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21 million people in the UK are eligible to shelter an additional £3,000 of savings from tax as from 6th October 2009 

From 6th October 2009 anyone aged 50 or over this tax year can save an additional £3,000 in their Individual Savings Accout ( ISA ).

Up until now consumers have been able to invest a total of £7,200 each tax year within the tax shelter of an ISA .

As from 6th October 2009, anyone over the age of 50 can invest a total of £10,200 in an ISA (with up to £5,100 in a Cash ISA).

From 6th April 2010 this new allowance is extended to anyone aged 18 or over.

With 21 million eligible people in the UK and at a time of record low interest rates, this opportunity to shelter an additional £3,000 of savings from tax should not be ignored!

Remember you can hold up to two ISAs each year. One cash ISA and one equity ISA , which is used as a tax free wrapper for stocks and shares and fund investments.

Under the new rules and from the dates stated above, you can put up to £10,200 into an equity ISA , minus the amount you have put in a cash ISA. The most you can put in a cash ISA is £5,100.

For further information see our ISA page or contact us.



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Minimum Pension Age to increase from 50 to 55 as from April 2010 
Since April 2006, the minimum age from which you could take benefits from a registered pension scheme was age 50.

As from 6th April 2010 the minimum age will increase to 55.

How will this change affect you?

The effect of this change will depend on your age and whether or not you have started to take benefits from the pension. The categories are as follows:

1) If on 5th April 2010 you are aged 49 or below, the earliest you will be able to take benefits will be age 55.

2) If you are between age 50 and 54 on 5th April 2010 and you have not yet taken benefits, you could draw benefits immediately (provided you are aged 50) or at any time up to 5th April 2010. However, if you decide not to take your benefits before 6th April 2010, the earliest you will be able to take benefits after 5th April 2010 will be on your 55th birthday.

3) If you are between age 50 and 54 on 5th April 2010 and you have partially or fully taken benefits and/or you continue to contribute to your pension policy, any benefits not drawn by 6th April 2010 will not be able to be taken until you reach age 55. This does not affect your pension income already in payment, just new lump sums and the corresponding income.

What if you don’t need an income from your pension just yet but would like to get hold of your Tax Free Cash entitlement?

If you are aged 50 or above there are ways of taking your Tax Free Cash lump sum now and taking the income at a later date when required. This may prove invaluable if you need your Tax Free Cash now. Remember after 6th April 2010 you will not be able to take any benefits from your pension until you reach age 55.
If you would like to learn more about your options at retirement click here .

Please contact us for further details and personalised illustrations.



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Personal Accounts/NEST – The story so far… 
The Pensions Commission found that between 9.6 and 12 million people were undersaving based on the benchmarks they set out. In order to deal with this issue, the Government will be introducing a national pension savings scheme as from April 2012. The scheme was initally known as the ‘personal accounts’ scheme but is now called the ‘National Employment Savings Trust’ or simply ‘NEST’

Employees and employers will be forced to contribute to a NEST account on behalf of the employee, unless the employee chooses to opt out.

Under this new scheme, all employees will be automatically included in a NEST scheme unless their employer already offers a suitable alternative pension scheme. Importantly employees will be forced to contribute 4% of band earnings and employers will have to contribute 3%. A further 1% will be paid in the form of tax relief meaning that a total contribution of 8% of band earnings will need to be paid into the NEST scheme.

Employers must contribute 3% of band earnings, currently described as 3% of employee earnings between £5,000 and £33,500. Employers will be able to phase this in, starting at 1% in 2012, 2% between 2016 - 2017, and 3% by October 2017. In addition, each employer will need to offer an auto-enrolment facility for all members of staff which will need to be in place by the beginning of the 2012 tax year.

Employees will need to contribute 4% of salary, unless they elect to opt-out of the scheme, while HMRC will contribute a further 1% by way of tax relief.

Small employers with fewer than 50 workers will not have to take part in the scheme until sometime between March 2014 and February 2016.

Employers must give new staff basic information about the scheme and staff must be enrolled within a month of starting work. Employees will then be given a further month to decide whether to opt-out.

Employers who already offer employees a pension scheme will have to ensure that their existing scheme is a Qualifying Workplace Pension.

Employers that do not currently offer employees a pension scheme, or those whose schemes do not pass the scheme exempt test and are therefore not considered to be qualifying workplace pension schemes will have to act to comply.

Many details regarding NEST accounts are yet to be finalised and we will aim to keep you posted with the latest developments.


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