What next for interest rates?

The Bank of England has embarked on the first rate rise for a decade, but there remains a long way to go.

The pain goes on for savers. Despite the Bank of England increasing interest rates from 0.25% to 0.5% in November, interest rates on savings accounts remain at dismally low levels, with no end in sight. With inflation reaching a six-year high in the same month, growing your savings in real terms remains a considerable challenge.

Certainly, the rate rise failed to deliver the upturn in savings rates many hoped. December 2017 research by Moneyfacts found the number of savings accounts paying a higher rate than 0.5% fell by 150 in the month that followed the base rate rise – the biggest drop in almost a decade.

The average easy access account rate crept up by just 0.06% to stand at 0.45% – showing banks and building societies were failing to pass on the full benefit of the base rate rise.

According to figures from the Building Societies Association, in November 2017, the average bank and building society savings instant account was paying just 0.12%, including bonus. The average one-year fixed rate bond offered just 0.72%. Back in July 2016 – just after the EU Referendum and before the decision to reduce base rate to 0.25% – these accounts were paying an average 0.34% and 0.93% respectively. In other words, average rates remain worse now than before the last rate cut.

Slow progress

The Bank of England’s first rate rise since the global financial crisis was a clear signal of its growing confidence in the UK economy, following the initial uncertainty over Brexit. But savers hoping it would be followed up by further rate rises – such as the US has experienced – have been disappointed. That seems to be it, for the near future at least.

Speaking in January 2018, Bank of England policymaker Silvana Tenreyro expects two further increases in base rate would be needed over the following three years, but that the Bank had “ample time” before considering the next rise. This view mirrors the governor Mark Carney, and other senior officials at the Bank. Economists themselves are divided over the prospects for 2018, with a Financial Times survey finding one-fifth of economists believe there will be no increase, whilst two-fifths expect it to rise by at least 0.5%.

But whatever happens in the near future, one simple truth will remain unaltered for savers. It is going to be a long time, if, indeed, ever, before interest rates return to the 5%+ levels seen in 2007.

Re-evaluating your long-term plans

Savings accounts will always play a part in a sensible investor’s portfolio. The security, and ease of access, makes them ideally suited for your short-term financial needs.

Yet when it comes to your long-term financial priorities, the personal finances world has simply changed. Savings accounts are no longer able to generate meaningful, lifealtering returns. If you have money ear-marked for your future and are prepared to commit it for the long-term, other options need to be considered.

Investing your money offers the potential to achieve higher returns. You will need to accept risk to your capital, but speaking to a financial adviser can help to develop an investment strategy that’s right for your needs.

The value of your investment can go down as well as up and you may not get back the full amount invested. Investments do not include the same security of capital which is afforded with a deposit account.

(Sources: http://www.bbc.co.uk/news/business-42320052https://moneyfacts.co.uk/news/savings/base-rate-beating-savings-deals-fallsharply/  https://www.bsa.org.uk/statistics/savings  https://www.reuters.com/article/us-britain-boe-tenreyro/ample-time-before-nextbank-of-england-rate-move-needed-tenreyro-idUSKBN1F42EZ?il=0)

City supports Lincoln City FC to Wembley

Seeing the City decorated in red and white makes everyone feel proud to be associated with Lincoln, and more importantly with Lincoln City Football Club, but no more than the team at Nicholsons Chartered Accountants, who have sponsored the team’s shorts for the last 3 years.

With crowds now approaching 10,000 we can safely say that football fever has hit Lincoln. Although losing to Arsenal In the FA Cup quarter final over a year ago, the team now return to London, this time for a first ever Wembley appearance, in the Checkatrade Trophy final against Shrewsbury.

Nicholsons has supported the team through their up’s and down’s and were delighted when Lincoln City FC got promoted last year.   With a strong hold of over 30 members of staff and their families from the office going to Wembley to support Lincoln City FC, it’s safe to say Team Nicholsons will be out in force.

Team Nicholsons will be having a red and white dress down and cake baking day to start the weekend off!

All that is left to say is – Good Luck Lincoln City.


Do pension contributions have to be cash?

Until now, the prevailing view, largely driven by HMRC, was that contributions to a pension scheme had to be in cash to get Income Tax relief.

In order to get an asset, typically the business premises, into a pension scheme, a cash contribution would be made, and then the scheme would buy the asset in question.  This often involved borrowing the cash short term, then repaying it immediately after purchase.  This could add significant costs to the whole transaction making it less attractive. 

However a recent First Tier Tribunal ruling has gone against this.  In the case in point, the contributor submitted a form pledging a contribution of £68,000 net to his company SIPP (self-invested pension plan).  The SIPP administrator formally acknowledged the obligation and asked how the debt was to be settled.  The individual replied that it would be an in-specie transfer of shares of equal value.  If the value of the shares changed prior to the transfer, any shortfall would be made in cash.   

HMRC contended that the relevant clause in the tax legislation required a money payment.  The Tribunal disagreed, and ruled that the legislation as written did not prevent a contribution being satisfied by transfer of an asset. 

As this is only a First Tier decision, and can be appealed by HMRC, It is too early to take this as a green light to start making contributing assets to your pension scheme.  But the fact that the FTT was very decisive in its ruling is a pleasing development.

Colm McCoy – Senior Tax Manager

Colm leads Nicholsons’ dedicated tax department and joined the firm in August 2014. Colm started his tax career in 1984, passed the chartered tax exams in 1989 and has now amassed over 30 years of experience. At Nicholsons, Colm advises SMEs and owner-managed businesses on their personal and business tax affairs.

When he’s not at work, Colm trains fanatically to compete in the obscure but growing sport of Crossfit. In his more sedentary moments he dabbles in problems in physics while listening to German opera or heavy metal.


Vacancy – Senior Auditor

Due to our expanding Auditing team we are looking to recruit a Senior Auditor, who will be required to assist the Directors and Associates in the provision of audit and other associated services to clients including assisting with the management of workflow and supervision, management, and training of team members as required.

The role of a Senior Auditor will be required to perform audit tasks that requires a good knowledge of specialised rules and regulations; to plan and help monitor workflows within the audit process and to undertake the necessary work to produce a completed audit file for review.

The key objectives of the role will include;

  • People Management
  • Work Management
  • Customer liaison
  • Compliance


  • Experience of Audits gained over 4 years
  • Good technical knowledge
  • Wide and high knowledge or accounting principles and auditing standards
  • Experience of dealing with difficult audit issues
  • Experience of organising and prioritising workload
  • Experience of involvement in meetings


The role requires a wide skill set to deal with deadlines, work under pressure, time management, accuracy, both written and verbal communication, computer literacy, multi-task and prioritise, team leader and good client communication.The person must be willing to learn, proactive, self-motivated, use own initiative, articulated, approachable, assertive, confident, team player, trustworthy, honest and punctual.

To download the full job description click here. To apply in writing enclose your CV and send it to Steve Davy at Nicholsons Chartered Accountants, Newland House, The Point, Weaver Road, Lincoln, LN6 3QN or call Steve Davy on 01522 815100.





Nicholsons announce new appointment

Nicholsons Chartered Accountants is pleased to announce the recent appointment of Georgia Roberts. Georgia has joined the accounting and audit team as a semi-senior accountant based at their Lincoln office.

After spending a year at Lincoln College Georgia started working for a local firm of accountants where she gained two and half years of experience in Medical accounts. During this time Georgia wanted to continue with her studies, so whilst still working full time she attended an evening course at Kaplan Financial College in Nottingham, as well as doing online lectures for 2 years.

After passing her AAT level 2 and 3, Georgia continued with her studies and completed her AAT Level 4 diploma in business skills in 2017. She has two more exams to do until completing her AAT level 4 in accounting.  Georgia’s next step will be to take her ACCA exams.

Georgia’s role at Nicholsons will be to prepare accounts and look at various aspects of tax compliance for the firm’s clients. When she isn’t working or studying Georgia enjoys going to the gym, socialising with friends and shopping.




Don’t fall of the retirement cliff

Failing to have sufficient pension plans could lead to significant financial headaches in retirement.

An over-reliance on the state pension could prove dangerous. The £8,456.20 maximum amount of annual income it pays, for the 2018/19 tax year, is certainly an extremely valuable benefit to support your lifestyle. But on its own, will it be enough to provide for your retirement? A December 2017 report, by the Organisation for Economic Co-operation and Development (OECD), suggests it won’t. The report warns many people could face something of a retirement income cliff – because the gap between UK employment earnings and state pension income is the largest in the developed world.

On average, state pension income equates to around 29% of what UK people earn – or less than a third of the income you currently receive. This compares unfavourably to other developed nations, where state retirement income is an average of 63% of earnings. So if you want to maintain or enhance your lifestyle, you face a huge shortfall to make up.

The importance of planning

Understandably, many of us feel apprehensive about our retirement plans. June 2017 figures from the Office for National Statistics show 46% of working adults, who were questioned between June and December 2016, aren’t confident their retirement income will give them the standard of living they hope for. Over two-thirds have not thought how long they will need to fund retirement for. The last point is important. Thanks to improvements in living standards, people are living longer and your retirement plans need to factor this in. It’s not just about having savings for the first few years of retiring, but considering how your needs might change, and if you might require provisions for areas like long-term care. There’s also your family’s inheritance. You may want to leave some of your wealth behind for them to enjoy, rather than spending all of it to fund your retirement.

Are you paying enough into a pension?

It’s never too early to start preparing for retirement, so if you have a few years left of working, considering your current arrangements could allow you to make better plans. For example, you might want to pay more into your pension, or even set up additional pensions. A huge advantage of taking this route is tax relief, as the government tops up your contributions by 20% or 40% (depending on if you’re a basic or higher rate taxpayer). With the pension freedoms also opening up your options for using these savings, from 55, you have greater flexibility to shape your retirement. There are important tax considerations around making withdrawals. The way your pension contributions are invested is another key factor. If you’re enrolled in your employer’s default pension scheme, there’s every chance it’s invested in a way that’s not fully suited to your circumstances. You might be willing to take more risk with your money, for example. With the stakes so high, speaking to a financial adviser is recommended. They can help you consider what you want to achieve in retirement, and if you have the provisions to make it happen. Retirement should be a chapter in life to relish, but it’s a leap into the unknown. A financial adviser can help you to plan for different scenarios, so you can look forward with confidence.

The value of your investment can go down as well as up and you may not get back the full amount invested. Accessing pension benefits early may impact on levels of retirement income and is not suitable for everyone. You should seek advice to understand your options at retirement. Levels and bases of and reliefs from taxation are subject to change and their value depends on the individual circumstances of the investor.

(Sources: http://www.thisismoney.co.uk/money/pensions/article-5147989/OECDreport-puts-Britain-bottom-pension-league-table.html

https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/articles/earlyindicatorestimatesfromthewealthandassetssurvey/attitudestowardssavingforretirementautoenrollmentintooccupationalpensionscreditcommitmentsanddebtburdenjuly2016todec2016) 6


Conference delivers advice to business owners

Over 100 delegates and 15 business support stands attended the Nicholsons Small Business Conference at the Drill Hall in Lincoln last Week.  The conference was organised by Nicholsons Chartered Accountants and was the first of its kind to be held in Lincoln. The aim of the conference was to provide small business owners with support and advice from a team of experts to help them face the daily challenges that running a business brings.

Networking over breakfast and an opportunity to visit a number of trade stands all offering services to small businesses, got the conference off to a buzzing start before seats were taken for the second part of the three part conference. Richard Hallsworth, Director at Nicholsons, opened the conference with a selfie ice breaker and an electronic voting poll, giving the audience a chance to interact and ask questions during the morning, before discussing why business failure rates are higher in years 2 and 3 after start up.

Richard said “Our research and conversations with business owners told us that there were gaps in knowledge when it came to certain areas of running an expanding business. We are committed to helping business owners not only with their finances but supporting them with wider business challenges. A conference covering a wide range of topics delivered by experts seemed like a good way of helping business owners and we were delighted with the response.”

First to take to the stage was keynote speaker, Glen Foster, from small business software company Xero. Glen touched on how technology is enabling small businesses to better understand their financial health and gain access to financial products and services to fuel growth. Providing further key elements to the conference were Michael Squirrell from Wilkin Chapman ‘Getting the legal’s right’. Nicholsons Head of Human Resources, Andrew Tomlinson, set out the essential points of employing people.  Cyber Security expert Ant McGhie from Barclays used the opportunity to talk about the importance of making sure businesses are protected and what more they can do.

The third and final part of the conference covered the hot topics of marketing, health and wellbeing and IT. Alex Wright from Knapton Wright, Rachel Linstead from Firecracker and Chris Pickles from the F1 Group all gave the audience an insight in how to make the most of these specialist areas and the benefits they could bring to their business.

Richard Grayson, Director from Nicholsons, gave an overview of the morning’s events and asked the audience to take three action points back to their business. The panel stepped back onto the stage to answer the questions submitted during the conference.

Videos will shortly be available – so if you would like to hear what our speakers had to say contact Linda Clark – linda.clark@nicholsonsca.co.uk. Due to the success of the event plans are already in place to hold a similar event next year.

What our delegates and speakers have to say…

Rachel Linstead – Firecracker  “I really enjoyed Nicolson’s Small Business Conference, it had the right balance of networking and speakers which all were very informative & shared easy to implement tips on how I can grow my business”

Gail Wood – LAGAT Ltd  “What a fantastic Business Conference Nicholson’s arranged on Thursday March 8th. Excellent informative speakers, good location and a very good range of businesses attended. The location was superb with parking close by. Let’s have some more Nicholson’s !!!! ” 

Anthony McGhie – Barclays Bank Plc “Great event. Well planned and coordinated, well attended on the day and a fantastic venue.”

Samantha Pover – Lincolnshire Chamber of Commerce  “The event was very well put together, Chamber were happy to exhibit and would certainly do it again if and when you do another. It was really informative not only for small businesses but for us too.  The speakers were very engaging, all talked about relevant subjects – very on topic.  Well done!!”

Michael Squirrell – Wilkin Chapman “We were delighted to take part in the inaugural Small Business Conference.  It was well organised and attended and I enjoyed the range of topics covered in the presentations.  It was great to have the opportunity to speak to some very interesting businesses who we had not met before.  Overall, an excellent event!”







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