The Queens Jubilees/ An economic comparison

First of all, may I wish Her Majesty the Queen many congratulations on her Diamond Jubilee of her ascension to the throne in 1952. I am one of many who admire her courage and energy in fulfilling her many duties and we are honoured to have her as our Queen.

The preparations for the Diamond Jubilee across the UK are gaining pace with Bunting, flags and homemade crown posters appearing in many villages and street corners. It certainly brightens many communities at a time of austerity and with many families, companies and individuals working hard to make ends meet.

It makes me feel rather nostalgic, as I reminisce about what for me was the last big Jubilee of 1977. To age me, I was 10 at the time and the prospect of a street party was very exciting indeed. With Union Jack hat made, I remember (in true British style) that it poured with rain that afternoon and we moved the party indoors. It did not dampen any spirits and much merriment was had by all. The children filled to the brim with tartrazine (a now well-known orange squash colour additive of the time), they played for hours. All great fun!

Obviously, at the age of 10, it was not my time to understand the detail of what was happening to the economy at that time and have referred back to the history books to investigate this further. We all know that the past is not a guide to the future, however, it nevertheless offers some interesting insight into the time then, and possibly a few comparable’s with what is happening now.

From an economic point of view, the 70's were in general a difficult economic period. With the price of oil reaching (at the time) a peak in 1973, Industrial disruptions and high unemployment to name but a few issues, the background to Her Majesty's Silver Jubilee was not that pretty. Sound familiar? As other points of reference, Labour was in power (with James Callaghan), Jimmy Carter became the 39th President of the United States of America in January, Punks and the Sex Pistols were rebelling at every opportunity and we endured the 'long hot summer of '76' the year before. We had only been in the European Economic Community (as it was known then/Now European Union) at that time in 1973 (Joining in 1973 with the agreement signed by Edward Heath).

But what was happening in the economy in June 1977? I have detailed some of the economic headlines/indices below:

• (RPI) Inflation Rate: 17.7%
• Bank Base Rate (04th May 1977): 8.50%
• UK Unemployment Level: 5.6%
• Dow Jones Index (01 June): Open 898.66,
• Litre of Petrol: 18p a litre (as was Diesel!)
• Gold Price 08/06/1977 per ounce: $142.30
• Average House Price 1977: £13,600
• Price of a Pint of Lager Beer (Probably from a Party 7 tin if you remember those!): 20p
• Price of a loaf of bread: 9p

Sources: Wikipedia, Yahoo, Guardian, AOL, Others

I am sure that these facts and figures will make interesting reading. It is ironic that the gathering of this information was achieved via the internet at the touch of some buttons. You could not have done that in 1977!

And what of the future? Many pundits have suggested that we live in unchartered waters, and I am sure that this will prove (in many quarters) to be true. What we can be certain of is that change will occur, both in personal circumstances/life phases and the economic environment which we live, work and retire in. Seeking independent financial advice on (and reviewing) your financial planning on a regular basis is important in ensuring that you get the best from your finances as times change.

I hope you enjoy the long weekend of the Diamond Jubilee and if you are looking at your financial situation over the summer, then come and speak to Chapters Financial Limited and see how we can help you with your future planning.

Past performance is not a guide to future performance and no individual financial advice has been provided in the content of this blog.

Keith G Churchouse, Chartered Financial Planner
Director, Chapters Financial Limited

Chapters Financial Limited is Authorised and Regulated by the Financial Services Authority. Number 402899

£1,000 a week? How much is the cost of Long Term Care?

The number of Long Term Care enquiries has been climbing significantly over the last few years. We are all living longer and the strains/demands of modern day life certainly seem to be taking its toll on the quality of life that many have in their later years. 

Many enquiries we receive come from those who have received Power of Attorney (or Court of Protection Appointed Deputy) to care for someone’s affairs, either financial or health related, at a time of need. There are two types of Lasting Power of Attorney, namely: 

•         Property and financial affairs

•         Health and welfare

A good example of when advice is needed is when someone enters a care home because they are struggling to look after themselves through failing health. Of course there are other reasons to enter a care home, such as the social aspects of maintaining regular contact in a community. It is at this time that the issue of money and meeting the cost of care becomes very important. 

Attendance Allowance?

The greatest concern (and responsibility) is obviously to meet the costs of any care provided to the person in your care to ensure they are comfortable. You may get some assistance towards costs, such as the Attendance Allowance. There are two levels of tax-free Attendance Allowance (Higher rate currently £77.45 p.w and Lower Rate, currently £51.85 p.w /tax year 2012/2013) and these are detailed further here: http://www.direct.gov.uk/en/MoneyTaxAndBenefits/BenefitsTaxCreditsAndOtherSupport/Disabledpeople/DG_10018710

Financial Assistance?

If the total assets available (including the value of the home) fall below £23,250 (tax year 2012/2013), your local authority may help with care costs, however the cover they provide may not be to the standard or in the location you would prefer. More details can be found here: http://www.moneyadviceservice.org.uk/yourmoney/life_work_and_study/guides/caring_for_someone.aspx

What can it cost?

In my recent experience, many are paying around £1,000 per week for their long term care requirements. It is this somewhat daunting requirement which places much pressure on those appointed as Attorneys to balance the budget in ensuring that any capital available, such as that released from a house sale, is planned carefully to ensure that care is provided both now and into the future. With inflation expected to remain higher than anticipated (see Bank of England May 2012 statement http://www.bankofengland.co.uk/publications/Pages/inflationreport/ir1202.aspx) ,it is also important to build increases in care costs into the financial planning undertaken. 

Variations and the quality of a care facility

I am aware that care cost can vary significantly dependent on where in the UK the care is provided, and you might want to investigate this carefully. Others prefer alternative solutions, such as remaining in their own home, with care being provided there. Whilst assessing the facilities available in your area, you can also look on a provider’s website to see the details of their last Care Quality Commission assessment and its outcome. More details of the work of the Care Quality Commission can be found here: http://www.cqc.org.uk/

Existing Income

Existing income will need to be taken into account, such as that received from (as examples) State pension, private/occupational pension arrangements or investment income. The income tax charge made on this income will also need to be calculated to identify the net income available for care.

The nil rate income tax band increases with age (subject to limits) and again this needs to be taken into account when planning for the provision of care fees.

Providing additional income from capital

One possibly simple way of achieving protection for someone who has recently entered care without any pre-existing protection, is to use an annuity to purchase income. This option has its security, but many find that the initial capital cost can be concerning. Each situation is different and the health of the Attorneys charge may well have a bearing on this decision. Another alternative is to generate additional investment income to help towards costs. This is likely to be subject to the Attorney’s views on investment risk. There are many combinations of plans that can be used to create a suitable solution and the main key is to take independent financial advice as soon as possible to create a plan that can be implemented in a timely fashion to get care costs in check. 

The Standard Financial Planning Rules apply

Emergency Deposit Funds

As with most types of financial planning (and planning for the provision of long term care costs is no different) I would recommend that you maintain an emergency deposit fund for the person in care. This should be a readily accessible cash/deposit type fund to meet any unforeseen costs that may occur. You can still use ISA allowances to enjoy tax efficient returns on cash funds, as an example. 

Will

Make sure there is a Will in place and that it is held securely for future reference.

Record Keeping

I would recommend that records of costs, expenses and income are maintained and that any advice received is maintained and reviewed to ensure that the responsibilities of the Attorney are being met.

Summary

Many new Attorneys and Deputies find the prospect of financial planning to meet care costs a daunting task, usually because of the capital involved and the high income that this needs to be generated to meet on-going care costs. Good quality advice is important in this instance, to ensure that income, and any shortfalls, can be understood and balanced and that this advice should be reviewed regularly. Chapters Financial can help you with this financial planning.

Chapters Financial Limited is not responsible for the content of external web-links. 

No individual financial planning advice has been provided in the content of this blog. You should speak to your own independent financial adviser (IFA) or please contact Chapters Financial Limited on 01483 578800.

Keith G Churchouse FPFS

Director

ISO22222 Certified Financial Planner

Chapters Financial Limited, Guildford, Surrey

Chapters Financial Limited is authorised and regulated by the Financial Services Authority.

The ethics of Chapters Financial. A view from our Para-Planner, Suzie Harrowing

I encountered quite a culture shock when arriving at the small family-run business of Chapters Financial Limited in the leafy market town of Guildford, having been City based before. I have been in the Financial Services industry for around 10 years, eight of these in central London, and it is has been a breath of fresh air to work at Chapters Financial Limited for the last four months.

Firstly, it is a joy to arrive at my desk within 20 minutes after leaving my front door rather than a 10 minute walk to the station, 45 minutes on a packed commuter train and half an hour (if things were running smoothly) of fighting my way through the London tube network. It certainly sets you up for a much happier and more productive day!

The ethics of this small Independent Financial Adviser (IFA) office are entirely contrasting to that of a large organisation and I have discovered this on a daily basis since working at Chapters Financial. My foremost observation is trust between client and company. Keith Churchouse, owner and Director of Chapters Financial, has a thorough understanding and knowledge of his clients and establishes an important and continuing relationship with each one. He knows far more about his clients than any adviser I have previously worked with, and this gives him a competitive advantage. Clients learn to trust honourable IFA’s and remain loyal to them, even during difficult economic periods.

Loyalty is a valuable commodity in the financial services industry and results in a low exit rate of clientele. Chapters Financial sees a steady increase in client numbers, usually approaching the company through word-of-mouth or the Chapters Financial website, with minimal clients leaving to go to competitors. Contrasting this, large organisations see a particularly high turnover of clients, many being enticed by the aspiration to increase their fortune, but comparable numbers being tempted away by more lucrative deals with rival organisations.

Many global organisations these days believe that their primary and only responsibility of business is to make money whilst abiding by the law. This clearly benefits the shareholders. However, working at Chapters Financial has shown me that businesses should benefit all their stakeholders – clients, providers, employees and their families, and the community within which the business operates. Chapters Financial are greatly involved in community matters and not a week goes by without Keith attending one of his many local Business Forum meetings. Many more large organisations are becoming involved in community matters in these times of increasing ethical standards, but they cannot get involved to such a degree as the smaller companies can. Being involved to such an extent as Chapters Financial is, lends itself to further trust and recognition from employees and local business people alike.

Although it has taken a few months to adjust to the small business working life, it has been a journey of discovery, an eye-opener and a sharp personal learning curve. My opinion of Financial Advisers has most definitely done a u-turn; financial advice is not about selling a product but about finding the most appropriate financial planning based solution to suit the clients’ needs. A simple concept but one that, unfortunately, is not widely used in financial services today.

Suzie Harrowing is a Para-Planner with Chapters Financial Limited. This is a non-advisory role. 

If you would like to consider your future financial planning further then please contact Chapters Financial Limited through this website or by telephone on 01483 578800.

No individual advice has been provided in the text of this blog and you should seek individual independent financial advice for your own circumstances.

Chapters Financial Limited is Authorised and Regulated by the Financial Services Authority. Number 402899

Chapters Financial receives two awards at the annual Financial Adviser Life & Pensions awards 2012 in London

The Financial Adviser Life & Pensions awards 2012 took place in central London on the 25th April at Sartoria Restaurant, the prestigious venue in Savile Row.

The Financial Adviser profession, along with their insurance and investment provider colleagues, celebrated the years success with these coveted awards.

Guildford High Street based Chapters Financial Limited, received two awards at the event, winning the independent financial advice category of Online IFA of the Year 2012 and being commended in the Small IFA Firm of the Year category. There to collect the awards was Chapters Financial Limited’s Director, Keith Churchouse.

Following the event, Keith said ‘ It was great to be nominated for the awards again this year and I was delighted to collect two awards for the recognition of the teams hard work. We live in challenging economic times, making high quality financial planning ever more relevant, and it is great for Chapters Financial to have their strengths and quality recognised with both awards’.

Related press article: Financial Adviser

Chapters Financial Limited is Authorised and Regulated by the Financial Services Authority. Number 402899 

Happy New Tax Year 2012/2013

We have now moved into the new tax year and this provides the opportunity to use your new tax allowances where appropriate, such as your ISA allowance (new limit of £11,280 maximum Stocks & Shares ISA or £5,340 into a cash ISA), Capital Gains Tax allowance (£10,600) and gift allowances for inheritance tax savings, amongst others, such as pension allowances.

As a point of interest, it was reported at the end of February 2012 by the Office of National Statistics (ONS) that contribution input to ISAs (Individual Savings Accounts) outstripped contributions to pensions in the tax year 2010/2011 (the last tax year) for the first time. With around £15.8bn going into ISAs and (only) £14.2bn going into pensions (excluding stakeholder plans) the margin was quite significant at this crossover point.

If you would like to review your annual tax allowances for this new tax year, in conjunction with your financial planning, then please contact us at the office by telephone on 01483 578800 or by email.

No individual advice has been provided in the text of this blog and you should seek individual independent financial advice for your own circumstances.

Chapters Financial Limited is Authorised and Regulated by the Financial Services Authority. Number 402899

All change in the delivery of UK Financial Services

The delivery of UK retail financial services will change at the end of this year, with the implementation of the Financial Services Authority’s (FSA) Retail Distribution Review, or RDR for short from the start of 2013.

There are also many changes planned for the FSA itself, including parts of its structure changing to the Financial Conduct Authority (FCA), with control being maintained by the Bank of England.

I am now writing on the additional important changes for this subject in this blog because the final details have now been firmly set.

The changes

The highlights of the changes are detailed as follows:

• As before, the Financial Adviser will agree the remuneration for their services (both initial work and on-going advice) with you in advance. However, services will be paid for on a fee basis, either via an initial fee or by a deduction from the plan being established (or a combination).

• Future financial advice will be offered on an Independent, Restricted or Simplified basis. For independent advice, an Adviser must consider all relevant options for you and do so free from any restrictions or product/provider bias. This makes sure that the advice offered to you is truly independent.

• That the consumer will receive advice from qualified, competent, trained professionals who subscribe to a code of ethics (renewed each year) ensuring they act with integrity and treat their customers fairly.

How will Chapters Financial Limited meet these new requirements?

Having moved to a comparable financial advice system to the one detailed above to achieve these outcomes in May 2007, we hope that you have seen the benefit of using our service over the last five years. As we approach the end of this year, and the full implementation of these new requirements, we are delighted that we have the appropriate systems in place to be able to continue to offer independent financial advice into 2013 and beyond.

Powerful proposition

We also believe that maintaining our independent status will make our financial planning proposition even more powerful, with the numbers of other independent advice providers expected to reduce because of the new requirements being made.

We have seen the number of new enquirers and referrals from existing clients rise in recent years (as Chapters Financial Limited and formerly Churchouse Financial Planning Limited) because of the standards in financial planning that we have set and maintained and this is evidenced by the recent industry awards we have detailed in our last newsletters.

Referrals are always very welcome and we thank you, our clients and Blog visitors, for your continued support.

If you would like to consider your future financial planning further then please contact Chapters Financial Limited through this website or by telephone on 01483 578800.

No individual advice has been provided in the text of this blog and you should seek individual independent financial advice for your own circumstances.

Chapters Financial Limited is Authorised and Regulated by the Financial Services Authority. Number 402899

ISAs overtake pensions as the savers choice

It was reported at the end of February 2012 by the Office of National Statistics (ONS) that contribution input to ISAs (Individual Savings Accounts) outstripped contributions to pensions in the tax year 2010/2011 ( the last tax year) for the first time. With around £15.8bn going into ISAs and (only) £14.2bn going into pensions (excluding stakeholder plans) the margin was quite significant at this crossover point.

Why this tax efficient savings preference change has happened could be for a number of reasons, with many citing the ever growing complexities of pension rules and the relatively simple (but less tax efficient) ISA rules, which allow accessibility to the capital invested. With many family budgets squeezed in the last few years, it may be this flexibility which has increased the desirability of this savings option.

It is also clear that with the introduction of changes to allowances for pension contributions, such as the Lifetime Allowance (falling from £1.8m to £1.5m next tax year), Fixed Protection, the annual allowance limit of £50,000 in a Pension Input Period / PIP, amongst others, the planned 'simplification' of pensions in 2006 has not been achieved. Also, with pension Auto-Enrolment for many employers and employees on the imminent horizon, an additional set of requirements will be introduced. Further details of these issues are detailed in our webpage ‘National Employers Savings Trust/ Auto-Enrolment/Workplace Pensions’ here.

It is good to see the annual contribution allowance limit climbing for ISAs rising from the current limit of £10,680 in this tax year (£5,340 into Cash ISA/ £5,340 into Stocks & Shares ISA) to £11,280 in the coming tax year (2012/2013). Further benefit has also been seen by recent rises in fixed rate ISA deposit terms provided by some providers, as they endeavour to maintain market share in this busy sector. Also, with recent rises in many equity markets, some have seen encouraging rises in their capital values.

Past performance is not a reliable indicator of future performance and fund values can fall as well as rise.

If you would like to consider your savings, investment and pension planning further then please contact Chapters Financial Limited through this website or by telephone on 01483 578800. No individual advice has been provided in the text of this Blog and you should seek individual advice for your own circumstances.

Chapters Financial Limited is Authorised and Regulated by the Financial Services Authority. Number 402899