MoneyMatters
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The The mostmost valuable valuable gift you gift could you could give give a child a child … … Tax efficient Tax efficient saving saving plansplans PagePage 2 2 Avoiding Avoiding the postcode the postcode lottery…How lottery…How it affects it affects youryour pension PagePage 3 3 pension Is the rightright to buy Is time the time to an buy an annuity? … Consider all your annuity? … Consider all your options PagePage 3 3 options Q&Q A:&Pensions shake-up… A: Pensions shake-up… What did the of Fair What did Office the Office of Fair Trading uncover? PagePage 4 4 Trading uncover? Understanding investing Understanding investing behaviour … Analysing the the behaviour … Analysing mostmost common objections PagePage 5 5 common objections Beating the inflation bubble … … Beating the inflation bubble HowHow can you youryour money can stop you stop money being eaten away? 6 6 being eaten away? PagePage Future vision … Having a Will, Future vision … Having a Will, means it will for all means it be willclear be clear for all PagePage 7 7 HowHow to action a Will … … to action a Will Key Key areasareas to consider 7 7 to consider PagePage Forward Guidance…. What Forward Guidance…. What effect doesdoes this have on the effect this have on the pound? PagePage 8 8 pound? HowHow to use trusts … … to investment use investment trusts What investors should looklook for for What investors should PagePage 9 9 Can Can “small” investing be be “small” investing worthwhile? … Tax for for worthwhile? … rules Tax rules smallsmall stocks PagePage 11 11 stocks Key Key Personnel covercover … Is Personnel …your Is your business protected? 10 10 business protected? PagePage Income protection ... Easing the the Income protection ... Easing difficult times PagePage 10 10 difficult times Offshore bonds … Growth in a in a Offshore bonds … Growth tax free environment 12 12 tax free environmentPagePage
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WhilstWhilst we doubt we doubt that many that many children children are are from birth from to birth ageto18 age and 18keeping and keeping it untilit age until age personally personally savingsaving into ainto pension, a pension, manymany 65, could 65, could build build a £1.28 a £1.28 millionmillion pot, atpot, a cost at a cost parents parents and grandparents and grandparents are offering are offering a a of around of around £52,000 £52,000 takingtaking into account into account tax tax helping helping hand hand by doing by doing so onso their on behalf. their behalf. relief,relief, with the withaid theofaid compound of compound interest. interest. Already Already thousands thousands of children of children are benefiting are benefiting If the Ifsame the same amount amount was paid was in paid from in age from age from afrom Junior a Junior SIPP (Self SIPP Invested (Self Invested Personal Personal 25 to25 ageto65 age the65value the value of theofpension the pension at ageat age Pension), Pension), with its with wide its wide investment investment choice, choice, 65 could 65 could be £496,000, be £496,000, at a cost at aofcost £115,000. of £115,000. low costs low costs and savings. and savings. This isThis double is double the cost thefor costhalf forreturned half returned Pensions, Pensions, such as such SIPPs, as SIPPs, are one areofone theof the potential potential value value (these(these figuresfigures are just are just most most tax-efficient tax-efficient ways ways of saving, of saving, mainlymainly projections projections and not andfact). not fact). because because of theoftax therelief. tax relief. Contributions Contributions are a are a maximum maximum of £3,600 of £3,600 each tax eachyear, tax or year, £300 or £300 per month. per month. The Government The Government automatically automatically pays tax paysrelief tax relief of 20of per20cent, per cent, so a £3,600 so a £3,600 contribution contribution only requires only requires a payment a payment of of £2,880. £2,880. Children Children in general in general don’t don’t pay tax; pay tax; the tax therelief tax relief is effectively is effectively ‘free money’ ‘free money’ into into their pension their pension pot. pot. The Junior The Junior SIPP isSIPP for isthose for those happyhappy to make to make their own their investment own investment decisions, decisions, without without Tax advantages Tax advantages financial financial advice. advice. It offers It offers a widea wide investment investment Investments Investments can grow can grow free offree capital of capital gainsgains tax tax choicechoice including including more more than 2,500 than 2,500 funds,funds, and further and further UK income UK income tax. Current tax. Current rules rules state state shares, shares, investment investment trusts,trusts, gilts, corporate gilts, corporate that from that age from55, agethe 55,child the can childnormally can normally take take bonds,bonds, ETFs and ETFscash. and cash. A pension A pension savings savings up to up 25to per25cent per as cent a tax-free as a tax-free lump lump sum and sum and scheme scheme for a child for a can childstart can immediately start immediately after after a taxable a taxable pension pension income income from the frombalance. the balance. they are theyborn. are born. It doesn’t It doesn’t mattermatter if you’re if you’re a a Contributions Contributions are generally are generally exempt exempt from from parent, parent, grandparent, grandparent, aunt or aunt uncle, or uncle, anyone anyone inheritance inheritance tax; the tax;“gift” the “gift” is often is often covered covered by by can put canmoney put money into ainto child’s a child’s pension. pension. one ofone theofinheritance the inheritance tax exemptions tax exemptions and and couldcould fall outside fall outside the estate the estate for IHTforpurposes. IHT purposes. The value of your of investment your investment and the andincome the income The contributor’s The contributor’s tax allowances tax allowances are not are not The value from itfrom can itgocan down go down as wellasaswell up as andupyou andmay you may affected affected as theastax therelief tax relief is based is based on theon the not get notback get the backoriginal the original amount amount invested. invested. Past Past circumstances circumstances of theofchild, the child, not the not the performance performance is notis anot reliable a reliable indicator indicator for for contributor. contributor. Therefore, Therefore, the amount the amount they can they can futurefuture results. results. PleasePlease contact contact us forusfurther for further information or if you or ifare youinare anyindoubt any doubt as to the as to the contribute contribute and the andtax therelief tax relief they claim they claim on on information suitability of an of investment. an investment. their own their pension own pension contributions contributions remains remains suitability unaffected. unaffected. It is worth It is worth notingnoting that Tax thatrules Tax rules and reliefs and reliefs are likely are likely to change to change over time. over The time.availability The availability of taxofshelters tax shelters depends depends on theonindividual the individual circumstances circumstances of theofchild. the child.
Growth Growth Starting Starting to save to early save early generally generally leads leads to a larger to a larger pension pension pot than pot than savingsaving more more at a later at a date. later date. Contributing Contributing £300 £300 a month a month
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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The estimated UK’s estimated 3.7 million 3.7 million diabetics diabetics couldcould Did you Didknow you know that your that postcode your postcode can now can now The UK’s miss out missonoutupontoup 19toper19cent per extra cent extra income income if if affectaffect not only not your only NHS your treatment NHS treatment and home and home theytofail declare to declare their diabetes their diabetes at retirement at retirement insurance insurance but also but your also retirement your retirement income. income. they fail yet live yetinlive an in affluent an affluent area, area, according according to to Annuity Annuity providers providers pay out payaout secure a secure income income for for specialist annuity annuity provider provider Partnership. Partnership. life and lifenow and routinely now routinely ask for askyour for postcode your postcodespecialist livingliving in a less in awealthy less wealthy area could area could gain gain beforebefore deciding deciding what what they will theypay. willThey pay. use They useThoseThose an increase of 9 per of 9cent per by cent declaring by declaring full full your postcode your postcode to work to work out how out long how you longare you arean increase information on their on health. their health. Partnership’s Partnership’s expected expected to livetoonliveaverage on average and therefore and therefore information actuaries actuaries have have reported reported that diabetes that diabetes is at the is at the how long how they long expect they expect to paytoout. pay out. theofmost the most under-reported under-reported medical medical This non-scientific This non-scientific measure measure is used is used for for top oftop condition. standard standard annuities annuities and explains and explains why people why peoplecondition. minorminor conditions conditions can qualify can qualify for a for a livingliving in an in affluent an affluent area, area, with awith highest a highest life life Even Even income, income, somesome retirees retirees have have increased increased expectancy, expectancy, typically typically receive receive an income an income lowerlowerhigherhigher their income by at by least at least a thirda third simplysimply by by than those than those livingliving in a poorer in a poorer area, area, with the with the their income providing providing as much as much information information as possible as possible lowestlowest life expectancy. life expectancy. whenwhen usingusing annuity annuity calculators. calculators. It is worth It is worth WhatWhat action action should should you take? you take? remembering remembering you can yourun canasrun many as many quotes quotes as as If you’re If you’re close close to retirement to retirement you should you should you want you want as it isasfree it isand freethere and there is no is no request request a guaranteed a guaranteed quotequote basedbased on your on your obligation obligation to proceed. to proceed. exactexact postcode. postcode. Then Then you will youknow will know what what your your are the arealternatives? the alternatives? true post-coded true post-coded income income rate is. rate Make is. Make sure sure WhatWhat Income drawdown drawdown offersoffers a flexible a flexible yet higher yet higher your other your other personal personal details, details, such as such your as your Income risk alternative wherewhere you control you control and review and review marital marital status,status, are also are correct also correct as these as these can can risk alternative wherewhere your pension your pension is invested is invested and the and the also affect also affect the income. the income. amount amount of income of income you draw you draw withinwithin the limits. the limits. Update Update your your health health situation situation - this- this This can Thisgive can you giveflexibility you flexibility and the and the couldcould increase increase your your income income opportunity opportunity to benefit to benefit from from investment investment Declaring Declaring your health your health conditions, conditions, whether whether you you growth growth but, itbut, is worth it is worth remembering remembering that your that your smoke, smoke, are overweight, are overweight, drink drink alcohol alcohol regularly regularly fund value fund value and income and income can fall canif fall yourif your or take or any takeprescribed any prescribed medication, medication, couldcould investments investments perform perform poorlypoorly or if you or ifwithdraw you withdraw significantly significantly increase increase your annuity your annuity income. income. income income too quickly, too quickly, therefore therefore your pension your pension ThoseThose in wealthier in wealthier areas,areas, who would who would pot could pot could be significantly be significantly reduced. reduced. otherwise otherwise face an face income an income cut from cut from their their postcode, postcode, have have the most the most to gain. to gain.
This has Thisbeen has been a good a good year for yearannuities, for annuities, with rates with rates risingrising since since January. January. In general In general terms,terms, this could this could meanmean that someone that someone with with a £100,000 a £100,000 pension pension pot will potbe will more be more than than £350 £350 a yeara better year better off foroffthe forrest theofrest their of their life. life. However, However, therethere is evidence is evidence to suggest to suggest the recent the recent Bull Run Bullmay Run be may coming be coming to anto an end. This end.isThis because is because annuities annuities are priced are priced in relation in relation to thetoyields the yields on Government on Government bonds, bonds, calledcalled gilts, gilts, and other and other fixed-interest fixed-interest investments investments such such as corporate as corporate bonds. bonds. The benchmark The benchmark 15-year 15-year gilt yield gilt yield rose rose significantly significantly from from 2.31 per 2.31cent per at cent theat the beginning beginning of January of January to 3.2p to per 3.2pcent per in cent in September. September. The outlook The outlook for annuities for annuities for the forrest theofrest of this year this has yearsoured. has soured. Gilt yields Gilt yields have have slowed slowed and on and October on October 1 the1benchmark the benchmark yield yield was 3.0 wasper 3.0cent. per cent. At theAtmoment the moment it it does does not seem not seem likelylikely that annuity that annuity rates rates will continue will continue increasing increasing in theinrun thetorun to Christmas, Christmas, especially especially as theasBank the Bank of of England England seemsseems to want to want to keep to keep rates rates low low for the forforeseeable the foreseeable future. future. It is too It isearly too early to know to know whatwhat effecteffect the financial the financial shutdown shutdown in theinUS thewill UShave will have on UKonbond UK bond yieldsyields so it will so itbe will important be important to watch to watch events events in America. in America. ThereThere is, however, is, however, a general a general consensus consensus that annuities that annuities will be will higher be higher at some at some time time in theinfuture. the future. This makes This makes deciding deciding the best the best time to time purchase to purchase an annuity an annuity a difficult a difficult task. task. For anybody For anybody considering considering purchasing purchasing an an annuity, annuity, it mayit be may prudent be prudent to take to as take as muchmuch time as time is needed as is needed in order in order to decide to decide whatwhat the right the right optionoption is. Once is. Once a decision a decision has been has been mademade it might it might makemake sensesense to to act straight act straight away,away, as those as those who defer who defer their their annuity annuity purchase purchase in theinhope the hope of of getting getting a higher a higher income income are often are often disappointed. disappointed. This isThis oneisofone theofmost the most important important financial financial decisions decisions you will youever will make, ever make, so discuss so discuss your requirements your requirements with your with your professional professional financial financial adviser. adviser.
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with higher with higher charges, charges, knownknown as “deferred as “deferred such charges can take canup take to up 20 to per20cent perfrom cent fromleviedlevied WhatWhat did the didOffice the Office of Fair of Trading Fair Trading such charges member member charges” charges” or “active or “active member member the value the value of a pension of a pension pot. Charges pot. Charges today today are are uncover? uncover? discounts”. discounts”. less atless around at around 0.5 per 0.5cent. per cent. With more With more peoplepeople set toset enrol to enrol in workplace in workplace often often The OFT The was OFT also was concerned also concerned about about those those in in pension pension schemes, schemes, the Office the Office of FairofTrading Fair Trading DoesDoes this OFT this intervention OFT intervention offeroffer better better the 3,000 smaller smaller pension pension schemes, schemes, wherewhere (OFT) (OFT) wanted wanted to assess to assess these these schemes schemes to to the 3,000 value value for savers? for savers? are only arearound only around 1,0001,000 members members or less, or less, ensureensure they are theyfitare forfit purpose for purpose and that andthey that they there there TheseThese proposed proposed measures measures shouldshould ensureensure that that who may who be may at be risk at because risk because of poor of poor do deliver do deliver value value for savers. for savers. savers savers are enrolled are enrolled in better in better governed governed schemes, schemes, governance. governance. It is thought It is thought there there could could be as be as The Government The Government wantswants more more working working delivering delivering better better value value for their for savings. their savings. But the But the as £10bn as £10bn in such in schemes. such schemes. peoplepeople to save to for save retirement, for retirement, whether whether via a via a muchmuch report report did not did go not as go far as as far calling as calling for a charge for a charge company company pension pension or a personal or a personal pension, pension, so willso will WhatWhat are the areOFT’s the OFT’s proposals? proposals? cap, ascap, many as many had hoped. had hoped. In its defence In its defence the the make make it compulsory it compulsory for employers for employers to match to match The OFT Thehas OFTmade has made a series a series of proposals of proposals and and OFT said OFT it said believed it believed its findings its findings had passed had passed the the contributions contributions in some in some instances. instances. It hasItbeen has been has reached has reached agreements agreements with regulators with regulators and and legal test legal to test be to referred be referred to the to Competition the Competition estimated estimated that only that5only million 5 million peoplepeople currently currently the industry the industry to improve to improve governance governance and toand to Commission Commission but it but felt itthat feltits that agreements its agreements with with save into saveainto workplace a workplace pension, pension, but the but the help employers help employers make make the right the decisions right decisions whenwhenthe industry the industry and regulators, and regulators, plus the plus the Government Government now requires now requires employers employers to to choosing choosing a scheme a scheme for their for employees. their employees. recommendations recommendations to Government, to Government, were were automatically automatically enrol enrol eligible eligible staff into staffainto a In dealing In dealing with the withOFT’s the OFT’s concerns concerns aboutabout old old “appropriate”. “appropriate”. It is consulting It is consulting on this ondecision. this decision. workplace workplace pension. pension. WhenWhen this obligation this obligation is is schemes schemes with high with charging high charging contracts contracts and and fully infully place in place for allfor UKallemployers, UK employers, it is believed it is believed action action should should I take? I take? bundled bundled trust schemes, trust schemes, the Association the Association of of WhatWhat that up that to up 11 to million 11 million peoplepeople wouldwould have have If you If are you paying are paying more more than 0.5 than per 0.5cent perincent in BritishBritish Insurers Insurers (ABI) (ABI) have agreed have agreed to an to an enrolled. enrolled. annual annual management management charges charges on your on pension, your pension, immediate immediate audit.audit. The audit The audit of these of these schemes schemes then you then are you in are a scheme in a scheme that is that higher is higher than than will bewill overseen be overseen by anby independent an independent projectproject The OFT The findings OFT findings the market the market average. average. If you If have you a have pension a pension The OFT Thefound OFT found that competition that competition alonealone could could board.board. datingdating back to back 2001 to 2001 or before, or before, this isthis veryislikely very likely new allschemes, new schemes, the ABI thehas ABIagreed has agreed that that not benot relied be relied upon upon to deliver to deliver value value for savers for savers in in For allFor to be to the be case. the case. its members its members will establish will establish Independent Independent defined defined contribution contribution schemes, schemes, wherewhere the saver the saver It is possible It is possible to transfer to transfer your pension your pension savings savings Governance Committees, Committees, representing representing does not doeshave not any havecontrol any control or guarantee or guarantee of theof theGovernance to a better to a better value value scheme scheme but check but check that if that you if you members’ members’ interests. interests. Committees Committees shouldshould size ofsize their of pension their pension pot. pot. do it so do will it so not will leave not leave you worse you worse off. Some off. Some recommend recommend changes changes to providers to providers and involve and involve It found It found two areas two areas of concern. of concern. pension pension schemes schemes have exit havecharges exit charges or or regulators wherewhere they suspect they suspect risks of risks poor of poor older older Older Older schemes schemes mainlymainly set upset before up before 2001 2001 regulators fees for fees leaving, for leaving, which which will be will deducted be deducted from from outcomes for savers. for savers. have savers have savers payingpaying charges charges of 1 per of 1cent peror cent or outcomes your fund, your fund, or valuable or valuable “guarantees” “guarantees” linked linked to to The OFT Thealso OFTrecommends also recommends that the that the muchmuch higher.higher. It is estimated It is estimated that £30bn that £30bn of of income income at retirement, at retirement, that are that worth are worth keeping. keeping. Government ban the banpractice the practice wherewhere members members savers’savers’ moneymoney is locked is locked into these into these schemes. schemes. Government
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who leave a scheme, a scheme, ie: to ie: gettoanother get another job, are job, are As many As many as 190,000 as 190,000 saverssavers are estimated are estimated to to who leave have enrolled have enrolled in these in these high-charging high-charging schemes, schemes,
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increasing. The of days of aforjoblifeforalong life along increasing. The days a job final salary pension at retirement with awith finala salary pension at retirement have have long disappeared in the private sector and long disappeared in the private sector and are being diluted the public are being diluted in theinpublic sectorsector too. too. Tomorrow a habit of arriving Tomorrow has ahas habit of arriving fasterfaster thanthink; we think; wise people canfor livetoday for today than we wise people can live and put andmoney put money forfuture. the future. You have asideaside for the You have to keep your budget and accept to keep withinwithin your budget and accept that that you can’t everything. you can’t have have everything.
Overlooking capital justthe for the Overlooking capital gain gain just for Yet others are relaxed in seeing Waiting things become clearer Yet others Waiting until until things become clearer are relaxed in seeing their their income income investments per in cent allnervous feel nervous volatile markets, investments We allWe feel aboutabout volatile markets, rise orrise fallorbyfall 50by per50cent a in a Retired people on what income Retired people mostlymostly focusfocus on what income but waiting for stock markets to become year. year. but waiting for stock markets to become their investment is likely to produce. their investment is likely to produce. Yield Yield is is is a personal very personal and depends investing may result more more stablestable beforebefore investing may result in in Risk isRisk a very thing thing and depends important, however, its nature very nature important, however, by itsby very this this on a person’s agewhat and what the money the return that goes withrisk. the risk. on a person’s losinglosing the return that goes with the age and the money is is to mean that something is being has tohas mean that something else iselse being actually you30are 30the andmoney the money Investors are often of anchoring, Investors are often guiltyguilty of anchoring, actually for. Iffor. youIfare and is is sacrificed, like “stock” growth prospects, if sacrificed, like “stock” growth prospects, if a pension, you won’t be to able to focusing too heavily on unfounded targets goinggoing focusing too heavily on unfounded targets into ainto pension, you won’t be able you keep without reinvesting. you keep takingtaking profitsprofits without reinvesting. on it25for 25 years, the and risesfalls and falls such the FTSE 100 breaking through such as theasFTSE 100 breaking through 6,0006,000 draw draw on it for years, the rises For bond growth, the higher the income For bond growth, the higher the income will be as seen as balanced overperiod the period or falling points; however, pointspoints or falling underunder 5,0005,000 points; however, will be seen balanced over the of of the more risk capital your capital Just because the more at riskatyour is. Justis.because an illogical this isthis an is illogical thing thing to do.to do. time. time. countries’ Government otherother countries’ Government bondsbonds pay apay a An of area riskoften we often is cash An area riskofwe forgetforget is cash high yield doesn’t theya are a good high yield doesn’t meanmean they are good Worried by risk Worried by risk taxinflation and inflation thevalue real value itself.itself. After After tax and the real of of investment. In the context of your personal investment. In the context of your personal you focus entirely theofrisk of losing If youIffocus entirely on theonrisk losing cash savings is dwindling most most cash savings is dwindling each each year. year. financial goals, looking at total return financial goals, looking at total return is a is a money and paying a premium for safety, money and paying a premium for safety, it it one ityear it doesn’t a problem, Over Over one year doesn’t causecause a problem, much more rational way of viewing portfolio much more rational way of viewing portfolio you insufficient with insufficient couldcould leaveleave you with fundsfunds for for but aover a number of decades be a big but over number of decades it canitbecan a big structure. It can also be more tax efficient structure. It can also be more tax efficient your retirement. Avoiding riskmeans also means your retirement. Avoiding risk also to financial your financial security. risk torisk your security. as it allows to focus on income both income too astoo it allows you toyou focus on both missing opportunities. You need missing opportunities. You need to be to be tax and capital gains tax planning tax and capital gains tax planning Living for today, but what comfortable withhighs the highs and that lowsathat aLiving comfortable with the and lows for today, but what aboutabout opportunities. opportunities. tomorrow? portfolio returns. people portfolio returns. SomeSome people wouldwould be be tomorrow? Tomorrow be to able to after look after worried a 5cent per loss centand losswould and would worried with awith 5 per pull pull Tomorrow won’twon’t be able look itself itself be “too Don’tDon’t be “too busy”busy” youvery are lucky. very lucky. you spend the money out, never to invest the money out, never to invest again.again. unlessunless you are If youIfspend all of all of all have busy where lives where aspects We allWe have busy lives manymany aspects your income nowwill youprobably will probably continue your income now you continue of personal finance be handled of personal finance can becan handled with with to spend of income your income our salary to spend all of all your as ourassalary monthly into ISA for ease, ease, savingsaving monthly into an ISAanfor increases with Ifage. you don’t getthe into the increases with age. youIfdon’t get into example, but remember thatwill thisgive will give example, but remember that this of saving on,will youfind willitfind habit habit of saving early early on, you veryit very you more timeenergy and energy for areas a you more time and for areas wherewhere a difficult so on later difficult to doto sodo later in on life.in life. of focused timeeffort and effort a bit ofbit focused time and couldcould makemake a The State Pension very modest and the The State Pension is veryis modest and the big difference to financial your financial situation. big difference to your situation. at which youdraw can draw it keeps age atage which you can it keeps
The value The value of your of your investment investment and the andincome the income fromfrom it canitgo candown go down as well as well as upasand up you and may you may not get notback get back the original the original amount amount invested. invested. Past performance Past performance is notisanot reliable a reliable indicator indicator for future for future results. results. Please Please contact contact us forusfurther for further information information or if or youif are you are in any indoubt any doubt as toas the tosuitability the suitability of anofinvestment. an investment.
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With With interest interest rates rates likelylikely to remain to remain belowbelow So what So what can be candone? be done? Investment Investment truststrusts inflation inflation for many for many yearsyears to come, to come, the new the new Private Private investors investors are switching are switching cash savings cash savings TheseThese are companies are companies whose whose sharesshares are are head head of theofBank the Bank of England, of England, MarkMark Carney, Carney,into funds into funds such such as unit astrusts, unit trusts, where, where, in in listedlisted and traded and traded on theonLondon the London StockStock announced announced he is he committed is committed to maintaining to maintainingreturnreturn for higher for higher risk, there risk, there is a greater is a greater Exchange Exchange but whose but whose sole purpose sole purpose is to is to low interest low interest rates rates for several for several moremore years.years. chance chance of keeping of keeping pace pace with inflation. with inflation. investinvest in other in other businesses. businesses. So, how So, can howwe canstop we our stopmoney our money beingbeing eateneaten Recent Recent figures figures showshow inflows inflows to such to such fundsfunds In many In many casescases they have they have explicit explicit away?away? are atare their at their highest highest level level in twoinyears. two years. objectives objectives to paytoan pay increasing an increasing stream stream of of Millions Millions of savers of savers have have suffered suffered negative negative According According to thetoInvestment the Investment Management Management dividends dividends and preserve and preserve investors’ investors’ capital capital real returns real returns on their on their cash,cash, this happens this happens Association, Association, the trade the trade body body for fund for fund firms,firms,against against the ravages the ravages of inflation. of inflation. ManyMany have have whenwhen inflation inflation exceeds exceeds even even the best the best the most the most popular popular fundsfunds were were thosethose wherewhereexceptional exceptional records records stretching stretching over many over many deposit deposit rates rates available, available, whichwhich has been has been the the20-6020-60 per cent per of cent assets of assets are invested are invested in in years.years. case for casealmost for almost five years five years now. now. shares. shares. In other In other words, words, investors investors sought sought a a SplitSplit your your cash cash OlderOlder saverssavers are especially are especially affected affected by theby the blendblend of assets, of assets, including including bondsbonds and cash and cash Cash Cash returns returns are low areright low right now, now, and set andtoset to Bank’s Bank’s “growth “growth first”first” policy,policy, as they as tend they to tend to alongside alongside shares, shares, to give to them give them the chance the chance of of remain remain low orlow possibly or possibly even even fall further, fall further, suffersuffer higherhigher inflation. inflation. The Alliance The Alliance Trust Trust gainsgains whilewhile limiting limiting the risk theofrisk fullofstock full stock so savers so savers have have to manage to manage their their accounts accounts Economic Economic Research Research Unit, Unit, whichwhich trackstracks market market exposure. exposure. aggressively aggressively to maximise to maximise income. income. inflation inflation acrossacross age groups, age groups, reported reported TryingTrying to beat to inflation beat inflation should should not benot atbe at One route One route is to split is to savings split savings acrossacross a mixa mix recently recently that the thatover-75s the over-75s were were experiencing experiencing the expense the expense of high of risk, high the risk,long-term the long-term peril peril of fixed of fixed and instant-access and instant-access deals.deals. This means This means the highest the highest rate of rate inflation of inflation of all of age all age of inflation of inflation needsneeds to beto setbeagainst set against the the that ifthat rates if rates do rise, dothe rise,instant-access the instant-access groups groups at 3.1atper 3.1cent. per cent. This isThis above is above the the short-term short-term risk ofrisk capital of capital loss ifloss money if money is putis put money money can be can moved be moved to benefit. to benefit. But, at But, theat the official official rate, which rate, which has now has dropped now dropped belowbelow into volatile into volatile investments investments such such as shares. as shares. samesame time, time, today’s today’s returns returns are maximised. are maximised. 3 per3cent. per cent. Investors Investors need need to beto careful be careful not tonot expose to expose It is clear It is clear that whilst that whilst inflation inflation may have may have Alliance’s Alliance’s research research showsshows inflation inflation risingrisingthemselves themselves to investment to investment disasters disasters over over edgededged downdown slightly slightly in July, in rates July, rates on savings on savings for allfor age allgroups age groups except except the under-30s. the under-30s. both both the short the short and longer and longer term.term. accounts accounts are falling are falling fasterfaster for both for both new and new and The rapid The rapid rise inrise fuelinand fuelfood and food costs,costs, on on A simple A simple balanced balanced portfolio portfolio over any over any existing existing savers. savers. whichwhich a larger a larger proportion proportion of pensioners’ of pensioners’ five-year five-year periodperiod has never has never lost more lost more than than ThereThere is no is sign no of sign improvement; of improvement; in fact, in fact, income income is spent, is spent, accounts accounts for much for much of thisof this1 per1cent, per cent, even even duringduring a financial a financial crisis.crisis. following following MarkMark Carney’s Carney’s announcement, announcement, increase. increase. Diversification Diversification is a safer is a safer havenhaven that does that does there’s there’s no expectation no expectation of things of things changing changing Efficient Efficient management management of savings of savings and and work,work, so people so people should should not benot afraid be afraid to beto be for several for several yearsyears to come. to come. investments investments can help can to help keep to keep inflation inflation in theinmarkets the markets if theyif have they have a long-term a long-term time time down.down. view.view.
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You need You need to appoint to appoint two trusted two trusted executors, executors, who must who must be over be 18, overto18, to administer administer your your affairs. affairs. ManyMany people people choose choose a spouse a spouse or one orof one their of their adultadult children children to dotothis, do as this, professional as professional executors are likely are likely to charge to charge a fee.a fee. The executors will go willthrough go through the process the process executors Having Having a Willa means Will means it willit be willclear be clear The executors of probate, of probate, and eventually and eventually will bewill granted be granted Will IWill for all for all have I have to pay to inheritance pay inheritance tax? tax? permission permission to distribute to distribute your assets your assets to your to your A person’s A WillAisWill oneisofone theofmost the most important important A person’s estateestate escapes escapes Inheritance Inheritance Tax Tax beneficiaries. arrangements arrangements you can youmake can make duringduring your your beneficiaries. (IHT) (IHT) up toup a certain to a certain level. level. This amount This amount is is Not having a Willacould Will could meanmean that ifthat youif you lifetime. lifetime. FailingFailing to leave to leave a Willawhen Will when you you Not having set byset thebyGovernment the Government and isand known is known as as areonly the surviving only surviving partner, partner, you would you would die, can die,put canaput lot of a lot stress of stress and strain and strain on on are the eithereither the ‘tax-free the ‘tax-free allowance’ allowance’ or theor‘nil the ‘nil in be control in control of who of looks who looks after after your your people people who are whonot areonly not grieving only grieving but but not benot rate band’. At present At present the niltherate nil band rate band is is children, who their who guardians their guardians wouldwould be or be or rate band’. possibly possibly also face also an face uncertain an uncertain financial financial children, set at set £325,000 at £325,000 and this and rate this is rate frozen is frozen what what wouldwould happen happen to your to estate your estate until until future.future. until April until April 2018.2018. Therefore Therefore an individual an individual the children the children reached reached 18. 18. If I don’t If I don’t havehave a Will, a Will, whatwhat happens? happens? with with an estate an estate worth worth more more than than £325,000 £325,000 If youIfare younot aremarried not married and have and have no no Your assets, Your assets, such as such your as home, your home, your bank your bank (or £650,000 (or £650,000 for married for married couples) couples) will be will be children children your estate your estate couldcould pass to pass your to your accounts, accounts, savings savings and investments, and investments, your your brothers brothers or sisters or sisters or even or even your parents. your parents. required required to pay to IHT pay at IHT a rate at a of rate 40 of per 40 per personal personal possessions possessions such as such your as car, your car, If no immediate If no immediate or distant or distant relatives relatives are are cent on centanything on anything aboveabove this level. this level. GoneGone jewellery, jewellery, and other and other itemsitems of value, of value, couldcould traced, traced, your estate your estate couldcould even even end up end up are the are days the days of thinking of thinking that paying that paying IHT isIHT is be distributed be distributed underunder the intestacy the intestacy rules rules beingbeing passed passed to thetoGovernment. the Government. ‘only ‘only for rich forpeople’, rich people’, property property valuesvalues have have ratherrather than following than following your wishes. your wishes. now trapped now trapped manymany and pushed and pushed themthem over over Use aUse professional a professional Intestacy, Intestacy, whatwhat doesdoes this mean? this mean? ManyMany Solicitors Solicitors and professional and professional financial financial the threshold. the threshold. They They may also may wrongly also wrongly Intestacy Intestacy rules rules applyapply if youifdie youwithout die without a a advisers advisers specialise specialise in Willinwriting, Will writing, they are they are assume assume that they that can they avoid can avoid IHT byIHT simply by simply Will and Willtherefore and therefore pass your pass assets your assets on, on, the best the people best people qualified qualified to write to write and and givinggiving awayaway their their assets. assets. In fact, In barring fact, barring dividing dividing them them up in up a specific in a specific order. order. administer administer a Will.a Will. an annual an annual £3,000 £3,000 gift allowance, gift allowance, almost almost The rules The rules are slightly are slightly different different in Scotland in Scotland Not only Not are onlythey are qualified they qualified and and than in than England in England and Wales and Wales but overall but overall they they everything everything a person a person givesgives awayaway in thein the regulated regulated but they but meet they meet you face-to-face you face-to-face are intended are intended to make to make sure the surebulk the of bulk anyof any sevenseven yearsyears before before their their deathdeath will be will be and talk andthrough talk through exactly exactly what what it is that it is you that you estateestate passespasses to anytosurviving any surviving spouse/civil spouse/civil liableliable to IHT. to IHT. want want your Will yourtoWill achieve, to achieve, ensuring ensuring you you partner partner and children. and children. makemake use ofuse theoftransferable the transferable nil rate nilband rate band WhatWhat can Ican do to I dominimise to minimise this?this? Why Why is making is making a Willa important? Will important? and that and all that assets all assets are inare order in order and will andbewill be The good The good newsnews for married for married couples couples and and If youIfget youmarried, get married, enter enter a civilapartnership civil partnership left toleft those to those you have you have identified identified after after you you civil partners civil partners is thatis they that are theyable are to able pass to pass or have or have any children, any children, all should all should prompt prompt die. You die.can Youappoint can appoint your solicitor your solicitor as as their their assetsassets and possessions and possessions to each to each otherother you toyou gettoyour get Will yourwritten. Will written. executor executor but remember but remember that they that will they will tax-free. tax-free. Also, Also, if theiftax-free the tax-free allowance allowance is is If youIfaren’t you aren’t married married but setting but setting up up charge charge for their for services. their services. not used, not used, the surviving the surviving partner partner is then is then homehome with your with partner, your partner, it’s probably it’s probably even even able double to double the niltherate nil band rate band to to more more important important as your as unmarried your unmarried partner partnerRemember Remember to seek to seek legallegal advice advice fromfrom able to £650,000 £650,000 upon upon their their death. death. won’twon’t get any getofany your of estate your estate without without a Willa Will an expert an expert solicitor solicitor to draw to draw up a up valid a valid that leaves that leaves it to them. it to them. Your Will Youralso Will also Will or Willconsult or consult your your professional professional namesnames the people the people you want you want to acttoasact as financial financial adviser adviser for help for help with with your your ‘executors’, ‘executors’, to carry to carry out the outwishes the wishes statedstatedtax and tax inheritance and inheritance planning. planning. in your in Will. your Will. Will Writing Will Writing is notisregulated not regulated by the byFinancial the Financial Conduct Conduct Authority Authority
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exports, exports, but bybut doing by doing so contributed so contributedThe future Interest Interest rates rates underunder ‘forward ‘forward guidance’ guidance’ will willboostboost The future for sterling for sterling the pound’s 25 per25cent per decline cent decline since since The initial not rise notbefore rise before the unemployment the unemployment rate falls rate fallsto thetopound’s The initial reaction reaction to thetoBank’s the Bank’s new new As yet, Asthere yet, there is little is evidence little evidence to to belowbelow 7 per7cent, per cent, it currently it currently stands stands at at 2007.2007. guidance guidance has been has been positive positive for the forpound, the pound, suggest the new the Governor new Governor MarkMark Carney Carney whichwhich around around 7.7 per 7.7cent. per cent. The thinking The thinking beingbeing to to suggest rose by rose around by around 1 per1cent per versus cent versus the the wouldwould favourfavour sterling sterling fallingfalling further. further. ScopeScopeUS dollar give individuals give individuals and companies and companies the the US dollar and euro and when euro when the policy the policy was was withinwithin the new the guidance new guidance for lifting for lifting interest interestannounced confidence confidence to borrow. to borrow. announced in August in August 2013.2013. Longer Longer term term it it if inflation if inflation pressures pressures rise suggests rise suggests he heis stillisbelieved The Bank The Bank wouldwould however, however, consider consider liftingliftingrates rates still believed a stronger a stronger US recovery US recovery will will is mindful of theofcentral the central bank’sbank’s main main interest interest rates rates sooner sooner if: it believes if: it believes inflation inflationis mindful favourfavour the US thedollar US dollar over sterling over sterling in thein the objective, to safeguard to safeguard the value the value of theof the months in 18-24 in 18-24 months’ months’ time would time would exceed exceed 2.5 2.5 objective, months ahead. ahead. This isThis likely is likely to coincide to coincide with with currency, in terms in terms of its of purchasing its purchasing power. power.expectations per cent per or cent if inflation or if inflation expectations expectations rise rise currency, expectations that the thatUS thecentral US central bank bank will will significantly; significantly; or theorpolicy the policy threatens threatens soon soon start start to taper to taper back back its QEitspolicies, QE policies, at at Are there Are there negatives negatives for sterling? for sterling? financial financial stability. stability. the very the time very when time when the Bank the Bank of England of England Just how Just quickly how quickly the 7the per7cent per cent The current The current high UK highunemployment UK unemployment rate rate couldcould be considering be considering moremore stimuli. stimuli. unemployment unemployment threshold threshold will be will reached be reached is is provides provides a measure a measure of theofamount the amount of spare of spare If there If there is a need is a need for more for more stimuli, stimuli, it is it is a guess a guess at best; at best; the Bank’s the Bank’s current current forecast forecast capacity capacity in theinlabour the labour market, market, the pre-recession the pre-recession thought thought that sterling that sterling will struggle will struggle to make to make is late-2016. is late-2016. Employment Employment fell much fell much less less figurefigure was around was around 5 per5cent, per cent, and should and should significant significant progress progress versusversus the euro the in euro thein the than than GDP during GDP during the recession the recession and could and could decline decline as theaseconomy the economy recovers. recovers. near term. near term. WhilstWhilst the European the European Central Central also grow also grow moremore slowlyslowly as output as output recovers. recovers. Bank Bank has indicated has indicated interest interest rates rates will will Stubbornly Stubbornly high unemployment high unemployment mightmight meanmean Are there Are there positives positives for sterling? for sterling? remain remain low for lowanfor ‘extended an ‘extended period’, period’, interest interest rates rates for longer, for longer, whichwhich wouldwould Low interest Low interest rates rates are normally are normally bad for badany for anylowerlower its own its stimulus own stimulus measures measures have have been been far far be negative for sterling. for sterling. currency, currency, but this butmove this move couldcould be good be good for for be negative less aggressive less aggressive and itand hasitnot hasyet nothad yettohad actto act If growth slowsslows the Bank the Bank couldcould still still sterling sterling if it helps if it helps the economy the economy grow,grow, wherewhere If growth on itson pledge its pledge to ‘dotowhatever ‘do whatever it takes’ it takes’ to to complement forward forward guidance guidance with more with more moremore spending spending means means moremore jobs, jobs, whichwhich complement preserve preserve the euro. the euro. The euro The zone euro zone only only quantitative quantitative easing easing (QE). (QE). This aims This aims to to boosts boosts spending spending further. further. recently recently camecame out ofout anof 18-month an 18-month increase increase the supply the supply of money of money available available to to WhenWhen considering considering the positives the positives it is it is recession. recession. Unemployment Unemployment averages averages over over borrow borrow at anat acceptable an acceptable cost but costtypically but typically important important to recall to recall that sterling that sterling has already has already 12 per12cent per will centmake will make for a for direaposition dire position and and weakens weakens a currency. a currency. weakened weakened considerably. considerably. Ex-Governor Ex-Governor wouldwould meanmean longer-term longer-term risks to risks theto the Mervyn Mervyn King favoured King favoured a weaker a weaker currency currency to to currency. currency.
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As As thethe world’s world’s oldest oldest collective collective investment investment vehicles, vehicles, investment investment trusts trusts areare often often being being dismissed dismissed as too as too complicated complicated or or tootoo small. small. Things Things areare changing changing in the in the way way other other funds funds areare marketed marketed and and distributed distributed so so thisthis could could encourage encourage many many investors investors to to now now reconsider reconsider trusts. trusts. In most cases,cases, debt levels debt levels are noaremore no more than than classes. Investment Investment trust fees trust have fees have always always In most Investment Investment truststrusts are “closed are “closed ended”, ended”, they theyclasses. per cent per of cent theofportfolio. the portfolio. However, However, a a “clean” “clean” because because they have they have nevernever paid paid10-1510-15 oftenoften perform perform betterbetter and are andcheaper are cheaper than than been been minority minority of trusts of trusts exceed exceed this and thiscan andtrade can trade commission to advisers to advisers or platforms. or platforms. unit trusts unit trusts and “open-ended” and “open-ended” investments investments commission on what on what appear appear to be to wide be wide discounts discounts as a as a SomeSome investment investment truststrusts may have may have whichwhich dominate dominate the investment the investment market. market. You can Youalways can always checkcheck this via thisbrokers’ via brokers’ performance fees. These fees. These are inare decline, in decline, but but result.result. One reason One reason why this whymay this be may a good be a good time timeperformance publications or publications whichwhich highlight highlight gearing. gearing. aboutabout 60 per60cent per of cent investment of investment truststrusts still still lists orlists to consider to consider investment investment truststrusts is theis the Investment truststrusts can also can retain also retain up toup to have have them.them. They are Theyusually are usually triggered triggered if a if a Investment introduction introduction of theofRetail the Retail Distribution Distribution Review Review per of cent dividends of dividends and income and income received received manager manager beatsbeats a benchmark a benchmark by more by more than athan 15 a per15cent earlierearlier this year this .year The.removal The removal of commission of commission from the fromportfolio, the portfolio, in anyinone anyyear. one This year.surplus This surplus certain amount. amount. bias inbias favour in favour of unitoftrusts unit trusts brought brought more more certain cash is cash called is called the revenue the revenue reserve, reserve, and can andbe can be transparency transparency regarding regarding costs.costs. Another Another reason reason Search Search for discounts for discounts used used to produce to produce a growing a growing stream stream of income of income is investors’ is investors’ craving craving for income for income in theinface the of face of The share The share price price is influenced is influenced by investor by investor for investors for investors even even whenwhen markets markets are volatile are volatile low bank low bank savings savings rates,rates, and their and willingness their willingness demand demand for the forshares, the shares, whereas whereas the net theasset net asset and companies and companies don’tdon’t pay dividends pay dividends or don’t or don’t to consider to consider non-mainstream non-mainstream asset asset classes. classes. valuevalue (NAV)(NAV) reflects reflects the value the value of theofportfolio. the portfolio. increase increase them.them. This isThis especially is especially helpful helpful to to Changes Changes to thetodiscounts the discounts and premiums and premiums of of Choosing Choosing which which market market thosethose investors investors looking looking for income. for income. truststrusts present present both both opportunities opportunities and risks and to risks to Browsing Browsing through through the Association the Association of of the investor. the investor. TrustsTrusts standing standing on a premium on a premium Investment Investment Companies’ Companies’ website website you will yousee will see couldcould be thebenext the to next fall.toCheaper fall. Cheaper truststrusts there there are hundreds are hundreds of investment of investment companies companies standing on wide on wide discounts discounts can do can do quoted quoted on theonLondon the London StockStock Exchange Exchange and andstanding disproportionately well should well should sentiment sentiment turn turn Alternative Alternative Investment Investment Market. Market. ManyMany offer offer disproportionately anddiscount the discount narrow, narrow, particularly particularly in a in a sectors sectors such as such technology, as technology, infrastructure infrastructure or orand the risingrising market. market. healthcare healthcare or themes, or themes, such as such income. as income. BeingBeing closed-ended, closed-ended, investment investment truststrusts do notdohave not have Understand Understand the gearing the gearing to meet to meet daily daily demands demands for redemption for redemption or or Like other Like other publicpublic companies, companies, new investment, new investment, whichwhich meansmeans that they that are they are investment investment truststrusts are free aretofree borrow to borrow particularly particularly well suited well suited to asset to asset classes classes whichwhich money. money. A well-run A well-run trust that trust isthat is require require a longer-term a longer-term perspective perspective or where or where “geared” “geared” will produce will produce enhanced enhanced liquidity liquidity is constrained. is constrained. TheseThese include include private private returns returns whenwhen markets markets are rising. are rising. equity,equity, infrastructure, infrastructure, convertible convertible debt and debt and But always But always remember remember that debt, that debt, in in commercial commercial property. property. effect,effect, reduces reduces the portfolio the portfolio valuevalue and therefore and therefore NAV. NAV. Watch Watch the charges the charges Statistics Statistics clearlyclearly showshow investment investment trusts’trusts’ net net asset asset valuesvalues have,have, on average, on average, performed performed betterbetter than unit thantrusts. unit trusts. Generally, Generally, investment investment truststrusts charge charge between between 0.75 0.75 per cent per and cent1and per1cent per less centaless a year than year unit thantrusts. unit trusts. This may This not mayseem not seem a lot a lot now, now, but small but small numbers numbers become become big numbers big numbers over time. over time. The value The value of your of your investment investment and the and income the income fromfrom it canit go can go Charges Charges on unit ontrusts unit trusts are under are under review, review, downdown as well as well as upasand up you and may you may not get not back get back the original the original because because the commissions the commissions paid to paid platforms to platforms amount amount invested. invested. Past Past performance performance is notis anot reliable a reliable indicator indicator and advisers and advisers are being are being removed removed and the and the for future for future results. results. Please Please contact contact us forusfurther for further information information or if or if industry industry is moving is moving towards towards “clean” “clean” shareshare you are youinare any indoubt any doubt as toas the tosuitability the suitability of anofinvestment. an investment.
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Income Income protection protection insurance insurance can can help help ease ease the difficult the difficult situation situation of of suddenly suddenly no longer no longer beingbeing employed. employed. Whether Whether you lose you your lose your job for job for circumstances circumstances that are thatbeyond are beyond your your control control or you or become you become sick with sick with an an illness illness that prevents that prevents you from you from working working for a for specific a specific period period of time, of time, therethere is much is much reliefrelief that can thatcome can come from from having having insurance insurance at a difficult at a difficult time time to replace to replace the income the income that you that you werewere previously previously earning earning and to and to provide provide the protection the protection that you that you need.need. ManyMany different different typestypes of of individuals individuals compare compare income income protection protection covercover and purchase and purchase this this Protecting Protecting against against thethe loss loss of of critical critical personnel personnel insurance insurance for the forprotection the protection of of income income and the andneeds the needs of those of those individuals individuals vary from vary from one situation one situation • The•costs The costs of replacing of replacing the individual the individual Key employees, Key employees, like directors like directors or critical or critical to another. to another. concerned, concerned, perhaps perhaps on a temporary on a temporary basis.basis. persons persons could could affect affect the business the business should should they they Whether Whether you have you have a feara of fear losing of losing • Business • Business loan repayments loan repayments that could that could be at be at not be not available be available to work to work for whatever for whatever reason. reason. your your job and job being and being unemployed unemployed or or a result as a result of theofimpact the impact of theof the You may Youneed may need to protect to protect your business your business risk asrisk you fear you that fear you that will youdevelop will develop an an circumstances circumstances involved. involved. against against unforeseen unforeseen circumstances circumstances such as such as illness illness in theinfuture, the future, therethere can be can be long sickness term sickness or premature or premature death.death. manymany reasons reasons to purchase to purchase income income long term Are there Are there any exclusions any exclusions or conditions or conditions If thisIfisthis a worrying is a worrying factor,factor, then you thenmay youneed may need attached attached to the to cover? the cover? protection protection insurance insurance now now to provide to provide to consider to consider “Keyman “Keyman Insurance” Insurance” covercover to give to give Any insurance Any insurance policypolicy of anyoftype any will typebring will bring protection protection against against whatwhat may may go go you peace you peace of mind. of mind. with itwith conditions it conditions that may thator may may ornot mayinclude not include wrong wrong in theinfuture. the future. Before Before What What protection protection does does the policy the policy certain certain things things that are that not are covered. not covered. purchasing purchasing this form this form of cover of cover provide? Once Once again,again, it is imperative it is imperative that you thatread you read however, however, it is essential it is essential to understand to understandprovide? Different Different providers providers will offer will different offer different formsforms of the of policy the policy carefully carefully beforebefore deciding deciding to to the benefits the benefits as well as as well theasoptions the options covercover and itand is important it is important to scrutinise to scrutinise the the purchase purchase it. it. that are thatavailable are available to you. to you. policypolicy carefully carefully to be to sure be just surewhat just what is on is offer on offer Should Should I proceed? I proceed? This isThis important is important because because thesethese in all in individual all individual cases.cases. Only you Only can you answer can answer this question, this question, but but details details can help can help you find you afind great a great • Generally • Generally they provide they provide cover cover in areas in areas such as: such as: remember remember people people are your are greatest your greatest resource, resource, premium premium for the forcover the cover you need you need and and A death A death in service in service of an of employee an employee or or they are they also are potentially also potentially one of one your of greatest your greatest will help will help you to you make to make the best the best policypolicy director director who iswho critical is critical to your to business your business liabilities. liabilities. purchase. purchase. operations. operations.
Remember Remember to keep to keep in mind in mind that, that, regardless regardless of your of your current current situation, situation, your your circumstances circumstances can change can change at anyattime. any time. WhileWhile you may you be may healthy be healthy now, now, this this can change can change very quickly. very quickly. As As such,such, income income protection protection insurance insurance can be can purchased be purchased to to protect protect against against the things the things that that can go canwrong go wrong in theinfuture. the future.
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ManyMany business business owners owners recognise recognise just how just how • A critical • A critical illnessillness to a very to aimportant very important muchmuch their operation their operation relies relies and depends and depends upon upon employee employee or director, or director, whichwhich may result may result in in a given a given individual, individual, whether whether that person that person is an is an them them beingbeing unable unable to return to return or continue or continue with with IT technician, IT technician, managerial managerial or executive or executive level. level. their normal their normal activities. activities. You should You should assessassess your need your need for Keyman for Keyman • The•insured The insured benefits benefits to thetocompany the company wouldwould Insurance Insurance by performing by performing an exposure an exposure analysis, analysis, typically typically include include a casha lump-sum cash lump-sum payment payment to to relating relating to thetopeople the people that work that work for your for your the policy the policy holding holding company. company. business, business, including including executive executive employees. employees. HowHow would would a lump a lump sum sum payment payment help?help? It is never It is never good good to discover to discover your exposures, your exposures, It could It could help by: help by: only inonly theincontext the context of someone’s of someone’s unavailability unavailability • Covering • Covering a lossaofloss initial of initial business business and/orand/or whichwhich bringsbrings your operation your operation to a grinding to a grinding halt. halt. capitalcapital start-up start-up investment. investment.
Can Can
““ ””
investing investingbe be worthwhile? worthwhile?
You can Younow can put nowAIM put stocks AIM stocks in in SmallSmall caps caps oftenoften outperform outperform the the individual individual savings savings account account mainmain players players in theinmarket the market your your meaning meaning that you thatdon’t you don’t Finding Finding the retirement the retirement stockstock (ISA),(ISA), pay capital gainsgains tax ontaxany on any that will thatmake will make your your fortune fortune is ispay capital profits you make. you make. You won’t You won’t nevernever easy. easy. One of One theofclassic the classic profits to paytoincome pay income tax ontax on Why Why fortune fortune stocksstocks of recent of recent yearsyearshave have impossible to puttoenough put enough are such are such shares shares good? good?impossible dividend dividend payouts payouts either.either. was online was online retailer retailer Asos.Asos. If you’d If you’d money money into itinto for itit for to make it to make a a This isThis partly is partly because because it’s easier it’s easier Also, Also, most most AIM shares AIM shares are are for small invested invested £1,000 £1,000 whenwhen the the significant significant difference difference to their to their for small companies companies to grow to grow at at exempt from from inheritance inheritance tax astax as company company listedlisted in 2001, in 2001, your your exempt portfolio. portfolio. a rapid a rapid rate. If rate. a large If a large company company as theasowner the owner has held has the held the stakestake wouldwould now be now worth be worth long long Of course, Of course, therethere are risks are risks as as is a dominant is a dominant playerplayer in a in a shares shares for atfor least at least two years two years particular around around £78,000. £78,000. companies companies are more are more likelylikely particular market, market, it’s hard it’s hard for it forsmall it small before their their death. death. Be aware Be aware to generate Sensible Sensible investing investing though though before to gotobust go and bustthe andshare the share pricesprices to generate moremore sales sales growth. growth. thatexemption this exemption doesn’t doesn’t It willItalways isn’t about isn’t about ‘getting ‘getting rich quick.’ rich quick.’that this can be can volatile, be volatile, therethere can also can also will always be easier be easier to grow to grow applyapply to property to property or investment or investment For every For every Asos,Asos, therethere are are be a gap be abetween gap between the price the price you you sales sales from from nothing nothing to £100,000, to £100,000, companies and it’s andnot it’sthat not that than than hundreds hundreds of failures of failures but don’t but don’tcompanies and atthe andprice the price you can you can from from £500m £500m to £1bn. to £1bn. buy atbuy to telltowhich tell which are exempt, are exempt, Smaller let that let put thatyou putoff youthis offsector. this sector.easy easy (the at ‘spread’). (the ‘spread’). But But Smaller companies companies are often are oftensell atsell so if your tax-planning tax-planning strategy strategy Research Research showsshows that, that, if youif you so if your overall, overall, the potential the potential returns returns familyfamily concerns, concerns, or theor the is based is based here, here, get professional get professionalmanagement take the takeright the right approach, approach, may worth be worth the added the added risks.risks. management teamteam may have may have may be financial financial advice. advice. investing investing in small in small caps caps can give can give This means This means that there that there can be can be substantial substantial stakesstakes in thein the Additionally from from next April, next April,company. your your portfolio portfolio a realalift. realWith lift. With Additionally exciting opportunities opportunities for smart for smart company. If theIfdirectors the directors own ownexciting you won’t you won’t to have to have pay stamp pay stamp plentyplenty new tax newrules tax rules making making investing investing investors investors who keep who keep a close a close eye eye of shares, of shares, they’re they’re duty duty if youifbuy youan buy AIM an share. AIM share. incentivised in AIM in stocks AIM stocks far more far more onsmall-cap the small-cap world. world. incentivised to dotoa do good a good job. job.on the thesethese exemptions exemptions appealing, appealing, there’s there’s nevernever been been a Basically, a Basically, LargeLarge scalescale companies companies can be can be that you thatdon’t you don’t pay any pay any a problem betterbetter time time to gotolooking go looking at at meanmean a problem for institutional for institutional tax ontaxmost on most AIM shares AIM shares what’s what’s on offer. on offer. investors. investors. Even Even if a fund if a fund whether whether you’reyou’re dead dead or alive. or alive. manager manager spotsspots a great a great The Government The Government helpshelps too too To have To have goodgood tax breaks tax breaks you you opportunity, opportunity, it’s often it’s often The Government The Government recently recently mademade need need goodgood investments investments to to changes changes to thetotax therules, tax rules, with with benefit. benefit. The good The good newsnews is thatis that the aim theof aim making of making investing investing in in plentyplenty of research of research showsshows that that smaller smaller stocksstocks far more far more smallsmall stocks, stocks, in theinpast the at past at attractive attractive to individual to individual least,least, have have moremore than than earned earned investors. investors. their their placeplace in portfolios. in portfolios. The changes The changes applyapply to theto the Alternative Alternative Investment Investment Market, Market, or AIM. or AIM. This isThis mostly is mostly mademade up up of small of small companies, companies, manymany of of whichwhich aren’taren’t established established enough enough to pass to pass the more the more stringent stringent listinglisting criteria criteria for the for the mainmain market. market.
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 and you may not mayget notback get back the original 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 to the suitability the suitability of an of investment. an investment.
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Offshore bonds provide an opportunity for your assets to grow in a tax-free environment, they also allow you to choose when any tax liability becomes payable. Many investors know that investing in an Individual Savings Account (ISA) or pension can help reduce their tax bill, but fewer are aware of the advantages of offshore bonds. Like pensions and ISAs, offshore bonds are effectively ‘wrappers’ into which you place your investments, like funds or cash. They are offered by life insurance companies operating from international finance centres. The major tax advantage of investing in an offshore bond is “gross roll-up”. This is where the underlying investment gains are not subject to tax at source, apart from an element of withholding tax. With an onshore bond, life fund tax is payable on income or gains made by the underlying investment. This means your offshore investment has the potential to grow faster than if it were in a taxed fund. Providing investments are held within the offshore bond wrapper, you don’t pay any income tax or capital gains tax on them and you can switch between different funds tax-free.
While you do have to pay tax on any gains when you withdraw assets, there are a number of ways you can potentially reduce the amount you pay. You can withdraw up to 5 per cent of your initial investment every year, until it is all gone, and defer paying tax until a later date. You may be a higher-rate taxpayer now but will expect to become a basic rate taxpayer when you retire, then you can defer cashing in your assets until retirement and possibly pay half the tax due on any gain realised. You can transfer ownership (assign) an offshore bond, or parts of it, as a gift without the recipient incurring any income or capital gains tax, although this may mean an Inheritance Tax (IHT) liability if you were to die within seven years. All future tax on withdrawals will be charged at the new owner’s tax rate. Putting an offshore bond in a trust could help your family reduce or avoid IHT, provided you live for seven years after setting it up. Offshore bonds are complex investment structures; please contact your professional financial adviser if you are considering investing in this area.
The value of your investment and the income from it can go down as well as up and you may not get back the original amount invested. Past performance is not a reliable indicator for future results. Please contact us for further information or if you are in any doubt as to the suitability of an investment.
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)