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Mowatt Financial Planning: September 2009

Friday, 25 September 2009

The Great Care Debate

A few months ago an interesting paper came out with proposals on care and support for older and disabled people. With the UK population ageing, there is a clear need for a review of how care for the older generation is provided. I doubt if the NHS was originally set up to tackle the UK as it is today.

The paper entitled Shaping the Future of Care Together is a good start to having a sensible debate on how to tackle this growing issue. The worry with all these things is the ability of our politicians to look beyond the next 5 minutes.

It's possible to express your views in a number of ways including going along to Roadshows that are being held around the country. The Roadshow comes to Leeds on the 2nd to 5th October. Check out the Big Care Debate website for more information.


Thursday, 24 September 2009

Increase in ISA Allowances

In 2 weeks time (from 6th October 2009), it will be possible to invest a further £3,000 into an Individual Savings Account (ISA) if you are 50 or over by the 5th April 2010. This brings the total ISA allowance up to £10,200. For under 50 year-olds the limit will increase from 6th April 2010.

Up to £5,100 of the new ISA allowance can be invested into a cash ISA with one provider (previously £3,600). The remainder of the £10,200 can be invested in a stocks and shares ISA with either the same or another provider. Alternatively, the full £10,200 can be invested in a stocks and shares ISA with one provider.

Using ISAs is a great way to invest tax efficiently as part of an overall financial plan. This is a good opportunity to top up your ISA if you have already made an investment this tax year or to make that ISA investment now if you haven't used this year's allowance yet.


Monday, 21 September 2009

A Sustained Recovery

It's interesting to read the various views on an economic recovery. With the FTSE performance over the last few weeks; it looks like we might be already there. However, given the scale of the problems that arose last year it does feel too early to see this as a sustained recovery.

The charts below produced by Fidelity show the indicators that they believe should all be green for us to have a sustained recovery. I've shown both August and September to show how these have moved.



The conclusion from this is that we don't yet have a sustainable recovery.

From an investment point of view, it doesn't change the general principle to make sure that your investments are in line with your attitude to risk. By doing this, the impacts of any upside or downside in the market will be in proportion to your risk appetite.


Monday, 14 September 2009

The Real Age of Retirement

Standard Life have just done an interesting piece of work entitled the Real Age of Retirement which illustrates how much longer an individual would have to work to get to 2/3rds of final salary if they had only the State Pension to provide for them in retirement. (Note 2/3rds of final salary is often considered the desired level of pension in retirement).

Taking a man currently aged 27 with a salary of £28,500 they would need to work to age 79 before the defered State Pension would get them to the 2/3rds level. They are already expected to work until 68 with the planned increases in the state pension age.

Of course it is possible to do something about it and the chart below shows the level of contribution required to get to the 2/3rds level at different ages.

Whether 2/3rds is the right level of pension or not, this raises a few points:

  • The sooner you start to save the better
  • Relying on the State pension will lead to a fairly meagre retirement
  • It's important to know where you are heading - this link will allow you to get a Pension Forecast


Monday, 7 September 2009

Financial Planning Week

This week is Financial Planning week. Have a look at the consumer website and take some action!


Thursday, 3 September 2009

Old Clothes and Porridge again

With holidays over, I'm trying to get back into a routine. I'm sure it will be easier when school is back as well.

Our first week on holiday was in Gullane which was brilliant: beautiful beaches, trips to the Festival and meeting old friends. In terms of the festival we focussed on comedy and I would recommend John Bishop and Jon Richardson if you get a chance to see them.

I would also recommend Templar Cottage in Gullane which was very well equipped.

Photo above is North Berwick beach looking towards the Bass Rock.

The next week was in Portugal where we found the sun and the heat!

I lost the fishing cometition 12-6! Mainly mackerel.

And now back to work!

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