The Importance of You

July 2021

An individual’s wealth usually increases over the decades and most people hope to have something to pass on to the next generation.
This normally happens on death, but because people are now living longer, this means an inheritance is often received after the time when it would be of most use.
The worry is that an early gift could be wasted, or that it may affect their own standard of living.
Helping people spend and gift is the best part of my job and why, by working with different generations, we offer family discounts on fees.
Life has changed for those in their 50s and 60s. We used to be the older generation, but now many of us see ourselves as being the filling in a sandwich, looking after our parents and still looking out for our kids, sometimes this can last until we are in our 70s by looking after parents, elderly aunts and uncles or other elderly relatives.
50-70 is supposed to be our time, when we should do what we want while we can, but so many miss out.
Part of my role is to help you recognise the importance of YOU and what you want to do and achieve.
For some who have just had bank accounts, premium bonds and perhaps a cash ISA, the idea of investing in anything that has a risk of going down can be a frightening thought, even though they know it is possibly what they should be doing.
Many of the same people forget that’s exactly how their pension works, unless they are lucky enough to have a final salary pension.
To give an example of the power of investing, clients in our Ethical portfolio 3 have seen an increase of 45.54% over a combined 5 year period (including the low UK market last year) which, compared to savings accounts previously mentioned, is quite a return (past performance is no guarantee of future returns and funds can go down as well as up).
As an individual’s age goes up, so does their desire to pass more of their estate to children on death, even though their children tell them to spend it on themselves.
Where affordable, I encourage gifting during lifetime so that the benefit can be seen and enjoyment achieved. It can also help with Inheritance Tax Planning (IHT).
When the time comes and Inheritance Tax is due you could find yourself having to pay tax at 40%, however, if you spend beforehand you effectively get a 40% discount (paid for by not paying tax to the Government).
Who doesn’t like a 40% discount on spending?!

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