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.

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.

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.

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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.

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.

Whenever we see a new client in need of financial advice, or revist the existing financial plan for an existing client, we need to gain a thourough understanding of the current financial circumstances.  This helps us to satisy the Financial Services Authority guideline to financial advisers regarding “Know Your Client”.

If you are wanting us to operate on a fee basis then you may want to collate this information yourself so here is a copy of the form for you to download and print.  Then we won’t have to charge you for us doing it.  It can be posted or emailed back to us before your first visit to our Coventry office.

personal fact find

corporate fact find

One of our areas of financial specialism is providing advice to owner managed businesses and we suggest that both documents are completed by potential clients in this situation.

However, we do require very exact detail about some of your pension, investments, insurances and other benefits so we may still have to write to some of your current product providers directly to obtain this.  The small print in some of those older pension contracts can be quite valuable to you with the passage of time.

Whenever we take on a new client for personal financial planning services the first item on the agenda is a full review of their existing finanical circumstances.  This is where we probe deeply into your employment status and benefits, insurance policies, pension funds, savings, life policies and so on.

As independent finacial advisers (IFA) we are authorised to advise on all your existing plans and policies and make further recomendations from the whole of the market place.

What often surprises me is that clients often are paying for insurance that they are unable to claim on.  For instance, Client x took out a  mortgage when they were employed and is now self employed. 

But what about the redundancy insurance which came with the mortgage?  They had been paying the £34 per month premium for the last 3 1/2 years but would never have been able to claim.

Often we find that new clients are overpaying for their insurance cover.  Client y need a commercial loan for her business and felt obliged (or pressured) to take out key person life cover in case she died.  A good idea but the bank could only sell it’s own insurance which was very expensive.

As part of our advisory service, we were able to provide identical cover with a different insurer giving her a saving of £62 per month.

Do you want to see if you can reduce your monthly expenditure, or even maximise the potential of your current budget.  Call us now to arrange a free initial consultation.

According to the Cambridge Dictionary, “Professionalism” is the combination of all the qualities that are connected with trained and skilled people.  So raising examination levels must be part of the answer.

Treating Customers Fairly (TCF) has also been part of the answer in that it has actually required IFA firms to look at how they do business and then make any changes to improve the customer experience.  I felt that my own 1 on 1 with the FSA in September 2008 was quality business advice. 

I felt I had had an improved customer experience with them!  I’m almost thinking that a 3 yearly 1 on 1 with the FSA for small firms would be another part of the answer to becoming more professional assuimg that the cost is kept at 2008 prices, £0. 

If we want the kudos of being associated with other professions then IFAs have got to walk the walk.  If that means taking exams, doing quality Continual Professional Development (CPD), developing inter personal skills, running a compliant business, being a great adviser, treating your clients like royalty and so on then so be it.

The end goal for IFAs surely has to be dealing with clients who have sufficient income, assets or liabilities such that they need a more sophisticated level of advice and those clients will be willing to see the value of paying for it.  I think that would reduce my own client bank from 780 clients to 156.

That leaves what we might call “bread and butter” business which might well be best served by “Money Guidance”,  although Money Guidance should have restrictions on types and limits advice it can provide, thus creating an effective advice type filter for members of the public. 

My guess here is that the FSA might do well to listen hard to the likes of the Citizens Advice Bureau (CAB), Which and Martin Lewis on this subject in order that they create something where there is an actual public need.  Even consider making Money Guidance a Charity like CAB.

Aged 38, owner managed IFA business of 1 adviser and 1 para planner/admin, currently reading AF3 pension planning (page 7 of 66 after two weeks!!) and quietly confident about the future of small IFA firms (or what ever we’ll be called then).