In 2012/13 HMRC will be able to collect up to £3,000 of underpaid tax and/or overpayments of tax credits via your PAYE code. If your tax code was too high in 2011/12 – and HMRC have had their problems on this front – you could find yourself paying the price from April. In any event, it is always worth checking your PAYE code before filing it. HMRC rely on data, from your employer for example, which may be out of date or just plain wrong. If you have a company car, take careful note of what the taxable benefit is; the rules changed again from April and some of the resulting increases will be significant.

HMRC’s web pages offer useful guidance to the calculations of codes and what the end letters mean (see www.hmrc.gov.uk/incometax/tax-codes.htm).

PAYE codes are meant to make tax collection simple but, as ever, garbage in results in garbage out. If you don’t want to find yourself paying the wrong amount of tax, check your code.

Pensions have been much maligned in many places – unjustifiably in my opinion – as they continue to represent an effective tax-efficient long term savings option for many people. However, the impact of QE has been severe and unexpected.

The final income one can draw from a pension fund is dependent on annuity rates; these are essentially a conversion rate from capital to income and are based on how long you are expected to live, and crucially, interest rates on Government Gilts. These Gilts are deemed to be a secure home for capital investments and pay a rate of return often called the ‘risk free rate’.

It is these rates that have been artificially depressed by the Government’s QE. This has a number of knock-on effects and requires attention by anyone at, or close to, retirement.

Essentially anyone retiring today is faced with income that is approximately 18% lower than this time last year. While we hope this reduction is only temporary, we have to recognise that there is a great deal of uncertainty about what will happen to Gilts in the future.

The fall in Gilt yields also affects those people who are drawing their pension under “Pension Drawdown”. In fact they have been hit twice-over. With a reassessment of longevity and a change in rules that together have knocked a further 20% off the maximum income allowance.

So what should anyone wanting to stop work do? There are few options:

• Delay retirement. Things will be different in the future (although not necessarily better).
• Shop around for best annuity purchase and check to see whether you qualify for enhanced rates based on health or lifestyle issues.
• Look for alternatives. Drawdown pension, investment linked annuity and temporary annuity options all bring in some form of delay to the final decision but still allow for retirement now.
• Retire but use other assets to supplement your income initially, rather than taking the pension.
• Spend less. While this may not sound like a great plan it is always an option to consider.

In any event, it is increasingly important to receive independent unbiased advice from a professional. To see how we have helped our clients and how they have benefited from exploring the different options available, please see our case studies (retirement planning and redundancy advice).

If you would like to speak to a trusted adviser about making your pension go further, please get in touch with the team at Fortitude Financial Planning.

We received very positive feedback from the event, with everyone enjoying the golf and dining. Prizes were awarded for the best individual, nearest to the pin, and the longest drive. Tom Kings, Jack Taylor and Martin Brown scooping up the prize for the winning team! Below are a few pictures of the day.

Team 1

Mark White, Andrew Humphries, Martin Keeling (Franklins), Trish Humphries

Team 2

Paul Davis (Keen Shay Keens MK), Paul Morrison (Shoosmiths), Allan Brown, Tim Davison

Team 3

Paul Ketcher, Alan Rouse, Charlotte Dunn (Shoosmiths), Ben Hands

Team 4 (Winning Team)

Tom Kings (Tollers), Jack Taylor, Martin Brown

Prize winners:

• Best individual player – Jack Taylor
• Nearest to the pin – Paul Davis
• Longest drive – Alan Rouse

Given how much fun we had and the excellent feedback we received, we will definitely repeat the event next year.

A select number of our clients and guests will be joining us at the Collingtree Park Golf Course to enjoy a day of golf and dining.

The scheduled start time is 11.30am with light refreshments, tee off at 12.30pm and a dinner in the evening. We will even be giving away various prizes for the best individual, best team score, nearest to the pin, and the longest drive.

Neil has been tasked with taking pictures of the day. We will post them to our blog next week, when we return to the office.

Have a great weekend!

Last week we attended the inaugural annual conference held by the IFP exclusively for accredited firms. It was an excellent event and we thought we would share information about the accreditation, the conference and the new IFP “great minds think alike” campaign with you on our blog.

The IFP are the UK professional body committed to the development of the multi-disciplinary profession of Financial Planning. They certify, uphold and monitor the professional standards of Financial Planning practitioners to protect the interests of members of the public, thus ensuring that they receive effective Financial Planning advice at all times.

The IFP promotes the practice of Financial Planning and recognises those Financial Planning firms that demonstrate their commitment to the highest professional standards via the Accredited Financial Planning firms register.

The exclusive conference for accredited firms took place at the Hilton Hotel, Kensington. It proved to be a great success, with a focus on supporting business growth, marketing and client engagement. Session leaders at the event included Brett Davidson, Darren Shirlaw, Julie Littlechild and Jon Pittham.

The IFP also launched the “great minds think alike” campaign, designed to drive the further development of the Financial Planning profession for the benefit of consumers. There was plenty of opportunity for delegates to contribute and share best practice. Nick Cann and Nick Blake commented on the success of the event.

“We were delighted that the inaugural conference for Accredited Financial Planning firms has proved so popular, being attended by the large majority of those currently on the register” Nick Cann, CEO of IFP.

“It was a pleasure to be involved in the inaugural Accredited Firms conference. The IFP has led the way in raising the bar of professional standards and improving client outcomes. This was evident in the gathering of quality Advice Practices at the event and the diversity and passion clearly demonstrated around the topics discussed. Congratulations to the IFP and to the Accredited firms for championing the standards required in future” Nick Blake, Head of Retail, Vanguard Asset Management Ltd.

The strapline for the “great minds think alike” campaign highlights the IFP’s dedication to great thinkers and their commitment to creating a like-minded community amongst the leading firms in the financial planning profession. We are proud to be a part of this movement.

We are really looking forward to seeing the evolution of the “great minds think alike” marketing campaigns – the very first of its kind. We are also excited to hear more about their initiative to support members in their marketing and help them to gain maximum professional and consumer recognition as a leader in the profession.

If you would like to read more information on the IFP and accredited firms, please visit their website. For more details on the “great minds think alike” campaign, please visit IFA online.

Here at Fortitude we’ve recently undertaken research and analysis to determine our ‘ideal client avatar‘. We have a lot of clients who fit this profile, each with similar needs, values and characteristics. Given all of our recent work on this initiative, we thought we would share our ideal client profile with you on our blog.

We’ve decided to call our avatars “Freddie” and “Felicity.” Freddie and Felicity are concerned about their finances and what the future might hold. They recognise the benefits of taking (and acting upon) financial advice. Over the years they have built up various investable assets. They are looking for the support of an expert to provide clarity on what they can achieve with their money. They would like to understand their options and gain a clear picture of their wider financial position, in order to regain control of their finances – and their future.

Achieving a “Life/Life” balance where they can do the things they enjoy today, without compromising their future lifestyle, is the ideal situation for Freddie and Felicity. In order to achieve a “Life/Life” balance they need clarity on their financial circumstances, their future goals and ambitions, and the resources they will need in order to achieve them.

Freddie and Felicity would like to work with a team who will take time to understand their current position and what they are trying to achieve, that can support them in co-ordinating and planning their financial future. They want a Financial Planner who will explain the various options available to them, allowing them the time to make decisions and consider the implications without feeling rushed to take action.

Freddie and Felicity will benefit from working with a team that can help them manage everything quickly and efficiently. A trusted adviser to help them make educated decisions, provide a clear idea of the actions that they need to take – as well as the compromises they might need to make in order to achieve their goals.

Most importantly, Freddie and Felicity are hoping to secure peace of mind. By working with a trusted adviser they can look forward to a future without confusion and worry.

Does this sound like you? If so, please get in touch with the team at Fortitude Financial Planning. We would be happy to show you how you can achieve a “Life/Life” balance. Make the most of where you are today – without compromising your lifestyle tomorrow.

The thing is that “simple” is not always easy.

Often we meet people who think that they know what they want from us, however as our relationship develops and trust builds, their requirements often evolve into something quite different.

Initially a client might feel they should be seeking advice on achieving the best investment returns available. While it is only natural to feel this way how does one define “best”? We believe that it is impossible to do so unless and until both the client and Financial Planner have a clear understanding of the purpose of the investment.

So if we are completely candid, we have to admit that we don’t always know what our clients really want. On the other hand, we do believe that we have a pretty good idea of what our clients need:

• Help in understanding their current position and what their existing investments, pension plans etc add up to in the context of their financial and lifestyle goals
• A clear idea of the actions that they need to take, and the compromises they might need to make, in order to achieve those goals
• Help in making smart financial decisions, avoiding the dumb ones and staying the course when things get rough
• Peace of mind (we know it’s a cliche but that’s what good Financial Planning is all about)

If these needs resonate with you it is likely that you will gain some real benefit from the Fortitude Financial Planning process.

“You can’t always get what you want
But if you try sometimes you might find
You get what you need”
The Rolling Stones

This post was prepared by Chris Bowmer. If you like what you read, why not follow him on Twitter?

The book is a memoir of her own life and how it was transformed through the regrets of the dying people she cared for. It is based on her original blog Regrets of the Dying, which I have copied below.

 

What has this got to do with Financial Planning you might ask?

Well, quite a lot actually. Financial Planning involves working out your goals in life. Then, by adding timescales and costs, you can work out how to get where you want to be by planning your finances accordingly.

The standard Fortitude Financial Planning process has always included an element of coaching where we help you to identify, quantify and prioritise your financial and lifestyle goals. The majority of our clients find this approach very helpful, as it provides a more personal context for the important financial decisions they need to make.

For some clients though, Financial Planning alone is not enough. While they might approach us with specific financial goals in mind (e.g. ‘I want to stop work when I’m aged 60′) they have rarely given a great deal of thought to what they will do next. Many are financially successful people, but they are not as content as they would like to be. They have plenty of financial resource and plenty of “stuff”. Nevertheless they feel that they are missing out on something and cannot quite put their finger on what it might be. Others may have a vague idea about what it is, but cannot see the way to reach it.

These clients need help to discover what they really want from life and at Fortitude we are developing the skills to do exactly that. I will shortly complete a period of mentorship with the Kinder Institute of Life Planning. The Kinder Institute trains and coaches financial advisers worldwide in a method called Financial Life Planning. This method is based on the premise that advisers should first discover a client’s most essential goals in life – their “hearts core” – before formulating a Financial Plan, so a client’s finances fully support those goals. This may sound elementary but few of us spontaneously undertake a thoughtful inquiry into our deepest and most enduring values and objectives.

If you take the time to read Bronnie’s blog you will find that the common regrets are based around missed experiences, feelings, friendships and relationships.

This is not so surprising when you think about it. It was my birthday recently and, as I often do at this time of year, I reflected on the highs and lows of the previous year. Guess what, the highs all involved memorable experiences with people I care about (and memorable does not necessarily mean expensive or even exciting); a meal with family and friends when I proposed to Helen, my son’s 18th birthday, getting my son settled into his University accommodation and an evening with friends watching their son performing in his band.

Why don’t you try it for yourself? Think about the last 12 months. Which memories provide the greatest source of happiness? What is it about those experiences that makes them so special? Would you like to have more of these experiences? What’s stopping you?

I found Bronnie’s blog very moving, but what really saddens me is that so many people only discovered what was really important when it was too late for them to do anything about it.

****REGRETS OF THE DYING, by Bronnie Ware****

For many years I worked in palliative care. My patients were those who had gone home to die. Some incredibly special times were shared. I was with them for the last three to twelve weeks of their lives.

People grow a lot when they are faced with their own mortality. I learnt never to underestimate someone’s capacity for growth. Some changes were phenomenal. Each experienced a variety of emotions, as expected, denial, fear, anger, remorse, more denial and eventually acceptance. Every single patient found their peace before they departed though, every one of them.

When questioned about any regrets they had or anything they would do differently, common themes surfaced again and again. Here are the most common five:

 1. I wish I’d had the courage to live a life true to myself, not the life others expected of me

This was the most common regret of all. When people realise that their life is almost over and look back clearly on it, it is easy to see how many dreams have gone unfulfilled. Most people had not honoured even a half of their dreams and had to die knowing that it was due to choices they had made, or not made.

It is very important to try and honour at least some of your dreams along the way. From the moment that you lose your health, it is too late. Health brings a freedom very few realise, until they no longer have it.

2. I wish I didn’t work so hard

This came from every male patient that I nursed. They missed their children’s youth and their partner’s companionship. Women also spoke of this regret. But as most were from an older generation, many of the female patients had not been breadwinners. All of the men I nursed deeply regretted spending so much of their lives on the treadmill of a work existence.

By simplifying your lifestyle and making conscious choices along the way, it is possible to not need the income that you think you do. And by creating more space in your life, you become happier and more open to new opportunities, ones more suited to your new lifestyle.

3. I wish I’d had the courage to express my feelings

Many people suppressed their feelings in order to keep peace with others. As a result, they settled for a mediocre existence and never became who they were truly capable of becoming. Many developed illnesses relating to the bitterness and resentment they carried as a result. 

We cannot control the reactions of others. However, although people may initially react when you change the way you are by speaking honestly, in the end it raises the relationship to a whole new and healthier level. Either that or it releases the unhealthy relationship from your life. Either way, you win.

4. I wish I had stayed in touch with my friends

Often they would not truly realise the full benefits of old friends until their dying weeks and it was not always possible to track them down. Many had become so caught up in their own lives that they had let golden friendships slip by over the years. There were many deep regrets about not giving friendships the time and effort that they deserved. Everyone misses their friends when they are dying.

It is common for anyone in a busy lifestyle to let friendships slip. But when you are faced with your approaching death, the physical details of life fall away. People do want to get their financial affairs in order if possible. But it is not money or status that holds the true importance for them. They want to get things in order more for the benefit of those they love. Usually though, they are too ill and weary to ever manage this task. It is all comes down to love and relationships in the end. That is all that remains in the final weeks, love and relationships.

5. I wish that I had let myself be happier

This is a surprisingly common one. Many did not realise until the end that happiness is a choice. They had stayed stuck in old patterns and habits. The so-called ‘comfort’ of familiarity overflowed into their emotions, as well as their physical lives. Fear of change had them pretending to others, and to their selves, that they were content. When deep within, they longed to laugh properly and have silliness in their life again.

When you are on your deathbed, what others think of you is a long way from your mind. How wonderful to be able to let go and smile again, long before you are dying.

 Life is a choice. It is YOUR life. Choose consciously, choose wisely, choose honestly. Choose happiness.

For more information, please visit Bronnie’s official website at www.bronnieware.com or her blog at www.inspirationandchai.com.

This post was published by Neil Bailey. If you like what you read, why not follow him on Twitter?

Owner managers, who plan to sell their business in the future for its maximum value need 3-5 years to plan and prepare. Do you know how much your business is worth and is it enough to be financially independent during your retirement?

At this event you will learn

• How to value your business
• How Lifetime Cashflow planning can help you
• The selling process
• Top tips on how to sell your business
• Pitfalls of entrepreneurs relief
• How to preserve your wealth

Event Details

Date: Thursday 9th February 2012

Times: 8.30am -11.00am

Venue: Doubletree by Hilton, MK Dons Stadium

Cost: Free Seminar with an optional free stadium tour afterwards

To view the agenda online, Click Here

Speakers

Adrian Todd, CMC Partners

Chris Bowmer and Tim Davison, Fortitude Financial Planning

Mark Rayner, Keens Shay Keens MK

Kick start your planning by attending this event and maximise your business worth. Book today as places are strictly limited. Click here to book your place.

When we re-launched our website, we not only decided to include a child and superhero theme, but a selection of BEHAVIORGAP.COM images. These are actually sketches drawn by Carl Richards who, like us, believes in presenting complex concepts in a way that is easy to understand.

Carl is a Certified Financial Planner^CM (just like Chris and Neil) and is the founder of Prasada Capital Management, based in Park City, Utah. His clients share two objectives: to not lose money and to enjoy their lives to the fullest. Carl is also a regular contributor to the New York Times.

When we discovered Carl’s website we noticed that we share a number of similar beliefs about the importance of ensuring that our clients have a proper Financial Plan in place in order to provide a framework to help make smart financial decisions (or at least avoid the dumb ones).

You can find more of Carl’s deceptively simple images on his website: www.behaviorgap.com/sketch

We were excited to hear that Carl has recently published his first book. We’ve ordered a copy for the office and the team are really looking forward to reading it.

If you like what you see and would like to purchase a copy of the book, you can do so online here. Enjoy!