November Notions…..Your financial planning month?

With the sky alight at the weekend with the beautiful colours of fireworks and the air thick with the smells of bonfire, I know that it is going to by a busy month in financial planning. For those of you who know that I complete 25 years in the profession in 2010, I would note that this experience has always taught me that November is a key (if not the key) business month in the annual calendar to seal off the years production. Can I add that this is not me suggesting this, but our clients usually requiring it.

I don’t know if this is because it is the last month on normality in the year before all things Christmas descend upon us, with the corresponding time and monetary commitments, or whether the first month of truly dark nights, providing more time to focus on financial planning, independent advice (IFA) and getting all things money in order. Whatever the reason, we always ensure that we are ready to help.

Like all financial planning, each client’s requirements, needs and aspirations are different and this variety is inspirational in making our work so enjoyable. I have given some examples below.

Pension Planning:

With many changes in the way the limits on pension tax relief have been applied or restricted and more changes proposed for lifetime allowances (LTA) , this is an area that is regularly changing and many find needs regular attention for contributions to Personal pensions (PPPs), Stakeholder Pensions and Executive / Employer schemes.

For employers, the effects of NEST (the National Employers Savings Trust) on the immediate horizon, this is taking up significant thinking time on the approach to the overall outcome of these plans.

Retirement Planning

I always recommend that a client starts to plan their retirement income planning around 6-12 months out from the date they plan to retire. This is because many want to know what they are likely to get in terms of tax free cash and the final income they can draw, either via an annuity purchase (Open Market Option/ OMO/ Impaired Life Annuity) or, for those prepared to take some additional risk, an income drawdown plan. As with most pension issues, the rules applicable are regularly changing and the increase in the age to which annuities have to be bought from 75 to age 77 is a good example. More changes are proposed for the future.

Early advice and guidance will provide retirees time to think about how the retirement options available and what will suit their needs both at retirement and into the future. Time is a key point here because there is usually a lot of information to take on and digest.

To help with this, we do offer a simple Retirement Options guide free of charge and this can be found here.

Investment Planning:

As we pass the half way stage in the fiscal year (April-April) many chose to invest in ISA’s rather than wait for the deadline of April 05^th. This seems to be another popular deadline that clients focus on. With the full ISA allowance at £10,200 each (2010/2011), this is a valuable tax efficient allowance that many use each year to shelter their investments. In addition, most have a full capital gains tax allowance (CGT) of £10,100 in a tax year (2010/2011) and again many find this of significant advantage in their overall planning. With the highest tax charge above this allowance at 28% as a flat tax rate, this can work well for high rate taxpayers.

Many also start to plan to use their gift allowances in the next month or so, such as the annual gift allowance of £3,000 each or gifts from surplus income.

Summary

You can see that there is usually a lot to think about in financial planning for many around this time of year, whether that be one individual topic or a combination of these, along with other areas of planning, such as inheritance tax.

As an amusing aside, I was horrified when I found out that ‘Santa Claus’ was following me on Twitter the other day (follow me as ‘Onlinefinancial’). At least he had waited until November to start. Either I have been a very good boy in the year or it is just a marketing gimmick. Sadly, I fear it is the later and not because I have not been good.

As we lead up to the festive season, please remember that it is not too late to get your finances in order and ready to face Christmas, 2011 and beyond.

As noted in this text, we are all different and this information should not be used or relied on as individual financial advice. The Financial Services Authority does not regulate Taxation advice.

Further details of this are available at our website, www.churchouse.com

Keith Churchouse

Chartered Financial Planner & ISO22222 Certified Financial Planner

Director of Churchouse Financial Planning Limited

Churchouse Financial Planning Limited is authorised and regulated by the Financial Services Authority