Dental Regional Manager, Simon Cosgrove, discusses how the October 2024 budget has impacted practice ownership and sales.

Neil Richardson of Wesleyan

Neil Richardson is a Dental Regional Manager, at Wesleyan Financial Services, guiding a team of dental Specialist Financial Advisers at Wesleyan Financial Services to support dentists, their families, and their practices with financial planning to secure their financial future.

He answers some questions arising from the October 2024 Budget.

“Following the delivery of Rachel Reeves’s first Budget of the new Labour Party government, Practice Plan and Wesleyan Financial Services - have issued a response of the key points for dental professionals.

Iain Stevenson, Head of Dental, at Wesleyan Financial Services (of which Practice Plan is a part) says:

Commercial Manager, Kabir Ahmed, for Wesleyan Financial Services, shares his views on the topical question of whether vicarious liability should be split among associates.

Head of Dental, Iain Stevenson, for Wesleyan Financial Services, discusses what the upcoming budget could potentially mean to dentists and why having a good understanding of your financial position now, could help you get ahead of the game.

Iain Stevenson is Head of Dental at Wesleyan Financial Services and has over 28 years of experience working in financial services.

What has the new Labour government announced so far that could potentially impact financial planning for dentists?

If we consider what has been announced so far, Labour has said it is not planning to raise income tax, National Insurance, VAT and corporation tax. On the face of it, this is a good thing, although, on the other hand, this needs to be balanced against the fact that income tax thresholds are being held and will remain frozen until 2028. This means that more people will start paying tax in the first place and others will be dragged into higher tax bands. Labour has also stated that their plans to end the VAT exemption on private school fees will go ahead – this change may have a significant impact on many of our dental clients whose children attend fee paying schools.

What might change in the future?

At present there is a degree of speculation regarding what was notably absent from Labour’s manifesto and what could therefore potentially change in the future. For example, there has been no specific mention of capital gains tax – this could possibly be an area for reform in the future. Capital gains tax, as we know, is not a tax on income, it's a tax on assets and the sale of assets – something which could perhaps impact the net returns received from the sale of a practice.

Then there is the age-old challenge around pensions – for the 35 years that I have been in this business, pensions have always been a potential target for change and for governments to try and do something in a different way. We know that the lifetime allowance - the maximum amount you're allowed to have in a pension pot or an accumulation of pension pots at retirement - was withdrawn last year, a welcome change that helped to encourage people to continue to save and look after themselves in the long term. Labour has confirmed that it will not reinstate the lifetime allowance, which is good news for dentists; however, another notable omission from the manifesto was around the annual allowance - the amount that you are allowed to contribute to a pension each year. If we look at pensions overall, they're extremely tax efficient and offer a good method of saving – this also means though, that some of the tax allowances may potentially be a target for change, such as pension tax relief to give an example.

The tax-free pension commencement lump sum - this allows you to take a certain percentage (currently 25%) out of your pension as a tax-free lump sum – is another area that has been discussed as a potential for change in recent years. Nothing has been announced however, and this is only speculation. I am hopeful that this government encourages people to save and look to maintain the tax advantages of pension planning and of retirement planning.

What sort of changes would you welcome from the new government?

I would be delighted to see changes made to ISAs to encourage people to invest more, especially so for younger people. If we think of young dentists who are just coming into the profession and how hard they have studied to get started – it would be wonderful to see some sort of scheme specifically for these dentists, to help them save and to encourage them to build solid foundations for their future as well.

What would you encourage dentists to think about now?

I would encourage dentists to look after themselves in the short, medium, and long-term and to not delay making decisions, with regard to their financial planning, in the event that things may change in the future.

My fear is that while there's uncertainty at the moment around what the new government might do, some people may choose to do nothing and that in itself, in the long run, could be even more damaging. By choosing to wait until inflation comes down, until interest rates come down or until the next budget for example, we miss opportunities; and when the autumn statement does come around, it’s likely that other unanswered questions will transpire. There will always be something else, a war that we cannot control or an economic challenge that we weren't expecting, or another reason to delay and before we realise, six months becomes one year, one year becomes five years and so forth, and then the opportunity has gone.

I would encourage dentists to take a step back and use this as a time to reflect and consider the following: What am I trying to do? Am I doing the best I can over the short, medium, and long term?

Speculating over what could happen is an interesting discussion, but it can also create fear. Therefore, we need to be careful that we don't over speculate and just assume that certain things are going to happen. We need to be careful that we don't just keep putting things off and ensure that we continue to make good financial, well-informed decisions.

Bear in mind that the value of investments can go down as well as up and you may get back less than you invest.

Tax treatment depends on individual circumstances and may be subject to change in future.

For further support and guidance to plan on financial planning, speak to a dental Specialist Financial Adviser at Wesleyan Financial Services by booking a no-obligation financial review or calling 0800 316 3784.

About: Iain Stevenson is Head of Dental at Wesleyan Financial Services and has over 28 years of experience working in financial services. Under Iain’s guidance, Wesleyan Financial Service’s Dental segment helps to support dentists, their families, and their practices with financial planning to secure their financial future.

Wesleyan Financial Services Ltd (Registered in England and Wales No. 1651212) is authorised and regulated by the Financial Conduct Authority. Registered Office: Colmore Circus, Birmingham B4 6AR. Telephone: 0345 351 2352. Calls may be recorded to help us provide, monitor and improve our services to you.

Professional Risks Corporate Manager, Thomas Hogan, for Wesleyan Financial Services, outlines the potential impact of business interruption as a result of cyber-attack.

Dental Specialist Financial Adviser, Paul Griffiths, for Wesleyan Financial Services, outlines the new tax rates, new allowances and other changes that have come into effect and explains what these will mean to dentists.

Chancellor of the Exchequer, Jeremy Hunt’s 2024 Spring Budget, was accompanied by a full fiscal statement from the Office for Budget Responsibility (OBR). In any election year, the Chancellor comes under pressure to make announcements that will boost their party in the opinion polls.

Specialist Financial Planner, Graham Hutton, from Wesleyan Financial Services highlights how a practices value plays an important role in retirement planning.

Specialist Dental Financial Adviser, for Wesleyan Financial Services, Stephen Barry, shares his insights on estate planning and how planning sooner rather than later can be beneficial.

Magdelena Harding, Specialist Financial Adviser at Wesleyan Financial Services discusses what practice owners need to think about when refurbishing their practice.

Dental Regional Manager, Neil Richardson from Wesleyan Financial Services shares his thoughts on what all young dentists should be aware of with regard to financial planning.

Simon Cosgrove, Specialist Financial Adviser for Wesleyan Financial Services, highlights the importance of checking where your pension is and how it’s performing…

Neil Richardson, Dental Regional Manager at Wesleyan Financial Services, shares how the Spring Budget’s biggest announcement can be addressed from a financial planning perspective…

Graham Hutton, Specialist Financial Planner at Wesleyan Financial Services, shares a key business management area that poses a significant financial risk to your practice…

Stephen Barry, Specialist Financial Adviser at Wesleyan Financial Services, shares the latest retirement research from the Pensions and Lifetime Savings Association (PLSA)…

Michael Copeland, Dental Regional Manager for Wesleyan Financial Services, reveals sought-after financial nuggets when it comes to life after work for dentists…

Paul Barnfather, Specialist Dental Financial Adviser for Wesleyan Financial Services, shares how there is a cost when delaying financial planning for retirement.

Birmingham-based specialist financial services mutual, Wesleyan has announced it will be supporting 15 dental students from disadvantaged communities with scholarship funding worth over £65,000. Each student will receive scholarship fees of £1,500 per year for the first three years, as well as regular mentoring and practical support both before and at the University of Birmingham.

The need for skilled dentists is more urgent than ever due to the pandemic. Dental surgeries were closed for months in lockdowns and many people are still avoiding routine check-ups for fear of COVID-19. This means people often need more complex treatments for advanced tooth decay and gum disease when they do see a dentist.

Nathan Wallis, Chief of Staff at Wesleyan said: “We’ve always been committed to supporting dentists through every step of their careers, from their first appointment right through to retirement, and we are proud to support 15 students, at the start of their professions. Not only do we care about our communities and the challenges of social mobility, but we also understand that access to funding is critical to getting started at university.”

Professor David Adams, Pro-Vice-Chancellor and Head of College of Medical and Dental Sciences, from University of Birmingham said: “Undergraduate dentistry students study for five years, instead of the usual three for many other subjects; by choosing to go into a field where they can help others, they are making a huge financial commitment. The scholarships from the Wesleyan Foundation will help to ease the pressure on students who would have otherwise struggled to get started at university.”

The scholarships form part of the University of Birmingham’s Pathways to Birmingham (P2B) programme, which has helped over 5,500 young people from underrepresented backgrounds study at the University over the last 20 years. The P2B programmes are targeted at young people who are the first in their family to go to university, are from low-income households, live in a postcode where few people go to university, have a disability, have been in care and/or are estranged from both parents or guardians.

Wesleyan, the specialist financial services mutual, launched the Wesleyan Foundation in 2017 as part of their commitment to supporting great causes that are important to their customer base of doctors, teachers and dentists, and the communities in which they live and work.

The Lifetime Allowance is the total amount of pension savings you can build up tax efficiently over your lifetime. On 6 April 2014 the Lifetime Allowance will be reduced from £1.5 million to £1.25 million. Many dentists could well exceed this due to the generous nature of the NHS Pension Scheme, especially those later in their career. A pension pot of £1.25 million translates roughly into an annual NHS pension income of between £54,300 and £65,500 depending on which section of the NHS pension scheme you are in.

Should I opt out of the NHS Pension Scheme in order to register for fixed protection?