lumin news Issue 11 / Summer 2024

Wealth management I Pensions I Mortgages I Inheritance & tax planning
Be better off with expert financial planning Issue 11 I Summer 2024
!
Pages 6 & 9
Business owners
’Tips Toolkit’:
See pages 6 & 9
INSIGHTS
AT A GLANCE
Retirement planning 2
Avoiding common retirement
planning mistakes
Pensions3
Beware the MPAA trap
Pensions4
Pension rule changes provide
a planning opportunity
Tax planning 4
New tax changes summary
Investments7
What makes a good
investment platform?
Investments8
Investment Clinic: Our take
on a reader’s portfolio
Mortgages9
The impact of falling rates
Mortgages9
Business owners face unique
borrowing challenges
Ask our Expert 10
Questions from our readers
Meet the Adviser 11
Rhys Martin on the transition
from the RAF to a
career in financial advice
Is your retirement plan watertight,
or are there holes in your ’bucket’?
Some savers face an unpleasant shock when they reach retirement and realise they
face a financial shortfall in later life. A robust retirement plan can help avoid this pitfall.
MARTIN COTTER
Managing Director
martin.cotter@luminwealth.co.uk
Phone 01727 893 333
Having a robust retirement plan is crucial, but
common pitfalls can jeopardize your future
financial security. One key mistake is underestimating
the amount needed for retirement.
Factors such as inflation, healthcare costs, and
longevity are often overlooked by savers, which
can lead to an insufficient nest egg. In some
cases, their current asset base may not allow
them to live the lifestyle they wish to, or they
could even run out of money.
Some also underestimate their investment
time horizon, which can hinder growth potential.
Someone in their 50s may have decades
of investing ahead of them, meaning they are
comfortable taking on more investment risk.
Retirement planning can also be pushed
into the long grass. But delaying retirement
planning can significantly diminish the effectiveness
of savings and investments, due to
missed compounding opportunities.
Proactive planning, regular reassessment
of your goals and independent financial advice
can ensure your plan for retirement is
watertight and that your financial future is
secure. For further reading see:
5 mistakes that people make when constructing
their own retirement plan (page 2)
Don’t inadvertently limit yourself to
£10,000 pension contributions (page 3)
Financial planning
Business owners
Investments
Start the tax year on
the front foot
Navigating the life
cycle of your company
What do market highs
mean for investors?
Lumin Wealth is a leading
firm of Chartered Financial
Planners with offices in
St Albans, London, Bishop’s
Stortford & Penn. We provide
financial advice and discretionary
fund management.
The start of a new tax year
represents an ideal opportunity
to take stock and finetune
finances. Are you optimising
available tax breaks? Is
now the right time to address
your estate planning, in order
to reduce inheritance tax liabilities?
Keep your wealth
’engine’ running smoothly in
the new tax year with a financial
MOT. Page 5
Whatever stage your business
is at, there are important decisions
to weigh up. You may
be looking to extract cash
profits and keep tax to a minimum,
or be searching for the
most tax-efficient exit strategy
if you plan to retire. Expert
financial advice can help
to ensure that you’re making
the right decisions, at the
right time. Page 6
Many global stock markets
have hit record highs in recent
months, as investors
benefited from a global rally.
But what do all-time highs
mean for investors? Regardless
of market movements,
there are some universal rules
and disciplines that should
remain constant as part of a
prudent, long-term investment
strategy. Page 7
lumin news is a periodic publication Circulation: 30,000 copies Publisher: Lumin Wealth Ltd, 5 Sandridge Park, St Albans, AL3 6PH, company no. 03381115. Lumin Wealth Ltd is
authorised and regulated by the Financial Conduct Authority (reg. number 775068) Editorial: William Monroe; Markus Graf Enquiries and address changes: Phone 01727
893 333, or email info@luminwealth.co.uk Copyright: No part of this publication may be reproduced or transmitted in any form without the prior permission of the Editor.

Page 2 lumin news 11 / summer 2024
Constructing a retirement plan: How to
avoid the most common mistakes
An effective retirement plan can help you accumulate wealth tax-efficiently, and
ensure you are in the best possible shape for retirement. But there are pitfalls to
watch out for. This article highlights some common retirement mistakes.
SARA MOORE
Financial Consultant
sara.moore@luminwealth.co.uk
Phone 01727 893 333
Savers are often tempted to
manage a retirement/investment
plan themselves, but a
lot is at stake when preparing
for and moving through the
retirement journey. Poor decisions
could mean having to
work longer, or, in the worst
cases, running out of money
during retirement. Here are
some common traps to watch
out for.
1. Cash levels and
life expectancy
Savers nearing retirement can
underestimate their investment
time horizon. If you are
retiring at age 60 and in good
health, you might need to
plan for 30 or even 40 years.
Too often, savers hold far
too much cash in low-interest
savings accounts, where its
real value is eroded by inflation.
When it comes to building
and protecting wealth,
stocks and bonds are more
suitable long-term assets.
Typically, cash should cover
about 6–12 months of expenditures.
This is also true
in retirement, to avoid being
forced to sell investments to
cover funding needs.
2. Optimising pension
contributions
Pensions are vital to building
long-term wealth, due to the
generous tax relief on contributions,
and the ’snowball’
effect of compounding investment
returns. But some
Build a larger pension pot with higher
contributions
Example: £60,000 annual salary; 5% net returns per annum.
£500,000
£400,000
£300,000
£200,000
£100,000
£0
2 4 6 8 10 12 14 16 18 20 22 24 26 28 30
Years
8% contribution 9% contribution 10% contribution
savers opt to build up funds
in savings accounts during
their working life, at the expense
of their pension pot.
Only matching the minimum
contribution required
by law (8% of earnings) can
lead to a shortfall in later life.
Some savers could be forced
to delay retirement, or may
even run out of money.
Higher monthly pension
payments can make a big difference
to your overall retirement
pot over time. In the
illustrative example – see
below left – a £400 monthly
contribution (8% of their
annual salary) sees the saver
end up with a pension worth
£333,000 after 30 years. But
paying in just £100 more
each month (a 10% salary
contribution annually) leads
to a pot worth £416,000 after
the same time period.
3. DIY investing and tax
inefficiencies
Investors can be prone to emotion-based
decision-making
(eg. panic selling when markets
experience sharp falls),
excessively risky holdings, and
failing to stick to a long-term
strategy. Failing to fully optimise
available tax breaks and
wrappers, such as the capital
gains annual allowance and
ISAs, can also prove costly in
the long run. A financial adviser
can ensure your investments
are set up tax-efficiently
and have the best chance of
long-term success.
4. Overlooking the
importance of financial
protection
People often insure their personal
belongings, but neglect
to insure the most valuable
asset: themselves. Insurance
provides a vital safety net
against future unforeseeable
expenses that can plunge you,
or your loved ones, into financial
turmoil or even debt. This
is particularly important for
households with a sole earner,
or company directors. Small
businesses may struggle to
survive if a director/key employee
is unable to work due
to illness, or passes away unexpectedly.
Insurance payouts
can help to cover the loss of a
key employee or director.
If you’re a business owner
then funding a life insurance
policy via your company
(rather than personally) can
be very tax-efficient, as premiums
are deductible against
corporation tax.
A financial adviser can
help you understand
your income needs and build
a bespoke retirement plan
that matches both your lifestyle
and financial goals. Call
03300 564 446 to speak to
one of our experts, or request
our factsheet below.
FACTSHEET
5 things to
consider: Planning
your retirement
Request this free factsheet
via enclosed response card,
info@luminwealth.co.uk
or call the Lumin team on
03300 564 446

lumin news 11 / summer 2024 Page 3
Don’t inadvertently limit yourself
to £10,000 pension contributions
MY TIP
Accessing pension benefits can come with a major trap. Triggering the Money
Purchase Annual Allowance places a limit on all further contributions.
KRIS FISHER
Financial Consultant
kris.fisher@luminwealth.co.uk
Phone 01727 893 333
Although many UK adults
(and/or their employer) can
pay £60,000 into a defined
contribution (money purchase)
pension in each tax
year and receive full tax relief,
certain savers have a £10,000
contribution limit, depending
on how, or whether, they
have accessed their pension
assets. This limit is known as
the Money Purchase Annual
Allowance, or MPAA.
What is the MPAA?
The standard annual allowance
of £60,000 is reduced to
£10,000 when someone takes
taxable income from a defined
contribution pension
(from the age of 55). UK
adults who have reached pension
age need to be wary, as
whether or not the MPAA is
triggered depends on how
pension benefits are accessed.
Inadvertently triggering
the MPAA can have major
consequences, as this places
a limit on all future pension
contributions. This is especially
relevant for those still
in full- or part-time employment,
who may wish to carry
on contributing larger sums
to their pension.
Tip: In light of this, certain
savers may opt to hold
the taxable portion of private
pensions back for later life,
and draw income from other
assets, such as ISAs, first.
When is it triggered?
The reduced allowance applies
only after a ’trigger
event’ has occurred. The most
common trigger events are:
f Taking pension income
from a flexi-access drawdown
account, after cashing
out the 25% tax-free lump
sum entitlement.
f Taking some, or all, of
your pension savings as a taxable
lump sum.
f Using pension savings
to buy an annuity where
income could decrease over
time (i.e. investment-linked
annuities).
f Exceeding income limits
from a capped drawdown
arrangement set up before
6 April 2015.
f Converting a pre-2015
capped drawdown account
into a flexi-access drawdown
account.
Which actions do not
trigger the MPAA?
There are certain circumstances
where accessing pension
benefits will not trigger
the MPAA. These events include
the following:
f Taking the 25% tax-free
cash only.
f Using pension savings to
buy a lifetime annuity where
the income cannot go down.
f Taking income from a
pre-2015 capped drawdown
arrangement that is within
the drawdown limit.
f Taking a small pension
pot worth less than £10,000
as a cash lump sum.
f Taking income from a
defined benefit pension plan.
What to watch out for
It’s important to bear in
mind potential penalties.
You don’t incur an immediate
tax charge when you initially
trigger the MPAA. But
those who are already subject
to the limit would face a tax
charge in the relevant tax year
if they were to exceed the
£10,000 contribution ceiling
in the future.
Tip: It is not possible to
carry forward unused annual
allowances from prior tax
years, once the MPAA has
been triggered. With careful
planning, a saver can continue
to pay substantial sums
into their pension annually.
Expert advice can prevent
an unplanned
triggering of the MPAA. To
find out more, please call
03300 564 446.
FACTSHEET
Your options for
your pensions
Request this free factsheet
via enclosed response card,
info@luminwealth.co.uk
or call the Lumin team on
03300 564 446
MARTIN COTTER
Managing Director of
Lumin VZ Group
With £80,000 of ISA and
pension allowances having
become available on 6 April,
I find myself asking why investors
often only use their
allowances in a mad rush at
the end of the tax year. Amid
the pressures and responsibilities
of daily life, tax planning
can feel like a chore,
which is why it is often left
on the back-burner.
A proactive financial adviser
can oil the wheels of your
tax-saving efforts by doing
the work for you, whether
that’s ISA or pension contribution
reminders, or actively
’harvesting’ capital gains to
avoid letting them run away.
The sooner you pay into
tax-sheltered investments,
the more time your money
has to grow. Paying in at the
end of the tax year leads to
a lot of money being left on
the table. You also negate
income/capital gains tax by
using wrappers.
My top tip: Embracing good
habits throughout the financial
year – whether that is
proactive estate planning,
budgeting, or upping your
monthly pension contributions
– can optimise your tax
position and help your wealth
grow faster.

Page 4 lumin news 11 / summer 2024
How much tax-free cash can you unlock from
pensions via the new lump sum allowance?
The scrapping of the lifetime allowance (LTA) in the 2023 Spring Budget created a
number of new planning opportunities for pension savers who may have reached
the LTA limit, but not taken their full tax-free cash entitlement.
From 6 April this year, the
new ’lump sum allowance’
came into effect. But what
does this rule change mean for
pension savers?
Rule changes
The new rules assume, for
the sake of simplicity, that
those who took pension benefits
prior to 6 April 2024
received 25% of their pension
value as tax-free cash.
The new lump sum allowance
entitlement has, as a
result, been fixed at £268,275
(25% of the former LTA of
£1,073,100) for most pension
savers.
However, savers may be
eligible to draw further taxfree
cash from a defined contribution
pension in certain
scenarios. Three examples of
this scenario include:
f If the saver took a final
salary pension income, but
did not draw tax-free cash.
f If there was a pension
with a generous guaranteed
annuity rate.
f Where pension benefits
were accessed at age 75.
Under the previous rules,
these scenarios would have
counted towards the LTA,
meaning no tax-free cash
could be released from any
other pensions (assuming the
LTA was reached). Any lump
sum taken would have been
taxed at 55%. Under the new
rules, however, an eligible individual
may now be able to
unlock further tax-free cash.
How to claim a backdated
tax-free lump sum
To be able to benefit from this
change, an eligible saver must
calculate their pre-April
2024 tax-free cash elements
using the new ’transitional
tax-free amount certificate’
method (the standard calculation
method is 25% of the
previously used LTA). This
must be submitted to your
pension plan provider before
the first tax-free amount is
taken after 6 April 2024. If it
is not, the ability to use the
transitional tax-free amount
certificate method is lost.
Future financial
planning opportunities
In addition, and due to this
change, there may now be an
opportunity to make tax-efficient
pension contributions
and benefit from future taxfree
payments from a pension,
even for individuals
who have not been able to
previously due to LTA protection,
or because they have
reached the LTA ceiling.
Information correct as
at 6 April 2024. Please
request the below factsheet
for further reading on how
pensions can be used to lower
your tax bill, or get in touch
with one of our experts on
03300 564 446.
FACTSHEET
Tax-saving tips
for pensions
Request this free factsheet
via enclosed response card,
info@luminwealth.co.uk
or call the Lumin team on
03300 564 446
Which new tax changes could affect you?
A raft of new tax rules were
introduced from the 6 April.
This ’tax table’ highlights the
key changes that savers need
to be aware of, including cuts
to the dividend and capital
gains allowances, an increase
to the threshold at which the
High Income Child Benefit
Charge kicks in, and important
changes to the pension
lifetime allowance regime.
For more reading around
changes to the pension lifetime
allowance, and the planning
opportunities arising
from this, see above.
Changes to taxation as of 6 April 2024
Tax area/rule
Lifetime allowance
Lump sum allowance
The lump sum and death
benefit allowance (LSDBA)
Capital gains tax rate on
residential property
Change
Former limit on the amount that could be saved into pensions
without a tax charge applying has been abolished
New lump sum allowance (LSA) fixed at £268,275 for most
people (25% of the former LTA of £1,073,100)
LSDBA is £1,073,100 for most. Applies to payments that use
up the LSA, as well as some non-taxable lump sum benefits
Reduced from 28% to 24% for higher rate taxpayers
Capital gains tax allowance £6,000 capital gains tax annual exemption cut to £3,000
Dividend annual allowance Tax-free allowance for dividend income is now £500
High Income Child Benefit
Charge
High Income Child Benefit Charge threshold is now £60,000;
ceiling beyond which benefit is lost is now £80,000

lumin news 11 / summer 2024 Page 5
Keep your wealth ’engine’ running smoothly
with a financial MOT
Just as your car needs an annual MOT, it’s important to look under the bonnet and
ensure your financial ’engine’ is in good working order. A new tax year provides a
natural opportunity to take stock of your wealth-building strategy.
GRAHAM CONNOR
Senior Financial Consultant
graham.connor@luminwealth.co.uk
Phone 01279 701 317
Factors to consider optimising
in a tax year include your
use of valuable annual allowances;
capital gains ’harvesting’;
your investment strategy;
mortgage situation; and
estate planning options. But
how does this work in practice?
And which easy wins
can give your wealth-building
strategy a leg up?
ISA/pension allowances
Tax wrappers are a key ingredient
in any financial plan.
But it’s important to fully
optimise annual allowances.
UK adults can pay up to
£20,000 annually into flexible
ISAs, with any gains exempt
from tax. Higher earners
may wish to consider
upping pension contributions
to boost their retirement
pot. Most people can
pay £60,000 annually into a
pension, while those with
unused annual allowances
from the prior three tax years
may be able to pay in a larger
sum via carry forward.
Paying into pensions and
ISAs at the start of each tax
year, rather than the end, can
be very beneficial over time,
as your investments have
more time to grow.
Key factors for the 2024/25 tax year
ISA (stocks & shares)
Pension for earners
Pension for
non-earners
Capital gains
harvesting
Investment strategy
(asset mix)
Mortgages
Estate planning
Facts & stats
£20,000 allowance per adult;
£9,000 for under-16s
Consider topping up your
pension
£2,880 can be contributed to
anyone’s personal pension
Use or lose the £3,000 tax-free
capital gains allowance
Review for changes in your
circumstances and rebalance
Renewal
Valid will and power of
attorney; mitigate IHT liabilities
Harvesting your
investment gains
Gains on investment accounts
or products held outside
of tax wrappers may be
subject to capital gains tax, if
gains exceed the annual capital
gains allowance. Basic
rate taxpayers see investment
gains taxed at 10%, while
higher and additional rate
taxpayers pay 20%. Each
adult currently benefits from
a capital gains tax Annual
Exempt Amount of £3,000.
This allowance needs to be
used before 6 April 2025.
Review your
investment strategy
The start of a new tax year is
a good time to conduct a thorough
investment strategy review.
Does your asset mix
align with your latest goals
and circumstances? How does
your performance compare
against benchmarks? Are excessive
fees/all-in costs hampering
your returns? Setting –
Action & timing
Consider contributing as soon
as you can
Can be done early in the tax year,
except for highest earners 1
Consider contributing as soon
as you can
Realise gains as part of ongoing
monitoring of your investments
Review annually
1 In light of the tapering (reduction) of the standard £60,000 annual allowance
Plan re-mortgaging 6 months before
fixed rate ends; review annually
Start your estate planning early;
review your will frequently
and sticking to – a long-term
strategy is the key to success.
Mortgages
It’s important to plan ahead
if your mortgage is up for
renewal. A good mortgage
broker will provide a rate
monitoring service, whereby
they will switch you to a
cheaper deal if the lender rate
improves before your mortgage
term starts. This can
apply to both a new property
purchase, or remortgaging
on your existing home. See
page 9 for more details.
Estate planning
Many families put off this
important issue, due to the
emotional difficulties involved.
Frozen nil/residential
rate band thresholds and
house price growth mean
that more people are at risk
of seeing a larger proportion
of their estate face an inheritance
tax (IHT) charge. Getting
on top of your estate
planning at an early stage can
mitigate a large IHT liability.
If you would like to
discuss your options
for the tax year, and how this
can form part of an overall
financial plan, please call
03300 564 446, or scan the
QR code on the back page of
this issue.
FACTSHEET
ISAs vs pensions
Request this free factsheet
via enclosed response card,
info@luminwealth.co.uk
or call the Lumin team on
03300 564 446

Page 6 lumin news 11 / summer 2024
Financial planning can help small business
owners navigate their company ’life cycle’
From inception and growth to risk management, strategic investments, and exit planning,
expert, independent advice can help to steer a business towards financial success.
JAMES CORCORAN
Chartered Financial Planner
james.corcoran@luminwealth.co.uk
Phone 01494 816 858
Typically small business owners
consider four stages in the
life cycle of a business: building
wealth, extracting wealth,
planning for retirement, and
exiting the business. It is crucial
to maximise all available
opportunities at the various
stages, and ensure the business
is well set up to meet
your personal objectives.
Accumulating wealth
(and protecting it)
During the accumulation
stage, cashflow modelling
can provide a clear view of
your future cash flow, enabling
you to easily visualise
the growth plan for a business
The life cycle of a small business
Implement tax efficiencies during
accumulation; Ensure adequate
protection to provide a safety net
and the eventual exit strategy
(sale/retirement). This can
flag up other areas of opportunity,
such as tax efficiency,
and optimising retirement
assets (eg. pensions/ISAs).
Another important area
to be aware of is business protection.
Would the business
survive if a key member of
staff was unable to work due
to illness, or died unexpectedly?
There are various forms
of protection to ensure that
a business can continue to
thrive, even in the event of
losing a key employee.
Extracting wealth and
planning for retirement
Once a business is generating
substantial cash profits, it’s
important to extract profits in
a tax-efficient manner. Many
directors take a small salary,
and draw the rest via dividends.
But, with dividend tax
rates currently high, pension
contributions can be a key
alternative strategy. Employer
Plan for retirement by considering
your exit strategy, and optimising
use of pension contributions
pension contributions can
usually be offset against corporation
tax, so making a
pension contribution via the
company, as opposed to a personal
contribution, can result
in significant tax savings.
A generous £60,000 annual
allowance means large
amounts can be paid into a
pension in each tax year.
Those with unused annual
allowances from the previous
three tax years may be able to
contribute a larger sum.
Facilitating a
tax-efficient exit
Business Asset Disposal Relief
(BADR), which was previously
known as Entreprenur’s
Relief, is one method
that can facilitate a tax-efficient
exit when company
directors are looking to sell
or retire. BADR allows UK
business owners to benefit
from a reduced capital gains
tax rate of 10% when disposing
of qualifying business
assets. Options where BADR
can be applicable include
selling to current employees
via a management buyout, or
merging with/being acquired
by another business.
If younger family members
are taking over then gifting
the business – or your
shares – is another option.
After seven years these assets
would be outside of your estate.
If the company qualifies
for Business Relief you may
be able to pass it on without
a tax charge. Early planning
can help you find the right
exit solution.
The role of financial
planning
Partnering up with a financial
planner helps ensure
your business/family are protected,
and that you are maximising
your wealth-building
and tax-cutting opportunities.
This latter point is especially
important in light of
recent cuts to the dividend
allowance and an increase to
the standard rate of corporation
tax (from 19% to 25%).
Want to find out more
about how financial
planning can lead to better
outcomes for your business?
Call 03300 564 446, or scan
the QR code on page 12.
FACTSHEET
Building
wealth
Extracting
wealth
Planning for
retirement
Exit
Tips on small
business protection
Extract company profits in a tax-efficient
manner via pension contributions and/or
salary plus dividends
Facilitate a tax-efficient
exit strategy that best
reflects your individual
circumstances
Request a free factsheet via
enclosed response card,
info@luminwealth.co.uk
or call the Lumin team on
03300 564 446

lumin news 11 / summer 2024 Page 7
A number of stock markets hit record highs
recently – should you invest now, or wait?
The positive return outlook for equity over long periods speaks for investing your
money as soon as you can. Global equities can complement UK holdings.
Many global stock markets,
including the FTSE 100 index,
hit record highs in recent
months, as investors
benefitted from a global
rally. But what do all-time
highs mean for investors,
who may be weighing up
Average returns per
annum on UK equity
10-year rolling returns
2003–2012 8.8%
2004–2013 8.8%
2005–2014 7.6%
2006–2015 5.6%
2007–2016 5.6%
2008–2017 6.3%
2009–2018 9.1%
2010–2019 8.1%
2011–2020 5.6%
2012–2021 7.7%
2013–2022 6.5%
2014-2023 5.3%
Source: FTSE 100 index
whether to invest now, or
keep their powder dry?
Risk vs. reward
Stock market highs mean that
investors now face buying at
higher prices. Some investors
have also been concerned
about higher rates, the risk of
economic contraction (recession)
and the related impacts
on financial markets. However,
staying on the sidelines
in the hope of timing a more
attractive entry point can be
costly, as your money has less
time to grow the longer you
are out of the market.
Price vs. total return
index
News reports focus on price
indices, measuring the average
share price or capital gain
of a basket of companies such
as the 100-largest UK companies
in the FTSE 100 index.
It may seem that UK equities
have been standing still in recent
years when looking at the
price return. However, that’s
only half the story. The UK
dividend yield has averaged
nearly 4% in the past 20 years,
making up about half the total
returns (price return plus
reinvested dividends).
UK vs. global equities
The UK accounts for around
4% of the MSCI World Index,
the most commonly used
benchmark for the global
stock market. While the dividend
yield of UK equities is
about twice as high as that of
the MSCI World, there has
been a notable divergence in
total return performance over
the past decade. Spreading
your equity holdings amongst
different markets can reduce
portfolio risk and enhance the
return potential.
Drip-feeding
Some investors drip-feed a
lump sum into markets, eg.
investing it in four equal installments
every three months.
That way, the price of the investments
averages out, which
can provide emotional comfort.
But history shows that
price averaging can lower returns,
as stock markets tend to
go up more often than down.
It is best to focus on
your long-term goals,
rather than trying to time the
market. Keeping assets in
cash also leaves them vulnerable
to inflation. Call 03300
564 446 to find out more.
Important: Past performance
is not a guide to future investment
returns.
What makes a good investment platform?
There are a large number of
investment platforms in the
UK market. How do investors
select a platform that’s
right for them? There are various
factors to consider:
Costs and charges
All investment platforms
charge an ongoing fee for the
use of their platform and account
maintenance. Typically,
the fee is charged as a
percentage of assets held,
although some platforms instead
charge a fixed fee on a
monthly, quarterly or annual
basis. Depending on the platform,
there can be additional
fees on top of this. These can
include trading charges, exit
fees and fund-switching fees.
The key is to assess all-in costs
and charges. A platform with
a high ongoing charge, and
other ’hidden’ costs, can substantially
undercut investment
performance over time.
Fund availability
Some platforms have very
limited investment choice. In
some cases, platform providers
will only recommend (or
make available) their own
funds, leading to a clear conflict
of interest. A lack of independence
could also negatively
impact performance
over time, and result in
higher ongoing fees.
Usability and
customer service
A good investment platform
should be user-friendly and
easy to navigate, providing a
straightforward view of your
investments and associated
reports/documents. Some
financial advice firms provide
an in-house investment platform
as part of their ongoing
fee, meaning they can provide
a faster, more personalised
client service.
Lumin’s ’WealthZentrum’
platform provides
numerous benefits for
existing clients. Please call
03300 564 446 if you would
like to find out more about
the platform.

Page 8 lumin news 11 / summer 2024
Lumin Investment Clinic: Portfolio
analysis from our experts
Investment Manager Elliott Frost provides investment tips for a lumin news reader.
ELLIOTT FROST
Investment Manager
elliott.frost@luminwealth.co.uk
Phone 02039 887 788
THE SCENARIO
lumin news readers David
and Sheila are seeking to
maintain their current
lifestyle when they retire in
five years’ time, budgeting
with income needs of
£50,000 a year (in today’s
money). They have
investments of £600,000
and bank deposits of
£150,000 (£50,000 is
earmarked for their
daughter). The couple are
concerned about funding
their retirement income
and related capital risk.
Let’s start with your investment
strategy across all
your investable assets, including
cash accounts. You
currently hold around 68%
equities, 6% bonds and a
large portion in cash, even in
David and Sheila’s combined assets
light of the money set aside
for your daughter. Higher
interest rates have made
bonds more attractive, so it
may make sense to switch out
of equities, or invest some of
the excess cash in bonds. For
instance, a passive product
like the iShares UK Gilts All
Stocks Index fund would be
a cheap way of accessing the
UK government market. Passive
or tracker funds aim to
replicate the performance of
an index, and this can work
well in market segments
where active funds on average
fail to outperform.
ISAs offer tax-free gains
and income, and similar flexibility
to easy-access general
investment accounts (GIAs).
Therefore, maximising ISA
annual allowances – £20,000
per adult in each tax year – is
a great way to boost post-tax
returns. You could consider
funding ISA contributions
by selling GIA assets (up to
£3,000 GIA capital gains are
tax-free per person).
Within the equity component,
you are heavily tilted
towards the UK (58%), the
US (27%), and Europe (8%).
The UK accounts for 4% of
the global stock market and,
while a certain home bias is
justifiable, you may wish to
consider a more balanced
geographical spread. This diversification
can shelter you
from country-specific risks,
including political and economic
factors.
Your US exposure mainly
comes from one fund holding
with a bias towards growth
stocks and the less liquid private
market. Liquidity is a
form of investment risk, and
should be compensated in the
form of higher expected returns.
A fund such as the Premier
Miton US Opportunities
Fund may help to balance
the US equity exposure, as it
invests in medium-sized
companies that stand to benefit
from a positive US economic
outlook.
Investing comes with
natural ups and downs, which
can be measured as volatility.
Your portfolio has greater expected
volatility due to a 31%
exposure to direct shares,
which also feature in some of
Total assets held in stocks, bonds and cash across investment and savings accounts.
Asset mix Equity Bonds Cash
Pensions £350,000 £40,000 £42,000
ISA £30,000 – –
GIA £130,000 £8,000 –
Bank account – – £150,000
Total £510,000 £48,000 £192,000
% of total assets 68% 6% 26%
your fund holdings. Consider
your capacity for loss as you
move into retirement and
begin to draw on your assets.
Switching into funds would
be a way to reduce company-specific
risks.
This analysis focuses on
investment aspects rather
than broader financial planning
topics, such as how to
fund a larger income shortfall
before State Pension payments
kick in, or that inflation
increases income requirements
over time. A clear
financial plan can help you
choose the best investment
strategy and generate income
throughout retirement.
A portfolio health
check can ensure your
investments are in the best
possible shape. Call 03300
564 446 or scan the
QR code to request
a portfolio check.
Important: This commentary
should not be regarded
as investment advice. It is
general information, based
on a snapshot of these investors’
circumstances. Past performance
is not a guide to
future returns. The value of
investments may fall as well
as rise, and you may get back
less than you invested.
FACTSHEET
Common investment
mistakes
Request a free factsheet via
enclosed response card,
info@luminwealth.co.uk
or call the Lumin team on
03300 564 446

lumin news 11 / summer 2024 Page 9
What could falling interest rates mean
for your mortgage deal?
It’s expected that interest rates could start to fall in the coming months, in line with
likely cuts to the Bank of England Base Rate. But what would this mean for borrowers?
Following a period of high
interest rates, the general economic
consensus is that we are
set to enter a cycle of falling
rates in the coming months.
The timing around rate falls
hinges on when the Bank of
England opts to cut the Base
Rate. At the time of writing
the Base Rate is 5.25%, but it
is expected a cut will happen
at some point in 2024.
What does this
mean for borrowers?
Mortgage interest rates have
so far remained roughly consistent
since the start of the
year (see chart). If and when
rates begin to fall, some borrowers
may be tempted to
wait and see if rates are reduced
further, but this can be
counterproductive. A mortgage
takes time to complete,
and a good mortgage broker
will monitor rates during the
application process, up to the
point of completion. If the
rate improves, they will
switch you over to a cheaper
rate, even if you’d locked in
a higher rate initially.
Lower rates can also have
a knock-on effect on the
housing market. Lenders can
be more generous on affordability
in a falling rate environment,
which may allow
those who were priced out of
a property purchase back
into the market. However,
this can lead to increased activity,
which in turn can raise
property prices.
Remortgaging in a
falling rate environment
If you are not moving home,
but your current rate is ending
soon, much of this still
applies. Securing a rate as
soon as possible is still a good
idea, in case the market
changes and rates go up. In
many cases, you can lock in
a rate up to six months in
advance. As with those looking
to move home, a good
mortgage broker will still
switch you over to a cheaper
deal before completion if the
initial rate falls in the mean
time. A 0.5% rate improvement
on a £300,000 mortgage
could save about £1,500
a year in interest rate costs.
Want to find out more
about how to source
the best mortgage deal? Call
our mortgage experts on
03300 564 446, or scan the
QR code on the back page.
Mortgage costs have remained consistent in
recent months (but could start to fall)
Example of a major UK bank for 5-year fixed rate at 60% LTV (with a
£999 product fee)
Small business owners: What income do mortgage
lenders recognise?
5.5%
5.0%
4.5%
4.0%
3.5%
3.0%
5.10.
23
1.11.
23
8.11.
23
14.12.
23
4.1.
24
16.1.
24
6.2.
24
23.2.
24
6.3.
24
27.3.
24
9.4.
24
Determining income levels
is crucial for lenders so they
properly evaluate the creditworthiness
of would-be borrowers.
But there are various
methods used to assess the
income of self-employed
people and company directors
with significant shareholdings,
many of which
vary from lender to lender.
What counts as income?
Some lenders consider up to
four income components for
mortgage purposes. Most
base their affordability assessment
on a director’s basic
remuneration and their
dividend income – typically
averaged over the past two
years. In addition, certain
lenders might take into account
the post-tax – or the
pre-tax – profit share of
shareholders with a stake
greater than 50%. Some go
even further by calculating
withdrawals against a director’s
loan account.
Relying on historical
income
Outdated income information
can pose a challenge for
small business owners who
are seeking to borrow. This is
because lenders typically assess
tax returns or company
year-end accounts that are up
to 18 months old. For the
self-employed, lenders use
the lower of the average taxable
income of the past two
years or in the most recent
tax period.
Small business owners will
often have a unique financial
structure, but an experienced
mortgage adviser can help
company directors find their
way through the mortgage
income maze and source the
best possible deal.
Are you a company
director with a mortgage
and controlling stake?
Speak to our experienced
in-house mortgage team on
03300 564 446.

Page 10 lumin news 11 / summer 2024
Ask our Expert
Your financial planning questions answered
Financial Planning Manager Joe Fisher answers readers’ questions on the
treatment of pensions during a divorce, changes to the furnished holiday
lets regime, and what a recent job move means for pensions.
JOE FISHER
Financial Planning Manager
joe.fisher@luminwealth.co.uk
I’m going through a divorce – how will our
pensions be divided?
Under UK law, the pension assets of
both spouses form part of the overall
distribution of assets when two parties
seek a divorce. A court will aim to
achieve a ’fair’ financial outcome when
splitting assets. Pension sharing is often
the go-to option used to divide the pension
pots of the respective parties. The
parties split their pensions with the aim
of achieving an ’equal’ outcome. There
are, however, some potentially complicating
factors.
One major potential pitfall is where
one party has a defined benefit (final salary)
pension plan. In these circumstances,
a cash equivalent transfer value is used
to assess the cash value of the plan’s benefits
at divorce. This quote is often not
an accurate reflection of the plan’s true
value. It can be as much as 50% below
’fair value’, or the true cost of replacing
the pension benefits in the open market.
Tip: It’s important to seek a pension
sharing report from a qualified
financial adviser if you have a defined
benefit pension. This report will help
to ensure a fair division of pension assets
and highlight potential pitfalls and
considerations.
I’m concerned about changes to the furnished
holiday lets regime. Is now the time to diversify?
The March 2024 Budget saw the Chancellor
pull the plug on the generous
support scheme that holiday let owners
currently benefit from, which is known
as the furnished holiday lets (FHL) regime.
Under the current legislation,
finance costs for fully furnished holiday
lets are deductible from taxable income,
while business asset disposal relief
(BADR) sees a reduced 10% capital
gains tax rate apply if the property is
sold or gifted (subject to eligibility).
The Chancellor’s decision to scrap
the regime provides food for thought
for those who run holiday lets businesses,
who may be tempted to sell up and
turn to the stock market, or diversify
into other tax-efficient assets, such as
enterprise investment schemes and venture
capital trusts (see factsheet).
FACTSHEET
Pension options in a divorce
Request a factsheet via the response
card, info@luminwealth.co.uk or call
the Lumin team on 03300 564 446
Tip: The regime is not scheduled to
be scrapped until 6 April 2025, so eligible
holiday let owners can sell the property
– and benefit from the reduced
BADR capital gains tax rate of 10% –
before that date. From 6 April 2025, the
standard rate of capital gains tax will
apply upon the sale of a FHL (18% for
basic rate taxpayers; 24% for higher/additional
rate taxpayers). The capital gains
tax annual allowance is £3,000.
FACTSHEET
Tax-efficient solutions
for wealthy individuals
Request a free factsheet via
the enclosed response card,
info@luminwealth.co.uk or call
the Lumin team on 03300 564 446
I have recently moved
jobs – what happens
with my pension fund?
First things first, I suggest examining
the details of your new pension plan.
Some employers will match your own
contributions, up to a certain limit.
Combined with the income tax savings
you achieve on personal contributions,
it can be a very lucrative way to boost
a retirement pot. You could also determine
how much more you could pay
into your pension this tax year, if you
have spare cash.
It’s important to make an active
choice about how your pension money
is invested. If you don’t, you’re assigned
a standard (’default fund’) strategy,
which may not reflect your objectives.
Depending on your age and investment
goals, you may be comfortable taking
on more risk, with the aim of generating
better returns over the long haul.
Employee benefits often include
financial protection. I suggest reviewing
any coverage that your employer provides
– eg. life insurance, critical illness,
income protection – and comparing this
with your household needs.
Tip: Finally, don’t forget about old
workplace pensions. Combining older
pension pots can result in greater convenience,
investment flexibility, and
progress on your retirement goals.
FACTSHEET
5 things to consider:
Changing jobs
Request a free factsheet via
the enclosed response card,
info@luminwealth.co.uk or call
the Lumin team on 03300 564 446

lumin news 11 / summer 2024 Page 11
OPINIONS
Meet the
Adviser:
Rhys Martin
Rhys Martin explains how he’s made the transition from
a career in the Royal Air Force to accompanying clients
on their financial planning journeys as a Financial
Consultant at Lumin Wealth.
What transferable skills have you
brought from your Royal Air Force
(RAF) career?
I was an Intelligence Analyst, which
involved a lot of analysis to turn data
into actionable intelligence for commanders
and other stakeholders. This
has served me well in terms of putting
all the pieces of the puzzle together to
create bespoke financial plans for clients.
Attention to detail and problem-solving
are also very important in both intelligence
and financial advice roles.
During my RAF career I gave briefs
to high-level individuals, including generals
and the Secretary of State for Defence.
This experience has really helped
when it comes to interacting effectively
with clients, and presenting reports during
Annual Reviews.
What attracted you to a career in financial
advice?
When I was growing up I always
wanted to do two jobs: join the RAF, as
my grandfather had served with the Air
Force during World War Two, and work
in finance. A friend in the RAF was
undertaking the Level 4 Diploma in
Regulated Financial Planning and I
thought it sounded very interesting. I
completed it during my last year of service
and loved it.
How have you found the training and
skills workshops?
The workshops, which are led by
senior advisers, have been invaluable.
Coming from a role that wasn’t customer-facing
would have been very difficult
without the training and mentoring I
have received at Lumin. As well as the
technical skills, I also needed to learn
the practical parts – the ’nuts and bolts’
that enable advisers to carry out their
role successfully. Everyone here, whether
that’s paraplanners, administrators or
senior advisers, has been more than
happy to assist with that.
What’s the best thing about being a
financial adviser?
I love guiding clients on their financial
advice journey via a clear and tax-efficient
financial plan. I have clients at all
stages of their lives, and each individual
(or couple) has different needs and goals.
This could include wealth accumulation
in the years leading up to retirement,
tax-efficient ways to draw on money
during retirement, options to mitigate
inheritance tax liabilities, or providing a
financial safety net for loved ones. I enjoy
every aspect of accompanying my
clients on their financial planning journeys.
Seeing them achieve their financial
and lifestyle goals is truly rewarding.
What achievement at Lumin are you
most proud of?
I’m most proud of how quickly I
achieved ’Competent’ adviser status,
which enabled me to then start advising
clients. The process took me just eight
months, from start to finish. There was
a lot of hard work involved on my side,
but the support and guidance of the
wider Lumin team has been invaluable,
and that continues to be the case on an
ongoing basis.
Lumin is always keen to hear
from enthusiastic career-changers,
or qualified financial advisers who
excel in providing a quality client service.
Do you know someone who would
like to be a part of Lumin’s exciting
growth plans? They can send their CV
to careers@luminwealth.co.uk or visit
luminwealth.co.uk/careers.
RHYS MARTIN
Rhys joined Lumin Wealth in
January 2023 after a successful
12-year career as an Intelligence
Analyst for the Royal Air Force.
He has a Level 4 Diploma in
Regulated Financial Planning
and is working towards achieving
Chartered status.

Page 12 | summer 2024
Pensions, investing, and tax:
Lumin experts in the media
Our financial consultants regularly appear in publications including The Telegraph,
MoneyWeek, Investors’ Chronicle, and i. Here we round up some recent coverage.
’How to minimise the
risks of a stocks and
shares Junior ISA’
MoneyWeek, 13.02.24
Financial Planning Manager
Jason Coppard says that parents
may be comfortable taking
on more investment risk
with junior ISAs, as they are
ring-fenced until age 18. An
18-year investment horizon
means that “there is plenty of
time for strong returns to
counterbalance the inevitable
leaner years, and for compounding
to work its magic.”
Diversification can help to
minimise risk: “You should
avoid unusually high allocations
towards single markets,
sectors or securities. Allocating
money across a number
of different asset classes helps
to smooth out the ups and
downs of portfolio values.”
’I’m suffering from pension
anxiety – I’m part of
the middle-aged “lost
generation”’
i, 26.02.24
Those who have been unable
to build up a substantial pension
pot may worry that they
will face a shortfall during retirement.
Chartered Financial
Planner James Corcoran says
it’s important to engage with
the problem “as soon as possible”.
Tracing – and potentially
consolidating – older workplace
pension pots is a good
starting point. Working out
your income needs will also
allow you to assess whether
you will face a shortfall in later
life. Factors to consider include
your ideal retirement age, desired
lifestyle, and other forms
of wealth, including property,
ISAs and the State Pension.
’When and how can you
draw down your private
pension?’
The Telegraph, 14.03.24
Joe Fisher, Chartered Financial
Planner, highlights that
asset bases are sensitive to
investment returns, identifying
the potential dangers of
’sequencing risk’ when taking
money from pensions: “Large
negative returns early on in
retirement, combined with
withdrawals, can eat into the
value of a portfolio. If not
managed correctly, it can lead
to funds not lasting the full
duration of retirement, or a
retiree being unable to live
the lifestyle they had previously
envisaged.” This underlines
the importance of carefully
planning withdrawals,
so that your pension pot
stands the test of time.
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ABOUT LUMIN WEALTH
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you are in expert hands with Lumin.
You can count on our expertise in:
Lumin Wealth offices
5 Sandridge Park, Porters Wood, St Albans, AL3 6PH 01727 893 333
Cornwell House, 21 Clerkenwell Green, London, EC1R 0D 02039 887 788
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Contact
To get in touch scan the QR code, email contact@luminwealth.co.uk,
or visit us at www.luminwealth.co.uk.
• Pensions & retirement
• Inheritance & tax planning
• Investments
• Protecting family & business
• Cashflow planning
• Financial planning for
business owners
• Mortgages
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Our content constitutes a ’financial promotion’ for the purposes of section 21 Financial Services and Markets Act 2000 (United
Kingdom) (’FSMA’). This publication is for general information only. It does not constitute advice or (by itself), a basis for any
financial decision. You should only make such decisions based on your individual circumstances and, we recommend, with advice
from suitably qualified advisers working for a regulated firm. Whilst we try to be accurate, Lumin Wealth does not accept responsibility
for any inaccuracies in this publication or for any loss that may result from reliance on it, but this disclaimer does not affect
our responsibilities or your rights under the FSMA or other applicable UK law and regulation. Any financial projections in this
document are provided for illustrative purposes only and should not be regarded as predictions. Past performance
is not a guide to future returns. The value of investments may fall as well as rise and you may get back
less than you invested. Tax treatment depends on your individual circumstances and rules may change. The
Financial Conduct Authority does not regulate tax and estate planning.