Now we’re talking money

Clients will shortly be receiving a hard copy of Talking Money. In it we highlight the inevitable end of tax year issues that need consideration – or at least some of them. We also have a feature on China “Enter the Dragon” in which five fund managers provide some thoughts about the state of the Chinese market each has a point to make.

We also outline a few of the changes to the State Pension – where for once the highly complex is actually becoming more simplified, this is truly a rarity when it comes to pensions. There is also a very small note in the news section which points to some of the problems of not using an adviser.

The real cost of not taking advice

In January the FCA produced some market data in an attempt to understand the impact of the new pension freedoms (introduced from April 2015). The figures show that one in five people who encashed a pension pot of £250,000 or more took no advice.

This is alarming because they would have automatically paid tax of 45% on the pension (as income above £150,000 is taxed at 45%). Huge sums of tax have been needlessly paid, reducing the value of a pension fund far more than the credit crunch – which at least has recovered somewhat.

Some speculate that this was and is the only real reason for allowing pension freedoms – to collect far more tax. Perhaps the Budget on 16th March will provide further insight into this position.

Similarly, only yesterday I met with someone who had not protected his Lifetime Allowance, which will result in a large tax liability.

Taking advice does have a cost, but so does not taking advice, however taking advice also has a value, not doing so does not.

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