...Male clients about to retire? ACT NOW!
The EU Gender Directive comes into effect on 21st December 2012. From this date annuity providers will no longer be able to offer different rates for men and women.
The new Directive will reduce the pension income available to men retiring after 20 December 2012.
Thursday, 29 November 2012
Thursday, 6 September 2012
GARRY HALE NAMED AS NEW PFS PRESIDENT FOR 2012/13
The Personal Finance Society (PFS) has elected Garry Hale, managing director of HK Wealth Managers Limited, as president for the year 2012/13 at the annual general meeting held in London on 5th September 2012.
Garry succeeds Jon Everill as president and is joined by David Thomas, joint managing partner at Chadney Bulgin, who has been newly elected as vice president and David Ingram, partner at Aim Two Three LLP, who retains his vice presidency.
Commenting on his appointment Garry said, “It is an honour to be elected as the new PFS president for 2012/13 but first I would like take this opportunity to pay tribute to Jon Everill who has shown the utmost commitment and dedication to the PFS in his role as president. I am looking forward to continuing Jon’s hard work in this critical year for the financial planner community. The Personal Finance Society has been instrumental in helping individuals and firms consider how they can most effectively comply with the new Retail Distribution Review (RDR) rules and requirements and as we approach the final few months we are seeing the hard work pay off.
“The PFS has also been helping firms and individuals look beyond the RDR requirements to Chartered status, and earlier this year the PFS was pleased to announce that it had topped the 3,000 Chartered financial planners mark. During my year as president I intend to continue this drive and focus on increasing levels of expertise and professionalism within the market.
” Fay Goddard, chief executive of the PFS, added: “On behalf of the PFS I would like to thank Jon Everill for all his hard work and dedication over the past year and welcome Garry as the new president. With the RDR threshold fast approaching our role of helping members develop and maintain their professional qualifications and standards is more important than ever before and we at the PFS are fortunate to have such experienced and knowledgeable individuals on the Board to lead the way with this ongoing support.”
These appointments follow news in July 2012 that Sharon Sutton, managing director of Thornton Associates Limited, has been co-opted as an adviser to the PFS board. For more information on the PFS please visit http://www.thepfs.org/
Thursday, 22 March 2012
The best 2012 Budget quotes……from the horse's mouth.
The best Budget quotes……from the horse's mouth.
From the Chancellor...
1. “Tax avoidance is morally repugnant.”
2. “We must repair the disastrous model of economic growth that created Britain’s record debt.”
3. “Financial services is not the only string to our bow.”
4. British people will "share the efforts and the rewards."
5. "We want to keep Wallace & Gromit exactly where they are."
6. "This country borrowed its way into trouble, now we're going to work our way out"
7. "We simply cannot justify those earning £15,000 paying for those earning £80,000."
8. "We are within touching distance" of £10,000 personal allowance goal
9. "We need to give Britain a modern tax system fit for the modern world."
...And from the Opposition leader:
10. "Now he's going to be able to buy his own horse" – Ed Miliband to David Cameron, in reference to the ‘horsegate’ scandal in which the PM admitted he rode ex-News International boss Rebekah Brooks’ horse.
From the Chancellor...
1. “Tax avoidance is morally repugnant.”
2. “We must repair the disastrous model of economic growth that created Britain’s record debt.”
3. “Financial services is not the only string to our bow.”
4. British people will "share the efforts and the rewards."
5. "We want to keep Wallace & Gromit exactly where they are."
6. "This country borrowed its way into trouble, now we're going to work our way out"
7. "We simply cannot justify those earning £15,000 paying for those earning £80,000."
8. "We are within touching distance" of £10,000 personal allowance goal
9. "We need to give Britain a modern tax system fit for the modern world."
...And from the Opposition leader:
10. "Now he's going to be able to buy his own horse" – Ed Miliband to David Cameron, in reference to the ‘horsegate’ scandal in which the PM admitted he rode ex-News International boss Rebekah Brooks’ horse.
Wednesday, 21 March 2012
Budget 2012: All you need to know
There were few surprises in George Osborne's third Budget but a few nasty shocks for pensioners, bankers and smokers. Read on for a summary of the measures announced by George Osborne and reaction to the Budget 2012.
50p income tax rate cut to 45p
George Osborne confirmed the 50p income tax rate on individuals earning more than £150,000 introduced in April 2010 would be cut to 45p from April 2013. The chancellor criticised the Labour policy after he revealed it had raised around a third of £3 billion it had been expected to generate.
Personal allowances raised by £1,100
Osborne’s plan to increase the personal allowance by £1,100 to £9,205 as of April 2013 was the coalition’s flagship policy for this Budget. The government was committed to further increases and was within ‘touching distance’ of an £10,000 allowance, according to Osborne, who claimed this measure would benefit 24 million individuals and would lift two million people out of paying tax.
Freezing age related allowances will cost pensioners £1.2 billion
The chancellor announced plans to phase out age related tax allowances which was branded a ‘stealth tax’ by Ed Miliband after it emerged it would cost pensioners £1.2 billion.
Age related allowances will be frozen at 2012/13 levels of £10,500 for those born between 6 April 1938 and 5 April 1948, and £10,660 for those born before 6 April 1938 as of 6 April 2013.
The chancellor steered away from widely the discussed policy of limiting pension contributions for higher rate earners but confirmed that the government will introduce a £140-a-week state pension which will not be subject to means testing.
Stamp duty land tax
Stamp duty land tax on residential property worth more than £2 million will jump to 7% from the current rate of 5% for homes valued at over £1 million. The chancellor also imposed a 15% rate on residential properties valued over the £2 million limit which were owned by companies in a move to combat a common tax avoidance scheme.
Osborne threatened further action against individuals who continued to try and avoid stamp duty tax.
Caps on income tax reliefs
The government will put a cap on individuals claiming income tax reliefs which could cause a major shake-up of tax planning for high-net-worth individuals. Individuals who claim more than £50,000 of reliefs will face a cap set at 25% of their income, said Osborne.
The cap will not apply to Venture Capital Trusts, Enterprise Investment Scheme or pensions tax relief.
Corporation tax cut by 1%
Government will cut the main rate of corporation tax to 24% in April with the intention of cutting it to 22% by 2014.
Osborne also proposed extending tax relief for video game and the TV production sector and simplifying the tax system for small firms with turnover of up to £77,000.
New anti-avoidance rules agreed
The Government will introduce a general anti-avoidance rule after Osborne branded tax evasion and aggressive tax evasion ‘morally repugnant’. The Aaronson report, which recommended that the anti-avoidance rule should only apply to most ‘outrageous’ cases of tax planning, will form the basis of proposals which will be incorporated into the Finance Bill 2013.
Tax clampdown on life policy and annuity allowance
HMRC plans to target the use of clusters of life policies and annuities with new measures unveiled in the Budget. Cluster bonds allows clients to access cash before the end of its term by redeeming segments leaving all the taxable gain on the final segment of the policy.
HMRC closes property-based IHT avoidance scheme
The government plans to tackle individuals using offshore trusts and settled property to avoid inheritance tax. The planned measures will prevent UK domiciles from acquiring interests in settled property via offshore trusts with the purpose of reducing the value of their estate.
Government caps MIPs contributions at £3,600
The government plans to introduce a £3,600 annual limit on payments into qualifying savings policies, including maximum investment plans (MIPs). Qualifying savings policies were a popular savings vehicle in the 1980s and have had a resurgence in interest from investors following the introduction of the £50,000 limit on pension contributions.
Levy on non-domiciles boosted to £50,000
The annual levy on non-doms who live in the UK for 12 years will increase to £50,000 under government plans. The increase from the £30,000 levy introduced by Alistair Darling in 2008 will prove controversial after the number of non-doms registered with HMRC fell by 16% in the last two years.
Child tax benefit cut curbed
Osborne has relaxed his plan to restrict the availability of child benefit to avoid ‘cliff edges’ which would have punished high earning single parents. The new rules will mean that child benefit will be reduced gradually when someone in a household earns £50,000 with the cut off set at £60,000.
Bank levy increased
The bank levy will increase to 0.105% from January in a move by Osborne to ensure that banks do not benefit from plans to cut corporate tax.
50p income tax rate cut to 45p
George Osborne confirmed the 50p income tax rate on individuals earning more than £150,000 introduced in April 2010 would be cut to 45p from April 2013. The chancellor criticised the Labour policy after he revealed it had raised around a third of £3 billion it had been expected to generate.
Personal allowances raised by £1,100
Osborne’s plan to increase the personal allowance by £1,100 to £9,205 as of April 2013 was the coalition’s flagship policy for this Budget. The government was committed to further increases and was within ‘touching distance’ of an £10,000 allowance, according to Osborne, who claimed this measure would benefit 24 million individuals and would lift two million people out of paying tax.
Freezing age related allowances will cost pensioners £1.2 billion
The chancellor announced plans to phase out age related tax allowances which was branded a ‘stealth tax’ by Ed Miliband after it emerged it would cost pensioners £1.2 billion.
Age related allowances will be frozen at 2012/13 levels of £10,500 for those born between 6 April 1938 and 5 April 1948, and £10,660 for those born before 6 April 1938 as of 6 April 2013.
The chancellor steered away from widely the discussed policy of limiting pension contributions for higher rate earners but confirmed that the government will introduce a £140-a-week state pension which will not be subject to means testing.
Stamp duty land tax
Stamp duty land tax on residential property worth more than £2 million will jump to 7% from the current rate of 5% for homes valued at over £1 million. The chancellor also imposed a 15% rate on residential properties valued over the £2 million limit which were owned by companies in a move to combat a common tax avoidance scheme.
Osborne threatened further action against individuals who continued to try and avoid stamp duty tax.
Caps on income tax reliefs
The government will put a cap on individuals claiming income tax reliefs which could cause a major shake-up of tax planning for high-net-worth individuals. Individuals who claim more than £50,000 of reliefs will face a cap set at 25% of their income, said Osborne.
The cap will not apply to Venture Capital Trusts, Enterprise Investment Scheme or pensions tax relief.
Corporation tax cut by 1%
Government will cut the main rate of corporation tax to 24% in April with the intention of cutting it to 22% by 2014.
Osborne also proposed extending tax relief for video game and the TV production sector and simplifying the tax system for small firms with turnover of up to £77,000.
New anti-avoidance rules agreed
The Government will introduce a general anti-avoidance rule after Osborne branded tax evasion and aggressive tax evasion ‘morally repugnant’. The Aaronson report, which recommended that the anti-avoidance rule should only apply to most ‘outrageous’ cases of tax planning, will form the basis of proposals which will be incorporated into the Finance Bill 2013.
Tax clampdown on life policy and annuity allowance
HMRC plans to target the use of clusters of life policies and annuities with new measures unveiled in the Budget. Cluster bonds allows clients to access cash before the end of its term by redeeming segments leaving all the taxable gain on the final segment of the policy.
HMRC closes property-based IHT avoidance scheme
The government plans to tackle individuals using offshore trusts and settled property to avoid inheritance tax. The planned measures will prevent UK domiciles from acquiring interests in settled property via offshore trusts with the purpose of reducing the value of their estate.
Government caps MIPs contributions at £3,600
The government plans to introduce a £3,600 annual limit on payments into qualifying savings policies, including maximum investment plans (MIPs). Qualifying savings policies were a popular savings vehicle in the 1980s and have had a resurgence in interest from investors following the introduction of the £50,000 limit on pension contributions.
Levy on non-domiciles boosted to £50,000
The annual levy on non-doms who live in the UK for 12 years will increase to £50,000 under government plans. The increase from the £30,000 levy introduced by Alistair Darling in 2008 will prove controversial after the number of non-doms registered with HMRC fell by 16% in the last two years.
Child tax benefit cut curbed
Osborne has relaxed his plan to restrict the availability of child benefit to avoid ‘cliff edges’ which would have punished high earning single parents. The new rules will mean that child benefit will be reduced gradually when someone in a household earns £50,000 with the cut off set at £60,000.
Bank levy increased
The bank levy will increase to 0.105% from January in a move by Osborne to ensure that banks do not benefit from plans to cut corporate tax.
Thursday, 6 October 2011
£75bn QE2 and what it all means
The Bank of England has increased its quantitative easing programme by a more than expected £75bn in a bid to kick-start the UK’s ailing economy amid fresh fears about the country's stalling recovery amid an escalation of the eurozone debt crisis.
This additional amount of Quantitative Easing (QE) extends the total involved in the programme to £275bn. The £75bn is around 50% greater than many economists were predicting.
Citing its reasons to pump more money into the economy, the Bank said the pace of global expansion had slackened, particularly in the UK's export markets. It also pointed to "vulnerabilities" in the indebtedness of eurozone counties.
A central bank implements quantitative easing by purchasing financial assets from banks and other private sector businesses with new electronically created money. This action increases the excess reserves of the banks, and also raises the prices of the financial assets bought, which lowers their yield.
The main aim of this is to make available more money to the High Street banks, which should enable them to lend more money to businesses and the public.
Revised figures show the UK economy managed just 0.1% growth in the second quarter - against a previous reading of 0.2% - whilst first quarter growth was revised down to 0.4%.
It remains to be seen whether this latest move will have the desired result of stimulating economic growth although the stock market has responded positively to the news of further Quantitative Easing.
If these gains in investment markets are maintained beyond the very short term, higher equity and gilt prices will be good news for investors with diversified portfolios who have been suffering from recent equity market falls and the uncertainty of the eurozone debt.
The Bank kept interest rates on hold at 0.5%. They have now been at this historic low for 31 months and the outlook is for interest rates to remain at this level throughout next year.
This additional amount of Quantitative Easing (QE) extends the total involved in the programme to £275bn. The £75bn is around 50% greater than many economists were predicting.
Citing its reasons to pump more money into the economy, the Bank said the pace of global expansion had slackened, particularly in the UK's export markets. It also pointed to "vulnerabilities" in the indebtedness of eurozone counties.
A central bank implements quantitative easing by purchasing financial assets from banks and other private sector businesses with new electronically created money. This action increases the excess reserves of the banks, and also raises the prices of the financial assets bought, which lowers their yield.
The main aim of this is to make available more money to the High Street banks, which should enable them to lend more money to businesses and the public.
Revised figures show the UK economy managed just 0.1% growth in the second quarter - against a previous reading of 0.2% - whilst first quarter growth was revised down to 0.4%.
It remains to be seen whether this latest move will have the desired result of stimulating economic growth although the stock market has responded positively to the news of further Quantitative Easing.
If these gains in investment markets are maintained beyond the very short term, higher equity and gilt prices will be good news for investors with diversified portfolios who have been suffering from recent equity market falls and the uncertainty of the eurozone debt.
The Bank kept interest rates on hold at 0.5%. They have now been at this historic low for 31 months and the outlook is for interest rates to remain at this level throughout next year.
Saturday, 28 May 2011
Nomination by Kinnird Primary School as an Enterprise Champion...
I was delighted to receive a letter the other day from Falkirk Council advising me that I had been nominated by Kinnaird Primary School as an Enterprise Champion.
The nomination recognises that I have, through support, demonstrated an attitude that is enthusiastic and motivating and that I have inspired and encouraged young people to develop an enterprising attitude. I have to attend an informal presentation to collect my certificate of recognition on 7th June.
I have been nominated for this award by the Primary 7 class teacher and seconded by 2 pupils following my visit to the school to talk to the pupils about financial planning during their school finance week.
The pupils wrote:
- “Mr Hale was inspirational when he came during Finance Week, to talk to P7 about tax and money. He showed us a fantastic video and we now feel inspired to save money!”
- “He taught us the importance of saving money, so when you’re older you can have a better life and achieve your future dreams “.
- “Mr Hale invented a client and made graphs of their accounts to help us understand savings and pension. He made it interesting and easy to understand”.
I must say that this nomination came to me as a total surprise and I am actually overwhelmed by it. I very much enjoyed preparing for the presentation that I did for the primary 7 class and enjoyed even more presenting it and the interaction with the children about financial planning.
I would like to thank very much Kinnaird Primary School for inviting me to talk to the class and to the teacher and pupils who nominated me for this award. I am very delighted to have been nominated and I look forward to receiving my certificate of recognition on the 7th June.
Garry Hale
Director
HK Wealth Managers Ltd
Monday, 16 May 2011
National Savings are back with Index-Linked Savings Certificates
NS&I have re-introduced new issues of its savings certificates, including index-linked Savings Certificates (often referred to as inflation-beating savings) and fixed-interest Savings Certificates.
The new Issues are available in a 5-year term only and offer tax-free returns based on inflation, Retail Prices Index (RPI) plus a fixed rate of 0.5%. They offer a maximum investment of £15,000. Fixed-interest Savings Certificates will pay 2.25% AER.
It is anticipated that Billions of pounds will flood into these new government backed investments as savers look to beat inflation on their savings. Savers are currently affected by the combination of high inflation and low interest rates, which means that the real value on savings are being eroded by inflation.
Although these do appear to look very attractive to savers particularly higher rate tax payers I would also consider the following points.
As we know currently inflation is at a very high level and with RPI at 5.3% it is well above the Bank of England’s inflation target. Also, at the moment interest is at an all time low and has been for some time now. Just in the last week the Bank of England has warned that inflation may rise further to a peak later this year. This would suggest that upon reaching its peak inflation will start to fall again.
It is therefore important to consider the effects of the anticipated returns over the full 5 year period where savers may be disappointed with the total return over the 5 years. It is possible to bail out after just 1 year where the return would be RPI plus 0.25%.
The anticipation over the next year or so is that interest rates are likely to start rising to bring the current high inflation under control. As inflation starts to drop the guaranteed return of inflation plus 0.5% will gradually become less attractive over time. The effect of this is that as interest rates start to rise again savers will start to receive some better rates of interest on their cash savings.
I therefore think there will be a point over the next year or so when there will be a tipping of the scales and that savers will benefit from the returns offered by the new NS&I Indexed Linked Savings in the early years of the 5 year period when inflation is still very high, as inflation drops savers will see a drop on their returns.
As a result although savers are receiving a very low rate of interest on their cash savings at present as inflation drops and interest rates increase savings will start to see some better rates of interest appear.
To conclude I would suggest that the rates currently look very attractive, particularly for higher rate taxpayers, and that they may be suitable for some savers as part of an overall savings and investment strategy to avoid the effects of high inflation.
The new Issues are available in a 5-year term only and offer tax-free returns based on inflation, Retail Prices Index (RPI) plus a fixed rate of 0.5%. They offer a maximum investment of £15,000. Fixed-interest Savings Certificates will pay 2.25% AER.
It is anticipated that Billions of pounds will flood into these new government backed investments as savers look to beat inflation on their savings. Savers are currently affected by the combination of high inflation and low interest rates, which means that the real value on savings are being eroded by inflation.
Although these do appear to look very attractive to savers particularly higher rate tax payers I would also consider the following points.
As we know currently inflation is at a very high level and with RPI at 5.3% it is well above the Bank of England’s inflation target. Also, at the moment interest is at an all time low and has been for some time now. Just in the last week the Bank of England has warned that inflation may rise further to a peak later this year. This would suggest that upon reaching its peak inflation will start to fall again.
It is therefore important to consider the effects of the anticipated returns over the full 5 year period where savers may be disappointed with the total return over the 5 years. It is possible to bail out after just 1 year where the return would be RPI plus 0.25%.
The anticipation over the next year or so is that interest rates are likely to start rising to bring the current high inflation under control. As inflation starts to drop the guaranteed return of inflation plus 0.5% will gradually become less attractive over time. The effect of this is that as interest rates start to rise again savers will start to receive some better rates of interest on their cash savings.
I therefore think there will be a point over the next year or so when there will be a tipping of the scales and that savers will benefit from the returns offered by the new NS&I Indexed Linked Savings in the early years of the 5 year period when inflation is still very high, as inflation drops savers will see a drop on their returns.
As a result although savers are receiving a very low rate of interest on their cash savings at present as inflation drops and interest rates increase savings will start to see some better rates of interest appear.
To conclude I would suggest that the rates currently look very attractive, particularly for higher rate taxpayers, and that they may be suitable for some savers as part of an overall savings and investment strategy to avoid the effects of high inflation.
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