FINANCE

DOES YOUR PENSION NEED A NEW HOME?

We would be happy to give a prize to anyone who could tell us how many personal pension providers exist in the UK today. It’s not just the ones that are active today as there are far more that are inactive or closed and have been taken over or merged. We’ve all heard of the blockbuster companies like Prudential, Aviva, Legal & General, Old Mutual that are currently active on the pension scene. But whatever happened to companies like Pearl Assurance, National Provident, Guardian, Eagle Star, Sun Alliance, Cornhill, Target, Abbey Life, Allied Dunbar, Royal, Canon, Laurentian, Hambro Life, Britannic, National Mutual, Clerical Medical, Co-op, Sentinel, Equitable Life, London Life, Hill Samuel, Scottish Life, Scottish Amicable, Lloyds Life and many more…do you have a pension plan with any of these? The companies that have closed to new business or merged with others still hold your pension funds and probably in an oldfashioned contract which could contain high charges and need close examination. You may be better off moving these policies to a newer style plan or combining with what you have already. The purpose of this is simply to have one source of funds to manage and control before and after retirement. Lots of small pension pots will cost more to administer and certainly be a headache when you eventually retire so having someone review your plans could be quite a valuable exercise. Some traditional plans can carry guarantees so be careful not to move funds without taking advice from a qualified advisor who would have professional indemnity insurance to safeguard the advice given. You might have stopped paying into some of these plans years ago and possibly moved house several times so the companies in question may not be able to find you to pay you what you are owed. The FCA can help you trace closed companies but it can be hard work. If you would like assistance in tracing pension assets let us know.

PHILIP VAUGHAN Director at Abacus Assurance Financial Services Ltd Porthcawl 01656 772222

RATES STILL FALLING – FOR YOUNG AND OLD

At the time of writing, one mortgage lender has just reduced borrowing to the lowest rate anyone can remember @ 0.89% with a 40% deposit. Those who are fortunate to have substantial equity in their properties can, if they meet other criteria, enjoy a remortgage at this interest rate. Indeed right across the board rates have never been lower and even 5 year fixed rates are ridiculously low so now’s the time to get your affairs in order, as rates can’t go a whole lot lower, surely? If the Bank of England follows through on its initial thoughts about raising the base rate to around 0.25% after Christmas due to the UK’s strong business figures, then you could be glad that you fixed now. Yet it’s not just younger people who are enjoying mortgages at these historic lows, as those in the retired sector see the interest rates drop on the kinds of borrowing that they use, primarily interest-only retirement borrowing. We have just carried out a remortgage for a couple in their eighties whose interest rate, 7.79%, was set some 12 years ago, at what was competitive at that time. We secured a new deal for them at an incredible rate of just 3.22%, fixed for life, and saved many thousands in interest going forward. This isn’t the only deal of this nature that we have secured – we do this on a weekly basis, little wonder we get calls virtually every day from new Clients who have either been recommended to us or are looking coming to us for our experience in this specialist sector. Every year, as a nudge to you to get matters sorted for the better, we offer a free Will and this year is no different. So for all mortgage cases and Later Life Borrowing cases that we arrange for clients until the end of September 2021, we not only sort your finances but also help you organise other important areas of your financial and legal arrangements, all Wills prepared by fully qualified specialists who work in this area every day. Just call us on 01656 782545 or 07768 418308 for an informal chat – we’re ready and waiting to help.

PAUL FIELDING Dragon Financial 01656 782545 / 07768 418308

FUNERAL PLANS VERSUS PERSONAL SAVINGS

Planning for your funeral is increasingly viewed as a positive thing to do. Making provisions for the future can help save your family from financial stress at a very difficult time and protect them from the potentially crippling impact of unexpected funeral expenses. Unfortunately, the economics of saving privately for your funeral make less and less sense, hit by the double whammy of rising funeral prices and falling interest rates. The SunLife (2021), Cost of Dying Report highlights the sad fact that funeral prices keep on rising – by 128% since their first report in 2004. They found that the average cost of a basic funeral had reached £4,184 in 2020. The report also shows although 65% of people made some financial provision for their funeral, only two thirds of that group had put aside enough to cover the whole cost. With forecasts that the average cost of a basic funeral will rise past £5,000 within five years, the problem of funeral funding shortfalls could be made worse by historically low interest rates on ISAs and savings accounts. So, what is the alternative for people wanting to make proper provision for the future? Unlike savings, funeral plans fix the costs of your funeral director’s services at today’s prices. This guarantees that there will be nothing more to pay for these services, no matter how much the price of funeral director services rise. With a range of options available to suit all budgets, including green options, you’ll have the reassurance of knowing all of their costs are covered. Putting money aside in a regular savings account beats making no provision. However, if you would like to consider alternative options on this, or any other area of financial planning, please don’t hesitate to get in touch for a no obligation enquiry

PHIL PROTHEROE Tavistock Partners [UK] Ltd 01656 771747/ 07859 129580