Do you want to save money?

We undertook a study recently to see the merit in clients paying a monthly fee for our advice rather than us earn commission when we sell a financial product such as a personal pension. We looked at different types of clients (age, sex, earnings, wealth) and found that just on cost it was mainly beneficial for clients to pay a monthly fee.

Take an average couple who are both 40.  They have life cover of £250k costing £42.28 per month, save £200 per month into a pension which is projecting a fund of £140k at age 65 and they save £100 per month into an ISA.

If they were a fee paying client of ours and we set up identical products the life cover would cost £31.86 per month, the pension fund would be projecting a value of £150k at retirement and they would not suffer an initial cost of 5.25% on every ISA contribution they made.  By the age of 65, purely on cost they would have saved £14,701 in charges against a fee of say £30 per month.  A net saving of over £5000.00

This doesn’t even take into account the ad hoc phone support we provide, the annual review we carry out with our fee paying client to try to improve fund performance, maximising all  cash saving returns, improving their mortgage rate, investing their baby’s Child Trust Fund voucher from the government and genral financial guidance on meeting their lifestyle goals.

We aim to make you money, save you money and save you time and I think the above example demonstrates how we can save you money.  Call us now to arrange a consultation to see how much we could save you.

Scottish Life have developed new software which they are providing free of charge to employers who take out a pension scheme for their staff.  This is an anticipation of the government requirements on compulsory pension schemes for all employers so why not take the initiative now.

If you are thinking of putting in a new pension scheme for your staff or would like to change your existing providers to obtain the software then please contact us on 02476 251100

Want to know more? -  Scottish Life Benefits Administration details are here.

At last!  Safeguarded Rights are now only a distant memory in the world of pensions.  This badly thought out and inappropriatley named type of pension fund is now to be brought in line with the rest of Contracted Out pensions funds.

The Pensions Act 2008 (Abolition of Safeguarded Rights) (Consequential) Order 2009 (SI 2009/598) removes references in pensions secondary legislation to safeguarded rights - eleven SIs in total are modified. Safeguarded rights arise when a member’s rights in an occupational or personal pension scheme which is contracted-out of the state second pension are shared on divorce or dissolution of a civil partnership. PA 2008 s.100 and the related repeals in Schedule 11 Part 2 abolish safeguarded rights altogether with effect from 6 April 2009. From that date, shared rights that derive from contracted-out rights will be treated in the same way as other shared rights.

And the best news is that if you are a policy holder who owned a Safeguarded Rights fund or were about to receive such a pension fund through your divorce then you are now able to take 25% of the fund as a tax free cash lump sum.  Thi sis subject to the normal rules surrounding all pension such has a earliest retirement age of 50.

Call me now if you want to discuss your Safeguarded RIghts in more detail.

We are all look for valautions on our investments and assetts and pricing any residential property has been difficult of late as valuations have been falling.  However, there do seem to be signs that the valuations have reached a point where they are now acceptable to buyers and investors with cash to hand.

Firstly, one of the most high-profile luxury developments in the UK is to be taken over in a deal worth less than a third of what Icelandic bank Kaupthing paid when it teamed up with property developers Nick and Christian Candy three years ago.  The control of the Noho Square scheme in London’s West End is to be acquired by Stanhope, the property company run by David Camp and backed by entrepreneur Ian Laing.

Secondly, Rightmove yesterday said there were early signs of a recovery in the market with the return of near- record volumes of traffic among would-be housebuyers monitoring the falling market.

So, is this now the time to buy?  We don’t have a crystal ball to help you with this decision on timing but you should be confident that the property you buy now will have cost you about 25% more 2 years ago.

Call us to discuss your plans in more detail.

Make the most of your ISA allowance

Whatever your savings needs, you’ll want to make sure you choose the most tax efficient option.  After all, you need your money to work hard for you.  Your valuable annual ISA allowance may have an important part to play in helping you achieve these objectives.

The important thing to remember is that you can’t carry forward your allowance so, if you don’t use it you’ll lose it. 

If your not sure what an ISA or you need a refresher on the guidlelines for investing then your should read the FSA Money Made Clear Saving and Investing  publication.  You can download a copy here.

If you would like to arrange a convenient time to talk through your options with me before the end of this tax year, please give me a call on 02476 251100.

There has been an awful amount of publicity surrounding pensions this week.  Sir Fred Goodwin and The Royal Mail have been getting pension pelters.  Goodwin’s was agreed, presumably when he decided whether to take the job or not, so it forms part of his contract and must be paid.

The same goes for the Royal Mail.  One of the factors of interview candidates being offered a job must have been the pension entitlement.  So that must stand also.

Not so long ago we have had strikes in both Council offices and the Fire Service.  Ok, these have been about pay, or equipment, but the amount of public funds that has to go into their pension scheme means there just isn’t enough money left over to give these folk a pay rise which, at an absolute minimum, must equal inflation.

If the government is really serious about following the private sector and oboslishing these long term, under funded state promises then it must begin with axing its own MP scheme.  This, amongst all public sector pension schemes, is one of the most generous.

Go on Gordon.  Put your pension where your mouth is!

Standard Life is to remediate all customers who lost money after the revaluation of its Pension Sterling fund last month (January), at an estimated cost of £100m.

With the level of interest you earn falling on cash savings accounts with bank and building societies by about 75% you might be facing the prospect of not enough income to meet you expenditure.  Of course, you could cut back on what you spend or even start using some of the capital but how long are you prepared to do this for?

In the world of investments, the more you want and the quicker you want it the more riskier the scheme tends to be.  We are not talking about 100% return/100% loss on the spin of a roulette wheel though.

By careful analysis of your income requirements and the level of risk you would be comfortable with (non, minimal, minimal to low, low, low to medium, medium etc.)  We can carefully advise you on both the most suitable style of investments scheme (ISA, Bond, OEIC, Unit Trust) and the most suitable underlying asset classes (Gilts, Fixed Interest, Corporate Bond, Equities etc.)

We have many years of experience in the area of investing for income and a number of satisfied clients.  If you would like to discuss you requirements with us then please contact us for a free initial consultation.

Everyone should know what they spend each month.  Most of us know what we receive each month.  I’m also sure a lot of people have taken time to do a budget planner.  A budget planner allows you to make sure that your income always exceeds your expenditure.

With some people now experiencing a lower income through the current economic downturn it is time to revisit this exercise to make sure that you don’t fall into the debt trap.  If you want a blank budget planner then contact us and we can email the one we use or you can download one from Money Saving Expert here.

But, once a planner has been done, what do you do with it?  Whether it keeps you solvent or sends you into debt it is worth asking an expert on personal finance for thier opinion.  We can offer you a free consultancy on this.  Call our office on 02476 251100 to arrange a meeting in our Coventry Office.  If this is not geographically possible then please visit IFA Promotion to find a suitable adviser in your area.

What a disaster this is turning out to be.   I speak as an investor, adviser and shareholder. Clients have lost money, advisers feel misled, shareholders worry about management and Standard Life ask for…..patience!!

Forget patience.  If this company was still a mutual organisation (owned by its policyholders) I don’t think it would have ever gone down the route of chasing a fast buck at the beck and call of investors.  And, even it had, I think it would have used its own funds to clean up the mess and financial loss of its wrong decisions and pay a lower bonus to with profit policyholders.

As a result of the wrong decisions I expect no winners.  Clients won’t want to put new money in an organisation whose cash fund loses value,  advisers won’t recommend a company that does not treat its customers fairly and investors will subsequently sell their shares in a less profitable organisation.

So is this goodbye to Standard Life or merely au revior until it changes it decision.  Over to you Mr Crombie.