Your financial questions answered
Whether you’ve just started thinking seriously about your finances or you’re an old hand with a well-established financial plan, it’s likely that you have plenty of questions about the ways in which personal finances work.
Naturally, we hear lots of these questions throughout the working week, and although some are specific to personal circumstances, many of them apply more widely.
Here are a few questions to get things started.
How much does financial advice cost?
You maybe won’t be surprised to hear that the answer to this question is along the lines of ‘It depends’. Getting advice on a single financial product is very different to asking a financial adviser to manage your investment portfolio on an ongoing basis, and the different charges will reflect that fact.
The key point to remember, however, is that good financial advice is designed to save you money – it should cost less than you would pay if you didn’t get advice.
Good financial advisers can save you money by reducing the costs you incurred by your pension, investments, mortgage and protection products, and they can also help make sure you’re saving and investing in the most tax efficient ways. They also guide you away from costly mistakes you might make if left to your own devices – ensuring your holistic affairs work in conjunction with each other and that kind of peace of mind is worth a lot.
So don’t be surprised that we can’t give you a specific answer to the question, ‘How much does financial advice cost?’. But rest assured that good financial advisers will always be happy to discuss costs upfront, and will be transparent about charges every step of the way.
Good advice is worth paying for, and with the potential to still come away better off.
How much do I need to retire?
Everyone’s retirement goals and aspirations are different, so coming up with a firm figure that applies to everyone just isn’t possible. Some people have a detailed retirement itinerary in mind, perhaps involving lots of foreign travel or the pursuit of an expensive hobby, while others are planning for something more modest. Either way, that’s OK – if there’s a plan in place to achieve it, you’re on the road to where you want to be.
But wouldn’t it be interesting to have a ballpark figure in mind – just to get an idea?
Of course it would, and the Pensions and Lifetime Savings Association has done some interesting work on this topic. Take a look at their Retirement Living Standards website to find a range of different retirement income levels and their associated lifestyles – they have figures covering single people and couples, and they’ve made it all easy to understand.
When should I start saving into a pension?
Although pensions can be complex, in many ways the answer to this question is easy. The sooner you start putting money into a pension, the better. It really is as simple as that!
Naturally, the pension product you choose and the investments you hold within it are important decisions too, but it’s almost impossible to begin saving into a pension too early. In fact, a child can have a children’s pension from as young as three months old – opened by a parent or guardian, of course – giving many years of potential investment growth.
The point to remember with pensions is that they are designed for the long-term, and even quite modest sums can grow into surprising amounts given enough time. The money within a pension grows free of tax, and you even get tax relief on the sums you pay in; even for a three month old, so if you haven’t already started a pension, it’s worth looking into as soon as you can.
Got a burning financial question? Ask away
The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.
The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief is generally dependent on individual circumstances.