5 things to expect when you return to work in the office

by libertas2019 on September 8, 2020 No comments

As lockdown eases and employers carry out Covid-19 risk assessments, you may soon be able to return to the office.

After months of working remotely, there may be things you are looking forward to – and some aspects of remote working that you may miss. As life slowly returns to normal, here are five things to expect from the transition.

1. Rigorous hygiene procedures will be in place

Before you return to the office, employers should complete a thorough risk assessment to ensure that you and your co-workers will be in an entirely safe working environment.

This risk assessment will identify which activities could cause the transmission of Covid-19, how likely this is to occur, and how to avoid the activity or control the risk that the activity presents. A completed risk assessment means you won’t have to worry about getting ill or doing activities that put you at risk.

In practice, the measures introduced to maintain a safe environment are probably the same as those you’ve already been following elsewhere. Much like supermarkets, retail stores, and restaurants, your office will be deep cleaned regularly and you will have access to hand sanitiser and any necessary PPE (personal protective equipment), such as masks.

Although you’ll need to be more mindful of hygiene in the office than before lockdown, none of the precautions are likely to be safety measures you aren’t already familiar with.

2. Your office and desk space may have been reorganised

Returning to the office will be a welcome change for some, particularly those with a desire for routine or those with an ad hoc home office in a crowded corner of the living room. You’ll get to enjoy a clearer boundary between work and home, making it easier to switch off at the end of the day and maintain a better work-life balance.

However, you may need to adapt to some changes in your usual office environment and adjust your old routines.

Your usual seating arrangements may change to allow for greater distance between desks. Screens between each desk could also be in place to help avoid contact with colleagues and limit shared breathing space.

These safety measures are unlikely to get in your way, you may even enjoy the added privacy of increased distance and your own enclosed space. Not only should you keep your distance from each other’s work areas, but hotdesking will no longer be an option. Your desk will truly be your own private bubble.

3. Social distancing will limit your face-to-face time with colleagues

Whether you’ve enjoyed the peace and quiet of work without chattering colleagues in the background, or can’t wait to have a meeting without family walking in on your Zoom call, there will be mixed reactions to the social aspects of life back in the office.

You will need to continue observing all the usual social distancing guidelines. To help people keep their distance from each other, one-way systems in corridors and open spaces may be in place. To further limit contact with others you will most likely have restrictions on the number of people allowed in canteens, restrooms, lifts, or meeting rooms at any given time.

Additional safety measures may be in place in higher risk areas such as kitchens, where there may be a ban on the use of kettles and fridges to avoid cross-contamination of your food and drinks. So, remember to bring a flask of your caffeinated beverage of choice to work if you need it.

Your return to the office may also be phased in one form or another. Your work shifts may be staggered or perhaps you will work one week in and one at home to help maintain proper social distancing. Even if your office is large enough to accommodate everyone at a distance, you may have more vulnerable co-workers staying at home to avoid the commute to work.

4. The digital tools adopted during lockdown will remain

During this transitional period back to office life, you are likely to continue using the software and other digital tools adopted during lockdown. Messaging someone on Slack or having a quick Zoom call rather than speaking to them face to face will help you maintain proper social distancing measures.

Your clients may also appreciate the continued use of tools such as video conferencing, information portals, and secure cloud storage. These have created added flexibility for when and how your clients can access your services.

Even after it is safe to return to life as usual, businesses may opt to keep these digital channels of communication and access to information open. After all, remote working during lockdown has proven how useful they can be. Continued use during a phased return to work will demonstrate how they can reliably make your life easier – even when things are back to normal.

5. Remote working and flexible hours could become the new normal

The host of digital tools and software adopted during lockdown have had a significant impact on how you work. They might also affect how you continue to work in the future.

Now that these digital tools are a part of your work processes, people may want to continue taking advantage of them. As remote working becomes more accepted, you may end up spending less time in the office.

Lockdown has also highlighted the benefits of flexible hours. Working around childcare arrangements, grocery shopping outside of peak times, and looking after vulnerable family and neighbours has meant that the classic nine-to-five day hasn’t been sustainable for some.

This collective realisation could change the way we approach work and office culture. Even after lockdown and Covid-19 are in the past, your working life may feel the effects. You may not only be working from home more often but also be able to work during the hours that best suit your lifestyle and other commitments.

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Chancellor brings in Stamp Duty holiday, how much could you save?

by libertas2019 on September 8, 2020 No comments

As lockdown measures were brought in, property viewings ground to a halt and the number of sales fell sharply. If you were hoping to purchase a property, the good news is that the sector is now open for business again and you could benefit from a Stamp Duty holiday.

Following weeks of delays, home buyers surged in July. It was the busiest month for home buying in ten years, with more than £37 billion worth of property sales agreed, according to Rightmove. It coincides with Chancellor Rishi Sunak unveiling a temporary reduction in Stamp Duty rates. Whether you want to move up the ladder, purchase a holiday home or invest in Buy to Let, it could save you money.

Raising the Stamp Duty threshold

Unless you’re a first-time buyer, you’d usually need to pay Stamp Duty when buying a property in England or Northern Ireland. Scotland and Wales also have similar property taxes in place.

Previously, the Stamp Duty threshold was just £125,000. With the average property in the UK now worth £231,855, according to the House Price Index, the vast majority of buyers would need to pay some Stamp Duty. However, if you purchase before 31st March 2021, the threshold has increased to £500,000. As a result, 90% of buyers will not pay Stamp Duty during the temporary reduction.

It could save you thousands on the cost of moving. The table below highlights the potential savings.

What does the Stamp Duty holiday mean for you?

The impact of the Stamp Duty holiday, if you’re looking to buy a property, will depend on your position.

  • First-time buyers: For most first-time buyers, the Stamp Duty reduction won’t result in lower costs. But it has stimulated the housing market, you may find more properties to meet your criteria available now.
  • Home movers: Most home movers won’t need to pay Stamp Duty if they purchase before the end of March 2021. As a result, you’re likely to save thousands of pounds on the cost of moving.
  • Purchasing a second home or Buy to Let property: You still benefit from the Stamp Duty holiday even if the new property won’t be your main home. You’ll need to pay the additional 3% Stamp Duty surcharge applied to second homes, but the overall cost will still be lower. It can make now the perfect time to invest if it’s something you’ve been considering.

When to file your Stamp Duty return

Even if the Stamp Duty holiday means you don’t need to pay the tax, you still need to file a return. You have 14 days to do this from when the purchase is complete, you must pay any Stamp Duty due at this point too. Usually, your solicitor will deal with this on your behalf. However, you can also file it yourself. If a return is filed late, interest will be added.

The Stamp Duty holiday can mean it’s the perfect time to move if it’s something you’ve been considering. If you’d like to discuss mortgage options or how investing in property fits into your wider financial plan, please get in touch.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

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libertas2019Chancellor brings in Stamp Duty holiday, how much could you save?

5 things to check before cashing in a Final Salary pension

by libertas2019 on September 8, 2020 No comments

If you’re fortunate enough to have a Final Salary pension, you have options for creating a retirement income that suits your goals. But, if you’re tempted to transfer out of a scheme, it’s essential you understand what you’d be giving up first.

Figures published in the Telegraph show cash transfer values for retirees leaving a Final Salary pension scheme reached record highs this summer. The estimated cash transfer value of a 64-year-old with a £10,000 a year pension was worth £260,800 in mid-June. It’s easy to see why Final Salary pension holders may want to transfer out of their existing scheme when such large sums are on offer.

However, it’s not in the interest of most people and there are numerous factors to consider before taking the next steps.

What does transferring out of a Final Salary pension mean?

A Final Salary pension, also known as a Defined Benefit pension, provides you with a guaranteed income for life.

When you start paying into a Final Salary pension, the calculation to understand your eventual retirement income is already defined. Usually, this is linked to how long you’re a member of the scheme and your final salary or career average. It is the pension scheme’s responsibility to meet these financial commitments. Investment performance will not affect how much you receive.

In recent years, the number of Final Salary pensions available has fallen as it becomes more expensive for schemes to meet their obligations due to longer life expectancy. This has also led to schemes offering greater sums to pension savers that wish to transfer out, known as a cash transfer value.

If you transfer out of a Final Salary pension, you lose a guaranteed income for life and instead receive a lump sum, which you will need to place in a personal pension, a self-invested personal pension (SIPP) or a pension scheme with another employer.

With a personal pension, your money is invested, and the performance will affect your retirement income. You’re also responsible for how and when you’ll access the savings, including ensuring it’ll last a lifetime.

5 things to think about if you’re considering transferring out

1. What income will your Final Salary pension provide?

The first step is to understand what income your current pension scheme will provide. You should receive an annual statement with these details or can contact your scheme to find out more. The scheme will also set a retirement date, this is often before traditional State Pension age. Remember this income will be paid for the rest of your life. It is also usually linked to inflation, preserving your spending power throughout retirement.

2. What additional benefits does your Final Salary scheme provide?

Many Final Salary pensions come with additional benefits, which, depending on your circumstances, can be valuable. For example, your scheme may offer a spouse or dependents’ pension. This would ensure loved ones continue to receive an income even if you pass away. If your family rely on your financial support, this can provide peace of mind. Any additional benefits from a pension will cease if you leave the scheme. As a result, if you transfer out, you will need to consider alternative measures.

3. What cash transfer value are you being offered?

To be able to understand how transferring out will affect your retirement long term, you need to review the cash transfer value your pension scheme will offer. You can request this from your pension scheme. While this can seem like a significant sum, remember this will need to last for the rest of your life and that inflation will have an impact long term.

4. How long is your life expectancy?

No one wants to think about passing away, but this is an important question when retirement planning. It’ll help you understand how long the cash transfer value will need to last for and how this compares to the guaranteed income. Keep in mind that we often underestimate how long we live for and there’s a good chance that you’ll exceed the average life expectancy and you need to factor this in.

5. What investment returns can you expect from a personal pension?

If you transfer from a Final Salary pension, your savings will usually be invested. This can help your savings to grow and keep pace with inflation. However, this comes with challenges too. To achieve your desired annual income, what returns would be needed? Once you have a figure, you also need to ask:

  • Are your expectations realistic?
  • How much risk will you need to take?
  • How will you manage market volatility?

It can be difficult to understand how a lump sum will translate into an income for what could be a 30- or 40-year long retirement. This is where financial advice can add value, helping you to grasp what giving up a Final Salary pension means for you in terms of income and lifestyle goals. You can’t transfer Final Salary pension with a value of more than £30,000 without seeking specialist financial advice.

Considering your lifestyle

One of the reasons that people consider transferring out of a Final Salary pension is the lump sum on offer. It can provide you with more flexibility in how and when you access your pension. For instance, you may plan to spend significantly more in the early years of your retirement.

However, in many cases, you can use other assets to create more flexibility and still benefit from the security of a guaranteed income. As a result, you need to consider your retirement lifestyle in the short and long term before you move forward with plans. Financial planning can put your options into perspective with your goals in mind. We’re here to help you create a retirement lifestyle that suits you, please get in touch.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

Transferring out of a Defined Benefit pension is not in the best interest of the majority of pension savers.

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How to improve your investment knowledge

by libertas2019 on September 8, 2020 No comments

The vast majority of investors want to improve their knowledge. In fact, according to research from Schroders, 97% of investors want to boost their personal finance know-how.

While a third wanted enough knowledge to comfortably make their own decisions, almost half wanted enough to be able to probe the advice they’re given. A further 17% said they wanted enough knowledge so they can confidently ask questions of a financial adviser.

Unsurprisingly, the volatility within global markets has focused the minds of investors. Half (49%) said they thought about their investments at least weekly, up from 35% before the crisis. With investment values falling in the short term and concerns about what the future holds, improving knowledge can help you feel more comfortable with market movements and planning for the future.

So, what can you do to boost your investment insight? Here are five steps you could take.

1. Read and listen to podcasts

Reading and listening to podcasts can be a great way to improve your basic knowledge and create a foundation to build on.

Online there’s a huge range of resources you can access. However, you should always make sure the information has come from a trusted source that can be verified, there’s a lot of misinformation and scams out there too.

Our blog includes a range of financial news and views that can help you get started. If you prefer to listen while you’re on the go, the Meaningful Money podcast covers a range of topics and is aimed at those wanting to improve their knowledge. Season two of the podcast is titled Investing 101 and covers a range of investing fundamentals, from why you should invest to understanding risk profiles.

2. Keep up to date with the markets

Make a habit of reading the financial section when you browse the news. Keeping an eye on the markets, how they move and what’s influencing them can boost your understanding of your own investments. Even just a glance each day can slowly build up your knowledge.

One important thing to remember here is that you should focus on long-term trends. Market updates will typically focus on what’s just happened, but you’ll need to put this into context with wider market movements.

3. Seek information on risk and volatility

Understanding risk and volatility when investing is important. Novice investors sometimes view these as the same thing, but they’re not.

Risk relates to the likelihood that the value of your investments will decrease. Higher risk products will typically offer an opportunity for higher rewards to compensate for this. But, while the potential returns can seem attractive, high-risk investments aren’t right for most investors. The level of risk appropriate will depend on your risk profile, which should consider many factors, from the investment time frame through to your attitude.

Volatility, on the other hand, describes an investment’s short-term fluctuations. These market movements can be easier to focus on, as you’ll see how they directly impact the value of investments. However, once again, it’s important to focus on the long-term trend and remember that short-term losses are only on paper until you sell assets.

All investments come with some risk and will experience volatility.

4. Don’t be afraid to ask questions

The world of investing can seem complex when you first start investing and it’s filled with jargon. If you’re unsure about something, ask. It’s a way to help build up your knowledge and fill in the gaps. Keep in mind where you’re seeking answers from, is it a reputable and trustworthy source?

One thing to be cautious of here is that the world of investment is full of opinion. If you ask, ‘where should I place my money?’ or ‘is now the right time to invest?’ to two people, you can end up with wildly different responses. Remember, your financial plan and long-term goals will play a role.

5. Speak to a financial adviser

Finally, working with a financial adviser can help you better understand your investments. While a third of respondents in the Schroders survey wanted to gain significant investment knowledge so they didn’t necessarily need to seek professional advice, it can still add value.

A financial adviser is on hand to answer your questions, from how your risk profile was calculated to what long-term investment gains mean for your lifestyle. As someone who is regulated and qualified, you know it’s information you can rely on. Even as your investment knowledge improves, a professional can provide another perspective and ensure your portfolio reflects changes, for example, when new legislation is brought in.

If you’d like to talk about your investments and how they fit into your financial plan, please get in touch. We’re happy to answer your questions and help improve your investment knowledge.

Please note: This blog is for general information only and does not constitute advice. 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.

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4 financial steps to take if you’re facing redundancy

by libertas2019 on September 8, 2020 No comments

As Covid-19 lockdown restrictions ease, there are still concerns about what it means for the economy. As the furlough scheme ends, you may be worried about what it means for your job role or you may have already been made redundant. While it’s the short-term challenges that are often the focus, it can affect long-term financial security too.

The Job Retention Scheme, also known as the furlough scheme, has paid employees unable to work due to the pandemic 80% of their wages (up to £2,500 per month) since April. In October, as Covid-19 restrictions lift, it will wind down. This will place some businesses in a difficult position.

A poll by the Bank of England suggested unemployment would increase to 3.5 million. This would be an unemployment rate of 11% compared to April’s official unemployment rate of 3.9%.

If you’re worried about job security, it can be worth taking a step back now to review your finances.

1. Understand the short-term financial challenges

If you’re being made redundant, the first step to take is to secure your short-term finances.

Check what redundancy payment you’ll receive and what assets you can use to tide you over in the coming weeks, this may include an emergency fund.

Your focus should be on keeping on top of debt repayments and essentials, such as utility bills. Check what outgoings you have and whether you can meet these with the existing assets you have. If you need help, seek it, including asking for a repayment holiday on debt if needed. Be proactive, it’s better to ask for a holiday than fall behind on repayments. You’ll still need to pay the money back eventually, but a holiday can give you some breathing space while you search for a new job.

2. Review your assets

Your emergency fund was designed to provide you with financial security at times like this. But it’s also worth reviewing other assets and understanding how they can support you.

These may include savings and investments. While you may not need them immediately, knowing that they’re there if you do can provide peace of mind and a sense of security during what may be a stressful time.

Once you have an income coming in again, it’s worth doing a follow-up review too. This can help you see where you need to divert savings to build funds back up. Even if you’ve not depleted assets while searching for a job, not contributing to them during this time can have an impact. Check to see if you’re still on track to meet goals.

3. Assess if you’ll lose benefits from your employer

Your employer may have provided additional benefits that were valuable to you, such as death in service insurance or other forms of financial protection.

While you may be trying to reduce your outgoings at this time, it may be wise to seek personal protection to improve your security depending on your priorities. Even if you decide you don’t need to replace these benefits, it’s important to understand what has been lost and how it could affect your long-term security.

4. Check your pension

When you’ve lost your job, pensions are unlikely to be high on your priority list. But once things have settled down and you have an income coming in, it’s an area to review.

Even taking just a few months out of contributing to a pension can mean you’re no longer on track to meet goals, especially when you consider employer contributions and tax relief will have stopped too. In some cases, you may need to increase pension contributions to meet your goals.

If you’re over the age of 55, you may be considering accessing your pension early. Make sure you understand the long-term implications of this before you make any decision. Taking a lump sum or income will affect your income in retirement. Accessing your pension may also mean the amount you can tax-efficiently save into a pension is reduced, impacting your ability to replace what you’ve taken.

Whether you’re thinking about taking a lump sum to tide you over or retiring early, please get in touch to understand what this would mean in the long term.

What’s being done to support those that are made redundant?

The government has taken some steps to support those made redundant due to Covid-19.

First, a new law was passed in July to ensure furloughed employees receive statutory redundancy pay based on their normal wages, rather than a reduced furlough wage. You’re normally entitled to statutory redundancy pay if you’ve been working for your current employer for two or more years.

You’ll get:

  • Half a week’s pay for each full year you were under 22
  • One week’s pay for each full year you were 22 or older, but under 41
  • One and a half week’s pay for each full year you were 41 or older

Length of service is capped at 20 years. Redundancy pay, including any severance pay, under £30,000 is not taxable.

If you’re made redundant, you may seek to claim benefit to support you in the short term. In March’s Budget, the application process for benefits was temporarily relaxed. Receiving some benefits will depend on your National Insurance (NI) contributions so it’s worth checking your NI record.

Chancellor Rishi Sunak’s Summer Statement also included measures to help people facing redundancy. Many of the steps focused on supporting young workers but there were some measures all could benefit from, including doubling the number of work coaches at Jobcentre Plus and a job-finding support service for those out of work for less than three months.

The Chancellor is expected to deliver the Autumn Budget in the coming weeks, which may include further measures as the situation progresses.

Please note: This blog is for general information only and does not constitute advice. 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.

The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation which are subject to change in the future.

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libertas20194 financial steps to take if you’re facing redundancy

What to do if you have multiple small pension pots

by libertas2019 on September 8, 2020 No comments

Throughout your career, you’ve probably contributed to a few pensions. It can be easy to lose track of them, so you may have considered consolidating them into one larger pension instead.

Indeed, research from the Pension Policy Institute shows that there are eight million deferred Workplace Pensions with values under £1,000. You could be neglecting to factor these savings into your retirement plan and continuing to pay administration fees that may entirely negate any investment returns.

If you have many small pension pots, now is a good time to make sure you don’t lose track of your previous contributions and think about the pros and cons of consolidating your small pension pots into one scheme.

Account for all your pensions

If you’ve had several jobs you could have multiple small pension pots.

In particular, you may have many Workplace Pensions. Since 2012, the government has required employers to automatically enrol the majority of employees into a Workplace Pension scheme. However, Financial Planning Today reports that 19% of UK workers are unaware of this.

Your first step is to make sure you don’t lose some of your contributions. Locate all the pensions you have paid into. To start tracking down ‘lost’ pensions, check any correspondence sent to you by your pension providers or old employers.

If you need help tracking down your pension pots, you can use the government’s free Pension Tracing Service. It will search a database of more than 200,000 Workplace and Personal Pensions to find the contact details for any schemes you may be a member of.

Should you consolidate your pensions?

If you do have multiple pensions, you may want to consolidate them. This will mean your retirement savings are held in one place, making it easier to manage. However, in some cases, it’s worth keeping pensions separate.

Answering these five questions can help you understand if you should make any changes.

1. What type of pensions do you have?

The kind of pension scheme you have affects income security in retirement.

A Defined Benefit pension provides a guaranteed income for life, often linked to inflation, which can provide financial security. As a result, leaving a Defined Benefit pension scheme is unlikely to be in your best interests.

In contrast, Defined Contribution pensions give you a final pension value based on how much you have paid into them and investment performance. Consolidating Defined Contribution pensions could reduce administration costs and make it easier to manage your retirement savings.

2. Do any of your pensions have additional benefits?

Some pensions offer additional benefits to their members. These may include a pension for your spouse or children, letting you take out larger lump sums tax-efficiently, or earlier access to benefits. It can be worth holding on to a small pension for continued access to these.

3. What is the long-term performance of your pensions?

If you choose to consolidate, think about where to put your money. Start by finding out how the money in your pension pots is invested. Assessing long-term investment performance can help you maximise pension savings through consolidation.

4. What administration fees do you pay, and what would be the cost of transferring?

Pension providers may take management fees as regular flat payments or a low percentage of your pension’s value. This means that administration fees for a particularly small pot could entirely negate its growth. Compare the long-term costs of paying administration fees on multiple small pensions against the cost of a larger pension and you’ll likely find you save money that can be put towards your retirement.

5. How and when can you access your pensions?

It’s worth thinking about how and when you’d like to access your pensions too. Some small pensions may come with tax benefits when you make withdrawals, and these may be useful to you. If you’d like to discuss the tax implications of consolidating pensions, please get in touch.

Whether pension consolidation is right for you will depend on your pensions and goals. If a low-value pot has no features of use to you, think about consolidating it to make it easier to manage retirement savings. Conversely, even a small pot with benefits you want may be worth holding on to.

Get in touch

Planning for retirement can be challenging, especially when your savings are spread across multiple pensions. If you’d like help understanding what the best course of action is, including whether to consolidate, please contact us.

Please note: This blog is for general information only and does not constitute advice. 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.

The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation which are subject to change in the future.

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