Eldon’s office will close at 2:00 pm on Tuesday 24th December, reopening on Thursday 2nd January 2025.
If you have any urgent questions over this period, please email them to enquiries@eldonfinancial.co.uk and we will make sure that you get a response.
We would like to wish everyone a very Merry Christmas and Happy New Year.
Thirteen may be an unlucky number for some but not for Eldon. For the 13th year in a row, we have made the 2024 New Model Adviser Top 100!
Citywire’s accolade marks the top 100 advice firms across the UK, recognising outstanding achievements and prominent leaders in the financial planning profession. We are proud to have featured every year since its inception, and would like to thank our team, as well as our clients, for getting us here!
On Wednesday 30th October 2024, Chancellor of the Exchequer Rachel Reeves unveiled her long-awaited Autumn Budget.
Here is a roundup of the main budget changes affecting personal finances:
State Pension
Income Tax Thresholds
National Insurance Contributions (NICs)
Capital Gains Tax (CGT)
Inheritance Tax (IHT)
Pensions and Taxation
Stamp Duty Land Tax (SDLT)
ISAs
Non-Domicile Changes
Other Announcements
If you would like to discuss any of the above elements further, please don’t hesitate to contact a member of the team.
On 30th October, Chancellor of the Exchequer Rachel Reeves will deliver the Autumn Statement, the first delivered by a Labour government in 14 years. There has been much speculation in the media as to what may or may not be included in that statement, given tax rises on ‘working people’ have been ruled out. This speculation can be unhelpful, as it can cause people to take action in an attempt to mitigate against potential changes, which may or may not come to fruition.
One example is the rumour that tax free cash lump sums from pensions could be reduced. Drawing tax free cash from a pension is an irreversible decision and could lead to individuals being worse off in the long run. Pensions still offer a very tax efficient environment for long term capital and pulling out tax free cash could see the capital left in a savings account, with less long-term growth. Alternatively, if funds are reinvested outside of a pension, future dividends, interest and growth would then be potentially subject to tax, which would not currently be the case within a pension. This is just one example, however.
Whilst legislative changes can alter some aspects of Financial Planning and some may wish to take steps sooner and prior to any potential changes, we cannot second guess what these changes may be. We can only ever work within the legislation that exists at present, planning effectively around this. If legislation does change, then as Financial Planners, we would look to make the best use of the new legislation within clients’ planning too.
A Financial Plan should be reviewed on a regular basis, taking account of changes to not only legislation, but also clients’ circumstances and changes in any short-term and long-term goals. In the same way trying to time investment markets and second guess them often proves futile, the same is true of legislative changes.
We cannot control the outcome of the statement or legislative changes, so worrying about things is not particularly helpful. Instead, focusing on the decisions and actions that can be taken following this, working towards planning goals and objectives (the things that we can control) to deliver the best outcomes, is the best use of time.
We are eagerly awaiting the Autumn Statement, not least as it will put an end to so much speculation. Our next news article will summarise any important changes for our clients.
In the meantime, as the old saying goes, keep calm and carry on!
One of our Chartered Financial Planners, Adam, has now completed his Coast-to-Coast walk, raising awareness for Williams Syndrome, a genetic condition that affects 1 in 10,000 individuals.
Despite facing inclement weather that included heavy rain and strong winds, Adam pressed on and completed over 120 miles during a six-day period.
Adam is grateful for all donations so far, which made the challenge worthwhile! For further information on the fundraising, please find below the link to Adam’s GoFundMe page:
https://www.gofundme.com/f/coast-to-coast-walk-for-williams-syndrome
In recent times we have seen a rise of ‘Finfluencers’ on social media, particularly with the younger generation, who are predominantly more active on social media. Finfluencers are social media influencers who offer advice and information on various financial topics.
Financial education/literacy is becoming more and more important in an increasingly complex financial world, however, a lack of financial education in the school curriculum means the younger generation is turning towards things such as social media for such knowledge. The danger in this, however, is that whilst some Finfluencers offer genuinely helpful tips, some are uninformed, and there are also cases of scammers posing as Finfluencers.
Finfluencers also don’t typically have any financial qualifications and are often not regulated to give financial advice. It can be hard to spot genuine, useful information from the scams, and the Financial Conduct Authority (FCA) is concerned that some ‘Finfluencers’ are not labelling content correctly or promoting products without understanding how they work, or the associated risks.
In July of this year, the FCA pressed ahead with charges against 9 individuals due to their involvement in the promotion of an unauthorised foreign exchange trading scheme on social media. 7 of these individuals were ‘Finfluencers’, and their court dates are set for the future.
That being said, there are some good, informative ‘Finfluencers’ who help people understand jargon, how certain financial products work, explain real-life case studies and give examples of these. This can help bridge the knowledge gap and increase financial education and literacy amongst younger people. However, personal finance is just that, personal to the individual, so it is important to research what is being said and consider how much of the content is relevant to your own circumstances and goals.
Interestingly, a recent survey also showed that 35% of Brits would consider using AI chatbot ChatGPT for financial advice in 2024, up from 27% in 2023. However, there has also been an increase in the number of Brits who would be against using it, up from 35% in 2023, to 43% in 2024.
Whilst it is good that people are thinking about and discussing Financial Planning, the use of AI and Finfluencers can ultimately mean that you do not receive all of the information required to make a fully informed decision that is appropriate for your own circumstances. At Eldon, we are advocates of goals-based personal planning, which focuses on achieving what you want in life, rather than just numbers on a screen. Financial planning is about making capital work towards real, tangible goals over time, and this is ever evolving, as goals and circumstances change and is never a ‘one and done’.
Following the end of a tax year, if you have paid either too little or too much income tax, HM Revenue and Customs (HMRC) will provide you with a P800 tax calculation to confirm your position.
Previously, if you were due a refund of overpaid tax, a cheque would be issued to you automatically within 21 days of the calculation being sent, if this hadn’t been claimed online. However, since 1st June 2024, cheque payments are no longer automatic. Instead, individuals will need to claim their tax refund online, by telephone, or via the HMRC app. If left unclaimed, the refund will not be received.
Typically, you have four years to claim a refund, after which the tax year becomes ‘closed’ to claims and it is not usually possible to receive the payment unless it can be proven that it arose due to ‘official error’ on HMRC’s part. For instance, if a refund is due for the 2020/21 tax year, you typically have until 5th April 2025 to claim this.
The current payment options for receiving a refund are:
At present, the timescales for receiving refunds are:
For more information on the refund process and how to claim, you can visit: https://www.gov.uk/tax-overpayments-and-underpayments/if-youre-due-a-refund
At Eldon, we regularly check our clients’ tax positions and documentation to ensure that everything is as expected. It is important that individuals keep on top of their affairs in this respect, particularly now that the onus of claiming tax overpayments has shifted towards the taxpayer.
If you would like to speak to a member of the team about any of the above, please don’t hesitate to get in touch.
This week, we would like to take the opportunity to highlight the 1407(Newton Aycliffe) Air Cadets, a group close to home who aim to ready the next generation for the world of work.
The Newton Aycliffe Squadron endeavours to promote leadership, teamwork and citizenship skills among young people aged 13 to 17, alongside a practical interest in aviation. Cadets undertake a diverse range of activities in doing so, which aren’t limited solely to flying. Other ventures include rock climbing, mountain biking, target shooting, and other sports.
Members also have the opportunity to work towards recognised awards and certificates, such as the Duke of Edinburgh’s Awards and BTECs in aviation and music, providing valuable life skills.
First aid training is another essential element to cadet training, vital for squadron activities but also useful day-to-day. Eldon recently supported the Squadron in purchasing an extensive range of first aid equipment, with the goal being to ensure that cadets are well-trained in delivering this if ever required.
We are impressed with the Squadron’s wide-reaching support and vision for young people, and are pleased that we could play a part in helping them to deliver a positive overall experience to those involved.
WizeUp Financial Education
Recently, paraplanner Natasha had the privilege of attending one of WizeUp’s impactful visits at Framwellgate School Durham. The sessions throughout the day catered to both Sixth Form students and Year 10 pupils, offering them invaluable insights into personal finance management.
The engaging workshop covered essential topics such as savings, budgeting, flat sharing, and understanding credit cards and credit ratings. These subjects are crucial in equipping young people with the knowledge they need to make informed financial decisions and build a secure financial future.
In addition to Framwellgate School, WizeUp has also recently visited schools in Newton Aycliffe, Hartlepool and South Tyneside with Eldon’s sponsorship, further extending their reach and impact.
WizeUp Financial Education is committed to fostering financial literacy among young people, empowering them with the skills and confidence needed to navigate the complex world of finance. By partnering with WizeUp, Eldon aims to support this mission and help create a financially literate future generation.
Careers Day
James and Beth also volunteered their time last week to attend a Careers Fair at St John’s School & Sixth Form College in Bishop Auckland. The event provided an excellent opportunity for students to explore career paths in financial planning and gain valuable insights into the financial industry. By participating in events like this, we hope to inspire the next generation of financial planning professionals.
Understandably, the topic on many people’s minds is elections. Given the UK General Election on the 4th of July, we have been getting asked more frequently how any result is likely to impact investment markets, and therefore an investment portfolio.
We know uncertainty leads to volatility in investment markets. Investment markets are forward-looking hence known information is reflected in stock prices rapidly.
So what is priced in at present? Well, bookmakers have a Labour majority at 1/20 odds and a Conservative majority at 150/1 odds. With odds like this in betting, you can see where the consensus is heading. Investment markets have priced in a likely Labour majority already. As with any election, some volatility in the run up to polling day and the days after is expected, with more if unexpected results come to pass. However, as we have always advocated at Eldon, looking through short term volatility at the longer term returns is more important to your Financial Plan.
Looking back at historical elections, it is hard to pick out any particular trend in what the stock market has done, however the most relevant appears to be 1997, when a comfortable Labour win was widely expected at the time. However in all instances, an election that had a likely majority tended to result in more favorable market performance.
| Year | FTSE 100 in 6 week run up | Outcome |
|---|---|---|
| 1987 | +9.70% | Thatcher win widely expected. British shares performed very well. |
| 1992 | -4.90% | All polls predicated a hung parliament. Nerves in the market led to a selloff. Conservatives won by a small majority. |
| 1997 | +4.39% | Polls showed Labour to win comfortably. Shares perfomed well with markets confident. Labour won by a landslide. |
| 2001 | +1.36% | Polls indicated a Labour win throughout the 18 months beforehand. Markets up. Labour retain. Dubbed a “quiet landslide”. |
| 2005 | -0.41% | Polling was much tighter than previous election. Markets stayed relatively flat. Labour retained a small majority. |
| 2010 | -8.15% | By April the race was too close to call. Markets retreated due to uncertainty. Hung parliament. |
| 2015 | -0.12% | Polls indicated it would be the closest election in history. Markets stayed flat. Conservative won a surprise outright majority. |
What often occurs through periods of volatility, particularly after significant daily drops, is that we see significant daily increases too. Ahead of time, it would be great to be able to pick and choose the days spent in the market, avoiding the downs, yet being invested for the ups. In reality, we know this just isn’t possible.
As ever, we come back to the adage that it’s “the time spent IN the markets, rather than trying to time the markets” that will reward investors in the long term. It’s important to remain disciplined through periods of volatility, should they occur over the remainder of this year, particularly with a US Election due in November too.
As part of this, investors need to ensure they are taking an appropriate level of investment risk in a well-diversified portfolio, resulting in a level of volatility they can tolerate from an emotional perspective (as well as financial) in the pursuit of returns over time.
So, although a General Election may cause some volatility (but also may not), there’s no reason to panic or make knee-jerk changes in light of this. Sticking to the long-term view is far more likely to benefit your Financial Plan.
