Do you keep meaning to sort out your will? We can help you

Life is busy, we get it. But is anything more important than being in control of your future? Recent research* suggests that only 44% of UK adults have made a will, which means that you’re far from alone if you haven’t yet got around to completing what, for some, appears to be a daunting task.

It’s always worth bearing in mind that if you die without a will, the law decides who inherits everything you own (your assets) according to certain criteria called ‘intestacy rules’. So your assets may not be divided up as you would like, meaning your loved ones’ future isn’t in your hands, but in the hands of HM Treasury.

What is a will?

A will allows you to direct how your assets are distributed after you die. These might consist of properties, bank balances or prized possessions. If you have a business or investments then your will describes in black and white who will receive these assets and when. It also enables you to leave gifts to a charity or charities of your choice, should you wish to.

In short, a will is the only way to ensure your money, property, possessions, and investments go to the people or the causes you care about most.

Don’t put it off

A 2023 report* from the National Will Register found that 42% of adults in the UK hadn’t spoken to anyone about what should happen to their assets after their death. Even among the age group most likely to have written a will, three in ten over 55s hadn’t discussed their wishes with anyone.

It’s easy to understand why people put off such major decisions but this isn’t a subject which should be parked – it’s one that needs to be proactively tackled before it’s too late.

Which is where we come in. Getting it right is too important to leave to chance, so get in touch and we can ensure you’re directed to the right place to ensure the will you write is uniquely designed to express your wishes and safeguard your loved ones’ futures.

Approved by The Openwork Partnership on 07/02/2024

Will writing is not regulated by the Financial Conduct Authority.

Will writing

Will writing

Overpaying your mortgage: should you do it?

Hardly a day goes by without the cost of living hitting the headlines. For many homeowners the increasing costs of owning and running a home is having a huge impact on household budgets. Even if you are near the top end of your monthly budget, or are expecting a ‘payment shock’ when you come to remortgage next, you may be wondering whether it’s worthwhile paying more than the minimum repayment each month, with the aim to save money in the long run.

So, what are the benefits of making mortgage overpayments?

  • Mortgage-free sooner
    Overpayments can either be a one-off lump sum or a regular overpayment made throughout the year. Overpaying on your mortgage means you can potentially clear your mortgage balance quicker.
  • Reduce the amount of interest you pay
    It could also make sense to overpay on your mortgage rather than keep your money in a savings account, because you may earn more in interest savings on your mortgage than you could earn in a typical savings account.
  • Access to better rates in the future
    Lenders will offer you better rates if you have a lower loan to value. The more you can pay to reduce your mortgage, the potentially lower interest rates you’ll have when you come to remortgage to a new deal.

Are there any downsides to overpaying your mortgage?

Overpaying on your mortgage might not be right for everyone. Using savings to overpay on your mortgage could leave you with less cash to fall back on in an emergency.

Not all lenders have the same rules for overpaying and there may be a penalty fee called an Early Repayment Charge (EPC) if you overpay too much.

You should only make overpayments if you’re sure you can afford them. It’s a good idea to make overpayments if you already have an emergency fund, and you don’t have any other, more pressing debts that need to be repaid.

It’s always a good idea to discuss your options with an adviser, we can help guide you through all your mortgage options including advice on making overpayments.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Approved by The Openwork Partnership on 07/02/2024

Mortgage Overpayment

Mortgage Overpayment

 

Consolidating your pensions – is it a good idea?

Jenny is a 47-year-old Account Manager with a long and varied CV.

She hasn’t quite had more jobs than hot dinners but, when she thinks about the various pensions she’s acquired over the years, sometimes it feels that way.

Jenny has recently been considering consolidating pensions. But is combining her pensions necessarily the best way forward?

There are several potential advantages of consolidating your pensions.

Easier to manage – One of the main advantages Jenny might gain by combining her pensions is it should be easier for her to manage her retirement pot and reduce her chances of losing track of any savings.

In October 2022, the Association of British Insurers reported that three million UK pension pots worth £26.6bn were no longer matched to their owners, putting these savers in danger of missing out on significant sums of cash.

Lost pensions are worth an average of £9,470 each and often become unmatched from owners who fail to tell providers when they move home. If you’ve lost track of a pension, the government’s pension tracing service may help you find it.

Lower costs – By combining her various pensions, it’s also possible Jenny will be able to reduce the fees she pays.

She’s currently paying separately for the administration of each of her pensions. This isn’t very cost effective and makes it difficult for Jenny to keep track of what she’s paying in total.

Better returns – If Jenny’s various pensions aren’t working hard to grow her savings, consolidation may be a good option.

By switching to a provider that offers more investment options than those available through some older schemes, she may be able to make her money work harder and potentially increase the size of her pension pot.

Increased flexibility  – Schemes set up before pension freedoms were introduced in 2015 may not be as flexible as newer schemes.

By combining her pensions, Jenny might benefit from greater freedom in how she’s able to access her money.

Income drawdown came into effect in 2015. This makes it possible for people to withdraw money from their pensions from the age of 55. Older pensions may not offer this option.

Before consolidating pensions, there are some important considerations

Do existing pensions come with valuable benefits? Jenny might be better leaving a pension where it is, if transferring money out would mean she’d end up sacrificing valuable benefits.

Benefits she might not want to give up include:

  • a guaranteed annuity rate
  • the ability to withdraw more than the standard 25% tax-free cash sum allowed under drawdown
  • being able to take a pension earlier than 55
  • life insurance or critical illness cover

Are any of the existing pensions final salary pensions? Final salary pension schemes offer a guaranteed income for life, inflation protection and they may pay out to a surviving spouse if Jenny dies after reaching the scheme’s pension age.

Often, it makes sense to leave final salary pensions where they are.

Are there exit fees? If any of Jenny’s current providers charge significant exit fees, she’ll need to make sure those costs don’t outweigh any potential gains.

As she won’t be needing her pension for over ten years, it may be cost effective to switch despite hefty exit fees. However, if she was closer to retirement, there may not be enough time for any gains she might make through higher returns to outweigh the exit-fee costs.

How are her current pension schemes performing? If Jenny’s current pension schemes are generating strong returns, it might not be worth moving them for the sake of a little less admin.

She shouldn’t assume that moving her money will result in a bigger pension pot.

The importance of expert advice

Deciding whether to consolidate pensions isn’t always straightforward. Jenny may well benefit by getting help from a qualified financial adviser. A professional will make sure she doesn’t inadvertently lose access to valuable benefits or reduce the potential returns of her investments.

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

Past performance is not a reliable indicator of future performance and should not be relied upon.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen. 

Key takeaways:

  • Whether it’s a good idea to consolidate your pensions will depend on your personal situation and pension schemes.
  • Combining pensions can make them easier to manage and reduce costs, as well as offering the potential for increased returns and more flexibility.
  • It’s possible you may sacrifice valuable benefits by consolidating your pensions.
  • Final salary pensions are usually best left where they are.
  • Hefty exit fees may mean it’s not cost effective to move your money.
  • If your current pensions are already generating strong returns, it may not be advisable to consolidate.
  • Getting professional advice could prevent you making a costly mistake.

Approved by The Openwork Partnership on 27/02/2024

 

Support your family finances

As we approach the end of the tax year, there’s still time for you to support your family finances, and ensure you use your allowances in an efficient manner.

Kick start your child’s financial future

Saving for your children’s future is a huge responsibility, although a rewarding one. To give your child a head start in life, you can open a child’s pension or a Junior ISA.

Both can be opened and managed on behalf of the child by a parent or guardian until the child’s 18th birthday. The pension limit is currently set at 100% of the child’s earnings (if applicable) or £3,600, whichever is the lower amount, but funds cannot be used until retirement, whereas the Junior ISA funds can be accessed after the age of 18 and could be used for things like university education or first home deposit.

The gift that keeps on giving

Gifts can be a great way to express love, appreciation, and support to your loved ones, but you can also use them to your tax advantage. As of 2023/2024, you’re entitled to an annual tax-free gift allowance of £3,000. This is also known as your annual exemption. With your annual gift allowance, you can give away assets or money up to a total of £3,000 without them being added to the value of your estate.

If you don’t use the full £3,000 gift allowance in one year, you’re allowed to roll it over to the following year. However, you’re only allowed to do this once, so you can’t roll any allowance you haven’t used over for a second year. If you use an unused allowance as well as this years, it would allow married couples or those in civil partnerships to gift up to £12,000 in one tax year.

If you die within seven years of making cash gifts of more than £3,000 in any one tax year, it may be included in the value of your estate and therefore potentially liable to inheritance tax. This is known as a potentially exempt transfer, or PET.

Additional gifts exempt from inheritance tax

Individuals are allowed to make additional gifts for special events such as Christmas, weddings, and birthdays. You can make gifts to family members, if you can prove the gift comes from your income and doesn’t affect your standard of living. In other words, to remain exempt from inheritance tax, once you’ve given the gift, you must still be able to maintain your usual standard of living.

Charitable donations and gifts to institutions such as art galleries, museums and heritage funds are also exempt from gift tax. In fact, giving to a registered charity may be a good way to reduce your income tax liability, particularly if you’re a higher rate or additional rate taxpayer.

Even if you don’t need to pay inheritance tax on gifts from parents, bear in mind that there may be other tax implications to consider. Income or gains arising from the gift could result in a capital gains tax charge for example. Whereas If you sell your assets gradually over several years, instead of all at once, you can keep the gains just within the annual allowance and reduce capital gains tax liability.

In a nutshell

There is still time to use your tax and pension allowances efficiently before the end of the tax year. Reach out to us today for guidance on building a financially strong future for you and your family.

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

Approved by The Openwork Partnership on 12-2-2024.

The 2024 Spring Budget: Winners and Losers

At 12.30pm yesterday, Chancellor of the Exchequer Jeremy Hunt announced the UK Spring Budget, as well as the economic and fiscal forecast by the Office of Budget Responsibility.

These legislative announcements are game-changers for Britain’s economy, and Hunt’s announcements included a number of sweeping changes that could potentially affect the personal finances of everyone living and working in the United Kingdom.

In laying out the Spring Budget, Hunt reinforced the government’s dedication to building the British economy while also helping working families.

Hunt’s last announcement, made back in November, included boosts to minimum wages, an increase in State Pension, and a reduction to the headline rate for National Insurance. As of today, the government is maintaining their low-tax strategy by decreasing National Insurance even further, alongside major initiatives aimed at helping drivers, families, those in debt, and other crucial economic groups.

So, ultimately, who wins and loses? Who will benefit? Who will miss out? We’re breaking it all down in this post.

The Winners

Employees

Perhaps the most notable development from the Spring Budget announcement was the continuing drop in the main rate of National Insurance.

Referring to the tax increases for higher-income individuals, Chancellor Hunt stated that: “because we’ve asked those with the broadest shoulders to pay a bit more, today I go further. From April 6th, employee National Insurance will be reduced by another 2p, from 10% to 8%.” This is in addition to the reductions from November’s Autumn Statement, when the rate was brought down from 12% to 10%.

The cut is primarily aimed to benefit employees instead of employers. For example, today’s reduction would be worth around £450 for someone on a full-time salary of £35,000. However, think tanks warn that tax cuts that lack a highly specific target may do more harm than good.

The Institute for Public Policy Research (IPPR) says the cut would cost the government around £10.4 billion, and although that money would then be divided amongst taxpayers, it’s unlikely to end up in the hands of those that need it most. Since high-income individuals benefit most from National Insurance cuts, almost half of the money would go to the richest 20% of households, while only 3% would benefit the poorest 20% of families.

While a National Insurance cut would increase annual household disposable income, the IPPR warns that the negative impact on public services negates this benefit.

Families claiming child benefit

Around 500,000 families will gain almost £1,300 from an increase in the high-income threshold for child benefit. Hunt says he will change the way child benefit is paid. At present, high-income thresholds only apply to individuals as opposed to households, which is set to change.

However, as the transition would take a significant amount of time to enact, the Chancellor announced an immediate solution by increasing the higher income threshold from £50,000 to £60,000.

First-time home buyers

Hunt claimed that the government is on track to deliver over a million homes, opening up the property market and helping young people get onto the property ladder. More than £188 million has already been allocated to building new homes, and over £242 million is still to be spent on building homes across London.

In addition, Hunt stated that a higher rate of property capital gains tax is to be reduced from 28% to 24%, in a bid to increase revenues by increasing the rate of transactions.

Drivers

Fuel duty has been frozen at 52.95 pence per litre since 2011. When the Ukraine War threatened to send prices skyrocketing, a temporary 5-pence reduction to fuel duty was introduced in 2022 to balance things out.

That reduction was extended in 2023. But it has now been extended yet again by Jeremy Hunt in today’s budget announcement, preventing a 13% increase in fuel duty according to the chancellor. Scrapping the increase could cost the government around £2 billion, according to independent think tank Resolution Foundation. While obviously benefiting drivers and the UK industry in general, the plan could have notable climate consequences.

Arts, the media, and the film industry

To help maintain creative sector growth in the UK, the Chancellor has announced a wave of tax relief measures for the British film industry. For example, the rate of tax credits for visual effects studios will be increased, and a 40% tax relief on gross business rates for eligible film studios in England until 2034 was announced. Additionally, the budget included a new tax credit for UK independent films made with a budget under £15 million.

Hunt also announced £26 million in maintenance funding to the National Theatre, and stated that the tax relief for theatres will be made permanent. The relief rate now sits at 45% for touring and orchestral productions, and at 40% for non-touring productions.

Households on universal credit

The Chancellor also announced plans to assist households currently living on universal credit, by making loans easier to repay.

Hunt stated: “Nearly one million households on Universal Credit take out budgeting advance loans to pay for more expensive emergencies like boiler repairs or help getting a job. To help make such loans more affordable, I have today decided to increase the repayment period for new loans from 12 months to 24 months.”

Hunt also announced that he would also abolish the £90 Debt Relief Order charge, and extend the Household Support Fund — aimed at supporting local councils in helping families with food banks and vouchers — for an additional six months.

The Losers

Holiday home landlords

The chancellor claimed that he intends to scrap tax breaks that make it more profitable for second homeowners to let out their properties to vacationers, rather than those who let their properties to long-term tenants. As such, the government is set to abolish the furnished holiday lettings regime.

Vapers and Smokers

The Chancellor also announced a new tax on smoke-free heated tobacco products — set to take effect from October 2026 — following on from the government’s proposed vaping crackdown announced in the autumn. Hunt also announced a one-off increase in tobacco duty. This means that taxes on tobacco products will rise further, making the habit far more expensive.

Oil and Gas Companies

Chancellor Hunt has announced an extension of the windfall tax on oil and gas companies. This means the government will apply the tax for another year beyond the previous end date. Instead of concluding in March 2028, it will continue on into March 2029, raising £1.5 billion.

The windfall tax (more accurately known as the 2022 Energy Profits Levy) is a response to the soaring profits oil and gas companies began making after the combined impact of the lifting of COVID-19 restrictions and price increases due to Russia’s war in Ukraine. The 35% tax (originally 25% but raised in January 2023) applies to any profits made from the extraction of UK oil and gas.

Non-Domiciled Residents

The Chancellor also announced that rules over the taxation of non-dom residents — those who live in the UK but keep their permanent, registered place of residence abroad — are set to change. Hunt stated that the existing system will be replaced by a: “modern, simpler and fairer” one, as of April 2025. From then on, non-domiciled residents living in the UK will face the same taxes as other UK residents after four years.

What’s Next?

As you can see, the 2024 Spring Budget statement has unveiled a number of key initiatives aimed at growing the economy, supporting business, and boosting industry across the nation.

It’s clear that these new initiatives will have a major impact on the finances of British people, and businesses operating in the country. It’s vital, therefore, to seek sound financial advice based on the adaptations laid out by the budget. Indeed, it can be tricky to understand exactly how the Spring budget will affect you or your enterprise without consulting qualified financial advisors first.

So, if you want more information on how the Autumn budget could affect your finances, don’t hesitate to get in touch now.

 

The value of investments and any income from them can fall as well as rise, so you may not get back the original amount invested.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

Approved by The Openwork Partnership on 06/03/2024

Preparing for retirement: the road to financial freedom

Retirement isn’t just about sipping cocktails on a beach; it’s about having the financial security to do so. Fortunately, there are plenty of ways to pave your way to financial freedom when it comes to your time to retire. However, it requires you to put in the work as the amount of money you need, will depend on the type of lifestyle you are picturing for yourself.

Start with a private pension

A private pension is a separate plan you can set up for yourself, where you contribute from your earnings, which pays you a pension after retirement. It is an alternative to the state pension.

Each private pension contribution you make is automatically increased by the basic rate of tax, which is 20% in the UK, including Scotland whose income tax is 19%. This means for every £80 you contribute, an additional £20 is added by the government.

If you pay a higher rate of income tax, you can reclaim this tax through self-assessment.

Set up a workplace pension

A workplace pension scheme is a way of saving for your retirement through contributions deducted directly from your wages. Your employer can also make contributions to your pension through the scheme.

Maximising your pension allowance

While there is no limit on the amount that can be saved in your pension each tax year, there is a limit on the total amount that can be saved each tax year with tax relief applying and before a tax charge might apply. Your annual pension allowance in the 2023/2024 tax year is your total salary or £60,000, whichever is the lesser amount, down to £3,600.

If in a previous year you had a pension, not a state pension, and made contributions below the maximum allowed level, then you could potentially fund these missing payments in this tax year, by carrying forward these allowances. This is known as pension carry forward.

Set up a child’s pension

To pave the way to financial freedom for your children, you can open a child’s pension. This can be opened and managed on behalf of the child by a parent or guardian until the child’s 18th birthday, however anyone can contribute to the account.

The pension limit is currently set at 100% of the child’s earnings (if applicable) or £3,600, whichever is the lower amount.

Build up a pension fund

It’s crucial to build up your pension, not only so you have financial freedom when you retire, but if you were to die, you can nominate someone to inherit your pension fund.

If you die before your 75th birthday, all pension funds can be paid to your beneficiaries tax-free. If you were to die after the age of 75, beneficiaries will be taxed at their marginal rates of income tax.

The value of your investments and any income from them can fall as well as rise. You may not get back the amount you invested.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

Approved by The Openwork Partnership on 12-2-2024.

End of the tax year checklist

As we approach the end of the tax year, it’s a good time to start thinking about how to make the most of the tax reliefs and allowances you’re entitled to, before they are lost. We’ve put together a checklist to ensure you’re aware of all the ways to make sure you don’t miss out.

1. Open or top up your ISA

You can hold up to £20,000 in your ISA in the 2023/2024 tax year and split the contribution, between either a Cash ISA or Stocks and Shares ISA.

2. Use your pension allowance

Usually if you’re under 75 can contribute to a pension and receive income tax relief, up to 45%. You can contribute your total salary or £60,000, whichever is the lesser amount, down to £3,600.

3. Review your State Pension National Insurance contributions

The amount of State Pension you’ll get depends on how many ‘qualifying’ years of National Insurance payments you have. Review your National Insurance contributions that you pay when you are working and see if you can top it up.

4. Open or top up a Junior ISA

You can add up to £9,000 into a Junior ISA in the 2023/2024 tax year, until the child turns 18. Like normal ISAs, you can choose between a Cash ISA or Stocks & Shares.

5. The capital gains tax allowance is £6,000 for the 2023/2024 tax year.

This means if you make gains on assets over the value of £6,000 annually, you’ll be required to pay capital gains tax on the excess amount at their marginal tax rate.

6. Match Capital Gains and Losses in the same tax year to reduce CGT liability.

Capital gains and losses incurred in the same tax year are offset against each other. This includes reducing gains down to zero even though some of the gain would otherwise have been covered by the annual exemption.

7. Consider VCTs and EISs

VCTs are sophisticated, long-term investments offering the chance to invest in small, fast growing UK companies. In return for the extra risk, you can receive a tax relief of up to 30%.

Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment. You may not be able to access your money easily and are unlikely to be protected if something goes wrong.

8. Reduce your Inheritance Tax liability

You can gift up to £3,000, known as the annual allowance, and use previous unused annual allowance once. Gifts over £3,000 are known as Potentially Exempt Transfers (PET) and free of inheritance tax if the individual survives seven years.

Planning now allows you to make smart decisions throughout the year that will benefit you and your family’s financial future.

Approved by The Openwork Partnership on 12-2-2024

The essentials you need to know about credit checks before borrowing money

The information a lender finds during a credit check is important – it could affect whether you’re able to borrow money, including through a mortgage, and the interest rate you’re offered. Yet, they can also seem perplexing.

Indeed, a Royal London survey found that a third of Brits had never looked at their credit report.

The good news is that we can help you cut through the jargon, so you feel more confident next time you apply for a loan.

Lenders usually carry out a credit check to assess how much risk you pose

Lenders carry out a credit check by looking at your credit report to understand how financially stable and reliable you are. Your credit report includes:

  • Personal details, such as your name and address
  • Borrowing and payment history
  • Current borrowing and credit limits
  • Details of people you’re financially linked to, like your partner.

If their check indicates that you are more likely to default on repayments, a lender may offer you a higher interest rate, which would affect your repayments and the total cost of borrowing, or even reject your application.

Hard v soft credit check

Two different types of credit searches can be carried out – a hard or soft credit check.

A soft credit check happens when you review your credit report or a lender checks to see if you’re eligible for certain offers. A soft credit check doesn’t show up on your report.

A hard credit check is usually carried out when you’ve made a finance application, such as a credit card or mortgage, and the lender wants to take an in-depth look at your report.

Hard credit checks may be noted on your credit report for up to two years and will be visible to other lenders.

Several hard credit checks in a short space of time may affect your ability to borrow as it could indicate you’re struggling to manage your finances. As a result, taking the time to understand which lenders are suitable for your needs could be useful as it may reduce the number of hard credit checks that are carried out.

A hard credit check can only be performed with your permission.

Don’t worry if you’re unsure about the two different types of credit searches and what they mean to you, we’re on hand to talk you through it all.

The essentials you need to know about credit checks before borrowing money

The essentials you need to know about credit checks before borrowing money

6 useful steps you could take to improve the outcome of a credit check

By reviewing your credit report and score before applying for credit, you may have a chance to improve how lenders view you. Here are six steps you may be able to take.

  1. Search your credit report for any mistakes and contact the provider to fix them
  2. Register on the electoral register to demonstrate stability
  3. Reduce your outstanding credit
  4. Pay more than the minimum payment on a loan or credit card
  5. Avoid late payments by automating bills
  6. Be careful about applying for new forms of credit.

Speak to your adviser if you have any questions

If you have any questions about your credit report or are worried about what it means for your future, including the ability to secure a mortgage, please don’t worry. You can contact Brooke Financial on 01132555762 or drop us an email on info@brookefinancial.co.uk to discuss your concerns and plans. 

Approved by The Openwork Partnership on 20/12/2023

 

father and son reading the newspaper laughing

How to protect your income and create a plan for financial security

How does income protection provide you with some peace of mind if the unexpected happens?

With the rise in the cost of living and borrowing, many people are worried about paying the bills if anything happens that could leave them unable to work. Recent surveys have shown that the average UK family doesn’t have enough in savings to be financially secure for long if they’re no longer receiving an income.

What is income protection?

Income protection insurance pays out a percentage of your monthly income if you are unable to work due to illness, an accident or disability. It gives you a buffer between finding yourself without an income, paying the bills and protecting your family’s security. Building an emergency fund for yourself is a good start to give you some financial backup, but income protection insurance can provide additional peace of mind.

How does income protection work?

Income protection is an insurance policy, so you pay a monthly or annual premium for it like any other type of insurance.

If you can’t work because of sickness, disability or other reasons (depending on your policy criteria), you’ll receive a regular income until you either return to paid work, retire, pass away or the policy term comes to an end. Policies can also be set up to pay benefits for shorter terms (1, 2 or 5 years), which could be cheaper. Income protection is different to life insurance or critical illness cover, both of which do not pay regular amounts but instead give you one-off lump sums in the event of your death or the diagnosis of a critical illness. That’s why it’s important to get advice if you are thinking about getting coverage.

“It’s important to get advice if you are thinking about getting coverage.”

Have you thought about later life planning?

Meeting the costs of care for elderly parents and yourself when the time comes is important to plan for. Your financial adviser can help you explore options that could work for you.

These could include:

  • Releasing equity from your property
  • Establishing an investment portfolio or building on an existing one
  • Downsizing your home
  • Lifetime care insurance if you’re over 60.

“Your adviser can help you choose the income protection policy that suits your needs.”

Did you know?

The max income protection benefit any provider offers is approximately 60% of gross pre-disability income. Premiums cost more if the waiting period is shorter and the percentage of your income is larger.

  • Income protection can give you some financial resilience, especially as statutory sick pay is only £109.40 per week (at November 2023), and may only be paid for 28 weeks.
  • Your adviser can help you choose the income protection policy that suits your needs, weighing up how much your premiums might be with the amount of coverage you’re after.

Get in touch

An adviser can help you figure out the right way to protect your income.

Please get in touch to arrange a time to chat.

Approved by The Openwork Partnership on 28.11.2023

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Credit scores explained: what could affect your credit score and things you can do to improve it

A guide to credit scores: What could affect your credit score and things you can do to improve it

Credit reports look at your borrowing history and how you’ve managed to pay back any money you’ve borrowed in the past. They’re put together by the three main credit reference agencies in the UK; TransUnion, Equifax and Experian. Every time you borrow and repay money, your credit score builds up in the background based on your credit history and habits.

A credit score can range from 0 to 1,000, depending on the agency, and is worked out using the information in your report. Each agency might have slightly different credit scores for you and their own levels of what they rate as a ‘poor’, ‘fair’, ‘good’ or ‘excellent’ credit score.

What they all have in common is that they offer similar perspectives on how lenders may view you when you’re looking to do something that involves credit – applying for a loan, credit card, mobile phone contract or securing a mortgage deal.

Why your credit score is important

The higher your credit score, the better you may look to a bank, building society, credit card company or other lenders. Your score can help you understand how lenders might assess how risky it would be to lend you money and whether you’re reliable when it comes to paying it back, as well as deciding how much interest you’ll pay and what your credit limit could be.

Lenders also have their own processes and consider factors besides scores to help make their decisions about you – so just because you’re turned down from one doesn’t mean another will.

“The higher your credit score, the better you may look to a bank, building society, credit card company or other lenders.”

What can affect your credit score?

It’s normal for your credit score to move up or down, but it’s a good idea to check it regularly to make sure it isn’t changing too much, as this could be due to inaccurate information in your credit report, or even due to someone fraudulently using your details.

The way you work with and use your credit can affect your score. It could be a change to your credit card balance, opening a new account somewhere, closing an account or simply making (or missing) a payment on a credit card. Other factors include your payment history, presence of any public records (like bankruptcies) and your credit usage, including if you’re keeping your debt to manageable levels.

The age of your credit accounts matters too, as it shows your experience in managing credit. Your credit limits and how much available credit you have access to can affect your score, along with any new account openings; making many credit applications at once may signal to lenders you need money.

What can affect your credit score?

You’re legally entitled to access your statutory credit report for free – online or by post – by requesting them directly from each of the three main credit reference agencies. To find out your credit score, try Credit Karma, TotallyMoney or sign up for a trial with checkmyfile.

 

“Only use your credit card for purchases you can afford so you’re in a stronger position to make your required payments every month.”

Six ways to improve your credit score

  1. Pay your bills on time, to show lenders you’re reliable at paying things like your rent or mortgage, utility and credit card bills.
  2. Only use your credit card for purchases you can afford so you’re in a stronger position to make your required payments every month. Avoid using the maximum credit limit on your card – aim for a limit of a smaller portion of your total credit limit.
  3. Use your credit card responsibly. Keep your oldest credit accounts open because having established accounts in good order shows lenders you’re experienced and reliable when it comes to managing credit.
  4. Avoid withdrawing cash using your credit card. Lenders could see this as a red flag, and it can also be expensive.
  5. Correct any errors on your credit report by writing to the agency concerned. These could include an incorrect address, letting them know you’re no longer linked to a joint bank account, or flagging any credit activity that hasn’t come from you.
  6. Put yourself on the electoral register. Registering your details on the electoral roll helps lenders quickly verify your identity if you want to take out a loan.

 

Get in touch

Speak to your financial expert to help you improve your credit score.

Please get in touch to arrange a time to chat.

Approved by The Openwork Partnership on 28.11.2023