-term care, never mind having the resources to pay for it. By taking appropriate action now, you and your family can face the future with peace of mind. Long-term care planning gives you choice, flexibility and dignity when care is needed. It protects the assets of your family, ensures stability for the future and can protect against future potential fee increases.  We know all the issues involved in this delicate subject and our professional, qualified and Independent Financial Advisers can provide workable solutions to the problems of long-term care funding and the preservation of the remaining estate.

We are specialists in structuring your affairs so that your assets are protected and more of your money passes down to your family members and beneficiaries. We can also provide you with expert impartial advice on wills, trusts and protecting your assets, including your property.  Some areas of finance can be complex but we always speak in plain English and explain everything comprehensively. We encourage clients to ask as many questions as they need to until they are comfortable and able to make an informed decision.

Our office is operating as normal but we can also offer appointments in the comfort of your own home, by telephone or by Facetime, Microsoft teams and Zoom. Please call us on 0114 235 3500 to arrange a free initial meeting. 

Westside Article – June 2021

The recent Budget was one of tax pain largely deferred. Mr. Sunak was never going to introduce significant tax increases as economic recovery is the priority.  The proposals of most interest were:

  • The addition of £70 to the personal allowance and £200 increase in the basic rate band, in line with indexation requirements.  However, after 2021/22, the personal allowance and higher rate threshold (outside Scotland) will be frozen for four tax years.
  • The inheritance tax nil rate band, the pensions lifetime allowance and the capital gains tax annual exemption will all be frozen at their current levels for the next five tax years.

These freezes, along with rising property prices across the UK, mean that investment values are growing, putting more people at risk of falling into the inheritance tax net.  The Government raises billions each year from people sleepwalking into higher and higher taxes.   It is time to act.  No matter how large or how modest, everyone has an estate and you will want to control how it is administered to the people or organisations you care most about.   There are lots of points to consider such as making a will, appointing a Lasting Power of Attorney or nominating a pension beneficiary.  It is important to plan ahead with confidence in order to minimise the tax burden for your family and loved ones in the future. 

The world has never seen as much coordinated stimulus as in the past nine months.  This sets the stage for a strong economic recovery across the world in 2021.  Markets have already put COVID-19 behind them and have been largely positive since January. Biden wasted no time in unveiling a $1.9 trillion stimulus package and the UK has announced more measures to protect badly affected businesses. Companies know that the end is in sight and they also know that consumers are itching to spend as soon as they can.  However, returns on bank and building society accounts are falling to a minimum and interest rates and inflation are picking up.  All of this suggests now is the time for a financial review so that you are ready for the recovery.

During the Covid-19 pandemic, financial scams have been a growing problem, particularly affecting the older generation with the average age of a victim being 75.  The need for trusted, independent advice has never been greater.  Hamnett Wealth’s Director, Jonathan Rowley, is a SOLLA accredited Independent Financial Adviser. SOLLA is a not-for-profit organisation founded to make sure older people and their families get the very best advice when it comes to financial planning for later life. SOLLA members keep up-to-date with the fast-moving world of financial fraud and can help to spot the signs of scams. They are dedicated to providing the right advice and with a full understanding of the issues affecting older people and their families. Hamnett Wealth Management has also committed to the Financial Vulnerability Taskforce Charter which aims to promote a greater understanding of vulnerability, encourage appropriate behaviours and establish good practice amongst personal finance professionals in respect of people who find themselves in vulnerable circumstances.

Hamnett Wealth Management offers a free consultation where you can gain an independent and professional second opinion on your financial arrangements. Do you know what your current advisor is charging you in fees?  Recent press reports have highlighted several cases of people moving their portfolios and pensions from a certain provider because they have been subjected to high fees, poor service and a lack of transparency.  Maybe you’ve lost touch with your financial advisor, are unsure of how your portfolio is performing or are looking to minimise the fees you are paying – our Advisors can review your finances and look at alternate ways for you to get a good return on your savings and pensions. We keep our costs to a minimum and because we are independent, we don’t need to worry about shareholders.  We can then pass these savings onto our clients, meaning that our fees are cheaper than the large corporate companies.

Our office is operating as normal but we can also offer appointments in the comfort of your own home, by telephone or by Facetime, Microsoft teams and Zoom. Please call us on 0114 235 3500 to arrange a free initial meeting. 

This article appears on page 27 of the June issue of Westside magazine. You can read the magazine online at Westside | RMC Media.