Lowes Magazine Issue 123

Tax There has been plenty of tinkering with tax over the years and we can expect governments to continue to do so going forward. On a positive note, the amount that can be earned before paying the relevant level of income tax has increased over the years. We have also seen the ISA allowance go up to £20,000, enabling us to save/invest more of our money free of income and capital gains tax. And we saw the introduction of the Residential Nil Rate Band (RNRB) increase the amount that could be passed on to specified beneficiaries by £175,000. However, the RNRB and the inheritance tax Nil Rate Band which has been £325,000 since the 2009/2010 tax year, have both been frozen until 2026, alongside the rate of capital gains tax (CGT) exemption, as another example. Freezing of tax rates is already seeing more people becoming liable for tax and is an area where Independent Financial Advice is proving its worth in helping identify and mitigate against potential tax liabilities. Risk Risk comes in many forms. Every time we save or invest we are taking risk in one way or another. There are risks we can better control and those we cannot. Geopolitical risk to our savings and investments, for example, can be seen in Russia’s invasion of Ukraine, which alongside supply chain issues, amongst others, are currently dampening investor sentiment. Throughout our lives our view on how much risk we are willing to take with our savings and investment will change. In our 20s and 30s we may feel happy being adventurous with our investments, because if we lose money as a result, we have time ahead of us to make it back as part of our long-term plan. But as we get older and nearer retirement, often we want to be more cautious in our investment strategies, not wanting to lose a chunk of our wealth from our retirement pot at or around the time we will need to draw on it.

If you know a friend, colleague or family member who you think could benefit from Independent Financial Advice, please do put them in touch. The best way is via our main telephone number: 0191 281 8811. We will be pleased to help. As I said at the start of this article, a financial plan is never ‘one and done’. Rather there is an inherent need to regularly review our finances and our plans, to better align them with our lives and our goals, always considering the changing world around us. In this article we have touched on a very few of the issues which can and have affected financial plans and why having a structured and long-term strategy in place, which is regularly reviewed, is essential. What we don’t want to do is be continually reviewing where we are – this has been proven to be counterproductive to a long-term financial plan. In our experience, as a rule of thumb, reviewing our overall plan once a year and amending if needed and where necessary, is usually sufficient to keep a plan on track. Bearing all these elements in mind, keeping Lowes abreast of any changes in your life or your life’s goals, will enable us to review your financial plan in good time and better ensure not only that we can advise in respect of those changes, but your overall financial plan continues to do what is intended. Life changes Finally, there will always be events which happen in our lives which require amendments to our financial plans. Births, marriages, divorces and deaths can not only affect us financially but can also change the way we view risk, our capacity for loss, our need for protection and consequently, how we structure our financial plans . Later life care as an example, is now an issue for more people as the demographic trend in the UK is for people to live longer than in the past, but not necessarily in good health. Structure and strategy

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