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Financial fallout from COVID-19


Impact on the nation’s wealth and financial security

It is becoming uncomfortably clear that while not everyone has been physically affected by coronavirus (COVID-19), every single one of us will be impacted financially. During the pandemic, savings and investments have been volatile, as have wages and jobs.


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Top 10 countries to retire abroad


Living in a place where the lifestyle and cost of living matches your financial situation

Are you ready to spend your golden years in comfort, style, and maybe even a bit of luxury? As a retiree, you’ll want to be able to live in a place where the lifestyle and cost of living matches your financial situation.


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How sustainable is your portfolio?


Increased investor focus on environmental, social and governance considerations

Environmental, social, and governance (ESG) issues continue to be a priority for many investors. Your values define you. But do your investments reflect who you are?

Increasingly investors are urging companies to build ESG considerations into their long-term strategy, bringing it up during engagements and using shareholder proposals to force companies to take action. Investing sustainably means putting your money to work on issues ranging from adapting to and mitigating climate change, improving working conditions and diversity, to tackling inequality.

Policy of engagement

Recent research has identified that nearly three quarters of women aged 40 and over would divest their pension from companies with poor pay practices, led by 74% of female ‘boomers’[1]. A majority of men of the same age group agree but younger women are split 50:50.

By contrast, many Millennials want to divest their pensions from the fossil fuels industry. Half (49%) of all age groups prefer a policy of engagement before divestment.

Governance practices

An overwhelming majority of older women would divest their pension from investments in companies with poor pay and governance practices. Women aged 40 and over are much more likely than men of the same age group to agree with such steps, with a slimmer 59% majority of men of the same age willing to do the same.

Within the older female age group, 74% of female ‘baby boomers’ and 73% of women belonging to ‘Generation X’ would invest less, or not at all, if they knew their pension was invested in companies that have attracted criticism for their governance and pay practices. However, younger women are split on the issue. Only half of millennial women would follow the same policy of cutting out these companies from their pensions.

Generational differences

Revealing clear and generational differences the findings highlight a strong contrast between the relative importance of ESG issues to older generations and the views of younger people, who are more focused on climate issues.

Millennials were more likely than any other generation to want to reduce their exposure to the fossil fuel industry, despite any potential consequences. Even if there was a resulting performance impact, 45% of Millennials would opt to divest their pension from fossil fuels. This compares to 30% of Generation X, while Baby Boomers (at just 23%) were half as likely as Millennials to divest from fossil fuels regardless of the investment outcome.

Investment returns

Including a further 41% of Millennials who would only divest from fossil fuels if it didn’t impact investment returns, a combined 86% of millennials would choose to divest their workplace pension from fossil fuels if it would have no negative impact on their pension.

But several of Britain’s top pension funds say they would have lost hundreds of millions of pounds had they sold out of oil and gas stocks in recent years, highlighting a potential cost to scheme members as funds face pressure to help fight global warming.

Workplace pensions

Reuters contacted 47 of Britain’s largest pension funds, with 33 saying they were not divesting from fossil fuels. Some highlighted the potential impact on returns, and their preference to engage with oil and gas companies as reasons.

Across all age groups nearly half of all adults (49%) would prefer a policy of engagement to encourage change, before divesting. It is also notable that only half of respondents were already aware of the types of investments within their workplace pensions, implying many more may not be aware of possible inconsistencies between these investments and their own beliefs.

Investments with social impact

More and more, investors want to invest sustainably: they want to combine investing for a financial return with a positive contribution to the environment, society or both. Whether you’re just curious about what options are available to you, or if you’re strongly opposed or for certain investment options, please contact The Clifton Business Consultancy on 0117 959 1022 or email cbc@cliftonbc.co.uk for further information.

Source data:

[1] Research from Legal & General Investment Management (LGIM) conducted by Watermelon Research (fieldwork): 22–29 October 2019 consisting of 1,000 interviews (online) with UK adults between the ages of 25 and 65, who have a workplace pension and work in the private sector.

INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS.

ANY LEVELS AND BASES OF, AND RELIEFS FROM, TAXATION ARE SUBJECT TO CHANGE. 

THE VALUE OF INVESTMENTS MAY GO DOWN AS WELL AS UP, AND YOU MAY GET BACK LESS THAN YOU INVESTED.

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Retirement freedoms


Ensure your future income will allow you to enjoy the lifestyle you want 

Preparing for retirement is like getting ready for a journey, it never goes quite as planned. But the better the plan, the better the outcome. When things go wrong, you want to have the flexibility to adapt to changing circumstances. You never know what retirement will be like until you get there.

Its also important to remember that retirement is not a single event. It is a process that begins long before you leave work and continues for the rest of your life. Retirees finally have the freedom to choose how to spend their time. While some people want to relax after a lengthy and stressful career, others are ready to move on to the next adventure.

The simple fact remains that those who prepare a financial plan are more likely than those who don’t to have a realistic idea of their retirement income and whether it will meet their needs. A personalised financial plan also means that if your projected income falls short of your requirements, you’ll likely have a backup strategy to help make up the difference.

Enjoy a new lease of life

But retirement is a challenging new phase in life. While it ranks high on the scale of stressful life events, it also provides the opportunity to enjoy a new lease of life. You are likely to enjoy the freedom to develop new interests but on the other hand may feel lonely, isolated and bored at times. An important step is to plan your goals and work towards them.

Unfortunately sentiments about a lack of preparedness for retirement go hand in hand with a lack of knowledge about what someone actually needs. That’s why a professionally prepared financial plan helps determine, with a greater degree of accuracy, what it will actually take to facilitate a chosen retirement lifestyle and goals.

Chosen retirement lifestyle

Then, ask yourself what income you will need to accomplish your chosen retirement lifestyle and what factors might affect your ability to fulfil those wishes. You may find there are non-financial factors that have a significant impact on whether or not you achieve your objectives.

However planning for an uncertain life expectancy in retirement unfortunately means some individuals may face the possibility of running out of money before they die, as they could save less during their working life and spend more in retirement than is appropriate for their circumstances.

Main questions to consider

One of the main questions you need to consider is, “What do you anticipate to be your major sources of expenditure in your retirement years?” The answer greatly depends on your circumstances, your family, and your retirement plans. Many retirees aim to travel in retirement, at least for a portion of the time. In retirement you may be planning to travel as tourists throughout the world, to visit family, or to enjoy holiday properties located in the UK or elsewhere.

Its also a time when you may want to carry work on some renovation work on your home, or move to the country or city, start a business, spend more time with friends and family, go back in to education, learn a new language or to play an instrument, start a new hobby, take up a new sport, join a gym or fitness group, or do absolutely nothing.

Enjoying the next phase of your life

 Whatever vision we all have for our retirement it should be one of the most enjoyable periods of our lives. So, if you’re concerned you won’t have enough income in retirement to maintain your pre-retirement lifestyle, please contact The Clifton Business Consultancy on 0117 959 1022 or email cbc@cliftonbc.co.uk.

 

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Building a strategy that meets your financial needs


Preparing ourselves for life to be really strange for some time

The only constant in life is change, which is why individual financial life planning should not be a one-off exercise. Reviewing your finances regularly is essential if you want to stay on track to meet your financial goals. Making sure your finances are in the best possible shape will also make sure you stay on course to achieving everything you want. 
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Preserving your wealth


Once you have acquired your wealth, the last thing you want to do is lose it through poor asset protection

Whether you have earned your wealth, inherited it or made shrewd investments, you will want to ensure that as little of it as possible ends up in the hands of the taxman and that it can be enjoyed by you, your family and your intended beneficiaries.
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How would you cope without an income?


Make sure you’re ready should the unexpected happen

Mental health conditions might not be as easy to pin down as physical health conditions, but insurers are increasingly recognising the need to provide cover and support to people suffering with mental ill health. And with mental health behind so many income protection claims, it’s worth reviewing what protection you have in place.

According to the Global Web Index, 54% of UK adults said that their mental health has worsened during the coronavirus (COVID-19) crisis. This concern is widespread, as the biggest fear for 30% of people is their mental health deteriorating during the epidemic[1].

Most common reason

Claims for mental health account for 29% of income protection claims, with some 7% of adults in the UK seeking mental health support through Telehealth services[2]. Worryingly, a Mind survey found that one in four said they had trouble contacting a GP or community mental health team as face-to-face appointments stopped in recent weeks[3].

It’s worth recognising that when it comes to mental health, insurers can offer more than simply the chance of a payout. A host of insurers have attempted to rise to the challenge of improving our mental states by providing a range of additional benefits and services that may give your mental health a boost.

Anxiety and depression

During this time of uncertainty and anxiety that the COVID-19 lockdown has caused, it has never been more important to look after our mental health. Up to one in four people experience a mental health problem such as anxiety and depression every week, and there is a strong correlation between financial health and mental health.

There is no difference in any of the insurance decision-making processes for mental health to those for physical health. The process by which decisions are made and guidelines are written is consistent for every medical condition whether physical or mental (or, as is often the case, a combination of the two).

Some serious consequences

Mental health is one of the leading causes of work absence in the UK. Over the course of the last decade, mental health issues in Britain have reached crisis levels. Approximately one in six people in England have met the criteria of having a common mental health problem such as anxiety or depression[4].

It is estimated in the future that one in four UK adults will experience mental illness during their lifetime, which could severely affect their ability to work. According to official statistics[5], mental health problems represent one of the leading causes of work absence in the UK and are the most common reason for sickness absence notes issued by GP surgeries in England.

Achieve more and enjoy our lives

Having good mental health helps us relax more, achieve more and enjoy our lives more. The coronavirus outbreak means life has changed for us all. It may cause you to feel anxious, stressed, worried, sad, bored, lonely or frustrated.

The NHS website (https://www.nhs.uk/oneyou/every-mind-matters/) provides expert advice and practical tips to help you look after your mental health and well-being. A host of insurers have also attempted to rise to the challenge of improving our mental states by providing a range of additional benefits and services that may give your mental health a boost.

Providing real peace of mind and security

 An income protection policy provides real peace of mind and the security knowing that should anything happen regarding your health which leaves you unable to bring in your usual wage, there will be an income to cover the essentials beyond statutory sick pay. Contact The Clifton Business Consultancy on 0117 959 1022 or email cbc@cliftonbc.co.uk to find out more. 

Source data: 

[1] Global Web index – Coronavirus Research, April 2020 – Series 8: Health, Personal concerns

[2] Global Web index – Coronavirus Research, April 2020 – Series 8: Health, Adoption rel=”noopener noreferrer” of Telehealth services

[3] Mental health charity Mind finds that nearly a quarter of people have not been able to access mental health services in the last two weeks

[4] https://www.canadalife.co.uk/news/britain-s-mental-health-crisis-and-group-insurance

[5] https://digital.nhs.uk/data-and-information/publications/statistical/fit-notes-issued-by-gp-practices/september-2018

 

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Looking to the future


Successful life planning also requires a significant degree of financial planning

We spend our lives planning our next holiday, for a family, buying a property, funding a child’s education and for the day we retire. So then why is it that some people seem to have the ability to live the life of dreams and pass on their wealth to the next generation when others are faced with huge tax bills, the prospect of selling their home or worried about healthcare costs?

Being able to realise our future plans and dreams requires objectives, information and organisation. Successful life planning also requires a significant degree of financial planning, a comprehensive picture of your current finances, your financial goals, and any strategies you’ve set to achieve those goals.

The planning process should be comprehensive and typically involve a close look at your personal goals, debt, income and cash flow, investments, retirement plans, tax strategies, estate plans, investment strategies, and insurance.

“If you had more time or money, what would you do?”

The outcome should enable any individual and their family to achieve a defined set of financial and lifestyle goals. It is a detailed process of assessing what one really wants out of life and then translating that into financial terms.

Defining your financial objectives and goals

Defining your goals and objectives are the foundation upon which your financial plan is based on and provides a roadmap for your financial future. Begin with the end in mind. What is your life about? What do you want to do? Who do you want to do it with? Where do you want to be in 5, 10, 20 years, and how much will that cost?

Look at your financial future as a whole when outlining these goals. All of your finances are connected, so don’t just focus on one aspect. Remember that they should be quantifiable and achievable with a clear and defined time frame. You need to separate your needs from your wants, and these need be reviewed periodically to capture changing circumstances and to ensure they remain relevant.

“What do you want to accomplish or attain so you will feel that you’ve had a life well lived?”

To get where you need to go, you need to know where you are starting from. What have you accumulated? What do you earn? What strategies are already in place?

Once you know where you want to go, how are you going to get there? At this point, you need to plan and devise strategies to save, invest, protect and pass on your wealth. A good plan is always in writing and has defined periods for its achievement that represent milestones and markers of success.

Now it’s time to take action. You’ve worked out where and how – now it is a case of putting that into your financial plan. It’s important to remember that life changes, career promotions come along, families begin and circumstances change – and your plan needs to change with it. Your plans need to be monitored, reviewed and adjusted accordingly.

Some people put off thinking about financial planning until later in life. But as a consequence, more often than not, they fail to put proper plans in place until in their mid-50’s. Therefore, it is critical that you start planning your finances from as young as possible. As soon as you have your first job, you should start comprehensive financial planning.

Thoughtful reflection about what you want

When you’re figuring out how to make a life plan, it helps to know what you want to change, and in what areas of your life. Big shifts and goals require thoughtful reflection about what you want and what is standing in your way. To discuss your plans or for any other questions or concerns you may have, please contact The Clifton Business Consultancy on 0117 959 1022 or email cbc@cliftonbc.co.uk.

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Inflation-proofing your portfolio


One of the biggest threats to the health of your investments

The coronavirus (COVID-19) pandemic has had a dramatic effect on the global economy. Around the world, economic activity has dried up. Fewer consumers are buying and fewer companies are investing.


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Retirement matters


Staying invested and giving your money the greatest chance to grow

Perhaps the most common investment advice is to stay invested. But with markets being so volatile, the ease of sticking to that advice has been sorely tested in 2020. Even though we’ve seen global markets bounce sharply from their March lows, understandably there will still be those investing for retirement who remain worried and wonder what the best approach is for the remainder of the year and beyond.


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