RTS Financial Planning

04/11/2021

Sue had two defined benefit pensions from previous employments and was keen to transfer them to a defined contribution pension.

They really wanted:

- The flexibility to take out a lump sum from their pensions and clear the debts.
- Husband David to then retire.
- Sue to take early retirement in the next few years or at least go part-time.
- Both to spend more time together enjoying themselves.

It turned out David was already receiving enough secure pension income that they could afford to cover all their essential spending in retirement if the debts were clear. So, they didn’t need lots of extra secure income that wasn’t flexible.

We built the file and passed the case on to our specialist defined benefit pension team.

It took a few more months due to long delays from the defined benefit pension administrators but eventually we got the result David and Sue wanted. It was recommended that both defined benefit pensions were transferred.

I met with David and Sue the other day and to see the smiles on their faces was amazing.

They have paid off their mortgage, cleared their debts and David is now retired. David receives his list of jobs to do around the house each day from Sue!

02/11/2021

Some tips for trying to get defined benefit pension advice.

Once you commit to regulated defined benefit pension advice you are usually committed to paying the advice fee which can be a percentage of your overall transfer value.

If the advice is not what you were hoping for then you could find you have paid out a lot of money and are still stuck where you started.

When trying to get defined benefit pension advice here are some tips for giving you the best chance of getting the right outcome you desire and that is appropriate:

1. It’s likely that most financial advice firms will only look at your case once you are aged 55 or over.
2. It’s usually easier to get advice if you have already left the employer or scheme so there is no further contributions going into the defined benefit scheme.
3. Speak to a range of Financial Planners and ask about their defined benefit pension advice process.
4. Are they independent?
5. Can they recommend alternative pensions from the whole of the market?
6. Don’t request a cash equivalent transfer value until you have found the Financial Planner you wish to work with.
7. Ensure you are able to get abridged advice first which will give you an indication of the likely outcome with little or no cost to you.

A defined benefit pension is likely to be either your biggest or second biggest asset in life so it is vital that you consider all your options and understand what you are getting into.

26/10/2021

There has been a lot of speculation in the press about what will be announced in the Budget this week.

They go into overdrive on scary headlines about how much extra tax you're about to pay.

The truth is no one can be really sure on what's about to be announced until the event has taken place so there is no point worrying about it beforehand and you certainly shouldn't be making any adjustments to your financial plan based on rumour.

Once the Budget is done we can take stock, see what needs to be adjusted, if anything and what opportunities there may be to be more tax efficient.

So for now chill out and have fun!

25/10/2021

In the past, holding investment assets inside a Trust was a fairly popular option for those that had reached their limits for ISAs and pensions. It gave you control over the assets but at the same time reducing your personal taxes.

Nowadays Trusts are subject to more and more taxes including an entry charge and ongoing periodic charges depending on the type of Trust in use.

If you are looking to invest in the region of £5 million+ then a private OEIC could be a good option.

If you were to hold shares directly in a large portfolio outside a pension and ISA, then every time you traded there is the potential that you could incur a large CGT bill.

A private OEIC removes this problem.

A private OEIC could be the solution if you have maxed out the allowances available for tax wrappers such as pensions and ISAs.

20/10/2021

Saving money in cash and waiting for the stock market to crash before buying in is a terrible investment strategy.

The more sensible and proven way to invest is to invest monthly and not worry about timing the market.

"Buy the Dip" is such a terrible investment strategy because when it wins, it tends to win by a little, but when it loses, it can lose by a lot.

A deep dive on Buy the Dip and why it is a subpar investment strategy.

19/10/2021

If you are passionate about helping others and gifting to charity do you have a structured plan? Or do you give to whoever asks?

Here are 5 tips for building your philanthropy plan:

1. Start with your why - What is it you want to achieve with your money? What causes do you care about most?

2. Do you want to go very broad give a little to a lot or a lot to a little? We would advise an 80/20 approach. Gifting the bulk of you donations to the causes you really want to focus on and then saving some for different causes that ask you from time to time.

3. How do you want your money spent? Research or a new building? Or our you creating your own charitable fund to invest?

4. what level of involvement do you want? Do you want to be part of the charity and manage certain aspects or are you happy to sit in the background?

5. What structure will you gift to? An established charity or will you set up your own fund?

18/10/2021

Rock bottom interest rates have led to the returns from cash ISAs being pretty useless. Especially when compared to the returns from stocks and shares ISAs that are invested in global equities.

So should you be ignoring cash ISAs?

Well, there is a handy little feature of cash ISAs that could still mean they are worth considering for some people. So don’t write them off just yet.

There is a handy little feature of cash ISAs that could still mean they are worth considering for some. So don’t write them off just yet.

15/10/2021

After the last 2 years we have had you can understand why global wealth took a significant dip in the first part of 2020.

By the end of March, global household wealth had already declined by around 4.4%.

Interestingly though, after much monetary and fiscal stimulus from governments around the world, global household wealth was more than able to recover, finishing up the year at $418.3 trillion, a 7.4% gain from the previous year!

Interesting stats:

- Individuals worth more than $1 million constitute just 1.1% of the world’s population, they hold 45.8% of global wealth.

- 55% of the population owns only 1.3% of global wealth.