Time is running out to use your ISA allowance. Use it or Lose it! 
Did you know that every tax year you have the opportunity to invest in stocks, shares and funds through an Individual Savings Account (ISA)?

And did you know that, unlike other forms of investment, with an ISA you won’t pay income or capital gains tax on any growth? *

This tax year you have an ISA allowance of £10,200. This can be invested as a lump sum, monthly payments or a combination of both.

As from 6th April 2011 the ISA allowance will be increased to £10,680.

Finding the ideal investment for you.

There are over 2000 funds to choose from and we can help you to find the ideal combination to meet your needs.

It’s important that you feel comfortable with your investment and that’s why we will only recommend funds that fit your investment risk profile.

For more information or to set up a meeting to discuss your needs please contact us .

* Please bear in mind that tax treatment depends on your individual circumstances and may change in the future.

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Major changes will be introduced to Income Tax and Pensions as from 6th April 2011 
Most of the changes below will take effect from 6th April 2011:

- Both employer and employee NI contribution rates will increase by 1%.

- The personal tax allowance will increase to £7,475 but only for those whose earnings are below £100,000.

- Higher rate tax of 40% will apply to earnings in the £35,001 to £150,000 band whilst the additional rate of 50% will continue to apply to earnings over £150,000.

- A new tax regime on pension contributions (both employee and employer pension contributions) will be introduced. The Annual Allowance will reduce to £50,000.

- Any contributions built up above this Annual Allowance will incur a tax charge at the employee’s full marginal rate of tax. The Annual Allowance includes all tax-relievable contributions you may be making to a registered pension scheme including the Company’s pension contribution.

- If the total payments to all your pension plans are less than £50,000 in one tax year, you will be able to carry forward any unused allowance from the previous three tax years. You will be able to carry forward unused allowance from the years before 2011 i.e. a deemed unused allowance can be determined for 2008/09, 2009/10 and 2010/11 treating the Annual Allowance as if it has always been £50,000.

- Alternatively Secured Pension (ASP) will be abolished on 6th April 2011.

- Unsecured Pension (USP) will be allowed to continue for life, will be referred to as drawdown pension and will be available in two forms:

- - - Capped: as current USP but with income limits equal to 100% of rates set by HMRC and reviewed every three years before age 75 and every year from age 75.

- - - Flexible: from which unlimited drawdowns can be taken subject to a Minimum Income Requirement (MIR).

- The MIR has been set at £20,000 p.a. for individuals.

- - - There will be no capital alternative to the MIR.

- - - The level of MIR is to be reviewed at least every five years.

- - - To meet the MIR, income must come from a lifetime pension: this pension can be level.

- Individuals in ASP or USP on 6th April 2011 will become subject to the new drawdown pension limits from their next review date.

- Lump sum benefits such as Pension Commencement Lump Sum (tax free cash) and Value Protection will not have to be taken by age 75.

- On death of a pensioner in drawdown current options continue to be available.

- The tax recovery charge on death benefits taken as a lump sum will be 55% at all ages once benefits have been crystallised or if death occurs after age 75.

- Contributions to pensions will not receive tax relief after age 75 and there will be a test against the Lifetime Allowance at age 75 regardless of whether benefits have been crystallised at that point.

For further information or if you feel that you will be effected by these changes please contact us .

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The Latest update on National Employment Savings Trust (NEST) 
From October 2012 UK employers must automatically enrol employees into a ‘qualifying workplace pension scheme’. This auto enrolment could be to your existing company pension scheme if it meets certain criteria. If it does not meet the criteria or if you do not operate a company pension scheme then your employees will be enrolled into National Employment Savings Trust (NEST), a scheme being introduced by the Government.

Between October 2012 and 2017, depending on the size of company, all UK employers will be required to contribute a minimum of 3% of each employee’s eligible earnings into a pension, assuming the employee does not “opt out”. This is intended to incentivise them to start saving towards their retirement. Employees will need to pay a personal contribution of 4% with a further 1% tax relief being added to make the minimum contribution 8%.

Compulsory employer and employee contributions will be phased in.

What is the definition of a ‘Qualifying Scheme’?

Those employers that offer pension schemes which are equivalent to, or provide more generous benefits, than NEST will be allowed to automatically enrol their employees into those schemes rather than NEST.

For an existing or new scheme to be classed as a qualifying scheme it must meet the following minimum criteria for contributions:

FINAL SALARY PENSION SCHEME (contracted out) - Accrual rate of at least 1/80th of pensionable pay

FINAL SALARY PENSION SCHEME (contracted in) - Accrual rate of at least 1/120th of pensionable pay

MONEY PURCHASE, STAKEHOLDER or GROUP PERSONAL PENSION PLAN - Minimum contribution of 8% of all qualifying earnings. (between £5,715 and £43,875 pa in 2010/2011 terms) with at least 3% paid by the employer. Schemes must offer a default investment option but will be able to offer an additional choice of funds if they want to.

Are all employers affected?

Self-employed and single director companies will be unable to use auto-enrolment, however they will still be able to use NEST accounts.

Every other business with eligible employees will need to comply with the regulations, even if there is only one employee who meets the criteria.

How attractive is the state scheme for its members?

Currently, there are plans to levy a two percent charge on contributions to pay for the start-up costs of the pension. This is for the repayment of a rumored 600 million pounds that the state is spending to set up the scheme. This is in addition to the 0.3 percent annual management fee.

As long as the two percent contribution charge is in place the potential returns of investors will be eroded.

Should we set up our own scheme rather than go down the ‘NEST’ route?

If you want to attract the best people to your company you will need to offer a pension scheme that offers a choice of good quality funds and low charges.

If you do not already have a pension scheme now is the time to start planning for one.

We can help your company set up a ‘qualifying workplace pension scheme’ that will provide more choice and better results for you and all your valued employees. Contact us today.

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Do you qualify for an enhanced/impaired life annuity? 
Many people are surprised at just how many conditions, either medical (such as diabetes or high blood pressure) or lifestyle (such as smoking) could qualify for an income over and above a standard rate annuity.

An estimated 55%-65% of people could have conditions that might qualify them for enhanced terms based on combinations of conditions.

It's easy to see if you may qualify, just by asking yourself three simple questions:

> Do you smoke?
> Are you taking prescription medication?
> Have you ever received hospital treatment for a medical condition?

If the answer is 'yes' to any of these, then it's well worth completing a short medical questionnaire. It's a straight-forward, tick box format which is easy to complete.

Enhanced annuities can provide an increase in pension income of up to 30% each year!

Whatever your circumstances, we are specialists in this field and we would be more than happy to assist you in your retirement planning, to ensure you maximise your retirement income.

Remember, annuities are more competitive than ever, and you stand to lose out if you simply take what's on offer from your existing pension provider.

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Its time to review your investments and pensions!  
If you are considering retiring within the next few years you should review the funds that your pension funds is invested in to see whether any changes are necessary.

People who are approaching the point when they take benefits from their pension plans may wish to avoid the risk of any short term falls in the stock market or the impact of movements in interest rates. These factors can adversely affect the size of your pension fund at retirement and the levels of pension income you are able to receive.

One way of reducing these risks is to switch all or part of your portfolio into Cash Funds, Gilt Funds or Fixed Interest Funds. If you are contributing to your pension fund on a monthly basis you may also wish to change your current investment instructions.

If you would like us to help you review your current pension funds please do not hesitate to contact us. We do not charge a fee to review your existing investments and pensions.

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Don’t pay more tax than you have to… make use of your ISA allowance 
It is very rare that the Government provides something which shelters your money from tax – but an Individual Savings Account (ISA) is one of those things. Introduced in 1999, it has now become the primary savings vehicle, with more than 17 million people – about 1 in every three adults – now owning one (source: www.hm-treasury.gov.uk).

There are just two types of ISA - the Cash ISA and the Stocks and Shares ISA – and the combined allowance for both in 2010/11 is £10,200.

Within this, the limit for Cash ISAs - or for the cash element within a Stocks and Shares ISA – is £5,100. However, there is flexibility over how these limits can be used - you can, for example, put the maximum £5,100 in a cash account and £5,100 in a stocks and shares account. Alternatively, though, if you place just £2,000 in cash, you can use the entire remaining balance – £8,200 in this case - to invest in stocks and shares. If you don’t need cash at all, you can put the full £10,200 into stocks and shares.

In addition, you can transfer existing Cash ISA holdings to a Stocks and Shares ISA without impacting on your current tax year allowance. So, if you have £10,000 already sitting in existing cash ISA plans then this amount can be moved to a Stocks and Shares ISA, yet leave your entire current tax year allowance still available for new investment.

Once invested, you have no further liability for income or capital gains tax on any profits you receive. There are also thousands of different investment options available – from cash and bonds through to property, equities and even overseas companies – so you can be confident that, whatever your aims and objectives, there is a suitable home for your money.

You should always seek advice when investing in a Stocks and Shares ISA in order to ensure that the investments you choose match the amount of risk you are willing to take.

If you would like us to send you a guide which takes you through the basic principles of ISAs and the different savings options and tax benefits please contact us.

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You only retire once and it only takes a little bit of effort to get it right! 
If you are retiring soon you will receive a retirement pack from your existing pension provider, including details for buying annuities . Never sign any pension annuity papers you receive without seeking advice. You could easily get up to 30% more each year and over a 20 year period this means you could get 6 times as much as you would have done.

The annuity offered by your existing provider is rarely the best rate you could obtain and you should shop around for the best annuity rate based on your circumstances.

It’s a sad fact that around 2/3rds of people do not shop around to find the best annuity rates. Most people could receive extra income, in some cases, up to 30% more than the original annuity offered. This increase could be worth thousands of pounds each year for the rest of your life.

And if that’s not enough, more and more people are eligible for even higher annuity rates nowadays due to their lifestyle, health issues and even where they live. If you’re a smoker, are under or overweight, or you have been diagnosed with Type 2 diabetes, high blood pressure or high cholesterol, you may qualify for a higher annuity rate. Its astonishing that over 1,500 medical conditions are now considered for higher annuity rates.

Annuities have a number of important and valuable options that allow you to tailor the income received… click here to read more about these options.

You should also consider your other Options at Retirement.

Most annuity providers will pay your finanical adviser a commission for the advice provided… but did you know that the annuity you receive will be the same whether or not your seek financial advise?

The annuity provider will allocate a commision for the case and if no financial advice is given the provider will simply keep the commission allocated for the case.

Remember, the difference between the best and worst annuity rates can be up to 30% , and possibly more in certain cases.

If you’re about to make one of life’s major financial decisions you really can’t afford to get it wrong. Contact us now and get the best advice which will make a real difference to your retirement income.

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Congratulations to all you quitters! 
If you quit smoking more than 12 months ago then read on…

Along with the many benefits quitting smoking has on your health it may also have additional finanical benefits you may not have thought of.

If you have a life insurance policy that was set up when you were a smoker, you will be paying ‘smoker rates’.

If you quit smoking more than 12 months ago you may be able to reduce the monthly premiums you are currently paying by taking out a new policy based on ‘non-smoker rates’. Once the new policy is in place you can simply cancel your existing policy.

Here’s a typical example:

James took out a 20-year, level term, life insurance policy when he was a 40 year old smoker, two years ago. He is currently paying a premium of £19.68 a month.

He quit smoking 18 months ago and even though he is now two years older, he can get the same cover for the remaining 18 years, for just £12.29 a month... a saving of £7.39 a month (£1,596 over the remaining term!).

If you would like us to provide you with a no obligations quote based on your current circumstances please contact us.

For further information on life insurance visit our life insurance page.

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