Monthly Archives: July 2020

Planning a move abroad?

Undertaking what is required takes a great deal of thoughtful consideration

You’ve always dreamed about living aboard, but how do you make that a reality? The first practical step is to think about where you are in your life and weigh which options are available to you. Factors like your age, financial situation and skill set will come into play as you consider where to explore long term. More open borders and the need to find work in the wake of the financial crash mean more people live outside the country they were born in than ever before.

Freeing up extra money

Home is where the heart and tax-free wealth is!

Preferring to remain in their own homes for as long as possible for many people is increasingly becoming an important part of how we view older age. There may be several reasons for this, to keep the family home, stay close to friends or remain in comfortable and familiar surroundings.

Family finances

Traditional spending and saving habits have been turned upside down

Household finances including spending and saving patterns have deteriorated drastically since the coronavirus (COVID-19) lockdown, despite unprecedented Government support. Traditional habits have been turned upside down, and household budgets that guided our incomings and outgoings before the pandemic are no longer valid.

Mind the knowledge gap

Some people still struggle to make informed retirement decisions

The decisions made at retirement are big ones and have long term consequences. Many spend years accumulating a large amount of money in pensions and other savings, but really don’t know what that might mean, how much income they can reasonably expect to receive and how best to take that income.

Protecting your retirement plans

Don’t let coronavirus derail your financial future

The COVID-19 pandemic has touched virtually every aspect of our lives, not least of which is how we save for retirement. And while the number one priority is keeping our families and ourselves safe and healthy, the next topic on most people’s worry list is the financial impact, especially if the situation doesn’t improve quickly.

Rise of the female breadwinner

Women now earn the most in one-in-four households

The proportion of female breadwinners is steadily rising but the trend could be knocked off course by coronavirus (COVID-19) crisis. Women out-earn male partners in almost a quarter of households, up from a fifth 16 years ago, according to new research[1].

Top 10 countries to retire abroad

Living in a place where the lifestyle and cost of living matches your financial situation

Are you ready to spend your golden years in comfort, style, and maybe even a bit of luxury? As a retiree, you’ll want to be able to live in a place where the lifestyle and cost of living matches your financial situation.

Retirement freedoms

Ensure your future income will allow you to enjoy the lifestyle you want

Preparing for retirement is like getting ready for a journey, it never goes quite as planned. But the better the plan, the better the outcome. When things go wrong, you want to have the flexibility to adapt to changing circumstances. You never know what retirement will be like until you get there.

Financial fallout from COVID-19

Impact on the nation’s wealth and financial security

 It is becoming uncomfortably clear that while not everyone has been physically affected by coronavirus (COVID-19), every single one of us will be impacted financially. During the pandemic, savings and investments have been volatile, as have wages and jobs. 

How sustainable is your portfolio?

Increased investor focus on environmental, social and governance considerations

Environmental, social, and governance (ESG) issues continue to be a priority for many investors. Your values define you. But do your investments reflect who you are?

Increasingly investors are urging companies to build ESG considerations into their long-term strategy, bringing it up during engagements and using shareholder proposals to force companies to take action. Investing sustainably means putting your money to work on issues ranging from adapting to and mitigating climate change, improving working conditions and diversity, to tackling inequality.

Policy of engagement 

Recent research has identified that nearly three quarters of women aged 40 and over would divest their pension from companies with poor pay practices, led by 74% of female ‘boomers’[1]. A majority of men of the same age group agree but younger women are split 50:50.

By contrast, many Millennials want to divest their pensions from the fossil fuels industry. Half (49%) of all age groups prefer a policy of engagement before divestment.

Governance practices

An overwhelming majority of older women would divest their pension from investments in companies with poor pay and governance practices. Women aged 40 and over are much more likely than men of the same age group to agree with such steps, with a slimmer 59% majority of men of the same age willing to do the same.

Within the older female age group, 74% of female ‘baby boomers’ and 73% of women belonging to ‘Generation X’ would invest less, or not at all, if they knew their pension was invested in companies that have attracted criticism for their governance and pay practices. However, younger women are split on the issue. Only half of millennial women would follow the same policy of cutting out these companies from their pensions.

Generational differences

Revealing clear and generational differences the findings highlight a strong contrast between the relative importance of ESG issues to older generations and the views of younger people, who are more focused on climate issues.

Millennials were more likely than any other generation to want to reduce their exposure to the fossil fuel industry, despite any potential consequences. Even if there was a resulting performance impact, 45% of Millennials would opt to divest their pension from fossil fuels. This compares to 30% of Generation X, while Baby Boomers (at just 23%) were half as likely as Millennials to divest from fossil fuels regardless of the investment outcome.

Investment returns

Including a further 41% of Millennials who would only divest from fossil fuels if it didn’t impact investment returns, a combined 86% of millennials would choose to divest their workplace pension from fossil fuels if it would have no negative impact on their pension.

But several of Britain’s top pension funds say they would have lost hundreds of millions of pounds had they sold out of oil and gas stocks in recent years, highlighting a potential cost to scheme members as funds face pressure to help fight global warming.

Workplace pensions

Reuters contacted 47 of Britain’s largest pension funds, with 33 saying they were not divesting from fossil fuels. Some highlighted the potential impact on returns, and their preference to engage with oil and gas companies as reasons.

Across all age groups nearly half of all adults (49%) would prefer a policy of engagement to encourage change, before divesting. It is also notable that only half of respondents were already aware of the types of investments within their workplace pensions, implying many more may not be aware of possible inconsistencies between these investments and their own beliefs.

Investments with social impact 

More and more, investors want to invest sustainably: they want to combine investing for a financial return with a positive contribution to the environment, society or both. Whether you’re just curious about what options are available to you, or if you’re strongly opposed or for certain investment options, please contact S4 Financial on 01276 34932 or email hello@s4financial.co.uk for further information.

Source data:

[1] Research from Legal & General Investment Management (LGIM) conducted by Watermelon Research (fieldwork): 22–29 October 2019 consisting of 1,000 interviews (online) with UK adults between the ages of 25 and 65, who have a workplace pension and work in the private sector.

INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS.  

ANY LEVELS AND BASES OF, AND RELIEFS FROM, TAXATION ARE SUBJECT TO CHANGE. 

THE VALUE OF INVESTMENTS MAY GO DOWN AS WELL AS UP, AND YOU MAY GET BACK LESS THAN YOU INVESTED.