News and blog

Double-dip?

There is a lot of talk about double-dip recession in the media at the moment. But what is a double-dip recession? Are all recessionary preiods the same? Hopefully this article will answer questions that you may have about this phenomenon. 
 


And Finally...

Spare a thought for 62 year old Diana Nyad who has had to give up on not one but two attempts to try and swim from Cuba to Florida. On the first occasion she suffered an asthma attack and then on the second try she received a nasty sting from a man-o-war jellyfish. She had swum about 49 miles of the 103 mile journey.

One of Diana's primary aims was to try and inspire people to remain active as they age.

They do say that if at first you don't succeed then try again. If that fails even more spectacularly then it is probably time for a cup of tea and a revisit of your goals!

Equity Release – Friend or Foe?

 For many retirees – as well as those considering their retirement plans – their home is likely to be their largest asset. In an environment of high inflation and low savings rates, money can be tight for pensioners, but misconceptions about equity release plans might prevent retirees from releasing the value tied up in their home. Research by Safe Home Income Plans (SHIP), the trade body for equity release providers, has found a number of myths that persist about equity release plans.

 

1 – 69% of UK consumers believe you risk losing your home. However, you can remain in your property for life as long as it remains your main residence. In cases in which a couple is involved, this rule will apply to the last surviving member of the couple.

 

2 – 67% of UK consumers believe you will not be able to leave an inheritance.  In fact, when you die, your home will be sold and the money used to pay off the loan. Although an equity release plan will reduce the value of your estate, any money left over will go to your beneficiaries. Taking out an equity release plan could also help by reducing inheritance tax liability.

 

3 – 52% of UK consumers believe you will not be able to move house. In practice, you have the right to move your equity release plan to another suitable property without suffering any financial penalty.

 

4 – 47% of UK consumers believe equity release plans are unsafe and unregulated. However, all members of SHIP have to abide by a rigorous complaints procedure to satisfy the Financial Services Authority.

 

5 – 43% of UK consumers believe your children will have to repay the loan themselves. In fact, you will never owe more than the value of your home and no debt is ever left to the estate. Importantly, SHIP providers also offer a no-negative-equity guarantee.

 

It is important not to confuse equity release plans with sale-and-rent-back arrangements, in which the house is sold – often at a discount – to a third party and then rented back to the vendor for a specified period. These arrangements tend to be an action of last resort, involving those in serious financial difficulties.

Equity release refers to Home reversion plans and Lifetime mortgages. To understand the features and risks ask for a personalised illustration.

Do you have full protection on your Deposit Accounts?

Here at RIS one of the important jobs we do is to help our clients with the assets they have outside of their investment and pensions;  the emergency funds, savings and just plain rainy day money that you build up.

At the end of last year it was announced that the level of depositor protection would increase to £85,000 per individual, per authorised institution (£170,000 for joint accounts). This is all well and good and in many ways a useful amount to give you some confidence that you will be able to make a claim in the event of the unthinkable happening and your bank goes to the wall.

However in these days of enormous global banking firms it is not always easy to tell which bank is part of which banking group. For example Marks and Spencers are part of HSBC; Post Office Savings are part of Bank of Ireland and so on.  The Financial Services Authority has produced a useful table which gives guidance on which firms belong to which group. This will help you to ensure that your savings don't breach that all important £85,000 limit per institution.

The table can be found here - www.fsa.gov.uk/Pages/consumerinformation/uk_groups/index.shtml

 

Government Calls Time on Contracting Out

The government currently allows you to opt out of the State Second Pension - this is called 'contracting-out'.   You may also have known it as SERPS or the State Earnings Related Pension Scheme.

The State Second Pension is the pension that the government provides on top of your basic old-age pensions.  You will qualify for this additional pension if you are or have been employed and  you have been earning in excess of the threshold set by the government.  For the 2011/12 tax year this threshold is £5,304. If you are contracted out the government pays some of your National Insurance Contributions to your own individual pension arrangement; these payments are known as rebates.

If you are due to take your retirement benefits prior to April 2012 then these changes will not affect you.  However if you are due to retire after this date and you are contracted out then you will notice some changes.  After April 2012 you will receive no further rebate payments into your plan. The contracted out funds that you have built up so far will remain invested and will be treated in the same way as the remainder of your pension pot.

In addition to this the limitations currently applied to the contracted out part of your pension pot will be removed. You will no longer be required to provide a retirement income to your spouse or civil partner in the event of your death unless you choose to do so.

You can find out more information on the benefits available under the State Second Pension by downloading the HM Revenue & Customs factsheet at https://www.gov.uk/additional-state-pension

New Team Member & More

We are pleased to announce the appointment of Julie Woodward as the newest member of our team. Julie will be joining us in October as Pat’s Client Relationship Manager/PA and we know she will be a big asset to the company.

Julie has previous experience of the financial services industry and joins us from her current role working as a Fundraiser for the Rainbow Centre in Fareham.  We are all looking forward to Julie starting with us. If you pop into the office then be sure to say hello.

Justin Randall will be our new Practice Manager from October and will be ensuring the continuing smooth running of the company with particular responsibility for Research, due diligence and Compliance.  All these functions ensure that RIS maintains the high level of service and ethics that our clients have been accustomed to.

Tracey Matthews has been promoted to become Steve Webb’s Client Relationship Manager/PA;  Tracey has worked at RIS for over 2 years as our New Business administrator and has excelled in everything she does.  Steve and Tracey make a formidable team and as well as providing advice and support to individuals, they manage several Group Pension Schemes for local businesses.

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Retirement and Investment Solutions
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Waterlooville
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T: 01489 878300
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E: advice@retirementis.co.uk