Office Administrator Needed

Our long-serving office administrator Sheila Ewing is retiring in July after more than 20 years’ with Phillip Bates Financial Services and, prior to this, our sister business, Phillip Bates & Co.

We are therefore starting to recruit Sheila’s successor. Excellent office administration skills allied to experience in the financial services sector are required for this position.

If you or someone you know would be interested in finding out more about the role, please contact Alan Mellor on 0151 353 1066.

Record rises on FTSE 100

The last couple of weeks have seen the longest run of daily rises on the FTSE 100.

For 14 consecutive days, the FTSE climbed that little bit further, eventually peaking at 7,338 points.

In total, the FTSE achieved a new record level by the close of business each day from December 28th until Friday 13th January. It eventually dipped at the start of this week as the markets held their breath waiting for the Government’s long awaited statement on what Brexit will mean for the UK.

The previous longest run of consecutive rises was almost ten years ago when the FTSE 100 rose for eight days.
The FTSE 100 owed much of its winning streak this time to the recovery of the banking and mining stocks.

A poor performing sterling – down almost 20% against the dollar since last June’s EU referendum – has helped to make FTSE 100 stocks more attractive.

This is due to the majority of stocks being multinational firms earning money in dollars. These companies then benefit from converting that revenue into pounds.

By Wednesday of this week, the FTSE 100 had fallen slightly to just over 7,200 points, still an impressive position and something unlikely to change in the foreseeable future.

Final Salary Pension Latest

In our November newsletter, we revealed just how dramatically the value of some final salary pensions have risen since the Brexit vote last summer.

Pressures on some pension schemes had led to some making hugely inflated offers to people to swap future income for a cash lump sum.

We have seen cases where the transfer valuations have gone up by tens of thousands of pounds in just a handful of weeks.

For some individuals this has meant cash sums equivalent to more than 30 times the projected annual income on retirement being offered to final salary (otherwise known as Defined Benefit) pension schemes.

While we are still seeing examples of sky-high valuations, there is no question that the tide is beginning to turn with some valuations falling by as much as 10%.

The sharp rise in transfer valuations has been caused by the dramatic fall in AA-rated corporate bond yields which, in turn, track 15 to 20 year gilt yields.

While the increased valuations may look appealing, anyone considering leaving their final salary scheme should do so only after careful consideration with their financial advisor.

There are a number of issues that need to be taken into account, the first of which should be considering your wider asset base. For example, do you have sufficient secure income from other assets to meet your basic living costs in retirement? Is the lump sum going to meet your future income requirements? What are the tax implications of withdrawing from your final salary pension scheme? What will the financial effects be on any spouse and other dependants?

If you are considering investigating the possibility of cashing in your final salary pension early, we recommend that you speak with Alan Mellor as soon as possible. Alan can be contacted on 0151 353 1066.

Neston Fund appeals for projects

Our sister company, Phillip Bates & Co chartered accountants is one of the founders of the Neston and District Community Fund.

The Fund, which was launched in 2015, wants to hear from organisations tackling social issues such as youth crime, drug rehabilitation and elderly isolation.

It was set up to specifically support the work of community and voluntary groups in Neston, Little Neston, Parkgate, Burton, Ness, Willaston and Puddington.

Four businesses – Phillip Bates, Clive Watkin Partnership, Rightway and G Tilby Engineering – launched the fund with an initial substantial donation. They followed this up with a further donation in 2016.

A number of grants have so far been given, the most recent one to Healthbox CIC, a not-for-profit organisation committed to delivering lifestyle change programmes in the community.

The grant from the Fund will support the Neston Healthy Families project which works with families with multiple and complex needs. The six-month project supports families who have been identified by primary schools, Plus Dane Housing and Neston Children’s Centre.

Phil Bates, Principal at Phillip Bates & Co, says: “We are proud of the projects we have been able to support since we launched the Neston and District Community Fund almost two years ago, but we know there is so much more to do.

“We particularly want to hear from any group which is helping to tackle deep-seated social issues within our community.”

The fund is administered by Cheshire Community Foundation, which works to match charitable donors with the causes that matter most in Cheshire and Warrington.

If you would like to apply for a grant, please email or call Phil Bates on 0151 353 0003.

Inheritance Tax changes explained

We are working closely with a number of our clients ensuring they are able to make the most of important changes to inheritance tax rules announced in the 2015 Budget.

If you own a property worth up to £1million, you can leave it to your children or grandchildren completely free of inheritance tax as from April 2020.

The former Chancellor, George Osborne, raised the IHT threshold from £325,000 per person to £500,000. This enables married couples and civil partners to pass on property of up to £1million without paying any IHT.

IHT is currently levied at a rate of 40% on the value of an estate above the tax-free threshold, which has been frozen at £325,000 per person since 2009.

Under the changes, couples can double the allowance, passing on assets to their children or other relations worth up to £650,000 before a tax charge is triggered.

Alan Mellor says: “We are advising our clients on the implications of the changes which were announced in 2015, but I know from speaking to other people that many people are not fully up to speed with the new thresholds.

“It is important that people plan ahead to get the benefit of the changes which will be phased in over the next couple of years. This applies equally to those who have a property worth over £2million or assets of more than £650,000.”

Alan Mellor can be contacted on 0151 353 1066.

PM spells out Brexit vision

After months of uncertainty, Prime Minister Theresa May has finally laid out her vision of post-Brexit Britain.

In a 43-minute speech on Tuesday, Mrs May went into some detail about her 12 negotiating objectives.

The Government made it clear that this will be the Prime Minister’s only statement on the matter before the start of exit talks in March.

The 12 objectives include:

• Britain will no longer be a member of the EU Single Market
• Britain will not seek to be a full member of the Customs Union, which is separate to the Single Market
• Britain to “get control of the number of people coming to Britain from the EU”
• Britain to “take back control” of our laws – with laws made in Britain not the EU
• Britain to guarantee the rights of EU workers in Britain and wants similar protection for British nationals in EU member states
• Britain to continue working with the EU on crime and terrorism matters
• Free movement to continue between Northern Ireland and the Republic of Ireland
• To achieve a smooth transition from EU membership to life outside of the EU with a “phased process of implementation”
• Continuing protection of workers’ rights as set out in EU legislation
• Both Houses of Parliament to vote on any final deal between the UK and the EU “prior to it coming into force”
• The importance of the Brexit deal strengthening “the precious union between the four nations of the UK”.
• Continuing collaboration between British and European science community on “major science, research and technology initiatives”.

Alan Mellor says: “Britain has been waiting more than six months for the Prime Minister to spell out her vision for life after Brexit.

“The reaction from the markets and financial community to Mrs May’s speech was generally very positive. The pound has its best day on the currency markets for almost 20 years.

“Now the Government has the trickier task of delivering on its big objectives.”

Beware the scammers

One of the downsides to the ever advancing technology is the ease with which people can fall prey to so called scammers.

I heard recently about a fellow professional who was caught out in an unfortunate and, ultimately, expensive sting.

He was contacted by email by the scammer masquerading as a client asking him to transfer £20,000 into a bogus account. It was only when the scammer came back a second time by email asking for a further transfer to be made that he smelt a rat.

It turned out that the completely credible email, containing the correct names of husband and wife clients, was a total scam.

The IFA in question was left will no alternative but to repay the £20,000 to his clients.

Here at Phillip Bates & Co Financial Services, we have a long-standing policy of always contacting our clients if we receive an email or letter asking us to making bank transfers.

This is just one example of a scammer in action. There are plenty more too good to be true investment “opportunities” that we should all be on our guard against. Some of the usual suspects include Caribbean holiday homes, storage pods and carbon credits.