Reeves Independent Market Outlook

Recent news 

  • Consumer Price Index (CPI) hits zero again but Wages growth up
  • UK wages accelerated from 2.7% to a five-year high of 3.2%.
  • Euro still weakening against the pound’
  • Bank of England Governor Mark Carney commented that ‘the point at which interest rates may begin to rise is moving closer with the performance of the economy’.
  • British unemployment rose unexpectedly from 5.5% to 5.6%
  • Reduction of pension life time allowance to £1million is a massive change and will impact on a surprising number of people. Anyone with a significant amount of time in Final Salary schemes should seek advice.
  • Volatile equity markets continue, especially in China which has seen significant loses

Key Matters

Bonds – What do we do with clients that hold bonds within their portfolio? Traditionally an asset class that is held as a more cautious holding, however they are now under pressure with the threat of rising inflation and interest rates. We will be emailing clients with proposed changes.

Greece – Where now for our European equity holdings? Last few weeks has seen significant movements downwards & now upwards again. We are currently monitoring our portfolio position and will continue to recommend appropriate changes.

Property – Corporate action announced for Threadneedle, and we will be assessing the impact on our portfolios and recommending change if appropriate.

Are there any opportunities right now?

Oil – There are options. The price of Brent Crude continues to fall as some of our clients will know. Is this the time to add or start investment in this area?

ETFS Brent 1mth (OILB) is designed to enable investors to gain a total return exposure to movements in the price of ICE 1 month Brent crude oil futures contracts plus a collateral yield. The exposure is obtained through fully funded uncollateralised swaps with Shell Trading Switzerland AG, a member of the Royal Dutch Shell Group. Basically if prices rise you will make money.

What Next?  Look out for our specific advice emails to follow.

If you would prefer a chat now about your portfolio please contact us now on 0871 271 1280 or e-mail dianne@reevesifa.com to arrange an appointment!

Sources:

We gain our information from a range of sources including seminars, webinars, industry publications and general media comments.

Disclaimer: This email is not intended as advice and no investment decisions should be made solely on the back of this email. Past performance is no guide to the future. All investments carry the risk that you will not get back what you have put in.

Case Study! Life Changing Advice – Life Changing Decisions – Life Saving Solutions!

An old Blog but I thought I would share it with you again

I know the title of the Blog sounds particularly ‘cheesy’ but it is a genuine response from a new client after the service we provided her in the last few weeks.

What was the client’s position when we met?

  • 58 year old single female
  • Has had a varied career history
  • Due to economic downturn is facing no regular job for the first time in her life
  • Had been looking forward to retirement at 65 when she could start drawing her occupational pensions
  • Last 18 months has seen a decrease in job prospects & savings
  • She was desperately worried about her income & her lifestyle had become restricted

What was the result of Reeves Independent’s Advice?

  • She now faces a ‘certain’ financial future were she does not have to work unless she want to
  • Stress & worry has now been removed
  • Happy & able to pursue open ended life time opportunities through a secure financial situation
  • Accessibility to significant cash that she didn’t have before which she can use for any purpose – whether it be fresh investment or to subsidise luxury travel
  • Adequate & secure income for the rest of her life
  • Significantly reduced running costs

How has Reeves Independent achieved this?

  • Reviewed all the options on her property assets & unused pension funds
  • Produced solutions which she previously didn’t know were possible
  • Helped her step by step through all the issues to enable her to make the best decisions for her

This has resulted in one very happy secure client!

If you would like to speak to someone about the Reeves Independent Retirement Planning Service please contact us NOW for a FREE initial chat on 0191 281 9862 or e-mail your enquiry to info@reevesifa.com

Summer Budget 2015 – A Detailed Summary!

George Osborne delivered his seventh Budget as chancellor today, the first for a majority Conservative Government since November 1996.

“A Budget for working people” and moving “Britain from a low wage, high tax, high welfare economy to a higher wage, lower tax, lower welfare economy.”

Here are the key announcements;

INCOME TAX

Personal Allowance: £11,000 in 2016/17, aiming at £12,500 by 2020, the threshold rising in line with the minimum wage*.

Higher rate income tax band: £43,000 2016/17, targeting £50,000 by 2020.

*Introduction of a new National Living Wage, from April 2016 £7.20 an hour for over 25s, rising to £9 by 2020 based on 30hours per week.

There will be introduced by legislation a tax lock to rule out increases in the main rates of income tax, VAT or National Insurance over the course of this Parliament.

INHERITANCE TAX

A new transferable nil-rate band is to be introduced from April 2017. This will apply when a main residence is passed on death to direct descendants, eg, children or grandchild. The allowance will be up to £100,000 in 2017-18, up to £125,000 in 2018-19, up to £150,000 in 2019-20, and up to £175,000 in 2020-21. This is in addition to the inheritance tax nil-rate band of £325,000, which will remain at this level until the end of 2020-21. Any unused main residence nil-rate band will be transferred to a surviving spouse or civil partner and means the effective inheritance tax threshold will rise to £1 million in 2020-21 for a qualifying couple.

The new main residence nil rate band will also be available when a person downsizes or ceases to own a home on or after 8 July 2015 and assets of an equivalent value, up to £175,000 in 2020-21, are passed on death to direct descendants.

PENSIONS

The Finance Bill 2015 introduces a tapered reduction in the annual allowance from 6 April 2016, for those with an ‘adjusted income’ of over £150,000. The ‘adjusted income’ definition adds-back any pension contributions, to prevent individuals from avoiding the restriction by exchanging salary for employer contributions.

For those in defined benefit or cash balance arrangements, the value of the employer contribution will be calculated using the normal annual allowance methodology i.e. the pension input amount for the scheme, less the amount of any contributions made by or on behalf the individual during the tax year.

To provide certainty for individuals with lower salaries who may have one off spikes in their employer pension contributions, a net income threshold of £110,000 will apply. If the individual’s net income is no more than £110,000 they will not normally be subject to the tapered annual allowance. However, anti-avoidance rules will apply so that any salary sacrifice set up on or after 9 July 2015 will be included in the threshold definition.

The rate of reduction in the annual allowance is by £1 for every £2 that the adjusted income exceeds £150,000, up to a maximum reduction of £30,000. The carry forward of unused annual allowance will continue to be available, but the amount available will be based on the unused tapered annual allowance.

All pension input periods (PIPs) open on 8 July 2015 are closed on that date, with the next pension input period running from 9 July 2015 to 5 April 2016. All subsequent pension input periods will be concurrent with the tax year from 2016-17 onwards.

There is a new 30-page Green Paper on pensions tax relief released today, as announced in the Chancellor’s Budget speech. Further information in due course.

DIVIDENDS

From April 2016 the Government will remove the Dividend Tax Credit and replace it with a new tax-free Dividend Allowance of £5,000 a year for all taxpayers. Dividend tax rates above this amount are going up from zero to 7.5% for basic rate income tax payers, from 25% to 32.5% for higher rate taxpayers, and from 30.56% to 38.1% for additional rate payers.

BUY-TO-LET INVESTORS

Buy-to-let mortgage interest tax relief is reducing to 20% by 2020 and “wear and tear allowance” to be replaced by allowance on actual improvement costs.

In addition, the Government will increase the Rent-a-Room relief from £4,250 to £7,500 a year from April 2016.

RESIDENCE & DOMICILE

From April 2017, anybody who has been resident in the UK for more than 15 of the past 20 tax years will be deemed UK-domiciled for tax purposes.

From April 2017 the Government will also introduce new rules so that everybody who owns residential property in the UK and would otherwise pay inheritance tax on that property cannot avoid paying it by holding it in an offshore structure.

CORPORATION TAX

Reducing to 19% in 2017 and 18% in 2020.

NATIONAL INSURANCE CONTRIBUTIONS

Small firms’ NI contributions will fall, with a £3,000 employment allowance, no longer applicable to companies where the director is the sole employee.

INSURANCE PREMIUM TAX

Increasing from 6% to 9.5% from November 2015.

CHILDCARE

From September 2017, free childcare entitlement will be doubled from 15 hours to 30 hours a week for working parents of 3 and 4 year olds.

EQUITABLE LIFE

The Equitable Life Payment Scheme, which began making payments in 2011, will close to new claims on 31 December 2015.

STUDENTS

From the 2016-17 academic year, maintenance grants will be replaced with maintenance loans for new students from England, paid back only when their earnings exceed £21,000 a year.

SUPPORT FOR MORTGAGE INTEREST

Currently, those who receive benefits to help to pay their mortgage interest are able to do so indefinitely with no need to pay anything back. This Budget takes action to convert the Support for Mortgage Interest scheme into a loan, so that homeowners repay the financial support they receive.

Further information is available on the following link to the HMRC Executive Summary:

https://www.gov.uk/government/publications/summer-budget-2015/summer-budget-2015

Those of you in need of a drink after reading all this will be happy to know it won’t cost you anymore as a result of this Budget!

If you have any questions on how the Budget affects you please do call now on 0191 281 9862 or e-mail info@reevesifa.com to arrange a call with one of our advisors!

 

July’s most read articles – Summer Budget Special!

Hello from Reeves Independent

We thought we would leave our monthly newsletter until after George Osborne’s Summer Budget yesterday, and whilst there weren’t too many immediate issues, many experts agree with our expectation that Pensions will remain a major focus and ‘radical’ changes may remove planning opportunities in the future.

Here are a couple of the best articles we have found on the Budget from yesterday;

Summer Budget 2015: What it means for people like you!

2015 budget roundup: what effects will the announcements have?

Additionally this is a useful calculator from the BBC website that shows how the Budget will affect you!

Finally as always we have tried to include many of the other areas involved in financial planning in our most read articles in the last month below;

How to pass on your pension savings to your loved ones!

Case Study – Creating a legacy for your family!

BLOG: Help your children to secure their financial future!

Are you ready to make the most of your #PensionFreedom? Advice is the way to be confident of making sound choices!

‘I’m so glad to be alive – and £400k richer’: James paid £26k over 13 years for a policy he hoped he would never need – but his foresight paid off

Do you have Powers of Attorney – SIMON LAMBERT: You need this essential safety net for your family finances – however old you are!

Case Study – A growing household!

A guide to paying taxes in retirement!

Incredible! Expats have lost pensions worth £850m An estimated quarter of a million UK pensioners overseas are missing out on benefits as pension scheme trustees can’t trace them!

How to make a financial safety net. Death, illness, money troubles… You can’t prevent the first, you can’t do much about the second, but you can protect against the financial problems that both of those can bring!

As always we hope that you find some of the above useful. If there are any areas that you would like more articles on please let us know as we welcome any feedback

If you would like to discuss any of the above articles & how they may affect you then please contact us NOW on 0191 281 9862 or e-mail info@reevesifa.com to arrange a FREE initial appointment

Additionally please have a look at our core services document or visit our website www.reevesifa.com for further information

Summer Budget 2015 – a very quick guide to the key announcements!

Taken from the Professional Advisor

A quick guide from @scottjsinclair

1 The tax-free personal allowance will increase to £11k to 2016-17 (eventually, the Conservatives have promised, it will rise to £12,500). A law will also be introduced so that once it reaches  this level in 2020, people working 30 hours a week on the minimum wage won’t pay any income tax.

2 The dividend tax credit (which reduces the amount of tax paid on income from shares) will be replaced by a new £5,000 tax-free dividend allowance for all taxpayers from April 2016. Tax rates on dividend income will be increased.

3 A ‘family home allowance’ of £175k per person will be added to the existing £325k (pp) inheritance tax threshold, meaning the total tax-free allowance for a surviving spouse or civil partner will be up to £1m in 2020-21.

4 The amount people with an income of more than £150k can pay tax-free into a pension will be reduced from April 2016.

5 The higher rate income tax threshold will increase from £42,385 in 2015-16 to £43,000 in 2016-17.

6 The main rate of corporation tax (already cut from 28% in 2010 to 20%) will fall further to 19% in 2017 and 18% in 2020.

7 Permanent non-dom status will be abolished from April 2017. From that date, anyone who’s been resident in the UK for 15 of the past 20 years will be considered UK-domiciled for tax purposes.

If you would like to discuss how any of these announcements affect you please email info@reevesifa.com or call us on 0191 281 9862 for a FREE initial conversation!

Please seek advice! Pensioners’ tax hell.

As we await George Osborne’s Summer Budget today I thought I would share this  article I read this morning from the Express website that highlights the importance of planning your pension income in retirement!

It is vital you speak to an expert to ensure you make the most of the pension you have worked so hard to save for throughout your life!

“Chancellor George Osborne’s reforms, introduced on April 6, allow the over-55s to take their pension pot as cash if they wish. The move was hugely popular but many people failed to realise that there was a big tax sting in the tail.

Many now face unexpected tax bills running into thousands of pounds.

More than 60,000 savers withdrew around £1billion in the first two months after being granted flexible access to their money in April, according to official figures”

Please do read the rest of the article – Pensioners’ tax hell. SAVERS taking advantage of their newfound pension freedoms have unwittingly handed the taxman a massive £700million windfall!

It is vital you understand all the tax implications of taking your pension in retirement!

Speaking to someone about these implications is easy with Reeves Independent, just email info@reevesifa.com or call us on 0191 281 9862 for a FREE initial conversation!

Other similar articles

Are you ready for the pension freedom changes?

Speak to an advisor NOW! Pension tax breaks: this is why they’re about to be cut

Five pension avoidance scam tips!

 

Speak to an advisor NOW! Pension tax breaks: this is why they’re about to be cut

As always we like to publish posts that I feel are relevant & important. This is a particularly good article & one that affects a large number of you!

Pension tax breaks: this is why they’re about to be cut – George Osborne’s Wednesday Budget is expected to usher in the first of many cuts to pension savers’ generous tax breaks! http://www.telegraph.co.uk/finance/personalfinance/pensions/11716178/Pension-tax-breaks-this-is-why-theyre-about-to-be-cut.html

Taken from the above article

“What action can you take now?

Drastic and immediately effective reductions to pension tax relief are seen as improbable in Wednesday’s Budget. Previous reductions to both the annual pension contribution limit (currently £40,000) and the lifetime allowance (falling to £1m in April 2016) have been introduced with some warning.

Trying to invest within the next few days simply on the fear of radical action by the Chancellor is impractical and rash, warned Paul Evans of Suffolk Life, a specialist pension provider.

But for those with pension arrangements in place and who were planning to make contributions around now in any case, doing so before the Budget might be safer than waiting.

“But ideally there would be enough time to allow for structured planning,” Mr Evans said. Your earnings, your use of previous years’ allowances and your alternative potential uses of the money all need to be taken into account.

But maximising the very generous tax reliefs – while they last – should be on everyone’s agenda. “What we know for now is that pensions are up there among the most tax-effective investments going,” he said”

It is vital you take advantage of all the tax breaks available to you to ensure you the have retirement you desire!

Speaking to someone about your pension tax relief options is easy with Reeves Independent, just email info@reevesifa.com or call us on 0191 281 9862 for a FREE initial conversation!

39% of UK employees do not have any form of life insurance

I have just read an article on the Actuarial Post website with some interesting facts & figures on it that I wanted to share with you.

A recent survey of UK employees for Canada Life Group Insurance highlighted the following;

  • Two in five UK employees (39%) do not have any form of life insurance
  • 38% of these have not even given any thought to life protection
  • 34% said they didn’t know how immediate costs (such as funeral expenses) would be met if anything was to happen to them and 37% said they didn’t know how their survivors would meet long term financial demands, including housing costs.
  • Four in five without protection don’t have a will – adding to uncertainty for families

“All these points seem to highlight the extent to which people avoid dealing with this uncomfortable topic and prefer to bury their heads in the sand rather than confront what might happen if they were no longer around. This is particularly worrying as 38% said that, if their survivors were relying only on savings and help from family and friends, they would expect their standard of living to be affected within one year”

A further alarming fact is ONS (Office for National Statistics) life tables suggest that 1 in 8 men and 1 in 12 women in the UK die during their working life (between the ages of 22-65) 3 , which further illustrates the importance of having appropriate cover in place.

It is imperative you ensure your family is protected in the worst scenario!

Speaking to someone about your protection planning needs is easy with Reeves Independent, just email info@reevesifa.com or call us on 0191 281 9862 for a FREE initial conversation!

Please do take a look at our Protection Service Proposition!

Five pension avoidance scam tips!

A fifth of people over 50 have been targeted by pension scammers, according to research from provider Retirement Advantage. Here are 5 tips to ensure you beat the scammers

1. An offer to help you access your pension savings before age 55. It is only possible to do this in rare situations, for instance if you are very ill, so be careful and always check with your pension provider.

2. A recommendation to take a large amount of money, or your whole pension pot, in a lump sum and invest it. There are significant tax implications if you take lots of your savings in one go, so check the tax position before you make any decisions.

3. Warnings that the deal is limited and you must act now. Choosing the right retirement income product(s) is a big decision and shouldn’t be done quickly or under pressure.

4. An encouragement not to get professional financial advice or talk to Pension Wise. An adviser would be able to explain the rules and tax implications of different options and help you make the best choices for your personal circumstances, so be very suspicious if this is discouraged.

5. Contact by somebody who is not on the Financial Conduct Authority (FCA) register. The register is a public record of all the regulated firms and individuals in the financial services industry, including retirement income providers and investment companies.

Always seek professional advice regarding your pensions!

Speaking to someone about your pension options is easy with Reeves Independent, just email info@reevesifa.com or call us on 0191 281 9862 for a FREE initial conversation!

Case Study – A growing household!

Last month we received an enquiry via Linked In from a long term contact who wanted some financial planning advice.

Steve was an Engineer & Sue worked as a secretary & they had 3 children. Previously they had taken advice from their bank & as such had accumulated a number of different financial products from different providers & they were unsure whether it all amounted to a plan or not

Our approach

As always Steve & Sue received a free initial consultation via a meeting at our office. Following this we conducted a full review of their existing products, where we found out that they had a number of investment products with high charges & modest returns as well as a number of insurance contracts that provided insufficient cover for them & their 3 children, in the event of illness, loss of income or death.

We discussed with them what their short, medium & long term objectives were,  ensured that we fully understood their risk profile & analysed their insurance requirements.  A complete financial plan was then discussed with them that included the following

  • What age they could retire at & define the income required to meet their lifestyle goals.
  • What correct level of insurance was to ensure their family was financially secure in the event of death or serious illness.
  • How to best ensure the wealth they had worked hard for could be passed tax efficiently to their family in the event of their death.

Steve & Sue will now receive annual reviews to ensure their plan remains on tracks & to take into account any changes to personal circumstances, legislation & investment returns.

Does this case study sound similar to you?

Speaking to someone about your financial planning needs is easy with Reeves Independent, just email info@reevesifa.com or call us on 0191 281 9862 for a FREE initial conversation!