Autumn Budget 2015

The Autumn Statement and Spending Review... the biggest headline was a U-turn in cuts from the Chancellor, but there were plenty of other announcements which may affect our clients.

Here our Managing Director Paul Northmore reviews the changes, and how we can help our clients plan for them.

Pensions
There were no major changes for pensions or tax this time round.

The state pension will rise by 2.9%, or £3.35, to £119.30 a week from April, to match the rise in average earnings for existing pensioners.

This comes after the government’s promise for the following five years which ensures the state pension will rise in line with inflation or earnings.

The new flat rate state pension comes into effect next year. This will be £155 a week from April.

Speak to your adviser if you have any questions about your state pension. Whether you get the full £155 will depend on if you have a private or workplace pension or if you have additional state pension.

Is your house made of money?

Our adviser Patrick Goddard will take the time you and your family need to fully explore your options and bring clarity to the subject of equity release

Life expectancy in the United Kingdom has increased to 78.7 years for men and 82.6 years for women, that's up by 26% for men and 14% for women in the last 20 years.

Good news, of course; but a long retirement leaves many people with the very real challenge of how to make savings and pension pots stretch.

Equity release is a real opportunity for retirement age home owners who are 'asset rich' but perhaps 'cash poor'. It’s a means of freeing up money from your home without having to move, to cover everyday expenses, or just to enjoy life a little more!

Money Is Not The Most Important Thing In Life...but it's a pretty close 2nd to oxygen

Steve Manning - Founder of Manning and Company

A wise man (whose name escapes me) uttered these words that I read in 1988 soon after my encounter with a financial adviser who had been recommended to me.

I was not long married, was living in a mortgaged house, looking forward to starting a family and was fully employed with a finance company that was a subsidiary to a major bank.

I reluctantly met the financial adviser but thought that with my company salary, pension and life cover package, I would not require his services.

Suffice to say I was totally misguided in my naivety. Not only did I realise how exposed I was financially and how forces totally outside my control could impact on my future, I was so impressed with what the financial adviser was offering, his passion and absolute belief in his role in people’s lives that I knew for sure I wanted to be him!

Pension freedom - how is it working?

It has been over 18 months since the 2014 budget when, in a surprise announcement, the Chancellor announced that instead of buying an annuity with their pension funds people would be free to spend them how they wish.
Here our adviser Peter Harrison explains

That plan was put into practice last April.

So have you bought your Lamborghini yet?

Well, it’s not quite as straightforward as you might think .........

 

·         First, you have to be over 55 to get access to your pension money.

·         Then it has to be the ‘right sort’ of plan – a lot of public service pensions are not included.

·         Some pension plans, especially older ones, do not yet have the facility to allow you to take all your money out. The government have made it clear that they want to make providers change their rules and cut their costs to let this happen, but in a lot of cases it is taking a long time to take action.

·         It can be expensive – some older plans impose financial penalties for early access, but, again, the government are looking at ways to control this.

·         And then, after all this, there could be a lot of tax to pay. Although it has been spelt out many times, it is not always easy to be sure how much tax will be taken off and how to get tax back if too much has been paid.