The state of the nation.

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

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

I’m starting this as a new category…not as much detail as a case study, just an insight into what I do every day. Today I’ve been doing mostly research for cases I’m working on…

Adam and Anita (*) are old enough to be retired, even though they’re not retired. They’ve got a business that’s struggling, they need some money to get through this recession and a few other things. They’ve come to me because they’ve worked out that raising some money on their family home is the best solution.

They don’t want to pay any interest, so that means a “lifetime mortgage” will fit the bill. Obviously, there’s a lot I’ve not included here because it’s boring, but it does rule out the less drastic solutions (like, a normal mortgage/business loan etc).

The trouble is that surveyors are tending to lop at least ten percent off the value of any property they see, which will give us a problem if that happens to Adam and Anita.

I’ve been tearing my hair out trying to get them a good rate, even though they want quite a lot of cash. It would be easy to get them an expensive deal, but they’ll pay for the rest of their lives, so a bit of extra time now is worth it.

I’ve found a bit of a work-around. One provider currently has a “free valuation” so, we get to try before we buy. If the surveyor goes crazy with the valuation, we can walk away. Hopefully, the credit imprint won’t cause too much of a problem.

That’s 239 words and it’s taken me half my day!

Bob and Belinda (*) are fed up with the investments they took out in 2006.

Now, there is at least one reason why most people would be slightly unhappy at this stage (FT-SE etc is down a bit, in case you just landed from Mars), but Bob and Belinda have another reason for unhappiness: Monitoring the investments is proving as much fun as … well, as much fun as trying to correspond with an insurance company.

They’ve been doing it themselves, you see.

They have worked out that what they have isn’t coping very well and I offered them a plan to improve things. It was simple, a combination of four lovely funds (no, I won’t name them here) but then spent hours trying to find one investment product that will fit them all in it.

To be fair, my wish list was to combine some rather famous flagship funds AND demand that the investment product I use can provide a regular income for them at a later stage AND demand that they can pay into the investment regularly AND that the product can manage the tax-free status of the …. oh, you get the picture.

Anyway, I’ve got a solution. I hope they like it, I’m seeing them tomorrow.

Please do comment on this, but do resist any temptation to criticise people’s objectives.

(*) Not their names!

Equity Release, Lifetime Mortgage, What's on my desk right now Adam ;, Anita;, Belinda;, Bob ;, insurance;, investment product;, less drastic solutions;