EU rules against sex discrimination

The European Court of Justice has ruled that gender-based insurance rates are unlawful in a move that could lead to a shake-up in the annuity market. This major ruling takes effect from 21 December 2012 and will fundamentally reshape the retirement landscape, leading to the likely equalisation of annuity rates for men and women. This ruling means it will be imperative that every investor shops around with their pension fund at retirement; if they don’t they risk ending up with a homogenised standard–issue annuity which is almost certain to be a poor deal for them.

Investing for growth, income or both

Do you want to grow your capital, increase your income or both? Your answer will determine the type of investments you select and, in addition, you need to be aware of the concept of ‘total return’. This is the measurement of performance – the actual rate of return of an investment or a pool of investments over a given evaluation period. Total return includes interest, capital gains, dividends and distributions realised over a given period of time.

Tax saving incentives for substantial charitable legacies

If you have an estate currently worth more than £325,000, you should plan early and act decisively if you are to avoid burdening your heirs with a future Inheritance Tax (IHT) liability.

Radical changes announced to the public sector

Labour peer Lord Hutton has recommended to ministers that public sector workers should no longer have final salary pensions. Instead they should have schemes linked to average earnings, while paying more and working longer.

Steadier results through a combination of strategies

In the current investment climate, absolute return funds could offer the ordinary investor access to a range of more sophisticated investment techniques previously only available to the very wealthy.

Chancellor George Osborne’s speech in full

Mr Deputy Speaker, last year’s emergency Budget was about rescuing the nation’s finances, and paying for the mistakes of the past. Today’s Budget is about reforming the nation’s economy, so that we have enduring growth and jobs in the future. And it’s about doing what we can to help families with the cost of living and the high oil price.

Reflecting popularity in the market

An investment trust is a company with a set number of shares. Unlike an open-ended investment fund, an investment trust is closed ended. This means there are a set number of shares available, which will remain the same no matter how many investors there are. This can have an impact on the price of the shares and the level of risk of the investment trust. Open-ended investment funds create and cancel units depending on the number of investors.

Participating in a wider range of investments

Unit trusts are collective investments that allow you to participate in a wider range of investments than can normally be achieved on your own with smaller sums of money. Pooling your money with others also reduces the risk.

Expanding and contracting in response to demand

Open-Ended Investment Companies (OEICs) are stock market-quoted collective investment schemes. Like investment trusts and unit trusts they invest in a variety of assets to generate a return for investors. They share certain similarities with both investment trusts and unit trusts but there are also key differences.

Investing in one or more of the four asset classes

Open-ended investment funds are often called collective investment schemes and are run by fund management companies. There are many different types of fund. These include:

Investing in one or more asset classes

A pooled (or collective) investment is a fund into which many people put their money, which is then invested in one or more asset classes by a fund manager.

Are you investing for growth, income or for both?

You should consider whether you are primarily investing for growth, income or both.

Selecting assets that behave in different ways

When deciding whether to invest, it is important that any investment vehicle matches your feelings and preferences in relation to investment risk and return. Hence your asset allocation needs to be commensurate with your attitude to risk. Another key question to ask yourself is: ‘How comfortable would I be facing a short-term loss in order to have the opportunity to make long-term gains?’ If your answer is that you are not prepared to take any risk whatsoever, then investing in the stock market is not for you.

What are you trying to achieve with your investments?

There are different types of risk involved with investing, so it’s important to find out what they are and think about how much risk you’re willing to take. It all depends on your attitude to risk (how much risk you are prepared to take) and what you are trying to achieve with your investments.

Passing on your wealth to future generations

A trust arrangement can ensure that your wealth is properly managed and distributed after your death, so that it provides for the people who depend on you and is enjoyed by your heirs in the way you intend. There still remain significant planning opportunities, even though changes announced in the 2006 Budget in relation to the Inheritance Tax treatment of trusts will have a bearing on the use of trusts in the future.