EXPERIENCE AND EXPERTISE COUNT!

We do seek to use our experience and expertise to maximise the help we can give our clients. Here are what a few clients have to say about their experience with us:

“My expectations were met and exceeded. The prospect of sorting out an annuity was very daunting but Sovereign Finance came to my rescue. The world of annuities and pensions were explained to me in an uncomplicated way, which made my decisions a lot easier. I genuinely don’t think anything could have been done better.”

– Mr GD of East Grinstead

“I am writing to thank you for your expert guidance. Despite the government simplifying pensions it is still a very complex area and your experience proved invaluable in progressing this matter.”

 – Mr & Mrs PB of Horley

“Such courtesy is not often found in many companies nowadays.”

 – Mr BB of Crawley.

LOOKING AHEAD – LASTING POWERS OF ATTORNEY

More and more people reaching retirement age are making long term financial arrangements, such as pension drawdowns or equity release, which will require on going attention and decisions. The fact is, whether we like it or not, that the older we get, the more likely it is that we will suffer a physical or mental disability. While people generally understand the need to have a will because they know that death is an eventual certainty, the same is not true with the problems that can come with gradually growing older. As Sovereign Finance has been around quite a while, we do have many older clients. As a company, we have decided that we should recommend to all those reaching retirement age that they consider taking out a Lasting Power of Attorney (LPA). This is a legal document that lets someone appoint one or more people (who will be called “attorneys”) to help them make decisions, or make decisions on their behalf, should they become incapable of making the decision themselves. There are two types of LPA; one for managing health and welfare issues, and one for managing property and financial affairs. It is possible for a person to arrange an LPA for themselves for a cost of only about £110 or so. But where one’s affairs are complex, we would recommend that a solicitor be used. That will be considerably more expensive, but in the long term it may prove to be money well invested.

PENSIONS AND HIGH EARNERS

From the 6th of April the Government is bringing out measures aimed at restricting the level of pension contributions very high earners (incomes of £150,000 and above) will be allowed to make and get tax relief. If you are in this category, do contact us for further information.

LIFETIME PENSION ALLOWANCE BEING REDUCED

For many of us the reduction from next April of the Lifetime Pension Allowance from £1,250,000 to £1,000,000 may not be of concern. However, there will be those who are not really big earners who may need to look at how this might affect them. For example, a person who has been in a salary-based pension scheme and has built up a pension entitlement of £50,000 per annum or more, may need to take some actions regarding this. If you think you may be affected, do contact your pension provider or ourselves for assistance.

 

CHECKOUT SOME OF THE INVESTMENT GUARANTEES AVAILABLE

Whether you are investing in a pension or other investments, the challenge for many older people is how to achieve a reasonable income without having to take high risks. There are some guaranteed options worth considering. Do contact us if you would like to find out more.

PENSION “FREEDOMS” – AND DANGERS!

As predicted 2015 was a Year of the Pension with many people taking the opportunity to access the money they had in their pensions.

The Government hastened to get out warnings about consequences of doing this unwisely. Not the least of these was that the person could run out of money in retirement! An important warning in this regard was issued by Department for Works and Pensions. They issued a factsheet confirming that if people “spend, transfer or give away any money taken from a pension pot” they could be considered to have “deliberately deprived themselves of that money” to secure or increase benefits. This could mean a person later on being ineligible for State benefits that he might otherwise have had. For further information on this, visit the Department for Works and Pensions website and search on “Pension flexibilities and DWP benefits.”

TAX MATTERS – AFTER APRIL 2016!

1. The Personal Tax Allowance (what you can earn before you pay any tax) goes up from £10,600 to £11,000.

2. The Basic Rate Tax Band goes up from £31,785 to £32,000. This means that from the 6th of April, with the first £11,000 earned being subject to no tax, you will not start paying £40,000 tax on earnings until they exceed £43,000. This is marginally better than the previous year.

3. We understand that the annual ISA allowance will remain the same at £15,240. The new Help to Buy ISA will become available from the 6th of April. This is for First Time Buyers only. For full details search “Help To Buy ISA” at www.gov.uk.

4. From 6 April 2016 the Rent-A-Room relief rises from £4,250 per annum to £7,500. That is a very attractive tax-free source of income for those with spare rooms they can let.

5. If you have saved in a deposit account which is not an ISA, you will be familiar with the fact that the Bank or Building Society would automatically deduct 20% of the interest as tax (unless you were a non-taxpayer and filled out the appropriate form). This will change from next April. Deductions will no longer be made. And, in fact, there is a new Personal Savings Tax Allowance which will mean that for a basic rate taxpayer, the first £1000 he earns in savings interest will be tax-free. For higher-rate taxpayers this allowance reduces to £500 per annum.