How much money is enough to retire?

How much is enough to retire?

By Alan Mellor, Chartered Financial Planner and Managing Director of Phillip Bates & Co Financial Services

I often take on a number of new clients at the start of a new year.

The holiday season will have provided an opportunity to discuss both immediate and longer-term plans. This is particularly the case for those in their early to mid-50s who are starting to think about retirement.

When can I retire? How much do I need?

Of all the questions I am asked, these are two of the more popular ones. However, the answers depend on the individual and require careful consideration before any significant life decisions are made.

I know from experience over the last 25 years that people often leave it later than they should to plan for their retirement.

Traditionally, the advice has always been that you should try and save the equivalent of half your age. For example, if you are 50 then you should aim to put away around 25% of your salary.

This is extremely rudimentary and not something we work to at Phillip Bates. Instead, we work with clients to put in place a very personalised and long-term financial plan.

We will carry out cash flow modelling that takes into account someone’s larger and smaller outgoings. How much of the mortgage remains to be paid off? Are you paying private school fees? How much do you spend – and expect to continue spending – on foreign holidays?

Our job as chartered financial planners is to provide clients with the right advice. This isn’t necessarily always what they want to hear, but the recommendations that will give them the best chance of long-term financial security.

I recently met with someone in their early 50s who said he would love to retire by the age of 57. We looked at the numbers together and agreed that this would simply not be possible. By working up a financial plan together, taking into account current and projected future spending, we were able to see how retirement in his early 60s would be achievable by taking important steps such as increasing monthly pension contributions.

I have also recently met up with a long-term client, now in his mid-70s, who retired over 10 years ago following the sale of a company in which he was a director and shareholder.

He did quite well from the sale but not as well as he and his fellow directors had anticipated.

Part of the plan we put in place was based on his desire to be able to continue enjoying a holiday home abroad until his mid-70s after which he would look to sell in order to help fund the next stage of his retirement plan.

But, following a recent review, we agreed that there was actually no pressing need to sell the home because his overall financial plan had performed well and was extremely robust.

There are lots of different factors to take into account when putting together a long-term financial plan.

Some clients choose to leave their full-time employment and take on a part-time job to help cover the gap between 60 and 66. Others take advantage of today’s more flexible pensions which give scope to take more for a few years and less later. Some people will spend extremely carefully during their working years in order to speed up the point at which they can take early retirement.

Often people simply do not realise quite how much they are spending now, let alone what they will ideally need when they do finally reach retirement.

Planning is key and the sooner that process begins the better your prospects of being able to enjoy the retirement you envisage.

Typically, we start working with clients in their late 40s, early 50s, but there is no hard and fast rule. We have some clients – often sons and daughters of older clients – who come to us in the 30s, while others will come to us much later following advice from family and friends that they should start planning for the future.

We are proud to be one of only a handful of Chartered Partnerships in the North West – combining the knowledge and expertise of our chartered accountants and chartered financial planners.

In the Financial Services team alone, we now have three dedicated chartered financial planners – myself, Helen Brown and Margo Dorozik.

Please contact us if you would like to arrange a free initial consultation.

Pre-Brexit Budget promises steady growth

Chancellor Philip Hammond’s Budget this week is unlikely to be one that we will talk about in years to come.

As is often the case in modern politics, the vast majority of its contents had been heavily leaked in the run-up to Monday’s speech.

But, for investors and those with a focus on long-term financial planning, Budgets lacking big surprises are often the best.

As former US President Ronald Reagan and a number of other notable people are supposed to have said: “Don’t just do something, stand there.”

One of the biggest concerns prior to the Budget announcement was that the Chancellor might look to reduce the amount of cash savers can put in their pension. As things stand, the maximum is £40,000 per annum and there was talk in some quarters of this being reduced to £30,000 or even less.

Thankfully, the annual allowance remained untouched, principally because Mr Hammond had taken advantage of revised borrowing forecasts which helped to fund a £103billion giveaway.

It allowed the Chancellor to continue the theme of Prime Minister Theresa May’s party conference speech that austerity is finally coming to an end after a decade of belt-tightening.

There are a lot of misconceptions around the annual allowance. For many business owners, putting away money is extremely difficult for the majority of their working life, but in later years they try to catch up meaning that the current £40,000 annual allowance gives them the opportunity to ensure their longer term financial planning is on track.

Other announcements that will be welcomed by the majority of tax payers are the increase in the personal allowance to £12,500 and the raising of the higher rate tax threshold to £50,000.

The Chancellor also disclosed that the Office for Budget Responsibility (OBR) had increased its projections for GDP growth from 1.3% to 1.6%. This is by no means dramatic growth, but often a steadier upward curve is preferable in the long-term to more erratic growth.

Overall, my view is that Budget 2018 is a good Budget for the vast majority. The economy is continuing to move in the right direction. We have waited a long time for signs that the austerity of recent years is coming to an end, but, equally, any loosening of the purse strings needs to be sensible and with the longer view in mind.

There were, of course, very few mentions of the elephant in the room – Brexit. The Chancellor said he was “confident” a deal would be done, but also talked about not being “complacent”.

If his confidence turns out to be misplaced, we may be having the next Budget rather sooner than anyone would want.

  • Clients with any questions concerning this week’s Budget, can give me a call on 0151 353 1066 or email:


Alan Mellor discusses the Budget

How will Brexit affect you?

Alan Mellor

Having a long-term financial plan is vital in order to “weather inevitable storms” like Brexit, according to a leading chartered financial planner.
Alan Mellor, Managing Director of Cheshire-based Phillip Bates & Co Financial Services, says the question he gets asked more than any other at the moment is: How will Brexit affect me?
Alan said: “While there is every chance there will be an economic downturn at some stage over the coming months, the key to good financial planning is to ensure that you are not overly exposed.
“And, as with every significant moment in history, the financial position is far from straightforward. There are always winners and losers.
“For example, a fall in the value of the pound increases the opportunities for businesses which export. Similarly, non-UK investments will typically go up in value as the pound is worth less.
“On the flip side, the cost of goods and other items such as foreign holidays goes up.
“What we don’t know yet, which is causing continued uncertainty for private investors and business owners across the UK, is how the current Brexit negotiations will play out.”
Alan added: “The best case scenario is clearly as smooth a transition as possible. The worst case scenario would see Britain crash out of the European Union in an unplanned and disjointed way. Having said that, even a more chaotic departure from the EU may work out for the better in the longer term.
“When the UK took the shock decision to leave the EU, the pound and the markets went into freefall. It looked like seismic change was on the horizon. The reality over the ensuing 12 to 18 months was somewhat different as investors were on the receiving end of some of the best returns since the 1980s.
“I met a client the other day who first became a client a few months prior to the 2008 crash. When the crash hit and values started to tumble, I was a little nervous. Surprisingly, the client was a lot more relaxed and told me everything would be alright because we had put a long term financial plan in place. When we met up again the other day, he reminded me of our conversation of 10 years ago and, as it turned out, he was right!”
Phillip Bates & Co Financial Services is one of only a handful of Chartered Partnerships in the North West – combining the knowledge and expertise of our chartered accountants and chartered financial planners.
Alan added: “For us, it is less about the money and more about ensuring that our clients have a considered, long-term plan in place that is fit for purpose and capable of weathering the inevitable storms that will come along during the lifetime of the plan.
“It is only through long-term planning that clients can have the best possible opportunity to be in control of their destiny rather than finding themselves dictated to by events outside of their control.
“The political and economic consequences of landmark events like Brexit focus the mind on the importance of having a broad and diversified portfolio of investments.”

When is the right time for business owners to retire?


By Alan Mellor, Chartered Financial Planner and Managing Director of Phillip Bates & Co Financial Services

A good proportion of the clients we look after at Phillip Bates & Co Financial Services are business owners.

This presents added complexities when trying to work out when the best time is to retire or, at the very least, step back from the day-to-day frontline.

Business owners are naturally extremely protective of the business they have built up, often over many decades.

Taking the decision to let go of the reins can often be daunting.

There are, of course, examples when a business owner has meticulously planned his departure with the final years running the company centring on his or her exit strategy. Sometimes, ill health can accelerate the need to put in place an exit plan.

At Phillip Bates & Co, we are all about long-term planning to give business owners the best possible opportunity to be in control of their destiny rather than finding themselves dictated to by events outside of their control.

Often, business owners I talk to think that their only option is to sell their company outright.

But the reality is very different. In recent months, working closely with our sister business, Phillip Bates & Co Chartered Accountants, we have helped business owners take a different route to creating more time for themselves and their loved ones.

In one case, we assisted the owner in exiting his business via an employee share ownership buyout. It is an altruistic way to pass a business on to the very people who have helped you to grow it over the years. In this instance, it cost the ‘buying’ employees nothing, with the retiring owner being paid an agreed sum based on future profits.

In other cases, the business owner often sees his exit as all or nothing when, in fact, one client of ours recently successfully reorganised his company so that other members of his management team took on more responsibility, allowing him to reduce his working week to just a couple of days.

There are a number of other ways in which business owners can move towards retirement. Some will pass the business on to their children or other family members. Some may consider a merger with another, complementary business. And, of course, many are sold as a going concern.

Whatever the route you choose to go down, a lot of emotion will be wrapped up in the decision-making process. To most people, their business is more valuable to themselves than it is to anyone else as it contains emotional value.

Planning is key. Addressing the question of “how much is enough?” should ideally begin a number of years before the decision is taken to start to exit a business.

We are proud to be one of only a handful of Chartered Partnerships in the North West – combining the knowledge and expertise of our chartered accountants and chartered financial planners.

In the Financial Services team alone, we now have three dedicated chartered financial planners – myself, Helen Brown and Margo Dorozik.

If you are a business owner considering options for retirement either now or in the future, please do consider making contact to arrange a free initial consultation.

Have you claimed your Power of Attorney refund?

A leading Chartered Financial Planners is encouraging anyone who has completed a Lasting Power of Attorney in the last six years to check if they are entitled to a refund.

Cheshire-based Phillip Bates & Co Chartered Financial Planners is highlighting the potential £54 refund, which will be paid out to those who have registered for a Lasting Power of Attorney in the period between April 1st 2013 and March 31st 2017.
The news comes as the Government launches a new scheme, meaning that people can apply for a partial refund as they were charged more than was necessary.
A Lasting Power of Attorney is a legal document that allows you to nominate a trusted friend or family member to look after your affairs if you were to ever lose your mental capacity.
When you register for a Power of Attorney you are charged an application fee to cover operating costs. The fee is set by the Ministry of Justice and paid to the Office of the Public Guardian.
However, the operating costs of the Office of the Public Guardian decreased between 2013 and 2017 and the application fee stayed the same. As a result, the Government is now repaying applicants the difference between what they did pay and should have paid, plus interest.
Alan Mellor, Managing Director of Phillip Bates & Co Chartered Financial Planners, said: “The Ministry of Justice estimates that as many as 1.7 million applications could be affected. It’s not clear exactly how many people are owed a refund, as some will have registered more than one Power of Attorney, but it’s likely to be a million or more.
“If this was you, we are encouraging you to act now to ensure that you claim back the money that you are owed.”
To claim a Power of Attorney refund, click here [].

We are one of the few firms to have Chartered Financial Planner status

Cheshire-based Chartered Financial Planners Phillip Bates & Co Financial Services now has three Chartered Financial Planners in its team.

The company is one of only a handful of firms in the region to have Chartered Financial Planner status.

Helen Brown, Senior Financial Planner and Margo Dorozik, Client Service Manager, join Managing Director Alan Mellor in becoming Chartered after passing their exams with flying colours.

Alan Mellor said: “As a firm we are immensely proud of our Chartered status and it is something that Margo and Helen have worked extremely hard for. They thoroughly deserve all that they have achieved.

“Helen and Margo’s qualifying is further recognition of our commitment to delivering high quality financial planning services to our clients.”

The company also welcomes two new starters – Nicky Wilson has joined the firm as Client Service Manager and Joanne McGarry as Administrator.

Alan added: “We are delighted to welcome Nicky and Joanne to the team.

“Nicky has lots of experience in the IFA market and wider experience in planning for small businesses. In her role, Nicky will be managing the client investment experience and providing clients with effective information in a timely and understandable format.

“Joanne has a decade of experience at IFAs on the Wirral and will be a key cog in the administration of our clients’ affairs, ensuring that we carry out their financial plans effectively.”

Phillips Bates & Co Financial Services works with clients across Cheshire, Wirral, Merseyside and elsewhere from its offices in Neston.

Anne Merriman Foundation for Hospice Africa celebrating 25th anniversary

Congratulations to our client Anne Merriman whose incredible foundation has helped over 30,000 people in Africa.

Hospice Africa Uganda – Uganda’s very first hospice – was set up in Liverpool by Dr Anne Merriman with the help of her friend in 1992, and is this year celebrating its 25th anniversary. Anne, then aged 58, founded the charity with the vision of “palliative care for all in need in Africa”.

The way in which Anne felt she would reach this vision was through creating a model from which African palliative care could be adapted to different countries, cultures and economies. Uganda was chosen and Hospice Africa Uganda (HAU) began with minimum funding in 1993.

The hospice has since supported 32,000 patients and families, and at this present moment supports more than 1,500 patients. It has also trained more than 10,000 people from all over Africa. In 1993, HAU was only the fourth country of the 54 African countries to have palliative care.

Anne had witnessed terrible suffering in Nigeria, where she had spent 10 years as a young doctor. While working as Medical Director of Nairobi Hospice, she was able to bring relief from severe pain with her formula for affordable oral morphine (which could be given at home), bringing patients and families to peace. Holistic care could then be given to them to address their social, cultural, economic and spiritual needs.

Anne was aware that the suffering was being experienced throughout the poorer countries of Africa and in most countries 90% of cancer patients were now dying at home and in pain, as a result of late diagnosis, most without pain control or treatment.

Cancer is one of the major killers in Uganda, with an estimated prevalence of 0.3% of the 39M population. 117,999 are suffering as we write. Yet palliative care is available in 90% of the Districts due to the efforts of HAU and its partners.

The average life expectancy in Uganda is just 54 years, but was only 38 when Dr Anne entered Uganda in 1993. AIDS was prevalent and millions of young parents were dying leaving young children without care and sometimes also with HIV.

Anne, now a 2014 Nobel Peace Prize nominee for her work in Africa, recognised this need and, together with her team in Liverpool and Uganda, was determined to do something about it.

Uganda was only the fourth country to receive palliative care at that time but now 37 countries are having some form of care, but only 22 have the affordable medication to control the severe pain of cancer. Uganda was found to have an integrated palliative care service close to the developed world in 2014 and in 2015 was recognised as the second best place to die in Africa.

Since leaving Singapore in 1990, Merriman has remained a client of Phillip Bates & Co Financial Services.

“The support I have received from Bates & Co has been invaluable,” she said.

“I have had and continue to have ambitious plans for Hospice Africa, and a key factor in me being able to achieve these goals has been the support I’ve received from Alan Mellor and his first-class team.”

The work of Anne and her team relies on donors to continue its vital work. Patients are asked to pay £2 per week but less than 30% can afford this. It costs £1million every year to care for patients and to train all involved in Uganda and from all over Africa up to a Bachelor’s degree for future leaders in PC. These degrees are through HAU’s Institute of Hospice and Palliative care in Africa, which grew from the education programme commenced in 1993. The degrees are distance learning except for an initial 4 weeks in Uganda.

“It has given me peace of mind, knowing that Bates can manage my finances in a way that allows me to focus on my work in Uganda,” Merriman said.

“Having them look after my finances in the excellent way they do gives me the confidence to continue in Uganda as long as the suffering need me. Thus I can continue to work as a volunteer in Uganda, 23 years on.”

To find out more about Hospice Uganda, visit:

Please donate through the website of Hospice Africa UK:

A photograph of a close up of a woman with a phone to her ear for our scam calls article

What to do if you receive a scam call about your finances

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

Scam calls can strike at any time and in any industry but can be particularly dangerous when dealing with financial matters.

By engaging in conversation with a scammer for even just a few minutes you could be on your way to losing thousands of pounds.

Alan Mellor, Managing Director at Phillip Bates & Co Financial Services said: “If you are unfortunate enough to be on the receiving end of a call from someone who is looking to discuss your personal financial matters, we’d first and foremost advise you not to engage in any further conversation with them. Put a stop to it there and then.

“By speaking further with them, you are inviting them to find out more and more about you and thus increasing your vulnerability.

“Financial advisers are, by law, unable to cold call you regarding financial matters by phone, so this should be a warning sign straight away.”

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

If you are concerned, please contact Alan Mellor on 0151 353 1066.

A photograph of a man writing on a piece of paper for our chartered status article

Congratulations Helen & Margo!

Helen Brown, Senior Financial Adviser at Phillip Bates & Co Financial Services and Margo Dorozik, Client Service Manager have both passed important exams in recent months, taking them one step closer to Chartered status.

The two, who took the exam just before Christmas, are now gearing up for their final exam, which they will take shortly.

Phillip Bates & Co Financial Services is one of only a small number of Chartered Partnerships in the region.

The firm is proud of its status, which reflects its belief of meeting the standards and quality of what they do.