And the strange thing is, just about everyone see retirement as something to look forward to. To have more holidays, spend more time with our families and just do stuff we never got round to when we were busy working.

So the big question for all of us….. “Are we going to have enough saved for a comfortable retirement?”

Where ever you are at, it’s never too late to start doing something about your retirement savings. And of course the closer you are to retirement the greater need to make sure what savings you have are protected as much as they can be. It would be very disappointing to put it mildly if the value of your retirement savings fell dramatically just before you retired.

So it’s really important to make sure you are not exposed to too much risk especially in the current economic climate.

When you do finally retire, you can usually take 25% of your retirement savings as a Tax Free Lump Sum. This can be very useful in producing additional income in retirement, which if done correctly can be tax free and also allowing you to retain the lump sum.

Whatever your retirement savings situation, don’t delay taking action. The more time you have to do something about your situation the less painful it’s likely to be. There is a limit to what can be done if action needs to be taken right at the point of retirement.

Talk to one of our qualified financial advisers, if you are concerned about your retirement savings.

The biggest reason for investing is to get a better return than you would get from leaving your money in the building society or worse still – SPEND IT!

You most likely also invested for the long term. Over the last 20 years the FTSE All-Share index rose by 361% or 7.94% a year. But here’s the really interesting part. If you lost your nerve and pulled out and only missed the best 20 days, yes that’s 20 days, your gain would only be 60.8% or 2.4% a year.

Although this is past performance and cannot be relied on to predict the future, it is an indication of what the stock markets can do.

2. Remember how long you are planning to invest for.

It’s completely natural to react to short term volatility, its human nature and we can sometimes wonder whether we have made the right investment decision.

However for most of us the time horizon may be 5, 10, 15 or 20 years from now, as hard as it may be the current fluctuations in the stock market are not really that important, just market noise.

3. Spread your risk

One of the basic principles of successful investing is to spread your risk and not put all your eggs in one basket. Don’t go chasing one fund that has a good track record. Chances are that it will not continue and even the best investment managers do not have a crystal ball and cannot predict future returns. So choose a range of different investments that give you a range of different levels of risk. Only the most aggressive of investors would be investing are their money into high risk equity funds.

4. Know how much risk you are taking with your  money

The basic rule of thumb is that the longer you have to invest, the more risk you can afford to take and the shorter the time to needing the money, the less risk you can afford to take. So understanding how much risk you are taking is important. Ask your financial adviser to tell you how much risk you are taking with your investments or alternatively ask us and we can look at it for you.

5. Invest regularly – drip feed your investment

Invest part of your monthly income every month. This helps smooth the risk trough what is called ‘pound cost averaging’. Sounds technical, but this is how it works. When the markets have fallen your monthly investment will be you more units/shares in that month. Provided that the final price of the units/shares rises over time, your total investment will grow much more than if the price of the investment increases in a straight line progression over the years.

6. Review what types of investment you hold

What was a good investment for you when you took it out may no longer suit you. Equity funds are higher risk and as such are more volatile. On the other hand fixed interest funds are more stable and should offer you greater protection in a volatile market. But beware, not all Fixed Interest funds are the same and some are much riskier than other. Check with your financial adviser first as he will be able to tell you if it’s right for you.

7. Get rid of poor performing funds.

Last but by no means least. Its good housekeeping to keep all your investments under review. It’s easy to put investments on the back burner and get on with today’s living. However, very few investments continue to perform well year after year. So, get your financial adviser to review your investments at least once a year, so that you can get rid of any of the poorly performing funds.

Finally, if you are not happy with how your investments are performing and would like a review please contact us for a no-obligation initial consultation.

The intention of the government is to encourage further charitable gifts of up to £300 million over the next 3 years. I remain unconvinced that this will actually happen, however, if you are thinking of doing this speak with solicitor or Will writer to make sure your Will takes advantage of these changes.

Each year up to 5,000 people gift part of their estate away to a charity of their choice upon death.

Billions have been invested into these complex investments, which are often sold by the banks and building societies. Fewer and fewer financial advisers are including these types of investments in their client recommendations.

Due to the apparent security and high returns offered by these investments cautious savers are increasingly being attracted to them. Often they have become disappointed by the low interest rates offered by straight forward deposit investments.  For some the attraction is too tempting as on the surface they appear to offer protection from the volatility of traditional investments where there is a risk that the value may fall.

These investments, known as Structured Products are often linked to a Stock Markets or a number of Stock Markets. The problem is though, if the Stock Market index fails to reach its target level, you usually don’t get any returns on your investment. And in some cases if the Stock Market Index performs badly enough, you can start to lose money as well.

But the real problem is that many of these types of investments are not protected by the Financial Services Compensation Scheme if the product provider fails.

We should all be concerned as the Financial Services Authority has already issued concerns about these types of investments and the amounts of money being invested into them. This is quite a big deal as the FSA rarely steps in and criticises investment products as it’s their role to regulate financial advice and not products.

Structured Products are also very complicated to understand. They use complex investments instruments called financial derivatives to try to give a guaranteed return linked to a stock market, after a set period of time, anything up to 6 or 7 years. But they are not invested in real shares. They are in effect a bets on the performance of the chosen stock market.

Often some of the money invested is held on deposit by a third party company.  Back in 2008 thousands of investors lost their investment when investment bank Lehman Brothers went bust. Many investors in Structured Products did not realize that their money was in fact held on deposit with Lehman’s.

To add insult to injury in 2009 another company called Keydata, which sold products through branches of Norwich & Peterborough Building Society, failed, leaving many investors seriously out of pocket.  For traditional Deposit investors, they are protected up to £85,000 from the Financial Services Compensation Scheme (FSCS), if the company fails. What’s very worrying from an investor point of view is that more than 200 Structured Products have been launched so far this year.

Latest figures from the Financial Ombudsman Service show that complaints about structured products are rising considerably. The percentage of cases found in favour of the consumer has increased considerably. This simple statistic says it all – the ombudsman upheld 96% of cases for consumers.

Our parting advice – If you don’t understand what you are investing in and how it works, don’t invest.

As a consequence their income may be up to 30% less than it could have been and this £1bn is set to rise with the introduction of work based pensions later this year. Many people do not shop around for the best rates.

Here are a few ways that you can improve your annuity rate.

• Your lifestyle may improve the annuity you get. For example if you smoke or are overweight, some companies may offer you an increased rate.

• If you have a medical condition that is likely to shorten your life, this may also improve your annuity income. For example if you are diabetic or have had a heart attack the rates may be increased.

It is most important to use the ‘Open Maket Option’ to get the best possible terms. A financial adviser will be able to access the best terms available from all the companies in the market.

Many people accumulate various pensions during their working lives, so combining them altogether at retirement may help you improve your income. Around 80% of all pension funds are valued at less than £50,000, so getting the best rates can be a challenge. Small pension’s funds are clearly a problem at retirement. However if your pension fund(s) total less than £18,000 it may be possible to take the whole amount as a lump sum, subject to tax.

Wealthy individuals and the not so wealthy have for years used legitimate ways to pay less tax, so say’s the treasury and is currently well reported in the media.

Tax avoidance – unlike tax evasion – is perfectly legal.

So, what are the most common forms of tax avoidance?

Tax relief

Individuals who have high incomes – Spare income can be invested to reduce the amount of tax paid. For example, this income can be invested into an individual’s pension scheme, up to a certain limit,

Or into schemes that invested in start up businesses that may have great potential. These are Enterprise Investment Schemes (EIS) encourage individuals to invest into new businesses, however by their very nature they are risky investments. These schemes have a limit on how much can be invested and get tax relief on.

It is also possible to insure your own life, and write the policy into a trust for your children or grandchildren. The money passes to them without paying inheritance tax. This is a useful strategy if you wish to plan for an Inheritance tax liability.

Employing a husband or wife

This is an entirely legitimate way to reduce the overall family tax liability, if you have your own business. Some business owners employ their husbands or wives, who paid little or no tax previously. They might do very little work, but are still paid a salary. This means that your overall income tax bill could be reduced. The benefit from doing this is because you will most likely have a personal allowance to set against your income. If you are earning more than £100,000, you will lose some or all of your personal allowance.

If all your household income was earned by one person, this may put you into a higher tax bracket. As a couple you may also be able to pay less tax by sharing ownership of the company and paying yourself a dividend, rather than salary.

Artificial losses

A business can be creative with their accounts and can legitimately make unnecessary transactions to create an artificial loss. These appear to be losses on paper, which can then be offset against income for tax purposes. They do not actually result in a loss in cash terms, however it does allow the business and its owner to benefit from a lower tax bill than would otherwise be the case.

As the Treasury is currently very short of money, changes could be introduced at any time under the General Anti-Avoidance Rule (GAAR). This could remove the opportunity to arrange your affairs in the best possible way to reduce your tax liability legitimately.

1. Do not rely on your husband to plan your financial future – Too often I hear that women are very reliant upon their partner for their future financial security. Sure many women may run the day to day finances, but often leave the real long term planning to their other half. It’s much better to plan your own financial security rather than leave it to someone else.

2. Women statistically live 4 to 5 years longer than men – It’s a simple fact that women live longer than men. And if you are a little younger than your partner it’s quite possible to be living up to 10 years longer than your partner. If you are reliant on your partner’s pensions and savings this may be a problem.

3. Women statistically earn less than men – This is another simple fact, whether we like it or not. Because women have career breaks to raise children they are often left behind when it comes to life time earnings. So it’s even more important to take control of your finances and to be wise with your money.

4. Invest in your financial education – Personal finance can be a complicated subject, but it doesn’t have to be. My “golden rule” is if you don’t understand it, don’t do it. However, to make the best of your money, it’s important to get yourself educated. There is no need to get too complicated, as for most people, keeping things simple is the best option.

5. Approximately 50% of UK wealth is owned by women – Despite the fact that women generally earn less during their working lives, they still own almost 50% of all UK wealth. The reasons for this are primarily for 2 reasons. Firstly, most women outlive their partners and usually inherit the assets. Secondly, divorce has a part to play in the accumulation of wealth for women.

6. Avoid the urge to spend – This is a tough one for all of us, as we are all capable of pending when we don’t really need to. Ask yourself, do I really need to be spending, or would I be better off in the long term investing for my future.

7. Plan for your retirement – Finally, it’s s simple fact that the state cannot look after us in retirement I the way which we would like. There is approximately 65% of retirees who are reliant on the State Pension in retirement. Don’t be one of those people, if you want a comfortable enjoyable retirement.

Get your finances on track today by speaking to a financial adviser. We offer financial planning advice to business owners who wish to have greater control over their financial affairs. Check out our About You page to see whether our services are right for you.

#TaxAction 2012 has kicked off today!  This is our annual report which identifies how much money we are wasting as a nation by not being tax efficient.

This year a staggering £12.6 billion is set to be gifted to the taxman through inefficient tax planning, the second highest tax wastage in the history of our report.  The campaign focuses on educating consumers on how to be more tax efficient and access appropriate advice.

Here is a great infographic with all the headline statistics from the report which you can see here.

£7.26bn in unclaimed income related tax credits

£2.45bn not making use of tax relief on pension contributions

£997m wasted on charitable donations

£448m wasted on Inheritance Tax

£403m not making use of ISA’s

£401m of unclaimed Child Benefit

£307m for late filing of tax returns

£133m wasted in Capital gains Tax

£118m on failure to use employee share schemes

£83m wasted on income and personal allowances

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1. Lack of ongoing advice

The sad fact is that many pensions are not regularly reviewed by the advisers that have set them up for you. The problem is that investment funds rarely continue to perform well year after year, so to get the best out your money, it’s important to regular check how your investment is performing. Many default investment funds have not performed well over the years.

 
2. Review how much risk you are taking

When you first took out your pension, your adviser probably advised you on how much risk to take with your investment. However over time the amount of risk we are prepared to accept in our investments tends to reduce, to the extent that by the time close to retirement we may not wish to take much risk at all.

 
3. Charges

Over the last 10 years, the amount we all pay in charges for our pensions has come under the microscope. For some pensions arranged over the last 20 years, the charges can be considerably more than you would be paying for a more modern pension. The more competitive the charging, the more of your money that is invested for you.

 
4. You are getting closer to retirement

The closer you get to retirement the more important it is to know how your pension fund is performing, where it’s invested, how much risk you are taking and what your are likely to receive when you retire.

 
5. How much income are you likely to receive

If you wait until your retirement, the chances are you will have no idea what income you will receive, and then it’s too late to make any changes. The longer you have to prepare for retirement, the much greater chance you have of doing something about it and achieving a comfortable retirement.

 
6. Is your monthly investment keeping pace with inflation

Many people set up their pensions and never review how much they are contributing each month. In very general terms average income doubles every 10 years, so we should also be reviewing our pension contributions on a regular basis so that the contributions at least keep pace with our income.

 
7. The State Pension is most unlikely to be sufficient

Finally, there is no doubt that the Basic Old Age pension will not be sufficient to maintain our lifestyle and keep us out of poverty. Indeed some people think that they may never receive a state pension. This may perhaps sound a little extreme, but one thing we can be sure of is that the state cannot afford to look after us, in the way which we would like.
So, get a pension review today. Most advisers will be happy to do this for you. However, our specifically designed service called the Pension Performance Review, can help you ensure that your pensions are on track for a comfortable retirement.

Around 70,000 people ask the DWP (Department for Work and Pensions) for help in locating lost pots each year. The Unclaimed Assets Register estimate billions of pounds could be remaining unclaimed assets,mhowever the exact figure is unknown.
So if you suspect you have lost pensions here is what you need to do.

Pensions Tracing Service. If you provide them with basic details they are able to searches their database of 200,000 different occupational and personal schemes. Visit its website at www.pension-tracing-service.com Alternatively, you can contact them on 0845 6002 537 or write to Pension Tracing Service at:

The Pension service, Tyneview Park, Whitley Road, Newcastle Upon Tyne, NE98 1BA

What information you need to give them.

Employers nameAny previous trading namesEmployers addressBank or insurance company name of pension providerYour nameYour National Insurance number

The Pensions Tracing Service can provide you with the contact details for the scheme administrator. However it will be up to you to contact them to find out about your pension.

If this does not work these organisations may be able help you find your lost pensions.

The Pensions Advisory Service www.pensionsadvisoryservice.org.uk/

Unclaimed Assets Register www.uar.co.uk/

There is no doubt that the problem of lost pensions is going to become an enormous problem and is far better to find out where they are now rather than later. 20 years from now it is likely to prove much harder to locate any missing assets. And if nothing else we have a much better chance of remembering useful information now rather than at a later data.
If you need help locating your missing pensions, contact us today for help.