MoneyMatters
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WithWith inflation inflation falling falling … … Where Where NOW? NOW? PagePage 2 2 The The secrets secrets of SIPP of SIPP success success … … flexible option PagePage The The flexible option 3 3 Pension tax relief … How much Pension tax relief … How much will be youentitled be entitled will you to? to? PagePage 3 3 Are an youEthical an Ethical investor? Are you investor? … … Should ethics outweigh growth? Should ethics outweigh growth? PagePage 4 4 Tax breaks & joint finances Tax breaks & joint finances … … A combination of choices A combination of choices PagePage 5 5 you take a chance? WILLWILL you take a chance? … … you written a Will? HaveHave you written a Will? PagePage 5 5 Make the most of a £500,000 Make the most of a £500,000 pension potThe …. The impact pension pot …. impact of of choices youryour choices PagePage 6 6 Failing to think Failing to think the the unthinkable… unthinkable… DoesDoes youryour insurance insurance covercover you?you? PagePage 7 7 Working in retirement Working in retirement … … Do prefer you prefer being Do you being “unretired”? “unretired”? PagePage 8 8 School fee planning…. School fee planning…. schemes NewNew schemes PagePage 9 9 Junior Transfers Junior Transfers … … Funds Junior ChildChild TrustTrust Funds into into Junior proposed ISAs ISAs proposed PagePage 9 9 REITsREITs … … Estate Investment Trusts RealReal Estate Investment Trusts PagePage 10 10 An option between annuities An option between annuities drawdown… and and drawdown… Investment-linked annuities Investment-linked annuities PagePage 11 11 Unclaimed pension pots… Unclaimed pension pots… What happens to them? What happens to them? PagePage 12 12
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Carney Carney will only willhave only one havevote one out voteofout nine of innine in the MPC the as MPC does as Sir does Mervyn Sir Mervyn King, King, it is it is suspected suspected that he that willhebewill able beto able carry to acarry a majority majority of MPC of members MPC members shouldshould he favour he favour help for help theforeconomy. the economy. The Consumer The Consumer PricesPrices Index Index (CPI) inflation, (CPI) inflation, more more It isbelieved also believed that the thatBank the Bank of England of England dropped dropped to a seven-month to a seven-month low oflow 2.4ofper 2.4cent per cent It is also underunder Carney Carney will adopt will adopt the policy the policy of giving of giving in recent in recent months, months, providing providing significant significant relief relief for for guidance on theonlikely the likely direction direction of interest of interest industry, industry, consumers consumers and the andBank the Bank of England. of England.guidance although although no one noexpects one expects the Bank the Bank of of In addition, In addition, helpedhelped by lower by lower petrolpetrol prices,prices, core corerates, rates, to take tointerest take interest rates below rates below 0.5 per 0.5 per inflation inflation retreated retreated to a 41-month to a 41-month low oflow justof2just England 2 England cent. cent. per cent. per The cent.only Thesignificant only significant upward upward impactimpact on on inflation inflation came came from higher from higher food prices. food prices. The stock The stock market’s market’s position position This was Thisthe wasfirst thetime first that timeinflation that inflation had had The big Thedrop big in drop inflation in inflation has hithas thehitCity thehard; City hard; fallenfallen back since back since September September 2012 2012 and gives and gives sending sending UK equities UK equities deeperdeeper into what into what many many incoming incoming Bank Bank of England of England governor governor feel isfeel overvalued is overvalued territory. territory. Mark Mark Carney Carney greater greater manoeuvrability manoeuvrability on on Inflation Inflation has squeezed has squeezed growth, growth, whichwhich has has monetary monetary policy.policy. now slackened now slackened substantially, substantially, but the butstock the stock A CPIAofCPI 2.4ofper 2.4cent, per although cent, although welcome welcome is is markets’ markets’ Bull Run Bullshould Run should not benot confused be confused with with still putting still putting an appreciable an appreciable squeeze squeeze on on real progress. real progress. households’ households’ purchasing purchasing powerpower given given that that The outlook for inflation for inflation average average weeklyweekly earnings earnings actually actually fell 0.7 fellper 0.7 per The outlook Themay CPImove may move back up back over up the overnext the few next few cent year-on-year cent year-on-year in March in March and were and were only up only upThe CPI months, but it but mayitnot mayreach not reach 3 per 3cent perover cent over 0.4 per 0.4cent peryear-on-year cent year-on-year in theinthree the three months monthsmonths, the summer, even though even though it wasitonce was thought once thought to March, to March, according according to analysts to analysts at Investec at Investec the summer, it could it could go as go high as as high 3.5asper 3.5cent peras cent hadas had May 2013. May 2013. seemed seemed likely likely earlierearlier this year. this year. WhatWhat doesdoes this mean this mean for monetary for monetary With underlying With underlying price pressures price pressures contained contained policy? policy? over the overcoming the coming months months by significant by significant excessexcess The easing The easing of upside of upside inflation inflation risks facilitates risks facilitates capacity, capacity, furtherfurther moderate moderate wage wage growth growth amid amid furtherfurther monetary monetary stimulus stimulus by thebyBank the Bank of of appreciable appreciable labourlabour market market slack,slack, and retailers and retailers England, England, if the ifrecent the recent signs signs of theofimproving the improving hard pressed hard pressed to raise to prices raise prices given given still still economy economy falter falter or if the or ifMonetary the Monetary PolicyPolicy significant significant pressures pressures on consumers, on consumers, inflation inflation Committee Committee (MPC)(MPC) feel that feelthe thateconomy the economy could could shouldshould be held.. be held.. do with do some with some extra extra stimulus stimulus to build to build More More significantly significantly the forecast the forecast is for is CPIfor CPI momentum. momentum. inflation inflation to stand to stand at 2.7atper 2.7cent peratcent theatend theofend of ManyMany believe believe the Bank the Bank of England of England will gowill go 2013 2013 and then and move then move gradually gradually downdown to stand to stand for more for more quantitative quantitative easingeasing once Mark once Mark Carney Carney at 2.1atper 2.1cent peratcent theatend theofend 2014. of 2014. ThereThere is is takes takes over as over governor as governor in July.inItJuly. is thought It is thought he he strongstrong beliefbelief that inflation that inflation could could finallyfinally get get will bewill keen be to keen try to and trybuild and build up escape up escape velocity velocity downdown to thetopromised the promised position position of 2.0ofper 2.0cent per cent from the fromeconomy’s the economy’s extended extended softness softness and will and will early in early 2015. in 2015. be keen be to keen establish to establish his presence. his presence. Even though Even though
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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SIPPS SIPPSsuccess success SIPPsSIPPs continue continue to provide to provide investors investors with with a provider a provider should should provide provide the full therange full range of of greatgreat way of way saving of saving for the forfuture. the future. SIPPsSIPPs retirement retirement options. options. are the aremost the most flexible flexible of any ofpension any pension Choosing Choosing a product a product for life forislife a decision is a decision products products currently currently available available in thein the that cannot that cannot be rushed, be rushed, so it so is worth it is worth marketplace marketplace but with but with increased increased scrutiny scrutiny talking talking through through all the allpossible the possible options. options. by the byregulator the regulator and difficult and difficult economic economic It’s also It’s very also important very important to understand to understand the the timestimes this means this means that selecting that selecting the right the rightrulesrules of theofSIPP the SIPP provider provider in terms in terms of of provider provider couldcould nevernever be more be more important. important. investments. investments. Longevity Longevity comes comes with with experience experience whichwhich Understanding Understanding the fees the and fees exactly and exactly is crucial is crucial whenwhen selecting selecting a SIPP a SIPP provider. provider.whatwhat they they involve involve is very is important; very important; for for Ensuring Ensuring that your that your provider provider has ahas fulla full instance, instance, for certain for certain assets, assets, such such as as understanding understanding and proven and proven knowledge knowledge of ofcommercial commercial property, property, providers providers may may use use the market the market will offer will offer you peace you peace of mind. of mind. ‘time-costing’ ‘time-costing’ so it’ssoworth it’s worth knowing knowing whatwhat So what So what do you do need you need to ensure? to ensure? a particular a particular transaction transaction involves. involves. Making Making Be certain Be certain that the thatSIPP the SIPP provider provider you you sure sure the fees the are feesclear are clear from from the beginning the beginning choose choose passes passes the new the new capital capital adequacy adequacycan prevent can prevent you from you from receiving receiving a nasty a nasty rules;rules; they they mustmust comply comply in fullinwith full with the the shockshock later later on. on. regulatory regulatory changes changes and be andinbe existence in existence Be diligent Be diligent and read and read the small the small print print for the forduration the duration of your of your retirement. retirement. concerning concerning charges charges and requirements. and requirements. A check A check on their on their financial financial strength strength would wouldSomeSome providers providers stipulate stipulate that you that need you need to to be recommended. be recommended. The proposed The proposed capital capital use their use their professional professional connections connections or risk or risk adequacy adequacy rulesrules are the areway the forward way forward for for incurring incurring extraextra costs.costs. Clarity Clarity around around costscosts the industry the industry and protection and protection of consumers. of consumers. and knowing and knowing exactly exactly whatwhat is expected is expected of of Trusted Trusted SIPP SIPP providers providers should should be more be more you and you what and what the provider the provider will offer will offer is is than than capable capable of meeting of meeting the new the new invaluable. invaluable. demands demands if they if they are aare strong a strong and well and well established established business. business. Choosing Choosing the right the right SIPP SIPP provider provider cannot cannot be done be done hastily, hastily, you you needneed to betoconfident be confident that your that your provider provider can be canrelied be relied uponupon to protect to protect your your retirement retirement savings savings in theinlong the long term.term. A SIPP A SIPP provider provider whichwhich can support can support clients clients is important is important as there as there are always are always manymany questions questions and, and, whilewhile financial financial advisers advisers will have will have an understanding, an understanding, it it can help can help to have to have a provider a provider at hand at hand to to explain explain the more the more technical technical issuesissues and and comecome up with up with solutions solutions to suit to individual suit individual circumstances. circumstances. SIPPsSIPPs are known are known for their for their flexibility, flexibility, as as they they werewere designed designed from from the desire the desire to to give investors give investors greater greater control control over over their their pension pension and aand SIPP a SIPP
All eligible All eligible pension pension contributions contributions automatically automatically qualify qualify for basic-rate for basic-rate tax relief: tax relief: • If you • Ifhave you have UK earnings, UK earnings, you can you can contribute contribute your your entireentire income income into into your your pension pension (subject (subject to a to a 2013/2014 2013/2014 cap ofcap £50,000). of £50,000). You You will qualify will qualify for basic-rate for basic-rate tax relief tax relief automatically automatically and for and for higher-rate higher-rate and additional and additional rate tax rate tax reliefrelief on that on portion that portion of your of your income income that attracts that attracts a higher a higher tax tax rate. Please rate. Please note:note: Higher Higher earners earners may be may subject be subject to limits to limits on the on the higher-rate higher-rate tax relief tax relief available. available. • If you • Ifdo younot dohave not have any UK any UK earnings earnings you can youstill canpay stillapay neta net contribution contribution of £2,880 of £2,880 a yeara into year into your your pension pension and receive and receive basic-rate basic-rate tax relief tax relief of £720, of £720, whichwhich will bring will bring your your overall overall investment investment up toup to £3,600. £3,600. You can Youalso can set alsoupseta up a pension pension for a for child a child or spouse or spouse and and pay the paycontributions the contributions on their on their behalfbehalf up toup these to these limits.limits. The amount The amount of taxofrelief tax relief you will you will be entitled be entitled to willtodepend will depend on your on your individual individual circumstances circumstances and most and most importantly, importantly, whether whether you are youaare a higher-rate higher-rate taxpayer taxpayer or not. or Please not. Please note note that tax thatrules tax rules can change. can change. Tax band Tax band explanations explanations An individual An individual with with no other no other allowances allowances wouldwould start start to payto pay higher higher rate tax rateover tax an overincome an income of of £41,450 £41,450 (calculated (calculated as your as your personal personal allowance allowance plus the pluspoint the point at which at which the higher-rate the higher-rate tax band tax band applies). applies). Income Income received received over this over this figurefigure wouldwould be eligible be eligible for higherfor higherrate tax raterelief tax relief if youifdecided you decided to to investinvest in a pension. in a pension.
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reached reached a record a record heightheight of around of around £11 £11 investments investments in Central in Central America, America, to social to social Although Although ethicalethical investment investment is often is often billion, up from up from £4 billion £4 billion ten years ten years ago. ago. housing housing projects projects in Brazil in Brazil whichwhich are helping are helping considered considered to be to a fairly be a fairly recentrecent trend,trend, the the billion, the last thedecade, last decade, the number the number of ethical of ethicalto solve to solve the country’s the country’s majormajor housing housing deficit, deficit, concept concept actually actually goes goes back back hundreds hundreds of of Over Over investors investors has tripled, has tripled, from from 250,000 250,000 to to and carbon and carbon neutral neutral oil drilling oil drilling investments investments in in years.years. Even Even until fairly until fairly recently, recently, investors investors who who three-quarters of a million. of a million. the USA. the USA. chosechose to invest to invest in ethically-minded in ethically-minded products productsthree-quarters WhenWhen it comes it comes to funds, to funds, there there are many are many to to were were oftenoften perceived perceived as a marginal as a marginal group.group. Profits Profits and principles and principles choose choose from,from, and they’re and they’re oftenoften categorised categorised But the Butconcept the concept has blossomed has blossomed into ainto viable a viable Investors Investors are, however, are, however, by nobymeans no means in various in various shades shades of green, of green, depending depending on theon the and rewarding and rewarding investment investment strategy, strategy, and inand in prepared prepared to sacrifice to sacrifice good good investment investment sensesense criteria criteria they apply they apply to their to investment their investment the wake the wake of theoffinancial the financial crisis,crisis, the nation the nation to buytointo buysuch into products. such products. There’s There’s still astill a decisions. decisions. A ‘dark A ‘dark green’green’ applies applies strict strict has become has become more more concerned concerned aboutabout the the widelywidely held belief held belief that investing that investing ethically ethically negative negative screening screening beforebefore investing investing in a in a impact impact of its of choices. its choices. Research Research from from EIRIS EIRIS meansmeans having having to sacrifice to sacrifice financial financial company, company, and excludes and excludes companies companies involved involved the non-profit the non-profit sustainable sustainable investment investment performance, performance, but the buttwo thecan twoactually can actually go go in unethical in unethical practices practices such as such defence as defence or or research research specialists, specialists, in fact, in shows fact, shows that an that an hand hand in hand. in hand. No-one No-one wantswants to settle to settle for a for a pharmaceuticals. pharmaceuticals. A ‘light A ‘light green’green’ fund uses fund uses increasing increasing number number of people of people wouldwould be be compromise compromise on returns, on returns, and they and should they should positive positive screening screening and invests and invests in companies in companies interested interested in investing in investing ethically ethically if theyif simply they simply nevernever think think that it’s thata it’s choice a choice between between ethicsethics whichwhich are making are making a positive a positive contribution contribution to to knewknew more more aboutabout it. it. or growth. or growth. the environment, the environment, or which or which have have a good a good At theAtsame the same time, time, however, however, people people are are In many In many cases,cases, ethicalethical investments/funds investments/funds ethicalethical track track record. record. becoming becoming more more conscious conscious of theof the have have produced produced above-average above-average returns, returns, even even SomeSome fundsfunds combine combine both both screening screening environmental environmental and social and social impact impact their their allowing allowing for the forcost the of cost extra of extra screening, screening, and and methods methods with awith ‘best a ‘best in class’ in class’ approach. approach. financial financial choices choices couldcould make,make, with more with more than than manymany of them of them have have outperformed outperformed more more So, while So, while a company a company may invest may invest in theinoilthe oil three three quarters quarters concerned concerned aboutabout issuesissues such such mainstream mainstream investments. investments. and gas andsector, gas sector, it willitonly will invest only invest in those in those as climate as climate change, change, human human rightsrights and and The investment options options whichwhich are doing are doing the most the most to limit to their limit their deforestation. deforestation. Perhaps Perhaps that’sthat’s why awhy higha high The investment As regards investment investment options, options, you can you can environmental environmental impact. impact. percentage percentage of those of those surveyed surveyed say they’d say they’d be beAs regards choose choose to invest to invest directly directly into companies into companies or or interested interested in investing in investing ethically ethically if theyif simply they simply projects projects whichwhich meet meet ethicalethical criteria, criteria, or look or look knewknew more more aboutabout it. it. at ethical fundsfunds whichwhich can be can growth be growth or or Just how Just much how much the market the market has grown has grown is is at ethical income generated. generated. highlighted highlighted in figures in figures from from EIRIS,EIRIS, showing showing income There There are many are many different different typestypes of projects of projects that the thatamount the amount of money of money invested invested in in to consider, from from bamboo bamboo plantation plantation Britain’s Britain’s greengreen and ethical and ethical fundsfunds recently recently to consider, 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 Past performance 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.
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WILL WILL
You You take take a chance a chance
Thinking Thinking aboutabout the possibility the possibility of of something something bad happening bad happening to youtoisyou is nevernever an easy an easy subject subject but, but, nonetheless, nonetheless, it is hugely it is hugely important. important. According According to Unbiased.co.uk, to Unbiased.co.uk, 10 10 per cent per of cent Britons of Britons have have nevernever considered considered writing writing Wills,Wills, and aand a similar similar number number of people of people believe believe their their estates estates will go willtogo thetoright the right people people automatically. automatically. MoreMore worrying worrying is thatis more that more than than a third a third of people of people over 55 overdo55not dohave not have Wills Wills in place. in place. AboutAbout half of half allof married all married adultsadults apparently apparently do not dohave not have Wills,Wills, even even though though a spouse a spouse or a civil or a partner civil partner may inherit may inherit only £250,000 only £250,000 if there if there is no is Will noin Will place in place and there and there are are children children or grandchildren. or grandchildren. MoreMore than than half of half allof unmarried all unmarried adultsadults livingliving with with a partner a partner intend intend to leave to leave a property a property to a loved to a loved one, one, yet partners yet partners face severe face severe disappointment disappointment if there if there is no is Will noin Will in place.place. The surviving The surviving partner partner can only can only claimclaim against against the other the other partner’s partner’s estateestate for maintenance, for maintenance, and they and they must must have have been been livingliving together together throughout throughout the two the years two years before before the death. the death. UnderUnder the rules the rules of intestacy, of intestacy, whenwhen a person a person dies without dies without leaving leaving a valid a valid Will, the Will,estate the estate must must be shared be shared out according out according to certain to certain rules.rules. Only Only married married or civil or partners civil partners and some and some otherother closeclose relatives relatives can can inherit inherit underunder the rules the rules of intestacy. of intestacy. ManyMany people people are simply are simply unaware unaware of theofcontrol the control that having that having a Willa Will givesgives you and youits and importance its importance in in ensuring ensuring your your lovedloved ones ones receive receive whatwhat you intend you intend for them. for them.
The average The average age that agepeople that people get married get married is is MakeMake savings savings by combining by combining jointjoint rising.rising. In 1979, In 1979, almost almost 75 per75cent per of cent women of women financial financial products products aged aged 18-4918-49 were were married, married, but bybut 2011 by 2011 that that If youIfjoin youyour join resources, your resources, you can youactually can actually had dropped had dropped to justto47 just per47cent. per cent. MoreMore people people makemake yourselves yourselves betterbetter off. Nearly off. Nearly three three in in are now are cohabiting now cohabiting beforebefore marriage, marriage, but but five households five households are missing are missing out onout savings on savings there there are still areastill higha proportion high proportion of people of people of around of around £350 £350 a yeara because year because they do they notdo not who consider who consider themselves themselves single.single. For example, For example, consolidate consolidate their finances their finances with family with family more more than nine than in nine 10 in people 10 people between between 25 and 25 and discounted discounted products, products, according according to Aviva. to Aviva. 34 are34single, are single, dropping dropping to four toinfour fiveinmen five men The biggest The biggest savings savings can becan made be made on home on home or or and seven and seven in 10 in women 10 women aged aged between between 35 35 vehicle vehicle insurances. insurances. So it’sSoworth it’s worth investigating investigating and 49 and according 49 according to thetoOffice the Office of National of National your options your options together together and get andbetter get better joint joint Statistics. Statistics. discounts. discounts. The effect The effect meansmeans that we thatare weallare getting all getting your your jointjoint financial financial affairs affairs used used to having to having our own our financial own financial freedom, freedom, KnowKnow Knowing Knowing your cash your flow cash at flow the at bank, the bank, or how or how as weasbuild we build our own our careers own careers and deal and with deal with much much you have you have owing owing on credit on credit as a couple as a couple is is financial financial decisions decisions each each day without day without key to key making to making sure you sure do you not do overspend not overspend and and considering considering or worrying or worrying aboutabout a partner, a partner, put yourselves put yourselves in difficulty. in difficulty. When When you both you both or their or financial their financial issues.issues. WhenWhen you do you meet do meet canyour see statements your statements you can youhelp can each help each someone someone and decide and decide to a commitment to a commitment to to can see other, other, and there and there is nothing is nothing to stop to you stop each you each each each otherother both emotionally, both emotionally, legallylegally and and having having your own your savings own savings accounts accounts to section to section financially, financially, then you thenneed you need to decide to decide whether whether other other funds. funds. you should you should get a get jointa account joint account and the and the chances chances are you aremay you find mayyour find new your spouse new spouse or Make or Make a Willa Will civil partner civil partner feels very feels differently very differently to you. to you. Sadly,Sadly, more more than two thanthirds two thirds of us of dieuswithout die without But allBut is not all islost; not in lost; factinjoint fact accounts joint accounts can can a Will,a and Will,even and even thosethose have have written written one may one may be beneficial be beneficial and listed and listed belowbelow are some are some of of find itfind is out it isofout date of by date thebytime the the timeworst the worst the advantages: the advantages: happens. happens. It is thought It is thought that more that more than athan thirda third of people of people over 50 over say50their say circumstances their circumstances Efficiently Efficiently use tax usebreaks tax breaks changed changed significantly significantly since since they last they last If oneIfofone youofisyou in aishigher in a higher tax band tax band than the than thehave have changed their Will, their according Will, according to Saga. to Saga. other,other, it makes it makes sensesense to have to have savings savings in thein thechanged So make So make sure that sureyou thatmake you make a Willaand Willbe and be namename of theoflower the lower taxpayer, taxpayer, because because you will you will sure to sure review to review it at regular it at regular intervals, intervals, or when or when be charged be charged less tax lessontax interest, on interest, this isthis is you have significant significant life events life events like buying like buying a a legitimate legitimate tax planning. tax planning. Also, Also, if youifboth you both you have property, property, having having children, children, or getting or getting an an have have individual individual savings savings account account (ISA) (ISA) inheritance inheritance yourself. yourself. Address Address them them sooner sooner allowances allowances that you thatcan youuse canfor usesavings for savings each each ratherrather than later, than later, and make and make sure your sure loved your loved year, from year, April from April 6 to April 6 to April 5, 2014 5, 2014 you can youput can put are protected. are protected. Your professional Your professional £11,520 £11,520 into your into ISA, yourand ISA,your and spouse your spouse or or ones ones financial financial adviser adviser will be will able be to able help to you helpplan you plan civil partner civil partner can do can thedosame. the same. ThereThere are other are other for events such events beforebefore they arrive. they arrive. tax allowances tax allowances you could you could maximise maximise too, and too, andfor such an accountant an accountant or professional or professional financial financial TakeTake advice advice adviser adviser will help will you helpmake you make the most the most of them. of them. For any Foradvice any advice on your on personal your personal financial financial circumstances, circumstances, pensions pensions and investments and investments whether whether current current or oldorplease old please contact contact us and us and we will webe will more be more than happy than happy to discuss to discuss the the options options available available to you. to you.
Will Will writing writing is not is regulated not regulated by the by Financial the Financial Conduct Conduct Authority. Authority.
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What What would would youryour priority priority be ifbeyou if you hadhad £500,000 £500,000 builtbuilt up within up within youryour pension pension fund? fund? Would Would youyou use use it toitensure to ensure a comfortable a comfortable retirement? retirement? Or would Or would it beitto bebenefit to benefit youryour heirs heirs from from youryour wealth? wealth? A £500,000 A £500,000 pension pension pot pot would would be enough be enough to deliver to deliver an annuity an annuity income income of around of around £26,000 £26,000 per per year, year, but but could could also,also, withwith careful careful planning, planning, produce produce a reasonable a reasonable inheritance. inheritance. to provide to provide a taxable a taxable income income its value its value and the andtax thefree taxcash free cash sustainable be sustainable without without a higha high Maximising Maximising income income options optionsnot benot sum available until the until the through through eithereither annuity annuity purchase purchasesum available risk, high risk, return, high return, investment investment plan, plan, Does Does this mean this mean getting getting the most the most or capped or capped or flexible or flexible drawdown. drawdown. entitlement entitlement is exhausted. is exhausted. The The it is more usualusual to seetowithdrawal see withdrawal income income at theatbeginning, the beginning, or is itor is itit is more Segments Segments not encashed not encashed are are remaining remaining fund will fundcontinue will continue to to of between of between 3 per 3cent per and cent and maximising maximising income income over your over your limitslimits “uncrystallised”. “uncrystallised”. ThoseThose segments segments grow grow without without liability liability to income to income per of cent theoffund. the fund. lifetime lifetime by trying by trying to achieve to achieve 5 per 5cent wherewhere the 25the per25cent per tax-free cent tax-free or capital or capital gainsgains taxestaxes (with (with the the Another approach approach is to consider is to consider growth? growth? Considerations Considerations whichwhich Another cash income or income has been has been issuedissuedexception exception of theof10the per10cent per cent investment-linked investment-linked annuities, annuities, cash or impact impact on choice on choice are: how are: much how much withholding withholding tax). tax). are “crystallised” benefits. benefits. can pay canapay higha starting high starting are “crystallised” risk can riskbecan taken, be taken, inflation inflation and andwhichwhich By staggering payments payments from from a aPhased Phased retirement retirement is alsoisan also an income, income, similar similar to 120toper 120cent per of cent ofBy staggering tax liability. tax liability. effective effective inheritance inheritance tax (IHT) tax (IHT) pension pension pot until pot “full” until “full” retirement, retirement, GAD, GAD, with the with potential the potential for future for future ManyMany people people with large with large planning tool as tool anyas any tax efficiency tax efficiency increases. increases. Tax-free Tax-freeplanning income income growth. growth. pension pension pots choose pots choose to maximise to maximise cash can cashbecan taken be taken from from the age the ageuncrystallised uncrystallised benefits benefits can becan be income income by investing by investing in either in either a a Leaving Leaving somesome to to of 55 of and, 55 taken and, taken as a 25 as per a 25cent per cent passed passed on toon nominated to nominated level or level inflation-linked or inflation-linked annuity. annuity. beneficiaries beneficiaries and retaining and retaining beneficiaries, beneficiaries, through through a trusta trust tax free taxlump free lump sum of sum a £500,000 of a £500,000 A married A married couplecouple in their in 60s, their 60s, somesome income income structure free offree IHTofand IHTwithout and without pension pension pot, would pot, would release release structure couldcould on average on average receive receive more more Phased Phased drawdown drawdown is an is option an option usingusing an individual’s an individual’s nil rate nil rate £125,000. £125,000. However, However, takingtaking than £23,000 than £23,000 per annum per annum grossgross wherewhere there there is no is immediate no immediate “slices” “slices” of income, of income, until full until full band.band. Crystallised Crystallised benefits benefits followfollow from from a pot aofpot £500,000 of £500,000 for a joint for a joint need need for the forfull thetax-free full tax-free cash cash retirement, retirement, couldcould provide provide an an the death the death benefit benefit rules rules applicable applicable life, level life, annuity level annuity and £12,057 and £12,057 amount, amount, and where and where maximising maximising additional additional annual annual tax-free tax-free income. income. to annuity to annuity purchase purchase or income or income from from an inflation-linked an inflation-linked annuity. annuity. deathdeath benefits benefits is desirable. is desirable. drawdown. WhereWhere lump lump sums sums are are At retirement, At retirement, the remaining the remaining drawdown. This isThis a straight is a straight forward forward easy easy With With phased phased drawdown, drawdown, part part crystallised crystallised benefits benefits are are income income pot can potbecan structured be structured taken,taken, strategy, strategy, but carries but carries little risk little risk of theofpension the pension is “crystalllised” is “crystalllised” at at usingusing any remaining any remaining tax-free tax-free taxable taxable at 55 at per55cent. per cent. with their with pension. their pension. In reality In reality this this outset, outset, this means this means that benefits that benefits cash, cash, by selecting by selecting an annuity an annuity or or plan isplan lessispopular less popular now because now because Preserving Preserving wealth wealth are drawn are drawn from from this portion. this portion. drawdown drawdown income income plan to plan to annuity annuity rates rates are soare lowsoand low and On death On death beforebefore the age theofage 75,of 75, The amount The amount of income of income required required generate generate the most the most efficient efficient net net inflation-linked inflation-linked annuities annuities are soare so any untouched any untouched pension pension fund fund determines determines the amount the amount of theof the income income strategy strategy usingusing available available expensive. expensive. withinwithin the lifetime the lifetime allowance allowance can can fund which fund which will be will “crystallised”. be “crystallised”. tax rates tax rates and allowances. and allowances. Another Another way isway to take is to pension take pension pass to pass beneficiaries to beneficiaries free offree anyof any 25 per25cent per of cent thisofwill thistake will the take the The pension The pension fund may fund remain may remain drawdown, drawdown, wherewhere the maximum the maximum tax. Iftax. theIfpension the pension holderholder dies dies form form of tax-free of tax-free cash, cash, with the with the invested, invested, potentially potentially increasing increasing income income at theatoutset the outset for capped for capped after after the age theofage 75,ofthe 75,entire the entire remaining remaining 75 per75cent per being cent being used used drawdown drawdown is currently is currently £28,000 £28,000 pension pension fund, fund, if paidif as paid a lump as a lump (120 per (120cent per of cent GAD) of GAD) and no and no sum, sum, is subject is subject to a 55 to per a 55 per limit for limitthose for those who qualify who qualify cent tax centontax death. on death. for flexible for flexible drawdown. drawdown. SomeSome investors investors with with large large pension pension pots take pots take the maximum the maximum income income of of £28,000 £28,000 but asbut it may as it may
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Mortgage Mortgage approvals approvals acrossacross the country the country But simply But simply accepting accepting the first the policy first policy on on Premiums Premiums are calculated are calculated according according to theto the have have increased increased sincesince April,April, with with the largest the largest offer offer couldcould cost you costthousands you thousands of pounds of poundsamount amount of time of time for which for which you want you want to beto be increase increase in lending in lending agreements agreements sincesince the the in theinlong the long run asrun theasdifference the difference between betweeninsured insured and how and big howthe biglump the lump sum payout sum payout pre-crisis pre-crisis days days of 2008. of 2008. This isThis possibly is possibly due due the cheapest the cheapest and most and most expensive expensive life life wouldwould be, asbe, well as as well your as age, your lifestyle age, lifestyle and and to thetoFunding the Funding for Lending for Lending scheme. scheme. insurance insurance premiums premiums can be canhundreds be hundreds of of health. health. With With an increase an increase in mortgage in mortgage activity activity pounds pounds a month. a month. ThereThere is absolutely is absolutely no no Critical Critical illnessillness covercover is designed is designed to ease to ease comescomes a riseainrise theinnumber the number of products of products obligation obligation to purchase to purchase the policy the policy offered offered financial financial pressure pressure if youifbecome you become ill or ill or and services and services sold alongside sold alongside thesethese new new alongside alongside your mortgage your mortgage agreement, agreement, nor norseverely severely disabled, disabled, or even or even if yourif children your children homehome loans.loans. New New first time first time buyers buyers tryingtrying to do to you dohave you have to stick to stick with with it if you it ifdid. you did. do. This do.cover This cover pays pays out benefits out benefits uponupon pick their pick their way through way through the paperwork the paperwork and and For the Foreasy the easy life, people life, people tend tend to take to out take out diagnosis diagnosis of oneofofone a range of a range of different of different legal legal promises, promises, may take may the takefirst the product first productnew policies new policies alongside alongside a newa mortgage, new mortgage, serious serious illnesses. illnesses. TheseThese can vary can between vary between on offer on offer whichwhich couldcould end up endcosting up costing themthemwhichwhich oftenoften means means that they that accept they accept the the policypolicy providers providers but allbutshould all should include include the the a fortune, a fortune, especially especially whenwhen that product that product is isfirst quote first quote provided. provided. But it’s Butnot it’stoo notlate; too late; majormajor conditions conditions like cancer, like cancer, heartheart attack, attack, life insurance. life insurance. you can youexit canyour exit life yourpolicy life policy at anyattime any time if ifa stroke, a stroke, kidney kidney failure, failure, majormajor organorgan Nobody Nobody wantswants to paytofor paysomething for something they they you find you afind better a better deal, deal, however, however, you should you should transplant, transplant, and multiple and multiple sclerosis. sclerosis. The cost The cost hopehope they will theynever will never need,need, let alone let alone thinkthinknot cancel not cancel your existing your existing life cover life cover until until the theof theofpremiums the premiums will also will depend also depend on your on your aboutabout whatwhat wouldwould happen happen to their to their families families new policy new policy has been has been underwritten underwritten and and state state of health, of health, lifestyle lifestyle and family and family history. history. if theyif died they suddenly. died suddenly. TheseThese are the aremain the main accepted. accepted. ReadRead the small the small print print to ensure to ensure you are you are reasons reasons why there why there is a vast is a protection vast protection gap gap Professionals Professionals in theinbusiness the business state state that thatclear clear on what on what is andis isn’t and covered. isn’t covered. in theinUK thewith UK with manymany households households exposed exposedLife cover Life cover is theismost the most commonly commonly bought bought Income Income protection protection coverscovers you inyou thein the to financial to financial catastrophe catastrophe in theinevent the event of of product product because because it’s the it’scheapest, the cheapest, but it’s but it’seventevent of anofaccident, an accident, unemployment unemployment or or unemployment, unemployment, illnessillness or death. or death. However, However,the cheapest the cheapest for a for reason. a reason. We are Wemore are more illness. illness. AfterAfter an agreed an agreed period, period, usually usually whilewhile life insurance life insurance should should be thebebedrock the bedrocklikelylikely to livetoalive fullalife fullthan life than have have a serious a seriousbetween between one and one 12 andmonths, 12 months, it pays it pays out aout a of family of family finances, finances, it needs it needs to beto be illness, illness, whichwhich means means that products that products such such as as proportion proportion of your of monthly your monthly income, income, everyevery purchased purchased with with care. care. A recent A recent YouGov YouGov critical critical illnessillness and income and income protection protection are are month month if necessary if necessary until until you retire. you retire. surveysurvey foundfound that more that more than than half of half those of thosevery important. very important. who have who have bought bought life insurance life insurance did sodid toso to ThoseThose looking looking for insurance for insurance covercover must must securesecure their their mortgage mortgage repayments, repayments, in order in order understand understand exactly exactly whatwhat they’llthey’ll be covered be covered to protect to protect their their familyfamily from from losinglosing their their for and for under and under whatwhat circumstances. circumstances. Life Life homehome if theyif died they suddenly. died suddenly. insurance insurance is theismost the most straightforward straightforward type type of personal of personal protection, protection, paying paying out aout lump a lump sum to sum your to family your family if youifdie youduring die during the the term term of theofpolicy. the policy.
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A growing A growing number number of men of are menretiring are retiring early,early,Flexibility cashnobutincome. no income. OthersOthers tapertaper their their Flexibility will play will aplay greater a greater role as role people as people cash but only to only realise to realise their new their lifestyle new lifestyle isn’t suited isn’t suitedopt toopt investment income, income, takingtaking just enough just enough to to work to work duringduring retirement retirement meaning meaning investment to them. to them. So they So return they return to work, to work, oftenoften as as income remain remain withinwithin the lower the lower rate bands rate bands for for income drawdown drawdown will become will become more more consultants consultants or managers or managers on reduced on reduced hours,hours,popular income income tax. Some tax. Some investors investors buy an buy annuity an annuity popular for those for those happyhappy to accept to accept the the the equivalent the equivalent of a part-time of a part-time job. job. with part with of part their of pension their pension pot and potuse and use additional additional risks. risks. It is estimated It is estimated that one thatinone twenty in twenty men men income income drawdown drawdown for the forrest. the rest. In income In income drawdown, drawdown, after after takingtaking any taxany taxaged aged 50 or50 over or have over have become become the the The flexibility The flexibility carriescarries greater greater risk. While risk. While free cash, free cash, the rest theofrest theofpension the pension fund fund ‘unretired’: ‘unretired’: usually usually professionals professionals with above with aboveremains annuity annuity income income is guaranteed is guaranteed not tonot runtoout, run out, remains invested. invested. Income, Income, if required, if required, can be can be average average earnings. earnings. In theInUS, thewhere US, where the trend the trend with income drawdown drawdown the pension the pension remains remains drawndrawn directly directly from from the fund, the fund, eithereither straight straightwith income started started a generation a generation earlier, earlier, it’s already it’s already four fourawayaway invested so it can so itfall canasfall well as as well riseasinrise value. in value. or at or a later at a date. later date. Investors Investors have have the the invested timestimes as many. as many. Income drawdown drawdown is onlyis suitable only suitable for those for those flexibility flexibility of pausing of pausing and then and restarting then restarting Income whowilling are willing and able and to able take to risks. take risks. If youIf you income income payments payments as required. as required. With With income incomewho are WhatWhat doesdoes this mean this mean for pension for pension are unsure, you should you should seek professional seek professional drawdown, drawdown, you control you control and review and review wherewhere are unsure, investors? investors? financial advice. advice. your pension your pension is invested is invested and how and much how much financial This trend This trend is likely is likely to have to have an impact an impact on how on how income income is withdrawn. is withdrawn. If youIflive youlonger live longer than than Considerations Considerations nownow investors investors decidedecide to take to an take income an income from from their their expected, expected, your investments your investments perform perform poorlypoorly or or If you’re If you’re planning planning to retire to retire soon,soon, it could it could be be pension. pension. your withdrawals your withdrawals are high are and highregular, and regular, the the sensible sensible to research to research the options the options available available Investors Investors can currently can currently take up taketoup 25toper25 per fund could fund could be depleted be depleted or even or even run down run down and compare and compare their benefits their benefits and risks. and risks. cent tax-free cent tax-free cash lump cash lump sum from sum from age 55 age 55 completely, completely, leaving leaving you with you no withincome. no income. SomeSome pension pension providers providers don’tdon’t offer offer income income and aand taxable a taxable income income from from the rest theofrest their of their Income drawdown’s drawdown’s flexibility flexibility drawdown; drawdown; othersothers that do thatmay do only may offer only offer it it pension pension pot. This pot.isThis achieved is achieved in twoinmain two main Income versus risk risk up toup thetoage theofage 75.of 75. ways:ways: an annuity, an annuity, whichwhich is a secure is a secure but rigid but rigidversus The of level income of income you can youtake can from take from your your It is always It is always sensible sensible to review to review your your optionoption guaranteeing guaranteeing an income an income for life, fororlife, or The level pension pension in drawdown in drawdown can vary, can within vary, within limitslimitspension pension arrangements arrangements in plenty in plenty of time of to time to through through income income drawdown, drawdown, a higher a higher risk but risk but set byset thebyGovernment. the Government. The majority The majority of of ensure ensure they give they you givethe youflexibility the flexibility you might you might more more flexible flexible alternative. alternative. people people on income on income drawdown drawdown take tax-free take tax-free ultimately ultimately need.need.
The value The value of your of investment your investment and the andincome the income from from it canitgo can go downdown 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 for futurefuture results. results. PleasePlease contact contact us forusfurther for further information information or if you or if you are inare anyindoubt any doubt as to as thetosuitability the suitability of an of investment. an investment.
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For the Forlast thetwo lastdecades two decades privateprivate schoolschool fees fees Investing Investing just £100 just £100 every every monthmonth into an into ISAan ISA have risen have above risen above inflation, inflation, so parents so parents need need a awith growth with growth at 5 per at 5cent peracent yeara(after year (after charges), charges), strongstrong financial financial plan inplan place in place if theyifwant they want to to you would you would have ahave sumaofsum around of around £15,530 £15,530 in in ensureensure the best theeducation best education for their for children. their children. 10 years 10 years time. time. Although Although the number the number of pupils of pupils in fee-paying in fee-paying If fee Ifinflation fee inflation is 4 per is 4cent perthen cent investing then investing in in schools schools has decreased has decreased in theinpast thefew pastyears, few years, cash only cashinvestments only investments will bewill a problem be a problem but but the average the average fees are feesstill arerising still rising by 3.9byper 3.9cent per cent investing investing in a range in a range of large of large solid blue-chip solid blue-chip to £4,765 to £4,765 a term, a term, or £14,295 or £14,295 a year,a in year, in companies companies will probably will probably beat inflation beat inflation because because 2012/2013, 2012/2013, according according to thetolatest the latest censuscensus by byeach year eachthese year these companies companies pay a pay dividend a dividend that that the Independent the Independent Schools Schools Council. Council. For children For childrenshouldshould matchmatch the price the rises, price rises, however, however, this this that board, that board, parents parents could could pay the payaverage the average fee feeroute route carriescarries more more risk. risk. ranging ranging from £8,100 from £8,100 a terma in term Wales in Wales to to If youIfhave you enough have enough equityequity in yourin home, your home, you you £10,054 £10,054 in Greater in Greater London. London. could could also use alsothis usetothis finance to finance schooling. schooling. Parents Parents face the faceworry the worry of making of making big lumpbig lump-ManyMany parents parents use offset use offset mortgages, mortgages, placing placing sum payments; sum payments; however, however, many many schools schools offer offer their savings their savings into an into account an account linkedlinked to their to their some some formsforms of financial of financial assistance. assistance. SomeSome allow allow homehome loan to loan reduce to reduce the mortgage the mortgage interest interest fees tofees be to paid be inpaid advance, in advance, locking locking in prices in prices at at payable. payable. The money The money you’veyou’ve built up built canupbecan be today’s today’s rates to rates avoid to avoid the inevitable the inevitable increase increase in placed in placed in theinsavings the savings account account wherewhere it it later years. later years. Parents Parents could could bridgebridge this position this positioneffectively effectively earns earns the mortgage the mortgage rate ofrate interest of interest from remortgaging, from remortgaging, or by or releasing by releasing tax-free tax-free and you andcan youpay canfees payon fees a monthly on a monthly or term or term cash from cash afrom pension, a pension, takingtaking the 25the per25cent per cent basis.basis. Remortgaging Remortgaging could could possibly possibly be another be another tax-free tax-free lump lump sum atsum ageat55. age 55. cheapcheap way atway theatmoment the moment as rates as are ratesvery are very Around Around a thirda of third private of private schoolschool pupilspupils attractive. attractive. receive receive some some form of form help of via scholarships, help via scholarships, Grandparents Grandparents can gift canupgift to up £3,000 to £3,000 a yeara year these these beingbeing awarded awarded to children to children with awith talent a talentwithout without inheritance inheritance tax (IHT) tax liability, (IHT) liability, whether whether for academia, for academia, arts orarts sports, or sports, or means-tested or means-testedthey pay theyinto paysavings into savings accounts, accounts, trusts,trusts, old child old child bursaries. bursaries. ManyMany schools schools offer sibling offer sibling discounts discounts trust funds trust funds or Junior or Junior ISAs. Your ISAs.professional Your professional and parents and parents in theinarmed the armed forcesforces or working or working as as financial financial adviser adviser can also canhelp also set helpupset plans up plans and and teachers teachers at theatsame the same schoolschool can save can around save aroundtruststrusts to cover to cover fees, while fees, while minimising minimising IHT. IHT. 25 per25cent peron cent fees. on fees. A bareA trust bare istrust the ismost the most simple, simple, the assets the assets and and Making Making the most the most of your of ISA yourallowance ISA allowance is is income income are held are and heldowned and owned by thebybeneficiary the beneficiary important important whenwhen schoolschool fee planning, fee planning, the the so all so taxallliabilities tax liabilities for income for income and capital and capital gains gains allowance allowance for thefor2013-14 the 2013-14 tax year taxisyear £11,520, is £11,520, tax falltaxtofall thetochild. the child. although although only £5,760 only £5,760 of thisofcan thisbecan kept be inkept in cash. cash. Starting Starting early is early important is important because because you youTrusts Trusts are not are regulated not regulated by the by the benefit benefit from compounded from compounded interest interest over the over the Financial Financial Conduct Conduct Authority. Authority. years years and ifand youifinvest you invest in theinstock the stock market, market, a a long timeframe long timeframe gives gives you the youbest theopportunity best opportunity to smooth to smooth out any outvolatility. any volatility.
The Government The Government recently recently launched launched its consultation its consultation on the on the options options to allow to allow transfers transfers from from ChildChild TrustTrust FundsFunds (CTF)(CTF) to Junior to Junior ISAs.ISAs. JuniorJunior ISAs ISAs are the arenew the new tax-efficient tax-efficient accounts accounts designed designed to to take take over over from from CTFs.CTFs. UnderUnder current current rules,rules, the 6the million 6 million children children who who already already havehave CTFs CTFs cannot cannot openopen a Junior a Junior ISA. The ISA. The problem problem is that is many that many CTF CTF products products oftenoften carrycarry higher higher charges, charges, offer offer lowerlower interest interest ratesrates and have and have less choice less choice than than their their JuniorJunior ISA counterparts. ISA counterparts. Excluding Excluding children children with with CTFs CTFs from from taking taking out Junior out Junior ISAs ISAs is is very unfair. very unfair. The Government The Government has has now now recognised recognised this and this isand is consulting consulting on allowing on allowing CTFs CTFs to to movemove to Junior to Junior ISAs ISAs whichwhich will be will be very beneficial very beneficial to millions to millions of of parents parents and children. and children. SuchSuch a move a move will allow will allow children children to enjoy to enjoy betterbetter returns returns on their on their young young investments investments and for and for parents parents to simplify to simplify their their paperwork. paperwork. The Government The Government has has donedone well to well recognise to recognise the the importance importance of simplifying of simplifying the the savings savings system, system, as it as makes it makes sensesense to allow to allow transfers transfers to start to start on a on a voluntary voluntary basisbasis at first at with first with the the view view to a full to amerger full merger in thein the future. future. As it As stands it stands the two-tier the two-tier system system is unsatisfactory is unsatisfactory for those for those who who havehave CTFs CTFs but want but want the the widerwider choice choice offered offered by Junior by Junior ISAs.ISAs.
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markets markets quickly quickly in order in order to fund to fundhigh-demand high-demand bond bond markets markets to to issue issue bondsbonds with, with, from from the the transactions. transactions. borrower’s perspective, perspective, highlyhighly The question The question everyone everyone wantswantsborrower’s attractive long-term long-term fixed fixed answered answered is what is what drovedrove last last attractive finance costs.costs. year’syear’s spectacular spectacular performance. performance.finance the cost theof cost capital of capital so low, so low, One factor One factor was without was without doubtdoubt With With the hurdle rates rates that REITs that REITs must must the strong the strong overseas overseas interest interest in in the hurdle achieve in order in order to deliver to deliver to to UK property, UK property, with international with international achieve their investors are lower are lower than in than in investors investors committing committing more more than thantheir investors the This past.isThis whyis the whyREIT the REIT £20 billion £20 billion to UKtocommercial UK commercial the past. is wellis positioned well positioned to drive to drive real estate real estate over the overcourse the course of of sectorsector market-leading returns returns to to 2012,2012, according according to figures to figures from frommarket-leading investors in theincoming the coming years.years. the accountancy the accountancy firm Deloitte. firm Deloitte. investors For investors who feel who feel Deloitte’s Deloitte’s analysis analysis has shown has shown For investors uncomfortable uncomfortable with single-stock with single-stock that key thatpricing key pricing pointspoints have have now now investments in REITs, in REITs, one one been been reached reached in several in several areasareas of ofinvestments alternative is an is investment an investment trust trust the commercial the commercial property property sector.sector.alternative specialising in property. in property. TheseThese PrimePrime property property such as such London as London specialising also hold also diversified hold diversified real estate real estate has now has become now become too tootruststrusts portfolios of property, of property, as well as as well as expensive expensive for many for many investors, investors, portfolios One winner One winner from from the March the March shopping shopping centres, centres, whichwhich are are whichwhich property company company sharesshares in in should should broaden broaden demand demand property Budget Budget was the wasReal the Estate Real Estate traditionally traditionally seen as seen a good as a good acrossacross certain cases,cases, whichwhich are softer, are softer, the rest theofrest theofmarket. the market. It Itcertain Investment Investment Trust Trust (REIT)(REIT) sector.sector. hedgehedge against against risingrising prices.prices. also thinks less aggressively run, strategies run, strategies also thinks fallingfalling pricesprices in thein the less aggressively The chancellor The chancellor promised promised to to REITsREITs did not didescape not escape the the than REITs. secondary secondary market market have have now now than REITs. implement implement new rules new rules allowing allowing recession recession and itand wasn’t it wasn’t until the until thelargely This softer This softer approach approach protected protected largely run their run course. their course. thesethese property property companies companies to to second second half ofhalf 2011 of 2011 that the that the investors duringduring the banking the banking Deloitte’s Deloitte’s analysts analysts conclude conclude investors investinvest in each in each other,other, as they as they sectorsector beganbegan to show to show signs signs of of that itthat with property with property fundsfunds is likely it is likely 2013 2013 will be will thebe the crisis,crisis, hopedhoped he would, he would, including including a a sustainable sustainable recovery. recovery. The vehicles’ The vehicles’ avoiding avoiding the extreme the extreme volatility volatility year that yearthe thatdownward the downward trendtrend in in consultation consultation on whether on whether they they exemption exemption from from corporation corporation tax, tax, seen theinREIT the sector REIT sector and, and, commercial commercial capital capital valuesvalues stopsstopsseen in should should be given be given institutional institutional as long as as long they as pay theyout pay90out per90 per and rising largely, maintaining maintaining their their and rising pricesprices should should return. return. largely, investor investor status,status, another another long-held long-held cent of cent their of income their income in dividends in dividends dividends throughout. throughout. The largest The largest UK and UKnorthern and northern dividends aspiration aspiration of theofproperty the property to shareholders, to shareholders, meansmeans investors investors However, However, this sector’s this sector’s long-term long-term European European REITsREITs are now are looking now looking industry. industry. do notdoface not double face double taxation taxation on on beyond performance performance recordrecord is notis not beyond equityequity and and The Budget The Budget announcements announcements thesethese property property vehicles. vehicles. Analysts Analysts spectacular. spectacular. takingtaking advantage advantage provided provided UK-listed UK-listed REITsREITs with awith ahave have always always expected expected the the of theof the bonus: bonus: the British the British Property Property development development of REITs of REITs in theinUK the UK Federation Federation announced announced the the to follow to follow the pattern the pattern established established changes changes wouldwould resultresult in an in an elsewhere, elsewhere, with more with more agile agile inflowinflow of funds of funds into REITs, into REITs, property property companies companies able to able to as well as as well greater as greater deal activity deal activity raise raise finance finance from from equityequity and an and increase an increase in joint in ventures. joint ventures. Property Property companies companies have have mademade significant significant gainsgains in recent in recent timestimes , the average , the average REIT was REITup was up 26 per26cent per during cent during 2012 2012 and has and has continued continued to post to positive post positive returns returns duringduring 2013.2013. REITs,REITs, whichwhich investinvest almost almost entirely entirely in commercial in commercial property, property, have have continued continued to be to liked be liked by by analysts. analysts. The sector The sector is prized is prized for for its income-generating its income-generating attributes, attributes, with many with many REITsREITs regularly regularly yielding yielding well above well above 5 per 5 per cent. cent. REITs’REITs’ investments investments rangerange from from warehouses warehouses to office to office blocksblocks to to
TheThe average average REIT REIT was was upup 26 26 perper cent cent during during 2012 2012 and and hashas continued continued to to post post positive positive returns returns during during 2013 2013
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 thetosuitability the suitability of an of investment. an investment.
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Standard Standard annuities annuities are based are based on gilts, on gilts, IOUs IOUs UsingUsing income income drawdown drawdown does does solve solve somesome of of sold by sold thebyGovernment the Government to investors. to investors. thesethese problems problems but brings but brings new ones. new ones. Currently thesethese gilts pay giltsrates pay rates belowbelow the rate the rate Here,Here, your pension your pension fund remains fund remains invested invested in inCurrently of inflation. assetsassets such as such shares, as shares, whichwhich are a are good a good of inflation. Investment-linked annuities, annuities, by contrast, by contrast, choicechoice for keeping for keeping up with up inflation with inflation and you and you Investment-linked can be can based be based on a wider on a wider rangerange of assets. of assets. withdraw withdraw money money from from it to provide it to provide an an bond bond pricesprices near record near record highs,highs, and no and no income. income. You can Youtake can as take much as much or as or little as as little asWith With scopescope for their for income their income to increase, to increase, manymany you like youeach like each month, month, so your so income your income can vary can vary investors investors believe believe that shares that shares currently currently offer offer as your as needs your needs do. do. prospects prospects than gilts. than gilts. It is widely It is widely The problem The problem with income with income drawdown drawdown is is betterbetter thought that annuity that annuity buyersbuyers are getting are getting a a that athat better a better income income todaytoday may mean may mean no no thought negative negative real return real return on their on money. their money. A tipping A tipping money money for tomorrow for tomorrow as youasrisk youeating risk eating awayaway has been has been reached reached wherewhere manymany people people at theatfund, the fund, by withdrawing by withdrawing more more than the than thepoint point Once Once we retire, we retire, we face we aface dilemma a dilemma of of will bewill better be better off considering off considering otherother options options fund produces. Alternatively, Alternatively, in theinsearch the search for for whether whether to settle to settle for the forlow theannuity low annuity rates rates fund produces. such investment-linked as investment-linked annuities. annuities. high income you may you put mayyour put capital your capital at at such as currently currently on offer, on offer, or riskorrunning risk running out ofout of a higha income People People with larger with larger than average than average pension pension too much too much risk. risk. money money in theinfuture the future if youifchoose you choose an income an income pots need to question to question whether whether guaranteed guaranteed SomeSome experts experts believe believe investment-linked investment-linked pots need drawdown drawdown plan. plan. annuities annuities should should become become the default the default pension pension annuities “bridge “bridge the gap”. the gap”. They combine They combine the the The main The main reason reason why retirees why retirees still buy still buy annuities now on. now on. advantages of an of annuity, an annuity, the guarantee the guarantee of a offrom a from annuities annuities despite despite rates rates beingbeing so lowsoislow thatis thatadvantages The may time have may have comecome wherewhere too many too many certain income income for life, forwith life, the withbenefits the benefits of of The time they offer they offer the only the means only means of turning of turning a lump a lumpcertain people see investment-linked see investment-linked annuities annuities as as drawdown: flexibility flexibility and the andchance the chance of an of an people sum into suman into income an income that’sthat’s guaranteed guaranteed to be to bedrawdown: too or risky tooorcomplex. too complex. A good A good professional professional risingrising income. income. 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The focus is on reducing the number of lost workplace pension pots which are left dormant as employees move around in the job market. The Department for Work and Pensions calculates there will be 50 million dormant workplace defined contribution pension pots by 2050, which may contain up to £757billion in unclaimed cash. It is anticipated that one pension following each worker as they move will cut the number of people with five or more dormant pots from one-in-four to just one-in-thirty. The question remains what happens to the money invested in these pre-carried pots if they remain unclaimed once the holder reaches retirement age, or dies? With trust-based pension schemes, governed by a board of trustees, any benefits that are not claimed by a member are held by the trustee in a “reserve account”, the member’s pension is held separately and can be accessed easily by the trustee when they come to be claimed, either by the member or their dependants. According to current legislation, if a member’s benefits still remain unclaimed for six years after their death or their selected retirement age, the member will cease to be entitled to those benefits. But as this is a trust based pension, the trustees can still decide, at their discretion, to pay all or part of the benefits to the member or another beneficiary.
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)
With more and more workers regularly switching employers and estimates of over £3billion in unclaimed pension funds now being quoted, it is vital that everyone ensures their personal details are kept up to date. With contract-based defined contribution pension pots things are different as these schemes are run by the insurers who provide the pension products. Insurance firms will make all possible attempts to trace the holder of the pension or if they are no longer alive, will seek nominated beneficiaries or relatives who may be entitled to the pot. In the unlikely event that none of these people can be traced, there is a longer period of dormancy than found with trust-based pensions of 10 years, before the money gets paid to the Government. Old pensions from several decades ago are particularly more difficult to trace, as the companies running the workplace schemes may not exist anymore, or have been the subject of several takeovers. It is important to note that records of such pensions should still exist, information for beneficiaries regarding pension pots in the event the pension holder dies can be found on the HMRC website.
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)