Getting Organised: The First Steps Towards Financial Clarity


The first step in the financial planning process is gathering all the information needed to make financial decisions. Because this can take valuable time, people are often tempted to jump straight to the decision. This usually leads to suboptimal financial choices, some of which may be irreversible.

From our work with clients, we’ve learnt that making smart financial decisions is only possible when all the relevant information is available. For this reason, our relationship with new clients always starts with getting financially organised. Doing this well lays the groundwork for the clarity and confidence that always follows excellent financial planning.

From Chaos to Order

Many investors struggle with disorganisation. The overwhelming nature of scattered documents, unclear cash flow, and a lack of clarity about one’s financial situation can take a significant mental and emotional toll. It’s easy to feel trapped in a cycle of financial uncertainty, unsure how to break free and take control of your money.

However, hidden beneath the surface of this chaos lies the transformative power of financial organisation. Getting organised initially seems daunting, but every journey begins with a single step. We suggest that you start small and celebrate your progress along the way. Financial organisation is a skill that can be learned and improved over time.

One of the first steps in getting organised is to create a centralised hub for your financial information. This can be a physical binder, a digital folder, or a combination of both. The second step is collecting the documents, statements, and information that make up your financial life and saving them in your centralised hub.

By having all your important documents in one easily accessible place, you can quickly and easily reference the information you need to make informed decisions about your money.

The Power of Financial Clarity

At the heart of organisation lies the power of clarity. When you take the time to gather and review your important financial documents and information, you create a clear picture of your current financial situation. This clarity is like a map, helping you navigate the complex landscape of your financial life with confidence and purpose.

With your financial information organised, you can gain a deeper understanding of your financial life. This means closely examining your income, expenses, savings, and investments and identifying patterns and trends that may impact your financial health. Are there areas where improvement can be made? Are there opportunities to redirect your resources towards your goals?

Financial clarity also enables you to set meaningful, achievable goals for your future. When you clearly understand your starting point, you can create a roadmap to guide you towards your desired destination. Whether you’re saving for a new home, planning for retirement, or working to pay off debt, having a clear action plan can help you stay motivated, focused, and on track.

Taking the First Steps Towards Financial Organisation

Financial organisation is like a beacon of light guiding you through the fog of financial confusion and illuminating the path to a brighter, more secure future.

The process and effort of getting financially organised may seem daunting at first, but the rewards are well worth the effort. When you commit to decluttering your finances, you’re not just tidying up paperwork – you’re laying the foundation for a more empowered, intentional relationship with your money.

We have successfully assisted countless families in this process, and we are more than capable of guiding you through the first step towards achieving the peace of mind from excellent financial planning.

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Financial Planning on Easy Mode


In video games, “Easy Mode” is a popular setting that makes the gaming experience more accessible and less challenging for players. When you play in this mode, the game automatically adjusts various elements to make your journey smoother and more manageable. Enemies become weaker, resources are more abundant, and the consequences of making mistakes are less severe. This allows players to enjoy the game at a pace that suits their skill level without feeling overwhelmed or frustrated.

Like gaming, many people find the world of finance and investing intimidating and complex.

In the following sections, we’ll explore how applying “Easy Mode” strategies to financial planning can help you manage your finances more effectively and achieve your goals.

The Challenges Financial Planning on Default Mode

Financial planning can be daunting and complex. Many investors are overwhelmed by the sheer amount of financial information, investment options, and ever-changing market conditions. This complexity often leads to pitfalls and obstacles, such as short-term thinking, emotional decision-making, and a lack of a clear, long-term financial plan.

Operating in this mode can take a significant emotional toll. The constant stress and anxiety of making the right financial choices can leave individuals feeling paralysed and unsure of how to proceed. The lack of a clear plan can also increase the risk of financial setbacks and losses, further compounding the emotional stress of investing.

Recognising the limitations of the default mode approach is the first step towards finding a better way to manage your finances. We firmly believe that the best way to increase the probability of success is to embrace simplicity, not complexity. While this can be difficult for wealthy investors to accept, we’ve seen the benefits first-hand.

Switching to Easy Mode

Transitioning from financial planning’s default mode to “Easy Mode” can bring a sense of relief and empowerment to your financial journey. Like in gaming, “Easy Mode” in financial planning makes enemies weaker, resources more abundant, and the consequences of mistakes less severe.

One of our biggest enemies in the financial planning journey is the constant media noise surrounding us. Regularly consuming news about short-term market movements and recent world events does not set us up for making smart long-term decisions. Smart investors know that success is more likely if they remain focused on the long term, which is easier when they are mindful of what information they consume.

Financial planning is the quest to accumulate enough resources for a dignified and independent retirement. Smart investors understand what asset classes give them the best chance of growing their resources and fighting inflation. They know that by diversifying within the right asset classes, they can put the odds of success in their favour.

Lastly, many investors undo the effects of their previous good decisions by making emotional decisions during times of heightened uncertainty, such as short-term world events. Smart investors understand market history and investment cycles, allowing them to stay focused on the long term when others react emotionally. This is another hallmark of those playing on “Easy Mode”.

Help On The Way

Embracing “Easy Mode” means focusing on long-term, goal-oriented strategies that align with your values. It involves prioritising the essential concepts and actions for your success.

Collaborating with a caring financial adviser can be instrumental on this journey, but the principles of simplicity, clarity, and emotional resilience remain invaluable even if you navigate the journey independently.

We encourage you to remember that the power to transform your financial life lies within your hands. Embrace the simplicity and clarity of the “Easy Mode” approach and take confident strides towards a brighter financial future. We exist to guide families on this path, and we invite you to connect with us if you need help with financial planning in “Easy Mode”.

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The Deceptive Allure of “More”


Cashflow is the lifeblood of any financial plan. How we allocate the money coming in will determine both the present and the future of our families. It’s not a glamorous topic, but it’s undeniably ground zero of financial success.

Our cashflow challenges evolve as we move through the different life phases. Our early working years are typically about providing for essential daily “needs”. For those whose careers allow them to break free from daily concerns, the allure of certain “wants” starts to emerge. These desires challenge our beliefs about what we need to be happy.

This internal battle rages on throughout life, and how we respond to this challenge will determine our future financial success. But what truly brings fulfilment, and what consequences do these decisions have for our future selves?

The Quicksand of Accumulation

Our desire to accumulate more is grounded in evolution. A striving for “more” drove past generations to create the world we now live in, and current-day economic theory is still based on the assumption that “more is better”. But, in a world where most of us have moved well beyond providing for basic needs, does this instinct for more create problems we could do without?

As financial advisers, we have witnessed firsthand families who have become ensnared by lifestyle creep at the expense of their futures. It’s a tradeoff many now regret, but like quicksand that gradually ensnares its victim, it’s difficult to break free.

Similarly, we have worked with many wealthy families who have found a way to overcome the desire for “shiny new things”. These families have a well-developed and personal philosophy of their values and a clear picture of what they consider a life well-lived.

Embracing The Tradeoff

There are many ways that spending can bring happiness and joy – interestingly, many of our clients have shifted their spending from possessions to experiences with family and loved ones.

However, everything in financial planning is a tradeoff. For many, embracing “more” comes at the expense of their own “tomorrow”. Tragically, this only becomes evident in most cases when it’s too late to change course.

Before all of us lies the invitation to let go of pursuing “more”, choosing instead to embrace “enough”. We appreciate and understand that everyone’s definition of satisfaction and “enough” is unique and personal. No matter what your definition of “enough” is, for most of us, this still means lives magnitudes better than our grandparents.

Navigating Together

We encourage you to seek clarity about what is truly important to you, bringing more intention to your spending and investing. All consumption cannot, and should not, be avoided. Indeed, one person’s “want” is another person’s “need”.

While you will always remain the expert in the design of your own life, we are the experts in guiding families in making the tradeoffs that provide them both meaning and an independent future.

Guiding families from pursuing “more” to embracing “enough for tomorrow” is our reason for being. The comprehensive planning we provide includes all the tools you need to walk your financial journey successfully. We look forward to guiding you on your journey to “enough”.

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The Stock Market Is All Around You


The stock market might be one of the most misunderstood concepts in the world. Given its central role in helping investors become financially independent, it’s crucial to understand what it is, what it isn’t, and how it functions.

Unfortunately, rather than playing the role of educator, the financial media have a vested interest in focusing on sensationalism, short-term events, and fear-driven stories. In this article, we’ll bring the important concepts back to basics. We’ll unpack the various stock market misconceptions and provide a clear framework for thinking about the stock market on your investing journey. We hope this will help you observe the world through a new lens and become a more mature and successful investor.

The Wrong Way to Think About the Stock Market

Many investors consider the stock market an abstract concept they cannot see or interact with. With this mindset, it’s easy to start thinking about stock ownership as a piece of paper. You hope that one day it will be worth more than it is today, but it’s not clear why that will happen. Investors with this understanding are essentially hoping for the best, and when results do not match their expectations, they will develop resentment towards the market as a whole.

Another group of investors have a cynical view of the market as nothing more than a casino in which the game is rigged in favour of “insiders”. They view wealth as something that can only come at the expense of others—a zero-sum game, as it were. With numerous examples of nefarious activity by those involved in financial services, it’s tempting to take this view. However, long-term success is not likely for someone operating within this framework.

Ultimately, without a proper understanding of the stock market, these investors are likely to remove themselves as stock market participants, and those who do invest are unlikely to behave in a disciplined manner when market volatility inevitably arrives. Both scenarios will severely damage their chance of becoming financially independent.

The Right Way to Think About the Stock Market

The first step towards correctly understanding the stock market is to become aware of the companies you interact with daily. From the moment you wake up, you consume goods and services produced by businesses. Many of these companies have their shares listed on public exchanges, making them available for purchase by any investor. While some investors buy these shares directly, the average investor becomes a stock owner when they invest money in large investment funds.

Through their management and boards, these companies are incentivised to increase the revenue and profits generated by their products and services. They use these profits to re-invest in attractive opportunities or distribute the money to shareholders as dividends.

And so, when you buy from a listed business, you indirectly send money back to its investors. You likely are one of them. A walk down any high street will see you coming into contact with dozens of listed companies. The stock market, therefore, is nothing more than a collection of these companies. It’s real companies selling real things to real people.

The aggregate stock market value quoted in the media is the best estimate of the market’s future value as arrived at by the millions of market participants, and it’s a marvel that we can participate in the economic potential of the capitalist society we live in.

Long Term Success Is Inevitable

Success in the investment markets comes down to good investor behaviour, and good behaviour only comes from correctly understanding the fundamentals. Typically, investors carrying around misconceptions about the stock market make poor decisions that result in financial loss, while investors with a mature understanding invest for long periods with confidence.

Your best starting point for interacting with the stock market is to remember that you are the stock market. It’s all around you. You contribute to it, and you benefit from it. You own the great companies of the world; what a marvel!

While short-term sentiment will ebb and flow among professional investors, you can take comfort in the fact that over more extended periods, the market increases due to higher corporate earnings and dividends. If you have the fortitude to stay disciplined during the inevitable (but temporary) downturns, you will experience lasting success.

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The Tragedy of Asset Misallocation


Military history is full of episodes that offer lasting lessons that can be applied in other fields. Take, for example, the unexpected fall of Singapore in World War II. Known as the Gibraltar of the East, Singapore’s defence seemed unbeatable, with massive guns pointing to the sea, awaiting a naval attack. However, the actual assault came through the Malayan jungle, where the guns couldn’t even aim. This strategic blunder resulted from putting resources in the wrong place and had severe consequences.

Just as Singapore fell due to a mistaken assumption about the threat’s direction, many modern-day investors are being misled about the ultimate threat to their financial security.

Guns Facing the Wrong Direction

Investors have been bombarded by internet gurus telling them about the danger of high fees, with the adviser’s cost coming under the spotlight. It has led to many investors believing that a DIY approach is the optimal strategy. While we acknowledge that some investors have the ability and discipline to follow a DIY approach, we have seen too many examples of investors working in isolation, leading to suboptimal results.

We frequently see clients making poor asset allocation decisions: how much to allocate to equities, bonds, and cash. This complex decision must weigh the investor’s time frame, goals, attitude to investing risks, and emotional makeup.

Research shows that over 90% of a portfolio’s return can be attributed to this single decision. It should be taken seriously, yet we still encounter too many investors who have misunderstood the path to success. When we have helped clients correct their approach, the value has far exceeded our advice fees.

While it’s true that high fees can eat into returns over time, fixating on them can distract from more crucial aspects that significantly impact investment success. It’s time we face the guns in the right direction.

The Critical Link Between Asset Allocation and Investor Behaviour

A successful investment strategy starts with knowing how to allocate assets correctly. Our best ally in this war is a good understanding of market history.

While equities (the ownership of the great companies of the world) has been the primary driver of global markets, too many investors have shied away from this asset class for fear of the frequent but temporary declines they experience.

Many long-term investors who can withstand short-term losses have given up real wealth to avoid the emotional stress of unpredictable markets. Some investors willingly accept this trade-off, understanding what it means. But too many investors don’t realise what they’re giving up or what other options they have. This is the great tragedy of asset misallocation.

There are countless examples of clients who have prospered thanks to a simple change in mindset aided by a caring adviser. This is the real value of advice and one we’re excited about showing to more clients.

The Courage To Be Disciplined

In a time where lifespans are becoming longer and longer, too many investors are at risk of investing without intention. While no single portfolio is perfect for every client, all investors could benefit from stress testing their portfolio by asking: “Am I short-changing my future self?”.
Our role as your lifetime financial partner is to reflect your decisions back to you, helping you make the right trade-offs for your unique circumstances. Where appropriate, we will push back and encourage you to follow the path of discipline that your future self will thank you for. Let’s face the guns in the right direction!

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Understanding Your Financial Levers


When managing money and working towards financial goals, it’s important to understand which factors we can control and which we can’t.

Interest rates, inflation, investment market returns, and economic growth fall outside our control. However, there are many factors we can control, and each of these becomes a lever we can pull to adjust our future financial circumstances.

In this article, we will explore the various financial levers that investors can utilise to enhance their financial well-being and achieve their desired outcomes.

Controlling Expenses

One of the most powerful levers at our disposal is the ability to control our expenses.

It’s vital to assess our lifestyle choices and avoid falling into the ‘lifestyle creep’ trap, where we progressively increase our spending as our income rises.

How mindful are you of your spending habits? By spending less and living within our means, we can free up resources for savings and investments.

Increasing Income

Another financial lever that investors can pull is increasing their income. While this may seem obvious, many individuals underestimate its potential. We can accelerate our wealth-building journey by actively seeking ways to earn more through career advancement, side hustles, or entrepreneurial ventures. Increasing our income provides us with more resources to save and invest, expands our financial opportunities, and enhances our financial security.

Investing More

Investing more is a powerful lever that can significantly impact our long-term financial success. By allocating a larger portion of our income towards investments, we can capitalise on the power of compounding and benefit from the growth potential of various asset classes. Adopting a disciplined approach to investing, such as automatic savings and paying ourselves first, is crucial. By consistently investing over time, we can build an investment portfolio that aligns with our financial goals.

Enhancing Investment Returns

While controlling expenses, increasing income, and investing more are essential, investors should also focus on enhancing their investment returns. This lever involves making informed decisions about asset allocation and diversification, and selecting investments that align with our long-term objectives. While investment returns alone should not be relied upon as the primary driver of financial success, optimising our investment strategy and seeking opportunities to maximise returns can significantly impact our overall wealth accumulation.

Adjusting Retirement Timeline

One often overlooked financial lever is adjusting our retirement timeline. While many individuals plan to retire at a specific age, it’s important to re-evaluate this timeline based on our financial situation and goals. Extending our working years can give us additional time to save and invest, allowing our assets to grow further. On the other hand, some individuals may choose to retire earlier, focusing on achieving financial independence and creating a fulfilling lifestyle. By carefully considering our retirement timeline, we can make informed decisions that align with our unique circumstances.

Avoiding Financial Mistakes

Avoiding financial mistakes is critical to protecting our wealth and financial well-being. By being vigilant and educated about common financial pitfalls, we can mitigate risks and preserve our financial resources. Learning from our mistakes and seeking wisdom from experienced individuals can help us navigate the complex landscape of personal finance and make sound financial decisions.

Housing Considerations

Housing decisions can also serve as a financial lever. Right-sizing or downsizing our house can release equity and reduce housing-related expenses, freeing up resources for savings and investments. Additionally, exploring innovative options like equity release can provide additional financial flexibility without the need to move house. We can optimise our housing decisions to align with our broader financial goals by carefully evaluating our housing needs and considering the financial implications.

Empowering Your Path to Financial Success

In summary, investors have a range of powerful financial levers to take control of their financial situation. Pulling these levers consistently over time can compound to create life-changing results.

However, working with a qualified financial adviser can provide invaluable guidance in adjusting these levers to match your specific circumstances and financial goals. By understanding these levers and collaborating with a financial adviser on how to pull them, investors put themselves in the best position to choose their financial path and progress steadily towards their definition of financial success.

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Do You Deserve the Returns?


Most things worth having in life often don’t come easy. With investing, it’s no different. If you want the returns that the best investors get, you have to earn them through the right behaviours and mindset.

As Mark Twain famously said about cats and stoves, investors often avoid the stock market entirely because they got burned once. But the stock market is more like a cold stove – strange at first, but safe if given the chance.

Like we do every few years, we once again find ourselves in a period of heightened uncertainty. With multiple wars on the go, high interest rates, and an imminent international election cycle, we have all the ingredients for the most common investing mistakes. But how is the mature investor to proceed in such an environment? Let’s unpack the mistakes before we explore a better approach.

The Behaviour Gap
It’s a sad reality that most people get investing wrong. They chase winning funds, buying high and selling low. They tinker and react instead of sticking to a plan. According to the data, the average investor’s returns are much lower than the returns of the funds they are invested in! This is a frightening fact and one that should scare any serious investor.

It’s not that these investors set out on a mission to fail. However, due to the human condition, all investors can be tempted into making irrational, emotion-driven decisions during times of uncertainty.

It’s only in the last few decades that the field of behavioural science has shed more light on the cognitive processes we fall into when we are stressed. The shortcuts we have developed through centuries of survival have not prepared us well for the modern financial system. However, through a mature awareness of how we operate, we can overcome this obstacle like all the other obstacles in our past. While it may not happen in our lifetime, the behaviours we aim towards may become more instinctual over time.

The Blueprint for Success
While the wrong behaviour may be ingrained in us, the correct behaviours have been modelled for us by many great investors. A study of history also hints at the mindsets that will best suit us as we embrace an uncertain future. These mindsets may be simple, but they will be challenging to cling to.

The first mindset we’re aiming for is a long-term perspective. This provides perspective about what it is that you’re trying to achieve on your investing journey and why it is that you’re trying to build wealth. By also having an understanding of history, we become rational optimists over time. The second mindset we desire is to become accepting of short-term disappointment. Setbacks are inevitable, and in investment markets, this shows up as market volatility – times during which asset values decrease in price. Finally, we aim for the ability to be patient. Great results come to those willing to wait to see the fruits of their labour.

These mindsets play out differently, but we know how great investors implement them. They typically invest in a globally diversified portfolio with low fees and contribute to them regularly with discipline and patience. This portfolio is “perfect” on day one, but the results will only come when mixed with a long-term perspective and patience.

While the portfolio is “perfect”, the investor knows that temporary declines will occur regularly. When it comes, they don’t change their strategy. They don’t react to short-term events. They welcome them as the price they have to pay for superior long-term returns.

We follow this blueprint ourselves, and it’s the one we desire for our clients. There’s no guarantee about the future, but we are confident that those who remain steadfast during times of uncertainty will reap the rewards in the long term. If you’re growing weary of uncertain times, we’d love to discuss your concerns. It’s in these times that our future success is shaped.

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Savers celebrate rising interest rates, but it could mean an unexpected tax charge


After more than a decade of low interest rates, many people will be pleased to see the amount their savings are earning is starting to rise. Yet, it could mean you need to pay a tax charge.

Interest from saving accounts may be liable for Income Tax. When the average interest rate was below 1%, you usually had to have a substantial amount held in cash accounts to face a tax charge. However, as interest rates rise, you could unexpectedly cross the tax threshold.

So, read on to find out when you need to pay tax on interest and how you could avoid a bill.

Do you benefit from the Personal Savings Allowance?

The Personal Savings Allowance (PSA) lets you earn interest on savings without paying tax. Not everyone benefits from the PSA, and the amount varies depending on your Income Tax bracket.

For 2023/24, the PSA is:

  • £1,000 a year if you’re a basic-rate taxpayer
  • £500 a year if you’re a higher-rate taxpayer
  • £0 if you’re an additional-rate taxpayer.

The PSA covers any interest you earn from savings accounts, as well as corporate bonds, government bonds, and gilts. It could also include interest earned on other currencies you hold in a UK-based savings account.

If the interest you earn exceeds the PSA, or you don’t benefit from it, it’s added to your other income when calculating tax liability. So, if you’re an additional-rate taxpayer, you could pay 45% tax on the interest your savings earn.

Usually, HMRC will make changes to your tax code to cover the tax charge on the interest you earn. For example, you may get a lower Personal Allowance if you exceeded the PSA in the previous tax year.

You don’t normally need to act to pay the tax, but you should let HMRC know if the interest you earn is no longer above the PSA so they can adjust your tax code accordingly.

Using your ISA allowance could reduce your tax bill

If you’re not using your ISA allowance, doing so could reduce your tax bill.

In 2023/24, your annual ISA allowance is £20,000. The interest cash savings generate when they’re held in a Cash ISA are free from Income Tax. So, if you could exceed the PSA, it’s worth reviewing if you’re using your full ISA allowance and the interest rates available on Cash ISAs.

To access the most competitive interest rates from an ISA, there may be additional requirements. For instance, some may require you to deposit a set amount each month or won’t allow you to make withdrawals for several years. Make sure you assess the terms and conditions of an account and that it suits your needs first.

A savings account may not be the most appropriate place for your money

While interest rates are increasing, if you benefit from the PSA, you’ll typically need to have a substantial amount held in your savings account before a tax charge is due.

According to MoneySavingExpert, as of May 2023, a top easy access account pays an interest rate of 3.71% (AER). With this interest rate:

  • A basic-rate taxpayer could place £26,954 into the account before exceeding the PSA
  • A higher-rate taxpayer could deposit £13,477 into the account before facing a tax charge.

Savings accounts play an important role in many financial plans. As well as being useful for your day-to-day spending, they often make sense for your emergency fund, which you want easy access to. However, you should be mindful of keeping large sums in cash accounts, as the value may fall in real terms.

While an interest rate of 3.71% may seem good when you compare it to recent years, it’s still much lower than the rate of inflation. When the cost of goods and services rises at a faster pace than your savings are growing, the value of savings in real terms decreases.

If you could face a tax charge because you’re holding large sums in cash, it may be worth looking at alternatives. One option, depending on your circumstances, could be to invest, which may potentially deliver returns that keep pace with inflation. However, there are still tax considerations if you decide to invest.

Creating a tailored plan could help you get the most out of your money and manage your tax liability.

Contact us to review your financial plan

Factors outside of your control affect your financial plan, from rising interest rates to inflation. As a result, it’s important to review your plan with these circumstances in mind to ensure it’s still appropriate for reaching your long-term goals.

If you have any questions about how rising interest rates or other factors may affect you, please get in touch.

Please note: This blog is for general information only and does not constitute advice, which should be based on your individual circumstances. The information is aimed at retail clients only.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

The favourable tax treatment of ISAs may be subject to changes in legislation in the future.

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.

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Tolkien’s work is still providing his family with a passive income. Could your estate do the same?


When people think about inheritances, they often view it as a lump sum. But you could leave your loved ones an inheritance that will deliver a passive income, and, in some cases, it’s an option that could improve their financial security.

Take the work of author J. R. R. Tolkien – his family still benefit from the passive income the copyright his work delivers 50 years after he passed away.

More than 80 years after the first edition of The Hobbit was released, Tolkien’s work is still hugely popular. Every year, his works generate tens of millions of pounds in royalties.

In fact, it’s thought Amazon paid as much as $250 million (£198 million) for the right to produce TV shows based on Tolkien’s work in 2017 – that’s 1,000 times more than Tolkien sold the movie and merchandise rights for in 1969. This money goes to the Tolkien estate.

Once you add up royalties from the books, film adaptions, and a range of licenced products, the Tolkien estate provides the author’s descendants with a huge amount of financial freedom.

You don’t have to pen a literary classic to leave your loved ones with assets that could provide them with a passive income.

There are lots of options that may be right for your family. For instance, passing on dividend-paying shares could provide them with an income. Or leaving behind a buy-to-let property is another option.

If you’re worried about how your family will cope financially over the long term or manage a lump sum, an inheritance that delivers an income could put your mind at ease. However, it may not be straightforward and there are some questions to consider first.

1. How would you pass the assets on?

If you want to leave a passive income to your family, there’s more than one way to do so. You should weigh up the pros and cons of the different options, including these three:

  • Gifting during your lifetime: You may want to pass on assets during your lifetime. This could improve your loved ones’ financial security now and mean you can see the benefits of your gift. Before gifting, assessing your own financial security is useful – could taking assets out of your estate now affect your lifestyle or security in the future?
  • Leaving assets in a will: By writing a will, you can state who you want to receive assets when you pass away. Assets would usually be given directly to the beneficiary once the probate process is complete.
  • Placing assets in a trust: If you want to place restrictions on how and when the assets can be used, a trust may provide a solution. For example, you can place assets that will deliver a passive income in the trust, but not allow the beneficiary to sell the assets. Trusts can be complex and it’s important they’re set up with your goals in mind, so legal and financial advice may be useful.

In some cases, you may want to mix the above options and still leave a traditional inheritance. For example, your child may receive a passive income through shares you’ve placed in a trust and receive other assets when you pass away because you’ve named them in your will.

A tailored estate plan allows you to create a solution that suits your goals.

2. What tax could be due on your estate and the income the assets generate?

If the value of your entire estate exceeds certain thresholds, it may be liable for Inheritance Tax (IHT). With a standard rate of 40%, IHT can significantly reduce what you leave behind for loved ones, and you may want to consider which assets your family could use to pay a potential bill.

There are often steps you can take to reduce a potential IHT bill during your lifetime. If IHT is a concern, please contact us to talk about the steps you could take.

As well as IHT, if your family receive an income from the assets, they may need to pay Income Tax on the gains. The rate of tax they pay will depend on other income they receive, such as their salary. So, understanding the tax position of your beneficiaries might be important when you’re deciding how to pass on wealth.

In addition, if they decided to sell the assets, they may need to pay Capital Gains Tax. So, understanding how they would use the assets they inherit could help minimise a tax bill.

3. Does inheriting a passive income make sense for your beneficiaries?

Before you decide to leave loved ones a passive income, it may be useful to discuss your plans with your beneficiaries.

Understanding what their goals and challenges are can help you leave an inheritance that suits their needs. While a passive income may mean they are financially stable, it might not be suitable for other goals. For example, if they want to purchase a home, a lump sum inheritance could make more sense.

Of course, you can pass on passive income assets to your loved ones without restrictions on how they use it. So, they could choose to sell the assets if they’d prefer a lump sum.

You could also involve your family in the estate planning process. It would provide an opportunity to talk about the different options and how they might use an inheritance.

Introducing your loved ones to financial planning could mean they make informed decisions that improve their financial wellbeing in the short and long term.

If you involve your family in the process, you don’t have to share all the details of your financial plan. You can decide which aspects of the plan and assets you discuss.

Get in touch to talk about your estate plan and passing on a passive income

If you want to discuss how you could support your family with a passive income, please contact us.

We can help you understand what your options are and how you could provide long-term financial support to your loved ones through an inheritance. We can also work with children, grandchildren, or other beneficiaries to ensure you’re all on the same page and they get the most out of the gift you leave them.

Please note: This blog is for general information only and does not constitute advice, which should be based on your individual circumstances. The information is aimed at retail clients only.

Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.

The Financial Conduct Authority does not regulate will writing, estate planning, or tax planning.

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

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Do you need to plan for a retirement without the State Pension?


There have been rumours for years that the government could scrap the State Pension. As the cost of maintaining the State Pension soars, more people think they’ll need to create a retirement income without any support from the government.

The National Insurance Act in 1946 introduced a contributory State Pension for all. Yet, almost eight decades later, many workers believe they’ll have to do without it.

A survey from think tank Phoenix Group revealed 1 in 3 people think there probably won’t be a State Pension by the time they retire. This rises to half of workers aged under 50.

Under the current rules, you can claim the State Pension from age 66, but it is gradually rising. By 2046, it is set to reach 68.

To be eligible for the full State Pension, you must have 35 qualifying years on your National Insurance (NI) record. For 2023/24, the full State Pension is £203.85 a week. If you have fewer than 35 years on your NI record, you may receive a portion of the State Pension.

Some of the concerns from younger generations are likely to be linked to reports that the cost of providing the State Pension is unsustainable.

Government spending on the State Pension could rise to almost 10% of national income by the 2070s

If it doesn’t make changes, the government could face a staggering State Pension bill in future.

An ageing population means a greater proportion of adults will be claiming the State Pension in the future. Around 24% of adults in the UK have reached State Pension Age today. According to a report from the Institute for Fiscal Studies, this will rise to 27% in 2050 and 30% in 2070.

The Office for Budget Responsibility expects spending on the State Pension to rise from 5.6% to 9.6% of national income over the next 50 years – that’s the equivalent of £100 billion a year in today’s terms.

Compounding this figure, the report also suggests an ageing population will lead to increased health and social care spending.

So, over the coming decades, the government may make changes to the State Pension in a bid to reduce spending. However, it could leave pensioners with a significant gap in their finances.

2 valuable reasons why the State Pension can be important for your retirement

The State Pension can be an important part of retirement planning for many people for two key reasons.

1. It provides a guaranteed income

The State Pension delivers a regular income you can rely on. As a result, it can provide a good foundation, particularly if you don’t have other sources of guaranteed income, such as a defined benefit pension or annuity. The State Pension may provide some reassurance that you can cover essential costs in retirement.

2. It rises each tax year

Under the triple lock, the State Pension rises each tax year by the greatest of three measures – the increase in annual earnings year-on-year, inflation, or 2.5%. As rising costs affect how far your money will go, the triple lock can play a vital role in preserving your spending power throughout retirement.

How could the government change the State Pension?

Scrapping the State Pension is just one option the government has. There are other steps it could take to reduce the bill, including:

  • Increasing the State Pension Age: Recently, the government announced it wouldn’t accelerate the State Pension Age any quicker than already planned. However, it’s likely to be an area it reviews in the future and it may rise.
  • Making the State Pension means-tested: Currently, anyone who has the necessary NI record can claim the State Pension, regardless of their other income or assets. There have been some calls to make all or a portion of the State Pension means-tested, which could lead to some pensioners no longer being eligible to receive it.
  • Scrapping the triple lock: Maintaining the triple lock to guarantee the State Pension rises each tax year was an election pledge of the Conservative government. However, after a record increase in 2023/24 due to high inflation, scrapping it could be considered to manage costs.

Create a retirement plan that gives you confidence in the future

While it’s impossible to predict how the State Pension will change over the coming decades, and the role it’ll play in the income of future retirees, you can still take steps to create financial security.

A retirement plan that’s tailored to your aspirations can help you use your assets effectively during your working life and when you retire. Please contact us to talk about your goals and what you might do to feel confident about your later years.

Please note: This blog is for general information only and does not constitute advice, which should be based on your individual circumstances. The information is aimed at retail clients only.

A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits.

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