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julY 2015 THE royall wealth partnership BRIngIng YOu OuR lATEST nEWS AnD InFORMATIOn On HOW TO BRIng YOuR MOnEY TO lIFE Welcome to the first edition of our newsletter e Royall Wealth Partnership has been launched to help people achieve greater financial security and economic well-being. reflect his key values, which includes transparency and treating the client and consultant relationship as a partnership. He said: “Our goal is to build a firm that works in partnership with its clients to achieve common goals of financial security and personal financial well-being. We believe in transparency, which is reflected in our charging structure. We use fixed charging, rather than a percentage of funds. e exception may be with smaller investment portfolios, where a percentage charge may be more cost-effective.” e firm is expected to grow in future years and is set on achieving Chartered status over the next year. is will show its commitment to raising standards of knowledge, capability and ethical practice. e firm was set up by Derrick Royall, 49, who has worked in financial services for over 30 years. Derrick, who is an associate of the Chartered Insurance Institute, said: “I enjoy working with people and helping make their dreams a reality through financial planning. We all have different needs and goals and it is important to fully understand this in order to offer top quality, personalised and independent advice.” Derrick, who lives in Bitton with his wife of 26 years, Karen, and their two children, has worked with a number of leading accountancy and wealth management firms. He created e Royall Wealth Partnership to Bristol City football fan Derrick enjoys running his own company and believes it helps him to better understand the needs of other business owners. He said: “I understand the challenges business owners face, such as juggling time and resources to achieve an end result. I personally like the flexibility and freedom that running your own business brings. It means you do not have to compromise on your own values.” Pension freedom and responsibility Changes to pension regulations for the over 55s came into force on April 6 – meaning people reaching retirement age can now use their pension pots however they choose. Former Pensions Minister Steve Webb said pensioners could spend their savings on a lamborghini. But what you can do and what you should do are perhaps two different things. People no longer have to buy a guaranteed annual income, an annuity, and have much greater choice. But with choice, comes responsibility. Your options include: taking the whole lot out, with just 25 per cent tax free; drawing a regular income; or passing your untouched pension onto an heir. If you take the money out, you could blow it on a sports car. However, let’s say this will cost £100,000 – only £25,000 will be tax free. e remaining £75,000 is taxed at your marginal income-tax rate – around £23,000. Also, the value of the car will, of course, depreciate. Or you could take the money out to invest, in a buy-to-let for example. But you would need to have a substantial amount to make it worthwhile. Also, you would need to factor in costs, such as insurance, and not expect to see a return any time soon. e Department of Work and Pensions (DWP) has said that anyone applying for means-tested benefits will have their pensions treated as though it still exists – even if they have long spent the money. Derrick is a volunteer with the Young Enterprise and Bristol Musical Youth Productions, of which his son, Tom, is a member. He is also a member of the community networking group, What’s Right. e group raises money for good causes through its business connections. On the other hand, withdrawing money patiently over a number of years would lower the tax rate below 40 per cent and leave you with a much lower tax rate. You could also look to combine these options, by taking a sum of money and buying an annuity. Derrick is a member of the Rotary Club of Bristol Breakfast, which supports charitable projects in the local and wider community. However, your best option will depend on your circumstances and needs. Pensions are not simple and you may wish to seek independent advice in order to get the most out of yours. Find more information on our new website www.royallwealth.com What does a Conservative government mean for your finances? e Conservative party has won the uK election and David Cameron has returned to Downing Street. Whatever your political preference, the Tories’ majority should enable us to plan our finances with more certainty than a hung parliament. We look at what to expect for your finances in the next five years: 1. Inheritance Tax e pledge has been to push the total taxfree allowance from £650,000 per married couple to £1m. An extra allowance would apply only to people’s main homes. However, the devil will probably be in the detail. One way it could work is if a couple has £500,000 of savings and investments and a £500,000 home, their estate would pay no death duties. 2. Income Tax e Conservatives have promised legislation which would prevent any increase in income tax, national insurance and VAT within this parliament. e tax-free personal allowance is to rise from £10,600 to £12,500 by 2020. e higher 40 per cent rate of income tax earnings threshold will increase from £42,385 to £50,000. e higher tax rate allowances could encourage people to aspire to earn more. But tax freezes could make it more difficult to tackle the deficit and it is possible the government could find other ways to collect the funds. 3. Duty Freeze Around 60 per cent of petrol is tax. e freeze on fuel duty rises are believed to help you save around £10 every time you fill up your car. e Conservatives have put into law that energy companies must offer customers the lowest tariffs and reduced green taxes. It is also freezing rail fares in real time until 2020. is will save most people money. 4. Mortgages e top-end of the housing market (those who own properties worth £2 million or more) will have breathed a sigh of relief that they will not be penalised by a mansion tax and the Conservatives have promised mortgage rates will be kept lower. However, low interest rates will continue to cause problems for savers, and investors could be forced into riskier assets in order to achieve a reasonable income in retirement. 5. Pensions Over-55s can now get their hands on their pension funds – rather than being restricted on the amount that they could withdraw or having to purchase an annuity. e Conservatives pledged to reduce the amount of annual pension tax relief available to the highest earners down to £10,000 a year. e change affects people who earn more than £150,000 a year. Overall, the party has pushed through more flexibility. But with that comes more responsibility. 6. Savings Interest rates are at an all-time low, but the Conservatives have abolished a 10p tax rate on savings. e party also plans to introduce a new personal savings allowance that will take around 95 per cent of people out of savings tax altogether. is means savers will not need to mess around with tax planning as much to save tax on their savings interest- assuming interest rates remain at historic lows. 7. Business and Employment e Conservatives pledged to create two million new jobs with the aim of achieving "full employment". Businesses are set to be offered competitive taxes, with a major business rates review to help smaller firms. Support has also been promised to provide three million new apprenticeships. A focus on educating potential employees in a way that employers need will be beneficial to businesses and the economy as a whole. To see the full report of how a Conservative government could affect your finances, visit www.royallwealth.com Music for Charity A charity reception organised by the awardwinning Bristol Musical Youth Productions (BMYP) during its West Side Story performance has raised £500. Derrick Royall, who is a volunteer with BMYP and whose son, Tom, played the lead role of Tony in the show, presented a cheque to Children’s Hospice South West. He said: “We’re delighted by the amount raised and it’s great to see such a worthwhile cause as the hospice benefit. It was a fantastic show and everybody who took part on stage and behind the scenes should be congratulated.” e reception was organised jointly with networking group What’s Right, of which Derrick is a member. e group includes businesses from various industries, which raises money for good causes by donating funds from work generated as a result of membership. Above: From le to right: What’s Right members Derrick Royall, john Tiley and David Wragg presenting a cheque to Kate Fisher, corporate fundraiser for Children’s Hospice South West. Top le: e cast from Bristol Musical Youth Productions (BMYP). le: Tom Royall, who played Tony in BMYP’s West Side Story. We hope you’ve enjoyed the first edition of e Royall Wealth Partnership News. We welcome any feedback you may have or if there are any topics you would like us to cover. e Royal Wealth Partnership Limited | 19 Portland Square, Bristol, BS2 8SJ | 0117 944 3030 | www.royallwealth.com e Royal Wealth Partnership limited is an appointed representative of In Partnership the trading name of e On-line Partnership limited which is authorised and regulated by the Financial Conduct Authority. Registered Office: Elm House, 9 Fountain Court, newleaze, Bradley Stoke, Bristol, BS32 4lA. Registered in England & Wales. Registered no: 9332186