11 March 2014
Saving up for your retirement is of the utmost importance because unfortunately but unavoidably, the government pension plan is not enough for most people to live comfortably on.
There has been enough press coverage on Pensions recently to make even the most financially savvy amongst us glaze over. When I talk to people about Pensions I’m faced with, “Why would you do a Pension?”, “My friend said Pensions are rubbish!” and “I’ll do it when I’m older”.
Simply, there is a lot of misunderstanding on the subject. However, this short article should dispel some of the mysteries surrounding this tricky subject. Some of the benefits of Pensions include:
- If you are a taxpayer, when you contribute into a Pension, the government contribute too! Therefore, for a basic rate taxpayer, £80 into a Pension is automatically grossed up to £100.
- Your funds grow in a tax favourable environment.
- You can draw on your Pension from age 55 usually taking 25% of the Pension pot as a tax free lump sum.
- You can potentially draw on a Pension whilst you are still working.
- You can then use the remaining funds to buy what is called an ‘annuity’ (which will pay you a regular income for the rest of your life.)
There are a lot of other points to cover on Pensions and it is a very wide subject. Therefore it pays to have an expert on side.
Whilst there are obviously other saving options for individuals looking to put money away for their future the questions are: have you thought about your retirement plans? Or can you afford not to?
Please note – all points covered regarding tax rates, pension age and entitlement to tax free lump sum are correct as at 03.03.14
By Roger Jackson, 11 March 2014 –
24 February 2014
Life has changed a lot for me and my family in the last year. Baby Charlotte is a beautiful, if somewhat noisy, addition to our family.
I was always confident that we could manage no matter what, but having a baby makes you look at things in a whole new light. We had to think about protecting our family should one of us die or be diagnosed with a serious illness.
It’s not easy budgeting when you suddenly go from a salary to the princely sum of £136.78 (statutory maternity pay) each week to live off and so we had to assess our expenditure and look at balancing what we could afford with what we could not afford to be without.
I personally have always had life and critical illness cover, but knowing that we didn’t have any for my husband, Alan, I found myself contemplating the ‘what if’ scenarios in life. Could I cope with a toddler and a teenager to look after if something happened to him?
After some discussion, we decided that a lump sum in the event of Alan’s death or diagnosis of a critical illness would really help. It would at least pay for childcare for us, so that I could continue to work.
Now all I have to do is budget for a soundproof room to hide in when my kids throw their inevitable tantrums!
By Lisa Bennett, 24 February 2014 –
20 February 2014
Whilst Japan is the worst performing market year-to-date, we believe that the fundamentals remain intact and the prospects for earnings growth in the region are good. We are cognisant, however, that Japan is a globally-integrated market, so not immune to macro headwinds.
The momentum behind growth and employment in the US will be key for the trajectory of quantitative easing and interest rate rises, going forwards. We expect developed markets to be characterised by low rates, subdued inflation pressures and low-to-moderate growth. We also expect central banks to err on the side of growth and accommodation. As such, we remain comfortable with a higher allocation to equities and our continued overweight to the US. However, we note that since the start of 2013, emerging markets have underperformed the US by 35% and spreads on emerging market debt have been close to 400 basis points over US treasuries. We will look to take advantage of value in these markets in due course.
David Coombs, Head of Multi-Manager Investments, Rathbones
By Ruth Power, 20 February 2014 –
18 February 2014
I have recently returned to FMB following seven month’s maternity leave. Although I am glad to be returning, albeit on a part time basis, a recent survey of mothers carried out by the netmums website showed that 7 out of 10 mums would rather stay at home with their children than go back to work. With increasing numbers of stay at home dads also, many couples are faced with the decision of whether or not they can afford to take this step.
For many, this simply just isn’t possible from a financial point of view. A recent uSwitch survey showed that around 3 out of 10 new mums end up in debt as a result of taking maternity leave, whilst more than 1 in 10 have to cut their maternity leave short due to financial pressures.
I would recommend drawing up a budget planner, which is basically a list of all essential expenditure such as your mortgage or rent, household expenses, utility bills etc. Don’t forget that many of the expenses you would incur as a working parent could be saved on – for example; commuting to and from work, buying work clothes and eating lunches out.
You then need to consider the cost of childcare. The average cost of a nursery place in the UK for a child under the age of two costs £4.26 per hour*. You may find that staying at home becomes financially more attractive once you factor this in. Other considerations are working tax credits and child benefit (this can be lost if you earn over a certain amount).
At FMB, we use cash flow modelling software which is specially designed to answer questions such as:-
"Could I afford to return to work part time, or even give up work altogether?"
We can also advise on ways to retain child benefit payments, such as salary sacrifice schemes which can provide child care vouchers or putting part of your salary into a pension plan.
If you are expecting and would like to talk to us about your financial matters, please give us a call.
* Daycare Trust and Family and Parenting Institute Childcare Costs Survey 2013
By Louise Smith, 18 February 2014 –
04 February 2014
Caption: The stunning Whitsunday Islands, Australia
"I have worked at FMB for over 8 years and my role is that of Team Leader. On 7th February I will be embarking on a Holiday of a Lifetime with my partner, Robert.
The 10th March is my next day back at work so I cannot wait to set my ‘out of office’ on Thursday!
I have never been on such a long holiday before and FMB has kindly let me have the time off work.
With the State Retirement Age being put back from 60 to over 67 years I felt I wanted to do something special and exciting now rather than wait another 14 years. Now you all know my age!
Myself and Robert fly out to Auckland on 7th February and will stay at the Sky City Hotel for 3 days. We then board P&O Aurora to embark on one of their World Cruises.
We will visit the Bay of Islands, then on to Sydney, Brisbane, Whitsunday Islands & Cairns. I have booked an excursion for a once in a lifetime experience at the world’s largest reef system, the Great Barrier Reef.
Aurora will then cruise to the Philippines, staying at Manila, where we will visit the old city. From there the ship sails to China and we get offshore in Shanghai, one of the world’s most fascinating cities, bursting with ancient traditions, culture and modern technology. Another port of call in China is Xiamen, once a major seaport for Imperial China.
The final place we step offshore for a couple of days is vivid and vibrant Hong Kong. I have planned a tram ride to Victoria Peak, where visitors come from all over the world to see the spectacular views. If time, I am hoping to get a ‘made to measure’ outfit from tailors in Kowloon. Hopefully I shall be wearing it when you next visit FMB!"
Angela Nottingham, Senior Client Services Supervisor, FMB
By Rebecca Wilson, 04 February 2014 –