Protecting your income

We all like to think the same way – it will never happen to me!

But have you ever considered how would cope financially if your were to suffer an illness or disability, leaving you unable to work?

How would you pay the bills? Could you survive on state benefits?

Income Protection (also known as Permanent Health Insurance) is an insurance policy that helps you cope financially if you can’t work due to illness, a disability or an accidental injury. It can provide you with tax free income if you make an eligible claim, which can then be payable through to retirement age.

The pricing of income protection usually depends on your occupation – the bigger the risk of sickness, then the higher the amount you pay. Premiums can be lowered if you choose to support yourself financially through the early months of a claim, as you can decide when you would like payments to start.

At my firm Financial Solutions Wales, we can discuss your exact income replacement requirements, the level of cover required, along with how you could support yourself in the event of needing to claim. As we are independent, we can look at all the providers of income protection and make a recommendation to meet your unique circumstances.

Please feel free to download the ‘Protecting Your Income‘ guide*. It contains plenty of information on what you should consider when thinking of taking out an Income Protection plan.

If you require independent financial advice on Income Protection, feel free to call on 01554 770022 and we can arrange a no obligation appointment.

*Brochure provided courtesy of http://www.adviser-hub.co.uk

Our short guide to Annuities

It takes many years of planning, saving and sacrifice to build up a significant pension – and, after all those years, you want to be sure you are making the most of it.

However, as you near retirement, your pension company will send you a variety of options to choose from.  Many of my clients find the choice a bit daunting, as they do not understand the choices and declarations that need to be signed.

There are alternatives to annuities, such as income drawdown, asset backed or short-term annuities.  It is usual that the pack that you receive will only provide a choice on straightforward annuity purchase, which is not always the best for everyone.

All pension providers must now recommend that you seek independent financial advice when they send you your annuity pack, quoting the ‘open market option‘.  I would comfortably state that whenever we  provide annuity advice, we are usually able to shape the annuity to suit your circumstances and obtain a higher income using the open market option.

The choices you usually get are:

  • Taking a tax free cash lump sum.
  • Purchasing a spouse’s/civil partner’s pension.
  • Inflation proofing the annuity.
  • Building in a guaranteed period.
The choices you usually do not get are:
  • Building in capital/value protection.
  • Basing the annuity on your personal/spouse’s health situation.
  • Taking into account your smoking/lifestyle circumstances.
  • Choosing an asset-backed annuity.
  • Including overlap (where the annuity continues through the guarantee period AND a spouse’s pension is paid)

Our downloadable annuity guide* is designed to provide you with the basic information you need to start thinking about your retirement opportunities. It cannot make any recommendations or decisions for you but, armed with the information it provides, you can start to ask questions and, with our help, make sure your retirement is as well-funded as possible.

Alternatively, if you require independent financial advice on retirement income options, feel free to call on 01554 770022 and we can arrange a no obligation appointment.

*Brochure provided courtesy of http://www.adviser-hub.co.uk

Long term care funding

The good news is that we are all living a little bit longer. Mortality rates are rising.

However, it is also expected that more of us will need residential or nursing care in our later years.

The cost of care is an issue that many older people feel that it is impossible to avoid. The cost of care in Wales averages between £419 and £589 per week*, depending on whether residential care or nursing care is required. The standard of care also differs widely, depending on the care home selected.

The family and person entering care will often desire the best care home, but have reservations about long term costs. It is also possible that some people entering care will qualify for some state help with the cost of care, but are unsure about what financial assistance is available. Some costs of care may be met by the local health board, and some by the local authority.

It is important to also consider assets which may be exempt from any financial assessment for care costs.

It is also important to know what state benefits you are entitled to when entering care.  Entitlement to state benefits such as Attendance Allowance will also depend on whether you are self funding, or in local authority funded care.

There has also been a lot of news recently about people paying for care when it should have been provided free through continuing care by the NHS.

There are several fears for people entering care, such as:

  • If self funding, how long will the money last?
  • The intended inheritance could disappear after many years paying for care.
  • Having to move a settled relative out of a care home if the available funding runs out.
  • Local Authority funding not meeting the costs of the desired care home.
  • The family may have to top-up funding to meet the costs of the care home.

How can we help?

As a specialist adviser on financing long-term care, we can discuss and put in place the most appropriate funding solutions for paying for long term care costs.

This will include discussing your entitlement to local authority support, as well as whether there is a need to pay for your own care, or whether it could it be provided free by the NHS.

Our knowledge in this area will assist when considering the long term funding options.

Our service.

We will offer you a no obligation initial meeting, provided entirely at our own cost, to see whether you need advice, and agree how we can work together.

If you decide that you need financial advice, then we can develop a plan, and discuss the advantages and disadvantages of the options available.

We are able to provide professional independent financial advice on the choices available for care funding, and would be delighted to meet with you and your family to discuss all the options available. The costs of such advice will be made clear if you appoint us as advisers.

If you require independent financial advice on Long Term Care funding, feel free to call on 01554 770022 and we can arrange a no obligation appointment.

*Source: Partnership Assurance research 2009/10

Our short guide to ISAs

‘ISA’ stands for Individual Savings Account, a tax-efficient wrapper offered under Government legislation as a way of encouraging you to save. An ISA sits over your choice of a number of different investments to shelter them from further tax on any income or gains earned.

There are now just two types of ISA – the Cash ISA and the Stocks and Shares ISA – and the combined allowance for both in 2012/13 is £11,280.

Within this, the limit for Cash ISAs – or for the cash element within a Stocks and Shares ISA – is £5,640.

However, there is flexibility over how these limits can be used – you can, for example, put the maximum £5,640 in a cash account and £5,640 in a stocks and shares account. Alternatively, though, if you place just £2,000 in cash, you can use the entire remaining balance – £9,280 in this case – to invest in stocks and shares. If you wish, you may put the full £11,280 into a Stocks and Shares ISA.

In addition, you can transfer existing Cash ISA holdings to a Stocks and Shares ISA without impacting on your current tax year allowance. So, if you have £10,000 already sitting in existing cash ISA plans then this amount can be moved to a Stocks and Shares ISA, yet leave your entire current tax year allowance.

Finally, if you already have an ISA, you are permitted to transfer it to a new plan manager, without using any of your annual allowance.

Please feel free to download the ‘Guide to ISAs‘ brochure*. It contains plenty of information on what you should consider when considering investing in an ISA.

Alternatively, if you require independent financial advice on ISAs, feel free to call on 01554 770022 and we can arrange a no obligation appointment.

*Guide provided courtesy of http://www.adviser-hub.co.uk

Investing for children

No parent will need reminding children cost money.

Many parents or grandparents are in the fortunate position to be able to save for their family and so often need advice on what may be the most suitable route.

With so many options available, where do you start?  A bank account, Junior ISA, Child Trust Fund or shares, to name a few?  Protection from inflation also needs to be considered.

Your timeline is very important.  A savings account for a toddler has a longer time horizon, and maybe you could afford to take more risk.  On the other hand, putting money aside for a teenager will probably need more security, and may be better suited to a deposit account.  Your attitude to risk will probably drive the most suitable investment.

Here are some considerations:

  1. Use personal allowances – the child will be able to earn £8,105 free of tax (2012/13).
  2. Are Junior ISAs or Child Trust Funds suitable?
  3. Trusts – these may provide the saver with more control over the investment.
  4. A pension contribution for the child may be desired.
  5. Friendly Society savings bonds may offer a suitable solution.
Please feel free to download the ‘Investing for Children‘ guide.  It contains plenty of information on what you should consider when investing for a child.
If you require advice on savings for a child, feel free to call on 01554 770022 and we can arrange a no obligation appointment.

Don’t lose out in retirement

As you head towards retiremCouple seeking retirement annuity pensionent, you spend a lot of time thinking about what you can do. It’s time to please yourself – work part time, take on a personal project, tour the world or, without any guilt, do absolutely nothing. It’s taken you a lifetime to get here so giving it a bit of thought is very satisfying.

However, a recent report from the National Association of Pension Funds found that many people do not include their finances in these thoughts. As a result, pensioners are missing out on as much as £1 billion in potential income1.

It all looks so simple

If you have been saving into a pension, either with your employer or on your own, you will likely get an offer from the insurance company or pension provider just before (they think) you are due to retire. This will quote an income which they guarantee to pay you in exchange for your hard earned savings. It will all look very easy –sign on the dotted line and everything is sorted out for you.

However, the NAPF’s report suggests that taking this offer could cost you dearly. You could end up settling for an income which, had you spent a little time checking the competition, could have been significantly increased by another provider.

Take every penny

There are many different options available at retirement and lots of providers fighting to get your business. With the competition so fierce, it is essential that you check every offer to find the most suitable solution and maximise the income you receive.

It is the lack of action which has led the NAPF to conclude that pensioners are losing £1 billion.

Their advice is therefore, shop around. Not only does this allow you to seek out better offers, it also gives you the chance to consider different factors. Inflation, for example, and health. The Association of British Insurers2 suggest that as many as 49% of people have lifestyle issues (eg: smoking, high blood pressure) or suffer from health conditions (eg: cancer, diabetes) which could increase the income they receive even further. Sadly, only 13% actually do anything about it.

You have nothing to lose

Our retirement review service is designed specifically to help you to make the right choice – and maximise the income you receive.

We take a detailed look at who you are, what plans you have and what can be done – and then seek out the best solution for you.

If you would like more information, call our office on 01554 770022 and we can discuss the benefits, without any obligation on your part. It will take only a few minutes – but could end up adding hundreds of pounds to your income just when you finally have the time to enjoy it.

1: NAPF/Pensions Institute, ‘Treating DC members fairly in retirement’ Feb 2012;

2: Association of British Insurers, ‘Annuity Purchasing Behaviour’, Sept 2010

Financial advice you can trust

Independent Financial Advice from Jeremy Phelps, Chartered Financial Planner

The Chartered titles, awarded under the Chartered Insurance Institute’s (CII) Royal Charter from the Privy Council, are steeped in history and they are just as relevant in today’s market.

A uniquely British institution, the Royal Charter is a stamp of quality that has stood the test of time and remained the gold standard for professional services in the UK and abroad.  Its reputation has held fast whilst governments have fallen and whole systems of economic theory have crashed to the ground.  The Chartered title remains a symbol of an unparalleled mark of quality – merit, competence and commitment to the highest standard of professionalism.

They remain the ‘gold standard’ of excellence and integrity.  My Chartered status provides you with comfort and security, serving as a benchmark for quality and ethical practice.

Consumer research by the CII has shown that ‘Chartered’ resonates best with the public in terms of recognition, trust and confidence – both in the insurance and financial planning sectors, and in the broader world of professional services.

Qualifications / Statement of Professional Standing

I am very pleased to advise that I have successfully passed the Advanced Diploma ‘Financial Planning Process’ examination set by the Chartered Insurance Institute.

As a result of passing this exam, I am now an Associate of the Personal Finance Society (APFS) and as such, I have applied for the Chartered Financial Planner title.

Finally, more good news!  I am one of the first Independent Financial Advisers to have received my Statement of Professional Standing (SPS) from the Chartered Insurance Institute.  The SPS confirms that I:

  • have adhered to a code of ethical standards.
  • hold the required qualifications for the activities I undertake; and
  • have completed appropriate CPD and complied with APER (Statements of Principle and Code of Practice for Approved Persons).

Please click here to receive more details on my Statement of Professional Standing.

Open Market Option – a Pension Income Boost?

For many years pension providers have been forced to recommend that those at or near retirement seek advice on using the ‘open market option‘ – using the pension fund and shopping around to see which company offers the highest income based on your unique circumstance.  The problem with this is that this piece of advice is often (but not always) several pages into the letter, and sometimes missed by the recipient of the option pack.

Missing the opportunity to shop around using the open market option can have a severe long term effect on your income.  Many people will qualify for a higher annuity based on their lifestyle, or their health issues.  With the average personal pension pot being around £30,000 this is a decision that must not be taken lightly, as when you purchase an annuity, it is a once and for all decision and cannot be changed later.

At Financial Solutions Wales, we specialise in sourcing the most suitable annuity income for you.  We will also discuss all other retirement income choices, such as Income Drawdown and the newer Third Way annuities.  Please give us a call on Llanelli 01554 770022.