National Minimum Wage Rates

Just a note to remind you that new rates for the National Minimum Wage (NMW) and National Living Wage (NLW) apply from the 1st April.

From the 1st April 2018, the following hourly rates will apply

  • NLW rate for workers aged 25 and over – £7.83
  • The main rate for workers ages 21-24 – £7.38
  • The 18 – 20 rate – £5.90
  • The 16 – 17 rate for workers above school leaving age but under 18
  • the apprentice rate* – £3.70

*for apprentices under 19, or 19 or over and in the 1st year of their apprenticeship

Remember there are no exemptions from paying the NMW on the grounds of the size of the business.

Young women worse off than their mothers and grandmothers

Today’s women risk being worse off than their partners, mothers or grandparents, despite improvements in gender equality, a report has suggested.

The Chartered Insurance Institute’s “Securing The Financial Futures of The Next Generation” Report describes today’s women as “profoundly more exposed to financial difficulty” than their male partners, mothers or grandmothers.

The report identified six key moments in life where women should be supported to combat the disproportionate financial risk borne by women.

Dubbed, Moments that Matter, these points in life include while growing up and studying, when becoming a mother or carer, when planning for retirement and when becoming ill and dying.

Women face an uphill struggle when it comes to saving, and are more likely to be constantly juggling life, career and kids leaving little room for managing their finances.

Inga Beale, chief executive of Lloyds of London and patron of Insuring Women’s Futures, said today’s women are simply unprepared for the risks that they face in life.

Ms Beale said; “Much has changed in the century since British women gained the vote, but there is significantly more to do to support women’s equal progression, improve women’s risk resilience and secure their financial independence.”

A task force comprising senior representatives from across the insurance and planning profession has been established to act on the issues raised in this report.

The report showed that women remain significantly dependent on their male partners, particularly in retirement, and risk poverty later in life.

It also revealed that divorce and separation is crippling many women’s long-term financial independence, and increasing amounts of cohabitation with lower legal rights compounds this issue.

Jane Portas, lead author of this report and partner at PWC, said many of the issues found in the report were deep rooted.

She said: “They will only get worse for the next generation unless we act now with fresh, innovative approaches and a change of mind-set.

“Improving outcomes for women requires collaboration between the insurance and financial planning profession, policymakers, employers and society.

“We need to find new ways of educating and engaging, consider policy approaches that can pave the way for alternative forms of access to risk and financial solutions, and to make financial planning and insurance more relevant and accessible to the many.”

Financial experts agreed that more needed to be done to increase women’s financial resilience.

One said: “There are various steps women can take to increasing their own personal financial strength.

“A large part of that is from equal pay and equal treatment, of which we are still on the cusp of this much needed change. In addition women simply need to take control; arrange insurance for ill health, save money, choose their partner wisely and base their financial decisions on their long term goals.”

Kate Smith, head of pensions at Aegon, said that focusing on the moments that matter in a woman’s life was a good way to improve female finance.

Ms Smith said: “From career choice and education to relationships, motherhood and health, we need to look at each of these factors and ask ourselves and the government, whether more could be done to prevent young women of today being worse off financially than their mothers and grandmothers.

“Women face an uphill struggle when it comes to saving, and are more likely to be constantly juggling life, career and kids leaving little room for managing their finances.

“But it is crucial that they actively engage with their financial plans and pension savings – burying heads in the sand is simply not an option. This shouldn’t be an issue which is looked at just by women.”

In today’s world, couples should discuss their finances together to make sure both partners are on track for individual financial security.

Ms Smith said the industry, the government and employers have an important role to play in this, be that through providing online tools, supporting people with their financial planning in the workplace or encouraging engagement with professional advisers.

 

 

Start early to plan for retirement.

We live in a time when the state pension age is increasing, the number of DB (Defined Benefit) Pension Schemes open to new members is decreasing, and more and more individuals will rely on DC (Defined Contribution) Pension Schemes in their retirement.

As a result of Auto Enrolment, it’s true to say the more people than ever are saving for their retirement. But the question is, will it be enough? For some, saving for retirement is at the bottom of their “to do” list.  Even if it’s on their agenda, they may not be in a position to save as much as they would like.

A question I am often asked is “How much do I need to contribute?” Of course, the answer to that is another question, “What sort of life style do you want in retirement?”  And the answer to that can range from “I don’t know” to “I don’t want to change my life style from what I have at present”.

Yes, we can make an educated guess, using assumed growth rates and assumed life styles. But that’s what the are – Assumed!

The best answer is generally, start early, ie in your teens or twenties and give yourself plenty of time to build up a substantial pension fund.  Apologies to those of you who have just missed those age groups.   But maybe you could encourage your children to start early.  Trouble is when you’re a teenager, you’re never going to get old, are you?

Remember, it’s not “the timing of the market”, it’s the “time in the market”.

Using Multi-Asset Funds in Client Portfolios

If the recent volatility in stockmarkets has demonstrated anything, it is that holding a diversified portfolio of investments rather than relying on any one asset class for returns is usually a wise approach.   So says the Investment Association.

It is no wonder the popularity of multi-asset funds is soaring, they say, with trade body, the Investment Association, reporting its Mixed Asset sectors have been taking in significant inflows.

We’ve been following this formula for many years now and we are pleased that our views are receiving the approval of the IA.

And one other thing to remember, particularly in times of volatility;  “It’s not the timing of the market, it’s the time in the market!