For some, pension and investment planning are both fascinating and dynamic in the way that various factors can be applied to provide the overall balance required. Others do not find this topic so consuming, although this does not alleviate the need to regularly review existing financial arrangements to ensure that they continue to meet your expectations.
In many cases, this can be viewed from two specific angles, detailed below:
The Tax Wrapper Angle
Like many issues, tax legislation rarely stands still for long, changing with budgets or possibly amended in Autumn Statements.
It will be interesting to see what our Chancellor achieves in this month’s Autumn Statement. Reviewing the tax wrapper being used (or available) in a pension or investment is worthwhile to ensure, where possible and prudent, that tax allowances are being used efficiently. Headline examples might be this year’s ISA allowance (£11,280) or annual gift allowance (£3,000) for IHT purposes, with many focussing on this later note as we approach the festive Christmas season. There are other less well known (or well used) allowances that can be overlooked, but may remain effective for you and your family’s financial planning. An example might be pension funding (usually to a limit of £3,600 gross in a year) for children. This example might seem an unusual idea, but the effects of very early pension funding for an individual can be significant.
Another great example of change in legislation, in this case in the provision of financial advice, is the ending of commission and a move to fee based advice and implementation from January 2013. This may have an effect on the way you take and pay for future advice. We have detailed this change in previous Blogs on this Chapters Financial website.
The Investment Angle
If you hold existing invested assets, you will have made decisions about the level of investment risk you are prepared to accept and confirmed your objectives for growth, income or possibly both, among many other points. The same would apply for new money being added, taking into account existing arrangements, your expectations and the diversity you expect. Investment markets and fund/ asset allocations usually move constantly, and it is possible to see past/ historic decisions of how you want an Investment Bond (as an example) to be balanced changing because of market movements. Your own circumstance and tolerance for investment risk may have changed from previous times and the current allocation may now be different from the preferred choice. You may, an example, have moved from an accumulation phase for your investments to a required income phase. This could usually be referenced at the time of retirement.
Regular Financial Review
A regular review allows the previous decisions to be considered and challenged to ensure that your existing holdings meet with your expectations and anticipated aspirations. If required, fund switches are usually easy and cheap to arrange and this planning can be used to change asset allocations to meet your on-going requirements and to reflect views of future investment opportunities.
Personal needs may have changed where capital or income may need to be released from existing holdings to meet a specified requirement and reviewing diversified holdings to see where best to release gains ( if available, possibly using tax allowances, such as the Capital Gains Tax (CGT) allowance/currently £10,600 2012/2013) is usually worthwhile and recommended.
Summary
Each client is an individual and we will provide financial planning advice on this basis. Therefore, no individual advice has been provided during the course of this Blog. The team at Chapters Financial Limited will be pleased to help you with your own individual requirements and to review and make recommendations for your existing arrangements.
In many cases, this can be viewed from two specific angles, detailed below:
The Tax Wrapper Angle
Like many issues, tax legislation rarely stands still for long, changing with budgets or possibly amended in Autumn Statements.
It will be interesting to see what our Chancellor achieves in this month’s Autumn Statement. Reviewing the tax wrapper being used (or available) in a pension or investment is worthwhile to ensure, where possible and prudent, that tax allowances are being used efficiently. Headline examples might be this year’s ISA allowance (£11,280) or annual gift allowance (£3,000) for IHT purposes, with many focussing on this later note as we approach the festive Christmas season. There are other less well known (or well used) allowances that can be overlooked, but may remain effective for you and your family’s financial planning. An example might be pension funding (usually to a limit of £3,600 gross in a year) for children. This example might seem an unusual idea, but the effects of very early pension funding for an individual can be significant.
Another great example of change in legislation, in this case in the provision of financial advice, is the ending of commission and a move to fee based advice and implementation from January 2013. This may have an effect on the way you take and pay for future advice. We have detailed this change in previous Blogs on this Chapters Financial website.
The Investment Angle
If you hold existing invested assets, you will have made decisions about the level of investment risk you are prepared to accept and confirmed your objectives for growth, income or possibly both, among many other points. The same would apply for new money being added, taking into account existing arrangements, your expectations and the diversity you expect. Investment markets and fund/ asset allocations usually move constantly, and it is possible to see past/ historic decisions of how you want an Investment Bond (as an example) to be balanced changing because of market movements. Your own circumstance and tolerance for investment risk may have changed from previous times and the current allocation may now be different from the preferred choice. You may, an example, have moved from an accumulation phase for your investments to a required income phase. This could usually be referenced at the time of retirement.
Regular Financial Review
A regular review allows the previous decisions to be considered and challenged to ensure that your existing holdings meet with your expectations and anticipated aspirations. If required, fund switches are usually easy and cheap to arrange and this planning can be used to change asset allocations to meet your on-going requirements and to reflect views of future investment opportunities.
Personal needs may have changed where capital or income may need to be released from existing holdings to meet a specified requirement and reviewing diversified holdings to see where best to release gains ( if available, possibly using tax allowances, such as the Capital Gains Tax (CGT) allowance/currently £10,600 2012/2013) is usually worthwhile and recommended.
Summary
Each client is an individual and we will provide financial planning advice on this basis. Therefore, no individual advice has been provided during the course of this Blog. The team at Chapters Financial Limited will be pleased to help you with your own individual requirements and to review and make recommendations for your existing arrangements.
Keith G Churchouse, Director
Chartered Financial Planner
ISO 22222 Certified Financial Planner
Chapters Financial Limited is authorised and regulated by the Financial Services Authority, number 402899.
Chartered Financial Planner
ISO 22222 Certified Financial Planner
Chapters Financial Limited is authorised and regulated by the Financial Services Authority, number 402899.
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