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Understanding Pensions on Death

The options available will depend on a number of factors, and since 6 April 2015 the most important of these is the age at the date of death, either before age 75 or over 75, to determine the amount of tax payable.

Death before age 75 The value of the pension fund at the date of death is payable to the nominated beneficiaries, and this is free of income tax provided they are designated within two years of the member’s death. If the designation is made after two years any income or lump sum paid will be subject to income tax at the beneficiary’s marginal rate.

The beneficiaries can choose how they wish to take the benefits, including a lump sum from the scheme, flexi-access drawdown, an annuity or scheme pension. You should note however that not all schemes will offer all of these options.

It is important to also remember that funds not already crystallised before death will be tested against the member’s remaining lifetime allowance. If the value of the death benefits takes them over …

October Budget Update

Personal Tax-free Allowance & Higher Rate Tax The personal allowance – how much you earn before you need to start paying income tax – will increase by £650 in April 2019, to £12,500.

Higher-rate income tax threshold to rise to £50k
The earnings threshold at which you’d need to pay the higher rate of tax (currently 40%) is going up to £50,000, from £46,351.

Both changes come into effect from 6 April 2019, a year earlier than planned. The Treasury estimates that around 32 million people will benefit as a result.

Lifetime Allowance As announced earlier, the Lifetime Allowance is due to rise by 2.4 per cent to £1,055,000 in 2019 in line with September’s consumer price index (CPI) inflation figure, which is good news for pension savers. The Lifetime Allowance is the maximum you normally can save over the lifetime of your pension pot without paying extra tax.

There were no changes to pensions tax relief rates and allowances, which is good news for those saving into a pension.

ISA (Indiv…

Pension Scam Tactics

Cold-calling is currently by far the most common method used to initiate pension fraud. Other scam tactics include:

Unexpected contact about a pension via phone, post or emailPromises of guaranteed high returns and downplaying the risksOffering unusual or overseas investments that are not regulated by the FCA, such as overseas hotels, forestry and green energy schemesPutting people under pressure to make a quick decision, for example with time-limited offers and sending a courier round with paperwork to signClaiming to be able to unlock money from an individual’s pension (normally only possible from age 55)
We recommend you reject unexpected pension offers – whether made online, on social media, through the post or over the phone. Contact us if this happens and after running through security we will endeavour to help.

Who are the European Financial Planning Association (EFPA)

Independent Financial Advisers in our firm are members of the Personal Finance Society (PFS). Following a mutual recognition agreement with the European Financial Planning Association, PFS members have now been granted EFPA European Financial Adviser (EFA) certification.

EFPA is one of the largest and most respected professional licensing, standard setting and certification bodies for financial advisers in Europe and was the first European financial standards association created to increase professionalism in the European financial services sector. EFPA UK is represented by the Personal Finance Society. It now accredits more than 60 European universities, banking and insurance institutes.
Why now? This agreement will ensure that consumers who wish to access advice from UK advisers, or maintain existing relationships in a post-Brexit environment will be able to do so as part of an all-embracing standard across Europe.
What are the benefits of this agreement? This agreement combines the…

The need for Diversification

Remember the interest on some NS&I products is potentially taxable

Some NS&I products pay returns that are free from income and capital gains tax. These include:

cash ISAspremium Bondsfixed Interest and Index-Linked Savings Certificatesjunior ISAs
With regards to Guaranteed Income Bonds, Guaranteed Growth Bonds, Income Bonds, Direct Saver and Investment Accounts, the returns are taxable but paid ‘gross’ (without tax taken off).

If you’re a UK taxpayer, you have a duty to declare the income to HM Revenue & Customs and pay any tax you owe. Please keep your NS&I annual interest statements and speak to us or your accountant. You should know that tax may change in the future.

To transfer or not to transfer?

More than 100,000 people transferred out of Defined Benefit (DB) pensions in 2017/18[1]. A DB pension scheme is one where the amount you’re paid is based on how many years you’ve worked for your employer and the salary you’ve earned. The figures show that a large number of people are still transferring out of traditional salary-related pensions, but whether this is a good idea or not depends crucially on your individual circumstances.

For many people, a guaranteed salary-related pension that lasts as long as you do and is unaffected by the ups and downs of markets, is likely to be the best answer. But there will be some who want extra flexibility or are focused on passing on some of their pension wealth for whom a transfer might be the right answer. It is vital to take, and listen to, professional financial advice in the form of pension transfer specialists before making a big decision of this sort.
Five reasons why a pension transfer might be suitable
Flexibility – instead of taking a…

Reminder of the benefits of your Personal Finance Portal

The Personal Finance Portal (PFP) is only available for our ongoing service clients. PFP can give you
access to view all your finances in one place, 24/7, on any mobile or web device. PFP enables you to view your fund information and financial portfolio in an instant.

Other benefits include:

Secure Messaging
With email and post increasingly open to being intercepted, we treat the security of the data you share with us with the utmost importance. PFP provides you with a secure messaging service, so you can quickly get in touch with your Adviser and have the peace of mind of knowing that any information you share is encrypted and completely privateA Secure Document Vault
PFP provides you with a secure Document Vault, so you can store all your financial documents online where they are secure and fully backed up - much safer and more convenient than the bottom of the filing cabinet (You can share these with us if you choose). In addition, we will share documents with you such as Financial…

Director Michael Crisp graduates

Congratulations to Michael for becoming Chartered. Here's what he had to say:

"Following completion of my final advanced paper I was able to apply for Chartered Financial Planner status, a prestigious title awarded by the Personal Finance Society. I believe that Chartered status is a must for any professional adviser wanting to provide Independent Financial Advice in the future. This award requires a great deal of commitment and a lifetime pledge to adhere to the code of ethics laid down by the Personal Finance Society to protect the best interests of clients at all times.

Since starting out in Financial Services it has always been my goal to achieve Chartered Financial Planner status, as it is the pinnacle of our profession and an accolade which should not be taken lightly. Among many things the journey has taught me that you must always continue develop your knowledge to ensure you can provide the best possible advice at all times.

The graduation took place at the Chartered …

National 3Peaks success!

Director Ben Allen and his wife Becky, along with seven other parents, successfully summited the highest peaks in Great Britain in 24 hours at the beginning of this month. They have raised over £4000, smashing their target of £3000 and providing Ingoldisthorpe Primary School with enough funds to purchase and build a new Garden Room.

The intrepid group of parents walked 23 miles ascending over 10,000ft to complete the challenge, which began on 31st August at 5pm.

Ben and Becky would like to say a huge thank you to all of those who have donated to this challenge. And special thanks goes to Grandmaster Pan who stepped in at the last minute as driver, as well as providing the team with exercises and stretches, drawing on his Tae Kwon Do experience, during the challenge.

Donations are still being accepted on the team's Go Fund Me page or in person at the Allen Tomas & Co office in Dersingham.

Charity Golf Day

The 3rd Allen Tomas & Co Financial Management Ltd Charity Golf day was held on Friday 14th September at Heacham Manor.

Organisers and Directors Ben Allen and Michael Crisp said "We had a fantastic day, the weather held and all that entered enjoyed the Golf and the well deserved hog roast afterwards. We are delighted to announce we raised £2,100. This will be split equally between the Norfolk Hospice and the Stroke Unit at Queen Elizabeth Hospital (West Raynham Patient and Equipment Fund). We chose the charities based on experience of personal family treatment from the QE staff and our recent visit to the Norfolk Hospice’s purpose built facility at Hillington, which has cemented our admiration of what has been achieved here during the 5 years of our ongoing charitable support".

The format for the golf event was team friendly Texas Scramble, which all the guests enjoyed thoroughly. First place went to Ward Gethin Archer Solicitors led by Chris Dewey, second place to Home I…

Parents attempting 24hour 3 Peaks Challenge

Parents Ben and Rebecca Allen (Allen Tomas & Co employees) are part of a group of intrepid West Norfolk parents that are training hard for the 3 Peaks Challenge to raise vital funds for their local school (Ingoldisthorpe Church of England Voluntary Aided Primary School). They will summit the highest mountains in England, Scotland and Wales in 24 hours from dusk on 31st August, walking over 37kms, climbing a total of over 10,000ft and driving 1830kms.

The completion of the challenge will help secure two exciting new developments for Ingoldisthorpe Primary: an outdoor log cabin classroom which will provide much needed space at their children's school and a stage piano to strengthen the school's music provision. A log cabin to match the existing classrooms will cost around £8,000 to buy and site on the school field. It will offer the school space for Music Lessons which are an important part of the curriculum, along with room for art, reading and intervention sessions for sm…

Managing Director Ben Allen graduates

Managing Director, Ben Allen attended the Personal Finance Society graduation ceremony on Friday 20 April 2018, as a result of achieving Chartered Status.

Ben explains "The event was held at 20 Aldermanbury, London, EC2V 7HY which is the Head Office of the Chartered Insurance Institute and the Personal Finance Society. It was a beautiful day in the city of London and the building itself is fascinating. Over a thousand years ago Aldermanbury was the home of Kings. Rumour has it that the Insurance Hall stands on a site originally occupied by a Saxon Palace, but we know for certain that a medieval manor house occupied the site, which by the 14th Century had become an Inn called 'The Axe' (the commercial sign of The Axe, which originally hung outside the Inn in 1698, is today situated above the entrance to the CII museum on the second floor landing!)

In 1932 the Chartered Insurance Institute was in urgent need of accommodation and so purchased the site (which was by then a w…

Ben Allen achieves the Later Life Adviser Accreditation with SOLLA

SOLLA was established in 2008 as a not for profit organisation dedicated to higher standards and accessibility to regulated financial advice for older people and their families. There are no shareholders and any profit is used to sustain the Society and its objectives.

All SOLLA later life advisers specialise in the financial needs of older people. Professional qualifications, whilst essential, do not always give a full picture of an adviser's experience or expertise. Those advisers who have taken the further step to become independently accredited can offer the added reassurance that they can give the practical help and guidance needed to help you make the right decisions at the right time. All full members of the Society must achieve the Later Life Adviser Accreditation and adhere to a Code of Practice to ensure their clients know what to expect from their services.

SOLLA helps people and their families in finding trusted accredited financial advisers who understand financial ne…

Why do we use Rayner Spencer Mills Research (RSMR)?

As part of our centralised investment process we use the research services of RSMR to construct our range of model portfolios. RSMR first launched their online fund ratings service for advisers back in 2007 and this offers us the widest range of ratings covering active and passive funds, Socially Responsible Investment-themed funds, multi-asset fund ranges, investment trusts and Discretionary Fund Managers. Their ratings are awarded following a rigorous process and are supported by factsheets and guides. Each factsheet provides background information, a summary of the investment process, comments and opinions. The team at RSMR have many years’ experience and maintain their market knowledge by meeting with the fund management community, market analysis and their own continuing professional development.

Their research is completely impartial and they cover the whole market composed of all funds across the universe of the Investment Association (IA) sectors. RSMR review and research fund…

Michael Crisp has achieved Chartered status

Michael Crisp, Director of Allen Tomas & Co Financial Management Ltd has now achieved Chartered status.

This means both Directors Ben Allen and Michael Crisp have now been awarded the prestigious Chartered Financial Planner designation.

Michael’s intentions are to continue his study and become a Fellow of the CII. As previously communicated, we recently became a Chartered firm of financial planners and Michael’s achievement reinforces our ethos and commitment to raising standards.

Inflation

United Kingdom Inflation Rate 1989-2018 The UK consumer price inflation eased to 3 percent in December 2017 from a near six-year high of 3.1 percent in the previous month, as widely expected. Prices rose at a softer pace for transport, recreation and culture, housing and utilities, and food and non-alcoholic beverages. Inflation Rate in the United Kingdom averaged 2.58 percent from 1989 until 2017, reaching an all-time high of 8.50 percent in April of 1991 and a record low of -0.10 percent in April of 2015.

Consumer prices index (CPI) is the government's preferred measure of inflation. It is used for international comparison and the government inflation target for the Bank of England Monetary Policy Committee. It is available as an index from January 1997, with estimates back to 1988. It excludes mortgage interest payments and council tax. As of the 2010 budget, CPI as part of the triple-lock, is used to index state pensions in place of RPI.

Why is inflation important? Keeping a …

The Dividend Allowance

Is this dividend allowance cut still going ahead? Although this dividend allowance cut was dropped from the Finance Bill 2017 as a result of the General Election, it will go ahead as planned from April 2018, as it was re-introduced into a second Finance Bill (published on 8th September). The Bill received Royal Assent on 16th November 2017.

What is the dividend allowance? The dividend allowance was only implemented in April 2016, as part of a radical shake-up in the way dividends are taxed. Prior to this date, under the tax credit system, dividends were paid to shareholders net, and multiplied by 10/9 to produce the gross dividend upon which dividend tax was levied.

Since the new rules came into play in April 2016, dividends are subject to new tax rates (basic – 7.5%, higher – 32.5% and additional – 38.1%). This has placed a significant additional tax burden on limited company owners. The one concession was the creation of a tax-free ‘dividend allowance’ applied to the first £5,000 o…

Chartered Financial Planners

The Chartered Insurance Institute (CII) has awarded the prestigious ‘Chartered Financial Planners’
title to Allen Tomas & Co Financial Management Ltd. Chartered status is an exclusive title only awarded to firms which meet rigorous criteria relating to professionalism and capability. All Chartered Financial Planners commit to the CII’s Code of Ethics, reinforcing the highest standards of professional practice in their business dealings.

As the premier professional body for the insurance and financial planning professions, the CII promotes higher standards of integrity, technical competence and business capability. With over 120,000 members in more than 150 countries, the CII is the world’s largest professional body dedicated to these sectors. Success in CII qualifications is universally recognised as evidence of knowledge and understanding. Membership of the CII signals a desire to develop broad professional capability and subscribe to the standards associated with professiona…

Happy New Year and Welcome Lisa

We wish you all a Happy New Year and would like to welcome Lisa Perkins to our Company. Lisa joined Allen Tomas & Co in January 2018 as a Paraplanner.  Having worked in the Financial Services Industry for over 30 years with a large Pension Provider, she gained a wealth of pension knowledge and obtained the Financial Planning Certificate. Lisa is currently working towards her Diploma in Financial Planning with the CII and hopes to achieve this soon. During her spare time Lisa enjoys travel and experiencing the many pub walks Norfolk has to offer.