It’s an incredible shrinking world!

It’s an incredible shrinking world!

It was two fingers from Cadburys when they reduced the weight of their Chocolate Fingers packs in 2015 and official figures show a whopping 2,500 products have shrunk in size but not in price since 2012!

Labelled as “shrinkflation” by the Office for National Statistics, their research shows products from chocolate bars to toilet rolls have all got sneakily smaller, giving us less for our money than before.

While smaller Crème Eggs, Toblerones and Dairy Milk bars may be a bitter truth to swallow, what’s really hard to stomach is how much your savings will have shrunk if you’re banking on a bank to look after them.

Just like some of our favourite foods, banks have shrunk what they give us by reducing interest rates in recent years, to the point where what we get falls short of the rate of inflation. This means, in terms of what your money is worth, your savings are actually shrinking!

While it’s a good idea to have cash you can access immediately in an emergency, many people just don’t realise that relying on bank savings accounts and cash ISAs comes at a cost, particularly if you plan to keep your savings there for three years or more.

How to beat savings shrinkflation

While there’s no guaranteed way of beating inflation, many savvy savers opt to put their money to work by investing it in stocks and shares. For example, if your savings had been invested in a fund that tracks the performance of the top 250 companies in the UK on the FTSE stock exchange over the past five years, you’d be enjoying capital growth of more than 96%! Ref HSBC FTSE250 Index Tracker,-prices–and–factsheets/search-results/h/hsbc-ftse-250-index-accumulation-inclusive/charts

Investing in stocks and shares is about making a trade-off. You give up the security of holding cash in the bank in the hope that your money will grow faster.

Some investments are more secure than others and it is possible to choose options that minimise your risk exposure but this does mean that you also lower your potential returns. It all comes down to your appetite for risk and your capacity for loss.

For those who are prepared to trade off the potential risk against potentially higher returns, a product with a higher proportion of equities could be right for you. Saving in this way can be really simple and doesn’t require any specialist financial know-how. Using an Online Investment tool such as our Online Service is a great way to find the right investment product with the right level of risk and reward for you.

Our questionnaire will guide you to the right type of product and takes just a few minutes. Why not give it a go?

Please note this article is for information purposes only.

Pump it up – how to help your friends and family avoid being financial couch potatoes

Pump it up – how to help your friends and family avoid being financial couch potatoes

As a client of Heritage you have the equivalent of personal finance trainers working for you, with the all benefits that can bring to your overall long-term wealth.

For friends, family and colleagues who don’t yet have the funds to need this service, there’s a real danger they can become financial couch potatoes, with any money they do save doing very little or no work, especially if it’s held in bank deposit accounts or cash ISAs.

With the help of Heritage, you have the power to show them how they can flex their savings muscles without breaking sweat. How?

Banks currently offer ridiculously low interest rates – often below the rate of inflation – so any money tucked away there is just snoozing and, ultimately, losing because, in real terms, its value is actually worth less than has been saved.

The alternative is to use an ‘active’ savings scheme, one that invests the funds into stocks, shares and other products designed to make the money work much harder and deliver better long-term results.

Just like going to the gym, it’s a bad idea to simply fling yourself into this sort of savings because if you don’t know what you’re doing, it’s possible to get hurt. That’s where we can help.

Helping your friends and family to get off the financial couch is easy using our simple with the Heritage Online Advice tool which will guide them to the right savings solution for their long-term goals.

The tool uses a step-by-step process that will help them think about their financial future and lifetime goals. It will help them identify their risk appetite and, importantly, their capacity for loss and then match them with an investment fund package that uses their tax-free ISA allowance.

The fund packages bring together different types of investment options, blended together to produce solutions that take into account the risk profile of the individual. The whole process can completed online in less than 15 minutes…even from a couch! Find out more here.

If you’re feeling really generous you could consider helping them make a start, by gifting up to £3,000 a year tax free each year. If you give them larger amounts and you die within seven years of making the gift, they will have to fork out the tax, which could be as much as 40%. Have a chat with us if you would like more information about this.

Referral bonus

We’ll give £50 each in Amazon vouchers to both you and whoever you refer when they start using the platform. All you have to do is email us with the names and email addresses of the people you are referring. Once they invest through the platform we’ll contact you to arrange delivery of your vouchers. Send your referrals to or contact your adviser.

Busted – the 7 biggest myths of investing

Busted – the 7 biggest myths of investing

Think investing is only for the rich? You’re not alone. There are many myths about investing that simply aren’t true. Understanding what these are will help you become a savvy saver and get your money working much harder for you.

1. Investing is only for the wealthy
Wrong! You can get started with a small amount and build it up by making regular top-ups. In fact, the sooner you start making regular top-ups the better because the interest you make on your growing investments can make a significant difference to your total over the long-term.

2. You need specialist knowledge to be a successful investor
Using an online advice tool from an independent financial adviser like Heritage Financial Solutions Ltd means you don’t need any special knowledge. Our easy-to-use interactive online tool will guide you to make the right investment fund choice for you, with the peace of mind that your decision is safeguarded by the fact it’s a product offered by an independent financial advice firm regulated by the Financial Conduct Authority (FCA).

3. I need a large lump sum before I get started
You can start investing in a tax-free stocks and shares ISA using our online advice tool with just £1,000. Topping up your investment regularly with smaller amounts gives you the opportunity to increase the interest you get on your investment over the long term.

4. I need to speak to a financial advisor before getting started
Getting advice from a qualified financial advisor can be incredibly valuable and have a big impact on your potential returns. However, if you’re investing less than £20,000 per year and plan to leave it there for three years or more, a tax-free stocks and shares ISA that you can buy online is a great option. Choosing one using our online tool means you’ll get the backing of a specialist financial advice firm but without the need to speak with an adviser directly.

5. Banks offer good deals for tax-free ISAs
There are lots of different options for investing in an ISA, not just through the banks. Most high street bank cash ISAs currently pay very low interest rates that are below the rate of inflation. This means the real value of your savings is actually falling, not rising. If you’re prepared to trade off some risk for higher potential returns, a stocks & shares ISA could potentially earn you a lot more interest, particularly if you’re happy to invest for three years or more. Our online investing tool is easy to use and will help you choose the right type of ISA for you.

6. Investing is too risky
While there is some risk in any investment linked to stocks and shares, you do have the ability to choose how much risk you’re willing to accept and, importantly, how much risk you can afford to take. As well as shares – or equities as they’re also called – there are other options that can offer less risk, such as government bonds. These are the equivalent of you lending money to the government for a guaranteed return.

Many ‘stocks and shares’ ISAs use these as part of their mix of investment options. When it comes to risk, it’s important to remember that while we hear about stocks rising and falling in value, if you’re investing for a number of years, the long-term performance of ‘stock market’ investments has historically risen in value.

7. You need to try and ‘beat the market’
“Sell high and buy low” is the holy grail for investors but it’s a fool’s game. The truth is it’s ‘time in the market’, not ‘timing the market’ that leads to successful investing, particularly when it comes to stocks and shares. Banks certainly have their place for small amounts of short term savings, but if you’re looking to make your money really work for you over the long-term, it’s well worth adopting an ‘investor’ rather than a ‘saver’ mentality and exploring your options.

If you’re looking for a straightforward, affordable way to invest into an ISA or Investment Account, and have decided that you don’t want face to face advice, then using our Personal Finance Portal may be the answer.

Please note this article is for information purposes only.

ISA – Individual Savings Accounts Online

ISA – Individual Savings Accounts Online

Top up your ISA Allowances.

Making the most of your tax-free allowance is easy.

An ISA is a ‘wrapper’ designed to go around an investment, to make it tax-efficient.

There are two types of ISA investments.

Stocks and shares ISA: this gives you the chance to invest your money in equities, bonds or commercial property without paying personal tax on any returns you might make

Cash ISA: this is like a normal deposit account – except that you pay no tax on the interest you earn.

The ISA limit for 2017/18 is £20,000.

You can invest up to the annual limit in a cash ISA or a stocks and shares ISA or a combination of both.

The annual ISA allowance is for every eligible adult. This means a husband and wife, for example, could put up to £40,000 between them into ISAs this tax year.


These days, we are all more aware of the need to provide for our financial futures, and to fit in with our busy lives, we’re increasingly comfortable with researching and buying products online.

If you’re looking for a straightforward, affordable way to invest into an ISA or Investment Account, and have decided that you don’t want face to face advice, then using our Personal Finance Portal may be the answer.

The secret to becoming wealthy – bypass the banks!

The secret to becoming wealthy – bypass the banks!

Why do the rich just seem to get richer? It’s a fact that money makes money and a key reason for this is due to compound interest.

It may sound like financial jargon but the way it works is simple. When you set up a savings plan, after a set amount of time you usually get a small amount of money added in the form of interest. This means you then have a bit more money than you started with. That slightly larger amount then attracts further interest, which is a larger sum than the first amount because your savings are more than you started with. The longer you keep your savings, the more the pot grows and the larger the amounts of interest you build up.

For example, if you earn the average UK salary of £27,271 and were able to save £227.26 every month (10% of your earnings) somewhere that paid you 7% interest a year, the compound interest would mean that in 10 years you’d have an amazing £39,564!

At the same interest rate and saving the same £227.26 a month, after 20 years you would have £119,076, rising to £278,867 after 30 years and, after 40 years it would be worth £599,995.

The key is in how much interest your savings are likely to attract and for most British savers, it’s where they put their savings that’s the problem. Recent research among people planning to save money over the coming year highlighted that seven out of 10 will put their money in a bank.

These savers will never be rich, for two key reasons.

  1. Banks pay very small amounts of interest.
  2. The amount of interest most banks pay is below the level of inflation and the cost of living, which means your savings are actually worth less in real terms than the amount you first saved.

Savers putting £227.26 every month into a bank account paying 1% interest would have just £134,170 after 40 years – £465,825 LESS than if they had been getting 7% interest!

The good news is that if you’re able to put some money into savings you could beat the lowly bank interest rates by using a stocks and shares ISA. This offers the ability to earn significantly higher levels of compound interest, depending on how the fund performs over the years and has the added benefit that the money you earn is tax free.

Stocks and shares tend to rise and fall in value depending on individual company performance and what’s happening in the world. This is one reason why people chose to save in ‘fund portfolios’’, a blend of different types of stocks and shares investments that mean risks are spread. Saving through stocks and shares is ideal if you’re planning to build your savings for three years or more.

There are options for different types of stocks and shares ISAs, depending on what your goals are for the savings and how much time you want to keep the money there. Using an online financial advice tool is a great way to find the right one.

Although you won’t have to speak to a financial adviser directly, your decision will be safeguarded by the fact it’s a product offered by an independent financial advice firm that is regulated by the Financial Conduct Authority (FCA). Some online companies offering access to this type of saving don’t offer you any protection that the product you choose is right for your circumstances.

Wake up and smell the coffee – banks Costa you more than you think!

Wake up and smell the coffee – banks Costa you more than you think!

Putting money in a standard UK bank saving account or cash ISA will see your savings shrink, not grow.

How come? Well, typical bank interest rates are below the cost of inflation – the amount prices rise and affect how much it costs us to live.

Let’s say you’ve had £1,000 in a high street bank savings or cash ISA account for the past 10 years. The average inflation rate over that period is 2.6 % (May 2007 to May 2017). Even if your bank paid you 1% interest – and most pay even less than this – this means your £1,000 now has the buying power of around £850 – £150 less than it was worth when you tucked it away!

That’s the equivalent of around 76 cups of Costa coffee down the drain!

What’s the alternative? Ditching the bank options and switching to save in a ‘stocks and shares’ ISA can reap much better rewards – especially if you’re planning to build your savings for longer than 3 years. Stocks and shares tend to rise and fall in value depending on individual company performance and what’s happening in the world. This is one reason why people chose to save in ‘fund portfolios’’, a blend of different types of stocks and shares investments that mean risks are spread.

There are options for different types of stocks and shares ISA, depending on what your goals are for the savings and how much time you want to keep the money there. Using an online financial advice tool like ours is a great way to find the right one.

Although you won’t have to speak to a financial adviser directly, your decision will be safeguarded by the fact it’s a product offered by an independent financial advice firm that is regulated by the Financial Conduct Authority (FCA). Some online companies offering access to this type of saving don’t offer you any protection that the product you choose is right for your circumstances.


UK election June 2017: May-hem

UK election June 2017: May-hem

UK election June 2017: May-hem

‘I went through absolute stress and mayhem. I couldn’t go out, because people were constantly on my back all the time’ – Cher

Whilst popular music stars – like Cher in the quote above – can hide at times of strife this is not a luxury offered to politicians and especially Prime Minister’s like Theresa May who called the election just over six weeks ago at a time of a significant opinion poll lead and closed the election period yesterday without a direct Conservative Party Parliamentary majority. All of this means the days of Parliamentary jockeying last seen by UK political watchers in the years before 2015 are inexorably back and questions of whether Theresa May can stay as UK Prime Minister are necessarily circulating. Simply put, her political gamble in April has not paid off. May-hem indeed.

From a financial markets perspective all of the above smacks of uncertainty for the UK’s domestic and external policies. The biggest reaction inevitably came from the value of the British Pound which at the time of writing has fallen about 2% since the close of the American markets on Thursday. Historically such a currency fall from the outcome of the lack of a clear majority government would reflect the fear that domestic policies would be caught in a political gridlock. However this election has larger, more external implications specifically on the issues of the Brexit negotiations.

Too much ink has been spilt already on the potential complexities, trials and tribulations of the Brexit negotiations…but the uncertain outcome of the General Election has added even further areas of debate. Consensus at the time the election was called centred on how a bigger Conservative government majority would allow a softer Brexit on the basis the ‘get out of Europe at any cost’ politicians could be ignored. Now, however, the range of scenarios are even wider. In my view a softer, delayed Brexit is now even more likely given current opposition politicians favouring such an approach. Any benefit from this however is threatened by the fear of domestic political change and potential gridlock including debate about whether the Prime Minister will resign, whether a coalition can be patched together and/or whether another General Election is required before the end of the year.

All of this has implications for UK equity and fixed income markets. A weak Pound helps the foreign currency earning sectors (such as the mining, energy, pharmaceutical and industrial sectors) and the immediate reaction by the UK stock market will be to favour such names over their more domestic centred peers in the retail, banking and building/construction sectors. Overall these ups and downs will mean the UK equity is less impacted than many think at face value but the performance mix between different shares is going to rise significantly. The opportunities for brave individual share pickers will therefore actually go up rather than down. Understanding what you invest in and the reasons why will matter more than ever as the more domestic-centred shares are cheap but more uncertain.

Political tribulations are unlikely to have too much of an impact on interest rate policy as the independent Bank of England will – if anything – err on the side of caution at times of political strife. UK bonds may be perceived by some as a safe haven but their current low yields still provides very limited returns for investors.

Uncertainties and a lack of forward clarity are rarely good news for investors, especially as clear scope for another election before the end of the year is apparent. It is certainly true that the financial markets backdrop that UK investors have seen over the last seven of eight years of strong gains and limited volatility is going to change. Returns are probably going to be lower and uncertainties higher – and that’s even before the considerations of curve balls like minority governments or any aggression by European governments (which would be foolish in my view given the nascent nature of their own regional economic recovery).

Positively, however, all is not lost. I mentioned above the good likelihood now that the practical Brexit timescale will be pushed out. Further, if in some form a coalition government can be formed, these current political uncertainties will fade a little. Additionally the immediate differences in performance between international-facing and domestic-centric shares will create opportunities for stock pickers. If you put all of this together there are opportunities for flexible and knowledgeable investors.

For Theresa May, the new after the election inevitably starts with a feeling of May-hem. For individual investors it does not have to be. As always the knowledgeable and sensibly brave investor who does not panic will find ways to be rewarded in the big and deep investing world out there.

Article written by Chris Bailey (Investment Committee Economic Adviser). For information purposes only, not to be taken as advice.

Benefits of Income Protection

Benefits of Income Protection

What is income protection insurance?

Income protection insurance is a long-term insurance policy to safe guard you if you can no longer work because you’re ill or injured.

  • It replaces part or most of your income – if you cannot work because you become ill or disabled.
  • It pays out until you can start working again – or until you retire, die or the end of the policy term – whichever is sooner.
  • There’s often a waiting period before the payments start – you generally set payments to start after your sick pay ends, or after any other insurance stops covering you. The longer you wait, the lower the monthly premiums.
  • It covers most illnesses and accidents that leave you unable to work – either in the short or long term (depending on the type of policy and its definition of incapacity).
  • You can claim as many times as you need to – while the policy lasts.

Do you need it?

  • According to the ABI, in the UK alone one million workers a year find themselves unable to work due to a serious illness or injury.
  • It doesn’t matter whether or not you have children or other dependants – if illness would mean you couldn’t pay the bills, you should consider income protection insurance.
  • You’re most likely to need it if you’re self-employed or employed and you don’t have long-term sick pay to fall back on.
  • Check what your employer will provide for you if you’re off sick with a serious illness.

Who doesn’t need it?

You might not need income protection insurance if:

  • You could survive on government benefits – but they might not be enough to cover all your outgoings.
  • You have enough savings to support yourself – remember that your savings might need to see you through a long period of time.
  • You could take early retirement – if you’re near retirement age, perhaps you could afford to retire early. If you’re unable to return to work you might be entitled to take your pension early.
  • Your partner or family would support you – perhaps your partner has enough income to cover everything the two of you need.

Please note this article is for information purposes only.

Ethical Investments

Ethical Investments

What are Ethical Investments?

Ethical investments – also called social investments, socially responsible investments and green investments – is a trend which has been widely referred to as the conscious use of investments to achieve social, ethical and environmental performance objectives, over and above the usual financial returns. The relevance of the ethical investment movement is found in its potential to deliver financial returns while also assisting in delivering on the countries social objectives, like environmentally sustainable development for example.

Types of Ethical Investment

There are essentially two types of ethical investment: shareholder activism and screened investments.

Shareholder activism is where groups of shareholders campaign for changes to what they perceive as unethical practices carried out by the companies they technically have a stake in, often by using the annual general meeting as a platform for their awareness and lobbying tactics. This category is defined as investors who have sponsored or co-sponsored resolutions on social issues in the last three years.

Screened investments typically include avoidance of investments in areas such as oppressive regimes, armaments, animal exploitation, tobacco, gambling and alcohol production. The converse might include purposeful support of investments in companies with a positive record in environmental awareness, employee welfare, or community involvement. This is an evolving field of investment which has grown to embrace over 300 different criteria, with gun control and biotechnology among the more recent issues to be factored in. This category of ethical investment has seen the largest growth of all.

Ethical investments have grown in popularity and now can be seen in many different sectors, with funds achieving several different aims from capital growth to regular income. If you would like to know more about how you can invest in a way which matches your own ethical views, speak to your local Independent Financial Adviser.

Please be aware ethical investments often carry investment risk, where you could get back less than your original investment. You should also take care many unregulated investments call themselves ‘Ethical Investments’. Unregulated investments do not offer the same level of protection as regulated investments and should be avoided.

AIM shares, ISAs and Inheritance Tax

AIM shares, ISAs and Inheritance Tax

Following recent changes in the taxation benefits of ISAs and Inheritance Tax, we wanted to expand on certain AIM shares which benefit from Business Property Relief or BPR and can now be held within an ISA account. Qualifying AIM shares benefit from BRP once they have been held by an investor for a minimum of two years, after this period they are exempt from inheritance tax. This mean for investors holding these shares in their ISA account for the two-year qualifying period should benefit from virtually no taxes while they hold the share, and no potential inheritance tax liability, which is currently charged at 40%.

Please remember the value of tax shelters will depend on individual circumstances, and tax rules can change over time.

Following the introduction of new ISA rules many investors are now looking to transfer their AIM shares into an ISA account, typically using a Bed & ISA service. The good news is that this doesn’t affect the qualifying period so, for example, if you transfer AIM shares you have already held for two years this inheritance tax benefit will be retained within the ISA, without them needing to be held for a further two years.

So which AIM stocks qualify?

There is no definitive list of which AIM stocks qualify for business property relief. This is largely because the qualification status of a company or businesses can change over time. The latest HMRC guidance is available at

Please bear in mind AIM stocks typically involve taking greater investment risk, make sure you understand all the consequences. We always recommend you seek professional advice. Your portfolio could fall in value and be worth less than your originally invested.