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Income Protection – why wouldn’t you want to protect your income?

Income Protection, also known as IP insurance, can help financially support you if you are unable to work and suffer a loss of earnings as a result of an injury or illness.

When you think about it, the most important skill you possess is being able to work and earn a living to pay for all the nice things in life. Unfortunately, the human body is not indestructible and is prone to getting injured or suffer from various ailments.

If you are unlucky enough to have an accident, or suffer from an illness that prevents you from working for any time up to a year or longer, how will you cope financially continuing to pay for all the bills, mortgage and other ongoing costs that life throws at you?

Why wouldn’t you want to protect yourself against this situation with Income Protection?

If you are fortunate enough to have a generous employer with good sickness benefits, who would continue paying you your basic wage for 6 months or so, then that’s good but the majority of employers are not in the position to do that.

What about State benefits?

If you don’t have any Income Protection and you do become injured or ill, before you know it your income whilst you’re unable to work would reduce to the current Statutory Sick Pay (SSP) rate of £94.25 per week, paid for the first 28 weeks that you are not able to work. Beyond this you may qualify for Employment and Support Allowance (ESA).

For the self-employed the situation is even more worrying. If you are one of the many millions that work for themselves and you become ill or disabled and are unable to work, if you don’t have any income protection in place you will have to look at State benefits such as SSP, or you could qualify for ESA. This would pay £73.10 per week for the first 13 weeks. At this point it would be reviewed and would either remain the same or increase to £100.75 per week if you are unable to return to work.

What this all points to is that if you simply rely on the State when you are unable to work, due to sickness or disability, you will suffer a huge reduction in your income. This can quickly begin to cause major problems paying for even your basic bills, let alone continuing to have the same lifestyle as before.

This is where Income Protection comes into its own

For an amount suited to your budget, you can have an income paid to you after you have been sick or disabled and unable to work for a period of time, known as the deferred period. This is normally for 8, 13, 26 or 52 weeks matching your individual needs.

An income of up to 60% of your previous earnings can be covered which means it would at least help pay for your essential costs.

If need be, the Income Protection plan would continue to be paid until you either went back to work or until your chosen retirement age. Potentially, this could add up to many thousands of pounds being paid to you over a long period of time, if necessary, which would not be available to you without having this kind of Income Protection plan.

It seems strange that most people will buy pet insurance before they even consider Income Protection.

If you had a machine producing money for you, day in day out, you would make sure it was insured. Well, that machine is you but, surprisingly, you never think of protecting this valuable asset against a breakdown or malfunction although you wouldn’t think twice about not protecting your car, for example.

Some relevant figures to leave you with:

  • £21,000 is the average annual shortfall for someone unable to work
  • The average UK employee could be on the breadline in just 32 days
  • 30% of UK employees have no financial back up
  • In 2016 there were 15 times as many people who needed income as needed life cover – 58,768 deaths compared to 866,667 ESA claims
  • For every death in 2016 there were 20 life policies sold as opposed to for every Income Protection policy sold 7 people claimed ESA

(sourced from Swiss Re, Term and Health Watch 2017, ONS 2017, DWP 2017)

So as can be seen, there is a real chance that you may be one of the unlucky people who may be unable to work due to sickness or disability and, potentially, struggle to cope with it all, financially.

The simple solution is to have a chat with us at Temple Wealth. We can help you overcome this financially crippling scenario and put together an Income Protection plan suited to your needs and budget.

Contact us on 01329 282882, or send a message using our Contact Us form or Facebook page, to speak to one of our independent advisers who can help create the right Income Protection plan for you.

The definition of illnesses or incapacity may vary between product providers and any claim is based on your actual evidenced income. Premiums must be kept up to date or cover will cease, some policies have no cash in value.

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Independent Mortgage Advisers – Why you should speak to them before anyone else!

Even seasoned home owners can find buying a property a complicated and confusing experience, particularly as it’s something most of us only do occasionally during our lifetime. So why should you speak to an Independent Mortgage Adviser before anyone else?

For first time buyers, the process can be even more baffling, so they need a professional, independent mortgage adviser, on their side. 

Although it was a few years ago now, I still remember the initial excitement of buying my first home.  I also remember the stress, worry and anxiety that went with it, which is why I absolutely believe it makes sense to talk with an independent mortgage adviser before even thinking about looking at houses! This applies to anyone, whether you’re a first timer, home mover, or buying a property for investment. It’s important to understand what’s currently happening in the mortgage arena.

We can help with more than just the mortgage

For me, and my fellow advisers at Temple Mortgage, it’s more about forging a two-way relationship (which doesn’t end once the mortgage starts but continues for many years as your life and circumstances change). We will work together on your current situation, finding out where you want to get to and help you to devise a plan and a timescale to get there.

Most advisers go that extra mile and offer practical advice too – I for one wished I had someone like this back in 1992, as I had so many questions. It’s one of the reasons my Financial Services career moved in this direction! Additionally, having access to the whole of the marketplace puts you as the buyer in a better, more informed position all round.

Using an independent mortgage adviser can save time and a lot of stress!

Lots of things can impact on borrow-ability including salaries, employment status, how long you’ve been employed/self-employed, credit commitments, credit status, and age, among other things. We can help you work out who to go to which can be a time-consuming process.  An independent mortgage adviser will recommend a lender from the whole of the market to achieve the best mortgage based on your specific circumstances.

Apart from advising and arranging on the mortgage itself, our services tend to go a lot deeper than just a transaction as the needs and understanding of mortgages can vary from client to client. An experienced mortgage adviser will pitch the advice at the right level, ideally before a property has been found.

How an independent mortgage adviser can help you…

A mortgage adviser can help in many ways, but some in particular include advice on:

  • What a mortgage is and the house buying process. It needs to be explained in plain English by someone who has the knowledge, but more importantly, empathy! 
  • How much can be borrowed, which I call ‘mortgageability’. It’s not just a case of walking into the local bank and they lend the money! It’s competitive out there, some lenders may not be as competitive as another, or their lending policy may mean they won’t lend at all.  This could cost you both time and money, and trying several different lenders has its own implications
  • The Help to Buy scheme and the additional factors that need to be considered with this
  • Reducing your outgoings and advice on what lenders will look for when assessing mortgage applications to be in the best position possible to move forward when a potential home is found
  • Saving for a deposit (including government bonuses such as the Help to Buy scheme) and advising on ways to boost your savings
  • The likely costs involved – solicitors, surveys, arrangement fees etc
  • What information lenders will need so it’s readily available, and if not, there is time to facilitate this
  • How credit scores affect borrowing and ways to improve it, if necessary
  • Making an offer on a property and negotiating with the Estate Agent
  • Recommend other professionals to help such as a solicitor, surveyor or Estate Agent, if you don’t already have one
  • Be there when it gets frustrating and understand the stresses involved
  • What happens at each stage of the process and keeping all parties informed – effective communication is a fundamental part and can help the wheels run more smoothly.  Who does what and why! 

In a nutshell, using an independent mortgage adviser can make life that little bit easier. Having a professional overseeing the process with the lender, estate agent and solicitor, will leave you to concentrate on the more enjoyable side, such as looking at furniture or planning your new kitchen!

To find out how we can help you, whether you are a seasoned home owner, or you are looking at saving for and buying your first house, contact Diane Blackman by email diane.blackman@templemortgage.co.uk, call Temple Mortgage on 01305 213150 / 07977 467117, or send us a message on our Contact Us or Diane’s Facebook page.

Your home may be repossessed if you do not keep up repayments on your mortgage.

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Inheritance tax – What is the main residence nil rate band?

Inheritance tax can cost loved one’s thousands of pounds in the event of your death, yet it’s possible to legally avoid huge swathes of it, or possibly pay none at all.


Benjamin Franklin said “the only things certain in life are death and taxes”
Inheritance Tax (IHT) touches on both.

My first entry is to do with the main IHT allowances, and to explain the new main residence nil rate band allowance, namely who is entitled to the new allowance and what it is all about.

The most important thing to do is examine whether you’ll pay inheritance tax and what to do about it. The following could help you to decide to reduce your potential Inheritance Tax bill or do nothing at all. The rules discussed here include the Government rule changes introduced by George Osbourne in 2015 that now give people an extra property allowance.

Inheritance tax is the tax paid on assets (after inheritance tax allowances are deducted) left when someone dies.

Where to start?

A good place to start from is by making sure that your WILL is up to date, and it details who is to benefit from your estate when you are gone. Reviewing it periodically will ensure that as your estate increases in value, the planning is an ongoing process to prevent you passing your hard-earned wealth to HMRC and not your family when you have died.

Firstly, you need to assess how much your estate is worth, then deduct your debts from this to give the value of your estate. Your assets include: cash in the bank, investments, any property or business you own, vehicles and pay-outs from life insurance policies, your entire wealth.

Every individual living in the UK is entitled to a £325,000 Inheritance Tax Nil Rate band.

On death, when your estate value is added up and valued above £325,000, anything above £325,000 it is currently taxed at 40%.

A married couple’s Executors on death would able to claim two Nil Rate Bands making a nil rate band total of £650,000; and if they qualify, would be able to also claim from the 2017/18 tax year the Main Residence Nil Rate band (which, from April 2020, is a further £175,000 each – making an individual’s total Nil Rate band of £500,000 and a married couple’s £1,000,000).

So, this would exclude most estates from any payment of Inheritance tax. But, and there are always buts, there are certain conditions around the Main Residence Nil Rate Band and in Part 1 the following should explain this in some detail for you, and you could see if you qualify for this added tax benefit.

How does the new ‘main residence nil-rate band’ work?

New for the 2017/18 tax year was the additional ‘main residence’ allowance. Known as the residence nil rate band. It is only valid on a main residence and where the recipient of a home is a direct descendant (classed as children, step-children and grandchildren). This is gradually being phased in and is what you’ll get on top of your existing allowance.

For the tax year 2019/20, it’s starting at £150,000 (meaning a total allowance of £475,000), rising by £25,000 in 2020 until it reaches £175,000 (meaning a total allowance of £500,000).

So, in 2019/20 tax year, the maximum that can be passed on tax-free is £950,000 for married couples or those in a civil partnership, £475,000 for others. For singles, this is made up of the existing £325,000 Nil Rate Band, plus the extra £150,000.

For couples, when the first one dies their allowance is passed to the survivor, so that £475,000 is doubled to £950,000.

By the 2020/21 tax year, the tax-free amount will rise to £1 million for couples (made up of £325,000 x 2 plus £175,000 x 2) and £500,000 for singles (made up of £325,000 plus £175,000), as the main residence allowance rises.

In the 2019/20 tax year, everyone can leave an estate valued at up to £325,000 plus the new ‘main residence’ band of £150,000 giving a total allowance of £475,000 per person. From the 2020/21 tax year the residence band will rise to £175,000 making a total of £500,000 each in total. So, for any estate valued under this their beneficiaries won’t pay inheritance tax. The amount is set by the Government and is called the nil-rate band, because it’s the amount you pay a ‘nil-rate’ of IHT on.

The Main Residence Nil Rate Band (RNRB) is for generational passing down of the benefit – namely the property in your WILL has to be passed to sons and daughters, blood line. If it is not, then it cannot pass the test and you would only be eligible for the standard IHT NRB of £325,000 and not the main residence NRB of £175,00 from April 6th, 2020. (current Main Residence Nil Rate Band is an added £150,000 from April 6th, 2019)

Above that amount, anything you leave behind is subject to tax of 40% (or 36% if you leave at least 10% of your assets to a charity).

For example…

If you leave behind assets in 2019/20 worth £500,000 (assuming you have just one property), your estate pays nothing on the first £475,000, and 40% on the remaining £25,000 – a total of £10,000 in tax – if you’re not leaving anything to charity. Officially, the £325,000 limit has been frozen until at least 2020/21, while the additional main residence allowance will be phased in until April 2020.

On estates worth between £1 million and £2 million, inheritance tax will be paid as normal on the amount above the tax-free amount. On estates worth £2 million or more, homeowners will lose £1 of the ‘main residence’ allowance for every £2 of value above £2 million. So, for a couple, properties worth £2,350,000 or more will get no additional allowance.

So, how much tax do you pay?

Your estate will owe tax at 40% on anything above the £325,000 inheritance tax threshold when you die (or 36% if you leave at least 10% to a charity) – excluding the ‘main residence’ allowance (see below). Some simple actions can save you thousands, yet sadly many people ignore it, either not wanting to consider the future or simply unable to broach it with relatives for fear of seeming grasping.

Former Chancellor of the Exchequer George Osborne revealed in July 2015’s Summer Budget that he’d scrap the duty when parents or grandparents pass on a home worth up to £1 million (£500,000 for singles). This is being phased in gradually, reaching a £1m exemption for couples in the tax year 2020/21.

The current nil rate band allowance is charged on the first £325,000 (per person) of someone’s estate – which is the value of their total assets they leave behind when they die. Couples can leave a home worth £650,000 without it attracting inheritance tax (singles £325,000). Above the threshold, the charge is 40%. This remains unchanged. What is new is the introduction of a new ‘main residence’ band.

Exemptions from inheritance tax

People in certain ‘risky’ roles are exempt from paying inheritance tax if they die in active service. Included in this are armed forces personnel, police, firefighters and paramedics, plus humanitarian aid workers.

The exemption also comes into play if a person who was injured on active service has their death hastened by the injury, even if they’re no longer on active service.

Other questions that need answering are:

When you die, assets left to your spouse or registered civil partner, provided they’re living in the UK, are exempt from inheritance tax. On top of this, your partner’s inheritance tax allowance rises by the proportion of your allowance that you didn’t use, meaning together a couple can currently leave £950,000 tax-free.

What if I’m not married? – While transfers of property and other assets between married couples or civil partners don’t attract inheritance tax, this isn’t the case for unmarried couples. If you’re not married, but own assets jointly with another person, the situation gets complicated, especially where a residential property is involved. Your liability to pay IHT will depend on whether you and your partner own the property as ‘joint tenants’ or ‘tenants in common’ and whether there’s a will.

If you’re joint tenants – (you both own all the property), and your partner’s left you everything in the will, then if your partner’s assets, including the property, exceed the £450,000 inheritance tax threshold, you’d have to pay it on any assets in the estate above that. After your partner’s death, your property would then be owned by you in its entirety.

If your partner didn’t leave a will – thanks to something called the ‘right of survivorship’, the property would still go entirely to you although the inheritance tax rules above would still apply. However, your partner’s family would still have a claim to his or her share of other assets such as insurance policies and pension investments.

A good place to start is with your WILL and needs to state clearly who is to be the beneficiary of your estate following your death. Your estate includes your hard-earned property that includes everything from savings investment and property of all types. For Inheritance Tax all your property as far as HMRC is concerned means the value of all worldwide held assets including property held in the UK.

Next quarter I will follow up with the HMRC permitted allowances for inheritance tax and how they can play a part in reducing your final inheritance tax bill, as well as the gifting allowances and other available solutions you can use. In the meantime, enjoy the Spring and the coming Summer months.

As an Independent Financial Adviser, I would be pleased to assist with any questions you might have.

Most importantly, if you found this interesting and want to know about all the solutions now then please contact me, David Rackham, at david.rackham@templewealth.co.uk or on 01329 282882 / 07734 17268, where I would welcome your call.

The Financial Conduct Authority does not regulate Inheritance Tax Planning or Wills. Level of taxation may be subject to change and their value depends on your individual circumstances. The content of this article is for information purposes only and based on our current understanding of legislation, which are subject to change.

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Help to Buy ISAs: Are they as good as they sound?

For first-time buyers who are saving toward a deposit, opening a Help to Buy ISA really is a no-brainer. Offering a 25% bonus of the total you have saved, in addition to interest accrued, there is no other savings account that can get close to these returns.

For many first-time buyers, saving for a deposit represents the biggest hurdle between them and getting on the property ladder. For this reason, the Help to Buy ISA will be music to many people’s ears.

The government backed scheme means that for every £1,000 you save, the government will credit you with an additional £250. This type of return is streets ahead of traditional savings platforms and is why over 1 million people have opened accounts since their inception.

If you want to reap the rewards of this scheme you will need to act fast;
the deadline to open a Help to Buy ISA account is 30th November 2019.

The account allows for regular saving; the first instalment can be of up to £1,200, with a maximum of £200 able to be deposited in each month thereafter. Whilst there is no limit on the amount that can be saved into a Help to Buy ISA, the bonus is capped at a maximum of £3,000. In other words, you will attract the 25% bonus on the first £12,000 of savings only. Given the monthly caps on deposits, it would take just over four and half years to qualify for the maximum bonus so opening an account early is essential to fully make use of the scheme.

The accounts are available to anyone aged 16+ and can be used to buy a property of up to £250,000 (£450,000 in London). If you are looking to buy with a partner or friend, you can each open an account meaning your bonus could total £6,000.  Although the accounts are designed for longer term saving, the bonus can be applied to as little as £1,600 meaning it is still worthwhile opening an account, even if you are as little as three months away from purchasing.

What are the alternatives?

In some circumstances, a Help to Buy ISA may not be the best fit; perhaps you wish to buy a property in excess of the threshold or you wish to deposit more than the ISA allows.

Whilst the Help to Buy ISA has had much press, the Lifetime ISA (LISA) has flown largely below the radar. One of the reasons for this is the lack of availability; to date, only a handful of providers offer the LISA. Another is its name; the Lifetime ISA is predominantly thought of as product for retirement planning.

Lifetime ISA (LISA)

Sure enough, a LISA has many benefits for retirement planning, but it can also benefit first time buyers in much the same way as a Help to Buy ISA, with some key differences.

With a LISA, you are not capped at £200 per month and you can pay in anything up to £4,000 per financial year, in a lump sum or regular instalments. This could suit you if you already hold savings as you can invest much more quickly. With the end of the tax year just a few days away, you could make a £4,000 deposit now (before 5th April 2019) and then invest a further £4,000 as soon as 6th April 2019.

Upon withdrawal, the LISA will also qualify for the 25% bonus, providing the account has been open for at least 12 months. The £4,000 yearly limit means a potential bonus of £1,000 per year with essentially no cap on the maximum bonus allowed (the bonus is capped at £33,000 meaning you would have to have the account for more than 33 years to hit the limit).

The LISA also allows for a higher purchase price outside of London with a £450,000 limit applicable anywhere in the country.

There are many factors that will determine which type of account is right for you. The table below highlights some of the main features and differences of each:

Help to Buy ISA vs Lifetime ISA

  Help to Buy ISA Lifetime ISA
Opening ageAnyone aged 16+ Anyone aged 18-39
Maximum contribution£200 per month (£1,200 in the first month) £4,000 per tax year  
Maximum property value£450,000 £250,000 (£450,000 in London)  
Maximum bonus£3,000 £33,000
Penalty if you don’t buy a house None
(You just don’t get the bonus)
Yes, unless you leave it until you are aged 60+    
How long before the account qualifies for bonus Once you have saved £1600 (minimum 3 months) 12 months from opening the account
When is the bonus paidOn completion On exchange  

Should you have any questions, or need help deciding if a Help to Buy ISA is best for you, please contact one of Temple Wealth’s advisers. We can advise you on all aspects of the house buying process – from beginning to save for your deposit to finally buying a house and getting the right mortgage for you.

Call 01329 282882 or use the form on our Contact Us page.


The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.

Your home maybe repossessed if you do not keep up repayment on your mortgage.

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Planning for the end of the 2019 tax year

With the help of a financial adviser and some simple financial planning ahead of the tax year-end (5th April 2019) you can make the most of the tax allowances available to you such as your ISA and pension Annual Allowance.

ISA allowance

You have a £20,000 ISA allowance each tax year. This is a ‘use it or lose it’ allowance as it cannot be carried forward if it is not fully utilised. This allowance will remain at the same level in the 2019/2020 tax year.

There are 4 types of ISA and you can put money into one of each kind of ISA each tax year:

  • Cash ISAs
  • Stocks and Shares ISAs
  • Innovative Finance ISAs
  • Lifetime ISAs

An ISA such as the Help to Buy ISA can be beneficial if you are saving to buy your first home. First time buyers get a 25% bonus from the Government on savings in a Help-to-buy ISA. The maximum bonus you can receive is £3,000 (if £12,000 has been saved). The deadline for opening a new Help to buy ISA is 30th November 2019.

With a Junior ISA,a UK child under 18 can currently save up to £4,260 in one tax year.

A financial adviser will be able to help you find the type of ISA most suitable for you and your investment goals.

Pension Annual Allowance

UK individuals can ‘normally’ contribute up to £40,000 gross, or up to their annual gross income, per tax year into a pension scheme. This allowance will remain at the same level in the 2019/2020 tax year.

Funds are tax efficient within a pension although the Lifetime Allowance (currently £1,030,000) limits the total amount you can accrue in a pension pot without an additional tax charge. 

You can take a look at our previous blog to find out if you are making enough pension contributions.

The Annual Allowance can be carried forward, subject to a few rules. If you have been a member of a pension scheme but have not fully utilised your Annual Allowance for the previous three tax years, you could be able to carry this forward to make a larger contribution in the current tax year.

Tapered Annual Allowance – this is when the Annual Allowance is reduced by £1 for every £2 of ‘adjusted income’ over £150,000. It can affect you if your income from all sources is over £110,000.

Inheritance Tax

The Inheritance Tax (IHT) nil rate band is currently frozen at £325,000 until 5th April 2021.

Inheritance tax planning can enable you to utilise the available exemptions including:

  • Annual Exemption – up to £3,000 can be given away each tax year and unused amounts can be carried forward and utilised in the next tax year.
  • Small Gifts Exemption – up to £250 can be gifted to as many people as you wish each tax year.
  • Gifts out of Income – you can gift regular disposable income if your income often exceeds your expenditure.
  • IHT efficient investments can benefit from business property relief and are then IHT exempt after being owned for two years. These investments can be high risk and financial advice should be sought.

Capital Gains Tax 

The annual exemption for the current tax year is £11,700. This is also an allowance that cannot be carried forward if it is not fully utilised. Unused losses are carried forward and can be offset against future gains.


2019/2020 tax year – changes to some of these allowances

Minimum/Living Wage

After 6th April 2019, the minimum wage for 18-20 year olds will increase from £5.90 to £6.15 per hour. For 21-24 year olds it will increase from £7.38 to £7.70 and for anyone aged 25+ it will increase from £7.83 to £8.21 per hour.

Personal Allowance

This will increase from £11,850 to £12,500 in the 2019/2020 tax year.

Lifetime allowance

This will increase from £1,030,000 to £1,055,000 in the 2019/2020 tax year.

CGT Annual Exemption

This will increase from £11,700 to £12,000 in the 2019/2020 tax year.

One of our independent financial advisers at Temple Wealth Management can advise you on how best to plan for the end of the tax year, as well as how to fully utilise your available allowances in the new tax year.

To discuss your end of tax year planning needs, contact one of our advisers on 01329 282882 or use our website contact form.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor. The Financial Conduct Authority does not regulate Tax Advice.

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Critical Illness Cover – what does it really do?

Critical Illness Cover is protection that’s designed to pay a lump sum if you’re diagnosed with one of a list of specified critical illnesses. 

Most Critical Illness Cover providers have a list of 40 plus conditions covered, but the big four are Heart Attack, Cancer, Stroke and Multiple Sclerosis (MS). Most companies offer children’s cover as an additional benefit and will pay an amount if any of your children are diagnosed with one of the listed conditions. Sadly, this is one of the biggest claim areas.

It doesn’t matter what happens after the diagnosis, it’s the diagnosis that triggers the claim on Critical Illness Cover (provided you survive more than 28 days after diagnosis). You don’t have to be terminally ill, off work for long periods of time, and you can make a complete recovery.

I’ve been a Financial Adviser for nearly 30 years and for much of this time I’ve been advising people to take out a range of protection insurance policies. For all of this time, I’ve been almost evangelical about the benefit of Critical Illness Cover.

Critical Illness Cover has been around for over 40 years. Most people now know somebody who has benefited from a Critical Illness Cover claim. If you don’t and you’re reading this – well – now you do. Whilst not unique, I’m unusual in that I not only advise on, and arrange critical illness policies for clients, I’ve also claimed on my own.

So what benefit does it really give?

You might just think it’s a lump of money – you can use it to reduce or pay off your mortgage and other debts, provide for additional health care and adapt your home if you need, but it also goes much deeper than that.

I was diagnosed with cancer in 2012. It goes without saying that it’s a pretty uncomfortable conversation that you have with your Consultant at this point. There’s shock, fear and even a bit of panic. The most difficult thing to deal with, in my view, is the uncertainty. Cancer, its treatment and subsequent hopeful recovery is a long road to travel and you ask yourself lots of questions. Will I make a recovery, will I be able to work, how will I react to treatment, if I do go into remission will it come back?

My NHS treatment was superb and with that, brilliant support from family and friends and a bit of luck I have made full recovery. The initial stages were very difficult with an endless round of hospital visits, surgery and chemotherapy which lasted around 6 months. Then you have regular checks and scans, hopefully to confirm that you are still clear. After 5 years, the big day when they tell you that you’re still clear and apart from for the occasional check every 5 years thereafter, they don’t want to see you again.

I made a claim on my Critical Illness Cover the day after I was diagnosed and within a month both policies had paid out.

I was doubly lucky in that I didn’t actually have to have too much time off work. I was able to work knowing that I didn’t have to if I wasn’t up to it. I knew that if I didn’t respond well to treatment that financially I was fairly secure. Believe me when I say that having that safety net is a massive comfort. I was able to concentrate on recovery without financial worries.

When you’re dealing with any critical illness you can count on superb care of the NHS. Hopefully you can rely on help from your family, friends and work colleagues, but in addition you need to be able to focus completely on the job at hand – recovery. To be able to do that you need to be free from financial worry. You need every possible advantage you can get. I know money isn’t everything, but it really does help. That’s the real point behind Critical Illness Cover and I truly believe that my policy helped me get to the stage I am at today.

About Critical Illness policies

Critical Illness Cover has evolved over the years and the modern policy offers flexibility with a much wider range of coverage. These include numerous additional benefits designed to aid recovery including, in some cases, specialist second opinions, access to complementary treatments and psychological support.

In 2017 (the latest full year statistics) 15,962 critical illness claims were paid in the UK with a total value of £1.16 billion paid. 92.2% of all claims made were paid by the insurers. (source: Association of British Insurers Claim Statistics 30/04/2018).

If you have existing policies, they are worth reviewing to make sure that the cover meets your current needs. If you don’t already have cover you can speak to an Independent Financial Adviser and see what’s available. It doesn’t need to break the bank.

If you’re ever in the unfortunate position that you need to claim on your Critical Illness Cover, you’ll think it’s the best money you’ve ever spent.

Critical Illness plans typically have no cash in value at any time and cover will cease at the end of term. If premiums stop, then cover will lapse. Plans may not cover all the definitions of a critical illness. The definitions vary between product providers and will be described within the Key Features and policy documentation if you proceed with the plan.

For more information on Critical Illness Cover, or any other protection needs, contact Simon Ereira at Temple Wealth Management on 01305 213150 or simon.ereira@templewealth.co.uk

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Are you making enough pension contributions?

Could you afford to live on an income of £155 per week in retirement? How about £8,060 per year?

You may be surprised to be told that these figures are one and the same. This is the Flat Rate State pension which a UK citizen with 30 years of National Insurance contributions will be eligible for from age 66 (as at January 2019).

The national living wage in the UK is currently £16,009 per annum. With this in mind, are you saving enough now to ensure that you can enjoy retirement without worrying about your finances?

How much are you contributing?

If you wish to receive a guaranteed income for life in retirement of the remaining £7,949 with no investment risk to your capital, you would need a pension pot of around £142,750* for a level income or a pension pot of £245,000* if you wish for your pension to increase in line with inflation.

In order to achieve these fund values in today’s terms (i.e. after the effects of inflation) this would mean making monthly pension contributions of at least £185.60 net or £317.60 net respectively from the age of 30 into a cost effect personal pension plan – assuming growth is 5% per annum, with an ongoing advice charge of 0.50% per annum paid monthly.

What can you do?

Of course, everyone’s situation is different. However, the Financial Times Adviser have calculated that clients who have an appointed financial adviser accumulate, on average, 21% more in their pensions than those who self-invest**. With this in mind, can you afford not to review your retirement planning? After all, a goal without a plan is just a wish, and you do not want to wish you did it on the day that you retire.

Contact one of our Independent Financial Advisers at Temple Wealth Management to find out how we can help you with your retirement planning and review your pension contribution levels.

You can contact us by calling our office on 01329 282882, send an email to Fareham@templewealth.co.uk or send us a message on our Facebook or Contact Us Page.

A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation which are subject to change in the future.

*Figures based on AssureWeb research completed on 08/02/2019 and are based on a single life, 5 year guaranteed annuity paid monthly in arrears for a healthy 66 year old, not taking into account advice charges.

**Source: https://www.ftadviser.com/your-industry/2017/07/13/financial-advice-leaves-people-40k- better-off/

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The importance of reviewing your personal finances, whatever your age

Setting goals for your personal finances is crucial to success and achieving your financial objectives.

What does it mean for your age group?

From your first job until your 30s, these are known as “the vulnerable years” as you are trying to build up your personal finances to secure your future, protecting your income and saving for the future.  You may have a specific financial objective such as buying your first car, saving a deposit for your first house or for even retirement.  This means being aware that, however small, the earlier you start the better the result.

Then you move to your 40s, when you may own your own home, have a family.  Your objectives will change towards protecting a higher level of income, whilst also protecting your family and lifestyle.  Retirement starts to be foremost in your planning in order to ensure financial security. It is important to consider making the most of your tax allowances for the future. 

In the years up until retirement, which could be any age from 55 upwards to around 70 you will begin to see the benefit of planning your personal finances from an early age.  You will be looking at making retirement work for you.  These are the years that you will start to think about your children and grandchildren and their financial security, maybe preparing the “bank of Mum and Dad”.  Health will start to play a part in your future financial planning.  An Independent Financial Adviser can help you assess if your personal finances are on track to achieve your goals.  

From your 70s and through retirement, your personal finances may mean that long term care becomes more of a consideration.   This can also include succession planning in terms of inheritance tax, Power of Attorney and ensuring your will is up to date.

There will be other areas of planning that will be unique to your situation and therefore the earlier you engage with planning your personal finances the better.  It does not matter if you think you have no money to consider these things; if you start planning early and engaging the easier it will be in the future.  An Independent Financial Adviser can help at any stage of planning.

Temple Wealth Management – Your Financial Partner for Life.

We believe that professional financial advice can add significant value to individuals at any stage of life whether this be ensuring you have a competitive mortgage rate; reviewing your protection needs in case the worst were to happen. 

Temple Wealth Management can help find the right solution to make your savings work better for you and guide you through retirement planning.

Contact TWM on 01329 282882 or fareham@templewealth.co.uk to find out how one of our advisers can help you

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How does the Help to Buy Scheme work?

In the five years since its inception, the Government has committed over £9.9 billion to Help to Buy. This is a scheme designed to help first-time buyers onto the housing ladder and home movers up a rung. Independent analysis shows that both the rate of take-up and the size of equity loans being given are growing.

So, how does Help to Buy work?

The Help to Buy scheme offers an equity loan where the government lends first-time buyers and existing homeowners money to buy a newly-built home.

Help to Buy Equity loans – how they work

  • You need at least 5% of the sale price of your new-build flat or house as a deposit.
  • The government lends you up to 20% of the sale price or up to 40% in Greater London
  • You apply to borrow the rest from a mortgage lender, on a repayment basis.

EXAMPLE 1 – Cost of home = £200,000

Your deposit (5%) £10,000
Equity loan (20%) £40,000
Mortgage (75%) £150,000
TOTAL (100%) £200,000

Who can’t apply for the scheme?

  • You can’t use the Help to Buy scheme to buy a second home or a property to rent out.
  • If you use Help to Buy, you can only take out a repayment mortgage.
  • You can’t buy a property for more than the set price limits.

When you sell your home, or the mortgage is paid off, you repay the equity loan plus a share of any increase in the value. It works like this:

EXAMPLE 2 – selling your home (value = £250,000)

Increase in value = 25%
Equity loan repayment = £50,000 (£40,000 + 25% profit)
Mortgage = £150,000 (less capital repayments)
Your share = £50,000 (excluding any moving costs)

The remaining equity figure after moving costs can be used as a deposit on your next home. The exact amount also depends on how much you’ve paid off your mortgage. You can also pay back part or all of the loan at any time. The minimum percentage you can pay back is 10% of the market value of your home. The amount payable will depend on the market value at the time.

What are the advantages of the Help to Buy Scheme?

  • If you want to move home but cannot quite afford the deposit, the Government’s Help to Buy scheme could make a big difference.
  • You get help buying a home enabling you to get on to the property ladder, boosting the housing market, and helping the wider economy
  • You need a smaller deposit to buy a home through Help to Buy which is set at a more manageable level of 5%. This is much lower than many other mortgage options meaning you could buy more quickly and own a brand new property
  • There are no loan fees due in the first five years although the amount owed can still increase during that time. The equity loan will rise and fall with the housing market, so if the house value increases in value, so will the amount owed.
  • For first time buyers in particular, these first five years can be some of the most financially strenuous, so a few years of breathing space may be viewed as an advantage.
  • Mortgage payments would still be made during this time (which will include interest charged by the mortgage lender), but no interest will be added to the Help to Buy loan.
  • There is the potential to access cheaper mortgage rates depending on individual circumstances. The fact you will need to borrow less overall may also mean being able to qualify for a mortgage in the first place. By needing to borrow a lesser Loan to Value, a more competitive rate of interest may be possible than if applying for a standard 95% mortgage.
  • You get a competitive Help to Buy loan rate (after five years). After not paying interest on the equity loan for five years, the initial rate of interest is 1.75% in the sixth year.

What are the drawbacks of the Help to Buy Scheme?

  • Although Help to Buy may give you the opportunity to purchase a new build home that you may not otherwise be able to afford, there are some limitations to carefully consider.
  • The Help to Buy loan will become more and more expensive. Although you will benefit from five years without interest, after this time the rate of interest applied to your loan will increase each year. While you will only pay 1.75% in your sixth year, each year your loan fee will increase by 1% plus any RPI increase.
  • The creeping annual cost of fees could put pressure on your monthly budget. Also, should RPI increase dramatically in any 12 month period, so would the additional rate of interest applied to your loan.
  • The amount you will ultimately need to repay on your Help to Buy equity loan is not fixed. Instead it will fluctuate with the market value of your property because it is percentage-based. This means that if your property has risen in value you may have to pay significantly more than you originally borrowed.
  • Currently the Help to Buy scheme is only available on new properties which may limit the choice of home. It is also only offered by some developers so the choice of property will be limited too.
  • It may feel like paying a premium for buying new, so unless you are really wanting a new property, other options should also be considered.
  • Not all providers offer Help to Buy mortgages, and those that do sometimes make them different from their standard mortgage packages. This is because a third party is involved with the purchase of your property, and they also have a claim to part of the sale value.
  • The potential danger of negative equity as some property experts claim that the Help to Buy scheme has started to inflate house prices. They are concerned that it is causing a housing bubble that will burst when the scheme ends, trapping a vast number of buyers in negative equity.
  • If you are buying a new home as an investment in the hope you will be able to move in the short to mid-term this could be an issue – if you are planning on living in the property for many years this will be less of a problem.
  • You do not know if the terms might change. While you can only plan your finances based on information you currently have available, a future government could review and change the terms of the scheme.

Your home maybe repossessed if you do not keep up repayment on your mortgage.

For more information on mortgages contact Martin Crump, one of our independent mortgage advisers at Temple Mortgages on 01305 213150

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Business protection – borrowing money to fund a business

Many business owners borrow money to provide the working capital needed to run a business. This money may be borrowed from the bank or from the director’s own capital that is lent to the business.

Business owners’ loans

Lending your own money to the business has a number of advantages with regards to tax and flexibility, however you might not be aware that in the event of an owner dying these loans are immediately repayable to their estate. This often means that the business may need to sell its assets or turn to the bank to replace that borrowing.

In the current economic climate, how easy would that be? The business could also face the possibility of expensive legal action with the deceased’s legal representatives. There are several ways to avoid this situation by effectively enabling you to become your own business banker.

It is worth reviewing your situation with a specialist business protection advisor. The intial consultation to ensure the business remains trading after the death of an owner or shareholder is usually free.

Bank loans

If you have a bank loan, you need to consider how you would service this loan if you lost a key business owner or manager through death or through serious or long term illness. In the current financial climate can you be sure your bank would assist in a recovery plan or would they, as in many cases, simply recall the overdraft and close the business down? It is easy to prepare for any eventuality.

Personal security

This is even more important if you have been asked to provide personal security (commonly known as a personal guarantee), in particular where the bank has taken a charge over your house. This could mean that in the event of your death your family could be reliant on your shareholders, partners or co-owners’ ability and desire to service the debt to keep a roof over their head.

In all of these situations we can advise on the most cost-effective means of protecting your family and your company.

In some cases, but not all, the existing business protection cover in place may be sufficient and fit for purpose. Following our free initial consultation we may be able to advise on an alternative that provides additional benefit for the same premium or similar cover for a lower premium. Where there is limited or no cover in place, we can create a cost effective cover strategy to protect both your family and your business.

For more information contact Tony Pizzi, our independent business protection adviser at Temple Wealth on 01329 282882