Almost every aspect of our lives has a financial implication. Whether we want to spend more time with our children or to spend half the year travelling, money is our means.

Part of the financial planning process is to invite clients to answer a series of questions which help them to articulate what really matters to them and how they want to live their lives. Sometimes they discover their most deeply held desires and needs and recognise they have to make a radical change of direction. And sometimes they discover that they are truly happy being, doing and having things as they are. More often, people realise that there are things they can do and changes they can make which will enhance their lives immeasurably. And nearly always money is at the root of what is holding them back. And with the right plan, it is money that will help them to move forward.

People are not used to talking to a financial planner about their lives, only about their money. This seems illogical to me. How can we create a financial plan if we do not know what you want from your life? I believe financial planning is a collaborative effort between client and practitioner with the client's needs, concerns, goals and desires at the centre of the process. I call it a Financial Life Plan and I believe it can help us to live a fulfilled life.

In my experience it's not easy to work out what you truly want from your life – it takes time, patience and, usually, a practitioner with the skill to listen for the clues that we all give when we start to talk about ourselves, our lives and our loved ones. Money is a powerful facilitator and with the right financial architecture anything is possible. Here are the top five areas people want to improve their lives in:

1.      Family / Friends / Relationships

2.      Values and Authenticity

3.      Creativity

4.      Community / Charity / Giving Back

5.      Experience difference cultures and countries / Travel the World

Notice its family, friends and relationships that top the list – more time with my children, more time with my partner and, sometimes, more time with me...for me.  With the right financial plan, you can get what you want – do you really want it?

Gosh it’s hard not to what with inflation surging to a record high, the growing Euro Zone economic crisis, World debt spiralling out of control, and the trade unions ready to embark on another winter of discontent.

However let’s remind ourselves that on a personal level we can do absolutely nothing to affect the above events.  We can worry all we like, but fear will not change anything.  These types of emotion tend only to drain you of all energy and halt you in your tracks.

Remember “time and tide waits for no man”.  

Who’s got 5 to 10 years of life that they can put on hold whilst the world sorts itself out?  Assuming it only takes that long!

Wouldn’t it be better if you continued living the life you both enjoy and deserve?  In fact why not have an extra holiday this year, help the family sooner rather than later, or even support your favourite charity now in your lifetime rather than it be a legacy from your will.

The answer lies in the “Blue is good, Red is bad” lifetime cash flow forecasts we produce during your Tracking Progress meetings.  We can take your present financial circumstances and do stress tests i.e. show you the effects of high inflation or a stock market crash on your money.  The result of you knowing “what if?” is peace of mind and confidence to get on and do whatever it is that’s important to you.

What are you waiting for?

Britons are clueless about pensions

HSBC's report about British attitudes towards retirement makes for grim reading, says Allister Heath of City AM.

• 17% of respondents don't know what their main source of income will be.
• 21% believe it will be state pension.
• 9% will be relying on personal pensions.
• 4% cite selling property.
• 39% have some form of strategy.

By contrast, twice as many people in Malaysia, China and India have a financial plan.  So what's wrong here in Britain?

First too many Britons rely on the state, even though the state pension will "by necessity be pathetically low".  Second, financial illiteracy means millions don't understand (or trust!) financial products.  Thirdly, many can't work out how much they need to put by, and those that do don't like the answer so do nothing at all!  Lastly, the public needs a reality check.  "You can't hope to retire in your 50's like your parents, if you're going to live to be 95".

Every year we all get bombarded with leaflets and e-mails providing the key points of the Chancellor’s Budget. This year I received no less than 43 e-mails detailing Osborne’s headline grabbing fiscal measures for the current tax year. For anyone who has successfully managed to avoid the key points, I apologise in advance as I have listed them at the bottom of this blog.

Anyway, this year rather than me concentrating on telling you how you will be affected, how about we do it in a more realistic way and you tell me how you feel about it all. Perception is reality after all.

 Does anything worry you?

What in the Budget has caught your eye?

More importantly has anything caused you to rethink the way you live your life?

By the way here’s the “increase to booze n fags” bit, alternatively known as the key points.

Budget: key points

·         Most of us will pay an additional 1% in National Insurance.

·         Your personal tax allowance goes up from £6,475 to £7,475.

·         Personal tax allowance to increase a further £630 to £8,015 in April 2012.

·         No personal tax increases; consultation on long-term plan to merge income tax and national insurance.

·         Any families earning more than £41,329 per annum will lose or have reduced their child tax credits.

·         10% discount on inheritance tax for those leaving 10% of estate to charity.

·         Corporation tax to be cut by 2%, not 1%, In April. Bank levy rises to compensate.

·         Council tax is set to be frozen in every English council.

·         Fuel duty to be cut by 1p/litre, planned 4p/litre rise (that was due now) delayed to 2012.

·         Although you cannot now pay as much into your pension each year, you are no longer forced to buy an annuity when you hit 75.

Every day of every week the media thrust down our throats "doom & gloom".

It's only human to get sucked into the negativity and therefore it's no surprise that we begin to worry about, and get involved with, other people’s problems. Yes as a decent society we should share the burden of misfortune and be generally concerned for the well fair of others, but I warn against being distracted by the media with things that don't affect us individually. 

Take this week for example, and the constant broadcasting on the topic of banker's bonuses.

Yes there is absolutely no argument that banker’s bonuses are both hideous in size and ridiculous by nature. How can you bail them out from bankruptcy (arguably the sector is still insolvent) to the tune of £x billion, for them to pay out part of that money as bonuses? Anyway, let’s not go there. We have to remember that the bankers are getting blamed for the state of the economy, which is absolute poppy cock. They certainly did not help the situation and probably brought the horrendous state of the economy to everyone’s attention, but the level of debt this country was already in is almost unimaginable. The banks are a politician’s dream of deflecting true blame.

See what’s happening here, I'm getting mad writing this and your probably gritting your teeth reading it. The point being what does it matter? On an individual basis we can do nothing about it. We should get on with our own lives and as a friend of mine constantly reminds me "all you can do is look after your own little ship". The danger of being distracted e.g. by the media or gossip in the pub, is that it makes you question what you are doing and it's not uncommon for people to then stop doing what they enjoy doing. But this is a reaction to other people’s woes and is a decision taken on emotion and not fact.

The state of the economy will take years to sort out, are you going to put your life on hold until it's better? I suggest if you haven't already done so, seek out financial planning advice to give you peace of mind, whilst others needlessly worry.

If you live the life you enjoy, and have planned the finances to cope with this, don't be distracted by anyone, let alone the media.

Pencil into your diaries Monday 20th and Tuesday 21st December, as we are having a couple of open days.

Please call in for a nosey, with coffee, sherry, mince pies etc served all day. Even though the schools will have broken up, don't hesitate to bring the kids. Scalextric, drawing competitions and a 6ft Snooker table have been set up (sorry, I really mean set up for the Dads!).

We have now been in our new office for 3 weeks and have had some great feedback, mostly around it being very conducive to the work we do, which is  to help you plan your money around the life that matters most to you.

Even long standing clients have commented on these office based appointments being the best they've ever had. We have certainly being surprised by this, but can begin to see that the discipline of you coming to us gives you more focus on what you want to achieve. We realise there may be distractions associated with seeing you in your own home, whether that's the children, feeling the home had to be tidy for the visit, or even feeling obliged to make us feel welcome with drinks etc. We have also realised that we have all the tools of the trade in the office, whether that's historical information you need, something copying or even a form signing. You don't have the delay or hassle of sending forms back to us, as it can all be concluded there and then.

Anyway, next week isn't about financial matters, it's all about stopping off to tell us what you think and more importantly have a few minutes break. A drink is always nicer when somebody else makes it!

Merry Christmas to you all & we hope to see you a week on Monday or Tuesday.

Nigel, Julie & Allison

....prices are up by 10%!

Cost of the Twelve Days of Christmas rises this year to £62,258 – though you may be able to get a bargain on the lords a-leaping

The cost of even a solitary partridge has gone up by 20% this year, says Pittsburgh-based PNC Wealth Management. Photograph: Oriol Alamany/Corbis>

Bad pre-Christmas news for incurable romantics wishing to offer their true loves the 12 days of gifts mentioned in the traditional song: a US online banking service reckons the price has gone up by more than 10% over last year.

The cost of the assorted flocks of turtle doves, French hens, calling birds, geese a-laying and swans a-swimming has risen steeply because of the soaring cost of fodder; the five gold rings are up 30% because of the price of gold and entertainment hire costs are also up, which presumably affects the price of pipers piping and drummers drumming. However, whether lords a-leaping come cheaper now after the Parliamentary expenses scandal, or are more expensive because other income streams have dried up, remains an open question.

Pittsburgh-based PNC Wealth Management, the financial services company that compiles the annual estimate, reckons the cost of the 364 items in The Twelve Days of Christmas will set you back $96,824 (£62,258) this December, a 10.8% increase on last year. For the stingy, it reckons just one of everything would run to $23,439, but that is still more than 9% up. By comparison, the US consumer price index rose by only 1.1%.

Jim Dunigan, the company's investment executive, said the rise was partly attributable to the relatively small group of goods and services on the list compared to the general index.

The company estimates that the five gold rings would cost $649.95, a third more than last year. The cost of the fowls on the list has gone up even more steeply: turtle doves are up by 78%, and three French hens have gone up by 233% to $150. He said: "There's no doubt that our feathered friends in general make up a good portion of the increase."

Only four of the gifts cost the same as last year: the pear tree itself, the calling birds, the geese and the maids a-milking. PNC reckons the most expensive item on the list was $6,294.03 to hire nine dancing ladies, up 15%. Even a solitary partridge is up by 20%.

PNC takes its annual survey – now in its 27th year – seriously, checking pet shops and jewellery stores, dance companies and entertainment services. This year's sources included the National Aviary in Pittsburgh and the Pennsylvania Ballet company. The index is used in schools to teach students about economic trends.

Any way, what ever happened to the days of giving a shiny new 10p and a satsuma? Kids today!

Acknowledgement - Stephen Bates of the Guardian

Almost two million UK savers with cash in an Irish bank may be nervous about the safety of their money due to the crisis facing the country's economy.

Ireland faces intense European pressure to accept a massive financial bail-out as its deficit runs at 32% of its national wealth.

Below, we round up the protection in place for those with savings in the UK arms of the three major Irish banks, which includes the Post Office whose financial services arm is run by Bank of Ireland (BoI).

Post Office/Bank of Ireland UK

Here, there are two tiers of protection:

• Savers are protected by the UK's Financial Services Compensation Scheme (FSCS) for first £50,000 per person deposited. This follows the formation of a UK arm of BoI on 1 November. Before that, savers were wholly reliant on the Irish government's Deposit Guarantee Scheme (DGS). From 2011, the FSCS limit will rise to £85,000.
• Above £50,000 (or £85,000 in January) savers are protected in full until 30 June 2011 by the Irish government's Eligible Liabilities Scheme (ELS). If the account is for a fixed term, the ELS guarantee only applies if it was opened from 11 January 2010 (when BoI joined the ELS). The protection for fixed term deposits lasts until account maturity.

This protection applies to BoI savers in Northern Ireland, as well as the Post Office's savings products (which are different to the NS&I products it sells that are 100% protected by the UK government).

It means savers have more protection than many of their counterparts in UK banks, though concerns have been raised as to whether the Irish government's scheme could handle all claims.

Allied Irish UK

Again, there is a similar two-tier system.

• Savers are protected up to £50,000 per person by the FSCS (rising to £85,000 in 2011).
• Above those sums, savings are guaranteed in full by the ELS until 30 June, or until a fixed term account matures. For fixed deals, only those opened from 21 January 2010 (when Allied Irish joined the ELS scheme) are protected by the ELS.

Anglo Irish

Again, there is a two-tier system, but with a difference.

• The bank does not have any UK protection so savers are wholly reliant, initially, on the Irish government's DGS, which protects deposits up to €100,000 per person.
• After that, the ELS protects all deposits until 30 June, or until a fixed term account matures. For fixed deals, they are only protected if opened from 28 January 2010 (when Anglo Irish joined the ELS scheme).

Summary

What's crucial is people know whether their bank has UK or Irish protection.

While nothing's certain, the safest position is to pick a bank with full UK protection. If it fails, a government you elect is responsible for your protection, rather than an overseas administration, even if that government is promising to protect larger amounts.

Even for those with savings in a UK-protected institution it's worth remembering that above £50,000 your money isn't guaranteed, and while no-one with cash in a UK-protected account has lost out since the start of the credit crunch, it is always a possibility. So spreading savings above that amount is sensible.

• Men and women will now receive the state pension at the age of 66 from 2020. The new rules mean that men and women aged under 57 on 6 April this year will have to wait until they are are 66 to draw a state pension.

• The National Employment Savings Trust (NEST) will go ahead starting in 2012. It will involve automatic enrolement into pension schemes for all employed people.

• The total amount of money you can put into a pension has been reduced. From April 2011 it comes down from £255,000 a year to £50,000. The good news is that the government will still give you tax relief on it at your highest marginal rate (20%, 40% or 50%). For example, someone paying a 50% rate of income tax would only need to write a cheque payable to their pension for £25,000 to ineffect have the contribution doubled to the maximum £50,000.

• Child benefit will be removed for any family where one parent is a higher-rate tax payer i.e. earning over £43,875 per year.

• Pensioners will continue to get free bus passes and over-75s will still get free TV licences.

• Warm Front, the government scheme for helping people improve domestic energy efficiency is to be phased out. The grants will cover the installation of insulation and heating improvements up to £3,500. If you receive some form of benefits, you probably qualify, so apply quickly.

(Research courtesy of Ruth Jackson, Money Week)

The Financial Services Authority (FSA) has proposed setting the new Financial Services Compensation Scheme (FSCS) deposit compensation limit for investors at £85,000.

 The new sterling limit, set out in this week’s quarterly consultation paper, will take effect from 31 December and follows on from the increase in the euro maximum amount to €100,000 after changes to European legislation.

Strange, I thought Westminster made the rules on behalf of the electorate? 

Although the change does not come into effect until 31^st December, the regulator says it has a statutory obligation to consult on the proposed rules beforehand and, as such, calculated the sterling amount based on the rate of exchange on 1 October.

Using the Bank of England's daily spot rate, €100,000 equated to £86,971 on 1 October. The FSA then rounded off this figure to the nearest whole £5,000 to arrive at the new sterling limit.

Once the rules come into effect the sterling compensation limit will be reassessed and realigned with the euro every five years. The regulator says fixing the compensation limit for a period of five years will give UK depositors a "degree of stability and certainty" and result in "greater confidence."

Currently investors are only protected on deposits up to £50,000.