but wisdom listens.”



Winter 2015


“Knowledge speaks,

but wisdom listens.

Jimi Hendrix

Old Mill as investment coach

Discover the TRUE value of a good adviser

Pension planning

The latest and best opportunities for

growing your wealth

The need for advice has

never been greater

Mapping the route to your financial goals

300 mile charity cycle ride

£7,000 raised for local charity



Paris to Yeovil charity cycle ride

Pension contribution tax relief set to fall again – act now

Old Mill gain top industry qualification

Guest Spot: Mogers Drewett Contentious probate – challenging a will and more

Where did you go on holiday?

Stamp Duty Land Tax Changes – what took them so long?

The gift of giving

Showtime for Old Mill

The mortality clock – a losing battle or once in a lifetime opportunity?

Four year delay to nursing care cost cap

Old Mill as investment coach

Pension planning

Guest Spot: Barnard Fitness Healthy, as well as wealthy and wise

Investor fire drill

The need for advice has never been greater

















Welcome to the Winter

edition of Wisdom and a new

look and feel for the magazine

I’m not sure about you but the

amount of information I am

surrounded with is staggering. Many

of us are now connected to a vast

knowledge bank – out and about

on our phones, at work and at home

on our laptops and computers.

But does it make decisions any

easier? I’m not sure it always does.

You can find knowledge about the

advice areas we look at: taxes, your

finances, investments, pensions,

planning but as knowledge often

deals with the subject matter in

isolation it doesn’t answer the

important question: “What’s the

right choice for me?.

We think a better way is wisdom.

In the dictionary this is defined as

“The quality of having experience,

knowledge, and good judgement

and I like to think this starts to

describe what we do for you. So

that’s why we changed the title of

our publication as while it does talk

about knowledge it tries to go

beyond this to look at the points

that are important to you.

Of course as clients of Old Mill you

will be receiving bespoke advice but

we hope that the articles we write

are complementary and reinforce

your individual advice.

We will be sending Wisdom to you

twice a year through the post but

if you want updates more regularly

there are timely articles and

commentary on our website and

you can sign up there to our

monthly email newsletters or email

marketing@oldmillgroup.co.uk and

provide your email address and we’ll

put you on the distribution list.

We hope that you find the articles

of interest and like the new format.

Do let us know if there are any

topics you would like covered in

future editions or if you have any

comments about the publication.

Would you like to know more?

Contact Paula Hodge

on 01935 709328 or email


1 www.oldmillgroup.co.uk


Increase in tax on dividends

The dividend tax regime is to be

fundamentally reformed from April

2016. Dividend tax credits are to be

abolished and will be replaced with

a £5,000 Dividend Tax Allowance.

The new rates of tax on dividend

income above the allowance will be

7.5% for basic rate taxpayers, 32.5%

for higher rate taxpayers and 38.1%

for additional rate taxpayers.

While these rates have risen they

remain below the main rates of

income tax. A good time to review

your situation if you receive high

levels of dividends.


Old Mill’s 300 mile cycle raises

£7,000 for School In A Bag


The thirteen strong team at Old Mill used

pedal power to raise more than £7,000 for

Yeovil charity School in a Bag. They took

part in a Paris to Yeovil (P2Y) 300 mile

cycle ride from the Eiffel Tower to their

offices at Maltravers House in Yeovil.

The money raised will help School in a

Bag (SIAB) deliver rucksacks filled with

stationery, learning resources and

eating utensils to poor, orphan,

vulnerable and disaster affected

children. The challenge was

organised by David Rice based

in the Yeovil office but staff from

all the offices participated, with

some riders literally taking up

cycling to do the challenge.

Starting under the Eiffel Tower, the group

rode more than 100 miles on the first day to reach

Bernay, spending nearly 11 hours in the saddle. The

second day saw them cover 77 miles from Bernay to

Bayeaux while on the the third day they rode 71 miles

to Cherbourg. The final day was back in the UK cycling

the 51 miles from a wet and very busy Poole to Yeovil.

Simon Pearson a SIAB volunteer and Luke Simon the

founder of SIAB joined Old Mill on the ride, Luke said:

“They made it really good fun. We had a really great

cross section from across the company, some quite

junior staff right up to one of the firm founders. It was

just amazing that we had this group of people that just

gelled so unbelievably well.

Paris to Yeovil is the second cycling challenge organised

by David; last July, 19 staff took part in the Old Mill

Office Cycle Challenge, where staff aimed to raise

£5,000 for School in a Bag by cycling the 140 miles

between each of Old Mill’s five offices (Melksham, Wells,

Yeovil, Dorchester and Exeter) in two days.

They more than tripled their target then, raising

£15,500, and David says he is delighted to have been

able to organise another successful challenge again this

year. He said: “The challenge was exhilarating, and

great fun, the comradery was fantastic. The French

countryside and roads were really enjoyable, everyone

was so encouraging towards each other, and we also

received fantastic support from friends, family and

colleagues as well as lots of Old Mill’s customers.

Massive thanks must go to our support crew, who were

invaluable providing much needed drinks and

refreshments, as well as Luke and Simon from SIAB for

their fabulous co-ordination for the event.

We are delighted to have raised around £7,000, but the

sponsorship is still coming and we are very grateful to

those who have donated so far.

Team P2Y, Ready for the long road ahead.



Arrival in Cherbourg

Still going strong (somewhere in France)...

“It was just amazing that we had this group of

people that just gelled so unbelievably well.

Luke Simon, founder of SIAB


Pension contribution tax relief

set to fall again – act now

No sooner have the pension rules changed

and they are potentially set to change

again. We have already looked at the

availability of tax relief for high earners as

this will be severely reduced for those

earning over £150,000 in April 2016.

But there is also a strong possibility of further changes

to pension tax relief for all in the near future. The cost of

pension tax relief is currently £34 billion and with

ongoing austerity this is an area the Government may

wish to target for future savings.

Pension rules consultation

In the Summer Budget the chancellor opened a

consultation looking at pension tax relief and considers

some big changes, including the removal of pension

contribution tax relief altogether. Although we don’t

expect the change to be this radical it is widely

expected that the rate of tax relief will fall.

The most likely outcome will be the removal of higher

rate tax relief, possibly with a flat rate of tax relief for all

and a rate of 30% has been mentioned in the past

(which will be good news for basic rate taxpayers).

The consultation closes in September and with an

Autumn Statement by the Chancellor scheduled for

November 25th there is the possibility that any change

could be announced then (And effective immediately).

We don’t have a crystal ball unfortunately but if you are

a high earner or higher rate taxpayer and intend to

make a pension contribution this tax year anyway we

think you should consider doing this now given the risk

of potentially losing out on significant tax relief.

Fall in the lifetime allowance

It has already been announced that the overall amount

you can have in a pension fund without incurring tax

charges is set to fall to £1m (currently £1.25m) from

April 2016. There is scope now if you are near or over

that limit to top up ahead of this change and then claim

the latest protection for your fund.

Possible to make larger contributions

It may also be possible to carry forward unused pension

allowances from previous years to make a larger

contribution either personally or through your

company and this ability will continue in 2016/17.

This includes the ability to carry forward up to £40,000

from the period from 6th April 2015 to 8th July 2015.

So even if you have already made a contribution in this

tax year it may be possible to pay more in.

If you want to discuss your individual circumstances

please speak to your usual Old Mill contact.

5 www.oldmillgroup.co.uk

See page 15 for advice on

making gifts to your family


Old Mill gain top industry


Old Mill has become one of only a handful of firms in the UK

to meet internationally recognised standards in the provision

of financial advice.

As part of our commitment to offer

you an exceptional client

experience in the provision of

financial planning services, Old Mill

has completed the certification

programme for BS 8577 – a

framework for financial advice and

planning services set out by the

British Standards Institute.

BS 8577 provides a framework to

increase client confidence by

specifying established best practice

and processes. It is the only

professional quality standard within

the UK’s financial services industry

to focus solely on the following key

areas of business practice:

operational management,

objectives and policies,

management responsibility,

customer relationship

management, recruitment, training,

development and ongoing

competence and control of

documents and records.

BS 8577 was developed in

conjunction with industry and

professional experts, consumer

representatives including Which?

and Standards International. Old

Mill is one of only 19 firms in the UK

to have gained the certification.

Paula Hodge, Head of Private Client

at Old Mill says the whole team

worked really hard to gain BS 8577.

This will now give potential clients

seeking financial advice the

confidence that Old Mill is an

organisation that can be trusted to

provide such advice safe in the

knowledge that it does so in line

with the highest industry standards.

Founder and Director of Standards

International Ltd Michelle Hoskin,

said Old Mill’s achievement is proof

of the firm’s ongoing commitment

to ensuring it delivers the best

possible financial planning

experience to its clients.

“It has been an absolute pleasure

working with Paula, Duncan, Sally

and the whole team at Old Mill, she

said. “Their programme started off

with an in-depth training workshop,

which was an opportunity for the

firm to really understand their

business in all areas and identify a

number of improvements that

would benefit them and, most

importantly, their clients.

Michelle continues, “From there, a

great deal of care and effort went

into their achieving BS 8577 as a

multi-site firm. Certification is the

outcome of a rigorous process in

which setting standards of

excellence has been fully embraced

by everyone at Old Mill.

Congratulations and exceptionally

well done!

Paula concludes: “BS 8577 gives us

the peace of mind that comes with

having put together and

implemented robust business

systems and processes, while it

gives clients the confidence that a

firm operating to the standard will

be a cut above the rest.

7 www.oldmillgroup.co.uk


Premium Bonds

On 1st June the maximum amount

of Premium Bonds you can buy

increased from £40,000 to £50,000.

“A prudent question is

one half of wisdom.

Francis Bacon

The average prize rate is 1.35% and

this is tax free. Remember, over the

longer term this level of return could

see the value fall against inflation.

But cash based investments are a

cornerstone of your financial plan.

If you’ve never checked the

premium bonds you already hold

there are £49 million in unclaimed

prizes and there is no time limit on

making your claim.



Howard Lee,

Mogers Drewett

Contentious probate –

challenging a will and more

Challenging, or indeed defending a Will,

is a serious matter that can often leave

families scarred. But for those who feel

they have not been adequately provided

for, there are several

options for action,

as Howard Lee at

Mogers Drewett


Challenging a will or making

a claim against the estate of

the deceased is a complex,

Howard Lee

and often emotionally

draining undertaking. But for those who feel they have

not been adequately provided for, there are several

courses of action that can be pursued.

It is important to remember that a person is generally

free to make their Will in whatever way they wish.

However, even if the Will is valid, this can result in a

claim being made under the Inheritance (Provision for

Family and Dependents) Act 1975 (or if there is no Will

to challenge the distribution under the Intestacy Rules)

if the applicant feels they have not been left reasonable

financial provision.

The Will document itself can be challenged if it can be

proved to have been made by forgery, fraud, or lack of

due execution. This can arise particularly in DIY Wills

that have not been made with professional advice.

A challenge can also me made based on the grounds

that relate to the testator’s mental capacity or

knowledge of their Will. For example, alleging undue

influence by a third party against the testator. This is

a common allegation but difficult to prove. There needs

to be clear evidence of actual coercion.

A cynical ingratiation by a family member or friend

in anticipation of a greater gain in the Will, will not be

enough however, distasteful that conduct might be.

Alleging that the testator lacked the mental capacity

to make a Will seeks to prove that they did not satisfy

the test for mental capacity that is recognised by the

courts. The applicant might have grounds to allege the

Will was not made with the testator’s knowledge and

approval. This challenge can succeed even if the court

determines that the testator did have mental capacity.

There can often be clear signs of concern when the Will

is made, so a Will maker must take care to make sure

a Will is valid.

There is another alternative route to make a claim

before or after death, using the equitable remedy of

proprietary estoppel. When someone makes a promise

to another that the second person relies upon and acts

to their detriment, the court can, in certain circumstances

uphold that promise and make a proportionate award

to do justice.

Claims can be complex, expensive and extremely

emotional, particularly as they often involve close

family members. Any claim will require a detailed

analysis of the facts and an understanding of the legal

position by a specialist adviser. Suspicion and

dissatisfaction will not be enough, and allegations are

often made that cannot be proved. Therefore it is

important that anyone who feels they have a claim,

or has to defend a claim, should seek specialist advice

at the earliest opportunity.

For further information or advice on this subject please

visit www.md-solicitors.co.uk or call 01749 342 323

9 www.oldmillgroup.co.uk


Where did you go on holiday?

Where did you go on your summer holiday? Did you plan it? For some,

there will be a lot of time and effort that goes into planning where to

go, getting a good price and then ensuring everything is in place for

a successful trip – clothes, airport parking and travel insurance – the

list is endless.

Holidays can be seen as a snapshot of

what life may be like when you retire

– time spent abroad, visiting family or

for favoured hobbies or pastimes.

Do you have a picture of what you

will do in retirement? Do you

spend much time planning how

you’re going to pay for this or

when you might have accumulated

those funds?

It’s important to be sensible to

ensure that your goals can be

obtained but remember that people

often underestimate what can be

achieved in the longer term.

At Old Mill we are able to help you

forecast your future income and

assets into and beyond retirement

to see whether those retirement

dreams are feasible and could

become reality. Below are some

simple steps that can help you in

thinking about your future plans.

Consider your existing


What costs will you save in

retirement and what additional

costs will you create when you finish

work. Will you have to replace your

company car? Will you want to

holiday more frequently? What will

provide your income once you stop


Contingency plans

What happens if you can’t retire

when you wish to, for example due

to ill health? This is often leads to

a light bulb moment for our clients,

the realisation that they may have

enough to retire now if they wish,

or understanding there is a shortfall

between objectives and reality.

This is also the first step in thinking

about others too. Many of our

clients will have sufficient to fund

their lifestyles and want to consider

helping their children or even

charitable giving. People can be put

off doing this if they are unsure if

they have enough wealth.

We can work with you to develop

a strategy to reach these objectives,

have a ‘Plan B’ in place and assist on

your journey to a happy retirement.

Would you like to know more?

Contact Sally Harrison

on 01935 709362 or email




Income Tax


The fact that each individual has

their own personal allowance and

their own starting and basic rate tax

bands means that tax savings are

available where income can be

legitimately shifted from a higher or

additional rate taxpaying spouse to

a non, starting or basic rate

taxpaying spouse.

This is especially so in regard to

income that falls between £100,000 –

£121,200 which causes the removal

of some or all of the personal

allowance and an effective tax rate

of 60% for non-dividend income.


Stamp Duty Land Tax Changes

– what took them so long?

The Stamp Duty Land Tax (SDLT) legislation has long been

held to distort the residential property market, with the

so-called “slab system.

This system meant that the full sales price of a property

was subject to a fixed percentage, depending which

price bracket the property fell into. For example a

£250,000 property would be subject to a SDLT charge of

1%, being £2,500. However a £250,001 property would

be subject to a SDLT charge of 3%, being £7,500. The

price difference of £1 led to an increased Stamp Duty

Land Tax liability of £5,000!

The thresholds were for sales prices of up to £125,000

(0%), £250,000 (1%), £500,000 (3%), £1,000,000 (4%),

£2,000,000 (5%) and above £2,000,000 (7%). The

difference becomes even more pronounced at the

higher end of the market, with the difference

between a £2,000,000 and a £2,000,001 property

being £40,000 of SDLT.

This resulted in two behavioural changes:

Firstly, it took a significant increase in the housing

market for properties to leap up into the next SDLT

bracket. Given the £5,000 increase in SDLT at £250,001

just for paying a £1 more, very few house sales took

place between £250,000 and £260,000, so that £250,000

proved a barrier to price increases, and a similar pattern

was seen with the other thresholds.

Secondly, a practice grew up between allocating the

purchase price where it was just over a threshold

between the property itself and chattels (moveable

items such as carpets and furniture) within it, as chattels

were not subject to SDLT.

In the Autumn Statement on 3 December 2014, a new

system was introduced for residential properties with

effect from 4 December to eliminate this distortion.

Non-residential and mixed use properties still follow the

old slab system.

The new system operates as follows:

n 0% on any amount up to £125,000

n 2% on any amount over £125,000 up to £250,000

n 5% on any amount over £250,000 up to £925,000

n 10% on any amount over £925,000 up to £1,500,000

n 12% on any amount over £1,500,000


This new system is anticipated to result in 98% of

purchasers paying less in SDLT than under the

previous system, with houses selling below £937,500

attracting the same or less in the way of SDLT

liability. It is the higher value properties that bear

the brunt of the reductions at the lower end. The

graph below gives examples of the difference made

by the new rules at different house prices. These

changes mean that SDLT will no longer prove an

artificial barrier to house price increases at certain

levels, and we applaud the Government for the

changes – well overdue and much needed!

Would you like to know more?

Contact Nicola Allen

on 01935 709382 or email


Of course SDLT is only one tax affecting property

purchases, as Income Tax, Capital Gains Tax, VAT and

Inheritance Tax may also have an impact,

depending on the future use of the property. The

best time to consider whether the purchase is being

made in the most tax efficient manner is BEFORE

exchange of contracts. Do speak to your usual Old

Mill contact if you would like advice regarding

property transactions you may be considering.

See page 24 for advice on

planning your pension


The gift of giving

For those willing and able to make them, gifts can be extremely

powerful, and many parents and grandparents want and intend

to gift as a way of helping family.

Whilst it is not for everyone, gifting

can leave a financial legacy either

during your lifetime or afterwards.

For those who are thinking of

gifting, lifetime gifts can give a great

sense of satisfaction in order that

you can witness the recipient

receive and use the funds that you

have provided.

Gifting is also an extremely useful

way of Inheritance tax (IHT)

planning. However, it is apparent

that despite a lot of knowledge on

the ‘7 year clock’ that applies to

Potentially Exempt Transfers (PETs)

there is sometimes confusion on

other gifts that you are able to make.

There are a number of lifetime gifts

that are available which are listed


Annual exemption

Annual gifts of up to £3,000 can be

made and are instantly outside of

your estate. If the previous year’s gift

was not (fully) used it can be carried


Small gifts

As the name suggests, gifts of up to

£250 can be made to any number

of people in the same tax year.

Gifts in consideration

of marriage or civil


Gifts can be made in relation to any

one marriage as follows:

n Each parent can gift £5,000

n Each grandparent can gift £2,500

n Any other person can give £1,000

Normal expenditure out

of income

Gifts can be made out of income

as part of your normal expenditure

as long as the following three

conditions are met:

n It must be out of income, not out

of capital

n It must be a regular gift

n It must not reduce the standard of

living of the donor (the person

who has made the gift)

Naturally this requires more thought

and planning than some of the other

gifts listed in this article, but this can

be highly effective.

Potentially Exempt

Transfers (PETs)

You can of course make gifts of

greater value than those shown

above, and these would typically be

classified as a Potentially Exempt

Transfer (PET). These gifts are called

potentially exempt transfers as you

have to survive seven years from

making the gift for it to fall outside

of your estate.

If you were making gifts in this

manner we strongly advise that full

records should be written down in

order that your estate can be

effectively managed, and to provide


Whilst the above covers lifetime

gifts, there are other gifts on death

or during lifetime that can avoid IHT.

n Gifts between spouses (and civil


n Gifts to charity

n Gifts to political parties

n Gifts for national purpose i.e. gifts

to a museum or the National Trust

Gifts and planning

Whilst the above gives some

guidance on gifts that can be made,

there are important considerations

that mean advice in these areas is

strongly recommended.

n Can you afford to gift now?

n Will you have sufficient capital to

last your lifetime after the gift?

n Are there capital gains tax (CGT)

considerations on making gifts

of your assets?

n Is gifting the right strategy or

should you look at other means

of reducing your IHT liability?

Finally, gifts may not always be

monetary and many of our clients

give their time to look after

grandchildren or take their families

away on holiday.

At Old Mill we are uniquely placed

to give advice on these areas, with

specialists in tax and financial

planning matters. Please call us if

you would like a review of your

Inheritance Tax position.

Would you like to know more?

Contact Michael Bagg

on 01935 709338 or email




Showtime for Old Mill

What a great season of country shows at Old Mill this year, starting

with the North Somerset Show in May. We have had a mixture of

weather but on the whole it has been a great year.

Pam Norris

At the end of May we had

the Royal Bath & West Show

which went superbly; we saw

so many clients, friends and

family over the four days.

Apart from a slightly washed

out Ladies Day, we were

delighted that Pam Norris

dressed appropriately for the

weather and won best

dressed at this year’s Ladies

Day competition before we

embarked on afternoon tea

in the members marquee.

We were delighted to have upgraded our show unit this

year, and we now have excellent facilities to offer

refreshments and drinks throughout the day in quality

surroundings. This is a huge improvement for us and

really makes a significant impact for us at shows, with

new branding and increased inside space for clients as

well as our catering needs.

The following week we had another wonderful three

days at the Royal Cornwall Show in Wadebridge and

then the fantastic launch of our new show unit at the

Mid Devon Show in July which took us into the

one day shows ending with Frome on the

12 September.

Cider judging at the Royal Bath and West Show


The Old Mill members marquee at the Royal Bath and West Show


Important changes to

protection for cash deposits

Following the credit crunch most

savers will be acutely aware of the

Financial Services Compensation

Scheme (FSCS). The scheme protects

deposits up to a set limit, in the event

that a bank or building society fails.

The amount of protection is set by

an EU directive at €100,000 and due

to the falling Euro the amount is set

to fall to from £85,000 to £75,000.

At four of the shows we also held a joint breakfast with

Porter Dodson and the CLA with some great local

speakers from a selection of local food and drink

businesses including, Copse House Cider, Cheeky Cow

Cheese, Somerset Cider Brandy, Furleigh Wine Estates,

Styles Ice Cream, Dorset Game Larder and Langham

Wine Estates. These gave a great opportunity to enjoy a

delicious breakfast whilst listening to some inspirational

talks before heading around the show.

The change does not come into

effect until 1st January 2016, however

you may need to start planning now

and to consider the following:

n Do you have more than £75,000

(£150,000 for married couples/

civil partners) with one institution?

n Do you know which banks/

building societies share a credit


n Do you need to plan any maturing

fixed interest accounts to ensure

you don’t roll over a sum greater

than the reduced allowance?


The mortality clock –

a losing battle or once

in a lifetime opportunity?

How often do we look back at a period of time and wonder how

or why it went so quickly? I am sure we have all uttered the phrases

that go along the lines of “where did the time go or “I wish I had

more time on various occasions whether it is with reference

to a weekend, holiday or day at work.


Also does it sometimes feel that

when you would like as much time

as possible the faster it goes –

a good example perhaps being a

holiday or time spent with

loved ones?

Should we really be surprised

though; time goes quickly because

it should – it is diminishing by its

very nature. Whilst we may not like

to think about it too much we all

have a limited amount of time in our

days, weeks, months, years and, dare

I say it, lives. We can sometimes forget

that once a certain period of time has

gone you can never change it or get

it back again.

I think deep down we all understand

that time is a precious commodity

but do we still take it for granted?

How many times do we put

something off because we can “leave

it for another day or “worry about it

later? Delaying some things in life is

not going to cause problems; how

many of us have left the washing up

for the next day without any dire


However, and in all seriousness,

have there been moments in life

when you look back and think “I

wish I had.... For most people the

biggest regrets can sadly be the

ones that hurt the most. For

example, at some point most of us

Would you like to know more?

Contact Jon Orchard

on 01225 701217 or email


will come to grips with losing a

loved family member or friend;

sometimes it can be expected, other

times very tragically not.

When these individuals are gone

from your life, how do you

remember them? I would suggest

that we remember them from the

moments we spent with them. So in

this context, how important looking

back is it that we try to spend as

much time with our loved ones as

possible, bearing in mind that

memories are simply “moments in

time. If you do not take the time to

create these “moments then what

memories could you be left with?

Do we often forget about these core

values in the hectic day to day lives

that we lead?

So why do we still take time for

granted? The answer I believe is

because we do not like facing up to

our own mortality.

Four year delay to

nursing care cost cap

After weeks of rumour and speculation,

the Government has confirmed that

implementation of Phase 2 of the Care

Act 2014, including the £72,000 ‘cap’ on

personal contributions towards care,

will be delayed until 2020.

This announcement represents a significant

change and the announced delays and the care

needs assessment system still mean there is a

post code lottery for care. It is important for

clients who wish to have choice and control to

retain sufficient wealth to be able to compete in a

progressively competitive care market where

money talks and gives massive advantage.

Care costs are rising significantly faster than

inflation and certainly faster than house prices, so,

planning ahead and considering the potential

need for care is prudent. The need for high

quality, specialist financial advice will be even

greater as people look to ensure that they do not

run out of money and can make the best use of

their assets when making care choices.

Let me put it this way, if someone

were to tell you in exact days,

months and years how much longer

you would live (a mortality time clock

perhaps?) would you view life

differently – would you change

anything? Maybe not immediately

but I am sure as the number of days,

months and years gradually reduced

down you would start to prioritise

certain things i.e. time with family,

friends, completing things you

always wanted to do etc.

I am also sure you would not work

right up until the numbers turned to

zero. Wouldn’t life be so much

easier if we all had a form of

mortality time clock? You would

have little regrets as you could plan

everything around the known time

you had left and you would also

know how much time you had with

other people until their clock

turned to zero.

The fact though is that many of us

cannot accept that we do all have

some form of diminishing clock

attached to our individual lives, the

only difference from the example

above is that we cannot see the

numbers. We sometimes stubbornly

believe that there will always be

enough time, even though the exact

opposite is true. This is the real

reason why people take time for

granted; simply because they are

unrealistic about how much they

have available.

This may all seem a bit depressing,

but it shouldn’t be; far from it – the

fact of the matter is that if you are

reading this you still have numbers

on the clock. The main consideration

is whether you are going to spend

them wisely before they run out?

If you want to discuss the changes in your

individual circumstances or for a family member

please speak to your usual Old Mill contact.

Would you like to know more?

Contact Chris Tweedie on 01225 701217 or email


See page 21 to find out about

investing for the future


Old Mill as investment coach

It is always tempting to judge the value of Old Mill as an adviser on the

recent performance of your investment portfolio. That is unfair as it

fails to understand both the true value that a good adviser delivers

with respect to investments and the fact that no manager can control

the returns that the market delivers.

A good adviser can earn their ongoing annual fee

several times over, simply by helping you to have

patience, fortitude and discipline in your investing.

As the founder of Vanguard and legendary US investor,

John Bogle points out: “If I have learned anything from

my 52 years in this marvellous field, it is that, for a given

individual or institution, the emotions of investing have

destroyed far more potential investment returns than

the economics of investing have ever dreamed of


When it comes to investing, there are five key areas that

we provide significant value:

n Structure: The starting and critical step is getting your

portfolio structure right for you. This must be based

on your emotional and financial tolerance for, and

need to take, risk. It involves selecting sensible risks to

take and using high quality, low cost funds to capture

the rewards that your earn for doing so.

n Governance: Making sure that your portfolio

strategy and the funds that you own continue to

deliver you with the greatest chance of a successful

outcome and that you avoid fads and too-good-tobe-true

products is important, yet much of this is

behind the scenes and you may not see the work

being done on your behalf.

n Hand-holding: The hardest part of investing is having

the confidence and emotional fortitude to stick with

the programme through thick and thin. When markets

are either going up or down with great magnitude,

as they inevitably do from time to time, an investor’s

emotions will kick in either in the form of greed or

fear often resulting in the destruction of wealth

through a ‘buy high, sell low’ strategy.

n Rebalancing: Over time, portfolios drift in terms of

their structure due to market movements resulting

in either too much risk (equities have increased as

part of the portfolio) or too little risk. Rebalancing

seeks to ensure that the risk level of the portfolio

remains where it was specifically designed to be.

It takes discipline to do this.

n Doing the boring stuff: The fifth level of value that

an adviser delivers is undertaking some of the menial,

yet highly valuable, administrative functions such as

ensuring that ISA allocations are made use of and that

capital gains are taken in a controlled manner, avoiding

as little time out of the market as possible. We all hate

paperwork, so let someone else take care of it!

Buy-high, sell-low strategy – favoured by

many investors!

As an example of the hand-holding role of an advisor,

take a look at the eye-opening chart opposite, which

compares the flow of money into and out of equity

mutual funds in the US to the year-on-year

performance of the global equity markets.

Investors load up on equities at the top of the market

and sell when the markets crash, time and time again.

The largest ever inflows into equity funds occurred

almost exactly at the top of the tech boom in early

2000. The biggest outflows occurred at the lowest

point of both the ‘Tech Wreck’ and the ‘Credit Crisis.’

In short, positive market returns result in investors

buying equities and negative market returns result

in investors selling equities!

21 www.oldmillgroup.co.uk

Would you like to know more?

Contact Kevin Whitmarsh

on 01749 335051 or email


Page 26 features guidance on the

unpredictability of investments

Research by Morningstar(1), reveals that the average

difference on an annual basis between the returns of

a fund and those that the average investor receives is

-2.5% per annum to the detriment of investors, on

account of their poor entry and exit timing.

Given that most advisors charge 1% as an ongoing fee,

which should also include comprehensive financial

planning and regular goal tracking, it is easy to see the

value of employing a steady hand to guide an investor

through choppy waters.

In conclusion

So next time you look at a portfolio valuation, spare

a little time to consider the broader, longer-term role

we are playing. What you are looking at is market noise,

which risks tempting you into bad, emotional choices.

We are here to provide perspective, stop you from

owning investments that should be avoided, help you

to keep faith in the programme and make you

rebalance, just when you don’t want to! That’s what

we are paid to do.

Figure 1: US investors – net new cash flows vs. equity market returns (1998 to 2013).

Source: Investment Company Institute. Copyright. All rights reserved 2013.

(1) Mind the Gap 2014 by Russell Kinnel, Morningstar



Pension tax relief to fall for

high earners

As promised in the Conservative

Manifesto the amount people with

an income of more than £150,000

can pay tax-free into a pension will

be reduced.

Currently people can contribute up to

£40,000 a year to their pension taxfree.

From April 2016, this amount will

be reduced for individuals with

incomes of over £150,000, including

pension contributions.



There was the fear that this would

be imposed immediately but the

date of change offers a window of

opportunity for those affected to

make a larger contribution. Speak to

your usual contact if you want advice

or visit our website for a factsheet.

Pension planning

The new pension reforms since April open up new opportunities and

below we have looked at some of the ways our clients have been using

pensions in their wider financial planning.

Inheritance Tax planning

Many of the articles in the press

have been talking about taking

money out of pensions but our tax

and financial planning experts are

seeing much more opportunity in

the ability to pass money to the

next generation tax-efficiently by

keeping pensions invested.

For some, the most important

strategy for Inheritance Tax (IHT)

planning is ensuring their affairs are

structured to benefit from attractive

Agricultural and/or Business

Property Relief (APR and BPR) in

respect of business assets.

The business can then be passed on

Inheritance Tax-free without falling

into the estate, and the pension

(which is outside of your estate) can

be passed over as well, minimising

any assets that will then potentially

be at risk of creating an IHT liability.

Land or business premises

in pensions

You have long been able to

purchase farmland and commercial

premises within your Self-Invested

Personal Pension (SIPP) or Small

Self-Administered Scheme (SSAS).

Farmland in pensions is often not

advisable due to the attractive

Agricultural Property Relief benefits

they receive when held outside a

pension fund but existing

commercial property or constructing

new buildings within your pension

scheme has a number of benefits.

This strategy has been used by

many of our clients to good effect

with a gross rent going into the

pension from the business and

allowing commercial property to be

purchased from funds already

accumulated within one’s pension

(rather than funding from other

sources or loans). There is also the

benefit from rising values in a taxfree

pension environment without

Capital Gains Tax to worry about.

However, the major drawback of this

strategy has been the issue regarding

what to do with the buildings when

you come to draw pension benefits.

Often the rental income is not

sufficient to cover the income you

may need from the pension and your

children inheriting the business may

not be able to afford to buy out the

assets from the pension.

Would you like to know more?

Contact Steve Woodham

on 01749 335027 or email


In the past if the property remained

in the pension fund on death the

land may have had to be sold to a

third party to cover a 55% death tax.

Fortunately, this very high tax

charge has now been removed.

Now that the pension funds can

potentially be passed on free of tax,

this last point disappears.

As such, a building held within a

pension fund could in theory be

passed down through the

generations, allowing it to stay in

the family and ensuring that the

business can continue to operate as

before. This represents a significant

improvement over the previous

more restrictive situation.

Succession planning and

equalising an estate

between children

The new pension rules will

effectively allow wealth

accumulated in pensions to be

passed through generations,

creating further opportunities.

For example, it is sometimes difficult

to ‘compensate’ children who do not

inherit the main business with other

assets. The ability to pass your

pension to these children can help

your estate planning be more

equitable as the pension fund will

no longer suffer a tax charge when

it initially passes to the family.



Allan Barnard,

Barnard Fitness

Healthy, as well as wealthy

Starting or maintaining a regular exercise routine can be a challenge as you get

older. The pressures of home and family life, as well as big life events can make it

feel like there's little time to exercise, as well as the increase of technology which

has made life even easier to avoid it.

For those who haven’t exercised

before, you may not know where to

begin. Or perhaps you think you're

too old or that exercise is boring or

simply not for you.

The NHS state that “to stay

healthy, adults should try to be

active daily and aim to achieve at

least 150 minutes of physical

activity over a week through a

variety of activities.

If you break this down it is only 20

minutes a day and there are so

many things that you can do to

achieve this. Whether you are a

regular at your local gym, go for

daily walks, swim regularly or even

everyday tasks like cleaning the

house; all these things can count

towards this. By keeping physically

active it not only improves your

health and quality of life but it can

also help you to live longer.

What are the benefits of exercise?

Aside from weight loss, there is a

lot to gain from exercise and it can

make a huge difference to staying

healthy and diminishing stress,

here are some of the benefits;

1. A healthy heart

Reducing heart disease and high

blood pressure. Exercise means a

healthier heart because it

reduces several cardiovascular

risks, people who exercise have a

lower risk of heart disease, high

blood pressure, type 2 diabetes

and many other chronic diseases.

2. Good mental health

Helping you to manage stress,

anxiety and depression. Studies

show that mental decline is not

an inevitable part of ageing.

People who lead intellectually

stimulating lives are more likely

to be free of dementia conditions

like Alzheimer’s.

It is possible to keep your brain in

shape and to cope with changes in

your mental ability by exercising


3. Boost self-esteem, mood, sleep

quality and energy levels.

Exercise releases endorphins,

powerful chemicals in your brain

that can make you feel good. By

doing regular physical activity

this can help increase those

levels, increasing your energy

levels as well as taking your

mind of any anxious thoughts/

stresses that you may have.

4. Help achieve and maintain your

ideal weight, reducing the risk of


Making sure you exercise

regularly and keeping an eye on

what you eat is of real

importance, by watching sugar

and fat intakes this can also help

deter that extra weight gain.

After you turn 50 a major reason

for age-related weight gain is

that the rate at which you

burn calories in food and

drink, known as your

metabolic rate, slows



and wise

Get fit, have fun, achieve your goals

down with age. The extra calories

will turn into surplus body fat over

time if you don’t adjust your diet or

exercise more.

5. To strengthen your bones and

prevent osteoporosis by doing

regular exercise.

By exercising you don’t just build

muscle and endurance but it is

also important for building and

maintaining bone density.

Weight bearing exercises such as

cycling, walking, and swimming

are great for this, as well as

resistance work, using light

weights and flexibility training

such as yoga or pilates.

These all help to improve

balance and co-ordination and

help to prevent osteoporosis as

you get older.

So how do you start introducing

exercising into your life?

It is never too late to start exercising

and by having the support of friends,

family or a fitness professional, this

can give you the confidence and

guidance to start. Always check with

your GP before embarking on a new

fitness regime but you will soon

notice the difference and the

benefits of exercise.

For more information or advice

please contact Allan Barnard on

07828 452029 or email



Investor fire drill

As part of the Financial Planning service

we encourage our clients to discuss the

unpredictability of investments and

what they will do in a stockmarket fall,

an “investors fire drill if you will.

We all experienced fire drills at school as children

and at work as adults. The purpose, of course, was

to learn what to do in the event of a real fire.

It wasn’t for an expected fire but was intended

to teach us how to survive and avoid serious

injury if, by chance, there was a fire.

Think about how you felt when the market was

headed down with no end in sight in the financial

crisis of 2008. Prepare yourself for the “this time it’s

different feelings you will experience if the

market does head south. This “talk should in no

way be considered a forecast, just as a fire drill is

not a forecast of a coming fire. But having this talk

today is so much better than having it when the

market has fallen 30%.

We know that you can greatly improve your overall

financial experience by setting the right expectations

before a market decline and maintaining discipline

during a decline. The stress of a collapsing stock

market fundamentally changes how people make

financial decisions and these can have a negative

effect on your wealth. Market declines happen

regularly – approximately three years in ten in the

past have seen annual falls in stockmarkets but

global markets have always recovered.

At the moment a broadly diversified investment

strategy provides a strong foundation for an

investment plan; this has made sense in the past

and will continue to make sense in the future.

Speak to your Old Mill Financial Planner if you want

to discuss this in your individual circumstances.

Would you like to know more?

Contact Gavin Jones on 01749 335038 or email



The need for advice has

never been greater

It feels recently as if there is an accelerating pace of change and

many constants we have had in the past – pensions, trusts, tax are

changing dramatically with a new Conservative government and,

dare I say, assertion of political philosophy.


Almost everyone worries about

money, what the future may hold,

and the decisions and choices that

they will face along the way and

people are looking for someone to

make sense out of this complexity.

For those that work with us the

benefits of good advice are often

received in the far-off future. It is

often easy to appreciate the value

received in the first year, and easy to

forget to appreciate the value on an

ongoing basis. The financial

planning relationship can be broken

down into three key phases of value.

Sorting out the mess and

building the plan

New clients often arrive with a

proverbial suitcase of bits and

pieces collected over the years, such

as a number of pension plans, withprofits

bonds, endowment policies,

life insurance and a stock broker or

IFA managed portfolio. This

collection of ‘stuff’ often has little

structure and rarely provides

comfort that the future will be

bright. That’s a stressful place to be.

The first and most vital step is to

help clients to set out their vision for

the future, both in terms of lifestyle

goals and the money needed to

fund them. Next comes the

analytical work, which may involve

using cash flow modelling tools, to

help empower clients to make

sensible strategic choices.

The resulting ‘plan for the future’

becomes a joint effort between

client and planner. Once sorted and

implemented, the client is then back

in control of their future and their

finances. The value is easy to see.

Progressing the plan

Financial planning is not a ‘set-andforget’

process, far from it, in fact.

Regular review meetings help to

provide clients with an insight into

how things are going relative to the

plan. What is more important is the

future and how the plan needs to

progress from this point forward.

Some issues and consequent

decisions faced may relate to

events in the client’s life, or may

be more technical or market issues

that sit in the financial planner’s

bailiwick. Clients have better things

to be doing with their time than

trying to understand and tackle

these issues alone!

Some years may be quite

uneventful, while others are

momentous. In the former, not

much may appear to happen, but

that does not diminish the value

of the financial planner, who is –

behind the scenes – constantly

on the lookout for issue that may

threaten the successful outcome

of the plan, or ways in which it can

be refined. At times of crisis,

understanding the issues faced,

finding a solution that makes sense,

facilitating decisions that need to be

made and having the fortitude to

execute under pressure, is where

great financial planners come into

their own.

Long life, death and


There are also some more subtle

areas of the value of a long-term

relationship with a trusted financial

planner. For many people, living

longer is a two-edged sword.

On the upside, we can all now

expect to live materially longer than

our grandparents’ generation. On

the downside, we also know that

with longevity comes attendant

health and financial challenges. For

example, long-term health care

costs are rising rapidly and simply

knowing that they can be met is a

great comfort to many. A financial

planner, who knows the family and

their financial circumstances well, is

well-placed to provide advice,

support and to facilitate the

financial consequences of the new

change in circumstance, when

it is needed.

“Life is very simple, but

we insist on making

it complicated.


Many clients, often one of a couple

who takes more interest in the

finances than the other, worry about

what will happen to their partner on

their death. Having a trusted

financial planner (and an up-to-date

plan), allows them to be confident

that, in the event of their death,

their partner will be well cared for

financially and that their affairs are

in order. Probate too, is a far easier

process when everything is


Most people would like to feel that

they will, in some way, leave behind

a lasting legacy. For some, that can

mean spending time and money

supporting their philanthropic works

and for others it may mean passing

on wealth from one generation to

the next. The proposed 2015

legislation has created an

opportunity to pass on wealth to

future generations in a tax effective

manner, for example. Again, financial

planners can play an important role

in helping clients to make decisions

surrounding such issues.

Would you like to know more?

Contact Simon Cole

on 01935 709364 or email


In conclusion

It is easy to forget when you meet

with your financial planner for your

annual review meeting that the

scope and value of the relationship

is far deeper and more important

than worrying about the 12-month

market noise that has resulted in

your portfolio going up and down,

or the fact that neither your

portfolio nor the plan has

changed much.

Meeting your goals, feeling

confident in the future and having

the time to enjoy the opportunities

that your money provides you, your

family and your community are

what really matter. Delivering ‘peace

of mind’ may sound a bit trite, but

that is the goal, consequence and

value of great financial planning.



Leeward House, Fitzroy Road,

Exeter Business Park,

Exeter, Devon EX1 3LJ

Tel: 01392 214635

Fax: 01392 214690

Email: exeter@oldmillgroup.co.uk


Wessex House, Challeymead Business

Park, Bradford Road, Melksham,

Wiltshire SN12 8BU

Tel: 01225 701210

Fax: 01225 709817

Email: melksham@oldmillgroup.co.uk


Bishopbrook House, Cathedral Avenue,

Wells, Somerset BA5 1FD

Tel: 01749 343366

Fax: 01749 344986

Email: wells@oldmillgroup.co.uk


Maltravers House, Petters Way,

Yeovil, Somerset BA20 1SH

Tel: 01935 426181

Fax: 01935 431852

Email: yeovil@oldmillgroup.co.uk


Old Mill Financial Planning LLP is authorised and

regulated by the Financial Conduct Authority (FCA).

The FCA does not regulate taxation.

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