10 Reasons for making a Power of Attorney

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Creating a Lasting Power of Attorney (LPA) is a crucial step in planning for the future, providing peace of mind and ensuring your affairs are managed according to your wishes. Here are ten reasons why making an LPA is important:

  1. Empowers Decision Making: An LPA allows you to choose someone you trust to make important decisions on your behalf if you become unable to make them yourself due to mental or physical incapacity.
  2. Avoids Court Intervention: Without an LPA, if you lose mental capacity, your loved ones may need to apply to the court for deputyship, which can be costly, time-consuming, and emotionally draining.
  3. Maintains Control: By creating an LPA, you maintain control over who will make decisions for you, ensuring that your preferences and values are respected.
  4. Financial Management: With a Property and Financial Affairs LPA, your chosen attorney can manage your finances, pay bills, and make financial decisions on your behalf, ensuring your financial affairs are handled responsibly.
  5. Healthcare Decisions: With a Health and Welfare LPA, your attorney can make decisions about your medical treatment, care arrangements, and daily living requirements if you are unable to do so yourself, ensuring your healthcare needs are met according to your wishes.
  6. Reduces Family Conflict: Designating an attorney through an LPA can help prevent disputes among family members about who should make decisions on your behalf, reducing potential conflicts during already stressful times.
  7. Ensures Continuity: By appointing an attorney through an LPA, you ensure that there is someone authorized to manage your affairs immediately if you become incapacitated, avoiding delays in important decision-making.
  8. Protects Vulnerable Individuals: LPAs are particularly important for vulnerable individuals, such as the elderly or those with disabilities, as they provide a legal framework for their care and financial management.
  9. Flexible Arrangements: LPAs can be tailored to your specific needs and preferences, allowing you to specify instructions and limitations for your attorney, ensuring that your wishes are followed.
  10. Peace of Mind: Ultimately, creating an LPA provides peace of mind for both you and your loved ones, knowing that there is a plan in place for the management of your affairs if you are unable to do so yourself.

In summary, creating a Lasting Power of Attorney is an essential part of estate planning, ensuring that your affairs are managed according to your wishes and providing peace of mind for you and your loved ones.

Why you should make a Will

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In the United Kingdom, creating a will isn’t just a legal formality – it’s about making sure your loved ones are taken care of just the way you’d want, even when you’re no longer around. Despite its importance, many people put off making a will, thinking it’s too complicated or they’re not wealthy enough to need one. But trust me, taking the time to make a will is one of the best things you can do for your family and your peace of mind.

First off, having a will means you get to decide who gets what when you’re gone. Without one, the government decides, and it might not match up with your wishes. Whether you have a big estate or just a few belongings, having a will ensures everything goes where you want it to.

Another perk? You get to pick someone you trust to carry out your wishes as the executor. This person will handle all the details, like gathering your assets and making sure your debts are paid off. Choosing the right executor is key to making sure everything goes smoothly.

Plus, if you have kids, a will lets you name a guardian for them. That way, you get to decide who’ll take care of them if something happens to you. It’s a big relief knowing your little ones will be in good hands.

And let’s not forget about taxes. With some smart planning in your will, you can actually reduce the amount of inheritance tax your loved ones will have to pay. That means more of your hard-earned money stays in the family.

So, bottom line? Making a will isn’t just for the rich and famous – it’s for anyone who cares about their family’s future. It’s a simple way to provide clarity, security, and peace of mind for those you love most. So why wait? Take the first step today and start crafting your will. Your family will thank you for it.

ISA Allowance 2015/16

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ISA Individual Savings Account 2011/12 tax yearWe are now well into the 2015/16 tax year and there are a few changes to ISAs which you need to be made aware of….

The ISA allowance has increased to £15,240 per investor and this applies to both Cash ISAs (over 16s) and Stocks and Shares ISAs (over 18s). You can invest in one Cash ISA and one Stocks and Shares ISA per tax tear and the total allowance of £15,240 can be split between the two types of ISA as you choose.

Previously you were able to transfer between ISA providers and Cash ISAs could be transferred into Stocks and Shares ISAs. Now, you can also transfer the other way – FROM Stocks and Shares ISAs TO Cash ISAs.

And finally, under new rules, your ISA allowance, if your married, does not die with you as was the previous case. Now, on death, your spouse or civil partner can inherit your ISA allowance.

 

ISA Allowance 2013/14 – until 5th April 2014

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Take a paycut and invest in your own financial futureThe current tax year ends on 5th April 2014 and until midnight you can invest up to £11,520 into a Stocks and Shares ISA. This can either be direct with a fund management house or via an investment platform, fund supermarket or wrap provider.

For those who are keen to manage their own portfolios there are a huge range of funds, shares and other investment classes to choose from to benefit from a more favourable tax treatment of income and capital gains tax, in the investors hands.

Alternatively, if you’re not so investment-savvy and wish to receive advice and guidance, please consult an Independent Financial Adviser.

If Stocks and Shares ISAs are not for you, due to the investment risks involved, you can still invest up to £5,760 into a Cash ISA. These are available from many banks, building societies and other institutions. They are quite simply bank account which pay your interest without any tax deducted.

Hope this helps!

Pay Yourself First

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Take a paycut and invest in your own financial futureA short post for this cold and wet Saturday afternoon.

To achieve financial independence you need to amass sufficient money/investment/assets to provide “unearned income” to replace your “earned income”.

Most will fail to achieve this in their lifetime simply because they spend first and then investment what is left (typically nothing!).

Those who build wealth know that you need to save first then spend what is less.

By effectively giving yourself a pay cut, say 10% of net income, you set this aside as your money for tomorrow. Only then do you spend what is left.

Whatever you decide to invest this money in, make sure it is taken from your bank account by Direct Debit immediately after payday, thus avoiding the temptation to spend it!!

Good luck 🙂

Increase your Wealth – Take a Pay Cut!

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It may sound like a crazy notion to increase your personal wealth by taking a pay cut – however can that work?

It’s simple really.

Most people have a limited income yet infinite needs and wants. They earn a fixed amount, or the household has a fixed monthly income, they spend, spend, spend first and save what is left over. I will be the first to admit that I used to “waste” money each and every month – bottled water (!), pre-packed sandwiches, not shopping around for more competitive insurance/utilities etc….

Result = there is rarely anything left over at the end of each month – “which runs out first, the month or the pay packet?”

It has been quoted many times (such as in The Richest Man in Babylon – a great book and worth the £3.46 price tag!) that those who build lasting wealth are those who SAVE first and then SPEND what is left.

By taking something off the top of each pay packet you can set this aside, firstly to build a “rainy day fund”, and then to consider medium and long-term investments.

It will be difficult at first as the decrease in monthly income can be noticeable, but over time, your spending patterns will be altered to match your new “lower” income level and quite quickly you will notice the increase in your personal wealth.

How Noticeable Will This Be?

If you set aside just £50 per month, and invest it to receive a net return of 5% per annum (which should be achievable) over a ten year period this will grow to £7,764.

If you could achieve 7% net per annum, this would amount to £8,654; which if continued for a further 10 years would £26,046.

The more you save, the quicker it will grow.

My Experience

I am fortunate in that I earn a decent income and am able to set aside £700 per month. If I continue this level of investment, I am currently on course to achieve full financial independence by the time I am 50.

It’s hard at first, but after a while your lifestyle adapts to the “pay cut” you choose – I find I now plan purchases ahead – I got rid of my credit cards – it’s addictive (although I do still enjoy life to the maximum – I just don’t waste money any longer!).

Where Should You Start?

Simple really – just keep a track of what/where your money goes on a regular basis for the next month or so – then analyse and be strict with yourself –

  • Do I really need to spend money on this item?
  • Is there a more cost-effective alternative?
  • What changes can I make in my lifestyle now to build the future I want rather than the future I currently have in-store?

Let me know you’re successes in “taking a pay cut” below.

A few interesting blog posts you might like

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I thought I would post about a few interesting articles I have read recently – I thought you might find them interesting reading – a little light relief from all this ISA allowance increase, change in pension age malarkey!

Rob over at MoneyWatch posted an interesting article “Create a Home Inventory” which got me thinking about an old game we used to play at cubs – the cub leader would bring our a tray with about 20 different items on and we used to have a about 20 seconds to look at the tray. The tray would then be taken away and we had to try and remember as many as possible.

I am sure if the worst happened and I was burgled or had a fire I would be able to remember a lot of things but I know for sure that I would not remember everything – I am therefore going to start cataloguing all my possessions – a spreadsheet will do the trick!

Meanwhile, Lee over at FivePencePiece, when he was not busy with Labour Party conference or his appearance on the radio wrote an article entitled Patience is a Virtue. Lee reminds us that nothing happens overnight and that “a journey of a thousand miles begins with a single step”.

I read a book many years ago on the subject of goal planning – one of the most important chapters for me talked about the need to take any task which at first glance might seem very difficult and break it down into smaller, more manageable “chunks” – for example, if you’re overweight and need to lose say 3 stone then this in itself is quite an achievement.

But if you break it down and say “I will lost 1lb per week” which is more than possible given some exercise and changing your diet, then you would achieve your waste loss goal in 42 weeks!

The final blog post I liked recently was “51 Unusual Money-Saving Tips” from over at WiseBread – I love lists – I am always making lists (mainly “to do” lists!) and love this kind of post – it acts like a hub with so much information coming off this hub in a series of “spokes” – just like a wheel on a bike.

Anyway – there should be enough for you to be going on with there – please let me know which posts you have read recently by posting a comment and a link below – please feel free to link to other personal finance blogs you visit.

Top 10 Personal Finance Articles – August 2009

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The following is a list of the top 10 read articles in August.

1. Pay Yourself First – the first step in wealth creation

This article discusses the need to save from income before spending it! This is a form of deferred consumption and by saving first and then spending what is left you can build a solid foundation to your financial future.

Tip – aim to start saving 10% of net income each and every month – it won’t be easy at first but your budget and lifestyle will adapt over time.

2. Get Money for your Old Mobile Phone

Many of us have old mobile handsets lying around – did you know you can sell yours online – here is an article discussing this – I recently sold my old Sony Ericsson K800i and received £28.00.

3. New Tax New ISA Allowance – ISA 2009/2010

In just over a months time the ISA allowance for over 50’s increases to £10,200, with the allowance increasing for the remainder of the population on 6th April 2010.

4. Cashflow forecasting – income and expenditure spreadsheet

Our free income and expenditure spreadsheet remains as popular as ever and we are receiving some great feedback from people who are using it – thanks!

5. Investment Bonds – an introduction

An investment bond can be a shrewd financial planning tool as well as an investment vehicle.

6. It’s not how much you save but how long

This article discusses how, over time, money make money – with interest earned on a savings account itself earning interest. The longer you can save for the more money you will build up – start saving as young as possible.

7. Non-taxpayers – ensure you receive your bank and building society interest without tax deducted

Completing a simple form can ensure that non-taxpayers, both young and old don’t pay unnecessary income tax on the interest they receive on their savings accounts. With interest rates as low as they are at present every penny counts so ensure you’re registered to receive your interest gross if applicable.

8. Personal Finance Blogroll

A list of the other personal finance blogs I visit on a regular basis – makes for some interesting reading!

9. Retirement is an Income not an Age

Many have fallen into the trap that retirement occurs at a particular age. Unfortunately for most of the population this occurs simply because they haven’t secured sufficient income to retire earlier. By targeting a specific income and going for that it is possible to retire early. In a forthcoming article on “goal setting” we will discuss how this can be achieved.

10. Buy a Financial Calculator

If you’re serious about planning your own finances I strongly recommend buying a good financial calculator – ideal for calculating rates of return, how much to save on a regular basis to build a certain sized fund etc.

And finally……

Be sure to subscribe to our newsletter – it’s free and you can cancel it at any time.

Also – did you know you can receive our blog posts via RSS.

Are you £1 ahead or £1 behind?

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I was reading an excellent post over at Seth Godin’s blog which got me thinking about budgeting, wealth and financial independence.

The article talks about how over 2 billion people on this planet live below the poverty line. Now for one moment, the chances are that if you are reading this article, you are not living in the abject poverty being suffered around the world but you could be in a state of personal financial “poverty”.

Do you spend more than you earn? Does more money float out of your bank account each month than flows in?

If you spend just one more £1 than you earn each month, you will get further and further into debt. If you spend £1 less than you earn each month that is £1 extra put in reserve.

To achieve financial freedom in your life time you need to spend money only on necessities, and save for a later time, when you can afford to buy luxuries.

Actions:

1. Prioritise your debts – pay those carrying the higher interest rates first

2. Draw up a cashflow forecast – see how your money comes and goes each month over the next 12 months.

3. Prune all those “luxuries” you don’t need – e.g. possibly downgrade on your satellite or cable package, cancel that gym membership you never use.

4. Destroy those credit cards – only use cash for purchases – open a separate savings account for those large, one-off purchases you need to make each year.

5. Live by the mantra, “10% of all I earn is mine to keep forever”.

What else can I add to this list – please comment below.

Top 10 Articles – June 2009

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The following is a list of the top ten articles visited in June 2009.

1. Pay Yourself First – the first step in wealth creation

Those who save first then spend invariably end up better off than those who spend first and save what is left.

2. New Tax Year – New ISA Allowance

Increase in ISA allowance following the start of the new 2009/2010 tax year on 6th April 2009.

3. Changes in ISA Allowance – Budget 2009

How the ISA allowance will increase to £10,200 for those aged over 50 on 6th October 2009 and for the rest of the population on 6th April 2010.

4. Cashflow Forecasting – Planning Income and Expenditure

A budget and cashflow planning article with a useful Excel spreadsheet to download and share with friends and family.

5. Investment Bonds – An Introduction

The various ways in which this life assurance based investment vehicle can help with your financial planning.

6. Non-taxpayers – earn interest without income tax deducted

How completing a simple form can stop non-taxpayers paying unnecessary tax on their bank and building society interest to the taxman!

7. Critical illness cover v income protection

How these two different types of protection product can be used to compliment each other.

8. Will writing – an introduction

What is a will and why are they important?

9. 10 Great Reasons for Writing a Will

A must-read article for all those serious about financial planning and protecting their families and loved ones.

And, finally…………..

10. The Rule of 72 – The Time Value of Money

A great little rule for making quick calculations