Useful Financial Advice Links & Downloads
Below you will find a selection of Useful financial advice website links, a selection of free downloadable PDF key fact guides and our quarterly newsletter that you may use.
At IEP Financial we aim to provide you with as much Useful Financial Advice and information as possible to keep you informed and help you make your financial planning decisions in Pensions, Investments, Mortgages, Life insurance, Protection and financial Reviews.
PENSIONS AND TAX PLANNING
If you are a high-earner and feel you are paying more and more tax, you are not alone. More than one in seven income tax payers are taxed at the higher, additional or top rate and they pay about two thirds of all income tax. Increasing the tax burden for higher earners has been a deliberate policy of successive governments. For instance, the thresholds for phasing out the personal allowance and the start of the additional rate tax threshold have both been unchanged since they came into force in April 2010.
Automatic enrolment has ‘changed the UK workplace forever,’ according to the Pensions and Lifetime Savings Association. Over seven million people working for over 340,000 employers have started to save via a workplace pension as a result of automatic enrolment, with more to come between now and February 2018. No employer – however small – can afford to ignore these changes. This radical pension reform got underway in October 2012 and has already worked its way through all employers which had PAYE schemes at 1 April 2012. It is now focused on those which were established after that.
The extent to which pension pots are being forgotten about has been revealed in a study from Aviva. A survey of almost ten thousand people who hold a pension has revealed that just under one in eight (13%) admitted that they have at least one pension that they have forgotten about(1). This equates to more that 2.5 Milllion pension policies currently sitting in the back of people’s minds(2).
SAVING FOR RETIREMENT
Retirement is something most of us look forward to − particularly on a Monday morning. However, those thoughts are often little more than a whimsical cocktail of not having to work and prolonged holidays. The reality could be rather different, particularly if your retirement date is some way off.
INCOME AT RETIREMENT
There comes a time when you stop working for your money and put your money to work for you. For most people, that is retirement. The decisions you make then could have repercussions for the rest of your life, and in recent years, there have been some major changes to the retirement choices you can make with your pensions. That retirement could also turn out to last considerably longer than you think, as the table below shows.
The way that investments are taxed has changed over recent years as successive governments have chosen to handle various sources of investment income in different ways. The aim has typically been to increase tax revenues. Alongside this, the whole tax system has grown increasingly elaborate, thanks to revenue-raising tweaks such as the taxation of child beneft and multiple reforms of dividend taxation.
INVESTMENT PLANNING AND ASSET ALLOCATION
Investment planning is now more of a science than an art. Technology, everincreasing investment opportunities and stricter regulation have all encouraged a more scientifc approach. But has your investment strategy kept pace? Investment planning and asset allocation is a multi-stage process. The actual execution of investment transactions is virtually instantaneous, but the decisions behind them need time and should not be hurried.
Investing in VCTs, EISs and SEISs
Governments of both hues have introduced (and closed down) a variety of schemes to encourage investment in new and small businesses. A key feature of all of these schemes has been tax relief, which the Treasury views as necessary to encourage private investors to accept a high level of risk. In the past, the creative minds of the financial services industry went to great lengths to devise structures which retained the tax benefits while minimising the risk.
INVESTING FOR CHILDREN
Most parents want to help their children financially, whether it is making sure there is enough money for their education or helping them to buy a property. An early objective may well be to help children understand the value and importance of money. Whatever the reason, tax will be a major factor to consider, as will the risks of giving children too much too soon. It is therefore important for parents and others to appreciate the basic tax and legal rules, and the investment products that are suitable for children.
MAKING THE MOST OF ISAs
When Individual Savings Accounts (ISAs) frst appeared in 1999, as a replacement for PEPs and TESSAs, they were a relatively straightforward offering. In the 19 years since complication has set in. The point has now been reached where a recent report on savings tax from the Offce of Tax Simplifcation (OTS) suggested that, “there is scope for a wider full review of the current ISA landscape, to make the regime simpler and more accessible”.
All too often, people put off estate planning. This is understandable as, rather than preparing for the here and now, it requires you to consider what will happen when your life is over, hardly something most of us rush to contemplate.
Consequently, estate planning often becomes, and all too often remains, a do-it-tomorrow task. When it could suddenly become all-important… it might be too late. After all, accidents and illness and do happen.
Most people’s fnances are like a house of cards, with their ability to earn an income acting as the bottom row. Everything else rests upon this bottom layer and, should the worst happen and your income stop, the whole house can come tumbling down. Life and health insurance protection underpins most good financial planning. These types of insurance can ensure that, if the worst should happen, the right amount of money will reach the right hands at the right time.
The taxman collected almost £4.9bn in inheritance tax (IHT) in 201/17, according to its latest figures, representing the highest level of IHT receipts since the current system was introduced in 1986. But if the value of your estate is worth more that £325,000 (known as the ‘nil-rate-band’), then HMRC will expect you top ay inheritance tax at a rate of 40% on the total value of assets in yor estate over that amount.
Key stages of financial Planning
Most people’s finances are like a house of cards, with their ability to earn an income acting as the bottom row. Everything else rests upon this bottom layer and, should the worst happen and your income stop, the whole house can come tumbling down. Life and health insurance protection underpins most good financial planning. These types of insurance can ensure that, if the worst should happen, the right amount of money will reach the right hands at the right time.
While the thought of going abroad to work or retire may be exciting, the months prior to departure may be highly stressful. Finding somewhere to live in your chosen country, arranging the necessary visas and booking a suitable removal fi rm are just some of the issues you are likely to have to deal with. Nevertheless, during this mad rush, it is vital that you pay adequate attention to financial planning. In particular, the tax consequences of leaving the UK are quite complex, so it is essential that you seek professional advice.
Business Succcession Planning
If you are a business owner, business succession planning and insurance is important. It is simply the process of planning for what you want to happen if you (or your co-owner, if you have one) were to die or fall seriously ill. If this happens family and business partners can be left in a complex situation. In some
instances, the business ends up in the wrong hands, in others the business can fail. These issues apply to sole traders, partners and shareholders in limited companies, and all of this can be avoided with some sensible succession planning.
Other Useful Links
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