Women aged 53 to 60 will soon be able to pay a further six years worth of national insurance (NI) contributions to boost their state pensions.

It raises to 12 the number of extra years of contributions that can be topped up, going back to 1975.

The government’s decision is included in an amendment to the Pensions Bill currently going through Parliament.

The change is aimed at helping some women who left the workforce to raise families or care for other relatives.
The extra six years of contributions will generate extra pension of about £18 a week from 2010.

In 2010 the number of years of NI contributions needed to qualify for a full basic state pension will come down to 30 for both men and women.

Currently the number of years needed are 39 for women and 44 for men.

New weekly credits will also come in to help people caring for children or disabled people build up their contribution records in the same way as if they had been working.

People who want to take advantage of the ability to buy six extra year’s worth of contributions will have to have paid for a minimum of 20 years already.

The cost of buying those extra contributions will also go up, from the current rate of £8.10 per week.

But is it a good thing to do. Well, compared to what it would cost to buy that level of income from a private annuity, it represents some good value. But one factor you will never know is how long your going to live for.

If you die soon after retiring, any annuity represents poor value for money. But, live until your 100 and they are the best investment you are likely to make.

Still confused? A good starting point to asses you own situation is to request a free State Pension Forecast online.

I am sure that all people who have been looking at taking a new mortgage or remortgaging recently have noticed how expensive the lenders arrangement fees are.

Mortgage Arrangement Fees are charged by the lender and are usually added onto the loan but can be paid by the applicant upfront. They used to be from £250 to £500 but now you are going to be lucky to find anything below £700. Cheltenham & Gloucester (part of Lloyds TSB) have fees of about £2500. Ok, their rates are good BUT £2500. Wow!!

As a general rule of thumb, once you have gather together all the mortgage products which fit your personal borrowing requirement you can then begin to work out which product is most cost effective for your size of mortgage eg. 3 year fixed rates with no extended tie in period.

Obviously, that’s where I want you to get a little stuck so you give my business a call and arrange a meeting with me to do it all for you.

As a client of ours (hello Neil) said today,

“It’s a little like the baker charging you to make the bread and then, when its made, make you pay for it.”

Please note that for mortgage advice, we receive a commission from the lender or charge you a fee (in case you think we will be biased towards the lender who pays us the highest commission)

It was only a matter of time before the return of the dreaded Market Value Adjustment (sometimes known as Market Value Reductions, MVAs or MVRs) to with profit investments. Today. Norwich Union announced the re introduction of these temporary encashment and surrender penalties.

The MVRs will take effect from today and apply to policyholders who wish to makes a partial or total withdrawal from the CGNU, CULAC and NULAP funds.

They are a mechanism to ensure policyholders leaving a fund do not take more than their fair share of the fund at the expense of remaining shareholders.

NU has not imposed MVRs on its funds since July 1 last year when they were in place for policies taken out in 1999 and 2000.

Commenting on the decision, John Lister, chief actuary at NU, says: “Since the beginning of the year we have seen equity markets, commercial property and corporate bonds fall significantly in value.

“As a result we have reviewed the situation and have decided to introduce MVRs for policyholders who have unitised with-profits policies and who wish to make a partial or total withdrawal from the CULAC and NULAP funds. These are on average between 13% and 22% across different years of business.

“The decision has been made in consultation with the majority independent With-Profits Committee, ensuring that the interests of all policyholders are represented.”

Three special bonus payments announced in February for eligible customers in CGNU and CULAC funds will continue to be paid on top of today’s announcement.

The average MVR rate for the year units were purchased is:

2001 13%
2008 13%
2002 15%
1996-9, 2004-6 16%
1995 17%
1988,2007 18%
1990, 1994, 2003 19%
1989, 2000 20%
1991, 1993 21%
1992 22%


So what really are the benefits of offering this scheme to your staff? Well, if they are already paying for it themselves (and they haven’t had a string of claims) they will jump at the chance to let you, the Employer, pay the premiums for them.

But it must be more than that. From the Employer’s point of view it does help with absence management. Rather than having the member of staff off work whilst undergoing sporadic treatment from the NHS they are treated, probably by the same consultant, but in a matter of days rather than weeks or months. This should lead to the speedy return to work of a fit, well and motivated employee.

It also increases time management. I’m sure we’ve all waited in the NHS waiting room for hours on end. Even those of us who have arrived early in the hope of a quick consultation and then back to the office. It doesn’t happen! Private Medical Insurance allows the patient to dictate the time of the treatment to fit in with their busy work schedule.

And of course the member of staff. In the event of an illness or injury which needs treatment, the sooner that the treatment starts the quicker the potential recovery. They in turn should feel gratitude to their employer who has gone that extra yard to care for it’s employees.

There are many different types of Private Medical Insurance Schemes to cater for all different business types and sizes. Indeed, there are many different providers of the insurance such as BUPA, Norwich Union Healthcare, AXA PPP Healthcare etc. As professional advisers, Simpson Financial Services works with you to ensure that you get the most appropriate scheme for your business.

Call us now to discuss your requirements.

So your thinking about a health check on your finances and wondering where to go for advice and what it involves. For all new enquiries about our service we provide a free initial consultation at our offices in Coventry.

The free consultation allows you the opportunity to see who we are and where we carry out our business with you. It also gives us the opportunity to see what we can do for you. You can do some preliminary checks on our firm on the Financial Services Authority register. Our reference number is 472031.

You might be interested in an income an expenditure analysis, claiming back tax paid, planning for you future or protecting what assets you have already accumulated. Indeed, most of our clients ask us to advise on all these areas for them.

You will need to bring with you some idea of you current financial circumstances such as 12 months bank statements and details of your current investments, pensions, savings and insurances. Don’t worry if you don’t have all the specifics at this time.

We look forward to meeting with you.

Never catch a falling knife.

Well, its a pretty self explanatory piece of advice and often used in investment circles. However, The Government has begun nationalising HBOS and the Royal Bank of Scotland, pumping £37 billion of taxpayers’ money into the struggling firms.

RBS has said that it will receive £20 billion of capital from the Government – meaning taxpayers will hold a 60 per cent stake in the company. Its chief executive, Sir Fred Goodwin, is to resign.

A further £17 billion is to be pumped into the merged HBOS-Lloyds TSB, meaning 40 per cent of the new “superbank” will be held by the Government on behalf of the public.

Lloyds TSB has also confirmed that while its takeover of HBOS is to go ahead, it will be at a far lower price than had previously been expected, meaning bad news for shareholders of HBOS.

The revised terms will see HBOS shareholders receive 0.6 Lloyds TSB shares for every HBOS share – down from an original level of 0.8.

Meanwhile, Barclays has insisted that it will raise £6.5 billion itself and does not need the Government’s help. As well as a cash call to the market, the bank will not pay a £2 billion dividend to its shareholders.

If its plan succeeds, Barclays will become the only major British-owned High Street bank to be fully independent. The only big bank that does not need cash is the foreign-owned HSBC.

The Government has also announced that it will create an entirely new body to oversee its shareholdings in the banks at “arm’s length” and reduce them over time.

“[The Government's] intention, over time, is to dispose of all the investments it is making as part of this scheme in an orderly way,” the Treasury said in a statement.

The move to take such significant holdings in banks, which was ordered by Gordon Brown after he found they were in a more vulnerable state than had been thought, fundamentally changes the nature of British banking.

Banks will effectively be state-run, with Government-appointed board members put in place to ensure it once again begins lending to businesses and individual customers.

Together with Northern Rock and Bradford & Bingley, the move will mean the Government effectively has four of the country’s biggest lenders under its control.

After my last post regarding protecting your cash assets we have seen today another finanical institution become nationalised. This time it is Icelandic bank, Landsbanki.

Iceland’s banking minister confirmed that Landsbanki has gone into receivership and would be taken over by the Icelandic Financial Supervisory Authority (IFSA) following emergency banking legislation that was passed last night.

In a statement the regulator said: ‘Based on new legislation, the IFSA proceeds to take control of Landsbanki to ensure continued commercial bank operation in Iceland.

‘Domestic deposits are fully guaranteed, as declared by the government. Landsbanki’s domestic branches, call centres, cash machines and internet operations will be open for business as usual. The objective of the IFSA’s action is to guarantee a functioning domestic banking operation.’

However, around 300,000 British savers with £4.5 billion of funds are now unable to access their money. They were drawn to the lender by high rates of return and could end up losing out. Maybe ths is the time that “value” starts to recover some of the ground lost to “price”.

With all the turmoil surrounding banks and their savers at the moment, finding a safe place for your cash deposits is becoming more of an art. No, we are not recommending the “under the mattress fund” for your money. We haven’t suggested that since the Millennium Bug scare.

Currently up to £35,000 of you savings is protected by the Financial Services Compensation Scheme. This is a bona fide scheme and we pay into it each year. It is also the scheme which is helping bail out Bradford and Bingley so I guess our contribution next year may be a little higher.

We have now received confirmation that all Post Office accounts are secure up to 100,000 Euros. This is because the Post Office falls under the Irish Deposit Protection Scheme.

If you wish to know more about investing your cash in The Post Office, or any other institution offering a higher level of protection then please contact us now.

The Financial Services Authority has produced a series of excellent guides to help UK consumers with their financial decision making. The guides, under the general heading of “Money Made Clear” are designed to be jargon free.

I have read through all of the guides and think they are very useful for both new and existing clients of ours to read through prior to receiving our professional advice. They will hopefully give you a general understanding of the issues surrounding the area of your finances which you need guidance and advice on.

Like most publicatioins they can quickly fall behind with the pace of legislative changes and product provider innovation so, even now, one of the guides misses a whole section on further alternatives to purchasing an annuity.

I don’t think the FSA ever intended these free guides to be a replacement to solid advice so please call us with your specific enquiry

Swisscanto aims to capitalise on the sustainable development of emerging market companies through the planned launch of a new fund.

The Swiss-based firm is planning to launch the Swisscanto (LU) Equity Fund Green Invest Emerging Markets fund in late August. Managed by Gerhard Wagner, the fund will invest in companies which contribute to and stand to benefit from the ethical and ecological development of emerging market countries.

The fund will target ecological companies which specialise in sustainable energy and water supply alongside companies which aim to increase efficiency in agriculture, forestry and the use of resources. Wagner can also invest in social welfare companies involved in education and healthcare.

Halifax has announced that one of their specialist divisions, The Mortgage Business, is to close to new customers on the 22nd August 2008. This residential lender has become the latest victim of the credit crunch as Halifax look to recoup its losses and “streamline” its businesses. In other words, reduce the payroll and loose over 300 jobs.

My firm had an excellent relationship with The Mortgage Business and its staff and we would like to wish all those staff leaving the very best of success in whatever new venture the persue.

TMB tended to specialise in buy-to-let and self-certification mortgages. Customers with an existing TMB mortgage would be unaffected by the changes, HBOS said.

It is only two more months to wait until the latest Pension Bill comes into force and brings and end to the lack of equality for divorcees receiving pensions sharing orders.

Safeguarded Rights is the name given to the part of the pension fund built up by National Insurance rebates, usually called Protected Rights. But as soon as these Protected Rights are subject to a Pensions Sharing Order and transferred into a private fund of a divorcee they become known as Safeguarded Rights. The only snag is you can’t currently take 25% of this fund as a tax free cash lump sum at retirement.

However, by the end of October 2008 the anomaly will be gone. This will have a significant impact on people who have Safeguarded Rights in their pension portfolio and have had to use other means to fund a future cash lump sum at retirement.

If you feel you might be affected by this you should contact us for further information