How much do I need to retire?

There are many varying factors that make up every individual’s answer to this question. Sadly, there is no “one-size fits all” answer, and seeking financial advice might be a good idea if you’re unsure.

You will need to consider what you can afford to be putting into your pension. You should evaluate your day to day living expenses and liabilities (mortgage, loans, etc.) these could all affect your ability to increase your regular contributions. If you can’t afford to make higher contributions now it isn’t the end of the world, it might just result in having to make higher contributions when you are more financially stable. You are currently unable to draw money from your pension until the age of 55, so you will need to ensure that any money invested is not integral.

Here are a few questions you should be asking yourself when trying to manage your retirement savings:

What do you already have in your pension?

Looking at what you already have in your pension is the best place to start. Doing so will allow you to see how quickly you are currently building your pension and how it might look in the future, from there you can start to make informed decisions and realistic expectations.

What kind of lifestyle are you looking to have during your retirement?

Your desired lifestyle will increase or decrease the amount of money you should have saved in your pension. If you are looking to spend £30,000 a year, you need to ensure you can afford to.

When are you looking to retire?

If you are considering taking early retirement then you will need more money in your pension to ensure you don’t outlive your funds.

With your state pension, there are benefits to retiring after your state retirement age. Choosing to defer retirement results in your income being increased.

What is your attitude to risk?

We all know the saying “high risk, high reward” but you need to consider what would you do if you lost all your pension savings? Could you afford to live? If the answer is no, then you should re-consider the amount of risk your taking with regards to your money.

Equally, more ambitious retirement plans may require more risk to be achievable.

If after crunching the numbers your goals seem unobtainable it might be worth considering managing your expectations and if all of this still seems confusing it might be worth seeking financial advice.

If you would like to talk to someone about your pension or receiving more information on how we could help you with your pension, please contact Sound Financial Management via telephone (01752 207070) or via email (

Work Experience with Sound Financial: Jacques Hubbarde

At Sound Financial Management we are constantly striving to encourage interest within the financial services sector, especially when it comes to the future of our industry. Encouraging young enthusiastic talent into our industry is important to us and the city of Plymouth.

Our graduate scheme has provided a gateway for those leaving university wishing to develop a career within the research & advisory sectors.

The business administration apprenticeship scheme has also provided school leavers the opportunity to qualify and progress within our support teams. Our first apprentice completed their NVQ  in 2010 and we have seen many of them flourish and progress their careers with us.

Jacques Hubbarde, a GCSE student from Hele’s Secondary School recently join us for his work experience. Jacques spent the week assisting our research team, developing an insight into our industry. Jacques’s ability to grasp many of the key aspects of the financial services industry was most impressive and we hope his experience will assist his business studies at school.

When questioned about his time with us, Jacques said “My placement has confirmed my future aspirations towards a career in the financial sector”.

We are pleased we have inspired him to consider the financial services industry as a career and wish him every success in the future.


Do You Need a Financial Adviser?

Regardless of whether you are considering buying a financial product or looking to establish a long term financial plan, you could possibly find yourself in need of a financial adviser.

There are a number of factors that should be considered when making financial decisions. A financial adviser can help highlight these and suggest the most appropriate route for your own personal needs and circumstances. Advisers offer services ranging from holistic financial planning, to more specialist advice.

What services do financial advisers offer?

All professional financial advisers need to know their client, this is usually done by completing a ‘fact find’, this process will entail answering questions in detail about your own personal circumstances, establish what your long and short term goals are and the amount of risk you are willing to consider with regards to your investments. This will then allow the adviser to provide recommendations that are suitable to your needs and aspirations.

Types of financial adviser

There are 2 different kinds of financial adviser. An independent adviser, meaning that they offer advice on the full range of investment products from the market or a specific market segment and a restricted adviser, meaning that the range of products or providers they will look at is limited.

The benefits of getting advice

Seeking advice should result in purchasing the right product for you, meeting your needs and expectations whilst taking into consideration your personal circumstances.

Depending on the type of adviser you use, you may also have a wider range of choices than you could possibly access on your own.

The difference between advised and ‘non-advised’ sales

Generally your bank or building society will discuss with you different products and let you decide which route you take.

Although this will allow you to make an informed decision, it doesn’t necessarily ensure you leave with the product that would suit your own personal financial needs and circumstances.

When should you seek financial advice?

The answer depends on the product and your own personal circumstances. You should ask yourself these questions; can you afford to lose any money? Do you have the time to do the research? Do you know what you’re doing when it comes to investing? If something goes wrong, are you able to take responsibility for any bad decisions? If you answered ‘No’ to any of these then you might want to consider seeking financial advice. It might be worth considering the potential financial and emotional cost of not seeking advice and purchasing the wrong product.

Is it cheaper to buy without advice?

If you do not seek advice you will not have to pay a fee. However, not seeking advice could result in purchasing a product which is unsuitable for your needs and goals and some products are only available to purchase through an adviser.

What do you pay for financial advice?

A lot of advisers offer a free initial consultation.

On 31 December 2012, the law regarding financial advice fees changed. Fees are required to be established up front and agreed before any work is carried out.

You can choose to receive on-going advice to insure your investments continue to be appropriate and is invested to achieve it’s optimum performance.

Cash savings products

Because cash products such as cash ISAs and fix rate saving bonds are relatively easy to understand, you may feel that you do not require advice and feel confident to use comparison sites; these products are easy to buy directly from the provider yourself.


Investments such as shares and unit trusts can be purchased directly from the provider. However, this is only recommended if you feel you have sufficient knowledge and are confident with the placement of the investment. These products can be more complex than cash savings products, an adviser will ensure you are aware of the products available to you when making your investment. Not seeking advice could result in purchasing a product that is not suitable for you.


Your employer should offer you a workplace pension. With this they may also offer you access to an adviser who can provide guidance about the scheme.

You can choose to invest in a personal pension; in this case it’s usually best to get advice unless you really understand how these products work. Personal pensions can be used to boost your existing pension savings or to merge different schemes together.
As pensions are long-term investments, you need to ensure you understand the various types of pension available to you and pick the one most suitable for your needs and goals.

Insurance or mortgages

This can be purchased or arranged via a price comparison website or brought directly from the provider. However, it is recommended that you do seek advice for these products to ensure you end up with the correct one for your circumstances. It might also be a good idea to have the range of products and options explained to you. Some products are again only available through an adviser and seeking advice could create the opportunity for a lower rate.

Everything you need to know about ISAs

An Individual Savings Account (ISA) is a method for you to save up to £20,000 (current limit for the 2018/19 tax year) tax free! You won’t pay tax on any interest on your investment as well as not having to pay any income or capital gains tax on the monies invested.

You can open an ISA lots of different ways including via your; bank/building society, a peer-to-peer lending service, a crowdfunding company, a stock-broker, a credit union, a friendly society and another financial institution.

There are 4 variations of ISA, it is possible for you to put your annual allowance into one of each kind of ISA or split your allowance across some/ all of the other types.

The different types of ISA are;

•Cash ISA
Cash ISA will generally include savings from a bank and building society

•Stocks and shares ISA
A stocks and shares ISA can include shares in companies, unit trust and investment funds, corporate bonds and government bonds.

•Innovative finance ISA
An innovative finance ISA allows for peer to peer lending without the use of a bank, as well as crowdfunding debentures – investing in a business by buying its debt.

•Lifetime ISA
A lifetime ISA can be used to buy your first home or save for later life, you must be over the age of 18 but younger than 40 to open a lifetime ISA. You are only able to put £4,000 into a lifetime ISA each year, the government with add a 25% bonus to your savings (up to a maximum of £1,000 per annum). These funds can be held in cash or within stocks and shares.

You can also open a Junior ISA for your child; this has an annual allowance of £4,000 and can hold stocks and shares or cash.

If you would like to consider opening an ISA or receiving information on which ISA might be more suitable for your own personal needs and circumstances, please contact Sound Financial Management via telephone (01752 207070) or via email (

Inflation Vs. Cash: What does inflation mean for your savings?

High inflation can cause issues when you’re saving, especially when your bank is only offering you a low interest rate.

What is inflation?

Inflation effects how much your money can buy. Think about 10 years ago, how much did a pint of milk cost? In all likelihood it cost now costs more: that’s inflation.

Rate of inflation

Still not sure what inflation is? Well, if a pint of milk was 48p this time last year and 50p now, you could say that the annual rate of inflation on a pint of milk was just over 4%. If you then expanded that to measure the changes in price of lots of goods and services, you could see how the cost of living in general is going up, or coming down. In the UK we have two main inflation rates: the Consumer Price Index (CPI) and the Retail Price Index (RPI).

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14 Ways To Save Money

Whether you’re a student studying at uni, trying to save for your first home or just saving for that next big purchase, everyone could do with a few helpful tips to save themselves some money. We’ve listed a few changes to your spending habits that can be made to make you more of a successful saver.

Sometimes it can be making little changes that make all the difference when trying to make considerable progress regarding savings or retirement fund building and saving a bit of money here and there can add up considerably over time. Here are 14 areas you can focus on:

1. Utility Bills
Some bills you just can’t get around paying, especially utility bills. But never fear: There are ways to help lower your energy bill in summer, winter, and all year long. Switching is easy and should be done regularly to ensure you’re receiving the best deal available to you. Comparison sites are very helpful and your usage could result in you benefiting from a different style of tariff than you’re already on

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The Main Changes This Tax Year 2018-19

The new tax year began on Friday with a bigger than usual set of changes to income taxes, personal allowances, pensions, buy-to-let taxation and dividend taxation. Here’s what to expect.

Personal allowance
The amount you can earn without paying income tax rises from £11,500 to £11,850, which works out as a tax cut of £70 for most people.
Income tax
The starting point for paying 20% basic rate tax will be £11,850, while 40% tax will start on earnings above £46,350 (up from £45,000).
It’s different in Scotland. The £11,850 personal allowance is the same, but the first £2,000 of earnings after that are taxed at 19% rather than 20%. After that, it’s 20% tax until your earnings hit £24,000, when it rises to 21%. Then above £43,430 the rate is 41%. Both have an upper rate above £150,000; in England it’s 45%, in Scotland 46%.
National insurance
Will be charged at 12% of income on earnings above £8,424, up from £8,164 until you are earning more than £46,350, after which the rate drops to 2%. It’s the same in Scotland.
Auto-enrolment Pension contributions start racking up from this week. From Friday workers must pay a minimum of 3% of salary into a pension (up from 1%), while the employer contribution rises from 1% to 2%.
Buy-to-let landlords
Will only be able to offset 50% of their mortgage interest when calculating their tax bill, compared with 75% before.
Until now you could earn £5,000 in dividends tax-free. This drops to £2,000 for 2018-19.


Why Is Life Insurance So Important In Your 20s?

In our 20s the last thing anyone wants to think about is getting ill or, god forbid, worse. Although we still feel like we live care-free lives and have no responsibilities, the reality is that we are now financially independent and this comes with certain responsibility not only to ourselves but to others. If you have any loans, a house, significant other or children, you should be looking at life insurance.

Today, we prioritize our technology and our pets, taking out policies to cover loss and damage to our phone and ensuring vets bills are covered for our furry friends. These are generally the first considerations when thinking about insurance, but why are we not considering ourselves? The main reason is that we don’t get educated to the importance of personal insurance, if you get ill and can’t work, you will most likely seek additional help from your parents or a home care service, which could be costly. Having insurance will absorb some of this financial burden and avoid eating into savings. The mind-set in the UK is also hindered by the NHS, because we have our healthcare provided the financial implications of becoming ill aren’t something we would consider an issue, our initial care is covered and we tend not to think about the ripple effect that could be caused due to illness. Potentially having to pay out of a new phone or an operation for man’s best friend is worrying and costly, thus insurance is an instant thought.

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Why You Shouldn’t Keep Your Money In Your Current Account

I’m sure I’m not the only one that makes the mistake of keeping all their free cash in their current account, but did you know that doing this can actually be losing you money?

Inflation Vs Cash FTSE Graph

Okay, no need to panic your bank isn’t stealing from you but in relative terms, your money is decreasing in value when you leave it sitting in your current account. Over the past 10 years, inflation (red line) has more than doubled the performance of cash (green line). This means that despite any growth a cash holding might have received during this time, in real terms the value of this saving would be halved.

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