NS&I to reduce interest rates from 24 November 2020

National Savings & Investments (NS&I) has today announced interest rate reductions, effective from 24 November 2020, that will apply to NS&I’s variable rate products, including Premium Bonds, and some fixed term products.

NS&I has taken this decision in order to strike a balance between the interests of savers, taxpayers and the broader financial services sector. These reductions will see NS&I align its savings products against the rates offered by the banks and building societies.

The Premium Bonds prize fund rate will be reducing by 40 basis points, from 1.40% to 1.00%. The odds of any £1 Bond number winning any prize will decrease from 24,500/1 to 34,500/1. The changes will be effective from the December 2020 prize draw.

If you have any concerns regarding the interest rate reduction or wish to review your current financial plans please get in touch to see how we can help.

Thank you to all the key workers

We have been delighted to support our hard working key workers and NHS staff by giving away over £1,000 worth of gin. We teamed up with Ellon Spirit Company to hand out over 50 bottles of gin to key workers across Aberdeenshire. We wanted to do something to say thank you to all those who have been working so hard over the last few months.

We asked people to nominate deserving key workers on our Facebook page with those selected receiving a bottle of “Ellon Gin” produced by Ellon Spirit Company. It was great not only to recognise some of our local key workers but also to support a relatively new business in Ellon Gin.

We also gave away £500 of free coffee to key workers at Symposium Coffee House on Monday 8th June to show our appreciation to all the key workers and we hope to look at something like this again in the near future as it was very well received.

What the COVID-19 coronavirus means for your pension

By now, you will likely have seen news reports about the impacts of the coronavirus crisis on global stock markets. Although the impacts of the virus and how governments around the world are seeking to control its spread are unprecedented, the same cannot be said for the impacts on people’s investments. Markets do fall from time to time and with varying levels of severity, but history shows that they then go on to recover.

Now, more than ever, it is important to remember that your pension is designed specifically to invest your savings for the long term. Here are a few important things to consider:

If you pay into your pension regularly: If you save money into your pension regularly, not only are you creating a good discipline that will reward you in future, you are also able to cushion these fluctuations. When markets are falling and you continue to pay in, the buying power of your regular contributions are greater because the cost of buying the underlying investments has reduced. This means that, when the investment markets do begin to recover, you will have purchased a greater level of underlying investments than you otherwise would have and, as the value of these investments increases, so will the value of your pension savings.

Younger savers: If you are some way off of retiring, there is plenty of time to see this crisis through and to benefit from years of investment growth to come in the future so long as you continue to pay in. Remember, now is a time when you can invest your money to buy extra assets while they are cheaper, giving you opportunity to benefit from their growth when markets return to normal. Making changes to your investments at times like this can ‘lock in’ losses that otherwise would have recovered. This can have serious implications on the value of your pension over the longer term.

Mature savers: If you are nearer to your retirement, it is worth taking some time to familiarise yourself with your pension – it’s value, investments and your contributions – and not to make any rash decisions (if you need to make any at all). If you were planning to take your pension in the near future, you should take extra care. How to take your pension is an important decision, so be sure to use free services like the Pension Advisory Service, who can offer you guidance. Alternatively, for recommendation and advice specific to your circumstances, you should seek the advice of a Financial Planner or Professional Financial Adviser. To speak to an adviser contact us on 01224 900879 or 01358 268166.

A warning about scams

At a time when the nation is pulling together to support one another, unfortunately scammers never tire from stealing money. We would like to warn you about a significant increase in pension scams taking advantage of the COVID-19 crisis and ensure you can spot the warning signs.

In the last few weeks, an increase in fraudulent activity has been detected by the Pensions Regulator, Financial Conduct Authority (FCA) and Money Advice Service. If you are approached about an investment opportunity that sounds too good to be true or are offered the ability to ‘access your pension early’, we strongly advise you to avoid it and report it to Action Fraud.

Always be mindful of the warning signs and, if in doubt, always check it out:

Reject ALL unexpected offers: Be wary of cold calls – they are completely illegal.

Know who you are dealing with: Always ensure you are dealing with an FCA-registered Financial Adviser. Check their credentials at www.register.fca.org.uk

Check contact details carefully: Scammers have been known to ‘clone’ legitimate financial advisers’ websites to pass themselves off as the real thing. Always use the contact details on the FCA register.

Don’t be pressured: ‘Time-limited offers’ or deals that sound too good to be true normally are. Your pension is one of your most valuable possessions and a genuine Financial Adviser will never rush you into a decision.

Get impartial information: Your money is your money. Never allow someone to tell you what to do with it. There are free and impartial services such as the Pensions Advisory Service, who can explain your options.

Don’t waste your money on ‘Pension Liberation’ deals: The earliest you can access your pension benefits is from 55, an age set by the government. Some organisations may promise you early access to your savings, but the costs are high and the impacts on your financial security are immeasurable. You can lose over 85% of your life savings with such arrangements – don’t hand your life savings to someone else for short term cash. It can cost you your future

For more information, visit the FCA’s ScamSmart website.

The retirement mistruth

If you pay much attention to the media and advertisers, you may think that retirement is all about riding jet skis, sipping sherry on the French riviera or cuddling grandchildren. No doubt you’ve seen one, if not all, of the images on many of the retirement articles out there. Though those sorts of activities are an important part of retirement, a recent study has revealed retirement to be more of a double-edged sword. For many, the first few months can involve a lack of purpose leading to something somewhat akin to a later life crisis, according to Harvard Business School professor Teresa Amabile.

It’s certainly hard not to lie about retirement because of the social norms associated with it. It’s meant to be the best time of a person’s life, that they’ve been working hard for. But it causes people to say one thing, and feel another. Professor Amabile interviewed 120 professionals about their views of retirement, at different stages of their careers.

“People think of planning for retirement as a financial exercise, and that’s all. It also needs to be a psychological and relationship exercise as well.

“We need to think about who we will be – who we want to be when our formal career ends. The people in our study who do that, tend to have a smoother transition.”

Revelations also arose when it came to how respondents described themselves. People often used their previous job title as a suffix to their retired status, usually saying that they were a ‘retired librarian’ or a retired ‘research chemist’ and the like. Though it’s important to be proud of what you’ve achieved during your career, it’s still important to prepare yourself for retirement as making sure you’re of sound mind as well as sound wallet will lead to better wellbeing after you draw the curtains on your career.

However, this doesn’t mean that work has to come to an end. There are plenty of retirees out there who still consult in their previous profession – some even take the opportunity to pursue other avenues of employment that they’ve always been interested in. There are plenty of remedies to the retirement riddle that don’t need to resort to a kind of ‘forced leisure’ that is often associated with retirement. The truth is, you don’t have to relax or slow down if you don’t want to – as long as you remain realistic.

It’s something that a retirement plan can help with tremendously as, more often than not, you’ll have to think about what you’re going to do when the time comes. It’s not all just financial saving strategies and tax mitigation, it’s about getting yourself into the mindset that retirement is on the horizon, and when it comes to the day that you draw your pension, you’ll be all the more prepared to make the most of it in a way that’s true to yourself and who you are.

Weathering market storms

There’s no doubt that periods of market volatility can be very unsettling for investors. Nevertheless, history shows us that, although equities can certainly be risky in the short term, they remain the best-performing asset class over the long term.

Although market instability can be unnerving and hard to tolerate, it can also create attractive opportunities. During periods of general market decline, the share prices of high-quality businesses tend to fall alongside those of companies that are experiencing genuine problems. These instances provide astute investors with an opportunity to pick up high-quality stocks at bargain prices, boosting their overall portfolio in the process.

Even the most experienced investment professionals cannot ‘time’ the market consistently. It is all but impossible to assess whether prices have peaked or troughed, so keep your head and don’t allow yourself to be flustered into selling for the wrong reasons. Instead, during periods of market instability, take the time to assess your own particular situation. Ask yourself two key questions: ‘Does my investment portfolio reflect my investment goals, personal circumstances and tolerance for risk?’ and ‘Is my portfolio adequately diversified across different asset classes and geographical areas?’ If you cannot answer ‘yes’ to both these questions, it is probably time to review your portfolio.

It’s always worth taking the time to ensure that your portfolio is on track to achieve your long-term aims whilst weathering the shorter-term storms. For help and guidance, talk to your financial adviser.

Budget 2020 summary

Personal taxation, wages and pensions

The tax threshold for National Insurance Contributions will rise from £8,632 to £9,500. The move, first announced in November, will take 500,000 employees out of the tax altogether.

Those earning more than £9,500 will be, on average, £85 a year better off.

5% VAT on women’s sanitary products, known as the tampon tax, to be scrapped

There were no other new announcements on income tax, national insurance or VAT.

Tax paid on the pensions of high earners, including doctors, to be recalculated.


ISA deadline

With the ISA deadline coming up here are some answers to the most frequently asked questions:

What is my ISA allowance?

Every UK resident over the age of 16 has the same Cash ISA allowance. The allowance for the tax year 2019/2020 is £20,000. The only exception to this is young adults who are aged 16 and 17, who have an additional Junior ISA limit of £4,368.

You can save up to £20,000, tax-free, into any combination of permitted ISAs. For example, you may choose to spread your savings across a Cash ISA or stocks and shares.

Any interest you earn on your savings doesn’t count towards your personal savings allowance.

How does the ISA deadline work?

UK residents get an ISA allowance for each tax year. This dictates exactly how much you can save in a tax-free cash or investment ISA.

At the end of each tax year, the ISA allowance is reset. This is why the end of each tax year is known as the ISA deadline. In the UK, the tax year runs from 6th April to midnight on 5th April.

The ISA deadline is at midnight on 5th April. Savers have until this time to add to their tax-free savings accounts. If savers miss this deadline, they lose any unused allowance for that tax year.

Many savers feel pressured in the run up to the ISA deadline, as they’re keen to make the most of any unused allowance.

However, if you don’t think you’re going to use all of your allowance before the ISA deadline, you don’t need to worry. This doesn’t affect how much allowance you’re entitled to moving forward, it just means you haven’t taken advantage of all of your allowance for that particular tax year.

What ISAs are available?

This is where we can help. There are many different ISAs out there and we can help you find the best one that suits not only your circumstances but goals. Please get in touch to find out more.

Aberdeen Cyrenians celebrate £2000 donation

A charity in Aberdeen has been awarded £1,000 in Skipton Building Society’s inaugural £40,000 Community Giving scheme. The donation has also been matched by local financial advisory firm Phil Anderson Financial Services.

Aberdeen Cyrenians is a charity dedicated to supporting people affected by homelessness, violence, domestic abuse and other forms of social exclusion. Forty community groups and charities across the UK have been chosen to receive a £1,000 pot of funding after being nominated by mortgage brokers and employees of intermediary firms.

Aberdeen Cyrenians was nominated by Phil Anderson Financial Services who have offices in Aberdeen, Ellon and Inverurie. They also agreed to donate a further £1,000 meaning the donation to the charity was £2,000.
Skipton Intermediaries launched Community Giving to give intermediaries the chance to reward charities and community groups which support housing and homelessness. More than 90 nominations were received and now the 40 successful good causes have been announced.

Paul Fenn, Skipton’s Head of Business Development, said: “Skipton’s new Community Giving scheme enables brokers and employees of intermediary firms across the country to identify those groups which are doing great work and help them access a £1,000 pot of cash. “We are delighted to announce the first 40 community groups and charities to receive funding and we hope our donation enables them to continue to make a real difference in their work.”

Chris Bennett Taylor, Head of Corporate and Business Services at Aberdeen Cyrenians said “Firstly, thanks so much to Phil Anderson for nominating us for the grant through Skipton Building Society funding. It’s very generous for them to match the funding and hugely appreciated. Thanks also to Skipton for this valuable donation.”

Congratulations Neil!

A massive well done to Neil for being named Scottish Mortgage Adviser of the Year at the 2019 SME News Finance Awards.

We are proud of everything Neil has achieved over the years with us and we are sure he can continue to deliver outstanding service to all of our clients.