Journalists looking for a story had suggested that the Chancellor, in his Autumn statement, might place a cap on the total size of ISA savings pots or reduce the amount of tax-free cash available from pension funds. Happily, neither fear was realised.
The tax-efficiency of ISAs makes them the obvious medium for non-pension investment in stocks and shares. However, ISAs cannot be transferred by the holder or held in trust, and consequently they will suffer the full impact of inheritance tax on the death of the holder.
The ‘Lifetime Allowance’, which limits the total sum which can be saved in a pension scheme while retaining the tax advantages, is to be reduced from £1.5m million to £1.25 million with effect from April 2014. However, investors whose funds already exceed £1.25 million in value or could do so by the time they retire can apply to HMRC to lock in to an allowance of up to £1.5 million.
The question on many people’s minds is “How long will the money last?” Among them are those facing the cost of long-term care; those trying to maintain a standard of living following divorce; recipients of personal injury claims; and redundant executives wondering how long their severance pay will last.
Saving for your pension is only half the battle for a comfortable retirement. As a new comparison website from the Association of British Insurers (ABI) shows, annuities — the income for life you receive in exchange for your pension pot – vary enormously between providers. Accepting what your pension company offers can leave you thousands of pounds worse off.
With the economy now getting back on track and markets improving, it could be time to review your investments to take advantage of new opportunities. Monitoring those investments can be a great deal easier if you have a platform.
Inheritance tax – once known as Estate Duty – used to be something that only troubled the seriously rich. Now, with house pricesrising in line with a recovering economy, many more people are starting to find that the taxman will take a share of their legacy before their loved ones. But there are steps you can take to help ensure your wealth goes where you want.
We are all living longer. According to current research, 50% of babies born now could live to see the grand age of 100. Unfortunately, longer life does not always mean longer independent living. More of us could need to fund long term care, for ourselves, parents or spouses.
The experts say the ideal time to start putting money into a pension is as soon as you start earning. That said most of us don’t live in an ideal world – so is there anything we can do if we’ve left things late?
Ron (of Red Earth Education) is back and hosting an art exhibition in Blackheath – Children of Africa Art Exhibition – to raise money for Red Earth Education.