ISAs, SIPPs, SSASs, VCT, EIS… It’s enough to make your head and eyeballs spin. Judging by the amount of acronyms the financial services has, there’s some justification of the view that the industry is awash with abbreviations and jargon. No wonder it’s easy for people to view personal financial planning as over-complicated.

So let’s strip away the unnecessary complications and get back to basics for a bit. Personal financial planning is about just that – planning. A decent structure is the basis for a secure future and it really is quite simple. The key to personal financial planning is to provide security, whether it’s a specific security for your family, should the very worst happen and a breadwinner is taken out of the picture, or the general security of knowing that there is something to fall back on should plans not work out.

Personal financial planning is also about accumulating capital and securing it ready for use when you need it. Having plans in place and the capital to carry out those plans can give you great peace of mind. A large part of financial planning for many of us is about building up an amount of money so that we have the means to enjoy a comfortable retirement when the time comes to stop working.

So, how do you get to that stage – with financial plans in place and a variety of eventualities covered along with a financial ‘safety net’? It’s a process, take it step by step so it’s not an overwhelming task. There are many aspects of personal financial planning you can do yourself, along with some we’d recommend you take independent financial advice about.

Your first step on the road of personal financial planning is to get on track with your current finances. Sit down with a budget plan and work out exactly (and we don’t mean roughly with lots of zeros at the end of the numbers where you have taken a guess at it) how much comes in each month and how much goes out. This sounds very simple, but as most of us now tend to pay for almost everything on a card, be it debit or credit, it can be difficult to keep track of spending.

As accurately as you can then, write down everything you spend and just for a month, try an experiment – withdraw a chunk of cash and try to live off that ONLY. It might be old-fashioned but as road tests by some of Worldwide’s staff show, it can really work. Handing over notes and seeing the contents of your wallet depleted really does make you realise what you’ve spent.

After that, work out how much you pay each year on things like running your car, Christmas, household repairs, vets bills etc. then break it down into monthly amounts and put aside money for them. To make this easier, there are some banks which will allow you to have a “master” savings account and then you can name separate pots of money, a bit like saving in jam jars, but more secure! At the start of the month, put that away and then when the bills come in, you won’t be walloped by them.

If after this you’re still feeling daunted, there is plenty of help at hand for your personal financial planning. Even if you’re feeling confident about your budgeting, consider taking some independent advice to see what else you could be doing to plan your finances for the future.

Arrange a meeting with an independent financial adviser who can help you with your budgeting and personal financial planning. They will also advise you on what you need to do to make sure you’re secure and they’ll help you get there.

Security and peace of mind are priceless. Often people worry about the cost of such a meeting but you will usually have a free initial consultation where the costs of any further advice you need will be explained fully to you and it’s up to you to take it up or not.

If you would like a free budget planner, call Donna Hansen on 0845 230 9876 or e-mail info@wwfp.net.

A leading firm of Cornish independent financial advisers is urging local businesses to back one of its team in a national competition.

Ronan Marrion, a mortgage adviser at Truro and Wadebridge based Worldwide Financial Planning, is in the running for an award at the annual British Mortgage Awards

Ronan, who lives in Truro and is based in the Wadebridge office of Worldwide, was presented with a ‘commended’ trophy at the 2010 awards.

But Worldwide is hoping that with the support of the business community he can go one better.

Worldwide director, Neil Chamberlain, said: “We’re really proud of Ronan and the reputation he has built up since he joined us.

“He’s got the ability to build up great relationships with customers and referrers, and always works with integrity to provide quality advice.”

Through the application Neil is keen to highlight Ronan’s work providing an independent service catering for clients in need of £1million plus mortgages through exclusive relationships with private and high street banks.

Neil added: “Ronan is also great at delivering adaptable mortgage solutions that are client specific in changeable economic conditions, which is something that is really important at the moment.”

The company also want to showcase Ronan’s ability to support individuals requiring finance to purchase holiday let properties which are difficult to fund through conventional methods, as well as packaging and presenting mortgage solutions for high net worth individuals with complex applications and demanding needs and timescales.

Ronan said: “I really enjoy my job helping people find the best solutions. The market has been tough the last few years, but there are options and opportunities.

“It’s nice that Neil and the team want to put me forward and get the support of the business community.”

The closing date for nominations in Friday, May 18. To nominate Ronan in the Overall category please visit http://www.britishmortgageawards.com/static/voting.

For more information on Worldwide Financial Planning please contact 01872 222422.

An award-winning firm of Cornish independent financial advisers continues to lead the way in the run up to forthcoming changes in the financial services industry.

Donna Hansen and Lynne Williams, IFAs at Truro and Wadebridge based Worldwide Financial Planning, have both achieved level four accreditation for financial planning.

The company now has seven advisers who have reached the required level to carry on practicing from January 1, 2013 when the Retail Distribution Review (RDR) is introduced by the Financial Services Authority (FSA).

Worldwide director, Neil Chamberlain, said: “I’m really pleased that both Donna and Lynne have gained the accreditation ahead of the introduction of RDR.

“As a company we’re working hard to educate and support our clients and associates, as well as ensure our highly professional team is fully prepared.

“I think to have seven advisers already accredited eight months ahead of schedule is recognition of the hard work and dedication put in by the team.”

In order to gain the accreditation to allow IFAs to continue to offer financial advice Donna and Lynne have taken exams in regulation and ethics, investment principles and risk, personal taxation, pension planning, financial protection and financial planning process.

Donna Hansen said: “It was hard work and many hours of study, as well as the time to take the exams, but it has been worth it.

“It means our current and future clients can have further confidence in the support we are giving them.”

Lynne Williams, who only joined the company in February this year, said: “It feels like a huge achievement and it’s great to be in good company with Donna and the other six advisers here at Worldwide.

“We’re now looking to support the rest of the team to help them achieve accreditation.”

Under RDR the FSA wants to achieve a resilient, effective and attractive retail investment market that consumers can have confidence in and trust at a time when they need help and advice with their retirement and investment planning.

RDR states that consumers are offered a transparent and fair charging system for the advice they receive; that consumers are clear about the service they receive; and that consumers receive advice from highly respected professionals.

For more information please visit email info@wwfp.net or call 01872 222422.

We’ve had work, health and finance on our minds recently; in particular, how we can get all three working in harmony. Because of that, the following news items (which have appeared in the Trade Press and National Press over the last few weeks) caught our eye.

• Tax Breaks for lower paid Workers – proposals to offer employers tax breaks for providing benefits for Lower Paid Workers (1)

• Private sector referred to Office of Fair Trading (1)

• Think tank proposes end to Private Practice – NHS consultants to be banned from Private Practice? (1)

• NHS routine waits up 6% – Non-urgent waits increase during 2011 (1)

The overall picture, judging by the above news stories, is that private medicine is back in the news and back as a topic of discussion amongst many people, not just those in the health service. It’s an important and far-reaching conversation, which also raises a number of important issues for the Employee Benefits sector, particularly when it comes to health benefits.

In particular, Private Medical Insurance (PMI) has been suffering from a prolonged period of stagnation in take-up. The cause of this is reckoned to be a number of factors, including the removal of tax-relief for the over 65s, rate increases well above the rate of inflation, the uncertain economic climate, punitive tax liabilities (the P11D tax document) for employees and the perceived improvement in NHS waiting times.

The P11D issue merits a closer look. If you’re not familiar with it, it’s a document employers must draw up for any employee who is in receipt of certain benefits which are in addition to their salary e.g. a company car or PMI. Details of these benefits are sent to the revenue and assessed for tax purposes, with the employee being liable for any additional tax at whatever tax rate they are on. This can discourage both employers and employees to take up these benefits.

Currently, employers can offset the costs of providing PMI against tax and a recent suggestion to allow further tax breaks for lower paid workers (exactly how low-paid is as yet unspecified) would reduce this cost further. (1) But this suggestion does not address the issue of the tax liability for the employee.

The whole Private Medical Sector has been referred to the Office for Fair Trading to look at, in particular, quality of care and costs. (1) This move has been broadly welcomed by the private sector as it will provide answers to the most commonly levelled criticisms – particularly highlighted by the proposal from The Bevan Foundation to prevent NHS consultants from undertaking private practice. (1)

The perceived improvements in NHS waiting times have also been challenged by the reported 6% increase in waiting times for non-urgent NHS treatment during 2011. (1)

So what does this all mean?

It would suggest that the climate for Private Medical Insurance to grow again is improving, however a note of caution to accompany this is the contraction in the number of Providers, which has been caused by various acquisitions and mergers (for example, Pru Health’s take over of Standard Life Healthcare and Simply Health’s merger with Groupama which completed last month) which could lead to an increase in the cost of premiums, thus slowing down growth. (1)

However, the response to this could be the growing number of traditional cash plan providers who are introducing new products to bridge the gap between the two plans – watch this space for more details! (1)

In any event, it seems like the ideal time for companies to review their provision. Taking the time now to ensure your employee benefits are still right for you and your employees could well pay dividends in the future.

For a free chat about your employee benefit provision, call Dean Laley on 0845 230 9876 or e-mail info@wwfp.net.

Sources:

1. Health Insurance Magazine

Originally they had approached their high street bank, asking for a commercial mortgage, but because of a lack of acceptable security in the bank’s eyes, they had been refused.

This could have been the end of the line for their expansion plans, but our clients were determined to find another solution. The first step they took after their initial setback was to approach us as their financial advisers. Because of that, we’d like to share the story of how we were able to find a way for their business to grow as it’s relevant for many businesses out there.

When our clients first approached us, they told us they’d been nervous initially about talking to a financial adviser – not an uncommon statement for us to hear. Talking to an adviser can seem daunting, but we assure you that the advisers at Worldwide are not at all threatening and really quite ordinary!

In all seriousness though, any good independent financial adviser will recognise that taking advice can be a big step for someone to take. When we’re contacted by new clients, the first thing we do is listen.

This was the case with our clients who owned the hotel. During the first consultation with them, they told us all about their business, what they wanted to achieve and we established the current position the business was in. That’s probably another area that we advisers have an advantage over banks – we’re able to take the time to really get to know clients and their businesses.

As soon as we had that vital information, we decided that in this case we could give the bank a second chance. The next step in the process was to request from the hotel owners the information we knew their bank would want to make a re-assessment of the proposition. We then organised the information in the best possible way and presented it to the bank.

A few days later, we had our success story – the bank agreed to arrange a commercial mortgage as part of the solution topped up by access to a government backed scheme – Enterprise Finance Guarantee (EFG) and Asset Finance – which was secured against some of the assets the business already owned.

So what caused the problem originally? The trap the business had fallen into was being unaware that they had the ability to raise more finance within their own business. This has been true for many of our clients, who have been unaware of the potential of the assets they own. Even with the best of intentions, banks can, at times, be a little narrow-minded and so focused on the product that they miss vital aspects of your business.

A good independent financial adviser will be able to take a much broader look at the whole of your business and find solutions that your bank might not have been able to. Think of a good adviser as being a little bit like a detective, tracking down all the assets your business has and the best financial solutions for it.

As well as being a detective, your adviser will also take on the role of negotiator and liaison officer, working with you and all the other professionals involved in the financing of your business.

Maybe most importantly of all though, your financial adviser is there to support you and your business so you gain the success you deserve.

For a free chat about your business finance call Jeff Lenihan or Rebecca Bendle on 0845 230 9876 or e-mail info@wwfp.net.

Your property may be repossessed if you do not keep up repayments on your mortgage or any other loan secured on it.

So where do you start?

The first place a lot of people will think of is their bank. But in the long term, this could turn out to be very costly. Your bank isn’t necessarily going to have the same priorities as you, meaning your business isn’t necessarily going to be the most important thing on their minds. The more cynical amongst us might even say that the most important thing to a bank is trying to sell you products. So before you pick up the phone to your bank, consider an alternative – speaking to an independent financial adviser first.

For most of us in the business world, it is a challenging time at present. It means that good quality advice on how to access finance is even more crucial to your chances of success. We’re often approached by business owners who tell us they can’t get finance from their bank, or are worried that in asking for more money, their existing financial arrangements will end up costing more as well. But that’s not the end of the road. If this has happened to you, make a call to your financial adviser.

How can an adviser add value to your business?

That’s a question we’re often asked and there are several parts to the answer. When looking at your business finance proposition, a good independent financial adviser will start by reviewing the circumstances of your business and the type of financing you need. Even if your bank has rejected your finance request, your adviser is likely to be able to re-package the request. We’ve known of many cases where a bank has overturned its initial decision and agreed to lend after the request has been reviewed by an independent business adviser.

Alternatively, your adviser may well be able to find a competitive solution from another provider. The best advisers will have access to finance providers across the marketplace – from traditional high street lenders such as banks and building societies, to ‘niche’ providers who may not be directly available to the public.

Your adviser should also have extensive current knowledge of what types of finance and propositions lenders are prepared to support and should tell you immediately if they believe your finance request does not meet the current requirements.

Another advantage of using an adviser is that they can take an overview of your business, think ‘outside the box’, create a bespoke package of solutions for most circumstances and be creative with the solutions to business finance problems.

The best independent advisers will project manage the identification and provision of your finance solutions from start to finish and liaise with all the relevant professionals involved, such as your solicitor and accountant.

Talking to an adviser about your business’s finance could also open up a range of financial options you might not even have been aware of. All good advisers won’t just look at your business finance needs in isolation; they will take a holistic view of your business – looking at all aspects such as your pension provision, employee benefits and protection.

Organising, or reorganising finance for your business can be a stressful undertaking so let your adviser take on some of the strain and free yourself up to spend time on your business. After all, that’s what’s most important.

For a free chat about your business finance call Jeff Lenihan or Rebecca Bendle on 0845 230 9876 or e-mail info@wwfp.net.

Your property may be repossessed if you do not keep up repayments on your mortgage or any other loan secured on it.

Auto-enrolment pension scheme – most workers unaware

According to a survey carried out by insurer Aviva, almost 70% of workers are unaware of the auto-enrolment pension scheme which is due to begin on the 1st October 2012 and involves employees being automatically enrolled in a company pension scheme. Source: Guardian

Bank of England Governor backs government’s budget

Sir Mervyn King, the soon to be departing Bank of England governor, backed the government’s programme of austerity during a Radio 4 Today programme while also defending his record during his ten years as governor. Source: Guardian

£3 each compensation for former Rover workers

Former workers at Rover are to receive £3 each in compensation after a 7 year fight for redundancy payments after the collapse of Rover, which was Britain’s last biggest carmaker. Source: Guardian

Osborne rejects bank deal

Chancellor George Osborne has said he will not sign up to the European Union’s ‘watered down’ rules for capital requirement following the Basel III rules because it would make him ‘look like an idiot’. Source: Fundweb

ISA sales fall by almost £2 billion

Sales of Individual Savings Accounts (ISAs) fell by almost £2 billion during the last tax year (2011 – 2012) according to the Investment Management Association. Source: Fundweb

Weetabix bought by Chinese firm

Weetabix, the famous breakfast cereal, which was until 2004 a family owned company has been bought by Bright Foods, a Chinese company. The Weetabix brand also owns Ready Brek and Alpen. Source: BBC News

Members of Cornwall’s business community came together for a friendly cheese and wine tasting competition at the invitation of Worldwide Financial Planning in March.

The event at the Alverton Manor Hotel brought together Cornish professionals for a social event with a difference.

Guests were invited to form teams to pit their taste buds against the rest of the business community in a friendly test of their cheese and wine expertise.

And the ability to spot a Merlot from Rioja or a Roquefort from a Camembert was thoroughly challenged in the friendly competition.

Truro’s Experience Wine provided six different wines for teams to taste with each bottle disguised – each numbered bottle then had to be matched to the list of wines they were given.

In the second round of the competition teams were tasked with matching the right name to an array of exotic cheeses provided by The Cheese Shop in Truro.

At the end of the night two teams were level on points at the finish and the crown of Tasters of Truro had to be decided with a tie-break.

WC Tasters lost out narrowly to the inventively named Table 9, consisting of Matt Dewhurst from WWFP, Jonathan Wilde of Wilde Law, Charlotte Cole of Celtic Sheepskin, Will Atlee of Miller Commercial and Dave Rogers of Clydesdale Bank.

Neil Chamberlain of Worldwide Financial Planning, and captain of WC Tasters, said: “Nigel Ede of Experience Wine and Mike Freeman from The Cheese Shop were excellent and it really was a great night with some excellent wines and cheeses.

“Credit must also go to Jeannie Cain and Matt Higham from WWFP who – apart from Matt’s dubious decision on which should be the winning team – did a brilliant job of organizing the event.”

“The feedback has been extremely positive from all quarters and it was a really great opportunity to get the business community together.”

Pension and retirement planning now needs a multi-dimensional approach and with many choices available, it can seem daunting and quite often leads people to put planning off for another day. Unfortunately, a comfortable retirement isn’t something that happens by itself – it needs careful and active planning.

These days when it comes to retirement planning, we have a lot of choice, but as a trade-off, we also have to accumulate more money, in a wider range of assets, in order to be able to take advantage of the benefits such as tax allowances.

So what are the best actions to take when it comes to retirement planning? Does everyone have to do the same thing? By no means; although most of us still have the traditional view that a pension fund is the only way to plan for retirement, that doesn’t have to be the case. There are many actions you can choose to take and your choices should be based on what you want for and from your retirement.

Ideally, planning for your retirement should be viewed and addressed in three clear and distinct stages:

1. Accumulation years – the time you spend building up as much capital and asset value as possible, as tax efficiently as possible

2. De-cumulation years – which should be the fun part of your retirement! This is the time you spend enjoying life after work and having the money to do it, while keeping the tax liability on your income as low as possible

3. Succession planning – when you decide who, apart from the revenue, is the intended beneficiary of your wealth, created through a life’s work

And how you approach these stages of your retirement depends upon a number of factors:

• What you expect your income needs for the future will be

• What you plan to spend your capital on

• What your income tax position is now and what it is likely to be in retirement

• Whether inheritance tax planning is necessary

Let’s take a closer look at some of the options you have for accumulating funds for your retirement. The tax relief on contributions into pension arrangements is still very attractive, but other investment options have their plus points and should be included in the bigger planning picture.

Individual Savings Accounts (ISAs) may suit some people. For the 2012/2013 tax year, your ISA allowance is £11,280. Income generated is currently tax free but bear in mind that the funds in your ISA will be included as part of your estate for inheritance tax (IHT) calculations

Offshore bonds are another possible option. Their key points are as follows:

• Your capital can be held in a series of tax-efficient ‘wrappers’ which match your attitude to investment risk

• They allow funds to ‘roll up’ outside the UK tax environment

• You can control when to pay tax and how much

• They can be a valuable tax wrapper for top up retirement savings

Shares may also appeal to some people as a part of their retirement plan. Although they are at the high end of the risk scale, they provide investors with potential for real capital growth and the option to benefit from dividend income.

Cash deposits can still form a useful part of your retirement plan. Current low interest rates, taxation and inflation reduce the value of these but they can provide some security in volatile times

If you own a business, the sale of it, if timed properly can be a significant capital generator for retirement – especially when entrepreneur’s relief is claimed to significantly reduce the capital gains tax (CGT) charge.

Residential and commercial property can provide useful income and lump sums in event of a sale.

With so many choices, it’s always helpful to have a discussion with a good independent financial adviser, who can look at your circumstances and ambitions and help you take the right actions for the right outcome.

For a free consultation about your retirement planning, call Nick McBreen on 0845 230 9876 or e-mail info@wwfp.net.

In the recent budget it wasn’t the cut in the higher rate of tax, the granny tax or even the new child benefit rules that  irritated most people, especially those in Cornwall. What was possibly the last straw was the attack on the iconic Cornish pasty! (1)

As financial advisers, we at Worldwide are often asked to help clients navigate through the complex taxation system so they can minimise the amount of tax they need to pay. So we’d like to offer you here a quick guide to the ‘pasty tax’.

To clarify: prior to the latest budget, pasties and other freshly baked products were exempt from VAT, or more correctly, they were zero rated. (2) Now the rules have changed and VAT at the full 20% will be payable if the pasty is sold at above ambient (room) temperature. So VAT is payable as the pasty comes out of the oven and becomes exempt as it cools.

What this means in theory is that the price of a pasty could fall from £2.40 to £2 as its temperature drops. Ambient temperature depends on the weather, the season or whether the shop is air conditioned. A pasty sold at 20c in the summer would most likely be below the ‘ambient air temperature’ and VAT free. On the other hand, during winter it would be warmer than the surrounding air and therefore liable for VAT.

There is potential here for several absurd scenarios: one being that people at the front of a long queue could in theory pay a different price than those at the back of the queue for the same product as the pasties cooled!

It seems likely that bakers will be responsible for keeping separate records of VAT paid on warm pasties and exempt cold pasties with separate cabinets for each sort. Will this cooling process be inspected by the pasty police? Who will be the first baker to go to prison as a pasty martyr? On a more serious note though, there is also the potential for people to reheat pasties incorrectly at home and contract food poisoning. And of course, the whole point of buying a pasty is to eat it fresh from its paper bag.

A little sense has prevailed, however, as some freshly baked products such as bread will still be exempt from VAT. But that does beg the question, in the interests of simplicity and to avoid bringing the whole taxation system into disrepute, why not exempt all food from VAT? After all, it was first introduced as a “luxury tax”.

The problem with all these indirect taxes, which governments of all shades are increasingly relying on, is that the millionaire pays exactly the same tax as the unemployed person. Even though their ability to pay is vastly different. It’s difficult to see VAT as a ‘fair’ tax. David Cameron was keen to tell us how much he enjoyed his holiday pasty, but will his next one be hot and with VAT, or cold and VAT free?

Tax is currently a ‘hot’ topic (if you’ll pardon the pun) so perhaps we should suspend judgement until we know all our politicians’ tax records as Boris Johnson and Ken Livingstone are intent on doing in the race to be London Mayor.

If so, we wouldn’t be the first nation to do so. In Norway, the nation’s tax records are published online. (3)

There, every citizen’s income, income tax paid and total wealth are published annually online. But not how many pasties they eat or how much indirect tax they pay through taxes like VAT.

Would that be a good thing? We’re not so sure. If everyone knew how much you earn and how much tax you pay, a trip to your local for a pint of Guinness could be marred by the landlord asking “How do you survive on your wages?”

Your answer might well be “I eat my pasties cold!”

For a free financial consultation, call Andrew Stallard on 0845 230 9876 or e-mail info@wwfp.net.

Source:

1. Guardian

2. HMRC

3. BBC News