Wealth is something a lot of people aspire to have these days. Whether that’s through hard work and building it up themselves, or inheriting it from their parents, the paths may vary, but the goal stays the same – build the wealth, and then keep it.

But if you’re inheriting wealth from your family, that second part can be tricky. In fact, studies by the Williams Group Wealth Consultancy have found that 70% of wealthy families lose their wealth entirely by the second generation (the first to inherit it), and 90% of them lose it all by the third.

Digging deeper into the problem, they found that 78% of those wealthy families felt that the next generation were not responsible enough to handle inheritance, and 64% admitted to disclosing little to nothing about their wealth to their children. When asked why they had not talked about it, respondents listed a number of reasons, from being taught not to talk about money at home to worrying that their children will become lazy and entitled, or that the information would leak out and make them vulnerable. And to an extent – they are right. On average, it takes the recipient of an inheritance cheque 19 days to by a new car.

But don’t worry, it’s not all doom and gloom. It is possible to hold on to your hard-earned wealth and make sure it survives for generations to come. It just means you need to be willing to plan now.

Talk Early, And Talk Often

Believe us when we say this – we understand why you might not want to talk about your wealth with your family. There are a lot of reasons you might not think that is a good idea, from fractured family dynamics to teaching your children the value of money and a good work ethic. And when your children are young, this make complete sense.

But when your children are grown up and functional adults in their own right, these reasons might not make much sense anymore. At that stage, being unaware of your wealth does nothing but foster ignorance and make them unprepared for the reality of handling it. So, what we suggest is this talking to your family early, and often, about your wealth. Not just about how much money you have and where, but how you built it, how you want them to use it, and how to handle wealth in general.

And it’s not just children – we see far too many people who haven’t had these conversations with their spouses either. Give your whole family a crash course in financial literacy and help them extend that wealth even further. If you’re not sure how to do that, ask your financial adviser, and they will be able to help you.

Make And Discuss Your Will

Firstly – get yourself a clear, iron-clad will made up by an expert. And second – tell your children about what’s in it.

Many parents decide not to disclose what’s in their will, where everything will go and what they want to be done with their estate. They might do this because they feel uncomfortable, or they don’t want to cause arguments. But transparency is key in ensuring your wealth is preserved.

Siblings will always find out who got what, and by talking through your will with your family, you get the chance to hash out any issues beforehand. It’s better to get this done now, rather than leave it to when you’re not around to explain or make adjustments. Then, it may dissolve into all-out legal war.

Create A Financial Roadmap

Did you know that almost a quarter of baby boomers think that their kids won’t be able to handle wealth properly until the age of 40? And that almost half of wealthy people over 70 agree with them?

Whether you agree with that statement or not, it’s unlikely any child will be happy if you withhold their inheritance until they turn 40, and past the age of 18 age doesn’t factor in much when it comes to passing on an inheritance.

So rather than worry about how they will handle your wealth, do something practical. Provide your family with a financial road map that covers everything from what you want that wealth to achieve, how you want it to be given back to the community and how you want them to grow the wealth further. This way you can provide guidance and ensure your wishes are being followed, and your wealth can endure a bit longer.

Invest In Proper Inheritance And Estate Planning

This is perhaps one of the most important steps, because without good inheritance tax and estate planning, you could end up paying a small fortune to the tax man. Working with inheritance tax and estate planners will help you find ways of preserving your wealth and keeping it in the family (legally of course), and help you work out exactly what goes to who and when.

Minimising the inheritance tax bill is one of the things that separates out the wealth that lasts past generation 2, and the wealth that’s all but spent within a year.

At Chilvester Financial, we have specialists in both inheritance tax planning and estate planning, as well as planning for long term care, pensions and other later-life issues. By embracing these issues now, you can make sure the inheritance you leave goes exactly where you want it to, and not straight into the pockets of the tax man. If you would like to know more about any of our later life services, just get in touch with the team today.

Equity release, also sometimes called a Lifetime Mortgage, can be a fantastic way to release some capital as you get older, helping you live more of the life you want. But it’s also quite complicated, and it can cause some confusion if you’ve never been through the process before or are just looking into it for the first time. There are a lot of questions you probably want to ask, but might be worried about voicing to a professional, or even to friends and family. First – don’t worry! There is no such thing as a stupid question, and we are here to make sure you understand the process of equity release and what it means before you go through with the paperwork. To try and set your mind at ease, we’ve pulled together a few of our most commonly asked questions about equity release and answered them for you here. So, let’s jump in!

Will I Still Own My House?

If you have taken out a Lifetime Mortgage, then you will remain the owner of your home. The deeds to the property will remain in your name, and you have the right to live there as long as you live.

Could I Lose My Home?

Going down the equity release route is a big decision and making sure you can release the money safely from your property is incredibly important. If you have taken out an equity release plan from a reputable and approved provider, then your plan should allow you to remain in your property until you or your partner pass away or move into long-term care. This means you’re not as risk of losing your home, and this is usually guaranteed in a written offer that is signed by yourself and the lender.

Is There Any Regulation Around Equity Release?

Yes. All equity release advice and plans are fully regulated by the Financial Conduct Authority (FCA), specifically to make sure customers who take out an equity release plan are properly protected from start to finish. There are also organisations like the Equity Release Council, who monitor suppliers of equity release plans and give them approved status if they are deemed safe.

Who Are the Equity Release Council?

The Equity Release Council is an organisation that promotes safe equity release plans. Choosing an equity release plan that has been approved by the Equity Release Council is a good way to put your mind at rest, as it guarantees:

• Your right to stay in your home as long as you choose.
• The freedom to move to another property without financial penalty (subject to criteria).
• A ‘no negative equity’ guarantee, so you never owe more than the value of your home.

Can I Still Leave An Inheritance?

Yes, but it might not be as much as you would like. All equity release plans may reduce the amount you leave as an inheritance in some way – but there are plans that allow you to guarantee inheritance to your loved ones when your plan comes to an end. You would usually choose an amount to ringfence for inheritance purposes. If this is an important factor for you, make sure you to talk to your financial adviser about your best option.

Can I End The Plan Early?

Technically, an equity release plan is designed to last for the rest of your life. But there are still ways you can repay the plan early if you want. For example, if you have taken out a Lifetime Mortgage and want to repay earlier than planned, you will have to pay off the full amount, plus any interest accumulated, plus a potential early repayment fee. It’s worth asking about early repayment with your adviser or provider before you take out the plan.

Can I Take Out An Equity Release Plan If I Have An Outstanding Mortgage?

Yes, absolutely. Equity release providers often allow you to release cash from your home even if you have an outstanding mortgage on it – but they will usually expect you to use that cash to pay off the outstanding mortgage before it’s spent on anything else.

What Happens If I Move Into Long Term Care?

Not everyone will end up moving into long term care, but it can happen to any of us. If you move out of your home and into a care home, your equity release plan will come to an end. This means that your property will be sold, and your debt will be repaid in full to your provider. However, if you’re part of a couple and only one of you moves into care, your partner can remain in the home until they pass away or move into long term care as well. Equally, if you stay in your home and receive at-home care, then you will be able to stay in your home until you pass away.

If you’re looking to release the capital in your property, then equity release is probably a good option. It’s now become one of the most popular methods used by homeowners and has proved its worth time and time again. Just make sure you choose the right provider and you can enjoy a comfortable retirement with more money in the bank. At Chilvester Financial, we pride ourselves on helping our clients find the right routes to financial security, whether that’s by planning for the future or using their existing assets in a more efficient way. If you would like to know more about equity release and how it might work for you, just get in touch with us today.

If you’re an employer, then you’re probably already well aware that you need to be enrolling your staff in a workplace pension scheme. No matter what the size of your business, whether you have 1 employee or 100, you still need to have a pension scheme in place and have your staff enrolled – unless they have specifically stated they do not want to be. While the dates to get this in place were rolled out gradually, this rule has been in place since October 2012. Which is why it amazes us that some businesses still don’t have a system in place, or a way to manage the auto-enrolment process for their employees. If that sounds familiar, then read on for a few tips.

Do Some Research On Pension Schemes

The first thing you need to do is some research. Auto-enrolment itself is pretty straightforward, but there is no set pension scheme you have to enrol in. That choice is completely up to you – and there are a lot of options out there! So find out about as many as you can, and make a list of what works well about them, and what doesn’t. You should also talk to your financial adviser, as they will be able to point you in the direction of specific schemes that will work well for your individual situation and needs. It’s important not to rush this stage, as you want to make sure you’re choosing the right scheme for your business and your employees.

Talk to Your Money People

We say ‘money people’ because depending on the type of business you run and your size, there are a number of suppliers who can help you out. If you use an external company for payroll, they need to know the details of your auto-enrolment scheme so that they can deduct the right amount from payslips and make the right payments each month. If you use an accountant, they will also need to know so that they can factor it in when preparing your accounts or giving you advice. And if you use a financial adviser, they can help you decide which pension scheme is right for you and give you some pointers on how to set it up and manage it.

Work Out Your Contributions

With auto-enrolment, both employer and employee are required to make regular contributions. But the amount you contribute, and expect your employees to contribute, is a bit more flexible. The total amount the employer and employee must contribute is dependent on the individual scheme’s rules, but there are still some minimum contributions that have to be made for auto-enrolment. These minimum contributions have been slowly increasing, and in April of this year, the rules reached their ideal level – with no indication that they will go higher. Now, the employer must contribute a minimum of 3% of the employee’s earnings, while the employee has to contribute 5%. But it’s worth remembering that this is a baseline – and you as an employer can contribute more than this, if you wish. This could be used to create a more attractive employment package and can be advertised as a benefit for workers. So work out what you want to contribute, and let the relevant people know.

Include Pension Info in Your Onboarding

Once you have chosen and set up your pension scheme, you need to do the auto-enrolment part. The law states that all employees should receive information about and be enrolled in the company pension within two months of starting work at your business, unless they expressly tell you (in writing) that they do not wish to be enrolled. Some businesses choose to tell employees about their pension after some time has passed – usually around 1 month – so that they can be sure the new employee will stay before they deal with all the paperwork. While there is some sense to that (especially if it is a high-turnover position), we are firm believers in sooner rather than later. A great way to communicate all the information about your pension scheme is to include it in your onboarding pack for new employees. This means you have met your legal obligations, and your employees have time to think it over and come to a decision that is right for them, without feeling rushed. It also means the paperwork can be processed along with all the other onboarding documents, so it’s much less likely to be forgotten about once everything is settled.

If you’re not sure how to go about managing the auto-enrolment process or want some advice on which pension scheme would be right for you, it’s always worth talking to a professional. At Chilvester Financial, we are happy to help all business owners understand their obligations under auto-enrolment, and help you find the right pension scheme for your business. To find out more, please get in touch with us today.

In this country we are lucky enough to have the NHS – which means most UK residents have access to free healthcare. This is a truly amazing system, and even though it’s under a lot of strain at the moment, it’s still one of the best things about living in the UK today. But for some UK residents, the NHS isn’t doing everything it can. Whether that’s because there is a lack of NHS specialists, equipment or facilities in their area – there is an argument for augmenting the wonderful services the NHS brings us with a more private healthcare element. So today we wanted to look at some of the pros and cons of private medical insurance in this country, and help you decide if taking out private medical insurance is the right choice for you.

The Pros of Private Medical Insurance

One of the main advantages to investing in private medical insurance is the fact that you will have access to instant, on-demand care. Relying on the NHS could mean you are waiting a very long time for treatment, especially if you are suffering from a rarer illness that requires specialist expertise. With private medical insurance, you can effectively ‘jump the queue’, and find specialists much more quickly.

With private medical insurance, you will also have access to a much wider range of resources. Private hospitals and departments can provide a large selection of treatments, ranging from the most basic procedures to the most specialised support. It also gives you quicker and easier access to ongoing treatments and recovery options, like physiotherapy which may have long waiting lists or simply not be available on the NHS in your area.

Finally, private medical insurance gives you a far greater choice in your medical treatments. From which facility you go to, to which doctor you use and even which private room you stay in. If you need surgery, you can take your pick of surgeons, hospitals and places to stay, which is likely to make your healthcare experience more pleasant and less stressful.

The Cons of Private Medical Insurance

Of course, as with anything in life, there are some drawbacks to taking out private medical insurance. The main downside is probably the more obvious one – all of those pros come at a price. Private medical insurance isn’t generally cheap, and the amount of Premium you pay will be based on a number of factors, including:

• Your provider
• Your health at the point of purchase
• Previous diagnosis
• If you are insuring family members as well

According to the Money Advice Service, a typical family premium covering two adults in their 40’s and two children under 10 can vary from £700 to £1,800 per year, and can increase every year, or if you make a claim.

It’s also important to know that private medical insurance doesn’t actually cover every single medical condition out there. So there may be times that you think you will be insured, but find you aren’t. For example, most private cover doesn’t include chronic conditions like heart disease, diabetes, high blood pressure and even some incurable forms of cancer. This might mean that you find yourself using the free NHS services, even though you have paid for private medical insurance.

Is Private Medical Insurance Right for You?

The truth is, only you can answer that question. If you are in good health, with no pre-existing conditions, and want to make sure you can stay that way, sacrificing a little of your disposable income on private medical insurance can seem like a no brainer. But if you suffer from a chronic condition that isn’t covered, or you have had health issues before, it may be harder to get coverage – even though it may be worth it in the end! Ultimately, the decision on whether it makes sense to take out private medical insurance depends on your needs as an individual, and as a family.

If you’re not sure if private medical insurance is right for you, then the first thing we suggest is that you talk to an expert. At Chilvester Financial, we can give impartial advice based on your current situation, your needs and your plans for the future, and help you decide if private medical insurance is right for you. And if you do decide to go for it, then we can also help create a tailored plan that meets your needs and fits your budget. If you would like to find out more, just get in touch with us today.