Money Talk: Key Financial Insights For May/June 2024  – Part 1

In our latest Money Talk release for May/June, we cover a range of critical financial topics to help you navigate the complexities of personal finance and secure your financial future. 

In the first of two posts, we will delve into a range of trending financial news including important changes to the rules on ISAs (Individual Savings Accounts). We also look at the financial implications of later-life care and the changes the government is proposing from October 2025.

In addition, we cover the importance of having a Will and the potential consequences of not having one. Finally, we speak about the importance of having a long-term investment plan and its importance when growing your financial wealth over time. 

For more detailed information on each topic below, please download the full newsletter

Research Shows That Over Half of UK Adults Do Not Have a Will

Recent research from a survey conducted by Opinium reveals that 51% of UK adults do not have a will, with 13% having no plans to create one. This includes a significant portion of older individuals, with 30% of those aged 55 and above without a will.

Many people mistakenly believe they lack sufficient assets to warrant a will or are deterred by the discomfort of contemplating mortality. However, not having a will can lead to lengthy legal processes and potential family disputes. Without a will, the distribution of your assets is subject to intestacy laws, which may not reflect your wishes.

Additionally, the absence of a will can create uncertainty and stress for your loved ones during an already difficult time. Creating and periodically updating a will ensures your assets are distributed according to your wishes and reduces the burden on your loved ones. It also allows you to appoint guardians for minor children and make specific bequests to individuals or charities. Estate planning is a critical component of financial security, and professional advice can help you navigate this complex area effectively.

Is it time to secure your legacy and ensure your wishes are honoured? Preparing or updating your will is a crucial step. If you have questions, need more information, or require professional assistance with drafting or revising your will, we’re here to support you. Let us help you every step of the way to ensure your future is not left to chance.

Stay the Course: The Power of Long-Term Investing

Maintaining a long-term investment strategy is crucial for financial growth. Despite the temptation to shift to cash during market downturns, historical data shows that staying invested usually yields better results. Market timing, the attempt to predict market movements and make buying or selling decisions accordingly, often leads to suboptimal outcomes. Investors who attempt to time the market may miss out on periods of significant growth that follow downturns.

Diversification is key to mitigating risks and achieving smoother performance over time. By spreading investments across different asset classes, sectors, and geographies, you can reduce the impact of poor performance in any one area. The principle of “time in the market” rather than “timing the market” underscores the importance of patience and perseverance.

Compounding, where your investment earnings generate their own earnings, can significantly enhance long-term returns. Certified financial advisors such as Ward Goodman can provide personalised investment strategies tailored to your risk profile and financial goals, helping you navigate market fluctuations and optimise your portfolio for long-term growth.

Plan Ahead: Managing the Costs of Later-Life Care

The financial implications of later-life care are often underestimated. With a proposed £86,000 lifetime cap on personal care costs starting October 2025, it’s essential to plan early. This cap only covers personal care costs, leaving additional expenses like accommodation and living costs to be managed separately.

The distinction between care costs and living costs is crucial, as the latter can significantly increase the overall financial burden. Establishing a thorough wealth strategy involves considering various funding options, such as savings, investments, and insurance products. Long-term care insurance can provide a dedicated source of funds for care expenses, while annuities can offer a steady income stream to cover ongoing costs.

Tax planning is also a vital component, as it can help minimise the financial impact on your estate. Seeking professional financial advice can help you navigate these complexities and create a plan that ensures you are financially prepared for long-term care needs, preserving your assets and providing peace of mind.

If you require expert guidance and support in planning for future care costs, the Ward Goodman team is here to assist you. We are committed to helping you navigate the intricacies of care planning and financial management to ensure your financial wellbeing and security in later life. Contact us today to explore how we can help you achieve your financial goals and provide a comfortable and secure future.

Important Changes to Individual Savings Accounts (ISAs) in 2024

Significant changes to Individual Savings Accounts (ISAs) have been introduced for 2024. Savers can now open multiple accounts of the same type within a single tax year, and partial transfers of funds are now permitted. This new flexibility allows individuals to tailor their savings strategies to meet their financial goals better.

Additionally, the proposed ‘British ISA’ aims to encourage investments in UK companies, offering a separate £5,000 allowance. This initiative is designed to support domestic businesses and boost the UK economy. The ISA regime continues to offer a variety of options to suit different financial objectives, including Cash ISAs for low-risk savings and Stocks & Shares ISAs for potential higher returns through market investments.

Lifetime ISAs and Junior ISAs provide additional tax-efficient savings opportunities for specific purposes, such as first-time home purchases or saving for a child’s future. Understanding the new rules and how they can be leveraged to maximise your savings strategy is essential. Professional advice can help you navigate these changes and optimise your ISA contributions for maximum tax efficiency and growth potential.

Secure Your Financial Future with Ward Goodman

For more detailed information on these topics, download the full May/June 2024 Money Talk newsletter from Ward Goodman. Our team of experts are here to provide you with personalised advice and support for all your financial planning needs. Contact us today to secure your financial future.

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