Reasons to Take Financial Advice

There are life-changing moments when we feel expert advice can make all the difference. Here’s five moments where if you’re unsure you should seek advice: This article is not personal advice. If unsure, please seek advice.

1. Retirement

Your retirement is unique to you.

You’ve built your pensions and assets over the years. But have you thought about when you’ll retire and how best to use your assets to support this?

We always start with the end in mind. It’s important to understand your goals and aspirations so it’s crucial to sketch out your ‘dream’ retirement. After a lifetime of work, what do you want to do when you retire and what’s important to you?

We always start with three simple questions:

  • When do you want to retire?
  • Why is this date important to you?
  • What does your dream retirement look like?

Once we share your dream, we’ll look into the numbers and how much it will cost.

By making sensible assumptions on growth and income rates we can work out if you’re on track. If there’s a shortfall, we can help you work out how to plug the gap.

We work with people like this every day. With a bit of budgeting and prioritising they end up closer to their dream retirement.

All investments rise and fall in value, so you could get back less than you invest.

2. Inheriting money

It’s daunting deciding what to do with a cash lump sum.

Ultimately, it depends on your long-term objectives. But, one thing’s for sure, you want your money to work hard for you and be as tax-efficient as possible.

Tax rules change and benefits depend on your individual circumstances so a financial adviser will look at your personal situation and goals. They’ll make sure you’re making the most of your tax allowances and reliefs. After all, less tax means there’s more money left for you. They’ll also consider if you want an income from your portfolio, capital growth, or a bit of both.

3. Estate planning

Losing a loved one is difficult enough. Do you want to leave the people you love most to try to unravel your finances and wishes?

With the average IHT bill at £180,000 for those who are subject to it, planning now could save your loved ones thousands. And with so much political uncertainty, now could be the right time to act.

The first step is to work out whether you’ll actually be affected by IHT.

Generally you pay IHT on assets passed down generations. It’s currently 40% on the value of a person’s estate above £325,000, or £650,000 for a couple. This includes property, money, investments and other possessions.

The good news is there are ways to reduce IHT. Advice helps you navigate the rules safely and correctly. And you could leave more behind for the ones you love.

Do remember that tax rules change and any benefits will depend on your individual circumstances.

4. You are over the age of 50 and your pension is near (or over) £1m

The £1.055m lifetime allowance is a cap on the total you can hold in pensions before being subject to a tax. Above this and you could face up to 55% in tax on the excess, when you take benefits.

Alone, this might not seem too complicated. But coupled with income tax, IHT and taking benefits, it can be costly if not planned properly.

For those with more complex positions, there are lesser known tax-saving strategies available. These rules can and do change though. A financial adviser will stay up to date with rule changes and help you make the most of your individual benefits.

If you’re close to the limit you need to understand your options and make sure the solution fits your needs. If you’re not sure, talk to us today.

5. You have numerous and complicated pension plans

Having different pension pots can make it harder to plan ahead for retirement. It’s often easier and clearer consolidating your pensions and managing them together.

But you shouldn’t rush into it. It’s vital to know what you hold, where it’s invested, any hidden benefits you may give up by transferring, or any excessive exit charges that might be applied.

This can be time consuming. So leave it to an expert.

A financial adviser can review all your pensions and produce a tailored plan based on your retirement goals. They’ll also help you avoid the pitfalls, or make the most of any historic benefits you didn’t know about.