Born between 6 April 1970 and 5 April 1978? Unlucky, you may now have to work a year longer.

The government has today announced that the predicted rise of the state pension age to 68 will now happen in 2037, 7 years earlier than was planned.

This affects about 6 million people born between 6 April 1970 and 5 April 1978.

We would not be at all surprised if the state pension age were to rise further in the future, could it become 70, or even 71,72,73………..

Food for thought.

If you would like to retire earlier, and to have a decent pension in retirement, contact us to get saving, or to make sure your existing pensions are in good order.

The importance of advice

A client approached us as she had received a pre-retirement pack from an old company pension scheme, from a very well known high street name.

This was for a relatively small plan value, and the pension offered was very small, at about only £70 a year. Our client asked if we could arrange for her to draw the whole fund as cash, or alternatively if we could transfer the fund to add to her existing sizeable pension benefits that we manage, as she could not see any value in such a small pension.

We examined the data and came to the view she was right, and it was likely to be in her best interests to draw the fund, as the break even point was so far away into the future she was unlikely to benefit from the pension.

There was quite a sizeable penalty on making a transfer, but not on drawing the funds directly from the scheme, so the latter was clearly preferable. The transfer would only be a last resort as an option.

The retirement paperwork gave options for drawing the fund as a one off payment under the triviality rules, but our client did not qualify to use these as her overall pension savings were too high.

We therefore considered drawing the benefits under the small pot rules, where you can draw plans of up to £10,000 as one off payments. There are various versions of these rules depending on the type of scheme, but they are quite straightforward for occupational schemes.

There was no option for this in the paperwork, so we contacted the scheme administrators to ask for this.

The adminstrators confirmed our understanding that we could use these rules, but they then advised that the scheme have chosen not to adopt the rules that actually allow this. They also advised that they thought the scheme had a lot of members in a similar situation, with small pots, who would probably prefer, or have preferred, to draw the funds as cash.

We thought this stance was worth challenging, as it would actually cost our client quite a sum of money if she transferred her benefits instead, so drafted a letter for her to send to the scheme trustees to ask them to change their stance.

We have today had a reply from the adminstrators to advise our request, together with other data we had provided, was reviewed at the last scheme trustees meeting, and they have chosen to change their stance and will now be adopting the small pot rules, subject to some further processes.

Not only does this mean our client will be better off, but this also opens up this option for other members of the scheme, which could be to the benefit of many members.

Please note though, drawing a cash payment rather than a pension is often not the right choice. Advice is important, as shown by this case, where we were able to provide an option our client would have not known was even available.

If you would like advice on your pension please contact us on 01543 440 300, email us on enquiries@acuityfinancial.co.uk or have a look at our website.

S Nokes

MD
14/12/16

Update on Annuities

The FCA is going to force annuity providers to tell customers how much they can gain from shopping around.

Providers will need to give customers personalised information on their options, and they will need to show how much the highest quote available on the open market differs from their own.

This is a welcome step forward, as the FCA said that its research had shown 60 per cent of annuity customers failed to switch providers, and they estimated 80% could have got a better deal. This backs up our own experience.

We would suggest that it is as important to make sure the annuity is set up in the correct way.

For example, do you include…….a dependent’s benefit and if so at what rate, a guarantee period and if so for how long, value protection, escalation, have it paid monthly or annually, in arrears or advance, should you buy an invested annuity, a variable annuity, a fixed term annuity, a hybrid product (you get the point).

Also it is important to check whether you might qualify for an enhanced rate, as this can give a big increase in rates.

We feel it is important to get advice, to make sure you set up the right annuity and get the best rate, as normally once you have bought an annuity you normally cannot alter it.

This is an area we specialise in. We can advise on the full range of options, including looking at alternatives too, so an informed decision can be made. We automatically search the market for the best rate, rather than being told to do so, as we work for you.

We can help. Call us 01543 440300

One in three families in England could not pay their rent or mortgage for more than a month if they lost their job, a study for the charity Shelter suggests

http://www.bbc.co.uk/news/uk-england-37017254

Planning for this kind of event can often be a forgotten activity. Call or email us to look at protection costs, you’ll be surprised at how affordable peace of mind is.

01543 440300                           enquiries@acuityfinancial.co.uk

Have you checked your pensions or savings recently?

With so much going on, it’s easy to simply file those pension and investment statements without a second glance, as surely the provider will be making sure that your nest egg is performing as effectively as possible.

Well, think again. In many circumstances, unless you make a conscious effort to review performance and change your investment strategy, then nothing at all will happen to ensure that your investments strategy is working in the way it was designed.

Why not call or email us for a no-obligation appointment on 01543 440300 or enquiries@acuityfinancial.co.uk

 

The cost of raising a child

In their 13th Annual Report on the yearly cost of a child LV Report that the headline cost of raising a child to 21 is now £231,843 making it more expensive than the average house.

Also included in the report is the cost of childcare and babysitting, which now accounts for a staggering 30% of the total cost.

Whilst none of us likes to dwell on our mortality, perhaps its time to look at the level of life cover that you have in place.

Call us on 01543 440300 or email us on enquiries@acuityfinancial.co.uk to talk about your needs.

Read more here

 

Deadline to the Breadline

Legal and General’s Deadline to the Breadline report shows that on average people could be on the breadline in just 29 days, if they suffered a critical illness, injury or the death of the main breadwinner. This reduces to just 14 days for working age families (18-64 years old).

Read more here

Acuity can help by finding the best cover for you.

Call us on 01543 440300 or email us @ enquiries@acuityfinancial.com