When we meet with new clients, one of the first things we do is ask them about their goals, and what they want to achieve with their life and their finances.

This is so that we can create a tailored plan to help them actually get there, rather than opting for an ‘out of the box’ solution that might not deliver the results they want. But one of the aims we see come up time and time again is saving up a nice nest egg to support their children – whether it’s a new baby they want to give the best start in life, or an older child who will be going to uni in a few years. As parents, it’s in our nature to want to provide for our children, especially in a world where prices seem to be climbing every day. So, how can you save for your child’s future, and will that change as they get older? 

 JISAs 

 JISA might not be an acronym you’ve heard before, but it is essentially an ISA, but for children under 18. The main benefit of a JISA (or Junior ISA) is that it offers tax-free growth, with no income or capital gains tax to be paid on it. This includes when the account is being funded by parents, even when the income exceeds £100 a year (2 common restrictions on other types of account). This means that parents can open up a JISA in the name of their child and pay money into it in a tax efficient way, knowing that when their child is old enough, that money will be there for them to access.  

Children have 2 different types of JISA: 

• A cash JISA, or;  
• A stocks and shares JISA 

And you can freely make transfers between the two if you want to open both. At the time of writing, you can put up to £4,386 into a  JISA each year tax free. For a stocks and shares JISA, you can put your child’s savings into investments like shares and bonds, potentially giving you a much higher return than the standard interest rate. This move is riskier, but it may give your child a bigger return in the long term.  

Life Insurance 

It’s never nice to think about, but life insurance is one of the most important things you can set up for yourself when you’re planning for the financial future of your family. Life insurance is essential because it is one of the only kinds of insurance that doesn’t directly benefit you – only those you leave behind. With a life insurance policy in place, you can ensure that when you leave this earth, your family will still be taken care of. A life insurance policy pay-out can be used by your family to: 

• Paying off debts – In the case of a mortgage, your family might need extra funds to keep being able to pay it off. Without a boost from life insurance, there is a chance they may need to sell the house when you’re gone. 

• Paying final expenses – Sadly, funerals aren’t cheap, and prices can sometimes run into the thousands. Life insurance money can help cover this and ensure your family won’t run up a debt to carry out your funeral wishes.. 

• Replacing your income – The money from a life insurance policy can go a long way to replacing your lost income, ensuring your family isn’t left struggling. 

• Covering children’s expenses – A life insurance pay out can also be put towards making sure your kids will be able to afford everything they need in the years to come.  

Children’s Pensions 

Although those 2 words might seem completely at odds, the reality is you can open a pension for your children from almost as soon as they are born. From a functional standpoint, a children’s pension is similar to a standard pension – money goes in, and when the child turns 55 they will be able to access it. Parents can pay up to £2,880 a year into the pension, of which there are many different  types . The child will benefit from 20% tax relief on top of this, which means a total of £3,600 per year. Over their life, this can add up to a significant amount. The catch is that the child will not be able to access this money until they are in their fifties. 

At Chilvester Financial, we love helping people plan for their financial future, and the future of their families. Our advisers can help you work out what the best method of saving for your children would be, as well as other options you may not have considered to help support your children now and in the future. If you would like to find out more, just get in touch to book your consultation. 

Financial planning is often something that makes people shiver and say, ‘that’s all too complicated’. And while that is true to some extent, it’s also something that has an enormous amount of value to your life both now and in the future. Whether you’re saving to buy your first home, saving into an ISA or trying to work out how to maximise your pension pot for later in life, having a solid plan in place will make things much simpler for you. A financial adviser can help you put these plans together, using their knowledge to potentially boost your returns and helping you make sound decisions. But if you’ve never done it before, what exactly is the value of hiring a financial planner, or of having a financial plan for your future?  

Set Clear Goals 

Who you are and what you want to achieve in your life is unique – no one else will be in the same position as you, or have the same goals for the future. So really, the way you handle your finances and plan for the future should be unique too. The problem is if you just go looking through the products you can find online, you will always be looking for ways to fit yourself into their specific boxes. A financial planner will be able to discuss what you want to achieve, and then recommend a tailored plan to help you get there. They will work with you to understand your goals, and then use all of their expert knowledge to research the market and create a solution that will help achieve all of those things. 

Have Regular Reviews 

There is a saying that the best laid plans of mice and men often go awry, and we believe that’s true – if you don’t keep an eye on them. All sorts of things can change your plans and your goals – from getting a new job, a new grandchild coming along, or even something like Brexit. The key to making sure your financial plans keep up with your changing life is to review them regularly. Taking advice from a professional financial planner means you will have regular reviews to keep track of your finances and progress towards your goals. This means you can adapt your plan as your situation and needs change, make changes if you don’t feel you’re on the right course, and it helps focus your mind on what you’re trying to achieve. 

Tax Efficient A Every Stage 

A good financial planner will make sure your money is working as hard as possible for your benefit. This includes things like minimising your current and future tax liability, moving money around to make the most of tax benefits and giving advice on what you can claim and when. Let’s face it, the UK tax system isn’t exactly the easiest to navigate on your own, but a financial planner will be able to help you work out how to make the most from your money. 

Detailed Product Knowledge  

If you go into a bank and ask about ISAs – you’re going to get information on the specific ISAs that bank offers (along with a sales pitch). Not information on ISAs in general, and certainly not independent advice. Not to mention there are almost endless options for things like pensions, savings and investments. Independent financial planners have access to the whole of the market and aren’t tied to one provider, allowing them to shop around and find the best deals for you based on what you need – not what they are trying to sell. 

At Chilvester Financial, we want you to be confident and comfortable working with us, secure in the knowledge that we can help you achieve your goals. We are a team of specialised financial planners, and we are always happy to answer any questions, talk through your options or give you a helpful hint here and there. If you would like to know more, or have any questions, just get in touch with the team today and book your free, no-obligation consultation. 

Did you know that around a third of all home loans made in the UK are remortgages? For most people, their mortgage is their biggest financial commitment, so it makes sense to streamline the debt where you can – which is exactly what a remortgage does.  But how does a remortgage work, and what are the pros and cons of remortgaging your property?

What is Remortgaging?

Put simply, a remortgage is the process of paying off one mortgage with the proceeds from a new mortgage on the same property. It’s often done when the initial mortgage comes to its end, or if you want to switch to a different type of mortgage, or one with a more favourable interest rate from another provider.

You can remortgage to replace your existing mortgage, or to borrow money against your property and release some funds. It might sound complicated, but in reality it’s quite simple. All you do is apply for a remortgage with your chosen lender, which is similar to the process for a normal mortgage. When you are approved, you use the new money to pay off your existing mortgage, leaving you with just the new mortgage to repay.

So Why Would You Remortgage Your Property?

There are a lot of reasons you might want to consider remortgaging your property, including:

• Your current deal is about to end: Many of the best mortgage deals only last for a short time, often between 2 – 5 years. When that comes to an end, your lender will put you on a standard variable rate mortgage – which is likely to be higher than your old interest rate and far from the best offer available. At this stage, you might want to switch to a better deal to save some money.

• You want a better interest rate: If your interest rate is seeming a little unmanageable, or just you think it’s too high, then you might want to consider switching to a mortgage with a more favourable rate, either with your existing lender or with a new one.

• Your home’s value has gone up – a lot: If the value of your property has risen sharply since you first took out your mortgage, you might find you’re in a lower loan-to-value band, which means you’re eligible for much lower rates.

• You’re worried about interest rates going up: We are in a time of massive uncertainty, so you might be watching the ratings with a keen eye. If the bank of England base rate is predicted to go up, then this may affect your mortgage payments, depending on the type of mortgage you have.

• You want to switch from interest-only to repayment: You may have taken out your mortgage when you were in one financial situation, and now you find yourself in another. Interest only mortgages were a very popular option a few years ago, but their main flaw is that the loan value never went down. If you want to start actually chipping away at the mortgage value, a remortgage could help.

• You want to borrow more: Of course, you might want to borrow more money against the value of your property, but your current lender has said no. Remortgaging with a different lender might help you raise money cheaply on low rates, freeing up that capital for you.

Are There Any Reasons You Wouldn’t Remortgage Your Property?

That’s all the positives, but are there any negatives? Are there any reasons why remortgaging might not be the right choice for you? Yes, mostly if:

• Your mortgage debt is really small: Once your mortgage falls below a certain amount – usually around £50,000 – it might not be worth switching lenders just to save a few pennies on fees. In fact, many lenders won’t take on mortgages of under £25,000.

• Your early repayment charge is really big: Most mortgages include an early repayment fee – an amount of money or percentage you need to pay if you want to pay off your mortgage early. This includes if you are remortgaging. So if that fee is huge, it might cost you too much to free yourself from that lender.

• Your circumstances have changed: If your financial position has changed since your current mortgage (for example you left full-time work and are now self-employed), you may find it more difficult to get a new mortgage. You may not fit new criteria, or be seen as too much of a risk.

• Your home’s value has dropped: You may have had a 10% deposit when you bought your home and got a decent mortgage, borrowing the remaining 90% of your home’s value. But now, your house price has dropped and the amount you owe is a bigger proportion. It happens, and the only thing to do in this situation is sit tight and make overpayments when you can afford it.

At Chilvester Financial, we are always happy to advise on whether remortgaging is the right option for you. We listen to your situation, ask questions and run the numbers to tell you whether you should remortgage to achieve your goals, which lenders would be best for you, or whether there is another way to get what you need. For more information, just get in touch with the team and book your free consultation.