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The The Autumn Autumn Statement… Statement… Main Main points points uncovered uncovered PagePage 2 2 Do you know howhow much Do you know much income to expect when you you income to expect when retire? … Be aware retire? … pension Be pension aware PagePage 3 3 Pension age age increase …. …. Pension increase RisesRises linked to life linked to expectancy life expectancy PagePage 3 3 Investing issues…What to to Investing issues…What consider before you you invest consider before invest PagePage 4 4 worry about Long WhyWhy worry about Long TermTerm funding CareCare funding …. …. Options available PagePage Options available 5 5 Drawing pension Drawing youryour pension in in stages … advantages Tax advantages stages … Tax and and benefits benefits PagePage 6 6 State Pension Boost… State Pension Boost… Voluntary National Insurance Voluntary National Insurance Contributions be made Contributions can can be made PagePage 7 7 marital status DoesDoes youryour marital status benefit benefit you?you? … … The The financial gains available financial gains available PagePage 8 8 Estate Preservation Estate Preservation … … Protecting wealth Protecting youryour wealth efficiently efficiently PagePage 9 9 Protect valuable Protect youryour mostmost valuable Recognise assetasset … … Recognise the the importance of insurance importance of insurance PagePage 10 10 Is playing it safe, more risky? Is playing it safe, more risky? … Analysing different … Analysing different investment funds PagePage investment funds 11 11
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• Infrastructure - The -Chancellor The Chancellor The main The main message message from from George George Osborne, Osborne,• Infrastructure announced a newa tax newrelief tax relief for shale for shale gas gas Chancellor Chancellor of theofExchequer, the Exchequer, is thatis the that the announced production, and further and further reforms reforms to make to make UK economy UK economy is recovering is recovering but there but there is stillis stillproduction, the most the most of theofUK’s the UK’s science science base,base, workwork to betodone. be done. including including a newa network new network of Quantum of Quantum ThereThere was little was little in theinstatement the statement Technology Technology Centres. Centres. Yesterday Yesterday the the affecting affecting investors investors directly, directly, but what but what government announced announced £375£375 billionbillion of of wasn’t wasn’t said was said just wasas just important as important as what as whatgovernment infrastructure spending spending over the overnext the next was said. was said. ThereThere was no wasmention no mention of theof the infrastructure 20 years. muchmuch predicted predicted cap on capISAs, on ISAs, and there and there 20 years. • Housebuilders - The -Government The Government will will were were no changes no changes to thetocurrent the current capital capital • Housebuilders issueissue £1 billion £1 billion in loans in loans to unblock to unblock largelarge gainsgains tax rates tax rates and reliefs. and reliefs. housing developments developments and give and local give local The ISA Theallowance ISA allowance was confirmed was confirmed as as housing authorities additional additional flexibility flexibility to increase to increase risingrising to £11,880 to £11,880 in theinnew the tax newyear tax year authorities housing housing supplysupply and support and support new new 2014/15. 2014/15. The increase The increase in theinState the State Pension Pension affordable housing. housing. age toage 68tois 68 likely is likely to betobrought be brought forward forward affordable • Retailers • Retailers - The -retail The retail sector,sector, particularly particularly from from the current the current date date of 2046 of 2046 to theto the smaller companies, companies, will benefit will benefit from from a a mid-2030s. mid-2030s. It means It means people people currently currently in in smaller discount in business in business rates rates of upoftoup £1,000 to £1,000 their their fortiesforties will not willget notaget state a state pension pension discount in 2014-15 in 2014-15 and 2015-16 and 2015-16 for retail for retail until until they are they68. are 68. properties properties (including (including pubs,pubs, cafes,cafes, BelowBelow are the aremain the main pointspoints from from the the restaurants restaurants and charity and charity shops) shops) with with a a Autumn Autumn Statement. Statement. rateable valuevalue of upoftoup £50,000, to £50,000, and aand a • UK• growth UK growth - After- After yearsyears of a sluggish of a sluggishrateable 50% 50% discount discount from from business business rates rates for new for new recovery recovery the UK theeconomy UK economy is growing is growing occupants of previously of previously emptyempty retailretail again.again. The Office The Office of Budget of Budget Responsibility Responsibilityoccupants premises for 18formonths. 18 months. moremore than than doubled doubled its growth its growth prediction prediction premises The outlook for the forUK theeconomy UK economy has has to 1.4% to 1.4% for 2013 for 2013 and expects and expects it to rise it totorise to The outlook improved improved significantly significantly in 2013, in 2013, and the and the 2.4%2.4% in 2014. in 2014. resulting increased increased confidence confidence has trickled has trickled • UK• exporters UK exporters – The–Government The Government will willresulting downdown to thetostock the stock market market with with the FTSE the FTSE double double the UK theEnterprise UK Enterprise FundFund All Share All Share risingrising by 16.2% by 16.2% this year. this year. commitment commitment limit to limit £50bn, to £50bn, helping helping The Government’s The Government’s focusfocus on reducing on reducing the the BritishBritish exporters exporters take advantage take advantage of of costscosts of doing of doing business business in theinUK theshould UK should opportunities opportunities in new in and new emerging and emerging be good newsnews for investors for investors in theinlong the long markets. markets. The Government The Government hopeshopes to double to doublebe good run. run. exports exports by 2020. by 2020.
The articles The articles featured featured in thisin publication this publication are forare your forgeneral your general information information and use and only useand only are and not are intended not intended to address to address your particular your particular requirements. requirements. They should They should not not be relied be relied upon in upon their inentirety. their entirety. Although Although endeavours endeavours have been have made been made to provide to provide accurate accurate and timely and timely information, information, there can there becan no be guarantee no guarantee that such thatinformation such information is accurate is accurate as of the as of date theitdate is received it is received or thatoritthat will it continue will continue to be accurate to be accurate in the in future. the future. No individual No individual or company or company shouldshould act upon act such uponinformation such information without without receiving receiving appropriate appropriate professional professional adviceadvice after aafter thorough a thorough examination examination of their ofparticular their particular situation. situation. Will writing, Will writing, buy-to-let buy-to-let mortgages, mortgages, some forms some forms of tax of and tax estate and estate planning planning are not are regulated not regulated by theby Financial the Financial Conduct Conduct Authority. Levels, Authority. Levels, bases of bases andof reliefs and reliefs from taxation from taxation are subject are subject to change to change and their andvalue their depends value depends on theon the individual individual circumstances circumstances of theof investor. the investor.
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ManyMany in their in their 40s are 40sunaware are unaware of theoftotal the total Pension Pension planning planning tips: tips: valuevalue of their of their pension pension pots or pots theorincome the income Make Make a plana of plan how of you howwill youachieve will achieve your your they can theyexpect can expect to receive to receive in retirement. in retirement. goalsgoals for retirement. for retirement. Keep Keep your plan your under plan under review review and make and make The run Theup runtoup retirement to retirement changes changes whenwhen necessary. necessary. If we Ifdon’t we don’t keep keep a close a close eye on eye our onpensions our pensions Keep Keep track track of your of pension your pension savings savings and and in theinearlier the earlier years,years, we run wethe runrisk theofrisk falling of falling understand understand whenwhen to top-up to top-up if youifaren’t you aren’t behind behind and leaving and leaving ‘top-ups’ ‘top-ups’ until the untillast the last savingsaving enough. enough. minute, minute, whenwhen it could it could be toobelate tootolate catch to catch up. up. Ensure Ensure your money your money is invested is invested in funds in funds Nearing Nearing retirement, retirement, our retirement our retirement savings savings that reflect that reflect your attitude your attitude to risktoand riskkeep and keep need need to beto one beofone ourofbiggest our biggest assets. assets. So bySo by reviewing reviewing regularly regularly as youasapproach you approach not keeping not keeping track track of theofvalue the value of ourofpension our pension retirement. retirement. pots and potshow and they how are theyperforming, are performing, we may we may Monitor Monitor the Lifetime the Lifetime Allowance, Allowance, whichwhich run the runrisk theofrisk missing of missing out on out opportunities on opportunities couldcould reduce reduce by thebytime the you timeretire. you retire. to take to action take action and leave and leave ourselves ourselves vulnerable vulnerable (£1.25m (£1.25m from from 6 April 6 April 2014)2014) and check and check at a later at a later age. age. whether whether you are youlikely are likely to goto over go this overlimit this limit Consolidate Consolidate your your pension pension pots pots risking risking a hefty a hefty tax charge. tax charge. ManyMany people people in theinUK thehave UK have two pension two pension Take the Takestate the state pension pension into account into account whenwhen plansplans or more, or more, perhaps perhaps built up built over up time over as time as you work you work out how out much how much extraextra income income you you they moved they moved employment. employment. will need. will need. Having Having multiple multiple pension pension pots could pots could makemake Start Start savingsaving for your for retirement your retirement early early to to it difficult it difficult for people for people to understand to understand the total the total maximise maximise the time the your time money your money is is valuevalue expectations expectations and possibly and possibly explain explain why why invested. invested. people people totallytotally lose touch lose touch with their with their pensions. pensions. Don’t Don’t ignoreignore the benefits, the benefits, if youifare youa are a Therefore, Therefore, considering considering consolidating consolidating your your basicbasic rate tax ratepayer, tax payer, for every for every £80 you £80 you pension pension pots may pots help. may help. investinvest in a pension in a pension it is automatically it is automatically Consolidating Consolidating allowsallows you toyou have to have just one just one topped topped up byup £20 bytax £20bytax thebyGovernment. the Government. provider provider to keep to keep in touch in touch with and withone and one If you Ifare youa are higher a higher rate tax ratepayer, tax payer, you can you can annual annual statement statement to look to at look andatreview. and review. receive receive higherhigher rate tax raterelief tax relief on your on your It could It could also mean also mean you could you could potentially potentially pay pay contributions; contributions; claimclaim this through this through your tax your tax lowerlower charges charges and possibly and possibly have have moremore choicechoice return. return. and buying and buying powerpower whenwhen you come you come to retire. to retire. If you Ifhave you have moremore than than one pension one pension plan, plan, consider consider consolidating consolidating themthem into one intopot one pot to make to make it easier it easier to seetohow see your how pension your pension is doing. is doing. MakeMake sure you sureare younot aregiving not giving up up important important benefits benefits such such as defined as defined benefits, benefits, ‘with‘with profits’ profits’ bonuses, bonuses, guaranteed guaranteed annuity annuity rates rates and enhanced and enhanced tax-free tax-free cash.cash.
Pension Pensionage age increase increase • State • State pension pension age to agerise to to rise68toin68 in mid-2030s mid-2030s and 69 andin69 late-2040s in late-2040s • Future • Future risesrises to betolinked be linked to life to life expectancy expectancy • Basic • Basic statestate pension pension to rise to by rise£2.95 by £2.95 to £113.10-a-week to £113.10-a-week fromfrom AprilApril 20142014 • Workers • Workers missing missing out on outnew on new flat-rate flat-rate pension pension can make can make extraextra NI payments NI payments YoungYoung adultsadults will be will working be working into their into their 70s and 70smillions and millions of workers of workers in their in their 40s 40s will have will have to wait to until wait until they are they68arebefore 68 before they can theyretire, can retire, the Chancellor the Chancellor confirmed confirmed in hisinAutumn his Autumn Statement. Statement. The age Theatage at whichwhich people people can claim can claim their their state state pension pension will rise willtorise 68toin68 theinmid-2030s, the mid-2030s, 69 in69 theinlate-2040s the late-2040s and future and future rises rises will will be reviewed be reviewed regularly regularly and linked and linked to lifeto life expectancy. expectancy. StateState pension pension ages ages are already are already risingrising to 66toin66 2020 in 2020 and 67 andfrom 67 from 2026,2026, but the but the Government Government has decided has decided to bring to bring forward forward further further rises rises as it deals as it deals with with the the growing growing costscosts caused caused by thebyUK’s the UK’s agingaging population population and people and people livingliving longer. longer. ExactExact datesdates for the forrises the rises are expected are expected to to be announced be announced soon.soon. The Chancellor The Chancellor said future said future generations generations can expect can expect to spend to spend a third a third of their of their lives lives in retirement, in retirement, muchmuch like those like those retiring retiring now, now, but linking but linking futurefuture rises rises with with life life expectancy expectancy will mean will mean today’s today’s children children face working face working until until well into well their into their 70s 70s before before they can theycollect can collect their their state state pension. pension. He said: He said: ‘Life expectancy ‘Life expectancy is currently is currently increasing increasing by roughly by roughly two years two years everyevery decade decade or about or about five and fiveaand quarter a quarter hourshours a day! a day! ‘Linking ‘Linking the state the state pension pension age to age lifeto life expectancy expectancy on the onbasis the basis that no thatone no one should should spendspend moremore than than a third a third of their of their adultadult life inlife retirement in retirement is an isinteresting an interesting concept concept but questionable but questionable as to as how to this how this reallyreally couldcould workwork in practice.’ in practice.’
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looking looking to save to for savefewer for fewer than five thanyears five years buy abuy fund, a fund, you automatically you automatically benefit benefit from from 1. Do1.you Do have you have the necessary the necessary cash cash then you thenshould you should generally generally stay clear stay clear of of somesome diversification diversification since since the fund the manager fund manager reserves? reserves? shares, shares, or anyorequity-linked any equity-linked investment investment and andwill typically will typically investinvest in 40-80 in 40-80 stocks. stocks. Having Having a healthy a healthy cash reserve cash reserve is necessary is necessary to to look toward capital capital security security options. options. We believe We believe it makes it makes sensesense to invest to invest for the for the meet meet the short-term the short-term expenditure expenditure needsneeds and andlook toward long-term long-term with investments with investments spread spread acrossacross to provide to provide an emergency an emergency fund; fund; the rule theisrule to is to 4. Invest 4. Invest with with tax-efficiency tax-efficiency in mind in mind different different regions regions and asset and asset classes. classes. hold three hold three to sixto months’ six months’ expenditure expenditure as a as a Less tax Lessmeans tax means greater greater returns returns for you. for you. good good starting starting point.point. An instant An instant accessaccess Cash Cash Tax wrappers Tax wrappers like ISAs like shelter ISAs shelter your savings your savings 7. Is your 7. Is your portfolio portfolio flexible? flexible? ISA often ISA often worksworks well here well since here since the interest the interest and investments and investments from from tax. Within tax. Within a Stocks a Stocks & &Making Making a decision a decision quickly quickly can becan vital be as vital notas not is tax-free. is tax-free. SharesShares ISA you ISApay youno pay capital no capital gainsgains tax and tax andbeingbeing able to able take to action take action quickly quickly can lead can to lead to no further tax ontax any onincome. any income. WithinWithin a Cash a Cashproblems. problems. Furthermore, Furthermore, if something if something is made is made 2. Are2.you Are aware you aware of the of‘Downs’ the ‘Downs’ as well as wellno further ISA you ISApay youno pay taxnoontax any oninterest. any interest. You don’t You don’t easy to easy do,towedo,are weallare more all more likely likely to doto it. do it. as the as‘Ups’? the ‘Ups’? to declare to declare ISAs on ISAs your on tax yourreturn tax return and andMarkets Markets movemove quickly quickly and being and being able to able to BondsBonds and funds and funds that invest that invest in shares in shares will will need need youwithdraw can withdraw your tax-efficient your tax-efficient savings savingsrespond respond rapidly rapidly is an is essential an essential part of part of rise and risefall andinfall value in value from from one day onetoday theto the you can whenever you need. you need. You can Youshelter can shelter up toup to portfolio portfolio management. management. next. next. The more The more volatile volatile an investment, an investment, the the whenever £11,520 £11,520 in ISAs in this ISAstax thisyear, tax of year, which of which up toup to largerlarger and more and more frequent frequent the ups theand upsdowns and downs 8. Can 8. you Can review you review your your portfolios’ portfolios’ £5,760 £5,760 can becan in be a Cash in a Cash ISA. ISA. will be. willVolatile be. Volatile investments investments oftenoften have have greatgreat progress? progress? profitprofit potential, potential, but carry but carry a higher a higher risk ofrisk of 5. Do5.you Do minimise you minimise your your investment investment Keeping Keeping an eyeanoneye your on investments your investments is is loss. You loss.should You should always always consider consider your your charges? charges? important important to check to check they are theystill areon still track. on track. adversity adversity to risktoand riskfluctuations and fluctuations in theinvalue the value The less Theyou lesspay youfor payyour for savings your savings and and Review Review your portfolio your portfolio at least at least annually annually to to of your of funds your funds beforebefore investing. investing. investments, investments, the greater the greater your potential your potential ensure ensure it remains it remains on track on track to meet to meet your your ThereThere is no is such no thing such thing as a risk-free as a risk-free returns returns couldcould be. be. needs.needs. investment. investment. Even Even cash loses cash loses valuevalue in realin real Investors Investors allegedly allegedly savedsaved £200 £200 million million in in 9. Don’t 9. Don’t shy away shy away fromfrom expert expert advice? advice? terms,terms, by thebyeffect the effect of inflation. of inflation. charges charges in theinlast theyear last alone. year alone. Savings Savings on on Making Making investment investment decisions decisions are never are never easy, easy, 3. When 3. When do you do want you want your your money? money? fund initial fund initial charges charges can help can get helpyour get your so perhaps so perhaps financial financial adviceadvice is worth is worth Most Most investors investors plan to plan invest to invest for five foryears five years as as investments investments off tooff a flying to a flying start. start. considering. considering. To help To you helpdecide you decide if financial if financial a minimum. a minimum. The longer The longer the timeframe, the timeframe, the lower the lower 6. Have 6. Have you got youagot diverse a diverse balance balance of of adviceadvice is right is right for you forand youwhich and which service service may may the risk theofrisk lossofand lossthe andhigher the higher the chance the chance of of investments? investments? be suitable be suitable contact contact your professional your professional stockstock market market investments investments beating beating cash. cash. The importance The importance of spreading of spreading your your financial financial adviser adviser to discuss to discuss your options. your options. By contrast, By contrast, if youifneed you need your cash your and cashare and are investments investments to reduce to reduce risk isrisk key.isWhen key. When you you
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The The value value of your of your investment investment and and the income the income fromfrom it can it go candown go down as well as well as up asand up and you you maymay not get not back get back the the original original amount amount invested. invested. Past Past performance performance is not is anot reliable a reliable indicator indicator for future for future results. results. Please Please contact contact us for usfurther for further information information or if or you if you are in are any in any doubt doubt as toasthe to suitability the suitability of anofinvestment. an investment.
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WaysWays to help to fund help long fund term long healthcare: term healthcare: LongLong TermTerm Care Care Insurance Insurance or or Immediate Immediate NeedNeed Care Care Fee Payment Fee Payment plan plan This isThis a type is a of type annuity of annuity contract, contract, specifically specifically designed designed for older for older people people needing needing care immediately. care immediately. It gives It gives you ayou a guaranteed guaranteed income income for life, forinlife, return in return for for an upfront an upfront lump-sum lump-sum investment. investment.
Downsizing Downsizing your your homehome to fund to fund your your Long Long Term Term Care Care Equity Equity release release We are now to livetolonger than we downdown to thetolower limit, limit, currently Weallare all likely now likely live longer than weof support, of support, the lower currently This gives you ayou lump a lump sum or sum steady or steady wouldwould have have in theinpast; this means we are after after whichwhich you won’t be expected the past; this means we are £14,250, £14,250, you won’t be expected This gives income income to pay to for pay your for care your using care using somesome more more likely likely to need Long Long Term Term Care. Care. Long Long to contribute. to need to contribute. the money that’sthat’s tied up tied in up your in your Term Term Care is defined as care Without Long Long Term Term Care health insurance, Care is defined as for carea chronic for a chronic Without Care health insurance, of theofmoney house,house, whilewhile you carry you carry on living on living there.there. condition or disability, whichwhich is likely to be to be you risk everything you have ever ever condition or disability, is likely youlosing risk losing everything you have The catch is thatisitthat must it must be repaid be repaid at a at a required for a long oftenoften for the worked for, asfor, it will used to fund required for a term, long term, forrest theofrest of worked as itbe will be used to your fund your The catch later stage, so generally so generally equityequity release release your life. from from help and this isthis a daunting prospect. yourThis life.care This can carerange can range help andcare. For care.many For many is a daunting prospect. later stage, schemes schemes should should only be only considered be considered once once assistance in your or care a in a If youIfdo notdohave assetsassets like alike home, or or assistance in own your home own home or in care you not have a home, you’ve you’ve explored explored all the all other the other options. options. specialist nursing home.home. However, it’s worth Term Term Care health insurance, the local specialist nursing However, it’s worthLong Long Care health insurance, the local remembering that you Long Long authorities will decide whichwhich homehome you are remembering thatmay you require may require authorities will decide you are Investment Investment Bonds Bonds Term Term Care at anyatage, example, following sent to, with council budgets, there there You can Care any for age, for example, following sent to, shrinking with shrinking council budgets, Youuse canInvestment use Investment BondsBonds to help to help an accident that has is little of finding yourself in a home an accident thatleft hasyou leftdisabled. you disabled. is chance little chance of finding yourself in a home pay for payyour for care. your However, care. However, because because ThereThere are options for funding Long Long Term Term you would choose if youifhad are options for funding you would choose youthe hadoption. the option. there’s there’s no guarantee no guarantee that the thatreturns the returns Care which are varied and can be be Long Long Term Term Care health insurance is is Care which are varied andoften can often Care health insurance will cover will cover the cost theof cost your of care your and careyour and your complicated. So if you a loved one needs to ensure that you the funds complicated. So iforyou or a loved one needsdesigned designed to ensure thathave you have the funds money money is tiedisup tied foruplong for periods long periods of of to paytofor home or in aorcare at theathome of of paycare for at care at home in a home, care home, to gettothe getcare the you careneed, you need, the home time, time, they’re they’re not generally not generally one ofone theof the it’s important to know the facts. The cost for asfor long youasneed it. Protecting it’s important to know the facts. The cost choice, choice, as as long you need it. Protecting betterbetter options. options. depends on your and mobility, what what your assets and leaving your legacy intact.intact. depends on health your health and mobility, your assets and leaving your legacy Sale And Sale Rent And Rent BackBack schemes schemes level of help you need and the level of and helpsupport and support you need and the You may You have may have heard heard of something of something calledcalled valuevalue of your assetsassets and income. of savings, your savings, and income. Sale And Sale Rent And Back Rent Back schemes. schemes. CostsCosts vary depending on theonlevel care vary depending the of level of care The Financial The Financial Conduct Conduct Authority Authority (FCA),(FCA), required, but average over £700 a week for a for a required, but average over £700 a week the UK’s the financial UK’s financial services services regulator, regulator, nursing homehome and around £580 £580 a week for a for a nursing and around a week is currently is currently investigating investigating bad practice bad practice in in residential home.home. It is thought that as many residential It is thought that as many this area. this area. So, whatever So, whatever you do, you don’t do, don’t as oneasinone three people have have to paytofor in three people paytheir for their sign asign newa Sale newAnd SaleRent And Back Rent Back own Long Term Term Care, Care, oftenoften losinglosing their home own Long their home agreement. agreement. in theinprocess. Long Long Term Term Care health the process. Care health Choosing Choosing how to how paytofor payyour for your insurance was created to help to fund insurance was created to people help people to fund Long Long Term Term Care is Care a big is a decision. big decision. To To their care reducing or losing their their their without care without reducing or losing explore explore all thealloptions the options and discuss and discuss main main asset.asset. whichwhich one isone bestis for bestyour for individual your individual If youIfhave assetsassets aboveabove £23,250, tax year you have £23,250, tax year circumstances, circumstances, speakspeak to an to professional an professional 2013/14, you will expected to fund 2013/14, yoube will be expected to the fund the financial financial adviser, adviser, preferably preferably one with one the with the vast majority of your Term Term Care. Care. vast majority of own your Long own Long specialist specialist CF8 qualification CF8 qualification on advising on advising BelowBelow this level, you will sliding scale scale this level, youget willa get a sliding on theonfunding the funding of Long of Long Term Term Care. Care. They’llThey’ll be able be to able explain to explain all theallcosts the costs and risks and involved, risks involved, and should and should be able be to able to help with help other with other things, things, like arranging like arranging your will. your will.
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increased by choosing by choosing partial partial drawdown. drawdown. Partial Partial drawdown drawdown If youIf don’t you don’t needneed to usetoyour use your entireentire pension pension to provide to provide an an increased means means splitting splitting your your pension pension into segments into segments and converting and converting income income straightaway, straightaway, you could you could use income use income drawdown drawdown to keep to keep segment segment to income to income drawdown drawdown at different at different times,times, as and as and your your pension pension invested invested and simply and simply just draw just draw the income the income you you each each whenwhen you need you need them.them. need.need. This isThis a higher is a higher risk option risk option that gives that gives you the youopportunity the opportunity This can Thishave can have two useful two useful tax advantages: tax advantages: to benefit to benefit from from investment investment growth. growth. By remaining By remaining invested invested your your fund fund valuevalue and income and income can fall caniffall your if your investments investments perform perform 1. Reducing 1. Reducing youryour income income tax tax poorly poorly or if you or if withdraw you withdraw income income too quickly. too quickly. An additional An additional EachEach time time you convert you convert a parta of part your of your pension pension to income to income benefit benefit is that is you that can youpass can pass your your pension pension to beneficiaries to beneficiaries after after drawdown drawdown you’re you’re usually usually entitled entitled to take to take up toup 25toper 25cent per cent of of death, death, subject subject to HMRC’s to HMRC’s taxation taxation charges. charges. the amount the amount as a tax-free as a tax-free lumplump sum.sum. The remainder The remainder is invested is invested For people For people with with moremore than than one income one income stream stream who who can can to provide to provide you with you with a taxable a taxable income. income. You can Youuse canthis use tax-free this tax-free affordafford to take to take moremore risk with risk with their their pension, pension, then then income income cash cash as part as of part your of your income, income, reducing reducing the tax theyou tax pay. you pay. drawdown drawdown offersoffers valuable valuable flexibility. flexibility. This flexibility This flexibility can be can be You could, You could, as anasoption, an option, just withdraw just withdraw the tax thefree tax cash free cash and and not take not take a taxable a taxable income income from from your your pension. pension.
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SomeSome investors investors may may be eligible be eligible for for The main The main bulk bulk of your of your pension pension remains remains flexible drawdown: drawdown: this option this option allows allows untouched untouched and this and process this process can then can then flexible you draw to draw as much as much income income as you as you be repeated be repeated with with whatever whatever size chunk size chunkyou to like without any limits. any limits. WithWith partial partial of your of your pension pension you choose, you choose, whenwhen you youlike without flexible flexible drawdown drawdown you can youdecide can decide how how choose. choose. muchmuch money money you want you want to withdraw to withdraw 2. Reduce 2. Reduce youryour death death taxes taxes and then and then just move just move that amount that amount into into UntilUntil age 75, ageonly 75, only the part the of part your of your drawdown, drawdown, whichwhich provides provides 25 per 25cent per cent pension pension in income in income drawdown drawdown has ahas a of theofamount the amount takentaken tax free. tax You free.can You can 55 per 55cent per cent tax charge tax charge applied applied on on leaveleave the rest theof rest theofpension the pension untouched, untouched, death, death, whenwhen paid paid out as out a lump as a lump sum.sum. whichwhich ensures ensures it canitbe canpassed be passed on tax on tax The remaining The remaining pension pension fund fund can can free on freedeath on death before before 75. Flexible 75. Flexible usually usually be passed be passed to beneficiaries to beneficiaries drawdown drawdown isn’t isn’t available available to everyone to everyone without without any tax anycharge tax charge at all.atItall. canIt can and there and there are particular are particular rulesrules to meet to meet therefore therefore be sensible be sensible to only to only use as use as before before you can youchoose can choose it, mainly it, mainly a a muchmuch of your of your pension pension as you as need you need for for minimum minimum otherother income income of £20,000 of £20,000 per per tax free tax cash free cash or income, or income, leaving leaving the the annum. annum. rest untouched. rest untouched. It’s important It’s important to bear to bear in mind in mind income income AfterAfter age 75 agethis 75 tax thisbenefit tax benefit is is drawdown drawdown is a high is a high risk option risk option removed removed and all andofall your of your pension pension because because your your income income is notissecure. not secure. becomes becomes subject subject to a 55 to aper 55cent per cent tax tax As income As income drawdown drawdown requires requires you to you to charge charge whenwhen passed passed on ason a lump as a lump sum.sum. be actively be actively involved involved in managing in managing your your If paid If paid out as out anasincome, an income, tax istax charged is charged pension, pension, you have you have to feel to comfortable feel comfortable at recipients at recipients normal normal rate. rate. making making your your own own investment investment decisions. decisions. Partial Partial drawdown drawdown couldcould allowallow you to you to If youIf are youuncertain are uncertain aboutabout its suitability its suitability cut your cut your income income tax bill taxand bill protect and protect we strongly we strongly suggest suggest you contact you contact your your your your pension pension against against tax intax theinevent the event professional professional financial financial adviser. adviser. of your of your death. death.
You You don’t don’t need need to to use use your your entire entire pension pension asas aa secure secure income income immediately immediately
You You want want the the option option toto pass pass your your pension pension toto beneficiaries beneficiaries after after your your death death
BOOST BOOST Pensioners Pensioners will be will given be given the opportunity the opportunity to buytoretirement buy retirement income income from from the the Government Government by making by making additional additional voluntary voluntary National National Insurance Insurance Contributions Contributions that could that could get them get them an an extraextra £1,300 £1,300 a yeara on yeartop onoftop their of their state state pension. pension. Chancellor Chancellor George George Osborne Osborne announced announced in hisinAutumn his Autumn Statement Statement that pensioners that pensioners missing missing out on outthe on the flat-rate flat-rate £155£155 a week a week state state pension pension will will get the getchance the chance to boost to boost their their incomes incomes in in a six amonth six month window window between between October October 20152015 and April and April 2016.2016. It is thought It is thought that pensioners that pensioners will be will be able to able purchase to purchase between between £1 and £1 and around around £25 a£25 week a week that will thatbe will paid be as paid as benefits benefits on top onoftop their of their basicbasic state state pension pension and additional and additional state state pension pension (S2P (S2P or SERPs). or SERPs). The Government The Government currently currently only allows only allows people people to make to make additional additional NI contributions NI contributions to filltoinfill missed in missed yearsyears on their on their NI record. NI record. This isThis offered is offered at a very at a generous very generous rate, rate, with with £705£705 buying buying £3.67£3.67 a week, a week, or justor just over £190 over £190 a year, a year, of income. of income. Currently, Currently, the average the average pension pension income income for those for those with with basicbasic state state pension pension and and S2P isS2P between is between £130£130 and £135 and £135 a week, a week, and many and many people people due to due retire to retire in thein the next few nextyears few years are unhappy are unhappy to beto be missing missing out on outthe on£155 the £155 a week a week new new state state pension pension beingbeing introduced introduced in April in April 2016.2016. But pensioners But pensioners will be will able be to able close to close this gap thisby gap paying by paying additional additional contributions, contributions, the value the value of which of which they they will get willback get back just ajust fewayears few years downdown the the line. line. Even Even thosethose who have who have achieved achieved the the maximum maximum state state pension pension and S2P andwill S2Pbe will be able to able buytoadditional buy additional income, income, as will as will thosethose on defined on defined benefit benefit pension pension schemes schemes who were who were contracted-out contracted-out of of S2P, and S2P,therefore and therefore were were only eligible only eligible to to take the takebasic the basic state state pension. pension. MoreMore details details aboutabout how it how willitwork will work will be will revealed be revealed in theinnext the 18 nextmonths, 18 months, but those but those interested interested in boosting in boosting their their income income should should consider consider starting starting to save to save now. now.
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although additional additional tax may tax be may payable be payable themthem in. This in.isThis especially is especially true for true for although ThereThere are aare number a number of ways of ways to benefit to benefit cash cash whenwhen the bond the bond is encashed, is encashed, in part in or part full. or full. couples, couples, who each who each have have their their own personal own personal from from your your marital marital status. status. youaare higher a higher rate taxpayer rate taxpayer and and allowance. This means, This means, between between you, you you, you If youIfare Although Although you can youcontribute can contribute any sum any sum allowance. spouse spouse or registered or registered civil partner civil partner is a is a investinvest up toup £23,040 to £23,040 into Stocks into Stocks & & your your into ainto personal a personal pension, pension, you can youonly can only couldcould lower-rate lower-rate or non-taxpayer, or non-taxpayer, you could you could Shares Shares ISAs each ISAs each year. year. receive receive tax relief tax relief on contributions on contributions up toup theto the transfer the bond, the bond, or segments or segments of theof the An issue for high for high earners earners usingusing ISAs is ISAs is transfer amount amount you earn you earn each each year, year, and subject and subject to to An issue to them. to them. This means This means any future any future that can’t they can’t be gifted be gifted and they and can’t they can’t be bebond,bond, a maximum a maximum annual annual allowance allowance of £50,000 of £50,000that they chargeable liability liability on encashment on encashment is is subject subject to a trust. to a trust. That means That means they they chargeable (for the (for2013/14 the 2013/14 tax year). tax year). Contributions Contributions mademade assessed assessed on your on your partner, partner, reducing reducing the the remain remain in theininvestor’s the investor’s estateestate for for whichwhich exceed exceed this allowance this allowance will be will taxed. be taxed. potential income income tax liability tax liability on any ongain any gain Inheritance Tax (IHT) Tax (IHT) purposes. purposes. Keeping Keeping potential If youIfwant you want to contribute to contribute moremore than than the the Inheritance realised. theinISA place in place and using and using somesome of theof the realised. annual annual allowance allowance in a tax in ayear, tax year, it’s worth it’s worth the ISA income income to fund to fund an appropriate an appropriate life policy life policy considering considering splitting splitting your your pension pension and that and that ShareShare your your assets assets to reduce to reduce tax tax thatbe can held be in held aninappropriate an appropriate trust trust to to of your of your spouse spouse or registered or registered civil partner. civil partner. that can liabilities liabilities covercover the IHT theliability IHT liability couldcould be one be one Let’s Let’s say you saywanted you wanted to contribute to contribute Capital Capital GainsGains Tax (CGT) Tax (CGT) is payable is payable whenwhen solution. solution. Alternatively, Alternatively, you could you could spendspend the the £60,000 £60,000 and receive and receive tax relief tax relief on the on the you sell youorsell transfer or transfer an asset, an asset, but transfers but transfers ISA funds ISA funds at retirement at retirement before before buying buying an an wholewhole amount, amount, you could you could put £50,000 put £50,000 into into between between spouses spouses or civil or partners civil partners are are annuity annuity or establishing or establishing drawdown drawdown of of your your pension pension and £10,000 and £10,000 into your into your exempt. exempt. The CGT The allowance CGT allowance lets you letsmake you make pension benefits, benefits, as these as these are more are more spouse’s, spouse’s, with with both both staying staying withinwithin the the pension a certain a certain amount amount of gain of each gain each year before year before IHT-efficient up toup age to75, agein75, theinevent the event of of annual annual allowance allowance limit.limit. This isThis dependent is dependentIHT-efficient you pay youtax. payFor tax.the For2013/14 the 2013/14 tax year, tax year, the the death. on your on your partner’s partner’s earnings earnings beingbeing higher higher death. allowance allowance is £10,900 is £10,900 per individual. per individual. So, bySo, by than than the amount the amount you have you have paid in. paid Even in. Even if if sharing sharing assetsassets withinwithin your your investment investment Transfer Transfer bonds bonds before before surrender surrender your your partner partner has no hasincome no income they can they can portfolio between between you and youyour and your spouse spouse or or Investment Investment bondsbonds provide provide a tax-efficient a tax-efficient portfolio receive receive tax relief tax relief on contributions on contributions up toup to civil partner, effectively effectively you double you double the the way of way holding of holding a range a range of investment of investment civil partner, £3,600 £3,600 grossgross each each year. year. If your If your spouse spouse is a is a allowance to £21,800 to £21,800 before before you pay youCGT. pay CGT. fundsfunds in oneinplace one place and aim andto aim provide to provide allowance basicbasic rate taxpayer, rate taxpayer, then then they will theyonly will only With With the rate the of rate CGT of payable CGT payable basedbased on on long-term long-term capital capital growth. growth. Income Income from from receive receive tax relief tax relief at 20atper 20cent per on centthe on the income income tax status, tax status, basicbasic rate rate investment investment bondsbonds is seen is seen by HM byRevenue HM Revenueyour your contribution. contribution. taxpayers pay 18 payper 18cent per and centhigher and higher rate rate & Customs & Customs to beto netbeofnet basic of basic rate tax, rate tax, taxpayers taxpayers taxpayers pay 28 payper 28cent. per cent. Holding Holding assetsassets Get the Getmost the most out of out your of your ISA ISA in theinname the name of theofindividual the individual paying paying the the Regardless Regardless of how of much how much you earn, you earn, lowerlower rate of rate taxofistax sound is sound financial financial ISAs should ISAs should not be not ignored, be ignored, because because planning. planning. Likewise, Likewise, transfers transfers of assets of assets income income from from themthem is tax-efficient is tax-efficient and you and you between between spouses spouses and civil and partners civil partners are are don’tdon’t pay any paycapital any capital gainsgains tax when tax when you you also exempt also exempt from from Inheritance Inheritance Tax (IHT). Tax (IHT). Additionally, Additionally, unused unused IHT nil IHTrate nil band, rate band, the amount the amount of your of your estateestate that isthat notis not subject subject to IHTto(currently IHT (currently £325,000), £325,000), can be can be used used by thebysurviving the surviving partner’s partner’s executors executors on their on their subsequent subsequent death. death.
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 back the original 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 forus for further further information information or if you or ifare youinare anyindoubt any doubt as to as thetosuitability the suitability of an of investment. an investment.
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For UK Forcitizens, UK citizens, Inheritance Inheritance Tax (IHT) Tax (IHT) is is currently currently set atset 40atper40cent per and centisand payable is payable on your on estate your estate once once your net yourassets net assets exceed exceed £325,000. £325,000. ManyMany married married couples couples and and registered registered civil partners civil partners can use canthe use the percentage percentage of theofunused the unused allowance allowance from from the estate the estate of theoffirst thetofirst pass to away. pass away. With With wide wide scale scale homehome ownership ownership and and risingrising property property values, values, more more and more and more people people need need to implement to implement an estate an estate preservation preservation strategy strategy to protect to protect their wealth. their wealth. thanIHT thethreshold, IHT threshold, the value the value of theofgifts the gifts estate’s estate’s potential potential IHT liability IHT liability and writing and writing it itthan the If youIffail youtofail provide to provide a Will,a your Will, estate your estate will will are added are added to your to estate your estate and subject and subject to tax to tax appropriate an appropriate trust.trust. The payout The payout can then can then be distributed be distributed according according to rules to rules set out setbyout by in an in be used be used to meet to meet any bills. any More bills. More importantly, importantly,due. due. law. These law. These are known are known as theas‘Rules the ‘Rules of of gifts are giftsdeemed are deemed to be to outside be outside your your by putting it in an it in appropriate an appropriate trust,trust, it willitbewill beSomeSome Intestacy’. Intestacy’. For example, For example, in England in England and and by putting estate. You can Yougive can as give many as many people people as youas you outside your estate your estate so it won’t so it won’t form form part of part ofestate. Wales,Wales, if youifare youmarried are married with children, with children, the theoutside £250 to £250 each each in anyintax anyyear. tax Ifyear. youIf you your estate your estate and will andnot willbenot liable be liable for IHT. for IHT. like upliketoup first £250,000 first £250,000 of your of estate, your estate, plus any plus any want want to give to larger give larger gifts, gifts, to onetoorone more or more personal personal possessions, possessions, wouldwould pass to pass your to your Gifting Gifting people, people, the first the£3,000 first £3,000 of theoftotal the total amount amount spouse. spouse. The remainder The remainder wouldwould be split, be split, half half GivingGiving your wealth your wealth awayaway to another to another you give you will givebewill exempt be exempt from from tax. You tax.can You can goinggoing to your to children your children whenwhen they reach they reach the the individual individual whilewhile you are youalive are alive couldcould also also also make also make a regular a regular gift asgift long as as long it isasout it is out age ofage 18ofand 18the andother the other half used half used to to reduce reduce your estate’s your estate’s exposure exposure to anto IHTan IHT of your of income your income and doesn’t and doesn’t affectaffect your your generate generate an income an income for your for spouse, your spouse, passing passing liability. liability. Such Such transfers transfers are potentially are potentially standard standard of living. of living. A wedding A wedding or registered or registered to your to children your children on theondeath the death of your of spouse. your spouse. exempt exempt from from IHT and IHTthere and there is no islimit no on limit on civil ceremony civil ceremony or similar or similar eventevent is a good is a good If you’re If you’re not married, not married, your estate your estate goes goes to to thesethese transfers. transfers. This isThis an is excellent an excellent way of way of example example of an of IHT-exempt an IHT-exempt gift. A gift. parent A parent can can your blood your blood relatives, relatives, even even if you’ve if you’ve been been transferring transferring assetsassets that you thatdo younotdoneed not need to to give up givetoup £5,000, to £5,000, a grandparent a grandparent £2,500 £2,500 livingliving with someone with someone for years. for years. A WillAclarifies Will clarifies keep keep in your in estate. your estate. and anyone and anyone else £1,000. else £1,000. your wishes your wishes and states and states who your who your Any gifts Any you giftsmake you make to individuals to individuals will bewill be beneficiaries beneficiaries should should be. be. in your in your future future exempt exempt from from IHT asIHT long as as long youaslive youfor live for TrustTrust Arranging a trusta could trust could be useful be useful if youifwant you want sevenseven years years after after making making the gift, thebut gift,itbut is it is Arranging Life Assurance Life Assurance to some give some money money to your to children your children or or PETa(Potentially PET (Potentially Exempt Exempt Transfer). Transfer). to give Life Assurance Life Assurance can be can a useful be a useful tool intool your in your not anot grandchildren but are butconcerned are concerned they might they might If youIfshould you should die within die within sevenseven years years and and grandchildren estateestate preservation preservation planning. planning. An option An option it tooitsoon, too soon, or, if you or, ifwanted you wanted to give to give the total valuevalue of theofgifts the you giftsmade you made is lessis lessspendspend couldcould be to be take to out takeaout plana to plan cover to cover your your the total awayaway capital capital whilewhile keeping keeping control control over how over how it is managed. it is managed. Tax charges Tax charges can come can come into play into on playtheon the money money placedplaced in trust, in trust, generally generally though, though, if it if it remains remains belowbelow the nilthe rate nilband, rate band, you won’t you won’t need need to paytoany paytax. any tax.
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Critical Critical Illness Illness Insurance Insurance EightyEighty per cent perofcent all of cancer all cancer patients patients find find themselves themselves struggling struggling for cash, for cash, according according to to or covers or covers what what is related is related to your to mortgage, your mortgage, charity charity Macmillan Macmillan Cancer Cancer Support, Support, decreasing decreasing in lineinwith line any withoutstanding any outstanding who estimate who estimate that cancer that cancer costs costs the average the average In peoples’ busy they livesfail theytofail to consider In peoples’ busy lives consider their their balance. balance. patient patient £570 £570 a month a month due to due hospital to hospital traveltravel real value to children, their children, and what real value to their and what wouldwould Always Always checkcheck if yourif employment your employment contract contract and loss and of loss earnings. of earnings. happen to loved their loved ones should they have includes happen to their ones should they have includes a death a death in service in service benefit benefit that will thatgowill go Critical Critical IllnessIllness CoverCover can offer can aoffer financial a financial an accident an accident or fallorill? fall ill? to your to family your family shouldshould you die. youThis die.could This could be be lifeline lifeline to people to people who develop who develop a serious a serious According According to latest to latest figuresfigures from the fromOffice the Office of of enough enough to allow to allow you toyou freetoup free theupmoney the money medical medical condition. condition. It pays It out pays a out tax a free tax lump free lump National National Statistics, Statistics, less than less 20 than per20cent perofcent of you’d you’d have spent have spent on premiums on premiums to fund to fund sum if sum the if policyholder the policyholder is diagnosed is diagnosed with awith a BritishBritish men and men10 and per10cent perofcent British of British women womenalternative alternative cover.cover. life-threatening life-threatening illness illness covered covered by their by policy. their policy. die before die before their 60th their birthdays. 60th birthdays. However, However, Income Income Protection Protection Insurance Insurance The real The benefit real benefit is that is you that can you use can any use any millions millions of Britons of Britons underunder the age theofage 60 of are60 are Income Income Protection Protection Insurance Insurance helps helps cover cover your yourpayment payment you receive you receive however however you want you want and and diagnosed diagnosed with critical with critical illnesses illnesses every every year, year, outgoings outgoings while while you are youunable are unable to work, to work, even evensome some policies policies include include pay outs pay for outs dependants, for dependants, with more with more involved involved in accidents in accidents that affect that affect up to up retirement. to retirement. recognising recognising the financial the financial hardship hardship that caring that caring their ability to work. their ability to work. It paysIt apays selected a selected percentage percentage of your of your for a loved for a loved one brings. one brings. Even ifEven youifare youemployed are employed full time, full your time, your monthly monthly income. income. Depending Depending on theonprovider, the provider, Even ifEven youifare yousingle, are single, individuals individuals with no with no employer employer will generally will generally stop paying stop paying your full your full you can yougenerally can generally choose choose to receive to receive up to up 60 to 60 dependants dependants should should consider consider critical critical illness illness salarysalary after aafter period a period of time of and timethe andstate the state per cent perofcent your of salary, your salary, you will youpay willless payfor less for cover cover to help to maintain help maintain their existing their existing standard standard benefits benefits you qualify you qualify for offer for limited offer limited help. help. cover cover if youifbelieve you believe that you thatcan youlive canonlive a on a of living. of living. SomeSome of theofdifferent the different types types of cover of cover lowerlower percentage. percentage. available available that could that could help support help support you oryou your or your Multiples offeroffer widerwider protection protection Payments Payments can start can as start soon as as soon youassuffer you suffer a a Multiples familyfamily in times in times of crisis of are crisislisted are listed below.below. Life Insurance, Life Insurance, Critical Critical Illness Illness Insurance Insurance and and loss ofloss income of income due todue being to being involved involved in an in an Income Income Protection Protection Insurance Insurance are designed are designed to to Life Insurance Life Insurance accident accident or falling or falling ill, or ill, after or aafter specified a specified protect protect people people in different in different situations. situations. Having Having a a Life Insurance Life Insurance will provide will provide your family your family with awith a period, period, normally normally 4 or 13 4 or weeks. 13 weeks. ManyMany peoplepeople combination combination of the of three the three is the is best the way best to way to guaranteed guaranteed cash lump cash lump sum orsum income or income to help to helpdefer defer the start the of start payments of payments until after until sick afterpay sick pay ensureensure you and youyour and family your family remain remain protected protected them them cope financially cope financially in theinevent the event of your of your from their from employment their employment has finished. has finished. should should any disastrous any disastrous situation situation occur. occur. For people For people death.death. You may Yoube may able beto able defer to defer benefit benefit payments payments with no with dependants no dependants a combination a combination of critical of critical to up 2 years, to 2 years, perhaps perhaps basedbased on having on having ThereThere are options are options between between cover cover that pays that pays for upfor illness illness cover cover and income and income protection protection may be may be other other cover cover that could that could support support in theininterim, the interim, out the outsame the same amount amount no matter no matter whenwhen you die; you die; sufficient. sufficient. such critical as critical illnessillness cover.cover. cover cover that increases that increases in lineinwith line inflation; with inflation; such as Your professional Your professional financial financial adviser adviser will help will help you consider you consider the combination the combination that isthat rightis for right for you. you.
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However, However, over the overpast the year, past some year, some fundsfunds have have LifeLife styling styling pensions pensions lost investors lost investors money money even even as stock as stock markets markets ManyMany company company pension pension fundsfunds use ause a have have been been rising.rising. Even Even more more concerning concerning is is ‘life styling’ ‘life styling’ strategy strategy as their as members their members movemove closercloser that some that some have have not made not made any money any money over over to retirement. to retirement. three three yearsyears and aand small a small amount amount have have failedfailed to to ‘Life styling’ ‘Life styling’ meansmeans that as that members as members produce produce positive positive returns returns over the over last the five. last five. progress through through their 50s theirand 50s60s andthe 60sfund the fund progress One theofreasons the reasons for such for asuch poora poor managers managers gradually gradually switchswitch their money their money out out One of of riskier performance performance is the is high the charges high charges levied,levied, of riskier sharesshares and into andsupposedly into supposedly less less additional additional to the to typical the typical annual annual charge charge of of risky areas risky areas such as such bonds as bonds and cash. and cash. The idea The idea 1.5cent per for centold-style for old-style funds,funds, manymany to reduce to reduce the risk theofrisk anyofstock any stock market market1.5 per We look We at look some at some investments investments you should you should beingbeing Absolute Absolute Return Return Funds Funds also charge also charge a a falls. falls. approach approach with caution, with caution, as they as may they pose may pose performance performance fee of fee 15 of per 15 cent per of cent any of return any return However, However, this strategy this strategy suggests suggests that bonds that bonds somesome hidden hidden dangers. dangers. aboveabove the fund’s the fund’s benchmark, benchmark, whichwhich is often is often will always will always be less berisky less than risky shares, than shares, and that and that Savings Savings accounts accounts the prevailing three three monthmonth interest interest rate. rate. is notisalways not always the case. the case. ManyMany professionals professionals the prevailing Having Having cash on cash deposit on deposit is viewed is viewed as theas the believe The Financial The Financial Conduct Conduct Authority Authority (FCA), (FCA), the the believe that the thatcurrent the current rise inrise theinprice the price of of ultimate ultimate safe haven safe haven for investors. for investors. City watchdog, City watchdog, which which took over took from over from the the manymany government government bondsbonds is unsustainable is unsustainable Not today Not today as a combination as a combination of inflation, of inflation, tax tax Financial Financial Services Services Authority Authority (FSA), (FSA), raised raised and that andsavers that savers couldcould be in be forina shock for a shock should should and ultra-low and ultra-low interest interest rates rates meansmeans that, in that, in sentiment concerns concerns aboutabout the complex the complex strategies strategies sentiment turn against turn against bondsbonds and this and this almost almost all cases, all cases, the value the value of savers’ of savers’ deposits deposits employed by some by some funds,funds, including including the use theofuse of ‘bubble’ ‘bubble’ in theinbond the bond market market bursts,bursts, leaving leaving employed is reduced is reduced year by year year. by Far year.from Far from beingbeing a safea safe derivatives. derivatives. The FCA Thebelieves FCA believes somesome investors investors heavyheavy losseslosses as a consequence. as a consequence. haven, haven, a deposit a deposit account account is a reducer is a reducer to theto the Billions struggle struggle to understand to understand thesethese products, products, Billions of pounds of pounds of pension of pension money money is is wouldwould real value real value of your of hard your earned hard earned cash. cash. which which therefore therefore might might not be not suitable be suitable for for invested invested in lifestyle in lifestyle funds,funds, yet the yetpotential the potential With With inflation inflation standing standing at 2.7atper 2.7cent, per cent, if ifrisk torisk them. them. investors to investors has not hasbeen not been widelywidely you are youa are basic a basic rate taxpayer rate taxpayer anything anything less less discussed. We are Wenot aresuggesting not suggesting any ofany these of these discussed. than 3.38 than per 3.38cent per interest cent interest a yeara will yearreduce will reduce products products are necessarily are necessarily bad, as bad, they as may they may Absolute Absolute Return Return Funds Funds the value the value of your of savings your savings in realinterms. real terms. have have a place a place in people’s in people’s portfolios portfolios for a for a fundsfunds are supposed are supposed to deliver to deliver absolute, absolute, A higher A higher rate taxpayer rate taxpayer needsneeds to findtoan find an TheseThese variety variety of reasons. of reasons. However, However, at theatvery the least, very least, betterbetter than zero than per zerocent per returns cent returns in anyin any investors account account paying paying 4.5 per 4.5cent. per cent. investors should should consider consider their portfolio’s their portfolio’s market market conditions, conditions, this being this being their attraction. their attraction. Of theOfhundreds the hundreds of ISAofand ISAnon-ISA and non-ISA adversity adversity to risktoon risk a regular on a regular basis,basis, as as accounts accounts in theinmarket the market today,today, only aonly handful a handful seemingly seemingly ‘safe’‘safe’ products products can prove can prove muchmuch offer offer basic basic rate taxpayers rate taxpayers a realareturn real return after after riskierriskier than once than once thought. thought. tax and taxinflation and inflation whilewhile for higher for higher rate rate taxpayers taxpayers the choice the choice is even is even less, all less, of all which of which are cash are ISAs cash with ISAs long with fixed-rate long fixed-rate termsterms of up of up to fivetoyears. five years. Considering Considering that the thatBank the Bank of of England England is expected is expected to raise to raise interest interest rates rates in in the next the five nextyears, five years, most most advisers advisers do notdo not recommend recommend locking locking awayaway your money your money for this for this long. long. The value The value of your of investment your investment and the andincome the income from from it it can go 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 is not a 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 in any doubt any doubt as to as thetosuitability the suitability of an of investment. an investment.
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ew research from Prudential shows that more than half of British couples aged 40 and over have not made any arrangements to ensure that their surviving partner, widow or widower, will continue to receive a retirement income. It is women over 40 who are most at risk, with 20 per cent planning to depend entirely on the income of her other half in retirement, compared with just five per cent of men. Prudential has found that 28 per cent of couples have yet to discuss the impact on pension arrangements of one partner’s death. Research shows, even those couples which have discussed their retirement finances have still made decisions which could leave one of them without any income if they outlive their partner. Making the right decisions on the best retirement income options, including what happens when one partner dies, can be daunting but an important step is to engage in retirement conversations with your spouse/partner. For couples looking to enjoy a comfortable retirement, organising and agreeing income options should be even more important for them than managing day-to-day-finances.
The research also found that there is still confusion among couples about the sources of their retirement income. It is thought that as many as 41 per cent admit they have never discussed how they will turn their pension savings into an income in old age, 20 per cent said they had discussed it but couldn’t agree on the best option to follow. Just 10 per cent planned to purchase a ‘joint life’ annuity, where a surviving spouse, partner or dependant will continue to receive an income after the person who bought the annuity with their pension pot dies. More concerning is that just 30 per cent of couples have reached any decision at all. Many people with no dependent partners/spouses opt for a single life annuity, but this covers just them and not any other dependant relying on them for financial support because payments stop at once on death. However many people buy a single life annuity because it pays a higher level of income than a joint life annuity, but this could bring financial hardship to their partner should they die early. Experts say couples should seek advice from a pensions specialist or financial
adviser well in advance of retirement and seek free information from independent organisations like the Money Advice Service and The Pensions Advisory Service.
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)