“Alpha women” need financial planning advice!

Sorry if this blog comes across as a little bit sexist – but woman to woman - our need for long term financial planning advice and investment confidence has never been greater.

 

Women who successfully juggle their careers with having a family and continuing to climb the employment ladder have been labelled by some as “alpha” women and by others as “financially indecisive”.

 

Other surveys suggest that working women find it easier to do the weekly shopping, and book a family holiday, than make longer term financial decisions - but oddly enough these same women usually have mortgages.

 

Frequently with both partners working some aspects of the previously recognisable “financial dominance” haven’t been fully ironed-out.

 

As a result, there is often a lack of clarity about who should benefit from the long term savings and retirement planning provisions and consequently these decisions are often delayed, or not addressed.

 

From 6 April 2016 the new single-tier State Pension will no longer take into consideration our partners’ National Insurance records. The currently available 50% of our partner’s state pension and the state widow’s pension (we receive following their death) will cease to accrue.

 

This could leave a big hole in our retirement budget that needs to be filled.

 

That said by acknowledging that women continue to make well thought out strategic decisions, on a daily basis, for both our families and the businesses we represent, isn’t it time we gave more consideration to our own financial planning needs - especially over the longer term?

 

 

Helen Wilson

Consultant

Telephone: +44 (0)20 7893 3456

Email:  getintouch [@] broadstoneltd.co.uk

What will you do with your pension pot?

From 2015, individuals will be broadly be able to do what they like with their pension pot. Some commentators have suggested that, having saved all our money for retirement, we will get to a point where the sight of this money and its availability will go to our heads and we will all be booking one way trips to Vegas and heading for the Ferrari garage.

This is, of course, utter nonsense - the majority of human adults seem to have evolved an ability to take care of themselves over the millennia.

This is not to ignore the fact that certain individuals will fritter away what they have managed to save. They could become reliant on the state, for example being entitled to the state pension and other benefits, as they would be now. However, the reality is that most people get up in the morning, try hard at their job and do their best to take care of themselves and their families. That's not suddenly going to change.

There are though other disadvantages around the changes to pensions. They could well make annuities more expensive as their take up will be reduced.  In my opinion, this is a necessary cost to give people the confidence to invest more for the longer term, knowing that their retirement savings have now become a lot simpler and a great deal more flexible.

Matthew Phillips

Managing Director

Telephone: +44 (0)20 7893 3456

Email: getintouch [@] broadstoneltd.co.uk

A school lesson

 

Ok, the schoolmaster’s hat is going back on again, bit of a lecture this one. We’ve touched on all sorts of technical details of auto-enrolment so far, but why are we doing this in the first place?

 

The first reason is that the State pension is up the swanny (note: technical term). We have an ageing population who, thanks to medical science, just refuse to die off gracefully. There are simply not enough young people to support the rapidly expanding over 65 population at the moment, so expect to see some changes to how the State Pension operates in the coming decade.

 

Presently, those receiving the Basic State Pension get roughly £5,700 per year, which is below the poverty line of £6566* - not ideal. So we can either raise taxes to increase the state pension or get people to pay in to a personal / company pension scheme. The Labour government of the time chose the latter option and enshrined it in the Pensions Act 2008. So now we have what was originally called pensions compulsion, now called auto-enrolment.

 

We’re actually behind many other countries around the world in implementing this. New Zealand has the Kiwisaver and Australia has a range of Superannuation schemes – even Chile is further along in its auto-enrolment provisions than we are!

 

 

Rob Barksfield

Auto-enrolment Consultant
  

Telephone: +44 (0)20 7893 3972

Email:  contactus [@] broadstoneltd.co.uk  

*Monitoring poverty and social exclusion 2013, Joseph Rowntree Foundation