The Money Advice Service

Lifetime ISAs



Welcome to our first update of the new season. Lots has been happening in the financial world recently, and one of the most interesting developments is covered in this month’s article.

The once simple and straightforward tax free savings account known as the ISA now comes in a number of different guises. The most recently announced, hot on the heels of last year’s Help to Buy ISA, is the Lifetime ISA.

This is a savings account for those aged 18-50 to pay into, and is designed primarily as a top up to your pension, as the main age people are expected to access it from is 60, but there is also another helpful opportunity when you buy your first property to use the money in your ‘LISA’.

The key features of this new account, to be launched in April 2017 (so details may be revised before then), are below:

  •   The Lifetime ISA will allow you to save up to £4,000 per year, and you will receive a government bonus of 25% on top of what you save - worth up to £1,000 per year

  •   Money in the ISA will not be taxed (i.e. on gains or the income from the cash or investments), and when you take it out you will not pay tax

  •   The money in your Lifetime ISA will only be accessible from age 60, or when you buy your first home

  •   You will be able to open a Lifetime ISA if you are aged between 18 and 40, but you will then be able to pay in until you’re 50

  •   If you paid the maximum in to your ISA every year from age 18 to 50, assuming no increase in the maximum contributions, you could receive a total of £32,000 in bonuses from the government

  •   It will form part of your overall ISA allowance for the year, which from April 2017 will be £20,000. So, as we understand it, on top of the Lifetime ISA allowance of £4,000 you should be able to put £16,000 into other ISAs (Help to Buy, Cash or Stocks & Shares). Note this may be subject to revision so that the bonus is also included in the contribution amount

  •   You will be able to combine existing Help to Buy ISA savings with the new Lifetime ISA (note that Help to Buy ISAs will not be available to new savers from 2019)

  •   You will be able to have Cash or Stocks & Shares in your Lifetime ISA which you should choose will depend on when you are likely to start using the money. If it is all for retirement from age 60, you could think about stocks and shares, or other permitted investments. If you might need the money to buy a house in the next 5 years, consider holding cash

  •   If you use the savings to buy your first home, it must be purchased for no more than £450,000. To count as a first time buyer, you must never have owned a property before, either inside or outside the UK

  •   You need to have held the Lifetime ISA for 12 months before buying a property with the money. After that, the account stays open so you can start to use it as a retirement savings vehicle

  •   If you take money out of the ISA for any reason other than to buy your first home before age 60, you will lose the government bonuses you have accrued and possibly attract a penalty (to be confirmed)

  •   Both you and your partner, or whoever you buy a property with, can have a Lifetime ISA potentially doubling the benefits available

    There is a lot of information to take in, but the new Lifetime ISA is generally good news for young savers. If possible (and appropriate take advice if needed), try to put money into your pension and the Lifetime ISA to build up maximum tax efficient savings for retirement.

    The added flexibility of using the ISA money for buying a home is welcome, as this has been one of the main problems with pensions, since younger people have needed to prioritise buying a property over retirement saving. Now you will be able to start saving for retirement whilst diverting the money to a property purchase if needed along the way.


    FF&P Wealth Planning is not providing advice or any type of product recommendation. Saving and investing will not be appropriate for everyone, and you should seek specialist advice where necessary. A good starting point might be the independent financial information website:



 You might only need to save for retirement for 10 years, but start early!

The headline might sound a bit flippant, but it has been shown that saving for the 10 years before you are 30 could mean you end up with more cash for retirement than if you save for the 40 years before you are 70.

So how is this possible? The answer is “compound interest”.

Compound interest is the additional return you make on the natural income and gains from your investments – in other words you earn income on the income. By starting a savings programme early, i.e. at the start of your twenties, the additional 10 years of growth and the compound interest can produce a bigger eventual pot of cash than adding to your savings for 40 years from your early thirties. The obvious caveat being that you should choose your investments carefully (i.e. so that you actually achieve a positive return).

The example looks at two savers who each contributed £2,500 a year to a pension, and the calculations assume investment growth of 7% per year (note that this is an ambitious target and would require a significant degree of risk to be taken; this will not be appropriate for everyone).

The first, who started saving at 21 and stopped at 30, would have a pension fund worth approximately £553,000 by the age of 70. This assumes that no further contributions were made from age 30 but that the fund carried on growing at 7% a year, with these gains reinvested in the pension.

The second saver, who starts at 31 and carries on contributing until the age of 70, ends up with a fund worth approximately £534,000, again assuming 7% annual growth.

The first saver has given up £25,000 of his earnings to build his retirement pot, and the second saver has put £100,000 away, whilst still achieving a lesser result. Obviously, if the first saver kept on adding to his savings, as would probably be sensible, the result would be even more impressive.

This example clearly highlights the benefits of saving in your early working years. Whilst you might not think you have much spare money after all your expenses go out every month, anything you can save on a regular basis now will go a long way towards a more comfortable retirement, leaving you more time to do the things you enjoy. Like watching England beat the Aussies.

Albert Einstein called compound interest the “eighth wonder of the world”, adding: “He who understands it earns it; he who doesn’t pays it.”


FF&P Wealth Planning is not providing advice or any type of product recommendation. Saving and investing will not be appropriate for everyone, and you should seek specialist advice where necessary. A good starting point might be the independent financial information website:

Budget update 2015


A short bulletin this month, as we take advantage of an interlude to the Ashes series for a week or so. We thought however that we should update you on the Budget that was held on July 8th; the first all-Conservative Government Budget for nearly 20 years. This is a summary of some of the key points that may affect you:

Income Tax

  • From the 2016-17 tax year, you will be able to earn £11,000 before paying Income Tax. This allowance is reduced gradually for those earning over £100,000 per year and will be removed completely if you earn over £122,000 per year

  • The basic rate tax allowance is also being increased slightly, so you would pay more tax at basic rate (20%) rather than higher rate (40%)

  • You will also be able to receive £5,000 in company dividends each year before paying Income Tax. Thereafter, Income Tax rates on dividends will increase

  • Basic Rate tax payers will be able to earn £1,000 per year from savings interest before paying tax; higher rate tax payers will be able to earn £500 on savings interest before paying tax. To put this into context, a basic rate taxpayer could earn 2% per year on £50,000 savings before paying tax this will eliminate tax on cash savings for a large number of people, as interest rates are so low

  • In summary there are tax cuts for most taxpayers, but the system is a bit more confusing Pensions

  • Annual pension contribution allowances were cut severely for those earning over £150,000 per year

  • Others will continue to be able to save up to the maximum of their annual earnings, or £40,000 whichever is lower
  • One quirk of the system is that if you made a pension contribution before the Budget on July 8th, but since April 6th, your allowance for this tax year is re-set, so you can contribute a maximum of £40,000 before April 5th 2016, regardless of earlier contributions (but subject to your earnings)

Rental properties

  • If you have a buy to let property, and you have been offsetting mortgage interest against the rent received to reduce your Income Tax bill, you will only be able to offset tax at 20% rather than your marginal rate. This is being phased in over 4 years from April 2017

  • If you made use of the Wear & Tear Allowance this is also being replaced and is unlikely to be as favourable in future

  • If you rent out a room in your main home you will be able to receive £7,500 per year rent before paying tax. This is a large increase from the current level of £4,250 per year

Inheritance Tax

  • Additional Inheritance Tax allowances are being introduced that will enable those who die leaving estates up to £2m to pass on more of their assets to their children or grandchildren, where this includes their main home, without paying Inheritance Tax


  • Help to Buy ISAs, which have been outlined in previous bulletins, will be available from December 1st 2015. Consider these if you are saving for your first home, as they will provide an additional cash boost from the government when you come to buy the property, based on how much you have saved in the ISA

    As well as the above changes, the government made significant cuts to welfare (government benefits), but offset this with an increase to the Minimum Wage, introducing the higher ‘Living Wage’. This is the hourly wage calculated that needs to be paid for someone to have an acceptable standard of living. It reinforces the government’s mission to promote working rather than being supported by the state.

    As ever, when you have some free time try to think about whether you could improve the state of your finances, and when in doubt consult an independent expert. As shown by this article, the landscape is always changing (plus we expect further changes in the ‘Autumn Statement’) and it’s important to keep on top of changes which could have a significant effect on you and your family. 


FF&P Wealth Planning is not providing advice or any type of product recommendation. Saving and investing will not be appropriate for everyone, and you should seek specialist advice where necessary. A good starting point might be the independent financial information website:

What does the General Election result mean for you?


It is unlikely to have escaped your notice that as well as Andrew Strauss being appointed Director, England Cricket in the last few weeks, we also now have a new majority Conservative government following the General Election on May 7th.

This means people’s finances can now be planned with a bit more certainty, as prior to the election it was very unclear who would be in power. This bulletin sets out what we now know, and what this could mean for you and your family’s finances.

  •   Income Tax, National Insurance and VAT have been “guaranteed” not to rise during this parliament

  •   The ‘Personal Allowance’, which is amount you can earn before paying Income Tax, should increase from £10,600 today to £12,500 by 2020. It is also expected that the amount at which you start paying higher rate tax (40%) will increase from £42,385 to £50,000. Both measures mean the majority of taxpayers will pay less tax as a proportion of their income by the time of the next election in 2020

  •   From April 2016, if you are a Basic Rate taxpayer, you will be able to earn £1,000 per year from your savings before paying tax. If you are a Higher Rate taxpayer the limit will be £500 of interest before you pay tax. This could save you up to £200 per year, and make Cash ISAs less useful for many people

  •   The ‘Help to Buy ISA’ written about in our last bulletin should now come into effect. This is intended to provide a maximum of £3,000 of government money to those who are saving for their first house. The scheme should now launch in the Autumn

  •   Help to Buy Mortgages, where the government helps people to borrow for their home with as little as a 5% deposit, should now continue and may even be extended

  •   A raft of new pensions legislation is now likely to come into effect. This includes:

o Reducing the amount that can be saved in pensions over a person’s lifetime to £1m. It is currently £1.25m. If you have pension savings above this threshold when you retire, you will face tax penalties (note the threshold is likely to begin rising with inflation from 2018)

o Consultation on reducing the tax efficiency of pension saving for high earners. If you earn over £150,000 your ability to save more into pensions is likely to be restricted or removed altogether

o The new rules on how you draw income from pensions will stay, meaning you can draw as much or as little as you want each year without restriction. Previously limits were in place or you had to buy an annuity, which guaranteed income for life but are currently at unattractively low rates

  •  Inheritance Tax may now fall for those who leave large ‘estates’ when they die. The threshold could be up to £1m for a married couple if their estate includes a property, within which no Inheritance Tax would be payable. This could save some families an additional £140,000 in tax when their parents or grandparents die
  •   The ‘Energy Price Freeze’ promised by the Labour party, where gas and electricity bills would be capped for a period of time, will not now come into effect. This means that the suppliers remain in charge of the cost of your energy

  •   Those on benefits are likely to have their payments cut or frozen for a period over the life of this parliament. The Conservatives promised to reduce spending rather than increase taxes to balance the books in this parliament, which is unlikely to be good news for those who rely on state support. In addition, further changes to things like Child Benefit which is payable to those where no-one in a household earns more than £50,000, have not been ruled out

  •   Free childcare for 3 and 4 year olds, for up to 30 hours per week, should now be introduced as this was a key Conservative campaign promise. This is an increase of 100% from the current 15 hours per week free childcare for working families (all parents in the household must work to qualify)

  •   Mortgage rates remain at historical lows, so this could be a good time to apply for a new mortgage or re-mortgage if your deal is nearing an end. It is generally assumed that rates will rise in the next 6-12 months if the economy continues to improve

    In general, if you are a young person with a job, who is perhaps saving for a new house, the new government could be considered to be positive for you. As ever there are pros and cons of each party being in government. There will be budget on 8th July which should confirm some of the above changes and may include some further new ideas. Seek advice if you are concerned about any particular aspect, or visit the government’s personal finance website for impartial, straightforward guidance.


    FF&P Wealth Planning is not providing advice or any type of product recommendation. Saving and investing will not be appropriate for everyone, and you should seek specialist advice where necessary. A good starting point might be the independent financial information website: 



End of the Tax Year – last chance to use 2014/15 allowances

With less than one week to go before the 2014/15 tax year ends, and 2015/16 starts. That means you don’t have much time to make any last minute investments or changes to your finances before the opportunity is lost.

Here are some of things you could think about doing before April 5th, for you and wider members of your family:

Use your ISA allowance:- everyone over the age of 18 can open a Cash and/or Stocks & Shares ISA and contribute a maximum of £15,000 before 5th April. You can only open one Cash ISA and one Stocks & Shares ISA each year, investing a maximum of £15,000 between them.


Income and gains in the ISA are tax free, other than a 10% tax on dividends. Few other investments are as tax efficient and accessible.

Make an ISA contribution for your children:- your children have an ISA allowance too. Alternatively they may have a Child Trust Fund. You can make a maximum contribution of £4,000 to a Junior ISA in the tax year, or their Child Trust Fund (the contribution period runs between their birthdays each year).

Your children can access the money from age 18, so make sure you are happy that they can do what they want with the money from that age. Anyone can contribute to your child’s ISA – i.e. grandparents, other family members etc.


Junior ISAs and Child Trust Funds grow in the same tax efficient way as adult ISAs. This could be a good starting point if you or others wanted to gift money to your children for university fees, property deposits or just to give them a head start.

Make a pension contribution:- you should think about maximising pension contributions if you haven’t done so already this year. If you are a County Cricketer you will be enrolled into a pension through your employer – contact them to check if you have scope to make a further contribution. The maximum is what you earn each year, or £40,000 if that is lower. You can access the money (currently) from age 55.


Personal contributions to pensions have ‘tax relief’ added by the government – effectively free money of up to 45% of the value of your contribution, depending on your tax rate. As sportsmen you will retire earlier than most, so it’s important to put money away for later life whilst you are earning. Pensions grow tax efficiently (like ISAs), and when you retire you should be able to access 25% of your pension tax free.

Use your Capital Gains Tax Allowance:- if you have investments that are easy to sell (i.e. not an investment property, but possibly shares or investment funds) that you have made a gain on, you could consider selling them before 5th April if the gain is within £11,000.


Gains realised up to £11,000 in this tax year are tax free. This could mean you pay less Capital Gains Tax in future.

These are some simple pointers to follow before the end of the tax year next week, if you haven’t been as hot on your finances this year as your pre-season training.

Next month’s article will look at some of the changes announced in the recent Budget, including the government’s proposal for ‘Help to Buy’ ISAs, which could help out with property deposits.


FF&P Wealth Planning is not providing advice or any type of product recommendation. Saving and investing will not be appropriate for everyone, and you should seek specialist advice where necessary. A good starting point might be the independent financial information website: 




Tax Return Season

Jan 2015 - it's the time of year when you could be completing your Tax Return (due to be filed, with any tax bills paid, by January 31st) and so have had quite enough of money matters, but here are a few suggestions on how you could be more tax efficient in 2015.

  • Pension contributions:- pension contributions you make personally (rather than those made by your employer), qualify for ‘tax relief’ at the rate you pay income tax. So if you are a Basic Rate Tax Payer, i.e. the highest rate of tax you pay is 20%, you will get 20% added to your pension contribution when you make it. If you pay tax at 40% or 45%, you can claim the difference back through your Tax Return

  • Charity donations:- donations to charity work in a similar way to pension contributions, as outlined above. Charities can claim Gift Aid, adding 25% to your donation, and if you are a higher or additional rate tax payer you can claim a further tax benefit through your Tax Return. Worthwhile if you make charity contributions throughout the year

  • ISA contributions:- saving cash or investments in an ISA means you do not have to pay tax on the income (other than a 10% built-in tax on dividends) or on any gains you might make on investments in the ISA. ISAs are a great base for your investment portfolio due to their tax-efficient nature. You can save £15,000 in an ISA this tax year, and another £15,240 from April 6th 2015

  • Annual Capital Gains Tax Allowance:- everyone has an annual CGT allowance, which is the amount of gain you can make on an investment in the tax year before paying tax (outside ISAs and pensions). In the current tax year, ending April 5th 2015, the CGT allowance is £11,000 per person

  • Tax efficient investments:- if you can take more risk and have covered the basics such as ISAs or pension contributions, you could consider investments in Venture Capital Trusts (VCT) or Enterprise Investment Schemes (EIS). These are for high-risk investors however as they include investments in very small companies, which almost always carry more risk. You can get Income Tax deductions of 30% of your investment in these schemes, along with numerous other tax benefits. We would strongly recommend seeking financial advice when considering investments in an EIS or VCT


    Finally, if you do need to file a Tax Return before January 31st make sure you do so on time, and transfer across any tax payments required. Otherwise there will be penalties which only get heftier the longer you leave it!


    FF&P Wealth Planning is not providing advice or any type of product recommendation. Saving and investing will not be appropriate for everyone, and you should seek specialist advice where necessary. A good starting point might be the independent financial information website: 

Buying a house

Is now a good time to buy a house?

Press coverage at the moment is rife with talk of not only Afghanistan’s chances in the World Cup, but low interest rates, which means that mortgages are at historically low rates too. This has led some newspaper commentators to suggest that this could be ‘the best time in history’ to buy a house.

Mortgage rates have almost halved over the last 12 months, and in practice, according to the Bank of England, this means a typical £200,000 mortgage is £100 per month less expensive than it was at the beginning of 2014. Furthermore, mortgage lenders are in the midst of a price war, so it is possible rates will go even lower over the next few months.

We therefore thought it would be useful to provide our tips on the house-buying process, in case low mortgage rates spur you on to make that first purchase, or potentially trade up to a bigger place.

1. It’s a good idea to get your mortgage in place whilst you’re researching places to buy. When you do find the dream home, you will be a much stronger position if you’ve got your finances sorted as far as possible in advance

2. You will need a 25% deposit to secure the best rates. Of course this won’t always be possible, and you can secure a mortgage with just a 10% deposit, but be aware the rates won’t be as competitive

3. Find a mortgage broker. They will research the best deals and take lots of the hassle out of arranging your mortgage. They will charge a fee, but if you don’t have the time to do it yourself (and spend a lot of time on it), it’ll be worth the money. A good starting point for finding a broker is visiting

4. Consider talking to a solicitor early on too. The quicker you can go in to action when an offer is accepted the better, as you will prove to the seller that you are serious. Anything you can do to avoid getting gazumped (where a higher offer is made and accepted after yours) is definitely worth it. Ask friends, family or your mortgage broker for recommendations of decent, cost-effective legal firms. Think carefully before using an online-only firm because it might be difficult to find a real person to talk to if it all gets messy!

5. Make sure you get a proper survey done. Unless the property you are buying was built very recently (and sometimes even then), it is worth getting at least a Homebuyer’s Report completed. The report will highlight any structural issues with the property, and detail any work that needs doing. The cost of this will vary depending on the value of your property, but should not be more than a few hundred pounds for a £200,000 - £300,000 property. Check your surveyor is RICS qualified, and if when you get the report there are significant problems, use this as a tool to renegotiate the purchase price, or ask for a payment from the sellers towards the costs of the work. Negotiation on this is usually done via the estate agent

6. Stay on top of it throughout the buying process. You and (usually) the person selling the property are the people with most interest in the purchase completing quickly, so you will need to chase your solicitors/surveyor/estate agents/mortgage broker at least every week if you want to get things done quickly. Never assume work is being done unless you’re asking about it! Once you get to exchange you should be home and dry. After this, both you and the sellers have a legal obligation to purchase/sell the property respectively. You will also, as the buyer, need to have house insurance in place as at the date of exchange. Then just agree a completion date and look forward to furniture shopping & moving in!

7. Buying a property now – whilst mortgage rates are at all-time lows, and the season has yet to get going – could be a sensible financial planning decision for the long term if you have your deposit and want to make the move...


FF&P Wealth Planning is not providing advice or any type of product recommendation. Saving and investing will not be appropriate for everyone, and you should seek specialist advice where necessary. A good starting point might be the independent financial information website: 



Christmas is a season of joy and goodwill. It’s also the busiest sales season for department stores and online retailers. 

Christmas is a busy time for credit card companies and pay day lenders too. Cards are used to facilitate spending, which is entirely sensible, although the trouble with credit cards is that many of us are persuaded to spend a little more at Christmas than we actually have in our bank account or our next pay cheque. For those who are careful and pay their credit cards off over a couple of months, that may be natural. However, the problem for most of us is that it’s too easy to go for the minimum payment on our credit card on direct debit and let the balance roll on. With UK bank rates at their lowest levels ever, this strategy might look alright, but the interest rate on credit cards might still be about 20%, which is an average rate these days.

Interest rates can be worse on some credit cards and are not far short of ‘daylight robbery’ from pay day lenders. 

Some credit card companies play to our human nature and offer an incredibly low monthly repayment, as low as 2% of the outstanding balance. If you overspend by £1,000 this Christmas and repay a minimum balance of just 2%, it could take you almost 4 years to settle the bill. 

So here are a few top tips to think about in the run up to Christmas:

  • Work out an affordable budget for Christmas, which includes presents or partying and try to stick to it.
  • Have a look at the last credit card statement you received, and make sure you understand what your card will cost you in charges if you don’t pay it off in full. It’s best to know that before you start using it.
  • If you have more than one credit card, check whether you are being charged an annual renewal fee. Reducing the number of cards you have may reduce fees being paid for something you don’t need.
  • If you have to go to a pay day lender or dip into an unauthorised overdraft this December, then you probably can’t afford to give your family more than a Christmas card. So just be honest with them and yourself!

Remember, just because it isn’t going well ‘down under’, that doesn’t give us an excuse to drown our sorrows and pay for it later… but if you do, make sure it’s not Australian wine!

Advice supplied by FF&P Wealth Planning. For more information on finance and wealth planning, please visit



As Benjamin Franklin once said, "In this world, nothing can be said to be certain, except death and taxes” . However, using your ISA allowance for savings or investment purposes is one of the few times that the government has provided an easy (and legal) way to reduce your 
tax bill – but you need to act before 5 April 2014.

Individual Savings Account (ISA)

What's special about an ISA (which stands for an Individual Savings Account) is that you will not be charged tax on the interest you earn, nor on the capital growth of your investments.

Cash ISA

The annual limit for cash contributions into your Cash ISA for tax year 13/14 is £5,760. This cash will not be subject to income tax, as it would have been in a regular bank account. This means that higher-rate taxpayers save income tax at 40% on any savings interest (additional rate tax payers save 45%), while for savers in the basic-rate tax band, it provides a saving of 20% on interest.

Benefits of Cash ISAs

To show the power of this tax saving, since ISAs were introduced in 1999, a comparison between a basic-rate tax payer who opened a Cash ISA when they were first launched and contributed the maximum each year, shows that they could have over £5,000 more than someone who used a basic (non-ISA) savings account, earning the same interest rate.

Stocks and Shares ISA

The annual limit for contributions to your Stocks and Shares ISA for tax year 13/14 is £11,520, although any contribution to a Cash ISA for the year will be deducted from the Stocks and Shares ISA limit.

Benefits of Stocks and Shares ISAs

If you use the stocks and shares part of your ISA, you will not have to pay Capital Gains Tax on your profits (potentially saving up to 28% tax). When it comes to Income Tax, ISAs help reduce the tax on dividends too.

Whether or not you should take out a Stocks and Shares ISA will depend very much on your attitude to risk. You should always seek professional independent financial advice first – for many, it’s the easiest way to start investing.


It is important to note that this year’s ISA contribution must be made by 5 April 2014 and any unused allowance cannot be carried over to future years. If you make a withdrawal from your ISA during the year, it is not possible to replace this part of the contribution later. You can also transfer existing ISAs to a new ISA. You can only put money into one cash ISA and one Stocks and Shares ISA per year.

ISAs are a great way to save or invest tax-efficiently. Any ISA holdings do not need to be included on your tax return. ISAs are also extremely flexible – most accounts (unless you have chosen a fixed rate ISA) allow you to get access to your money whenever you want. This makes them a good option for people looking for decent returns, but who want to be able to make a withdrawal when necessary.

Hopefully by using your ISA allowance limits, you won’t feel the desire to bowl a rib-breaking bouncer at the tax man!



From a young age, you’ve probably heard your parents say “don’t spend it all at once”, but if you do decide to save your money, you have to think about what to do with it.                              

Goals and Objectives

In today’s world it can be hard to find any spare money from your pay cheque to save, but it is really important to work out how much you can afford to save from your monthly budget, if it’s possible. Once you manage to start saving money, either on a regular basis or if a lump sum comes in (hopefully a bonus for some silverware success), you then have to decide what to do with it.

Saving Money – Short Term

There are many things you will want to buy in the next five years – some things will be small, like a television, and others might be much larger, such as a house. Having your savings in a bank account or building society account means, that when it comes to paying, you can transfer your money across. For this reason, it’s really important to have money in your bank or building society account, in excess of what you need as an ‘emergency fund’. It is important to use your savings for this, rather than using a credit card because this can be a very expensive way to buy things. 

Investing Money – Long Term

There are also things that you may plan to buy in the long term. It may well still be a house, but you may want to buy it in longer than five years’ time. If you put your savings into a bank account, you will only earn interest, which has been very low over the last few years (perhaps around 2%). This is why many people look to investing. Investing means putting money into shares, bonds, property or other financial schemes, with the purpose of earning a profit. Over a longer period, returns are usually greater than bank interest rates; however, it’s worth bearing in mind that the value can drop to lower than the original investment value.

As this chart below shows, the value of investing (the blue line) goes up and down a lot more than putting the money in the bank (the black line). So, if you wanted to use the money in the short term (less than five years), you might not want to risk investing it and having less than you started with. However, if you want to use the money over the longer term (over five years), investing should make your money work harder and could lead to bigger returns. 



It is worth pointing out that there are many more complicated ways of investing than highlighted above and that it is important not to put ‘all your eggs in one basket’ when investing. Before implementing your saving and investment strategy, you should look to get advice from the relevant financial services professional. However, once you have a strategy for saving cash for the short-term and investing for the long-term, it can help you to achieve your financial goals and objectives. This should free up more time to focus on your goals and objectives at the crease.



When deciding whether or not to go for a six, you may well be considering the risk and potential return. On the upside you could get six runs, however, you might be more likely to get out!

Saving and investing also involves a variety of risks and returns, for example the risk your money will not keep up with rising prices (inflation risk),the risk that comes with share prices going up and down (market risk), the risk that the person or company that you invested your money with will fail (default risk) and the risk that you could have earned better returns elsewhere. 


 When deciding how to invest and save it’s important to strike a balance between these different risks and the potential rewards. The factors to consider when getting that balance right for you will depend on:

  • Capacity for loss – how much you can afford to lose
  • Investment goals and objectives – time frame and need for returns
  • Attitude to risk 

Taken together these make up what’s called your ‘risk appetite’. 

Capacity for loss

What would happen if you lost some or all of the money you’re putting into investments?  Or, what if stock markets have fallen and the time you need the money is not a good time to sell? The answer to these will depend on your circumstances and how much of your money you’re investing.

To help develop your answer, it’s important to think about the people who depend on you financially and any other important financial commitments you need to be sure of meeting.  There is often little advantage in investing for the long term, only to have to borrow to then meet short term needs.

Investment goals and objectives

Your saving and investing choices will depend on your financial goals and timescales – the bigger your goal in relation to the assets or income you wish to invest, the greater the rate of return required to meet your goal. Taking no risk at all may make your goals impossible to achieve; or taking too much risk may lose all your investment.

As discussed below in the ‘Investing and Savings’ article, short-term goals (under five years) such as a car or a house deposit are best saved for in cash; whilst with longer-term goals, it might be more suitable to invest your money to give a better chance of greater returns.

However, as a long-term goal moves closer, your risk balance might need to change. For example, you may want to start moving into less risky assets a few years before the goal date, to start ‘locking in’ gains, and to protect your investment against events like market falls.

Risk attitude

Personal attitude to risk is hard to measure and can be changeable, what feels comfortable one day may not the next.

Risk attitude is subjective and is likely to be influenced by current events or recent experiences which can make it tricky to look long term. When stock markets are rising, people often feel comfortable with market risk; however, they tend not to when they are falling. Unfortunately, this natural tendency means that people often make bad investment decisions. Most people are not comfortable with the idea of losing money. On the other hand, they may regret it if they’ve been very cautious and their long term investments don’t produce the returns that others receive.


You should always assess your risk appetite and circumstances before making any investment decisions and understand the risks you are taking.

Investment advisers and financial advisers must assess your risk appetite before making any investment recommendations. Some use risk-attitude questionnaires, but remember your capacity for loss and the nature of your investment goals are also essential in determining a good balance of risk for you.

You can also manage your risk by not putting all your eggs in one basket and spreading your money across a range of different types of investments. As in cricket, perhaps it makes more sense to go for four!


FF&P Wealth Planning is not providing advice or an investment recommendation. The value of investments can go up as well as down and you may not get back the full amount invested. This article should be used for general information only.



In January this year we wrote to you about saving into ISAs, and how this is often a good idea if you have spare cash to save at the end of the month. In the Chancellor’s Budget in March he announced wide-ranging changes to ISA saving and these come in to effect in July 2014, so get ready!


As a reminder, an ISA (which stands for an Individual Savings Account) is a Savings Account for either cash or investments that does not charge tax on the income you earn inside the ISA, nor on the capital growth of your investments.


Those of you who use your ISA allowances regularly, or remember our article from January, will recall that at present your ISA allowance is split between what you can save in cash and what you can invest, usually in stocks and shares. From July 2014, you will be free to invest all of your ISA allowance, which has been increased to a whopping £15,000 per person per year (up from £11,520 in 2013/14), in either cash or investments, or a mixture of both.

The ISAs will be rebranded as “New ISAs”, or NISAs, and will open up a great deal more flexibility for savers and investors. They will also allow you to make more of your savings tax efficient, because you can save more into them.

For example, if you were to save the full £15,000 in cash in your NISA, and managed to find a 2.5% annual interest rate, as a basic rate taxpayer you would now save £75 in tax. Until April 2014, you were only allowed to save £5,760 in cash in your ISA, the maximum tax you could have saved was £28.80 based on a 2.5% interest rate. This is a big jump.

If you are a higher rate tax payer, the numbers are even more impressive; from July you would save £150 in tax on the above example, compared to a £57.60 saving until April 2014.

From July you will also be allowed to transfer old Cash ISAs into Investment ISAs and vice versa, something that was previously restricted.

This all points to the government’s desire to make saving more attractive and to give you the freedom to use your tax allowances as you wish. It should help make saving for your house, car, TV or new cricket kit all the easier, and we urge you to consider making the most of the allowances available if you are debt-free and have money available to save or invest.


It is important to note that this year’s full ISA contribution of £15,000 can be made from July 2014 but must be used by April 5th 2015. Any unused allowance still cannot be carried over to future years.

If you make a withdrawal from your ISA during the year it is not possible to replace this part of the contribution later, so think carefully before making withdrawals just to top up general expenditure.

ISAs remain a great way to save or invest tax efficiently. Your ISA holdings do not need to be included on your tax return. ISAs are also extremely flexible, most accounts (unless you have chosen a fixed rate cash ISA) allow you to get access to your money whenever you want without penalties. This makes them a good option for people looking to grow their money, but who want to be able to make a withdrawal when necessary.


A quick word for those of you starting a 1st XI of your own… from July the Junior ISA allowance will increase to £4,000 per year, and this can be a great way to start a nest egg or university pot for your little ones in a tax efficient way. Anyone can contribute – so encourage grandparents, aunts, uncles and wealthy cousins to make tax efficient birthday or Christmas gifts. You’ll thank them for it when university fees come round!


FF&P Wealth Planning is not providing advice or any type of product recommendation. ISA investing will not be appropriate for everyone and you should seek specialist advice where necessary. A good starting point might be the Independent financial information website



Wimbledon, the World Cup and the Commonwealth Games are all over, so there’s now little excuse not to sort out your finances this summer! Just kidding, we know this is your busiest time of year, but just in case you have a few minutes between innings to tidy up your finances, following these financial hints and tips could mean you have a better organised financial situation by the end of the season.


Hopefully this one will last until October when no doubt you will be heading off for a few well- earned weeks rest on a sunny beach. You may have read in the paper or heard on the news that the British Pound is currently strong against most major currencies. This means that, as things stand, you should get more Euro, Dollars or Malaysian Ringgits for your money when you head abroad this year.

There are many reasons why the Pound is strong at the moment, but one of the main ones is because the UK is generally in better economic shape than many other countries, so this is seen as a good place to hold currency over many other countries. Make the most of it and use a currency exchange comparison tool before you go to get the best deal on your holiday money.


Our last article outlined the New ISA rules, which came into effect on 1st July. You can now save £15,000 per adult in either cash or stocks and shares in an ISA. This is a significant increase, particularly in respect of Cash ISAs where the previous maximum was £5,760. Income and gains made in ISAs are tax free, potentially delivering big benefits if you can get the maximum in each year. Depending on your circumstances, ISAs can be a great first step into the world of saving and investing for your future, especially if you combine it with maximising your pension contributions (see below).

Also, if you have kids, you can also now put in £4,000 per year to their Child Trust Fund or Junior ISA. From April 2015 you should also be able to transfer any Child Trust Funds into Junior ISAs, which should mean greater flexibility and more investment options for your children’s savings. Remember this could be a handy pot to put towards university fees or their first car or flat. It is never too early to start saving!


The summer can be a good time to review your pension situation and consider whether you are saving the most you can afford. Your cricket pension requires you to pay at least 5% of your salary in, but you will get tax relief from the government on any contributions you make. This can mean an extra 20%, 40% or even 45% of the contribution is added on your behalf, depending on how much you earn. This really is free money, and the more you pay in the more tax relief you could get so it’s worth maximising your payments if you have some spare cash at the end of the month.

Most of you will be able to access your pension from age 55 (possibly going up to 57 or 58), so it’s a long term plan, but potentially a valuable one when planning for life after cricket.


At the moment mortgage rates are historically low. Take some time to check your deal and make sure it is competitive. There is some talk that rates will start to go up later this year or next year as the economy grows, so if you are in a position to, you could consider locking in to a deal now whilst rates are low. Always speak to a mortgage adviser first to check that any deal is suitable for you, and that there aren’t penalties if you leave your current mortgage early.

It goes without saying that, other than your mortgage, debt is not the best position to be in. Try and pay off any personal loans or credit cards as quickly as possible, and in general this should take priority over adding to savings and investments. Credit cards are notoriously expensive when the 0% interest deals end, so either pay it off as you go or if necessary make sure you switch to another 0% deal when it ends to avoid paying unnecessary interest charges. Don’t use credit cards as a way of making your monthly salary go further, it will come back to haunt you in the end.


Review your insurance contracts on your car, home, contents and anything else to make sure they’re competitive. The PCA has deals with brokers who can help if you think you aren’t getting value for money in these areas – head to the PCA website as a first port of call for more information.


FF&P Wealth Planning is not providing advice or any type of product recommendation. Saving and investing will not be appropriate for everyone, and you should seek specialist advice where necessary. A good starting point might be the independent financial information website: 



As the season draws to a close, it is possible that you will have a bit more spare time to deal with all the “life admin” that gets put to the bottom of the agenda at the beginning of April. One of the issues that is relevant for everyone is putting money away for the time when you stop earning, and have to live off the money you made as a member of the working population. For sportsmen, retirement often comes earlier than for others and many of you will be in the best earning years of your life right now.

So it’s worth thinking about what you can do today to provide for the future, and why it’s so important.


Don’t wait for the benefit of hindsight. In a 2012 survey of American pensioners, when asked the question ‘what one piece of advice would you give younger people’, 39% responded ‘save for the future’. When asked what was the most important piece of financial advice they would give, 93% said ‘start saving early’ and 84% recommended contributing to your employer’s pension plan.

Whilst I hope and expect that some also responded, ‘live for the day’ or ‘you can’t take it with you’, it certainly indicates that given their time again many older people wish they’d been a bit more shrewd in their younger days so they could spend more time in retirement enjoying their money, rather than wishing they had some.


In the UK, if you haven’t made any private pension contributions and have no other pots of money such as ISAs or cash savings to live from in retirement, you will have to survive on the State Pension. Changes are afoot with this and so these figures will shortly be updated (and will increase a bit), but today’s basic state pensioner receives just £113.10 per week. That’s £5,881.20 per year. Compare that to your current salary and think about whether it’ll provide the sort of lifestyle you want in your 60s and 70s.

Also think about when you’d like to retire. Most people don’t fancy working forever; however much they currently enjoy their job, watching the overseas tour live every winter, or a couple of months sailing the Med every summer, are more appealing than being office-bound for 48 weeks of the year. The State Pension age for everyone under 40 today is now 67, and if anything that is likely to go up before you get there. Before this, unless you’re on benefits, you get nothing from the government. Therefore, if you hoped to retire before age 67, you’ll need to make your own arrangements before State support kicks in.


Again, start early. To give a basic example, if you start saving £150 per month when you are 25, at retirement you could end up with a fund worth £395,000 (assuming annual growth of 7 per cent). But if you leave it another five years and don’t start saving until you are 30, your fund would only be worth £270,000. That is a difference of more than one-third, and illustrates the power of compound interest over time.

In addition to your cricket pension, which you should all be members of, you can make additional pension contributions. The overall maximum is £40,000 per year (possibly more than this if you didn’t make the maximum contribution in the three previous years), but you must earn at least as much as you contribute to a pension in a particular year for it to be tax efficient. Whilst the maximum is an annual £40,000, just an extra £150 per month as noted in the example above could make a big difference. Get some professional advice or visit if you want to explore your options in more detail.

And it’s not just pensions – some say the major disadvantage of private pensions is that you can’t access the money until you are at least 55 (increasing to age 57). Whilst I would say that’s good because you are supposed to be saving for retirement, of course some people have good reasons to require access to their savings before then. So look at ISAs, cash savings, investments etc. if you would prefer the option of access before you’re in your fifties. Read previous articles for more information on these options.

Just a bit of extra saving now will make all the difference towards that retirement of winters in the Caribbean, or summers in Med.


FF&P Wealth Planning is not providing advice or any type of product recommendation. Saving and investing will not be appropriate for everyone, and you should seek specialist advice where necessary. A good starting point might be the independent financial information website: 



As we approach the end of 2014, we thought it would be useful to provide our top ten tips for financial harmony in the year ahead. And then, because it was Christmas, we thought the snappily titled ‘The 12 Tips of Christmas’ would be more apt... Let’s hope the article itself is of better quality than the headline.


Start a spreadsheet or even just a list. Put your net monthly income at the top, followed by your fixed outgoings each month. Deduct your outgoings from the income and this will leave you with what you have to spend (or save!) each month. Simple but very effective, and should mean your savings grow quicker.


What is your focus financially over the next 1, 3, 5 and 10 years? Just as in cricket, if you aren’t clear on your goals then you can’t put a plan in place to achieve them. Typical things might be; wanting to buy a car or a house; planning a wedding; or maybe thinking about saving for children’s education. Once you know what your goals are, work out when and how much you need to achieve them, then think about what you need to do or save to get there.


After reserving some cash for an emergency fund, pay down debt - starting with the most expensive (i.e. the one on which you’re paying the most interest). This should almost always be your first priority when it comes to financial planning.


That’s it. Just don’t. If you do, apart from paying horrific amounts of interest, you won’t be able to get a mortgage for at least 5 years with most lenders.


There are many easy ways to boost your credit rating, which will really help when you come to take out a mortgage in future (or next time you re-mortgage). Things to consider doing are:

  • Check your credit report – you can get a copy for £2 from a credit rating agency like Experian. Check if you have any black marks against your name before applying for credit

  • Make sure you’re on the electoral role – look on your local council’s website for how to do this if you aren’t registered to vote

  • If your credit history is poor, or you haven’t had any form of credit before, consider taking out a credit card and using it for an element of your monthly spending (petrol or travel costs might be a good idea) then pay off in full each month. This should prove to lenders that you are a good credit risk


You can pay £15,000 into a Cash or Stocks and Shares ISA each tax year (the amount you can save is likely to increase each April). This is a good basis for a savings or investment portfolio as almost all the income you earn, and gains you make, are tax free. Usually it is advisable to use ISAs before other types of savings or investment vehicles.


If you have held Savings Accounts for over a year check the rate of interest you are receiving. More often than not the bank will have reduced the rate to well below 1% after the first year, if not nearly to zero. Check comparison sites for a new, better interest rate. Alternatively, if you don’t want to keep swapping accounts, look for the best rate that doesn’t include a bonus.


When your car insurance renewal comes up, or you move into a new flat and need to set up gas and electricity accounts, shop around for the best deals. You will be surprised how much you can save each year. There are numerous comparison websites available, just enter that search term into Google and spend a bit of time researching. That goes for other types of insurance, bank accounts and holiday cash too.


If you pay for your bank account each month and get insurance as part of your monthly contract with your bank, don’t then also take out separate insurance that covers the same thing. The classic is mobile phone insurance – this will inevitably be offered under the contract with the bank, but your mobile provider will almost certainly try to sell you it as well. Others to watch out for are travel insurance and car breakdown insurance.


If you’ve bought a house, or have any other assets that you would want to make sure are passed on to specific people in the event of your death, make a Will. They are quick, cheap and easy, plus you might get preferential rates through the legal services offered by the PCA – visit the website for more details. Other legal services, such as for buying a property, are also offered through the PCA.


At some point you won’t be able to make a living from playing cricket, and the fact is that ‘retirement’ comes a lot earlier for professional sports people than most others. Planning for life after cricket could include:

  • Paying as much as you can afford into your pension scheme

  • Not blowing all your surplus cash whilst you’re playing – save for the future

  • Thinking about what will you do for a living after cricket. Coaching? Teaching? The murky

    world of finance? Give it some thought during the off-season and make a plan to make yourself more employable. Adding to your qualifications would of course be a great first step


Don’t be afraid to seek advice when making major financial decisions, such as buying a house, finding a mortgage, or entering the world of investments. Local independent financial advisers and mortgage brokers can be found at the following website

And finally... don’t spend the whole festive season thinking about your finances! Have a fantastic Christmas and look forward to a happy, healthy and prosperous 2015.