In case the article on the exciting world of ISAs did not grab your attention in the Standard last night, CLICK HERE to view it online.

ISA season is fast approaching – if you would advice on how to make best use of your allowances this year, please just let us know.

Using some of your ISA allowance to shelter part of your cash account would use up some of the ‘CASH ISA’ element.

Keen to get us all investing in real assets like stocks and shares, the Government allow us to use the remaining allowance to shelter part of a share portfolio or perhaps some collective investment funds. This would use up the ‘Securities ISA’ element.

The decision for many then should not be, ‘should I buy an ISA?’, rather ‘should I be saving in the bank or investing in the stock market?’

It is surprising how many people we meet who have an ISA but did not realise that they hold a basket of FTSE shares via a tracker fund, sold to them by the nice man in the bank!

If you are making provision for the longer term and you are comfortable to invest some cash as opposed to save it, then here are some tips when choosing an ISA:

Investment ISA

• Would you like to select the individual shares yourself (self select) or rather use collective funds to outsource these decisions?
• If using funds then be sure to check initial charges – these can range from 0% to 5.5% on the money you invest
• If you are paying initial charges, what are you receiving in return? Advice, top active fund management..?
• What are the annual management charges (AMCs) or better still the Total Expense Ratios (TERs) of the funds selected?
• Are there any other charges – switching, annual or quarterly fixed costs etc.
• Using an ISA via a platform or wrap, as opposed to a single fund group or bank, will provide access to funds from many different providers, often 1000’s to choose from
• Flexibility: If you later need to take some funds out, what is the minimum amount that must be left in to keep an account open?
• Online access: can you view and make changes to your investments online?

If you are excited about ISAs and want to know more – feel free to drop in or call or e-mail.

From October, starting with major organisations, most employees aged over 22 must be enrolled automatically into a ‘qualifying pension scheme’; individuals can opt out, employers can’t. Companies with no qualifying scheme must take action, failing which they will have to enrol employees into the government-sponsored National Employment Savings Trust (NEST). It is in the employer’s direct interest to examine the alternatives because they will from September 2017 be making a minimum 3% contribution and it is questionable whether NEST will be the perfect choice for them and their employees.

Not one for the back burner
Some smaller employers may think they can leave auto-enrolment on the back burner, because they have heard it is coming in gradually or think that accepting the default arrangement – NEST – will make things easier. That may not be so and it would not be in employers’ or employees’ interests to ignore other options such as a group personal pension scheme. It has been decreed that NEST administration must not be complex, so limited investment fund choice is envisaged – yet there will be a 1.8% levy on each contribution until NEST’s start-up costs have been recovered.

The danger of deferring action on auto-enrolment is that a last-minute decision will not produce the best outcome. Thus, employers of all sizes must start preparing for auto-enrolment now, as companies with 3,000-plus employees will be drawn in during July 2013. There is no let-out even for those with fewer than 50 on the payroll, although the Government has recently announced a delay to implementation for smaller employers, due to the economic climate. So, how best to progress things? Take specialist professional advice as soon as possible, allowing time to put the optimum solution in place. Among the first things to check with advisers is the actual staging date by which registration with the Pensions Regulator and full implementation of auto-enrolment must by law be completed by your business.

Is successful financial planning simply a matter of resolve? Not necessarily, most of us also need professional help and guidance to turn our financial plans into reality. But resolve is a great starting point, so maybe a few New Year Resolutions would not go amiss. Individual advice is not dispensed in this newsletter, but here are a few ideas that may be worth pursuing by the end of the tax year.

With the new tax year in sight, it is timely to review usage of the current year’s Individual Savings Account allowance of up to £10,680. Remember that Junior ISAs with a £3,600 annual limit are now available for many under-18s.

As official interest rates are forecast to stay low, it may be opportune to restructure borrowings to eliminate costly store and credit cards and perhaps, with the benefit of professional advice, survey the mortgage market for a more competitive deal.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

It generally makes sense to hold an accessible cash reserve equivalent to at least three months’ salary to cover any emergency or other unexpected spending. Taking out a high-interest savings plan is one way to accumulate a useful cash reserve.

Everyday financial pressures often overshadow the need for adequate protection for family in case of premature death or serious illness. So, it is important to reassess levels of protection insurance such as life, critical illness and income protection.

Dying without a Will can place extra pressures on those left behind and lead to what may be deemed inappropriate distribution of assets. Consider making or updating a Will to ensure that, for example, children’s welfare and financial needs are provided for. Will Writing is not regulated by the Financial Services Authority.

Thinking ahead is the key to a comfortable retirement, and pension contributions offer useful tax relief. It takes time to build up a useful pension pot, so make 2012 the year to ensure that retirement planning is on target to deliver a comfortable lifestyle.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

So, what is the alternative to chasing the star performers like a punter at the races, only to look back in anger when they finish way down the field? Many serious investors have concluded that the key to solid performance over the medium to long term is adoption of an investment strategy that may deliver neither spectacularly positive results nor spectacularly negative results year by year. By spreading risk in a measured way, they can benefit from bright spots and cope with any weak performers.

Not everyone loves the roller coaster
In line with this, Holder & Combes sees its financial planner role as using knowledge, skill and experience to maximise clients’ prospects of achieving their objectives, rather than promising massive returns from speculative stock-picking. This approach means focusing first on the investor, to identify an investment strategy involving a mix of asset classes with which they feel comfortable, particularly in terms of risk tolerance. Not everyone in the fairground loves the roller coaster.

A key question for the investor is whether they wish to share in broadly average performance across the asset classes chosen for their portfolio or would prefer a more active approach. The latter may or may not achieve superior performance over time, but does involve management fees. In other words, active investment management between asset classes offers the possibility – but not certainty – of above-average performance; not the smoothest ride in the fairground, but not the roller coaster either.

Global market conditions can, as the past four years have shown, produce stomach-churning dips for even the most cautiously invested portfolio. However, in more normal conditions and over the medium to long term, a passively managed portfolio should deliver fewer shocks and surprises, as gains or losses – the fairground’s swings and roundabouts – are averaged out. We aim to guide you through the options available, identify a portfolio mix to match your needs and keep its suitability under review – so that, one day, you can look back in satisfaction at your investments’ performance.

The answer to that is another question: is happiness that is based upon a false sense of security a true form of happiness or one reminiscent of ostriches, their heads and lots of sand? We would all be entitled to feel genuinely happy if we were safe in the knowledge that our lifestyles and, more importantly, our families were protected from the financial effects of misfortunes that will regrettably affect thousands among the UK population during 2012 and beyond.

At this point, various statistics could be reproduced to show the numbers of people likely to suffer strokes, heart attacks, cancer, serious accidents, unemployment and other misfortunes over a twelve-month period. The stats are thought provoking, but they can also lead us to play numbers games to justify inaction. Some people might see, as an example based on a random figure, a one-in-twenty chance of misfortune as a gamble worth taking. If it were a one-in-five chance, they might take a different view.

The commonsense view
Whatever the statistics, we support the commonsense view – bad things can happen and they can happen to anyone. So, it is important for everybody to consider the financial implications of misfortune and to arrange protection for themselves and their family. The most obvious form is life insurance to cover borrowings, including any mortgage if a protection policy is not already in place. Life policies may also be structured to provide an income stream, perhaps for a fixed period until children have completed their education.

Life cover is just one aspect, however, because families need extra capital and replacement income if – as is more likely than death – a breadwinner becomes ill or unemployed. Critical illness insurance pays out in the event of a serious ailment, medical condition or permanent disability as defined in the policy’s terms. Income protection insurance may take several forms, such as personal accident & sickness, permanent health, or accident, sickness & unemployment. Time to arrange a protection review?

Oil companies and banks are firm favourites with the fund managers, but not necessarily with the consumer who invested in these funds in an attempt to avoid such companies!

It is the mismatch of consumer expectation and fund group delivery that we found interesting. Many ethical funds may well invest in line with your expectations, but many will not – the message then is to read more than the marketing literature and get hold of the detailed propectus to investigate fully what the fund manager is up to.

Read more  on the Metro WEBSITE or download the pdf of the print article HERE

Moonlighting as the Pension Detectives, we shall feature regularly on the This is Money Website – so keep your eyes peeled.

Read the first article HERE

Gareth from Silverman Sherliker LLP stepped up to the challenge:

Why do I need a will?

Wills allow you to choose:

• Who will inherit your assets;
• Which assets go to each particular beneficiary;
• Who will be responsible for administering your affairs in your absence;

If you do not make a will… the law will decide who gets your assets. Certain events will take place automatically, regardless of whether or not it was your intention.

Dangers of not having a Will…

1. Additional costs are often incurred in cases where no Will exists, which in turn reduces the value of the estate.

2. Additional distress to family and friends – If you do not make a Will, the Law of Intestacy will govern the distribution of your estate. You can save your family and friends from going through more anxiety following you death by creating a Will that provides them with a clear guide as to your wishes and intentions.

3. Protect your children – If you have young children who would need to be cared for in the event of you passing away, you can select who should be appointed Guardian to you children.

4. Protect you partner – If you are not married or in a civil partnership, your partner may not receive any support or inheretence.

5. Protect your assets against unwanted beneficaries – If you are seperated, but not yet divorced, your ex-partner may be entitled to claim against your estate.

6. Items of sentimental value may not be passed onto the appropriate person.

Can I use a ‘Do-It-Yourself’ pack?

There are many rules and regulations that govern the creation of Wills and without the specialist knowledge and guidance of a solicitor with expertise in Wills and Probate matters a number of problems can arise.

Dangers of DIY wills can include:

• It may not be legally binding because its structure or content does not comply with the various legal requirements;
• Ambiguity within the Will, can result in additional costs being incurred to clarify the issues;
• Unexpeced/unecessary taxes such as Inherentance Tax, which could have been avoided or minimalised with a professionally drafted Will.
• Producing Wills that do not accurately reflect your true intentions, which can result in your assets being passed to unintended individuals.

Please feel free to contact Gareth Hughes directly (Private Client Partner at Silverman Sherliker LLP) on 020 7749 2700 or by email on gh@silvermansherliker.co.uk

Whether self employed or employed, this unpopular annual event is very often left to the last minute. Some want to delay paying any additional tax due until the 11^th hour, while others have simply had more interesting things to do since April last year!

With this in mind, we have put together some tips to help ease the pain of completing your return.

1. Is this for you?

Many people are routinely sent tax returns to complete, even when there is no actual current requirement for them to complete one. If you earned less than £44,000 in the year from 6^th April 2010 to 5^th April 2011, and have no other income from shares or property, then it is well worth contacting HMRC to ask if you should really be completing one at all.

2. Register for online submission

If you definitely will be completing a return, the online submission is without doubt the quickest and easiest way to get your details to the tax man. A few swipes at your i-Pad and a few numbers in the right boxes, and this should be a pretty straight forward exercise. This task might not necessarily be the weekend-ruiner you had been dreading.

3. Don’t be late!

£100 fine for missing the deadline, and then you could be charged interest on any tax due. The only thing worse than paying tax is paying fines for paying tax and then interest on the tax and fines that you are paying! Also, new in for 10/11, even if there is no tax to pay and a return is late, the £100 fine applies anyway!

4. Get yourself organised

If you are attempting to tackle this 10/11 return only now, after almost 10 months of careful deliberation of course, it is well worth digging out and collating all of the bits and pieces of information that you are going to need before you set about the forms. To bake this tax return cake, best to line up all the ingredients in advance to ensure a tasty output.

5. Find those receipts – where did you leave that shoebox?

For self-employed people, any money spent “wholly and exclusively for business purposes” can be added up and deducted from all the money billed during the tax year:

Typical items might be the cost of stock, payroll costs, premises costs, repairs, motor and travel expenses, finance costs, administration costs, professional fees…

6. Fetch the speedo from your bike!

You can claim up to 20 pence per mile for distances travelled on your bicycle in the pursuit of your business. I am always surprised how far I have pedalled and when tax is due, every penny off the dreaded bill is worthwhile.

7. Pension Contributions

Don’t forget to include your personal pension contributions – if you are lucky enough to be a higher or additional rate tax payer and wise enough to be making personal pension contributions, then it may be the case that HMRC will owe you money! Personal contributions attract a maximum of 20% relief straight away. For each gross contribution you made, you could be owed another 20% or even 30%.

8. Invest in some good coffee

Before launching into this task, brew some strong coffee and log out of Facebook. Submission of a tax return is a serious business, declaring your income and gains is a legal requirement so your full concentration is recommended!

9. Gift Aid

Money you generously donated to charity is not all lost! Including these donations on your return could mean a reduction in the tax you pay in a similar way to pension contributions. If you are a higher rate tax payer for example and have already allowed the charity to claim gift aid – for every £100 you donated you can personally claim £25 back. If you are a signed up user of giving websites such as JustGiving – you can log in and print off a list of all donations from there.

10. Don’t include ISAs!

Many people pour over their ‘tax advantaged’ ISA statements trying to see what information is required. Put that statement back in the draw and move on, ISAs are out of equation.

11. Online banking

Some bank’s online banking let you go back and search for items. For example: If you have misplaced the annual bank interest certificate your bank sent you back in April/May last year, then you can search for ‘interest’ received.

12. Capital allowances

Again for the self employed – the value of certain assets you may have bought for your business are not tax deductible, instead you might be able to claim so called ‘capital allowances’. These allowances are designed to give you credit for the reducing value of the assets through an effective reduction in income tax.

13. If it gets complicated – ask for help.

Seeking advice or guidance from a suitable accountant or financial planner could save you time and money. Many friendly professionals will be happy to clarify some points on the phone at no charge. Before spending hours scouring google, it might be worth picking up the phone.

Ed Holder, JAN2012

This article was also published on Times Online: Read It Here