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Finances at the Bar

The demands of life as a self-employed barrister can mean that often your personal finances take a back seat. But in light of our recently acquired financial freedom, it is our responsibility to ensure we are representing our financial interests as effectively as possible.

Sex Discrimination Act 1975

Women were permitted to open bank accounts in their own right.

No matter what your age, or stage in your career at the Bar, there are a number of areas of financial planning to consider; to provide you with peace of mind and ensure you are putting in place the financial foundations necessary to reach your financial goals, and not leave anything to chance.

Financial Planning: The Essentials

Protection

It’s role in your financial plan

The foundations – protecting everything you have achieved so far and your future goals and objectives.

Without appropriate protection in place:

  1. How would you pay your bills without an income?
  2. How long would your savings last?
  3. If you were to die or become critically ill, how would your family manage financially at an already difficult and stressful time?

Whilst there are many financial protection products available, that might be suitable for your circumstances, Income Protection Insurance is essential for barristers at the self-employed bar.

What does it cover?

Next Steps:

Everyone’s circumstances are unique, but in all cases, speaking to a financial adviser:

· To establish the suitability of financial protection you may already have in place
· Identify any gaps that should be covered
· Put in place appropriate solutions to secure your financial position

They will ensure you are prepared for any unexpected risks you might face and safeguard the efforts you have made towards building both your current and future lifestyle.


The value of an investment with St James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.

Trusts are not regulated by the Financial Conduct Authority.


REFERENCES
(1) Aegon UK, Our insight to the nation’s financial wellbeing, 2022.

Pensions

It’s role in your financial plan

Creating the retirement lifestyle you want.

Whilst the above figures can in part be explained by issues facing women, such as the gender pay gap and maternity breaks, in light of the great steps we are taking in today’s society towards gender equality, it is time that women take control of their future and work to improve this disparity whilst also providing themselves with financial freedom at retirement.

How much do I need?

What you can do:

Speaking to a financial adviser they can help you to:

  • Determine what a good retirement looks like for you.
  • Establish a savings plan that is affordable and helps meet your retirement goals.
  • Ensure you are utilising the tax efficient advantages a pension provides.
  • Establish a plan to draw down on your pension when the time comes, that is both the most tax efficient and gives you the financial freedom you have worked hard to achieve. 

The benefits of starting to save now:

  • Ensuring you have good pension savings to draw on when the time comes, mitigates against the uncertainty around provision of State Pension being available or sufficient to meet your retirement goals.
  • The earlier you start saving for retirement, the easier it will be to create the retirement lifestyle you want – it gets you into good habits and you benefit from compound interest.
  • As well as saving for your future, saving into a pension provides you with the benefit of Income Tax Relief - as higher earners, don’t miss out on reducing your Income Tax liability.

REFERENCES
(1) Gender Pensions Gap, NOW:Pensions, 2024.
(2) The Pensions and Lifetime Savings Association/Loughborough University Retirement Living Standards, accessed January 2023.

Savings and Investments

It’s role in your financial plan

Establishing a method for managing your income is essential for ensuring that whilst you can meet your short-term commitments, any surplus income is working hard for you in the background.

There is a time and a place for both cash and investment strategies – are you utilising them effectively?

What you can do:

As with all areas of financial planning, everyone’s circumstances are unique, but in all cases, speaking to a financial adviser can help to:

  • Ensure your savings and disposable income are appropriately balanced between cash and investments.
  • Make the most of tax-efficient allowances available to you.
  • Implement a financial strategy which is suitable, taking into account your risk level and timeframes.
  • Understand the wider economic environment and make rational investment decisions whilst also avoiding undue stress.

The below table provides you with an example model for managing your income, ensuring that all needs and areas are addressed:

REFERENCES
(1) Nutmeg, Why Women are Better Investors, 2022.

Financial Reviews

Its role in your financial plan:

Regularly reviewing the plans you have in place, ensures they continue to remain suitable to your individual circumstances and on track to meeting your goals.

No matter what financial strategy you put in place at the start of your journey, it is likely that as you move through your personal and professional life, your needs, objectives and circumstances will change, and with that, your financial plans need to adapt.

What you can do:

  • Don’t leave your future to chance – review your financial plans this year, next year and every other year after that.
  • Celebrate the wins – you will be surprised how much you are already doing towards achieving your financial goals.
  • Where there are gaps in your plan that need addressing – don’t panic, but equally don’t ignore them – be proactive.
  • If you aren’t already working with someone, find a trusted adviser you get on with, who you can build a long-term relationship with and who will be there along your journey to support you and give you peace of mind that your financial interests are being looked after.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.

The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief generally depends on individual circumstances.

Where to start – 4 important questions:
Do I need a Financial Adviser?

Working with a financial adviser is as essential as appointing an accountant.

There are ‘do it yourself’ options available, but determining the most suitable product and financially secure firm, for potential growth, in alignment to your risk appetite is not easy; can be difficult to devote the necessary time to, and may not be something you want to take responsibility for, without the requisite expertise.

What does a Financial Adviser do?

We work to a three-stage process to provide a bespoke service:

How much will it cost me to work with a Financial Adviser?

As with all financial adviser firms, there is no obligation to choose to work with us as your financial adviser following any initial discussions or questions you may wish to ask.

If you decide you would like to work with us specifically, charges will be explained in full – Westgate discounts our standard charges for members of the Bar.

You should always bear in mind that choosing the right financial adviser to work with is not just about the cost, make sure you also factor in the following considerations:
• Net return
• Level of risk
• Quality of Fund Managers
• Financial security of the company
• Service provided

Why work with us?

Westgate specialises in advising members of the Bar, and with this knowledge and expertise of the sector alongside an understanding of the demands and complexities of a career at the Bar, provides a tailored and flexible service to meet your needs, goals and objectives.

We are a Partner Practice of FTSE 100 company, St. James’s Place, our advice is backed by the St. James’s Place Advice Guarantee* and St. James’s Place are part of the Financial Services Compensation Scheme, providing clients with confidence in the placement of their funds with us.

Our comprehensive and holistic advice addresses all of these needs, through one point of contact.

Protection

The foundations of your financial plan – protecting everything you have achieved so far and your future goals and objectives.

Without appropriate protection in place:

? How would you pay your bills without an income
? How long would your savings last
? If you were to die or become critically ill, how would your family manage financially at an already difficult and stressful time

69% of people in the UK don’t have any life insurance, critical illness cover or income protection to fall back on.(1)

What you can do:

Everyone’s circumstances are unique, but in all cases, speaking to a financial adviser:

  • To establish the suitability of financial protection you may already have in place
  • Identify any gaps that should be covered
  • Put in place appropriate solutions to secure your financial position 

Will ensure you are prepared for any unexpected risks you might face and safeguard the efforts you have made towards building both your current and future lifestyle.

TAKE ACTION AND BOOK YOUR NO OBLIGATION REVIEW TODAY

The value of an investment with St. James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up.  You may get back less than you invested.

The levels and bases of taxation, and reliefs from taxation, can change at any time.  The value of any tax relief is dependent on individual circumstances.

REFERENCES
(1) Aegon UK, Our insight to the nation’s financial wellbeing, 2022.

Pensions

Creating the retirement lifestyle you want.

37.9%

On average women retire with a 40.3% smaller pension pot than the average man’s.(1)

£37,300

This is the annual income a single person requires per year for a comfortable retirement lifestyle.(2)

Whilst the above figures can in part be explained by issues facing women, such as the gender pay gap and maternity breaks, in light of the great steps we are taking in today’s society towards gender equality, it is time that women take control of their future and work to improve this disparity whilst also providing themselves with financial freedom at retirement.

What you can do:

The earlier you start saving for retirement, the easier it will be to create the retirement lifestyle you want. Speaking to a financial adviser they can help you to:

  • Determine what a good retirement looks like for you.
  • Establish a savings plan that is affordable and helps meet your retirement goals.
  • Ensure you are utilising the tax efficient advantages a pension provides.
  • Establish a plan to draw down on your pension when the time comes, that is both the most tax efficient and gives you the financial freedom you have worked hard to achieve. 


TAKE ACTION AND BOOK YOUR NO OBLIGATION REVIEW TODAY

REFERENCES
(1) Achieving Gender Equality in Pensions, Prospect 2021
(2) The Pensions and Lifetime Savings Association/Loughborough University Retirement Living Standards, accessed January 2023.

Building Wealth

Dividing your resources between your short-, medium- and long-term strategies can help ensure your savings and investments help, rather than hinder you when working towards your goals.

Only a third (33%) of women see themselves as investors, much lower than their male counterparts (41%).(1) However, research suggests of those women that are investing, in general, they make better investors than men.(2)

Therefore we must use these investment findings to our advantage when building wealth.

What you can do:

As with all areas of financial planning, everyone’s circumstances are unique, but in all cases, speaking to a financial adviser can help to:

  • Ensure your savings and disposable income, are appropriately balanced between cash and investments.
  • Make the most of tax-efficient allowances available to you.
  • Implement a financial strategy which is suitable, taking into account your risk level and timeframes.
  • Understand the wider economic environment and make rational investment decisions whilst also avoid undue stress.

TAKE ACTION AND BOOK YOUR NO OBLIGATION REVIEW TODAY

REFERENCES
(1) Fidelity International, Global Women and Money Study, 2021.
(2) Nutmeg, Why Women are Better Investors, 2022.

Review your Financial Plan

This year, next year and every other year after that.

No matter what financial strategy you put in place at the start of your journey, it is likely that as you move through your personal and professional life, your needs, objectives, and circumstances will change.

One simple step is all it takes – regularly review with your financial adviser the plans you have in place, to ensure they continue to remain suitable to your individual circumstances and on track to meeting your goals.

What you can do:

  • Celebrate the wins – you will be surprised how much you are already doing towards achieving your financial goals.
  • Where there are gaps in your plan that need addressing – don’t panic, but equally don’t ignore them – be proactive.
  • If you aren’t already working with someone, find a trusted adviser you get on with, who you can build a long-term relationship with and who will be there along your journey to support you and give you peace of mind that your financial interests are being looked after.

TAKE ACTION AND BOOK YOUR NO OBLIGATION REVIEW TODAY

Your home may be repossessed if you do not keep up repayments on your mortgage. The value of an investment with St. James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up.

You may get back less than you invested. Trusts are not regulated by the Financial Conduct Authority.


Tel:
01962 353153

Web: https://westgatewealth.co.uk/specialist-advice/the-legal-profession/the-bar

Email: louise.crush@sjpp.co.uk

*St. James’s Place guarantees the suitability of the advice being given by members of the St. James’s Place Partnership when recommending any of the wealth management products and services available from companies in the Group, more details of which are set out on the Group’s website at www.sjp.co.uk/products.

Westgate Wealth Management Limited is an Appointed Representative of and represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the Group’s wealth management products and services, more details of which are set out on the Group’s website www.sjp.co.uk/products. The titles ‘Partner’ and ‘Partner Practice’ are marketing terms used to describe St. James’s Place representatives.

REFERENCES
[1] Women and Protection during Coronavirus, Zurich, 22 June 2020.
[2]
Figures from LV= Risk Reality Calculator, based on a 40-year-old, non-smoking woman retiring at age 67
[3] A J Bell, 25 February 2019
[4] Retirement Living Standards, Pensions and Lifetime Savings Association, published 2021. Figure is for a standard single person net income. Calculated on an annuity of £4,800 per £100,000 and include an assumed State Pension of £9339 per annum (2021-22). The income figures do not take into account any housing costs. i.e. Mortgage payments or rent. The pension pot assumes any tax-free cash has already been taken.
[5] WealthiHer Network, The Changing Faces of Women’s Wealth, 2021, total number surveyed 22392
[6] Women in Wealth: Managing the Next Decade of Women’s Wealth, Boston Consulting Group 2020 (April 2020)

Her Bar’s top financial tips:

Taxes and Profits

Barristers are responsible for filing their own tax returns as a self-employed worker. Experts tend to advise saving 50% of every brief fee and placing this in savings in order to cover tax payments (both VAT and income tax). *REMEMBER* From April 2019 all businesses with turnover over the VAT Threshold (currently £85,000) are required to maintain digital records as part of HMRC’s scheme Making Tax Digital. 

It’s highly recommended to use an accountant when managing your business finances, but barristers are reminded that any expense incurred “wholly and exclusively in the course of your trade as a barrister” will be deductible in calculating your business profits.

Separate business & personal banking

Having a defined separation between business and personal finances are recommended when self-employed as good common accounting practice. Her Bar recommends setting up a separate business account with a debit and credit card and to have different budget spreadsheets/ accounts if dealing with your finances yourself. This can be done using excel, google sheets, by hand or perhaps through paid software – whichever way you find budgeting easiest.

On a monthly budget don’t forget to include the following expenses:
Income – in the form of billings
⦁ Rent contribution to chambers
⦁ Any tax payments
⦁ Expenses e.g. new technology, books etc…
⦁ Travel costs

Plan ahead of time for career changes

Career changes such as taking a break or achieve the position of a King’s Counsel can have a large effect on your  finances and thus it’s recommended to prepare in advance for any changes, ensuring have a buffer savings account.

Many don’t realise that taking Silk can cause your income to temporarily drop, as although fee briefs increase - many take on less cases annually and the demand can be less than for a ‘Senior Junior’ barrister. A classic accounting tip is to have at least 3-6 months of your essential ‘need’ costs e.g. rent, mortgage, food, bills saved, which can be drawn upon during times of financial uncertainty. Of course, the level of financial security will depend on every individual women barrister’s circumstances.

Consider wealth planning

Women in general invest 40% less money than men do, creating a £15 billion investment gap and results in women in their early 60s having on average £36,000 in their retirement pot, whilst men at the same age are able to enjoy an average pot of £142,000. Her Bar is dedicated to gender parity and encouraging women barrister’s to invest and plan their hard-earned wealth to ensure money grows for them is one way to achieve this.

There is a range of support available for women interested in wealth planning ranging from ‘free resources’ to ‘paid experts’, like Westgate Wealth Management featured above.