Major life events

A tale of two coronations: 1953 and 2023

As we celebrate the coronation of King Charles III, we look back at the late Queen’s coronation in 1953 and how Britain has changed over the last 70 years.

The morning of 6 May 2023 will see the coronation of King Charles III at Westminster Abbey in London – almost 70 years after his mother was crowned in the Abbey on 2 June 1953.

Inevitably, comparisons between this year’s coronation and the Queen’s in 1953 will be rife. It’s already been announced that the service will be markedly shorter than his mother’s and the procession will be half the length, but it will certainly not lack pageantry and colour.

Back in 1953 the Queen’s coronation was the first ever to be televised. Fewer than two million British homes owned a TV at the time and the Queen’s coronation played a major part in making television mainstream. Over half the UK population crowded into the homes of family and friends with a television to watch the event in black and white. A black and white TV with a massive nine-inch screen would set you back around £45 – more than £1,000 in today’s money. Today, many British households have a TV in almost every room and along with phones, laptops and tablets, there will be no shortage of ways to watch the King’s coronation on 6 May.

So, what was Britain like 70 years ago?

In 1953, Britain was a major economic power but just emerging from the grip of post-war austerity. World War II had ended in 1945, but people were still living with the effects of the conflict. Many of its major cities were bombsites, staple foodstuffs were still rationed, it was almost impossible for many families to borrow money and there was a desperate shortage of affordable housing.

The start of the 1950s also saw high inflation of over 10%, which was attributed to a boom in world commodity prices as a result of the Korean War. So there are some surprising parallels with our cost of living crisis today. However, the end of the Korean conflict in July 1953 ushered in a period of low inflation and stable commodity prices that lasted until the 1970s. So Britain in 1953 was on the up with growth of 4% (up from 0.3% in 1952) and inflation down to 3%.

Interest rates

At the time of the Queen’s coronation, interest rates were down to around 3.5% according to the Bank of England, having fallen from 4.0% the previous year. In the 1950s it was the government of the day that controlled monetary policy. The responsibility for rate setting was only handed over to the independent Bank of England in 1997 by Gordon Brown, then Chancellor of the Exchequer. The current UK interest rate is rising and stands at 4.25%, its highest in 15 years, following 11 hikes since 2021. The Bank of England is expected to raise rates again in its next Monetary Policy Committee meeting on 11 May, as it attempts to rein in our current stubbornly high inflation.

House prices

Britain is known as a nation of homeowners and house prices are a favourite topic of conversation. The ending of austerity during 1953 saw extensive local authority driven housebuilding, as the UK built council houses to deal with the post-war shortage. Home-ownership rates were quite low, around 31% in 1953, but they grew rapidly as rising incomes enabled more to buy. Home ownership peaked in 2003 with around 70% of homes privately owned but has since fallen back to around 64% today as the price of housing has risen faster than incomes – making the dream of owning a home unattainable for many. According to historic data from the Nationwide Building Society, a typical UK property cost £1,891 in 1953, but the average house price had risen to £258,115 by March 2023.

Earnings

In the 1950s the UK economy was growing, with wages increasing and low unemployment. In 1953 average weekly earnings were around £7, but this masked a stark difference between the earnings of men and women. While men were paid on average £9 a week, women earned only £5 – a staggering gender pay gap of 80%. According to the Office of National Statistics, average weekly earnings today stand at £638 and while a gender pay gap remains, it is now down to 9.4%.

Stocks and shares

The world of investing was very different in 1953. As major industries had been nationalised, the stock market was light on transport stocks and utilities, while financials, materials and consumer staples were more dominant. The market also had a much more domestic focus than the global markets we know today. The FT30 index – one of the oldest indices in the world – was devised in 1935 and made up of 30 of the largest British companies, many of which are still around today although now part of large multinational groups. These included Imperial Chemical Industries (now part of Akzo Nobel), Distillers (now Diageo) and Imperial Tobacco (now Imperial Brands).

The FTSE100 index we know today was not founded until 1984. These days heavy industry has given way to other sectors such as consumer staples, financials, energy, healthcare, and materials which now dominate the modern indices. These changes reflect Britain’s significant shift to a services sector economy, with new jobs in finance, retail, tourism and hospitality sectors. In 1950, the Bank of England reported that manufacturing accounted for 33% of Britain’s gross domestic product (GDP), but by the end of 2022 this had fallen to less than 10%. Meanwhile the services sector now accounts for around 80% of Britain’s total output.

It’s fascinating to look back on the impact of geopolitical events and how the UK economy has evolved over the last 70 years. It highlights the powerful cyclical changes in the economy and, as we face our current economic headwinds, offers a reassuring reminder that all crises eventually pass.

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 specific support when planning your retirement, as well as for other major life events, please contact us on the same number as above, or complete the contact us form using the link below.

We do not offer legal advice. We would always recommend you seek professional legal advice in relation to your will and lasting powers of attorney. We are, however, happy to work with your legal team, or to provide an introduction to a suitable lawyer should you wish.

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.

Can the bank of Mum and Dad work long term?

While parents and grandparents have been property lenders for many years, the recent rise in mortgage rates and the cost of living crisis have led to far more help for the next generation. But does this support have long-term, unforeseen ramifications?

Over the last few years, house prices have continued to rise much faster than income and the bank of Mum and Dad remains one of the UK’s top property lenders. According to analysis by property firm Savills, the bank of Mum and Dad paid out almost £8.8 billion in gifts and loans during 2022. An estimated 170,000 first-time buyers had family help in getting a mortgage, which amounted to almost half of all mortgaged first-time buyers. With increasing interest rates, stricter mortgage criteria and a cost of living crisis, it’s expected this number will jump to 61% in 2023. The desire to help your children onto the property ladder is strong, but could this support leave you with longer term and unforeseen ramifications?

The long-term impact will depend on how you choose to fund the gift or loan. While the use of cash savings or withdrawing money from your investments or pensions are all possibilities, they have the potential to cause problems for your future financial and retirement plans, not least because we are all living longer and annuities are no longer the automatic choice.

Taking money from your investment portfolio means you run the risk of losing out on any growth and the compounding benefits that investments typically carry, as well as any future benefits from bond coupons or equity dividend payments. The potential rates of return on investments are generally higher than the return on cash over the longer term, but it is always worth remembering that markets can go down as well as up and you may not get back the original amount invested.

Meanwhile, accessing your private pension pot may mean you don’t achieve all your retirement goals. The money taken out of your pension will not be there to grow and compound but, perhaps more importantly, if you access your pension, your annual allowance – the amount you can pay in while enjoying the government’s tax incentives – has reduced from up to £60,000 a year to just £10,000. This lower tax support may mean you need to defer your retirement date.

The good news is that there is another possibility. If you have investable assets over £1 million, you can access the bespoke lending options available through private banks. Not only can loans be secured against your property or investment holdings, but the support you receive will ensure you understand the full implications of any decision and the impact it will have on your long-term financial goals. As a result, you can retain your capital and continue to benefit from your wealth while helping your loved ones with their more immediate needs.

What are the benefits?

As private banks operate on a more personal case-by-case basis, they can offer a more flexible approach for larger loan amounts, usually over £250,000. The benefits include:

A more tailored service with a dedicated relationship manager, who will take time to understand your current financial position and any long-term plans before providing the most efficient outcome for you.
Less rigid criteria and a wider range of options:
- Facilities in sterling, euro or US dollars
- Interest only loans
- Shorterrepayment terms
- Scheduled repayments linked to a specific date.
Borrowing against your UK, Isle of Man or Channel Island-based residential property.
Borrowing against your investment portfolios, provided they are held with the bank.
Quick, yet carefully considered, decisions to meet an immediate need for cash, without having to sell any of your investments.

A win for you and your family – in the short term and the longer term.

Clients can borrow against a UK, Isle of Man or Channel Island-based residence, be it a home or an investment property. We also lend against investment portfolios and loans can be denominated in Sterling, Euros or US Dollars. With clients in 160 countries, we often help clients based outside the UK, and have lent using the same approach across market cycles since 1987.

To find out more about Nedbank Private Wealth’s bespoke lending services, please visit our ‘Borrowing’ page or email [email protected]. You can also contact your private banker directly or call our client services team on +44 (0)1624 645000. Or you can get in touch using the links to the forms towards the end of this page.

If you fail to keep up loan repayments, your assets used to secure the loan may be at risk and/or your home may be repossessed. Any examples are for illustrative purposes only. The webinars and Q&A do not constitute an invitation or inducement to buy any financial product 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.

Andrew Halsall

Andrew heads up the Isle of Man private banking team. He joined the bank in 2005 and has over 30 years’ banking experience. He looks after a portfolio of domestic and internationally-based clients, working closely with them, and their professional advisers, to meet their wealth management, succession planning, pension and lending needs.

Andrew is a Chartered Wealth Manager and a Fellow of the Chartered Institute for Securities & Investment.

Building a financial future after divorce

The first working Monday of the new year is said to be the busiest day for divorce lawyers but going through a divorce can be an emotional upheaval at any time of the year. Huw Williams examines eight steps you can take to start getting your life in order and planning for the future.

As John Lennon sang, “Life is what happens while you are busy making other plans”. Life is unpredictable and sometimes we can be thrown off course by something we were least expecting. This is often the case with divorce. One minute you’re happily married and planning your life together, the next you are going your separate ways. The end of a marriage can evoke many conflicting emotions that make it difficult to focus and look ahead.

Grief – at the loss of a relationship, your familiar way of life and the dreams and aspirations you shared.

Guilt – over a perceived failure to make it work.

Anger – at a partner’s betrayal.

Fear – of the unknown, coping with changed circumstances and being alone.

There is no quick way off the emotional rollercoaster. The coping process must start by allowing the freedom to grieve while taking the necessary steps to move on. At such a distressing time, you are faced with unravelling all the aspects of your shared life together and it is important not to overlook the financial issues that will inevitably arise. In addition to legal advice, it is recommended that both parties seek professional financial advice at the start of the process.

Here are eight ways you can start to move forward:

Starting over – The first step is to assess your current financial and family situation. It helps to produce a full disclosure of all assets, including pensions, at the outset. Joint bank accounts will need to be separated. Money for immediate living expenses will need to be arranged. Open discussion will be required on custody arrangements for children, and who will pay for child support and day-to-day expenses through the divorce process. It is also important to check your credit score and ensure you have suitable insurance cover as you go your separate ways.
Taking control – Choosing to move forward means taking control of those things you can control and not wasting energy on those you can’t. Once you’ve assessed your current situation, you can start prioritising the issues and decisions that are within your control and start considering your life on the other side of divorce – your future opportunities and strengths.
One becomes two – The money that was supporting one household will now have to stretch to fund two. This may mean adjustments to the standard of living you’re accustomed to, as expenses increase. Divorce is also about ensuring young children are taken care of and supported through the upheaval of separation and change.
Emotional attachment – Emotions play a large part in how well people adjust to a new life after divorce. Individuals that find it harder to let go of the past will struggle more than those who can look to new possibilities in the future. It is helpful to see it as a transformational period where new plans can be formed.
Building resilience – Keep focused on what you can control and where you want to get to. Set new goals and take small steps to achieving them. An experienced financial planner can help take the emotion out of the raft of decisions you are faced with at this challenging time. Talking to a financial planner can ease the pressure and fear of the unknown, and help you understand the possibilities for the new life ahead.
Experienced advice – Having gone through many divorces with other clients, a specialist financial planner can help negotiations by understanding your situation and needs. Using cash flow planning, they can help you visualise what you could have and how it could work for you, and to evaluate settlement offers.
Communication is key – It always helps if the divorcing parties are both on board with the financial planning process. Usually, one of the partners will have taken more of a lead in financial matters. In these cases, the other partner can benefit enormously from the help, guidance and support of a financial planner through the divorce process.
An education – Financial planning not only assists with decision making, but it can also help with understanding the short and long-term implications of those decisions. For example, around custody, maintenance, division of assets, current and future income and expenditure, to name just a few.

Untangling finances during divorce is always complex. Decisions made in the heat of the moment can have significant and long-lasting consequences. How much money you will need is never an easy question to answer. But working with a financial planner and developing a personal cash flow plan will go a long way towards showing the lifestyle you could aspire to after divorce and how you can achieve it.

Different scenarios can be modelled to help make the best and most informed decisions. For example: should you keep the marital home; what would be the best option for the pensions; and what are the tax considerations? At such a challenging time, cash flow planning can provide clarity and peace of mind both before and after a divorce settlement.

Having a financial plan can help restore your faith in the future and create a new beginning.

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.

Any examples of investments and structures used are for illustrative purposes only. This article 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.

Huw Williams

Huw joined the London team in 2017 from Duncan Lawrie and has over three decades of private banking experience. Having started his career with NatWest, he spent 14 years at Grindlays Private Bank before joining Butterfield Private Bank for 12 years in 2004.

As a trusted adviser to his loyal and long-standing high-net-worth client base, Huw is passionate about delivering exceptional client service dovetailed with a full range of holistic private banking services. These include identifying wealth management requirements and offering integrated banking, lending, investment management and fiduciary services.

He is a Chartered Wealth Manager and a Chartered Fellow of the Chartered Institute for Securities & Investment.

Protecting your digital legacy

What are your digital assets worth? Potentially more than you think, which could present a challenge to ensure they are passed to loved ones after your death. But what strategies can you consider to protect these for the next generation?

The remarkable transformation we have seen from a world where everything was physical to a digitally enabled environment has changed the way we live. The internet and related services give us the freedom to manage simple aspects of our lives from the comfort of our home or office. We socialise, shop, sort out holidays and bank on desktops and mobile devices.

But the pace of change we are witnessing carries with it a unique risk that, for many, has not been dealt with when planning their wealth succession. Research from The Law Society published in 2021 shows that 93% of people with a will have not included any digital assets in it. Just 7% said they fully understand what happens to these assets once they have passed away. This is particularly concerning given that each digital channel and possession often requires different treatments.

Significant digital assets in value

One area that has gained attention among investors is non-fungible tokens (NFTs). These are assets that are unique and irreplaceable, which are verified and stored using blockchain technology. Encompassing everything from music to a website domain, the most common form of NFT at present is digital artwork. A number of traditional auction houses and online trading sites are now trading NFTs, demonstrating their growing popularity as an asset of value.

Another example of complex digital wealth is cryptocurrency. 2022 research from HMRC and Kantar Public assessed that 10% of UK adults have held cryptocurrency, up from 5.7% in January 2021’s Financial Conduct Authority data. And despite their highly volatile long-term prices, these assets are likely to have a digital footprint worth preserving.

Alternatively, there may be assets that have valuable intellectual property (IP) rights attached, such as copyright, patents and trademarks. If these are complex or extensive, you may want to set out specific powers to administer these assets separately, which may require (additional) professional executors, not least as what you consider IP may not be the case. Website domain names, for instance, are only treated similarly to phone numbers.

Then there are sentimental digital assets to consider. Anyone who is even an occasional user of social media may have amassed images and videos that are legally owned by the provider. Some services, such as Amazon (e.g. Kindle) are very clear that their offering comes with single user rights and so ends with the death of the user and cannot be passed on.

Apple and Google, however, approach rights differently. Apple’s Digital Legacy lets people choose up to five family members or friends who can access their account when they are no longer around using a special access key and with a copy of the death certificate. This gives access to the data stored in iCloud, such as photos and documents. Google, meanwhile, allows users to set up an inactive account manager, selecting up to 10 trusted contacts and granting permissions based on what emails, files and information you want them to access.

While there are steps you can take, depending on the platform, it is better to think ahead and ensure it is clear who is responsible for these and who can manage the user profile – not least as it is often a very helpful channel to communicate a bereavement.

Ensuring non-physical assets are recorded and handed down is now a very real consideration when it comes to wealth planning.

The forgotten assets

There are other assets that can easily slip through the net of any typical estate valuation. These include digital vouchers, funds held in digital wallets and online gambling accounts, or other funds held in payment services, such as PayPal.

Even non-monetary assets, such as those on social media accounts, may have significant value. Quite apart from the sentimental value for the next of kin and loved ones, it is vital that families take steps to both protect and maintain control of these as part of the overall estate.

Proving ownership, however, is not as straightforward as it might seem. Many digital assets (particularly of monetary value) are likely to be password protected in a way that prevents anyone – even the next of kin – gaining access after death. This could trigger a long and uncomfortable legal battle to claim inheritance rights – and most probably at the worst time emotionally for the family.

Take back control

Despite the unenviable situation families can find themselves in by overlooking the digital portion of an individual’s estate, there are steps you can take now to ensure both the monetary and sentimental assets remain accessible to your family.

The most important thing is to list your accounts. Please note that this access should not be detailed in your will, which will eventually become publicly available once probate has been granted. And, while there might be the option for a backup using a hard drive and archiving assets, there are other practical steps you can take to protect your digital assets for the next generation.

For example, preparing an inventory of your digital assets makes sense, providing details of what you hold and how they can be accessed. The details of any computer software or online accounts should also include passwords, relevant email addresses and directions for ease of access. There is also a burgeoning number of providers who offer online ’safety deposit boxes’ for a fee to store your login details securely. Examples of these providers are Assetlock, Deathswitch and Legacy Locker. This information would then be made available to your nominated individual following your death. You can also use your inventory to highlight what assets you want preserved and what should be deleted or destroyed.

When it comes to preserving or deleting assets held on social media platforms, most social media firms have specific processes in place, but these vary significantly between platforms. For those interested, we have included some examples of these at the end of this article – information which can be used by you to see if you want a profile memorialised (if that is an option) or removed.

Next steps

Whatever action you take, it’s important you appreciate the breadth and complexity of your digital assets, giving them the attention they deserve in any wealth planning scenario, whatever your family circumstances. Often assets may have sentimental value too and having a plan in place could help your family while they are grieving.

Working through your digital life is important and – setting out plans between a will and a letter of wishes (which sits alongside the legal documents and allows you to set out your wishes without these eventually making their way into the public domain) – is a fundamental part of the estate planning process.

SPECIFIC ACTIONS FOR EACH SOCIAL MEDIA CHANNEL

Meta has different approaches for its platform. On Facebook, you can choose to have your profile deleted after your death when that’s requested by a verified family member. The requester needs to provide proof of death, such as a death certificate. Alternatively, your profiles can be memorialised, the request for which needs to include a link to online proof of death, such as an obituary. To do this, a legacy contact should be set up so they can manage the account on your behalf.

Meta follows a similar protocol for its Instagram platform although, unlike Facebook, you cannot change or post any content to a memorialised profile. Unsurprisingly, the approach for WhatsApp varies too given users are identified only through their phone number, rather than a username. The platform recommends your family simply saves any photographs and videos to the phone and then removes the account.

Twitter, on the other hand, does not allow access to deceased people’s user profiles. The company will, however, deactivate an account for someone who is authorised to act on the behalf of the estate, or for a verified immediate family member of the deceased.

Meanwhile, LinkedIn also has a process for memorialising the profile of a deceased member, and the request has to be initiated by an authorised individual, although anyone can report the profile of a deceased member, which results in the account being hidden.

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.

Anna Slater

Anna joined Nedbank Private Wealth in 2022 and is based out of the London office, working with the wealth planning division. Alongside the team, she works with clients and their families, in tandem with their professional advisers, to ensure they have a clear wealth plan in place to help them achieve their financial and lifestyle objectives.

Anna holds the Diploma in Regulated Financial Planning with the Chartered Insurance Institute and a BSc (Hons) degree from the University of East Anglia.

Don’t end up ‘someplace else’ – a plan for expat living

Having a wealth plan can be even more important as an expat, as you will likely have more complex financial needs and assets spread around the world. Failing to plan could financially leave you ‘someplace else’.

“If you don’t know where you are going, you’ll end up someplace else.” This is particularly appropriate when we consider our financial goals and aspirations. As an expatriate living abroad, having a plan can be even more important as you are likely to have more complex financial needs and assets spread around the world.

Having lived in London for several years and believing not much could compare to its vibrancy and buzz, my plan for my future expat life needed to be a good one if I was to avoid disappointment. Here I am today in the heart of Dubai in my unlined suit, something I learned very quickly was needed to combat the intense heat. And Dubai didn’t disappoint. The largely expatriate society (making up around 88% of the current population of the United Arab Emirates) offers a culturally diverse pool for networking and socialising, that I have chosen to immerse myself in fully. While it would be easy to be led astray by the high standard of living, the attractive benefits such as tax-free income has allowed me to remain focused on my financial targets for the future.

Whatever your reasons for choosing the expatriate life, whether you are on a work secondment, you’re a retiree or are just escaping to sunnier climes, having an effective financial plan can help you maintain your lifestyle and ensure your diverse financial assets are working together for your future.

The best place to start your plan is by understanding what you want from life. Your life goals can usually be split into short, medium and long-term aims, they need to be reasonably achievable and should be specific to you. It often helps to see a list of typical goals to help you focus on what is most important for you and your family, for example:

Short term Up to five years	Medium term Up to 10 years	Long term Over 10 years
Buy a UK holiday home	(Early) Retirement
Consider extending time overseas	Become a consultant	Buy a large rural home
Save for retirement		Long-term health care
Support aging parents	Support children until financially independent	Pay for grandchildren’s education

By prioritising your goals and a timeframe for achieving them, you will be able to estimate how much money you will need and when. This will form the roadmap for your plan and you can start to manage your finances in the most effective way to attain your goals.

Making a plan means you should record your current income and living expenses, and calculate how much money you have available to put towards achieving your goals. It is unlikely your income will remain the same over your lifetime, so this is something you can build into your financial plan. You should also consider other sources of income you may have over time from investments, your pension, or perhaps an inheritance. Against these, you need to include the costs and timing of your short and medium-term goals, such as buying a second home, paying for children’s education or returning to your home country.

One thing that could easily be overlooked, while you are enthusiastically making your final preparations for moving is, do you plan to return to your home country at some point? If so, you will need to start planning well in advance to ensure the move back is seamless and tax efficient. Your financial situation as an expatriate may no longer be applicable if you become tax resident in another country, so a review of the potential implications is vital. Tax treatment depends on your individual circumstances and may be subject to change in the future so it is important to get specialist advice. While we don’t give tax advice, we have the experience to point you in the right direction, not least as it makes sense to look into the tax payment schedule for your new destination.

For example, If you intend to move back to the UK for example, it pays to keep up your Class 3 national insurance contributions as you need 35 qualifying years – that’s up from 30 years previously – to be entitled to the full UK state pension. In addition, you should beware of spending too much time in the UK while preparing for your return, as you could accidentally bring forward the start date of your UK tax residence status. The number of days spent in the UK to trigger your residency can vary and is based on the amount of time you have been non-UK resident for. This is well worth not leaving to chance.

Hong Kong, Singapore and Dubai are popular choices for those looking for warmer climes. However, the high cost of living can be a deterrent for the long-term, but if you can’t bear the thought of cold, grey winters in the UK, you could opt for an investor visa and switch to working in Australia for a while, before retiring there or moving to sunny Cyprus, Gibraltar or Malta.

You should also review any existing pension or investment arrangements to ensure they remain in line with your goals. If you plan to return to the UK, it is worth considering the use of tax-efficient investment structures, such as ISAs and single premium life insurance bonds. If you have a qualifying recognised overseas pension scheme, you must inform your provider if you intend to move to a different jurisdiction.

If you have any assets that have risen in value, you may consider selling them with a view to ‘crystallising’ those gains before you become tax resident in another country.

Tax is, however, just one consideration. Other factors, such as to how to fund your lifestyle, buy a property, manage succession planning, and pay for health care and children’s education should all be factored into your plan.

It is never too soon to set up a financial plan, but once you have, it does not mean your work is done. It pays to review it regularly to ensure it still aligns with your current situation and remains on track to meet your goals. That way you can continue to enjoy an international lifestyle, while knowing your wealth is working towards your future goals. You don’t want to end up just ‘someplace else’, financial nor geographically.

Sources: Edaradia

Quote: Yogi Berra

How might the Queen’s financial affairs have changed in 70 years on the throne?

As we celebrate the Queen’s Platinum Jubilee, we look back at how life has changed for women financially since 1952 and how changes in women’s rights may have helped her control more of her own affairs – unique as they are.

When the Queen took over the reins (or reign) from her father in 1952, the world was, of course, very unalike to how it is today. In a time when men earned on average £9 a week, women received just £5 and the average property price was a modest £1,891, the Queen was certainly in an unusual financial position.

Perhaps the only piece of legislation that applied to women beyond her at the time was the 1882 Married Women’s Act, which allowed her to retain the titles of the privately-owned property (such as Balmoral and Sandringham) gifted by the late King George VI. Still, in the Queen’s entirely independent case, she also benefitted from a special arrangement with the UK government whereby the heir to the throne is not subject to inheritance tax (IHT) on private assets. This was decided on the grounds that monarchs cannot work or trade and, therefore, could struggle to ‘grow’ their wealth.

The understanding also sits alongside the protection of assets owned by the sovereign, which are also not subject to death duties given no crowned head is allowed to exchange chattels or property into private wealth.

In today’s 2022, as then, this is a marked divergence from commoners who can only reduce their IHT bill through a concise list of personal allowances.

By 1960, the Queen’s third child had arrived, followed four years later by her fourth and, unlike many other mothers of the 1960s and far beyond the legal necessities, pomp and pageantry, she stood out in that her children bore her name together with that of her husband. Sharing Mountbatten-Windsor with Prince Philip and their family presented a modern wife to the world, both symbolically and financially.

Should she have decided to, in 1975, the Queen could have benefitted from the introduction of the Child Benefit Bill which, unlike the payments covered by the 1945 Family Allowances Act (and other relevant government bills), were not means tested. Given this applied to any children under the age of 19 if they were in full time education (or 16 if they then left school), this could have continued to help fund her children’s education until at least 1982 when Edward was at university. It could also have helped Princess Anne who bore the Queen’s first grandchild in 1977, as well as other royal mothers until the means testing was introduced in 2013.

Anne may also have benefitted from the 1975 Sex Discrimination Act (rather than the earlier 1970 Equal Pay Act) given she continued to compete internationally in horse races and trials after her 1973 marriage and even after she gave birth to her eldest son. But even if it offered no monetary support to either the Queen or Anne, given it was their positions that came with the income, the act could have helped improve perceptions of Anne’s active role in carrying out royal duties, as women’s participation in the workforce became better supported by society.

With another five grandchildren arriving between 1981 and 1990, the Queen and other members of the royal family may have been encouraged to set up trust funds for each child, and put in place the gifting of assets to reduce the size of her estate – given the IHT arrangement only applies to the heir.

The change in the 1990/91 tax year, introducing independent taxation for married women rather than being taxed alongside their husbands, would not have helped the Queen, given she did not pay income tax at that point. Although it may have helped later when she started voluntarily paying income and capital gains tax in 1992. But the change will have encouraged (married) women in the workplace to take up the opportunity to earn and be taxed on their own income, as figures show that between 1995/96 and 2004/05, UK median household income grew at an average rate of 3.7% per year.

1992, dubbed the Queen’s ‘annus horribilis’, features again on our list given Anne divorced her first husband and Charles and Andrew announced separations from their wives. Marital separations would have led to complex distributions of assets – hence the four years it took to decide Charles’s divorce settlement with Diana, Princess of Wales – and could have impacted the Queen’s financial considerations.

The birth of more grandchildren in 2003 and 2007, plus the arrival (to date) of 12 great-grandchildren, will have led to more necessary changes to the royal households’ finances. But while some details have been made public – such as Charles donating his pension from his time serving in Britain’s armed forces to charity – others will likely remain secret.

This is because the Freedom of Information Act 2000 does not apply directly to the Royal Household, which was not included in the act’s definition of a public authority. As a result, while we have insights from the financial accounts published annually by The Crown Estate, we are unlikely to see the details of the Queen’s current financial situation, or that of her immediate family, anytime soon.

As we toast the Queen over the Jubilee bank holiday on the public service she has performed, it is important to reflect on the opportunities and limits to our own wealth planning in 2022. We too may face our own annus horribilis, although we should also see an annus mirabilis* or two too. The legislative changes, market reforms, investment lows and highs that have affected finances since the beginning of the Queen’s reign in 1952 will also continue to impact our own finances in the future.

Ensuring you are informed and equipped to deal with all scenarios is a lesson the Queen, I am sure, would still be eager to share.

Anna Slater

Anna holds the Diploma in Regulated Financial Planning with the Chartered Insurance Institute and a BSc (Hons) degree from the University of East Anglia.

A discussion on dementia with Alzheimer’s Research UK

In this short webinar Stuart Cummins, CEO of Nedbank Private Wealth, was joined by Hilary Evans, CEO of Alzheimer’s Research UK, and Professor James Rowe, the Chair of its Strategic Advisory Board, to talk through the pioneering medical research they are leading on dementia.

Alzheimer’s Research UK estimates that the UK has around one million individuals suffering from dementia. Globally, the World Health Organization estimates the number to be over 55 million.

Catch up with Stuart Cummins, CEO of Nedbank Private Wealth, in conversation with Hilary Evans, CEO of Alzheimer’s Research UK, and Professor James Rowe, the Chair of its Strategic Advisory Board, about the steps you can take to lower your risk of developing dementia and the reasons to be upbeat about the work being done by medical research teams around the world and in the UK to find cures.

For more information, please read Alzheimer’s Research UK’s Think Brain Health advice on their website. And among the options to donate, the charity especially welcomes gifts donated via wills.

As a wealth manager, we also think it’s important to think about your personal finances, and specifically the measures you can put in place now to help mitigate consequences in the future, as Simon Prescott, a senior wealth planner, explains in this short video

To find out more about lasting powers of attorney, please read the update: Dementia awareness and your wealth.

Stuart Cummins

Stuart is chief executive of Nedbank Private Wealth Limited.

He has over 20 years of banking and investment experience, incorporating senior roles in Cazenove Capital, C. Hoare & Co. and Barclays Wealth. His focus has been on developing high-net-worth relationship and advice businesses across wealth management, private banking and corporate banking. At C. Hoare & Co., Stuart was responsible for the portfolio management and wealth planning business, and was a member of the Executive Group and Investment Committee.

Based in the London office of Nedbank Private Wealth, he has overall responsibility for managing the company’s UK and international operations across all its office locations.

Stuart is a Chartered Wealth Manager, Fellow of the Chartered Institute for Securities & Investment, and a Fellow of the Chartered Institute of Bankers.

Simon Prescott

Simon heads up the wealth planning division for the international business. He works with clients and their families, in tandem with their professional advisers, to help structure their investments and other financial assets to achieve their goals and aspirations through the development of bespoke wealth plans. Working in partnership with our teams of private bankers, he integrates the benefits of wealth planning alongside our broader wealth management and wealth structuring capabilities.

Simon has over 24 years’ experience of delivering investment and planning advice, 15 of which have been with Nedbank Private Wealth. His appointment followed the establishment of bank’s wealth planning function, where he was instrumental in its design, build and implementation.

Simon holds the Level 7 Diploma in Advanced Financial Planning, the highest financial planning qualification in the UK, and is a Certified Financial Planner^TM, a Chartered Wealth Manager and a Chartered Fellow of the Chartered Institute for Securities & Investment.

Dementia awareness and your wealth

With Alzheimer’s Research UK estimating around one million people in the UK suffer from dementia, of a global total of over 55 million, it is increasingly important to plan for the possible financial consequences in case of mental incapacity, as Simon Prescott explains.

Humans are known to have a negative bias hardwired into their approach to life. Even if 90% of a conversation is positive, we will tend to focus on the negative 10% much more. And while it is a bias that we can learn to manage – or at least be aware of, as with all behavioural biases – many of us don’t, so its impact disproportionately affects our lives.

This negativity also becomes apparent in the way we seek out or avoid information – as my colleague Rebecca outlined in the January issue of our client magazine, Opportunity (see page 10). This leads some to avoid contemplating anything that might negatively impact them in life, even though they realise that this may result in further complications, and scientists are still not really able to pinpoint why this is the case.

The earlier the better

About 50% of people do actively seek out information. For these people, as well as those realising that bucking a bias may be a good thing, it’s worth noting that starting sooner rather than later really does set you up for better outcomes. This applies to dementia, as the team at Alzheimer’s Research UK articulated in a conversation, and when planning your future finances.

The earlier you start any planning with regard to your wealth, incorporating all the various scenarios that may come to pass, whether positive and negative, the better prepared you would be for whatever life throws at you. But it’s particularly important when discussing dementia (or any mental incapacity) given any decisions you make should be made when you are 100% mentally competent.

At a basic level, you should have an up-to-date will in place that sets out how your estate will be distributed. But by completing (or updating) one as part of a comprehensive wealth plan, you would understand your finances now and what could form your estate in the future. This helps you to mitigate inheritance tax, but it will also help reassure you, and your loved ones, that you are on top of your affairs.

But there’s a further important step, in addition to a will, which is to have completed and registered lasting powers of attorney – i.e. LPAs.

While we outlined these in January, it’s worth reiterating what lasting powers of attorney (LPAs) are. Basically, an LPA is a legal document which allows you to give people you trust the authority to manage your affairs, particularly if you lack the capacity to make certain decisions for yourself in the future.

There are two types of LPA: one is for property and financial affairs. This allows for someone (your attorney(s)) to make decisions on your behalf (as the ‘donor’) on money, tax, bills, property, pensions and investments.

The second is for health and welfare matters, which allows for decisions on things like medical care and where the donor lives. Again, as we noted before, this LPA only kicks in once you are deemed to be incapable of managing your own affairs, while the property and financial one can start as soon as you specify.

If you own a business, you may also put in place a separate LPA specifically for your business.

Fortunately, the legislation on property and financial affairs LPAs has recently changed in England & Wales, with work done to prevent fraudulent documents being registered and efforts made for the filings to be done electronically. More recently, although the formal guidance on the Office of the Public Guardian’s website still requires updating, changes have also been approved with regard to the management of investments, by the attorneys on behalf of donors, which include the ability to appoint or change discretionary investment managers.

Prior to this, specific wording had to have been incorporated into an LPA if the attorney wished to use, or change, an investment manager. This specific wording was often missed, not least given many didn’t know a specific clause was required, so it’s a welcome change as it will make it easier for families to ensure any monies they are in charge of can be managed by the best-value, best-performing portfolio providers, and without having to set up a new LPA or apply to the Court of Protection.

Again, the earlier LPAs are put in to place the better. And contrary to popular opinion, this is not just something to think about only when you are old, or indeed for old people, and instead should be put in place for everyone.

If it’s too late, the person (or people) you want to act on your behalf will have to apply to the Court of Protection for a deputyship instead, which could take a number of months to put into place, often during a potentially stressful period, and may lead to less preferable outcomes.

Remember an LPA is not simply about fully taking over somebody’s affairs. It’s better to think of it as working with the person you love, not least as there are some simple steps that can be accomplished earlier on making life easier for the donor immediately. These include making sure important bills are not forgotten by switching them to direct debit, through to ordering large print documents.

In summary, we believe setting up an LPA is a simple process. But it’s also one that should be seen as delivering a lot of benefits, which for us include:

It is a great way to protect your assets and make sure you are and will be looked after
You are in charge of your own destiny by planning in advance and setting out the decisions you want others to make on your behalf
You get to choose who looks after your situation – i.e. someone you can trust to act in your best interests
It’s more efficient (and less expensive) to put an LPA in place when you are in charge of every aspect of life than waiting and being forced to make an application to the Court of Protection.
It will reduce the level of stress for you, and your loved ones, providing reassurance about the future.

So please get in touch should you want to talk through the wealth planning process. Whether you have an existing legal adviser or would like to be introduced to one, we can help here too. And, regardless of your future state of mind, whether you suffer from dementia or not, there will a robust plan in place for you, and for your finances, to achieve a more optimal course of action.

Category: Major life events