Briefings



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Lack of life insurance sounds alarm bells

Lack of life insurance sounds alarm bells Issued: 2 November 2016   Many of us realise we should have life insurance and, inevitably, some of us will regret that we don’t. A recent comment on the Moneyfacts website reports research suggesting that as many as 44% of those with a family aged 18 or under, or who are in a long-term relationship, don’t have any form of life insurance and that figure jumps to 72% for those without critical illness cover. (To read the report, please click here.) We insure our possessions – why do we fail to insure ourselves? It seems that far too few of us take the plunge, a move that could save our family’s finances sliding into trouble should something tragic happen to us. Yes, it maybe sales hype – but not having life insurance could be a major error of judgement on your part if […]

Could your business repay its debts if an owner died? A Rough Guide.

Could your business repay its debts if an owner died? A Rough Guide. Issued: 7 November 2016   Having a business loan is an essential asset to many businesses, helping them invest, grow and prosper – but if thought hasn’t been given to what would happen if an owner of the business suddenly died they can easily become a major liability. Apart from losing someone whose input may be critical to the wellbeing of the company, having to repay significant sums of money at short notice may not be feasible and possibly force the business into administration. Research carried out by Legal & General shows the average debt carried by businesses in the SME sector is around £344,000. This figure is a combination of credit card debt, overdraft facilities, business loans, commercial mortgages and Directors’ Loan, a loan from a director into the business that may have involved their taking […]

Retirement savings crisis

Retirement savings crisis Issued on: 8 November 2016   More than half of adults are ‘not confident’ they will have sufficient income to see them through their later years, reports the Mail Online, with only three in ten feeling either ‘very’ or ‘fairly’ confident they’re on track to achieve the level of pension income they want. (Click here to read the comment in thisismoney.co.uk.) The survey, conducted by Opinium on behalf of online investment platform, Nutmeg, asked over 2,000 adults around the country a series of questions relating to their retirement confidence. Using a constant rate of return of 6% to calculate pension pot size, Nutmeg calculated the number of years new retirees would be able to maintain their desired retirement income before exhausting their savings. It’s dismal reading and is yet another indicator that too few people are saving anywhere near enough to ensure a ‘financially secure and comfortable […]

What, you may ask, is relevant life cover? A Rough Guide.

What, you may ask, is relevant life cover? A Rough Guide. Issued on: 14 November 2016   That’s a very good question because, despite its benefits, surprisingly few people seem to have heard of it. A relevant life plan is simply a life insurance policy paid for by a business to provide life insurance for named directors or employees – and there are some worthwhile benefits that small businesses, directors and high-earning employees need to consider. Many employers either offer, or want to offer, life insurance as a death-in-service benefit for their employees, usually opting for a simple group policy. Unfortunately, group life policies are often accompanied by restrictions and difficulties, for example, they don’t recognize individuals; companies usually have to have a minimum number of employees to qualify and schemes for small companies can be eye-wateringly expensive. Offering relevant life cover can be an excellent alternative bringing significant advantages […]

Life insurance: The Telegraph squashes eight myths

Life insurance: The Telegraph squashes eight myths Issued on: 16 November 2016   It’s incredibly easy to build a persuasive argument around ‘life insurance is essential if you’ve got dependants’, yet a recent survey showed that nearly half of those with a family aged under 18 don’t have it. If you don’t have it, it’s very probable that you know you should have it and, unfortunately, some of us may regret not having it. So why don’t we have it? The Financial Services section of The Telegraph (online) recently published a list of eight common myths which either muddy the water or hold people back from ‘doing the right thing’. (See the full list here) It makes interesting reading and, as the briefing says, “We’ve gone ahead and exposed the most common [myths] so that you can make a better choice around the policy that will provide you with the […]

Investment bond? Think ‘probate bare trust’

Investment bond? Think ‘probate bare trust’ Issued on: 16 November 2016   In February 2016 a proposal to reform application fees for grant of probate was published as part of an on-going, wide-ranging review of Her Majesty’s Courts & Tribunals Service. The proposal recommended abandoning the current two-tier system in April 2017, replacing it with seven tiers with dramatically higher charges – for example, if the estate is valued at between £500,000 and £1million, the fee will jump from £155 to £4,000 – meaning the estate will become liable for much higher legal fees. But, says Canada Life, these fees can be partially mitigated if any investment bonds are placed in a ‘probate bare trust’. (To read the article, as it appears on Citywire, please click here) When someone dies their estate has to be ‘wound up’, the granting of probate (‘confirmation’ in Scotland) to an executor being the first […]

I’m 28 – and I AM saving enough for retirement!

I’m 28 – and I AM saving enough for retirement! Issued on: 21 November 2016   Despite all the stories about people not saving enough for retirement, some are bucking the trend reports Sarah Davidson in Thisismoney.co.uk. Prompted by the death of her mum, 28-year-old Toni Leigh Hall started saving into a pension after her employer ‘sat her down to talk through her finances’ a couple of years ago. As a result, Toni started to save a ‘decent’ amount of money into a workplace pension, benefitting from both tax relief on her contribution and an additional contribution from her employer. Most employers match their employee’s contribution so, a basic rate tax payer saving £50 per month will receive £12.50 tax relief along with an additional £50 from their employer: total £112.50. Although Toni didn’t want to say exactly how much she was saving, she says she should receive just over […]

Aviva AE review – three rules of thumb to guide you

Aviva AE review – three rules of thumb to guide you Issued on: 21 November 2016   Aviva has called on the government to increase the total auto-enrolment contribution to 12.5% over the next 12 years to give workers a better chance of building an adequate pension pot, reports Hannah Godfrey in Retirement Planner (click here to read the article). Publishing its ‘Pre-review of Auto-enrolment’ ahead of the government’s own review, which is due next year, the pension provider made ten proposals it ‘believed would improve the retirement prospects of ordinary people’. The 12.5% recommendation is the headline proposal in the report’s ’10 Steps to Auto-enrolment Success’ which covers the four cornerstones of potential reform: adequacy, scope, consolidation and engagement. The ninth proposal recommends savers are encouraged to adopt ‘three rules of thumb’: The ’40-year rule’ – savers should aim to start saving at least 40 years before their target […]

Did you know the IHT nil-rate band of £325,000 is transferable?

Did you know the IHT nil-rate band of £325,000 is transferable? Issued on: 25 November 2016   The Finance Bill 2016 received Royal Assent on 15 September 2016, becoming an Act of Parliament that will introduce new legislation from April 2017. It includes several measures that affect inheritance tax planning which, in the main, are complicated so, as Tony Wickenden says in Money Marketing, it seems an appropriate time to put a spotlight on an important part of overall IHT planning that’s relatively straightforward: the transferrable nil-rate band. The ‘nil-rate band’ is a tax-free, inheritance tax allowance that everyone is entitled to in the same way that we’re all entitled to a personal, tax-free income tax allowance. The allowance has crept up over the years and is currently £325,000, a figure introduced in 6 April 2009 and fixed until 2019, but, despite being a personal allowance, it’s actually transferable. Married […]

Auto enrolment has been successful

Auto enrolment has been successful Issued on: 29 November 2016   It’s just over four years since auto enrolment was introduced with the specific aim of getting workers to save for their retirement – and what a success it’s been. Over 234,000 businesses have set a workplace pension scheme; opt-out rates, at around 10%, are much lower than anticipated, and more than 6.5 million people are now saving for their retirement. The Mail Online asked pension expert Andy Beswick, managing director of Business Solutions at Aviva, to review the scheme and highlight how small businesses can benefit. To read Andy’s article in full, please click here. The full state pension is currently worth around £150 a week; about £650 a month or £7,800 a year – and that’s if you qualify for a full state pension. It’s not a lot of money from which to buy food, pay bills and […]