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National Stress Awareness Day is on 3 November. Stress is something everyone experiences at different points in their lifetime, but it can harm your wellbeing and health. Recognising the signs of stress means you can take steps to reduce the impact it has on your life.

According to a study from HR software provider CIPHR, Brits feel stressed eight days a month on average. That adds up to around three months a year. Almost 8 in 10 people said they felt stressed at least once a month. So, if you feel stressed, you’re not alone.

The research found there are many reasons for stress. Financial anxiety and a lack of sleep were the most common causes. Things like health, work in general, and cleaning were also found to have an impact. Recognising the signs of stress is important for managing the effect it has, so here are seven of the most common symptoms.

1. You feel tired

Even when you plan to get eight hours of sleep, stress can still leave you feeling exhausted in the morning. This may be because you’ve had a restless night, or had trouble going to sleep because your mind is focused on your concerns. It can be a vicious circle too, as a lack of sleep can exacerbate other signs of stress and add to your worries.

2. You experience regular headaches

The occasional headache is common, but if you’re experiencing them frequently, it could be a sign of stress. Stress headaches will often feel like pressure on either side of your head and may be accompanied by tense shoulders and neck. If headaches are common, it’s also advisable to seek medical attention, which can ease concerns if you’re worried about your health.

3. You feel more emotional

Stress can heighten emotions and may mean you react differently in some situations than you normally would. You may, for example, feel more tearful or irritable during the day. This is one of the signs that can worsen if you’re experiencing a lack of sleep too.

4. Your diet has changed

Hormones released when you’re stressed can affect your relationship with food. For some, stress can mean they lose their appetite in the short term. For others, it can lead to stress eating, which could mean eating more or choosing unhealthier foods. A poor diet can contribute to stress, tiredness, and your capacity to carry out day-to-day activities.

5. You feel overwhelmed

Feeling overwhelmed and like you’re not in control of things is common when you’re stressed. It can mean if you’re facing a problem, you’re not able to come up with a solution to resolve it. When you have a lot on your plate, being overwhelmed can mean you feel less able to tackle it, potentially causing even more stress.

6. You’ve lost motivation

Whether you’re putting off work tasks or avoiding doing the things you used to enjoy, stress can mean you lose motivation. While it can seem easier to avoid these things, it can mean you miss out on activities that would lift your mood.

7. You get ill easier

As well as an emotional impact, stress can have a physical one too. Stress can impact your immune system and mean you become ill more frequently. It can also mean it takes longer for you to recover and feel like yourself again.

5 ways you can combat stress and boost your wellbeing

If you’ve been feeling stressed, it can seem like there’s little you can do. But some relatively small steps can have a real impact on your wellbeing and help reduce the levels of stress you’re experiencing. Here are five ways to do this:

Exercise

Stress can mean you feel lethargic but pushing yourself to exercise can release feel-good hormones that can boost your mood. Where possible exercise outdoors to get the added benefits of fresh air and nature.

Set small goals

Setting out a plan can help you take back control and work towards your goals. Setting small targets can help keep you on track and mean you feel like you’ve accomplished something each day. Remember to celebrate the positive steps you’re taking.

Connect with people

Stress can lead to people feeling isolated and you may avoid spending time with others, whether that’s your family, friends, or colleagues. Make a conscious effort to make plans to socialise.

Create some me-time

Think about what you enjoy doing and schedule some time to focus on this. It could be reading a book, going for a walk, or something entirely different, but don’t feel bad about spending time on the things that are important to you.

Talk about your worries

Don’t be afraid to seek help or talk about what is causing you stress. It can help you see things from another perspective and create a plan to reduce stress. In some cases, chatting with loved ones can help, in others working with a professional to talk through your worries can be beneficial.

Investment decisions should be based on logic and fact. But it’s easy for emotions and biases to affect your decisions, and this can lead to investment mistakes.

Behavioural bias can be useful in some circumstances. It’s a way of making mental shortcuts when you need to make complex decisions. When you consider how many decisions you need to make day-to-day, being able to make quick decisions is important. However, it’s just as important to recognise when biases can be harmful, and investing is one example.

Biases may come from your past experiences, unconscious beliefs, or the way you use information. Being aware of how biases may influence you can help you reduce the risk of making a mistake. Here are five common cognitive biases that could have an impact on your investments.

1. Confirmation bias

When you’re deciding which stocks, shares, or funds to invest in, you’ll seek out information to help you make a decision. However, in many cases, you will already have a preconceived idea about whether an investment opportunity is “good” or “bad”.

Confirmation bias refers to the tendency to place a great emphasis on information that supports your existing beliefs. With so much information on your fingertips online, it’s often easy to find something that fits in with this. While placing importance on the source that supports your views, you may also disregard information that doesn’t fit your existing ideas. It can mean you end up making investment decisions based on a small sample of information without fully assessing how reliable or relevant it is. Being critical of information is crucial.

2. Loss aversion

When you think of potential investment mistakes, it’s likely that taking too much risk is what comes to mind first. Yet, taking too little risk can be just as damaging.

Previous research suggests that people are more sensitives to losses than wins. So, you’ll feel more pain from a loss than you’d feel joy from a win. In investment scenarios, it can mean you avoid taking risks even when evidence suggests it’s worth it. As a general rule of thumb, the more investment risk you take, the better the potential returns, so loss aversion can mean you miss out.

However, it’s important to take a balanced view of risk. Investment values fluctuate and can fall as well as rise. You need to consider what your risk profile is when investing. It can help you avoid loss aversion while still choosing investments that are appropriate for you.

3. Anchoring bias

How do you decide what a piece of information is worth? Anchoring bias refers to the phenomenon of placing too much emphasis on a single piece of information and anchoring your views to this.

Let’s say you purchased a share and evidence suggests it’s time to sell. Anchoring bias can mean you hold onto the share for longer because you’ve anchored on the higher price you bought it at. This anchoring can give you the view that the share is more valuable than it actually is. This is despite the share price you purchased it at having no impact on the present.

As with confirmation bias, being critical of the information available is important.

4. Hindsight bias

It’s natural to look back at investment decisions and consider what you could have done differently. However, hindsight bias means you attribute different levels of control to decisions depending on their outcome.

It’s a tendency to see beneficial past events as predictable. So, if you made an investment decision that’s performed well, you’d put it down to you foreseeing that the company would perform well. In contrast, you consider bad events as unpredictable, so if an investment performs badly, it’s because it was out of your control. Hindsight bias can make it difficult to objectively look at past investment decisions.

5. Bandwagon effect

Investment decisions should reflect your circumstances and goals, but the bandwagon effect means you make decisions because it appears many people are doing the same thing.

For example, after reading a news article about how everyone is investing in Silicon Valley stocks, would you be tempted to invest in opportunities within this sector? It could be right for you, but if you haven’t reviewed your current portfolio, risk profile, or the investment themselves you could be making a mistake. Speculative bubbles are often the result of the bandwagon effect.

Need help making investment decisions?

Working with a financial planner can help you reduce the impact that bias has on your investments and other financial areas. Being able to discuss your investments and why you’re making certain decisions can be all you need to highlight where bias is occurring. We can also help you understand which investment decisions make sense for you with your goals and situation in mind. Please contact us to talk about your investment portfolio.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

How often do you discuss your finances? In the UK, talking about money and our long-term financial plans are often still seen as a taboo subject. Breaking down this barrier could help you and those who are important to you make better money decisions.

Talk Money Week will take place between 8–12 November and aims to encourage people to talk more about finances. From discussing pensions in the workplace to saving goals with family, having an open conversation about money can be a positive thing. Despite this, Talk Money Week research found that 9 in 10 adults, the equivalent of 47 million people, don’t find it easy to talk about money, or don’t discuss it at all.

Talking about money can be difficult, but according to research, people who talk about money:

• Make better and less risky financial decisions
• Have stronger personal relationships
• Help their children form good lifetime money habits
• Feel less stressed or anxious and more in control.

It’s a step that can help improve your financial wellbeing and long-term resilience. It doesn’t just help you, either – it can support the financial security of the people around you too.

If money isn’t something you talk often about, it can be difficult to start conversations and get into the habit. Here are three reasons to start doing it now.

1. Take control of your finances and goals

Money-related stress is common. Research from CIPHR found that 79% of people feel stressed at least once a month, and money was the top cause of this. Some 39% of people said money was the thing they worried most about.

Talking about your concerns can help your worries seem more manageable. When you’re stressed, it can be difficult to make decisions and understand what your options are. Talking about it can help you create solutions and take control of your finances.

You shouldn’t just speak about concerns, either; talking about what money will allow you to do can help motivate you and keep you on track. For instance, talking about a savings account that will help you book a dream trip, or how increasing your pension contributions will mean you can retire early, are just as important as sharing the things you worry about.

2. Make better financial decisions

Financial decisions can seem complex and, at times, it can be difficult to understand what your options are. In other cases, you may take certain steps simply because that’s what you’ve done in the past, even if it’s not right for you now.

Perhaps you save into a savings account with your current account provider because that’s what you’ve always done. But a conversation with a colleague could highlight that there’s an alternative account that’s offering a higher interest rate to help your money go further. Or a conversation may mean you start to consider investing some of your savings rather than holding cash.

Talking about money can help you look at your finances from a different perspective and mean you make better decisions.

3. Pass on your financial knowledge

Over the years, you’ll have picked up your own body of financial knowledge. By making it part of everyday conversation, you can help people around you make better financial decisions too. Perhaps you could highlight why paying into a pension early makes sense to younger generations, or have some tips for starting an investment portfolio.

It can also help you foster a relationship where loved ones feel comfortable coming to you to ask for advice or share their concerns. It can mean they’re less likely to bury their head in the sand if they’re struggling or to miss opportunities.

Having open conversations about money and how it can help you achieve goals can help loved ones make better decisions.

When should you talk to a financial planner?

Talking to loved ones about your finances can be beneficial. However, there are times when working with a financial planner can help you get the most out of your assets. A professional can help you understand the complexities of things like tax allowances, as well as how the decisions you make now will affect your goals.

By working with a financial planner, you know you can have confidence in your plan. It can be useful at any point in your life, including milestones like retiring, and is a step that can ensure you remain on the right track long term. If you’d like to arrange a meeting, please contact us.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

Half of the adults in the UK don’t have a will. While you may have a reason for putting the task off, there are many compelling reasons to make time to write a will that could provide peace of mind.

A survey from Will Aid found that 49% of UK adults do not have a will in place. A fifth said their reason for putting it off was because they do not want to think about death. While contemplating passing away is difficult, it is important to think about what you’d want to happen to your estate after you die.

Even if you have a will in place, you should regularly review it. Over time your wishes and circumstances can change. What you wrote 10 years ago may no longer align with your goals. Whether you’ve welcomed grandchildren, inherited money, or simply changed your mind, your will should reflect what you would like to happen to your estate. It’s a good idea to review your will every five years or after big life events.

If it’s something you’ve been putting off, here are five excellent reasons to make writing or updating your will a priority.

1. A will is the only way to ensure your wishes are followed

Without a will, your estate will be distributed according to intestacy rules. This can be very different from what you want, particularly if you have a complex family or want to leave something to several people. The only way to ensure your wishes are followed is to write a will.

2. You can use a will to name a guardian for your children

If you have children, you can use a will to name a guardian for them. Despite this, only a quarter of parents have named a guardian for their underage children in their will, according to Will Aid.

Without a named guardian, a court would decide who looks after your children. In some circumstances, this may not be who you wished and could even be someone your child does not know well.

3. A will can reduce family conflicts occurring

Grief can lead to family conflicts and has the potential to cause long-term disputes. In some cases, how your estate is distributed may be contested and it could cause rifts. This may be due to one person believing they know what you would want, which sharply contrasts with what another believes. Setting out your wishes clearly in a will can provide certainty and reduce the risk of family conflicts arising.

As well as putting a will in place, it may be worth speaking to your loved ones about your wishes too. This gives you a chance to help them understand why you may be making certain decisions.

4. You can leave a charitable legacy in your will

As well as leaving wealth to your family and friends, you may want to support a charitable cause too. Your will means you can leave a legacy to causes that are close to your heart. There are several different ways of doing this, from leaving a specific sum to charity to leaving a proportion of your estate. A legal professional will be able to offer advice on the different options you may want to consider.

As well as having a positive impact, a charitable legacy can also reduce a potential Inheritance Tax (IHT) bill. If you leave more than 10% of your estate to charity, the rate of IHT paid will reduce from 40% to 36%.

5. If your estate could be liable for Inheritance Tax, a will can reduce the bill

As well as leaving a charitable legacy, there are other steps you can take to reduce an IHT bill. Writing a will can help you maximise allowances so that you can pass on more of your wealth.

You can leave £325,000 to loved ones without any IHT being due, this is known as the “nil-rate band”. In addition to this, you may be able to take advantage of an additional £175,000 allowance known as the “residence nil-rate band”. You can use this if you leave your main home to your children or grandchildren. Naming your children or grandchildren in your will as benefactors of your home can increase the amount you can pass on without leaving an IHT bill.

Depending on your circumstances and goals, there may be other things you can do to reduce IHT. For example, placing some assets in a trust and passing these on through your will may be right for you. Keep in mind that trusts can be complex and often irreversible, so it’s important to take appropriate advice. If you’re worried about IHT, there are often steps you can take to reduce the bill.

If you’d like to discuss the value of your estate and how you can pass on assets to your loved ones, please contact us.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The Financial Conduct Authority does not regulate will writing, tax planning, or estate planning.

In the 2019/20 tax year, taxpayers paid a record amount of Capital Gains Tax (CGT) to HMRC. If you could face a CGT bill, there are some things you can do to reduce it.

According to Which?, individuals paid £9.9 billion in CGT in 2019/20, up from £9.5 billion in the previous year. CGT is a tax you pay on the profit when you sell an asset that has increased in value; this could include stocks and shares, property, or material goods. The rate of CGT you pay is dependent on your Income Tax band and the asset you’re selling, but it can be as high as 28% when selling residential property that is not your main home. As a result, it can significantly eat into your profits.

If you could be liable for CGT, here are five useful tips that could help you reduce your bill.

1. Make use of your CGT allowance

Each tax year, you have an allowance known as the “annual exempt amount”. This is the amount of profit you can make before any CGT is due.

For the 2021/22 tax year, this allowance is £12,300. Planning the disposal of assets to make full use of this allowance can reduce the amount of tax due. For instance, spreading the sale of assets over several tax years to ensure you don’t exceed the threshold can mean you avoid or reduce how much CGT you need to pay.

The annual exempt amount is frozen at £12,300 until 2026, making efficient tax planning even more important. Inflation means the value of assets is likely to continue rising during this period, so more taxpayers could find they unexpectedly exceed the threshold.

It’s also important to note that the annual exempt amount is £12,300 per individual. So, if you hold assets jointly or transfer assets to your spouse or civil partner, you can effectively double the threshold. However, you cannot carry forward unused annual exemption into a new tax year.

If you’d like to create a strategy that makes use of your CGT annual exempt amount, please get in touch.

2. Maximise your ISA contributions

If you could pay CGT when selling stocks and shares, maximising your ISA allowance makes sense.

Each tax year, you can place up to £20,000 into an ISA. You can hold this money in cash or invest it. If you choose to invest, the money can grow free from Income Tax and CGT, making ISAs an efficient way to invest. Again, the ISA allowance is per individual. So, as a couple, you could add up to £40,000 each tax year to ISAs between you.

You cannot carry forward unused ISA allowance – if you don’t make use of it, you lose it.

3. Take advantage of Enterprise Investment Scheme (EIS) tax reliefs

Gains made in an EIS are free from CGT if you hold the asset for more than three years. However, these investments are not suitable for everyone.

EIS were designed by the government to encourage investors to invest in smaller companies. These are typically higher risk than traditional investments. You should carefully consider your risk profile when investing in an EIS and keep in mind that you will need a long-term investment strategy to make use of the CGT tax relief. If you’d like to discuss if EIS could be right for you, please contact us.

4. Offset your losses

If you’ve made a loss when selling some assets, you can offset these against a CGT bill. Losses that you wish to offset must occur in the same year as the gains. You will also need to register losses with HMRC. Offsetting losses can help you balance your gains and reduce a tax bill. However, it can be complex and it’s important the right procedures are followed.

5. Reduce your Income Tax levels

As the rate of CGT is linked to your Income Tax band, reducing your taxable allowance can mean you pay a reduced amount of CGT overall. There are several ways to do this, including making pre-tax contributions to your pension and making donations to a charity. This could help you save for a more comfortable retirement or have a positive impact on a good cause.

The above list isn’t an exhaustive way to reduce CGT. Depending on your circumstances, there may be other steps you can take too. If you’re worried about a CGT bill and would like to learn more about how you could reduce the cost, please contact us to create a bespoke plan to mitigate your tax liability.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

Almost a fifth (18%) of UK adults said their income had increased in the three months to June 2021, according to an LV= survey. As the pressure of lockdown eases, employees are also less worried about losing their job or being able to find work. If you have more disposable income now, it could be worth boosting your pension.

There are many reasons why 9.5 million people have benefited from an income increase. For some, coming off furlough as they head back to work will mean their income has increased. For others, a pay rise, switching jobs, or even cutting back on other areas may mean they have more disposable income than they did just a few months ago.

So, what should you do with the extra income?

With lockdown measures lifting, it’s not surprising that 28% plan to socialise more and 36% plan to go on holiday in the next 12 months. A quarter also said they were planning special days out with their family to make up for lost time.

While spending some of your savings or additional income on the things you enjoy isn’t a bad thing, adding some of it to your pension could secure your future. Here are five reasons to think about boosting your pension regularly or with a one-off contribution.

1. Your contributions will benefit from tax relief

Assuming you don’t exceed the Annual Allowance, your contributions will benefit from tax relief. This relief means some of the money you’ve paid in tax is added to your pension, providing an instant boost. So, your money can go further when paid into a pension.

Usually, tax relief is paid at the highest rate of Income Tax you pay. Your pension provider will typically claim it for you, but you will need to complete a self-assessment tax form to claim your full allowance if you’re a higher- or additional-rate taxpayer.

2. Your employer may match your contributions

If your increased income means you could put away more into your pension each month, it’s worth checking what your employer’s benefits are. Some will also increase their contributions to your pension if you do. Others may offer a salary sacrifice scheme that would mean you benefit in the long run.

3. Pension investments can grow free from Income Tax and Capital Gains Tax

When investing for the long term, a pension can make sense. This is because returns from investments held in a pension are not liable for Income Tax or Capital Gains Tax. If you want to invest for your future, a pension can help you reduce tax liability and get the most out of your money.

Instead, you may pay Income Tax when you take an income from your pension. The amount of Income Tax due will depend on your income from all sources, so it is possible to manage your withdrawals to minimise tax.

4. Your investments benefit from the compounding effect

As you can’t access your pension until you’re 55, rising to 57 in 2028, your investment returns are themselves invested to potentially deliver further returns. Over time, these additional returns can add up and help your pension grow at a faster pace. With workers paying into their pension over decades, this compounding effect can mean a more comfortable retirement.

While over the long term, investments have historically delivered returns, it is important to remember that investment values can fall too. If your pension value falls, focus on the long-term trend and what your goals are.

5. It can help you create a more secure retirement

If retirement is some way off, it can be easy to put off adding to your pension now. However, even a slight increase in your pension contributions in your working life can mean the difference between meeting your retirement goals and falling short of them. Setting out what you want your retirement to look like, whether that involves exploring new places or relaxing with loved ones, can help you see if you’re on the right track.

Remember: it could be some time before you can access your pension

While there are compelling reasons to add to your pension, you need to consider when you will want to access the money. Your pension usually isn’t accessible until you’re 55, rising to 57 in 2028. If you’d want to use the savings before this age, you should consider alternatives.

You should ensure you have a financial safety net should the unexpected happen too. Do you have a rainy-day fund to fall back on? As you can’t access your pension, you won’t be able to pay for a leaking roof or cover expenses if you need to take time off work. As a result, you should ensure you’re financially secure before increasing your pension.

Please contact us to talk about your pension and how to get the most out of your savings.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

A pension is a long-term investment. The fund value may fluctuate and can go down, 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.