Thursday, 20 August 2015

Tips For A Cautious Investor

With interest rates offering little to get savers excited, now may be a good time to look at other options. 

If you are a first time investor, you may be feeling nervous about taking the plunge.  There are a range of low risk investments to help you take your first steps into investing.

Here are some tips to get you started.

You Will Need Some Cash (So Make It Work As Hard As It Can)
Having cash to hand acts as a buffer against life's ups and downs.  How much cash you need to keep depends on your situation.  Some people like to keep a 2-3 months’ salary. 

That being so, it is a good idea to make your cash savings work as hard as they can. 

From Autumn this year, ISAs (Individual Savings Accounts) will become more flexible.  You will be allowed to withdraw and replace money as you wish. 

The only condition is that the net contributions stay within the ISA limit for any given year. This means that all or part of your ISA allowance can essentially be used as a standard savings account.  It will have the benefit of allowing you to receive interest on your savings without paying tax.

Look At Government-Backed Schemes
Every now and again, governments introduce schemes to encourage saving and/or investing. 

At the moment, first-time buyers building a deposit for a house might like to look at the “Help To Buy ISA”.  This scheme is due to start in autumn this year.  In short, for every £200 saved, the government will add £50, up to a maximum of £3000. 

The government also recently ran a “Pensioner Bonds” scheme for over 65s.  This is currently closed, but given its huge popularity, it is entirely possible that it will open again. 

It is always worth keeping an eye open for government-backed schemes as they may offer special benefits.

Make Your Investments Match Your Needs
There is a huge range of investment products available. 

Instead of thinking in terms of “good” and “bad”, think in terms of “appropriate” or “inappropriate”.  In order to decide whether or not an investment is appropriate, you will need to start by considering your current situation. 

In particular, you will need to be realistic as to whether you should start investing right now. If you have high-interest debts, you may be better to spend any spare cash you have, on paying them down first. 

Once you are ready to start investing, you will need to think about your short-, medium- and long-term goals.  You will also need to be realistic about your attitude to risk. 

You may have heard the expression “the value of an investment can go down as well as up”.  This is true.  It is also true that some investments carry more risk than others.  Some people are happy to accept higher risk for the possibility of higher reward.  Other people prefer to take a safer line in their investment strategy. 

Of course it is perfectly possible to divide your investment funds between investments with different levels of risk.

Diversification And Dividends – The Two Pillars Of Investment
You have probably heard the saying “don't put all your eggs in one basket”.  This often holds true for investments.  Putting all your money into high-risk investments creates the risk of losing it all.

By contrast, putting it all into lower-risk investments means you can miss out on some great returns. 

By having a mixture of investments of different degrees of risk, you can have the best of both worlds. 

Also remember that investments can be for growth or income or a mixture of both.  Many listed companies pay dividends to shareholders.  These can be reinvested for more growth or used as income. 


For more information please do not hesitate to contact the team at Ward Williams Financial Services Ltd on 01932 830664 or by email on

Monday, 17 August 2015

Ten Financial Tips For New Graduates

With university fees of up to £9,000 a year and predictions that students might be paying back their loans in their 50s, financial planning after graduation has never been more important.

This blog article will explore the top ten most important financial considerations for new graduates and the spending, saving a borrowing pitfalls to avoid.

No New Debts
Leaving university with potentially a lifetime of debt in tuition fees means that new graduates need to be especially careful not to take on any new debt.

Taking out credit cards, hire purchase agreements on cars or buying any other big ticket items on instalments, can leave you over-burdened by debt and any disposable income you might have will be sucked up in repayments.

Leave Mortgages For Later
In the long run it always makes more financial sense to own a property than to rent it, but for new graduates, the costs involved are huge.

Stricter lending rules and spiralling house prices mean that for many graduates, home ownership is prohibitively expensive, but it also presents an obstacle to job mobility.

Recent graduates often need to be mobile to find new career opportunities and a property can tie them down.

Pay Off Your Debts
The longer you are in debt, the longer you will be working hard to pay interest, so your first post-graduation priority should be to get out of debt as quickly as possible.

In order to pay your debts most effectively, start with the highest interest debt first (typically this will be a credit card, store card or personal loan), and then pay off lower interest debts like student loans later.

Start Saving
At university when funds are often short and there are constant demands on your income, there is little scope for saving.

However, after graduation, it is one of the most important habits to get into. Having regular savings, even if you are putting away a small amount each month is essential; as your income rises, so does the temptation to spend it.

You will need to protect your savings from taxation and the best way to do this is with an ISA or NISA, which can be easily set up through your bank.

You might have previously wondered ‘what is an ISA?’ or ‘how does an ISA work?’. It is a savings account which has an annual tax free allowance of £15,240.

Avoid Credit Cards
As previously mentioned, debt is a way of draining the lifeblood from your finances and a credit card can often be the quickest way of building up a debt burden for the future.

The best time to own a credit card is when you can be sure that you will rarely need it.

Pay into a Pension
As with savings, pensions are an important part of your financial future that cannot be neglected. If you have asked yourself ‘What is a pension pot?’, it is time to become more financially educated about preparing for the future.

When you start your first job, investigate the workplace pension scheme, or, if you are self employed, it might be an idea to set up a private pension instead.

It is always worth asking the question, can I be getting more from my pension? Especially when you are reviewing your annual pension statement.

Continue Learning
One of the keys to boost your future earning potential is to carry on educating and ‘skilling’ yourself.

Budget Effectively
The suggestions in this blog involve a degree of discipline with your money and a requirement to budget effectively.

If you do not have a clearly structured financial plan then the chances of you being able to save prudently are slim.

Have a picture of your income and your expenses, work out what is left (and where you can cut back), and divide that between your savings and pension.

Emergency Fund
Life is full of surprises, not all of them pleasant, which is why it is important to have a contingency fund.

Most financial advisers recommend that you build your emergency reserves enough for three months of living costs or the equivalent of three months salary.

For most people, this can not be done overnight and requires a long term commitment to saving.
The advantage is that savers with cash reserves are less financially insecure if they become unemployed and do not have to take the first job on offer.

Invest if you can…
Creating a strong financial basis for the future often means investing spare cash prudently and watching these investments accumulate value. After ensuring your financial stability, you might be thinking ‘Where do I Invest for growth?’

If you have managed to pay off debt and accumulate some savings, adding to a portfolio of investments is one of the best ways of making your money work effectively for you (though the value of investments can go down as well as up).


For more information please do not hesitate to contact the team at Ward Williams Financial Services Ltd on 01932 830664 or by email on

Thursday, 13 August 2015

Have You Made Your Will Yet?

After a lifetime of saving and prudence, you may well have accumulated a great deal of personal financial wealth that will outlast you.

However, without a Will to state who will benefit from your wealth, much of the hard work you have put in over the years might be lost.

Dying without a Will (being intestate), can present your loved ones with all sorts of difficulties when it comes to dealing with your estate and it presents the tax man with an opportunity to extract wealth from your life savings.

This blog article is a quick guide to making a Will and ensuring that your legacy goes to your loved ones as you intend.

A Will To Fit Your Circumstances
Leaving your wealth behind might not be quite as straight forward as you think.

Depending on your circumstances, your age, health and life expectancy and the number and age of your dependents, you might find you have to word your Will specifically.

For example, if you have young children or grandchildren, you might want them to inherit your estate at a certain age, or you might stipulate that the money is used for something specific, such as university fees. 

It might be that you want to appoint certain Trustees or Guardians in your Will. This might be the solicitor who is drawing up the Will or another legally recognised individual who can administer and distribute your estate.

Giving To Charity
If you are leaving an estate to others, you can give part (or all, if you want) of this away to charity.
The amount that you leave to charity will be deducted from your estate before the government calculates the amount of Inheritance Tax that is due.

If you leave at least ten percent of your estate to charity, the overall Inheritance Tax rate that is levied will decrease (though not if you take the option of deducting contributions from your estate first, as listed above).

Dying Without A Will
You should probably consider updating your Will every five years or so.  As your life circumstances, and that of your dependents, changes, your instructions on how to deal with your estate will change as well.

If you do not have a Will and pass away unexpectedly, a relative will have to apply for probate, the legal right to administer your estate.

There are legal processes that also decide who is legally entitled to what if you do die without a Will.
Decisions made by the government might not match your own wishes, and they expose your estate to Inheritance Tax.

A Will that is written by an Inheritance expert can help avoid large portions of Inheritance Tax , simply by allocating money and property according to Inheritance Tax allowances. Anything left to your spouse or civil partner is Inheritance Tax exempt up to the value of £650,000 (if you both combine your allowances).

Having a Will drawn up might cost in the region of £200-£300, but in the long run, it is worth an immense amount more in terms of peace of mind and the knowledge that your life’s savings will go to good use.

Leaving wealth behind is a way in which we leave something of ourselves to future generations and it can be more complex than it appears to be.

For more information please do not hesitate to contact the team at Ward Williams Financial Services Ltd on 01932 830664 or by email on