Essentially Wealth – Quarter Three 2019

The Financial Conduct Authority (FCA) has announced its desire to start a conversation about intergenerational differences and the changing financial needs facing consumers from different age groups. While it’s certainly good to talk, this is obviously an extremely complex issue and the financial narrative is not one that everybody may want to hear.

Pension reforms introduced in 2015 mean there is much greater freedom, both for investors and for those wanting to access their pension pots. Despite having to make many important decisions, both in the years running up to retirement and afterwards, a recent survey shows that only 32% of retirees take professional advice.

It may seem like light years away, but retirement will creep around faster than you expect. So, the sooner you engage with the topic, the sooner you’ll get your plan in place and get working towards the retirement you deserve. The earlier you start saving for retirement, the longer your money has to grow. Reinvested dividends and, even in today’s climate of low interest rates, compound interest, can play an important part in investment growth.

The last decade has witnessed a number of legal reforms aimed at cracking down on the use of trusts as a potential means of tax avoidance. However, despite these changes, trusts can still provide an effective way to transfer wealth and thereby help families achieve their financial goals.

The growing need to provide financial assistance to the younger generation is a recurring theme in today’s society. How can parents or grandparents help younger family members and are there any potential pitfalls when doing so?

Partly due to the 2011 abolition of the default retirement age and the current phased increases in State Pension age, an increasing number of people are working longer than ever before. They are conscious of the need to fill the financial void between an insufficient pension and lengthening life expectancy. Additional pressures sometimes include supporting family and thinking about covering care costs in later life.