NEST – Pushed out next year?

Employers wishing to know when they are scheduled to begin payments towards the new NEST pensions can find a list of dates by clicking here. In practice it will be a year until the first NEST scheme is implemented (October 2012) and then, this is only for the very largest of companies, employing over 120,000 people. Smaller companies and organisations will have until March 2014.
If you would like to set up a NEST scheme, you can do so “very easily” by visiting the NEST website. However be warned that there are limits to the amount that can be contributed and significantly a very small choice of funds (currently just 5). The main advantages of the NEST arrangements are:
1. The investment charges are low
2. The scheme is relatively easy to set up
3. Staff can access and view their account
4. Everyone is opted in if they have not opted out.
In addition, contrary to initial information, it would appear that when moving between jobs it will be possible to consolidate NEST pensions, however it is my understanding that it is not possible to move NEST into other pensions and vice versa.
NEST is aimed at low income earners who are not providing themselves with pensions. It remains to be seen if this will “solve” the problem. It may form part of a range of options available to employers. Importantly, the contributions will be 5% from the employee and 3% from the employer in due course. Contributions are currently limited to £4,200 per tax year, so anyone with an income above £52,500 will find that they cannot contribute significantly towards the pension. Many people will however find this allowance significantly more than they had been contributing. The current tax year restricts pensions contributions to the larger of £3600 or 100% of earnings, up to £50,000.
Contributions start with 1% from the employer and 1% from the employee (2% in all) until September 2016, thereafter 2% from the employer and 3% from the employee (5% in all) until October 2017 when employers must contribute 3% and employees 5% (8% in all).
The alternative is arranging your own pension arrangements, ideally one that has a good choice of funds (after all the size of the pension will be based on how much the pot is worth). This also allows more choice and flexibility for staff. However, having fund choice is only an advantage if it is used.
The NEST site is fairly good, although it is quite easy to find yourself using it in a rather circular fashion. In summary this is a pension for low earners, there is very limited investment choice and charges are low. Alternatives (individual or group personal pensions, or SIPPS) will be more expensive but offer considerably more investment options. It might be reasonable to say “you get what you pay for”.
Here is a video from NEST, I’m not sure if it was deliberate that one of the characters wears a hat rather like Jack Nicholson in the movie poster for “One Flew Over The Cuckoos Nest” but it may be a deliberate intent to appeal to blue collar workers, mind you, quite how much a pint of beer will cost in 40 years time is anyones guess.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting
NEST – Pushed out next year?2023-12-01T12:49:08+00:00

Hope For Europe This Weekend?….Always.

The constant news about economic troubles around the world is depressing. There is a fairly high chance that the eurozone will have to alter dramatically – many will say “not before time” and probably “we told you so”. There are obvious advantages to a stable European market and it is certainly helpful to commerce and travellers to have reduced complexity with a single currency.

The problem though is something rather more fundamental that Europe seems to forget on a frequent basis. One size does not fit all. There are cultural differences and ways of living that differ between nations (indeed we are aware of this even within our own small island). We can be thankful to Gordon Brown for not taking the UK into the Euro, which his then boss (Tony Blair) was very keen to do. Certainly it would be nice to live in a world where each nation values life and personal freedoms, but we are acutely aware that this is not the case in many parts of the world, including Europe and on occasion even here within Britain.

This weekend, finance ministers will be meeting in Poland to discuss and hopefully take action on the problems relating to the Greek national debt. However, before we rush to chasten the Greeks, our own situation is not that much better and the North American (USA) numbers are even more terrifying. Change is needed and this needs to be done thoughtfully and carefully. The problems are enormous, but we are (well I certainly include myself) not without hope, which reminded me of this rather powerful little poem.

https://www.youtube.com/watch?v=42E2fAWM6rA

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

Hope For Europe This Weekend?….Always.2023-12-01T12:49:08+00:00

Gold and all that glistens

Image from WGC website
If the markets and the general debate about the merits of Eurozone leave you feeling rather cold, perhaps some inspirational gold accessories will brighten up life… The World Gold Council produce a variety of information about gold, including fashion designs of a rather high quality. Given the current price of gold I would advise being careful about where such pieces are worn and you may wish to secure a price in advance.
Designers in the latest WGC issue include Tre Spighe, Malcolm Betts, Paloma Picasso, Fred, Lorenz Baumer, Solange Azagury-Partridge, Pomellato and Kim Kaufman.
We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting
Gold and all that glistens2023-12-01T12:49:09+00:00

Creatives Required for Great Financial Planning

Like most people in work, my job involves rather more than simply the job description, which is a good thing I guess. By way of example, a typical week  tends to involve at least one training seminar and probably one or two exploratory meetings with various industry consultants.

Last week I attended yet another training session about the retail distribution review (RDR) and the changes that impact me, the firm and our clients from 2013. The morning event was held at Grocers Hall, a fairly plush venue a stones throw from the Bank of England. The speakers were all of very high calibre, but all reflected on the sad state of the changes that are in motion but by no means finalised or clear. There are now only a few months to go (15 and a bit to be precise) yet there are still significant unresolved issues. This has considerable impact on financial advisers across the country. It is my belief that very little will change for our clients or our firm, after all we have always operated on a transparent fee system, however the bulk of advisers in Britain still operate on a commission basis. The change from one to another is considerable, and one that doesn’t take a couple of weeks to implement.
The new rules are probably beyond the reach of a considerable number of IFAs at present with many now taking early retirement and attempting to sell their business. There will be fewer advisers from 2013. I regularly receive emails that ask if I am seeking to sell my business (I’m not!).
Sadly, I do not believe that even with fewer and better qualified advisers to regulate, that all advice will be good. Technical knowledge is one thing, but being able to apply good financial planning principles based upon a deeper understanding of your objectives is vital. In reality, most of us have little interest in financial products or in financial services generally. What people are far more interested in is whether they will have enough money to have the life they want and guidance about what to do if not. The concept is pretty simple, the putting a great financial plan together requires thoughtful creativity as well as technical know-how.
If you have not seen the Warner Brothers film “The Bucket List” directed by Rob Reiner and starring Jack Nicholson and Morgan Freeman, here is the trailer, which may provide some thoughts.
We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting
Creatives Required for Great Financial Planning2023-12-01T12:49:09+00:00

Top Rates for Cash ISA Rates

Here are some of the top rates at the moment. Please remember that this is not advice and I’m not paid by any of these organisations to plug their accounts. I would advise great caution when dealing with any Bank or Building Society. Try to keep a balance at no more than £85,000 in a single account so that you are covered by the compensation scheme. Be warned that often when it comes to banking products, you do not always get what it says on the tin… at least the large print.
Key things to reflect on are the ACCESS you want to the funds. Many accounts need 30 days, 60 days or longer to make a withdrawal, which is not always possible when your boiler needs replacing. Cash ISAs are great places to park money so that interest (which is pitiful at present) is paid without tax. However, this is only really sensible for short-term holdings (under 5 years) and assuming that you are not using your stocks and shares ISA – which would generally be a better long-term investment.

 

One Year Deposit

Online: Skipton 3.45%
Bank: Santander 4.20%
Building Society Barnsley 5.00%

Two Year Deposit
Online: Nottingham 4.00%
Bank: Yorkshire 3.82%
Building Society: National Counties 3.76%

Instant Access
Online: Derbyshire 3.18%
Bank: Santander 2.50%
Building Society: Nottingham 3.25%

Fixed Rate Cash ISA
Online: Clydesdale 4.50%
Bank: Clydesdale 4.50%
Building Society: Barnsley 5.00%

Variable Rate Cash ISA
Online: AA 3.05%
Bank: Santander 4.00%
Building Society: Newcastle 3.00%

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

Top Rates for Cash ISA Rates2023-12-01T12:49:10+00:00

Statistics and Persistency – Seeking Winners

Andy Murray continues to make progress towards a grand slam win. This is one way to view his recent attempt to win the US Open in New York. Unfortunately Andy was beaten by Rafael Nadal in the semi-final but remains firmly in fourth position in the ATP world rankings. The top four are seemingly some distance ahead of the chasing pack. Congratulations naturally go to Novak Djokovic who won the mens singles.
It is worth remembering that fortunes can change quickly. Four years ago at roughly the same point, Andy was ranked 18th with a fairly large gap between him and the top four, who then also included Nikolay Davydenko. Murray broke into the top 4 a year later and has remained there ever since. No small achievement. By comparison, Mr Djokovic was ranked 21st 5 years ago and broke into the top four a year later in 2007. So whilst we may be tempted by our media to think that British tennis still has not got recent grand slam winner, the signs are certainly good for Andy Murray, provided that he can remain fit and continue to improve his game.
There is also some encouraging news in the women’s singles with several encouraging signs. Elena Baltacha and Laura Robson both progressed to the second round. Anne Keothavong and Heather Watson didn’t make it past the first round, but certainly Heather Watson’s match against Maria Sharapova must surely be encouraging. Particularly worth noting is that in the boys juniors tournament, there were three British boys in the semi finals. The boys number 1 Jiri Vesely (CZE) beat the unranked Kyle Edmund (GBR) to reach the final. The other semi-final between Oliver Golding and George Morgan. Oliver Golding went on to win the final against Vesely. So several to watch out for in the years to come… of course much like investing, past performance is no guarantee of future performance, but it probably is unwise to throw it out as merely a collection of statistics.
After all the years of delays and wet summers we have had here in Wimbledon, I think that its possibly a little early to suggest that New York should invest in better protection such as a roof.. after all they have had a month of earthquake, hurricane and rain… not exactly the same as a poor English summer! However, it would clearly be wise for the Open organisers to reflect on New York weather statistics to help them determine if investing in a new roof would be a wise use of money so that their future returns are protected.
We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting
Statistics and Persistency – Seeking Winners2023-12-01T12:49:10+00:00

Fifty Percent Tax can be avoided: Enterprise and Entrepreneurialism

There has been coverage in the media this week about the high profile group of economists that suggested that the 50% tax rate is counter-productive and results in reduced tax collection. This is a debate that is probably most likely argued based upon which side of £150,000 your income falls.
In practice there are things that can be done to reduce income tax for any individual, however in practice it is generally the more affluent that can really use allowances fully.
Pension contributions up to £50,000 would attract tax relief at 40% and perhaps 50% depending on income. In other words a 50% taxpayer is really investing £25,000 to get £50,000 invested. This does of course depend entirely on the figures involved and in theory under the new rules unused allowances from the two previous years could be used as well.
ISAs are not tax reducers immediately, but they grow free of capital gains tax and the bulk of income tax. £10,680 is the current full allowance, per person over 18.
Anyone can gift money and this acts in a similar way to pension payments, in that the charity receive the extra grossed up payment.
For those that are keen to help the UK grow businesses and create jobs, there are Enterprise Investment Schemes, which can provide 30% tax relief on the investment and can also be used to defer capital gains tax. These are higher risk investments than the majority of normal investment funds. An EIS can swallow up to a £500,000 investment from an individual, providing a tax relief of £150,000.
So there are things that can be done to reduce taxable income and use allowances (there are other too). Those least able to take advantage are those in good pension schemes and high incomes, who may get caught out by new rules that would mean paying even more tax – even if they already pay 50% on some of their earnings.
I think it unlikely that the Coalition Government will remove the 50% rate at the moment, preferring to wait until the economy is obviously improving.
We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting
Fifty Percent Tax can be avoided: Enterprise and Entrepreneurialism2023-12-01T12:49:11+00:00

Base Rate Held

 

Following a turbulent time on the markets and the Americans effectively outlining that they will hold their rates for 2 years, it was little surprise that the Bank of England announced that the base rate would remain at 0.50% today. The economic data about the UK and other economies is looking pretty poor and whilst normally rates should be rising (to dampen inflationary pressures) they are “unable” to do so without potentially damaging growth.

The Federal Reserve committee members have been pushing for the Fed to produce more explicit information about longer-term interest rate plans. They made positive steps forward in this regard by agreeing that the target range for Fed rates is 0 – 0.25% until mid 2013.

There is a little bit of smoke and mirrors going on though. Rising inflation is good for debt as it reduces it in real terms. The concern about inflation seems to be evident in that National Savings (NS&Iwithdrew their index-linked (inflation-linked) certificates, which suggests that a good deal should not be too good.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

Base Rate Held2023-12-01T12:49:12+00:00

Top Cash ISA Rates – Car Crash Waiting to Happen?

One Year Deposit
Online: Vanquis 3.45%
Bank: Santander 4.05%
Building Society: Barnsley 5.00%

Two Year Deposit
Online: Nottingham 4.00%
Bank: The Co-Operative 3.75%
Building Society: National Counties 3.76%

Instant Access
Online: West Bromwich 3.17%
Bank: Santander 2.50%
Building Society: Nottingham 3.25%

Fixed Rate Cash ISA
Online: Clydesdale 4.50%
Bank: Clydesdale 4.50%
Building Society: Barnsley 5.00%

Variable Rate Cash ISA
Online: AA 3.05%
Bank: Santander 4.00%
Building Society: Newcastle 3.00%

Of course none of these rates look good when you consider that RPI is currently running at 5.0% and CPI is 4.40% (according the Office for National Statistics). In fact cash currently locks into a guaranteed loss in real terms.

At the risk of sounding stupid, this is not advice. It is merely a list of some of the best rates currently available. However I advise caution, some banks and building society accounts are not quite what it says on the tin. Some are linked to the stock market – which to my mind is virtually the opposite of deposit. The FSA know this, but so far I have not seen any action by them, though in fairness they are keen to prevent misleading advertising within financial

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

Top Cash ISA Rates – Car Crash Waiting to Happen?2023-12-01T12:49:12+00:00

Losing It With Ruby Wax

Ruby Wax is currently on tour with her comedy show “Losing It” in which she partners musician Judith Owen. Having completed a stint at the Edinburgh Fringe and pilots throughout NHS hospitals they have brought the show to the Duchess Theatre in the West End.

The show is poignant and hilarious in parts, relating Ruby’s much publicised struggle with mental illness. She provides some great insights and finds humour in the madness of contemporary life. The pair intend to get the discussion started about the supposedly taboo subject of mental health, which suggests that 1 in 4 adults will suffer from poor mental health at some point in their lives. I’m not sure about the accuracy of the statistics or how this is measured and it would seem that all of us are prone to depression at times. The main thing about mental illness is that it is not generally well understood. A broken arm or serious illness such as cancer invokes sympathy generally, but mental health problems are often dismissed as they are not seen in the same manner. This makes life harder for those suffering with the problem.

One has to wonder at the madness displayed rather obviously in the media and financial services sector. An industry full of people believing that repeating the same behaviour will lead to a different outcome, despite the evidence and experience of the opposite. I could rant on for ages about this, but in essence the credit crunch happened and nothing has really altered to stop it happening again. Indeed the madness is that as taxpayers we merely handed over lots of money to some very overpaid people who have not yet been made to change their ways.  Frankly much delusion exists within financial services and I see evidence of it each week. So the latest revelations of the former Prime Minister and his Chancellor being “at odds” with one another over economic policy, but left in charge of the country and then their plans initially being lauded as “leadership” is hardly surprising.

However, unlike Ruby, who seemed to suggest that pill popping was the answer (which it may be in part, but certainly is not the entire solution) the pill popping of quantitative easing is only a temporary measure. The fundamental reasons and cracks in the system need to be properly examined. There are no easy answers, but only because the questions are pretty difficult and painful to ask, sometimes scary to ask. The markets are finally coming around from a heavy dose of antidepressants, but now the hard work must begin with some thoughtful, serious thinking and counselling of experts who may well think there is another way to live. This sort of work takes time (good therapy does). Some of it will be painful, but real change won’t simply happen – it has to be thoughtfully planned and implemented. There are no shortcuts.

Ruby Wax’s show is running in London until 1st October. It’s a good show, although the second half (a Q&A session) is probably much more hit and miss. If you have an interest in mental health issues, perhaps because of someone you know, SANE are running events with Ruby Wax at the Duchess Theatre on Tuesday’s.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

Losing It With Ruby Wax2023-12-01T12:49:13+00:00
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