Financial Stability Is a Great Gift To Give Your Partner, Children & Grandchildren
As the spectre of the cost-of-living crisis looms large, fuelled by higher inflation, higher bills and higher mortgage repayments, savvy grandparents will be thinking of inheritance taxes and the future financial health of their spouses, children, and grandchildren.
The last few years have highlighted that money worries and financial stress are some of the stresses most linked with health issues, with people feeling so overwhelmed that they put off planning for the future.
Taking Stock & Planning Can Minimise The Impact of Inflation
Money and financial planning are still a taboo topic of conversation but it’s a conversation families should not shy away from.
Speak to your partner, children and grandchildren and they won’t believe that in the 1970’s inflation averaged 10% a year. In the West, we have become used to taking low inflation for granted with the annual rate in the 2010s at an incredibly low 2% but those days are gone.
Today, the ghost of inflation past has returned and is likely to persist for some time, post covid, as global supply pressures outpace capacity, and global economy bottlenecks. The Bank of England’s published inflation rate sits at 5.4%, with respected economists predicting a 7% high in April 2022.
This means investors, pensioners and savers need to be chasing ‘real returns’ to ensure their money is growing. Real returns mean what you get back AFTER inflation and all costs.
Whilst cash and bonds carry lower risk and are good for emergencies, it doesn’t beat inflation which means your money will lose value over time. If you’re keen to find out what kind of investor you are and which SCM Portfolio matches your risk appetite, take our Attitude To Risk Questionnaire today.
Inheritance Tax
Although the political appetite for inheritance taxes has been on the wane in recent decades, the massive black hole at the centre of government finances, coupled with the economic shocks of the pandemic raises the possibility of new taxes on wealth being introduced and existing ones reformed. That is despite the fact that only 0.5% of total tax revenues in OECD countries come from these taxes.
It’s a good idea to use all the ‘legal tax avoidance’ schemes at your disposal. For example, putting money aside for your children and grandchildren via a Stocks & Shares ISA or JISA.
SCM’s award winning, low cost, 100% transparent holdings Investment Portfolios are flexible, easily accessible and have no exit fees.
A Tax-Free Gift for Your Loved Ones
For those over the age of 18, an Individual Savings account (ISA) allows the holder of the ISA to benefit from tax-free savings (including tax-free capital gains and income) with an annual allowance of £20,000 for 2022/23.
A Junior ISA (JISA) is available to every child, from birth to 18 years old, living in the UK, and has an annual allowance of only £9,000 a year. By putting money aside regularly, over the long-term can really add up to a tidy little sum to help go towards their first car, pay for university tuition, or buy their first home.
IMPORTANT
The deadline for both ISAs and JISAs is midnight on 5th April 2022 – so don’t delay!
Get started today – it can only takes 10 minutes with SCM Direct!
Capital at Risk
The value of investments can go down as well as up and investors may not recover the amount of their original investment.
SCM Direct is a London-based award winning online wealth manager offering actively-managed investment portfolios.
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0207 838 8650
www.scmdirect.com
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