Premier Independant Nov-Dec 2014

MoneyMatters November/December 2014

More good news for

The million pound

GUARANTEE

PENSIONS

ISAs vs Pensions It’s a numbers

game

When will

YOU RETIRE?

THE

Pensions Bill

Lifestyle Protection

Creating Wealth

Tax Rules

Premier Independent Services Head Office, 4a Gildredge Road, Eastbourne, East Sussex, BN21 4RL Web: www.premierindependent.com Email: info@premierindependent.com Reg statement: Premier Independent Services is a trading name of Premier Independent Ltd is an appointed representative of IN Partnership the trading name of The On-Line Partnership Limited which is authorised and regulated by the Financial Conduct Authority Registered in England and Wales no 4441022 Registered Office 4a Gildredge Road Eastbourne East Sussex BN21 4RL

inside inside The The million million pound pound guarantee guarantee PagePage 2 2 When retire?

When will will you you retire?

PagePage 3 3 Pension tax warning Pension tax warning on on withdrawals PagePage cashcash withdrawals 3 3 Pensions The The Pensions Bill Bill

PagePage 4 4

a numbers gamePagePage It’s aIt’s numbers game 5 5 More good news More good news for for pensions pensions PagePage 6 6 Venture Capital Trusts Venture Capital Trusts PagePage 7 7 Inflation-proof Inflation-proof youryour income income PagePage 7 7 Income Drawdown PagePage Income Drawdown 8 8 to transfer HowHow to transfer youryour Stocks & Shares Stocks & Shares ISA ISA PagePage 9 9 Make savings Make youryour savings go go further further PagePage 10 10 Pensions v ISAs Pensions v ISAs

PagePage 11 11

to find HowHow to find youryour hidden treasures PagePage hidden treasures 12 12

Need Need more more information? information?

Simply Simply complete complete and and return return the the information information request request on on page page 12 12

2

Savers Savers could could seesee deposits deposits of up of up to £1m to £1m guaranteed guaranteed as as Bank Bank of England of England looks looks to shake to shake up up savings savings protection protection The Bank The Bank of England of England recently recently announced announced a aThe Bank The Bank of England of England has also has set alsoout setplans out plans shake-up shake-up of how of savers how savers wouldwould be covered be covered if ifto improve to improve protection protection for insurance for insurance policies. policies. their bank their bank went went bust. bust.

The BoE TheisBoE looking is looking for forThe Introduction The Introduction of 100% of 100% covercover on theonvalue the value banksbanks to deposit to deposit up toup £1million to £1million as cover as cover for for of a product of a product wouldwould be introduced, be introduced, up from up from certain certain circumstances. circumstances. the current the current 90% 90% figure.figure.

Such Such movesmoves are asare a consequence as a consequence to to This isThis for isproducts for products wherewhere customers customers remove remove the chaotic the chaotic scenesscenes witnessed witnessed in in wouldwould be disadvantaged be disadvantaged if theyif lost theytheir lost their 20072007 whenwhen there there was awas runaonruntheonNorthern the Northern cover,cover, such as such professional as professional indemnity indemnity Rock Rock bank.bank.

Money Money wouldwould be protected be protected for forinsurance insurance or anor annuity an annuity whichwhich is paying is paying out. out. up toup sixtomonths, six months, with cash with also cash being also being The proposed The proposed increase increase for savers for savers will bear will bear moved moved into another into another bank.bank. a one-off a one-off cost of cost £390million, of £390million, a bill ainbill which in which Presently, Presently, £85,000 £85,000 is protected is protected underunder the the60 to60 80% to 80% wouldwould fall onfalltheonbiggest the biggest banksbanks Financial Financial Services Services Compensation Compensation Scheme Scheme per per the Bank the Bank of England of England statedstated the annual the annual cost cost banking banking licence licence if a bank if a bank or building or building society societyto thetoindustry the industry wouldwould be around be around £50million £50million runs into runstrouble, into trouble, this limit this islimit set isacross set across the theafter after the initial the initial cost. cost.

EU. EU. TheseThese potential potential rule changes rule changes are targeted are targeted The new The £1million new £1million limit would limit would applyapply and andto gotoahead go ahead at theatend theofend 2016 of 2016 with the with the support support money money temporarily temporarily deposited deposited in a in a consultation consultation finishing finishing at theatstart the of start 2015. of 2015.

bank,bank, wherewhere for instance for instance househouse purchase purchase Andrew Andrew Bailey,Bailey, Deputy Deputy Governor Governor of theof the capital capital is in transit is in transit or a personal or a personal injuryinjury claimclaimBank Bank of England of England and Chief and Chief Executive Executive of theof the is in process. is in process.

This would This would covercover roughly roughly 99% 99%Prudential Prudential Regulation Regulation Authority Authority said: ‘These said: ‘These of house of house sales sales in theinUK. the UK. proposals proposals will allow will allow customers customers to have to have As it stands As it stands customers, customers, have have to wait to for wait for continuous continuous accessaccess to thetomoney the money in their in their their money their money up toup seven to seven working working days under days under bank bank account account or receive or receive payment payment from from the the the current the current scheme, scheme, but under but under the new the new FSCS FSCS if thisifisthis notispossible.’ not possible.’ scheme scheme it willitbewill automatically be automatically transferred transferred to to‘Additionally, ‘Additionally, the increase the increase in FSCS in FSCS limitslimits another another financial financial firm to firm avoid to avoid any confusion any confusion for certain for certain typestypes of insurance of insurance will mean will mean or delay or delay whenwhen a business a business is failing. is failing. policyholders policyholders who may who find mayitfind difficult it difficult to to This should This should enable enable fasterfaster accessaccess to their to their obtainobtain alternative alternative cover,cover, or who or are wholocked are locked money. money. into ainto product, a product, have have greater greater protection protection if if The new The bank new bank in which in which the money the money entersenterstheir insurer their insurer fails.’ fails.’ wouldwould be chosen be chosen by a process by a process that would that would see banks see banks ‘bid’ for ‘bid’the forcustomers. the customers.

The articles The articles featured featured in this publication in this publication are for are yourfor general your general information information and useand onlyuse and only areand notare intended not intended to address to address your particular your particular requirements. requirements.

They should They should not be relied not beupon reliedinupon theirin their entirety. entirety.

Although Although endeavours endeavours have been havemade beento made provide to provide accurate accurate and timely and information, timely information, there can there be no canguarantee be no guarantee that such that information such information is accurate is accurate as of the as date of the it date is received it is received or that or it that it will continue will continue to be accurate to be accurate in the future. in the future.

No individual No individual or company or company should should act upon actsuch upon information such information withoutwithout receiving receiving appropriate appropriate professional professional advice after advicea after thorough a thorough examination examination of theirof their particular particular situation. situation.

Will writing, Will writing, buy-to-let buy-to-let mortgages, mortgages, some forms someof forms tax and of tax estate and planning estate planning are notare regulated not regulated by the Financial by the Financial Conduct Conduct Authority. Levels, Authority. Levels, bases ofbases and reliefs of and from reliefs taxation from taxation are subject are subject to change to change and their and value theirdepends value depends on the individual on the individual circumstances circumstances of the investor. of the investor.

2

When Whenwill willyou youretire? retire?

PENSION PENSION TAX TAX

The Government The Government wantswants people people to continue to continue ‘Having ‘Having already already abolished abolished the discriminatory the discriminatory working working until they until are they70are which 70 which in turnin will turn willdefault default retirement retirement age, our age,focus our focus now isnow on is on delaydelay even even further further the age theatage which at which people people actingacting to prevent to prevent individuals individuals beingbeing forcedforced stop working stop working and retire, and retire, according according to plans to plans out ofout theoflabour the labour market market early,early, and where and where we we from from the Department the Department for Work for Work and Pensions. and Pensions. cannot, cannot, supporting supporting older older workers workers to re-enter to re-enter The DWP’s The DWP’s business business plan, plan, published published in in the world the world of employment.’ of employment.’

People People takingtaking advantage advantage of a concession of a concession October October 2014 2014 statedstated ‘good‘good performance’ performance’ on on Successive Successive Governments Governments have have identified identified that will thatallow will allow a pension a pension fund to fund be to used be used this score this score wouldwould be to be raise to raise average average getting getting people people to work to work longerlonger as keyastokey to as a cash as a machine cash machine could could be hit be by hit large by large retirement retirement ages by ages sixby months six months in a year, in a year, putting putting the nation’s the nation’s finances finances on a on a tax bills tax on bills their on withdrawals. their withdrawals. although although it added it added that itthat would it would ‘not normally ‘not normally sustainable sustainable footing. footing.

SomeSome believe believe this isthis theis the The withdrawals system system was was expect’ expect’ changes changes of thisofmagnitude. this magnitude. first steps first steps in theindemise the demise of theofstate the state pension pension The withdrawals announced announced recently recently by the by chancellor the chancellor as as Retirement Retirement ages are agesonare theonincrease the increase and and as weasknow we know it. it. an extension an extension of the of groundbreaking the groundbreaking the Government the Government welcomes welcomes this asthis it knows as it knows Mr Webb Mr Webb said: ‘If said: someone ‘If someone worksworks an extra an extra pension freedom freedom system system that will thattake will take thosethose nearing nearing retirement retirement are generally are generally the the year they year can theyadd can10% add 10% to their to pension their pension for for pension effect effect next April next April 2015.

2015.

Under Under these these higherhigher rate tax ratepayers tax payers and such and losses such losses to theto the life. What life. What we are wedoing are doing is catching is catching up with up with complex complex reforms, reforms, the purchase the purchase of an of an Exchequer Exchequer are hard are to hard replace. to replace.

Recent Recent figures figures decades decades of longer of longer living.’living.’ annuity annuity will no will longer no longer be compulsory be compulsory showshow that men that retired men retired at an at average an average 64.7 64.7 ‘We are ‘Weliving are living longerlonger but the butlabour the labour and instead anyone anyone over the overage theofage 55 of 55 yearsyears of ageofinage 2014, in 2014, compared compared to 64.5 to in 64.5 in market market and people’s and people’s retirement retirement age has agenot has not and instead will be will allowed be allowed to make to make regular regular 2011-12.

2011-12.

Women Women were were retiring retiring at 63.1 at years 63.1 yearsbeen been keeping keeping up. I have up. I have fought fought against against a a withdrawals from from a fund. a fund. of ageofinage 2014, in 2014, compared compared to 62.7 to in 62.7 in vaguevague targettarget of trying of trying to gettopeople get people to work to work withdrawals With With an increasing an increasing number number of of 2011-12.

2011-12. longerlonger to have to have something something more more specific.’ specific.’ unemployed unemployed older older people people manymany may be may be The state The state pension pension age, when age, when people people can can Planned Planned rises in rises theinstate the state pension pension age age beginbegin to draw to draw the state the state pension, pension, is being is being have have been been accelerated accelerated to help to achieve help achieve this. this. tempted tempted into withdrawing into withdrawing cash from cash from raisedraised and has andahas direct a direct influence influence on average on average The current The current state state pension pension age has agebeen has been their pension their pension for everyday for everyday livingliving costs costs retirement retirement ages and agestaxation and taxation income. income. equalised equalised for men for and menwomen and women so that, so by that, by without without assessing assessing the possible the possible pitfalls. pitfalls.

The DWP The DWP acknowledges acknowledges that women’s that women’s state state2018,2018, everyone everyone will only will be only able be to able claim to claim a a In some In some circumstances, circumstances, tax attax theatrate the rate pension pension age isage rising is rising far faster far faster than for thanmen. for men.state state pension pension whenwhen they turn they 65, turnwhich 65, which is is of 45% of 45% couldcould be deducted be deducted beforebefore the the The faster The faster rise inrise theinstate the state pension pension age for age for the current the current level for levelmen. for men. payment payment is made is made by thebypension the pension women, women, is being is being equalised equalised with that withof that men of men UnderUnder Government Government plans,plans, the age thewill agethen will thencompany, company, even even though though the recipient the recipient is is at 65 at by65 2018. by 2018.

This isThis mostly is mostly responsible responsible for forrise torise 66to in 66 2020. in 2020.

In 2026 In 2026 it willitstart will to start riseto rise not ornot hasornever has never been been a higher a higher rate rate the faster the faster rise inrise women’s in women’s average average againagain so that soitthat hitsit67 hits by67 2028. by 2028. taxpayer. taxpayer.

This may This be may because be because an an retirement retirement ages. ages.

In 2012, In 2012, George George Osborne Osborne confirmed confirmed that that emergency emergency tax code tax code couldcould be used be used by by The Pensions The Pensions Minister Minister SteveSteve WebbWebb the Government the Government will use willanuse Office an Office for Budget for Budgetthe pension the pension company company if it has if itinsufficient has insufficient suggests suggests it’s not it’ssimply not simply the Government the Government Responsibility Responsibility reportreport to create to create a solida solid link link knowledge knowledge of its of customer’s its customer’s financial financial pushing pushing people’s people’s retirement retirement ages ever ages ever between between the state the state pension pension age and agerising and rising life lifeposition. position. upward upward it’s other it’s other factors factors too. too. expectancy. expectancy.

It is likely It is likely to seetothe seestate the state However, However, only 25% only 25% of theoffund the will fundbe will be He said: He ‘Unplanned said: ‘Unplanned exit from exit from the labour the labour pension pension age rise agetorise 70to and 70beyond. and beyond. tax free. tax Any free.further Any further sums sums takentaken out will out will market market can have can have catastrophic catastrophic consequences consequences So theSotime the has timenever has never been been more more right right to to be subject be subject to taxtobased tax based on theon the for individuals’ for individuals’ livingliving standards standards into old intoage, old age,plan for planyour for own your personal own personal pension pension as it as it individual’s individual’s total earnings total earnings for that fortax that tax and comes and comes at great at great cost to cost thetoeconomy, the economy, seemsseems the state the state pension pension couldcould be a long be a way long way bill. People bill. People who do who wish do to wish withdraw to withdraw business business and society and society as a whole’. as a whole’. off inoff theinfuture. the future. fundsfunds from from their pension their pension can avoid can avoid having having to paytoemergency pay emergency tax bytax ensuring by ensuring that the thatpension the pension provider provider is given is given proofproof of theofindividual’s the individual’s tax code tax code for the for the relevant relevant year. year.

If an emergency If an emergency code code is used is used and too and too muchmuch tax istax deducted is deducted from from a withdrawal, a withdrawal, then this thencan thisbecan reclaimed. be reclaimed.

But Revenue But Revenue and Customs and Customs does does not make not make immediate immediate refunds. refunds.

The possibility The possibility that athat large a large chunkchunk of taxofcould tax could be taken be taken is yetis yet another another reminder reminder of how of carefully how carefully people people must must plan be plan before be before seeking seeking to to benefit benefit from from the new the pension new pension freedoms. freedoms.

warning warning onon cash cash withdrawals withdrawals

The The Government Government wants wants

to to raise raise thethe average average retirement retirement ageage byby sixsix months months every every year year

3

3

Pensions PensionsBill Bill Details Details of theofnew the pension new pension reforms reforms first first In addition, In addition, whilstwhilst your money your money is in the is in the Investors Investors interested interested in taking in taking advantage advantage of of announced announced in theinMarch the March Budget Budget have have been beenpension, pension, it canitremain can remain invested. invested.

So, if So, yourif yourthe new the freedoms, new freedoms, but wanting but wanting to take to their take their set out setinout theinTaxation the Taxation of Pensions of Pensions Bill Bill investments investments perform perform well you wellcould you could end up end uptax-free tax-free cash now cash and nowstart and start drawing drawing from from published published on 14on October 14 October 2014.2014. with more with more money money available available to withdraw to withdraw their their pension pension beforebefore April April 2015 2015 couldcould Chancellor Chancellor George George Osborne Osborne said people said people over time. over time.

On the Onother the other hand,hand, if yourif your consider consider income income drawdown drawdown now and now and should should “be able “be to able access to access as much as much or as or as investments investments perform perform badlybadly you could you could end end benefit benefit from from extraextra freedom freedom from from next year. next year.

Freedom whenwhen you pass you pass your your pension pension on on little of little their of their pension pension as they as want they want and pass and pass up with up less withmoney less money available available to withdraw. to withdraw.Freedom Freedom Freedom in how in how you take you take your your pension pensionUntil Until now there now there was little was incentive little incentive to to on their on their hard-earned hard-earned pensions pensions to their to their The Chancellor The Chancellor has described has described pensions pensions as as preserve preserve a pension a pension fund,fund, because because on death on death family’s family’s tax free.” tax free.”

People People should should be “free be “free to to similar to bank to bank accounts. accounts.

This isThis because is because it could it could be subject be subject to a punitive to a punitive 55% 55% choose choose whatwhat they do they with do their with their money”. money”. similar from from April April 2015,2015, if you’re if you’re aged aged at least at least 55, 55,pension pension ‘death‘death tax’. tax’.

WhatWhat does does this freedom this freedom meanmean in in be able be to able decide to decide how to how make to make This has Thisnow has changed. now changed. practice? practice?

How How will retirement will retirement be effected be effected you’llyou’ll withdrawals withdrawals from from your pension: your pension: From From April April the 55% the 55% pension pension ‘death‘death tax’ tax’ after after April April 2015?2015?

1. the Takewhole the whole fund fund as cash as in cash oneingo one gowill be will abolished. be abolished.

WhenWhen you die, youany die,money any money The new The rules new rules applyapply to investors to investors aged aged at at 1. Take 2. smaller Take smaller lump lump sums,sums, as and aswhen and whenleft inleft your in pension your pension can be can passed be passed on toon to least least 55 who 55 have who have a personal a personal or stakeholder or stakeholder2. Take you like your beneficiaries. your beneficiaries.

They They will benefit will benefit from from the the pension, pension, a SIPP, a SIPP, an AVC an or AVC anyorother any other defined defined you like 3. aTake regular a regular income income (via income (via income windfall windfall subject subject to income to income tax attax their at their contribution contribution pension pension and come and come into effect into effect 3. Take drawdown drawdown – where – where you draw you draw directly directlymarginal marginal rate, tax rate,free taxor free subject or subject to a 45% to a 45% from from April April 2015.2015.

How How you take you take your your 25% 25% tax-free tax-free cash cash from from the pension the pension fund,fund, whichwhich remains remainstax (iftax you(ifdie youafter die after age 75 age and 75your and your MostMost people people can take can up take toup 25% to 25% tax-free tax-free invested invested – or via – oranvia annuity an annuity – where – where beneficiaries beneficiaries take your take pension your pension as a lump as a lump cash from cash from their their pension. pension. you receive you receive a secure a secure income income for life) for life) sum).sum).

WhatWhat happens happens if I’mifalready I’m already drawing drawing From From April April 2015 2015 you’llyou’ll be able be to able decide to decide PleasePlease remember remember though, though, any any my pensions? my pensions? how you howtake you that take tax-free that tax-free cash:cash: take ittake all it allwithdrawals withdrawals in excess in excess of theoftax-free the tax-free If you’re currently currently in income in income drawdown, drawdown, in oneingo one upfront go upfront or have or have a portion a portion of anyof anyamount amount will be will taxed be taxed at your at marginal your marginal rate rateIf you’re you should be able be to able benefit to benefit from from the new the new withdrawals withdrawals you make you make tax free. tax free. (the highest (the highest rate of rate income of income tax you taxpay). you pay). you should rules rules from from April April 2015.2015.

So, someone So, someone with awith pension a pension worthworth Both Both annuities annuities and income and income drawdown drawdown are are If you’ve If you’ve used used the whole the whole of your of pension your pension £100,000 £100,000 will have will have the choice the choice of: of: already already available available underunder current current rules.rules. buy annuity, an annuity, it’s unlikely it’s unlikely you’llyou’ll be be Taking Taking the £25,000 the £25,000 tax-free tax-free cash all cash at all once, at once,However, However, whilstwhilst currently currently the income the income you youto buytoan affected affected by the by changes. the changes. with any withsubsequent any subsequent withdrawals withdrawals taxedtaxed as ascan take can through take through income income drawdown drawdown is is Investing income; income; usually usually subject subject to a maximum to a maximum decided decided by by Investing The flexibility new flexibility is making is making pensions pensions Making Making a series a series of withdrawals of withdrawals over time over time the Government’s the Government’s Actuarial Actuarial Department Department The new extremely attractive. attractive.

You can Youbuild can build up your up your and receiving and receiving 25% 25% of each of each withdrawal withdrawal tax tax(known (known as theas‘GAD the ‘GAD limit’),limit’), from from April April 2015 2015extremely pension pension fund,fund, knowing knowing from from age 55 age you 55can you can free. For free.instance, For instance, someone someone making making lump lump therethere will be will nobe limits. no limits. not draw only draw on your on savings your savings without without the the sum withdrawals sum withdrawals of £20,000 of £20,000 wouldwould receive receive It willItbe will your be responsibility your responsibility to decide to decide not only current restrictions, restrictions, but also but pass also on pass any on any £5,000 £5,000 of each of each withdrawal withdrawal tax free. tax Equally, free. Equally, how much how much income income to take, to take, bearing bearing in mind in mindcurrent unused savings savings to beneficiaries’ to beneficiaries’ tax tax someone someone takingtaking an income an income of £1,000 of £1,000 a a the more the more you take, you take, the greater the greater the risk theyou risk youunused efficiently on death. on death.

However, However, with the with the month month wouldwould receive receive £250 £250 of that of payment that payment will run willout runofout money of money later later in life.inWe life.don’t We don’tefficiently freedom comescomes the responsibility the responsibility of of tax free. tax Please free. Please note:note: this will thisnot willbenot be knowknow how long how we’ll long we’ll live, so live, it’ssoimportant it’s importantfreedom managing your pension your pension responsibly. responsibly. available available through through an annuity. an annuity. to think to think carefully carefully aboutabout how much how much of your of yourmanaging The second The second optionoption couldcould be attractive be attractive pension pension you can youafford can afford to take to out. take out. because because it could it could help you helpmanage you manage your tax your tax liability. liability.

4

4

It’s It’saa

numbers numbers

GAME GAME TheThe world world of finance of finance is always is always on the on the move, move, knowing knowing the the keykey numbers numbers thatthat change change is essential. is essential.

JustJust when when we have we have got got usedused to one to one set of setallowances of allowances andand taxtax breaks breaks along along comes comes the the Government Government andand shakes shakes everything everything up again. up again. for thefornext the tax nextyear taxofyear 2015-16 of 2015-16 and then and rises then rises Budgets Budgets set byset thebyChancellor the Chancellor George George Osborne Osborne the nil-rate the nil-rate band band threshold, threshold, whichwhich is £325,000 is £325,000 line inflation, with inflation, then averaging then averaging 2.5 %,2.5 %, for anfor alwaysalways deliverdeliver a series a series of changes of changes that leave that leave in lineinwith individual. an individual. and 5% andgrowth 5% growth a year.a This year.isThis onlyisaonly model, a model, However, peoplepeople overwhelmed overwhelmed and confused. and confused.

We look We at look at However, IHT isIHT notispayable not payable whenwhen an estate an estate but it but doesit show does show the strength the strength of constant of constant passespasses the key thenumbers key numbers to hopefully to hopefully encourage encourage you toyou to between between a husband a husband and wife andor wife from or from saving. save more save more or avoid or avoid any hits anythat hitswill thateat willinto eat into saving. one civil onepartner civil partner to another. to another.

Married Married couples couples or or your pocket. your pocket. civil partners can transfer can transfer the unused the unused element element £1.25 £1.25 million million Lifetime Lifetime Allowance Allowance civil partners ThereThere are 1128 are 1128 tax reliefs tax reliefs available available to to of their of IHT-free their IHT-free allowance allowance to their to spouse their spouse does put doesthe putbar theonto bar how onto much how much you can yousave can save individuals individuals and businesses, and businesses, according according to theto the into ainto they die. theyAdie. couple A couple wouldwould therefore therefore have have pension, a pension, this limit this islimit on the is onamount the amount of of whenwhen latestlatest reportreport by thebyNational the National Audit Audit Office.Office. tax relief total useable tax allowance tax allowance of £650,000 of £650,000 by by tax relief you are youallowed. are allowed.

BreakBreak through through this thisa totala useable Most Most of theofpopular the popular including including ISAs, pensions ISAs, pensions doubling up their up allowance their allowance this financial this financial year. year. £1.25m £1.25m limit, limit, without without protecting protecting yourself yourself and anddoubling and the andinheritance the inheritance tax nil-rate tax nil-rate band band threshold threshold you will youpay willa pay tax achange tax change of 55% of 55% on anyon any £11,000 £11,000 Capital Capital GainsGains Tax (CGT) Tax (CGT) is an is an are shown are shown belowbelow excess. excess. allowance allowance that offers that offers everyone everyone the ability the ability to to £15,000 £15,000 You can Yousave can £15,000 save £15,000 into an into an Individual Individual protection protection is available is available if the ifvalue the valuemake make a profit a profit of up of to up £11,000 to £11,000 in thisintax thisyear tax year ISA each ISA year eachfrom year July from1July 2014.

1 2014.

It is the It is the of your of pension your pension benefits benefits at April at 5April 2104 5 2104 without without payingpaying CGT and CGTthe andtax thedoes tax not doesapply not apply maximum maximum amount amount you can yousave can into saveainto tax-a tax- exceeded exceeded £1.25£1.25 million. million.

This provides This provides you with you with to transfers to transfers of assets of assets between between married married couples couples advantaged advantaged each tax eachyear tax(from year (from April 6April to 6 to your own your personal own personal lifetime lifetime allowance allowance equalequal to toor civilorpartners. civil partners.

Careful Careful management management meansmeans a a April 5).

April 5). your existing your existing savings savings at theattime, the subject time, subject to a to acouplecouple can, therefore, can, therefore, make make a profit a profit of £22,000 of £22,000 The maximum The maximum ISA allowance ISA allowance of £15,000 of £15,000 will will maximum maximum of £1.5 of million. £1.5 million. and pay andnothing. pay nothing.

Beyond Beyond this basic this basic rate rate be universal. be universal.

You can Youput canit put all init cash, all in cash, all in all in £26,760 taxpayers taxpayers pay 18%, pay 18%, while while higher higher rate payers rate payers £26,760 By leaving By leaving it lateityou latewould you would stocksstocks or shares or shares or a mix or aofmix them of them both. both. pay 28%. pay 28%. have to have invest to invest £26,750 £26,750 each year eachofyear your of your 305305 months months It would It would take 305 take 305 current current salarysalary if youifstarted you started a pension a pension at theat the £6,000 £6,000 SellingSelling personal personal possessions, possessions, months months to save to £1 save million £1 million in a stocks in a stocks and and age ofage 50 of to 50 be to able beto able achieve to achieve a retirement a retirement including including books,books, furniture, furniture, old coins, old coins, paintings, paintings, sharesshares ISA, according ISA, according to calculations to calculations by by income income at 65 at of 65 £20,000 of £20,000 per year, per assuming year, assuming a aetc, for etc, less forthan less £6,000, than £6,000, any profit any profit is tax-free. is tax-free. investment investment manager manager Fidelity.

Fidelity.

This assumes This assumes an angrowth growth rate ofrate 5.5% of 5.5% and inflation and inflation at 2.5%. at 2.5%. The sale Theissale CGTis exempt, CGT exempt, if the ifobjects the objects are are investment investment todaytoday of theof£15,000 the £15,000 limit. limit. owned owned and sold and by sold a married by a married couple, couple, the the £325,000 £325,000 Inheritance Inheritance tax is tax charged is charged at at This example This example assumes assumes the ISA thelimit ISA islimit frozen is frozen 40% 40% exemption exemption increases increases to £12,000. to £12,000. on theonvalue the value of an of individual’s an individual’s estateestate over over The value The value of your of investment your investment and the andincome the income from from it canitgo can down go down as well as as well upas and upyou andmay you not mayget notback get the backoriginal the original amount amount invested. invested.

Past performance Past performance is notisa not reliable a reliable indicator indicator for future for future results. results.

PleasePlease contact contact us forusfurther for further information information or if you or ifare youinare anyindoubt any doubt as to as theto the suitability suitability of an of investment. an investment.

5

5

More Moregood goodnews newsfor for Pensions Pensions Following Following the pension the pension reforms reforms introduced introduced in theinBudget the Budget this year, this year, This includes: This includes: the Government the Government has recently has recently announced announced further further changes changes to thetotax the tax• Pension • Pension fundsfunds paid out paidfrom out from drawdown drawdown beforebefore or after or after age 75 age 75 treatment treatment of pensions of pensions on death. on death. from from a standard a standard pension pension will not willbenot subject be subject to theto55% the 55% tax charge tax charge • Drawdown fundsfunds can be can paid be to paid inheritors to inheritors as pension as pension assetsassets tax tax TheseThese new changes, new changes, whichwhich are yet aretoyet be to confirmed, be confirmed, will make will make it it • Drawdown possible possible for money for money purchase purchase pension pension funds,funds, including including thosethose already already free free • Income • Income takentaken from from inherited inherited pension pension fundsfunds is taxisfree taxiffree the if the in drawdown, in drawdown, to be to passed be passed on toon beneficiaries to beneficiaries free offree tax.of tax. member member died before died before 75 75 This should This should encourage encourage investors investors to maximise to maximise their pension their pension The tables belowbelow showshow the difference the difference between between old and oldnew and rules new rules contribution contribution allowances. allowances.

You can Younow can save now into saveyour into pension your pension fund,fund, The tables at a glance. knowing knowing you can younow can draw now draw on allon of all your of savings your savings from from age 55, age 55, at a glance.

The Inheritance Tax (IHT) Tax (IHT) rules rules remain remain the same the same for both for both old and old and but you butcan youalso can pass also on passany onunused any unused savings savings to beneficiaries’ to beneficiaries’ tax free tax freeThe Inheritance new rules new rules wherewhere pensions pensions are usually are usually held in held trust in outside trust outside your your on death. on death. and therefore and therefore inheritance inheritance tax isn’t tax usually isn’t usually applied. applied.

At present, At present, it is only it is possible only possible to pass to on passa pension on a pension as a tax-free as a tax-free estateestate Generally pension pension providers providers should should allowallow you toyou nominate to nominate your your lump lump sum ifsum youifdie youbefore die before the age theofage 75ofand 75you andhave you have not taken not taken any anyGenerally beneficiaries, beneficiaries, whenwhen you begin you begin your pension. your pension.

It should It should also be also possible be possible tax-free tax-free cash or cash income. or income.

If youIfhave, you have, the fund the is fund subject is subject to a 55% to a 55% tax tax to change to change the beneficiary the beneficiary should should your circumstances your circumstances change change over over charge. charge. time. time.

This nomination This nomination is notisusually not usually legallylegally binding; binding; however however it does it does As of As April of April 2015,2015, regardless regardless of when of when you die, youyou die,can youpass can on passyour on your your provider your provider awareaware of your of wishes. your wishes. pension pension tax free, tax provided free, provided your beneficiaries your beneficiaries keep keep the money the money in a in a makemake It is expected that the thatnew the rules new rules will bewill effective be effective from April from April 2015.2015. pension. pension.

Should Should they decide they decide to make to make withdrawals, withdrawals, they only theypay onlyincome pay incomeIt is expected The information The information currently currently available available suggests suggests the announced the announced death death tax attax their at highest their highest marginal marginal rate, providing rate, providing you die youafter die after age 75. age 75. benefits benefits flexibility flexibility will apply will apply to death to death benefits benefits paid after paid April after April 2015.2015.

If youIfhave you have already already decided decided to gotointo godrawdown, into drawdown, there there should should be be no advantage no advantage in delaying. in delaying.

Even Even if the ifworst the worst happened happened and you anddied you died beforebefore April April 2015,2015, your beneficiaries your beneficiaries couldcould opt toopt delay to delay takingtaking any any lump lump sum payments sum payments until after until April after April 2015.2015.

Death Death BEFORE BEFORE age age 75 75 ThoseThose currently currently in income in income drawdown drawdown should should be able be to able benefit to benefit Old rules Old rules NewNew rulesrules from from the new the rules new rules from April from April 2015.2015.

Tax free Tax free or 55% or 55% tax tax Lump Lump sum sum Tax free Tax free ThoseThose who have who have used used their pension their pension to buytoan buy annuity, an annuity, will bewill be in drawdown if in if drawdown unaffected unaffected by the by new the changes. new changes.

An annuity An annuity will stop will on stop your on death your death Tax free if taken Tax free if taken via via Taxed as income Taxed as income unless unless you have you have chosen chosen to protect to protect the income. the income. drawdown drawdown Income Income

(viaannuity an annuity (via an or or Taxed as income Taxed as income if if drawdown) drawdown) taken viaannuity an annuity taken via an Option available Option available only only Option available Option available to to to dependents to dependents any beneficiary any beneficiary

Death Death AFTER AFTER age age 75 75 Old rules Old rules

NewNew rulesrules Subject to 45% Subject to 45% tax tax Lump Subject to 55% (unless Lump sum sumSubject to 55% tax tax(unless paid paid as as income) income) Taxed as income Taxed Taxed as income Taxed as income as income Income Option Option available Option available Income available only only Option available to to to dependents any beneficiary to dependents any beneficiary DeathDeath benefits benefits may be may subject be subject to a lifetime to a lifetime allowance allowance tax charge. tax charge.

6

6

‘Inflation-proof’ ‘Inflation-proof’ your your income income Investing Investing in theinstock the stock market market is a popular is a popular way to way generate to generate additional additional income income for for thosethose in retirement, in retirement, especially especially with with interest interest rates rates likelylikely to remain to remain low for lowthe for the foreseeable foreseeable future. future.

Shares Shares offer offer the potential the potential for significant for significant long-term long-term income income growth. growth.

This isThis vital is for vital for thosethose who may who rely mayon relythe onincome the income from from their their investments investments for 20foryears 20 years or longer. or longer.

How we Howinvest we invest our capital our capital has expanded has expanded shares. shares.

An income-tax An income-tax rebaterebate of up of to 30% up to 30% is isEven Even a relatively a relatively low rate low of rate inflation of inflation will will dramatically dramatically over the overyears. the years. available available on theoninitial the initial investment, investment, meaning meaning significantly significantly erodeerode spending spending powerpower over the over the Options Options rangerange from from individual individual company company a subscription a subscription of £10,000 of £10,000 in effect in effect costs costs you you long long term,term, so having so having a fixed a fixed income income can be can be shareshare ownership ownership to more to more unfamiliar unfamiliar territory. territory. £7,000. £7,000.

Up toUp £200,000 to £200,000 can becan invested be invested each eachdisastrous. disastrous.

One “in Onevogue” “in vogue” optionoption is Venture is Venture Capital Capitaltax year tax and yearthere and there is no is capital no capital gainsgains tax totax to By investing By investing in companies in companies whichwhich pay pay TrustsTrusts (VCTs), (VCTs), they trade they trade on theonLondon the London StockStock pay on pay theondisposal the disposal of VCTofshares.

VCT shares.

Any Any risingrising dividends, dividends, investors investors can ‘inflationcan ‘inflationExchange Exchange (LSE) (LSE) alongside alongside otherother publicly publicly dividends dividends are also arepaid also free paidoffree tax.of tax. proof’proof’ their their income income – though – though of course of course it it listedlisted companies. companies.

They aim Theytoaim produce to produce a a To qualify To qualify for the for30% the 30% income income tax relief, tax relief, also means also means the value the value will inevitably will inevitably profitprofit by investing by investing in small, in small, oftenoften unquoted, unquoted,you must you must remain remain invested invested for a minimum for a minimum of of fluctuate fluctuate alongalong with with the share the share price.price.

TheseThese companies companies usually usually needing needing more more investment investmentfive years. five years.

Investors Investors mightmight consider consider VCTs,VCTs, are exactly are exactly the types the types of companies of companies sought sought to help to them help them grow grow their business. their business. once once they have they have used used up their up pension their pension and and by equity income income funds,funds, whichwhich principally principally VCT managers VCT managers are extremely are extremely experienced; experienced; ISA allowances, ISA allowances, givengiven the tax thebreaks tax breaks they they by equity invest invest in companies in companies with with an attractive an attractive they use theythis useexperience this experience to help to the helpbusiness the business offer. offer. dividend. grow,grow, takingtaking a hands-on a hands-on approach, approach, to theto the VCTs VCTs do fitdo in an fit in existing an existing portfolio portfolio and and dividend.

Furthermore, thesethese fundsfunds also offer also offer the the investee investee company company by taking by taking a seata on seat theon the should should be viewed be viewed as a pre-retirement as a pre-retirement plan to plan to Furthermore, potential potential for capital for capital growth, growth, as they as have they have board.board. help build help build up tax-free up tax-free income income until until an in-built ‘buy low, ‘buy sell low,high’ sell high’ discipline. discipline.

VCTs,VCTs, don’tdon’t investinvest purelypurely for growth. for growth. retirement. retirement.

ManyMany investors investors do consider do consider VCTs VCTs an in-built VCTs VCTs oftenoften provide provide part of part their of investment their investmentas very as high very risk highand, risk therefore, and, therefore, they are they are Investing Investing whenwhen a company a company is out-of-favour, is out-of-favour, as a loan as a to loan thetomerging the merging business business with awith a oftenoften completely completely overlooked overlooked or avoided. or avoided. and the andshare the share price price depressed, depressed, should should smaller smaller amount amount in shares. in shares.

Such Such loansloans can can ThereThere are risks, are risks, but itbut is spread it is spread by investing by investingresultresult in a boosted in a boosted yield.yield.

If theIfvalue the value of theof the help generate help generate an income, an income, whichwhich is paidis to paid to in a portfolio in a portfolio of companies. of companies.

SinceSince VCTs VCTs were were stockstock is then is then recognised recognised by thebywider the wider investors investors in theinVCT. theWhen VCT. When underlying underlying introduced introduced in theinmid-1990s, the mid-1990s, managers managers have havemarket, market, the share the share price price rises rises and the andyield the yield businesses businesses are sold, are asold, portion a portion of anyofgain any isgain isbecome become more more experienced experienced in their in field their and field and falls. falls.

The manager The manager couldcould then then sell the sellstock the stock paid to paid VCTtoinvestors VCT investors as a dividend. as a dividend. oftenoften have have a vested a vested interest; interest; so byso investing by investing at a profit, at a profit, having having enjoyed enjoyed an elevated an elevated ManyMany VCTs VCTs pay apay tax-free a tax-free dividend dividend of of their own their capital own capital alongside alongside otherother investors, investors, income income stream. stream.

If markets If markets go through go through a a around around 5%. The 5%.majority The majority of returns of returns from VCT from VCT they have they have their own their risk ownand riskreputation and reputation to to toughtough patchpatch the income the income usually usually falls falls investment investment comecome from from dividends, dividends, ratherrather than than consider. consider. proportionately, proportionately, meaning meaning that the thatlonger the longer capital capital growth. growth.

However, However, the fact theremains fact remains If youIfhave you have utilised utilised your ISA yourallowance ISA allowance and and valuevalue is eroded. is eroded. that investing that investing in smaller in smaller companies companies is higher is higher contributed contributed fully to fully your to pension, your pension, you may you may term term

VCTs VCTs

risk and riskVCTs and VCTs are aimed are aimed at more at more want want to take to atake closer a closer look at look VCTs. at VCTs. sophisticated sophisticated investors. investors.

The Government The Government offersoffers generous generous tax relief tax relief to those to those who invest who invest in new in issues new issues of VCTof VCT The value The value of your of your investment investment and the andincome the income from from it canitgo can down go down as well as as well upas and upyou andmay you not mayget notback get back the original the original amount amount invested. invested.

Past performance Past performance is notisanot reliable a reliable indicator indicator for future for future results. results.

Please Please contact contact us forusfurther for further information information or if you or ifare youinare anyin any doubtdoubt as to as thetosuitability the suitability of anof investment. an investment.

7

7

Income IncomeDrawdown Drawdown The The alternative alternative toto buying buying anan annuity annuity at at retirement retirement is is Income Income Drawdown.

Drawdown.

You You draw draw a variable a variable income income directly directly from from thethe pension pension fund fund and and thethe balance balance stays stays invested invested as as you you choose. choose. you should you should still receive still receive an income an income whilstwhilst you wait you for waitthe forcapital the capital to to recover. recover.

Use Diversification Use Diversification Smoothing Smoothing the volatility the volatility of shares of shares can be can found be found by anby exposure an exposure through through a collection a collection of equity of equity income income funds.funds.

TheseThese aim toaim invest to invest in in firms firms that have that have the potential the potential for rising for rising dividends dividends over the overlong the term, long term, whilstwhilst offering offering potential potential for your for capital your capital to grow. to grow.

The fund The manager fund manager spreads spreads your money your money acrossacross a range a range of dividend-paying of dividend-paying companies, companies, spreading spreading risk. risk.

BeingBeing in total in total control control of theofpension the pension fund is fund what is what gives gives income income Additionally, Additionally, to diversify to diversify your income your income further further you could you could also also drawdown drawdown its appeal, its appeal, but itbut comes it comes with considerable with considerable risks, risks, because becauseconsider consider bond bond funds,funds, both both corporate corporate and Government and Government bonds. bonds. it’s you it’swho you decides who decides wherewhere to invest, to invest, and how and much how much income income to take. to take.

The income The income they provide they provide is stillisreasonably still reasonably attractive attractive in theincurrent the current ManyMany are now are choosing now choosing income income drawdown drawdown for a for variety a variety of of low interest low interest rate environment, rate environment, keeping keeping in mind in mind an unexpected an unexpected jump jump reasons. reasons.

We look We at look some at some potential potential investment investment strategies strategies to consider. to consider. in interest in interest rates rates or rising or rising inflation inflation expectations expectations wouldwould generally generally resultresult TakeTake tax-free tax-free cash cash with with no income no income in prices in prices fallingfalling but, the but,income the income should should remain remain the same. the same.

Pensions Pensions normally normally allowallow 25% 25% to be to taken be taken tax-free tax-free as cash as from cash from your your With With such asuch consideration a consideration an option an option couldcould be strategic be strategic bond bond funds,funds, pension, pension, leaving leaving the rest theinvested rest invested in income in income drawdown. drawdown.

ThereThere is no is nowherewhere the manager the manager has the hasfreedom the freedom to seek to out seekthe outbest the best requirement requirement to take to an take income an income if youifdon’t you don’t need need it. it. opportunities, opportunities, whilewhile also having also having the ability the ability to offer to offer somesome shelter shelter in in A option A option couldcould be to be wait to for waitthe formore the more flexible flexible pension pension rules rules to to tougher tougher times.times. comecome into effect into effect in April in April 2015.2015.

Looking Looking to maximise to maximise income income If youIfdon’t you don’t intendintend to take to an take income an income until later until in later retirement, in retirement, you youCapital Capital withdrawals withdrawals provide provide big injections big injections of income of income but there but there are are can probably can probably affordafford to be to a little be a more little more aggressive aggressive in your in investment your investmentinherent inherent risks with risks this withapproach, this approach, withdrawing withdrawing capital capital whenwhen your your approach, approach, keeping keeping the fund the invested fund invested in theinstock the stock market market via via portfolio portfolio is in decline is in decline will compound will compound your losses. your losses. investment investment funds,funds, or if you or ifhave you have the appetite, the appetite, directly directly in shares. in shares.

ThereThere are steps are steps you can youtake can to take reduce to reduce this risk. thisThe risk.first Theisfirst to is to Retirement Retirement can last can20-30 last 20-30 years,years, over this overperiod this period of time of shares time shares have have ensure ensure your portfolio your portfolio is diversified is diversified and not andentirely not entirely dependent dependent on theon the historically historically out-performed out-performed otherother asset asset classes classes such as such cash, as cash, or gilts or gilts performance performance of theofstock the stock market. market.

FundsFunds have have the potential the potential to to (Government (Government bonds). bonds).

Remember, Remember, though, though, there there are noareguarantees no guarantees perform perform in a variety in a variety of market of market conditions. conditions. and any andinvestments any investments can fall caninfall value in value as well as as well riseassorise yousocould you could get get Consider Consider holding holding at least at least a year’s a year’s required required income income in cash. in cash.

If If back back less than less what than what you invest. you invest. markets markets fall, having fall, having a casha buffer cash buffer to draw to draw upon upon allowsallows you toyou watch to watch TakeTake a regular a regular income income market market trends, trends, whilstwhilst still receiving still receiving an income. an income.

If yourIf plan your isplan to take is to an take income an income from from your drawdown your drawdown fund then fund your then yourReducing Reducing or stopping or stopping income income withdrawals withdrawals temporarily temporarily whilstwhilst the the investments investments need need to keep to keep pace pace with your with withdrawals, your withdrawals, or youormay you may markets markets are inare turmoil in turmoil is alsois aalso strategy a strategy you can youadopt, can adopt, thus thus exhaust exhaust your fund. your fund.

If youIftake you too takemuch too much and investments and investments don’tdon’t do do preserving preserving your funds your funds longerlonger term.term. as well as as well youasthought, you thought, your fund your value fund value and future and future income income will fall. will fall. Mixing Mixing your your income income Investing Investing solelysolely in cash in will cashprotect will protect the value the value of theoffund the short fund short term,term,The main The main point point to income to income drawdown drawdown is theisincome the income is variable is variable and and but isn’t but so isn’t suitable so suitable long term long term as it isasmuch it is much less likely less likely to produce to produce the the not secure. not secure.

Yet inYet retirement, in retirement, it’s good it’s good to have to have somesome level of level secure of secure level of level returns of returns required required to sustain to sustain your withdrawals. your withdrawals. income income to cover to cover basic basic livingliving expenses expenses and bills. and bills.

An option An option wouldwould be to be draw to draw the income the income generated generated by your by your You could You could use some use some of your of pension your pension to provide to provide the security the security of an of an investments, investments, leaving leaving the investments the investments themselves themselves intactintact to grow to grow over overannuity annuity with income with income drawdown. drawdown.

This option This option can offer can offer the best the of best of time. time.

This isThis called is called drawing drawing the ‘natural the ‘natural yield’.yield’.

Should Should markets markets fall, fall, both both worlds. worlds.

The value The value of your of your investment investment and the andincome the income fromfrom it canitgo candown go down as well as well as upasand up you and may you may not get notback get back the original the original amount amount invested. invested.

Past performance Past performance is notisanot reliable a reliable indicator indicator for future for future results. results.

Please Please contact contact us forusfurther for further information information or if or youif are you are in any indoubt any doubt as toas the tosuitability the suitability of anofinvestment. an investment.

8

8

How Howtototransfer transferyour yourstocks stocksand andshares sharesISA ISA

totoanother anotherprovider provider

be transferred be transferred directly directly into an intoISA, an ISA, should take around take around 2-3 weeks.

2-3 weeks.

Contact Contact the the With With the recent the recent shakeshake up ofup Commissions, of Commissions,should providing providing this happens this happens withinwithin 90 days 90 days of of new provider, they will theyask willyou asktoyou to investors investors are witnessing are witnessing manymany changes changes new provider, the shares beingbeing released. released. complete complete a transfer a transfer form form and, ifand, necessary, if necessary,the shares this year. this year. a newa ISA newfor ISAyou. for you.

With With trail commission trail commission on funds on funds bought boughtopenopen Stocks and and shares ISA transfer Stocks shares ISA transfer Dowithdraw not withdraw the money the money yourself yourself as as via investment via investment platforms platforms scrapped scrapped sincesince Do not Transferring Transferring a stocks a stocks and shares and shares ISA, ISA, will its lose tax-free its tax-free ISA status ISA status and make and make 1 April 1 April 2014,2014, manymany investment investment platforms platforms it willitlose especially especially if youiffind you afind more a more competitive competitive sure there sure there are no arepenalties no penalties for switching, for switching, have have had to had introduce to introduce new ways new ways of of platform platform is relatively is relatively easy:easy: whichwhich couldcould be thebecase the case with with fixed fixed rate rate charging charging for their for their services. services.

Contact Contact the new the provider new provider and set andupsetanup an Platforms Platforms have have now moved now moved to charging to chargingdeals.deals.

ISA account ISA account with with them.them. eithereither a percentage-based a percentage-based fee, afee, flatafee flatorfee orStock Stock transfer transfer Complete Complete an ISA antransfer ISA transfer form,form, whichwhich a combination a combination of theoftwo. the This two.makes This makes it it will request will request the ISA thedetails ISA details you are you are It is possible It is possible to transfer to transfer existing existing easiereasier to compare to compare different different platforms. platforms. transferring and how and much how much of it you of itwould you would investments investments into an intoISA anwrapper, ISA wrapper, making making transferring This means, This means, if youifhave you have a relatively a relatively smallsmall like tolike transfer to transfer themthem moremore tax-efficient. tax-efficient.

Currently Currently the rules the rules portfolio portfolio a platform a platform charging charging a percentage a percentage Decide whether whether you want you want an “in-specie an “in-specie do not doallow not allow transferring transferring directly directly into your into your Decide basedbased fee may fee be may more be more competitive. competitive.

If youIf you transfer”, this isthis where is where your your existing existing ISA but, ISA on but,a on platform, a platform, the stocks the stocks and and transfer”, have have a larger a larger portfolio, portfolio, a fixed a fixed fee isfee likely is likely holdings holdings are moved are moved over or over whether or whether you you shares shares transfer transfer process process is stillispretty still pretty to offer to offer you the youbest the option. best option.

Should Should you you are selling are selling all orall some or some of your of your holdings holdings straightforward. straightforward. wantwant to manage to manage your your ISA, it’s ISA,important it’s important to to firsttransferring and transferring the cash the cash value.value.

‘Bed ‘Bed and ISA’ andenables ISA’ enables you toyou selltothe sell the first and knowknow the dealing the dealing charges. charges. new provider new provider will notify will notify you when you when shares shares then then buy them buy them back back immediately immediately Your Your Also consider Also consider the type the of type investments of investments on on your your transfers transfers are completed. are completed.

HM Revenue HM Revenue from from your your ISA. There ISA. There are aare couple a couple of points of points offer.offer.

MostMost platforms platforms offer offer access access to to & Customs & Customs has set hasa set 30 working a 30 working days days time time to beto aware be aware of when of when doingdoing this. this. hundreds hundreds of different of different investments investments but but limit limit for transfer, for transfer, however, however, somesome providers providers First, First, the repurchase the repurchase happens happens therethere can be can gaps, be gaps, so make so make sure your sure your have have been been takingtaking longer longer with with transfers, transfers, immediately immediately after after the sale the to sale limit to limit favourites favourites are available. are available. particularly thosethose that are thatinare specie. in specie.

Where Where exposure exposure to price to price movement, movement, but you but you particularly You can Youtransfer can transfer an ISA antoISA a NISA, to a NISA, a New a New this happens, you should you should contact contact the new the new mightmight get back get back a lower a lower number number of shares of sharesthis happens, ISA orISA even or even an ISA. anThey’re ISA. They’re all exactly all exactly the the provider.

If areIfstill arenot stillsatisfied not satisfied you can you can withinwithin your your ISA. Commission, ISA. Commission, stampstamp duty dutyprovider. samesame thing.thing. contact the Financial the Financial Ombudsman Ombudsman Scheme, Scheme, and any andbid anyoffer bid offer spread spread absorbs absorbs them.them. contact CashCash ISA transfer ISA transfer whoinvestigate will investigate on your on your behalf. behalf.

Also, Also, because because you’ve you’ve sold shares sold shares you will you will who will realise realise any capital any capital gainsgains or losses. or losses.

If youIffind you afind better a better rate or rate youorjust youwant just want to to A point to remember to remember is thatis shares that shares in a in a consolidate consolidate your your ISAs so ISAs they’re so they’re all in all onein one A point company company ShareShare Save Save or SAYE or SAYE scheme scheme can can placeplace and easier and easier to manage, to manage, it’s very it’s simple very simple to dotoand do and

You You can can transfer transfer anan ISA ISA toto a NISA, a NISA, a New a New ISA ISA oror even even anan ISA. ISA. They’re They’re allall exactly exactly thethe same same thing. thing.

The value of your investment and the fromfrom it canitgo as well as upasand not get the original amount The value of your investment andincome the income candown go down as well up you and may you may notback get back the original amount invested.

Past performance is notisanot reliable indicator for future results.

Please contact us forusfurther information or if or youif are invested.

Past performance a reliable indicator for future results.

Please contact for further information you are in any as toas the of anofinvestment. indoubt any doubt tosuitability the suitability an investment.

9

9

Make Makeyour yoursavings savingsgo gofurther further Most Most working working ageage people people in the in the UK could UK could make make a dramatic a dramatic change change to their to their retirement retirement stability stability by making by making some some incremental incremental changes changes to their to their saving saving habits, habits, according according to new to new research research published published by the by the Department Department for Work for Work andand Pensions Pensions (DWP).

(DWP).

People People are are not not saving saving enough enough to to provide provide themselves themselves the the standard standard of living of living theythey are are used used to when to when theythey retire. retire.

It isItestimated is estimated thatthat around around 12 million 12 million people people in the in the UK need UK need onlyonly to make to make modest modest changes changes to safeguard to safeguard their their financial financial future. future.

The DWP The DWP research research suggests suggests that landmark that landmark balance The DWP The DWP research research concludes concludes that: that: balance between between providing providing improved improved reforms reforms of theofState the State Pension Pension system, system, working workingretirement • The•maintenance The maintenance of theoftriple the triple lock lock retirement outcomes outcomes for allfor butallwithout but without havinghaving to introduce to introduce workplace workplace pension pension schemes schemes with witha detrimental guarantee, introduced introduced by thebyGovernment the Government in in a detrimental impactimpact on working on working life incomes. life incomes. guarantee, auto-enrolment auto-enrolment and efforts and efforts to help to older help older job- job- The DWP 2010,2010, into future into future years years will prevent will prevent the the The DWP research research highlights highlights three three key key seekers seekers get back get into backwork, into work, are allare playing all playing a a factorsfactors number number of under-savers of under-savers increasing increasing further. further. leading leading to poor to retirement poor retirement income income key role keyinrole tackling in tackling the problem the problem of underof under- prospects: • Action • Action to increase to increase employment employment levelslevels prospects: saving. saving. amongst peoplepeople aged aged between between 50 and 50State and State 1. Not 1. having Not having a fullawork full work history: history: This This amongst ManyMany of theof12the million 12 million peoplepeople who are who are can result Pension age and age toand encourage to encourage peoplepeople to to can result in a reduced in a reduced entitlement entitlement to thetoState the State Pension savingsaving too little too are littlealready are already on theonright the right remain in workplace in workplace pensions pensions Pension, Pension, due todue thetolack theoflack National of National Insurance Insurance remain savings savings track track and could and could safeguard safeguard their their • Most significantly, significantly, to recognise to recognise that that contributions contributions and aand reduced a reduced time period time period to to • Most financial financial futurefuture by putting by putting away away just ajust littlea little grow grow increasing increasing contributions contributions paid into paidworkplace into workplace privateprivate pension pension savings. savings.

This isThis most is most more.more.

The analysis The analysis finds that findsofthat theof12the million, 12 million,typicaltypical pensions pensions could could have ahave positive a positive impactimpact on on amongst amongst lower-income lower-income groups. groups. almostalmost half are halfatare least at 80% least 80% of theofway the way reducing reducing under-saving. under-saving.

2. Not 2. contributing Not contributing to private to private towards towards achieving achieving their retirement their retirement income income pensions: pensions: This isThis more is more typicaltypical of people of people in in Sources: https://www.gov.uk/government/news/take-action-nowhttps://www.gov.uk/government/news/take-action-nowtarget,target, while while only 8% onlyare 8%less arethan less 50% than 50% there.there. the middle-income the middle-income groups, groups, who are whoinare work. in work. Sources: to-safeguard-your-retirement-pensions-minister to-safeguard-your-retirement-pensions-minister The Government’s The Government’s pension pension reforms reforms have had have had 3. Not 3. contributing Not contributing enough enough to private to private the biggest the biggest positive positive impactimpact on theonlower the lower pensions pensions to generate to generate a large a large enough enough earners, earners, the focus the focus is nowis on now those on those peoplepeople in in retirement retirement income: income: This isThis most is most typicaltypical the middle the middle and higher and higher income income groups, groups, who are who are of people of people in theinhigher-income the higher-income groups. groups. amongst amongst the worst. the worst.

WhilstWhilst the problem the problem is is The research The research document document sets out sets out amongst amongst all income all income groups, groups, it is those it is those in thein the the scale the scale of theofsavings the savings challenge challenge middlemiddle and higher and higher income income groupsgroups who, who, facingfacing the UK, theasUK, theasaverage the average age age statistically, statistically, face the facebiggest the biggest income income hit when hit whenof theofcountry’s the country’s population population they take theyretirement. take retirement. continues continues to rise.toThe rise.number The number of of The research The research showsshows that higher that higher income income peoplepeople classed classed as under-saving as under-saving is is groupsgroups could could benefit benefit significantly significantly from higher from higherdefined defined by a replacement by a replacement rate which rate which contributions contributions but recognises but recognises that, ifthat, set too if set too measures measures retirement retirement income income as a as a high, high, these these rates could, rates could, percentage percentage of working of working age income. age income. proveprove difficult difficult for for lowerlower earners earners and and encourage encourage more more peoplepeople to opttoout optofout of workplace workplace pensions pensions entirely. entirely.

The DWP The DWP is is considering considering what what work work is needed is needed to to consider consider pension pension contribution contribution rates rates whichwhich strike strike the right the right

It isItestimated is estimated that that around around 12 12 million million people people in the in the UKUK need need only only to to make make modest modest changes changes to to safeguard safeguard their their financial financial future. future.

10 10

PENSIONS PENSIONS vs vs ISAs ISAs How How dodo they they compare compare after after the the new new pension pension rules? rules?

It’s It’s oneone of investors’ of investors’ most most common common questions: questions: should should I invest I invest in an in an ISAISA or aorpension? a pension?

Ideally, Ideally, investors investors should should consider consider taking taking advantage advantage of both of both their their ISAISA andand pension pension allowances allowances fully fully each each year. year.

ButBut in reality, in reality, most most of us of can us can only only afford afford to invest to invest a set a set amount amount each each taxtax year year andand therefore therefore have have to decide to decide what what proportion proportion to allocate to allocate to each to each taxtax wrapper. wrapper.

What factors should What factors should youyou consider?

New rules consider?

New rules have dramatically have dramatically changed how pensions changed how pensions work: what is the impact work: what is the impact of these changes? of these changes?

5. Eligibility 5. Eligibility • ISAs: • ISAs: Any UK Anyresident UK resident can invest can invest in an in ISA. an ISA. • Pensions: • Pensions: Any UK Anyresident UK resident underunder age 75 age 75 1. Access 1. Access to your to your money money beforebefore age 75. ageIf 75. theyIfdie theyafter die age after75, agethe 75, the can contribute can contribute to a pension to a pension and receive and receive tax tax • ISAs: • ISAs: you can youaccess can access your money your money at anyat any beneficiary beneficiary may have may to have paytotax, paybut tax,usually but usually relief. relief. time, with time, no with taxnototax paytoonpay anyonwithdrawals. any withdrawals. only atonly their at income their income tax rate. tax rate.

6. Investment 6. Investment choice choice • Pensions: • Pensions: you can youonly cannormally only normally accessaccess your yourThis means This means it should it should be possible be possible to useto use • ISAs: • ISAs: StocksStocks & Shares & Shares ISAs allow ISAs allow you toyou to moneymoney from age from55; agethe 55;first the25% first 25% is usually is usually pensions pensions for estate for estate planning, planning, although although investinvest in funds, in funds, sharesshares (including (including AIM),AIM), tax-free, tax-free, and the andrest thesubject rest subject to income to income tax taxcontributions contributions mademade while while in ill health in ill health or within or within investment investment trusts,trusts, ETFs, ETFs, gilts, bonds gilts, bonds and and at your at highest your highest marginal marginal rate. rate. two years two years of death of death may still maybestill subject be subject to IHT.to IHT. cash. cash.

What What is the is effect the effect of the of new the new 3. Tax 3. savings Tax savings when when you you invest invest • Pensions: • Pensions: Personal Personal and stakeholder and stakeholder pension pension rules? rules?

From April From 2015 April 2015 investors investors• ISAs: • ISAs: investments investments can grow can grow free offree capital of capital pensions pensions only allow only allow you toyou invest to invest in funds in funds – – will have will far have more far more freedom freedom over how over they how they gains gains and income and income tax. tax. typically typically from the frominsurer’s the insurer’s own range. own range.

SIPPs SIPPs accessaccess moneymoney in their in pensions their pensions from age from55. age 55. • Pensions: • Pensions: investments investments can grow can grow free offree of (Self Invested (Self Invested Personal Personal Pensions) Pensions) allow allow you you After After the 25% the 25% tax-free tax-free cash, cash, you can youtake canatake a capitalcapital gains gains and income and income tax. Intax. addition, In addition, to invest to invest in funds in funds from fund from management fund management regular regular income income or ad-hoc or ad-hoc lump lump sums,sums, even the even the you can youalso canbenefit also benefit from up from to up 45% to 45% tax tax companies, companies, sharesshares (including (including AIM),AIM), wholewhole fund as fund cash, as cash, subject subject to income to income tax. tax. relief relief on pension on pension contributions, contributions, so currently so currently investment investment trusts,trusts, ETFs, ETFs, gilts, bonds gilts, bonds and and 2. Tax 2. treatment Tax treatment when when you you passpass the the the effective the effective cost ofcost a £10,000 of a £10,000 investment investment cash. cash. investment investment on, after on, after death death could could be as be little as as little £5,500, as £5,500, depending depending on on So what So what should should an investor an investor choose: choose: • ISAs: • ISAs: ISA investments ISA investments are normally are normally subject subject your circumstances. your circumstances. an ISA an or ISAa or pension? a pension? to Inheritance to Inheritance Tax (IHT) Tax of (IHT) 40%, of 40%, if the iftotal the total4. Available 4. Available allowances allowances The answer The answer will ultimately will ultimately depend depend on your on your value value of your of estate your estate exceeds exceeds the ‘nil-rate the ‘nil-rate • ISAs: • ISAs: this year thisyou yearcan youinvest can invest up to up to circumstances, circumstances, aims and aimspriorities. and priorities. band’.band’.

This isThis currently is currently £325,000 £325,000 for for £15,000. £15,000.

Are you Aresaving you saving for retirement, for retirement, or foror other for other individuals, individuals, or up or to up £650,000 to £650,000 if youifinherit you inherit • Pensions: • Pensions: this year thismost year most UK residents UK residents underunder goals?goals?

MightMight you need you need to access to access your money your money your spouse’s your spouse’s or civilorpartner’s civil partner’s unused unused age 75 age can75invest can invest up to up as to much as much as they as they beforebefore age 55? ageHow 55? much How much can you canafford you afford to to allowance. allowance. earn and earnreceive and receive tax relief, tax relief, subject subject to a to a save each save year? each year?

Are you Areplanning you planning to take toan take an • Pensions: • Pensions: Pensions Pensions are usually are usually exempt exempt from from£40,000 £40,000 annualannual allowance. allowance.

ThereThere are two are two income income from all from your all investments, your investments, or want or want to to IHT, and IHT,instead and instead taxedtaxed at 55% at 55% if youifdie you die main main exceptions: exceptions: pass them pass them on when on when you die? you die? whenwhen you are youover are 75 over or 75 while or while in income in income Non-earners Non-earners , who,can whocontribute can contribute up to up to PleasePlease note: note: tax benefits tax benefits depend depend on on drawdown. drawdown. £3,600 £3,600 gross gross (a payment (a payment of up of to up £2,880, to £2,880, circumstances circumstances and tax andrules tax can ruleschange. can change.

What What is the is impact the impact of the of new the new plus automatic plus automatic tax relief tax relief of up of to up £720); to £720); Once Once you’veyou’ve decided decided to invest, to invest, don’t don’t delay delay pension pension rules? rules?

On 29On September, 29 September, the the High earners High earners , who,can whocontribute can contribute up to up to your action. your action.

Both ISAs Both and ISAspensions and pensions offer offer Chancellor Chancellor announced announced (subject (subject to confirmation) to confirmation)£190,000 £190,000 if theyifhave they unused have unused annualannual remarkable remarkable benefits benefits and the andsooner the sooner you invest, you invest, this 55% this 55% tax, sometimes tax, sometimes knownknown as pension as pension allowance allowance from previous from previous years,years, and meet and meet the the the longer the longer your money your money has tohas grow. to grow. ‘death‘death tax’, will tax’,bewill abolished be abolished if someone if someone dies dies other other criteriacriteria of theof‘carry the ‘carry forward’ forward’ rule. rule.

The value The value of your of your investment investment and the andincome the income fromfrom it canitgo candown go down as well as well as upasand up you and may you may not get notback get back the original the original amount amount invested. invested.

Past performance Past performance is notisanot reliable a reliable indicator indicator for future for future results. results.

Please Please contact contact us forusfurther for further information information or if or youif are you are in any indoubt any doubt as toas the tosuitability the suitability of anofinvestment. an investment.

11 11

How to find your hidden treasures With the economy still recovering, money is still tight for many families. But it is possible to grow your finances by tracking down lost money that is rightfully yours.

PREMIUM BONDS It s thought that there are one million National Savings & Investments Premium Bond winners who have so far failed to come forward for prizes worth a total of more than £47 million.

Typically these remain unclaimed because winners move house or overseas.

They also get forgotten when bought by parents for children. The good news is that there is no time limit on claiming.

If you think you have a forgotten NS&I Premium Bond or account, write to Tracing Service, NS&I, Glasgow, G58 1SB. FORGOTTEN SAVINGS There have been a number of mergers, takeovers and flotation’s in the savings industry over the past 20 decades, during this time it is easy to lose track of a savings account or two.

If you suspect that you have dormant savings, (no activity over 12 months for current accounts) and (three to five years for savings accounts), try the free service mylostaccount.org.uk.

This ties together schemes run by the British Bankers’ Association (BBA), the Building Societies Association (BSA) and NS&I. Money unclaimed for 15 years is now seized by the Government and spent on good causes – but you still have the right to claim it back.

Flotation’s of mutual insurers and building societies directed billions in

windfall cash payments and shares to millions of customers and most surprisingly a high number of people failed to claim them.

LOST PENSIONS Employees often work for numerous companies during their career these days, which mean they can accumulate several pension plans along the way.

If you think you have lost track of a pension, try the Pension Tracing Service, which holds details of 200,000 personal and company pension schemes.

When you have traced your lost pension get in touch with the plan provider.

Contact the free Pension Tracing Service at gov.uk/find-lost-pension or phone 0845 600 2537.

UNCLAIMED ESTATES The death of distant relatives could be unknown to you and should you become the beneficiary of an unknown estate, you will certainly become one of the estimated 11,500 unclaimed estates, which are in the process each year and millions of pounds are paid out to long lost or never known relatives.

A good place to look if you think you maybe a beneficiary is Bona Vacantia, a government website listing unclaimed assets since 1997. The deadline for claiming is usually 12 years after the death, but it may be extended to 30 years at the discretion of the Treasury Solicitor.

STOP MONEY LEAKS People can save hundreds of pounds annually by good money management.

Direct debits that should be cancelled, paying unnecessary interest on credit cards and failing to redeem loyalty card benefits are just a few of the bad money habits that lose people cash each year.

Comparison website Gocompare suggests these money leaks work out at a collective £12.2 billion a year.

For more information on any subject that we have covered in this issue, or on any other subjects, please tick the appropriate box or boxes, include your personal details and return this section to us.

Thank you for your honest and trustworthy approach!

As a company your advice and knowledge has been invaluable. We were looking for a company that could not only look after our company’s pensions plan, but also advise us on which type of insurance policies were applicable to us. Your advice on, key man, death in service, and life insurance has made all of our directors, not only feel comfortable about the future of the company but also for their families.

Sarah Kneller (Pensions and Insurance)

Thank you so much for sorting out my Mortgage and Life insurance. I felt completely informed and well looked after throughout my house buying process.

I will be recommending your services to all my friends and family.

Chris Riley (Mortgage and Insurance)

After years of careful financial planning. I put my trust into Premier Independents Advisor’s, they proved to be highly knowledgeable, and were easily able to explain my options to me in a concise manner, that left me feeling better informed to make future financial decisions. I continue to ask for their expertise before investing my savings.

Mr John Haynes (Investments)