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Make your money last as long as you do: five questions you ought to ask yourself

As life expectancy improves, so does the length of time needed to extend your income in retirement. Taking the appropriate steps can help you to enjoy the lifestyle you want for as long as you require.

Today, most people can expect to live longer than generations previously. Data by the UK Government show the average life expectancy of men aged 65 in 2019 at 83.8 and women at 86.1 – the highest ever recorded at this age. They counted more than 600,000 Britons aged over 90 and 13,330 centenarians, 13% more than the previous year.

While this is good news, improved life expectancy has some drawbacks. Simply put, can we afford the costs of living longer?.

You can evaluate whether your resources are on track to last your life by thinking about these five key questions.

How much retirement income do you need?.

Do you want just enough every month to live comfortably in your retirement, with perhaps a little extra to allow for some luxury now and then? Would a moderate income be sufficient as long as you have access to “rainy day” or emergency funds?.
If you are still working, will your savings and pensions cover your lifestyle needs, or are you planning to cut back when you stop working?.

Remember to consider the impact of inflation on minimizing your spending power yearly. As an example, you spend EUR5,000 a month. Assuming an inflation rate of 3% a year, in 10 years’ time you would need about EUR6,720 a month to maintain the same spending, and EUR9,030 in 20 years.

2. How much would you like to leave behind?

If you want to leave a lasting legacy for your family or other heirs, you must ensure you do not spend it in your own lifetime without compromising your own quality of life right now.
A holistic approach to financial planning, which takes estate planning into account together with your wealth management and tax planning, can prove invaluable.

3. How can you make your investments and savings last?

You should assess whether your investments, assets and savings are working as hard as they can for you, and are protected from unnecessary taxation.

As an example, are you making the most of the tax-efficient opportunities available in your country of residence, or are you holding UK assets that attract higher taxation and possibly even deliver less growth?

If you are a business owner, have you started planning a tax-efficient exit strategy to get the best out of your years of hard work?

There are also considerations of currency. Taking income in sterling while spending euros in your day-to-day life makes your money susceptible to conversion fees and exchange rate risks. Explore arrangements that offer the flexibility to hold investments in more than one currency and convert if it suits you.

Don’t underestimate inflation here too. While it is appealing to choose low-risk investments in your later years, your capital still needs to keep pace with the cost of living, and cash in the bank is unlikely to do this. Your Lawsons Equity can recommend a diversified investment strategy to meet your situation, goals and risk tolerance.

4. How can you get the most out of your pensions?

For most people, pensions are the key to funding retirement, so you have to take extreme care to do what is right for you. The UK State Pension, which is currently worth a maximum of ₤ 9,350 per year, is probably not going to fulfil your requirements alone.

While you should assess your options, your best approach could be to take no action at all, especially if you have a “final salary” pension that guarantees an income for life. In any case, beware of the possibility of “liberating” your pensions before you are 55, as they are likely to be scams.

Retired expatriates can gain from transferring UK pensions to an EU/EAA-based Qualifying Recognised Overseas Pension Scheme (QROPS) or reinvesting a lump sum into arrangements that comply with your residence. As well as tax efficiency, this can provide estate planning advantages and flexibility to take income in sterling or euros. However, there are many variations in products and jurisdictions that may affect the advantages

If both you and the QROPS are based in the EU/EEA (European Economic Area), transfers into QROPS are currently tax-free. Otherwise, the UK government charges a 25% ‘overseas transfer charge’. If, as many are speculating, the UK extends this charge to the EU/EEA region after the Brexit transition period ends in December, there could be limited time to transfer without tax penalties.

So if you decide a transfer is suitable for you, take action as soon as possible, bearing in mind that transfers can take months to finalise to lock in today’s benefits and prevent unnecessary taxation.

Take personalised, UK-regulated pension advice to find the most suitable approach to your goals and circumstances.

5. How can you limit the impacts of taxation?

An undesired side effect of rising life expectancy is a general trend for tax increases, as governments struggle to finance escalating pension and health care services for ageing populations.

Higher taxation can pose a serious threat to your financial security in retirement. Look for compliant arrangements that are offered to expatriates in your country of residence, which can significantly minimise taxation, making your money go further for you and potentially your chosen heirs. For the best results, you should seek personalised, cross-border advice.

Regardless of your stage of life, good financial planning can help you afford the lifestyle you want for as long as you want, so you can focus on enjoying your time abroad. To schedule a no obligation initial consultation with one of our financial advisors, click here.

Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from, taxation are subject to change.

The value of investments and income from them may go down. You may not get back the original amount invested

Lawsons Equity Limited is a company registered in Malta with company number C49564 and licenced by the Malta Financial Services Authority as Enrolled Insurance Brokers under the Insurance Intermediaries Act 2006, and to provide Investment Services under the Investment Services Act, 1994.

Lawsons Equity Ltd have passported their services across the EU. To see a full list of countries click here

In the United Kingdom, Lawsons Equity Limited is deemed authorised and regulated by the Financial Conduct Authority. Details of the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the Financial Conduct Authority’s website.

Identifying your investment objectives is a lifelong process

Identifying your investment objectives is a lifelong process. If it is not properly implemented through an appropriate investment strategy, a total wealth solution has no value. If you have an adequate amount of money in your cash savings account – enough to cover you for at least six months – and desire your money to grow in the long run, you should take into consideration investing some of it.

Investing is a life long process, and the earlier you start, the better off you may be in the long term. Irrespective of the financial stage of life you are in, you will need to take into account what your investment goals are, how long you have to pursue each objective, and how comfortable you are with risk.

Future objectives and current finances

The appropriate savings or investments for you will depend on how willing you are to take risks, and on your future goals and current finances. Investing is separate from simply saving money, as both your potential returns and losses are greater.

If you’re retiring in the next one to two years, as an example, it might not be the correct time to put all your savings into a high-risk investment. You may be better off choosing something like a cash account or bonds that will safeguard the bulk of your money, while putting just a modest sum into a more growth-focused option like shares.

Deciding on your investments and savings

You may be a few months away from placing a deposit on your first property purchase. Here, you might be contemplating cash or term deposits. You might also opt for a more conservative investment that keeps your savings safe in the short term.

Alternatively, if you have just recently begun saving and working, you may be willing to invest a more substantial sum of your money into a higher-risk investment with higher potential returns, recognizing you won’t need to access it in the immediate future.

Diverse types of investment choices

You should consider various different investment options, if appropriate. A diverse portfolio can help safeguard your wealth from market corrections. There are four main types of investments, also called ‘asset classes’, each with their own benefits and risks.

These are:

  • Cash – savings put in a bank or building society account
  • Shares – investors buy a stake in a company
  • Property – investors invest in a physical building, whether residential or commercial
  • Fixed interest securities (also called ‘bonds’) – investors loan their money to a company or government

Defensive Investments

Defensive investments prioritize generating regular income, rather than growing in value over time. The two most common types of defensive investments are cash and fixed interest.

Cash investments include:

Savings accounts with high interest rates

The main advantage of a cash investment is that it provides steady, regular income through interest payments. It is the least risky type of investment. It is possible the value of your cash could decrease over time, even though its pound figure remains the same. This may occur if the cost of services and goods rises too quickly (also known as ‘inflation’), meaning your money buys less than it used to.

Fixed-interest investments include:

Term deposits, government bonds, corporate bonds

A term deposit enables you to earn interest on your savings at a comparable, or slightly higher, rate than a cash account (depending on the amount and term you invest for), but it also locks up your money for the length of the ‘term’, so you can’t be tempted to spend it.

Bonds are essentially loans to governments or companies that sell them to investors for a fixed time period and pay them a regular interest rate. At the end of that period, the price of the bond is paid back to the investor.

Bonds are considered a low-risk investment. Certain types can decrease in value over time, so you could potentially get back less money than you originally paid.

Growth investments

Growth investments intend to increase in value with time and potentially generate income. Growth investments may deliver higher returns than defensive investments, because their prices can rise and fall considerably. You also have a stronger chance of losing money.

Shares and property are the two most common types of growth investments.

At its most basic, a single share represents a single unit of ownership in a company. Shares are typically bought and sold on a stock exchange.

Because their value can rise, shares are considered growth investments. You may make money by selling shares for an increased price than you initially pay for them.

If you own shares, you may also receive income from dividends, which are effectively a portion of a company’s profit paid out to its shareholders.

The value of shares may also fall below the price you pay for them. Prices can be volatile from day to day, and shares are generally best suited to long-term investors, who are comfortable withstanding these downs and ups.

They have in the past delivered better returns than other assets. Shares are considered one of the riskiest types of investment.

Returns are the profit you generate from investments.

Depending on where you put your money, it could be paid in different ways:

  • Dividends (from shares).
  • Rent (from properties).
  • Interest (from cash deposits and fixed interest securities).

The difference between the price you pay and the price you sell for makes up your capital gains or losses.

Lawsons Equity are here to satisfy our clients by recommending the highest quality products and services in line with our clients’ aspirations, expectations and objectives, whether these are over the medium or long term, and in accordance with a desire to generate a regular income and/or capital growth. To schedule a no obligation initial consultation with one of our financial advisors, click here.

We look forward to hearing from you.

Source data:.

[1] YouGov Plc carried out the research online across a total of 5,757 adults aged 18+. Data was weighted to be representative of the GB population. Fieldwork was carried out 26 March– 11 April 2020. YouGov Plc carried out an additional survey online across a total of 2,251 adults aged 18+. Data was weighted to be representative of the GB population. Fieldwork was carried out 11 March– 12 May 2020.

Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from, taxation are subject to change.

The value of investments and income from them may go down. You may not get back the original amount invested.

Lawsons Equity Limited is a company registered in Malta with company number C49564 and licensed by the Malta Financial Services Authority as Enrolled Insurance Brokers under the Insurance Intermediaries Act 2006, and to provide Investment Services under the Investment Services Act, 1994.

Lawsons Equity Ltd have passported their services across the EU. To see a full list of countries, click here.

In the United Kingdom, Lawsons Equity Limited is deemed authorised and regulated by the Financial Conduct Authority. Details of the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the Financial Conduct Authority’s website.

Lifetime events that professional financial advice can help you navigate

Professional financial advice offers so much more than just practical, financial advantages. It also helps to improve your emotional well-being by making you feel better about your money and yourself – particularly in moments of crisis.

In the current climate, we recognize that you may be worried about your work, finances and what the future holds. Research by the Office for National Statistics (ONS) found that more than 25 million people have experienced “high” anxiety since the outbreak of the coronavirus (COVID-19]

Obtaining advice isn’t just for the affluent; many people can benefit from an expert overseeing their financial circumstances. Let’s look into what it means to take advice and what it may be able to do for you.

When professional financial advice could help you to avoid costly mistakes, here are five scenarios that you are likely to experience in your lifetime.

1) Consolidating your pensions.

Nowadays it’s common to have multiple pensions from previous jobs, and there are various advantages to consolidating them, such as managing all your money in one place and paying just one set of fees.
You could lose out on pension advantages when you transfer funds to a different provider and may also experience unexpected fees. Your professional financial adviser will advise on the most appropriate options.

2) Making financial gifts

Perhaps you want to help your family members by making a financial contribution to their education or home, or celebrating a special occasion. If you do not know the complex rules surrounding inheritance tax and gifting, you could leave the recipient with a potential tax bill in the future.
Your professional financial adviser can ensure that you are making tax-efficient financial gifts within the specified limits. They can also assess how much you can afford to give away without causing you financial difficulties.

3) Leaving assets to loved ones

You’ll want to ensure that your money, assets and property go to the desired recipient when you make a Will. If your estate is larger than the current threshold of ₤ 325,000 (2020/21 tax year), an Inheritance Tax of 40% may be applied, meaning that a substantial portion could be taken by HM Revenue & Customs.
Your professional financial adviser can recommend options that protect your wealth from taxation and ensure it goes to your relatives.

4) Starting to invest

Investment always involves an element of risk, but the risk involved can vary significantly between the different asset classes, markets, sectors and geographical areas, to name but a few. It can be difficult to evaluate the level of risk associated with an investment. Your adviser will help you to match investments that are appropriate to your goals and investment risks.

5) Being targeted by fraudsters

The returns they promise can make it very difficult to turn down if someone contacts you unexpectedly with an amazing investment opportunity. These opportunities often turn out to be scams.

Lawsons Equity – Professional financial advisers

Your professional financial adviser is there to help you if you are contemplating an opportunity or have already handed over money to someone you suspect is a fraudster. They can suggest legitimate ways to protect and grow your money.

Click here to arrange a no-obligation initial consultation with one of our financial advisers to discuss your needs in more detail.

We look forward to hearing from you.

Source data: [1] Office for National Statistics Research, Personal and economic wellbeing in the UK, May 2020.

Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from, taxation are subject to change.

The value of investments and income from them may go down. You may not get back the original amount invested.

Lawsons Equity Limited is a company registered in Malta with company number C49564 and licenced by the Malta Financial Services Authority as Enrolled Insurance Brokers under the Insurance Intermediaries Act 2006, and to provide Investment Services under the Investment Services Act, 1994.

Lawsons Equity Ltd have passported their services across the EU. To see a full list of countries click here.

In the United Kingdom, Lawsons Equity Limited is deemed authorised and regulated by the Financial Conduct Authority. Details of the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the Financial Conduct Authority’s website.

Times of Malta – Prince Philip and his carefree life in Malta

Malta entered the life of Prince Philip, Duke of Edinburgh, through his passion for the Royal Navy. Since then, the island always held a special place in his heart – offering a carefree “home” to him and his wife, then Princess Elizabeth, during their first years of marriage.  After his death, aged 99, Claudia Calleja from Times of Malta looks at Prince Philip’s ties with Malta – ranging from polo playing, to granting its independence. 

It was the night between September 20 and 21, 1964 – when Prince Philip, the Duke of Edinburgh, shared a special moment with Malta as the country gained independence after nearly 165 years of British rule.

Prince Philip handed over the formal independence documents to Malta’s Prime Minister George Borg Olivier – in front of over 30,000 Maltese who gathered at the Granaries in Floriana to witness history unfold.

Times of Malta photographer Frank Attard, 93, remembers every detail witnessed through the lens of his camera.

“The atmosphere was out of this world. I was stationed near the flagpoles and at midnight, the Union Jack went down and the Maltese flag went up. The crowd applauded and cheered,” he recalls.

A few hours before the flags were changed, he adds, the Duke was greeted with a warm applause as he read a message from his wife, Queen Elizabeth: “I am certain of one thing. Throughout the period of British administration, this vital fortress and base has only been used to preserve peace in the Mediterranean and to promote law and order.”

Click here to read the full article in Times of Malta

Lawsons Equity Limited is a company registered in Malta with company number C49564 and licenced by the Malta Financial Services Authority as Enrolled Insurance Brokers under the Insurance Intermediaries Act 2006, and to provide Investment Services under the Investment Services Act, 1994.

Lawsons Equity Ltd have passported their services across the EU. To see a full list of countries click here

In the United Kingdom, Lawsons Equity Limited is deemed authorised and regulated by the Financial Conduct Authority. Details of the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the Financial Conduct Authoritys website.

Responsible Investing (ESG)

Everyone has the ability to invest sustainably.

Increasingly, investors are urging companies to build ESG considerations into their long-term strategy, bringing it up during engagements and using shareholder proposals to force companies to take action. Investing sustainably means putting your money to work on issues ranging from adapting to and mitigating climate change, improving working conditions and diversity, to tackling inequality.

Invest today. Change tomorrow

Responsible, sustainable and environmentally friendly investing is here to stay. But, while demand is growing among all age groups, genders and income bands, some savers and investors are missing their biggest opportunity for responsible investing, which is through their pension.

We all want to make responsible choices as more of us are becoming aware of global challenges, such as environmental issues, human rights and climate change. Were also starting to care more about how our behaviours affect the planet and society.

Policy of engagement

Recent research has identified that nearly three quarters of women aged 40 and over would divest their pension from companies with poor pay practices, led by 74% of female boomers[1]. A majority of men of the same age group agree but younger women are split 50:50. However, many Millennials want to divest their pensions from the fossil fuels industry. Half (49%) of all age groups prefer a policy of engagement before divestment.

Governance practices

An overwhelming majority of older women would divest their pension from investments in companies with poor pay and governance practices. Women aged 40 and over are much more likely than men of the same age group to agree with such steps, with a slimmer 59% majority of men of the same age willing to do the same.

Within the older female age group, 74% of female baby boomersand 73% of women belonging to Generation Xwould invest less, or not at all, if they knew their pension was invested in companies that have attracted criticism for their governance and pay practices. However, younger women are split on the issue. Only half of millennial women would follow the same policy of cutting out these companies from their pensions.

Generational differences

Revealing clear and generational differences the findings highlight a strong contrast between the relative importance of ESG issues to older generations and the views of younger people, who are more focused on climate issues.

Millennials were more likely than any other generation to want to reduce their exposure to the fossil fuel industry, despite any potential consequences. Even if there was a resulting performance impact, 45% of Millennials would opt to divest their pension from fossil fuels. This compares to 30% of Generation X, while Baby Boomers (at just 23%) were half as likely as Millennials to divest from fossil fuels regardless of the investment outcome.

Future success

It is acknowledged that companies that act responsibly to their employees, the environment and the public have a better chance of future success than those that dont. Investing in these companies is a logical approach financially as well as ethically.

Many pension holders understand this approach and see the value of it. In a recent survey, more than one-third of respondents said the option to invest their pension only in sustainable companies is important to them[1]. Nearly two-thirds said having clearly branded funds for investing in environmentally and socially responsible companies is important.

Pension investments

The same survey suggests that pension holders feel that sustainable investing isnt just important, but interesting. More than half of respondents said that a fund focused on clean energy and lowering carbon would make them more interested in their pension. A similar number felt that way about a zero-plastic fund.

But while pension holders feel these issues are important and interesting, that isnt yet affecting the way they invest. Most people dont manage their pension investments themselves, instead leaving their pension invested in the default options set by a provider chosen by their workplace. So, more than two-thirds of pension holders do not know how sustainable their pension is.

Environmentally friendly

Many pension holders dont know that they can choose their own funds, and therefore that they can choose sustainable or responsible funds. Around half are unaware of ways to ensure their pension is environmentally friendly.

Clearly, there is a large audience of individuals who would like to invest their pension more sustainably and responsibly but dont know where to start. There are plenty of options, but without specialist experience, it can be difficult to select those that are truly responsible and environmentally friendly and will also deliver the financial return youre seeking.

Workplace pensions

Reuters contacted 47 of Britains largest pension funds, with 33 saying they were not divesting from fossil fuels. Some highlighted the potential impact on returns, and their preference to engage with oil and gas companies as reasons.

Across all age groups nearly half of all adults (49%) would prefer a policy of engagement to encourage change, before divesting. It is also notable that only half of respondents were already aware of the types of investments within their workplace pensions, implying many more may not be aware of possible inconsistencies between these investments and their own beliefs.

Investments with social impact

More and more, investors want to invest sustainably: they want to combine investing for a financial return with a positive contribution to the environment, society or both. Whether youre just curious about what options are available to you, or if youre strongly opposed or for certain investment options, click here to schedule a no obligation initial consultation with one of our financial advisors and discuss your situation.

Source data:

[1] https://adviser.scottishwidows.co.uk/assets/literature/docs/2020-09-responsible-investment.pdf

[2] Research from Legal & General Investment Management (LGIM) conducted by Watermelon Research (fieldwork): 22–29 October 2019, consisting of 1,000 interviews (online) with UK adults between the ages of 25 and 65, who have a workplace pension and work in the private sector.

Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from, taxation are subject to change.

The value of investments and income from them may go down. You may not get back the original amount invested

Lawsons Equity Limited is a company registered in Malta with company number C49564 and licenced by the Malta Financial Services Authority as Enrolled Insurance Brokers under the Insurance Intermediaries Act 2006, and to provide Investment Services under the Investment Services Act, 1994.

Lawsons Equity Ltd have passported their services across the EU. To see a full list of countries click here

In the United Kingdom, Lawsons Equity Limited is deemed authorised and regulated by the Financial Conduct Authority. Details of the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the Financial Conduct Authoritys website.

Life insurance – Knowing your family is protected

For many people, the pandemic has made us realise the importance of life insurance as a fundamental part of a solid financial plan. It is understandable that we would rather not think of the time when we are no longer there.

But, as we have seen in recent years, it is important to protect the things that matter in case the unexpected happens.

Protected financially

We insure our cars, homes and even mobile phones, so it goes without saying that we should also be insured for our full replacement value to ensure that our loved ones are financially cared for in the event of our premature death.

Life Insurance will help you to financially protect your family. It could pay out a cash sum if you die while covered by the policy. You choose the amount of life cover you need and how long you need it for and you can pay your premiums monthly or annually.

It provides a safety net for your family and loved ones if you die, helping them cope financially during an otherwise tough time, ultimately it offers reassurance that your family would be protected financially should the worst happen.

We never know what life has in store for us, so it is important to get the right life insurance. A good starting point is to ask yourself three questions:

  • What do I need to protect?
  • How much cover do I need?
  • How long will I need cover for?

This sum must account for their living costs and any liabilities, such as a mortgage.

Financial safety

It may be the case that not everyone needs life insurance (also known as life cover and death cover). But if your spouse and children, partner or other relatives depend on your income to cover the mortgage or other living expenses, then the answer is ‘yes.’

Life insurance makes sure they’re taken care of financially if you die. So whether you’re looking to provide a financial safety net for your loved ones, moving house or a first time buyer looking to arrange your mortgage life insurance – or simply wanting to add some cover to what you’ve already got – you’ll want to make sure you choose the right type of cover.

That’s why obtaining the appropriate advice and knowing which products to choose – including the most suitable sum, assured, premium, terms and payment provisions – is essential.

Premature death

The appropriate level of life insurance will enable your dependants to cope financially in the event of your premature death. When you take out life insurance, you set the amount you want the policy to pay out should you die – this is called the ‘sum assured’. Even if you consider currently you have sufficient life assurance, you’ll probably need more later on if your circumstances change. If you don’t update your policy as key events happen throughout your life, you may risk being seriously under-insured.

Different stages

As you reach different stages in your life, the need for protection will inevitably change. How much life insurance you need really depends on your circumstances, for example whether you’ve got a mortgage, single or have children. Before you compare life insurance, it’s worth bearing in mind that the amount of cover you need will very much depend on your own personal circumstances; such as the needs of your family and dependants.

What do I need to protect?

  • Who are your financial dependents: your husband or wife, registered civil partner, children, brother, sister, or parents?
  • What type of financial support does your family have now?
  • What type of financial support will your family need in the future?
  • What type of costs will need to be covered like household bills, living expenses, mortgage payments, education costs, debts or loans, funeral costs?
  • There is no one-size-fits-all solution, and the amount of cover – as well as how long it lasts for – will vary from person to person.

These are some events when you should consider reviewing your life insurance requirements:

  • Buying your first home with a partner
  • Covering loans
  • Getting married or entering into a registered civil partnership
  • Starting a family
  • Becoming a stay-at-home parent
  • Having more children
  • Moving to a bigger property
  • Salary increases
  • Changing your job
  • Reaching retirement
  • Relying on someone else to support you
  • Personal guarantee for business loans

Individual lifestyle factors determine the cost

The price you pay for a life insurance policy depends on a number of factors. These include the amount of money you want to cover, the length of the policy, but also your age, your health, your lifestyle, and whether you smoke.
Replacing at least some of your income

If you have a spouse, partner or children, you should have sufficient protection to pay off your mortgage and any other liabilities. After that, you may need life insurance to replace at least some of your income.

How much money a family needs will vary from household to household so, ultimately, it’s up to you to decide how much money you would like to leave your family that would enable them to maintain their current standard of living.

Two basic life insurance types

There are two basic types of life insurance, ‘term life’ and ‘whole-of-life’, but within those categories there are different variations.
The cheapest, simplest form of life insurance is term life insurance. It is straightforward protection, there is no investment element and it pays out a lump sum if you die within a specified period. There are several types of term insurance.

The other type of protection available is a whole-of-life insurance policy designed to provide you with cover throughout your entire lifetime. The policy only pays out once the policyholder dies, providing the policyholder’s dependants with a lump sum, usually tax-free. Depending on the individual policy, policyholders may have to continue contributing right up until they die, or they may be able to stop paying in once they reach a stated age, even though the cover continues until they die.

When choosing between these life insurance options, think about:

  • Affordability – a joint life policy is usually more affordable than two separate single policies
  • Cover needs – do you both have the same life insurance needs, or would separate policies with different levels of cover be more appropriate?
  • Work benefits – if one of you has work ‘death in service’ benefit, you might only need one plan.
  • Health – if your joint policy is with someone in poor health, this may increase your monthly payments.
    Remove the burden of any debts

Generally speaking, the amount of life insurance you may need should provide a lump sum that is sufficient to remove the burden of any debts and, ideally, leave enough over to invest in order to provide an income to support your dependants for the required period of time.

The first consideration is to clarify what you want the life insurance to protect. If you simply want to cover your mortgage, then an amount equal to the outstanding mortgage debt can achieve that.

To prevent your family from being financially disadvantaged by your premature death and to provide enough financial support to maintain their current lifestyle, there are a few more variables you should consider:

  • What are your family expenses and how would they change if you died?
  • How much would the family expenditure increase on requirements such as childcare if you were to die?
  • How much would your family income drop if you were to die?
  • How much cover do you receive from your employer or company pension scheme and for how long?
  • What existing policies do you have already and how far do they go to meet your needs?
  • How long would your existing savings last?
  • What state benefits are there that could provide extra support to meet your family’s needs?
  • How would the return of inflation to the economy affect the amount of your cover over time?

To discuss your situation, click here to schedule a no obligation initial consultation with one of our financial advisors.

Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from, taxation are subject to change.

The value of investments and income from them may go down. You may not get back the original amount invested

Lawsons Equity Limited is a company registered in Malta with company number C49564 and licenced by the Malta Financial Services Authority as Enrolled Insurance Brokers under the Insurance Intermediaries Act 2006, and to provide Investment Services under the Investment Services Act, 1994.

Lawsons Equity Ltd have passported their services across the EU. To see a full list of countries click here

In the United Kingdom, Lawsons Equity Limited is deemed authorised and regulated by the Financial Conduct Authority. Details of the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the Financial Conduct Authority’s website.

How will you divide your wealth? 

There is no easy way to say it – anticipating ones death is an uncomfortable topic. Yet it is often worth pushing past the initial discomfort to pursue the potential rewards of effective wealth transfer planning. There are three places your assets can go at your death: to your family and friends, to charity or to the government in the form of taxes.

Almost half of all Baby Boomers say they have enough personal wealth that they can afford to gift some of it away during their lifetime, new research shows[1]. The figures, collected by YouGov show that 48% of Baby Boomers say they could afford to give money to family members before they die. Less than a third (29%) ruled it out, and 26% say they are unsure.

Larger one-off wealth transfers

Of those who say they can afford to make lifetime gifts, 40% say they would favour multiple small gifts and a third (33%) would prefer larger one-off wealth transfers. A further 30% are unsure which would better suit their needs.

Despite the large number of people who estimate they can afford to pass some of their savings and assets to family members, government statistics suggest only between 31% to 39% of people aged 50-69 have ever given a financial gift. And just a small minority appear to have a plan for regular annual gifting, with just 15% of 50-59-year-olds having gifted in the last two years.

Intergenerational financial advice

The statistics reveal the importance of wealth transfer planning and lifetime gifting advice. It is estimated that around £5.5trn of intergenerational wealth transfers will occur over the next 30 years[2]. An effective plan can lessen the likelihood of family conflict, reduce estate costs, reduce taxes and preserve wealth.

Obtaining professional intergenerational financial advice will increasingly become a key part of financial planning for the Baby Boomer generation. This generation has accrued significant personal wealth, having benefitted from rising house prices, stock market growth and the higher prevalence of generous pension schemes, and they want to give younger generations a financial boost.

Lifeline for some younger people

In contrast, younger generations often find themselves facing high house prices and the need to make significant personal contributions to their Defined Contribution pensions in order to secure a decent retirement fund.

Gifting between the generations will increasingly become a lifeline for some younger people as they struggle to get on the housing ladder, pay for school fees and deal with the ever-increasing expenses of living.

Careful balancing act to figure out

Passing on wealth to the next generation is one of the most important yet challenging aspects of financial planning. Its vital that helping the younger generations doesnt come at the expense of your own retirement funds and so there is a careful balancing act to figure out if you can afford it. If you can afford to gift, its vitally important to consider the various Inheritance Tax and gifting rules.

Despite this, there is still a clear gifting gapbetween the number of people who can afford to gift and those who actually have a lifetime gifting plan in place. Gifting is a great way to help you make the most of your financial assets and enjoy seeing your life savings helping your children and grandchildren.

Wealth transfer planning process

Establishing who gets what, how they get it, and when they get it, are, as a general rule, personal matters. But these decisions can have significant financial implications. Life events, as well as market and regulatory factors, can impact the wealth transfer planning process. Therefore, it is important for your wealth transfer plan to remain flexible and be revisited and adjusted periodically. Please contact us on +356 2157 6666 or email info@lawsonsequity.com to discuss your plans.

Source data:

[1] Research commissioned by Quilter and undertaken by YouGov Plc, an independent research agency. All figures, unless otherwise stated, are from YouGov Plc. The total sample size is 1,544 UK adults, comprised of 529 Baby Boomers, 501 Generation Xers and 514 Millennials. Fieldwork was undertaken between 07/07/2020 – 08/07/2020. The survey was carried out online.

[2] Passing on the pounds – The rise of the UKs inheritance economy. Published May 2019. Author: Kings Court Trust

Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from, taxation are subject to change.

The value of investments and income from them may go down. You may not get back the original amount invested

Lawsons Equity Limited is a company registered in Malta with company number C49564 and Licenced by the Malta Financial Services Authority as Enrolled Insurance Brokers under the Insurance Intermediaries Act 2006, and to provide Investment Services under the Investment Services Act, 1994. Lawsons Equity Ltd have passported their services across the EU. To see a full list of countries click here

In the United Kingdom, Lawsons Equity Limited is deemed authorised and regulated by the Financial Conduct Authority. Details of the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the Financial Conduct Authority’s website.

How secure is the future of your family or business?

Projecting ourselves into the future to see whats around the next bend is not an easy thing to do

Given the current situation during this difficult and unsettling time with coronavirus (COVID-19), its important to think about how secure your familys or businessfuture would be in the event that you were no longer around. Understandably, we would rather not think of the time when were no longer around, but this crisis has highlighted the importance of protecting the things that really matter – like our loved ones, home, lifestyle and business – in case the unexpected happens.

The outbreak of the coronavirus may mean you have concerns about your life insurance and whether youre covered. If you have life insurance to provide for those left behind, or to cover business loans after your death, its important to keep paying the premiums, even if youre tempted to put it on hold to cut costs. You could lose your cover and may struggle to find the same level of cover if you start another policy later on.

Full replacement value

For many of us, projecting ourselves into the future to see whats around the next bend is not an easy thing to do. However, without thinking, we insure our cars, homes and even our mobile phones – so it goes without saying that you should also be insured for your full replacement value to ensure that your loved ones and business are financially catered for in the event of your unexpected death. Making sure that you have the correct type and level of life insurance in place will help you to financially protect them.

Life insurance provides a safety net. Ultimately, it offers reassurance that your family and business would be protected financially should the worst happen. We never know what life has in store for us, as weve seen in recent weeks with the outbreak of COVID-19, so its important to get the right life insurance policy.

A good place to start is asking yourself three questions: What do I need to protect? How much cover do I need? How long will I need the cover for?

Ask yourself

Who are your financial dependents – your husband or wife, registered civil partner, children, brother, sister, or parents?
What kind of financial support does your family have now?
What kind of financial support will your family need in the future?
What kind of costs will need to be covered, such as household bills, living expenses, mortgage payments, educational costs, debts or loans, or funeral costs?
What amount of outstanding business loans do I have now?

Financial safety net

It may be the case that not everyone needs life insurance. However, if your spouse and children, partner, or other relatives or business depend on you to cover the mortgage, other living and lifestyle expenses, or business loans, then it will be something you should consider. Putting in place the correct level of life insurance will make sure theyre taken care of financially.

Thats why obtaining the right professional financial advice and knowing which products to choose – including the most suitable sum assured, premium, terms and payment provisions – is essential.

No one-size-fits-all solution

There is no one-size-fits-all solution, and the amount of cover – as well as how long it lasts for – will vary from person to person. Even if you consider that currently you have sufficient life insurance, you may probably need more later on if your circumstances change. If you dont update your policy as key events happen throughout your life, you may risk being seriously under-insured.

As you reach different stages in your life, the need for protection will inevitably change. How much life insurance you need really depends on your circumstances – for example, whether youve had a mortgage, youre single or have children, or you have business loans that you are liable to pay.

Dont leave it to chance

Since the outbreak of COVID-19, some insurers are restricting cover for new applicants and have introduced new questions to their application forms. This has been done in order to establish and manage the insurance risks it poses. Planning for a time when youre no longer around may seem daunting, but it doesnt have to be.

Dont leave it to chance – speak to Lawsons Equity on +356 2157 6666 or email info@lawsonsequity.com for further information.

Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from, taxation are subject to change.

The value of investments and income from them may go down. You may not get back the original amount invested

Lawsons Equity Limited is a company registered in Malta with company number C49564 and Licenced by the Malta Financial Services Authority as Enrolled Insurance Brokers under the Insurance Intermediaries Act 2006, and to provide Investment Services under the Investment Services Act, 1994.

Lawsons Equity Ltd have passported their services across the EU. To see a full list of countries click here

In the United Kingdom, Lawsons Equity Limited is deemed authorised and regulated by the Financial Conduct Authority. Details of the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the Financial Conduct Authority’s website.

More over 55s forced to dip into their pension pot

Understanding the different ways you can use your pension money

An increasing number of pension savers have started to withdraw funds after many pressed pause at the start of the coronavirus (COVID-19) pandemic. The number of people taking only a tax-free lump sum has increased by 55%. Worryingly, the number of people withdrawing all of their pension in one lump sum increased by 94%.

Complex tax rules around pension pot withdrawals

Once you reach age 55 you can now access your pension pot. You can take some or all of it, to use as you need, or leave it so that it has the potential to continue to grow. In September 2019 the Government confirmed it would legislate to enact proposals to increase the minimum access age from 55 to 57 in 2028[1].

Due to COVID-19, many peoples incomes have been significantly reduced and so taking money out of their pension pot seemed like a quick cash-flow solution. But there are complex tax rules around pension withdrawals so people should be aware of the potential consequences.

Needing money after a change in circumstances 

While a tax-free lump sum can be withdrawn from a pension without incurring any tax liability, any balance withdrawn is subject to income tax. The number of people buying a guaranteed income for life (annuity) increased by 41%.

The increase in withdrawals is due to a combination of factors, including some people returning to withdraw after pausing earlier last year due to stock market volatility and some people needing the money after a change in circumstances.

Factors weighing on pension savers minds 

Data from August and September last year showed withdrawal levels got closer to levels seen in 2019 but many pension savers still resisted the urge to access their pension pots in the face of continued financial uncertainty. When you take your pension, some will be tax-free but the rest will be taxed. You need to be aware that tax depends on your circumstances, which can change in the future.

Stock market volatility, coronavirus (COVID-19) and employment prospects are just some of the factors weighing on pension saversminds when considering taking money out of their pension pot. Everyone is different and it is important to find the right solution for your circumstances.

Top 5 things to consider before withdrawing money from your pension pot:

1. Pensions freedoms: 

Familiarise yourself with the pensions freedoms so you are aware of your options. You can now do a lot more with your pension pot than previously. Everyone is different and it is important to find the right solution for your circumstances. What risks are you willing to take?

2. Saving requirements: 

Consider the amount of money you will need each month to maintain your lifestyle. Ask yourself: How much might I need? How much might I get? Do I still have a mortgage to pay off? What other sources of income do I have, and do I need my pension to keep up with inflation? Could I consider working for longer? Do I want to have annual holidays?

3. Costs later in retirement:

Think about costs later in your retirement. What will your living costs be in the future? Care needs are not a subject we are comfortable thinking about but it is important to have conversations about it with your family, as well as Powers of Attorney, Wills and inheritance.

4. Health and life expectancy:

We often vastly underestimate this, but evidence shows we are mostly living longer, with a growing variation in healthy life expectancy. If you have a partner, do you need to provide for them financially after you die, or are you relying on them?

Time to talk to us?

Few of us may expect to give up work altogether in our 50s. But a growing number of us are dipping into our pension before retirement age.Before we get into the different ways you could withdraw money, theres some more general things to think about first. Try asking yourself the following questions: How long will I need my money to last? How long do I want to keep working? How much tax might I pay? Could my health and lifestyle affect what I get? How much do I want to leave behind?

Whether you have plans to retire completely or want to scale down your work hours, there are now more options than ever to choose from when thinking about making your savings work for you. If you are considering accessing your pension it is essential that you receive professional financial guidance to enable you to make an informed decision. If you get it wrong you could end up with a  large tax bill. To discuss your situation or to find out more, please speak to Lawson’s Equity on +356 2157 6666 or email info@lawsonsequity.com for further information.

Source data:

[1] https://questions-statements.parliament.uk/written-questions/detail/2020-08-28/81494

Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from, taxation are subject to change.

The value of investments and income from them may go down. You may not get back the original amount invested

Lawsons Equity Limited is a company registered in Malta with company number C49564 and Licenced by the Malta Financial Services Authority as Enrolled Insurance Brokers under the Insurance Intermediaries Act 2006, and to provide Investment Services under the Investment Services Act, 1994. Lawsons Equity Ltd have passported their services across the EU. To see a full list of countries click here

In the United Kingdom, Lawsons Equity Limited is deemed authorised and regulated by the Financial Conduct Authority. Details of the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the Financial Conduct Authoritys website.

Have you prepared for the unexpected?

One in eight homebuyers don’t discuss their protection needs

 
Buying a property is usually the biggest financial responsibility many of us will take on in our lifetime, and it’s an obvious moment to pause and think about our protection needs.
The most common types of mortgage protection typically consists of mortgage life insurance with critical illness cover and mortgage payment protection insurance (MPPI). Nobody wants to run into financial difficulty, but homeowners should have provision to continue paying their mortgage if something happens to their main source of income.

Older homebuyers the most exposed

Relying on savings isn’t viable for many and certainly isn’t good for financial resilience. However, one in eight (13%) homebuyers who purchased their mortgage via a mortgage broker did not discuss their protection needs, according to new research [1], with older homebuyers the most exposed, with the potential for the higher risk of health issues impacting their income.
The majority (76%) of homeowners discussed protection products during their initial session, with life insurance being the most commonly purchased product (57%), followed by critical illness (36%) and income protection (31%).

More likely to suffer from health concerns

However, more than one in ten (13%) did not discuss protection at all, rising to a fifth (20%) of those aged 55 and above– despite this age group being more likely to suffer from health concerns. More than one in four homebuyers who did discuss protection did not go on to make a purchase (28%), leaving them unprotected as a result.
Of these, 25% rejected the opportunity to take out cover because they felt they couldn’t afford the premiums, as the overall cost of buying a home was already expensive. A slightly smaller proportion (19%) felt they could not afford the cost as the mortgage itself was costly.

Didn’t see the value in protection products

Nearly a quarter (23%) didn’t see the value in protection products, while 18% thought they would never need them. One in seven (14%) intended to purchase protection through a different route but never got around to it.
Alarmingly, two in five homeowners (42%) could only cover essential bills for up to two months if their household lost its primary income, and a further 30% could only extend to six months. Adequate financial protection is therefore vital to ensure households can keep up their mortgage payments and retain possession of their home should they unexpectedly lose their income.

Are you prepared for life’s unexpected events?

When life becomes unpredictable, we can help you protect against financial hardship. When you need it most, having the right protection in place will provide you with that important financial breathing space. To review your current protection requirements or to find out more, please speak to Lawson’s Equity on +356 2157 6666 or email info@lawsonsequity.com for further information.
Source data:
[1] Canada Life 10 December 2019
Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from, taxation are subject to change.
The value of investments and income from them may go down. You may not get back the original amount invested
Lawsons Equity Limited is a company registered in Malta with company number C49564 and Licenced by the Malta Financial Services Authority as Enrolled Insurance Brokers under the Insurance Intermediaries Act 2006, and to provide Investment Services under the Investment Services Act, 1994. Lawsons Equity Ltd have passported their services across the EU. To see a full list of countries click here
In the United Kingdom, Lawsons Equity Limited is deemed authorised and regulated by the Financial Conduct Authority. Details of the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the Financial Conduct Authority’s website.
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