Business

A financial letter from Santa (with a nod to Elf and Safety) . . .

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HI folks, it's Santa here, sending a special Christmas message on behalf of my friends at Kennedy Independent Financial Advice (KFA).

Thanks for all your letters and present requests. Mum and dad must be glad to hear that money grows on trees. As such, it will be no surprise for them to hear that a few years ago the researchers found the average cost of bringing up a child to 21 in the UK is £231,000.

So it’s time to plan ahead.

KFA were here in the office with me last week. They explained to me there’s no better time than the end of the year to update your financial planning, and get things in shape for 2021. That’s why I’m writing today. Read on for some good financial planning tips for next year, including saving, insurance, and pension planning.

A children’s Isa, for instance, is a beautiful thing, and anyone can contribute to it, so at Christmas and birthdays a few pounds into the account offers a great (and untaxed!) savings alternative to just another computer game.

KFA were also telling me that we can even open a children’s pension for them! It is a nominee account which gets tax relief from the tax we paid.

As usual, I’ll be sliding down a chimney near you on the 25th. A glass of milk will be fine this year, please. You all left me out whiskey last year, and I got cautioned for tipsy in charge of a pack of reindeer.

The reason I mentioned the milk is that I’m on a health kick, at the strong suggestion of Mrs Claus. I’m a bit worried about the old ticker. As you can imagine, visiting over 65 million families in one night on Christmas Eve tends to put one under P. So KFA sorted me out with critical illness insurance, and now I’m covered if the elves and the reindeer lose my income for a while, due to an unexpected health setback.

Nonetheless, it also got me thinking about my retirement planning. KFA have also given me some really good tips about that. When you think about it, taking into account tax relief and work contributions, a pension is absolutely the best way to save for your later years.

Or in my case, centuries. (However, if you’ve been around for over 10,253 years, try convincing a pensions actuary that you’re going to pop your clogs in 25.)

Did you know I nearly wasn’t able to bring your presents this year? Myself and Rudolf nearly got put on furlough! On that very subject, KFA mentioned that the Chancellor is facing a major bill to cover the costs not only of furlough, but also Eat Out to Help Out and other things this year. It’s actually going to total £300bn to £500bn, and some experts believe recovering that money could mean removing the ability we have to draw down tax-free money from our pensions.

They also reminded me that in 2017, Theresa May said that the state pension triple lock, which raises the state pension in line with inflation, would cost £45bn over 15 years. The triple lock is another big cherry for any money-saving Chancellor to take down from our Christmas tree.

Other worries that KFA are helping me with this year: Rudolf and all the reindeer are self-employed, and so far appear to be invisible to the government in terms of auto-enrolment into a pension scheme; and the angel on top of the Christmas tree is worried about the gender pay gap for all the little girls on earth, and so it’s important that they plan ahead.

We’re also looking at accident insurance after Ricky, one of my best elves, was loading up the sleigh with the forklift when he fell out and broke his elbow - so we have Elf and Safety issues as well.

Okay, must get back to work now. Today I’m making my list of who has been naughty or nice, although the elves said that this is in contravention of Article 4 of the General Data Protection Regulation (EU) 2016/679.

The good news is that my letter arrived this morning giving me clearance to use Northern Irish airspace, and if you like you can follow my arrival on the internet on Christmas Eve night. However to observe social distancing, all children do need to be in bed by 9.30pm.

I can tell you confidentially that I will be visiting my friends at KFA and everyone else in Northern Ireland between 1.16am and 1.38am.

See you soon, and here’s to a better financial 2021!

Signed, Santa.

:: Michael Kennedy and Shaun Doherty are independent financial advisers and pensions specialists, and can be contacted on 028 71886005. Further information on Facebook at Kennedy Independent Financial Advice Ltd or at www.mkennedyfinancial.com