Trading is all about timing the market. Basically, it’s the old adage of “buy low and sell high”, but applied to the stock market. There’s nothing inherently “right” or “wrong” about the strategy, but it does carry a couple of significant pitfalls as compared to investing. First of all, trading is, essentially, all about making transactions and the companies which arrange these transactions generally charge a fee for their services. Even if this fee is small, it still eats into a trader’s profits. Secondly, traders may face a larger tax bill than investors. In the UK, for example, Capital Gains Tax is payable on the sale of shares (except when they are held within an Individual Savings Account). It, therefore, follows that traders, who are continually buying and selling shares could wind up paying substantially more tax than investors who are buying and holding shares. The irony here is that investors who pick the right shares could still end up with the same amount of profit in hand at the end of the year. Growth versus income Traders focus on the price of a share. The basic idea behind trading is to look for shares which have good prospects for growth, wait until the growth is achieved (at least to a sufficient level) and then sell the shares on to someone who missed out on the opportunity to buy them the first time around. Investors, by contrast, may look for capital growth or income, alternatively known as earnings or yield. The key difference between growth-focused investors and traders is that the former are in it for the longer term. For example, they may specialize in the Alternative Investment Market, or the smallest companies on the main stock market, sit tight as these companies grow (accepting that some of them will probably fail along the way) and then sell (a part of) their shares to investors who prefer to invest in companies which have reached a certain stage of maturity. It should be noticed here that investors who are focused on growth can only realize their gains when they sell their shares (although they may pick up some income along the way). Investors who are going for yield are looking for dividend-producing shares, which will pay out (ideally) year after year. The point to note here, however, is that it is never a given that a company will pay a dividend. Those seeking guaranteed income will need to look elsewhere, such as on the bond market. Inflation applies to the stock market too Over the long term, prices, in general, tend to go up. Sometimes, the price of certain categories of purchase can trend downwards. For example, technology is notorious for starting out extremely expensive and then becoming more affordable as it matures and reaches the mainstream. Occasionally prices, in general, can trend downwards. This is called deflation and can lead to all kinds of financial complications. The stock market is, at the end of the day, just an old-fashioned market, albeit one which specializes in a very specific range of products. As such, it also experiences the impact of inflation. What this means in practice is that over the long term the price of the stock market as a whole is likely to trend upwards, however, the periods of upward growth are likely to be interspersed with periods of contraction and periods of volatility. Although the performance of the stock market is essentially a consolidation of the performance of its constituent companies, the performance of individual companies can go against the overall performance of the stock market – for better or for worse. This means that investors do have to be cautious when dealing with companies which are performing poorly when the stock market is doing well, but it also means that investors have the potential to achieve returns which beat the stock market average. For Investments, We Act As Introducers Only

How much value do you place on peace of mind? If you really stop and think about it, you might be surprised by just how much it matters to you. For example, knowing that your loved ones will be protected in the event of your death can bring you peace of mind. Knowing that you and your loved ones (including your pets) will receive the best, possible healthcare if you need it, can bring you peace of mind. Knowing that you can replace your key possessions if you need to can bring you peace of mind. All in all, peace of mind can be a huge benefit and it’s a benefit we can all enjoy with the health of the right insurance cover. Here are 3 points to creating the right form and level of insurance cover for you. Integrate your insurance cover with your overall financial plan Your insurance cover should form part of your overall financial plan and thus help you to move towards your life goals. Looking at your insurance from this perspective can make it easier for you to deploy your finances effectively. Specifically, having insurance gives you a clear idea of your potential exposure to any given hazard. Basically, instead of your liability being potentially unlimited, it becomes limited to the premiums and one or more instances of the excess. Knowing this, you can then make better-informed decisions on how much money you need to allocate to protecting yourself against the hazard and, by extension, how much you can allocate to another purpose, such as saving and investing for your future. Aim to insure everything you value and if you can’t afford this, prioritise effectively In addition to thinking about insuring anything you can see (like your house, your car and/or your pets), think about insuring intangible assets such as your income, your health and, in particular, your peace of mind. Even if you are in full-time employment, you may want to look at forms of income-protection cover and health-related cover. Basically, an employment-linked benefits package may not be as generous as you might hope and neither may any state benefits for which you may qualify (if you qualify for them). You may also wish to give serious consideration to anything which could potentially leave you exposed to liability claims, even if they are totally unjustified. Two obvious candidates for this are pets and bicycles, both of which could potentially leave you open to expensive claims for damages to other people’s person or property, including nuisance claims. Having legal cover could be very reassuring and save you a lot of potential stress. Ensure you have the right level of cover It may be fairly obvious that you want to avoid having too little insurance. After all, while having too little protection may be better than having none at all, it does rather go against the principle of ensuring that you are protected against whatever life can throw at you. It may, however, be rather less obvious that you also want to avoid paying for excessive insurance cover. Basically, insurance companies will only payout to the extent of the damage caused, they will not pay more even if you have paid for a higher level of cover. In addition to ensuring that you have the right level of cover at the time you make the initial purchase, you need to ensure that the level of cover is updated with your changing circumstances. For example, if you simply have life insurance to cover your mortgage, you may be able to reduce your level of cover each year as you pay back your mortgage and increase the equity in your home. For pets insurance, we act as introducers only.

When you’re a child, the first time your parents hand you a house key of your own can be a really memorable experience. As an adult, picking up the keys to your first house can be an even more memorable experience. The bad news is that it can be quite a tough slog to get to the point where you can hold those keys in your hand. The good news is that it is possible and a bit of advance planning can get you there. Here are three tips. Minimize your consumer debt It can be hard to make ends meet, especially for young people, who are not only at the start of their careers but also still getting to grips with basic life skills such as budgeting. Having easy access to credit can, therefore, be very useful, in fact, for some people it may be essential. For example, if you’re self-employed and have limited savings, then your credit card may be your only practical option for managing regular expenses on an irregular income. If this sounds like you, then always make the minimum payments on your credit card in full and on time and aim to pay down your credit balance as much as you can when you do have money, ideally pay it off completely. This will not only help your credit record (which is very important for a number of reasons, including getting a mortgage) but it will also improve the overall state of your finances by lowering the amount of interest you pay. On a similar note, while life is for living and it’s understandable that you will want to make the most of any experiences which come your way, remember that life is a marathon not a sprint. In other words, unless an experience really is “once in a lifetime”, it may be best to postpone it until your finances are in a more robust state, while you focus on improving your ability to make significant life purchases, such as your first house. Save and invest as much as you can Staying out of debt is a good start but if you really want to own your own home, then you will need a deposit and you will want it to be as big as possible. Ideally, you will treat saving for your first home as one part of your overall financial plan and you may find it very helpful to get professional advice on setting up and implementing this plan. Financial advice can be just as useful when you are at the start of your career, on a relatively low income, as it can later in life. In fact, starting out your adult life on a solid financial footing can be hugely beneficial later on down the line. Ensure you have the right insurance This may seem like an odd suggestion but the idea is to minimize the likelihood that you will have to divert cash from saving towards your first house to dealing with an unexpected event which life has thrown your way. Essentially, you should aim to ensure anything which really matters to you, be that in a practical sense or in an emotional one (insofar as that is possible), so this includes both tangible assets (such as cars, bicycles or essential work equipment) or intangible assets (such as your income, your health or the health of your pets). The big advantage of having insurance is that relieves you of the responsibility of guessing what your potential liability might be and “self-insuring” and gives you a set liability of the premiums plus any excess. You can then use this knowledge as the basis of an effective budget. Your property may be repossessed if you do not keep up repayments on your mortgage.

Before the internet went mainstream, it could be extremely difficult for smaller-scale investors to access international markets at all, especially ones at the greatest distance from their country of domicile.  There were numerous practical barriers in the way, such as the lack of availability of key data and the cumbersome (and expensive) nature of international money transfers.  Now, however, global asset allocation is genuinely available to smaller-scale investors and there are many arguments in favour of taking advantage of it. Global asset allocation and the principle of diversification Global asset allocation and diversification are basically two sides of the same coin.  Diversification basically means getting the right number of investment eggs in the right basket.  Basically, it’s the art and science of robust asset allocation.  Global asset allocation means exactly that, in other words considering the options available in the whole of the world before deciding which is the right one for you.  For example, you may opt to diversify your assets by dividing them between cash and near-cash, equities and tangible assets  This is your first layer of diversification.  Your second layer of diversification is deciding exactly which of these asset-allocation options to pick.  For example, looking at cash on its own, even if you just want to keep it in an old-school, instant-access savings account, there are still a number of options from which you can choose and if you extend your range of options to the likes of bonds, then there are even more choices available.  Similar comments apply to equities and tangible assets.  Your third layer of diversification is deciding where in the world you wish to hold your choice of assets.  In other words, global asset allocation is used alongside the principle of diversification, rather than separately to it.  For example, you may decide that you would like to have X% of your overall asset portfolio held in bonds and you may then choose to diversify further by purchasing bonds issued in different countries and currencies. The basics of global asset allocation Just as the stock market contains young start-ups, blue-chip companies and everything in between, so the world contains emerging economies, mature economies and everything in between.  For investment purposes, the difference between emerging economies and mature economies tends to be the extent to which they offer robust protection to investors.  For example, the U.S. is a prime example of a very mature market and its Sarbanes-Oxley Act of 2002 provides stringent auditing and financial regulations, which are backed by a credible enforcement process.  This last point is important, since rules are, effectively, meaningless without credible regulators.  Additionally, emerging markets tend to be growing at a faster pace overall than mature markets.  As is generally the case in life, however, there is a certain degree of nuance to both of these points.  For example, individual companies in emerging markets may deliberately go (well) over and above what is required of them by law, possibly in order to appeal to international investors, while individual companies in mature markets may look to find legal loopholes in regulations designed to protect investors, or they may simply have little interest in whether or not smaller-scale investors are happy with their performance.  On a similar note, while emerging markets as a whole may be experiencing rapid growth (or at least more rapid growth than mature markets), they too can experience periods of stagnation or even recession, while mature markets can be home to investments which offer great prospects for capital growth and/or long-term solid yield, for example, start-up companies or properties in areas with good prospects for growth. For Investments, We Act As Introducers Only

There are many ways of saving for retirement, but the option of saving through a pension scheme remains a firm favourite. There are many reasons for this but two stand out in particular. Firstly, pension saving is very heavily promoted by the government. Arguably the most notable example of this was the introduction of the auto-enrolment scheme, which basically forced employers to enrol employees into a workplace pension scheme unless they actively opted out. Secondly, pension saving can be a very tax-efficient way of saving for the future. Basically, you can make pension contributions out of your pre-tax income in the present and then access the returns in your later years, when you will have ceased to have income from employment (or at least the same level of income from employment). The basics of pensions and tax Basically, you can potentially save up to £40,000 per year into a pension fund without paying tax on it. There are, however, a couple of details worth noting. First of all, you will only receive tax relief on the contributions made out of your own total taxable income. In other words, if you are lucky enough to have someone else topping up your pensions contributions, you will not receive tax relief on their contributions. There is, however, a slight twist to this in that couples who are in a legally-recognized relationship can have the (higher) earner make pension contributions on behalf of their spouse (or civil partner). At the current time, they can make annual contributions of up to £2,880 on which base-rate tax relief will be applied, giving a total value of £3,600. Secondly, if your total adjustable income is over £150,000 your annual allowance will fall by £1 for every £2 excess income you have. Hence, if your total adjustable income is £230,000 per annum or more, you will lose your entire annual allowance. For the sake of clarity, your total adjustable income is your annual salary, dividends, rental income and savings interest, plus the value of any employer pension contributions. NB: If you are a member of a defined benefits pension scheme then the benefits you accrue each year will be assigned a monetary value which will form a part of your overall personal allowance and hence will reduce the amount you can save in other pension schemes. Options for pension saving If you are in employment and meet the criteria for auto-enrolment then you will be auto-enrolled into a workplace pension unless you actively choose to opt out of one. Opting out is a serious decision, as it means that you may lose the benefit of the employer’s contributions. It may, however, still be the right option if you are struggling to make ends meet and do not feel confident about making even the minimum level of employee contributions. If this is the case, you may wish to ask your employer if they will pay their contributions into a private pension, although this would be entirely optional. For those in other situations, a personal pension may be an appropriate option. Last but by no means least, you may wish to ensure that you maximize your entitlement to a state pension. This means paying National Insurance contributions, which will happen automatically if you are in employment and meet the relevant criteria but can also be done voluntarily. National Insurance credits can also be accrued if you are in receipt of certain benefits. This fact may be of particular relevance to those fulfilling caring roles, such as home-makers with children as it may make it worthwhile to apply for a benefit for which you qualify, even if you know that your overall household income is too high for you to receive any financial support at this point. For Pension We Act As Introducers Only

Special introductory deals can be very helpful, but they run out eventually.  Similarly, fixed-rate mortgages also have a finite run-time, after which you are typically switched onto your lender’s standard product.  Remember that when a financial product comes to the end of its life, you don’t necessarily just have to take what your lender gives you, nor do you have to go out and purchase a fresh version of the same product (or a product which is as close to it as you can find).  Instead, you can take your time to look at your options and think through them carefully.  Indeed, you may even want to get professional advice, especially for important decisions, such as choosing the right mortgage product for you. Remember to think about the possibilities of “hidden” products Let’s assume you bought your home two years ago and took out a fixed-rate mortgage with a two-year lifespan.  If you leave your mortgage just to run its course, then you’ll stay with the same lender but be moved onto a variable-rate product.  If, however, you approach your lender before the fixed-rate period ends, they may be willing to offer you an alternative deal, which could be more attractive.  This deal may not be advertised, hence the importance of asking directly.  You will only know whether or not this deal is your best option when you compare it to what else is on the market, preferably including the “hidden” deals, which aren’t widely advertised.  When making your comparison, however, you may want to take into consideration the fact that remortgaging with your current lender could save you the time and hassle of having to submit an entirely new mortgage application as you would have to do if you went to a different lender.  Whether or not this makes the deal worth it will, of course, depend on what is on offer and how you feel about having to go through the entire mortgage evaluation process all over again.  It is, however, a point worth noting. The bigger picture While it may seem only a short while since you last went through the process of finding and applying for a mortgage, it’s worth remembering that mortgages are significant financial products.  Therefore, even though the difference between the right mortgage and all the others may ultimately come down to fine details, the sheer size of the loan involved can mean that those fine details end up making a huge difference to the overall state of your finances.  Hence it follows that a fixed-rate deal coming to an end is an opportunity to assess your current lifestyle and financial situation to make sure that you get the mortgage product which is right for you now.  This may be a fixed-rate mortgage, but it may also be a variable-rate mortgage.  It may be a standard, repayment mortgage or it may be an offset mortgage.  It may be a mortgage from a mainstream lender or it may be a product from a niche lender (or it may be a niche product from a mainstream lender).  There are so many mortgage deals on offer from so many different lenders that navigating your way through them on your own could be something of a nightmare.  This is why it can be helpful to make use of the services of a professional mortgage broker.  While mortgage brokers do, of course, charge a fee for their services, you’re not just paying for the convenience of having the hard work done for you.  You could actually wind up not only being shown a great deal which you would never have found on your own but also paying less for it than you would have if you had gone directly to the lender. Your property may be repossessed if you do not keep up repayments on your mortgage.

Getting “on the property ladder” is notoriously difficult and moving up it can also be quite a struggle.  (In fact, even downsizing can bring its challenges, especially if you are moving to a more expensive part of the country).  The good news is that there are some government-backed schemes which can make the challenge a bit more manageable.  Most of these only apply to first-time buyers, but there are some which are also available to those moving into their second or subsequent home.  Here is a quick rundown of the ones currently available. Help to Buy ISA This scheme is only open to first-time buyers and is due to close its doors in November this year, but there are still a decent number of institutions offering it.  The basic idea is that you can save up to £12,000 yourself to which the government will add a 25% bonus up to a maximum of £3000.  If you are making a joint purchase then each purchaser can put their own Help to Buy ISA towards the purchase, so if you’re buying your first home as a couple, you could receive up to £6000 of help.  There is, however, a catch to the Help to Buy ISA which is that it can only be used for the actual purchase price of a home, it cannot be accessed to pay the holding deposit. Lifetime ISAs The Lifetime ISA is only available to those aged over 18 but under 40.  You can save up to £4000 per year onto which the government will add a 25% bonus each year up until you reach the age of 50.  You can only withdraw this money to buy your first home or when you reach the age of 60.  The question of whether or not Lifetime ISAs should be used as a replacement for or supplement to pensions is a complicated one and ideally anyone considering it should take professional advice.  They can, however, be a useful way of putting together some extra cash to buy your first home. Shared Ownership With shared ownership schemes you buy a share in a home and pay rent on the rest.  You may have the option to buy further shares in the home as your financial situation improves.  Shared ownership schemes are often associated with essential workers (such as those in the emergency services) and first-time buyers, but each scheme sets its own rules.  Shared ownership can lower the barrier to entry to buying your own home, but remember that you will not necessarily have the same degree of freedom you would have had if you had owned your home outright and, in particular, you will need to ensure that any future buyer meets the scheme’s criteria. Equity Loans Equity loans are available to those buying second and subsequent homes (for their own use) as well as to first-time buyers, but they are only available on residential property.  The Help to Buy: Equity Loans scheme only operates in England.  Wales and Scotland have similar schemes known as Help to Buy – Wales and the Affordable New Build Scheme respectively which are both the same general idea but are implemented slightly differently.  In the English scheme, qualifying buyers are supported with a government-backed loan of up to 20% of the cost of a new-build home, buyers are expected to raise 5% of the purchase price themselves as a deposit and to get a mortgage for the rest.  This support can make it much easier for buyers to get a mortgage but there are a couple of important points to remember.  The first is that these equity loans are only interest-free for five years and the second is that the amount repaid to the government will depend on the value of the home at the time it is sold (or when you buy yourself out of the loan).  If your home increases in value, the government will take a share of this increase. Your property may be repossessed if you do not keep up repayments on your mortgage.

ISA stands for Individual Savings Account and the basic idea behind them has remained largely the same since they were introduced.  Essentially, they’re a tax-efficient way of saving and/or investing.  For adults, there are currently five types of ISAs.  These are: Cash ISAs, Stocks & Shares ISAs, Innovative Finance ISAs, Help to Buy ISAs, and Lifetime ISAs.  For children, there is also the Junior ISA.  Here is a brief guide to what you need to know about them. The overall limit for ISAs is £20,000 For the tax year 2019/2020, the maximum ISA allocation is £20,000.  You can put all of this into one, specific ISA or spread it across a number of them, as long as you keep within the overall limits.  Certain types of ISA have their own, further, limits. Cash ISAs Cash ISAs are basically tax-free savings accounts.  They may or may not be instant-access, this depends on the provider’s terms and conditions.  It is now possible to withdraw money from a cash ISA and then replace it within the same tax year.  You cannot, however, roll over unused portions of your ISA allowance. Stocks and Shares ISAs Keeping investments within a Stocks and Shares ISA protects them from capital gains tax, dividend income tax and tax on the interest income from bonds.  It does, however, have to be noted that stocks and shares ISAs can be subject to transaction charges levied by the hosting platform.  Having said that, so can regular trading accounts. Innovative Finance ISAs The term “Innovative Finance ISA” covers a lot of possibilities.  Possibly the most obvious is peer-to-peer lending, but there is also crowdfunding and some forms of business and property lending.  There is, however, a quick note of caution to sound and that is that you should really check whether or not a particular option is supported by your ISA provider before you get too carried away with the idea of investing in it.  Another point to remember about peer-to-peer lending, or any form of direct lending, is that your money is not protected the way it would be in a standard bank.  Basically, Innovative Finance ISAs are an alternative way to invest rather than a way to save. Help-to-Buy ISAs The clock is ticking on Help-to-Buy ISAs.  Launched in December 2015, they were billed as a way to save for your first home.  People who qualified as first-time buyers could open an account with a maximum deposit of £1,200 and thereafter they can save up to £200 per month.  When the account holder buys a home, the government adds a 25% bonus onto the amount saved, up to a maximum of £3,000.  The Help to Buy ISA ran into something of a media firestorm when it emerged that the funds could only be accessed upon completion of a sale.  Hence buyers were not able to use them towards the holding deposit on a property.  This may have been the reason why the government decided to end the scheme.  It will close on 1st December 2019.  In other words, the last day to open one is 30th November 2019. NB: Help-to-Buy ISAs are basically a niche form of cash ISAs so you may struggle to open both in the same year.  If you wish to hold both, then the easiest approach might be to hold them with the same provider and essentially split your allowance between the two. Lifetime ISAs With a Lifetime ISA, you can save up to £4000 per year onto which the government will add a monthly bonus of 25% up to a maximum of £1000 per year.  You can open one as soon as you turn 18 and you cease to be eligible for one as soon as you turn 40.  The bonus will continue to be paid until you turn 50 so, in theory, the maximum bonus is £33,000 (or £32,000 if your birthday falls on the 6th of April of any year).  Although you can withdraw money from a LISA for any purpose, you can only benefit from the bonus if you use the money towards the purchase of your first house or for retirement. For investments, we act as introducers only.

SWOT analysis is a hugely useful business tool.  The acronym stands for “Strengths, Weaknesses, Opportunities and Threats”.  Strengths and weaknesses are internal to the organisation, while opportunities and threats are external.  In principle, the concept can work just as well in the private world, in practice, it can be quite a challenge for a person to analyse their own situation from an objective perspective.  This is why it can be very helpful to get an opinion from a friend.  When dealing with finance, however, a friend may simply not have the necessary knowledge to be able to offer you meaningful guidance, hence the benefit of speaking to a financial professional. Understanding your strengths and weaknesses The basic principle of protecting yourself and your family is understanding how to make the most of your strengths and minimise your weaknesses, but it may take a bit of a jump to picture how your situation and lifestyle translates into financial terms.  For example, you may be aware that you benefit from having two sets of grandparents close by to support you with childcare and general help, but you may never have stopped to think about how much money this saves you and, therefore, never thought to take any precautionary measures about what you would do if they became unable to help let alone what you would do if they required your help. Opportunities and threats In financial terms, it might be better to think of this as “plans and budgets”.  Everyone will have their own idea about how they want to live their life and different dreams will require different levels of finance to turn them into a reality.  Added to this, there is the simple fact that the longer you can give yourself to accumulate the funds you need, the easier it can be to achieve your goal.  For example, if you need to save £100 and you give yourself two years in which to do this then, essentially, you only need to save £1 per week (and you can give yourself four weeks in which you don’t save anything) whereas if you only give yourself 10 weeks, then you must save £10 per week without fail.  Of course, this is a very simplistic example, which ignores matters such as interest (and its compounding) and investment returns (versus the loss of losing your capital), but it illustrates how useful it can be to make an early start on working towards your life goals. The golden rule of effective risk management The golden rule of effective risk management is that you must know what the risks are in order to be able to manage them and, life being what it is, you may well find that the nature and extent of those risks will change as your life changes.  For example, for young adults in the pre-child and pre-mortgage stage of their lives, the main risk may be of accident/illness with the corollary of being able to work as a result.  Even in this period of a person’s life, however, they may wish to think about how their death might impact the people they love, for example, not being around for parents as they age, and take steps to mitigate this.  As a person moves on through life, the nature and extent of the risks might change and increase, particularly if they buy a home and/or have children.  This fact of life means that in order for risk management to be effective, it must be appropriate to the nature and level of risk and this, by extension, means that it must be updated as circumstances change.  A financial professional can help to look at a person’s life situation from an objective perspective and help them to determine the right level and form of cover at any given time in their life.

Insurance cover falls into the category of purchases you’d probably rather not use but still want to have around in case you do actually need them.  It may not be glamorous and it is highly unlikely to be free, but it can be a whole lot more attractive and cheaper than having to manage a difficult situation without it.  Here are some ideas as to how the right insurance cover can benefit you. Health cover While the NHS is an institution, the fact is that there are a lot of demands on it, which means not only that the waiting time for treatment may be longer than you’d like but that treatment may be limited to what you need rather than what might be optimum.  Health insurance can make it possible for you to get the treatment you need more quickly and may support you in getting the treatment you want.  Even if you’re not convinced about the need for full health cover, you might want to consider dental cover as anyone can have an accident which damages their teeth and dental bills can be expensive. Wealth cover Even those in paid employment are recommended to think about how they would meet their financial commitments if they became unable to work for a time.  You may find that a combination of work-related benefits and state benefits will suffice, but you may not and you will only know either way if you check.  The self-employed may be eligible for state benefits but will need to arrange their own insurance cover if this is insufficient. Those in employment might wish to look at payment protection insurance to cover financial commitments such as credit cards and loans, including mortgages.  While this type of cover is (still) in the news due to the historic mis selling scandal, it is important to remember that the scandal related to inappropriate sales practices rather than an issue with the product as a whole.  For some people it is a very useful form of cover. Income protection insurance is available to both the employed and the self employed.  As its name suggests, it is intended to replace income lost if an illness makes a person unable to work for a period of time.  This has obvious relevance to the self-employed but may also be of relevance to the employed.  Similar comments apply to critical illness cover, which, as its name suggests, pays out if you are diagnosed with one of an agreed list of critical illnesses. Life cover From the perspective of the insured person, the main benefit of life insurance is knowing that you have taken care of those who survive you.  Because of this, it’s important to review any policy on a regular basis, such as once a year, to ensure that you have the right level of cover for your current situation.  You should also review it in preparation for or immediately after any major life events such as births and marriages.  Life insurance can be written into a trust to keep it separate from your main estate, which not only reduces the value of your formal estate (thereby potentially reducing your family’s inheritance tax bill) but also allows a claim to be processed immediately and the money released to your beneficiaries (long) before probate is completed.  This can help them to move on with their lives.  As a final point, because life insurance is treated separately from the rest of your estate, you need to make any updates to the policy (e.g. change of beneficiary) through the insurance provider rather than by means of changing your will.

We all have to face up to the fact that at some point in time we are no longer going to have a place on this earth.  By acknowledging this reality, we put ourselves in a position to take steps to mitigate the impact our death could have on other people, especially those who look to us for financial support.  Here are some tips on how to achieve this, including a basic guide to the use of trusts. Take steps to minimise your taxable estate prior to your death The less you leave behind, the less inheritance tax will be levied on your estate.  Obviously, you will need to exercise some common sense about this and ensure that you still have sufficient funds to meet your own worldly needs right up to the point where you no longer have any, but as a rule of thumb if you can pass on a gift to someone while you are still alive (and ideally when you still have a reasonable expectation of living for seven years after making the donation), then from an IHT perspective, it can make great sense to do so. Leave a will Making a clear will can go a long way towards easing the practical burden on those left behind.  Remember to keep it up to date if your circumstances (or wishes) change. Have appropriate life insurance Even if you believe your assets should be enough to give your loved ones all the support they require, life insurance claims are entirely separate to probate and can be processed much more quickly to give your nearest and dearest helpful financial support at a difficult time. Write your life insurance into a trust There are two advantages to writing a life insurance policy into a trust.  The first is that it ring-fences it from your overall estate, thus potentially reducing the IHT bill your heirs will face.  The second is that it can allow you to exercise a degree of control over how the money is used.  This last point means that it may be appropriate to bequeath other assets via a trust even if there is no IHT benefit.  While the forms a trust can, in theory, legally take, are many and varied, in practice, there are three forms of trust which are particularly common for estate planning. Bare Trusts As their name suggests, bare trusts really are a “bare bones” form of trust, but then, depending on your situation, you may not need any more.  Bare trusts are held in the name of a trustee but once the beneficiary is of age (18 in England and Wales, 16 in Scotland), they can access the capital and income at any time and use it as they wish. Discretionary Trusts The difference between a bare trust and a discretionary trust is that in the latter case, the trustee can be given a far greater degree of authority with regards to how the capital and income are used.  For example, a parent might prefer a discretionary trust to a bare trust to prevent a (very) young adult from going on a spending spree with their inheritance and then having nothing left. Interest in Possession Trust With an interest in possession trust, the beneficiary receives the income from the trust but does not take possession of the underlying capital/assets, which will be passed on to someone else in due course.  This type of trust could be used to support children for a certain length of time, for example, until they finish their education, but could also be used to support dependent adults e.g. elderly relatives, without increasing the IHT burden on their estate when they eventually die. For investments we act as introducers only.

Starting a new job can be an exciting, not to say nerve-wracking, experience for anyone, especially if it is your very first job (or at least your very first proper adult job).  Joining one of the armed services can be particularly emotional, particularly if it results in deployment far away from your family and established social circle.  On the plus side, working in the army can offer excellent financial rewards so here are five tips to make the most of them. As soon as you apply to enlist, start tracking your spending rigorously Having a clear record of where your money is going now can be a great help when it comes to working out how to budget your army pay so that you meet your essential expenses, save a little and still have enough left over to enjoy yourself. As soon as you have been accepted review your current spending When you join the armed services, accommodation, of some form, will be provided with the job.  The exact form of this accommodation may vary, for example, you could be living in a private room in a barracks or sheltering in a tent during an operation in the desert, but you will be provided with a place to live.  As the previous sentence indicates, however, this will be where the armed services need you to be rather than where you choose.  If you are currently living in rented accommodation, you will not only (presumably) need to give up your accommodation, but remember to cancel any services you use (and pay for) in connection with it.  If you are currently living with your parents, then you may want to look through your spending and see if any of it relates to services which not be of any benefit to you while you are in the armed services.  This could be services which are restricted to your local area, or services which you will now get for free (membership of your local gym, for example, would probably fall into both categories). Consider selling possessions you will not use but need to insure While it might be tempting to keep a car for when you are in the UK and able to use it, you have to weight this convenience against the cost of insurance.  If you do decide to hold on to a car, you may be able to lower your premiums by looking at options such as paying annually (even if you wait until after you have received a few month’s pay), choosing a higher excess and/or agreeing to have a “black box” fitted. Remember to update any financial providers with your contact details While snail mail may seem an antiquated means of communication in the 21st century, financial services companies do, generally, require their customers to provide them with a physical address, which, for armed services personnel will typically be a BFPO address, which must be given in the correct format, including postcode.  You will need to update all of your financial providers every time you move. Make sure to pay all bills on time If you have financial commitments, such as credit cards, you need to make your payments on time just the same way as you would in any other job.  If you set up a direct debit, this will be done automatically.  Alternatively, if you make manual payments, then remembering to send the money as soon as you are paid regardless of when the payment is actually due, will ensure you don’t forget or, even worse, forget and spend the money on something else. Bonus tip In addition to the financial rewards associated with joining the armed services, you may also find that you have opportunities for professional/vocational training.  Making the most of these opportunities can not only help you to develop your career in the armed services but can also be of benefit when it comes time to make the move back to “civvy street”.