If you’re a company director and you have life assurance in place to protect your family, you could be paying more tax than you need to.  Relevant life policies are a way of providing death in service benefits on an individual basis no matter how small your business is.

 What are the benefits?

Although the company pays the premiums, they are not normally assessable to income tax on the employee as a benefit in kind. This can be a significant saving, particularly for a higher rate taxpayer.

Unlike a registered group scheme, the benefit will not form part of the employee’s annual or lifetime pension allowance.

These payments may be treated as an allowable expense for the employer in calculating their tax liability, as long as the local inspector of taxes is satisfied they qualify under the ‘wholly and exclusively’ rules.

 In most cases the benefits are paid free of inheritance tax, provided the benefits are payable through a discretionary trust.

 Who are relevant life policies suitable for?

 Small businesses that do not have enough eligible employees to warrant a group life scheme.

 High-earning employees or directors who have substantial pension funds and do not want their benefits to form part of their lifetime allowance.

 They are not suitable for the self-employed or equity partners, although their employed staff could be covered.

 Are there any limits to the cover I have?

 The legislation does have some limits to qualify for the tax concessions, and to ensure these are met we make sure that:

 The cover must be paid in a single lump sum before the age of 75.

 Only death benefits can be provided.

 Benefits must be paid through a discretionary trust.

 Beneficiaries are normally restricted to family members and dependants

Too see how much you could benefit from this call us on 0845 0179 578 to discuss your circumstances further.

Whenever I begin to advise a client on their retirement planning it is important that I fully understand their current circumstances.  This often involves dealing with various historic pension funds and benefits all (hopefully) packaged together in a tidy manner for me. However, there is always one ommission and that is details of the State Pension.

The State Pension is the foundation block of your retirement plans.  Whether it forms the majority or minority of potential retirement income it is still valuable.  It can vary quite significantly based on your level of earnings and your employment status (employed, self employed, not employed etc).  I’ve seen State Pensions for this year vary from £91 per week to £164 per week.

Also, you may have noticed a lot of press about State Pensions and extending the retirement age from when you can draw your pension.  This bad news is offset by the return of the link between the State Pension yearly increases and earnings increases.

If you would like to find out the details of your own State Pension then you can request a forecast online here for free.  It will tell you what you have built up so far, when you forecasted State Pension age is and how many more years of contributiong you need to do in order to get the maximum basic pension is.  It will also confirm if you have any entitlement to The Graduated Pension Scheme, SERPS or the more newer State Second Pension (S2P).  It’s only 4 pages long and iit is something you should read well before you plan to retire. 

If you would like any advice on State pensions or your retirement planning then please get it touch.

It has been a tradition of pension schemes for many years that the earliest age you can get at your pension benefits is age 50.  However, about 3 years ago the rules changed to increase that age to 55 but the change was not immediate.  In fact, the rule change wasn’t to come into effect until the 6th April 2010.  I am finding it hard to believe that this is only 7 months away now!!! 

We are experiencing an increased amount of enquiries from clients and prospective clients who are able to access their pension funds now but won’t be able to do so after April 2010.  They are looking at this for many reasons such as early retirement, loss of employment income, home refurbushments and starting up businesses.  Are you looking to release the tax free cash from you pension fund?  Are you affected by the age increase?

We can advise you on all the different ways you can receive benefits such as an annuity, open market option, phased retirement, income drawdown, 3rd way annuity, with profit annuity etc.  Contact us now for more information and to book your free initial consultation. голова болит секс голова болит секс голова болит секс голова болит секс голова болит секс

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.

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.

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!

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.

There are many reasons to start a pension scheme for all or some of your members of staff.

• Your duty as a caring employer to assist in the longer term care of your staff.
• To help attract quality individuals to work in your business.
• To help retain quality individuals who already work for you.
• The Income Tax and National Insurance benefits on contributions you make.

However, there is none more so than you legal obligation to provide a pension scheme if you have 5 or more employees in your business.  Currently there is no legal obligation for the company to contribute but that is changing.

Personal Accounts are expected to appear in 2012 with the likely contribution basis to be set as follows:

Employer 4%

Memeber of Staff 3%

Govermnent 1%

This creates an opportunity for you, the employer, to begin to start contributing now and been seen as a good employer, rather than wait until 2012 when your staff will believe your only doing it because you have to.

Careful advice is required when implementing a new scheme and you should consider the future change in legislation, how you announce the scheme, how you administer the scheme and so on.  Simpson Financial Services are experts in guiding you through all the relevant aspects of setting up a new pension scheme. 

If you wish to arrange an informal discussion please contact us here.

So you are reaching your intended retirement age and you are beginning to receive your maturity options from your various pension providers.  What do you do now?  How do you decide on which style of annuity is best for you.  Level in payment or increasing?  A spouses pension or single life? Take the tax free cash or not?  Or even is buying an annuity the best way for you to provide income in retirement?

For the purpose of this article, lets assume that a single life, escalating annuity is best for you.  The next part of our advice process now involves finding which Pension Provider is going to offer you the highest income for your fund.  This ability to shop around for the best annuity rate is called The Open Market Option. 

The Pension Providers base their annuity rates on their own experiences of average life expectancy.  Don’t be fooled by there warm brochures covered with pictures of a happy pensioners.  They want you to die prematurely so they don’t have to pay your annuity out for long.   In fact, a number of Pension Companies will now offer enhanced annuity rates for smokers and retirees who have serious medical conditions such as high blood pressure, historical heart attacks, diabetics etc.

We don’t advocate you start smoking just before you retire but if you do, or you take medication, then contact us to see how much extra pension income you might get. 

You only get one chance to buy your annuity so make sure you contact us to get the correct advice on both style of annuity and the Pension Provider offering the highest rate.  

Then all you have to do is live a long and happy retirement!