Over half of UK workers are unable to survive financially for more than three months

New research from Aviva reveals that over half of UK workers (52 per cent) would be unable to survive financially for more than three months if they were off work with an illness. Around a third (30 per cent) say they would survive for less than a month. Less than one in ten (9 per cent) say they would remain solvent for a year or more.

What should you do to reduce, or even eliminate, an Inheritance Tax burden?

Inheritance Tax (IHT) in the UK may be one of life’s unpleasant facts but IHT planning and professional advice could help you pay less tax on your estate. With the current thresholds set to remain at £325,000 for individuals and £650,000 for married couples and registered civil partnerships until 2014, now is the time to consider reviewing your potential liability and finding out what you could do to reduce, or even eliminate, this burden.

The state of the economy and the government’s future plans

On 29 November 2011, the Chancellor of the Exchequer, George Osborne, announced the Autumn Statement, which provided an update on the government’s plans for the economy based on the latest forecasts from the Office for Budget Responsibility. These are the key announcements from his speech.

Year-end tax planning tips

With further tax increases likely on the horizon, there really is no time like the present to take a step back and look at how you could reduce your taxes and improve your financial planning strategy.

33 per cent of investment companies yielding more than FTSE 100 average yield

While the hunt for income continues apace, recent figures released by the Association of Investment Companies (AIC) demonstrate that 33 per cent of conventional investment companies are yielding more than the FTSE 100 average annual yield of 3.2 per cent. Of these, 66 per cent are trading at a discount to net asset value.

A tax-efficient wrapper surrounding your fund choices

Individual Savings Accounts (ISAs) are not actual investments; they are a tax-efficient wrapper surrounding your fund choices. When you make an ISA investment you pay no income or capital gains tax (CGT) on the returns you receive, no matter how much your investment grows or how much you withdraw over the years.

A range of funds for the medium- to long-term

Investment bonds are designed to produce medium- to long-term capital growth, but can also be used to give you an income. They also include some life cover. There are other types of investment that have ‘bond’ in their name (such as guaranteed bonds, offshore bonds and corporate bonds) but these are very different. With an investment bond, you pay a lump sum to a life assurance company and this is invested for you until you cash it in or die.

Contributing a preferential sum into an employee’s pension plan

Salary sacrifice (sometimes known as ‘salary waiver’) in the context of retirement planning is a contractual arrangement whereby an employee gives up the right to receive part of their cash remuneration, usually in return for their employer’s agreement to provide some form of non-cash benefit. Salary sacrifice is a voluntary scheme so, even if your employer offers it, they cannot force you to take part.

Spreading your capital across different investment vehicles

Having the right mix of investments will enable you to plan to keep your savings ahead of any inflationary concerns you may have. Spreading risk and getting a good mix of assets is known as ‘diversification’. This is a relatively simple concept; it means spreading your capital across different investment vehicles rather than placing all your capital solely in one place.

Will you be faced with an income shortfall?

While pensioners said they needed an average of £22,000 a year to live comfortably, their actual income averaged £15,800, according to a recent report by Prudential, the insurer. Almost two in five said they found living on their retirement income harder than they had expected.

What retirement income should you aim for?

Retirement may seem a long way off but are you saving enough now for a comfortable retirement in the future? A general rule of thumb suggests that you should aim for a retirement income of two-thirds of the amount you would expect to be earning at the end of your career. It can be hard to plan for tomorrow in this current climate of austerity when we’re busy living for today, but if you begin planning and saving now you’ll have more options in the future.

The highest first half on record

According to the Investment Management Association (IMA), net retail sales of funds of funds (an investment strategy of holding a portfolio of other investment funds rather than investing directly in shares, bonds or other securities) totalled £3.8bn for the first six months of the year, the highest first half on record.

Do you want more control over where your money is invested?

Self-Invested Personal Pensions (SIPPs) were introduced in 1989 to give those planning for retirement greater control over where their pension fund is invested. Essentially, a SIPP is a pension wrapper that is capable of holding investments and providing you with the same tax advantages as other personal pension plans.

Choosing the right cover can help ease your financial pressures

You really need to find the right peace of mind when faced with the difficulty of dealing with a critical illness. Critical illness cover is a long-term insurance policy designed to pay you a tax-free lump sum on the diagnosis of certain life-threatening or debilitating (but not necessarily fatal) conditions, such as a heart attack, stroke, certain types/stages of cancer and multiple sclerosis. A more comprehensive policy will cover many more serious conditions, including loss of sight, permanent loss of hearing and a total and permanent disability that stops you from working. Some policies also provide cover against the loss of limbs.

Rise in the number of older people selling their homes

Falling pension incomes and the rising cost of living have led to a rise in the number of older people selling their homes and moving into rental properties in order to fund their retirement, according to latest research.