Tag: financial advice

20-20 vision for your finances

Happy 2020!

We’ve just stepped into a new decade and all the surprises that brings. But as we set off on the next chapter, I always think that the exciting thing is the uncertainty. Yes we know some things are definitely going to happen, like most of our New Year’s resolutions will fall by the wayside, the UK will leave the EU and that we’ll all get older and hopefully a little wiser. 

However when it comes to the markets, we can’t know for sure how they are likely to impact our personal finances. Having said that, we do have the next best thing available to us; our ability to review and amend!

Whatever your long-term plans may be, now is the time to review how the last year or two has performed for you and to put yourself in the right position to take full advantage of the financial opportunities now available. A review of your Savings, Estate Planning, Insurance Covers, Investments and Pensions now will allow you to make any changes and tweaks in your finances in order to make sure that you reach the end of the 2020’s in the financial position that you set out to achieve.

Now’s the perfect time to inspect an ISA

If you don’t currently have an ISA in your portfolio, then can I suggest that you add one to your list of things to consider this year.

It’s a great tax-efficient way of approaching investments, as your returns are free of income and capital gains tax. You can invest in an ISA up to a limit of £20,000 of which £4,000 can be paid into a LISA (for those eligible). 

As the annual deadline for ISA’s is 5 April 2020, this means that you potentially have two bites of the cherry available to you throughout 2020. By that I mean that you can currently take advantage of the ISA Tax-free opportunity for the remaining of the tax year, plus you can then do the same again on 6 April 2020. Please don’t leave it too late though, as some providers take several working days to process new ISAs, so leaving things until the beginning of April may mean you miss the closing deadline.

Take a look at a LPA And Will

The chances are that you could be amongst over 50% of the UK adults, including many in their 50’s and 60’s, who don’t currently have a Will in place. If that’s the case, could I respectfully suggest that writing one really should be high on your financial agenda for 2020. 

Whilst you may already have a Will in place, or high on your ‘To Do’ list, can I also prompt you to consider Lasting Power of Attorney (LPA), as incapacity often strikes without warning. Which means that sorting out a LPA can save your estate and it’s beneficiaries considerable costs and avoid unnecessary and lengthy delays.

If this all sounds a bit daunting, please be assured that putting Will and a LPA in place is nowhere near as difficult or costly as many people think. If you are unsure regarding whom to approach to best sort these things out, then start by contacting us. We can easily arrange Wills and LPAs through our sister company Bridgewater Wealth Protection www.bridgewaterwp.com

If you do already have a Will or LPA, then please take this reminder as an opportunity to review it. Checking that it is up to date and that it reflects your current wishes.

Improve your Insurance

Even if you have insurance covers in place, now is an opportune time to review things. Our advice would be to just make sure that each plan covers you for everything you need and that the costs are correct. Your circumstances may well have changed since you took any cover out. If that’s the case, then it’s critical that you ensure you are covered for all you require and that there are no plans available that could provide better cover and possibly a lower premium too.

The wrong product can end up costing you a great deal of unnecessary expense and stress, so please take the time to review and compare cover options.

Investigate your Investments

After a bumpy year (The Queen’s words, not mine) in politics and the markets, now is an excellent time to take stock and to just check that your investment strategy is on course to achieve your goals. 

An excellent starting point would be the latest report regarding your mutual funds. There you can check to make sure that they still match your appetite for risk and that you are also happy with where your money is being invested.


A good tip, for when you consider your investments, especially when thinking about your exposure to risk, is to always include your pension, ISA’s funds and stocks together. Do this even when the funds are spread around different accounts and investment products, that way you will get a better feel for your overall portfolio.

Peer into your pension

Lastly and certainly not least, is your pension. 

Your pension is one of the most valuable assets you can have, yet it often gets overlooked; and I feel that more often than not, we don’t give pensions the attention that they deserve. 

Regular reviews of your Pension makes excellent financial sense, especially as legislation has changed massively in the last few years. So if you haven’t recently reviewed your pension position, then now would be a very good moment to do so.

During your review, ask yourself the following questions:

• Are the level of your contributions correct? Too little could leave you
wanting in retirement and too much could create problems with your
Reduced Lifetime Allowance
• Does the strategy still fit with your time horizon, changes in your current
situation or attitudes to your investment risk?
• Is your pension scheme up to date and able to take advantage of the new
pension freedoms, or is it an older scheme that can’t benefit?
• Does your pension fit with your retirement and estate planning?
• If your pension is a Final Salary Scheme, then with the increases in
transfer values, is it worth requesting a transfer value and restructuring
the pension?

Although this isn’t every question you should ask, they are certainly questions you should know the answers to, if you want to ensure that your pension is in the best place it can be.

We’re here to help whenever you need us

Although no one can see into the future, having a close look at your finances now is the difference between approaching 2020 with a clear financial strategy or setting yourself up for a cry of ‘I should have gone to Specsavers’ later in the year! 

I hope that this blog goes someway to starting the new financial year off on the right foot. If however there is something specific you would like to talk to us about regarding your plans, then please get in touch with us at Bridgewater Financial Services, where we will be delighted to help guide you through your individual options and strategies.

Wishing you all a Happy and Prosperous 2020.

Now’s not the time to play ‘financial chicken’

Sometimes it’s good to be the odd one out!

The election is over, now let the dust settle

Finally we have the outcome and a new strong direction for the UK, with Brexit now happening in the way that Boris Johnson has planned. There will be international reactions to the new political landscape and the markets will no doubt respond too. In fact, at the moment the exit poll was announced Sterling rose significantly; and we can expect to see further fluctuations across the board in the UK markets. Which is why, whatever way you voted, I’d like to just focus your attention on your finances and what you should and shouldn’t do next. 

Psychologists tell us that we have been hardwired over the last 100,000 years to behave the way we do. With most of these behaviors being based on primal instincts that determine our survival as individuals and as a species. So in many ways, these behaviors are so deep routed at a biological level, we don’t stand much of a chance of avoiding them as individuals. That is of course, if they are not pointed out and guarded against.

The modern world really is an extremely new phenomenon, especially when we look at it through the lens of evolution. The vast interconnections and the exchange of up to the minute information and ideas are truly phenomenal. So have some sympathy for that part of your brain that has been hardwired to live in a world that lasted for around 98,000 years and now no longer exists; and never doubt the influence it still has over you and your finances!

Here’s how a caveman still influences your decision-making

We all carry around these hardwired modes of behaviour; and one that may come to the forefront in the next couple of months is what psychologists call ‘The Bandwagon Effect’

There is an incredibly powerful compulsion to follow the herd. It’s been bred into us at the very base level of our existence; and in uncertain and stressful times, it comes right to the front of our thinking. That’s because for tens of thousands of years, belonging to and conforming to a group was a very successful strategy for survival. Staying with the group is far better for survival than going it alone. Hence, over thousands and thousands of years the desire to follow the herd has been bread into all of us over time – and is now a fundamental human instinct. 

How many times have you fallen for the appeal of a busy mediocre restaurant verses a fabulous empty one saying “Let’s eat here, it looks full so it must be good”?.. It’s the Bandwagon Effect in full swing.

When the wheels come off and that impacts your finances

An excellent and extreme example of The Bandwagon Effect causing financial problems was laid out in the dramatic rise and crash of Bitcoin. That particular bandwagon was one that people couldn’t get on fast enough, despite common sense telling them that it wouldn’t last. For the majority of ordinary investors, they bought Bitcoin at the height of its value only to watch the value plummet. 

Whilst Bitcoin is an extreme example, I use it to illustrate the Bandwagon’s grip on sane minds. So my words of caution are aimed at the post-election markets in general, over the short-term.

March to the beat of your own drum

Over the next few weeks or months the markets are going to react to the first quarter of the new Government. That may well create fluctuations and the odd perceived stampede toward the Bandwagons. My advice would be to bide your time and wait. 


Think about theold adage ‘If you see a bandwagon, it’s already too late’

Markets hate uncertainty and have been reacting to the political deadlock that we have been living with through the post Brexit Referendum. 

However, now is the time for the markets to settle again. It’s certainly not the time to take peer-pressured decisions on investment acquisitions or disposals. If you spot an opportunity whose value is created by a sudden influx or departure of groups of investors, please think again. Remember that bandwagons often artificially alter a market for the short term. So get some impartial advice and consider your options calmly and pragmatically. Please bear in mind that the powerful drives to follow the herd have been with us for over 100,000 years and have served us incredibly well. However, they are your worst enemy when it comes to the financial markets.

Unleash your inner Spock!

I’m not sure if there is such a thing as The Bandwagon Effect on Vulcan. However, I would say that approaching the financial markets with a Vulcan like emotionless clarity, and a determination not to get carried along with the crowd, is the only way to overcoming the possible pitfalls of market hysteria. 

The markets are probably ahead of you anyway

Most of the serious financial markets have had any political upheavals already costed into them. So what you will be witnessing in any fluctuations is merely a settling of the market.

Also, don’t forget that the markets are now interlinked throughout the world. So, whilst the UK General Election may seem incredibly important to us, to the international markets it’s just a small bump in a very long and well-established road – and nowhere near as significant to performance than many of us believe.

Don’t just take our word for it though – talk to us too!

If you have any questions or worries regarding the current or future financial and investment markets, then pleasecontact us at Bridgewater Financial Services where we will be delighted to help guide you through your individual options and strategies.

Don’t sleep through the changes in your pension statement

Wake-up packs and how NOT to lose sleep over them

“Pensions Statement” is possibly the right word for those of us who have thought about these things. Wake-up pack feels a little more like a hysterical last minute plea!

However, whatever your thoughts on the name, as of Friday 1 November 2019, The Financial Conduct Authority (FCA) has determined that every pension customer should receive a Wake-up pack, from the age of 50 onwards. The pack will be provided by the pension provider and will contain a one-page summary of the pension details and should be updated every five years until the pension is eventually cashed in.

The one-page summary will include:

• The value of your private pension
• Your assumed retirement date
• The contributions made that year by you and your employer
• General information on retirement planning

All Wake-up packs will also carry a risk warning that is tailored for the individual that the packs is being sent out to. So as you will imagine, the risk warning to a 50 year old will be different to that of someone who is 75 years plus. These warnings will be tailored according to the information that the pension provider holds on the client receiving the pack.

Although providers will have free rein to include whatever risk warnings they want, most will cover the risks of pension scams, contributions and investment risk as well as an explanation of tax issues.

What’s the big idea?

The motivations and idea behind this new wake-up pack is to encourage you to consider your approaching pension and to give you the time to put more money aside to cover your retirement, if it seems necessary.

The wake-up pack will also contain information regarding the Government’s Pension Wise Service. Along with a summary of the possible advantages of shopping around when purchasing a pension in the first place, as well as the best practice to follow when exploring this. Assuming you haven’t already covered all of this off with your Financial Adviser.

Packs will start to arrive:
• Within two months of you reaching your 50thBirthday
• Four to ten weeks before reaching the age of 55 years
• After 55 they will arrive every five years until your pension is cashed in

Additional triggers for the packs are:
• When you ask for a retirement quotation (if it’s more than six months before you intend to retire)
• When you are considering, or have stopped, an income withdrawal arrangement
• When you decide to take further benefits from your pension.
• When you request to access your benefits for the first time

Although packs do not need to be sent out, if you have already received one in the last year. Which is good news for the trees, as all wake-up packs must highlight that guidance is available from Pension Wise and, apart from the one sent at aged 50, will also have to be accompanied by a brochure from the Money Advice Service.

So has your financial adviser been asleep then?

You would assume that all these issues and more would have been taken care of by your financial adviser – and in most cases, you’d be right (depending upon who your adviser is).

So don’t worry, as these new requirements are mainly aimed at helping non-advised clients make better decisions for themselves. If however there is anything in your wake-up pack that you have any questions about, then don’t hesitate to contact your adviser and ask.

As always, if you have any questions regarding your current or future pension strategies, then please contact us at Bridgewater Financial Services where we will be delighted to help.