small business

 

Financial health is financial wealth.

If you want to be financially healthy, please book an initial meeting and let’s discover if we can help you
Call us on 01332913006

 

 

Financial health is financial wealth.

If you want to be financially healthy, please book an initial meeting and let’s discover if we can help you
Call us on 01332913006

 

 

Financial health is financial wealth.

If you want to be financially healthy, please book an initial meeting and let’s discover if we can help you
Call us on 01332913006

 

 

Financial health is financial wealth.

If you want to be financially healthy, please book an initial meeting and let’s discover if we can help you
Call us on 01332913006

 

Everything you need to know about… Group Life Insurance

Everything you need to know about… Group Life Insurance

We speak to many of our small business owning clients about group life insurance and we find many people are in the dark as to what it actually is and how it can benefit their business. In this blog we share the answers to many of their questions.

 

What is group life insurance?

Group life insurance is a policy that small business owners can take out to cover everyone who works for the business. If they die while still employed by you the policy will pay out a lump sum to the named beneficiaries. The lump sum would usually be either a multiple of their salary or a fixed sum. Their death doesn’t need to be related to their work, and may include death by natural causes at home, for example.

 

Who can benefit from it?

Your employees can benefit from peace of mind in having life cover that they don’t have to pay personally for. Their families will benefit from a fixed lump sum if they die while working for you. As the employer you will be seen as offering a generous employee benefit which need not cost a great deal to provide. You may also add other health benefits to the policy, which may reduce absenteeism or get your employees back to work sooner if they are off sick

 

Why should I offer it?

In a competitive recruitment market, group life insurance can be a great employee benefit to offer as part of your overall benefits package. If you are trying to attract and retain experienced staff with families and responsibilities, it can be seen as a particularly valuable benefit.

 

Is it the same as death in service benefit?

Yes, many companies use this phrase, but it’s the same thing.

 

Does a group insurance policy cover my freelancers or subcontractor?

It would normally only cover those with an employment contract.

 

What other benefits may come with employee life insurance?

As part of the overall package you may also wish to offer health benefits to your employees, such as physiotherapy or counselling sessions. This may be particularly useful if your employees do a very physical job or one that involves stressful situations. Other benefits may include private health cover or access to a GP and you can cover your employees as well as their immediate family members. As the employer you can structure the policy to offer the benefits you find most appropriate to your team.

 

How much does it cost to have a group life insurance policy?

This will depend a great deal on your workforce, how many people you have, their ages and the industry you work in, as well as which benefits you choose to include on your policy. You may want to work to a particular budget and adjust the cover to suit that.

How does independent financial advice help in choosing the right policy?

There are very many insurance companies who provide group life insurance policies, and it can take time and expertise to find the right policy to suit your business. An independent financial adviser can take a view of the market and present you with just one or two appropriate policies for you to discuss and choose from.

You can also ensure your insurance policy is consistent with your pension arrangements or any other financial benefits you already provide.

 

At Sheldon Flanders we are able to advise on group life insurance policies, as well as a number of other financial benefits for your workforce. Book an appointment to speak to us about your business requirements.

 

Financial health is financial wealth.

If you want to be financially healthy, please book an initial meeting and let’s discover if we can help you
Call us on 01332913006

 

Your financial resolutions for 2023

Your financial resolutions for 2023

Have you resolved that 2023 is the year you get your financial situation organised? You may have been thinking about reviewing your pension? Or checking if you are making the most from your investments? Maybe 2023 is the year you will retire and make a start on all those big adventures you have been looking forward to.

Whatever your financial resolutions for this new year, we can help you achieve them.

Reviewing your pension

If you are running a successful business, your pension contributions should form part of your financial planning for the business. But maybe you have made changes to your business recently and you need to reassess your pension arrangements. Or perhaps your business is relatively new and you haven’t thought about your pension since leaving your corporate role. The sooner you start, the more you can save before you retire.

If you have a personal pension that you haven’t looked at for a while, it would almost certainly benefit from an independent review and potentially making changes to the investment funds.

Planning your retirement

If 2023 is your planned retirement year (lucky you!) we can help you decide what to do with your pension pot. Since pension freedoms, which give you the flexibility to withdraw income in a way you choose, the need for advice is paramount.  We can help you decide on the most appropriate course of action and draw income in the most tax efficient way.

Maybe you want to phase out of running your business and into retirement and you want some help to plan that handover successfully. We have worked with very many retiring entrepreneurs to help them take those steps into a prosperous retirement while ensuring that their business continues to run successfully.

 

I want to invest for the future

Maybe 2022 was the year you became a parent, or a grandparent and want to start a fund to help them in the future. Maybe you have inherited a significant amount and are wondering how best to invest it. Perhaps you are just looking at your bank account and wondering how to make your money work a little harder. There is a staggering array of savings and investment products on the market, and we can help tailor investments to your own needs.

Can I do good with my money?

In 2022 we made the decision as a business to focus on values led investments. With every new client when we research suitable investments for them, our focus is on sustainable investments (find out more here). We will explain these funds clearly to you when we present our recommendations, and are always happy to explain any aspect of the fund and their features. If you would like your investments to make a wider impact, we’d be delighted to explore this with you.

Whatever your financial goal we are best placed to give you totally independent advice which focusses on you and your needs. Take a look at the comments of our clients and let us see if we can help you.

Get in touch

We can help you keep your 2023 financial resolutions. Book an appointment by calling us on 01332 913006

 

Financial health is financial wealth.

If you want to be financially healthy, please book an initial meeting and let’s discover if we can help you
Call us on 01332913006

 

Autumn Statement 2022

Autumn Statement 2022

You can download this update here

 

“We will face into the storm”

On 17 November, Chancellor of the Exchequer Jeremy Hunt delivered his fiscal plan to “tackle the cost-of-living crisis and rebuild our economy” stating that the government’s three priorities are “stability, growth and public services.” The Chancellor struck a defiant tone during the key fiscal event, saying he was “taking difficult decisions” that would deliver a “balanced path to stability” before outlining a package of measures equating to a consolidated total of around £55bn in spending cuts and tax rises.

Economic forecasts

Mr Hunt began his statement by stressing that the country is facing “unprecedented global headwinds” before unveiling updated economic projections from the Office for Budget Responsibility (OBR) which confirm the UK is now officially in recession. The Chancellor did, however, point out that the independent public finance analyst believes the downturn will be relatively shallow, if comparatively long. The revised GDP figures suggest the UK economy will grow by 4.2% this year, but then shrink by 1.4% next year before returning to growth in 2024.

The Chancellor also announced revised OBR forecasts which suggest inflation will peak in the current quarter and then drop sharply over the course of next year. The OBR’s updated forecast though does suggest the eroding impact of inflation will reduce living standards by 7% in total over the two financial years to 2023-24, wiping out the previous eight years’ growth, while unemployment is expected to rise from 3.6% today to 4.9% by 2024.

Public finances

During his speech, Mr Hunt announced he was introducing two new fiscal rules and that the plan he was announcing met both of them. His first rule states that underlying debt must fall as a percentage of GDP by the fifth year of a rolling five-year period, while the second states that annual public sector borrowing, over the same time period, must be below 3% of GDP.

The Chancellor went on to reveal updated public finance forecasts, which predict government borrowing in the current fiscal year will rise to £177bn before falling back to £69bn (2.4% of GDP) in 2027-28. This means the medium-term fiscal outlook has materially worsened since the previous OBR forecast produced in March, which had predicted borrowing of £32bn by 2026-27. The OBR said this deterioration in the public finances was due to a weaker economy, higher interest rates and higher inflation.

Personal taxation, wages and pensions

The Chancellor went on to make a raft of key personal taxation, wages and pension announcements.

The government will increase the National Living Wage for individuals aged 23 and over by 9.7% from £9.50 to £10.42 an hour, effective from 1 April 2023.

The commitment to the pensions Triple Lock remains, which will increase the State Pension in line with September’s Consumer Prices Index (CPI) rate of 10.1%. This means that the value of the basic State Pension will increase in April 2023 from £141.85 per week to £156.20 per week, while the full new State Pension will rise from £185.15 to £203.85 per week. The standard minimum income guarantee in Pension Credit will also increase in line with inflation from April 2023 (rather than in line with average earnings growth).

The Income Tax additional rate threshold (ART) at which 45p becomes payable will be lowered from £150,000 to £125,140 from 6 April 2023. The ART for non-savings and non-dividend income will apply to taxpayers in England, Wales and Northern Ireland. The ART for savings and dividend income will apply UK-wide.

The Dividend Allowance will be reduced from £2,000 to £1,000 from April 2023, and to £500 from April 2024.

The annual Capital Gains Tax exemption will be reduced from £12,300 to £6,000 from April 2023 and then to £3,000 from April 2024.

The change to Stamp Duty Land Tax threshold for England and Northern Ireland, which was announced on 23 September 2022, remains in place until 31 March 2025. The nil rate threshold is £250,000 for all purchasers and £425,000 for first-time buyers.

In addition:

  • The Income Tax Personal Allowance and higher rate threshold are to remain at current levels – £12,570 and £50,270 respectively – until April 2028 (rates and thresholds may differ for taxpayers in parts of the UK where Income Tax is devolved)
  • Inheritance Tax nil-rate bands remain at £325,000 nil-rate band, £175,000 residence nil-rate band, with taper starting at £2m – fixed at these levels for a further two years until April 2028
  • National Insurance contributions (NICs) Upper Earnings Limit (UEL) and Upper Profits Limit (UPL) frozen for a further two years until April 2028
  • The 2022-23 tax year ISA (Individual Savings Account) allowance remains at £20,000 and the JISA (Junior Individual Savings Account) allowance and Child Trust Fund annual subscription limits remain at £9,000
  • The Lifetime Allowance for pensions remains at its current level of £1,073,100 until April 2026.

Business measures

  • The National Insurance Secondary Threshold is frozen at £9,100 until April 2028
  • The VAT registration threshold is fixed at £85,000 for two years from April 2024
  • R&D tax credits to be reformed to ensure public money is spent effectively and best supports innovation
  • Businesses making extraordinary profits due to external factors are required to contribute more, including those in the oil and gas sector – the Energy Profits Levy is now extended to the end of March 2028, and the rate is increased by 10 percentage points to 35% from 1 January 2023
  • A new temporary 45% levy will be introduced for electricity generators from 1 January 2023
  • A package of targeted support to help with business rates costs worth £13.6bn over the next five years
  • The Annual Investment Allowance (AIA) is to be set at its highest ever permanent level of £1m from 1 April 2023.

Cost-of-living support

The Energy Price Guarantee (EPG) per unit will be maintained through the winter, in effect limiting typical energy bills to £2,500 per year. From April 2023 the EPG will rise to £3,000 per year, ending March 2024. The government will double to £200 the level of support for households that use alternative fuels, such as heating oil, liquefied petroleum gas, coal or biomass.

The Chancellor announced that there will be targeted cost-of-living support measures for those on low incomes, disability benefits and pensions. In 2023-24 an additional Cost of Living Payment of £900 will be provided to households on means-tested benefits, £300 to pensioner households and £150 to individuals on disability benefits. Rent increases in the social housing sector will be capped at 7% in the next financial year.

Education, health and social care

To promote education and boost the UK’s health and social care system, Mr Hunt announced:

  • An additional £3.3bn per year for the NHS in the 2023-24 and 2024-25 tax years
  • Up to £2.8bn in 2023-24 and £4.7bn in 2024-25 for the social care sector
  • An additional £2.3bn per year for England’s core schools budget in 2023-24 and 2024-25
  • An extra £1.5bn, £1.2bn and £650m have been pledged for hospitals and schools in Scotland, Wales and Northern Ireland, respectively.

Priorities for growth

Next, the Chancellor moved on to outline his three priorities for economic growth: energy, infrastructure and innovation. Key announcements included:

  • A new Sizewell C nuclear power plant in Suffolk
  • New funding of £6bn from 2025 to meet the government’s objective to reduce energy consumption from buildings and industry by 15% by 2030
  • Northern Powerhouse Rail and HS2 to go ahead as planned
  • A commitment to proceed with round two of the levelling up fund, at least matching the £1.7bn value of round one
  • The removal of import tariffs on over 100 goods used by UK businesses
  • An increase in public funding for R&D to £20bn by 2024-25.

Other key points

  • Vehicle Excise Duty chargeable on electric cars, vans and motorcycles from April 2025
  • Local authorities in England given additional Council Tax flexibility by modifying the referendum limit for increases
  • Review of the Energy Bill Relief Scheme, findings to be published by 31 December 2022
  • The Secretary of State for Work and Pensions will publish the government’s Review of the State Pension Age in early 2023
  • Defence spending to be at least 2% of national income
  • Overseas aid spending to be kept at 0.5% for next five years.

Closing comments

Jeremy Hunt signed off his announcement saying, “There is a global energy crisis, a global inflation crisis and a global economic crisis, but the British people are tough, inventive and resourceful. We have risen to bigger challenges before. We aren’t immune to these headwinds but with this plan for stability, growth and public services, we will face into the storm… I commend this statement to the House.”

It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding of taxation and can be subject to change in future. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK; please ask for details. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor.

All details are believed to be correct at the time of writing (17 November 2022)

 

Financial health is financial wealth.

If you want to be financially healthy, please book an initial meeting and let’s discover if we can help you
Call us on 01332913006

 

Protecting your business: Key Person Insurance

Protecting your business: Key Person Insurance

Running a business is full of challenges. While keeping your current clients happy and planning for business growth, you are probably also thinking about how to attract new clients and deal with any future issues. Arranging Key Person Insurance may not be on your list of things to do this year.

You may have plans if things go wrong in your business, for example a robust back up system for your data or insurance for your premises. But have you thought about insuring the people within your business? According to government statistics, only 25% of businesses ever get to the point where they employ staff, so building an effective team is a big step and it takes time and effort. Regardless of the sector you operate in, recruiting great people can be really tough. Add to that, the statistics around some critical illnesses make difficult reading – in the UK 375,000 people are diagnosed with cancer each year. Accident statistics are also shocking: 1,608 people were killed and 26,701 were seriously injured in road accidents in the UK in 2021. Each of those statistics is a person who has a family, a job and an employer.

When we talk with our clients, if they own a business we often raise the subject of Key Person Protection. Many of them have not heard of it, despite that fact that it can be a very helpful business investment.

What is Key Person Protection?

Key Person Protection is one way to safeguard your business against the death, terminal or critical illness of a key person in your organisation. It is an insurance policy which is designed to pay out a lump sum on the death or illness of the insured key person during the length of the policy.

This could be used to find a replacement, to pay off a loan or to make up a shortfall in revenue. Any of these actions can help keep your business trading and protect the livelihoods of everyone else connected with the business.

Who counts as a key person within your business?

A key person could be anyone who is crucial to the day to day running of your company. This might be a business partner, a director, an employee, or anyone whose skill, knowledge and experience affect revenue.

How should I consider who to include in a Key Person Protection policy?

Consider the responsibilities a key person might have. Think if any loans or financial commitments depend on that person, whether their loss would have an impact on sales, or whether their absence would impact on future planning.

How much could it cost my business to protect my key people?

Like any form of life insurance, premiums are calculated depending on a number of factors including the sum assured, the key person’s lifestyle and age, if they smoke and their health history. If you would like an idea of how much it could cost your small business to insure your key people, please talk to us and we can advise you.

Do you recommend a particular product?

No, we look at a wide cross section of the market, so it’s our job to research suitable insurance companies and find the right policy to suit your business.

Why should I spend money on Key Person Protection at the moment?

This is an important question, and we understand you may be keen to limit the costs in your business. However we believe you should think of Key Person Protection in the same way as you think of other insurances, back ups and contingency plans. It’s simply a tool to ensure that one person’s bad luck doesn’t end up having catastrophic consequences for the whole company.

 

To talk to us about Key Person Protection and other ways we can support your business, call 01332 913006.

 

 

Financial health is financial wealth.

If you want to be financially healthy, please book an initial meeting and let’s discover if we can help you
Call us on 01332913006

 

Why female entrepreneurs need to think about pensions

Why female entrepreneurs need to think about pensions

In Pensions Awareness Week our MD Karen Sheldon reflects on why she is so determined to ensure women entrepreneurs are thinking about their financial futures.

Like so many women I started my career in a corporate environment. I was good at what I did, I earnt the bonuses and went on the conferences and sales trips. It’s easy to take many things for granted when you work for a big organisation. Your salary drops into your bank account at the end of the month, there’s always someone to ask if you have IT problems, and you are part of a pension scheme.

Like many women when they become parents, I came to the point when working for someone else wasn’t working for me or my family and I decided to set up my own business. Not only did I learn quickly how to sort out any IT problems, I made sure to set up my own pension fund and prioritise making payments over the years of growing the business. As a pensions adviser, this was second nature to me. But I realised that for many women in the same position as me, starting their own business after a long corporate career, this wasn’t a priority.

This is why, in Pensions Awareness Week, I’m so determined to ensure that other female entrepreneurs are building pension planning into their business finances. Here’s why you – as a female entrepreneur – need to think about your pension:

Your state pension may be later and less than you think

If you were hoping that the state pension will step in and support you in your retirement, let me give you a reality check. You won’t be able to claim a state pension until well into your 60s – use the government tool here to check exactly when https://www.gov.uk/state-pension-age And it may not be as much as you think. The current state pension is £185.15 a week, assuming you have made adequate NI contributions. Whilst a good staple building block, for many it just won’t be enough to enjoy your retirement, so you will need to think about other sources of income.

Women have less in their pension funds

According to research by Legal and General earlier this year, women have significantly less in their pension pot regardless of which sector they are in.

This is particularly worrying because women are likely to live longer than men, so really should have larger pensions at the point of retirement.

Add to this, research in 2019 by Scottish Widows showed that more than a third (35%) of female entrepreneurs are saving nothing for their retirement. That’s almost 600,000 women who will have no savings to fall back on in later life. It revealed that less than half of self-employed women save the minimum recommended level for retirement.

There are many reasons for this. If we are starting a new business in our mid career, we will prioritise other financial matters before our pensions. We may find it harder to access finance, so we are more likely to self-fund our businesses. We may also be working fewer hours, to allow for caring responsibilities, so our turnover is reduced.

If we are in a relationship, our incomes may be less than our partners, and seen as less important, or simply an income for extras, such as holidays. We are more likely to prioritise putting funds into savings for our children.

All of these factors play a significant part in the funds we have available to invest in pensions.

Women think differently about money

Aside from demographic issues, attitudes towards money may also be important. The Fidelity Global Women and Money report 2021 suggests that while women’s incomes globally increased to $24 trillion in 2020, up from $20 trillion in 2018, we do not think of ourselves as investors.

Legal and General’s research showed that “women are less likely than men to feel confident managing their investments (22% of women versus 41% of men), and their savings (56% of women versus 67% of men).”

Simply put, we don’t see ourselves as investors, so we don’t invest.

We are still impacted by the pandemic and cost of living

Add to all these ongoing factors, nearly one in five women (18%) has reduced the amount of money she is saving into a pension as a direct result of the pandemic. As we face a cost of living crisis in the UK, women entrepreneurs may be tempted to reduce or completely stop their pension payments in favour of other more pressing concerns.

What is the solution?

There is a lot of work to do to ensure that women entrepreneurs have the financial future they deserve. You can’t just rely on the state pension and anything that you may have saved from their corporate career. You can start a personal pension with a relatively small amount, and there may be significant tax implications from investing, depending on the structure of your business. The key is to start, and to save regularly.

Whatever your concerns about investing in a pension, I would be really happy to talk to you about it. Please book a free initial conversation by calling the office. Because financial health is financial wealth.

 

Financial health is financial wealth.

If you want to be financially healthy, please book an initial meeting and let’s discover if we can help you
Call us on 01332913006