AXA pension proposition enhanced by Finance News Bulletin
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Published: 01/12/07
Funds can be held in trust for up to 80 years following an investor's death, via an enhanced retirement fund proposition from AXA riches Management, the company has announcedThe discretionary trust option enables pension possessions to be passed on while minimising risk and legal responsibility for inheritance tax (IHT)It is available on a range of pensions including stakeholder, individual pension and self-invested pension wrappers, or Sippsskull of retirement development Tony Moore said: "People want to see the benefits of saving firm for their own financial security, without having to be anxious about IHT legal responsibility on their death prior to vesting
"Recently AXA and Winterthur Wealth Management appointed Ian Colquhoun as its organization director of profitable operations in the UK of its new investment companyAXA and Winterthur supposed that the new company aimed to "redefine"
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A tale of two tax shelters - Published:07/12/07
All times are London time look for News in the FTcom siteSearchSearch Quotes in the FTcom siteQuotesYOUR MONEY Your investmentsBreadcrumb follow direction-finding:FT Home > Your money > Your investmentsServicesWhich is the improved investment vehicle for boosting existing retirement saving: a pension or an individual savings account (Isa)In recent existence, for some the answer has in its place been buy-to-let But for most investors looking to top up their core pension savings, the genuine choice is between these two normal tax sheltersIsas, now held by 17m individuals and worth more than £200bn in sum, are clearly well-liked Tax-free returns and the flexibility of being able to access money at any time have proved an good-looking combinationBut while Isas are often talked of as useful retirement economy top-ups, a pension vehicle will frequently make more financial senseIn fact, there is a rising case for more topping up to be done through pensions, say adviserspopulace have been too listening carefully on ‘pensions bad, Isas good’,” says Michael Owen, financial planning manager of Brooks Macdonald Financial Consulting“Pensions are a distant more attractive investment option than a few years ago,” adds Patrick Connolly of riches managers Towry Law, pointing to the growth of self-invested personal pensions (Sipps), higher payment limits and lower charges “The query is how much flexibility you require If you don’t require [interim] access to the money and are just saving for a retirement fund, there’s a very strong argument for doing it through a retirement fund”Pensions, unlike Isas, offer income tax relief on aid and also allow 25 per cent of the accumulated finance to be taken tax-free at retirement Isas instead disburse out wholly tax-free, and these tax differences can prove important for investors’ relative returnsAccording to analysis by Hargreaves Lansdown, a low-cost supplier of Sipps and Isas, a pension could give a total payout that is up to 25 per cent higher than that from an identical investment in an IsaThe table above shows that investors ahead the biggest advantage from pensions are those who are higher-rate taxpayers when they pay in – and therefore benefit from 40 per cent income tax relief on aid – but who pay a inferior tax rate when they take their pension in retirementThis is a common occurrence Many higher-rate taxpayers move into the basic-rate group in retirement, and this is set to fall from 22 to 20 per cent from AprilBut this duty gradient” benefit could work out even greater for many pension savers With the personal payment for over-65s increasing above £9,000 from next year, many higher-rate investors could end up paying an effective speed of just 10 per cent on their pension investments, says HargreavesOn the other give, higher-rate taxpayers who are set to pay 40 per cent tax in retirement might in its place look at investing in the pension of a non-earning spouse to take benefit of their personal allowanceThe allowance increase has created an chance for couples, says Tom McPhail, Hargreaves Lansdown’s head of pensions research“The significant step is to anticipate the future distribution of retirement savings within a pair and to ensure they are as evenly communal as possible,” he saysBut the firm’s figures also suggest that pensions may offer only marginal or even non-existent financial compensation compared with Isas for some basic-rate taxpayers and investors whose tax rate does not decrease as much in retirementFor such investors, pensions offer smaller overall tax benefits The comparisons also issue in that Isa investors drawing an income mechanically retain a stake in their fund’s ongoing growth; with pensions, investors more often than not forgo this benefitBut even where the Isa stands to yield a senior overall return, the danger of “living too long” means that it is still the riskier option, says McPhailLiving only about an extra day beyond the assumed standard life expectation could negate any identified Isa advantage, he says “The longer you live, the improved a deal the pension is”Investors should therefore require a substantial best in the form of a higher profits from an Isa to compensate for the option that the income could run out before they die, he saysretirement fund annuities, for all the censure they attract, do give investors a guaranteed income for lifeBy contrast, Owen of Brooks Macdonald points out that those in poor health or with abridged life expectancy may do better from an equal Isa investmentIsa investors may also want to consider rolling over their funds into pensions at a afterward date – for example if they are a basic-rate taxpayer but move into the higher-rate band They can then gain upfront duty relief Copyright The Financial Times Limited 2007Sipps boost savings by 40 per cent - Sep-15Investors move labor pensions to self-invested schemes - Sep-07Commercial property money win tax concession - Jul-21FSA to keep a close eye on manufacturing regulation - Apr-08There's no point paying for things you put on't use - Mar-31Increased choices in an ever-shifting scenery - Mar-31More in this sectionBlogsBrussels BlogCharles PretzlikClive CrookDear LucyEconomists’ ForumEnergy FilterJohn GapperGideon RachmanTech BlogThe Undercover EconomistWestminster BlogWillem Buiter’s MavereconRegional pagesLatin American agendaChinaIndiaBrusselsInteractivePodcastsDebates & pollsAsk the expertMarkets Q&AJobs and classifiedsBusiness for saleContracts & tendersJobs Search Type your search criteria below:* Minimum holdup 15 minutesAll times are London timeFT HomeSite mapContact usHelpAdvertise with the FTMedia centreStudent offersFT ConferencesFT Research CentreFT SyndicationCorporate subscriptionsFT GroupPartner sites: Chinese FTcomLes EchosFT DeutschlandExpansionInvestors ChronicleExec-Appointmentscom© Copyright The Financial era Ltd 2007 "FT" and "Financial Times" are trademarks of The Financial.
Read More: A Tale Of Two Tax Shelters >>Growing tend in UK property equity release gives rise to concerns - Published:31/03/07
A growing tendency among UK pensioners applying for equity release mortgages is causing concerns with at least one financial consultant Bristol-based adviser Hargreaves Lansdown believes that Brits who are looking to rely on evenhandedness release mortgages to fund their retirement plans are not being realistic about how to finance their prospect needsHuge rises in UK house prices has resulted in a generation of pensioners in the UK having big amounts of equity in their property Given that retirement fund amounts over the same period of time have performed badly in comparison, growing information of pensioners in the UK are electing to withdraw the evenhandedness they have in their property, via evenhandedness release mortgages, and to use the proceeds to finance their retirementThis has lead to a number of middle-aged populace in the UK believing that a similar dependence on property investments will be preferable over investing in option long-term pension schemes However, Tom McPhail, head of investigate at Hargreaves Lansdown, disagrees and argues that in fact this could be a very grave long-term financial errorMcPhail argues that the massive increase in property prices in the UK over the history two decades has been fueled by a lack of available properties While this may be benefiting UK pensioners looking to fund their departure today, McPhail says that the combined factors of an aging population along with the extra housing being constructed will mean that, in the long-term, there will be a growing number of people looking to release the evenhandedness in their house but with far more housing availableThe net result of these two factors will probable mean that the housing shortage in the UK will disappear and a correction will take place in the UK housing market that will denote a sharp reduction in the evenhandedness value people have in their homes Thus, in the long word, those looking to fund their pensions in the UK via equity release mortgages will be facing diminishing income Far better, McPhail says, is that middle-aged populace in the UK look to alternative means of funding their long term pension needs, such as with confidential pensions and ISAsCommenting on his comments, McPhail said that: "Property is not a in one direction bet The demographic pressure will eventually give way gambling your retirement security on property is a very high risk strategy"The great obsession about buying a property is that it’s a guaranteed investment, prices just keep leaving up, right incorrect We look at what happens when the bubble bursts and prices dropThe market is flooded with different types of mortgages, but how do you know which one is right for you The decision has to be yours, whether you take advice from an Independent monetary Advisor or do your own researchRather like a full house in poker there seems to be a wide selection of mortgages on the market, but aren’t many of them the same kind of productEarly salvation Penalties - Loan Extras - Debt Consolidation awful Credit - Choosing a Personal Loan - Loan Penalties.
Read More: Growing Tend In Uk Property Equity Release Gives Rise To Concerns >>Pittards ditches pension scheme - Published:19/12/06
The Pittards leather firm is about to cut all links with its pension scheme and hand it over to the retirement fund Protection Fund (PPF)The Yeovil-based firm's move means 1,600 future pensioners will take delivery of only 90% of their expected pensionsPittards says the only alternative would have been to call in receivers, which might have led to its closureThe Pension defence Fund is the government-sponsored body funded by a tax on pension schemes that organises the bail-out of bankrupt occupational pension fundsLindsey Blackford, finance director of Pittards, supposed: "When it all goes through then we will have no responsibility for the pension scheme"Pittards has been tanning skin in Somerset since 1826 and once employed 2,500 employees in the UKAs well as losing money over the last few years, it has seen the deficit in its retirement fund scheme balloon to £33 million, with possessions of about £70m compared to liabilities of around £100mThe deficit grew, Pittard claims, because of persons living longer than expected and poor investment returnsReceivership was the option we presented to the PPF We supposed this is a better deal for you, and they were very supportive"This is something we have been agonising over for the last seven or eight years There has been no solution to it"The problem for Pittards is that as well as losing money in its everyday trading, it was faced with seeing its retirement fund contributions rise from £2m last year to £4-5m this year"The commerce, making the money we create, on the margins we create, cannot have enough money this" Blackford saidUnlike some employers - many of whom used fit investment income in the 1990s to take a full or biased holiday from paying pension contributions - the company had been paying full contributions for the history ten yearsIndeed, the company had taken various ladder recently to bridle in the cost of its pension provisionIt had changed the scheme from a final salary to a vocation average scheme, then stopped up it to new members and then asked members to pay senior contributionsBut on top of that, it was facing an approximate £500,000 levy to the PPF - precisely because the company and the scheme were at such far above the ground risk of going underSo Pittards told the trustees and the PPF that unless some kind of deal could be struck then receivership was the likely option, which would have left the pension system in a worse positionAfter several months of negotiations Pittards announced in demonstration that it was going into a form of bankruptcy called a Company Voluntary Administration (CVA)Under this arrangement, the firm offered to disburse off all its amount overdue - except the money it owed to the pension system, which it closed to existing membersThe deal involves the PPF taking on the system into its "holding pen" and assessing it for savePittards will pay a further £25-£3m over the next five years, tenable against the firm's Yeovil plant, over which the PPF will have a legal charge in case of defaultThe two sides have the same opinion that if the factory is sold in the next 20 years then any windfall increase, up to a ceiling of £68m, will also be waged to the PPF"Receivership was the alternative we presented to the PPF," says Mr Blackford We said this is a better deal for you They were very supportive"Now that shareholders and creditors have agreed the contract, Pittards will be free from the CVA - and can therefore continue trading as a solvent enterpriseIt will almost immediately set up a stakeholder pension system but will not make any contributions as an employerInstead, it has give its staff an extra pay go up of 35%, with the workers being left to decide for themselves if they want to put the money, plus any other contributions of their own, into the pension fundMeanwhile the firm's factory in Leeds is being shut later this day with more than 200 redundanciesAs well as shedding its pension scheme, the firm has attracted the famous Swedish investor, Peter GyllenhammarHe has bought a 65% bet in the company for just £2m, with most of that being used to create the initial payment to the PPFCurrently Pittards specialises in creation skin which is mainly bought by manufacturers of gloves and shoesOne of its biggest clientele is Footjoy, known to golf players as the world's biggest producer of golf shoes with 30-40% of the earth marketIt also makes the leather for cycling fashion accessory, military camouflaged fashion accessory and provides shoe leather for companies like MerrellBut some of their near the beginning decisions have proved controversial, with some critics proverb they are bailing out firms' managementOne such decision involved captivating a stake in the insurance broker moor Lambert in exchange for taking on its three retirement fund schemesAnother saw the Regulator allow Norwegian conglomerate Kvaerner to cut loose its retirement fund scheme here in the UK for former members of the Trafalgar home industrial groupBack in Yeovil, Lindsey Blackwood is confident the corporation, now shorn of its pension liabilities, can start to trade profitably againAnnuity improvement Women 1 Women 2 Pension human rights Divorce Work pensions Lump sums Pension Credit ice-covered pensions Shortfalls Overseas pension Small pensions Tax and retirement funds Pension repair Made simpleState retirement fund With-profits Final salary.
Read More: Pittards Ditches Pension Scheme >>