News & Insights

Education and school fees planning is a major concern for any person looking to provide the best opportunities in life for their children or grandchildren. It's a serious enough burden whoever and wherever you are in the world, but if you are one of the several million British expats living abroad, the issue can seem particularly daunting.

Especial empathy should be reserved for those families who have chosen, whether it is for work, lifestyle, health or other concerns, to move abroad and to send their children to private boarding schools back in the UK.

For parents in this position just a small change in their financial circumstances can occasionally place their children's private education at risk. Fees can be onerous and effective wealth management planning can mean the difference between comfortably affording them or finding the bill a distinct headache.

Official figures have revealed that pension funds have plummeted a further £25 million into the red. The fall in bond yields - on which pension funds rely - has increased the pressure on the pots available to support final salary scheme pay-outs. At the end of May, the pension backstop PPF (Pension Protection Fund) revealed that the roughly five and a half thousand pension schemes it monitors have a combined deficit of nearly £295 billion. This is almost £25.5 billion worse than a month earlier.

Fears for the robustness of pension pots have been highlighted by the widely reported BHS deficit.  They come as a separate study reveals some of Britain’s biggest companies are paying shareholders a dividend bonanza despite huge deficits of their own. The Pensions Regulator have issued a similar warning in the past, saying: ‘It is important that employers treat their pension scheme fairly. We expect trustees to question employers’ dividend policies where debt recovery contributions are constrained.’ 

Is it time the 21 million people with over £60 billion saved should cash in their Premium Bonds? Of course, you could just win millions! Premium Bonds are a savings product where the interest is based on a monthly prize draw and the annual prize rate is dropping from 1.35pc to 1.25pc. This is the average return, indicating that for every £100 paid in to bonds, on average £1.25 a year is be paid out.

In practice, that’s impossible. The smallest prize is £25; so if 20 people each had £100 in, for one to win £25-plus, the remaining 19 win nothing.

They seduce with tax-free returns, but if you live in Spain that is not and has never been the case and now, in the UK, that’s no longer special with the new rule meaning all savings interest is automatically paid tax-free.

It's no surprise that France is a popular destination choice for British expats looking to spend their retirement years overseas. From its beautiful pastoral landscapes to its quaint cobblestoned streets, settling into a new life in France is like living in a Claude Monet painting.

The lure of this picturesque setting is too much for many retirees to resist. If you are considering joining your fellow expatriates, then there are a few things you should consider.

As we hurtle towards the EU referendum and are being deluged with information about the whys and wherefores of Brexit or Bremain, Blacktower takes a look at what matters to us: the UK expats whose futures, whatever the outcome of the vote, are very much determined by the quality of their expat financial advice.

Well, data published by the Office of National Statistics shows – although not completely reliably, we feel – that there are around 1.2 million British expats within the EU (some estimates put this figure as high as 2 million).

The vast majority of these live in tried, tested and sun-drenched destinations such as Spain and France. But before you start thinking that expats just move away purely in search of a sunnier climate, think again; the third most popular destination is Ireland (150 days of rainfall a year compared to the UK's 133).

Following the news that no new buyer was interested in BHS and its £571 million pension deficit, a number of our clients with a working history in BHS got in touch with us to find out their position and options with regards to their future pensions. Unfortunately, it was too late as the window had closed. The BHS scheme got into the Pension Protection Fund, a statutory fund in the U.K., intended to protect pensioners if their pension fund becomes insolvent. What this means is that they are now locked in without any possibility of looking at alternatives and transferring out. For deferred members, this means a potential reduction in pension income as the PPF only compensates 90% of the income up to a certain cap.

It has been reported recently that the new pension freedoms are not that easy to take advantage of.  Savers looking to move their funds from an under-performing pension often find that there is a high price to pay for the privilege. All too many fund managers slap hefty charges on disgruntled customers looking to make a getaway, in the shape of exit fees. These can eat up as much as five or ten per cent of your pension and also prevent many savers from taking advantage of new pension freedoms. 

Now that it is almost settled that the U.S. presidential nominees are known - barring any huge U-turns or assassinations - both candidates have been setting out their plans for economic transformation to make the USA great again. What is very interesting is that both Donald Trump and Hilary Clinton are aiming their reforms at the super-rich.