As more of us reach the age of 100, financial planning is vital to ensure we have enough money to fund our lifestyles through a potentially long retirement.

Reaching the age of 100 may seem a rather fanciful prospect but if you were born in 1974 in the UK, as I was, your chances of becoming a centenarian are 20.4% if you’re a woman and 13.9% if you’re a man. Based on the latest estimates from the United Nations, there were 593,000 centenarians around the world in 2021 and it’s a fast-growing age group. Studies estimate there could be 3.7 million centenarians alive by 2050.

Better healthcare and lifestyles around the world, along with luck in the genetic lottery, play a big part in increasing longevity. Yet there is still no way to accurately predict how long any of us will live and this is a crucial factor when it comes to planning your finances. How do you ensure you have enough money to fund your lifestyle through a potential 30-40 year retirement?

Here are six things to consider when preparing your wealth for a long life well lived:

1. Define your long-term financial goals

Talking about money and your aspirations with loved ones is key to understanding what you want from life – for yourself and your legacy. Defining this will help build a framework for managing your wealth to achieve these goals.

2. Make your pension a priority

Pensions can be one of the most efficient ways to save for your retirement, so it may be worth ensuring you make the most of your pension allowances. In the UK, the benefits include tax relief on your contributions and tax free growth of the investments within the pension. In addition, pension funds do not form part of your estate when you die and are therefore free from UK inheritance tax. If you have a number of pensions, it may be worth consolidating them, although the associated risks and charges should be considered. Taking advantage of ISAs is another tax-efficient strategy for long-term financial planning in the UK.

3. Invest for the long-term

The power of compounding and diversification make investing for the long-term one of the best ways to grow your wealth. Make sure you are comfortable with the investment risk in your personal portfolio, and it is suitably diversified to meet your needs.

4. Contingencies

If you live to age 100, there are likely to be a few unexpected events along the way. However, the financial impact of these can be considered and options such as life insurance, income protection and critical illness cover can help to protect your wealth and provide peace of mind for you and your family. Life expectancy may be improving but it is no guarantee of good health, so the possibility of long-term care should also be considered.

5. Estate planning and gifting

As well as managing your wealth during your lifetime, it’s important to consider how it will be managed after you’ve gone. The first step is to ensure you have an up-to-date will or wills (if you have assets in more than one jurisdiction). Whether you plan to pass your wealth on to your family or have philanthropic ambitions, considering your options and putting the right structures in place is vital to ensure a smooth, efficient transfer. Structures such as trusts, family investment companies and donor advised funds may be appropriate.

6. Make a wealth plan

Having considered your goals and values, creating a wealth plan will allow you to visualise the financial route you need to take – right up to age 100. Using specialist cashflow software, a wealth planner will work with you to define your current and future financial circumstances and align them to your goals and values, enabling more informed financial decisions. We call it ‘investing with purpose’. The future is never certain, and your wealth plan can explore various scenarios to stress test situations. This means you can be as prepared as possible for the unexpected. Your wealth plan should be flexible and with regular reviews it can be adapted as markets, fiscal regimes and your personal goals and circumstances evolve.

At Nedbank Private Wealth, we can partner with you to understand your financial goals and create the most appropriate wealth plan. We work with clients and their families around the world, in tandem with their professional advisers, to help them achieve a life well lived – all the way to 100 or more!

Clients of Nedbank Private Wealth can get in touch with their private banker directly to understand how wealth planning can help them achieve their financial goals and objectives, or call +44 (0)1624 645000 to speak to our client services team.

If you would like to find out more about how we can help you with retirement planning or more general wealth planning support, please contact us on the same number as above, or complete the contact us form using the link below.

Any examples of investments and structures used are for illustrative purposes only. The inclusion does not constitute an invitation or inducement to buy any financial investment or service. None of the content constitutes advice or a personal recommendation. Individuals should seek professional advice, based on their jurisdiction and personal circumstances, before making any financial decision.

Investment Counsellor Rebecca Cretney is joined by Hugh Davidson MBE to discuss his philanthropic journey and key learnings from his many years of extensive work and research in the field of philanthropy.

There are many reasons people make the decision to get into philanthropy but whatever the motivation it will be important that the money you give, whether that’s £1 or £1m, is getting the most impact possible.

Investment Counsellor Rebecca Cretney is joined by Hugh Davidson MBE to discuss his philanthropic journey and key learnings from his many years of extensive work and research in the field of philanthropy.

Hugh has been involved in the voluntary sector for many decades, first as a prison visitor at Durham Prison, then as Chair of Trading and Member of Council at Save the Children UK. Since 2004 Hugh has been a full-time unpaid volunteer, mainly through H&S Davidson Trust, involved with causes in India, Bangladesh, Vietnam, and Ghana, and Rushen Heritage Trust in the Isle of Man.

Clients of Nedbank Private Wealth can get in touch with their private banker directly to understand how we manage money, or call +44 (0)1624 645000 to speak to our client services team.

If you would like to find out more about how we can help clients manage their investments, please contact us on the same number as above, or complete a form using the links towards the end of the page.

Investments can go down, as well as up, to the extent that you might get back less than the total you originally invested. Exchange rates also impact the value of your investments. Past performance is no guide to future returns. Any individual investment or security mentioned may be included in clients’
portfolios. They are referred to for information only and are not intended as a recommendation, not least as they may not be suitable. You should always seek professional advice before making any investment decisions.

Watch a panel discussion with local philanthropists and experts in the field of philanthropy, as we explore the importance and impact of philanthropic giving.

https://vimeo.com/768014701/1cbdb0918eWe were delighted to facilitate this special event hosted by His Excellency Lieutenant General Sir John Lorimer and Lady Lorimer.

The Isle of Man has a long history of philanthropy. A good example is the activities of Sir William Hillary, who, as an Isle of Man resident founded the Royal National Lifeboat Institution in 1824. As part of this venture, he appealed to other philanthropists to join him. At the age of 60, in 1830 Sir William Hillary took part in the rescue of the crew of the packet St George, which had foundered on the rocks at the entrance to Douglas harbour. This prompted Sir William to set up a scheme to build the Tower of Refuge, which we still see standing today.

This noble philanthropic activity saved lives and created a legacy for generations to come. This example of what good can be done when we commit ourselves to have a positive impact on the world around us is inspirational, if not slightly overwhelming!

It is in the spirit of facilitating learning, education, discussion and debate that we were pleased to support this event, with our partners at Philanthropy Impact.

Our panel discussed issues surrounding philanthropy, impact investing and how the Isle of Man, though small, is positioned to impact the world way beyond its borders.

Clients of Nedbank Private Wealth can get in touch with their private banker directly to understand how we manage money, or call +44 (0)1624 645000 to speak to our client services team.

If you would like to find out more about how we can help clients manage their investments, please contact us on the same number as above, or complete a form using the links towards the end of the page.

Investments can go down, as well as up, to the extent that you might get back less than the total you originally invested. Exchange rates also impact the value of your investments. Past performance is no guide to future returns. Any individual investment or security mentioned may be included in clients’
portfolios. They are referred to for information only and are not intended as a recommendation, not least as they may not be suitable. You should always seek professional advice before making any investment decisions.

Understanding the difference between charity and philanthropy can be difficult. The right option can depend on the impact you wish to make.

Picture yourself on the edge of a flash flood. Seawater has risen so high that it has crashed over the sea wall. Water has gathered forming a large pond. In the middle of that pond is a young man struggling to swim having been caught up in the rising waters. Distress is clearly etched on his face, he is tiring fast. This has clearly happened before, because nearby you find a life preserver and throw it out to the man, who uses it for buoyancy and is able to kick himself to safety.

You saw someone suffering and you acted immediately to affect the situation in a positive way. But the look on the man’s face will not leave you: what about the next person that gets into trouble when the floods come? What if no one is there in time to throw the life preserver? You start thinking about how you could help prevent this from happening again and to investigate what caused the flood in the first place. In this instance, experts confirm the sea wall is not high enough. And so, you get in touch with local authorities and rally support to build a better and higher sea wall preventing any future flooding, which you help pay for.

And this is a good way of demonstrating the difference between charity and philanthropy – charity looks to offer direct relief from pain and suffering (throwing the life preserver) whereas philanthropy seeks to address the root cause to effect lasting change (building a sea wall).

When put this way it is easy to see that both philanthropy and charity are very similar and very different, and both are just as important in today’s world. It is often easier to see how you can help with an emerging situation or catastrophic world event that causes suffering – it is sometimes not as easy to see how you can impact the root cause.

Now let’s follow this train of thought and consider the funding of the sea wall.

Simple, right? If you are willing to pay for it, you find out how much it costs to build the new wall and give the money to the relevant local authority.

But what if the authority doesn’t use all the money to build the wall?  What if this is a big project, lasting years and you want to ensure your funds are used for the intended purpose and not squandered through corruption or negligence. If you simply hand over money you have given up your control.

Could there be a better way? Sometimes. Depending on the impact you wish to make, sometimes a lump sum is best.  Sometimes regular payments are preferable.  A financial professional who is versed in philanthropy should be able to guide you on the best solution. Their advice should encompass your goals, tax situation, financial position and the objectives of the cause you wish to benefit. They could also advise you on the best approach for tax efficiency. This may be the setting up a donor advised fund or foundation where the money is gifted and no longer owned by you, but you still have control over how and where it is used and obtain all of the tax relief you are entitled to. In the case of very long-term projects, the money could be invested and gradually distributed at pre-set intervals. Over time, this could increase the amount available to the charity (as the invested funds grow).  Additionally, you retain control, so you may choose to change the causes that receive your support at any point in the future.

Finally, by having conversations with a financial professional that include your intentions to gift money philanthropically, they can gain better insight into you as a person, your goals and your priorities, which could also translate into how they invest on your behalf more generally (in your pension pot or legacy plan, for instance). Ultimately, this level of conversation will lead to a better partnership of trust, a better understanding of your wealth needs and an extension of your impact well beyond your philanthropic giving.

Clients of Nedbank Private Wealth can get in touch with their private banker directly to understand how we manage money, or call +44 (0)1624 645000 to speak to our client services team.

If you would like to find out more about how we can help clients manage their investments, please contact us on the same number as above, or complete a form using the links towards the end of the page.

Investments can go down, as well as up, to the extent that you might get back less than the total you originally invested. Exchange rates also impact the value of your investments. Past performance is no guide to future returns. Any individual investment or security mentioned may be included in clients’
portfolios. They are referred to for information only and are not intended as a recommendation, not least as they may not be suitable. You should always seek professional advice before making any investment decisions.

While some see philanthropy as an intrinsic part of their wealth plan, others are more indifferent, believing that they already contribute to society by paying taxes. We examine the roots of charitable giving, what motivates people and offers some tips on the steps your family could take should you wish to become more socially responsible.

“To make life a little better for people less fortunate than you, that’s what I think a meaningful life is.” These are the words of the late Ruth Bader Ginsburg, US Supreme Court Justice – who was a firm believer that it is the duty of the more fortunate members of society to offer a helping hand to others. The ‘Notorious RBG’, as she became known, did not just gift considerable time to the causes she supported but also significant funds, which she donated to dozens of nonprofit organisations, such as her US$1 million prize for philosophy and culture in 2019 from the Berggruen Institute, an independent think tank.

But not everyone feels this way. Some are firmly of the opinion that this is the role of government and their wealth is for them and their family, and should not to be used to try and correct the world’s ills. They – perhaps inadvertently – follow the thoughts of the 20th century political philosopher, John Rawls, who argued that citizens discharge their moral responsibility when they contribute their fair share of taxes, which the authorities then collectively use to take care of the poor and vulnerable using the greater level of resources at their disposal. The better-off, he believed, are then free to dispose of the rest of their income as they wish.

A number of factors may influence people’s thoughts on this subject, including how they might give back and to whom.

Sources of wealth can contribute to how people feel about giving back – such as whether wealth has been a key driver of their career or, instead, a happy by-product. And there are other aspects too that influence financial decisions, for example whether you want to use your wealth to collect art or build a collection of other treasures – which could be donated to a national institution and, therefore, posthumously see you labelled as a philanthropist – or if you want to focus more on experiences.

Nationality can also be a differentiator, too: individual giving in Belgium, Germany and France is said to be rising, while in Spain, the Netherlands and the UK, it is declining. Family history, personal values and even religious beliefs can also greatly impact how people behave when it comes to philanthropic endeavours.

Historically, for example, some wealthy individuals donated due to their Christian duty and charity was seen as a way to ‘save one’s soul’. And contemporary philanthropy was present in Tudor times – a way of thinking that became increasingly popular from the 19th century. This is when a number of well-known charities that still operate today, such as the St John Ambulance Brigade and the Salvation Army, were formed. It was also around this time that financier George Peabody, widely regarded as the father of modern philanthropy, founded the housing association, Peabody Trust, which still owns and manages 67,000 homes in London and the South East of England.

Some people, however, believe that some philanthropists are driven by ulterior motives. One school of thought, for example, suggests that Scottish-born American industrialist Andrew Carnegie could have used his fortunes to increase the wages of his underpaid staff, instead of setting up his numerous foundations.

But how do you choose a worthy cause?

Even once you have decided to give, there is still a question around the destination of the donations and, once again, a range of considerations can come into play. Some families may have historic links to causes, while others may find the outcomes sought by organisations chime with their personal experiences or emotional connections. The COVID-19 pandemic, in particular, has been an interesting lens through which to view this. The pandemic, as with many other areas of our lives, has prompted many people to examine, and even completely rethink, their current attitudes to social responsibility versus taxes. This is demonstrated in the recent news that 100 millionaires and billionaires signed an open letter aimed at authorities (and other elites) demanding that they be taxed more.

Whatever your current thoughts or feelings on ‘giving back’ to society, it’s still worth considering philanthropy – not least as the desire to donate might only flourish when the perfect opportunity for you presents itself. Or, you may find there is a cause that an immediate family member wants to support that resonates with you too.

As such, the best place to start is with an open and honest conversation with your loved ones, which could follow the outline below:

  • Do you have an established set of family values? If no, what is it that you collectively stand for and believe in? What charities or causes could you over time – perhaps even passionately – support?
  • If yes, are they written down or (only) inferred? Consider committing them to paper so that everybody is, literally, on the same page. You might even seek to develop your own family mission statement or a manifesto as a guiding principle.
  • Once you have your values, consider what it is that you want to contribute in addition to (or instead of) money, e.g. time, land, property or even access to your network of professional advisers and other donors.
  • Also think about whether you want to give during your lifetime or posthumously – a subject we can help with, as this can have consequences for estate planning.
  • Finally, discuss how frequently you intend giving. Will any plan form a regular activity (even if it’s only once a year) or will you donate as a one-off event? This could, of course, in part be dictated by what you may be donating.

You can also decide that you aren’t ready, or able, to do any of this yet. Perhaps it may never be on your radar. But even acknowledging this is a good first move.

And, if you’re unsure where to start or need guidance facilitating a family conversation, please involve our wealth planners, who are well-versed in such discussions and who have considerable experience, working alongside your private banker, to guide your initial steps in an approach that is tailored to your circumstances.

By sitting down and discussing the purpose of your wealth, whatever this may look like, you’re also more likely to define your own position when it comes to social responsibility and whether you actually want to have an impact – which doesn’t have to be sizeable. Any contribution can make all the difference in the world to a chosen cause or individual. Because, in the words of Bader Ginsburg, “Real change, enduring change, happens one step at a time”.

Clients of Nedbank Private Wealth can get in touch with their private banker directly to understand how wealth planning can help them achieve their financial goals and objectives, or call +44 (0)1624 645000 to speak to our client services team.

If you would like to find out more about how we can help you with wealth planning support, or more specifically support in planning your retirement, please contact us on the same number as above, or complete the contact us form using the link below.

Any examples of investments and structures used are for illustrative purposes only. The inclusion does not constitute an invitation or inducement to buy any financial investment or service. None of the content constitutes advice or a personal recommendation. Individuals should seek professional advice, based on their jurisdiction and personal circumstances, before making any financial decision.

The response to COVID-19 showed that many people can act swiftly and spontaneously to support a vital cause. In less frantic times, however, it might pay to take a more considered and structured approach to giving.

The pandemic has underscored the value of philanthropy. High net worth individuals accounted for more than a quarter of the US$20 billion-plus value of donations awarded globally to COVID-19 causes in 2020, according to the philanthropy-tracking charity, Candid. Billions more were given by individuals directly, through structures or directly, to existing charities.

Scientists have spoken of the “crucial difference” made by such philanthropy in helping to unlock radical new approaches to vaccines and treatments. This was a global crisis in which urgent donations, sought and offered at pace, were critical to success.

Some argue that this more nimble approach to giving should be adopted permanently, discarding much of the red tape that can curb the progress of good causes. It’s a compelling viewpoint – but at the same time, philanthropists naturally want to be sure that their gifts are going to have the greatest possible impact.

Many find that organising their giving in a more structured way delivers better results. However, this approach needn’t rule out the flexibility for swift, one-off donations when the occasion demands. Following five simple steps could help hone your philanthropic strategy.

1. Be guided by your values

There’s an unlimited pool of worthy causes. Even the most beneficent and far-reaching of philanthropists needs a focus: the Bill & Melinda Gates Foundation, for example, prioritises education, poverty and health.

Consider the causes closest to your heart and decide where you want to make a difference. You might decide to involve family in defining what matters most. It’s easy to become sidetracked by the sheer breadth of worthwhile issues; be open to explore all topics, but emphasise the need to be selective. By the end of your discussion, aim to write down a single line that encapsulates your philanthropic mission.

2. Arm yourself with knowledge

Detailed research will pay off in deciding where best to direct your efforts. Besides making a deep dive in your chosen area, you might want to check out open data that is gathered to help improve charitable giving, and published by organisations such as the OECD and 360giving.

Consider which non-profit, government agency and other philanthropists are already working in your chosen field. Look at past and current projects, and weigh up what seems to be working. If possible, speak to charities and agencies and explore their needs. Where are the gaps? Can you create new ventures without duplicating other efforts, or would it be more effective to support existing causes?

3. Set firm objectives

Ask yourself what you want to achieve through your philanthropy. Consider what success will look like, and how long it is likely to take. Be ambitious but realistic: the narrower your focus, the less likelihood of vagueness or ‘mission creep’.

As with your initial value setting, it might help to condense your goal to a short statement that will serve as a reminder in future decision-making.

4. Think beyond donations

Having done thorough research, you may be content simply to direct your money to trustworthy channels. Alternatively, you might want to take a more hands-on role in pursuit of your goals.

What else might you offer besides donations? Do you have specific skills – for instance, in personal contacts, recruitment, or general leadership – that could benefit the work on the ground? If so, define the extent and limits of your personal commitment from the outset.

5. Choose the right vehicle

Once you’ve crystallised your philanthropic ambitions, it’s important to talk through your options with your wealth manager.

Setting up a private foundation is one possible route, given a significant endowment to work with. Creating a brand in this way can raise the profile of your cause, and offers the prospect of a long-term legacy. Creating a foundation is similar in many ways to setting up a business: it’s critical to get the right advice on legal, tax and staffing issues.

A less formal solution, which also allows you to build up more capital before donating, is Donor Advised Funds (DAFs). A DAF allows you to make charitable contributions, receive immediate tax benefits, then recommend grants from the fund to charities. It also allows for anonymity when donating.

And of course, direct donations based on need are always an option. As many involved in the fight against the effects of COVID-19 can testify, there’s a lot to be said in favour of so-called ‘chequebook philanthropy’.

However you choose to consider each aspect of philanthropy, which can be very powerful and help you tap into rich emotions, it is worth a conversation. We can help ensure your generosity doesn’t inadvertently leave you and/or your family financially disadvantaged or generally disappointed by the experience, but instead help you take a more constructive approach that supports those charitable causes close to your heart.

Clients of Nedbank Private Wealth can get in touch with their private banker directly to understand how wealth planning can help them achieve their financial goals and objectives, or call +44 (0)1624 645000 to speak to our client services team.

If you would like to find out more about how we can help you with wealth planning support, please contact us on the same number as above, or complete the contact us form using the link below.

Sources: Nedbank Private Wealth; Imperial College London; and McKinsey.

Any examples of investments and structures used are for illustrative purposes only. The inclusion does not constitute an invitation or inducement to buy any financial investment or service. None of the content constitutes advice or a personal recommendation. Individuals should seek professional advice, based on their jurisdiction and personal circumstances, before making any financial decision.

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