1. The DIGITAL personAL fInAnce mAGAzIne sepTemBer/ocToBer 2009 Planning yourFinancial protection for you retirement income Maximising an income from your pension fund and your familyWith the abundance of choice, we canhelp you make the right decisionsEmerging markets The search Do they have the potential to lead the recovery when the world economy begins to stabilise?for incomeInvesting for an income Are you taking advantage in a low interestrate environment of your ISA allowance? The earlier you invest, the longer your money is outside the reach of the taxman Transferring your pensions Your questions answeredWealth management Aiming to preserve your wealth and shelter it from the burden of higher taxes

2. 14 06Financial 26 24 planning is our business. 13 Were passionate about making sureInside this issue your finances are in good shape.05 Corporate bonds10 Are you taking advantage of 20 Investing in uncertain timesAttracting investors for all the rightreasonsyour ISA allowance? In a low growth environment, whichareas offer the best prospects?The earlier you invest, the longer yourmoney is outside the reach of the Our range of personal financial planning services is06 Self-Invested Personal PensionsWhy astute investors are talking totaxman21 Dates for your diaryDont miss these deadlines or submitting extensive, covering areas from pensions to inheritance matters and tax-efficient investments.us about taking control of their owninvestment decisions 11 Planning your retirementincomeyour 2008/09 tax return08 Wealth managementAiming to preserve your wealth andMaximising an income from yourpension fund21 Locating a lost pensionTracing service may provide the helpyou need!Contact us to discuss your current situation, and wellshelter it from the burden of higher taxes 12 Transferring your pensions provide you with a complete financial wealth check. 08 Taxpayers allocated incorrect Your questions answered22 Buy-to-let landlords acquiring more propertiestax codesHave you had too much tax deductedfrom your wages? 14 What type of investor are you?Building a solid investment strategyInterest rate cuts tempting propertyinvestors back in to the marketthrough good and bad times 08 Emerging markets24 Long-term careDo they have the potential to lead therecovery when the world economy 16 Financial protection for you andyour familyThere is no panacea when it comes topaying for care begins to stabilise?With the abundance of choice, we canhelp you make the right decisions26 Experiencing mortgage repayment problems? 09 The search for incomeInvesting for an income in a low interest rate 19 Inheritance tax planningKeeping your hard-earned assets out ofIts essential to talkenvironmentthe hands of the taxman28 Data BankTax facts, do you know your numbers? 03 3. 16Creating wealth Inside this issue Welcome to the latest issue of ourpersonal finance and wealthmanagement magazine. Achievingthe standard of living you require during your retirement will largely depend on the choices you make when considering how to take an income from your pension fund. On page 11 we consider some of the options21 22 that may be appropriate to your particular situation and the degree of control you want over your pension.With so many different protection options available, making the right decision to protect your personal and financial situation can seem overwhelming. On page 16 we look at the plethora of protection solutions which could help ensure that a lump sum, or a replacement income, becomes available to you in the event that it is needed.If you are an income-seeking saver in search of good returns from your savings in this lowCorporate bonds interest rate environment, turn to page 9 to find out how we can provide you with the professional advice you need to enable you to consider all the options available.At the time of going to press, the global financial crisis and events have been changing very quickly, and some further changes are likely to have occurred by the time you read this issue. A full content listing appears on page 3.Content of the articles featured in thisAttracting investors for all the right reasonspublication is for your general informationand use only and is not intended to addressyour particular requirements. They should Corporate bonds are a type of fixed interestWhen held within a trust or fund, fixed Over the comingnot be relied upon in their entirety andsecurity. A fixed interest security is a way ofinterest does not mean fixed income. Corporateshall not be deemed to be, or constitute, lending money to a company in return for a bonds offer different rates of interest and matureyears, if the yieldsadvice. Although endeavours have been from corporate bonds08fixed rate of interest over a set period. This typeat different times. Money may be investedmade to provide accurate and timelyinformation, there can be no guaranteeof investment is intended to provide you with ainto, or withdrawn from, a fund that invests inoutperform the returns fromregular, reliable income.corporate bonds. The income levels from truststhat such information is accurate as of thedate it is received or that it will continue toOver the coming years, if the yields from corporate vary because bonds are continually boughtcash, corporate bonds couldbe accurate in the future. No individual or bonds outperform the returns from cash, corporateand sold by the fund manager at different rates. become an increasinglycompany should act upon such informationwithout receiving appropriate professionalbonds could become an increasingly larger part ofYields are used to indicate the income levelslarger part of investorsinvestors portfolios. This will largely be dependentreceived from corporate bond trusts.advice after a thorough examination ofon the state of the economy, unemployment levels, The value of your capital in a corporate bondportfolios.their particular situation. We cannot accept 2919responsibility for any loss as a result ofinterest rates and future tax rises. fund is not guaranteed and can vary. In addition,acts or omissions taken in respect of anyEvery bond issued by a company is given a the value of your investment is likely to fall ifarticles. Thresholds, percentage rates andcredit rating by an agency such as Morningstar orinterest rates begin to rise in the medium totax legislation may change in subsequentfinance acts. Moodys. These credit rating agencies assess how long-term, but on the flip side, it is likely tolikely it is that the company will be able to make increase in value if interest rates fall.the interest payments and repay the capital. Themost secure rating is an AAA rating.The value of investments and the income from When you invest into a corporate bond fund,them can go down as well as up and you may not If you consider that corporateTo DISCuSS Your FInAnCIAL you are lending your money to companies whoagree to pay you an amount of interest over get back your original investment. Past performanceis not an indication of future performance. Tax bonds still look undervaluedPLAnnIng rEquIrEMEnTS or To a certain period of time. Corporate bonds arebenefits may vary as a result of statutory change and and would like to discuss theoBTAIn FurThEr InForMATIon, issued at different rates of interest by differenttheir value will depend on individual circumstances. options available to you, pleasePLEASE ConTACT uS.companies. Generally speaking, the more securea company is, the lower the interest rates it will Thresholds, percentage rates and tax legislation maychange in subsequent finance acts. contact us to discuss yourneed to offer to attract investors.particular requirements.04 05 4. retirementretirement Self-Invested Personal PensionsSIPPs are wrappers that into a SIPP, there are a number relevant earnings and receivedifferent pensions under the oneprovide individuals with of important considerations you full tax relief on the total, subjectSIPP wrapper by transferring a seriesmore freedom of choice thanshould discuss with us first. These to a maximum earnings limit of of separate schemes into your SIPP.other conventional personalwill include the potential charges245,000 in 2009/10. If you were toHowever, it is important to ascertainpensions. They allow investors toinvolved, the length of time youinvest more than your earnings but if there are any valuable benefits inchoose their own investments orhave to retirement, your investment within the annual allowance youyour existing schemes that wouldappoint an investment manager to objectives and strategy, your would not receive any additional be lost on such a transfer. The actuallook after their portfolio.existing pension plan guaranteestax relief. Where the total pensiontransfer costs also have to be takenWhy astute investors are talking to us about taking As a SIPP investor you have theoption of choosing when, where and and options (if applicable) and the effects on your money if you are input amount exceeds the annual allowance a tax charge of 40 perinto consideration, if applicable.control of their own investment decisionshow you invest the assets of yourpension fund. Contributions that transferring from with-profits funds.If you are an expatriate living cent of the amount in excess of the limit will be levied.SIPPS are not appropriate foreverybody and there are alternativemethods of saving for retirement.you make to your SIPP will currently overseas or hoping to move Contributions can be made by Following the introduction of Pension Simplification legislation in 2006, Self-Invested Personal Pension Plans receive tax relief of between 20 per overseas in the very near future, employers, employees and thecent and 40 per cent, depending on then it may also be worth self-employed. Where previously The value of investments and the (SIPPs) have become more accessible to more sophisticated investors who require greater control over their which personal tax band you are in.considering a Qualifying Recognised employees in a company pensionincome from them can go down You have to appoint a trusteeas well as up and you may not get pension planning and want greater access to different investment markets. They also offer excellent tax planningto oversee the operation of yourAs a SIPP investor you have the option back your original investment. Past solutions, and in these current difficult financial markets provide for the appropriate investor the maximum SIPP, but having done this you canof choosing when, where and howperformance is not an indicationthen effectively run your pensionof future performance. Tax benefits amount of flexibility when planning for retirement.fund according to your investmentyou invest the assets of your pension fund. may vary as a result of statutoryrequirements. The range of available Contributions that you make to your SIPP will change and their value will dependinvestments will depend largely on currently receive tax relief of between 20 per on individual circumstances.your choice of SIPP provider we Thresholds, percentage ratescan discuss this with you to ensure cent and 40 per cent depending onand tax legislation may changethat you select the most appropriate what personal tax band you are in. in subsequent finance acts.scheme provider. Transferring your pension will Ultimately it is down to theOverseas Pension Scheme (QROPS).scheme who earned more than not guarantee greater benefits intrustees of your pension plan to A QROPS is a pension scheme set 30,000 were not permitted also toretirement.agree whether they are happy toup outside the UK that is regulated contribute to a SIPP, they are nowaccept your investment choices as a pension scheme in the countryfree to do so, provided that theyinto the SIPP. The trustees arein which it was established, and it do not exceed the limit of 100 perresponsible and liable for ensuringmust be recognised for tax purposes cent of their earnings, up to thethat the investment choices fall (i.e. benefits in payment must be maximum earnings limit.within their remit. A fully fledgedsubject to taxation). The procedureAlternatively, an employer canSIPP can accommodate a widefor overseas transfers has been also make an annual contributionrange of investments under its simplified significantly since Aprilof up to 245,000 in 2009/10 onumbrella. However, you are likely2006. Now, as long as the overseasbehalf of an employee regardlessto pay for the wider level of choice scheme is recognised by HMof their remuneration.with higher charges. Revenue & Customs as an approved There are charges associated withAt its most basic, a SIPP canarrangement, the transfer can beSIPPs, these include, the set-up feecontain straightforward investmentsprocessed in the same way as aand the annual administration fee.such as cash savings or government transfer to a UK scheme.A low-cost SIPP with a limited range If you would like tobonds. You can also include unit and There is in fact no financial of options, such as shares, funds andinvestment trust funds, and otherlimit on the amount that you cancash, might not charge a set-up fee arrange a review ofmore esoteric investments such ascontribute to your SIPP, although and only a modest, if any, annual fee.your current retirementcommercial properties and direct there is a maximum amount on A full SIPP will usually chargeprovision and discussshare investment. Other optionswhich you will be able to claim a set-up fee and then an annualare derivatives, traded endowmenttax relief in any one tax year andfee. The charges are usually a flat the options available topolicies and shares in unquoteda lifetime allowance restrictingrate, so they benefit investors withyou, please contact us.companies. So investments held the total fund size. Under thelarger pension pots. There will,within your SIPP wrapper can range rules which came into force fromin addition to annual charges, befrom low to high risk, but crucially April 2006, investors now havetransaction charges on mattersNeeD MORecannot include a second home orother residential property. much more freedom to invest money in their SIPP. such as dealing in shares and switching investments around. INFORMATION? If you are considering transferring You can make contributions If appropriate, you are also PLEASE CONTACT USyour existing pension moneyof up to 100 per cent of your net permitted to consolidate several WITH YOUR ENQUIRY.0607 5. Wealth creationWealth managementAiming to preserve yourwealth and shelter it fromthe burden of higher taxes The search for incomeMaking sense of your planning objectivesand finances requires even more time andeffort in todays constantly fluctuatingeconomic environment. With the reduced rate of economic growthand the impact of the recession, a reviewof your financial and tax planning positioncould enable you to lower or even defer taxthat you have to pay, enabling you to free up Investing for an income in a low interest rate environmentcash for other investment purposes in yourbusiness or personally. If you are an income-seeking saver in search of good returns from your savings inis by investing in stocks that pay a dividend. Ifa firm is making good profits it can decide to There is no substitute for personal advice. Ifthis low interest rate environment, we can provide you with the professional adviceshare this with investors rather than reinvest ityou would like to discuss the range of personal in the business, so essentially dividends are theand business planning services that we offer, you need to enable you to consider all the options available. In addition, we caninvestors share of company profits. Share prices ofplease contact us for further information. help you determine what levels of income you may need and work with you to companies that regularly pay dividends tend to beless volatile than other companies, but remember review this regularly as your requirements change. Another major consideration that company shares can fall in value. In addition,Emerging markets is your attitude towards risk for return and availability. This will determine which dividends can be cut if a company finds itself in Taxpayers allocatedneed of extra cash. asset class you are comfortable investing in. Another way to invest in equities for the incorrect tax codespurpose of obtaining a better income is via an C ash, especially in the current climate, isincome (called the coupon) and a lump sum at equity income fund. The fund manager running an important element for any income maturity (called the par). They typically performthe portfolio selects a wide range of equities, so investor. One option you may wish towell as the economy slows and inflation falls. you are less reliant on the performance of anyHave you had too much tax Do they have the potential to lead the recovery when the world discuss with us is cash funds, dubbedGovernment bonds tend to move in theone particular company, and will try to selectcompanies that pay regular dividends.deducted from your wages? economy begins to stabilise? money market portfolios. These use the pooled savings of many investors to benefit from higher opposite direction to shares and historically are good diversifiers. But on the flipside, the rates not available to individuals. They can invest government is likely to issue more gilts and thisTHM Revenue & Customs (HMRC) oweshe term emerging markets appeared first stormy and volatile past, rallying and slumping farin the most liquid, high-quality cash deposits andlarge supply may lead to falls in gilt prices. As If you would like to discuss howhundreds of millions of pounds to as many asduring the 1990s and is now widely usedmore violently than the developed world. near-cash instruments such as bonds. But, unlikegovernment bonds pay a fixed income stream, the you could generate more income4.5m British taxpayers after allocating themto describe countries not considered to be a normal deposit account, the value of a cash real value of these payments erodes if inflation from your savings in this lowwith incorrect tax codes. developed. Third World, lesser developed fund can fall as well as rise, although in theory, at rises. Similarly, the value of bonds typically falls With world markets remaininginterest rate environment, please The National Audit Office estimates thecountries or under-developed countries. Developedleast, it should not experience volatile swings.when interest rates rise.department could be liable to repay 1.6bnmeaning essentially the major European countries volatile, it is important to make Bonds are a form of debt, an IOU issued by Corporate bonds operate under the same contact us. Well ensure that youto taxpayers who had too much tax deductedplus USA, Canada, Japan, Australia and New Zealand.sure that your investment either governments or firms looking to raiseprinciple as gilts, in other words companies issue make an informed decision basedfrom their wages. In recent months emerging stock marketsportfolio is continually meetingcapital. As an investor, when you purchase adebt (bonds) to fund their activities. High-quality, There were 20m queries about tax codes inhave reached levels last seen before the collapsebond you are essentially lending the money to well-established companies that generate lots on the options available to you.March this year, up from around 16m last year.of the Lehman Brothers investment bank. The your specific requirements. Tothe government or company for a set periodof cash are the safest corporate bond issuers andongoing rally has been due to a returning belief arrange a review of your particular of time, which varies according to the issuer.their bonds are known as investment grade.The value of investments and the incomeMake sure that you pay the rightin decoupling, the theory by which emergingsituation, please contact us. In return you will receive interest, typically High-yield bonds are issued by companiesfrom them can go down as well as up and youmarkets will in future be less dependent on thepaid twice a year, and when the bond reachesthat are judged more likely to default. To attractmay not get back your original investment.amount of tax, and claim back fortunes of developed markets because they willmaturity you usually get back your initialinvestors, higher interest is offered. These arePast performance is not an indication of futuremoney that may have beenbe able to rely on stronger domestic demand. The value of investments and the income frominvestment. But you dont have to keep a bond known as sub-investment grade bonds.performance. Tax benefits may vary as a resultoverpaid, please contact us for Asia and Latin America havent had the recentthem can go down as well as up and you may notuntil maturity. You can, if you wish, sell it on.The risks related to investing in bonds can beof statutory change and their value will dependfundamental problems in the banking sector that get back your original investment. Past performanceMuch of the governments debt, including thereduced if you invest through a bond fund. Here on individual circumstances. Thresholds,further information.the developed world has had, so lending andis not an indication of future performance. Tax additional money being used to aid the economythe fund manager selects a range of bonds,percentage rates and tax legislation may changecredit growth have resumed rapidly and this isbenefits may vary as a result of statutory change andand refinance the banks, is in the form of bondsso you are less reliant on the performance of in subsequent finance acts.helping drive growth.their value will depend on individual circumstances.it issues. Gilts are bonds issued by the Britishone company or government. The distributionNeeD MORe Emerging markets, particularly China, have seenThresholds, percentage rates and tax legislationgovernment. The advantage of gilts is that theyield gives a simple indication of what returns are likely to be over the next 12 months. TheINFORMATION?strong demand for recent initial public offerings,may change in subsequent finance acts. If yougovernment is unlikely to fail to pay interest ormany of which have raced higher in the style of the invest in funds which invest abroad, movements inrepay its debt, so they are generally the safestunderlying yield gives an indication of returnsPLEASE CONTACT US dotcom boom, raising fears that another bubblecurrency exchange rates may cause the value of yourinvestments. To date, the UK government has after expenses if all bonds in the fund are heldWITH YOUR ENQUIRY.could be forming. Emerging markets have had ainvestment to go up or down.never failed to pay back money owed to investors. to maturity. Government bonds pay a known and regular An alternative route to generating income 08 09 6. Wealth creation retirementPlanning your retirement incomeMaximising an income from your pension fund T he earliest you are currently permitted toan unpredictable and possibly falling retirementdo not want to buy an annuity with their pension take your retirement benefits is from the age income worries you, then conventional annuities fund. ASPs are intended to provide an income of 50, but this is set to rise to age 55 from may be more appropriate.in retirement for scheme members and their April 2010. If you are considering setting up a dependants, rather than be used as a device to Are you taking advantageconventional-lifetime annuity, which pays a secure pass on tax-privileged pension funds.income for life, there is now no requirement to buyUnsecured Pension (formerlyan annuity by the age of 75. However, you must Income Drawndown)start to take your benefits from the age of 75, inIf you are approaching retirementaddition to any tax-free element.Under the option of Personal Pension Fundand would like to discuss the of your ISA allowance? Withdrawal, you can choose to take a tax-free cashThe optionslump sum immediately and then, instead of buying options available to you, pleaseConventional-Lifetime Annuity an annuity, leave the remainder of the fund in a contact us. tax-efficient environment. An annual income (taxedA conventional-lifetime annuity converts youras earned income) can be taken, within prescribedpension fund into an income for the rest of your life, limits, from the invested pension fund. This is aThe value of investments and the income fromhowever long you live. You can add different options flexible option which may be a consideration for them can go down as well as up and you may not The earlier you invest, the longer your money is outside of the reach of the taxmanand purchase different types depending on yourneeds and circumstances. For example, your annuity more substantial funds or if you have other sources of income. This allows you to take a taxable income get back your original investment. Past performanceis not an indication of future performance. Taxcan pay out to your spouse or partner on yourdirectly from your fund, leaving the remainderbenefits may vary as a result of statutory change and By investing earlier in the tax year, you could make sure that you are using your Individual Savings Account death, or you can choose an enhanced or impairedlife annuity, which may give a higher income than invested. It is available up to age 75.their value will depend on individual circumstances. Thresholds, percentage rates and tax legislation may (ISA) allowance to its full advantage. The earlier you invest, the longer your money is outside the reach of a conventional annuity if you have an illness or Phased Retirementchange in subsequent finance acts.medical condition, or are a smoker. A conventional-Phased retirement is a personal pension plan the taxman and has the opportunity to work harder for you. lifetime annuity is the simplest retirement option and allows you to buy an annuity or incomeand provides a secure, taxable income which is drawdown in stages rather than all at once. It is ISAs are virtually tax-free savings, a cash ISA to a stocks and shares pay tax at 40 per cent on yourpayable for the rest of your lifetime. up to you to decide how much income you need which means that you do not have ISA, but they must transfer the savings interest If you would like toand when you would like to start taking it. You to declare any income from them, whole amount saved in that taxn if you pay the saving rate of taxdiscuss how planningthen cash in as much of the plan as necessary to and you can use an ISA to save cashyear in that cash ISA up to the day for savings, outside an ISA you Investment-Linked Annuityprovide your chosen level of income. You can take or invest in stocks and shares.of the transfer would pay tax at 10 per cent on ahead and making Investment-linked annuities offer the chance toout a phased retirement plan any time after then the money transferred is then your savings interestthe most of your ISA obtain a higher level of income, but you needage of 50 (55 from April 2010). What can you save or treated as if it had been investedn if youre a basic rate taxpayerallowance early couldto be comfortable with linking your income in invest in an ISA?directly into the stocks and shares inside or outside an ISA you payretirement to the stock market. They may beAlternatively Secured Pension mean you benefit fromISA in that tax year, the saver istax at 10 per cent on dividendsuitable if you have other income sources, are from age 75 ISAs can be used to: then still able to save or invest the income, this is taken as a taxthe potential of greater prepared to take a risk to achieve a higher income n save cash in an ISA and theremainder of their 7,200 annualcredit before you receive the returns before the end or can accept the risk that your income mayThe governments A-Day pensions simplification interest will be tax-freeISA investment limit in that taxdividend and cannot be refunded reduce. Investment-linked annuities are designed legislation, which came into force in April 2006, of this tax year, please n invest in shares or funds in an ISA, year, including up to 3,600 in a for ISA investments to give you the opportunity to obtain an incomecreated Alternatively Secured Pensions (ASPs). any capital growth will be tax-freecash ISAn if youre a higher rate taxpayer contact us.that increases during your retirement. If the risk ofASPs are available to people reaching age 75 who and there is no further tax to pay n from October 6, 2009, the ISA you would normally pay tax on on any dividends you receive limit will increase to 10,200, updividend income at 32.5 perThe value of investments and theto 5,100 of which can be saved cent, in an ISA you wont get income from them can go down Transferring money fromin cash for people aged 50 or overback the 10 per cent dividend as well as up and you may not get cash ISAs to stocks andn from April 6, 2010, the ISA limit tax credit element of this, butback your original investment. Past shares ISAswill increase to 10,200, up to5,100 of which can be saved inyou will save by not having topay any additional tax performance is not an indication offuture performance. Tax benefits may If you have money saved from a cash for all ISA investorsvary as a result of statutory change and previous tax year you can transfer Capital Gains Tax (CGT) their value will depend on individual some or all of the money from aHow much tax will you savingscircumstances. Thresholds, percentage cash ISA to a stocks and shares ISAsave? rates and tax legislation may change in without this affectingyour annual If you make gains of more thansubsequent finance acts. ISA investment allowance.Interest from savings:10,100 from the sale of sharesMoney saved in then if you pay tax at the basic rate,outside an ISA you would usuallyand certain other assets in the taxyear 2009/10, you would normally NeeD MORe current tax year:pay 20 per cent tax (2009/10) onhave to payCGT. However, you do INFORMATION?your savings interest not have to pay any CGT on gains PLEASE CONTACT US n savers are able to transfer moneyn if you pay tax at the higher rate,from an ISA. WITH YOUR ENQUIRY saved in the current tax year from outside an ISA you would usually 1011 7. retirement Transferring your pensions Your questions answered There are a number of different reasons why you may wish to consider transferring your pension schemes, whether this is the result of a change of employment, poor investment performance, issues over the security of the pension scheme, or a need to improve flexibility. You might well have several proceeding with a transfer. Here Q: Will I lose any benefits? maintain the balance of your portfolio. different types of pension. The goldare some of the most commonA: It is possible that your currentIt is also possible that the amount of standard is the final-salary scheme,questions we are asked by our clientspension may have valuable benefits risk you are prepared to take could which pays a pension based on considering this course of action. that you would lose if you werechange over time, for example, if your your salary when you leave your jobto transfer out of it, such as death financial situation changes or as you and on years of service. Your pastQ: Will the new pension be morebenefits or a Guaranteed Annuity get nearer to retirement. employer might try to encourage expensive than my existing one(s)? Rate (GAR) option. A GAR option is you to move your pension away A: If the new pension costs more,where the insurance company will by boosting your fund with an you must make sure you are satisfied pay your pension at a particular rate,While transferring your enhanced transfer value and eventhat any additional costs are forwhich may be much higher than the pensions may seem a cash lump sum.good reason. For example, if the rates available in the market whenHowever, this still may notnew pension is offering you access you retire.like a good idea, it is a compensate for the benefits you to more funds than your currentdecision that requires are giving up, and you may need anpension(s), consider whether Q: Are there any penalties if I professional advice exceptionally high rate of investment you need them. You will receivetransfer? return on the funds you are given information about the costs of the A: Some pensions may apply abefore any action is to match what you would get if younew pension in the Key Featurespenalty when you transfer out.taken. If you would stayed in the final-salary scheme.Illustration (KFI) that is provided to like to discuss yourAlternatively, you may have ayou. The Key Features Illustration Q: Would a stakeholder pensionparticular requirements, money purchase occupational refers to the actual funds and meet my needs and objectives? scheme or a personal pension. These investments that you will be using inA: Stakeholder pensions are often please contact us. pensions rely on contributions andyour new pension.the cheapest pensions available investment growth to build up aand, if appropriate, this could be an The value of investments and the fund. When you retire, this money Q: Is it a good idea to transfer all option to consider.income from them can go downIf appropriate to your can be used to buy an annuity which of my pensions into a single newas well as up and you may not get pays an income. pension? Q: Will the investments in the newback your original investment. Past particular situation, itIf appropriate to your particularA: If you currently have several pension be right for the amount ofperformance is not an indication ofmay make sense to bring these situation, it may make sensepensions and are looking to putrisk I am prepared to take?future performance. Tax benefits maypensions under one roof to to bring these pensions under them into one new pension, you A: We can explain the differentvary as a result of statutory change and benefit from lower charges, one roof to benefit from lowerneed to fully understand the funds and investments and make their value will depend on individual charges, and aim to improve fundassociated costs. You may notrecommendations so that the circumstances. Thresholds, percentageand aim to improve fund performance and make fund necessarily need a new pension toinvestments chosen are appropriate rates and tax legislation may change in performance and make monitoring easier.put all of your pensions together. for the amount of risk you aresubsequent finance acts. Transferringfund monitoring easier. If one of your existing pensions prepared to take with your money.your pension will not guarantee greater Transferring your pension already meets your needs andbenefits in retirement. Pension transfers are a complicated objectives it might be possible to Q: Will I need ongoing advice? area of financial planning and theretransfer all of your other existingA: Some fund selections may need are many things to consider beforepensions into that one.to be reviewed from time to time to 12 13 8. InvestmentWhat type of investor are you?Building a solid investment strategy through good and bad timesDuring this period of economic Whatever your investment strategy the starting points Aggressive InvestorAchieving a should be the same, and we can help you identify theturbulence, what strategytype of approach best suited to your particular needs The aggressive investor wants to see real capital and preferred balance between risk and return.growth in the short-to medium term of betweenshould investors take? Your3 to 5 years and isnt concerned about short-termown attitude to risk is crucial. Take a look at some possible strategies for cautious, fluctuations. This investor will be prepared to take on comfortable moderate and aggressive investors.a wide range of stock market investments includingYou may be comfortable topotentially volatile shares where there are high Cautious Investorlive with capital risk if it means The cautious investor understands that they need to potential higher. The aggressive investor may offsetgains but also where the risk of losing money isthe chance of a higher return achieve a return better than the rate of inflation tothese high risk investments by diversifying into lower- maintain their financial position and that in order torisk areas and may only be making those high riskin the end. Alternatively, youretirement. beat the returns available on cash deposits they mayinvestments with money they could afford to lose. need to accept some stock market risk. However themay be risk averse and dont cautious investor is uncomfortable about sharp fallswant to risk your capital under in value and wants to invest in stable investmentsTo arrange a review of your where the risk of this happening is limited. Keeping investment requirements,any circumstances. ahead of inflation and getting a slightly better returnis more important than getting a high return only by please contact us.accepting a higher level of risk. Do you need a professional assessment The value of investments and the income from themModerate Investor can go down as well as up and you may not get backThe moderate investor wants to see their money grow your original investment. Past performance is not anover the medium to long-term 5 years. As well as beatinginflation the moderate investor knows that capitalgrowth available from investing in the stock market indication of future performance. Tax benefits mayvary as a result of statutory change and their valuewill depend on individual circumstances. Thresholds, of your situation to make this a reality?gives them an opportunity of achieving this. Although percentage rates and tax legislation may change innot happy about a significant short-term set-back the subsequent finance acts.moderate investor is willing to accept the risk as theyare investing for the longer-term. However sustained If you are unsure whether your pension is performing infalls over a longer period might persuade the moderateinvestor to move to less-risky investments. line with your expectations, and that youve made the right pension choices dont leave it to chance.Contact us to discuss these and other important questions, and well help guide you to a comfortable retirement. 14 9. ProtectionProtection Financial protection for you and your family With the abundance of choice, we can help you make the right decisions With so many different protection options available, making the right decision to protect your personal and financial situation can seem overwhelming. There is a plethora of protection solutions which could help ensure that a lump sum, or a replacement income, becomes available to you in the event that it is needed. We can make sure that you are able to take the right decisions to deliver peace of mind for you and your family in the event of death, if you are too ill to work or if you are diagnosed with a critical illness.You can choose protection-only financially? You may not be able 12 to 24 months on a valid claim insurance, which is called term to work and so lose your income, if you have an accident, become insurance. In its simplest form, it but you are still alive so your life ill or unemployed. Most of these pays out a specified amount if you assurance does not pay out. And to protection policies operate a die within a selected period of years. compound the problem, you maydeferred period, which is the If you survive, it pays out nothing. Italso require additional expensiveperiod from when a claimable event is one of the cheapest ways overallnursing care, have to adapt your happens to when the policy starts of buying the cover you may need.home or even move to another morepaying out. Alternatively, a whole-of-life suitable property. Private medical insurance covers policy provides cover for as long as Income Protection Insuranceyou for private medical treatment you live.(IPI) formerly known as permanentand you can choose to add onhealth insurance would make up extra cover, such as dental cover. Life Assurance Options a percentage of your lost income You may select the hospitals n Whole-of-life assurance planscaused by an illness, accident orwhere you would want to becan be used to ensure that adisability. Rates vary according totreated close to home. As always,guaranteed lump sum is paid the dangers associated with your the more benefits and the moreto your estate in the event ofoccupation, age, state of health comprehensive the policy youyour premature death. To avoidand gender but IPI is particularly select, the more it will cost.inheritance tax and probate important if you are self employed Beyond taking the obvious stepdelays, policies should be set up or if you do not have an employerof ensuring that you have adequateChoosing the right mixunder an appropriate trust. that would continue to pay yourinsurance cover, you should also n Level term plans provide a lumpsalary if you were unable to work. ensure that you have made a will. Aof financial protectionsum for your beneficiaries in If you are diagnosed withliving will makes clear your wishesfor your particularthe event of your death over asuffering from one of a number ofin the event that, for example, yousituation is essentialspecified term. specified critical illnesses, a critical are pronounced clinically dead n Family income benefit plansillness insurance policy would following an accident, and executesto ensure that your give a replacement incomepay out a tax-free lump sum if the an enduring power of attorney, sospecific requirements for beneficiaries on yourevent occurred during the term that if you become incapable ofare fully covered. To premature death. of your policy. Many life insurancemanaging your affairs as a result of n Decreasing term protection plans companies offer policies that coveran accident or illness, you can bediscuss your options,pay out a lump sum in the event you for both death and critical illnessreassured that responsibility will please contact us.of your death to cover a reducing and will pay out the guaranteedpass to someone you have chosenliability for a fixed period, such as benefit on the first event to occur. and trust.a repayment mortgage. Accident Sickness andOf course, all these protectionNeeD MOReSimply having life assurance mayUnemployment (ASU) can be takenoptions also apply to your spouseINFORMATION? not be sufficient. For instance, ifout for any purpose to protect yourand to those who are in civil you contracted a near-fatal diseaseincome and to give you peace ofpartnerships.PLEASE CONTACT US or illness, how would you cope mind. The benefits only pay forWITH YOUR ENQUIRY.16 17 10. Wealth protection Youve protected your Inheritance tax planning most valuableKeeping your hard earned assets out of the hands of the taxman assets.E ffective inheritance tax(such as a home given to a son orSome cash gifts are exempt from all the instalments have been paid, planning could save yourdaughter but in which you still live) tax regardless of the seven-year rule. the outstanding amount must be beneficiaries thousands and assets held in some trusts from Regular gifts from after-tax income, paid. The IHT threshold in force at of pounds, maybe even which you receive an income.such as a monthly payment to a the time of death is used to calculatehundreds of thousands dependingAgainst this total value is set family member, are also exempt how much tax should be paid.on the size of your estate. At its everything that you owed, suchas long as you still have sufficientsimplest, inheritance tax (IHT) is the as any outstanding mortgages or income to maintain your standardtax payable on your estate whenloans, unpaid bills and costs incurredof living.If you have concernsBut how financially secure areyou die if the value of your estateduring your lifetime for which bills Any gifts between husbands and about the impact IHTexceeds a certain amount.have not been received, as well aswives, or registered civil partners,could have on your IHT is currently paid on amountsfuneral expenses. are exempt from IHT whether they particular situation, please your dependents?above 325,000 (650,000 for Any amount of money given awaywere made while both partnersmarried couples and registered outright to an individual is not countedwere still alive or left to the survivorcontact us so that wecivil partnerships) for the currentfor tax if the person making the gift on the death of the first. Tax will becan review your financial2009/10 tax year, at a rate of 40 persurvives for seven years. These gifts due eventually when the surviving position and offercent. From 2010/11 this figure is setare called potentially exempt transfers spouse or civil partner dies if professional advice about Timely decisions on how jointly owned assets are held, the to increase to 350,000 (700,000for married couples and registered and are useful for tax planning. Money put into a bare trust the value of their estate is more than the combined tax threshold,the options available. mitigation of inheritance tax, the preparation of a Will and civil partnerships). If the value ofyour estate, including your home (a trust where the beneficiary is entitled to the trust fund at age currently 650,000.If gifts are made that affect theThe value of investments and the the creation of trusts, can all help ensure your dependentsand certain gifts made in theprevious seven years, exceeds the 18) counts as a potentially exempt transfer, so it is possible to put liability to IHT and the giver dies less than seven years later, a specialincome from them can go downas well as up and you may not get are financially secure.IHT threshold, tax will be due on themoney into a trust to prevent relief known as taper relief mayback your original investment. Pastbalance at 40 per cent.grandchildren, for example, frombe available. The relief reduces theperformance is not an indication of Without proper tax planning,having access to it until they are 18.amount of tax payable on a gift. future performance. Tax benefits mayContact us to discuss how to safeguard your dependents,many people could end up leaving However, gifts to most other types In most cases, IHT must be paid vary as a result of statutory change anda substantial tax liability on their of trust will be treated as chargeablewithin six months from the end their value will depend on individualwealth and assets, dont leave it until its too late. death, considerably reducing thevalue of the estate passing to their lifetime transfers. Chargeable lifetime transfers up to the threshold of the month in which the death occurs. If not, interest is charged circumstances. Thresholds, percentagerates and tax legislation may change inchosen beneficiaries.are not subject to tax but amountson the unpaid amount. Tax on subsequent finance acts. Your estate includes everything over this are taxed at 20 per centsome assets, including land andowned in your name, the share of with a further 20 per cent payablebuildings, can be deferred andanything owned jointly, gifts from if the person making the gift diespaid in instalments over ten years.which you keep back some benefit within seven years. However, if the asset is sold before 19 11. Investing news Dates for your diary Dont miss these deadlines The deadline for submitting your 2008/09 tax return by post is 31 October 2009Returns filed manually after this date will result in a 100 fine. Paper returns must reach HM Revenue & Customs (HMRC) by this date so that it can calculate the tax you owe before the 31 January payment deadline. The end of October is also the final submission date for paper returns if you want the tax you owe to be collected through your tax code. This is possible if you owe less than 2,000.The deadline for filing your 2008/09 tax return online is 30 December 2009 if you want to pay through your tax codeSix million taxpayers filed online last year, an increase of 50 per cent on the previous year. This method means the tax owed is calculated automatically. Rebates are also paid back more quickly to online filers. All taxLocating a lost pension owed must be paid by 31 January 2010.Late filing and payment means taxpayers are automatically fined 100. If the balance has not been paid by 28 February 2010, a further five per cent surcharge is added to the bill and if the tax still has not been paid Tracing service may provide the help you need! Investing in uncertain times by 31 July 2010 another five per cent charge is applied. If you think you may have an old pension but are n The full name and address of your employernot sure of the details, the Pension Tracing Service who ran the occupational pension schememay be able to help. They will try and match the you are trying to trace. Did your employerIn a low growth environment, which areas offer the best prospects? information you give them to one of the schemeson their database and inform you of the results. change names, or was it part of a larger group of companies?If they have made a match they will provide youn The type of pension scheme you belonged to. Interest rates have fallen to assets. It is important to get thetheir steadier results through aThe value of investments and the with the contact address of the scheme(s) and youFor example was it an occupational pension their lowest levels in the Bank ofright balance within your portfolio combination of different strategies. income from them can go downcan get in touch with them to see if you have anyscheme, personal pension scheme or a group Englands 315-year history andand this will also depend upon yourSome exposure to emerging as well as up and you may not get pension benefits.personal pension scheme? could fall even further, along with individual needs. economies, whose currencies look back your original investment. Past They will not be able to tell you if you haven When did you belong to this pension scheme? further inflationary falls.Corporate bonds are issued bylikely to appreciate against sterling,performance is not an indication any entitlement to pension benefits, onlyIf, during this currentcompanies to raise capital. The is worth considering. There is alsoof future performance. Tax benefits the scheme administrator can give you this For occupational pension schemes: recessionary climate, you are bond is a tradeable instrumentan argument for foreign income may vary as a result of statutory information and there is no charge for using n Did your employer trade under a different name? seeking higher returns from yourin its own right and its value will funds, even if their dividends change and their value will dependthis service which typically takes about n What type of business did your employer run? investments, you may consider tend to rise as interest rates fall remain the same. on individual circumstances.15 minutes to complete the form. n Did your employer change address at any time? a combination of the following: and remain low. Conversely there Thresholds, percentage ratesTo trace a pension scheme by phone or post the corporate bonds, equity income, value tends to fall when interest and tax legislation may change Pension Tracing Service can be contacted by callingFor personal pension schemes: absolute return funds and emergingrates rise.NeeD MORein subsequent finance acts.0845 6002 537. Telephone lines are open Monday n What was the name of your personal pension markets. This will, of course, depend a great deal on your attitudeAbsolute return funds can protect investors when marketsINFORMATION?Fluctuations in exchange rates can affect the sterling value of anyto Friday 8.00am to 6.00pm.The Pension Tracing Service will need to know scheme? n What address was it run from? towards risk for return.go down and, indeed, in some PLEASE CONTACT US income received.at least the name of your previous employern What was the name of the insurance companyNeeD MOReWITH YOUR ENQUIRY.In times of economic uncertainty cases give a return. When marketsor pension scheme. If you can give them theinvolved with your personal pension scheme? INFORMATION? you may wish to consider spreadingrise, they should also capture a following information they will have a better PLEASE CONTACT US the risk by having a good mix ofportion of the rise. They achievechance of finding a current contact and address WITH YOUR ENQUIRY.for the scheme: 20 21 12. PropertyProperty Buy-to-let landlords n If you are thinking of buying a leaseholdn If you are using a letting agent, have youconsider taking appropriate professional advice. In property, what is the length of the leaseassessed how much they will charge you forparticular, you may need to take specialist legal and remaining and is sub-letting allowed?their services? tax advice from suitably qualified professionals. acquiring more properties n Have you consulted a solicitor about the legal n Will the net rental yield i.e. the rent remaining after implications of renting out your property? you have paid your running costs, be sufficient to The value of investments and the income from them n Have you investigated the running costs of the meet your monthly mortgage payment? can go down as well as up and you may not get back property (e.g. ground rent, service charges, your original investment. Past performance is not an repairs, letting and management fees, etc)?indication to future performance. Tax benefits may n Have you allowed for furnishings and other Choosing your mortgagevary as a result of statutory change and their value start-up costs in your calculations? If you are thinking of raising a mortgage to help will depend on individual circumstances. Thresholds, n Have you considered how you will repay yourfund the purchase of a property, you should percentage rates and tax legislation may change inInterest rate cuts tempting property investors back in to the marketmortgage if you have no tenants paying rent? n Are you aware that your property could decrease, as well as increase, in value?consider the following: n Have you considered what type of mortgage tosubsequent finance acts.Your property may be repossessed if you do n Are you aware of all the safety regulationsbuy your property with? Tnot keep up repayments on your mortgage. Landlords have been he Bank of Englands decision to cut interest rates to historic lows over the past year has also helpedn Are you prepared to tie-up your capital for aconsiderable period? applying to rented property? n Have you considered the likely costs of dealingn Have you considered the impact of any futurerises in interest rates? buying more properties in struggling landlords, according to ARLA. Half of n Will you have sufficient savings and other forms ofwith tenants who do not pay their rent orn Could you meet the monthly mortgage damage your property, including the costs of the last quarter according tempting investor landlords back to the market because n capital after youspecialist taxthis property investment? those surveyed said they thought the cuts areHave you takenhave madeadvice about the evicting a tenant in court?payment from your own resources, if the rentwas not paid or the property was empty? to a survey. The Association of the minimal interest to savings rates. implications of buying and selling a buy-to-letn Have you considered using the services of an The ARLA survey also indicated the rise in buy-to- property, and the tax treatment of all income andagent to let and manage your property on a day-If you are unsure of any of your answers to the of Residential Letting let activity could be as a result of increased average expenditure from renting?to-day basis or will you be doing this yourself? questions in this checklist, you should seriously Agents (ARLA) quarterlyweighted rental returns. Houses had risen from4.8 per cent to 5.1 per cent, with flats up from 4.9 persurvey revealed a bounce cent to 5.0 per cent. Returns for flats remained consistent Choosing and managing your property back in the buy-to-letthroughout the UK. However, optimism is muted in the buy-to-let marketIt is equally important that the property you buy isappropriate for the purpose and is properly managed market. In the ARLAby the lack of buy-to-let mortgages on the market.thereafter.members survey of the You should consider the following points beforeChecklist for investing landlords Private Rented Sector (PRS) This checklist is an introduction to buy-to-let highlighting deciding to proceed: for the second quarter the types of questions you should be asking yourselfn Are you regarding this as a medium to long term project? of this year, nearly twice before buying a property to let out. It is not intended as anexhaustive list, merely an introduction for new buy-to-letn Have you consulted a professional, qualified localletting agent before beginning your search for a as many ARLA members investors, to a range of issues they should consider before property?entering the residential lettings market for the first time.n Have you thought about the type of household which reported landlords areYou should consider the following points beforewill want to rent your property? buying more properties.making any financial commitments: n Have you considered that demand for this type ofproperty may change from year to year?n Have you made independent inquiries to confirm a Making your investment likely rental figure? n Are you investing to generate an income or hoping to n Is the location of the property attractive to tenants? see your capital grow and are your expectations realistic? n Most lenders will require you to have an Assured n Do you have sufficient capital of your own to invest inShorthold Tenancy agreement with your tenants. Are a property?you aware of the legal implications of this? 2223 13. Long-term careLong-term care As you get older, youmight develop healthproblems that couldmake it difficult tocope with everydaytasks. So you may needhelp to stay in yourown home or have tomove into acare home. Long-term care There is no panacea when it comes to paying for care Long-term care provision in the United authorities varies. So you should find out what The amount you pay will vary depending on: Kingdom has been the subject of much debateyour local authority offers. and analysis over the past decade, yet the issueIf you dont qualify for financial help from n the amount of income you want; of how to fund the cost of that care for futurethe local authority, you will normally have ton whether you want the income to increase, for generations remains unresolved. Much of thepay towards the cost of care out of your ownexample, with inflation; debate has revolved around how the State income and savings which could result in youn your age and sex; and should address the problem.eventually having to sell your own home to meet n the state of your health.As you get older, you might develop healththe costs. problems that could make it difficult to copeYoull be assessed medically to determine how muchDID yOU knOW? with everyday tasks. So you may need help to you must pay for your chosen level of income. stay in your own home or have to move into a There are many different ways to care home. help you pay for long-term care.The State may provide some help towards Pre-funded long-term care insurance the costs of this care depending on yourAnyone who requires care in a care home and worth applying for as this support can add up toIf a property is sold or if there are other circumstances, but there are also other ways toLong-term care insuranceYou can buy this in advance, in case you needhas assets worth over 23,000, which can includea few thousand pounds. savings available, there are other options to help you cover the cost of care, including using care in the future. You can buy it at any age, but property, will have to pay for their care in full. meet fees. The simplest option may be to keep savings and investments. Long-term care insurance is one way of insuring some have a minimum age for receiving the plan With care home fees averaging 24,700 a year, orPaying for carethe funds in interest-bearing cash accountsLong-term care refers to care you needyourself against the cost of long-term care.benefits of 40 or 50.35,100 a year if nursing is required, according to Despite the state benefits, many will not have and gradually spend the capital down. The risk for the foreseeable future, maybe as a result You take out an insurance policy that will pay outSagas Cost of Care Report 2008.enough other pension income to cover their here is that the funds could be depleted down of permanent conditions such as arthritis, There are basically two types of long-term care a regular sum if you need care. It pays out if you are fees and will have to rely on their assets toto the local authority funding levels, which a stroke or dementia. It could mean help insurance (LTCI): no longer able to perform a number of activities ofState assistancecover the rest.could mean that the current care home was no with activities such as washing, dressing or daily living (such as washing, dressing or feeding There are state benefits that will help, the mostIt is widely believed that people can be forced longer be affordable. eating, in your own home or in a care home n Immediate care LTCI - you can buy this when yourself) without help, or if you become mentallycommon being Attendance Allowance, a tax-free to sell their properties but this is not the case,Alternatively, in exchange for a lump-sum (residential or nursing).you actually need care; and incapacitated. The money it pays out is tax-free.weekly amount of 47.10 or 70.35.although whether to keep or sell the property is payment, a care fee annuity may provide aYou should check with your local authorityn Pre-funded LTCI - you can buy this in advance, Some existing policies may be linked to an If nursing care is required, the NHS makes a one of the hardest decisions to make.sufficient guaranteed tax-free income for life. This about any support they give. The social services in case you need care in the future.investment bond, which is intended to fund the weekly contribution of 106.30 directly to yourIf you wish to keep the property and do not should help ensure that fees could be met for life department will assess your care needs and premiums for the insurance policy. These policiescare home to be offset against fees. Assuming have other savings, the property could be letand also protect any remaining capital. The risk your income and savings. If your income andinvolve more investment risk and, in some cases, that both of these benefits were received, they to generate income. However this is taxablehere is that no capital is returned on death. savings are low the local authority will pay someImmediate care long-term care can use up your capital. could generate an additional 9,185 a yearand often is not sufficient to cover the funding or all of your long-term care costs. insuranceYou typically pay either regular monthlytowards the fees. shortfall, so additional income would have toThere is no panacea when it comes toYou may also qualify for Disability Livingpremiums or a single lump sum premium. In Private payers who own a property but have be found. Allowance if you are under 65 or AttendanceThis can be purchased when you have beeneither case, the insurance company usually savings of less than 23,000 are entitled to a The local authority deferred payment schemepaying for care; there are advantages Allowance if you are over 65. Attendance Allowance medically assessed as needing care, which can bereviews the plan, say every five years, and12-week property disregard where the valuemay be able to help and would pay towards theand risks with each option and it is cannot normally be paid if social services or theat any age. the premiums may then rise, even if youve of the property is excluded from the financialcare in return for an interest-free charge against important to obtain professional NHS are funding your care in a care home. You buy an immediate care plan with a lump bought a single premium policy. Premiums assessment. As a result, they qualify for state the property that would need to be repaid onAlthough social security benefits are the samesum. This pays out a regular income for the restdepend on your age, sex and the amount offunding during this period. This does meandeath. The property might still have to be soldadvice before making any decisions. throughout the UK, other help provided by localof your life, which is used to pay for your care. cover you choose.having to involve the local authority, but it is well to repay the debt. 24 14. PropertyProperty Experiencing mortgage repayment problems? Its essential to talk If you are having difficulty meetingMoving a repayment mortgageThe state benefits and schemes Homeowners mortgage your mortgage repayments or areonto an interest-only basis, provided to help homeowners in difficulty support worried it may become a problem in you understand you will not behave recently been strengthened. the future, you may wish to consider paying anything off the actualIt is worthwhile seeking advice on Under the homeowners the following information. mortgage. whether you are eligible for any mortgagesupport scheme borrowers Adding arrears to the outstandingof the schemes or benefits listedwho are facing possession because of a What you should do if youmortgage amount rather than below. large but temporary reduction in their are having trouble payingseeking immediate payment. income can deferpart of their interest your mortgage Accepting reduced payments for a Government schemes payments for up to two years. Thisshort period of time until you are able to help with mortgagewill reduce your monthly payments If you are in this situation there are to resume full payments and repaybut the money isnt written off, the two steps you should follow: any arrears that build up as a result.arrearsdeferred payments are added on to the Changing the way you make yourpayments, or the date you make them.Income support for outstanding mortgage balance. So you n Tell your lender as soon as will pay it back eventually, with interest, possible: your lender will be The earlier you make contact, themortgage interesthowever the schemeis only offered sympathetic and will provide asmore options there are available tothrough some lenders. much assistance as possible. resolve the problem. However, these Income Supportfor Mortgage n Check the help available to you: are short-term solutions and in the Interest (ISMI)helps homeowners Mortgage rescue your repayments may be covered long-term a repayment problem on benefits with theirmortgage by an insurance policy or youwill have to be resolved. Your lender interest payments provided that theMortgage Rescue schemes may be eligible for government will wish tostay in regular contactmortgage was used to purchase theareoperated independently benefits or schemeswhich couldwith you to keep up to date with anyhome or for work to maintain the inEngland, Scotland, and Wales. help you to stay in your home. changes in your circumstances.propertys fitness for occupation.To find out if you are eligible for Each lender has a policy settingThere is an upper limit of 200,000 mortgage rescue or another form Inform your lender out how they will treat borrowers on the size of mortgage whichof assistance you shouldcontactMortgage rescue in which reduces your monthlyThe Financial Services AuthoritysIf you arewhen their mortgage is in arrears.ISMI will cover. Restrictions can be your local authorityor Citizens mortgage payments. You still (FSA) announced recently that they If you are having trouble paying Your lender should provide you with imposed if your housing costs areAdvice Bureau. Scotland remain the outright owner of the are introducing an interim regime forhaving difficulty your mortgage, or you think it willinformation explaining how you canconsidered to be excessive. YouIf you are facing possessioninproperty;andthe regulation of sale-and-leasebackmeeting your be a problemin the near future, expect to be treated by them.cannot claim if you work 16 hours or Mortgage rescue inScotland you may be eligible forn Mortgage to Rent, the housing firms. They are not the same as mortgage repayments you should inform your lendermore per week, or your partner works England themortgage to rent scheme, where association pays off yourhome reversion schemes which are or are worried it may immediately. Your lender will be Get advice24 hours or more, or if you have the housing association buys yourmortgage debt and you then for people who have paid off their fair and work with you to find a savings of over 16,000. Mortgage rescue schemes in Englandhome and you continue to live therebecome a tenant of the housing mortgage and want to sell part or become a problem in repayment solution.There are a number of organisationsIn addition to interest payments, are aimed at vulnerable householdsas a tenant. association, paying a rent you their entire home for cash and retain Some lenders have telephoneand counsellors that can help you ISMI may also cover ground rent or facing possession (families withTo apply, you must firstget advicecan afford.the right to live in it for a nominal rent. the future, tell your helplines or debt counselling facilities assess your financial problems andcertain service charges, but it will children, the elderly, those with a about your financial situation from Priority is given to families andThey should also not be confused lender as soon to assist making contact. The sooner advise the best course of action to not cover the capital part of your disability or pregnant women). either Citizens Advice, a debt advice people who live in speciallywith the government mortgageas possible. you contact your lender the better, so solve them. mortgage payments or the premiumsservice or other advice agency, a adapted housing.rescue schemes. that action can be taken to deal withon an endowment policy.There are two forms:solicitor,or your local authority.Selling your home in this way the difficulty.Check the options andThe timing of the assistance will The Scottish Government Sale and rent-may allow you to clear your If you cant afford your fullhelp available to you depend on when you took out your n Shared Equity the housing announced an expansion of back schemesmortgage debts and stay in your mortgage repayments you should mortgage, but usually you will start association buys a stake of the theMortgage to Rent Scheme and a home. However, if you opt for talk to your lender and still payIf you become unemployed, have an receiving assistance 13 weeks afterequity in your property which new Shared Equity Scheme. Some companies offer to helpsuch a scheme you will no longer what you can afford. This showsaccident, or are too sick to be able to the start of a claim. ISMI is normally reduces your monthly mortgage you if you get into financial own your home and could still your lender you are committed to work, you should check whether youpaid direct to your mortgage lenderpayments. You still remain theMortgage rescue in Walesdifficulties with your mortgage be evicted if you fall behind solving the problem and makes it have a mortgage payment protectionand credited to your mortgageoutright owner of the property;and payments by buying your homewith your new rental payments. easier for them to help you.There policy. This type of insurance wouldaccount every four weeks in arrears. n Mortgage to Rent the housingThe mortgage rescue scheme in and then renting it back to you In addition most of these firms are several options that your lender usually have been taken out at the The upper limit on the rate association pays off your Wales take two forms: for a fixed period of time (six will pay you less than the market may be able to consider including: same time as your mortgage and, if youof interest paid is 6.08 per centmortgage debt and you thenmonths or more). These arevalue of your property, so think Reducing your monthlyhave an eligible claim, will cover your andthere is a two year time limit become a tenant of the housingn Shared Equity, the housingsometimes called mortgagecarefully before entering into Your ProPErTY MAY BE payments by lengthening the term mortgage repayments up to a period of in which you can claim IS forassociation, paying a rent youassociation buys a stake of rescue, rent-back or sell-to-let such a scheme and make sure you rEPoSSESSED IF You Do noT kEEP uP of the loan. 12 months or sometimes more.mortgage interest. can afford. the equity in your property schemes.understand the consequences. rEPAYMEnTS on Your MorTgAgE. 26 27 15. Data bankData bankRegistered Pensions Data Bank2009/102008/09Lifetime allowance* 1,750,0001,650,000Annual allowance 245,000235,000Special annual allowance20,000n/ALifetime allowance charge 55% if excess is drawn as cash25% if excess is drawn as incomeAnnual allowance charge 40% of excessMaximum pension commencement lump sum*25% of pension benefit value Tax facts, do you know your numbers? Maximum relievable personal contribution100% of relevant uk earnings or 3,600 if greater* Subject to transitional protection for excess amount Income Tax Rates 2009/102008/09 Individual Savings Accounts (ISAs) 10% starting rate band on savings income up to*2,440 2,320 Basic rate20%20% Maximum Investment Component2009/102008/09 higher rate of 40% on income over 37,40034,800 Cash3,600 (5,100*)3,600 Dividends for:basic rate taxpayers10%10% Stocks & shares balance to 7,200 (10,200*)7,200 higher rate taxpayers32.5%32.5%* from 6 October 2009, higher limits apply only if born before 6 April 1960. Trusts: standard rate band generally 1,000 1,000 dividends (rate applicable to trusts)32.5%32.5%Inheritance Tax other income (rate applicable to trusts)40%40% Pre-owned assets tax minimum taxable as income 5,000 5,0002009/102008/09 *Not available if taxable non-savings income exceeds starting rate bandnil-rate band*325,000312,000rate of tax on excess 40% 40% Main Personal Allowances and Reliefs Lifetime transfers to and from certain trusts 20% 20%overseas domiciled spouse/civil partner exemption55,000 55,0002009/102008/09100% relief: businesses, unlisted/AIM companies, certain farmland/buildings Personal (basic) 6,4756,03550% relief: certain other business assets Personal (65-74) 9,4909,030 Personal (75 & over) 9,6409,180*Up to 100% of the unused proportion of a deceased spouses/civil partners nil-rate band Married couples/civil partners (minimum) at 10%* 2,6702,540can be claimed on the surviving spouses/civil partners death after 8 Oct 2007 Married couples/civil partners (under 75) at 10%* n/A 6,535 Married couples/civil partners (75+) at 10%6,9656,625Reduced tax charge on gifts within 7 years of death Age-related reliefs reduced by 50% of income over 22,900 21,800Years before death0-3 3-44-55-6 6-7 Blind persons 1,8901,800 % of death tax charge 100806040 20 rent-a-room tax-free income 4,2504,250 Annual exempt gifts 3,000 per donor 250 per donee Venture capital trust (VCT) at 30% 200,000200,000 Enterprise investment scheme (EIS) at 20%500,000500,000Capital Gains Tax EIS eligible for capital gains tax re-investment reliefno limit no limit * Where at least one spouse/civil partner was born before 6 April 1935 Exemptions 2009/102008/09 non-domicile Remittance Basis Charge:Individuals, estates, etc 10,1009,600 For adult non-uk domiciliary after uk residence in at least 7 of the previous 9 tax years: 30,00030,000Trusts generally5,050 4,800Chattels proceeds (5/3excess gain is taxable) 6,000 6,000 Basic State Pension2009/102008/09Rate WeeklyAnnualWeekly AnnualIndividuals 18% 18% Single person 95.25 4,953.0090.704,716.40Trusts and estates18% 18% Dependants addition57.05 2,966.6054.352,826.20 Total married pension 152.307,919.60145.05 7,542.60Entrepreneurs Relief 2008/10: Pension Credit - Standard Income Guarantee 09-10 4/9ths of business gain (effective tax rate of 10%). Lifetime limit: 1,000,000 Single: 130.00 pwMarried: 198.45 pwFor trading businesses and companies (min. 5% employee/director shareholding) held forat least one year 28 29 16. Isnt it time you had a financial review? Well make sure you get the right advice for your individual needs. We provide professional financial advice covering most areas of financial planning, including, tax-efficient savings, investment advice, retirement planning, estate & inheritance tax planning, life protection, critical illness cover and income protection.To discuss your options, please contact us. Goldmine Publishing Limited, 2009. Articles are copyright protected. Unauthorised duplication is strictly forbidden.Published and licensed for distribution in electronic forms only by agreement of Goldmine Publishing, PrudencePlace, Proctor Way, Luton, Bedfordshire, LU2 9PE.