News Archive - April 2009
Annuitychecker - make the most of your retirement.
17/04/2009Thousands of people are wasting millions of pounds every year when they retire.
When you start to draw an income from a personal pension, you have the option to shop around and buy an annuity from whoever has the best rates at that time. This is called the Open Market Option. Unfortunately, around 60% of people do not take advantage of this option, simply drawing their pension direct from their original pension provider.
By doing this, they guarantee themselves a lower level of income for the rest of their lives. How much lower? Well, standard annuity rates can vary by up to 10% between providers. But if you are a smoker or in poor health, or just taking medication, then you can get an even better annuity rate by using a specialist provider offering enhanced rates.
It's sad that more people do not seek advice when they retire - it's a huge decision which impacts on your future wealth. With this in mind, we have set up a new website which aims to help people to make the right choices and to provide annuity comparisons for them. You only retire once - so make the most of it and use our annuity comparison website, www.annuitychecker.co.uk
Budget 2009 News
25/04/2009The 2009 Budget's main income tax changes will not directly affect the majority of UK taxpayers. The Government has proposed a new 50% rate of Income Tax for those who earn more than £150,000 per annum with effect from April 2010. Anybody earning more than £100,000 will also get a reduced tax-free allowance, losing £1 of their tax-free allowance for every £2 that they earn over £100,000. This will mean that more of these high earners' total income is taxable. They have also introduced a system whereby these high earners will get less tax relief on their pension contributions. Anybody earning £150,000 p.a or less will be unaffected and will still get tax relief at their highest rate of tax, whereas those earning over £180,000 p.a will only get basic rate tax relief on their contributions. There will be a sliding scale for people earning between £150,000 and £180,000 p.a.
Something to bear in mind is that the earnings figures quoted above do not include dividend income, which is not classed as 'relevant earnings' for these purposes. High earners who are also directors of their own company have considerable flexibility as regards pension contributions (whether they are paid by them personally or by the company) and also how they are remunerated (by salary or dividends). Directors should take advice to ensure that their current arrangements are still the most tax efficient.
The other major change for savers is that the Government has increased the annual ISA limit to £10,200. Up to £5,100 of this can be paid into a Cash ISA, with the rest going into a Stocks and Shares ISA. This limit will be introduced on 6 October 2009 for those aged 50 and over, and 6 April 2010 for everybody else. This is a welcome increase which will hopefully act to encourage savers, despite the miserly rates currently prevailing for cash deposits. For those willing to take some risk and put money away for the long term, a Stocks and Shares ISA might be a good idea, as long as we assume that one day the current economic gloom will start to dissipate. When this might happen is the million dollar question - one which Alistair Darling seems to answer differently to everybody else.
The material here is for general information only and is not intended to be relied upon for individual investment decisions. Appropriate independent advice should be obtained before making any such decisions. Mulberry Financial Ltd does not accept any liability for any loss suffered by any user as a result of any such decision.
The information is based on our understanding of current HMRC rules and practices (as at the news article date) which are always subject to change. Taxation and trust advice and Cash ISAs are not regulated by the Financial Conduct Authority. This site is aimed at UK residents only.
Please remember that the prices of shares and other investments can fall sharply. You may not get back the money you originally invested. Past performance is not necessarily a guide to the future.
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