Sending a child to school for the first time is a significant milestone in many ways and, if truth be told, one of those ways is financial.  Even though childcare costs may still be an issue, especially in the school holidays, the fact still remains that school provides a place to keep children safe while parents get on with work (or anything else they do) as well as an education. When children reach school-leaving age, they are classed as young adults and while they may, in principle, be able to fend for themselves.  In practice, however, there are good reasons why they might still benefit from parental help regardless of whether or not they plan to go on to university.  For example, driving lessons and their own transport might help to open up job opportunities for them.  That being so, parents may wish to put away some money while their children are at school in order to help them transition into young adulthood when they turn 18 (or 16). Junior ISAs are a tax efficient option for saving for children Junior ISAs are essentially restricted versions of the standard adult ISA.  For the 2018/2019 tax year, the maximum payment is £4,260, which may not sound like much compared the the adult £20,000, but is still a lot better than nothing.  Like standard adult ISAs, the money can be held as cash (in which case interest income is tax free) or it can be invested in stocks and shares (in which case capital gains and dividend income are tax free).  An adult controls the account until the child is 16, at which point they can take over the management of the ISA, but can only withdraw the money when they turn 18. Cash versus stocks and shares Deciding how much of the money to keep in cash and how much to invest could be a challenge for some parents and professional advice could be very helpful here.  While cash is, on the face of it, the safest option, in that the capital is guaranteed to be preserved, interest income alone may not be enough to ensure that your (child’s) savings grow in line with inflation, not even when protected from taxation.  While investing in the stock market may seem more risky, it also offers the potential for much higher returns, which could really make a difference to your child’s future as a young adult. The question of control Speaking of risk, there is one issue with Junior ISAs, which some parents may find off putting.  That is the fact that as soon as your child reaches their 18th birthday, they get full control over the money, whether you like it or not, and they can spend it exactly as they see fit.  In other words, you might have intended them to use it the money to further their education, but if they want to spend it on the latest tech gadgets, there is absolutely nothing you can do about it.  There are basically two ways you can look at this possibility.  One is to take the view that if you educate your child about good financial management while they are still young, then you will have equipped them to handle the money responsibly and if they choose not to do so, you can legitimately decline to give them further finance or insist that the money is given as a loan and paid back.  The other is to avoid Junior ISAs and opt for a savings method which may be less tax efficient but gives you the option of exercising (some degree of) control over how the money is spent. For investments advice we act as introducers only.

The most fundamental rule of home improvement is that it should add value to your home in some way, be that by increasing your enjoyment of it or by increasing its financial value (or both).  While everyone will have their own idea of what makes a perfect home, there are some basic rules of home improvement of which everyone should be aware. Work out what you can do before you think about what you will do Before you set about making any major updates to your home, double check what your house deeds say about it and what your insurance company thinks about it.  If there are no stumbling blocks here, then make sure you are clear on where you stand with regards to planning permission.  In particular, do not just assume that any adaptations to your home will be covered under “permitted development”.  Finally, you may want to stop and take some time to think about how your plans might impact your neighbours or to put it another way, just because you legally can do something, doesn’t mean that you necessarily should.  If your neighbours dislike your plans, then you will have to think about the benefits of the improvement versus the risk of jeopardising good neighbourly relations. Be realistic about the impact the change will have on the resale price of your home Even if a change does add value to your home, there is no guarantee that it will increase the eventual sales price by as much as you paid to make the change.  Therefore, in an ideal world, you should aim to make any major changes when you still anticipate living in the home over the long term so that you can benefit from them in terms of the improvement to your lifestyle.  The closer you get to the point where you are thinking of selling your home, the more carefully you should think about spending money on major updates, especially where they involve an element of personal taste.  For example, you might think that the industrial look is perfect for a kitchen in a modern home, but people who come to view your home may disagree and either move on to another property or put in an offer which takes into account the cost of removing the kitchen you’ve just had put in. Use professionals (at least for major work) While the problems of “cowboy builders” may make for good TV, there are plenty of good quality, reputable builders out there who have skills, tools and insurance and who can provide any documentation necessary to demonstrate that your build meets legal requirements.  Depending on what you are having done, they may also provide a warranty.  Before reaching out to builders for quotes, make sure you are clear in your own mind about what you want, but be prepared to listen if a prospective builder makes alternative suggestions, even if they are more expensive, just ask them to explain themselves in plain English and good builders will be happy to do so.  Only proceed with a contract once you are 100% sure that you and the builder are completely clear about what you have agreed and are happy that it can be delivered to the agreed time-frame and for the agreed price.  This is important with any form of contractual agreement and arguably especially important when it comes to building work since it is far easier to make changes to plans, timescales and budgets, while they are still on paper than to start changing your mind once a builder has begun putting up scaffolding or ripping up floorboards. Do you have these? Top 10 DIY nightmares: Woodchip wallpaper Mirrored ceilings Carpeted bathrooms Ugly blinds Fake beams Outside toilet Artex ceilings Internal stone cladding Beaded curtains in doorways External stone claddingTop 10 DIY dreams: Interior redecoration Flooring replaced New bathroom Garden makeover New kitchen New boiler/ central heating system Double glazing / new windows New shed or garden building Exterior redecoration 10. Better insulation

Getting on the housing ladder is all very well, but if you start off your time as a home owner by purchasing a small property then you may well find yourself in a similar situation to first-time buyers if you later decide you wish to move to a larger home, for example in order to start a family. While you will hopefully have built up equity in your property and may have seen it increase in value, all things being equal percentage increases in the price of smaller, more affordable, homes will still result in less net profit than percentage increases in the price of larger homes.  For example, if a home originally cost £100K and increases in value by 1%, it will be worth £101K but a 1% increase in the value of a house which cost £200K will make it worth £202K and so on.  This means that instead of the £100k difference in price there was initially, there is now a difference in price of £101K. Even if you are planning to move to a different area, where homes are more affordable, you may still find yourself facing challenges.  For example, if you wish to move from a small, city centre flat, to a family home in a commuter town, but still plan to keep the same job (or at least work in the city itself) then your mortgage affordability calculations will have to incorporate the fact that your travel costs will increase.  You may still save money overall, but possibly not as much as it might initially seem from the house prices alone. As is so often the case in life, there are no easy fixes to this situation, but here are some thoughts you might want to keep in mind when you’re moving into your first home. Keep saving for your next deposit Resist the temptation to think “job done” and relax your financial discipline.  Yes, buying your first home is cause for celebration and, of course, life is for living, but if you have any plans to move on to a bigger home at some point in the future, for example, if you want to have children, then it’s a good idea to start preparing early. Be careful what changes you make to your current home The longer you plan to stay in a property, the longer you have to benefit from any changes you make to it.  The less time you plan to stay in a property, the less time you have to benefit from any changes you make to it and therefore, from a purely financial perspective, the more confident you need to be that these changes will increase the value of your home sufficiently to justify making the up-front investment.  Also, be very careful of making any change which it would be difficult for a new purchaser to reverse. Do everything you can to maximise the sale price on your home when the time comes This may seem like stating the obvious, but it does matter.  In particular, do your research before deciding on an estate agent or estate agents and a conveyancer and once you have made your choice be ready to work with them to make your house as appealing as possible to potential buyers.  Remember that every little increase in the sales price is a bit more money in your pocket, which can go towards your next home (or any other purpose you choose).  Keep in mind, however, that you will usually have to pay standard selling charges out of the sales price (for example the fees for your estate agent and your conveyancer) so your net profit will typically be slightly less than the sales price minus the balance of your mortgage. Your property may be repossessed if you do not keep up repayments on your mortgage.

General figures about the cost of retirement income can have their uses, but the fact of the matter is that, like many aspects of life, the cost of retirement will depend greatly on your own personal circumstances, needs and wants.  Therefore, instead of looking at “average costs”, we’d like to suggests some points you should consider when estimating how much money you will need to live on comfortably in retirement. Housing Obviously you will need a place to live in your retirement and where you choose to live will influence how much it will cost, although working out the effective cost of a home may require looking at far more than just the headline figures.  For example, let’s say you own a flat in London and have paid off your mortgage.  It would be nice to say that it would now be free to live in your flat, but actually there will still be costs involved and these costs may be both open and hidden.  An example of an open cost might be council tax, which you might still be required to pay depending on your income.  An example of a hidden cost might be the loss of earnings generated from the lump sum you would gain from selling your property and moving somewhere smaller and/or in a more affordable location.  Moving to a more affordable location, however, could also carry hidden costs, for example, you may find yourself spending money on fares to visit your nearest and dearest or for them to visit you.  You then have to decide whether or not the move is justified either because you are still better off financially or because the move enhances your life in some other way, such as allowing you to live in a more congenial climate. Opportunities to earn further income Retirement is an opportunity to leave behind the grind of everyday working life, but you may still find it beneficial to keep working in some capacity, at least in the earlier part of your retirement.  You may also want to look at other ways to earn income such as letting out a room in your property.  What opportunities are open to you will depend at least partly on your housing decisions.  For example, if you opt to live in a popular holiday destination and have a spare room, then you could look at offering holiday lets, whereas if your home is off the tourist trail and/or you don’t have a spare bedroom, then the holiday lets market may effectively be closed to you, although other options may still be open, such as undertaking knowledge-based work via the internet or running your own online store.  Basically the more income you can earn in your retirement years, the further your retirement savings could potentially stretch and the longer you can delay your effective retirement (as opposed to your official one) the longer your retirement savings will have to keep growing. Desired lifestyle A person’s lifestyle essentially has two components, needs and wants.  Needs, by definition, have to be taken care of as top priority and so your needs will form your baseline for judging the cost of your retirement.  In order for your calculations to be accurate, it is really important to be clear about the difference between needs and wants.  For example, you need a place to live, you do not necessarily need a home with one or more extra bedrooms, even if you do plan to have family over regularly.  Once you have worked out how much your needs are going to cost, you can start looking at your wants and, if necessary, prioritising them and thinking about what they will mean in financial terms. For pension, investments advice and tax planning we act as introducers only.

The Help to Buy scheme was rolled out in April 2013 and recently made headlines (albeit not necessarily front-page ones) by being rolled out to March 2023.  While it may be a matter of debate whether the Help to Buy scheme is a useful scheme to help those struggling with house purchases or just a backdoor hand-out to home builders which simply works to keep house prices artificially high, it is a matter of fact that the interest-free loan only lasts for five years, after which the government charges interest of 1.75% on the original loan amount, increasing each year by RPI plus 1%.  This means that from now until (currently) 2028, a percentage of home owners who have bought their homes using the Help to Buy equity loan scheme will be seeing their payments increase. A reminder about how equity loans actually work In short, the government provided a loan of up to 20% of the purchase price of a new-build home in return for an equivalent stake in the property.  Buyers provided a minimum deposit of 5% and standard mortgage providers made up the difference.  The equity loan is interest-free for the first 5 years, after which interest becomes payable at 1.75% and then each year it increases by the retail price index +1% until the loan is paid off.  In effect, the equity loan functions as an interest-only mortgage in that you are only paying interest on the debt rather than repaying the debt itself, which lowers your monthly payments but means you are not making inroads into the sum originally borrowed. Paying back your equity loan There are basically two ways to repay your equity loan.  One is to sell your property and give the government the appropriate percentage of the sales price.  The other is to have your home valued (by a RICS surveyor) and buy the government out of its share as a percentage of current market value.  NB: this is only possible provided that you are repaying a minimum of 10% of your home’s value. Selling your current home If you are in this situation, you could take it as a sign that now would be a good time to take a good look at your living arrangements and think long and hard about whether or not they are right for you.  Home owning does have its advantages, but so does renting and if you’re unsure about where the future is going to lead you, it may be best to opt for the flexibility of renting until you have a clearer idea of where you are headed professionally and financially. Staying put If your equity loan is now coming due, it presumably means that you have been in your current home for the last five years, paying off your main mortgage, in which case, you will hopefully have some equity in your property, especially if house prices in your area have risen since you made your purchase.  If you are confident that your are happy to stay in one place and able to finance a mortgage over the foreseeable future, then you may wish to streamline your life and potentially reduce the overall cost of your home by paying off the equity loan.  Be aware, however, that doing so will not necessarily reduce the cost of your purchase, since you will change from paying interest to the government to paying interest to a mortgage lender.  Assuming, however, you opt for a repayment mortgage you will, at least, be making inroads into the outstanding balance of the loan and you will also get the full benefit of any house-price rises after you have bought the government out of its share of your property. Your property may be repossessed if you do not keep up repayments on your mortgage.

Romance can make the world a brighter place but as any long-term couple will know, in day-to-day life there are a lot of practicalities to consider when it comes to making a relationship work.  One of these is considering how assets will be managed, in particular, who actually owns them and who pays for them.  A property is generally a huge asset so it makes sense to give serious consideration to the formalities of its ownership.  Here are some common scenarios and points to consider with regards to each of them. Couples in legally-recognised unions buy a property together If you are in a permanently-recognised legal union then for practical purposes, you and your spouse are recognized as two separate but equal halves of the same whole.  Holding a property as joint tenants would reflect this since it would give you equal shares in the property and equal rights over it.  It would also mean that if one of the parties died, the other would automatically inherit their share of the property.  Where a property is bought with a mortgage, life insurance may be necessary to ensure that the survivor can continue to live in the property (or at least sell it on their own terms), which raises the question of whether or not each party should take out an individual life insurance policy or whether they should take out a joint policy.  There is no right or wrong here, but there is the hard fact that joint life insurance policies typically pay out once (on “first death”) and then terminate, which means that if life insurance were still required, the survivor would have to take out a new, individual, policy in any case and the cost of life insurance goes up with a person’s age. Couples in non-legally-recognised unions buy a property together Whatever your views on the laws surrounding marriage, civil partnerships, divorce and dissolution, the fact is that there are laws so there is a legal framework in which couples operate, whether they like it or not.  Couples outside of this structure need to put their own framework in place.  They can buy as joint tenants if they wish and this may be an appropriate choice for couples in long-established unions who are confident that they will be together until death parts them, but otherwise it may be more appropriate for them to buy as “tenants in common”, which puts the purchase on a more business-like footing and gives each purchaser their own share in the property.  These shares can be of different sizes and each purchaser can treat their share as they see fit, for example they could sell it on to a third party or bequeath it to someone other than their partner.  Tenants in common can still take out joint life insurance if they wish, however it might be more appropriate for them each to take out their own life insurance policies to reflect that fact that they are still acting as legally-independent units. One half of a couple moves into a property which is owned by the other half of the couple This may be the trickiest situation of all since there are so many possible variations.  Rather than try to cover them all, we’ll just offer a basic rule of thumb that if you contribute to the purchase of a property in a meaningful sense then it could make a great deal of practical sense to have that contribution recognised legally by having the property ownership transferred to being one of tenants in common, always remembering that the tenants’ shares can be of different sizes.  You would then have to consider what would happen to both your partner and your share of the property in the event of your death. Your property may be repossessed if you do not keep up repayments on your mortgage.

Assets are nice to have but it’s income which pays the bills, literally.  This reality may pose something of a conundrum for modern retirees who could find themselves in a situation where they have a high net worth on paper, but poor cash flow, with the result that although they are technically well-off, in actual fact, they may struggle to pay their bills.  Here are some suggestions to help address this situation. Make the most of your pension pot Even if you have already taken out an annuity, you may be able to cancel it and take an alternative approach.  It is, however, strongly recommended to get financial advice before taking such a major step.  If you have not yet taken out an annuity, then you will want to make sure that you take the right decisions with your hard-earned pension pot every step of the way throughout your retirement.  Again, this is where professional advice can be invaluable. Either downsize or make the most of the space you have Accommodation can be a tricky subject for retirees.  Some may be comfortable in their established family home or, at least, not see anywhere better, in which case their immediate preference may be to stay put.  Those who opt to do so should, however, be aware that this carries risks.  Perhaps the most obvious risk is that property prices will go down so that you will get less for your home if you decide to sell it or release equity from it.  In the former case, you should also expect to pay less for your next home, but this does not apply in the latter.  A less obvious, but still potentially significant risk, is political trends.  For example, the government could change the tax system to make it more expensive for people to stay in houses which are held to be under-occupied.  If you do wish to stay in your current home, you may could look at ways to make the most of any extra space you have, for example, unused bedrooms vacated by adult children could be used by lodgers even if only for part of the year. See if you can still work in some capacity You may not want to go back to “working nine to five”, but there may still be ways you could earn a cash income, such as joining the gig economy or monetising a hobby.  This may not be a great income or even an income on which you could live without touching your retirement savings, but it would be extra money and if you earned it doing something you enjoy, it would be fun too. Be strategic with your cash savings Most of us need to keep some cash savings ready to hand if only as an emergency fund and although interest rates are still at less than 1% (plus savings interest can be taxed), as the old saying goes, “look after your pennies and your pounds will take care of themselves).  While you will probably want to avoid bouncing around between banks if only for your convenience, you should certainly keep your eyes open for anyone who is offering an especially good deal and, in particular, see if it would be worthwhile for you to keep your cash savings in an ISA wrapper to minimise your tax liability. Keep setting aside investment income if you possibly can Try to keep making savings from your pension (and/or other income) so you can carry on investing for your future and so that you have the potential to leave a legacy behind you, even if you don’t have children, you may still have family and friends or at least causes you wish to support. For pension, investments advice and tax planning we act as introducers only.

You might be tempted to think of self-employment as being your own boss.  That’s true, but you are also your own HR department and finance department as well.  Those in formal employment may have access to in-work benefits in the case of ill health and a formal redundancy process, with appropriate payoff, if they find themselves surplus to requirements at their place of employment.  Those in self-employment, however, need to take care of themselves and there are some key points they should consider. Pricing for goods and services needs to be sufficient to make it possible for you to earn a decent living This may seem like stating the obvious but it’s one of the most fundamental lessons any (potential) freelancer has to learn and learn quickly.  If you price your time at the sort of rate you would expect to be paid if you were in employment then there is a distinct possibility that you will find yourself financially worse off because you have failed to allow for the fact that your hourly rate in employment is calculated not just taking into consideration statutory deductions such as tax and national insurance, but also the cost of providing in-work benefits.  You may find that this fact is counterbalanced by the fact that you no longer have to support the cost of travelling to work, but this is not guaranteed.  You may also find that you are quite happy to accept a reduction in take-home pay in return for a better quality of life, however, you are only going to have a better quality of life if you can manage to pay your bills month after month, otherwise, you are simply going to have a whole lot of stress.  In short, when it comes to freelancing, pricing matters a lot and should be amongst your first considerations. Insurance can give you great peace of mind, provided that you use it strategically One of the first points to remember about insurance is that you may need to update your policies to reflect your change in employment status.  For example, if you are planning to work from home then your home contents insurer will probably want to know about it.  They may well be perfectly happy to continue your cover, possibly even at the same rate, but they are likely to want to know about it and there may be implications for people in certain types of job, for example, if you are planning to have clients come to your home. Personal insurance can protect you and your loved ones against life’s misfortunes There are all kinds of insurance policies you can take out as a self-employed worker.  Common ones include income protection insurance, critical illness cover, health insurance, dental insurance and pet insurance.  You may also want to look at extending cover to other members of your family who might otherwise have been covered by your (former) in-work benefits, for example minor children. Professional insurance may be a legal requirement and if not can still be good to have Depending on the nature of your business, you may find it useful to take out professional indemnity insurance and/or public liability insurance.  You may also want to take out insurance to protect your business assets, such as your electronics equipment and, possibly even more importantly, the data it contains.  Cyber liability insurance has been around for some years now and given the environment in which we now live and the extent to which so many people do so much business online, it could be a very worthwhile investment since it is entirely possible that the data stored in your electronic devices is far more valuable than the devices themselves.

Home insurance comes in two basic forms, buildings and contents.  In principle it sounds simple and in practice it isn’t particularly complicated, but there are seven key points you need to take into consideration when buying it. Your policy needs to be up to date to be useful It’s easy to lose track of what you actually have in your house because you’re so busy with life in general, but look on insurance purchase/renewal time as an opportunity to take stock of your possessions and make sure that they are all covered in one way or another.  This could also be a good opportunity to make sure that you have clear details of any important items in your home so that in the event of a burglary you can provide both police and your insurer with clear and accurate details of them. You need to be clear on your insurer’s definition of valuables If your home contents insurance policy has references to “valuables” then there should also be a definition of what your particular insurer considers valuables to be and you should familiarize yourself with it so you are sure you know where you stand. Make sure you are clear on policy exclusions/limitations Insurance fraud is a reality and insurers are well aware of this.  This does not mean that they will not pay out on legitimate claims, however it does mean that they may write policies in such a way that there are exclusions on the cover they provide, that their liability is limited in certain areas and/or that cover is only applicable when you have declared yourself as having certain items. Check if your policy extends to your garden Garden outbuildings such as garages and sheds do not necessarily have the same degree of security as a family home and as such they can be relatively easy targets for thieves, a fact of which insurance companies are well aware.  Your home insurance policy may not extend to your garden at all and if it does its cover may be limited.  This may not bother you if your garden is essentially a patch of lawn but if it’s your pride and joy, then you may want to take out specific garden insurance. Check if the policy comes with accidental damage automatically included. You might think that any home contents insurance policy should automatically cover you for accidental damage, but again, your insurer may disagree.  If your home insurer offers accidental damage cover as an additional extra, then do your sums before paying up.  Essentially have a think about the items in your home which are most at risk and then decide whether they need to be insured at all or whether you could just replace them in the event of damage.  If you do decide they need to be insured then have a look at insurance policies for the items in question and see if they offer better value than your main insurer’s offering. Check your insurer’s policy on flood damage This is obviously most important to those who live in flood-prone areas, but even if your local area has never flooded before (or not for years), it’s still useful to know as, in principle, floods can happen anywhere, particularly if the UK is deluged with storms and snow. Make sure you haven’t over-insured Over-insurance won’t bring you any extra benefit in the event of a claim, but it will usually cost you extra in terms of premiums.  Given that money not spent buys are much as money earned, it makes sense to ensure that your insurance cover is adequate but not excessive. For General Insurance we act as introducers only.

If you like reading about the property market, you may have noticed that, over recent years, there has been something of a trend away from “let the buyer beware” and towards seller disclosure.  In fact, buyers can now take legal action against sellers if they can demonstrate that the seller deliberately mislead them.  Of course, they key words in that sentence are “demonstrate” and “deliberately”.  Sellers can only disclose what they know and in law a person is innocent until proven guilty, which means that the onus is on you to prove that the actively failed to disclose something to you, rather than that they simply didn’t know it.  That’s why a property survey can be a wise precaution. Surveyors work directly for buyers Sellers choose the estate agent they want to use to sell their home and the estate agent acts for them, not for the buyer.  Insofar as they legally can, it is the estate agent’s job to highlight a home’s good points and draw attention away from any potential flaws it has.  Buyers choose surveyors and the surveyor works for the buyer.  It is the surveyor’s job to give an accurate and objective report of the condition of the property so that the buyer can make an informed decision as to whether or not its price is reasonable. Surveys versus valuations A survey is undertaken on behalf of the buyer and looks at the condition of the home so that the buyer can make an informed decision as to whether or not the terms of the purchase are reasonable.  A valuation is undertaken on behalf of a potential mortgage lender and simply assesses the value of the home and whether or not the home can be used as collateral for a mortgage.  While you could reasonably see a valuation as being a form of home survey, it has to be clearly understood that it is a very “light touch” survey which offers very little in the way of hard information to the purchaser. Different kinds of surveys Not only is there a difference between a valuation and a survey, there are different kinds of surveys to cover different situations. New-build properties At one end of the survey scale there is a new-build “snagging survey” which basically is intended to catch little bits and pieces which may have been overlooked by developers.  Surveys on new-build properties do not typically need to go into great levels of detail, since new-build properties typically come with guarantees from the builder. Building surveys At the other end of the scale, there are building surveys, which are the most comprehensive type of surveys are really do go into a lot of detail about the condition of the property.  These surveys are strongly recommended for older and/or unusual properties, in order for buyers to be comfortable that there are no nasty surprises waiting to bite them in the wallet later on. Condition reports and HomeBuyer’s reports These two types of survey are somewhere in the middle with condition reports being relatively lightweight and HomeBuyer’s reports being more in depth.  As such the former is more appropriate for newer and/or more standardised properties and the latter for properties which are neither particularly new nor particularly old, but still fairly standard. The value of a proper survey Money saved is worth as much as money earned and spending a little money on a home survey can save you a lot of money later since it will alert you to any issues of which the seller was unaware.  It is also worth noting that if the issue is news to the seller, they may agree that it is reasonable to lower the agreed price so the sale can still go forward, just on a slightly different basis. For surveys we act as introducers only.

Insurance might not be the first topic which comes to mind when you are trying to make light-hearted conversation, but it may well be the first topic which comes to mind when you are dealing with a challenging situation. It can be difficult to make generic comments about insurance because we’re all individuals and as such have our own individual needs, but it’s actually fairly easy to dispel some objections to taking out insurance. It costs too much There are various factors involved in the price of insurance but perhaps the most obvious is risk. In short, the more likely it is that you will need to claim on your insurance policy, the more that insurance policy is likely to cost. Obviously, there may be times when you and insurance companies have a different idea of how big a risk you are, for example, you think that your local area is a flood risk but insurance companies may disagree. In general, however, if you could reasonably view yourself as a low risk for insurance companies, then you can expect to pay relatively low premiums and while the opposite is also true, if you know you are a high risk then there is even more of an argument for having insurance to cover the risk. It’s also worth noting that in many cases you will have some degree of control over the cost of your insurance, for example if you are looking for health insurance then smokers can expect to pay more than non-smokers, hence, there is yet another benefit to stopping smoking. Even when there is little you can do to change your level of risk (and hence make yourself a more attractive customer), you may still be able to influence the cost of your insurance premium in other ways, such as by agreeing to pay a higher excess in exchange for a lower price. There’s no real benefit to it As a minimum, insurance can bring you peace of mind. It can also help you to manage your cash flow. Insurance premiums are predictable monthly payments and insurance policies will state the excess you have to pay on any given claim. After this, however, any costs which fall under the remit of your policy will be covered by your insurance company. You won’t have to find yourself scrambling for cash or trying to get finance to cover the expense. The basic rule of thumb with insurance is that the more something matters to you, the more effort you should make to protect it. For example, a solid pet insurance policy may mean the difference between being able to afford treatment for a beloved pet or having it put to sleep. Mobile phone insurance, by contrast, may or may not be worthwhile depending on your mobile. If you have a top-of-the-range handset, it may indeed be worth protecting, but if you’re happy with a cheap-and-cheerful one then you may be perfectly happy with the idea of just going out to buy a new handset if necessary. Insurance companies won’t actually pay out unless they absolutely have to This is probably true but also rather misleading. No company is going to make payments unless they have a genuine reason to do so, but any company which understands the importance of good customer service is most certainly going to pay out if a customer has a genuine claim on them. At the end of the day, insurance fraud is real and so it’s understandable that insurance companies tend to want some kind of substantiation of claims. At the same time, however, if an insurance company were to get a reputation for unreasonably denying genuine claims, then it would probably soon find itself in trouble with both the regulators and the media.

Switch on daytime TV and it probably won’t be too long before you run into an advert for some kind of insurance and if it’s life insurance there’s a good chance it will make the point that life insurance gives you the peace of mind of knowing that your loved ones will be in the best possible position to cope with your death.  This is actually a very fair point and the absolute best way to set up a life insurance policy is to place in in a trust. Trust(s) and protection In very simple terms, when you die your estate is yours to dispose of as you wish (with a very few niche exceptions), but the transfer of ownership may be subject to legal formalities and tax.  This can make it time-consuming and frustrating for your heirs to get access to money they may need to get on with their own lives.  Writing a life insurance policy into a trust essentially ring-fences it from the estate as a whole, so it can be paid out much more quickly.  As an added bonus, this means the proceeds of the policy will be excluded from the calculation of the value of the estate as a whole.  In fact, you could even use life insurance as a means to pay the anticipated IHT bill, although this is an option for which professional advice is particularly recommended. The importance of keeping your protection up-to-date Keeping your protection up-to-date doesn’t just mean remembering to pay your premiums.  It means making time to think about the nature of your cover, how much it is and who will benefit from it and making sure your cover always reflects your current situation rather than the situation when you took it out, however long ago that was.  Similar comments apply to your will.  Hopefully by now at least the majority of people understand the importance of making a will and this would be a good moment to emphasise that there are certain requirements to be met if a will is to be legally valid and so even though there are “will-making kits” you can use to draw up your will yourself, this is an area in which professional advice can easily pay for itself. Planning ahead can make life easier for everyone The Swedish have a tradition called “death cleaning”, which may sound rather gloomy, but is actually a very positive concept, which we might call “setting your personal business in order”.  Instead of leaving this until a time when you begin to feel yourself failing (we hope this will never come but need to be realistic), treat decluttering and organising your life and assets as part of an ongoing process, ideally in partnership with your intended heirs.  This gives you the opportunity to move on assets during your lifetime (remembering that you will almost certainly have to give up the beneficial interest in them) so that, hopefully, they will have ceased to form part of your estate upon your death (or at least qualify for some level of IHT relief).  You may have noticed that we used the term “assets” rather than possessions.  This is because these days some of your assets may be digital, for example social-media accounts, and you will need to think about what will happen with these.  As a minimum, you will want to think about the many online accounts you probably have these days and decide which of them are important enough that your next of kin/executor needs to have their details and how you are going to communicate them securely. For pension and investments advice we act as introducers only. For will writing we act as introducers only.