This video is sponsored by BKL
Transcript
[00:00:00] Eleanor Mills: Welcome to our Special NOON webinar on the Budget and what it means for us and Queenagers and what we call, what we like to call it, NOON Queenager Financial Spanx.
I think we’re calling it at the moment Queenager Financial Finesse, but it’s, I think it’s the same kind of thing, which is where we try and do a very kind of NOON take on the kind of financial advice and things that we need to know. Lovely to see lots of friends joining us. Hello, picture, shout out to Geraldine.
Hello, hello. Donning. Haven’t seen you for a while and tole always lovely to see you, and lots of other ones there. Hey, Geraldine, lovely to see you and seen you for a while. And lots of, lots of others coming in too. Great to have so many of you joining us. Let’s just give everybody kind of a minute or so to come in.
But I hope you’re all having a lovely day. It’s beautifully sunny where I am in London. We seem to have lost the storms and we are really happy today to be joined by two amazing Queenagers from our partners, BKL, who really know their stuff on all of this. So we’re gonna be all asking them lots of, lots of good questions.
And as we always say at these NOON these NOON events, there’s, you know, there really is no such thing as a stupid question or if there is a stupid question, that’s probably the one I’m gonna be asking. And so we really want you to kind of use this opportunity to have, it’s amazing to have Myfanwy and Emma with us who really, know their stuff.
So really make the most of that and put your questions in the chat. And we’re gonna try and make this as. Informal and as lively and as acronym-free as we possibly can. Because we know at NOON that sometimes us Queenagers can be slightly put off by things financial personally. I know I sometimes approach my tax return with a combination of fear and of kind of terror and boredom, which is a particularly noxious combo.
I know some of you’ll be thinking you’ve gotta get your tax returns done kind of over Christmas and that kind of thing. So the point of this session is to really explain as much as we can some of the changes that have hap happened in the Budget and how they affect us as Queenagers or the kind of things that we should be thinking about as a result.
And I think the fact that we had nearly 200 people sign up for this webinar shows that there is a real appetite for this kind of information and that often the way things are covered. In the press, very sorry to my former brethren is not necessarily exactly it’s not necessarily served up in the way that we want it or that, or in a way that feels that understandable or digestible.
So what we’re gonna try and get at today is a real sense of what the Budget means for Queenagers. And more than that, a chance for you to ask Emma and Myfanwy their opinion on maybe things which are bothering you. Remember we can’t give act, we can’t give you specific advice. We can’t say, we can’t say this is exactly what you should do, but we can say these are the kind of things that are a good idea.
So just to just to understand the kind of the difference in that. So I think we’ve got lots of ah, I love everyone’s already putting their questions in the chat. Good to see that that’s all happening. Also, tell us where you can tell us where you are, if you’d like or what. And Jen has just shared a poll of some of the kind of, so what we’ve put out here are some of the things that we’ve we can talk about today.
And so it’d be really interesting to know from all of you actually on the call, which of those things on the poll that Jen’s just posted in the chat is most pertinent to you, because then we can focus on those things. And don’t worry, we’re also gonna have a good look through your questions and answer all of those too.
So, I think we should get cracking. There are still some more people joining, but they’ll just have to, they’ll have to catch up. So welcome to this NOONwebinar on Queenager Finances. Everything we need to know what’s changed out the Budget, but also a bit of a kind of more general look at the kind of things that we should be thinking about at this point in life.
And as I said earlier, there are no stupid questions. Really feel free to ask everything you want to know in the, meeting, chat and, or, you know, put your hand up and we, we’ll take some questions directly to Emma and Myfanwy as we go. So just to introduce our very distinguished panellists, we’ve got Myfanwy Beynon-Pollitt.
I well done. Is that right? I, I, I know that you’re called Myfanwy, but I was not very sure on the cna, so I’m very sorry about that. I hope that’s in the right place. And Emma, Jordan Brown, both of whom are very senior at BKL, who are our partners. You may have seen stuff around BKL in the newsletter.
We decided to partner with them because I kept getting asked by queen ages about their finances and who I use and wealth planning and all that kind of thing. So I thought, well, who better to recommend than the people I actually use myself? BKL, full disclosure are my accountants. They’ve helped me in founding two businesses at 50.
I was a good journalist, but I knew nothing about business or anything I needed to do to keep myself safe as a as an entrepreneur and also as a, somebody kind of moving into from being employed and to being self-employed and all of that kind of thing. And I really recommend taking some financial advice from people that you trust.
So that’s why we partnered up with BKL Because I recommend them because I actually use them myself. So Myfanwy do you want to kick off a bit, telling us a bit about you? And then Emma do the same and then we’ll get to some questions. Welcome. Awesome.
[00:05:36] Myfanwy Beynon-Pollitt: Thank you so much. How exciting to be here.
It’s been awesome seeing all the names ticking up. It’s brilliant to have so many people in the room. So I’m Vannoy everyone calls mem love, like love. From from BKL. I’m one of the partners at BKL. I’m an audit partner by trade for my sins property specialist as well. So that’s part of my background, but I’m also a board member at BKL and specialise in governance and sustainability.
I’ve got many hats today and I’ll bring whatever’s useful. But there we go. That’s me in a nutshell. Brilliant.
[00:06:07] Eleanor Mills: Thanks Myfanwy. and Emma, tell us a bit about you and your specialties.
[00:06:11] Emma Brown: Hi everybody my name’s Emma Brown. Emma Jordan Brown is my married name. Excuse me, I head up the tax consultancy team here at BKL.
So obviously lots of conversations going around the Budget after last week, so I will try and help you out as much as possible. Eleanor promised I will answer all of your questions. If there’s anything I can’t answer though, I will make sure that we do follow up with whatever is still outstanding after this webinar.
But I’ll do my very best. Just to give you, I guess a bit of background about me, I’m a mixed tax advisor, which means I advise individuals as well as companies. So really well placed for anybody that’s you know, an owner, manager in the same way as Eleanor is. I think, you know, there are things that you need to think about in your company that.
Impact on your personal decisions and vice versa when you are owning and controlling your own business in that way. It’s very, very important and it’s the majority of our client base. So entrepreneurs are own managed businesses, so hopefully I can cut across all things tax today. I’ll do my very, very best.
I just to give you a bit of background and a bit of I guess, female power. I was the first, , ever internally promoted tax partner at BKL, and I was the first ever female tax partner at BKL as well. Great. , at the gender age of 35, so I also sit on the executive committee alongside m so yeah, hopefully, , you’ll be rest assured that BKL are very, very female, fa female friendly and there’s a lot more of us behind the scenes, which hopefully you’ll, you’ll get to meet more of the team as, as these webinars go on.
Thank you.
[00:07:34] Eleanor Mills: Brilliant. Thanks Emma. And thanks, Myfanwy, so let’s jump in. So, Myfanwy as somebody who’s pretty expert in this field and who is also a proud Queenager, what would you say are the key things that we all need to be aware of in the Budget?
[00:07:52] Myfanwy Beynon-Pollitt: I think what’s really interesting is that a lot of the stuff that’s come out of the Budget, and Emma will talk about the tax in a lot more detail is, you know, talks about freezes and what does a freeze mean? And that’s the kind of thing that that, that is a, they call it stealth tax, they call it all sorts of stuff, right? Yeah. But what it really means is that the cost of living goes up. That the, that the, the tax, you know, that the rates at which you pay tax stay the same.
So we end up paying a lot more tax at the different levels. So what it means is that for all of us, as we keep earning more, or you know, the, the cost of living goes up, also the, the proportion of tax that is taken out of our salaries actually increases by quite a lot. So to the extent that, which I thought was fascinating, to the extent that now he gets state pension.
That, that you will be taxed on a proportion of your state pension because the minim tax free allowance is now less than the state pension amount. Which it’s kind of that piece that goes, goodness, you know what? It says that things aren’t changing too much. There are changes, but what it really means is that by staying the same, it creates a bigger impact than you imagine.
And, and that’s a piece of the jargon that sometimes gets lost in the noise when they say, oh, it’s been frozen, so you think it’s a good thing, but it’s not really.
[00:09:09] Eleanor Mills: Okay. So it’s gonna catch more people in that tax bracket. Because inflation’s going up and wages are kind of going up with inflation.
The tax threshold’s being frozen. So actually more people are being caught in it.
[00:09:26] Myfanwy Beynon-Pollitt: More people are being charged higher rates of tax now because their salaries are going up.
[00:09:31] Emma Brown: Yeah. And I think to dispel one of the terminologies there that mug use is stealth tax. That’s been something that’s been, you know, something that’s been banded around a lot over the last few days.
And the reason why they’re calling it stealthy in this way is because they haven’t actually increased the rate of tax.
[00:09:48] Myfanwy Beynon-Pollitt: Mm-hmm.
[00:09:49] Emma Brown: And because of that, Rachel believes she hasn’t broken her manifesto pledge, which we won’t get into politics or political persuasions today. I fundamentally disagree with for the reasons that Myfanwy mentioned.
So that’s why stealth is being used because they haven’t actually increased the rates. They feel as though they haven’t changed anything. But what it will mean for the pound in your pocket is that you get less of it, right? So you will feel the pinch, you absolutely will, but because it hasn’t been a technical tax rate change, it’s seen as stealthy.
Does that make sense?
[00:10:19] Eleanor Mills: Yeah. Yeah. That’s really interesting. So basically although she says she hasn’t put an up income tax, in effect she has because she’s frozen the level on which you get hit, which it actually means she’s lowering the threshold at which you have to pay to,
[00:10:35] Emma Brown: exactly.
That, you know, and I think what it does really is it doesn’t have an immediate hit in terms of the finances in the coffer, and actually spreads that over a number of years. And you’ll have heard everybody saying, you know, this raises up until 2030. That’s just the end of the term of the government.
Ultimately though, what it enables Rachel to do is say, I didn’t tax you all right now. I’ve tried to spread that out for you to ease the burden and ease the pain. What fundamentally it does is kick the can down the road, though it doesn’t actually fix the problem right now. So again, slight mixed messaging, as is always the way in politics.
Let’s be fair.
[00:11:14] Eleanor Mills: Okay. So, so, so basically what we need to take away from this is that basically that it’s, it’s like a backdoor tax increase that we’ve all had. Yeah, yeah, absolutely.
[00:11:23] Myfanwy Beynon-Pollitt: Exactly right.
[00:11:24] Eleanor Mills: Excellent.
[00:11:24] Myfanwy Beynon-Pollitt: So isn’t it the case, Emma, that it’s been frozen in this way for the past, almost like 10 years?
[00:11:31] Emma Brown: Yeah. Absolutely. I think tax allowances across the board have not been raised enough. And this is over consecutive governments, right? I don’t think there’s one government to blame in this particularly, but you take something like inheritance tax, you know, that the nil rate band for that has been stuck at 3, 2, 5 for decades.
And again, it’s what’s relative and relative to right now in everybody’s financial situation right now. And I think that’s the difficulty when you freeze rates in the way that you mentioned it explained earlier of you’re not taking the current cost of living into account. And that’s what creates more of a tax burden on the average Joe.
[00:12:06] Eleanor Mills: Yeah. And we know that there’s been big inflationary pressures, over the last few years. Because we know that all the prices have gone up.
[00:12:12] Jennifer: Yeah.
[00:12:13] Eleanor Mills: Okay. So what we put there for you on the, on the screen is a slide showing what the, what the thresholds are being stuck at. And don’t worry about having to write these down.
We’re going to share with you all the slides that we’ve got here at the end, we’re just going to try and make this very un-slide heavy. Because we know that can be quite a bit of a turnoff in itself. The other big changes in the Budget are around dividends and property. And and savings.
So should we go into that a bit? Let’s go into what the savings on the Because everyone will have heard about ISAs and things like that. Let’s, we’ll come back to dividends and properties in the sector. It’s slightly more technical. And let’s, let’s start off with the savings and the ISAs.
Shall we?
[00:12:56] Emma Brown: Yeah, I think ISAs is still, still a good play for most people, right? It needs to be a blend of things and obviously there’s an annual allowance for the amount that you can put into an ISA, but from an income tax or a capital gains perspective, you’re not paying that right now. You know, they’re exempt still from those they do fall into the inheritance bucket still.
So let’s bear that in mind but it means that, you know, any interest that you are getting off of your savings is not being taxed on you right now. Okay.
[00:13:21] Eleanor Mills: Can we have the slide, which is specifically about ISAs? I think it’s the next one. Because there’s been a change, hasn’t there? So until now, you’ve been able to put £20,000 into an ISA tax free every year, but the government has now changed that.
So that you can only put £12,000 into an ISA, is that right?
[00:13:41] Emma Brown: Exactly that. They’ve brought that right down. And bear in mind, that is an individual limit, you know, so if you’ve got a, a wider family, you can, for example, set up ISA for your children if you have any. That doesn’t help a lot of families though, right?
Like let’s be fair about it. So, even though it’s an individual threshold, bringing that right down means that people are going to have to invest if they want to outside of an ISA. And then of course you are paying income tax.
[00:14:06] Eleanor Mills: Okay, fine. But just to explain what this means. Because we know from other events that we’ve done that a lot of Queenagers are very partial to a cash ISA.
We did a thing around Queenager Financial Spanx last year where we discovered that practically everybody in the room understood about their cash ice and was putting money into it, but that they were much more resistant to putting money into stocks and shares. So can you describe to us, Myfanwy, the kind of the difference here and why the government have done this?
[00:14:41] Myfanwy Beynon-Pollitt: So part of the reason is that they want to force people to, divest how they’re handling their money. I think they expect that fewer people will put money in, people will stick to the £12k instead of putting the full £20k in because they’d be worried about, or nervous about putting, money in stocks and shares.
So it creates almost a new limit for the tax-free amounts that are able to be saved. I mean, what’s really interesting – I’m sure Emma’s got some thoughts on the tax side – but what’s really interesting from an investor side and I dunno how many people here have an individual an IFA to help them with their tax, with their investment strategies.
[00:15:23] Eleanor Mills: And IFA though just on acronym what?
[00:15:25] Myfanwy Beynon-Pollitt: Independent Financial Advisor. That’s right. And what’s really interesting is it isn’t actually that difficult and it’s not actually that complicated. It just trickier than it is to put money in these stocks and shares ISAs.
So it almost like creates like an artificial step that someone has to do something that sounds harder to save their money in a more tax efficient way. And I’m not sure what you’ve got on the tax side.
[00:15:51] Jennifer Howze: Myfanwy, can I just jump in there too? It seems to me as somebody who has both cash and stocks and shares ISA, that it also means as a country, all of our ISAs are much more exposed to the vagaries of the stock market. Now, of course, we know the stock market has been a great place to increase your wealth over the however many years and decades. But I think, you know, for Queenagers in particular, we’ll want to make sure that any kind of stocks and shares investing via ISA it really matches our risk profile.
Like, how worried we are about any of that savings to kind of go away because the stock goes down.
[00:16:35] Eleanor Mills: Yeah. Myfanwy, do you want to speak a bit to your own experience with this? Because one of the things that’s come up before is, what is an independent financial advisor and what can they do for you?
Why would you need one? What kind of person needs an independent financial advisor? How do they, how can they help?
[00:16:52] Myfanwy Beynon-Pollitt: That’s a really good question because I didn’t have one for quite a long time. And probably maybe when I got divorced, actually, I began thinking, gosh, I need to get a bit more structured around my own financial advice.
I’m an accountant, you’d think I understand, and I do, and I understand enough to talk to clients about it. But then when it comes to taking the plunge, making some, difficult decisions myself about what my own personal risk profile is or where would I put my money, I felt that it was really important for me to get some additional advice.
So it’s an independent person, the clue’s in the name. An independent person that’s not affiliated with any particular stocks or shares or investment profiles. And their job is to give you neutral advice that you can then listen to, understand and take. So I found that really helpful.
And it was really interesting because when I first started working with an IFA I was like, no, my risk profile is low. No, no, no. I’m a risk profile number one. They ask you to go one to 10. And I was like, I’m number one. I’m an accountant. That feels right for me. But the longer I’ve been working in investing, I’m kind of, you know what? I could take a six on that one and I could take a four on this. And you become a little bit more flexible as you become. More confident, I suppose, in making those sorts of decisions, because it’s quite scary if somebody says, how would you feel if you lost all your savings overnight? And I’m like, well, that would be awful.
Yeah, no, I’m, I’m a note on this. You know, and then you realise it’s not actually that scary. And their job is to explain things to you in a way that you can make a really good decision. And some of them are more…and you have to move around a bit and find somebody that really works with your personality, and somebody that will take the time to explain in a way that is clear.
Because some people just bamboozle you with…I’ll give you an example. I’ve got sustainability background and one of the things that was most important to me was to make sure that I was getting advice from my advisor that was linked with my values around sustainability. And one IFA I spoke to said, you’ll never make any money on that. Don’t do it.
And then I spoke to another and they said, No, no, no, no. There are loads of really valuable options that you can look at and just take a look. And it was just another way of looking at it. And I’m very happy with my sustainable portfolio now but it took me a little bit of moving around to find the right person.
[00:19:11] Eleanor Mills: Yeah. I have to say, speaking to that Myfanwy, I took my pension out of…because I worked for News International for a long time, so I had a lot of money in there and I could move some of it out and I transported some of it out and I put it all into kind of gender impact sustainability.
Like, you know, I had a kind of halo pension. I was so virtuous. And I have to say that the bit of my pension that was in kind of child labour and guns and oil, which I couldn’t move, has definitely gone up a lot more. But I have to say that I feel good about the choices that I’ve made. And you’re right, that it has, it has come back.
And so I think what’s interesting about being an investor, and I’m relatively new to this as well, is you can very much align your portfolio along your values. I invest in a lot of kind of gender impact. So that’s in, that’s investing in women’s projects. I invest in a lot of women in, actually in South America and that kind of thing.
And so I think it’s really quite fun to have a sense of agency about what your money is doing in the world. And certainly if you care about climate change, putting your money into green investments is actually one of the biggest effects that you can have. Much more so than recycling your, you know, plastic milk cartons.
If you actually move your money into sustainable stocks and shares or things which are you know about renewable energy and those kind of things. You not only make money on the money that you’ve got in the bank, but you’re also helping to make the world a different kind of a place. It’s actually one of the most powerful things that we can do as individuals.
[00:20:46] Myfanwy Beynon-Pollitt: That’s right, and that’s one of the reasons I moved because I wanted to have that ability to make that choice.
[00:20:52] Eleanor Mills: Yeah. And I think that that’s something that really resonates with with us, at this point and as Queenagers. And I think that that by Myfanwy said something really interesting in the run up to this call.
You were saying that making, not making a decision – leaving all your stuff in a cash ISR or just having it in your current account – that is a decision about your money. And it’s possible to take some quite baby steps in this, maybe get yourself a cash ISA, maybe put a bit of money if this year you can’t put all £20,000 in a cash ISA, put, you know, £12,000 in the cash ISA and try the £8,000 in some stocks and shares.
You can start off with a very low risks, some gilts or something like that. And then you can always ramp it up if you slightly get the bug. I agree. My risk profile’s gone up a lot, I’ve taken much more risk than my husband’s much more risk averse.
So, and we have a kind of joint thing, but it’s kind of one of those things that you begin to, you can kind of begin to play with as you become a bit more confident. And Emma, I just had a look at the poll and I noticed that salary sacrifice, and inheritance tax are what people are most interested in, in knowing a bit about.
So will you take us through salary sacrifice? Because I certainly find that quite complicated, but I know that that applies to a lot of the women here. Jen, do you want to give us the salary sacrifice slide please?
[00:22:14] Emma Brown: Of course. So I think, let’s explain the term. Yes. Good start. What it means is, so if you get a salary of let’s say £50,000, what you’re saying is, I want to forego an element of that salary and receive something else instead.
So quite often pension contributions are structured in a way of salary sacrifice. And let’s say for example, you put £5,000 in, it would reduce your salary from £50,000 to £45,000 because £5,000 is then going in your pension. So you are foregoing your salary, which means obviously your taxable salary then goes down accordingly.
You are only getting taxed on the £45,000, so it means that it’s coming out of your salary before any tax, before any National Insurance. And that obviously then has a saving to us as an individual because it means we’re not having to pay out of our paycheck when we receive it, which has already been subject to tax and National Insurance.
Hopefully that’s clear.
[00:23:11] Eleanor Mills: Yeah, that’s good. So currently you are allowed to do this, but the rules are going to change in April, 2029. So if the women on the call are currently doing that salary sacrifice, should they go on doing that?
[00:23:24] Emma Brown: Absolutely, certainly until April 29. And look, anything can change in politics in 3 years is, is a hell of a long time for any policy change.
So everything’s up for grabs in until then, honestly. While it’s still here, I would recommend absolutely making the most of it. Anybody that isn’t paying into salary sacrifice right now, you’ve got three years as a minim left and I would very much hope that everybody sees sense before then and, and does, and that see, you should do
[00:23:51] Eleanor Mills: it because basically it’s a way of putting more money in your pension tax free.
[00:23:54] Emma Brown: Absolutely. Yeah. And most of the time the employers will contribute a little bit more as well, because you’ll see on the slide here it says that pension contributions now by way of salary sacrifice, you know the employers are going to have to pay National Insurance on that. So, okay, so you know whether they’re paying you as a salary or paying into your pension, they’re paying National Insurance either way.
Now what, what tends to happen at the moment, Eleanor, because they don’t have to pay National Insurance right now on your pension contributions. Usually what an employer will do is give you the benefit of some of that and they’ll say, look, you know, we’ve saved that amount of money. We are going to put, let’s say, half into your pension and will share that benefit between us, which of course then is helping everybody’s pension pots grow.
So the reality of this change is it’s not necessarily a money raiser. The money was being paid one way or the other, but instead of it going into your pension pot, it now goes into the extra coffee.
[00:24:50] Eleanor Mills: So that’s basically another way that Rachel Reeves is taking some more money off us. Absolutely.
Okay. That’s really helpful on the kind of technicality of the salary sacrifice. And now can we have a look at inheritance tax, which I know is a big thing for lots of Queenagers, both for themselves, but also because they might be in a situation where they’re going to be inheriting money from a parent.
So what are the big changes here, Emma, and what do we need to look out for?
[00:25:14] Emma Brown: The big changes are the ones at the top of the slide there, Eleanor, agricultural and Business Property Relief. Anybody that’s an entrepreneur has been hit incredibly hard by the Business Property Relief changes – the acronym is BPR and apologies for the acronym here.
[00:25:27] Eleanor Mills: And can you tell us what Business Property Relief is? I’m an entrepreneur, I’ve got no idea.
[00:25:31] Emma Brown: Yeah, absolutely. So, you know, if you’ve got a company, those company shares, if you were, God forbid to pass
[00:25:38] Emma Brown: They would be able at the moment to go down to your family without any inheritance tax. It was fully exempt. The value of your business was fully exempt, and you were able to pass that down to your family free of inheritance tax.
[00:25:50] Eleanor Mills: Wow. And you now not,
[00:25:52] Emma Brown: Well, you are up to a million pounds now. A lot of people will sit here and say, it’s a million pounds. You’re a millionaire. You know, why shouldn’t you be paying tax over and above that?
That said, that’s an incredibly high limit. Yeah. I think for most people. However, when you speak to an entrepreneur, and you’re probably attest to this yourself, when you’ve gone through that journey of starting something up from scratch, nine times out of 10 you are borrowing to fund that business, usually with a personal guarantee.
Like on your house.
Usually when you’re employing staff, you make sure, frankly, they get paid first. Yeah. And you tend to pay yourself lost.
[00:26:28] Eleanor Mills: You don’t take a salary for the first…I still don’t take a kind of salary.
[00:26:33] Emma Brown: Yeah, so I think people forget the sacrifices that entrepreneurs have made to be able to trade and employ people and put money into the economy.
And so unfortunately the kind of misconception that a million pounds is really, really high, you can have what most people, again, to use the term, a lifestyle business, and a lifestyle business means effectively you earn enough money to sustain your own lifestyle.
You’re not earning loads above that. You don’t have a lot of disposable income, but you’re very comfortable in your way of living.
[00:27:07] Eleanor Mills: Yeah.
[00:27:08] Emma Brown: And anybody that’s a lifestyle business, you can still reach a million pound valuation fairly easily.
[00:27:16] Eleanor Mills: And I think actually, particularly if you’ve got an office or something or you know, or if the company owns some property Yeah.
[00:27:22] Emma Brown: Ab absolutely. That, you know, usually we would value a business, let’s say, at the end of, you’ve got your income, you’ve left all your expenditure, and you’ve got your net profit at the end.
You know, really basic valuation principle, five times that profit is what your business is worth.
[00:27:36] Eleanor Mills: Okay.
[00:27:37] Emma Brown: Right. So, you can get to a position where you can make a couple of hundred grand at the end of the year. That’s tipping you into this million pounds already.
[00:27:46] Eleanor Mills: So that’s not running a business that’s not Nike.
[00:27:51] Emma Brown: Exactly. Exactly that. And I think to put this into real terms though, Eleanor, what it means is when you pass, you know, your business assets down to whomever you, you wish to benefit from those on your passing, they’re not going to have any cash. Right. All they’ve received is shares in a business.
It’s not liquid in that way. And when we say liquid, it means it is not money. Yeah. I’m going to have to liquidate it. Yeah. I’m going to have to sell it in effect to get that money.
[00:28:18] Emma Brown: So what that means is, you know, any family businesses that have been passed down generations, it’s going to hit the next generation.
They’re going to be hit with an inheritance tax bill that they can’t pay. And they’re going to have, sell their family business to pay for that inheritance tax.
[00:28:31] Eleanor Mills: We’ve all heard about this a lot in relation to farmers, haven’t we? Mm-hmm. And family owned farms where again, a million pounds sounds like a lot, but actually that’s probably just the value of the land and the kind of tractors and stuff. And if you have to pay a huge amount of inheritance tax on your tractors and your land, then you’re not going to be able to afford to farm it Right. In the next generation. Absolutely. So, is this a similar kind of hit on businesses?
[00:28:54] Emma Brown: Absolutely. Exactly that. So, if we look at farming, and unfortunately now again, it’s an asset, it’s not cash. When the next generation get hit with that inheritance tax bill, they’re going to be selling off all this amazing farmland. They’ll be selling it to developers. Right. And a load of houses are going to be built.
The only people that win here are property developers, unfortunately.
[00:29:15] Eleanor Mills: So that’s, so again, that’s another, that’s a kind of tax rate. And then on the other inheritance tax changes. What, what else should we be aware of or, and, and other things that should, we should be saying to our, you know, our parents that they should be doing to try and, you know, avoid this as much as possible or not?
Is there not much anyone can do?
[00:29:33] Emma Brown: Oh, look, I, I think if you follow my dad’s advice, spend it. Yeah, that’s what Myfanwy said to me. Honestly, my dad’s been very open and honest and said he is only gonna leave me with debt, which I love. Right? I, I want, I want my parents to be able to enjoy their lives.
And ultimately, lifetime gifting is a really, really good way to avoid inheritance tax on the estate at death so enjoy life.
[00:29:55] Eleanor Mills: Give your money away to your kids while you can.
[00:29:58] Emma Brown: Absolutely. So if you’re going to have a chat with your parents, tell them that.
[00:30:02] Myfanwy Beynon-Pollitt: If it’s useful. So my, my dad’s a farmer actually.
And what’s really interesting is bless him, he doesn’t have a will, so when we’re thinking about talking to your parents, and it’s not easy. Because I know that when I say, try to say to my dad, Hey dad, you know. Put a will in place, you can get insurance to cover the inheritance tax.
You know, there’s lots of things you can do. And he was like, I don’t want to talk about money with my daughter. I’m like, you know what can you do? It’s not straightforward to have these conversations with your parents, but I think it’s really important that there are basic tax planning tools, tricks, tips, that you can put in place relatively easily. It doesn’t negate all of this work, but if you know that your parents or the people that you are or that you yourself actually haven’t got a plan in place, just get a plan in place.
You know, the worst plan is no plan in terms of inheritance tax.
[00:30:59] Eleanor Mills: And I think that’s particularly true when it comes to a will. I mean, lots of you here will have been to a NOON Circle. We’ve had a lots of conversations in the London Circle recently about what a couple of the Queenagers have had women who have had parents who’ve died without a will and have had real problems with probate and that kind of thing.
I think the kind of the first bit of any kind of inheritance tax kind of thinking is, Have you got a will? And that’s also something that BKL can help you with. And the other thing is power of attorney. If you both over, for your parents, if they’re, particularly if they got problems with Alzheimer’s or dementia or those kind of things, and that can suddenly happen, that can happen very fast.
So I think it’s also one of these things where it’s really worth having that conversation before the point at which it’s necessary to really think about, you know, what would happen if they, , you know, if they, if they kind of lose their marbles or they need you to kind of help them and how that’s gonna happen.
And this sense of how, you know, having, having a will makes it much easier for the people that you leave behind.
[00:32:02] Emma Brown: And, and it is really funny, I think when I talk to my clients about inheritance tax, Eleanor, there’s this real sense of I don’t want to talk about my immortality.
[00:32:09] Jennifer: Yeah. And, and
[00:32:10] Emma Brown: people go one way or the other, they absolutely want to have the conversation or they absolutely don’t.
There’s very few people that sit on the fence with this.
[00:32:18] Eleanor Mills: Yes.
[00:32:18] Emma Brown: A lot of people that don’t do anything at all come at it from a view of, it’s just not my problem. I’ll be dead. Somebody else has the tax bill. I don’t care, and look, that is, that is an opinion and a of you, and I’m not here to judge that.
But what it does do, unfortunately is leave the next generation with a lot of mess to clean up. Yes. And, and actually very little power to do much about it. , because a part of the will, it’s not only this is how I would like to pass down my estate and who too, but, you know, I trust these people to administer that and make sure that, that that happens correctly.
And those people, they’re called executors of the will, you know, they are able to make decisions about those assets and they have that power where you don’t have a will in place. Those people aren’t appointed. Yeah. And then, so then there’s a vacuum.
[00:33:04] Eleanor Mills: So we’ve got really good a question on the tax, on the chat here, on the tax, on the chat from Emma stock, she’s saying question in two parts.
What insurance can you get to cover inheritance tax? That’s a good question, Emma. And also, do you have any argents to persuade a reluctant parent to do some planning? What, what would be your most persuasive argents? Great question, Emma.
[00:33:25] Emma Brown: Honestly, do you want to give you money to the government?
Yes. Okay. That’s good. I think that’s ultimately where it comes down. And again, depending on somebody’s political persuasion, you know, depending what parties in power, they might, they might be more inclined to say no to that question. Yeah, a lot of people though, Eleanor don’t think they’ve really got anything to pass down.
Yeah. That’s another part of this, but ultimately anybody with a house or a pension, you know, you’re having the conversation irrelevant of the value. Yeah. As I said, £325,000 is the nil rate band right now. So sorry.
[00:33:58] Eleanor Mills: So £325,000 is what? For, for what you can hand down without getting any inheritance tax?
[00:34:04] Emma Brown: Exactly that. Exactly that.
[00:34:05] Eleanor Mills: And, and so, so that’s not very much. So, so if you’ve got a house, it’s say in London, which is worth a million pounds, how are you going to have, are you going to, so if your parents die and that they’ve got their house, you are going to have to pay what? 40% of the, of the difference between £325,000 and a million.
[00:34:22] Emma Brown: Exactly.
[00:34:22] Eleanor Mills: It’s a lot of money.
[00:34:23] Emma Brown: Yeah. No, there, there was some slightly higher rates where it’s property that somebody’s lived in. Mm-hmm. But parking those funny rules for a moment, you can have somebody that bought property in the ’80s for 10, 20 grand. Yeah. And it can now be worth a million.
Yeah. Right. You don’t need to be, I think somebody that’s a high earner to have a high value asset.
[00:34:42] Eleanor Mills: No, for sure. Not particularly. No.
[00:34:44] Emma Brown: And I think people forget that a, a little bit. Yeah, you know, even my, my m and dad’s, you know, two bed bungalow in, in Bristol blows that. And they didn’t pay very much for it 15, 20 years ago, that’s just kind of the value that’s, that’s built on that property, you know, over the years. So I think I would really recommend anybody that just thinks that their affairs aren’t complicated enough or valuable enough to get a will because, you know, they, they fall under those limits. Number one, you might fall under those limits, but equally your assets might not go where you want them to.
Yeah, but more importantly, I would strongly suggest they probably are over that limit.
[00:35:22] Eleanor Mills: And so what can, so what can you do? Say your parents are sitting in house, which is worth a million pounds. Okay. And they’ve made a will. What can you do as the person who’s going to benefit from that, there’s a bit of stuff in the chat as well saying, I thought property was only £175,000 before you had to pay inheritance tax.
Can, can you give us the actual threshold, Emma?
[00:35:47] Emma Brown: Yeah. So where, where you have a property that you’ve lived in and you pass it down to your family in the,
[00:35:52] Eleanor Mills: It’s your main residence.
[00:35:53] Emma Brown: Exactly. That, yeah. You get a slightly higher nil rate band, which is really helpful. The other thing that happens is if, if one of your parents dies before the other
[00:36:03] Eleanor Mills: Yeah.
[00:36:04] Emma Brown: And they’ve passed everything to the surviving spouse.
[00:36:07] Eleanor Mills: Yeah.
[00:36:07] Emma Brown: And then meal rate bands come over as well. They get transferred. So
[00:36:11] Eleanor Mills: you can end with, but when they die and it comes to you, so it comes down to generations, then you are going to get hit with it.
[00:36:18] Emma Brown: Exactly that.
[00:36:19] Eleanor Mills: And is there anything that, is there anything that you can do in that situation or is there any planning that can be done so that the money doesn’t go to the taxpayer?
[00:36:27] Emma Brown: Yeah.
[00:36:28] Emma Brown: Number one is your will because you need to understand where those assets are being directed. Yeah. There can be some, some IHT breaks where you donate to proportion of that to a charity as well.
[00:36:39] Eleanor Mills: Okay.
[00:36:40] Emma Brown: That, that can be helpful, but not everybody is, is that way inclined. , ultimately when you are looking at the value of your estate, you know, it used to be things like BPR and a PR Agricultural and Business Property Relief we were talking about earlier.
Yeah. They were really, really good. IHT protectors, you know? You were able to, to, you know, skew your stocks and shares portfolio in a way that might benefit a BPR in some instances.
[00:37:03] Eleanor Mills: So if you had agricultural land or you had your money in your business, then you could pass it down to your children without it hitting the tax.
So that, so that loophole’s gone. It has and, and, and isn’t there something also new about taxing the amount of money you leave in your pension now as well? Isn’t that, ISNT that any change?
[00:37:21] Emma Brown: So again, before there were IHT reliefs for passing down your pension. And don’t get me wrong, there were, you know, you needed to be by a certain age and it needed to go to a certain person.
All of those have been taken away now as well. So your pension forms a part of your estate. So, whereas some people might not have drawn down on the annuity income from their pension when they came of pensionable age because they didn’t need that income. Yeah. And they were really comfortable with passing that down to the next generation.
Those people are going to start taking income out of their pension now. There’s no reason for them not to. So take it out and spend it.
[00:37:52] Eleanor Mills: Yeah. But it seems an incredibly unfair tax because all the money that we’ve already got in our pension or that we’ve saved during our lives, we’ve already paid income tax on, or, you know, capital gains tax or kind of dividends.
So, so this is like an extra tax on everyone who dies.
[00:38:08] Emma Brown: Exactly that. Yeah, and you know, ultimately anything that you have as an asset, you either earned money to buy it.
[00:38:16] Eleanor Mills: Yeah.
[00:38:16] Emma Brown: Or you sold something and made a profit. To buy it. Right? That money came from somewhere. So, you know, any asset that you own usually is being purchased out of earned income and taxed income.
So you are right. Inheritance taxes a is another tax again on that. Yeah.
[00:38:30] Eleanor Mills: Double whammy. Okay, so we, we’ve got some questions in the chat now about dividends, which I’m also interested in as somebody who’s self-employed. , Becca said, while I appreciate everyone’s circumstances different, for those of us self-employed with a limited company, does there become a point with the new 2% dividend tax where it becomes better to take a bigger salary than pay yourself through through dividends?
Because a lot of us who are self-employed, or sorry, or have a limited company and a, a kind of entrepreneurs, rather than taking a salary, we pay ourselves through dividends and they basically up the tax on that. So, so is it becoming, you know, less of an advantage to take dividends rather than income?
[00:39:11] Emma Brown: It already had.
[00:39:12] Eleanor Mills: Okay.
[00:39:13] Emma Brown: So when they hiked up dividend tax rates a few years ago, unfortunately that kind of benefit got eroded at that point, Eleanor, so an additional 2%,
[00:39:23] Eleanor Mills: right?
[00:39:24] Emma Brown: Absolutely. You know, in most instances, we’ll put it beyond doubt. The rewind, it always used to be people would incorporate into a limited company, rather than being a sole trader, you would take your basic rate salary so that you hit all of your state pension boxes.
Right. So at that point it used to be £10, £12 grand. Yeah. And then everything else you would take as a dividend because you didn’t pay National Insurance on it.
[00:39:45] Eleanor Mills: Yeah, right. And, and the taxation rate was lower than on income. Exactly. Is that now, is that now not as beneficial?
[00:39:52] Emma Brown: Absolutely. Yeah. I mean, when they brought in the, the first kind of hike on dividend tax rates, you know, you’re seven and a half and, and it went up to 39.25.
I think back then, as soon as they did that, the reason they did it was so that the differential between taking a salary and a dividend. Was, you know, was basically on parity and it stopped people incorporating and going into companies. Yeah. Because it wasn’t as attractive. That was the reason they did it back then.
So you’re right, an additional 2% now almost certainly erodes the benefit of a dividend. And when you, Emma,
[00:40:25] Jennifer Howze: Emma, can I just, this is Jennifer from NOON just jumping in. Is there a reason why the government would want to keep people from incorporating?
[00:40:35] Emma Brown: Honestly, Jennifer, I can’t answer that question because it doesn’t make any sense to me whatsoever. What a company provides somebody. Let’s be honest about it. Anybody can trade as a sole trader or you can incorporate and trade through a company. Right. What the company offers you is legal protection.
[00:40:49] Jennifer Howze: Yes. One of the problems I had with my previous business, BritMums, which was very successful for more than 12 or 13 years, was that the, a couple of different things came about where it was becoming impossible for us to remain a limited company, but as a result, we couldn’t work with some of our big clients.
I mean, that included Coca-Cola or Boots or whatever. Yeah. They won’t deal with a small sole trader or even a partnership.
[00:41:17] Emma Brown: You’re absolutely right. I think most of the larger firms, if they’re going to contract with you, want it through a limited company for that reason. It’s, it’s, it’s held as a separate legal entity.
You know, you can sue a company. And, and I think I don’t really honestly understand the reason why they would look to almost be suggesting that you shouldn’t trade through a company at this point. It doesn’t make any sense to me. , I’m sure there is sense somewhere, I’m sure somebody’s thought about this, but ultimately, again, and to kind of, I guess go right back to my original point, the, the, the chancellor is saying that she hasn’t broken the income tax pledge in her manifesto.
Don’t get me wrong. The raises on dividends, the raises on savings and the raises on property, they’re all income tax. They’re just called something else.
Yeah, right. She’s just taken different income types and therefore the terminology that we use from a tax perspective is slightly different. You call it a dividend tax rather than an income tax, if that makes sense.
But it’s a technicality only.
[00:42:14] Eleanor Mills: Yeah. But it’s basically an income tax on, , on people with small businesses who pay themselves for dividends. It’s, it’s the way they take their income. So it is an income tax, it’s just called something else. You’re right. Yeah. And somebody, Maria is saying if you’re a grandchild living with parents who are living with their parents, could the property be gifted or put in trust for the grandchild and be free of inheritance tax?
[00:42:37] Emma Brown: Unfortunately, there’s something called gift of reservation of benefit. Which is a bit of a mouthful, but if you take it literally, it means if a grandparent in this situation gifted to the grandchild, yeah, that’s quite helpful. Because you’re knocking it down two generations, which means you’re kicking that inheritance ca tax can hopefully much further down the road, but where they’re still living in that property or they can still benefit from that property, then all of that is looked through and the planning is
[00:43:03] Eleanor Mills: okay.
So you can’t do that. You, so basically if you’re all living in the same house, then it’s still going to count as their house. Even if you try and do that.
[00:43:09] Emma Brown: Exactly the way around it, Eleanor, is to charge your grandparents rent, that will go down. Well try that one.
[00:43:14] Eleanor Mills: No, and I think, I think this is really difficult.
I think there’s a really big, I think there’s a big kind of psychological thing. Because I I, I’ve really sympathise with some people on the chat saying, how do you have that conversation with your parents? Because that’s certainly a conversation that me and my sister have been trying to have with my mother for years.
Because she was like, oh darling, you know, you, you’ll inherit my, you know, my flat. But the reality is because the inheritance tax will be so high on it, we’re going to have, we’ll have to sell it. That, and we’ve been trying to say to her, Because there’s a 7-year rule, isn’t there around gifts
[00:43:44] Emma Brown: lifetime.
[00:43:45] Eleanor Mills: If she’d done that, then we might be able to do it, but now it’s getting a bit late. She’s getting quite old.
[00:43:49] Emma Brown: Yeah. Look, the, the, the two big things that help you with your inheritance tax exposure is gifting away in your lifetime.
Yeah.
So we call that a potentially exempt gift. And and that’s the 7-year rule that you are talking about? Yeah. So if you gift it away and the person gifting survives seven years.
[00:44:06] Eleanor Mills: Yes,
[00:44:07] Emma Brown: No inheritance tax, you’re fine.
[00:44:08] Eleanor Mills: Okay.
[00:44:09] Emma Brown: If they die within that 7-year period, there is an element of inheritance tax to pay. And once they’ve survived 3 years, that becomes less and less and less over time. Which is the reason why we call it potentially exempt.
[00:44:21] Eleanor Mills: Okay,
[00:44:23] Emma Brown: So that, that is something you can do.
The earlier that people gift, the better, because obviously the more likelihood is they’re gonna survive seven years, right? Yes. Being, being brutally honest about it. The other good thing to be able to do is once you’ve got yourself to a position where you’ve done all of your investing, you’ve, you’ve invested in the most tax efficient where you can, you understand where everything’s going.
If there’s a residual IHT liability and mob mentioned it earlier, you can insure it against that. Okay? So you can pay a premium. Now that says, okay, on my death, I know that, that, my, my beneficiaries are going to have to pay inheritance tax of this. So I’m going to pay an insurance policy now that will pay out when I die to make sure that inheritance tax liability settled on their behalf.
[00:45:04] Jennifer Howze: Okay. And what kind of, how expensive are those kind of inheritance tax policies? Are they quite expensive because you, you know, they can be, it depends how old the person is, right?
[00:45:11] Emma Brown: Right. If you are younger and in better health, actually the premiums can be incredibly low, unfortunately. So that, so that might be worth something to worth looking into
[00:45:22] Jennifer Howze: and definitely. Mm-hmm. And Emma is that something that if I were to come to BKL as a client, y’all would be able to say, here are some, you know, here are these kind of policies, here are some options, that kind of thing. Is that the kind of thing y’all advise on?
[00:45:36] Emma Brown: Absolutely. Jen. There are a few people that can advise on this, and what you want to make sure is these three people will talk to each other, okay?
[00:45:43] Jennifer: Mm-hmm. So your
[00:45:43] Emma Brown: tax advisor will be able to do it. Your independent financial advisor will be able to do it, and the lawyer that does your will, will be able to do it. Okay? Now what you want to make sure is that these three people are talking to each other, that they don’t try and point score off each other.
Because what quite often happens when you’ve got more than one professional advisor in the room is somebody will go, okay, well I’ve suggested this and somebody else will go, oh, but I know a bit better. Yeah. And, and you get this point scoring mentality. You don’t want that. You want all of your three advisors talking to each other very well discussing, sharing ideas, and coming together with a joined up plan.
Because that way they’re putting you front and centre. They’re not trying to point score, they’re trying to make sure that you as their client are best advised.
[00:46:27] Eleanor Mills: Yeah. Yeah. And that, sorry to sense the team. ,
[00:46:32] Jennifer Howze: I was just going to say that’s would be of benefit of going to a place like BKL because I could get all that information in one place.
[00:46:41] Emma Brown: Yeah. So win not Louis so I need to make that really, really clear. We don’t offer legal advice. We do work with, you know, a a, a great list of fantastic private client lawyers that would be able to, you know, we’d be able to recommend. But as Mark said earlier, I think you want to make sure your advisors work best for you.
So we always recommend at least two or three advisors in any different capacity. Call all 3 of them, you know, talk to them, help, you know, understand who you connect with. Ultimately, you want your professional advisors to be people that you trust and that you can communicate openly with. Because if you don’t tell them everything, they’re going to advise you incorrectly.
It’s not going to work. Okay? So I think you want to go to, if you, if you have one advisor that you really trust, you can ask them to recommend other people because they will tend to recommend people that are very similar to themselves, I would say as, as advisors. But you do a bit of research. Don’t just go to the first one.
[00:47:37] Eleanor Mills: Yeah, I think that’s really good advice. But I would also say BKL do do wills and they will kind of, you know, they definitely offer a kind of joined up, a kind of joined up service, so you are not going to get kind of conflicting. Yeah. Kind of conflicting advice from those people want you to explain lifetime gifts and particularly what that means from November, 2025.
[00:47:57] Emma Brown: I mean, ultimately it’s giving your assets away before you pass. Okay. So during your lifetime, and that can be anything from cash or cars or chapels or stocks and shares.
[00:48:07] Eleanor Mills: And are there limits on how much you can give away?
[00:48:11] Emma Brown: No, is the short answer. However, you need to understand most of the time, if you’re giving something away, it is a, it is a disposal for capital gains tax so that you know, you, you don’t want to be saving with one hand to pay tax on another.
So it needs a little bit of consideration. There are some, sorry.
[00:48:30] Eleanor Mills: So if you are in the receipt of a gift, you can, you can get club with capital gains tax, is that what you’re saying?
[00:48:35] Emma Brown: No. If I’m gifting to you, Eleanor.
[00:48:38] Eleanor Mills: Yeah.
[00:48:38] Emma Brown: So if I’m, if I’m saying, okay, I don’t want this asset anymore and I’m giving it to you.
Yeah. It’s the disposal on me. I’ve, I’ve still sold something. Okay. And where, where you are giving to somebody that is a connected person to you. Think about this. Mainly family members. Yeah. That they’re connected for this purpose that is deemed to be at market rate. So even if you don’t pay me anything for it,
[00:49:01] Eleanor Mills: Right.
[00:49:01] Emma Brown: I will get taxed as though I sold it at today’s current value.
[00:49:06] Eleanor Mills: Wow. And there’s Wow. And is there, and is there a limit on that? So can you give away kind of smaller limits without being hit with that tax
[00:49:11] Emma Brown: £3,000 a year? You can, you can gift away from an inheritance tax perspective. But if are, so it’s,
[00:49:17] Eleanor Mills: so it’s really, it’s got re it’s got really tight.
So if you are kind of, you know, your m is whatever is sitting on over some, you know, a flat or some reasonable assets or a pension, it’s quite hard to get them out of their estate.
[00:49:31] Emma Brown: Yeah. I mean, look, if it’s real estate, it’s not only capital gains tax we’re worried about, it’s also stamp duty loan tax, by the way. Which is another tax. Again,
[00:49:39] Eleanor Mills: This is not good. What would be roughly the maxim salary plus dividends we can take each year from April, 2026 while still staying within the basic rate, says Julia Self and a lady runs a business entrepreneur under, after my own heart,
[00:49:55] Emma Brown: Oh look, I think the basic rate band is, is being frozen, so it’s about £50 grand.
Yeah you’ve got your basic raise, I think 12, 7 50 at the moment. It’s on the slide, so sorry, my apologies. These number move quite a lot, but
[00:50:06] Eleanor Mills: Yeah, it’s about £12,500, isn’t it? So that’s what you can earn without having to pay any tax at all. And then between £12,000 and £50,000, you paid 20%, is that right?
[00:50:15] Emma Brown: Exactly, yeah.
[00:50:17] Eleanor Mills: And then after that it’s £40,000 and after £125,000 it’s even more, isn’t it?
[00:50:23] Emma Brown: Yeah. So the dividend tax rate’s slightly different. And you know, the savings again, so you’ve got slightly different thresholds and tax rates for property and dividends and savings, which is the reason why the chancellor change those rather than your earned income on a salary is, is deemed as something different.
[00:50:41] Eleanor Mills: Yeah,
[00:50:41] Emma Brown: It’s all income tax, as I said earlier.
[00:50:44] Eleanor Mills: I mean, certainly what I’ve found as an entrepreneur is that taking some tax advice and, you know, talking to your accountant about the most tax efficient way to do things ends up saving you far more money than the cost of taking the professional advice.
[00:51:00] Emma Brown: I would, I would absolutely hope so. I mean, any professional advisor should be adding value, right? Yeah. You shouldn’t be entering into a conversation that’s costing you more than you save.
[00:51:08] Eleanor Mills: No, but I think, but I think that that’s something that, so people can, like, if you talk to an independent financial advisor or you talk to an accountant, yes, you know, they will charge you some fees, but they will always save you more money than the money that you pay them.
[00:51:21] Emma Brown: The good, the good ones will, the good ones will, but the point there is around timing, isn’t it? You know, because I might be saving you tax 5, 10 years time, but you are having to pay my fee right now.
[00:51:33] Eleanor Mills: Yeah.
[00:51:33] Emma Brown: And so it’s a timing point for a lot of people.
[00:51:37] Eleanor Mills: Yeah. And, and, and there’s a trade-off.
But I think what we see, I mean, what we’ve seen in the big piece of Queenager research that we’ve just done around women getting divorced in midlife. And what we also saw when we did the financial Spanx and with our other kind of the other bits of research that we’ve done at NOON is that most women, most Queenagers, are not.
Taking enough financial advice. So only 9% of women getting divorced were talking to any, taking any kind of financial advice. Yeah. And that was often a mistake because they were very emotionally attached, say, to staying in the house that they’d been in, rather than thinking about the value of the spouse’s pension or those kind of things.
So what, what I think we would like to get across is that if you take some financial advice, you will probably almost inevitably be in a better financial position than if you hadn’t, because they’ll tell you things that you didn’t know. And as the tax system gets kind of tighter and tighter, it’s more and more important to have the right kind of tax advice and tax planning advice.
Because as we can all see, the inheritance tax rules are basically going to catch all of us. They were never intended to do that. But if in a, and now if you are, you know, you even have any kind of a house in the southeast, you are going to be hitting those thresholds.
[00:52:52] Emma Brown: Absolutely. Yeah, undoubtedly. And you know, I think when we’re, when we’re talking about this.
It’s really difficult to understand when is the right time. Yeah. And we were talking about divorce earlier, right? I think you can come out of that situation. It’s incredibly emotive and frankly, trust is broken quite often. So you need to find the right person. Somebody I, I saw has put in the, in the chat, how do you trust somebody?
[00:53:14] Eleanor Mills: Yeah. I was just going to ask you about what does trust look like when selecting advisors? I mean, I would say that for me trust on selecting an advisor was being introduced to them by somebody I really trusted. So my co-founder at NOON, , had been a BKL client for like 20 years before she introduced me to them, and I really trust her.
So that was a kind of good thing. And then I think it’s about the chemistry between you and the people that you work with, and also feeling that they, they understand you, they understand what your business is doing and that they’re, and that they’re there for you in a kind of, you know, in a way which is more than just the kind of business.
More than just a kind of business relationship. So I think there’s also, it has to be a bit of kind of personal chemistry in this kind of thing. Do you think that’s right?
[00:53:58] Emma Brown: Absolutely. I think, I think there’s, there’s a lot of products that I get seen being sold to people from a tax perspective that are totally inappropriate for them.
If you are entering into a conversation with an advisor and they say, politely, you don’t need me right now, you’re good, but come back to me if this happens, or this happens.
[00:54:14] Eleanor Mills: Yeah.
[00:54:15] Emma Brown: And they’re almost not forcing you in into advice where you don’t need it. Great sign.
[00:54:20] Eleanor Mills: Yes.
[00:54:20] Emma Brown: I think when we talk about independent financial advisors, what does that mean?
There are some people that are not independent. They work for, you know, a firm and they will sell that firm’s products, whether or not they’re the right product for you. You know, if you’ve got an advisor that says, don’t go into sustainability when they know that that’s your value, not the right person for you.
But ultimately I think where you’ve received advice and you crosscheck that with an advisor that you do know and trust, you know, does this feel right? Does this sound right? Please, please, please, everybody on the call do not crosscheck advice with Google tax. Google always wrong. , and so is Bob down the pub.
I get that a lot. My mate, Bob down the pub told me this was really good advice. The difficulty is, and the right advisor will ask you why you want to do something. You know, if you say, okay, I want to do this. If they’re going, okay, well we’ll do that without asking you why. What’s the intention? What are you trying to get out of this?
If they don’t understand why you are doing it, they’re not advising you properly.
[00:55:20] Eleanor Mills: It’s a really good question here about do you coordinate advice with international tax advisors for people with assets and income in the UK and abroad? I’ve said yes. Because I know that you did.
[00:55:27] Emma Brown: Absolutely.
We’re part of an international association called DFK and I sit on the International Tax Committee. , so we do a lot of work around cross-border relationships, and the reason why we as fermented into that association is because, number one, we wanted to give our clients the confidence to go into a, a different geographical location with confidence rather than, you know, I’m, I’m not having to Google accountant in Dubai.
Right. The, the other thing about it, we are not tied to them, Eleanor, so we don’t have to refer to them. So we only refer to advisors that we know and trust that are going to treat our clients as well as we would to.
[00:56:00] Eleanor Mills: Yes. No, no, that’s, that’s, that’s definitely good. Okay, so I reckon we’ve got Chime for one more.
One more question. So Anna very patiently, right at the beginning, said, Budget mentioned that you have to have 35 years of National Insurance contributions for a full state pension. But what’s the minim National Insurance contribution per annum as I only have 30 years worth? She says
[00:56:20] Emma Brown: You can top up voluntarily.
Okay. So there is a form that you can fill out. I think if you, if you Google it, it will, it will pop up. And if not, I can send the link through. Yeah, you can get test against what you’ve contributed and how much they pension that you would now receive if you didn’t do anything. Yeah. There is something called class 2 National Insurance.
, sorry, not class 2. Class 3 is voluntary. You could top up and you could put money into that pot to effectively tick the box for the additional 5 years.
[00:56:46] Eleanor Mills: Yeah.
[00:56:47] Emma Brown: And again, so you get the full pension, so you get your full state pension in the end. Yeah, exactly. But again, if you had an independent financial advisor, they’d be able to say to you, okay, well if you put that amount in, you’ll get this as a return.
Or I could put that same money somewhere else and get you a better return. So pension blindly, I guess is the point.
[00:57:06] Eleanor Mills: Yeah, there are always, and that, that there are always trade-offs. I mean, I just think, I think that it’s been fascinating, , talking to you both. Thank you so much. I can see that we are almost, almost at the end of the hour.
It’s gone really quickly and so many kind of great questions from you all out there. But I think that the kind of really key takeaway is it’s worth going, getting some advice. Particularly it’s always worth having a will Because if you don’t get a will, that’s you know, that’s a whole world of pain for your descendants and incredibly expensive.
And it’s worth really thinking if, particularly if you’ve got a house or any kind of asset, which is worth over a million pounds and you know, or your parents have, is taking some. Some kind of fun inheritance tax planning or some tax planning or financial planning kind of Now, because one of the great things about being a Queenager is that we know that we are likely to live till we’re a hundred.
And actually at the NOON circle the other day said, if you are relatively healthy in your fifties, as a woman, you can probably expect to live till you are 97, which is fantastic, but we’re also going to need some money to underpin that. And women currently have a 35% gender pension gap, which people don’t talk about.
So women are retiring with between 35 and 40% less than their pension than men are. So it’s really important, I think, for women at this point to take some advice, kind of really work out what the, your, what your options are. And you may, there may be things out there that you can do that you have no idea about.
So this is something that I was very, , resistant about when I first set up NOON and be having become a business owner kind of twice over, I really realized that there’s, , huge amount of value in taking some advice from people who know they always will, in the long run, save you some money.
And you know, more than that, you can get, you can, you are going to leave a real pickle for your descendants if you don’t get a will and you don’t have, you don’t do any kind of planning. And also what I’d like to say to you all is that it’s really worth putting some money in the stock market, just not just keeping it in cash.
Because as we saw last year, that the value of your cash is being eroded all the time by inflation, Myfanwy and Emma, do you want us to have a quick kind of parting shot?
[00:59:14] Emma Brown: I’ve just put the state pension forecast link into the chat for anybody that needs it. So that will, that will be what helps you understand what you’re going to get right now, and it should talk you through next actions as well in terms of voluntary contributions.
[00:59:27] Eleanor Mills: Brilliant. Thank you so much for that, Emma. You’re welcome. And thank you. Thank you so much, Marvin. Thanks for being credit. So honest about your own and it’s really, I think, really helpful to those of us who feel we don’t know very much about this. To hear somebody like you who’s a brilliant accountant, who’s also like, had to kind of get their own finances under control.
Because I think we can feel like we’re the only ones who are finding this difficult. But.
[00:59:49] Myfanwy Beynon-Pollitt: Absolutely. Do you know, the only thing I was going to add was, was that that piece around going with your gut and really listening to yourself, if you don’t understand something and nobody’s, and, and you’re not finding it’s coming clear, just keep asking the questions and don’t, don’t let yourself be, be put off from finding the answer.
There’s nothing wrong with your ability to understand as the person is not explaining it to you clearly enough. So just to go away with that piece of confidence for these conversations, because they can feel quite complex, but they don’t need to.
[01:00:15] Eleanor Mills: Yeah. And I think, I think that’s really true, and it’s okay to kind of keep asking questions.
Yeah. I mean, I’m a journalist, so my job is to ask questions, but I often find myself with my financial advisors going, look, hang on a sec. Can you just explain that again? Or get them to kind of put it on a, you know, put it on a piece of paper or give you an example and keep asking the question until, you know, until you get an answer that makes sense to you because it’s your money and it’s your future, and you have a right to advice which kind of feels right for you. And if you are, if you have an advisor who is making you feel uncomfortable when you do that, then you know they’re the wrong advisor. Go and talk to somebody like Emma or Myfanwy.
Someone who you do, or Tony who looks after me at BKL and who can explain it to you in a way that does make sense, because that, you know, that’s really empowering. And what we’re trying to do for all Queenagers is to give us all more agency, more power, more sense of control over our lives, and particularly our money as we age.
Oh, brilliant. I’m so glad that so many of you have enjoyed this. Lots of chat and lots of stuff in the chat about how helpful it was and, and you know, the informative and well explained. So well done Emma and Mel for, for that. We really appreciate it and we’re going to be doing some more of these. We are really happy about our partnership with BKL Because we can also see what value it brings to all of you lovely Queenagers.
So whether you’ve been watching live or whether you are watching this on catch up, thanks so much for joining us, do check out BKL. The email is queenagers@bkl.co.uk I think that’s right. Yeah, to queenagers@bkl.co.uk. That is a special email just for you wonderful ladies who come in from NOON.
We entered into this partnership because these are people I trust with my own, my own money, my own businesses. And so this is a really, this is as good a recommendation as I can make. I can’t do more than say, these are the people that I use myself. So thank you so much, Myfanwy. Thank you, Emma.
Thanks, Jen for being superstar in the background. Never runs smoothly without you. In fact, Jen knows far more about all of this than I do. Really lovely to see so many of you. And I hope we see you really soon.
And, . Yeah. And hopefully we’ll see lots of you at the party next week, which is being held at BKL’s very swanky offices in, , central London. I’ve just ordered all the booze which is so it’s going to be I’ll be there then.
[01:02:33] Emma Brown: Ellen
[01:02:34] Eleanor Mills: and Emma, Emma and love, you’re both coming to that, aren’t you?
Indeed, yes. So you can buttonhole them over a glass of Prosecco or two.
[01:02:42] Jennifer Howze: I was going to say Emma and Myfanwy. They’re going to be very busy I bet at the party
[01:02:48] Eleanor Mills: And very popular. Lovely to see you all. Thank you so much for joining us.
The video of this session we’ll also send to everybody who registered. So thanks.
[01:02:56] Jennifer Howze: And it’ll be up on our YouTube channel and we’ll do highlights on socials.
[01:03:00] Eleanor Mills: Brilliant as ever. Thank you all. See you soon. Thank you. Thanks very much. Bye-bye. You. Good luck. Take some financial advice.
