Monthly Archives: January 2022

Cash Deposits

Whether your investing your money into a Bank or building society, or looking to invest. We all want to find the best returns for our money.

Mr F had £220,000 in building society accounts.

When the accounts were first opened with the building society, they offered a good return and bonus rate however these have now reduced over time, meaning that he was now earning an average of 0.25% across his portfolio.

Due to the decrease across his portfolio, We were able spread his deposit across 3 accounts; A 6 month term account, A 1 year fixed term account and an 18 month fixed term account increasing Mr T’s interest from £550 to £3,939 per year with full FSCS protection.

This is done by spreading your deposit across banks that offer the best rates available. By using a one-time sign-up process means you never need to open or close another savings account again.

Rates are dependent on the amount and terms of the account for each bank.

The minimum investment required is £85,000.

If you would like more information on this product or would like to start the process, please contact us directly so that we can help you through the process.

Website: www.dgfs.biz

DG Financial Services is Authorised and Regulated by the Financial Conduct Authority

What you need to know about Tax and Cryptoassets

How are cryptoassets taxed in the UK?

To begin with, tax is payable on any profit received from the disposal of cryptocurrencies. This includes when they are:

  • Sold;
  • Exchanged for another cryptoasset; or 
  • Used to buy goods or services.

Cryptoassets are taxed according to their nature and how they are used, rather than the definition of the asset. 

The vast majority of cryptoasset investors who live in the UK are potentially liable to CGT on any profits or gains from any disposals that they may have made. CGT is only payable if total gains from all relevant assets are above the annual exempt amount (tax-free allowance), which is £12,300 in 2021-22.      

In rare circumstances, revenue from cryptoassets may fall under income tax rules, for example if the investor is:

  • Actively ‘mining’ or ‘staking’;
  • ‘Trading’, where HMRC deem it to be a job or profession; or 
  • Getting paid for a job or service in cryptoassets or cryptocurrency.               

HMRC may view all of these activities as forms of generating income, which makes them subject to income tax (up to 45 per cent depending on your income), not CGT. 

Learn more here: https://www.ftadviser.com/investments/2022/01/17/what-you-need-to-know-about-tax-and-cryptoassets/

TAX ADVICE IS NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.

TIME TO BRING YOUR PENSIONS TOGETHER?

3.6 million Britons have lost track of their pension savings

The more old pensions you have, the easier it is to end up losing one.

Tracing pensions from years ago can be a hassle. Over 3.6 million Britons admit they have no idea how many pensions they have and risk paying more in fees than necessary, according to new research

The number of workers with small pension pots of under £1,000 has surged dramatically in recent years, as auto enrolment has allowed millions of people to benefit from workplace pensions for the first time.

PAYING FEES TO MULTIPLE PROVIDERS

However, with the average employee now changing jobs 11 times[2] in their working life, people are increasingly building up many small pots and are often losing track, misplacing paperwork or forgetting about previous schemes they are invested in.

The Pensions Policy Institute (PPI) predicts the number of small pots will triple by 2035 to 27 million. Although the government’s Pension Dashboard will allow people to see all of their pensions in one place when it comes into eect in a few years’ time, it will not solve the problem of savers paying fees to multiple providers across all their pensions.

CONSOLIDATE SMALL PENSION POTS

While savers already have the option of combining their pensions, one in ten (10%) have no idea how to do this, while 12% say it’s just too much hassle. As a result, more than two-fifths (44%) say they’ve never bothered to track down savings from a previous employer.

Almost three-quarters (72%) of Britons now support the introduction of a new system that would automatically consolidate small pension pots as they move jobs, reinforcing strong support from the industry for the change. This would make it easier for people to manage and keep track of their retirement savings, while making the system more ecient and eective for the UK’s 33 million pension holders.

COMPARE THE FEATURES AND BENEFITS

Even if you have not had that many jobs, you may still have a number of dierent pensions to keep track of. Pensions can be confusing, but there is an alternative way to help keep on top of them. Pension consolidation may allow you to combine some or all of your defined contribution pensions in one place. Consolidating your pensions means fewer statements to keep an eye on, along with fewer and potentially lower management charges. However, not all pension types can or should

be transferred. It’s important that you know and compare the features and benefits of the plan(s) you are thinking of transferring. It can be a complex decision to work out whether you would be better or worse o combining your pensions, so it’s essential to obtain professional financial advice.

HELPING YOU STAY ON TRACK FOR THE FUTURE YOU WANT

Deciding whether to combine your pensions can be a complex decision and is not for everyone. Whether you want to consolidate into an existing pension you have with us, or you want to combine your existing pensions in a new pension, we are here to help. Speak to us today and make sure your plans are on track for the future you want.

A PENSION IS A LONG-TERM INVESTMENT NOT NORMALLY ACCESSIBLE UNTIL AGE 55 (57 FROM APRIL 2028 UNLESS PLAN HAS A PROTECTED PENSION AGE). THE VALUE OF YOUR INVESTMENTS (AND ANY INCOME FROM THEM) CAN GO DOWN AS WELL AS UP WHICH WOULD HAVE AN IMPACT ON THE LEVEL OF PENSION BENEFITS AVAILABLE. YOUR PENSION INCOME COULD ALSO BE AFFECTED BY THE INTEREST RATES AT THE TIME YOU TAKE YOUR BENEFITS.

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. YOU SHOULD SEEK ADVICE TO UNDERSTAND YOUR OPTIONS AT RETIREMENT.

CREATE A BETTER WORLD TO LIVE AND RETIRE IN

Pension investments to harness a more sustainable planet

Few people are aware of what their workplace pension invests in, let alone how their pension provider incorporates Environmental, Social and Governance (ESG) matters into the process.

Almost two-thirds (64%) of UK pension holders say that didn’t know their pension could be invested in ways to help fight climate change. One in six (17%) of UK pension holders currently invest their pension responsibly, but 41% say they would like their pension to be invested responsibly, new research has revealed.

COLLECTIVE POWER

Over three-quarters (77%) of UK adults class themselves as ‘climate conscious’. Three out of five (59%) UK adults are familiar with the term ‘responsible investment’, but only 26 per cent actually know what it means and understand its collective power to protect the planet. Men are more likely to be familiar with the term ‘responsible investment’ than women (69% vs 50%).

More than half (56%) of pension holders said they would consider investing a portion of their pension responsibly. Around a quarter (23%) were willing for at least half their pension to
be invested responsibly, with one in ten (11%) wanting between 90% and 100% of their pension invested responsibly.

PROTECTING THE ENVIRONMENT

With over half (57%) of 18-24-year-olds wanting their pension investments to harness a more sustainable planet, compared to just over a quarter (29%) of 65-year-olds and over, it’s clear there is still more that can be done to build a better understanding of inter-generational financial resilience for the future.

Pension holders were also asked what criteria they would like a responsibly invested pension to consider, with climate change and protecting the environment (42%) being highly rated. Social factors such as health and safety (29%) and use of plastic (28%) followed closely behind. The research also found that more than half (53%) of pension holders do not know how their pension funds are invested.

DOING THE RIGHT THING FOR A SUSTAINABLE FUTURE

Ethical investing has a positive impact on the world while also aiming to make a profit. It also means you receive a financial return without sacrificing your social, moral or religious principles. Many pension providers oer ethical funds for their investors – meaning you can save for retirement with a clear conscience. Please contact us for more information.

GENERATION VEXED

A third of Gen Xers not confident they can fund their retirement

One in three (31%) Generation X members (those born between 1965 and 1980) do not feel confident they will be able to work for as long as they need to fund their retirement needs, due to concerns around health and age.

With 57% of Gen Xers wanting to save more for retirement but struggling to do so, a quarter (25%) plan to work part-time past the State Pension Age (SPA) to plug an expected income shortfall in retirement, while 17% plan to work full-time. However, they have serious concerns about whether they will be able to continue working later in life.

The findings, which are contained in a report from the International Longevity Centre (ILC)[1] show why many people in Generation X continue to be ‘Generation Vexed’.

As many as 37% of all Gen Xers plan to work later in life to boost their retirement income, while for 25% this is their only plan.

However, they have several concerns they fear will constrain their ability to do this:

  • 59% are worried poor physical health will restrict their ability to work
  • 31% are concerned poor mental health will impact them
  • 31% fear age discrimination will restrict their ability to retain or find another job
  • Other concerns include not having the right skills to adapt to the changing job market (19%) and a fear that the economic impact of the pandemic will make it harder to remain in work (17%)

These concerns are perhaps understandable, especially as 36% of all Gen Xers, and one in three (33%) of those whose only plan for retirement is to work longer, also have a health problem or a disability.

Meanwhile, almost two-thirds (62%) of those who plan to work past the SPA to address an income shortfall in retirement are confident they’ll be able to do so – but they may find this is not always possible as a quarter (25%) of this group currently have a health problem or disability, and some 7% expect to provide care to an adult in the next five years.

READY TO GET YOUR RETIREMENT PLANS IN MOTION?

There are many things to consider when planning for retirement. By understanding precisely what you’ll need to get to where you want to be, you can ensure you’re prepared for the future. We can help you by creating a clear plan and then delivering on it. To find out more, please contact us.