Who wants to be a millionaire?

Getting there could be easier than you think – but you’ll need to start young

Parents could make their baby an adult millionaire by starting a pension pot when they are born. Children born this year could become millionaires by their 43rd birthday if their families contribute to a pension for the first 18 years of their lives[1].

The analysis found that parents or grandparents contributing £2,880 per year (£3,600 after tax relief)
until their children turn 18 years old could create a pot of £1,021,837 by 2061. The figure assumes a total contribution of £51,840, a growth rate of 8% per annum, and is net of product charges.

SUBSTANTIAL POT OF CASH
This assumed growth rate may seem high, but data from Moneyfacts, the comparison website, showed that average returns from pension funds were 10.5% in 2017 and have seen double-digit growth for six consecutive years.

While lower growth rates reduce the return, they would still leave children with a substantial pot of cash to help them retire. Average growth rates of 2% and 5% mean that, by the time the child reaches its 55th birthday (2073), they would have a pot of £171,086 and £668,592 respectively.

LOVED ONE’S PENSION
On an average 5% growth rate, the child would be a millionaire by the time they retire in 2083 (65 years old), with a pension pot of £1,089,067. By the same milestone, a growth rate of 8% would create a pension pot of £5,555,260.

Previous research found that very few people would consider contributing to a loved one’s pension – only 2% of over-55s said they would support a relative by putting money into a pension fund. By contrast, 68% said they would leave their family an estate when they pass away, compared with 34% who would help their family with ongoing gifts of any kind.

COMPOUNDING INTEREST
Despite its obvious advantages, contributing to a family member’s pension is one of the last thoughts to cross the majority of people’s minds.

Yet, provided growth rates remain at current levels, it could make a millionaire of a child born today by the time they hit middle age from a relatively modest £51,840 over 18 years. It’s the power of compounding interest in action.

One of the biggest obstacles to passing on wealth tends to be the parents or grandparents worrying that their younger family members will ‘waste’ the money on frivolous purchases.

But pension contributions guarantee that their children won’t be able to use the proceeds until they are of pensionable age.

TAX-EFFICIENT SAVINGS
If they don’t want to exert that amount of control, they can look at other ways too. Junior ISAs offer tax-efficient savings until a child is 18, albeit with no tax relief. However, if they want to be very specific about what their money pays for, discretionary trusts are another option, keeping it vague about who benefits and in what capacity.

For most parents, saving regularly is an integral part of securing their child’s financial future. Making regular contributions to a child’s pension may not seem like the obvious choice. However, given the flexible nature of pensions and the tax relief offered by the Government, they can provide a very simple way of securing children’s financial future in retirement.

MAKING THE MOST OF RETIREMENT SAVINGS

Saving for a child today is a wonderful gift for their future. There’s no time like the present to take steps towards making the most of retirement savings for your children. To discuss your options, please contact us.

Source data
[1] Figures taken from Brewin Dolphin’s ‘Mind the generation gap’ research, which included a detailed survey of 11,000 people.

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. TAX TREATMENT IS BASED ON INDIVIDUAL CIRCUMSTANCES AND MAY BE SUBJECT TO CHANGE IN THE FUTURE. ALTHOUGH ENDEAVOURS HAVE BEEN MADE TO PROVIDE ACCURATE AND TIMELY INFORMATION, WE CANNOT GUARANTEE THAT SUCH INFORMATION IS ACCURATE AS OF THE DATE IT IS RECEIVED OR THAT IT WILL CONTINUE TO BE ACCURATE IN THE FUTURE. NO INDIVIDUAL OR COMPANY SHOULD ACT UPON SUCH INFORMATION WITHOUT RECEIVING APPROPRIATE PROFESSIONAL ADVICE AFTER A THOROUGH REVIEW OF THEIR PARTICULAR SITUATION. WE CANNOT ACCEPT RESPONSIBILITY FOR ANY LOSS AS A RESULT OF ACTS OR OMISSIONS.

We are recruiting now!

Exciting times at Mulberry Wealth Management Ltd as we continue to grow the company!

We are looking to recruit two individuals to join our wonderful team:

  • Mortgage Administrator
  • Senior Administrator

If you are interested in either role please get in touch for our job specifications.

Please email: jackie@mulberrywealth.co.uk

 

Do you have protection if the worst should happen?

Nine in ten Britons are in danger of financial hardship – so what cover do you need?

Britons are woefully under-protected should serious illness strike, according to new research[1]. Despite more than a fifth (21%) of people admitting their household wouldn’t survive financially if they lost their income due to long-term illness, fewer than one in ten (9%) have a critical illness policy. People are, in fact, more likely to insure their mobile phones (12%) than to protect their own health.

Taking out life insurance also appears to be falling down the population’s priority list, with just 27% having a life policy, equivalent to 14 million people. Worryingly, this has dropped by 7 percentage points compared with 2017 – a year-on-year decrease of 3.6 million individuals.[2]

PRECARIOUS POSITION

This is an especially precarious position for the two fifths (42%) of UK households that are reliant on just one income, and it’s clear that many are in lack of a ‘Plan B’. Despite 43% of people saying they’d rely on their savings if they or their partner were ill and unable to work, a third (35%) admit their savings would last no more than three months if unable to work, and more than half (54%) say they’d last no longer than a year. Three in ten (30%) – or 15.5 million people[3] – say they aren’t saving anything at all.

One in five (19%) say they’d rely on state benefits if they or their partner were unable to work for six months, but at a time when welfare reform is resulting in significant changes to benefits such as child and working tax credits, income-based job seeker’s allowance, income support, housing benefits and bereavement benefits.

FAMILIES UNPREPARED

On top of this, some people are leaving themselves and their families unprepared for other aspects of illness or bereavement. One in five (20%) people aren’t sure who would take care of them if they fell ill, and nearly half (48%) don’t have the protection of a Will, power of attorney, guardianship or trust arrangement in place for their families.

When asked why they haven’t taken out life or critical illness insurance, almost a third (30%) of the UK’s primary breadwinners say they don’t see the need for cover, raising concerns over their financial resilience should the unexpected happen.

UK’S PROTECTION GAP

The research also reveals that a lack of trust and understanding could be contributing to the UK’s protection gap. On average, people think that just a third (34%) of individual protection claims are paid out by insurance providers each year, based on the misconception that insurers will do anything not to pay. In reality, however, virtually all protection insurance claims (97.8%) were paid in 2017[4]. In addition, almost four fifths (78%) of people are unaware that cover often comes with practical advice and emotional care, as well as financial support, without having to make a claim.
It’s a worrying truth that people are more likely to insure their mobile phones than their own health. On a societal level, we increasingly think in the short term, caring more about tangible things in our day-to-day lives. On a more fundamental level, we’re programmed not to think about the worst happening. Together, these are dangerous inclinations, as people aren’t thinking about insuring their health or life until it’s too late.

 

IMPROVING YOUR FAMILIES’ FINANCIAL SECURITY
Insurance can play an important role in improving your families’ financial security, to help them if you were to die prematurely or were unable to support them due to being unable to work. To discuss your situation or to arrange a meeting, please contact us.

 

Source data:
[1] 2017 ONS data shows there are 51,767,000
adults in the UK. 27% of people have a life insurance
policy in 2018, amounting to 13,977,090 people.
34% of people had life insurance in 2017, totalling
17,600,780 people.
[2] This amounts for a difference of 3,623,690.
[3] 2017 ONS data shows there are 51,767,000
adults in the UK. 30% of people say they aren’t saving
at all – amounting to 15,530,100 people.
[4] Association of British Insurers (ABI) and Group
Risk Development (GRiD), April 2018
All fgures, unless otherwise stated, are from Opinium
Research. The survey was conducted online between
5th and 12th April, 2018, with a sample of 5,022
nationally representative UK adults.

 

Beware of the Scammers

Beware of the scammers

Fraudsters employ increasingly advanced psychological tactics to persuade victims to invest

An estimated £1.2bn is lost to investment scams each year, with share sales, wine investments, land banking and carbon credits commonly used by fraudsters to target potential investors. A recent study by Citizen’s Advice found nine out of ten people would fail to spot common warning signs of a pension scam, such as unusually high investment returns, cold calling and offers of free financial advice.

It’s very important to remain vigilant when you are looking to access the money you have invested. Last year, victims of investment fraud lost on average £32,000 as fraudsters employed increasingly advanced psychological tactics to persuade victims to invest.

SO WHAT IS AN INVESTMENT SCAM?

Investment scams are a form of fraud where there is a high risk that you could lose some, or all, of your money. Often, the investment opportunities that scammers offer don’t really exist – or don’t have the rewards being promised. Scammers can appear professional and trustworthy, so even experienced investors may fall victim to these schemes.

HOW TO SPOT AN INVESTMENT SCAM

Scammers are always changing their tactics, so the following are some of the red flags that could help you to spot an investment scam:

Be vigilant – if a phone call or voicemail, email, or text message asks you to make a payment, log in to an online account or offers you a deal, be extremely cautious. Financial institutions, banks and online retailers never email you for passwords or any other sensitive information by requesting that you click on a link and visit a website. If you get a call from someone who claims to be from your bank, don’t give away any personal details.

Scammers often use very convincing tactics to get you to sign up. Beware of anyone trying to pressurise you into making a decision. Scammers will make an investment sound very appealing and will often suggest that it’s less risky than it is. Offers made by scammers often sound too good to be true. For example, you might be offered better interest rates or returns than you’ve seen elsewhere.

Scammers are persistent and will often try to form a relationship with you in an effort to build your trust. Beware of anyone who calls you repeatedly and/or anyone who tries to keep you on the phone for long periods of time. You might be told that you’re receiving a very special and/or limited offer. You might be told not to tell anyone about the offer you’ve been given. But talking with trusted friends and family about any investment offer you’ve been given could help you spot a scam.

Fraudsters are known to target previous victims of investment fraud, claiming that they can recover lost money. You might be asked to pay an upfront fee, but these companies will not get back your money. Some companies that run scams base themselves overseas in order to avoid regulatory requirements. Be cautious if a company that is based overseas contacts you with investment opportunities.

HOW TO PROTECT YOURSELF FROM INVESTMENT SCAMS

Get to know the red flags above that could suggest a scam. The Financial Conduct Authority ScamSmart website offers helpful support about what you can do to spot investment fraud.
More information about pension scams can be found at http://www.pension-scams.com – check out the leaflet there.

Make sure that the company or financial adviser you’re dealing with is authorised by the UK Regulator – the Financial Conduct Authority (FCA). You can check their Financial Services Register and get more information on unauthorised firms overseas. https://register.fca.org.uk/

The FCA also have a warning list that you can check to help stay ‘scam smart’ before you go ahead with any investment.

Other useful information to help protect you from scammers can also be found on The Pensions Regulator website. http://www.thepensionsregulator.gov.uk/

Remember the following:

  • Reject any cold calls that you receive, and please don’t give out any personal or financial information until you are sure you are dealing with a reputable company.
  • You can report fraud and cyber crime via ActionFraud, the UK’s national fraud and cyber crime reporting centre.
  • Keep up to date with the latest scams and fraud warnings with useful advice at Age UK.
  • Remember to trust your instincts. If you think the offer sounds too good to be true, it probably is!

Mulberry staff raised £603.90 for Kidney Wales

Mulberry staff decided to challenge themselves in 2018 and entered the Invcbl challenge which is a muddy 10k assault course.

A team of 9 took part on the day and we are pleased to say they all survived in the very wet and muddy conditions!

Mulberry raised an amazing £603.90 for Kidney Wales.

New Sign!

Taufa’ao Filise – ex Cardiff Blues player and now with Dragon Signs with Mulberry’s new sign!