SKQ Issue 8

issue 8

SKQ A publication from

WELCOME

to issue 8

It’s now two years since we published our first edition of SKQ - time flies!

Christmas is upon us again, with this year’s festivities looking much more familiar than that of 2020. In fact, the SK team all got together in London for a fabulous Christmas lunch just recently and it was great to be able to celebrate in person.

Personally, I am looking forward to perusing a Christmas market and having my first attempt at ice skating.

In this issue: • Richard outlines the forthcoming tax year end • David looks at the importance of understanding your credit score • Nick Elston discusses looking after your mental wellbeing during the festive season From the team at SK, we wish you all a Merry Christmas and a Happy New Year.

As always, the SK Team is here for you.

Chloe Editor chloe@skfinancial.net We encourage you to share our magazine with those you think may find it useful.

If you have any feedback or would like to contribute to our next issue of SKQ, send Chloe an email at chloe@skfinancial.net

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CONTENTS 04 Outlook from Kunle 06 Credit Score 101 – David 09 Tax Year End – Planning with Richard 10

Thriving through Christmas with Nick Elston

12

SK Invest Podcast – Introducing Mark Harries

13

Get to know Tracey

14

Money Musings

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OUTLOOK From

Kunle

Taking a moment to reflect As we approach the end of year, it feels like a natural time to take stock and reflect on what we’ve achieved, what’s to come and what’s important to us. Here are a few things I have been mulling over.

Good people I am very proud of how we, as a team, have looked out for each other. We have managed to add two new team members and watching the way that every person has encouraged and assisted Beth and Jade into the SK Team reminded me that I work with really good people.

A bit of a facelift Having placed a large focus on improving the way SK looks this year, with our new website, marketing documents and communications, we are now looking at other ways to enhance our services to you. This will include:

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• a new client portal, making it safer and easier for you and us to share personal and sensitive information; • a new look to the client review documents.

Financial reassurance We are also developing our software to make sure we can identify if you are on track with your finances or not. No one wants any hidden surprises, which is why we want to provide you with reassurance and make sure that your requirements are realistic and achievable.

Food for thought Through SKQ and the SK Invest podcasts, we are aiming to provide a balance of technical, personal and inspirational themes and stories to help build on your understanding of finances, learning from others and to help with motivation. Anything that you would like us to mention or if there is anyone that you would like us to interview, please do say.

The joy of down time We live in a digital age. And I still believe that technology should be used to carry out a variety of tasks in a more efficient and faster way, so that we can free up time to do more of the things that we love and enjoy. For me, this is reading and I have enjoyed spending my spare time reading more books. The last book that I read was the compelling “Snow Falling On Cedars”…

It tells the tale of a Japanese – American fisherman accused of killing his neighbour at sea on San Perdo, where the aftermath of the 2nd World War has left an immeasurable strain on the local community.

Empathy, always On my travels this year, I came across two things that I have deeply connected with. The first was this quote - “There is no memory in our head that doesn’t have an emotion attached to it”. And the second was the emotional wheel:

“There is no memory in our head that doesn’t have an emotion attached to it.”

It reminded me of the myriad of emotions that we can feel at any one time. With this in mind, I am now making a concerted effort to always be conscious of how the person I am talking to may be feeling and of having the emotional intelligence to understand how this may impact their current state of mind.

I wish you a happy Christmas and a healthy 2022.

PLUTCHIK’S WHEEL OF EMOTIONS Two-dimensional circumplex model

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CREDIT SCORE 101

BY DAVID STEPPINGS SKQ issue 8 | 6

In today’s world most people at some point in their life will need credit, be it for a personal loan, car finance or mortgage.

What a good credit score can do for you A good credit score offers more than just bragging rights. Having a high score makes it easier to be approved for credit cards and loans, qualify for lower interest rates and get higher credit limits and loan amounts. Not only that, but your credit score also opens up a range of credit card options, including top-tier rewards credit cards.

Why your credit score is important Your credit score is calculated based on your financial behaviour. The simplest way to build your credit score is to pay any existing credit cards (at least the minimum payment), loans, and mortgages on time, and keep within all agreed credit limits.

How you make your payments and how much you pay is reported every month on your credit file and general affordability.

Lenders look at all of these factors when you apply to borrow from them. They’ll also take into account how much credit you owe compared to your income, to form an overall picture of your credit worthiness.

This is why your score can determine whether you’re a worthy borrower when applying for a mortgage or other methods of financing. The better your credit score, the stronger your chances are of being accepted for credit.

David

Do you know what your credit score is?

You can check your credit score and obtain a full report free of charge. It is worth doing this to see what your credit report looks like and to ensure there are no factual errors.

There are multiple providers you can use to check your credit score, to name a few; • Experian www.experian.co.uk • Equifax www.equifax.co.uk • Check my file www.checkmyfile.com this one in particular checks data from Equifax, Experian, TransUnion and Crediva The report will show all credit agreements you have including credit cards, loans and mobile phone plans and looks at whether you make repayments on time and in full.

In addition to these, we are seeing more ‘buy now pay later’ schemes. Although these might not run a ‘hard credit check’, which can leave a footprint on your credit report, any outstanding balances can appear and will be taken into account for affordability.

Student Loans are not factored into your credit report but could have an impact on affordability, if you’re still paying this off when it comes to applying for a mortgage.

Interestingly, your credit score may be lower if you have never borrowed any money, as it marks an absence of proof that you are a reliable borrower.

Ways to increase your credit score You can get a bad credit score by failing to make repayments on time or by missing them altogether.

Default or bankruptcy will stay on your credit file for 6 years, so it’s important to stay on top of your repayments. If you feel you need to improve your credit rating, there are things you can do to achieve this: • Register on the electoral roll • Pay your bills on time • Use a credit card little and often • Fix any errors on your credit record by contacting the company provider • Check if you are linked to another person. A spouse, relative or friend linked to you through a joint account, mortgage or loan together could affect how you are viewed by lenders if they have a poor rating. If you end financial ties with someone, contact the credit reference agency to get them removed from your own credit report.

A helpful website to learn more about how to read your credit report can be found here

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Why does it seem that Christmas comes around so quickly? Is that an age thing?

Being a father of two young boys, I have already helped them with their Trick or Treat outfits and now we’re talking about Elves!

So whilst many of us are amidst the annual splurge on gifts and other indulgences, we are then confronted by that uncompleted tax return that needs to be submitted by the end of January. (From 6th April 2023 this will replaced by the Making Tax Digital (MTD) initiative.)

With all that head space being filled, it’s easy to lose sight of the benefits of undertaking a little financial housekeeping.

After all, who wants to pay more tax than is reasonable? But it’s worth remembering that allowances and tax reliefs are there to be used and the window to ‘use it, or lose it’ is short.

Here are a few items to tick off your checklist before April 5th 2022:

Richard

• If you earn £100,000 or more, your tax free allowance reduces by £1 for every £2 above £100,000 until at £125,140 there is no Personal Allowance left.

Making additional pension contributions between now and April 5th can help recover your Personal Allowance and result in paying less tax.

• Talking of pension contributions, you can make significant inroads to your retirement planning by ‘carrying forward’ unused allowances from previous tax years. Tax relief up to your marginal rate is available up to the equivalent of your current year’s salary.

• If you own your own business you can make employer pension contributions and these can be offset against your tax.

• A little known allowance called the ‘Marriage Allowance’ allows one spouse with earnings below the Personal Allowance of £12,570 to transfer up to £1,260 of their allowance to their partner. The higher earning spouse must be a basic-rate tax payer for this to be effective.

• Don’t forget to top-up your individual ISA allowance. The cap remains £20,000 for the current tax year and cannot be rolled over.

• With Inheritance Tax, it’s a case of every little helps. Use your annual gift exemption of £3,000 to chip away at that taxable estate. If you didn’t use it last year, you can carry forward the unused allowance to gift up to £6,000.

• For those with young families, don’t forget you can make pension contributions of up to £3,600 per child each year. Junior ISAs are also a great way to give your child’s savings a boost and up to £9,000 can be contributed each year. And if they are aged between 16-18 they can currently have a Cash ISA to a maximum of £20,000 and a Junior ISA (JISA) of £9,000. That’s £29,000 that you can put away in each of these accounts.

• For any substantial expenditure items, consider using your annual Capital Gains Allowance rather than using other sources. It’s up to £12,300 for the remainder of this tax year. Remember that realising capital losses can offset any capital gains you make from other investments.

Don’t leave it too late to plan!

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THRIVING

THROUGH CHRISTMAS NICK ELSTON • Inspirational Speaker • Award Winning Mental

Health Engagement • Transformational

Speaking Coach • Founder of Forging People

www.nickelston.com

Let’s face it, not everyone is a big fan of the holiday season – it may not be socially acceptable to say it, but some simply don’t like Christmas (shhhh).

It kind of makes you feel like a grouch to say it – but, in the spirit of honesty, I fall more into that category.

In fact, Christmas has carried a triggering element when it comes to my OCD (obsessive compulsive disorder) and GAD (generalised anxiety disorder).

The mania leading up to the event, the constant spending, the back-to-back socialising (it’s tough work being an introvert) plus the perceived weight of expectation from our friends and families is all then amplified by a ‘people pleasing’ mentality. Phew! I need to take a lie down in a dark room just writing about this.

But, before you label me a Grinch or assume I am surrounded by challenging people – I assure you I am not either of those things – the burden of responsibility lies solely with me and I fully accept that.

However, accepting that means that I have put processes and tools in place to help me over the years and every year I begin to enjoy the period more and more.

I ensure that boundaries are set well in advance, expectations are managed, and I always escape to the Cornish coast on the 27th December until the first week of January so that I can ‘recharge’ before the new working year starts.

I now look forward to the Christmas period because I do it on my terms, whilst being respectful of others.

I look forward to seeing my family and friends, expectations have been managed when it comes to ‘who goes to who’ and ‘who is buying who what’ – well in advance.

Plus, I can throw all of me into the holidays because I have a break scheduled in just after so I can recover – win win win.

I have also neglected, quite intentionally, to add that it is my birthday on Boxing Day – so another year older always puts a downer on things anyway.

My top tips for thriving through Christmas: • Map out what your ideal Christmas looks like for you.

• Set some boundaries to ensure you get as close to that as possible.

• Communicate that to everyone involved ASAP so it’s sorted well in advance – manage expectations.

• If you feel you will be using lots of energy – schedule lots of ‘me time’ in too!

• Ask people what they want too – often, we are all trying to please everyone based on what we assume!

Have a very merry Christmas, a happy holidays and a prosperous 2022!

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THE SK INVEST PODCAST INTRODUCING MARK HARRIES

CHIEF INVESTMENT OFFICER OF SQUARE MILE

Every quarter we interview our investment partner, Square Mile, asking them questions raised either by our clients, our colleagues or within our community.

For this latest podcast, we speak to Mark about inflation - we recognise that inflation is a danger and rising inflation is dominating headlines, but we look to find out whether this is just a temporary blip.

We also discuss how the portfolios are performing and the subject of rebalancing. As Mark explains, “rebalancing is another important tool that we deploy in our investment process. When our investment team creates a diversified portfolio based on the risk level of the client, they make decisions about how much money should be allocated to equities and bonds. Rebalancing is all about maintaining that weighting and it’s a process that we action for our clients on an annual basis.”

Listen here to learn more on these topics and about how their portfolios have been set up to mitigate investments risks and to create an opportunities to take a profit.

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GET TO KNOW: TRACEY

A member of the SK team tells us a bit more about their life, loves and future plans…

I started my working career back in 1980, working as a Junior Typist for a stockbroking company called Grieveson, Grant. I’m still in touch with the friends I made there in my first year! The offices where I started are just around the corner from Snow Hill, in Gresham Street although it looks very different now by the Guildhall! After many company name changes and varying roles as my career progressed, I met Kunle along the way. We stayed in touch and I later joined him at SK Financial some ten years ago.

Alongside my career, at home I married Jay and have two children. When I returned to work, priorities changed and I then worked part-time – a nice working/home life balance and flexibility within SK has always worked well.

Working part time also gave me the time to do some voluntary work with the Samaritans. A simple ethos but so important that we talk, especially in such a digital world! In fact, the first ever Samaritan call was taken just across from Cannon Street in St Stephen, Walbrook, by the founder - the actual telephone is still there!

During lockdown I rediscovered the Kent coast, fish and chips on the sandy beaches of Dymchurch and Camber Sands, especially on a sunny day. I also looked back at my family history. I would definitely recommend anyone to doing this. ‘Ancestry UK’ has so much information and it’s amazing what you can find.

Favourite City: It has to be London on a clear blue-sky day or even just a dry, cloudy day! Whether it’s a walk along the Southbank, Borough Market, a stroll around Hyde Park or afternoon tea at the Corinthia! As Samuel Johnson said – ‘when a man is tired of London, he is tired of life; for there is in London all that life can afford’.

Bucket List: I would like to get to the Maldives before they disappear.

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“Every day is a bank account, and time is our currency. No one is rich and no one is poor, we’ve got 24 hours each.”

Money Musings As I’m sure we’ve all heard at least once ‘money doesn’t grow on trees’.

This got us wondering what other ideas, thoughts and advice people have or have received around money.

We asked the team and clients to share some of their ‘money musings’ • Aim to save 10% • Take the trip, money can always be earnt back later • A friend talked me out of buying a car which loses money and investing in property. Back then £5k deposit could get you a studio flat zone 2 London. Best move I ever made • Earn a pound and don’t spend £1.20 • If you are still thinking about it in a week, go back and make the purchase • Don’t try living a champagne lifestyle on a beer budget • Save a bit, spend a bit • Look after the pennies and the pounds will look after themselves • Every day is a bank account, and time is our currency. No one is rich and no one is poor, we’ve got 24 hours each • Some people are so poor, all they have is money • You can’t take it with you when you go • The best place for money is not under a bed!

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Chloe

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Seasons Greetings from everyone at SK The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it.

This document is distributed for information purposes and should not be considered investment or other advice or an offer of any product / security for sale. This document contains the opinions of the authors but not necessarily the firm and does not represent a recommendation of any particular security, strategy or product. Information contained herein has been obtained from sources believed to be reliable, but is not guaranteed.

Please contact us before you transact. Errors and omissions excepted.

SKF Trading Ltd trading as SK Financial.

SK Financial is directly authorised and regulated by The Financial Conduct Authority.

SKQ issue 8