The state of the nation.

Today, I just have a link for you to see.  Not necessarily enjoy, but definitely see: It’s about facing unknown unknowns.

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On April 6th, the earliest age people can draw pension benefits rises from 50 to 55.

If you’re 30 now, you might file that under “whatever”.

If you’re between 50 and 54 now, you might want to think about whether the change will affect you.  Obviously, the younger you are, the longer you will have to wait to draw your pension.

The pension companies are already busy with this work, tons of people need information – at least – and some are choosing to, er, board the flight if you’ll forgive the metaphor.

If you are affected, don’t leave it until the last minute to think about it.

News, What's on my desk right now 06/04/2010, age 50, pension, retirement

If you’re unlucky/lucky enough to be facing redundancy soon, with a big severance payment, you might well be expecting your money on 31 March? It seems to be a popular date.

Take great care in advance if you’ve got any tax planning in mind: The last day of the tax year is 1 April this year (because of the Easter bank holidays).

This could make a huge difference if you’re facing 40% tax on severance pay.  It’s quite easy to do that because your redundancy sits on top of a whole year’s income, especially if you don’t expect to pay 40% tax in the new tax year.

So what?
Plan carefully. Take advice if you need it.

Uncategorized, What's on my desk right now pension contribution, redundancy, severance, tax

I’ve four similar cases on the go at the moment, all at different stages, all investing for long-term income.

Drs H invested for income two years ago, when he retired.  Our second annual review will be on Friday.  I’ve begun preparing for that, with a performance review of all the funds and holdings within the funds.  Their brief was a sustainable income, with a long retirement in mind, so plenty of scope for the income to rise to keep pace with inflation. (Although, they haven’t started spending the income yet.  Maybe this time?)

Mr & Mrs S are new clients.  They’ve recieved a lump sum from an injury settlement, so it’s not a cheerful time.  They need a modest income, from a portfolio that can cope with changes in their objectives.  We’re at the begining of the planning process.

A different Mr & Mrs S need more income, so we need to change their investment brief.  They want a high level of income now, but with limited scope for protection from inflation.

Finally, Mr & Mrs M retired five years ago, but have been managing without an income from their investments.  Their children would rather that Mum & Dad enjoy the money, instead of struggling without it.  So, we’ve agreed to chase a useful level of income now, with some scope for protection from inflation.

Four customers, similar ages, similar wealth levels, and broadly similar objectives.  But there are some crucial differences, aren’t there?  They’re the bits I enjoy coming to work for!

What's on my desk right now Business/Finance, income, inflation, portfolio, retired, retirement

After 2012, financial advisers will have to choose a path.

Either, they can sell a simple range of products, which will have commission built in, so you don’t have to pay up front for their work.

Or, they can be professionals – highly qualified and charge fees for their work.

There’s a lot of argument at the moment about the finer points, but that is the upshot.

Please forgive the gung-ho marketing, but I’ve been waiting for this development since 1995.  I am already running with the second path for my business, three years early.  If you need advice about your money, and you want to know what you’re paying for that advice, we need to talk.

Getting Good Financial Advice certified, chartered, Fee, Fee-based advice, impartial, independent, Retail Distribution Review

We don’t save enough.  State pensions aren’t enough to live comfortably on.  So what can I look forward to, as a thirty-something?

Here’s what I think.

Why are we so desperate to retire early?  I don’t think we’re designed to rest for a third of our lifetimes, and our life expectancy continues to get longer.  Even our “active” lives are getting longer, that is, before too many bits of us stop working entirely.

So, again, why are we so desperate to retire younger?

Is it because we work too hard?  We work really hard when we’re young, trying to get together tons of money so that we can stop working just before we get old.  It doesn’t make sense really.

I think it makes more sense to accept that we’ll have to work into our seventies (then maybe our eighties and nineties), but spread out the effort as well.  What might that mean, in practice?

Working moderately, perhaps saving less because we’re not fixed on saving it all for a life in the sun.  Like our grandparents did?

Does it sound a bit dull?  Doesn’t that depend on what we choose to do while we’re not working?

That makes sense to me, but maybe I’m just an idealist with my own business, so I can say “no” without fear of losing my job.  I enjoy what I do, so the thought of having to keep doing it doesn’t bother me too much.

The real problem may be that there aren’t enough jobs to keep us all busy.  But that’s another post, surely?

If you agree, or even if you disagree, tell me what you think?

Building Wealth

Parsonage www.parsonage-group.com are holding a tea party to raise funds for Marie Curie cancer care at the Spread Eagle in Lymm on the 26^th of June between 2:30 and 4:30.  Please come along and support this great charity event.

News Lymm, Marie Curie, Marie Curie Cancer Care, Tea Party

No, this isn’t a public flogging for my hubby (even though he didn’t empty the dishwasher this morning), this is about other people’s divorces.

I advise a lot of people on the financial implications and consequences of splitting up, you see.

Sometimes, they need help with carving up the marital assets.  The house and and bank accounts are easy, but what about investments? pensions?  Especially pensions, as they can be worth more than the house.

Sometimes, they need help protecting maintenance payments, to make sure that the income keeps coming even if ex-hubby gets ill or dead (they still won’t pay if you murder him, so don’t bother thinking of that as a strategy.  It won’t work).

What’s my advice in a nutshell? – Try Relate! (it’s a lot cheaper)

What's on my desk right now consent order, divorce, maintenance, pension, relate, sharing order

It seems to be that simple for Mr H, an imminent recipient of a Decent-Sized Redundancy Cheque.  He wants to keep the tax burden down, and needs an income.  Fair enough, but where to draw the line???

That’s what I’m working out for him.

I’d better go and do it, then!

What's on my desk right now redundancy

The UK savings rate (that’s how much we all put to one side instead of spending on handbags) is up from virtually zero to 4%.  I’m proud of us!

I’m from the generation that has found borrowing easier than saving up, so I think we should be proud that we’re adjusting.  Hopefully this is a new trend, not just a recession coping strategy.

“But”

The post-war average was 7%, so we’ve still got some work to do – and we should all save 10%, so somebody isn’t saving properly yet.

“And, but”

I am aware that inflation is bad for savings – and see my previous post about that – but it’s still worthwhile…. You could always put your savings in inflation-proofed accounts.

I wonder – did the last bout of high inflation kill off our willingess to save? Answers on a post-card please….

Building Wealth inflation, saving, United Kingdom