As we now all know, the raises will be in line with the CPI from next April which should save a tidy sum over the next 3 – 5 years and help cut public spending but the statisticians have now warned that the CPI isn’t perhaps the best index to have used and have suggested alternative inflation measures.
This article is enlightening and a worthwhile read and also points out that the govenment’s budget is being accused of being ‘regressive’!
As can be seen in this graph from ONS/DWP there are 7.6m female pensioners in the UK and we are an aging nation.
As our population ages there are less people in work to support them. In 2001 it was calculated that there were 3.32 people working to support every state pensioner, now it’s calculated that by 2060 the ratio will have fallen to 2.44 people of working age for every one state pensioner. In other words, there will be fewer working people contributing towards the system that finances the state pension.
By increasing the start up age for drawing a pension in the UK the Government are trying to reduce the time a person will actually spend in retirement.
Many people feel that this is an unfair way to deal with pensions and that the government should look at other options for reducing our national debt.
I’d be interested to hear your views.
You can find out more about pensions on the Directgov site.
The number of people over 65 is predicted to account for around 1.4 of the population in the next 20 years and yet these are the people being hardest hit with money worries as the UK spirals into further debt and pensions and retirement plans are aborted.
Money Sickness Syndrome is attacking our pensioners with 43% experiencing anxiety, 22% a lack of concentration, 24% insomnia and 21% feel depressed. AXA conducted the research as they fear that the increase in the retirement age will only aggravate money woes for many pensioners.
“As an ageing population, such financial and health issues are a major concern for us as a nation and the consequences are likely to only get worse in the years to come,” said Eugene Farrell, AXA Psychological Health and Wellbeing Head. “Pensioners today have a lot to contend with. And while it’s no surprise to find money worries are a concern for them, it is deeply worrying that it is affecting their health in such a way. Of the three quarters of pensioners feeling stressed, over the last 12 months over half said their money stress had worsened and a huge 53% expect their situation to worsen in the next year compared to 36% of top managers.”
This study also identified that only 36% of pensioners would actually take steps to secure control of their personal finances and a low 5% sought help from an independent financial advisor.
If you feel this way and display any of the symptoms of money related stress please contact me for independent advice. I offer a one hour free consultation and at the very least, can help you regain control of your finances to secure peace of mind.
The opinions expressed are not necessarily held by Fox and Co Financial Management Ltd unless specifically stated. The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.
Any investor in Gold needs to beware as the gold bubble is set to burst according to one foreign exchange broker, FXCM Holdings. “The current rally in gold could well be unsustainable, with the bubble set to burst at the first sign of weakness. With real supply and demand conditions for gold pressuring prices lower, continued interest in investing in the metal is the only way for prices to continue to advance – but the truth is that the rally has become self-fulfilling with its appeal to investors dependent almost entirely upon its continued gains.”
While gold has been a good investment for a while now, the caution is that the bull market in gold is now looking more like a speculator’s game, not a hedge against risk or a safe haven. With tension in the Middle East rising,gold could be pushedup again but the question everyone is asking is, is the current $1230 price sustainable? The global rush by retail investors, particularly in the last 18 months, should be warning enough. Gold is a tactical investment. Not a strategic one.
Consumers are keen to know whether or not they can use their annual exemption of £10 100 to reduce their higher taxed, post June gains and offset carried-forward losses against higher-taxed post-Budget gains, to save the most tax?
Tim Norkett, of Horwath Clark Whitehill, the accountants, confirms that the new higher rate of capital gains tax (CGT) of 28 per cent applies to gains on assets sold on or after June 23 2010 by higher-rate taxpayers ie: people whose income in this tax year and whose capital gains arising on or after June 23 total more than £43,875.
It is unusual for a new tax rate to be introduced part-way through a tax year. However, as HM Revenue & Customs’ Budget Note 20 states, the £10,100 annual exemption, and losses carried forward from earlier tax years or prior to June 23, can be allocated against gains realised after the Budget to reduce those taxable at 28 per cent.
For example, if a higher-rate taxpayer with £10,000 of losses had realised gains of £20,000 before the Budget and a further £30,000 after the Budget, both the £10,100 annual exemption and carried-forward losses would be deducted from the £30,000 post-Budget gain, leaving £9,900 taxable at 28 per cent. The other £20,000 of pre-Budget gains would be taxed at the previous 18 per cent flat-rate of CGT.
This flexibility also means that, where a higher-rate taxpayer has losses from before the Budget, it might be worth selling further assets to generate post-Budget gains against which the losses can be offset – so achieving tax relief for these losses at 28 per cent rather than 18 per cent.
Individuals with non-taxpaying spouses or civil partners should also consider transferring assets to their partners before sale, so that CGT is payable at 18 per cent on the first £37,400 (the partner’s basic rate band) of taxable gains.
(Source: FT.com)
The opinions expressed are those of the author/s and are not held by Fox and Co Financial Management Ltd unless specifically stated. The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.
Girlings was launched in the early 1990s as the result of its CEO, Peter Girling, realising that there was a huge gap in the property market. As a former Housing Manager for Help the Aged and a Director of McCarthy & Stone Care Services and Peverel, Peter was well placed to understand the evolving retirement housing industry. Even though there was then a deep recession, the demand for retirement property was growing with purchasers being unable to buy new property without releasing equity from their homes. There was the additional problem of the increasing number of unoccupied retirement properties where owners had died or moved to nursing homes, where families were having difficulty in both selling and servicing the outgoings. With a surplus of empty accommodation yet a thriving demand for occupation, the concept of renting in retirement was born. If the retired could rent then the second hand market would pick up and ultimately so would the market for new properties.
As the acknowledged leader in the provision of private retirement property to rent on Assured Tenancies Girling’s have many hundreds of satisfied tenants and landlords who can commend them and their professional service.
At London’s Retirement Show last weekend Girlings was exhibiting for the fourth consecutive and commented that this year’s show seemed busier than ever, with thousands of visitors and a greater number of exhibitors offering everything today’s active retired might need – from elaborate climbing holidays, to line dancing, Tai Chi and cookery, through to financial advice.
The popularity of the show can no doubt be attributed to the fact that for the first time in history there are more pensioners than children in the UK – 11.58 million men over 65 and women over 60, compared to 11.52 million under-16s and we are all living longer and healthier retirements than in previous years. By 2034, 22 per cent of us will be over 65 years old, so the boom in the retirement market will continue.
But whilst the show depicted retirement years as being inspirational and a time for people to discover new and exciting activities , as well as the chance to spend the kid’s inheritance now, there were serious undertones. All this fun needs serious financial consideration and, as the recent financial crisis showed, there just aren’t any fail safe investments any more.
It was little wonder therefore that competing with the queues for the climbing walls were people scrambling for places at seminars from the likes of Prudential offering financial advice, and companies like Girling’s offering advice about how to live well and cost-effectively in retirement.
Their main advice to people interested in renting in retirement was to look at all their housing options and seek expert independent advice about how they should best fund and live in retirement before making life changing decisions. But they also stressed that people need to think ahead and assess not just their needs at 65, when climbing holidays still appeal, but later in life in their 80s and 90s when their needs will be different – this means that issues such as the length and security of tenure, having a house manager on site and access to a 24 hour help line might become the most important factors in any decision.
For more information please click here.
Traditional pensions limit investment choice to a short list of funds, normally run by the pension company’s own fund managers but a SIPP allows you to invest pretty much where you like.
You can choose from thousands of funds run by top managers including Artemis, Fidelity, and Invesco Perpetual as well as pick individual shares, bonds, gilts, investment trusts, exchange traded funds and cash.
There are significant tax benefits.
1. The government contributes 20% of every gross contribution you pay – meaning a £1,000 investment in your SIPP costs you £800.
2. If you’re a higher rate taxpayer (40%) you could claim back as much as a further £200 via their tax return on the above example. Additional rate (50%) taxpayers could claim back as much as a further £300.
3. You can normally withdraw up to 25% of your fund as a tax free lump sum between the ages of 55 and 75. The remainder is then made available to provide you with a taxable income.
The opinions expressed in this blog are not necessarily held by Fox and Co Financial Advisors unless specifically stated. The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.
All indicators are that ‘green’ is the way to go. Bloombergs recent projections into alternative energy expenditures indicate that this sector will grow around 67% up to 2020 making it a steady and reliable investment choice.
Some of the reasons they cite for this include the fact that global expenditure on renewable energy projects will increase from $90b (US) now to $150b (US) in 2020 and then to $200b by 2030 given current policy targets.
Their New Energy Finance model tells us that by 2020 renewable energy will make up 22% of the world’s installed power generation base, up from 13 % today. To avert the worst effects of climate change and achieve an average of 2tCO2 (tons of carbon dioxide) per head by 2050 they claim that expenditure on renewable energy assets needs to increase to $230
billion by 2020 and $500 billion by 2030 to meet this goal. This will mean that
renewable energy expands to cover just over 40% of installed power generation
capacity and contributes 45% to the additional 19Gt (gross tons) of emission reductions
needed by 2030.
We can all see where this is going and let’s face it ‘green’ energy is a long term investment option that’s worth investigating.
The opinions expressed are those of the authors and are not held by Fox and Co Financial Management Ltd unless specifically stated. The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.
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