Monthly Archives: April 2010

The SIPP or the Self-Invested Personal Pension usually takes monetary contributions as a form of investment. Usually, SIPP Pensions can be a transfed from an exiting policy including final salary schemes, occupational pension schemes, free standing additional voluntary contribution schemes, section 32 buy-out policies, retirement annuity contracts, and personal and stakeholder pension schemes. SIPPs can also be from a one off investment or could also be a regular contribution.  Protected Rights Fund has been allowed to be transferred to SIPP in October 2008 covering funds generated through the member being contracted on SERPS or the State Second Pension S2P.

Aside from money investment, the SIPP could also accept other forms of assets which cover government securities; stocks and shares along UK recognized stock exchange schemes, unit trusts, insurance company funds, traded endowment policies, deposit accounts into banks and other building societies, National Savings Products and commercial properties like offices, factory premises and shops. Residential properties cannot be held directly by the SIPP because the policy will not allow ordinary potential property investor to take advantage of the tax relief benefits which is entailed in the SIPP portfolio.

In cases when property becomes a SIPP Pension contribution or when the SIPP investment may include rented properties, the collection of rental fees and the management of the said invested properties should be handled by you as the owner. However, the trustees could require agents to deal with it. Subject to the Annual Allowance rules, the maximum investment to the SIPP highly depends on the pension schemes opted for. In 2008-2009, the highest possible amount of investment is £235,000 while in the year 2009-2010, an amount of £245,000 was set as the highest possible limit. The range of contributions and benefits from the self-invested personal pension highly depends on the the insurance company you are dealing with.

Are you tired of living day by day, every moment, every second in this world worrying about your tomorrow and whether your financial status would suffice your inevitable needs? Probably survival is the basic instinct and we all know that resources are not boundless no matter how we wish it was. So the result is you ponder harder on your job, hope for a promotion for a better salary and endlessly tiring yourself day-dreaming about that stable and worry free life.

So then you give a thought on business. But on the other hand you think you are not capable enough or fear that you might lose all. So at the end of the day like a shining shimmering text on your head blinking in and out the word investment pops up So the next thing to ask, what is the best investment?

Good thing for United Kingdom people there is what they call an Investment Individual Savings Account (ISA) that was created April 1999. It could be inferred that it not actually an investment but a container which other investments can be held with probably its best feature− tax-free.

As mentioned earlier Investment ISA’s is tax-free and to add more to its joyful assets you will not lose the capital you invested. Many investors and experts say that Investment ISA is ideal for people who want longer-term investment because the tendency of Investment ISA if lowest investment possible is done would result to lowest pay returns. Types of Investment ISA’s like stocks and shares ISA offers a wider range of investments on their assets which is advantageous for those who are daring enough to put their money in it but it pays a lot since it endows much higher rates of capital growth.

In summary, if you tend to be pre-contemporary and rely on yourself and save on your piggy bank, you are better-off investing money like on ISA especially when you are looking for long-term investments. Your future is just a simple investment away, if you invest wisely and research thoroughly where to invest.

Getting insured is a wise move if you really want to make sure that your children and your spouse have this convenience over life even after your death. In most cases, insurance companies offer a contract called annuity in order to give chance for you to invest your money while the company promises to either grow it or pay it in periodic terms. Sometimes, people doubt the credibility and use of an annuity especially so if they do not really understand the things that go with it. They focus primarily on the negative results of annuity engagement before they are able to weigh the advantages of annuity.

In many situations, life analysts have referred to annuities as helpful in almost all kinds of circumstances. The primary benefit of someone who invests in an annuity is that he subjects himself to mitigated tax. Tax-deferred growth is earned as huge amount of money is diverted into annuity terms and products. Money is also assured to be compounded within the set contract of your policy. On the other hand, people opt for annuities because they are guaranteed a good return of their invested dollars. They are insured that once they put on their money on the contract, they earn a corresponding amount.

More advantages of annuity include the guaranteed lifetime payments. This means that even after your death, your heirs will be able to receive the money earned from your annuity investment. There are times when you might get affected with the notion that annuities are entailed of payment for the guarantees and some contracts need to have surrender periods. This could be true in some situations but this highly depends on your insurance company. A strong and credible insurance company will not let you pay something which you don’t need and could provide you the guarantee commensurate to your contract of investment.

A recent report details the levels of people retiring in the UK with debt issues. 1 in 4 people are reaching retirement age with significant levels of debt. One of the reasons behind this disturbing number is the attitude to debt of the baby boomer generation and specifically in relation to Mortgage debt, both residential and on BTL properties.

Historically those of the population who were homeowners reached retirement age with no mortgage outstanding, especially in relation to their main residence. This is now no longer the case. Due to changing attitudes to debt and more recently, the credit crunch many people who are reaching retirement age still have significant outstanding amounts on a mortgage.

This has become the case due to the rise over the last 15 years of the financial tactic of raising capital from the residential property to finance other parts of the family life. The real problem has arisen where the laon has been secured using a mortgage on an Interest only basis where there is no repayment vehicle in place.

To put bluntly, people are reaching retirement age with a significant mortgage debt with no means to pay the loan. This causes an issue in two respects, one how to pay the capital and 2 as the loan is not paid, how to pay the monthly interest element.

These issues are apparent at a time where income in retirement in relation to what was the income pre retirement is in a serious shortfall. These factors are leading to more people at retirement using an Equity Release plan to pay off a capital loan on their main residence. As with all such transactions professional, specialist, independent advice should be sought from an Equity Release Professional.

Mick Bradley
Managing Director
07766 257464

Moratorium is a regular form of underwriting employed by private medical insurance companies in the UK. With Moratorium underwriting there is a set period of time where you are not covered for previous medical condition(s) suffered from prior to the private medical insurance policy being taken out.The Moratorium period can last for a period between 2-5 years, depending on the underwriter.

The conditions that are not qualified for treatment in the time period include, any medical conditions for which treatment, advice or medication have been necessary in the years prior the start of the plan. If any of the pre existing conditions do not recur during a 2-5 year period after the policy is taken out then the policy holder is qualified for treatment on these conditions in the future.This does not affect appropriate treatments of new conditions.

Each individual is covered under a private medical insurance policy and specialist policies are available for cancer cover. Moratorium underwriting cover starts almost immediately, as underwriting is not necessary. The strength of moratorium underwriting is that the policyholder is almost guaranteed the medical coverage even with certain pre-existing conditions.

The gap in income between work and retirement has been a cause for concern. What seems to be adding to this gap is the % of people who are regularly consulting an IFA, recent research shows only 8% of Britons regularly consult an IFA. Compare this with the 32% of Britons who search the Internet for Financial Advice. Where many products are ideally suited to being researched definitely and in some cases transacted on line the purchase of an Equity Release scheme is not one of them. That the research can be carried out on the internet is absolutely true however to enter into the actual purchase is one which requires professional, expert advice.

In the recent survey a majority of people expected to have a high living standard in retirement they were often unaware of the range of retirement options open to them. Also 35% of those questioned had no regular pension in place. Also the level of knowledge of equity release as part of retirement planning was interesting with 14% having never heard of it. Of those who had heard of it 32% thought it a form of sale and rent back and 9% thought it was a Remortgage. It is clear from this that the need for advice on equity release plans is imperative as is the need for education generally in relation to the product.

The internet is a fantastic starting point to gathering information on Equity Release however to progress the process towards an equity release purchase the need for an Adviser to be involved is paramount. There seems to be a perception gap with regard to retirement planning. 73% of Britons consider themselves responsible for their own retirement finances yet only 8% are regularly consulting an IFA. There are many areas of planning which can be researched on the internet. The purchase of an equity release plan is not one of them.

The need for advice from a specialist, professional adviser has never been more relevant or more necessary.    

Mick Bradley
Managing Director
Retirement Solutions Limited
07766 257464

WHAT IS A SIPP Pension?

A SIPP Pension is a cost-effective and tax-efficient way to invest and gives you exceptional choice, freedom and flexibility in how you save for your retirement – while offering all the usual benefits of a personal pension.

A SIPP Pension offers a far wider range of investments than traditional pension plans, including funds from many investment companies, shares and commercial property.  SIPPs can also be useful for consolidating a range of pension plans, especially if you are interested in using income drawdown in retirement.  When you want to start withdrawing funds from your SIPP – between the ages of 55  and 75 – you can take up to 25% as a tax-free lump sum, with the remaining fund used to provide you with a Taxable income.

AM I ELIGIBLE?

You can open a SIPP if you are under 75 and resident in the UK.  If you move abroad after taking out a SIPP, investment restrictions may apply.  If you are 75 or older, you can only open a SIPP if you are transferring a pension from another pension provider or a registered pension scheme.

GETTING ADVICE

Your adviser can help you set up a SIPP. They will be able to select suitable investments for you and, in the future, review your SIPP to ensure your progress is on track. By working closely with your adviser, you could start planning for a more secure financial future.

Pension Release is only suitable for a very limited number of people and should be only taken as a last resort. Taking money from your pension now will reduce the amount of income available to you come retirement. This service applies to UK pensions only.

The current rules say that with pension release UK you can release a cash lump sum of up to 25% of the value of your pension fund. This pension fund release is tax free and is know as a ‘Pension Commencement Lump Sum’ (PCLS). In addition, with pension release the remaining fund can be used to provide you with an income that might be taxable – depending on your circumstances. Pension release is available from age 55.

Once you reach age 55 you can draw on any private pensions you have, many people also draw on their pension and continue to work.  HMRC treat this income as part of your PAYE and therefore you could pay tax on the income.

With this type of Pension Advice there are many steps in the process of releasing your pension which can take time, but our professional team of expert advisers will endeavour to make the process as smooth as possible for you.