Even though there are plenty of ways you can potentially save for your retirement, saving via a pension scheme remains one of the most common, especially for those in employment, who now have to be automatically enrolled into a pension scheme unless they actively choose to opt-out.  If you’re one of the many people currently saving into a pension, here are some points to remember. Remember that the state pension still exists On the one hand, there is really no guarantee that the state pension will continue to exist in the future.  On the other hand, it does exist in the present and it could be worth considering whether or not to incorporate that fact into your retirement planning. For example, if, for whatever reason, you have not paid National Insurance for a long time and have relied exclusively on saving for your retirement out of your own private funds, then you may not feel it is worthwhile to start “filling in” your “missing” contributions.  On the other hand, if you’re only slightly short of the money you would need to have a state pension (or to increase the level of state pension to which you would be entitled if current rules continue to apply), then you might want to consider making voluntary contributions. If you’re working and paying NI because you have to, then you will automatically be building up your entitlement to a state pension (assuming it continues to exist) and might want to think about how to use your entitlement to its fullest advantage, for example, you might want to delay taking your pension so as to receive a higher level of income when you do claim it. Remember that there is still a case for annuities Annuities are, basically, products which guarantee an income, in the context of pensions, usually for the rest of your life.  Like all financial products, they have their advantages and disadvantages and are better choices for some people than for others.  Buying an annuity may be the right option for you if you value simplicity, especially if you have a smaller pension pot.  The less money you have to invest, the harder it will be for you to generate an income off which you can live and the more at risk you will be if the value of your investments goes down instead of up, as can and does happen. Remember you do not need to use all your pensions savings at once Retirement age is the age at which you can access your retirement savings, but just because you can do something doesn’t mean that it is necessarily the right thing to do.  If you have only been able to make minimal retirement savings, but are still fit, healthy, able (and possibly willing) to work (at least in some capacity), then it may be to your long-term benefit to carry on working for as long as you can (or at least are happy to do so), in order to maximise your income when you do decide to draw on your retirement savings. On a similar note, even when you do decide that the time is right to start accessing your pension fund, you do not necessarily have to access it all at once.  In fact, unless your plan is to use your pension pot to buy an annuity, it may be much more advantageous (from the perspective of tax) to access it a bit at a time, especially if you wish to withdraw cash.  As always, however, it is very much advisable to take professional advice on this.  At the very least, familiarise yourself with the tax rules in force at the time you wish to access your pension pot in whatever manner. For pensions, savings and investments we act as introducers only.

The introduction of new “affordability” criteria for mortgages created the, arguably rather farcical, situation of some people being told that they could not remortgage to a cheaper deal because they could not afford it and thereby being forced to continue using a more expensive mortgage product.  These people have become known as “mortgage prisoners”, but now there is, at last, hope that they may get an early release from this ludicrous situation. The FCA is working with lenders to introduce more appropriate affordability assessments Mortgage prisoners who have demonstrated the ability to manage their current repayments and who do not wish to borrow extra funds are to be given an affordability assessment which should better reflect their situation.  Hopefully this will open the door to them being able to access better deals, which could save them money and/or provide better security (for example, longer-term, fixed-rate deals). It can still pay to improve your standing as a borrower Regardless of what action the FCA ends up taking or what impact it has on lenders, the simple fact of the matter is that companies generally keep their best deals for their best customers.  It can therefore make a lot of sense to do everything you can to make yourself as attractive a customer as you can possibly be, especially when dealing with “big-ticket” items such as mortgages. Try taking a long, hard look at your financial management to see if you can make any “wins” The less you need to borrow (both objectively and as a percentage of the value of your home), the easier it is likely to be to persuade a lender to say “yes”.  If you’re a first-time buyer or regular mover, that will typically mean building up as big a deposit as you possibly can.  If you’re a mortgage prisoner looking to break free, that will typically mean paying down your current mortgage to the point where you do meet the standard affordability criteria and can, therefore, access the “open market” of mortgage products. Even if you think you’re really making every penny count, it never hurts to double-check and to think hard about any sacrifices you could make, no matter how small.  Little wins are still wins and do add up, although it can take a while. Do everything you can to polish your credit record Your credit record will not just influence your ability to get a mortgage, it may also influence your ability to access other products and services, which might be very useful to you in your situation.  For example, if you’re currently paying down debt on a credit card, then a good credit rating could make it possible for you to get a product with a lower interest rate (or possibly even a 0% balance-transfer deal).  This could give your finances a helpful boost and help you to ease your way out of crippling debt. Dealing with negative equity If you are in negative equity, then it is strongly recommended that you get professional advice before taking any final decisions on how to go forward.  In principle, if you can afford the repayments, then it may make sense to stay in your current home and let time and inflation sort the problem.  The risk here is that there may come a point when you cannot afford the repayments, in which case your home may be repossessed and could potentially be sold for much less than you would have received had you dealt with the sale yourself. In principle, if you sell your home when you are in negative equity then you are obliged to make up the shortfall, however, you may find that your lender might be willing to let you make repayments over a period of time at a rate you can reasonably be expected to afford. Your home may be repossessed if you do not keep up repayments on your mortgage.

Regardless of how you feel about Brexit, it’s probably good news that one way or another, the issue is likely to be resolved in the near future, so we can all get on with making plans for our future.  Since we all need somewhere to live (as do our family and friends) this means that the state of the housing market is likely to be a significant consideration for us.  With that in mind, here are some thoughts about what the election could mean for your mortgage. A weak pound could see the arrival of higher interest rates The Bank of England is charged with keeping inflation at 2% and has a margin of error of 1% either way.  If inflation is too low, the Bank of England can lower interest rates and/or use quantitative easing to stimulate the economy.  If inflation is high, however, then its only option is to raise interest rates. In principle, the government could choose to make life easier for borrowers by raising (or even eliminating) the inflation target, thus allowing the Bank of England to keep interest rates at a lower level.  This could potentially be good news for mortgage holders, although there are other economic factors which are likely to play a role in just how happy they would feel.  In practice, the government might be very wary about doing this, since excessive inflation has consequences for everyone. All that being so, mortgage holders might want to think about their ability to service a mortgage if interest rates were to rise significantly.  In theory, they could rise indefinitely.  For practical purposes, however, you might want to use 20% as your absolute maximum (based on the fact that since 1979, the highest the base rate has been is 17%).  If this is a frightening thought, then you might want to look at fixing your mortgage rate, possibly for as long as five years, so give yourself the best chance of working out which way the wind is blowing and what you want (or need) to do about it. Brexit could mean a significant readjustment of the UK’s economy In principle, it is still possible that the UK government will negotiate a soft Brexit.  In practice, this is looking increasingly unlikely.  Boris Johnson has made it very clear, he intends Brexit to happen on (its latest) scheduled date of 31st January 2020 and it’s hard to see how any sort of soft-Brexit deal could be negotiated during that time, let alone preparations made for implementing it. To be fair, all changes tend to have “winners” as well as “losers” but in the case of Brexit, the stakes are very high and hence so are the short-term risks to anyone who depends on the EU for a significant portion of their livelihood.  If you’re concerned about your ability to pay your mortgage in a post-Brexit environment, then it’s recommended to deal with the situation as quickly as possible and ideally to take professional advice. If you conclude that it would be best for you to sell your home and rent for the time being, then it is usually best to do so on your own terms, rather than waiting for circumstances to force you to do so.  The good news here is that achieving clarity over Brexit may increase the activity from buyers who will finally have some clarity on what the future is likely to hold for them. You may, however, discover that you can manage your mortgage by making some adjustments to your lifestyle and/or your finances.  For example, it might be possible to remortgage on a product with a longer-term, so as to make the monthly repayments more affordable.  This could increase the amount of interest you pay overall, but you might consider this a price worth paying. Your home may be repossessed if you do not keep up repayments on your mortgage.

These days, funeral music can go way beyond traditional hymns like Abide with Me, but out of all the songs you might want to choose for your funeral, possibly the most appropriate would be the 2015 hit by LunchMoney Lewis - Bills, because, while death may be free, dying can be expensive.  Here are some of the ways it can cost you and your estate. End-of-life care Even if you spend your last days in your own home, you may find that it brings a financial burden.  For example, you may need to make adaptations to your property to reflect your reduced mobility and/or employ someone to help you with tasks you are no longer (as) able to do yourself.  If you need to go into a care home, then costs can really mount up.  This has long been a controversial political area and it’s always possible that politicians will put a fairly low cap on the amount which must be paid by the individual before they receive tax-funding, but then again, it’s always possible that they will raise it or eliminate it completely. Funeral costs In principle, you don’t actually have to pay for your funeral.  If you really can’t afford it, your local council will arrange a “public health funeral”, which may be a burial or cremation.  Although the local council will arrange for a coffin and the services of a funeral director so that the deceased’s remains can be treated with a reasonable degree of dignity, that may well be as far as it goes in terms of the ceremony. In other words, the ceremony will take place at the time and place which is most convenient for the council, there may not be a great deal of notice for any family and/or friends and you can forget about flowers, music, viewings, obituaries or transport for family members.  In fact, you may well have to forget about having a grave to yourself, let alone one with any kind of memorial. If you’re the kind of person who thinks that your earthly remains don’t matter, then you may be fine with this.  If, however, you’d like something a little more to speed you on your way, or you think it’s important to those left behind that they can grieve with more dignity, or at least, more control over the practicalities of the funeral ceremony, then you will need to be able to fund it out of your estate. Probate and Inheritance Tax Even if your estate falls below the IHT threshold, you are still going to have to complete the process of probate to HMRC’s satisfaction.  This is probably going to involve some degree of cost for which someone is going to have to pay.  If your estate does fall above the IHT threshold then HMRC has first claim on the estate (apart from certain allowed costs) and you’re going to have to factor this reality into the calculations you make about how much money/assets you will need to leave behind in order to ensure that your loved ones (continue to) have a decent standard of living. The importance of insurance It can also be very difficult, for some people, to save the money they are likely to need for their end-of-life expenses.  The good news is that insurance can often help, you just need to make sure that you have the right sort of cover at the right level and set out in the right way.  For example, life insurance written into a trust can be used to cover IHT fees with minimal tax liability.  If you’re confused about how to make insurance work for you, a financial professional can give expert guidance tailored to your specific needs and wants. For Estate planning, Probate and Inheritance tax planning, we act as introducers only The FCA does not regulate Probate and some forms of Estate planning and Inheritance tax planning

The concept of a cashless society may sound good in theory.  It’s questionable whether it will ever work in practice.  It is, however, indisputable, that cash isn’t king anymore.  Plastic, in its various forms, has long since taken over.  There are lots of practical advantages to using plastic rather than cash.  One of these is convenience.  Chip and PIN transactions are massively faster than cash transactions and contactless transactions are faster still.  Some people, however, wonder if this is actually a benefit or if it could actually be a problem. The case against contactless The case against contactless is fairly straightforward.  Some people believe that it makes the buying process just too easy and therefore encourages what is effectively “mindless spending”.  In other words, people just tap their cards without thinking and potentially wind up with a whole pile of “stuff” they neither need nor want and/or a bunch of unrecognisable transactions on their statement.  These transactions will be for small amounts (contactless transactions have to be low-value for security reasons) but, as everyone knows, small transactions can soon add up. The case for contactless We all hate queues and we hate them most of all when we’re in a hurry.  The ability to “tap and go” speeds up the buying process even more than the arrival of chip and PIN did and you still get a record of your purchase on your statement.  In this context, it’s worth noting that these days, statements are close to real-time, rather than monthly as they were in the days of paper. In principle, contactless payments could actually make some purchases a bit more affordable, although it’s unclear how much this translates into real-world practice.  The reason for this is that, as the saying goes, “time is money”, in other words, the faster retailers can process transactions, the more of them they can process in the same time-frame and, in all seriousness, the fact that contactless transactions do not require the retailer to provide a receipt not only speeds up the process it lowers the cost-per-transaction for the retailer. Even if this fact does not actually translate into lower costs for the customer, it may translate into the difference between the retailer being able to pay human salaries and the retailer not being able to pay human salaries.  Not to put too fine a point on the matter, this is likely to be a significant concern at the best of times and with Brexit (allegedly) happening soon, it could become an even greater concern. So who is right? There’s no easy answer to this one, but common sense suggests that contactless may encourage people who were already inclined to make impulse buys but will not necessarily change the habits of people who are in the habit of thinking before they part with their money. Possibly, therefore, a reasonable solution would be for banks to stop handing out contactless cards by default and start issuing them on request, or, as a minimum, to give customers an easy way to “opt-out” of contactless.  Ideally, if the technology allows it (or can be developed to allow it), customers who opt for contactless would be given the opportunity to restrict their usage limits even further. This needn’t necessarily be just by volume or value of transactions; it might be more meaningful if customers could apply limits by category of transaction.  For example, a customer might choose to block all contactless transactions except the purchase of travel tickets, so that they limited their options for impulse spending but kept open the possibility to buy travel tickets at maximum speed.

In a divorce situation, both assets and liabilities have to be split fairly between the two parties.  For most people, the family home will be an asset which has a liability attached to it.  In other words, the family home will be a source of equity, but it will also have a mortgage attached to it.  It will also, by definition, be the place where the family lives.  This combination of facts can lead to all sorts of complications when a couple divorce, especially when there are children involved, but these complications have to be resolved. You must keep paying the mortgage for as long as you own the house Assuming you have a joint mortgage, then you are probably “jointly and severally liable” for the mortgage payments, which basically means that you need to keep making them even if you have stopped living in the house.  If you can’t afford to move out and pay the mortgage on your current property, then legally the most sensible approach is to stay put (assuming it’s safe for you to do so).  Your partner cannot force you to leave and if it takes two of you to pay the mortgage (or you are the sole breadwinner) it is not in their interests to do so. For the sake of completeness, while lenders tend to be fairly sympathetic to divorce situations, they do expect the mortgage-holder(s) to do everything possible to make good on their payments and, if there are difficulties, to resolve them as quickly as possible, by whatever means possible, including selling the house.  Failing to do this can not only damage your credit record (which has all sorts of implications these days) but lead to your home being repossessed. Selling up and moving on can be the best option even when there are children involved For the most part, there is a strong preference for keeping children in their established home and there are a lot of good reasons for this.  At the same time, however, children are going to need attention from both their parents, especially during the instability of a divorce situation (no matter how amicable it is or how responsibly parents are handling it).  Parents are unlikely to be able to devote their full, calm attention to their children if they’re worried about how to pay a mortgage, so it may make sense to sell up and move on until the situation stabilizes.  It may even make sense for both parties to rent for a while until the dust settles and they see where they are. Alternatively, if there is a lot of equity in the home and the remaining partner can afford to service a mortgage, you could flip the situation on its head and release equity from the family home to give to the person leaving it.  Although equity release is often associated with older people, quite a lot of it does happen in divorce situations and it can work very well. After divorce, lenders usually count child support as an expense but not as income When buying property after a divorce, each half of the former couple will be assessed on their ability to pay a mortgage and this is where life can get interesting.  If you are paying child support, then lenders will treat this as a non-negotiable expense.  If, however, you are receiving child support, then lenders will not necessarily treat it as income.  This may seem nonsensical but the fact is that if you have the ability to pay child support then you must pay it, but if you are due to receive child support then you are dependent on your ex-partner’s ability to pay it.  If their circumstances change, then so will your payments.  In other words, you can only get what they have. Your property may be repossessed if you do not keep up repayments on your mortgage. Equity release refers to home reversion plans and lifetime mortgages. To understand the features and risks ask for a personalised illustration.

These days, for practical purposes, you are the sum of your data.  Everything you do online creates a data trail which doesn’t just point back to you, it comes to form a part of your identity, hence the term “digital identity”.  As such, it is vulnerable to the threat of identity theft.  With that in mind, here are some facts you need to know. Nobody is “too insignificant” to be a target for identity theft Think about the real world.  You’re probably aware that people often steal cars to commit robberies.  Have you ever thought about the type of cars which get stolen?  They tend to be fairly ordinary ones and there are two good reasons to account for this.  First of all, expensive cars tend to be protected by excellent security (precisely because they are expensive) and secondly because they get noticed, which is likely to be the last thing a thief will want.  Similar comments apply to identity theft.  Not only can wealthier people afford top-quality security, but they are also, often, very recognisable and hence more challenging to impersonate successfully.  That doesn’t mean they can’t fall victim to it (both J.K. Rowling and Jack Dorsey famously have) but it does mean it’s a lot harder.  Average people can be much easier targets, with a more appealing risk/reward ratio. So what, exactly, is your digital information worth? It’s practically impossible to answer that question directly because there are so many variables and to a certain extent, it will depend on the individual.  So, let’s try looking at it another way.  How can your digital information be used?  There are two main answers to this (albeit with numerous variations on each). The first option is that your digital information will be used for standard financial crimes.  Classic examples of this include credit cards and loans being taken out in your name.  There are, however, plenty of other options for criminals.  For example, these days, it’s very possible for mobile phones to be targeted, in which case, you might see calls and/or texts to premium numbers or in-app purchases being made for apps you don’t remember installing. The second option is that your digital information will be used for ideological crimes, or, to put it quite bluntly, cyberterrorism.  This is a very real threat and is likely to grow bigger as the internet matures into the new frontier of hostilities between different ideologies, however, these are defined. What can you do to protect yourself? First of all, you need to continue to follow all the established practices for protecting yourself against “real-world” identity theft.  Remember that good digital security starts with good physical security and that means protecting everything from your regular post (you probably still get some and it does still have a value) to your online-capable devices.  Remember that if a person can get physical access to a device, they can tamper with it. In particular, remember that you need to protect any device which can go online, not just the “obvious” ones, such as computers and mobile devices.  There are already documented instances of “internet of things” devices being hacked.  As the Iot grows and the average person acquirers more and more “smart” devices, it will become increasingly important to keep track of them and keep them all protected. That said, it’s important to have robust security software on all your computers and mobile devices (and those of your family) even if the devices themselves are “budget-friendly”.  It is your identity you are protecting, rather than the device itself.  This is likely to become increasingly important as banks switch from using card readers to using text messages, which will mean that if someone can compromise your phone, they could potentially do a lot of damage to your bank account.

Wills are essentially about stating what you want to happen with your property in the event of your death.  You may never have thought of your children as your property, but you do need to think about what will happen to them in the event of your death.  Here are some points to consider. You can make a will in favour of your child before they are even born Basically, you would set up a trust with your child as the beneficiary and then make out your will in favour of the trust.  While this does involve some extra steps (for which read extra paperwork and costs), the benefit of this arrangement does not necessarily end with the birth of your child. Quite the opposite, it can last for as long as you want, even when your child is an adult, which can be very useful.  For example, you could gradually allow the child more control over how their inheritance is used but keep some restrictions in place until your child is safely into “proper” adulthood, say their early twenties, rather than handing it all to them when they reach 18 (as is the case with Junior ISAs). In this context, it’s also worth noting that life insurance pay-outs can be made into trusts, in which case they are held to be outside the main estate and hence exempt from inheritance tax.  So, in principle, you could set up a trust fund for each of your children and have the proceeds of your life insurance policy split between the trusts.  On a separate note, you might also want to set up a trust for your partner to receive their share of the life insurance, as this could make their lives much easier while probate is being completed, especially since the process is notoriously slow. Your will can specify guardianship arrangements for your children Should you fail to make a will, the government, or more accurately the family courts, will decide who gets guardianship of your children and this may result in them being placed in a children’s home while the issue is being decided, which may take some time, especially if there are family battles over guardianship.  Resolving the matter beforehand will not only give you peace of mind but will also allow you the chance to integrate the guardian into the child’s life so that there is minimal disruption if anything happens to you and your spouse. You avoid invoking the pain of simultaneous death rules Contrary to what some TV programmes might like to suggest, it is not necessarily all that easy to work out which of two (or more) people died first.  The law recognises this, which is why there are simultaneous death rules.  Basically, these are exactly what they sound like.  If there is no practical way of working out who died before whom, then the law will, essentially, take its best guess.  In the absence of well-written wills, this can create serious complications and frustrations. Your children will be protected in the event of your spouse remarrying If you die before your spouse and do not leave a will, then typically your spouse will inherit most, if not all, of your estate.  This may seem fine given that your spouse will be the other parent of your child.  The problem is that if they then remarry and do not make a will, their spouse will become the default beneficiary of their estate.  Depending on circumstances, your children may have a claim, but even if they do, the usual outcome is that the surviving spouse inherits the majority of their deceased partner’s estate. For wills, trusts, probates and investment products we act as introducers only.

Who is vulnerable?  At an individual level, we might all come up with different answers to that question (although there might be a lot of overlap between them).  The Financial Conduct Authority (FCA), however, has a very specific definition of the term: “Someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care.” The first point is particularly worth noting since it implies that vulnerability can be a temporary state brought on by circumstances, rather than something permanent.  In other words, an individual could move from being classed as not vulnerable to being classed as vulnerable and, in principle, could transition between these classifications at different points in their lives (although it is obviously to be hoped not). The key point to note is that companies cannot definitively conclude that a customer is not vulnerable just because they have not identified themselves as being vulnerable in some way, for example needing special arrangements for communication due to a disability. For practical purposes, this means that companies will need, as a minimum, to be continually aware of the possibility that a customer may be vulnerable and may want to consider working on the assumption that a customer is to be considered vulnerable unless demonstrated to be otherwise, rather than vice versa.  After all, surely all customers deserve companies to show them the highest levels of care? The FCA is due to release guidance on the treatment of vulnerable customers, however, Monzo Bank has undertaken research into this area and identified five main areas of vulnerability, which act as barriers to banking.  These are: Mental health conditions Lack of access to physical branches Struggles with technology Language issues, particularly issues with written English Lack of a fixed address Monzo also identified that lack of acceptable identification was an issue, however, at this point in time, it has not managed to find a way to address this.  The other issues, however, all have potential solutions. Mental health conditions Addressing the issues faced by those with mental health conditions really comes down to awareness of them and a willingness to address them on a “good-faith” basis.  Possibly, the single, most-effective way to improve the experience of people with mental health issues is to ensure that they can get easy access to human staff who have the time to deal with them as individuals. Lack of access to physical branches This point may come as a surprise given that so many people are happily using online banking for the sort of tasks which used to be conducted in a branch.  Banks may, therefore, need to get creative about addressing this.  For example, they may wish to look at operating pop-up branches, perhaps in other stores, if there is no economic justification for a fixed branch. Struggles with technology First of all, it’s not just older people and people with certain health issues who struggle with technology.  While many younger people are comfortable with it, there are still some exceptions.  Secondly, you can be a technological genius, but if you can’t get reliable, secure access to the internet, then you can’t use online banking.  Right now, it is not at all guaranteed that everyone can just jump online when they want to, this may change in future, but it would probably be best not to count on it. Language issues, particularly issues with written English It may be entirely reasonable for banks to expect their customers to speak English (or bring someone with them who can), but written English is another matter and poor written-English skills may not come down to a lack of knowledge of the language, they may, for example, be a sign of a health condition such as dyslexia.  Banks may, therefore, need to think about other approaches such as empowering staff to provide assistance. Lack of a fixed address Banks could look to become more flexible in what they will accept as a fixed address, e.g. accepting homeless shelters as fixed addresses.

Everyday frustrations and challenges are a part of life.  Maybe it’s a commute where you never get a seat no matter how tired you are, an annoying colleague or a day just not working out how it was supposed to.  If these irritations only happen from time to time, there may be little you can do about them.  If however, they start to impact your overall quality of life, then you may need to take action and you certainly need to think about how to protect yourself against life’s major challenges such as loss of employment, serious illness and death.  With that in mind, here are some points to consider. Having a cash cushion can buy you time to think and act Cash cushions serve much the same purpose as physical cushions, they provide a certain degree of padding against hard bumps.  They may be all you need to deal with minor issues (like having to pay for a taxi because your train is delayed and you cannot afford to be late) but it may not be anything like enough to see you through the major ones (like an extended period of illness).  It may, however, be enough to give you time to think about your next move (for example in a redundancy situation) or to take action (for example by gaining new qualifications). Minimising debt and non-essential contracts can give you more room to manoeuvre Basically, the less of your income you have to dedicate to non-negotiable expenses such as debt repayments and other contractual obligations, the more you will have available to use for your needs (and ideally wants) at the time.  As a rule of thumb, you want to target high-interest debt first, as this gives the biggest scope for savings.  Once you’ve cleared the balance completely, think about whether or not you still need the product and if not then it’s advisable to take steps to close it completely.  Not only does this remove one source of potential temptation, it takes the product off your credit record and also helps to limit the extent to which you may be at risk of identity theft. When it comes to contracts, there is more nuance.  Sometimes it does make sense to enter into a long-term contract.  For example, you may know for sure that you will need the product or service over the lifetime of the contract and that the contract will give you a better deal than you would have been able to achieve on a more flexible basis.  The key here is to think about whether or not you really need the product or service at all and if so whether you are sure you are going to need it for the lifetime of the contract and if so whether or not the contract really does offer a great deal compared to paying as you go.  (Read the small print).  Basically, if you’re thinking about entering into a long-term contract, take the decision carefully. Make sure you have the right insurance cover When thinking about insurance cover, you may find it helpful to start by making a list of what really matters to you and then look at your options for protecting it.  For example, if you start with your home, then buildings and contents insurance may be obvious necessities, but if you’re paying a mortgage then your ability to keep your home will depend on your ability to keep paying your mortgage, hence Income Protection insurance could be good purchases.  Similarly, when thinking about protecting people, remember the contribution made by homemakers.  It may be very advisable to ensure they are covered by-products such as Life Insurance or Critical Illness cover, in fact, it may even be worth having Critical Illness cover for children as a child’s illness can lead to illness for adults.  Similarly, Pet Insurance can protect both children and adults against losing a much-loved friend due to being unable to pay for the treatment they need. For General insurance, Accident sickness and unemployment insurance (ASU) and pet insurance, we act as introducers only.

Death is inevitable, taxes can often be managed to some extent.  Using relevant life policies instead of life insurance can be an astute way to help those who are left behind after a bereavement without incurring a hefty tax burden. Relevant Life policies versus Life Insurance - the basics A Relevant Life policy can only be taken out by a company on behalf of one of its employees (including directors).  Relevant Life policies work on a similar basis to Life Insurance policies, however, if they meet certain, specific criteria, they are an allowable business expense, meaning that they can be set against profits for the purposes of calculating Corporation Tax.  This fact can significantly lower the tax burden on both the employer and the employee. Criteria to qualify as a business expense At current time 2019/2020 these are the main criteria for relevant life cover to qualify as a business expense.  It is strongly advisable to double-check that a policy complies with them before purchasing it. The policy must only provide a lump sum benefit on death (or diagnosis of terminal illness) payable before the age of 75.  It must not include any element of critical illness cover or have any surrender value. The policy must only benefit an individual (or a trust set up on behalf of an individual) or a charity. The main purpose of the policy should not be for the avoidance of tax. Tax treatment of qualifying relevant life plans While it is important to note that the use of Relevant Life plans should not be mainly for the avoidance of tax, they can offer significant tax benefits for both employer and employee. From an employer’s perspective, they can be set against profits for the calculation of Corporation Tax (provided that the premiums are wholly and exclusively for the purposes of the business) and as they are business expenses rather than employee benefits, they are also ignored for the purposes of calculating the employer’s National Insurance contributions. From an employee’s perspective, the fact that the policy payments are business expenses rather than benefits not only means that they are ignored for the purposes of calculating income tax and national insurance, but it also means that they are ignored for the purposes of calculating annual and/or lifetime pensions allowances. To put this another way, if a company buys Relevant Life policies for its employees, let’s say at £200 each, they can set this cost against profits, thus reducing their Corporation Tax bill by £38 per employee (Corporation Tax is currently set at 19%).  In other words, the effective cost of the cover would be £162 per employee. If an employee buys a Life Insurance policy at £200, they have to pay for this out of their post-tax income.  What this means in practice will depend on the employee’s salary, but assuming a 40% Income Tax rate and a 2% National Insurance rate, the actual cost of the cover would be £344.83.  In other words, the insurer would get £200 (minus tax) and the government would get £144.83.  The differential would be even greater for employees on higher tax bands, such as directors. A quick note about other death-related insurance Relevant Life policies are for the benefit of the employee’s loved ones rather than the business.  If, however, the employee in question is key to the continued success of the business, then it may be worth taking out Key Person insurance for them.  If they are a shareholder, you may also want to look at Shareholder Protection Insurance, which could make it easier for the company to buy the shares from the beneficiaries of the deceased’s estate. For Tax planning, we act as introducers only.

There is really nothing new about the concept of companies needing to protect themselves against the threat of being targeted by malicious actors.  It is, however, fair to say, that the nature of these threats changes over the course of time.  With that in mind, here are some points to consider regarding protecting your company from 21st-century threats. Physical threats Never underestimate the importance of good physical security, in particular, good access controls.  Not only can this help prevent unauthorised people gaining access to your building, but they can also make it easier to investigate any incidents which occur within it.  Basically, the fewer people who have access to a specific area within your building, the fewer people could be involved with anything which occurs in it.  This goes as much for your own employees as for members of the public. Companies may also want to think seriously about protecting themselves from legal claims by investing in public liability insurance. Digital threats When looking at digital threats, companies may wish to ask themselves two questions. What training do my employees need to keep themselves and the company safe online? What support does my IT team need to keep the company safe in cyberspace? Each of these questions will need to be answered on an individual basis, however, it is strongly recommended to give them both serious consideration, especially since missteps here could have serious legal consequences.  GDPR, for example, does allow for prison sentences. In short, if companies need to take a cold, hard look at their ability to safeguard their data and their brand against cyberthreats and decide if they have the necessary expertise to do so themselves or if they need to get external help.  Companies may also want to think about investing in insurance against the consequences of cyberattacks. Reputational threats Companies may wish to give guidance to their staff regarding referencing the company in any way on social media.  They may also wish to set policies regarding the use of social media in company time and/or from company equipment and these policies may need to be split between staff who use social media for work purposes and those who do not.  In fact, the category of staff who use social media for work purposes may then need to be split between those who use it for research only and those who use it to communicate on behalf of the company.  There is no insurance policy in the world can protect a company from the reputation consequences of poor social media management.  It is therefore absolutely imperative that companies think about everything they post and avoid any temptation to give knee-jerk responses to any issue raised with them, not even if it seems minor and especially not if it appears to be serious. The threat of losing key staff Admittedly this threat is not unique to the 21st century, but it remains a very real threat in the modern age and hence deserves to be treated as such.  In addition to doing whatever you reasonably can to keep staff happy in their posts, you may wish to give serious consideration to the question of how your company would manage if a key staff member were to die in service.  If their unexpected departure would cause serious issues for the company, then it might be worth purchasing Key Person insurance for them.  Companies might also wish to look at buying Shareholder Protection Insurance to assist them with buying shares from the estate of a deceased shareholder.  This could both provide funds for their loved ones and ensure that control of a company remains where the company would like it to be. For public liability insurance we act as introducers only.