Blog Archive

Think carefully before securing debt against your home, your home may be repossessed if you do not keep up repayments on your mortgage.
The Financial Conduct Authority does not regulate commercial and buy to let mortgages.
Commercial mortgages are available via referral to a master broker only.
Equity Release and Lifetime Mortgages will reduce the value of your estate and can affect your eligibility for means tested benefits.
23rd December, 2022: What is Equity Release?
Heide Swift DipFA, CeMAP, CeRER
What exactly is, Equity Release?
The definition of Equity Release:
‘The use of financial arrangements that provide the owner of a property with funds derived from the value of the property while enabling them still to use it’
Equity release refers to a range of financial products that allows access to equity (cash) tied up in property if you are over the age of 55. Money can be released as a lump sum, in several smaller amounts, or as a combination of both. Funds may be used however you wish.
There are 2 Equity Release options:
- Lifetime Mortgage: a mortgage is secured on your property (residential property) and you retain ownership. Some of the of the value of your property can be ring-fenced if required, as an inheritance for your family. You can choose to make repayments or let the interest roll-up. The loan amount and any accrued interest is paid back when you die or when you move into long-term care.
- Home Reversion Scheme: part or all of your home is sold to a home reversion provider in return for a lump sum or regular payments. You have the right to continue living in the property until you die or go into long term care, rent free, but you have to agree to maintain and insure it. You can ring-fence a percentage of your property for later use, possibly for inheritance purposes. The retained percentage will always remain the same regardless of the change in property values, unless you decide to take further cash releases. At the end of the plan (either on your death or your move into long term care) your property is sold by the lender and the sale proceeds are shared, according to the remaining proportions of ownership.
Who can take out Equity Release?
Anyone over the age of 55 can take out an Equity Release plan. It’s a loan secured against your home and payments are NOT mandated if you take a Lifetime Mortgage as oppose to a Home Reversion Scheme. Taking out a Lifetime Mortgage might mean you end up with end up with a significantly higher debt than you originally take out if you choose not to service the interest payments or reduce the capital loan. If you take out a Home Reversion Scheme the lump sum payment you receive is likely to be significantly under the market value of your property.
If you need money but are unable to raise the funds in an alternative way (for example, re-mortgaging with a traditional mortgage or a loan) and you don’t want to down-size, then Equity Release may be something to consider.
I hear from people whose financial circumstances have changed and they can no longer be considered for a traditional mortgage. If they don’t want to move (or perhaps are not in a position to move) then Equity Release is a possibility. It’s important to understand exactly what the possible down-sides are. You may not leave any equity in your property to benefit your beneficiaries when you die (or if the loan is repaid if you move permanently into long-term care).
What can I use Equity Release funds for?
You can use the funds from Equity Release for virtually anything! Some examples of cases I’ve worked on recently:
- A couple coming to the end of their mortgage term on an interest-only mortgage. They had not made any arrangements to pay off the loan. A standard re-mortgage over a short mortgage term was not affordable so they selected Equity Release and are intending to pay the interest in lieu of their current mortgage repayments.
- A couple with no children – no beneficiaries – in their early 70s. They plan to travel and have a couple of big birthdays and an anniversary looming. They are using the equity in their home to enjoy their retirement.
- A lady wants to help her son and his wife get onto the property ladder – so she wants to gift him the money via an Equity Release plan. This is known as “living inheritance”. The beneficiaries benefit while the donor is still alive and the donor can see their family enjoying the money.
- A lady coming to the end of her mortgage term. Her husband had sadly passed away and her pension income was not enough to be able to obtain a standard re-mortgage. She used Equity Release to pay off her residential mortgage and borrowed a little extra to replace her boiler.
- An elderly couple who, although were still living at home, needed help around the house. Their son and his family were living with them and they were getting under each other’s feet. So they used Equity Release to convert a barn in the grounds for the extended family to live in whilst retaining their independence from each other.
- A couple in their early 60s are conscious of the increasing cost of living. They are both unemployed for health reasons and only on a small private pension income, currently. They are considering Equity Release to change their boiler and to replace the windows to
- reduce their heating bills.
- A divorced, self-employed lady in her early 60s is self-employed but not earning enough to be able to support a standard mortgage. She wants to replace the windows in her property and repay a small mortgage.
How much could I borrow, with Equity Release?
The amount you can borrow with Equity Release depends not on your level of income and outgoings (like a standard mortgage).
It’s based on your AGE and the value of your PROPERTY.
Why? Because of the No Negative Equity Guarantee, the lender will need to calculate the amount they will lend you based on the roll up of interest over the remainder of your life. They will take Office of National Statistics data to anticipate how old you will live to (based on your current age). Their calculations will need to ensure there roll up of interest plus the original loan, does not equate to more than the property value.
They are taking the risk in terms of projecting your lifespan and this is why interest rates are usually higher for an Equity Release (Later Life Mortgage) than a traditional mortgage.
Of course, some people live much longer than others. It’s important to know that you WON’T be evicted or repossessed if you live a long and healthy life!
Why is Equity Release different from a standard mortgage?
In very simple terms:
- You don’t HAVE to make any payments (of interest or capital) if you don’t want to.
- You do NOT have to meet a lender’s affordability checks as the assumption is you’ll let the interest roll up.
- The interest rate is fixed for the rest of your life.
- The amount you can borrow is based on the value of the property and how old you are.
Can I buy a new home with Equity Release?
Yes, you can.
Over the past couple of years I’ve helped 2 households move home.
In one case, a widowed lady wanted to move closer to her daughter and family who live in a more expensive area than she was living in.
In the 2nd case, a couple wanted to move near their daughter and partner, on the south coast. Although they didn’t “upsize”, the property was in a more expensive location than they moved from.
It’s important to know that Equity Release mortgage offers are often valid for less time than a standard mortgage. So we’d need to be really careful when selecting lenders that we can anticipate the completion date to avoid the offer expiring before the home move has been completed.
When it comes to Lifetime Mortgages, if you envisage that you would like to move home in the future we would need to ensure you have a portable policy. This gives you the right to move to another property subject to the new property being acceptable to your provider as continuing security for your Equity Release loan (an Equity Release Council standard). Please note that although you can move home and take your Lifetime Mortgage with you, if you decide you want to downsize later on it might be that you do not have enough equity in your home to do this.
The Equity Release Council
The Equity Release Council is the industry body for UK Equity Release specialists including providers, advisors and solicitors. Members of the Equity Release Council agree to the Council’s rules and have signed up to their Statement of Principles.
The Equity Release Council is guided by 4 brand values which guide everything it does. They are:
Authoritative : To be at the vanguard of substantiated, credible, evidence-led market insights, knowledge and data.
Progressive: To be the advocate of market change, innovation, betterment and reform.
Incisive : To have clarity of thought, commitment of decision making and the rigour to deliver the right solution.
Trustworthy: To inspire confidence, reliability and transparency across all stakeholders.
Heide is a member of the Equity Release Council and can be found in their directory of advisors. Their website can be accessed here: Equity Release Council Website
By clicking this link you will be departing from the site of Swift Mortgages & Finance, neither Swift Mortgages & Finance nor Quilter Financial Planning Ltd are responsible for the accuracy of the information contained within the linked site.
What you need to know about Equity Release:
Equity Release including Home Reversion Plans and Lifetime Mortgages will reduce the value of your estate and can affect your eligibility for means-tested benefits.
Equity release can be more expensive than a traditional mortgage.
There is no “fixed term” by which you need to repay a Lifetime Mortgage loan, therefore accrued interest may escalate quickly.
Home reversion plans are likely to offer you much less than the market value of your property.
Releasing equity in your property now may leave you short of funds at a later date.
If you move home, you may need to repay some of your mortgage, particularly if you are intending to downsize.
Monies received through Equity Release may affect your state benefit entitlement.
The Financial Conduct Authority does not regulated Estate Planning and Inheritance Tax Advice.
Heide x
Get in touch:
Telephone: 01525 309300
Mobile: 07903 302895
Email: heide@swift-mortgages.com
#SwiftMortgages
#SwiftMortgagesandFinance
21st October, 2022: Inter-Generational Wealth Planning
Heide Swift DipFA, CeMAP, CeRER
We must talk about mmm, mmmm, money (How very un-British!)
This is not an article about inheritance tax planning, per se. Although, I can certainly help if you want advice on the subject and help you not miss out on the valuable allowances available. However, this is an article about highlighting the need for families to start a conversation about mmm, mmmm, money.
It is well known that British people, especially of a particular age, do not like talking about certain topics. University College London conducted research in 2015, and concluded our personal finances is a more uncomfortable topic for us Brits to talk about than our relationships.1
A survey conducted in 2019 by Lowell, a company which helps consumers and businesses manage their credit position, surveyed 2,000 people about their attitudes towards discussing certain topics. The survey found that religion, mental health and infertility were all more socially acceptable topics than finances and debt.2
And yet, it is estimated that the value of inheritances is set to double over the next 20 years.3 If we extend the time horizon, it is estimated that £5.5 trillion is expected to pass to the next generation over the next 30 years.4
The recipients of this windfall are expected to be other ‘baby boomers’ and people in the younger Generation X (40- to 54-year-olds) or Millennial age groups, those aged between 25 and 39.5 Let’s just focus on the recipients of these inheritances for a moment. Data from the Office of National Statistics5 paints the following picture:
- Inheritances from spouses of the recipient had the highest value, on average, and were mainly distributed among those aged 55 years and over,
- Those aged 55 to 64 years were the most likely to receive an inheritance and also received the largest inheritances on average, and
- Individuals with the most income and wealth were likely to receive the largest gifts and loans, on average.
No surprise in the recipient typically being a spouse, and the spouse also being a baby boomer, as people tend to (but not always) partner with someone of their own age. It should be remembered; we do live in an era of increasing divorce rates across the different age groups and subsequent re-partnering and second families. So, choosing who you leave your money to, and how much, is often more complicated than it used to be. The potential for family fallouts is greater. All the more reason to talk about the subject early.
As our life expectancy has increased over the years, then the age of the recipient of an inheritance has also increased. The baby boomers receiving the inheritance are those people who have enjoyed the greatest increase in the value of their assets: money going to money.
Those leaving the money will no doubt want to ensure that their beneficiaries, be their family, friends and/or charities, enjoy their windfall. They will also probably wish to minimise the tax man’s take on their bequests in a legal and ethical way. Figures from HMRC for the 2020/21 tax year show £5.4bn was collected in inheritance tax, an increase of £190m on the previous year. The receipts from Inheritance Tax have been increasing year on year for some time and look to increase further still. Inheritance Tax is often referred to as the voluntary tax as there are simple measures to mitigate it, which are often overlooked.
At the risk of raising the elephant in the room…
What would be the benefit of taking the risk, and breaking the taboo of talking about money, either as a parent with your children or a child (and their siblings) with their parents. Quilter found in their research6 that one in five (18%) of the people in the 55 to 65 (baby boomers) age range who received an inheritance would prefer to pass it on to the next generation – almost immediately. Remember the ONS data I highlighted previously, money going to money. Does the recipient really need the money?
Those that do pass on this inheritance pass it straight to their own children (81%). A further 10% skipped a generation and handed it to their grandchildren.
Many 55–65-year-olds have benefited from rising asset prices, (e.g. houses) during their lifetime. Many have enough savings, investments, and other wealth, so may feel that their children or grandchildren need it more than they do.
Instead of thinking of your money as something you leave to your next of kin when you die, why not plan early and support younger family members who have an immediate need for financial support?
The evidence from the Quilter research indicates that many beneficiaries pass the money on.
If you are thinking of leaving money to specific people, are you sure they really want or need the money, or is there somebody else in the family who could benefit more? Similarly, if you think you may be in line for an inheritance, but feel your children or grandchildren would benefit more, perhaps now might be the best time to – TALK ABOUT MONEY. You might be able to see the recipients enjoy the money you have provided for them.
Whether you are the benefactor or the possible beneficiary, having the conversation now can make sure the money goes to the right person, at the right time and in the right way.
As the old BT advert said – “it’s good to talk”.
Tax treatment varies according to individual circumstances and is subject to change.
Heide x
References
1https://www.independent.co.uk/news/science/talking-about-money-britain-s-last-taboo-10508902.html
2https://www.thedebtadvisor.co.uk/brits-find-difficult-talk-money-mental-health
3J Leslie & K Shah, Intergenerational rapport fair?: Intergenerational wealth transfers and the effect on UK families, Resolution Foundation, February 2022
4Passing on the Pounds report, Kings Court Trust, 2017. Source: Inheritance Economy (kctrust.co.uk)
5Office for National Statistics – Intergenerational transfers: the distribution of inheritances, gifts and loans, Great Britain: 2014 to 2016 Source: Intergenerational transfers: the distribution of inheritances, gifts and loans, Great Britain – Office for National Statistics (ons.gov.uk)
6The research was commissioned by Quilter and undertaken by YouGov Plc, an independent research agency. All figures, unless otherwise stated, are from YouGov Plc. The total sample size is 1,544 UK adults, comprised of 529 Baby Boomers, 501 Generation Xers and 514 Millennials. Fieldwork was undertaken between 07/07/2020 – 08/07/2020. The survey was carried out online. The importance of being trusted by your clients’ families | Quilter plc
Get in touch:
Telephone: 01525 309300
Mobile: 07903 302895
Email: heide@swift-mortgages.com
#SwiftMortgages
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14th June, 2022: Are you missing out on pension tax breaks?
Are you missing out on pension tax breaks?
Most of us understand the benefits of investing tax efficiently. Using the tax allowances, such as ISAs, provided by the government each year means we can avoid paying unnecessary tax. However, many of us are missing out on the valuable tax savings available through our pensions.
Pensions are one of the most tax efficient ways to save for your retirement. If you’re a UK taxpayer, in the 2022/23 tax year you can get tax relief on pension contributions of up to 100% of your earnings or a £40,000 annual allowance, whichever is lower. In simple terms, the tax relief you receive on pensions means some of your money that would have gone to the government as tax goes into your pension instead.
We have found many of our clients have been able to save additional lump sums over the past couple of years due to the restrictions on holidays and social gatherings. The current rates of high inflation mean any savings you hold in cash are at risk of losing their value over time you could consider investing additional lump sums. Redirecting any savings into your pension may mean you will be able to enjoy more of the good things in life when the time comes to retire.
Alternatively, some of us have seen our income reduce during the last couple of years, or have seen increased expenditure due to the cost of living crisis, which has affected our existing financial commitments. For example, having to reduce contributions to our pensions. If you are self-employed, your income will almost certainly vary from year to year, sometimes reducing the amounts you are able to contribute to your pension and your allowable tax reliefs.
Carry forward
However, whether you find yourself with more, or less to save, you can take advantage of any unused allowance from the previous three tax years, subject to allowances and limits. This is commonly referred to as ‘carry forward relief’.
Carry forward allows unused annual pension allowances from previous tax years to be carried forward and added to the annual allowance for the current tax year.
The example below shows how you could benefit. Considering the annual allowance of £40,000, there is £50,000 unused annual allowance from the previous three years. Added to the £40,000 annual allowance, £90,000 could be contributed to the pension and receive tax relief in the 2022/23 tax year.
Tax year | Annual Allowance | Total contribution | Unused allowance |
2019- 20 | £40,000 | £10,000 | £30,000 |
2020 – 21 | £40,000 | £30,000 | £10,000 |
2021- 22 | £40,000 | £30,000 | £10,000 |
However, your earnings must be at least equal to the amount that you are looking to contribute at that point. So, in this example, to contribute £90,000, you would also have to earn at least that much in the current tax year.
How we can help
Carry forward can be a valuable way of ensuring you don’t miss out and pay unnecessary tax. Whether that’s because you have additional savings to invest in your pension, or you need to temporarily reduce your financial commitments and would like to benefit in the future.
If you would like to learn more, please get in touch now and stop paying tax unnecessarily.
Tax treatment varies according to individual circumstances and is subject to change.
If you’d like to learn more, please get in touch, and remember I will always stand the cost of our first meeting.
Tax treatment varies according to individual circumstances and is subject to change.
Heide x
Telephone: 01525 309300
Mobile: 07903 302895
Email: heide@swift-mortgages.com
#SwiftMortgages
#SwiftMortgagesandFinance
29th March, 2022: The Cost of Cash in an ISA
The cost of Cash
“Cash is like oxygen – you want to be sure it’s around, but you don’t need to have excessive amounts of it around” – Warren Buffet
So, how much cash should we hold?
• A couple holding cash ISAs may be missing out on £15,368 of real return over 10 years
• Inflation and opportunity cost are factors that impact real returns
• With inflation looking like being at its highest for years, the erosion of value is increased
We are approaching ‘ISA season’ when financial advisers typically draw their clients’ attention (rightly) to the benefits of sheltering their hard earned in an ISA.
In a nutshell, you won’t pay any tax on the interest or growth you get from the money you have in an ISA, which is so attractive that there are limits to how much you can put in annually.
However, it’s also worth considering what the money in your ISA is actually in – is it in cash, or is it invested in stocks and shares?
What do we mean by ‘cash’?
‘Cash’ means different things to different people. Some think of cash as physical money – the folding (and rattling) stuff. Many think of cash as including what is in their current account. Others include any money in immediate or short term access deposit accounts, or cash ISAs.
One useful way of defining cash is any money you have which is both:
(a) Immediately available to you, and
(b) Is not invested, so it doesn’t have any investment risk attached to it i.e. if stock markets go down it won’t affect the value.
What are the benefits of cash?
Cash is immediately available, so it’s great for handling unexpected events. Those might be negative – your boiler gives up, or your children need a sudden bailout. They could be positive opportunities – you suddenly find the car you’ve always wanted, or you get an unexpected chance to take your dream holiday.
Even people with substantial investments are usually advised to keep an amount of cash. Why? Simply because if you need cash short term – either for an unexpected event, or for general living expenses, you don’t want to be having to sell any investments at a time when the markets might be down, or borrow at potentially high rates of interest. That would ‘lock in’ the losses.
How much cash to hold?
The amount is often based upon how much people ‘feel’ safe having. A more considered way to establish the appropriate amount is to think firstly in terms of time rather than actual amount. Ask yourself – ‘if anything bad happened, such as I was made redundant, how long do I want to know that we could manage at our existing rate of expenditure before our savings are exhausted?’
What are the downsides of cash?
How is it that you can have too much cash? Because cash isn’t earning anything whilst it’s, well…cash. In fact, it’s losing money, and in two major ways.
Firstly, you are losing through inflation. Secondly you are losing through the opportunity cost. In other words, what you could have gained through a higher rate of investment return, compounded.
This diagram shows that, if you have £40,000 of savings in cash (for example, two cash ISAs of £20,000 each) earning no interest, then in 10 years you will have £40,000. Except you won’t, not really. Because its buying power in real terms will have been eroded. With inflation at 2.5% per annum(1), it’ll only be worth £31,053 in today’s terms. You will have lost £8,947 of buying power.
Note:
Investors do not pay any personal tax on income or gains, but ISAs do pay unrecoverable tax on income from stocks and shares received by the ISA managers.
Tax treatment varies according to individual circumstances and is subject to change.
Stocks and Shares ISAs invest in Corporate bonds; stocks and shares and other assets that fluctuate in value.
The value of investments and the income they produce can fall as well as rise. You may get back less than you invested.
But the losses from the opportunity cost are even worse. For example, a couple who invests these ISAs in cash rather than in a stocks and shares ISA with a typical balanced multi asset fund could lose out on an extra £15,368 in real terms i.e. accounting for inflation.
Here’s how:
If you hold your cash in an instant access savings account you may get, say 0.6% p.a(2). This means that you have still lost money, because the interest is less than inflation. So, after 10 years your £40,000 is now worth just £33,018. You’ve still lost £6,982 of buying power.
If you don’t need this £40,000 for 10 years, you may decide to invest it in a typical balanced fund, let’s say one with an average per annum gain of 4.0% (after fund charges). Now of course you can still get your money at any time by selling the fund – but you might not want to, because at any time the markets could be down and you could lose money if you decide to sell at that particular moment. So, let’s assume you won’t be touching the money for 10 years. Assume also that you pay no tax on the gain – either because it’s within your Capital Gains Tax allowance or is protected in an ISA.
In this case, you will have more than offset inflation, and will have £46,421 in the value of today’s money – a gain of real buying power of £6,421 after inflation. In actual terms you will have £59,210, which is the £40,000 compounded at 4% per annum over 10 years.
So, you will have avoided losing the difference between the invested amount and the savings amount – £13,403.
You will have avoided losing even more if your alternative to investing had been to hold onto the cash in, say, a cash ISA or a current account that paid no interest – a loss of £15,368 avoided.
Of course, you’ll have your own numbers.
But the principles still hold, so it might be worth asking yourself some key questions – “How much have I got?” “How much do I need?” And crucially to help avoid such losses – “When do I need it?”
References
1.Bank of England Monetary Policy Report August 2021 p6 Chart 1.4
2. Moneyfacts.co.uk savings accounts article
If you’d like to learn more, please get in touch, and remember I will always stand the cost of our first meeting.
Tax treatment varies according to individual circumstances and is subject to change.
Heide x
Telephone: 01525 309300
Mobile: 07903 302895
Email: heide@swift-mortgages.com
#SwiftMortgages
#SwiftMortgagesandFinance
28th February 2022: Are you approaching your Company’s Year-End?
Company year-end approaching? Don’t lose out!
Welcome to new and existing readers to my blog. As always, I try and provide you with help and guidance on financial matters which may be relevant and pertinent to your financial circumstances and plans.
To save you time, this article is aimed at business owners who are approaching their business’ year end. If you don’t run you own business, then the article will have limited benefit to you. I suggest you might want to ‘move on’ to reading something more relevant and pertinent to you. You might, however, find something of interest. Whether you read on or move on, thank you for your time.
If you have decided to read on, I am guessing you might run your own business, on your own, or with a partner or shareholders. As a business owner, I know the competing demands running a business has on my time (the most valuable, scarce, and irreplaceable resource) and my finances.
Approaching your company’s year-end is a challenging time. There are the ever-present challenges of profitability, cashflow, and (getting and keeping) customers. Often, business owners can be too close to the tree to see the wood, let alone the forest! What is essential, however, is to take the time to review, plan and take advantage of the significant tax breaks available to us as owners for the future of our business and us as individuals.
Our personal and business finances are inextricably linked, one being dependent on the other. There are many time limited allowances available to us as business owners and as individuals. Being time limited, if we do not take advantage of them, and we have to consciously do so, the tax man will not offer them up again, we will lose them.
For example, some of the questions you may want to consider include before your business year end include:
- Should you make a company pension contribution or take the income and pay a personal pension contribution?
- Should you pay yourself a bonus (and do you pay the tax on the bonus and leave the money in your loan account for cashflow) or a dividend?
- What capital investments do you need to make and what allowances do you need to use?
The answers to these questions will have an effect on your overall financial planning, your mortgage planning and your pension planning. All of these have an effect on your financial future.
My advice would be to take the time now to review and assess your business’ and your personal financial position. This will help you determine which allowances are available to you and how best to use them, not only for today but also for tomorrow.
We work with our clients, and their other professional advisers, to help them through the maze of choices. Often, significant gains and improvements can be achieved by changing existing arrangements and plans, without starting new plans.
If you’d like to learn more, please get in touch, and remember I will always stand the cost of our first meeting.
Thank you again for reading, I hope to speak to you soon but please do take the time to act. You might lose out and your future self might regret not taking action now.
Tax treatment varies according to individual circumstances and is subject to change.
Heide x
Telephone: 01525 309300
Mobile: 07903 302895
Email: heide@swift-mortgages.com
#SwiftMortgages
#SwiftMortgagesandFinance
15th February: Are you using all your tax allowances and reliefs?
Telephone: 01525 309300
Mobile: 07903 302895
Email: heide@swift-mortgages.com
#SwiftMortgages
#SwiftMortgagesandFinance
1st February 2022: Maximising Your Tax Allowances
Are you missing out on pension tax breaks?
Most of us understand the benefits of investing tax-efficiently. Using the tax allowances, such as ISAs, provided by the government each year means we can avoid paying unnecessary tax. However, many of us are missing out on the valuable tax savings available through our pensions.
Despite the revolution of the last six years, pensions are still one of the most tax efficient ways to save for your retirement. If you’re a UK taxpayer, in the 2021/22 tax year you can get tax relief on pension contributions of up to 100% of your earnings or a £40,000 annual allowance, whichever is lower. In simple terms, the tax relief you receive on pensions means some of your money that would have gone to the government as tax goes into your pension instead.
You may be one of the thousands of people who have seen their savings grow over the last year due to lockdown. A reduction in commuting costs, expenditure on entertainment and holidays has meant many people have found themselves with more disposable income. If you find yourself in this position you could consider putting more into your pension. Even if you can’t commit to regularly saving more, you could consider investing additional lump sums. Redirecting any savings into your pension may mean you will be able to enjoy more of the good things in life when the time comes to retire.
Alternatively, some of us have seen our income reduce during the last year which has affected our existing financial commitments. For example, having to reduce contributions to our pensions. If you are self-employed, your income will almost certainly vary from year to year, sometimes reducing the amounts you are able to contribute to your pension and your allowable tax reliefs.
Carry forward
However, whether you find yourself with more, or less to save, you can take advantage of any unused allowance from the previous three tax years, subject to allowances and limits. This is commonly referred to as ‘carry forward relief’.
Carry forward allows unused annual pension allowances from previous tax years to be carried forward and added to the annual allowance for the current tax year.
The example below shows how you could benefit. Considering the annual allowance of £40,000, there is £50,000 unused annual allowance from the previous three years. Added to the £40,000 annual allowance, £90,000 could be contributed to the pension and receive tax relief in the 2021/22 tax year. However, your earnings must be at least equal to the amount that you are looking to contribute at that point.
Tax year | Annual Allowance | Total contribution | Unused allowance |
2018 – 19 | £40,000 | £10,000 | £30,000 |
2019 – 20 | £40,000 | £30,000 | £10,000 |
2020 – 21 | £40,000 | £30,000 | £10,000 |
However, your earnings must be at least equal to the amount that you are looking to contribute at that point. So, in this example, to contribute £90,000, you would also have to earn at least that much in the current tax year.
Carry forward can be a valuable way of ensuring you don’t miss out and pay unnecessary tax. Whether that’s because you have additional savings to invest in your pension, or you need to temporarily reduce your financial commitments and would like to benefit in the future.
If you’d like to learn more, please get in touch now and stop paying tax unnecessarily.
Tax treatment varies according to individual circumstances and is subject to change.
Heide x
Telephone: 01525 309300
Mobile: 07903 302895
Email: heide@swift-mortgages.com
#SwiftMortgages
#SwiftMortgagesandFinance
Heide’s Blog – 20th December 2021
It’s been a crazy year. Actually, a crazy couple of years! 🙁
We’re into December and I’ve realised it’s the first time I’ve done a blog since the summer.
I have a New Year’s resolution and that’s to keep in touch more regularly in 2022 and beyond.
So let’s talk about Budgeting. It’s the time of year people think about money (or their lack of it) because they probably spend a lot due to Christmas and all the festivities and celebrations surrounding it.
It may be worse this year as people on the whole didn’t really have much of a Christmas last year as we weren’t allowed to mingle and socialise outside our immediate households. January is often the time of year people think about cutting back: whether it be spending or eating and drinking. Quite often, one leads to the other!
In any case, January is a great time of year to get on top of your finances. To review your current expenditure and see where you can make changes.
A time for “budgeting”.
What is the dictionary definition of budget? I’ve looked it up: “to allow or provide a particular amount of money in a budget”.
Your income is the money you get IN.
Outgoings relate to the money you SPEND.
Budgeting is aiming to ensure that your outgoings are equal to or less than, your income.
When it comes to your outgoings, you have “essential” and “non-essential” expenditure.
Essential expenditure may include:
- Rent/Mortgage
- Utilities
- Council Tax
- Food
- Travel to Work
Non-essential expenditure is usually money spent on extras such as clothing, coffee, meals out, takeaways.
Knowing exactly what your expenditure is can help you to effectively budget.
Something as simple as a spreadsheet will work. Include your “take home pay” (what you get paid after your tax and national insurance contributions have been paid). Make a list of your essential bills.
The difficulty comes when we have essential expenditure which is not fixed. For example, we’ll pay more money in the winter for heating our property than we will in the summer. So when it comes to managing your budget, go for “worst case scenario” and add the winter utility costs onto the spreadsheet.
What’s left? If there are any areas of non-essential expenditure you can cut down (for example, food shopping costs? eating out costs? How much is your daily or weekly coffee on the run?) then we can aim to do that. Do you have an emergency fund? Do you have enough money in savings to be able to cover your essential outgoings for a few months, in the event of an unexpected reduction in income?
Spending more than you earn on a regular basis is “living beyond your means”. Although, for most of us this may happen occasionally, if it is regularly the case, you will be making up the deficit either by going into debt (adding to credit card balances, for example) or reducing your savings.
We’ve recently heard in the news that inflation is at at a 10 year high. And the Bank of England increased Base Rate by 0.15% on 16th December to 0.25%. This means that the spending power of your savings is likely to be reduced as the prices of goods increase. And credit (mortgages, loans and credit cards) are likely to become more expensive as interest rates rise.
Think what we’ve learned from the Covid-19 pandemic: how many people were in a financial turmoil because of losing 20% of their monthly income? If you’d like any help with creating a budget planner, particularly if you’re thinking about buying a property at any time in the future, please get in touch and we’d be very happy to help you.
In the meantime, have a very merry Christmas and a wonderful new year,
Heide & Poppy x
Telephone: 01525 309300
Mobile: 07903 302895
Email: heide@swift-mortgages.com
Website: www.swift-mortgages.com
#SwiftMortgages
#SwiftMortgagesandFinance
Heide’s Blog – 20th August 2021

Hello again! 🙂
How can it possibly be almost the end of the August already?
It’s been a long time since I was last in touch with you via a blog. That’s because we’ve been so busy. So this week is just a quick insight into what’s recently been going on in our world over the past few months.
From now on we’ll aim to keep in touch with you at least fortnightly.

Heide has qualified with her Diploma in Financial Advice (DipFA) and is now qualified to offer advice in investments and pensions as well as mortgages, equity release (lifetime mortgages) and financial protection.
We are therefore now able to assist you through your complete financial lifecycle: from setting up an ISA to start you saving for your first home, helping you get your first time buyer mortgage, helping you financially protect yourselves to ensure you’re not left homeless if the worst happened, moving to your next time home, helping your save towards your retirement, helping you downsize when the time is right and help you access your pension funds to see you through your retirement.
We will be re-branding over the next month or so and will become Swift Mortgages & Finance. We’ll keep you posted and let you know when our website has been fully updated to reflect our new services.

Poppy is the apprentice who started with us in March 2020 – 2 weeks before the first lockdown last year! Poppy has stuck with business administration apprenticeship through a difficult year – she hasn’t had a single face to face college day. She’s done everything from home but now is nearly ready to take her final end-point assessment. She takes the assessment in September so we’re keeping our fingers and toes crossed that:
a – she passes the exam
b – she’ll stay on with us beyond the end of her apprenticeship scheme and work with us in the long-term

We have a new mortgage and protection advisor working with us : Agata. She lives in the Nottingham area but of course, can deal with people anywhere as we are not geographically limited. Agata is Polish so has the advantage of being able to help Polish applicants in their own language.

Finally, for this week, Heide is taking part in a charity abseil for a charity called Ailsa’s Aim. The charity provides funds and support to families and children suffering from cancer. If you’d like to donate, your pennies would be very much appreciated!
If you have any questions, particularly in terms of financial advice or mortgages we’d love to hear from you. Our contact details are below and we offer an complementary initial review with no obligation.
- Equity Release will reduce the value of your estate and can affect your eligibility for means tested benefits.
- The Financial Conduct Authority does not regulate Buy to Let Mortgages.
- The value of investments can fall as well as rise. You might get back less than you invested.
- Past performance should not be regarded as guide to future performance.
- Tax treatment varies according to individual circumstances and is subject to change.
Telephone: 01525 309300
Mobile: 07903 302895
Email: heide@swift-mortgages.com
Website: www.swift-mortgages.com
#SwiftMortgages
#SwiftMortgagesandFinance
Heide’s Blog – 2nd April 2021
I hope you are keeping well and looking forward, at long last, to getting back to normality soon. Not long now before we can go to the pub – albeit in the garden! And I can’t wait to see the hairdresser…..
It’s almost the beginning of the new Financial Year.
Which means it’s our birthday! Swift Mortgages is now 4 years old.
But to celebrate our birthday we’ve become Swift Mortgages & Finance!
You may already be aware, but I have spent a few months studying for, and taking, my Diploma in Financial Advice (DipFA) exam. I took the exam in October of last year. Received the pass result in November and then went through the process of registering my change of permissions with the FCA (Financial Conduct Authority) and also with Quilter Financial Services (my financial network).
It still didn’t seem real until the certificate arrived! 🙂
I’m pleased to be able to tell you that I am now qualified to be able to provide financial advice with immediate effect as well as still being able to help with any of your mortgage, equity release and financial protection requirements.
Whether you’re planning for your retirement by making contributions into a pension or increasing your wealth by investing, please feel free to get in touch.
According to Aegon (The Retirement Confidence Survey, 2019) 36% of people have never considered how much they will need to retire comfortably so it’s important to invest in your pension as early as possible.
If you have pensions from previous employers, we can review those and ensure your requirements are on track to provide the income you need on retirement.
If you have money to invest, we can help you make the most of your ISA allowance to earn tax-efficient returns. ISAs are free from personal income tax and capital gains tax*.
Although having a wide range of options is a good situation to be in, it can be difficult to make the right choice. With so many options, how do you know which is right for you and your financial goals?
We’ll discuss your goals and get to know your appetite for investment risk. Then we’ll use our expertise to help you decide which option is best for you.
Please, do get in touch to arrange a meeting.
Likewise, if you know of anyone else who may like need any of the services I provide, I’d be very happy for you to pass on my details.
Thank you and speak soon! x
You can find me on the Equity Release Council’s Website: ERC
You can find me on Vouched For: Vouched For
- Equity Release will reduce the value of your estate and can affect your eligibility for means tested benefits.
- The value of pensions and investments and the income they produce can fall as well as rise. You may get back less than you invested.
- Tax treatment varies according to individual circumstances and is subject to change.
- Investors do not pay any personal tax on income or gains, but ISAs do pay unrecoverable tax on income from stocks and shares received by the ISA managers.
Swift Mortgages and Swift Mortgages & Finance are trading styles of Heide Swift and authorised and regulated by Quilter Financial Planning.
Heide Swift
Telephone: 01525 309300
Mobile: 07903 302895
Email: heide@swift-mortgages.com
Website: www.swift-mortgages.com
#SwiftMortgages
#FinancialAdvisor