INVESTING FOR GOOD – THE LOW DOWN

INVESTING FOR GOOD – THE LOW DOWN

by | Aug 3, 2021 | Uncategorized

INVESTING FOR GOOD – THE LOW DOWN

16

July, 2021

ESG Investing

Advisers

Money Management

Investors are increasingly choosing to put their money into companies that seek to make the world a better place.  

Over half of advised UK adults surveyed now want to move into ESG investing, according to a new study by insurer Prudential[1]

“ESG investing” is where the focus is on backing companies with strong credentials when it comes to environmental, social and governance (ESG) matters. 

There are businesses all over the world that are dedicated to the environment by developing cleaner energy, sustainable transport as well as reducing plastic waste. 

Under the “social” part of ESG, the focus is on a company’s treatment of staff and suppliers, and to what extent it upholds labour and human rights. 

Governance relates to issues include ensuring fair leadership of the business, matters of executive pay and its stance on shareholder rights. 

In 2020, the amount of money invested in funds which aim to be responsible in these areas trebled year on year from £3.2 billion in 2019 to £10 billion, according to The Investment Association[2]

The Prudential study would suggest that these figures could grow substantially again this year, with 61% of respondents (who have a financial adviser to handle their investments) saying they care more about the environment and the planet than they did before the pandemic. 

While these numbers are encouraging, 36% admit they actually have no idea what their current investments – including pensions – are invested in.

While having a financial adviser means that investors don’t need to worry too much about understanding the finer intricacies of global stock markets, ESG is becoming a worthy talking point – perhaps the new dinner party topic.

At Tavistock our ACUMEN protection portfolio offers a one-size-fits all ESG policy which looks into seeking maximise risk adjusted returns, whilst prioritising investments that exhibit strong quantitatively verifiable ESG characteristics.

Of course, this is not all about our own moral compasses and desire to help improve our world.

Investing for good is also rewarding from a returns point of view.

The FTSE4Good index of ethical stocks has beaten the FTSE 100 index of leading UK stocks over one, three, five and ten years. Globally, the MSCI World SRI Index for socially responsible funds has beaten the MSCI World Index over three and five years[3].

“ESG is becoming a worthy talking point”

When it comes to choosing your investments, rather than selecting the individual companies in which to invest, you can use funds that are dedicated to ESG investing.

There are broad funds that look to cover a wide range of issues, and more targeted funds that may look just to seek opportunities within one theme. For example, investing only in companies that are tackling climate change by contributing to the decarbonisation of the world economy.

Ready to explore ESG investing further?

Your adviser can talk you through the options for investing in ESG funds for your ISA or pension. There are plenty to choose from with more and more funds being launched each month.

Together you can find the investments that are seeking to improve areas you feel passionate about.

Source

[1] https://www.mandgplc.com/~/media/Files/M/MandG-Plc/documents/prudential/02-06-2021-Covid-increases-desire-for-sustainable-investing.pdf 

[2] The Investment Association: https://www.theia.org/media/press-releases/ps52bn-inflows-active-funds-december-second-highest-inflows-record

[3] https://www.fefundinfo.com/en-gb/news/esg-investors-setting-the-pace-for-change 

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This Blog is published and provided for informational purposes only. The information in the Blog constitutes the author’s own opinions. None of the information contained in the Blog constitutes a recommendation that any particular investment strategy is suitable for any specific person.

ONLINE PENSION SCAMS ARE ON THE RISE.

ONLINE PENSION SCAMS ARE ON THE RISE.

by | Jul 20, 2021 | Education, General Investing, Planning, Retirement

ONLINE PENSION SCAMS ARE ON THE RISE

20

July, 2021

More than two thirds of savers believe that they would be able to spot a pension scam if they saw one. However, the Financial Conduct Authority (FCA) says that this consumer confidence may be misplaced. Since January, over  2m has been lost to pensions scams. The regulator has warned that savers are nine times more likely to accept ‘advice’ from someone online than a stranger in person.

Research from the FCA, found savers are considerably more likely to be deceived by scammers’ tactics online than they would in person. The average loss to pension scams this year was 50,949, according to complaints filed with Action Fraud – more than double last year’s average of 23,689.

Online scammers are not being selective, with pension pots big and small being targeted. Reported loses range from  1,000 to as much as 500,000. The regulator found pension holders were five times more likely to be drawn in by a free pension review from a stranger online than someone in their local pub.

In a response to try and tackle this, the regulator has revamped the messaging of their scams campaign, urging savers to “ flip the context”, to help make scams easier to spot.

“just over a third are not able to recognise time-limited offers as a sign of a scam.”

Mark Steward, executive director of enforcement and market oversight at the FCA, said: 

“Imagine a stranger in a pub offering free pension advice and then telling you to put those savings into something they were selling. It is difficult imagining anyone saying yes to that.”

“It’s no different online. Whether you’re on social media or checking your emails, if someone offers you free pension advice, ‘flip the context’ and imagine them doing the same thing in real life. Stop and think how you would react.”

The FCA did find that half of pension savers were unlikely to make an ‘impulse buy’ in general, however, just over a third are not able to recognise time-limited offers as a sign of a scam.

The guidance from the FCA is this:

Whether you are on social media or checking your emails, if someone offers you free pension advice, ‘flip the context’ and imagine them doing the same thing in real life.

The FCA have said they are concerned about the over-confidence of savers as this could lead to them letting their guard down and failing to check on the firms in which they are dealing with.

When dealing with and receiving advice from financial professionals, savers can visit the FCA register to check whether their adviser is registered and see if there are any warnings attached to them.

Source: https://www.fca.org.uk/news/press-releases/scammers-target-pension-pots

PROVIDING NEWS AND VIEWS TO SUIT ALL NEEDS

This Blog is published and provided for informational purposes only. The information in the Blog constitutes the author’s own opinions. None of the information contained in the Blog constitutes a recommendation that any particular investment strategy is suitable for any specific person.

Starting your own business: mistakes to avoid

Starting your own business: mistakes to avoid

by | Jul 9, 2021 | Education, Planning

STARTING YOUR OWN BUSINESS: MISTAKES TO AVOID

09
JULY, 2020
MONEY MANAGEMENT

ENTREPRENEURSS

FINANCIAL PLANNING

CASH FLOW

Starting the journey as a business owner can be an exciting and rewarding experience, however, it is important to avoid money management mistakes and learn how to take calculated risks that will benefit your company. With a sizable number of new businesses failing within their first year, it’s important to learn from past entrepreneurs’ mistakes to avoid them yourself in the future.

Common money management mistakes

1. Not having a detailed financial plan

Not having a detailed financial plan will likely lead to imprudent spending. Creating a balanced business plan, which details short, medium and long-term goals, will help you to see the bigger picture, minimising mistakes and leading to greater financial returns. Careful planning will help keep finances on track and help keep your cashflow under control.

2. Mixing of personal and business finance

It may be tempting to use one bank account to organise your home and business finances. However, this makes it easy to lose track of bills, extra costs, and revenue. It will also make it near impossible to create an effective financial forecast.

“Cashflow is king and has a significant impact on a business’ success”
3. Misunderstanding cashflow

Cashflow is king and has a significant impact on a business’ success with many new and even experienced entrepreneurs overlooking its importance. Cashflow represents the variance of money flowing in and out of the business. Poor cashflow is likely to become an issue for example if clients are not paying for your services by their due date.  Creating an efficient process to monitor accounts payable and received will help you know when to chase the payments in and out whilst managing future financial requirements and expectations.

4.Limited accountancy knowledge

The world of finance can be complicated, therefore daunting and feel over demanding, so it is important to learn key terms and rules you will need to follow and why. Educating yourself will lead to greater money management skills and better results. Don’t shy away from a financial professional straight away as they can help you identify cash flow issues, provide advice, and point you in the right direction to find a solution. It’s important to focus on the right things.

5. Managing Business Deductions

Every business must monitor and control expenditure, which should be budgeted for, and categorised. This will help you to improve cash flow and manage money effectively. Make sure to keep receipts and invoices organised to refer back to ready for when tax season arrives.

Money management is one of the most important parts of a business and should be taken seriously from day one to avoid business-threatening problems. To find out more in-depth information that could benefit you, find online resources and/or talk to a financial professional today.

PROVIDING NEWS AND VIEWS TO SUIT ALL NEEDS
This Blog is published and provided for informational purposes only. The information in the Blog constitutes the author’s own opinions. None of the information contained in the Blog constitutes a recommendation that any particular investment strategy is suitable for any specific person.

HAVE I SAVED ENOUGH FOR MY RETIREMENT?

HAVE I SAVED ENOUGH FOR MY RETIREMENT?

by | Jun 18, 2021 | General Investing, Planning, Retirement

HAVE I SAVED ENOUGH FOR MY RETIREMENT?

18

JUNE, 2021

Retirement
Pension Pot
Goals

Retirement can be a daunting thought. It can cause the best of us additional stress and anxiety as the big day gets ever closer, always wondering if our pension pot will prove to be enough. The amount needed to fulfil your dreams will largely depend on the lifestyle and post retirement plans you have in mind.

How long do you need to work for?

The answer to this will obviously vary from individual to individual, but one thing is clear, the bigger the sum in your pension pot, the earlier you will be able to retire. Some people choose to carry on working for many years after their State Pension Age, often for the very reason that they want or maybe even feel they need to build up a larger sum after their career ends.

It’s also important to consider your workplace pension, especially if you choose to reduce your work hours as you get older. This will have a direct effect on how much you get from the company into your pension. If this concerns you, it’s something you should talk to your employer about.

A recent study by Which?* suggests that you will need around 757,000 in your pension pot to enjoy a ‘luxurious’ retirement, but reports that at least  265,420 would be required to live comfortably, but much will depend upon your circumstances and also where in the country you chose to retire.

Your final pension pot on your last working day is not necessarily the final number you have to just live off, until it runs out. There are ways to grow your money after you have retired.

Your goals are important

It’s worth sitting down in advance to give some detailed consideration to what you want to achieve throughout your retirement. Maybe you are simply looking to cover all your bills and live a comfortable lifestyle without stress or worry. Perhaps you are looking for a more active lifestyle full of activities and holidays which will inevitably eat into your pot. These decisions will have an impact on the amount you need in the pot before you retire.

Looking at creating and itemising your own personal roadmap could help to set these goals and provide a rough estimate on the final figure you’ll require to reach them. The roadmap could include:

• Ideal age of retirement

• What you want to accomplish

• What lifestyle you want to lead – such as travelling or hobbies that may incur costs

We all know life doesn’t always work out to plan. Many things can change over time but having a guide that maps out what you want to do and how you want to live can help make the process of retiring easier. It will give you a clearer idea about what’s needed to navigate your way to achieving your plan.

“It is never too early to start, build up your pension pot as soon as possible.”

Quick Tips – How many have you already done?

• It is never too early to start, build up your pension pot as soon as possible.

• Review your workplace and personal pensions to ensure you are satisfied.

• Benefit from workplace pension contributions.

• Increase contributions when life changes occur.

• Add little contributions here and there – every little helps!

• Find old workplace pensions that may have been lost and collate into one pot.

• If you want to check you are saving enough for your retirement then contact your adviser.

* https://www.fca.org.uk/publications/research/financial-lives-2020-survey-impact-coronavirus

PROVIDING NEWS AND VIEWS TO SUIT ALL NEEDS

This Blog is published and provided for informational purposes only. The information in the Blog constitutes the author’s own opinions. None of the information contained in the Blog constitutes a recommendation that any particular investment strategy is suitable for any specific person.

The mystery of the missing pensions

The mystery of the missing pensions

by | Jun 10, 2021 | Planning, Retirement

THE MYSTERY OF THE MISSING PENSIONS

10

JUNE, 2021

Pensions
State Pension
Retirement

It’s been widely reported that millions of people have lost track of their workplace pensions as people change jobs and move house so often.

An estimated £19 billion is sitting unclaimed, with the average pension pot valued at £13,000. But it seems the problem is not exclusive to private pensions.[1]

A new report has revealed that 250,000 State pensions have gone missing, leaving people without a monthly income to which they are entitled.

Financial consultancy Lane, Clark & Peacock (LCP) claims said there were 8.78 million people in the UK aged 70 or over, but only 8.53 million are receiving a state pension. This breaks down to around 97,000 men and 155,000 women.

Under state pension rules, all over-80s can claim a pension of £82.45 a week regardless of their National Insurance contribution levels – but 107,000 are getting nothing.

This means that around £400 million has gone unclaimed every year, affecting 65,000 women and 42,000 men.

There are a handful of reasons that some of the people identified in this study might not be receiving their State pension.

Some will have deferred their payments. The attraction of doing so, for those who don’t need the income yet – perhaps if they are still working – is that the State Pension payment increases by the equivalent of 1% for every nine weeks you defer. This works out as just under 5.8% for every 52 weeks. So by deferring for those 52 weeks, you’ll get an extra £10.42 a week (just under 5.8% of £179.60).

Equally, the amount of State pension paid depends on how many years of National Insurance individuals have paid. You need at least 10 years to qualify.

There’s also a small number of people that claim certain disability benefits or carers benefits past pension age which can reduce or eliminate their entitlement to a pension. However, the report points out that these reasons only explain a fraction of the ‘missing’ 250,00 pensioners.

“Retirement planning is key to make sure you have enough money for the lifestyle you want.”

LCP’s report is calling for a Government-led campaign to raise awareness to reunite people with their State pension, and ensure people claim what’s rightfully theirs. This could include local authorities and health services who deal with the over 80s making sure that they are taking up their entitlement to a State pension. Or even an automatic payment – at the moment the State pension still needs to be claimed, it doesn’t just start paying out.

Steve Webb, former pensions minister and partner at LCP said: “The Government needs to do much more to identify those who are on zero state pensions and to make sure that they draw the pension to which they are entitled”.

This is not the first time that the Department for Work and Pensions (DWP) has been in the spotlight for problems with State pension payments. One high profile case has been the £3 billion underpayment of pensions to around 200,00 elderly, widowed and divorced women[2].

The DWP has admitted fault and more than 74,000 married women are due a windfall of as much as £23,000, and widowed retired women will receive an average payment of £17,000.

Time to take action

It’s important to check with the DWP if you are being paid the correct amount.

Anyone that thinks they may be eligible to receive a State pension can find out how to apply at www.gov.uk.

For further information about over-80 state pension eligibility, you can visit www.gov.uk/over-80-pension/eligibility.

A State pension is of course just one element of the wider financial picture when it comes to retirement as it cannot be relied upon alone.Retirement planning is key to make sure you have enough money for the lifestyle you want.

A financial adviser can help provide the right path to financial security.

Source: [1] https://www.ifs.org.uk/publications/15422

[2] https://www.bbc.co.uk/news/business-56275415 

PROVIDING NEWS AND VIEWS TO SUIT ALL NEEDS

This Blog is published and provided for informational purposes only. The information in the Blog constitutes the author’s own opinions. None of the information contained in the Blog constitutes a recommendation that any particular investment strategy is suitable for any specific person.

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