CHEAP LIFE ASSURANCE

The most inexpensive type of life assurance is called term assurance. It is life assurance for an agreed amount of cover over an agreed term of years at a fixed price. For example life assurance of £100,000 over 25 years for a 30 year old would only cost about £6.00 per month and for a 40 year old only about £9.00 per month.

If you would like an estimate of the cost of life assurance for you, just call or email us. Let us know your date of birth, whether you are a smoker or non-smoker and how much life assurance you would like to have, and we can reply with an illustration from the open market within an hour or two. We do not charge for this service and, if you want us to arrange the life assurance for you, there is usually no charge by us to you as the life companies pay commission.

CHEAP PROTECTION

One of the cheapest financial planning and protection tools is still term life assurance. The amount that is insured will be paid out on death at any time during the agreed term of years. It really is a must for young families where husband and wife can be covered by a single policy and get substantial cover for less than £10.00 per month.


We would be happy to provide quotes by return of e-mail. Contact us on 01342 313302 or info@sovereignfinance.org

Can You Afford To Take The Risk?

You have to insure your car and you have to insure your house, but you are not required to insure yourself or your spouse despite the possible consequences!

Life Assurance does not need to be expensive and we can generally provide a quote within an hour or less.

THE AUTUMN STATEMENT

If we focus on the changes taking place in April 2014, we have the following tax changes: 1. Personal Tax Allowance increased from £9,440 to £10,000 2. Basic Rate Tax Band down from £32,010 to £31,865 (meaning that with the first £10,000 earned being subject to nil tax, you will not start paying 40% tax on earnings until they exceed £41,865 – marginally better than last year’s £41,450). 3. Individual Savings Accounts (ISAs) go up to £11,880 (last year £11,520) with half of this(£5940) able to be put in a Cash-ISA. 4. The main rate of corporation tax will be cut from 23% to 21% from April 2014. 5. A £1000 business rates discount in 2014/15 will apply to retail properties including pubs,cafes, restaurants and charity shops; and a 50% business reoccupation relief for businesses that move into retail premises that have been empty for a year or more. There is no change in the Property Stamp Duty Tax (still nil on purchase prices up to £125,000, 1% up to £250,000, 3% up to £500,000, 4% up to £1 million, 5% up to £2 million and 7% for over £2 million). The threshold for Inheritance Tax also remains unchanged at £325,000. The Capital Gains Tax Exemption is another tax allowance that is not changed this year –remaining at £11,000. And for those with significant pension savings, there is actually a reduction in the amount of pension they are entitled to accumulate in their lifetime (Lifetime Allowance) from £1.5 million to £1.25 million. The future carrots being dangled include: 1. From April 2015 no employer’s National Insurance tax on employees under the age of 21. 2. From 2015/16 married couples who are not higher rate taxpayers being able to possibly benefit when one spouse is not earning enough to use up all of their Personal Tax Allowance. Effectively this will be worth up to about £200 a year less tax for the couple to pay. 3. The Capital Gains Tax Exemption is promised to go up to £11,100 from April 2015. And then there is the contentious issue of an 11% pay rise for Members of Parliament from April 2015!

HOW MUCH WOULD LIFE ASSURANCE COST?

We are required by law to insure our car and our driving, our home and its contents, but insuring our lives is not required, even though the consequences of an unexpected death can be very considerable. Research by the Liverpool Victoria Assurance Company has established that only 31% of households in the UK have life assurance. Life assurance does not need to be expensive. Give us a call and we can tell you what it would cost within the hour.

OTHER OPTIONS FOR INCOME IN RETIREMENT

While pensions are traditionally the way most people will provide for themselves in their later years, they are not the only option. Many people have greater faith in property and will build up a portfolio of residential investment properties producing a net rental income and the possibility of an increase in the property values. Mortgages for Buy-To-Lets have become very competitive and still can be done on an interest-only basis in order to maximise the income produced. Please contact us if you require any further information about Buy-To-Let mortgages. Other savings such as Individual Savings Accounts and stocks and shares generally can also provide an income in retirement. The return on cash investments is not very good currently but has been better in the past. The income from shares in the way of dividends can provide a very useful source of retirement income, for those who understand the risks and are willing to take them. Pretty much a last resort for income or a lump sum in retirement are Equity Release Plans. They are available from age 55 (note: for a couple the qualifying age is determined by the younger of the two). Interest rates and costs for these options have been going down, so they are worth reviewing if needed. We would be happy to provide quotes and clarify the options for you.

The Value of Experience and Expertise!

By survey what you want from us is our advice on financial matters, utilising our extensive knowledge and long experience going back over 30 years. We enjoy helping in this way and continuing to assist our clients and their friends and their children. Those that have used us do know they can rely on us again and again. In recent service questionnaires when asked why they chose to use Sovereign Finance we received answers such as the following: “We dealt with Sovereign Finance before and found them of good service, reliable and honest. Always.” Mr GS of Ashford “Thank you so much for making it all happen so fast. Brilliant!” Mrs SR of London “Mr Shuster is dedicated to getting the right result.” Mrs HT of West Sussex “We had previously used Sovereign and had confidence in the advice given. We expected a good service and that’s what we got.” Mr KH of Eastbourne “The service I received was excellent with regular correspondence and home visits. Good work. Keep it up”! Mr MB of Pembury

How Much is a Mum or Dad Worth?

Those who have children should certainly consider having life assurance. Recent research showed that only 53% of parents in the UK had life assurance and this level is decreasing. The research looked at what it would cost if a family lost a parent and had to replace all of the work they do. The value of replacing a Mum worked out at £30,032 and a Dad at £21,306 (Dads take note!). Contact us and we can provide quotes speedily.

Review your life assurance arrangements

Pull out the documents and see how much you are covered for and for how long. You may find a policy is coming to its end and you can ask us to check the cost to ensure you are not overpaying for your life assurance. The Uni-Sex insurance directive that came into force at the end of 2012 has brought about various changes in the costs of life assurance – some good and some bad!

SUGGESTIONS FOR THE NEW YEAR

Review your mortgage interest rate. If you find that you are on the Standard Variable Rate with your lender (4.25% to 5.0%), contact us for quotes as you should be able to save 1% to 2% and that can mean quite a bit of savings each month. Lenders are having to compete more for business now and that means a better deal for the borrower. 3 and 5 year fixed rates are looking very competitive. As independent mortgage brokers we can help you find the best deal.


Review your pension. By survey almost half of the working population have never reviewed their pension plans, even though the majority of those contacted did say that they considered it important to know how their pension funds were invested. A failure to review your pension can leave you exposed to inappropriate investments and also prevent effective planning for your retirement income when you reach your 60s and 70s. It is also valuable to get a State Pension Forecast. We are available to help with this.

Get rid of any credit card debts that are hanging around. The temptation to pay just the minimum payment is intense and the credit card balances then do not go away. It is much better to organise a loan over a few years with fixed payments and pay off the credit cards. That is not to say that a credit card cannot be a useful tool, but you need to be disciplined and pay the full balance off each month.

If you are a 40% taxpayer. Do take the maximum advantage of your pension contributions to reduce how much you pay in tax.

Take advantage of your Individual Savings Account Allowance – Particularly the Cash ISA, so that you build up a cash cushion (and generally get a better rate of interest on your savings).

If you have an interest-only mortgage - Review it carefully to ensure that it will not become a problem when you reach the end of the mortgage term. It is wise to act early rather than ignore the problem until it is close upon you.

Review your insurances. If your circumstances have changed since you last took out life assurance, you may need more, or less, life assurance to meet your needs. One immediate benefit, however, is that the minimum technical requirement for those advising on investment, pensions and annuity has been increased. While examinations are not necessarily a true measure of understanding and ability, they can have value. Another change is that investment, pensions and annuity advice will now be charged for on a fee basis, rather than being paid by commission, as was generally the case before.

The intention is to bring the profession in line with other professions such as solicitors and accountants. We will need to see how the public responds to this major change. Advisers in 2013 will also be split into two groups –those who provide independent advice from across the market and those who provide advice restricted to certain parts of the market. Sovereign will continue to provide independent advice.

For speedy, impartial advice, contact us on 01342 313302.

Gender equality in retirement

From 21 December 2012, the practice of using gender to calculate insurance contracts and annuity rates will be outlawed. In future, women who opt to receive drawdown pension income will find that their maximum amount of available income is determined using the same calculations as those used for men.


In March 2011, the European Court of Justice ruled that the practice of considering gender when calculating insurance contracts and annuities contravened discrimination laws. More recently, HM Revenue & Customs issued new guidance for pension providers, ordering them to use the same rates for women as men when calculating their maximum drawdown pension from 21 December 2012. Income drawdown allows the individual to withdraw income from their pension fund while leaving the fund invested, thereby allowing it to benefit from any further growth. The amount of income that can be withdrawn from the fund is capped in order to ensure the pension pot cannot be drained. Traditionally, income drawdown rates for men and women have been calculated using two different tables – one for women and one for men. Because the life expectancy of the average British man is shorter than that of the average British woman, the amount of income a man has been able to withdraw from his pension fund has been higher than for a woman. However, the new rules will ban this practice, allowing women who opt for income drawdown to draw an increased level of income, while men’s entitlement will remain unchanged.

Life Assurance Likely To Get More Expensive!

Life assurance has been around for a few hundred years, dating back to times when groups first worked out that they could buy some piece of mind for themselves and their families by each making a contribution to a pooled fund which would be available to help other members of that group or their families in the case the wage earner died early.


While it has become more popular, and thus cheaper, it still remains primarily a way to buy peace of mind for those with commitments such as family or business. The cost of life assurance is based on risk. To help in assessing this risk the life assurance companies have all of the records of people dying and from what cause (the Mortality Tables) and also details of a person’s medical history. If one is young and in good health, life assurance is very cheap indeed. As one grows older, and where there are medical problems (past or present), the risk, and thus the cost, goes up.

At the end of December 2012 a European Court decision will come into force affecting all insurance companies. It basically dictates that all premiums for insurances must be the same for men and women who are otherwise of equal risk. Historically, as per the records, women live longer than men and life assurance for women has usually been cheaper for a man of the same age. Despite these facts the European Court has decided that equates to sex discrimination! Frankly we think that is nuts, but it will not be the first piece of nutty European legislation. The result will be more expensive life assurance for women. One would think it would also mean somewhat cheaper life assurance for men, but at the same time the life assurance companies are being required to hold more reserves, which will make it more expensive for them to trade. This will almost certainly drive life assurance costs up for both men and women. In short then, it is probably a good time to review your life assurance and make any changes needed. We are likely to look back and see this as having been a particularly cheap time to take out life assurance. And remember the research indicates the cost of taking on people to do the work of a Mum works out at about £30,000 and a Dad at about £21,000! We can quickly provide you with any life assurance quotes you may need. Contact us on 01342 313302 or info@sovereignfinance.org

HOW MUCH IS A MUM OR DAD WORTH?

While on the subject of life assurance, it is interesting to look at some research done last year on the value of a Mum or Dad – just on the cost of replacing their work at home and in looking after the children, should one parent die or be ill and unable to work. The value of a Mum works out at £30,032 and a Dad at £21,306! The same research showed that only 53% of parents in the UK had life assurance and only 24% had Critical Illness cover. Both of these have gone down by 4% in the last two years. We would like to assist you to ensure you have the cover that you need and want. Just give us a ring on 01342 313302 now!

UNISEX INSURANCES!?

A European Court Directive (the EU Gender Directive!) is coming into effect later this year which will require all insurance companies to treat men and women equally as regards what they are charged for insurances. This goes against common sense when life assurance has always been cheaper for women because statistically they live longer than men. On the other side of the coin, men taking their pension benefits have always benefited from a higher income from their annuity because men will not live as long and the pension provider therefore does not have to pay out the income for as long as for a woman of the same age. Common sense, however, has not been much of a feature of European Court Decisions. This does open a window of opportunity for men to take their annuities before the end of the year and for ladies to secure their life assurance now before the costs go up. There is a further matter that is likely to drive up the cost of life assurance in the coming year. A new tax arrangement being imposed on insurers will require them to keep more in reserves to safeguard their financial position. This will translate for the average person into higher costs for their insurances. We may never again see life assurance costs as low as they are now. Do contact us to discuss how this could affect you and what you might or might not be able to do to take advantage of this "Buy Now" – 01342 313302.