Vaughan Wealth

Have you given any thought to what your financial goals will be for 2022? 🎯

If you need help achieving your goals, we could be able to help you!
Visit our website to view our services and get in contact with us.

www.vaughanwealth.co.uk

Inflation has been in the news a lot recently, but what causes it?

(A) The classic economic definition of the cause of inflation is that of ‘too much money chasing too few goods’.

In the UK, there is some £200 billion of household savings waiting to be spent on new cars, home improvements and more, which, coupled with shortages and bottlenecks from the rapid recovery, is likely to lead to an increase in prices.

Inflation currently stands at 5.1% (15th Dec 21), so if your money is sat in 'cash' then it will be decreasing in value against the rate of inflation.

But what can you do about it?
(A) If you don't need that money in the short term, then look for investments that have the potential to outpace inflation.

Some people have a habit of waiting until towards the end of the tax year (which is 5 April) to use up as much of their ISA allowance as they can. However, by paying in as much as you are able to early in the tax year, you give your money a far better chance of working as hard as possible for you.

Not only does this shield your investments from tax for a longer period of time, it also gives your money extra time to benefit from ‘compounding’. That’s when the money your ISA makes through growth and investment income is reinvested – and so that, too, has the chance to earn even more for you.

For example, if you had invested your full ISA or PEP (the predecessor of the ISA) annual allowance every year since they were introduced (in 1987) early in each tax year, it would have been worth £1,100,932 at the end of the 2020/21 tax year (assuming the investments had followed the performance of the FTSE All-Share Index).

However, if you’d waited until the end of each tax year to invest your full allowance, it would only have been worth £1,025,023. That’s a difference of £75,909, or almost 7% less than what it could have made.

The value of an ISA with St. James's Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than you invested.

Your 20s are a pivotal time for developing healthy financial habits.
It’s typically the first time you are living without parental support, and you face the reality that financial choices have a serious impact on your future. By developing good practices now, you get a good start on securing your finances in the coming decades.

As Christmas approaches, everybody wants their loved ones – and especially their children – to be happy on the big day.

Good food and time spent with the family are important ingredients for an enjoyable festive season, but when it comes to presents, why not think a bit more creatively than a pair of socks or an unwanted gift set?

Instead, you could consider giving a financial gift to your nearest and dearest. It’ll not only make you and the recipient feel good, but, if you take the right advice, it could also save you a lot of money in tax.

If you are thinking about how you can help your children or grandchildren for the future, as well as on the day itself, here are some ideas.

We have just launched our new website, which is full of exciting new features. 💻

To see what’s new, pay us a visit by going to:
www.vaughanwealth.co.uk

Anyone who has sadly lost someone that leaves behind an Estate knows how much work goes into the administration side of passing on those assets left behind.

Estate administration is the process of dealing with a person’s legal, financial and personal tax affairs after they have died.

Have a read of the document below to give yourself a better understanding of exactly what needs to be done.

And have a think about your own financial affairs - do you feel you have everything in 'order' ready for your beneficiaries?

Are you financially confident?

Financial confidence is not:

❌ Flashy cars
❌Fancy clothes
❌ Expensive restaurants

What financial confidence actually is:

✔️ Being in control of your finances
✔️ Not feeling stressed about how you will pay for things
✔️ Not having money hold you back from doing the things you want to do in life

Its financial education Friday! This week we cover the personal savings allowance.

Your personal savings allowance (PSA) is a tax-free allowance that lets you earn interest on your savings without paying tax on that interest. The allowance you get depends on what rate of income tax you pay:

Basic-rate (20%) taxpayers: can earn £1,000 in savings interest per year with no tax

Higher-rate (40%) taxpayers: can earn £500 in savings interest per year with no tax

Additional-rate (45%) taxpayers: £0 – they do not get an allowance.

Do you know these five numbers? 👀

If you are just starting out on your financial journey these numbers can help you set goals and figure out areas where you might need some improvement.

Set SMART financial goals.🎯

S – Specific
M – Measurable
A – Achievable
R – Realistic
T – Time bound

Here we are with another financial education Friday, this week it is about ‘Tax Wrappers’