EXPERIENCE AND EXPERTISE DO MAKE A DIFFERENCE!

We do seek to use our experience and expertise to help our clients achieve their objectives and enjoy financial security. Here are what a few clients have written to us recently regarding their experiences with us: “I must place on record my sincere appreciation of the kindness and the thoroughness of your preparation of the proposed mortgage.” — Mr RJ of Burgess Hill

COUNTING THE COST OF CHRISTMAS

Those who are very forward thinking will have worked out their Christmas budget and earned the money well in advance. They then have no surprise credit card bills greeting them in the New Year. There are many, however who are not so well organised and credit card bills will be an unwelcome visitor in their households in January and February. Credit cards are a useful way to shop and pay and are valuable – providing that the balance is paid in full when it comes due. If you have had to use credit cards and do not have money to pay them off in full, we would advise that you take out a loan to pay them off. In this way you know they will eventually be paid off in full and end up costing you much less overall.

GETTING OLD

It happens. A useful checklist for putting matters in order when dealing with someone who is getting old (even yourself!) could be as follows:

1. Get a Will made. Dying without a Will leaves a problem for those left behind.

2. Get a Lasting Power of Attorney made. Most people have had the experience with a family member or friend where they reached a point where the friend or family member could no longer deal confidently with key decisions regarding their health or finances and would benefit from help from someone they can trust. The Lasting Power of Attorney (LPA) puts an arrangement in place so that the named person or persons can act on behalf of their friend or family member.

3. Make a plan regarding any Inheritance Tax that might have to be paid when you die. For those who

add up the value of their estate including property value and find it is less than £325,000, a simple note showing what you added up – the items and their values, would probably be enough of a plan.

THE MIDDLE ROAD FOR PENSIONS!

For the last few years those with personal pensions have found that they have a wide freedom of choice as to how they can take their pension benefits from age 55.

The new Flexi-Drawdown Pension arrangement allows you to keep your pension fund invested indefinitely and still have the option of taking out money from the pension at any time – whether that means taking it all at once, or monthly, or annually, or just bit by bit as needed. By leaving it invested in this way there is a chance of making a good return on your pension investment so that it lasts longer (although the value of the fund can go down as well as up, so it could also shorten the time the pension fund lasts).

The traditional way of taking pension income – the Lifetime Annuity, is also still available. In this way you can secure an income for life by exchanging some or all of your pension fund for a guaranteed income for life with a fixed rate of return. This provides the certainty of income for those who need that sort of certainty, but does mean that the lump sum used to “buy” the annuity is gone forever. There is a middle road option which not everyone is aware of. This is the “Fixed Term Annuity”.

This arrangement guarantees an income for a period of time – usually 5 years – with a guaranteed lump sum at the end of the fixed term. This provides the certainty of income for the fixed period which, for example, might be needed to cover a shortfall of income until one’s State Pension comes into payment. Additionally it guarantees a fixed lump sum on maturity. At that point you have the chance of making your choice all over again – whether that choice is to put the lump sum in a Flexi-Drawdown pension or purchase a Lifetime Annuity, or even purchase another Fixed Term Annuity. So this middle way provides some of each – guaranteed (!) – some income and some lump sum.

All of these choices have their advantages and disadvantages and so it is important to choose the one that best matches your income and investment needs. We can assist you to choose the option that best suits your situation.