Norfolk Financial Services News

# Tamsin Brown
# Magazine: FinancialAdviser
# Published Thursday , November 26, 2009

The vast majority of the population is unaware of or does not understand the value of insuring their retirement income, research from Aegon has shown.

While 70.3 per cent of respondents said they had or would normally consider buying contents insurance, only 1.8 per cent said they would consider insuring their retirement income.

But when asked if they would look at a product that guaranteed their retirement income was paid for life, never fell and could rise over time, 49 per cent of those yet to retire replied they would.

The research indicates that while there is an appetite for insuring pension income, there is a lack of understanding and knowledge of unit-linked guarantees, according to Aegon.

The product only came over from the US in 2006 and has come under fire from some quarters for carrying higher charges.

At a seminar organised by Aegon to discuss the increasing relevance and importance of unit-linked guarantees, Colin Bell, product director for unit-linked guarantees of Aegon said: “Yes, there is an additional guarantee charge. The returns will be less than if you have invested in pure income drawdown but that is essentially an insurance premium.”

He said that with defined contribution schemes becoming the standard retirement vehicle – putting more onus on self-provision – unit-linked guarantees will become an important market for the future, providing an alternative to annuities and income drawdown.

Mr Bell said: “For an affordable cost, unit-linked guarantees can provide people with the security of knowing their retirement income will never run out, never decrease and also has the potential to increase over time if the underlying investment performs well.”

Laith Khalaf, pensions analyst for Hargreaves Lansdown, said that while unit-linked guarantees were a great concept, the products that have been delivered to the market have been too dear.

He said: “The guarantee has come at too high cost.”

Mr Khalaf said he sees annuities remaining the way most people decumulate their pension.

For Retirement Income advice call 01603 861621

Any “relevant UK individual” can contribute up to 100% of their relevant UK earnings into a SIPP, or, if they have no earnings, they can contribute up to £3,600 gross per annum e.g. Mrs Smith is earning £100,000 per year and she can contribute up to £100,000 per year into her SIPP. Please note that there is an annual maximum tax relievable contribution level of £245,000 for 2009/10 and for 2010/11 this will increase to £255,000. You can contribute more, but it will be taxed at 40%. Anyone, even a child, can contribute up to that £3,600 limit in a SIPP. It is possible to contribute more than the annual allowance in certain circumstances, such as in the year of retirement or by changing input periods. We would strongly recommend that advice be sought.

Pensionable income including employment income, bonus, benefits in kind, self employment and partnership profits can all be contributed (Pensionable income does not include investment income, rental income or pension income).

Call us on 01603 861621 or visit our website here

Equity release valuable care tool, say SHIP

Equity release provider trade body SHIP has welcomed the Government’s Green Paper consultation on the future of care and proposes a more central role for equity release.
SHIP said the funding option review is not comprehensive enough, although it welcomed the government’s decision not to increase the tax burden on UK citizens.
Andrea Rozario, director general of SHI, said: “Under the current system with its maximum asset limits, some older people have been forced to sell their homes in order to fund their care needs.  This is a problem we believe will continue under some of the funding proposals in the paper and one that we believe equity release could help with.

“80% of the UK’s wealth is held by the older generation and by providing them with this choice it not only allows them to make use of what is likely to be their largest asset, but also gives them a wider choice of care option.  Delivering a simple effective method by which those entering long term care can access an equity release scheme with all the safe guards and rights that people currently receive from products offered by SHIP members is something that is worthy of serious consideration.

Posted by Kevin Stelfox

If you have your own business you have the choice of either a SIPP or a SSAS.

A SSAS is a Small Self Administered Scheme, individually authorised by HM Revenue and Customs. It is an occupational registered pension scheme set up by the sponsoring business.

In the same way as a SIPP, the SSAS receives contributions and transfers to accumulate a retirement fund for its members. At retirement the choices are the same as for the SIPP.

However a SSAS, unlike a SIPP, can make a loan back to the sponsoring employer thus giving flexibility to that business. A SSAS  is also able to own the business property, and invest in a wide range of investments.

Protected Rights

SSASs cannot currently accept Protected Rights as the Department of Work and Pensions (DWP) class SSASs as an occupational scheme and the new legislation only relates to SIPPs. However, it is possible to hold Protected Rights money in a SIPP which can sit alongside a SSAS and be used for joint investments.

For Independent Financial Advice IFA  in Norfolk call 01603 861621

If you are looking for financial advice in Norfolk or in the Norwich area then we would ask that you consider us. Norfolk Financial Services are Independent Financial Advisers and have a wealth of experience dealing with clients in all areas of financial planning.

Consider us for the following:

• Annuities
• Bank Accounts
• Credit Cards
• Household Bills
• Insurance
• Investments
• Loans
• Mortgages
• Pensions
• Pension Release
• Property
• Savings
• Tax
• UK Economy
• Equity Release Schemes

Put us to the test and call us now on 01603 861621 we promise you will not be disappointed

According to Wikipedia

Key person insurance, also called, especially formerly, key man insurance or sometimes keyman insurance, is an important form of business insurance. There is no legal definition for “key person insurance”. In general, it can be described as an insurance policy taken out by a business to compensate that business for financial losses that would arise from the death or extended incapacity of the member of the business specified on the policy. The policy’s term does not extend beyond the period of the key person’s usefulness to the business. The aim is to compensate the business for losses and facilitate business continuity. Key person insurance does not indemnify the actual losses incurred but compensates with a fixed monetary sum as specified on the insurance policy.

An employer may take out a key person insurance policy on the life or health of any employee whose knowledge, work, or overall contribution is considered uniquely valuable to the company. The employer does this to offset the costs (such as hiring temporary help or recruiting a successor) and losses (such as a decreased ability to transact business until successors are trained) which the employer is likely to suffer in the event of the loss of a key person.

Ask yourself these questions?

* Does your business rely heavily on one or a few key individuals?
* Could your business survive without those individuals?
* What could go wrong if a director/partner were to die or be diagnosed
with a critical illness?
* How would you retain control of the business?
* Do you have a written agreement in place as to what would happen?

If this has raised some questions for you, please contact us for a Business Health Check
Call us 01603 861621

or visit our website http://www.norfolkfs.co.uk