Monthly Archives: June 2010

The Finance Act 2010 included legislation to restrict pension tax relief given at above the basic rate on pension provision for 2011/12 onwards by high-income individuals. The Government is to continue with this plan for the time being but will also be considering, in consultation with interested parties, possible alternative means of raising the same tax revenue.

One alternative would be to significantly reduce the pension annual allowance (currently £255,000) to somewhere in the range of £30,000 to £45,000.

The Government is to include powers in the next Finance Bill to repeal the legislation contained in Finance Act 2010 – although that this is not to say the legislation will be repealed.

Once you reach retirement there are now four choices for pension annuity :

• Take a scheme pension – a secured pension for life paid out of the scheme assets or purchased from an insurance company
• Buy an annuity (an investment that provides a regular income for life)
• Draw an income directly from your pension fund, as an ‘unsecured pension’ before age 75
• Draw an income directly from your pension fund, as an ‘alternatively secured pension’ from age 75

All types of pension schemes are now allowed to pay a tax-free lump sum of up to 25 per cent of the overall value of your benefits. This is provided there is provision in the scheme rules, to an overall maximum of 25 per cent of the lifetime allowance. You are not entitled to a tax-free lump sum once you reach age 75.

ISA stands for Individual Savings Account, a tax-efficient wrapper offered under Government legislation as a way of encouraging you to save. An ISA sits over your choice of a number of different investments to shelter them from further tax on any income or gains earned.

There are just two types of ISA – the Cash ISA and the Stocks and Shares ISA – and the combined allowance for both in 2010/11 is £10,200.

Within this, the limit for Cash ISAs – or for the cash element within a Stocks and Shares ISA – is £5,100. However, there is flexibility over how these limits can be used – you can, for example, put the maximum £5,100 in a cash account and £5,100 in a stocks and shares account.

Alternatively, though, if you place just £2,000 in cash, you can use the entire remaining balance – £8,200 in this case – to invest in stocks and shares. If you don’t need cash at all, you can put the full £10,200 into stocks and shares.

In addition, you can transfer existing Cash ISA holdings to a Stocks and Shares ISA without impacting on your current tax year allowance. So, if you have £10,000 already sitting in existing cash ISA plans then this amount can be moved to a Stocks and Shares ISA, yet leave your entire current tax year allowance still
available for new investment.

Nowadays it is no longer necessary to sell your home in order to release money that is tied up. It is possible to release some of the money by using one of the UK equity release schemes. These schemes enable you to remain in your home whilst also enjoying the money that is within the property. These schemes use the value of the home and will pay the homeowner an agreed amount of money and this is normally paid in monthly installments.

This new income can be used in a range of different ways and this is a very useful thing for retired people. The state of the economy put a lot pf pressure on people and it meant that they could not live in the manner that they wanted to. These schemes allow homeowners the option to fulfill their basic needs whilst still enjoying the things that they truly desire.

A lot of retired people this a good way to some money to do thing that they want to such as going on holiday or even just getting rid of financial burdens that they have. Another advantage of this type of loan is that the money can be spent in any way that the homeowner wants to.

When you are thinking about using one of these equity release schemes there is a few things that you should consider. The lender will need to make sure that you actually own the property and they will also have to ensure that any secured loan on the property has been paid in full.

In addition to completing these two checks the lender will also have to carry out a valuation on the property so that they know how much it is actually worth. Another thing that should be taken into account is the age of the homeowner. The older someone is the more equity they will be able to unlock on the home.

The UK Home Reversion schemes is a situation where you sell your home or a percentage part of it to a Reversion company however you retain the right to reside in it rent free for the rest of your natural life. The funds you receive from them can be accepted as a cash lump sum, a monthly amount or a combination of these two.

The company is not allowed to sell the property unless you and your spouse decide to move into long-term care or you are both dead. This does mean however that you will definitely not receive the current full market value of your property as the Reversion company could wait up to 30 years before they can sell the property and make their profit.

The normal payout amounts are 20% to 60% of the property’s value, but are dependent on a few factors, the primary one being the age of both you and your partner. The older you are the higher the payout percentage will be.

Health is also an important factor and so as far as UK Home Reversion schemes are concerned, old age and poor health are a distinct benefit as more funds can be raised.

It is not a requirement to sell 100% of the property’s value. You can sell any portion of the value, the choice is yours. Selling all of it now will give you more money however upon death you will not have any assets to pass on to your beneficiaries. If you sell part of it only, you would, in the future, have an option to sell more of the property. This is a good idea as the older you become, the amount you can get increases.

If you are considering making use of the UK Home Reversion scheme, do not be concerned that your tenancy may be at risk as a legal document called a Lifetime Lease has to be signed by the Reversion company.

It is more than likely that you have heard of an equity release calculator but are unaware of what it actually is. These calculators are widely available on the internet and they are designed to help people to estimate the value that is remaining at various points in the future. These calculators are actually very quick and they are simple to use. These calculators are based on your personal circumstances and also your view on the inflation of house prices.

If you are considering how a lifetime mortgage plan could change your life then it is a good idea to find out if you qualify for one of these equity schemes and the calculator can be a great help in doing this. An equity release calculator will be able to tell you how much equity you may be able to get from your home.

It is very important to consider both the advantage and the disadvantages prior to deciding which equity scheme you should choose if any at all. If you are looking to get more out of your retirement then these equity schemes may be very useful. Almost everyone would like to be able to live a comfortable once they have retired.

Using one of these calculators can give you a rough estimation of how much money you could receive if you decide that you would like to take up one of the schemes. You will have the choice to either take out a lifetime mortgage or a home reversion plan.

Image how your life could be different if you had that extra money and this money is tax-free therefore there is nothing to pay on it. Another advantage is that this money does not actually need to be repaid. Once you have had a look at the figures on the calculator if you are happy then you will need to contact an equity release specialist.

Use our equity release calculator to find out how much you can release from your property and if you require any further assistance please call us.

People who prepare income drawdown plans will find the task much easier if they use an income drawdown calculator. These drawdown calculators offer another option to the calculation of annuity schemes. In this scenario, the investor is offered variable income. This variation has set limits that are laid down by the Government Actuary Department (GAD). As the financial aspects to this investment opportunity are many and complex, an income drawdown calculator is necessary.

The one main function of this investment tool is to calculate the income to be withdrawn from a prescribed pension fund amount. Secondly it will determine the limits as laid out in the table rules as set out by the GAD.

Age and gender are the most important fields to complete on the calculator. When calculating potential income it will be based on the rates of today. Some allow rates on previous dates but none will go beyond 6 April 2006.

The next bit of information that is vital to the correct figures being delivered is the value of the pension fund. Lump sum withdrawals also need to be mentioned. There is a default setting of 25%. If you have already withdrawn money and enjoyed the tax-free lump sum then you may not do this again.

You can also use the income draw down calculator to determine the GAD limits. Information required for this would again be status, age and gender. A very important bit of information would be the Gilt Index Yield. This gives you precise indicators of the maximum and minimum income to be approved.

There are professional financial advisors that are also able to calculate if you do not have one of these calculators. These advisors would have financial accreditation and are connected to the economic industry. They will have access to all the relevant financial updates. It is still felt that the income drawdown calculator will give you the most accurate figures possible.

A stakeholder pension plan provides you with an excellent means of investing your money wisely. This money can then be accessed and used after you have retired. This plan also offers a number of tax benefits that are only applicable to certain kinds of pensions. The best part about participating in a stakeholder pension plan is that you can start out by investing as little as twenty pounds and then you can stop and start or even change the payments whenever you like.

With this plan, people stand to get tax relief on their payments. This kind of pension plan is really an investment that you will be making for a longer period of time with the goal of building up sufficient funds to help you live a better and more comfortable retired life.

These plans are not the same as many other personal pension plans because to participate in the former type it is necessary to meet certain requirements as set out by the government. These requirements relate to capped charges as well as low minimum contribution levels.

A stakeholder pension plan provides a tax efficient means of investing your money as you will get tax relief on the payments made into this pension plan. In fact, the relief is available for sums of up to 2880 pounds per year or hundred percent of your taxable income in the UK, if the latter is greater. This plan is also very flexible as you have the opportunity of stopping starting and changing your payments to suit your needs and circumstances.

The benefits of this plan include choosing to invest your money in any one of different funds. In addition, you can also take your pension benefits at any time after you have reached the ages between 55 and 75 years. When you retire, it is possible to take up a quarter of the lump sum amount without being taxed on it.

Equity Release Lifetime mortgages are also known as Roll up Mortgages is a very popular type of Equity Release. Before proceeding further with taking such mortgages, it is important to understand just what such mortgages really are. Basically, these mortgages involve a lender offering you a cash lump sum or a monthly income or even a combination of these two whose value will be based on the true value of your home or property.

When you avail of lifetime mortgages, you should also expect to be charged interest on the money borrowed but you may not have to pay for this. Instead, the interest will be rolled up on the amount of the money originally borrowed. This leads to compounding of interest over a number of years which in turn also means that interest is going to be charged on the interest accrued.

When you sell your property, the loan as well as the compounded interest money will have to be repaid by you to the lender. One thing that you have to keep in mind before availing of such mortgages is the fact that because the interest will be compounded it will add to your financial burden. In fact, should the loan period extend beyond a certain period of time, it can cause the outstanding amount to grow beyond your paying capacity and even beyond the value of your property.

Therefore, before availing of such mortgages, be sure to take only that much loan that you feel you can easily pay back. The good news is that because lifetime mortgages are being sold on the basis of no negative equity guarantee, the lender will be the one to bear the risk of instances when the value of the loan exceeds that of the property against which the mortgage was given.

This means that the borrower will not be forced into selling or moving out of their homes because they are protected by the no negative equity guarantee.

Good news for those people over age 55 that are considering equity release and were waiting for house prices to rise before making any decision. The Land Registry has recently released figures reporting that UK house prices increased during the last year by 8.5 per cent. Homeowners in London are seeing their properties increasing more than the rest of the UK, with prices increasing by 14.8 per cent. The average UK property price stands at £165,596.

If you are in need of capital to fund required expenditure or income to make ends meet on a daily basis then equity release could be worth considering. Available for over 55′s but realistically for the over 65′s. Equity release is not for everyone and you should consider all the options available before making a decision.

Retirement Solutions have advisers nationwide that can help you decide if equity release is right for you. If you prefer we can conduct business with you over the telephone, the choice is yours.

TO UNDERSTAND THE FEATURES AND RISKS ASK FOR A PERSONALISED ILLUSTRATION. AN EQUTY RELEASE PLAN WILL REDUCE THE VALUE OF YOUR ESTATE, WILL NOT BE SUITABLE FOR EVERYONE AND MAY AFFECT YOUR ENTITLEMENT TO STATE BENEFIT.

While most people obtain health insurance from their employer, and this is usually the best option for those with children who need coverage for the entire family. Children seem highly prone to accidents and become ill more often than the average adult, so you will definitely want a good insurance plan that will cover them. Even if you are in a special situation, there are still ways to obtain affordable Parent & Child medical insurance in the UK.

Each of the countries of the UK has their own National Health Service, a national publicly funded form of health care which promises to provide coverage for permanent residents. Details and specifications may vary from country to country and you should check with a local office to see what type of coverage you are qualified to receive.

The NHS may not cover everyone or all expenses, so you will possibly need to consider other options that you have available. The Internet offers the greatest resource to date. If your family has a certain upcoming expense such as the birth of a child, or you are planning to have children, it is all the more important to get this matter settled.

Do some research online. Obtain some online quotes directly from UK health insurance providers online and consider the various options that come up. Many smaller insurance companies who are starting up will be willing to offer you a lot for your money. Just be sure that you are working with a legitimate company before you sign up.

Going without health insurance can prove disastrous and could be the decision that would ruin your life. Who knows when they may contract an illness or face a medical emergency that would put them in debt for the rest of their life with no coverage to rely upon? Be smart and plan carefully so that your future is secure. This is especially important when your children are involved.