Chris Jennings

FREE seminar to share industry secrets

By David Lamb CFP™ MCSI

This Spring marks our 32nd anniversary in business – and three decades in which I have seen many changes in the financial service industry.

These have mainly been in the transition to better quality of advice, achieved through more regulation and mandatory qualifications for advisers.

Unfortunately, the ‘industry’ is still not quite there yet and remains dominated by the product providers (banks, investment houses and life assurance companies) who constantly come up with reasons you should give them your money.

True financial planning is not about your money, but about how you can use your resources to support you and your family’s lifestyle without the fear of running out of money, whatever happens.

We pride ourselves in being at the forefront of the development of lifestyle financial planning; we are only one of 60 firms of financial planners in the country to be accredited by our professional body the Chartered Institute of Security and Investment.

I am a Certified Financial Planner, Affiliate of the Society of Trust and Estate Practitioners and a Chartered Wealth Manager, while my new colleague Peter Kenny is also highly qualified to Level 6 and will become chartered in the very near future.

I am not a big fan of the financial services ‘industry’ and have always tried to be different; a rebel with a cause if you like! Over the last few years in these monthly columns I have tried to explain what true lifestyle financial planning is, but there is a limit to what you can get across in 400 words.

This month we are therefore going to hold a FREE seminar, followed by a light buffet, to share with you a few trade secrets the financial services industry does not want you to know (which you won’t find by Googling) and what true financial planning is all about.

The event is being held at 6pm on Monday May 20 in the Bishop Merton Room at St Mary’s Parish Centre on Thornhill Road.

If you would like to join us, please reserve your place by emailing or calling 01661 860438. But you will need to be quick – places are strictly limited to 20 attendees.

Hopefully, at the end of the seminar, we’ll all be rebels with applause!

First life saved by client’s drone donation

By David Lamb CFP™ MCSI

In January I wrote about a lovely client who made some very generous donations to Glenmore Lodge and Cairngorm Mountain Rescue.

Louie’s gifts, in memory of her late husband Norman, funded a course teaching children mountain skills at the outdoor training centre near Aviemore and a hi tech thermal imaging drone to support search and rescue operations.

The beneficiaries were chosen because Speyside in Scotland was one of the couple’s favourite holiday destinations.

At the end of January, whilst driving home from work listening to the news, I learned that a monkey had escaped from the Highland Wildlife Park in Kincraig and Cairngorm Mountain Rescue were helping with the hunt for the marauding mammal using their new drone.

The search for the Japanese macaque, nicknamed Kingussie Kong after a local town, had made national news. When the monkey was eventually recaptured following four days on the run after being tracked by the drone, it looked rather hungry and feeling sorry for itself. But its life had probably been saved by the airborne tracker that Louie’s money bought.

When done properly, financial planning can have a major impact on clients’ lives and a knock-on effect in other areas. Who would have thought that asking a client how she wanted to use her money could result in a few days of fun following the national news?

I get a lot of job satisfaction helping clients plan and achieve their desired lifestyle. But having a small part in an event that made national news and knowing that the drone which Louie had generously funded with our help will one day save a human life is especially heartwarming.

How you can turn your grief into a lasting legacy

By David Lamb CFP™ MCSI

The loss of a life partner is one of the most traumatic experiences we can have. But out of the resulting grief can emerge a lasting legacy, as our latest client case study shows.

With no children or close relatives, Louie and husband Norman were absolutely devoted to each other and did everything together.

One of their favourite holiday destinations was Speyside in Scotland, but three years after Norman passed away Louie had still not returned to the area – saying it would be just too painful to visit.

Financial planning projections showed Louie was financially secure, and her plan was to bequeath donations to Dogs Trust and other charities in her will.

We suggested to Louie that the charities could have a long wait and she may enjoy seeing the beneficiaries of her wealth by making donations now – an idea she loved. As this was also Norman’s money, we asked what he would have wanted.

He was very keen on rugby and hill walking and Louie felt sure that he would have liked to support his local rugby club and also to help to get underprivileged children out of the city and into his beloved mountains.

She emailed the secretary of Norman’s first rugby club, while we contacted Glenmore Lodge, one of the country’s leading outward-bound centres.

We also suggested to Louie that, if we were going to help kids get into the mountains, we should also think about getting them down – so we also contacted Cairngorm Mountain Rescue.

After discussions Louie decided to fund a minibus for the rugby club and an expensive drone for the Mountain Rescue team. Glenmore Lodge are also developing a course, to run over 10 years, to train children in mountain skills, which will be in Norman’s name, with a plaque dedicated to him at the lodge.

The donations left a lasting legacy for Norman which gave Louie a huge morale boost and she is following the students’ progress with a keen interest.

Model your financial future with our free online tool at

How proper financial planning can be truly life-changing

By David Lamb CFP™ MCSI

Our last blog focused on value for money and how there is a lot more to financial planning than investment returns. When it’s done right, it can be truly life-changing – as the client case studies we will share over the next few blogs will demonstrate.

Our first is Bob and Maureen. Recently retired, they were relieved when our comprehensive, stress tested financial plan showed they were never going to run out of money.

We then explained to them that there were actually some serious challenges of being what we call a ‘got too much’ client. Tax being one of them.

Surely they’ve already paid enough tax when they were working and running their business; now we pointed out that inheritance tax would probably be their biggest tax bill ever. We reminded them that it’s no use being the richest man or woman in the graveyard.

We asked Bob and Maureen how much they wanted to leave behind and Bob said that he didn’t want to payany inheritance tax, which at the time meant leaving no more than £650,000.

A further calculation showed that they could do this and also easily spend an extra £30,000 each year, in today’s terms, for the next ten years.

That was the good news. But in the initial factfinding we do with all new clients, when we ask them to score themselves against ten key life satisfaction areas, Bob and Maureen came out low on fun, recreation and fulfilment.

We had already identified low spending on holidays but further discussions uncovered Maureen had a fear of flying which was becoming a real problem.

So we sent Bob details of a flying phobia course at Newcastle Airport and, three months after Maureen completed it, we received a surprise postcard of an orangutan. They were in Borneo! Now seasoned globetrotters, they send us a lovely hamper every Christmas in gratitude. 

Photos of the orangutan take pride of place on our clients’ ‘bucket list’ wall in our office – along with pictures of campervans, the Northern Lights and other wonderful reminders from clients of how we are changing their lives for the better.

Next blog – how we helped a widow leave a lasting legacy for her beloved husband. Model your financial future with our free online tool at

How much are your investments really making?

By David Lamb CFP™ MCSI

One of my major issues with the investment industry is its high charges.

They are often difficult to understand and are frequently hidden – or ignored – due to ‘good’ returns. Just because your money is ‘growing’, doesn’t mean you’re getting value for money.

Charges often include a product fee – charged by the company who provides you with the investment vehicle, a fund charge – made by the fund manager, and an advice fee – payable to your adviser.  

These can be as high as 2% but are often around 1.8%. We aim to get our clients charges to as close to 1% as possible – and sometimes slightly lower.

Remember, the higher the charges the less you have invested. The less you have invested, the less there is to grow. Most importantly, when somebody claims that their charges are high because they give better value for money or provide superior performance, remember that while charges are guaranteed, returns are not.

Here is an interesting exercise for you. Ask your adviser for your fund’s annual returns over the last five years (or Google search your fund’s fact sheets). Calculate the average growth over those five years, then take off the total annual charges. What is your growth after charges?  

For example, average growth over five years of 4% less charges of 1.5% means growth after charges of 2.5%.

Unfortunately though, this isn’t your real growth; you then need to deduct the effects of inflation.

We are currently assuming inflation over the longer term to be 3.25%, but you can make your own assumptions by using data from the Office for National Statistics available at Deduct this from your growth.

Continuing our example, growth after charges is 2.5% less inflation of 3.25% = – 0.75%.

What are your net returns? Is this value for money? Who is making the most from your money? Who is taking the risk – the product provider, the fund manager or adviser?  Whose money is being invested?

Of course, as I’ve explained in earlier articles, there is a lot more to financial planning than investment returns. Are you really getting value for money from the fees you pay?

Self-assess your progress in your financial planning, for free, at:

Listen to The Boss

By David Lamb CFP™ MCSI

My last work meeting before leaving for Rome to see a Bruce Springsteen concert early this summer was an investment risk analysis with a new client.

During the discussion I asked him his views on the investment industry. He responded that he thought it was a necessary evil and considered it a very manipulative boys’ club. Ouch!

A couple of days later I heard Bruce sing: “We learned more from a three-minute record than we ever learned in school.”

The Boss also wrote:

Gambling man rolls the dice

Working man pays the bill

It’s still fat and easy on banker’s hill

On banker’s hill the party’s going strong

Down here below we’re shackled and drawn.

With this reputation, perhaps the investment industry could learn a lot from a three-minute record. No wonder people are wary of financial advisers if they seem to be an old boys’ club, only interested in wanting to invest your money at no risk to them!

A good financial planner will be different because they should focus on you, your family and your lifestyle – not your money.

Many of our clients initially come to us thinking they need advice on a product (a pension or investment), but after we have explained what true financial planning is they understand that what they really want is to know how much is enough? Enough to give them the lifestyle that they want without the fear of running out of money, whatever happens.

Many think this is the big question. We think it is the second biggest question. The big question is enough for what? What is your lifestyle now and what do you want it to be in the future? The planner should then work with the client to achieve this lifestyle, using the resources that the client has available.

Have you thought about what your lifestyle looks like through the different phases of your life and how much will be ‘enough’ to fund it?

There are free resources on our website that can help you do this anonymously, including a tool to help you understand your current lifestyle and a questionnaire to help determine where you feel you are with your financial planning.

You may find the results interesting.

Visit – scan the QR code for speed.

The review: the financial planning equivalent of satnav

By David Lamb CFP™ MCSI 

I ended my last blog by saying you could sit back and relax for 12 months on completion of the implementation stage of your financial plan. After this first year the next stage is your initial review.

A financial plan is always work in progress and one of the worst things a financial planner can do for their clients is not to provide regular reviews.

Nowadays, most cars have a satnav, which constantly reviews your progress towards your destination. If you take a wrong turn, it will warn you and advise you how to get back to your planned route.

Your financial review is your ’moneynav’ and should include:

  • Your objectives – What have you achieved? Are there any new objectives we need to plan for?
  • Current position – What has changed since the last version of the plan? Income, expenditure assets and liabilities statements should be updated.
  • Investments – Are adjustments to take into consideration revised objectives? If still accumulating wealth, are the investments on target to achieve ’Enough’? If decumulating, and you are never going to run out of money, how are the investments performing against inflation? For both scenarios, do we need to make some amendments? Different asset classes perform in different ways; does your portfolio still match your investment risk profile? If not, we may need to rebalance to the ‘shape’ of your original portfolio (all our clients are automatically rebalanced once a year, at no charge).
  • Estate planning – Have there been changes within your family, or with legislation that we need to consider?
  • Assumptions – Do these need adjusting to adapt to your changing circumstances or the economic environment? At present, inflation springs to mind!
  • Taxation and legislation – Are there any changes that we need to consider? Recent changes to capital gains tax and pensions have made some clients change their strategy.

Your review is not just about looking back, it’s also about planning going forward; what are you going to do next?

In some instances, there may be significant changes where a completely new financial plan may be required. But usually the existing plan can be updated and amended.

My favourite part of the review is catching up with the progress of our client’s bucket lists.  We have some lovely photos in our office from clients who have been ticking off their lists, including watching orangutans in Borneo, Route 66 on a Harley Davidson, wild camping and the results of some fantastic charitable donations.

Just remember though, financial planning is like exercise; you can’t go to the gym once and be fit for life, you must keep going!

Implementation of your financial plan: a team game

By David Lamb CFP™ MCSI 

In my last blog I explained why cashflow modelling should be at the core of a professionally structured financial plan. On completion of the plan, the next stage is implementation.

At this point in the process you may need to build a good team of experienced professional advisers around you, not just your financial planner.

Most financial plans are likely to include estate planning. I would strongly recommend a specialist solicitor above all others who may write wills, because they are more likely to have the experience to draft the will for complex finances or family structures.

Don’t just give them instructions – a good estate planner should be asking similar questions to your financial planner about your family, relationships, wealth etc and be prepared to work alongside your financial planner.

For those with businesses or complex tax issues, you may need to include an accountant as part of the team of advisers. We often suggest that the business should be seen as a financial asset that can either be sold at retirement or generate extra income that can be invested to provide an income in retirement. The accountant can therefore support this kind of planning.

In some cases, we have brought in business coaches to provide extra support.

An issue we sometimes see with clients who should be decumulating their wealth is how they find it very difficult to change a lifetime habit of accumulating, even though they know they should be spending or gifting their money.

In most cases cashflow modelling will provide this confidence to change, but sometimes a life coach may help to overcome any mental blocks.

When it comes to the financial advice part of the implementation, usually involving pensions and investments, products should already have been built into the plan. However, you need to be aware of the effects of the costs of establishing that product.

What are the initial costs for setting up a new product?

What impact will these have on the growth of the funds?

What of the ongoing fees?

What are the net returns expected after all charges and inflation after the anticipated growth rates? Refer to the adviser’s assumptions document. Do these charges provide value for money?

Once the implementation of the plan is complete, you can sit back and relax for 12 months before your review is due. One of the biggest disservices a financial planner (or adviser) can do for their client is to fail to carry out a review.

More on this in my next blog.

Cashflow modelling: the next best thing to a crystal ball

By David Lamb CFP™ MCSI 

In my job I use lots of different tools, from compound interest rate calculators to investment risk analysis systems.

But the one piece of equipment I would really like is a crystal ball. To see into my client’s futures would be invaluable. Unfortunately, despite years of searching, I can’t find one that works anywhere!

The next best thing to a crystal ball is cashflow modelling, because with reasonable and robust assumptions they can tell you so much about a client’s financial future and, therefore, the impact on their lifestyle. 

Cashflow modelling should be at the core of a professionally structured financial plan.

Just about every financial decision you are ever likely to make will have an impact on your cashflow projections and I don’t think you should buy an investment or protection policy without understanding how that product will benefit your projections.

Building a detailed cashflow model can be time consuming but the benefits are huge and, combined with a bit of lifestyle planning, can change lives.

Cashflow modelling can tell you so much, for example:

  • How much is enough to give you the lifestyle you want, without the fear of running out of money, whatever happens.
  • When you can retire and stop doing the things you don’t want to do and start doing the things you do want to do.
  • How much you will leave on your death and how much you need to leave. Consideration can then be given to how much you want to leave and the implications if these numbers are different. It may be that younger people with families need to think about contingency plans, such as life assurance. Older people, who may be leaving too much, can ask if they can spend more (think bucket lists!) or give money away during their lifetime, not when they die.
  • How much money you will need at different stages of your life.
  • How much risk you need to take with your investments. If you are never going to run out of money, you do not need to take unnecessary risks to get more!
  • Whether you need to worry about money, or not.

Helping clients see into their financial future can have a massive positive impact on their lives, but it is essential that these projections are reviewed on a regular basis.

Build your own cashflow model at

Why you can’t do financial planning without a financial plan 

By David Lamb CFP™ MCSI 

In recent blogs I’ve detailed the data needed to complete a financial plan and the importance of assumptions.  

Now we get to the structure of the financial plan itself. The plan is not a static document and should evolve as the client’s life changes. 

It could be relatively simple or quite comprehensive, depending upon the client’s requirements. Either way, it should be easily understandable. 

The plan itself may not involve the use of financial products (we are financial planning, not providing financial advice at this stage). 

The structure, as recommended by the Chartered Institute of Securities & Investment should include:  

  • Objectives and priorities – a statement of what the client wants to achieve and when. 
  • Assumptions – this would usually be a summary of the main assumptions.  
  • Current position – this will include detailed statements for assets and liabilities as well as net worth, income and expenditure, net spendable income, tax calculations, such as income and inheritance tax. This information will then be used to produce cash flow statements which will then show you where you are heading financially if you do not do anything. A comprehensive plan will also include projections in catastrophe scenarios.  
  • Action plan – this will be where the planning actions are detailed. Again, these can be very simple or extremely detailed. I prefer to keep this section as simple as possible, going into greater depth in a separate document, if required. The format should include the specific action, the reasons for the recommendation and who will be responsible for carrying out the action (this may include the client, the financial planner, their solicitor or accountant) and timescales for completion. As part of the action plan, the cash flow projections should be updated to show the effects of the plan on the clients projected financial future.  
  • Arrangement for review – a financial plan must be an evolving document, so it is essential to have regular reviews.  

We often meet new clients who think they’ve been receiving financial planning but have never seen a financial plan. In reality, they have only been receiving financial advice.  

However, without a plan it will be very difficult to understand the consequences and benefits of financial advice and, unfortunately, that is where things can go wrong. 

A financial plan should be the centre of an ongoing, structured professional process and at the centre of a financial plan should be cashflow projections. More on that in my next blog. 

What you need to ensure your financial plan takes off properly

By David Lamb CFP™ MCSI

A pilot wouldn’t dream of taking off without a flight plan and a properly qualified financial adviser shouldn’t provide advice without a properly constructed financial plan.

In the ideal world, a financial plan would be built using a crystal ball. Unfortunately, we do not live in an ideal world, so a financial plan needs to be based round cashflow projections, to give you a glimpse into your financial future. I’ll go into more depth on cash flow modelling later in this series of blogs.

Like all projections we need to make assumptions. These include:

  • life expectancy
  • inflation (rates for prices, earnings, house prices etc may differ)
  • investment returns for different asset classes (which will then help in providing projected returns according to your own investment risk profile)
  • changing spending patterns at different stages of your life (ideally you will probably want to spend more during the ‘active retirement’ phase of your life on holidays, fun and recreation etc than you will during the ‘traditional retirement’ phase, when you normally spend less because you are slowing down)
  • the cost – and length of stay – of long term care.

These assumptions must be both reasoned and reasonable – and it is essential that your planner agrees these with you before looking at your cash flow projections.

If you don’t have confidence in the assumptions, it follows that you will not have confidence in the outcomes. If you are not confident in the outcomes, your plan will be meaningless, you all have wasted both your time and money and your financial future will remain uncertain.

At your first meeting with your prospective financial planner, ask to see their Assumptions Document. Do you understand them and are you happy to accept them? Don’t be afraid to ask to see their research to confirm those assumptions are reasoned and reasonable.

Of course, there is only one thing you can guarantee about assumptions…they will be wrong!

Changes in your career, lifestyle and the economy all affect your cashflow projections. So like the pilot with his flight plan who will constantly have to adjust to ensure he arrives at the correct destination, your financial planner must constantly review the assumptions and revise the projections, which is why regular planning reviews are essential.

Once we have the data and have agreed with the assumptions, we look at what we can do with this information. More on that in our next blog.

Data gathering – the next step after choosing your financial planner

By David Lamb CFP™ MCSI

Once you have settled on a financial planner you feel comfortable with and are confident that they can provide value for money, the next stage of the process is data gathering.

For most people, the main aim of financial planning is to achieve and maintain their desired lifestyle, without the fear of running out of money, whatever happens. The purpose of data gathering (or fact finding) is to help you and your planner understand what resources you have available to support your aims and objectives.

The easiest data to gather is the quantitative data, (the facts) which will include income and expenditure, assets and liabilities, along with details of your will, if you have one. Family details are essential.

To save time it is usually easier to give your planner account numbers for all your financial products. They can then provide you with a letter of authority to allow the providers (investment or insurance companies) to give them all the information they require.  Mortgage providers are likely to charge for this, so best dig out your latest mortgage statement.

Contact details for other advisers such as your accountant and solicitor are helpful because your planner may need to work as a team with fellow professional advisers when tax or estate planning.

These quantitative hard facts are essential but qualitative, soft data is also vital to help you achieve your aims and objectives. This information is usually best discovered in a conversation with you.

This could include questions to help your adviser understand your current and desired lifestyles, your expectations for retirement and plans for your family such as funding children’s weddings and house deposits.

It is not uncommon for clients to have given little thought to these questions and therefore to not have a clear vision of what they want.

With more than 30 years as a financial adviser my experience suggests that many clients don’t know what they want, but they do know what they don’t want, which is anything less than they have now.

We have some free resources on our website at which ask you questions you may not realise you need to know the answers to – and to help you quantify your lifestyle and identify areas for improvement.

Once this data has been collated and analysed your planner can then build cashflow projections based on your current position, showing where you are heading without any planning.

They should also compile what is basically a set of accounts, detailing your income, expenditure, assets and liabilities, along with inheritance tax calculations. Before they do all this though, you all need to understand and agree the assumptions made in these calculations.

More on this in our next blog.

The cost – and value – of financial planning

By David Lamb CFP™ MCSI

The cost of the service is an important factor when deciding to work with a financial planner, but equally important is to understand the value that the planner provides.

Obviously financial planners need to be paid for their service, not just to earn a living or cover their business expenses but to cover the liability they take on when they provide financial advice.

Traditionally the cost of financial advice was met by a commission on the sale of a financial product, creating an incentive for a financial ‘adviser’ to sell a financial product. Since 2012, the cost of advice has usually been covered by an ‘adviser fee’ paid from a financial product.

But genuine financial planning should not dependent upon the sale of a product; you should be prepared to pay a separate fee for professional services.

In your initial meeting with your prospective financial planner, spend time getting to understand their fee structure. Do they charge by the hour, one overall fixed fee or a series of fixed fees as you progress along the process? What is right for you?

If the fee is to be paid from a financial product, the ‘planner’ will be relying on selling a product. At this point, it is probably best to end the meeting and look for somebody else.

Once the financial plan is complete, you may require financial advice and it is important to understand how you will pay for this. Will you be invoiced or will the fees be deducted from the recommended product? If the fees are deducted you need to understand, not only how much they are, but the effect on your investment these fees could have.

What rate of return does the planner expect to achieve for your investments (the research should not be based upon past performance)? Consider these returns then deduct all fees. Is this value for money?

If the fees are based on percentages and are to be deducted from the product, consider if you would write a cheque separately for this advice. If not, look for another financial planner.

What are the charges for ongoing advice? Are they solely taken from the product? If so, this could cause a conflict of interests because the adviser may not want you to spend your

money. Again, you may want to look to look elsewhere.

Ask the adviser how they will measure the value of their service. Can they provide specific benchmarks to help you achieve your objectives and your desired lifestyle? If not, the search for a good financial planner continues.

Here are the budget winners – but who are the losers?

By David Lamb CFP™ MCSI

Well, I didn’t see that coming!

Chancellor Jeremy Hunt has abolished the pensions lifetime allowance and increased the annual allowance by 50% to £60,000.

The lifetime allowance (LTA) is the maximum amount you can have in pension funds before paying tax. The current limit is £1,073,100. If this is exceeded, tax of 55% is paid on a lump sum and 25% on income (from the pension).

The annual allowance (AA) is the limit that can be paid into a pension in any one tax year – currently £40,000 – whilst still qualifying for tax relief. Any payments above this will be added to your income and you will be subject to tax at your marginal rate.

If your income exceeds £200,000 your AA will gradually taper to as low as £4,000, meaning any contribution above this will be taxable.

Many people may think these are large amounts of money, a nice problem to have and it doesn’t affect me, but indirectly it may.

Having a few clients who are employed by the NHS, I see how they are penalised for working so hard.

The NHS pension is a defined benefit scheme, which means that the benefits are calculated as a proportion of salary. To provide this guaranteed pension costs a lot of money, often in excess of the current £1,073,000 LTA. 

This means that the longer an NHS employee works, the more tax they will pay in retirement on top of normal income tax. This acts as a bit of a disincentive to work to normal retirement age, which is why a survey by the British Medical Association found that almost half of all consultants were planning to leave, or take a break, over the next 12 months.

But it gets worse when the AA is also considered.

These are expensive to fund and, as so many senior medics are well paid, they exceed their AA and are taxed immediately on this benefit, resulting in a double disincentive.

More and more NHS workers, already feeling stressed, are retiring early or working part-time and this is where everyone is affected; longer NHS waiting lists and making it extremely difficult to see your GP.

Hopefully these changes will encourage doctors to take on extra work to reduce waiting lists without being heavily penalised.

Expert predictions suggested that the LTA was going to rise to £1.8m which, according to leading wealth management provider Quilter, could result in a benefit to a pension scheme holder who has a fund of £1.8m of around £181,725 due to saved tax.

Mr Hunt has gone way beyond this.

So, that’s some good news. Tomorrow, I suspect, will be when we start to learn how today’s budget will hurt us….

Capital gains – and losses – after tax changes this April

By David Lamb CFP™ MCSI

Significant changes are being introduced in April to Capital Gains Tax which reduce the exempt amount but increase the timescales for asset transfer.

Capital Gains Tax (CGT) is a tax on profits when you dispose of an asset, either by sale or transfer. 

There are no liabilities for transfers between spouses but when the transferee disposes of the asset, they will be liable for the whole gain.

Those going through a divorce, or dissolution of a civil partnership are also able to benefit from this principle up to the end of the tax year when they separated, or until decree absolute, whichever comes first.

Unfortunately, this often causes problems.

When a relationship breaks down one spouse will usually move out of the family home, in which case HMRC no longer treats this property as their main residence, and a clock starts ticking…

If the matrimonial home is to be sold, the spouse who has moved out has until the end of the tax year for the property to be sold. After this, they will subject to CGT on any gains made on the value of the property. This problem is exasperated if they split late in the tax year, reducing the window of opportunity to save CGT.

This provides the partner remaining in the home with an unfair opportunity. The longer it takes to sell the home, the more their ex-spouse has an exposure to potential CGT. They don’t. The cynic in me would be concerned about ex-spouses prolonging the sales process of the matrimonial home to financially penalise their former husband/wife.

Currently an individual can make a gain of £12,300 before being liable for capital gains tax, which is then charged at 10% for basic rate taxpayers and 20% for those liable for higher rates. If the chargeable gain is on residential property (but not your main residence) the rates are 18% and 28% respectively. For the spouse who moves out the house will cease to be their usual residence, therefore the 18% and 28% rates apply.

From April 2023, the annual exempt amount will reduce from £12,300 to £6,000 meaning that the gain will be smaller before a tax liability arises. The following year, it gets worse again, because the £6,000 will be halved to £3,000.

But there is good news!

From 6 April 2023, divorcing spouses will have three years from the year they stopped living together to make the transfer on a no gain/loss basis. 

And if the assets are transferred as part of a formal divorce or civil partnership agreement, the timescales become open ended; the three-year limit does not apply.

The new rules will also apply to Mesher orders, meaning that spouses who are entitled to receive a share of the proceeds of the sale of the matrimonial home will benefit on a deferred basis.

Please be aware that these new rules only apply on transfers made after 6 April 2023.

When assisting clients with estate planning, I often recommend that cohabiting couples marry because this can be very advantageous to reduce inheritance tax (married couples can inherit their spouses’ assets and even their nil rate band and residential nil rate band). Not very romantic, but very tax efficient and most people are keen to save tax!

The same cannot be said when advising on divorce. It is very hard to recommend separating couples to remain under one roof until the house is sold to avoid CGT. There are limits as to how far people will go to avoid tax!

But at least when it comes to divorce – a hugely stressful time – the capital gains tax clock won’t be ticking as loudly, or at all.

What to expect from your first meeting with a financial planner

By David Lamb CFP™ MCSI

If you have decided you want to enlist the services of a lifestyle financial planner, what should you expect from your initial consultation?

The first meeting should be an exploratory session where you and the financial planner get to know each other to determine if they can help you and you can work together. This should be at the planner’s expense; do not pay for this meeting!

If you are a couple you should both attend the meeting (it should be a joint plan for a joint lifestyle) and hold it in the planner’s office. Whether you find it tidy and functional or cluttered and chaotic could give you a fair indication of the standard of service you would expect to receive.

Being issued with an agenda confirming the date, time and location and providing a proposed structure of the meeting would also indicate an efficient and organised planner. Prepare by thinking about what you want to achieve from the meeting and any specific questions you want to ask.

The planner should first explain how they work (the regulatory issues and their processes) and want to know about you, your family, your employment, your lifestyle and your objectives.

They will also ask you a little bit about your financial background, but if they ask too many questions about your money at this first meeting, this could mean that they are more interested in your money than you and want to sell you a financial product. If they do, you should probably look for another financial planner.

Once the planner has discovered a little bit about you, you should find out more about them; ask about their qualifications and experience and what type of clients they have. Are they similar to you?

Ask detailed questions about their processes. Do they use cash flow modelling? What are their fees and how do they measure the value of their service?

Financial planning is usually a long-term process, so working with your financial planner is going to be a long-term relationship. The planner needs to be able to get to know you, your family, your lifestyle, and – later – your money in detail.

Are you comfortable with this? Do you like and trust them? If not, you should look for another financial planner. But if you are happy, you are probably ready to go to the next stage – providing all the relevant data to produce a detailed financial plan.

Next blog: finding out about fees and how the value of service is measured.

What’s in a name? A lot!

By David Lamb CFP™ MCSI

I have seen the name given to people who give advice or sell financial products change many times in the 38 years I have worked in the financial services sector.

Common examples include insurance agent, financial consultant, broker, financial adviser and wealth manager. The latest favoured term seems to be financial planner.

Unfortunately, many ‘financial planners’ are just financial advisers. Financial planner may sound better but there is a big difference between planning and financial advice – and not just in the qualifications.

Financial advice is the recommendation of a financial transaction at a fixed point in time – the selling or, or helping to buy, a product – whereas financial planning is an evolving action plan, resulting from a cyclical process.

Financial planning may involve financial advice (although not necessarily from the financial planner) but it does not need to involve product recommendations. A financial plan may, or may not, involve providing regulated financial advice.

Most importantly, clients do not need to be asset rich or earn high incomes to require financial planning.

In this new series of articles for 2023, I am going to describe the financial planning process – as detailed by my professional body the Chartered Institute for Securities and Investment and recommended for a Certified Financial Planner.

Qualifying as a Certified Financial Planner (CFP™) requires years of experience and the completion of a difficult and stringent process including standardised exams and a demonstration of ethics.  The most important aspect quality of a CFP™ is that they have a fiduciary duty, meaning they must make decisions with their client’s best interests in mind.

Future articles will include: what you should expect from a first meeting with a financial planner; the data required for a detailed financial plan and determining objectives; the importance of assumptions; the structure of a financial plan; why cash flow modelling is essential in financial planning; how the plan may be implemented; and why regular reviews are essential.

My experience shows that financial planning works well if it is done with clients as opposed to for them, but it works best if clients do their own financial planning and I just facilitate the meeting, use my professional knowledge when required and produce a structured financial plan.

Next blog: what you should expect from a first meeting with a financial planner – and what to be wary of.

What yesterday’s Autumn Statement means for taxpayers

Chancellor of the Exchequer Jeremy Hunt MP

Ouch! That’s stung a bit…

Yesterday’s Autumn Statement came at a time of significant economic challenge for the whole world.

We are currently facing a war in Ukraine contributing to a surge in energy prices, increasing global inflation and central banks raising interest rates to control inflation – which increases the cost of borrowing and therefore slowing growth. 

This is after higher levels of Government debt due to the impacts of Covid-19; UK Government debt spending is now expected to reach a record of £120.4bn this year.

A raft of tax increases is therefore not unexpected. They include:

  • Road tax on electric cars from 2025
  • Increased Council Tax
  • 45% income tax threshold reduced to £125,000
  • Personal allowances and reliefs frozen until 2028
  • Capital Gains Tax threshold reduced from £12,300 to £3,000 in 2024
  • Dividend Allowance reduced from £2,000 to £500 in 2024.

The last two measures will hit small investors particularly hard and care may be needed when doing a Bed and ISA (transferring money from taxable unit trusts to the same funds within a tax-free ISA wrapper).

So how much will these changes to income tax affect net incomes? This graphic shows how much worse off people earning up to £100,000 will be.

Whilst having less in our pockets is disappointing, the above figures show that The Autumn Statement will not have a disastrous impact on most people’s lifestyle.

The current rate of inflation is 11.1%, but the Bank of England expects this to fall sharply in 2023 due to the price of energy not rising so quickly. The BofE does not expect the price of imported goods to rise so fast and there will be less demand for goods and services.

A sharp fall in inflation is good news, but a key cause being reduced demand for goods and services is slightly worrying. Is this due to the Government forecasting higher unemployment? This would be the quickest way to reduce inflation, but quite brutal.

Key questions you need to ask yourself: how can you prepare for the next couple of difficult years, how will this affect your budget in the short term and what will the longer-term effects on your lifestyle be?

An emergency fund is essential. I would recommend that this is between at least three and six-months’ salary.

The next thing to do is a detailed expenditure analysis. This will ensure that you are in control of your spending and help identify areas where you currently spend money you could avoid.

If you earn £50,000 a year and can stop spending £572 on avoidable expenditure, you have just saved the amount the Government has picked out of your pocket.

How will the current situation affect your longer-term lifestyle? To analyse this, you need to create cash flow projections. These will tell you the truth about your money. You can build simple cash flow projections for free at:

Should I be worried if my investments are losing money?

By David Lamb CFP™ MCSI

English philosopher and statesman Sir Francis Bacon famously once said ‘Money is like manure, of very little use except it be spread’.

And how you ‘spread’ the risk of your investment portfolio is crucial if it is to be of future use.

Historically, stock market investments provide good longer-term returns but as most people are aware investing in shares does have its risks.

To reduce these risks, measured by volatility, investment portfolios will not just put money into the stock market but will consider other assets such as cash, fixed interest securities (bonds) and property, depending upon the target level of risk of the portfolio.

The lower the risk, the more will be invested in cash and fixed interest securities. The higher the risk, the greater the weighting in equities.

Another aim of investing in a range of asset classes is to achieve negative correlation between these investments. When one asset class falls out of favour, another will attract investments (the money must go somewhere!)

To understand the benefits of negative correlation, let’s assume that last August when temperatures were very hot you decided to invest in ice cream. The sales pattern of ice cream will be high in the summer but low in the winter.

You do not want to have all your eggs in one basket, so you decide to spread the risk by investing in something else, suncream. The problem with this is that both commodities will sell in a similar way throughout the year.

If you invested in Wellington boots, when sales are likely to be higher the winter and lower in the summer, you will achieve negative correlation with your ice cream.

If the equity market falls, often investors will expect money to flow out of the stock market and into fixed interest securities because they are usually lower risk and returns would normally be expected to be higher than putting the money in the bank.

Therefore, funds such as Vanguard and BlackRock that offer asset allocations of 40% fixed interest and 60% equities have been so successful; they also have very competitive charges.

But we live in strange times!

The following chart shows the correlation between the US stock market and US bonds between 1926 and 2022. In almost 100 years, there have only been three years when both asset classes have provided negative returns – the last more than 50 years ago.

While the current market turmoil is extremely rare it is therefore not unique.

This year we have experienced inflation hitting a 40-year high, governments reversing monetary policy, the ongoing pandemic, the supply chain problems caused by the COVID lockdown in China and Russia’s invasion of Ukraine, which of all 26 wars in Europe since 1945 has had the biggest impact on world economies.

It is likely that we will continue to suffer this economic pain for some time, but eventually we will come out the other side and things will improve.

In the meantime don’t panic and if you have any concerns about your investment portfolio please do not hesitate to contact us at or by calling 01661 860438.  Hopefully, we can provide some reassurance.

What the current political financial crisis means for investments

By David Lamb CFP™ MCSI

Amid the ongoing political financial crisis, turn on the news and it’s all doom and gloom for investments.

Almost daily it seems that we are being told that gilt yields are rising and that it is bad news. But why is that? How do gilts operate?

In this blog I will explain very basically how fixed interest investments work.

Suppose two years ago, the Government needed borrow £100 and you agree to lend them the money for a fixed rate of interest of £2 each year for 10 years, and at the end of that term the loan will be repaid. This £2 is known as the coupon rate.

This is a good investment for you because two years ago you would have struggled to get an interest rate from a bank or building society as high as 1% and, after 10 years, the loan will be repaid if the borrower is still around.

As it is the UK Government, I think we can be pretty sure that the borrower will be there to repay the money.

So what is the risk?

Let’s assume that you need to get your money back today, so you go to the Government and ask for your £100 back. Unfortunately, the Government will respond saying that they are not due to repay the money for another eight years, so come back then and you can have your money.

Because you really need your capital returned, you go elsewhere to try and sell the bond. You go next door and offer it to your neighbour and say ‘give me £100 and you will get £2 every year and in eight years’ time, you will get your £100 back from the Government’.

Unfortunately, your neighbour responds saying that he can now get 4% on money in the bank but (because he knows you really need the cash) he offers you £50 for the bond on the basis that you are getting some of your money back and he is still getting his 4% interest.

This is the main risk with fixed interest investments. The amount payable is fixed but if interest rates go up, the capital value will fall.

Now let’s assume that you need the money after nine years. The Government will still tell you to come back at the end of the 10-year period.

So you again approach your neighbour, who points out that interest rates are still 4% and offers you £50, but you now say ‘okay interest rates are 4% but you will get back £100 in a year’s time. You give me £90 and over the next 12 months you will get £2 interest and an increase on your investment of £10’. That is a return of £12. This is the yield.

So when we hear in the news that fixed interest yields are increasing, this is because the capital value is reducing.

Added into this, we need to consider risk; the risk of the capital not being repaid. The bigger the risk, the bigger the return you would expect.

One of the causes of fixed interest yields increasing is because there is concern that the Government is borrowing too much money and therefore the risk of default increases.

As we have seen the coupon stays the same, so to increase the interest rates the capital value will fall to reflect the higher risk.

The good news is that the credit rating agencies, whilst suggesting a negative outlook, are still rating the UK as AA (the best is AAA). Whether the rating is AAA or AA, what really matters is being patient – things are most likely to improve.

Should you be currently avoiding investments that hold fixed interest?

Stick to the principle that the best time to buy an asset is below its longer-term intrinsic value which will ultimately lead to satisfactory returns. Whilst this is a philosophy that is simple to understand, it can be difficult to execute for a lot of investors.

What should you do if your investments currently hold fixed interest funds?

When we are analysing our client’s attitude to investment risk, we ask them how they would react if their investments fell by a relatively large amount. Most wouldn’t panic and they would remain patient and wait for their investments to return to higher levels.

Now is that time. Be patient; things will get better. 

The Bank of England is still predicting inflation will be closer to its 2% target in 2024. Interest rates will fall, so will yields and the capital value of fixed interest investments will increase.

An action plan to help you cope with the cost of living crisis

By David Lamb CFP™ MCSI

With inflation at its highest level in 40 years, how can you formulate an action plan to manage the resulting cost of living crisis?

The first thing to do is not to panic!

The second thing is to complete a detailed budget analysis. This will help you plan how much you can spend each month and help identify areas where savings can be made.

This analysis will only work if you are honest about your income and expenses; it must be detailed and accurate.

Refer to bank statements, investment statement, P60s or pay slips, credit card bills and recent utility bills.

Look at your expenditure and identify where you can make savings.

Never has the saying ‘look after the pennies and the pounds will look after themselves’ been so important.

The UK Parenting Forum shared some practical tips for looking after the all-important pennies, including:

  • Showering at the gym, not waiting until you get home. This is, of course assuming you use your gym membership. Research has shown that 77% of UK adults who sign up for gym membership then fail to attend regularly, wasting an average of £303 per year.
  • Buy porridge in bulk instead of expensive children’s cereals
  • Consider charging phones and battery packs at work (with employers’ permission, obviously).
  • Paying for insurance monthly incurs interest. Consider paying for this on a 0% purchase credit card, then pay off monthly. Discipline is required.
  • Cut dishwasher tablets in half.
  • Use washing powder not liquid and use half the recommended amount unless the clothes are really dirty (powder is cheaper than liquid anyway). Don’t bother with fabric conditioner as you will not really notice the difference.
  • Dried beans and pulses are really economical and could replace the Friday night curry (you have stopped your takeaways haven’t you?)
  • Check the price of fruit and veg price/kg. Often the smaller bags are cheaper.
  • Bagged fruit and veg is often cheaper than loose.
  • Plan meals, and shop only one each week, but plan for eight days. On day eight use up all the odd bits and pieces in the fridge. This will result in you shopping for 46 weeks of the year and gain six weeks’ extra housekeeping money.
  • Turning off electrical devices, instead of leaving them on stand-by. It has been estimated* that the average UK household wastes £147 each year by having devices on stand-by for example:
    • Television £24.61 pa
    • Set top box £23.10
    • Games console £12.17
    • Microwave oven £16.37
    • Shower £9.80
    • Washing machine £4.73
    • Printer £3.81 (I’ve just switched mine off!)
    • Phone charger £1.25.

* Source: British Gas

All very helpful, but this will give you the biggest saving: most houses are heated between 18°C and 21°C.  According to the energy supplier Utilita, just reducing the temperature by 1°C could save as much as £321 a year. Just wear a thick jumper and you’ll not notice the temperature, but you will notice the savings!

You can use our Truth about Money calculator to help you with your expenditure calculations and build finance projections at:

Economic blogger explains current financial crisis

Joe Blogs

If you want to understand the causes of the growing financial crisis gripping the UK economy, a video explainer has been published today by Joe Blogs.

The film provides a clear analysis of the background behind the events of recent days which have seen the value of the pound plunge and fears grow over increasing interest rates and their impact on mortgages and the overall cost of living.

Fine out more about Joe Blogs here:

Watch the video here: RUSSIA – UK in DEEP TROUBLE as Sterling Hits RECORD LOW & War Fuels INTEREST RATES & INFLATION Rises – YouTube

(Click on ‘skip ads’ and scroll back to the start of the film for more background on the current UK economic position)

The damaging consequences of high inflation

By David Lamb CFP™ MCSI

For those of us whose memories stretch back that far, in April 1976, Brotherhood of Man and Abba were at the top of the UK music charts, Jim Callaghan became Prime Minister and the Ford Escort was the UK’s best-selling car.

The Bank of England base rate was 9.75% and inflation was 13%, (having peaked at 25.9% the previous October).

Moving back to today, 46 years later, inflation is estimated to be heading for 13% or more again. But what does this mean for us and our standard of living?

Key findings of independent think tank the Resolution Foundation, which is focused on improving the living standards of those on low to middle incomes, in its latest briefing note include:

  • average real pay in Q2 will be 9% lower than two years earlier, and will wipe out all pay growth since 2003
  • real household income will fall by 5% in 2022-23 and 6% in 2023-24 – a drop of £2,800 for those earning the average salary
  • a combination of earnings stagflation and the energy shock means the country is on track for two decades of lost income growth.

The effects are already being felt. Research by insurance giant Aviva has found that 40% of 55 to 64-year-olds are struggling financially and ‘up to their eyes in debt’.

More than a third of over 55-year-olds feel they are having money difficulties; they typically spend a greater proportion of their income on food, energy and fuel, with it being calculated that they would need an extra £257 each month to feel financially secure.

75% of these people are looking for ways to boost the income, and a third look for food reductions in supermarkets on a regular basis. A further 8% say that they have had to delay retirement to make ends meet.

Added to these stresses, many of this generation are trying to support elderly parents, whist still supporting grown up children.

Research by another insurer, Legal and General, has found that the average working household is only 19 days from a financial crisis if they were to lose their jobs. Almost two million adults have no money left at the end of the month, an increase of 330,000 over the previous two years.

Older workers tend to have more reserves, providing up to 99 days in the event of a loss of income but these households are also more likely to overestimate the emergency fund, assuming they can last for 180 days.

The main issue with this is that this age group have less time to rebuild their funds before retirement.

Accumulating an emergency fund is essential and we would recommend holding the equivalent of between three and six months’ income. National Savings and Investments Premium Bonds can make an excellent home for an emergency fund.

Financially, most people expect a tough winter, but what can be done to ease the pressure? In my next blog, I will suggest a cost of living action plan.

Why are we suffering from spiralling inflation?

By David Lamb CFP™ MCSI

It does not seem so long ago that we were in the middle of a pandemic and inflation was only 0.3% (November 2020).

The reason inflation was so low was down to the lockdowns, when we could only really buy essentials; we could not go the pub or restaurants, go on holiday or even have a haircut.

This resulted in the second quarter of 2020 recording the highest level of savings on record at 23.9% of disposable income or £140bn. The average for the previous decade was 8.5% (source: Office for National Statistics/ONS).

When the lockdowns were lifted, this money gushed through the economy, increasing inflation to 3.9% by June 2021.

The Bank of England has an element of control over this inflation. Increasing interest rates makes the cost of borrowing more expensive, effectively taking money out of the economy, so people have less to spend which therefore reduces demand.

This can, initially, seem good news for savers, as they will experience higher returns on their deposit accounts. But the bad news is for those whose investments hold fixed interest bonds such as gilts, where the capital value is likely to fall.

Many investment funds use fixed interest product to offset the volatility of equities. If you hold a cautious managed type of fund, you will likely hold fixed interest investments.

Of course, the interest rate on deposit account is not the real rate of return on those investments. The real rate of return is the interest rate minus inflation.

The current rate of inflation (latest figures are for the 12 months to August 2022) is 9.9% (Source: ONS).

According to Moneyfacts, the best one-year fixed rate deposit account is paying 3.3%. That is a real return of -6.8%!

And on September 9 investment bank Citi warned that it expects inflation to hit a 50 year high of 18.6% early in 2023.

The causes of the current inflationary pressures have changed since the end of lockdown and now include the higher prices of goods we buy from abroad. Businesses are charging more because they face higher costs and there are more job vacancies than there are people to fill them, meaning employers are having to pay higher wages to attract new applicants.

The highest price rises over the past year include fuel at the forecourts (+43.7%), transport (+15%), food and non-alcoholic beverages (+12.7%) and housing/household services (+9.1%).

However, the major cause of the current high inflation is the cost of energy. Russia’s invasion of Ukraine has led to the price of gas more than doubling since May this year, with Vladimir Putin being accused of weaponizing energy.

We are effectively at economic war with Russia.

Everybody is aware that the following winter is going to be tough, but let’s look to the positives: at least it is an economic war, the Government is intervening to freeze household energy costs and the Bank of England is forecasting inflation to be back to its target of 2% in around two years.

If you are concerned about the longer-term effects of inflation on your wealth, please seek professional advice. In my next blog, I will look at the possible consequences of high inflation to investors.

How a detailed financial plan can ease those money worries

By David Lamb CFP™ MCSI

When people complete our ScoreMy questionnaire for the first time, the most common low score is not worrying about money.

Financial stress can take a huge toll on your emotional and physical health and your relationships and the overall quality of your life, leading to insomnia, weight gain and depression. It’s not worth it; there are more important things in life than money!

A detailed financial plan can help remove this anxiety.

Detailed data analysis, including understanding your income, expenditure, assets and liabilities can help identify the cause for concern. This process will also include – you’ve guessed it – cash flow projections.

Once the issues have been identified, a financial plan can be developed to address these issues.

Plans could include a spending plan to ensure you do not exceed your budget or create some spare money to increase savings and how to repay debt more quickly (the word ‘mortgage’ contains the French word for death so get rid of it as quick as possible!)

Also planning for retirement so you can stop doing the things you don’t want to do and start doing the things you do want to do. All without the fear of running out of money.

There is no point in creating a plan if it is not implemented. A well-structured financial plan will include simple actions, steps to help you achieve your objects.

How do you eat an elephant? In small bites.

Life is complicated and circumstances can change, so it is essential that your plan is reviewed on a regular basis and adjustments made as, and when, required.

Along the way you are bound to suffer setbacks. These things happen, don’t beat yourself up but get back on track as quickly as possible.

Professional advice can be invaluable in helping to overcome money worries.

In extreme cases the following websites may be helpful:

In my experience, the causes of money worries are rarely unique and in most cases a financial planner will be able to draw on their experience to help create a well-structured financial plan to help you exorcise those money worries.

A word of warning: if you meet a financial adviser and they want to know about your money without getting to know you first, they are probably more interested in your money than you – and are best avoided.

If you do not know how much is enough, you do not have a financial plan.

Find that elusive work-life balance with our Lifestyle Wheel

Do you want to improve your lifestyle? The answer is a definite yes for most of us, but to do so you need to balance various aspects of your life.

So how do you achieve this?

As part of our lifestyle financial planning service, Lamb Financial has developed a simple online tool that enables you to rate how you feel about all the key components including your physical and emotional health, relationships, time, money and personal fulfilment.

Using the FREE Lifestyle Wheel web app you give yourself a score on each of ten questions and it will join the dots to see whether you are in for a bumpy or a smooth ride – and suggest areas for improvement.

If you have a good balanced lifestyle, you will have a nice big round circle. You may score low but have a nice round wheel, but this probably means you are in for a bumpy ride!

Any buckles in your wheel will suggest areas for improvement. If you need to improve your lifestyle, think about why you have given yourself that low score, what you can do to improve it, when are you going to take action and what the financial implications are.

Lamb Financial Director David Lamb CFP™ MCSI, who devised the Lifestyle Wheel, said: “When I have initial meetings with new clients one of my key priorities is to establish what kind of lifestyle they desire, in order to identify how much is enough to fund this whatever happens.

“The Lifestyle Wheel is a simple way of finding out how they feel about all the important aspects of their life, and where they need to make changes to achieve a balanced lifestyle. But we also have added it to our website so it is free for anyone to use.”

The new facility is part of a groundbreaking web app called ScoreMy which enables professional advisers who offer financial planning, estate planning and other similar services to measure the impact of their counsel on clients, informing future actions.

If you would like to test out the Lifestyle Wheel, visit:

The importance of life assurance, a pension fund and a lasting power of attorney

By David Lamb CFP™ MCSI

Nobody likes to think about catastrophe scenarios such as death, serious illness or even losing a job. But failure to plan can be planning to fail and will subconsciously create nagging worries.

The first thing to do should be to create an emergency fund, which I discussed in an earlier blog.

What would happen if you were to die? Would your financial dependents be able to maintain their lifestyle without the fear of running out of money?

Life assurance of £100,000 may sound a lot of money, but is it enough? If your net income is £2,500 each month, it does not provide much more than three years of income. If you have a young family, they may run out of money.

If you were to die, would your family need a lump sum, or an income? Insuring for an income is usually lower cost than insuring for a lump sum. You are paying for something you do not want to benefit from, so get it as cheap as possible.

How did you arrive at your level of life assurance? A detailed shortfall analysis will help you calculate how much life assurance you may need. Cashflow modelling can help with this.

Will any life assurance go straight to your family, when they need it, or will it get delayed whilst probate is processed and are there any inheritance tax issues? Placing a policy in trust can help resolve these issues but careful planning and professional advice is essential.

What would happen if you were to suffer a critical illness? Often a first heart attack is nature’s way of telling you to slow down. Do you really want to have to rush back to work because you need to pay the mortgage? A critical illness policy could provide a cash injection that could be a life saver!

It is generally considered sensible to accumulate a pension fund so that you do not need to rely solely on a State pension in retirement. If you are incapacitated, without any income protection, you may need to survive on state benefits with far more financial responsibility.

Another important issue to consider – and one that most of us do not want to do think about our loved ones or ourselves – is losing mental capacity.

Many people think ‘it won’t happen to us, we’re fine’, but what would happen to your finances if this was to happen?

Effectively the Court (of Protection) comes along and puts a padlock on that person’s finances, and they and their family lose control of their money. Cheques can’t be written, money can’t be transferred and bills cannot be paid. A deputy is appointed and so starts a long and expensive process.

The key to that padlock is a Lasting Power of Attorney, but you can only buy that key when you have mental capacity. Once that is lost it is too late.

You can build your own cashflow model, for free, at

If you do not know how much is enough, you do not have a financial plan.

The many reasons you need a will

By David Lamb CFP™ MCSI

Many people do not make wills. The most common reasons for this are procrastination, fear of tempting the ‘Grim Reaper’, not being able to decide who should inherit, not wanting to pay the fees or thinking that assets will pass automatically to the family.

Then there are the people who are just selfish and don’t care what happens after they have gone.

There are many reasons to make a will, which could include:

  • To name guardians for children
    • If you do not state who should look after your children, should you die, the family courts may need to choose a guardian. This may not be somebody you would agree to.
  • To provide for financial dependents including stepchildren
    • This may include allocating funds for education or a deposit on their first home. Stepchildren will not automatically inherit, which may not be your wish if they are a big part of your life.
  • To protect partners
    • Unmarried partners will not automatically inherit if there is no will.  This could include the family home.
  • To avoid family disputes
    • Family arguments often arise when the deceased is intestate and can be costly and damage family relationships.
  • Inheritance tax planning
    • Writing a will can be a good opportunity for inheritance planning which, don’t forget, is a tax on accumulated assets after paying tax.
  • Who will take care of your pets?
    • You may also want to allocate money for food and healthcare.
  • To protect your digital assets
    • What do you want to happen to your music, photographs, emails etc? How can people access these? Can your passwords be located?

There may also be issues with your beneficiaries:

  • Are they responsible enough to benefit? If not, what could the possible consequences be?
  • Your beneficiary’s legacy may be lost should they be involved in divorce or bankruptcy proceedings at the time of inheriting. Do you want your potential ex son, or daughter in law, to effectively inherit your assets?
  • Ultimately, who will benefit from your personal assets your children, or your stepchildren? Or even your surviving partner’s new partner!

Death in service benefits and pension death benefits can be very flexible, with a little planning, but many people do not give much consideration to nominating beneficiaries, losing out on huge potential benefits.

Score your financial planning at

Cashflow modelling can help you share your wealth when your family needs it most

By David Lamb CFP™ MCSI

Do you know how much you want, need and will leave after your death, and how you are going to achieve this?

These questions are so important!

Many people when asked how much they want to leave will say nothing. One client told me that the last cheque he wanted to write would be to the undertaker and, if we did our job well, that cheque would bounce!

Most people will leave something because they don’t know when they are going to die (which is not too helpful for financial planning but probably good news).

But even those who want to leave nothing will end up leaving far too much because they fear spending too much and running out or, after a lifetime of savings, their brain is not wired to spend.

How much you need to leave changes throughout your life. Those with financially dependent families probably need to leave quite a lot to make up for lost income in the event of the early death of the breadwinner. Once the children are financially independent, so long as your partner is financially secure, you probably do not need to leave a lot.

How much you are going to leave is an essential question that needs to be answered to protect financial dependents.

Using cashflow modelling, these questions can be easily answered and can result in families being financially secure, no matter what happens, and spending money becomes easier because you know how much you can spend without running out of money.

Of course, many people don’t want that cheque to bounce and want their loved ones to benefit from their wealth once they no longer need it but you do not necessarily need to die before you no longer need it.

Your cashflow projections will indicate how much you can afford to give away without compromising your financial security. Why wait for your death before your family benefits?

If you are 30 when your child is born, and you live to the age of 100, they will not inherit until they are 70. They may have paid for their children to go through university and have helped them get on the housing ladder years before.

When they receive their inheritance, they probably do not need the money! If you are never going to spend the money, give it away when it is actually needed – and when you will be there to see the smile on their faces.

Hoarding your money without gifting or spending it is a waste of opportunities.

You can build your own cashflow model, for free, at

Are you using all available tax allowances to avoid paying unnecessary tax?

By David Lamb CFP™ MCSI

Nobody likes to pay unnecessary tax but are you taking advantage of all available methods to reduce your tax bill legally?

With careful planning, you can:

  • Reduce your income tax
    • Is your tax code correct, can you claim tax credits and anything from the marriage allowance or pay into a pension? You should also ensure that you meet the tax return deadline and reclaim any overpaid taxes.
  • Gain employee tax benefits
    • These could include a season ticket loan to reduce travel costs, claiming tax free childcare, switching to a low emissions company, or (my personal favourite) buying a bike on the right to work scheme.
  • Cut tax on your savings
    • This can include maximising your personal savings allowance, making the most of your ISA allowance, using the starter rate for savings.
  • Use tax deductible expenses (if self-employed)
    • Reclaiming the running costs of a car when used for business, changing your accounting year end to help with cash flow, carrying forward annual losses to offset against profits from a more successful year.
  • Cut tax on your investments
    • This may include maximising your dividends, using your capital gains tax allowance (and avoid CGT it by investing in ISAs), transferring assets to a spouse, investing in junior ISAs and switching investments to capital boosting investments. For the more adventurous, investing in enterprise investment schemes or venture capital trusts may be an option, along with bank shares through your company.
  • Save property income tax
    • By using the rent a room relief or claiming landlord’s expenses.
  • Save inheritance tax
    • This has been described as a voluntary tax paid by those who dislike their children even more than they dislike the Inland Revenue. A lot of potential tax can be saved with good planning.
  • Make charitable donations
    • Doing this via gift aid can help if you are subject to higher or additional rate tax. The charity can also benefit from reclaiming tax on the donation.

Score your financial planning at

How to tackle the biggest threat to your wealth: inflation

By David Lamb CFP™ MCSI

I have seen many investors with a portfolio that has no real relevance to their lifestyle and ambitions.

Often they have some lower risk investments in deposit accounts and then longer-term investments to provide the best returns they can get, or an income to supplement their pension.

But far more can be done to make your money support your lifestyle.

In a previous blog I discussed having an emergency fund and then investing money in lower risk deposit accounts, to fund expenditure more than income within the short to medium term (up to five years).

Longer term, inflation is probably the biggest threat to your wealth.

I have said that I see an awful lot of people taking more risk than they need to take with their investments, but almost as common as taking too much risk is taking too little risk.

People fear investing money in the stock market so they keep all their hard-earned wealth in deposit accounts, safe in the knowledge that this time next year they will have the same amount plus interest. Unfortunately, they forget about inflation.

If you have £1,000 in the bank this year and earn 1% interest, next year you will have £1,010. Unfortunately, if inflation is 3%, the buying power of that £1,010 is only £979.

Their money is actually decreasing in value but the investor does not see that; however they do see the cost of living increasing.

To counter inflation risk, over the longer term you may need to take a little more market risk, but over the longer term history shows you will maintain the real value of your money.

If you are never going to run out of money, don’t take unnecessary risks to get more money than you need; it may go the other way. Instead, reduce your level of risk to just enough to match – or slightly beat – inflation.

Another consideration when structuring your wealth should be asset allocation and cost.

This often has the benefit of enabling you to ignore the financial industry’s hype. It is an industry full of people making promises they can’t keep, promises about ‘beating the markets, picking the best stocks and promises of high returns. If it sounds too good to be true, it probably is.

Thorough research shows that asset allocation and low charges have much more influence on returns than a fund manager’s skill (which can add more risk), market timing and all the other things the ‘industry’ claims it is good at.

If you would like to know more about evidence-based investing, we have an interesting booklet that we would be happy to email, free of charge. Please email to request a copy.

It is also important to consider how your income requirements change throughout your life.

For example, in retirement you will probably want to spend more in the earlier stages (‘active’ retirement) than the later stages (‘traditional’ retirement) but many people are advised to take a level income throughout retirement. This often means they don’t have enough money when they want to spend it and too much money when they can’t spend it! 

Again, cash flow modelling can help with this.

The main purpose of wealth is to support our lifestyles. As our lifestyle changes, our wealth needs to be able to adapt to those changes. If you do not know how much is enough, you do not have a financial plan.

Keep calm and take a long term view

Investors should not panic about short term down markets following the invasion of Ukraine, and instead take a long term approach.

That’s the clear advice in our Ukraine-Russia Crisis guide, just published on our website.

The 24-page guide looks at emotional v market volatility, risk tolerance and how it is important at times like this to speak to your financial advisor who will take the emotion out of decision-making to tactically exploit market dislocations and rebalance portfolios.

Download your free copy here.

Why you need to plot your lifestyle ambitions before deciding on level of investment risk

By David Lamb CFP™ MCSI

During my three decades in financial planning I have found many investors take far more risk with their money than they need to. This often leads to tears because they have invested in poor performing or risky investments.

Financial advisers need to complete an investment risk analysis before that client invests their money, as part of the regulatory process.

To me, this process is like sticking pins into their clients to find out how much pain they can take and then deliver that pain! The adviser is happy because they have followed the regulatory process and the client is temporarily happy because they will follow the advice.

Most risk analysis processes focus primarily on market risk. This is the possibility of the loss of some of the original capital because the value of investments linked to the stock market can vary and, although the long-term trend tends to be upwards, at any time the market might dip meaning the investment is worth less than was originally invested.

This is probably most investors’ initial concern because of previous experience investing with the wrong risk profile.

But there are other types of risk, including shortfall risk and inflation risk (I will discuss the latter in my next blog).

Shortfall risk is when the amount invested to reach a financial goal at some time in the future may not reach the target amount. Where investments are chosen with no or low risk the returns are likely to be lower or could fall short of the amount targeted.

Knowing how much is enough to give you your desired lifestyle, without the fear of running out of money, will help you determine the returns you need to achieve from your money and therefore how much risk you need to take.

If you are not going to achieve your desired lifestyle with the returns you are earning on your existing investments, you may get closer to your goals if you take a little bit more risk to get those higher returns.

Knowing the returns you need to achieve will help you make an informed decision as to how much risk you should take.

If you are achieving returns above your needs, you can reduce the amount of risk you take with your money.

If you do not know how much is enough, you do not have a financial plan.

You can build your own cash flow model at and score your financial planning at

Why a bucket list is essential if you are to make the most of your life

By David Lamb CFP™ MCSI

As I mentioned in my first blog in this series, financial planning is about ensuring when you have one foot in the grave and look back over your life you have no regrets.

Because by then it will be too late to do anything about it and you will be mourning lost opportunities.

A bucket list is an essential – and hopefully fun – way of making the most of your life. After all, as far as we know we are only on the planet once!

Make a list of all the things you want to do or experience in your life and get an estimate of the cost. Crucially, give yourself timescales – or you may never get around to achieving them.

These can be built into cash flow projections and then your wealth can be structured to fund this list, as and when you want to tick each item off.

A bucket list does not have to be about frivolous or expensive things (we find that seeing the Northern Lights and campervans are the most popular) but could include paying for children’s weddings or house deposits.

Research has shown that buying experiences is generally more rewarding than buying things. Build up the memories for later retirement.

The following example shows why a bucket list before retirement is essential.

Suppose in retirement that top of your list is a very expensive world cruise. Cash flow projections may show that if you retire one year earlier you will not be able to afford that holiday of a lifetime. But if you work for an extra year, it will affordable.

If you retire before making your list and then decide (and cost) what you want to do, that ambition may be unaffordable. You may have regrets about retiring and it may be too late to return to work.

Knowing that you need to work that extra year will enable you to make an informed decision; is your priority to retire early or go on the cruise?

If you decide to work that extra year, at least you know why you are continuing and you will be working for a purpose. That extra year may therefore be less stressful.

Bucket lists are an essential element in financial planning. Don’t look back and have regrets.

Looking down memory lane as we celebrate 30 years in business

The Amstrad PWC 8256

By David Lamb CFP™ MCSI

It is a momentous week for Lamb Financial.  For it’s exactly 30 years since I launched the business which went on to become Lamb and Associates (now Lamb Financial).

And what a week the first week in February 1992 was. In other news, Foreign Secretary Douglas Hurd signed the Maastrict Treaty that formed the EU, Her Majesty The Queen was celebrating her Ruby Jubilee and a certain Kevin Keegan was named Newcastle United’s new manager.

The average price of a house in the UK was £56,500 while petrol cost around 40p per litre. Meanwhile George Michael and Elton John were number one on Top Of The Pops with ‘Don’t let the sun go down on me’.

The cutting edge of communication was the fax machine, while our computer was an Amstrad PWC 8256 that you had to stop from printing if you needed to use the telephone as it was so noisy.

If we needed to obtain a quote or illustration we faxed the life insurance company, who would then post it. Incidentally those illustrations did not reflect the actual charges for the product but merely ‘industry averages’.

Commission disclosure was rightly introduced in the mid ’90s and – even better – in 2012 advisers had to agree their fees with the clients.

At least 20 insurance companies had offices in Newcastle. Now only three names remain, and none have local offices.

Along the way there have been a few scandals – Equitable Life, pensions mis-selling, PPI and most recently the Neil Woodford saga. Many of those involved with these scandals have long since left financial services and, generally, the standard of advice is much higher.

But financial services is an industry geared to selling products and not a profession (yet), and will remain so until advisers do not rely on selling products to earn their income and provide genuine, impartial financial planning advice.

Over the last 30 years I have learned a lot, including:

  • Product providers, by their nature, want to sell products. They are not really interested in financial planning, which should be left to well qualified professional advisers, with no links to the product providers.
  • Most active managed funds do not provide good value for money. A mix of generally passive funds with an asset allocation structured towards the client’s individual risk profile and their objectives is much better.
  • It is not up to me as a financial planner to determine if I provide value for money for my clients; it is up to them. I should ask them on a regular basis if we are achieving this.
  • The financial services industry has brainwashed people to believe that financial planning is about financial products, and many financial advisers do not realise this. Financial planning (especially lifestyle financial planning which we specialise in) is not about money or financial products, but about using a client’s resources – not just their money – to support the way they want to live their lives.
  • There are more important things in life than money: health, relationships, and time being the top three.
  • It is important to focus on a balanced lifestyle. In my early years with the business I regularly worked more than 12-hour days and many evenings, only cutting back when my son was born. Running a business takes a lot of focus and energy. It is important to keep these in perspective.
  • Many of my clients have been with me for much of my 30 years (and many I’m honoured to call my friends, not just clients), and their objectives change over time. When we set out together, some wanted Porsches and Ferraris. When they get older, relationships and time are more important than the flash toys.
  • More people come to us wanting more time than more money.
  • Most importantly, all clients want to know how much is enough?  Enough to give them the lifestyle that they want, without the fear of running out of money, whatever happens.  No financial advice should be given until this is known.

There are many other things that I have learned over the last 30 years that have helped me develop a lifestyle financial planning business that I am proud of.

As a Certified Financial Planner accredited by the Chartered Institute for Securities and Investments – one of four firms in the North East and only 67 nationwide – I am confident that we are now one of the leading businesses of our type in the North of England.

The final lesson? Time flies when you are having fun!

Why financial planning needs to be designed to support your lifestyle

By David Lamb CFP™ MCSI

Many people invest their money to get the best returns possible and the financial services industry encourages this (it helps them sell more products). But within a financial plan it is essential that your investments are designed to support your lifestyle.

The first thing to consider is an emergency fund. The textbooks will suggest holding capital to the equivalent of between three and six months’ income which can be drawn as at short notice.

However, in my experience, a more reasonable amount should be what feels comfortable to the individual, giving some consideration to the cost of an emergency that is not insured.

For those in work, I would suggest a minimum of six months’ salary, to ensure you can continue to fund your lifestyle should you lose your job. This will give you a comfortable period to find a new job.

After ring-fencing your emergency fund, consider what expenditure above normal income you may require in the next five years.

This money should be invested with relatively low risk, but possibly with longer notice period. These funds can be used for funding expenses that exceed normal income, such as holidays.

Longer term funds can be invested to achieve a higher return, depending upon your personal risk tolerances, to provide wealth for retirement or funding bucket list expenditure.

There may be other specific objectives, such as children’s weddings, house deposits or university. These need more detailed planning to take into consideration:

  • The cost today
  • The future value of those costs
  • When the money is likely to be required
  • Inflation (but the Retail Price Index may not be a good inflation assumption). For example, education fees often rise at a higher rate than inflation.

Once you know the target value, and the assumed rate of returns on your investments, you can then calculate how much you need to save.

If you have a specific budget, you can calculate the returns required – and therefore the level of risk you need to take with your investments.

Score your financial planning at

Triple lock suspension leaves pensioners out of pocket

By David Lamb CFP™ MCSI

Welcome to 2022! It’s hard to believe that it is now more than two decades since people were partying like it was 1999 and worrying about the millennium bug! But time flies and, for many, retirement seems to be hurtling towards us.

It is prudent to review your pensions on a regular basis, but in this blog I’m going to update you on some changes to the State Pension, and rules relating to small pension funds.

In 2010 the triple lock was introduced to the State Pension, a guarantee that it would not lose value compared to inflation and would instead increase by the greatest of either:

  • Average earnings
  • Prices as measured by the Consumer Price Index (CPI)
  • 2.5 per cent inflation.

Unfortunately for beneficiaries of the State Pension (but possibly fortunately for taxpayers) the Government announced in September the average earnings element of the triple lock would be suspended for a year, due to an unusually high average earnings increase put down to the ending of the furlough scheme.

Office for National Statistics data showed the growth in average total pay including bonuses was 8.3 per cent for the three months to July. If the triple lock had been left unchanged this would have smashed the previous record pension rise since its introduction – a 4.6 per cent increase in 2011/12.

The temporary removal of the earnings link will result in the State Pension increasing instead by 3.1 per cent in April, from £179.60 to £185.15 each week, well below the current inflation rate (as the decision was taken before the CPI rocketed to 5.1 per cent in November).

Another change to pensions to be brought in this year is the abolition of flat fees on small pension pots below £100.

This may not seem to be much for a pension fund, but we quite often meet new clients who have several small pots created by changing jobs regularly whilst also paying into different workplace pensions.

This is good news, but I would urge anybody with a ‘frozen’ pension fund to ensure that they do not have any flat fees charged to their pension in addition to any more common percentage-based fees.

It is also worth bearing in mind that it is probably not worth paying higher pension fees to get ‘superior’ investment returns. Charges are guaranteed, returns are not.

If you need help to understand the charges on your pension funds, please do not hesitate to contact us at

Why yesterday’s interest rate rise may not be all good news for investors

By David Lamb CFP™ MCSI

Yesterday the Bank of England announced that it would increase interest rates from 0.1% to 0.25%.  This is the first rise in interest rates in three years.

This may seem good news for investors struggling to achieve value with interest rates of around 0.5%, but unfortunately the news is not all that good.

The day before interest rates were increased, it was calculated that inflation was 5.1% and the Bank of England now expects inflation to be around 5% until the spring, probably peaking at around 6% in April.

This means that, even if you can earn 0.75% interest, if inflation is 5% the real value of your money is being eroded by 4.25%.

What can you do to protect your savings?

Many may consider transferring money out of deposit accounts and investing in the stock market because, over the longer term, stock market growth usually exceeds inflation.

But this growth can often be very volatile, meaning that 100% investment in the stock market is probably too high a risk for most people.

A properly constructed investment portfolio should be designed around your lifestyle, including short-term, low risk deposit-based investments and longer term investments designed to combat the threat of inflation.

As the economic environment – as well as your lifestyle – is constantly changing, it is essential that portfolios should be reviewed on a regular basis.

Taking into consideration the effects of the Omicron virus and, its effect on the economy, one New Year’s resolution that should be kept is to review your portfolio after the Christmas period.

If you would like help with this, we would be happy to assist. Contact us at

How much is enough to support your lifestyle? If you don’t know, you don’t have a financial plan.

By David Lamb CFP™ MCSI

Do you know how much is enough to support your lifestyle, without the fear of running out of money?

This is one of the most important questions financial planning will help answer.

We see many people working longer than they need to because they do not know how much is enough.

I don’t think working past retirement age is a bad thing (and research suggests it is a good thing) but many people continue to work when they don’t want to, thinking they have to get as much money as possible before retiring.

But when can they stop doing the things they don’t want to do and start doing the things they do want to do?

Have you ever seen a gravestone with the epitaph ‘He wished he’d spent more time at work?’ No, me neither.

Knowing how much is enough will help you answer the most common planning questions, such as:

  • When you can retire
  • How much you need in pensions to retire comfortably
  • How much you need to save
  • Whether you need to downsize your home for financial reasons and not just an easier life (less housework!)
  • How much risk you need to take with your investments
  • How much extra you can spend in retirement
  • How much money you can gift to your family
  • Whether luxuries are affordable.

By analysing your assets, liabilities, income, expenditure and understanding your desired lifestyle – and by doing financial planning based around a cashflow model – it is possible to calculate the answer to the essential question.

If you do not know how much is enough, you do not have a financial plan.

We have a limited number of books called ‘Enough? How much money do you need for the rest of your life?’ by international lifestyle financial planning guru Paul Armson. If you would like a free copy (on a first come, first served basis) please contact us at

You can build your own cash flow model, for free, at

Score your financial planning at

Big increase in inflation means now is the time to discuss investment options with your financial adviser

By David Lamb CFP™ MCSI

Figures from the Office of National Statistics show that the Consumer Price Index hit 4.2% in October, up significantly from the September figure of 3.1% and the highest for more than a decade.

Governor of the Bank of England Andrew Bailey admitted this was slightly above their predictions and suggested that CPI could be as high as 5% by the Spring and that the BoE is giving serious thought to increasing interest rates.

This would obviously not be good news for those with mortgages, but is it really good news for investors? Probably not.

Whilst many people will be keen to earn higher rates of interest on the deposit accounts, they need to consider the gap between the interest rates and inflation.

If deposit accounts are earning 1% and inflation is 4%, the real value (the purchasing power) of that money is going to reduce by 3%. And unlike suffering a 3% fall due to the volatility of the stock markets, this reduction is unlikely to recover.

Investors holding fixed interest investments such as government bonds (gilts) or corporate bonds are likely to see their capital fall in value as interest rates rise. Earlier this year, we recommended that all our clients switched out of fixed interest funds to avoid this risk.

Many people with pensions, ISAs and other Stock Market-based investments invest in funds that hold fixed interest securities as well as shares, often 60/40 in favour of shares.

This means that 40% of these funds are at the risk of going down. Unfortunately, fund managers can do little about this as the objectives of these funds state that they must hold asset classes in these proportions. Even if a fund manager thinks that fixed interest is a risk, they cannot sell.

If you hold these funds, you should speak to your adviser to consider switching out of the funds altogether.

What can you do to protect your savings and investments from increasing inflation?

For money that is likely to be needed in the short to medium term, you cannot really invest anywhere else other than deposit accounts so you should look to get the best rate of interest you can find.

A word of warning though! Do not attempt to get a higher rate of interest by opting to fix your interest for a longer period as you will effectively be locking your money into the current low rates of interest. At present, a variable rate is probably the best option.

Over the longer term, historically the best way to counter inflation is to invest in the Stock Market which, over the longer term, you would expect returns higher than inflation.

However, investing 100% of funds in the Stock Market will probably exceed most people’s investment risk tolerances, so you will probably be advised to invest in other asset classes to reduce the volatility.

Historically, fixed interest has been a good tool for dampening Stock Market volatility, but given the reasons outline above this may not be a good idea now.

So to sum up, my advice is to discuss your options with your adviser. We live in strange times.

Achieving your life’s aims – the real focus for financial planning

By David Lamb CFP™ MCSI

We have looked at the ten key components that make up your lifestyle in a series of blogs over recent months.

Once you have identified your desired lifestyle, the next step is to establish how you will fund it, which brings us on to financial planning.

Many people think that financial planning is all about pensions, investment funds and life assurance. That is probably because that is what the financial services industry has led them to believe, so they can sell them more products.

The Chartered Institute for Securities and Investments describes financial planning as:

“A professional service for individuals, their families and businesses, who need objective assistance in organising their finances to achieve their financial and lifestyle objectives more readily.”

Ultimately, I think financial planning is about ensuring that you do not end up in your later years looking back over your life and having regrets.

You don’t want to feel you did not leave enough money to ensure your loved ones can maintain their lifestyle or that you will die leaving too much money, which could mean a life of wasted opportunities.

You don’t want to mourn experiences that you never experienced, or hold on to your wealth for too long when you could have passed it to your children when they actually needed it.

I have seen websites promising to produce a financial plan after a short initial meeting. But a properly constructed plan requires a lot of detail and reasoned and reasonable assumptions.

In future series I will describe the process of a structured financial plan. But over the next ten blogs I will highlight the essential questions you should be able to answer and score, to ensure that you financed planning is on track to help you achieve you and your family’s desired lifestyle.

Take our Score My financial planning questionnaire now to see how you are progressing with your plan at

Lamb Financial joins exclusive list of accredited CISI financial planning providers

Lamb Financial’s Planning Support Officer Jan Hooper, Director David Lamb CFP™ MCSI and Business Manager Laura Fairley

Lamb Financial has joined an exclusive list of financial planning firms accredited by the Chartered Institute for Securities & Investment.

We are one of only four financial planning providers in the North East, and 67 nationwide, to achieve Accredited Financial Planning FirmTM status out of more than 5,400 advice firms operating across the UK.

Those 1.2% who do make the grade need to demonstrate their professionalism by meeting the highest standards of excellence in financial planning.

To become an Accredited Financial Planning FirmTM you must be able to demonstrate that providing a financial planning service is core to your business. Your company must demonstrate the following:

  • A full financial planning service, including cashflow modelling, is offered by default.
  • The financial planning proposition is clearly communicated and promoted to clients in marketing materials.
  • Policies and procedures are consistent with the CISI’s Code of Conduct.
  • The firm’s business structure reflects a clear fiduciary responsibility to clients.
  • A clear and consistent fee structure.
  • An understandable and visible investment philosophy.
  • All staff are aware of the Financial Planning service and how it differs from financial advice.
  • That the majority of advisers are qualified with a level 6 Financial Planning qualification.

In addition, CISI accredited firms must have a defined process for financial planning which meets the CISI ‘six stage’ definition, and is offered to clients as a default part of your service:

  1. Gathering data.
  2. Establishing the client’s objectives, goals and aims.
  3. Processing and analysing information.
  4. Recommending a plan of action.
  5. Implementing the plan when agreed.
  6. Reviewing the plan regularly.

The latest professional recognition is one of a number of formal qualifications and accreditations Lamb Financial Director David Lamb has. He also holds a Certificate in Financial Planning and the Society of Trust and Estate Practitioners (STEP) Certificate for Financial Services Trusts and Estate Planning.

David said: “We have always believed that focusing on helping our clients to achieve the desired lifestyle, without the fear of running out of money, is a fundamental part of our service and that financial planning should be seen as a profession, not just as a distribution channel for the financial services industry.

“We are delighted that our values have been recognised as matching the CISI’s high standards of financial planning excellence and we look forward to helping to bring professional financial planning to the forefront of financial services.”

Sally Plant, CISI Head of Financial Planning added: “It’s a pleasure to welcome Lamb Financial to join the CISI as Accredited Financial Planning Firms. It is pleasing to see more firms wanting to gain the accreditation and recognising the value in having Certified Financial PlannerTM professionals within their firms.”

Consumers can find the list of CISI Accredited Financial Planning Firms in their area by accessing the CISI’s Wayfinder website.

Who will look after your money if you can’t?

By David Lamb

Most of us do not want to do think about our loved ones or ourselves losing mental capacity and many people think ‘it won’t happen to us, we’re fine’. But what would happen to our finances if this were to happen?

Effectively the Court (of Protection) comes along and puts a padlock on that person’s finances, and they and their family lose control of their money; cheques can’t be written, money can’t be transferred and bills cannot be paid. A deputy is appointed and so starts a long and expensive process.

The key to that padlock is a Lasting Power of Attorney (LPA), but you can only buy that key when you have mental capacity. Once that is lost it is too late.

When you set up a Property and Financial Affairs LPA you can decide immediately what duties your nominated attorneys can help you with now, or only when you are no longer able to make decisions for yourself.

The following link is to BBC Money Box programme broadcast on 23 February 2021 that you should listen to: or use your camera on your mobile phone to access via the QR code below:

When establishing a Property and Financial Affairs LPA, it would be prudent to consider a Health and Welfare LPA at the same time. 

These focus on the personal aspects which affect your health and wellbeing, such as the treatments you have, where you are taken care of and if you need to be looked after in a nursing or care home. The Health and Welfare LPA can only be used when you no longer can make your own decisions.

I strongly recommend that you consider establishing Lasting Powers of Attorney whilst you still can before it’s too late. You never know what is around the corner.

You can make your own LPA by going to, by approaching a local solicitor or contacting us for assistance.

What can I do if my pension fund is suspended?

One of the major perils in the minefield that is pension funds is a fund being suspended, which can happen for a variety of reasons. David Lamb, from The Pension Sharing Service, explains what your options are if, like Karen, this happens to you.

Karen was awarded 100% of one of Norman’s pensions, and a smaller share of another. Their solicitors have been very prudent because one pension had a guaranteed annuity that would have been lost on transfer, meaning neither party would benefit. This is the plan that Karen received the smaller share of.

Unfortunately, this order cannot be implemented because a couple of the funds the pension holds are suspended from trading.

Karen has a problem.

The transfer process explained

When a defined contribution scheme such as a personal pension is to be transferred, the assets – effectively unit trusts held by the pension trustee – are sold and the cash is then transferred to the receiving scheme. It is invested in a new portfolio of funds, ideally recommended by the pension creditor’s financial adviser, based upon their attitude to investment risk.

The issue

Many modern pension funds do not invest the money themselves, instead offering an external investment fund with different fund managers and a wide range of objectives. This is generally good but, occasionally, the funds can experience issues which can result in them being suspended from trading (cannot be bought or sold and turned into cash).

This could be for a variety of reasons, most commonly with property funds suffering liquidity issues (an inherent risk with these funds). If too many people want to disinvest, the fund may not hold enough liquid assets (cash) to pay them and therefore it may have to sell properties to raise the cash, and this can take some time.

This would not normally cause a problem for pension sharing order (PSO) as most orders are made for less than 100% of the fund, therefore other assets can be sold to provide the funds to be transferred.

Unfortunately, for Karen, the 100% order meant that the transfer must be all or nothing; the pension provider cannot transfer less than the amount stated in the PSO (for example leaving the suspended funds and transferring only those that are tradable).

Karen is currently surviving on her State pension and desperately needs the money she has been awarded.

Karen’s options

Karen has three options.

The first is to be patient and wait for the suspensions to be lifted. Unfortunately, one of the suspended funds is the Woodford Income Fund, which due to problems with the underlying investments could take years for the suspension to be lifted and be very costly to the investor. Karen cannot afford to wait very long.

Secondly, Karen could instruct her financial adviser and pension company to individually transfer all the underlying unit trusts by stock transfer, but this could take a long time, therefore incurring extra costs and is littered with pitfalls. Even the pension company advises against this and, in the end, Karen will still be stuck with funds that she cannot convert into cash for the foreseeable future to provide her with an income.

Karen’s third option would be at to apply to get the PSO amended so that she either takes a greater share from Norman’s other pension, but he could be reluctant to agree with this because he will effectively be giving up a high guaranteed income for (potentially) worthless funds.

For an easy life, Karen could write off the Woodford fund so that the transfer could proceed which she considers unreasonable because she is taking the hit, not Norman, and he would benefit if the fund recovers. In any event, if the Woodford fund makes up only 5% of the total portfolio, Karen could be losing almost £15,000.  She cannot afford this level of loss.

Do not tread on the mines!

What can family lawyers do to avoid similar situations?

I would strongly recommend that when asking for details on pensions, a breakdown of the individual funds is requested. This information will help identify any funds that are currently suspended or run the risk of suspension at short notice. If a pension portfolio holds these types of funds, a request for a PSO should not exceed the percentage of funds trading without this risk.

Where possible, spread the PSO over other pension policies to avoid having to take 100% of one particular product.

Ensure that the PSO is implemented as quickly as possible as fund suspensions can occur at any time, with relatively short notice.

I was discussing these issues with my wife, who is a family lawyer, and the very next day Aviva, which operates some of the largest property funds, gave notice that its funds (which are currently suspended) are to be wound up, with the properties being sold. Aviva has warned that this process could take up to two years.

Be aware of pensions holding this fund and ensure the order excludes the percentage held in this fund.

Don’t worry – assistance is available

If you have any concerns about the issues raised in this article, please do not hesitate to contact The Pension Sharing Service.

Tel.      0808 1781695/07708 690811



Why your biggest fear should be running out of time – not money

By David Lamb

In the last in our series of articles on the components that make up our lifestyle we look at abundance.

This is when you have more money than enough…enough to give you the lifestyle that you want without the fear of running out of money, whatever happens.

Many people do not realise they have abundance because they do not know how much is enough. This can result in them having more money than they need without realising it. And then it is wasted for years.

For many, their biggest fear is running out of money, but I would suggest that your biggest fear should be wasting your life and the time, not running out of money. This may mean that you have wasted the opportunity to use your wealth to enhance your lives and others you care about.

We only have two types of clients: accumulators and decumulators. Accumulators are, generally, those still working and therefore increasing their wealth. Decumulation would normally start at retirement.

Unfortunately, many people spend all their working lives saving for retirement but when retirement comes, they feel uncomfortable about spending their hard-earned money. This is probably because, not only do they not know how much is enough, but their brains are not wired to spend money after 40 years of accumulation.

Try this: fold your arms. Now fold them the other way. For most people this does not seem natural. This is because you have spent your whole life folding your arms one way and then, I come along and ask you to do it another way. It is a similar process, but your brain is not wired that way.

It is the same with decumulation, it does not feel right. Proper financial planning will help you rewire your brain by identifying how much is enough and then, with that knowledge, help you to structure your wealth to support an orderly the decumulation of capital. So long as it is controlled, and logical, you will feel comfortable.

Scottish-American industrialist and philanthropist Andrew Carnegie once said: “It is a sin to die with too much money.”

However, this does not mean you should waste your hard-earned wealth. When you are absolutely sure that you have the lifestyle that you want and are confident that there is nothing left on your bucket list, you can use your wealth help other people.

If you live to age 100, how old will your children be when they inherit? If you were 30 when you became a parent, your children will be 70. Will they really need their inheritance? They struggled to buy their home, put their children through university, probably worked long hard hours (possibly to the detriment of spending time with their children) and when they don’t need the money, it falls into their lap. But too late.

All the time they have been struggling financially, your wealth has been sitting in investments, not doing you any good (other than providing a feeling of security, because you don’t know how much is enough) because you are not spending it and it is not helping your family because it is lying in your investments.

It is, however, doing the financial services industry a lot of good because it is making money from your money (and it will continue to make loads of excuses why your money should continue to be invested). If you are never going to use that money, why not give it to your family now when they actually need it?

Of course, there can be other beneficiaries of your wealth, not just your family. Many people get a lot of satisfaction from supporting charities. I had a client who wanted to leave money to the Dogs Trust in his will. He was only 75 and he was never going to spend his excess wealth so why help his favourite charity in 25 years’ time? A lot of dogs would suffer over the next quarter of a century when he could be helping them now. Why wait?

I know older businessmen who still get a lot of satisfaction from work. Unfortunately, the longer they work and earn money, the bigger their inheritance tax liability. Why not use all that experience to help younger businesses and save them money and time by learning from the mistakes they had made 30 years ago? Invaluable knowledge that can be shared.

A friend of mine who is a solicitor has noticed that more and more people are investigating the establishment of charitable foundations (there are organisations that can help with this). His experience is that, because there are fewer burials and therefore fewer headstones, setting up such foundations is a nice way to be remembered.

Identifying abundance can avoid a lot of money worries, ensure that you get the most out of your life, and help other people. Do not let your money lie in investments to be passed to others when you die (because, hopefully, this may be a long time in the future). Do not die with too much; it is a waste of opportunity.

When you are aged 100, with one foot in your box, please do not look back and have regrets.

The most important thing about money? Knowing how much is enough…

By David Lamb

When I first started writing about the components that make up our lifestyle, I suggested that money was at number nine. We eventually got there!

It doesn’t matter how much money you have, if you don’t have quality physical and emotional health, good relationships, enough time, personal fulfilment, a satisfying career, enjoyable fun and recreation and financial independence, you will not have a balanced lifestyle. Life will not be brilliant.

Remember; money could make you happier, but love will make you happy.

I wrote this blog on the day that Eddie Van Halen, reputedly one of the world’s greatest guitarists died. According to the website Celebrity Net Worth, his estate is worth $100m. I would guess his family would give every cent of this to have him back with them.

Am I saying that money is not important? No.

Money provides security and safety for you and your family and pays for all the necessities such as a home, food, clothing, and general living expenses. After the basics are covered, money can provide funding for the fun things in life, especially time, fun and recreation.

An abundance of money can help others, which can provide great personal satisfaction. More on this in my next blog.

But money can also cause problems.

I have seen many people obsessed with getting more and more money and accumulating more than they need. This usually means they spend too long doing the things that they do not want to do (work), saving money to do things that they will never get round to doing. What a waste!

Money can also cause arguments. I think it is safe to assume that most of these arguments are not about having too much money.

The big question, which is a theme that has run through this series of blogs, is how much money is enough? Enough to give you the lifestyle that you want without the fear of running out of money whatever happens.

The key to a good financial plan is knowing how much is enough. If you don’t know how much is enough, you don’t have a financial plan!

A good lifestyle financial planner will identify your (realistic) desired lifestyle, calculate how much this lifestyle will cost and then answer the question ‘how much is enough’? They will then work with you, using the resources you have available, to work towards achieving that lifestyle.

Money underpins every other aspect of your lifestyle. It needs to be well managed.

Beige budget balances spiralling debt and stagnant economy

By David Lamb

Last Wednesday’s budget was quite beige, but what could Chancellor of the Exchequer Rishi Sunak do?

He must balance spiralling Government debt with an (almost) stagnant economy.

Hopefully that stagnation will turn into a coiled spring as we get closer to the end of lockdown and the £130bn that the British public has saved since the first lockdown is spent on haircuts, meals (eating in not takeaway), drink and holidays.

This massive government debt will have to be repaid, but now is too early so what has Mr Sunak done to get the British public to help repay those staggering amounts (£355bn according to the BBC)?

One way of increasing tax revenue, without blatantly increasing rates is to use inflation (not much of that now, but just wait until we get spending again).

The pension lifetime allowance – the maximum capital value you can have for your pension (LTA) – has been frozen at £1,073,100 until 2026. You may think that this is a lot of money and does not apply to you but, as inflation increases, for those in defined benefits this could become a real problem.

NHS staff could become some of the hardest hit, the weekly hand clapping long forgotten.

What can be done to reduce this?  If you are in a defined contribution scheme, you could pay in less, or reduce your investment risk profile to reduce the growth.  Members of defined benefit schemes could leave the scheme or simply work less hours (thereby reducing salary and pension benefit). 

Regardless of the type of pension, many people may become disillusioned with pensions and may consider other methods of savings, such as individual savings accounts. But all potential options have major disadvantages.

The inheritance tax threshold has been frozen at £500,000 (including the residential nil rate band) for a single person and £1m for married couples. As with the freezing of the LTA, this will raise taxes through wage inflation and asset price inflation.

Is there any other name for this, other than a wealth tax?

What can be done to mitigate this?  Possibly gifting, or spending more, but again there could be negative consequences; you could run out of money!

The annual personal allowance of £12,500 has also been frozen, as has the capital gains tax allowance, at £12,300 and the High-Income Child Benefit Tax Charge at £50,000. Because of wage inflation, more tax will be collected.

The freezes on allowances may only impact on a relatively small number of people now, but with rates frozen until 2026, more people will be caught as the years go on.

There is no easy way to mend the nation’s finances, and it is going to take a long time, but we do not want our personal finances to be negatively affected either. There are things we can do to reduce the impact of taxes (which are likely to get worse once the economy recovers), but these can have a negative effect on other areas of financial planning.

To help you make the correct decisions, it is essential to have a detailed, regularly reviewed financial plan, which will help you understand how much is enough. Enough to give you the lifestyle you want, without the fear of running out of many, whatever happens.

Once you know how much is enough, you will be in a good position to make sensible, informed, and logical decisions to adapt your plans to the current economic and fiscal climate. If you do not know how much is enough, do not have a plan.

As the old saying goes, failing to plan is planning to fail.

Who will look after your money if you can’t?

By David Lamb

Most of us do not want to do think about our loved ones – or ourselves – losing mental capacity and many people think ‘it won’t happen to us, we’re fine’. But what would happen to our finances if this were to happen?

Effectively the Court of Protection comes along and puts a padlock on that person’s finances, and they and their family lose control of their money.

Cheques can’t be written, money can’t be transferred, and bills cannot be paid. A deputy is appointed and so starts a long and expensive process.

The key to that padlock is a lasting power of attorney, but you can only buy that key when you have mental capacity. Once that is lost it is too late.

BBC Radio 4’s personal finance show Money Box featured the rules for taking care of some else’s finances in their programme last week. You can listen to it via the following link:

I strongly recommend that you consider establishing lasting powers of attorney whilst you still can before it’s too late. You never know what is around the corner…

Why financial independence may be a lot closer than you think…

By David Lamb

The next component of lifestyle, after fun and recreation is financial independence.

Financial independence can be described as having enough income to pay for your living expenses for the rest of your life without having to work or be dependent on others or a business.

At first this may sound quite difficult and daunting to achieve, but we have never had a client come through our doors where we haven’t been able to tell them to do a couple of things to achieve financial independence. It is easy!

All you need to do is:

1. Sell everything. Your house, your car, contents, everything! Turn all you have into cash.

2. Move to Malawi. Malawi is a generally peaceful country that has had stable governments since gaining independence from Britain in 1964. The cost of living is lower than the UK – the total cost of living for two people, with average consumption, for one month will be $705 (£546). The average salary for an accountant is $14,166 (£10.981), in the UK they can earn up to £60,000, or more. You will probably be the richest family in your new village and will never worry about money again!

But you may not have the lifestyle that you want……

Many people are under the misunderstanding that to achieve financial independence, they need as much money as possible. Unfortunately, we have seen many clients who continue to work long after they could have retired.

As I mentioned in an earlier blog, I don’t think it is a bad idea to work past retirement, so long as it is enjoyable and is keeping you young. But working unnecessarily often means that this is at the detriment to other areas of their lifestyle such as health, relationships and time doing the things you want to do.

Understanding your lifestyle (enjoying the good parts and being able to identify areas for improvement to give you more balance) should be at the heart of financial planning.

When you have identified the lifestyle that you want, you can then work out how much this will cost. When you have done this, using cash flow modelling, a financial planner can then calculate how much is enough. Enough to give you the lifestyle that you want without the fear of running out of money, whatever happens.

In my experience, this is quite often a lot less than people would imagine.

Financial independence may be a lot closer than you think. You just need to know how much is enough and then create a simple, realistic, and reasoned plan to get you there.

How good would you feel if you didn’t need to worry about money?

Leading investment firm highlights interest rate threat to fixed rate investments

By David Lamb

A couple of days after I wrote my last blog, highlighting my concerns about fixed rate investments, I found a very interesting article written by Giulio Renzi-Ricci of Vanguard Asset Management Limited – one of the world’s largest investment companies and a leader in passive investments.

Giulio is concerned that the correlation between fixed interest and equities have converged to such an extent that bonds can no longer be relied on to perform their primary role as an anchor in times of market stress.

He goes on to say that there is worry that portfolios are too heavily exposed to duration risk (longer term bonds) which will mean they could be vulnerable if interest rates increase.

Another issue Vanguard has identified is that the rock bottom yields are compromising the function of bonds as portfolio diversifiers. They analysed the distribution of UK bond returns when UK equity returns were negative between January 2003 and November 2020 and looked at two scenarios: when 10-year gilt yields were greater than or equal to 1%, and when 10-year yields were below 1%.

When equities fell, government bonds provided higher returns than corporate bonds and cash. Because of this, government bonds can be good ‘shock absorbers’.

There is also concern that, if interest rates rise, the returns from equities could also turn negative (it will be more expensive for companies to borrow money to fund their growth, for example).

Portfolios with high fixed interest and equity holdings could be hit twice. Giulio concludes by asking if interest rates increase because economic activity is recovering and earnings growth is also increasing?

Would equity prices move up or down?

This would depend upon the relative forces associated with earnings growth or rates growth. Higher interest rates do not necessarily mean negative equity returns. Central banks are unlikely to start increasing interest rates unless they are reasonably confident in the economic recovery. If so, expect a positive impact on equity returns.

This brings us back to my last blog: take action!

We strongly recommend that you review your investment portfolios (including your pensions) to determine how much fixed interest your portfolios hold and seek advice as to how you can minimise the threat to your wealth if inflation and interest rates increase in the capital value of your fixed interest investments falls.

Lamb Financial is here to help.

The information contained in this article is provided for information purposes only and is based on the opinion of Lamb Financial and does not constitute financial advice or a suggestion to a suitable investment strategy. You should seek independent financial advice in regard to your own personal circumstances before embarking on any course of action.

Lamb Financial is a trading style of Lamb and Associates Independent Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority. FCA number 782092.