Daniel Cornish – Financial Planner at Wealthwide talks about the impact of higher interest rates for savers.

The Bank of England base rate has recently increased to 5.25%, a level not seen for 15 years. This has resulted in a wider spread in the rewards offered for cash accounts from banks and building societies. Although there are higher rates available from a range of providers many people’s standard current and savings accounts are seeing their interest rates remain stubbornly low. Business loan and mortgage rates have increased dramatically in the past year, so the financial landscape has certainly changed significantly.

Many of us have been touched by the horrific events and unfolding human tragedy in Israel and the Gaza Strip, and concerned by how this might escalate into a wider conflict at a time of great uncertainty in the world. People’s immediate focus is, rightly, on the plight of those caught up - either directly or indirectly - in the maelstrom of the conflict. We can only hope that some form of peaceful solution can be arrived at quickly, however hard or unlikely this may seem.

Article published in The Dentist online 17th March 2023

There were some big surprises in the Chancellor’s Spring Budget. Lucas Salt from independent financial advisers Wealthwide sets out how the proposed changes will impact dentists.

Pensions

In the Commons on Wednesday, Jeremy Hunt announced two major reforms to the pension tax system which will significantly benefit dentists. The Chancellor said he would abolish the lifetime allowance for pensions, which is likely to save many dentists thousands of pounds of tax in retirement. He also increased the pension annual allowance from £40,000 to £60,000 from 6th April 2023.

Many of the dental clients we advise - both practice owners and associates – love their jobs and are passionate about dentistry. They do however often express a desire to work less clinical hours so they can spend more time with their family, take more holidays or pursue other interests. Many are held back by the fear that treating less patients themselves is just not feasible and worry about the financial implications.

For dentists who are interested in booking more than the average 4-5 weeks off per year (plus bank holidays), here are some issues to consider and a few suggestions for making it happen.

It can be a bit overwhelming finding the time to organise your personal finances, particularly if you’ve set other New Year Resolutions. Thomas Dickson, Chartered Financial Planner at Wealthwide provides a month-by-month guide to help you make the most of your money and simplify your life in 2023.

January – Request your NHS Total Rewards Statement

This is the first step for dentists in the NHS pension scheme to understand what their benefits are likely to be at retirement. You need this to work out whether you’re likely to exceed the Lifetime Allowance of £1.073m. You can read more about this here

As the cost-of-living crisis bites, dentists may be tempted to ditch some of their insurance policies in order to reduce spending. However, in a profession that relies on physical and mental well-being, reducing or cancelling protection for a short-term saving could cost you in the long run.

Edited December 2023

For many dentists, understanding their NHS pension is crucial to helping them calculate how much money they’ll have when they retire. Unfortunately, the Annual Benefit Statement, provided by NHS pensions, doesn’t give you all the information you need to make informed choices about your future.

Thomas Dickson, Chartered Financial Planner at Wealthwide explains the five key parts that are missing and what you need to do to fully understand what your pension will be worth at retirement.

Many dentists are keen investors either into ISAs, personal pensions or share portfolios; some prefer to leave their money in cash savings. Wherever you save your money, it is almost certainly being impacted by the current double whammy of record levels of inflation and uncertainty in the stock market.

As a result, you may be considering pulling out of the markets and ploughing cash into current accounts earning zero or very little interest. If that’s you, you’re not alone. Between January and July this year, almost £12 billion was withdrawn from investment funds – the first time in a decade that the amount withdrawn was higher than the amount invested.

With all the negative headlines about UK fiscal policy, inflation, interest and mortgage rate rises, stock market volatility and gilt prices falling, many dentists will have been watching in horror as the value of their investments has fallen, wiping out any growth from the last few years, and raising concerns about pensions and retirement.

The FTSE is down 10% year to date; the US Nasdaq has fallen further at 33% during the same period. In such times, we would look at the bond markets to provide some stability but the value of UK 10-year gilts slumped following the Chancellor’s announcement of unfunded tax cuts. This in turn prompted the Bank of England to embark on a programme of buying up long dated gilts in order to head off a liquidity crisis among UK pension funds.

The Chancellor’s “mini budget” was supposed to jump start the UK Economy. But since last Friday we’ve seen an unnerving chain of events starting with a significant fall in the value of the pound, prompting the Bank of England to indicate another interest rate rise is on the way, which in turn, has lead to turmoil in the mortgage market, with deals being pulled and replaced by those at a higher rate.

Published in BDJ in Practice November 2021

By hosting the 26th UN Climate Change Conference (COP26) in Glasgow this month, the UK is confirming its commitment to working with all countries to bring climate change under control. The past decade was the warmest on record, and governments agree urgent collective action is needed.

Extreme weather events, including heatwaves, floods and forest fires that we have witnessed around the world in recent years, have brought the discussion around climate change into sharp focus. Whilst the enormity of the challenge can seem daunting, we can all make a difference. The problem is that we face a range of trade-offs and contradictions; for example, we may dislike fossil fuels and CO2 emissions, but we still drive diesel cars and fly to nice places for our holidays.

Our thoughts on the Bank of England’s September 0.5% interest rate increase were published in both Dentistry magazine and The Probe this month. Here’s an extract:

The Bank of England has increased the interest rate for the seventh time this year. The 0.5% increase means interest rates have hit 2.25% – the highest level in 14 years.

The hike in interest rates is a result of the Bank’s attempt to lower inflation, previously predicted to reach 13% in October.

This is what Wealthwide, a team of specialist dental financial advisers, has to say about the rising interest rate:

It was billed as a “mini budget”, but the Chancellor's announcement was anything but “mini”. Indeed, it reveals a significant change of economic policy for the new government and set out the biggest level of tax cuts since 1972, amounting to £45 billion or 2% of GDP.

Kwasi Kwarteng’s fiscal statement is designed to jump start the UK economy, and there are some substantial benefits for higher earning dentists, particularly principals. Chartered Financial Planner Daniel Cornish takes a detailed look at the budget’s implications for dentists.

Suppose that every day, ten men go out for beer and the bill for all ten comes to £100. The men decided to pay their bill the way we pay our taxes, which went something like this…

• The first four men (the poorest) would pay nothing

• The fifth would pay £1

• The sixth would pay £3

• The seventh would pay £7

• The eighth would pay £12

• The ninth would pay £18

• The tenth man (the richest) would pay £59

Article published on Dentistry Online, June 2022

We are living through turbulent times - a cost of living crisis, compounded by soaring gas and oil prices, inflation, disruption in trade caused by Brexit, thousands of dentists leaving the NHS, and low morale in the profession.

In twenty years of working with dentists, the strain on many of the dentists I speak to is palpable. There is therefore no better time for dentists to be supported by financial professionals who specialise in working with dentists and can add value to their finances and quality of life.

Article published on Dentistry online, May 2022

A large lump sum has just landed in your bank account - perhaps you’ve sold your practice or you’ve just inherited some money. You may be tempted to crack on with paying off your mortgage, or negotiate the best rate on an investment, or even splash out on that special gift you’ve been promising yourself.

Thomas Dickson, Chartered Financial Planner at Wealthwide explains why having a plan is crucial.

Article featured in Dentistry Magazine August 2022

There’s something about getting on a plane, boat or bus and setting off on holiday that makes some people a bit jittery about their future. Have they got all of their affairs in order before jetting off on their travels? Is their Will up-to-date?

I was reminded of this by a client recently who told me that in the days leading up to a trip, her anxiety levels rise and she starts writing notes to her family informing them which solicitor has a copy of her latest Will, and where the various keys and codes are hidden, just in case something happens to her when she’s abroad.

Orthodontist Peter Boyd shares his financial planning journey, where an initial conversation about NHS pensions turned into a comprehensive financial plan for the future

I qualified as a dentist in 2002 and as an orthodontist in 2010. My work has predominantly been within the NHS, with a bit of private work mixed in.

Over the last couple of years, I have been seeing more private patients and, in 2020, along with three colleagues, set up a new private orthodontic practice in Otley called Yorkshire Orthodontics.

My long-term aim always was to reduce the amount of NHS work I was doing,and increase the private element of the practice. I didn’t necessarily want to drop it altogether, as I was conscious there would be changes to NHS contracts in Leeds and was keen to retain ours.

After years of building your practice, and finally completing the sale of the goodwill, most principals will look forward to seeing a large lump sum credit their bank account.

It appears that the practice sales market is buoyant at the moment, and over the last few months, we’ve certainly seen an increase in enquiries from principles who are selling. Luke Moore, from practice sales agent The Elite group believes “the market overall is definitely more active than it has been”, and that there are a number of reasons why, including: dentists who had intended to sell during the COVID year but didn’t because the market was in a state of flux are now doing so; and because the pandemic has changed many people’s priorities, and some are deciding to sell early whilst the market is strong.

Based on discussions we’ve had with principal dentists over the last 20 years and the financial advice we’ve given about how to manage a lump sum post sale, I’ve summarised some of the relevant points that most dentists need to think about.

Thomas Dickson explains why understanding your finances is the first step towards making hopes for the future a reality.

What do you really want?

If you asked yourself what you really love about life, and what you want to be doing more of, what would you say? We’ve been asking our clients this for more than 15 years and as we continue to live with Covid 19, these questions seem more important than ever.

Some of our dental clients want to buy a second home; others thrive off developing their career or building up their dental practice; some want to reduce their clinical hours or leave the NHS or dentistry completely. Some know exactly what they want and are well on their way to achieving it, but for most people, focusing on what they really want is a crucial first step.