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Money Magazine

  1. 1. The DIGITAL personAL fInAnce mAGAzIne sepTemBer/ocToBer 2009 Planning your Financial protection for you retirement income Maximising an income from your pension fund and your family With the abundance of choice, we can help you make the right decisions Emerging markets The search Do they have the potential to lead the recovery when the world economy begins to stabilise? for income Investing for an income Are you taking advantage in a low interest rate environment of your ISA allowance? The earlier you invest, the longer your money is outside the reach of the taxman Transferring your pensions Your questions answered Wealth management Aiming to preserve your wealth and shelter it from the burden of higher taxes
  2. 2. 14 06 Financial 26 24 planning is our business. 13 We’re passionate about making sure Inside this issue your finances are in good shape. 05 Corporate bonds 10 Are you taking advantage of 20 Investing in uncertain times Attracting investors for all the right reasons your ISA allowance? In a low growth environment, which areas offer the best prospects? The earlier you invest, the longer your money is outside the reach of the Our range of personal financial planning services is 06 Self-Invested Personal Pensions Why astute investors are talking to taxman 21 Dates for your diary Don’t miss these deadlines or submitting extensive, covering areas from pensions to inheritance matters and tax-efficient investments. us about taking control of their own investment decisions 11 Planning your retirement income your 2008/09 tax return 08 Wealth management Aiming to preserve your wealth and Maximising an income from your pension fund 21 Locating a lost pension Tracing service may provide the help you need! Contact us to discuss your current situation, and we’ll shelter it from the burden of higher taxes 12 Transferring your pensions provide you with a complete financial wealth check. 08 Taxpayers allocated incorrect Your questions answered 22 Buy-to-let landlords acquiring more properties tax codes Have you had too much tax deducted from your wages? 14 What type of investor are you? Building a solid investment strategy Interest rate cuts tempting property investors back in to the market through good and bad times 08 Emerging markets 24 Long-term care Do they have the potential to lead the recovery when the world economy 16 Financial protection for you and your family There is no panacea when it comes to paying for care begins to stabilise? With the abundance of choice, we can help you make the right decisions 26 Experiencing mortgage repayment problems? 09 The search for income Investing for an income in a low interest rate 19 Inheritance tax planning Keeping your hard-earned assets out of It’s essential to talk environment the hands of the taxman 28 Data Bank Tax facts, do you know your numbers? 03
  3. 3. 16 Creating wealth Inside this issue W elcome to the latest issue of our personal finance and wealth management magazine. Achieving the standard of living you require during your retirement will largely depend on the choices you make when considering how to take an income from your pension fund. On page 11 we consider some of the options 21 22 that may be appropriate to your particular situation and the degree of control you want over your pension. With so many different protection options available, making the right decision to protect your personal and financial situation can seem overwhelming. On page 16 we look at the plethora of protection solutions which could help ensure that a lump sum, or a replacement income, becomes available to you in the event that it is needed. If you are an income-seeking saver in search of good returns from your savings in this low Corporate bonds interest rate environment, turn to page 9 to find out how we can provide you with the professional advice you need to enable you to consider all the options available. At the time of going to press, the global financial crisis and events have been changing very quickly, and some further changes are likely to have occurred by the time you read this issue. A full content listing appears on page 3. Content of the articles featured in this Attracting investors’ for all the right reasons publication is for your general information and use only and is not intended to address your particular requirements. They should Corporate bonds are a type of fixed interest When held within a trust or fund, ‘fixed Over the coming not be relied upon in their entirety and security. A fixed interest security is a way of interest’ does not mean ‘fixed income’. Corporate shall not be deemed to be, or constitute, ‘lending’ money to a company in return for a bonds offer different rates of interest and mature years, if the yields advice. Although endeavours have been from corporate bonds 08 fixed rate of interest over a set period. This type at different times. Money may be invested made to provide accurate and timely information, there can be no guarantee of investment is intended to provide you with a into, or withdrawn from, a fund that invests in outperform the returns from regular, reliable income. corporate bonds. The income levels from trusts that such information is accurate as of the date it is received or that it will continue to Over the coming years, if the yields from corporate vary because bonds are continually bought cash, corporate bonds could be accurate in the future. No individual or bonds outperform the returns from cash, corporate and sold by the fund manager at different rates. become an increasingly company should act upon such information without receiving appropriate professional bonds could become an increasingly larger part of Yields are used to indicate the income levels larger part of investors’ investors’ portfolios. This will largely be dependent received from corporate bond trusts. advice after a thorough examination of on the state of the economy, unemployment levels, The value of your capital in a corporate bond portfolios. their particular situation. We cannot accept 29 19 responsibility for any loss as a result of interest rates and future tax rises. fund is not guaranteed and can vary. In addition, acts or omissions taken in respect of any Every bond issued by a company is given a the value of your investment is likely to fall if articles. Thresholds, percentage rates and credit rating by an agency such as Morningstar or interest rates begin to rise in the medium to tax legislation may change in subsequent finance acts. Moody’s. These credit rating agencies assess how long-term, but on the flip side, it is likely to likely it is that the company will be able to make increase in value if interest rates fall. the interest payments and repay the capital. The most secure rating is an AAA rating. The value of investments and the income from When you invest into a corporate bond fund, them can go down as well as up and you may not If you consider that corporate To DISCuSS Your FInAnCIAL you are lending your money to companies who agree to pay you an amount of interest over get back your original investment. Past performance is not an indication of future performance. Tax bonds still look undervalued PLAnnIng rEquIrEMEnTS or To a certain period of time. Corporate bonds are benefits may vary as a result of statutory change and and would like to discuss the oBTAIn FurThEr InForMATIon, issued at different rates of interest by different their value will depend on individual circumstances. options available to you, please PLEASE ConTACT uS. companies. Generally speaking, the more secure a company is, the lower the interest rates it will Thresholds, percentage rates and tax legislation may change in subsequent finance acts. contact us to discuss your need to offer to attract investors. particular requirements. 04 05
  4. 4. retirement retirement Self-Invested Personal Pensions S IPPs are wrappers that into a SIPP, there are a number relevant earnings and receive different pensions under the one provide individuals with of important considerations you full tax relief on the total, subject SIPP wrapper by transferring a series more freedom of choice than should discuss with us first. These to a maximum earnings limit of of separate schemes into your SIPP. other conventional personal will include the potential charges £245,000 in 2009/10. If you were to However, it is important to ascertain pensions. They allow investors to involved, the length of time you invest more than your earnings but if there are any valuable benefits in choose their own investments or have to retirement, your investment within the annual allowance you your existing schemes that would appoint an investment manager to objectives and strategy, your would not receive any additional be lost on such a transfer. The actual look after their portfolio. existing pension plan guarantees tax relief. Where the total pension transfer costs also have to be taken Why astute investors are talking to us about taking As a SIPP investor you have the option of choosing when, where and and options (if applicable) and the effects on your money if you are input amount exceeds the annual allowance a tax charge of 40 per into consideration, if applicable. control of their own investment decisions how you invest the assets of your pension fund. Contributions that transferring from with-profits funds. If you are an expatriate living cent of the amount in excess of the limit will be levied. SIPPS are not appropriate for everybody and there are alternative methods of saving for retirement. you make to your SIPP will currently overseas or hoping to move Contributions can be made by Following the introduction of Pension Simplification legislation in 2006, Self-Invested Personal Pension Plans receive tax relief of between 20 per overseas in the very near future, employers, employees and the cent and 40 per cent, depending on then it may also be worth self-employed. Where previously The value of investments and the (SIPPs) have become more accessible to more sophisticated investors who require greater control over their which personal tax band you are in. considering a Qualifying Recognised employees in a company pension income from them can go down You have to appoint a trustee as well as up and you may not get pension planning and want greater access to different investment markets. They also offer excellent tax planning to oversee the operation of your As a SIPP investor you have the option back your original investment. Past solutions, and in these current difficult financial markets provide for the appropriate investor the maximum SIPP, but having done this you can of choosing when, where and how performance is not an indication then effectively run your pension of future performance. Tax benefits amount of flexibility when planning for retirement. fund according to your investment you invest the assets of your pension fund. may vary as a result of statutory requirements. The range of available Contributions that you make to your SIPP will change and their value will depend investments will depend largely on currently receive tax relief of between 20 per on individual circumstances. your choice of SIPP provider – we Thresholds, percentage rates can discuss this with you to ensure cent and 40 per cent depending on and tax legislation may change that you select the most appropriate what personal tax band you are in. in subsequent finance acts. scheme provider. Transferring your pension will Ultimately it is down to the Overseas Pension Scheme (QROPS). scheme who earned more than not guarantee greater benefits in trustees of your pension plan to A QROPS is a pension scheme set £30,000 were not permitted also to retirement. agree whether they are happy to up outside the UK that is regulated contribute to a SIPP, they are now accept your investment choices as a pension scheme in the country free to do so, provided that they into the SIPP. The trustees are in which it was established, and it do not exceed the limit of 100 per responsible and liable for ensuring must be recognised for tax purposes cent of their earnings, up to the that the investment choices fall (i.e. benefits in payment must be maximum earnings limit. within their remit. A fully fledged subject to taxation). The procedure Alternatively, an employer can SIPP can accommodate a wide for overseas transfers has been also make an annual contribution range of investments under its simplified significantly since April of up to £245,000 in 2009/10 on umbrella. However, you are likely 2006. Now, as long as the overseas behalf of an employee regardless to pay for the wider level of choice scheme is recognised by HM of their remuneration. with higher charges. Revenue & Customs as an approved There are charges associated with At its most basic, a SIPP can arrangement, the transfer can be SIPPs, these include, the set-up fee contain straightforward investments processed in the same way as a and the annual administration fee. such as cash savings or government transfer to a UK scheme. A low-cost SIPP with a limited range If you would like to bonds. You can also include unit and There is in fact no financial of options, such as shares, funds and investment trust funds, and other limit on the amount that you can cash, might not charge a set-up fee arrange a review of more esoteric investments such as contribute to your SIPP, although and only a modest, if any, annual fee. your current retirement commercial properties and direct there is a maximum amount on A full SIPP will usually charge provision and discuss share investment. Other options which you will be able to claim a set-up fee and then an annual are derivatives, traded endowment tax relief in any one tax year and fee. The charges are usually a flat the options available to policies and shares in unquoted a lifetime allowance restricting rate, so they benefit investors with you, please contact us. companies. So investments held the total fund size. Under the larger pension pots. There will, within your SIPP wrapper can range rules which came into force from in addition to annual charges, be from low to high risk, but crucially April 2006, investors now have transaction charges on matters NeeD MORe cannot include a second home or other residential property. much more freedom to invest money in their SIPP. such as dealing in shares and switching investments around. INFORMATION? If you are considering transferring You can make contributions If appropriate, you are also PLEASE CONTACT US your existing pension money of up to 100 per cent of your net permitted to consolidate several WITH YOUR ENQUIRY. 06 07
  5. 5. Wealth creation Wealth management Aiming to preserve your wealth and shelter it from the burden of higher taxes The search for income Making sense of your planning objectives and finances requires even more time and effort in today’s constantly fluctuating economic environment. With the reduced rate of economic growth and the impact of the recession, a review of your financial and tax planning position could enable you to lower or even defer tax that you have to pay, enabling you to free up Investing for an income in a low interest rate environment cash for other investment purposes in your business or personally. If you are an income-seeking saver in search of good returns from your savings in is by investing in stocks that pay a dividend. If a firm is making good profits it can decide to There is no substitute for personal advice. If this low interest rate environment, we can provide you with the professional advice share this with investors rather than reinvest it you would like to discuss the range of personal in the business, so essentially dividends are the and business planning services that we offer, you need to enable you to consider all the options available. In addition, we can investors’ share of company profits. Share prices of please contact us for further information. help you determine what levels of income you may need and work with you to companies that regularly pay dividends tend to be less volatile than other companies, but remember review this regularly as your requirements change. Another major consideration that company shares can fall in value. In addition, Emerging markets is your attitude towards risk for return and availability. This will determine which dividends can be cut if a company finds itself in Taxpayers allocated need of extra cash. asset class you are comfortable investing in. Another way to invest in equities for the incorrect tax codes purpose of obtaining a better income is via an C ash, especially in the current climate, is income (called the coupon) and a lump sum at equity income fund. The fund manager running an important element for any income maturity (called the par). They typically perform the portfolio selects a wide range of equities, so investor. One option you may wish to well as the economy slows and inflation falls. you are less reliant on the performance of any Have you had too much tax Do they have the potential to lead the recovery when the world discuss with us is cash funds, dubbed Government bonds tend to move in the one particular company, and will try to select companies that pay regular dividends. deducted from your wages? economy begins to stabilise? ‘money market’ portfolios. These use the pooled savings of many investors to benefit from higher opposite direction to shares and historically are good diversifiers. But on the flipside, the rates not available to individuals. They can invest government is likely to issue more gilts and this T HM Revenue & Customs (HMRC) owes he term emerging markets appeared first stormy and volatile past, rallying and slumping far in the most liquid, high-quality cash deposits and large supply may lead to falls in gilt prices. As If you would like to discuss how hundreds of millions of pounds to as many as during the 1990’s and is now widely used more violently than the developed world. ‘near-cash’ instruments such as bonds. But, unlike government bonds pay a fixed income stream, the you could generate more income 4.5m British taxpayers after allocating them to describe countries not considered to be a normal deposit account, the value of a cash real value of these payments erodes if inflation from your savings in this low with incorrect tax codes. developed. Third World, lesser developed fund can fall as well as rise, although in theory, at rises. Similarly, the value of bonds typically falls With world markets remaining interest rate environment, please The National Audit Office estimates the countries or under-developed countries. Developed least, it should not experience volatile swings. when interest rates rise. department could be liable to repay £1.6bn meaning essentially the major European countries volatile, it is important to make Bonds are a form of debt, an ‘IOU’ issued by Corporate bonds operate under the same contact us. We’ll ensure that you to taxpayers who had too much tax deducted plus USA, Canada, Japan, Australia and New Zealand. sure that your investment either governments or firms looking to raise principle as gilts, in other words companies issue make an informed decision based from their wages. In recent months emerging stock markets portfolio is continually meeting capital. As an investor, when you purchase a debt (bonds) to fund their activities. High-quality, There were 20m queries about tax codes in have reached levels last seen before the collapse bond you are essentially lending the money to well-established companies that generate lots on the options available to you. March this year, up from around 16m last year. of the Lehman Brothers investment bank. The your specific requirements. To the government or company for a set period of cash are the safest corporate bond issuers and ongoing rally has been due to a returning belief arrange a review of your particular of time, which varies according to the issuer. their bonds are known as ‘investment grade’. The value of investments and the income Make sure that you pay the right in ‘decoupling’, the theory by which emerging situation, please contact us. In return you will receive interest, typically High-yield bonds are issued by companies from them can go down as well as up and you markets will in future be less dependent on the paid twice a year, and when the bond reaches that are judged more likely to default. To attract may not get back your original investment. amount of tax, and claim back fortunes of developed markets because they will maturity you usually get back your initial investors, higher interest is offered. These are Past performance is not an indication of future money that may have been be able to rely on stronger domestic demand. The value of investments and the income from investment. But you don’t have to keep a bond known as ‘sub-investment grade’ bonds. performance. Tax benefits may vary as a result overpaid, please contact us for Asia and Latin America haven’t had the recent them can go down as well as up and you may not until maturity. You can, if you wish, sell it on. The risks related to investing in bonds can be of statutory change and their value will depend fundamental problems in the banking sector that get back your original investment. Past performance Much of the government’s debt, including the reduced if you invest through a bond fund. Here on individual circumstances. Thresholds, further information. the developed world has had, so lending and is not an indication of future performance. Tax additional money being used to aid the economy the fund manager selects a range of bonds, percentage rates and tax legislation may change credit growth have resumed rapidly and this is benefits may vary as a result of statutory change and and refinance the banks, is in the form of bonds so you are less reliant on the performance of in subsequent finance acts. helping drive growth. their value will depend on individual circumstances. it issues. Gilts are bonds issued by the British one company or government. The ‘distribution NeeD MORe Emerging markets, particularly China, have seen Thresholds, percentage rates and tax legislation government. The advantage of gilts is that the yield’ gives a simple indication of what returns are likely to be over the next 12 months. The INFORMATION? strong demand for recent initial public offerings, may change in subsequent finance acts. If you government is unlikely to fail to pay interest or many of which have raced higher in the style of the invest in funds which invest abroad, movements in repay its debt, so they are generally the safest ‘underlying yield’ gives an indication of returns PLEASE CONTACT US dotcom boom, raising fears that another bubble currency exchange rates may cause the value of your investments. To date, the UK government has after expenses if all bonds in the fund are held WITH YOUR ENQUIRY. could be forming. Emerging markets have had a investment to go up or down. never failed to pay back money owed to investors. to maturity. Government bonds pay a known and regular An alternative route to generating income 08 09
  6. 6. Wealth creation retirement Planning your retirement income Maximising an income from your pension fund T he earliest you are currently permitted to an unpredictable and possibly falling retirement do not want to buy an annuity with their pension take your retirement benefits is from the age income worries you, then conventional annuities fund. ASPs are intended to provide an income of 50, but this is set to rise to age 55 from may be more appropriate. in retirement for scheme members and their April 2010. If you are considering setting up a dependants, rather than be used as a device to Are you taking advantage conventional-lifetime annuity, which pays a secure pass on tax-privileged pension funds. income for life, there is now no requirement to buy Unsecured Pension (formerly an annuity by the age of 75. However, you must Income Drawndown) start to take your benefits from the age of 75, in If you are approaching retirement addition to any tax-free element. Under the option of Personal Pension Fund and would like to discuss the of your ISA allowance? Withdrawal, you can choose to take a tax-free cash The options lump sum immediately and then, instead of buying options available to you, please Conventional-Lifetime Annuity an annuity, leave the remainder of the fund in a contact us. tax-efficient environment. An annual income (taxed A conventional-lifetime annuity converts your as earned income) can be taken, within prescribed pension fund into an income for the rest of your life, limits, from the invested pension fund. This is a The value of investments and the income from however long you live. You can add different options flexible option which may be a consideration for them can go down as well as up and you may not The earlier you invest, the longer your money is outside of the reach of the taxman and purchase different types depending on your needs and circumstances. For example, your annuity more substantial funds or if you have other sources of income. This allows you to take a taxable income get back your original investment. Past performance is not an indication of future performance. Tax can pay out to your spouse or partner on your directly from your fund, leaving the remainder benefits may vary as a result of statutory change and By investing earlier in the tax year, you could make sure that you are using your Individual Savings Account death, or you can choose an enhanced or impaired life annuity, which may give a higher income than invested. It is available up to age 75. their value will depend on individual circumstances. Thresholds, percentage rates and tax legislation may (ISA) allowance to its full advantage. The earlier you invest, the longer your money is outside the reach of a conventional annuity if you have an illness or Phased Retirement change in subsequent finance acts. medical condition, or are a smoker. A conventional- Phased retirement is a personal pension plan the taxman and has the opportunity to work harder for you. lifetime annuity is the simplest retirement option and allows you to buy an annuity or income and provides a secure, taxable income which is drawdown in stages rather than all at once. It is ISAs are virtually tax-free savings, a cash ISA to a stocks and shares pay tax at 40 per cent on your payable for the rest of your lifetime. up to you to decide how much income you need which means that you do not have ISA, but they must transfer the savings interest If you would like to and when you would like to start taking it. You to declare any income from them, whole amount saved in that tax n if you pay the ‘saving rate’ of tax discuss how planning then cash in as much of the plan as necessary to and you can use an ISA to save cash year in that cash ISA up to the day for savings, outside an ISA you Investment-Linked Annuity provide your chosen level of income. You can take or invest in stocks and shares. of the transfer would pay tax at 10 per cent on ahead and making Investment-linked annuities offer the chance to out a phased retirement plan any time after the n the money transferred is then your savings interest the most of your ISA obtain a higher level of income, but you need age of 50 (55 from April 2010). What can you save or treated as if it had been invested n if you’re a basic rate taxpayer allowance early could to be comfortable with linking your income in invest in an ISA? directly into the stocks and shares inside or outside an ISA you pay retirement to the stock market. They may be Alternatively Secured Pension mean you benefit from ISA in that tax year, the saver is tax at 10 per cent on dividend suitable if you have other income sources, are from age 75 ISAs can be used to: then still able to save or invest the income, this is taken as a ‘tax the potential of greater prepared to take a risk to achieve a higher income n save cash in an ISA and the remainder of their £7,200 annual credit’ before you receive the returns before the end or can accept the risk that your income may The government’s A-Day pensions simplification interest will be tax-free ISA investment limit in that tax dividend and cannot be refunded reduce. Investment-linked annuities are designed legislation, which came into force in April 2006, of this tax year, please n invest in shares or funds in an ISA, year, including up to £3,600 in a for ISA investments to give you the opportunity to obtain an income created Alternatively Secured Pensions (ASPs). any capital growth will be tax-free cash ISA n if you’re a higher rate taxpayer contact us. that increases during your retirement. If the risk of ASPs are available to people reaching age 75 who and there is no further tax to pay n from October 6, 2009, the ISA you would normally pay tax on on any dividends you receive limit will increase to £10,200, up dividend income at 32.5 per The value of investments and the to £5,100 of which can be saved cent, in an ISA you won’t get income from them can go down Transferring money from in cash for people aged 50 or over back the 10 per cent dividend as well as up and you may not get cash ISAs to stocks and n from April 6, 2010, the ISA limit tax credit element of this, but back your original investment. Past shares ISAs will increase to £10,200, up to £5,100 of which can be saved in you will save by not having to pay any additional tax performance is not an indication of future performance. Tax benefits may If you have money saved from a cash for all ISA investors vary as a result of statutory change and previous tax year you can transfer Capital Gains Tax (CGT) their value will depend on individual some or all of the money from a How much tax will you savings circumstances. Thresholds, percentage cash ISA to a stocks and shares ISA save? rates and tax legislation may change in without this affecting your annual If you make gains of more than subsequent finance acts. ISA investment allowance. Interest from savings: £10,100 from the sale of shares Money saved in the n if you pay tax at the basic rate, outside an ISA you would usually and certain other assets in the tax year 2009/10, you would normally NeeD MORe current tax year: pay 20 per cent tax (2009/10) on have to pay CGT. However, you do INFORMATION? your savings interest not have to pay any CGT on gains PLEASE CONTACT US n savers are able to transfer money n if you pay tax at the higher rate, from an ISA. WITH YOUR ENQUIRY saved in the current tax year from outside an ISA you would usually 10 11
  7. 7. retirement Transferring your pensions Your questions answered There are a number of different reasons why you may wish to consider transferring your pension schemes, whether this is the result of a change of employment, poor investment performance, issues over the security of the pension scheme, or a need to improve flexibility. You might well have several proceeding with a transfer. Here Q: Will I lose any benefits? maintain the balance of your portfolio. different types of pension. The gold are some of the most common A: It is possible that your current It is also possible that the amount of standard is the final-salary scheme, questions we are asked by our clients pension may have valuable benefits risk you are prepared to take could which pays a pension based on considering this course of action. that you would lose if you were change over time, for example, if your your salary when you leave your job to transfer out of it, such as death financial situation changes or as you and on years of service. Your past Q: Will the new pension be more benefits or a Guaranteed Annuity get nearer to retirement. employer might try to encourage expensive than my existing one(s)? Rate (GAR) option. A GAR option is you to move your pension away A: If the new pension costs more, where the insurance company will by boosting your fund with an you must make sure you are satisfied pay your pension at a particular rate, While transferring your ‘enhanced’ transfer value and even that any additional costs are for which may be much higher than the pensions may seem a cash lump sum. good reason. For example, if the rates available in the market when However, this still may not new pension is offering you access you retire. like a good idea, it is a compensate for the benefits you to more funds than your current decision that requires are giving up, and you may need an pension(s), consider whether Q: Are there any penalties if I professional advice exceptionally high rate of investment you need them. You will receive transfer? return on the funds you are given information about the costs of the A: Some pensions may apply a before any action is to match what you would get if you new pension in the Key Features penalty when you transfer out. taken. If you would stayed in the final-salary scheme. Illustration (KFI) that is provided to like to discuss your Alternatively, you may have a you. The Key Features Illustration Q: Would a stakeholder pension particular requirements, money purchase occupational refers to the actual funds and meet my needs and objectives? scheme or a personal pension. These investments that you will be using in A: Stakeholder pensions are often please contact us. pensions rely on contributions and your new pension. the cheapest pensions available investment growth to build up a and, if appropriate, this could be an The value of investments and the fund. When you retire, this money Q: Is it a good idea to transfer all option to consider. income from them can go down If appropriate to your can be used to buy an annuity which of my pensions into a single new as well as up and you may not get pays an income. pension? Q: Will the investments in the new back your original investment. Past particular situation, it If appropriate to your particular A: If you currently have several pension be right for the amount of performance is not an indication of may make sense to bring these situation, it may make sense pensions and are looking to put risk I am prepared to take? future performance. Tax benefits may pensions under one roof to to bring these pensions under them into one new pension, you A: We can explain the different vary as a result of statutory change and benefit from lower charges, one roof to benefit from lower need to fully understand the funds and investments and make their value will depend on individual charges, and aim to improve fund associated costs. You may not recommendations so that the circumstances. Thresholds, percentage and aim to improve fund performance and make fund necessarily need a new pension to investments chosen are appropriate rates and tax legislation may change in performance and make monitoring easier. put all of your pensions together. for the amount of risk you are subsequent finance acts. Transferring fund monitoring easier. If one of your existing pensions prepared to take with your money. your pension will not guarantee greater Transferring your pension already meets your needs and benefits in retirement. Pension transfers are a complicated objectives it might be possible to Q: Will I need ongoing advice? area of financial planning and there transfer all of your other existing A: Some fund selections may need are many things to consider before pensions into that one. to be reviewed from time to time to 12 13
  8. 8. Investment What type of investor are you? Building a solid investment strategy through good and bad times During this period of economic Whatever your investment strategy the starting points Aggressive Investor Achieving a should be the same, and we can help you identify the turbulence, what strategy type of approach best suited to your particular needs The aggressive investor wants to see real capital and preferred balance between risk and return. growth in the short-to medium term of between should investors take? Your 3 to 5 years and isn’t concerned about short-term own attitude to risk is crucial. Take a look at some possible strategies for cautious, fluctuations. This investor will be prepared to take on comfortable moderate and aggressive investors. a wide range of stock market investments including You may be comfortable to potentially volatile shares where there are high Cautious Investor live with capital risk if it means The cautious investor understands that they need to potential higher. The aggressive investor may offset gains but also where the risk of losing money is the chance of a higher return achieve a return better than the rate of inflation to these high risk investments by diversifying into lower- maintain their financial position and that in order to risk areas and may only be making those high risk in the end. Alternatively, you retirement. beat the returns available on cash deposits they may investments with money they could afford to lose. need to accept some stock market risk. However the may be ‘risk averse’ and don’t cautious investor is uncomfortable about sharp falls want to risk your capital under in value and wants to invest in stable investments To arrange a review of your where the risk of this happening is limited. Keeping investment requirements, any circumstances. ahead of inflation and getting a slightly better return is more important than getting a high return only by please contact us. accepting a higher level of risk. Do you need a professional assessment The value of investments and the income from them Moderate Investor can go down as well as up and you may not get back The moderate investor wants to see their money grow your original investment. Past performance is not an over the medium to long-term 5 years. As well as beating inflation the moderate investor knows that capital growth available from investing in the stock market indication of future performance. Tax benefits may vary as a result of statutory change and their value will depend on individual circumstances. Thresholds, of your situation to make this a reality? gives them an opportunity of achieving this. Although percentage rates and tax legislation may change in not happy about a significant short-term set-back the subsequent finance acts. moderate investor is willing to accept the risk as they are investing for the longer-term. However sustained If you are unsure whether your pension is performing in falls over a longer period might persuade the moderate investor to move to less-risky investments. line with your expectations, and that you’ve made the right pension choices – don’t leave it to chance. Contact us to discuss these and other important questions, and we’ll help guide you to a comfortable retirement. 14
  9. 9. Protection Protection Financial protection for you and your family With the abundance of choice, we can help you make the right decisions With so many different protection options available, making the right decision to protect your personal and financial situation can seem overwhelming. There is a plethora of protection solutions which could help ensure that a lump sum, or a replacement income, becomes available to you in the event that it is needed. We can make sure that you are able to take the right decisions to deliver peace of mind for you and your family in the event of death, if you are too ill to work or if you are diagnosed with a critical illness. You can choose protection-only financially? You may not be able 12 to 24 months on a valid claim insurance, which is called ‘term to work and so lose your income, if you have an accident, become insurance’. In its simplest form, it but you are still alive so your life ill or unemployed. Most of these pays out a specified amount if you assurance does not pay out. And to protection policies operate a die within a selected period of years. compound the problem, you may ‘deferred period’, which is the If you survive, it pays out nothing. It also require additional expensive period from when a claimable event is one of the cheapest ways overall nursing care, have to adapt your happens to when the policy starts of buying the cover you may need. home or even move to another more paying out. Alternatively, a whole-of-life suitable property. Private medical insurance covers policy provides cover for as long as Income Protection Insurance you for private medical treatment you live. (IPI) formerly known as permanent and you can choose to add on health insurance would make up extra cover, such as dental cover. Life Assurance Options a percentage of your lost income You may select the hospitals n Whole-of-life assurance plans caused by an illness, accident or where you would want to be can be used to ensure that a disability. Rates vary according to treated close to home. As always, guaranteed lump sum is paid the dangers associated with your the more benefits and the more to your estate in the event of occupation, age, state of health comprehensive the policy you your premature death. To avoid and gender but IPI is particularly select, the more it will cost. inheritance tax and probate important if you are self employed Beyond taking the obvious step delays, policies should be set up or if you do not have an employer of ensuring that you have adequate Choosing the right mix under an appropriate trust. that would continue to pay your insurance cover, you should also n Level term plans provide a lump salary if you were unable to work. ensure that you have made a will. A of financial protection sum for your beneficiaries in If you are diagnosed with living will makes clear your wishes for your particular the event of your death over a suffering from one of a number of in the event that, for example, you situation is essential specified term. specified ‘critical’ illnesses, a critical are pronounced clinically dead n Family income benefit plans illness insurance policy would following an accident, and executes to ensure that your give a replacement income pay out a tax-free lump sum if the an enduring power of attorney, so specific requirements for beneficiaries on your event occurred during the term that if you become incapable of are fully covered. To premature death. of your policy. Many life insurance managing your affairs as a result of n Decreasing term protection plans companies offer policies that cover an accident or illness, you can be discuss your options, pay out a lump sum in the event you for both death and critical illness reassured that responsibility will please contact us. of your death to cover a reducing and will pay out the guaranteed pass to someone you have chosen liability for a fixed period, such as benefit on the first event to occur. and trust. a repayment mortgage. Accident Sickness and Of course, all these protection NeeD MORe Simply having life assurance may Unemployment (ASU) can be taken options also apply to your spouse INFORMATION? not be sufficient. For instance, if out for any purpose to protect your and to those who are in civil you contracted a near-fatal disease income and to give you peace of partnerships. PLEASE CONTACT US or illness, how would you cope mind. The benefits only pay for WITH YOUR ENQUIRY. 16 17

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