Your latest Pilgrim team update

Welcome to your summer update from Pilgrim Financial Planning. With temperatures soaring in the past few weeks, we hope you’ve been able to stay cool!

Here at Pilgrim we’ve been making the most of the nice weather by raising money for charity, so read on to find out the latest news in the business.

2 of our team raised £555 for charity with a half-marathon

Giving back to the community is very important to us. That’s why we’re delighted to announce that some of our team have gone the extra mile (or rather, 13 miles!) to raise money for charity.

In May, Victoria Westbrook and Jamie Havard outdid themselves by braving the hot weather to complete a half-marathon. We’d all like to wish them a huge “well done” and hope they’re very proud of themselves.

In doing so, they managed to raise a very impressive £455, plus £100 in Gift Aid, for the homeless youth charity Centrepoint. This organisation does a huge amount of work with one of the most vulnerable groups in society.

Centrepoint helps to get young homeless people off the street and into a safe environment where they can get back on track and become more independent.

We’d like to give a huge “thank you” to all our clients who donated money for this very worthy cause.

Pilgrim Financial Planning has launched a brand-new and much-improved website

In the last few weeks, Pilgrim Financial Planning has launched a new website, so if you haven’t had a chance to see it yet, have a quick look and let us know what you think!

The new website is easier to use than ever before and provides our clients with an easy point of access to their Personal Finance Portal and investment platform. Our updated site can be viewed on all devices and we hope you’ll agree that it’s a huge improvement.

We have planted 22 baby saplings as part of a reforesting effort by the National Trust

As you may remember from our previous article, environmentalism is a cause that is close to many of our hearts here at Pilgrim. That’s why we’ve been supporting the National Trust’s campaign to plant 20 million trees in the UK by 2030.

As part of our plan to become eco-friendlier and offset more of our carbon emissions, we now make a donation to this charity whenever we take a new client onboard. This money goes towards reforesting and building habitats for wildlife.

So far, we’re delighted to announce that 22 saplings have been planted on our behalf, and we hope to grow this number even further in the near future.

If you want to find out more about the benefits that this scheme will bring, both to UK wildlife and the planet, visit the National Trust’s website to find out more. If you’d like to support their scheme, you can also donate directly through their website.

Get in touch

As always, if you ever need to speak to us for any reason, please don’t hesitate to get in touch. Please email enquiries@pilgrimfp.co.uk or call us on 01749 670087.

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How working with a planner can help you make the transition to retirement

Here at Pilgrim, we spend a lot of our time helping our clients transition from one stage of their life to the next. And very often, the biggest change that people need help with is the move to retirement.

Finally being able to stop working and start enjoying your free time can seem like a dream, but when the time comes you may feel differently about it. In fact, if you aren’t prepared emotionally, retirement can take some getting used to.

As someone who helps a lot of clients to make this transition, we asked Damien to share some of his thoughts on how we can help you when it comes to taking this important step. Over to you Damien!

My father had been really looking forward to giving up work. He had been employed at the same company for 40 years and the constant pressure that came with his job had been getting to him. There had simply been too many meetings, too much travel, and too much stress.

But when the time came, his retirement didn’t quite pan out the way he’d hoped. While he had plenty of hobbies to keep him busy, he didn’t feel the same sense of fulfilment that he was used to.

In fact, he found he often missed the hustle and bustle of the office – managing his responsibilities for the day, chatting to his friends and colleagues, and sorting the daily streams of emails and calls. More than anything, he missed being in the middle of things and felt lost without it.

It can be uncomfortable to give up the career that you’ve spent so long building

In the many years I’ve worked in this role, I’ve found out that my father’s story isn’t uncommon. After all, when you’ve put in so much effort to build your career in a field you love, it can often be difficult to give it up.

That’s why, although you may recognise that you’re entering a new stage of your life, you might not have given much thought as to how you’ll manage this change emotionally. This is especially true if you have a busy lifestyle and haven’t had much time to sit down and reflect.

While retirement is a wonderful opportunity to do all the things you want to do, it’s important to be aware that there can be downsides to it. Like the pain of divorce, suddenly not being around your old friends and colleagues every day can be stressful, and managing that grief is important.

Back in the early 20th century, psychologists James Robertson and John Bowlby studied how children experienced separation anxiety when taken away from their parents.

In this experiment, the two found that most of the children went through three stages – first they protested at the situation, then they despaired, and finally they detached themselves emotionally, which causes them huge amounts of anguish.

In the same way, being cut off from regular contact with your friends and colleagues can be a hugely stressful experience, no matter what stage of life you’re at. That’s why it’s important to prepare yourself mentally before you retire.

3 useful ways you can make the transition easier for yourself

If you want to be able to enjoy your retirement to the fullest, here are three valuable tips to make the transition easier for you.

Invest in your personal relationships

One of the best ways to deal with this change is to strengthen your personal relationships. And, of course, there’s no better place to start than at home, spending more time with your family and friends.

Investing in your close personal relationships can really help to boost your emotional wellbeing. In fact, a 2006 psychological study found that friendship accounts for 58% of the variance in people’s happiness.

Build networks beyond the office

While it can be easy to focus all your effort on your workplace, it’s important to build networks beyond the office too. This is especially true when you’re in the run-up to retirement.

For example, volunteering can be a great way to give back to your community while also building relationships with other like-minded people. You could also take up a new hobby and meet people that way, as my father did when he joined his local boules club.

You can also use your retirement as an opportunity to keep learning, such as enrolling on a university course. Alternatively, you could consider tutoring, so that younger people can benefit from your reservoir of knowledge and experience.

Find new outlets for your energy

Another option you could consider is to work part-time after you’ve retired, such as in a consultancy role. For example, you could mentor budding entrepreneurs or young executives to help them navigate the world of business.

And, of course, since networking is vital for a company’s success, you could use your valuable connections to give a jump-start to the people that you’re mentoring.

Working with a planner can give you greater peace of mind when retiring

In the past, retirement planning was mostly about the numbers. With such a big focus on finances, the emotional implications of the decision had to take a back seat, if they were mentioned at all.

Today, however, financial security is only one element of your long-term plan. In the modern day, as people live longer and enjoy different lifestyles in retirement, making sure you are happy, healthy, and mentally active is essential.

If you want to be able to enjoy your retirement to the fullest, working with a financial planner can help you to navigate your way through this period of change. This can be a huge weight off your mind and enable you to enjoy this chapter of your life without any concerns.

Get in touch

If you want to know more about how we can help you to prepare for a relaxing and fulfilling retirement, get in touch. Please email enquiries@pilgrimfp.co.uk or call us on 01749 670087.

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4 useful tips to shield your money from record Inheritance Tax takes

Over the course of your life, you’ll have worked hard to ensure that you and your loved ones can enjoy a high standard of living. And of course, you’ll want your family to inherit the wealth you earned, so it can benefit them too.

That’s why it can often be painful to think about how deeply Inheritance Tax (IHT) could eat into the value of your assets when you pass away. After all, you earned your money and may have paid tax on it already, so it’s only fair that your loved ones should keep it.

According to predictions by the Office for Budget Responsibility (OBR), published by FT Adviser, British people are set to pay £37 billion in IHT over the next five years. This is a colossal amount, so if you want to know how to shield your wealth from it, read on for four valuable tips to cut your potential tax bill.

1. Giving to charity can reduce the amount of IHT you have to pay

Each person has an allowance for how much they are able to pass on to their loved ones without incurring IHT, which is known as the “nil-rate band”. In the 2022/23 tax year, this stands at £325,000.

If you plan to leave your primary residence to your children or grandchildren then it can rise by a further £175,000 with the addition of the “residence nil-rate band”. This brings the total amount you can leave to your loved ones before paying tax up to £500,000.

You should also remember that it’s possible to transfer any unused part of the IHT nil-rate band from a deceased spouse or civil partner to the surviving spouse or civil partner.

Since the nil-rate band is frozen until at least 2026, as your assets grow in value, they could push you over this threshold and result in a tax charge. For example, according to the Office for National Statistics (ONS), house prices grew by 12.4% in the year to April 2022. So, if the value of your home continues to grow as the nil-rate bands remain static, it’s more likely you’ll end up liable for IHT.

One useful way you can potentially decrease your tax liability is to give a portion of your wealth to charity, as this can have several benefits. For a start, when you donate more than 10% of your net estate to charity, your IHT rate falls from 40% to 36%.

In addition, any gifts you make to qualifying charities are themselves exempt from IHT regardless of the value of the gift.

Donating enough of your wealth can even lower the value of your estate to below the nil-rate band, meaning that your loved ones may not have to pay IHT on it at all.

2. Putting a portion of your wealth in a trust can protect it from IHT

One useful way to shield a portion of your wealth from tax is to put it into a trust. Essentially, this helps you to keep some assets out of your estate and you can set the rules for how and when they can be used. In some cases, you may still be able to earn an income from those assets.

Of course, there are also some downsides to this decision. One of the biggest is that once you’ve transferred some of your assets into a trust, this usually can’t be reversed, so it’s important to think carefully before acting.

3. Use life insurance to pay any IHT liabilities

As you’ll know, having the right type of protection in place can help you to overcome any unexpected issues you run into. But what you might not know is that you can also use it to cover any tax liabilities that your family might encounter after you pass away.

Taking out life insurance can mean that your loved ones will receive a lump sum, which they can then use to cover any IHT that’s due. While this doesn’t mitigate the IHT bill, it ensures that the full value of your estate can be left to your chosen beneficiaries.

If you decide to do this, it’s important to remember that the protection must be written in trust, otherwise the lump sum will count towards the value of your estate and potentially make your IHT problem worse.

4. Draw your retirement wealth in a tax-efficient way

When it comes to working out your IHT liability, not all assets are treated the same. That’s why, if you want to shield more of your money then it can be helpful to draw your retirement wealth in a tax-efficient way.

To put it simply, your loved ones can typically inherit your self-invested pension plans (SIPPS) without paying any IHT on their value, as long as you haven’t accessed them yet. However, once you’ve drawn an income from them, they are counted as part of your estate for IHT purposes.

That’s why it can often be wise to rely on your non-pension assets first, such as any ISAs you may hold. By drawing an income in this way, you can maximise the amount of pension wealth that you could potentially pass on to your loved ones.

Of course, if you want to be able to manage your estate in the most effective way, seeking professional advice can really help. A financial planner can enable you to pass on as much of your wealth as you can in a tax-efficient way, giving you one less thing to worry about.

Get in touch

If you want to know more about how to minimise the amount of IHT you have to pay, get in touch. Please email enquiries@pilgrimfp.co.uk or call us on 01749 670087.

Please note:

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

A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits.

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Your Pilgrim team update

Welcome to your spring update from Pilgrim. Now that winter is over and the flowers are starting to come out, we hope you can take some time to enjoy this warmer weather.

Here at Pilgrim, we’re taking advantage of the recent sunshine to raise some money for charity, so read on to find out more.

Our Impact Team is raising money for the homelessness charity Centrepoint

In recent months, the rising price of fuel, food, and energy has squeezed the finances of many households. In fact, according to the Guardian, the cost of living crisis may drive many people into homelessness in the coming years.

This is an issue that many of us feel strongly about, which is why we wanted to do our bit here at Pilgrim. That’s why we’ve decided to raise money for the homelessness charity Centrepoint, an organisation that tries to help one of the most vulnerable groups in society, the homeless youth.

There are many reasons why a young person may have to leave home, from family breakdowns to escaping violence or abuse. Whatever their reason, Centrepoint enables them to get them off the street and into a safe environment while they get the help they need to move on to independence.

On Saturday 14 May, the Impact Team will be completing a half marathon to raise money for the important work that this charity does.

If you’d like to make a donation, and do your bit to help end youth homelessness in the UK, click here for a link to our JustGiving page.

We have new team members joining us

We are pleased to welcome three new team members who will be based in our Bristol office.

As of the end of April, Cormac Brady joined us as a paraplanner, working with the financial planners to assess client needs and help them to build a resilient long-term plan.

He brings with him many years of experience, in both general financial knowledge and specific pensions expertise.

We also have Amber Nathoo and Samantha Milligan joining our technical teams and they will no doubt speak to many of you over the coming months.

We look forward to them joining us and we are sure that they will all make a valuable contribution to our team.

Our brand new website is easier to use than ever before

We launched the new Pilgrim website this week, so don’t forget to pop over and have a look – we’d love to hear what you think.

This new site provides an easy point of access to the Personal Finance Portal and your investment platform via the Client Login page, making it easier to use than ever before.

Get in touch

As always, if you ever need to speak to us for any reason, please don’t hesitate to get in touch. Please email enquiries@pilgrimfp.co.uk or call us on 0117 214 0870.

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Everything you should know about our new tree-planting scheme

When the Brunel and Pilgrim Impact Teams first joined forces, one of their primary focuses was to explore ways in which they could be more proactive in reducing our carbon footprint.

Alongside their focus on recycling, implementing a cycle-to-work scheme, and offering staff the ability to work flexibly from home, the Impact Team wanted to go that one step further. At the same time, we also wanted to thank people in a sustainable way for becoming clients.

This led to the introduction of the Impact Team’s first company-wide initiative to plant a tree for every new client, supporting the National Trust and their campaign to plant 20 million trees by 2030.

We chose the National Trust not only because of the important role it plays in preserving our heritage and wildlife, but also because its numerous sites are popular destinations that both staff and clients enjoy.

By donating to such an established cause, we can have a greater impact as we are working collaboratively with like-minded people.

In planting a tree for each new client, we hope to reduce any emissions we produce when delivering our service, as each tree could remove up to one tonne of carbon. Not only does planting a tree contribute to the reduction of greenhouse gases, but it also creates new habitats for a variety of wildlife.

At the time of writing, the National Trust have planted around 76,000 saplings of 14 different species of native broad leaf trees at various sites across the UK.

You can click here to find out more about the benefits that this scheme will bring, both to the wildlife in this country but also the planet more generally. If you want to support the National Trust’s efforts directly, you can also donate to the cause through their website.

Get in touch

If you want to know more about how we’re reducing our environmental impact, get in touch. Please email enquiries@pilgrimfp.co.uk or call us on 0117 214 0870.

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3 important reasons why you should put a Lasting Power of Attorney in place now

Did you know that if you fell ill and weren’t able to make decisions for yourself, your loved ones wouldn’t automatically be able to act on your behalf?

While no-one likes to consider the possibility that there may be a time when you can’t manage your own affairs, it can be important to make a plan just in case.

This is where putting a Lasting Power of Attorney (LPA) in place before this happens can help you. As we’ll discuss later in greater detail, this is a legal document that lets you appoint people to look after your affairs on your behalf when you’re no longer able to.

Despite the benefits that an LPA can offer, a study published in FTAdviser shows that 4 in 5 over-55s do not have one in place. Read on to find out more about what they are, as well as three important reasons why you should put one in place now.

There are several different types of LPA that you can put in place

To put it simply, an LPA allows you to choose someone, or multiple people, to manage your affairs on your behalf if you were ever unable to do so yourself. This could be due to an accident that leaves you physically incapacitated, or due to an illness such as dementia.

You can choose anyone to act as your attorney, as long as they are over the age of 18 and have the mental capacity to make decisions. If you decide to have more than one, you can also choose whether they can act separately or must make decisions together.

One of the most important things to remember when it comes to implementing an LPA is that you can only put one in place while you have the mental capacity to do so. This is why it is often better to do it sooner rather than later, as you don’t know what the future may hold.

There are two main types of LPA that you could consider, and they can each cover a different area of your welfare. These are:

Health and Welfare LPA

This type of LPA would cover aspects of your day-to-day wellbeing. This can include any medical care you may need, your daily routine, as well as potential decisions like whether to move you to a care home.

Property and Financial Affairs LPA

This LPA would cover the management of your assets, such as properties and investments. An attorney’s responsibilities may include jobs like paying bills and claiming benefits on your behalf.

Of course, since each role has its uses, you may want to consider whether you would benefit from only one of the two types of LPA, or both.

Read on to find out three important reasons why you should put an LPA in place now.

1. Gives you a greater amount of control

One of the most important reasons to appoint an attorney is that, since you choose who will act on your behalf, you can retain a sense of control over what may happen. Since you can pick a person that you trust, you’ll be able to relax, knowing they will manage your affairs in the most effective way.

Furthermore, you also have a high degree of control over what your attorney, or attorneys, are allowed to do on your behalf. For example, you may restrict them from making decisions about a particular asset, such as your family home.

That said, it’s also important to bear in mind that an LPA will only trigger when you are incapacitated. At that point, you won’t be able to make any changes to it, so think carefully about the long-term consequences of any restrictions you impose.

2. Helps your loved ones to make decisions faster

Another benefit of having an LPA in place is that it can help your loved ones to manage your affairs without any delays if the worst should ever happen to you.

If you are incapacitated and don’t have an attorney lined up, your family will have to apply to the Court of Protection in order to appoint a deputy. This can potentially be very time-consuming and may potentially take several months.

As you might imagine, this delay could leave your loved ones vulnerable to financial issues while their application is being processed.

It’s also worth noting that LPAs can be highly flexible as you can use them for temporary issues, such as if you are hospitalised after an accident. If you set an LPA up temporarily, you can apply to alter or remove it once you can prove that you have the mental capacity.

3. Can give you greater peace of mind

Without the help of a crystal ball, nobody can predict what the future may hold. However, knowing that you have an LPA in place can give you peace of mind to know that you’ll be able to overcome any issues you may encounter.

Since you can choose who will act on your behalf if you were ever unable to manage your own affairs, you can be confident that they’ll be able to do so effectively.

For example, if you run your own business then you could appoint a co-worker or business partner to look after your share of your business. Since they would be familiar with the kind of challenges that this role could have, you can rest easy knowing that they’ll be able to handle it.

If you want to know more about how you could benefit from having an LPA in place, you may want to seek professional advice. Working with a financial planner can help you to assess your needs and designate an attorney, or attorneys, to look after your affairs if you’re ever unable to.

Get in touch

If you want to protect yourself against the unexpected by putting an LPA in place, we can help. Please email enquiries@pilgrimfp.co.uk or call us on 0117 214 0870.

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Why there’s no need to worry about the recent market volatility

These are difficult and volatile times. In addition to the growing human cost and suffering, the escalating conflict in Ukraine and resulting sanctions on Russia have added a new dimension of risk to investment markets.

Under such conditions, it can be hard to stay focused, especially given that nobody knows what may lie around the next corner.

Keep your wealth invested in a diverse portfolio

In our experience, the best strategy under these conditions is to keep your wealth invested in a diversified portfolio. This is why it’s important to maintain a long-term perspective and stick to the strategy that you and your adviser have put together when you formed your financial plan.

When a client raises concerns to us, one of the first things we do to give them some peace of mind is to stress test their portfolio.

In the year to date, the FTSE All Share Index is down by 0.12%. However, it’s important to bear in mind that the lion’s share of our clients’ wealth is invested in the globally diversified IronBright 50 portfolio.

While this is down by 5.64% this year to date, due to market volatility, in the year to April 2022 it has still grown by 3.14%. This is because it contains a good mix of growth assets, such as equities, and defensive assets, such as bonds.

When stress testing your portfolio, a good starting point can be to go back to one of the biggest falls in living memory. For the IronBright 50 portfolio, this would have been the famous “Winter of Discontent” in 1972, when it decreased in value by 26.9%.

Of course, it’s worth bearing in mind that, while it fell over a period of 24 months, it only took three months to recover. If your financial plan can remain on course after such a stress test, then it can overcome short-term concerns.

A very low exposure to Russia

IronBright operates a strict asset allocation policy, which gives you access to a globally diversified suite of portfolios. Many clients have asked us, given our international flavour, if we have a large exposure to Russia. As one person put it: “are we on the wrong side of history?”

Thankfully, you will be pleased to hear that we have no direct exposure to Russia, although there is indirect exposure through several funds. These are principally in the Blackrock Emerging Markets Equity fund, in some passive portfolios, and in the Hermes Global Emerging Markets fund.

The manager in the latter fund has been actively selling anything remotely unsavoury over the past few months, whereas the former reflects the index it tracks.

The maximum amount of exposure that any one portfolio has indirectly to Russia is 0.15% in the core satellite and 0.05% in the passives. In relative terms, this is almost an entirely clean bill of health.

Our three guiding principles remain in place, and we do not veer from them. These are:

Belief in the future

We know the market will continue to deliver long-term value, as it always has.

Patience

We keep an eye on the long term rather than trying to second guess the short term.

Discipline

We hold strict asset allocations and rebalance the portfolios every six months to maintain them.

Because we stick to these principles, we are pleased to report that all portfolios are performing in line with expectations and holding up well.

Get in touch

If you’re concerned about your progress towards your financial goals and want some reassurance that you’re still on track, get in touch. Please email enquiries@pilgrimfp.co.uk or call us on 0117 214 0870.

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