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Yours financially

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									       Yours financially
         An independent look at personal wealth and financial protection

         Summer 2006




                                            NORRINGTONS
                                            48 HIGH STREET IPSWICH IP1 3QJ
                                            Tel: 01473 226663 Fax: 01473 230594
                                            E-mail: info@norringtons.co.uk
                                            Website: www.norringtons.co.uk

                                            Regulated by the Financial Services Authority



 Welcome to the Summer                                               New Pension Term Assurance
 issue of our newsletter
                                                        Up to 40% tax relief on life assurance
Looking through the pages of this newsletter,
it’s remarkable how many aspects of our
daily life are affected by financial planning.          T   he new ‘A-Day’ pension regime on
                                                            6 April this year means it is now
                                                        possible to get a generous amount
Take the house we live in. A simple regular             of tax relief on certain life assurance
check of mortgage deals on offer could                  policies.
perhaps save us enough each year for a
better holiday, new furniture or be put into            If you are a higher rate taxpayer you can
a new investment plan to fund even bigger               now effectively reduce the amount you pay
things.                                                 for life assurance by up to 40%!

And speaking of investments, Traded                     In fact even if you are a basic rate taxpayer,
Endowment Policies are a little known means             or don’t pay tax at all, the Government will      Reduce the cost of valuable protection
of building up some sizeable capital. Worth             still contribute 22% of your premium.             for your dependents
checking out.
                                                        This type of insurance is called ‘Life           You should also remember that tax
New legislation means that vital protection             Insurance with Tax Relief’, and you only         rules and reliefs are subject to change.
for our dependants could now be obtained                need to look at the maths to see why this        The exact amount will depend on your
for less so we can protect and save.                    is such a potentially popular form of life       individual circumstances. The amount
                                                        cover:                                           you pay for this will be taken out of your
And just in case we might need medical                                                                   pension allowance, but don’t let that put
treatment, there’s a way of avoiding long and           This indicative example shows how a              you off. You don’t need to have a pension
worrying hospital waiting times.                        normal £300 premium can fall to as little as     to benefit and it will not be used to provide
                                                        £180 after tax relief – saving £120 per year     you with a pension income.
The quality of our later life is crucially affected     or £3,000 over a typical 25 year term!
by sound retirement planning and action now
can make a huge difference.                             Non and Basic Rate Taxpayers:                    One other important point – you should
                                                                                                         never cancel any existing life assurance
                                                         Annual life assurance premium        £300
We hope this newsletter provides food for                                                                cover until you have new cover in place.
thought in all these areas as you soak up                Govt pays basic tax relief at 22%     -£66      Contact us today, without any obligation,
the long awaited summer sun. Please don’t                You pay                              £234       to discuss your life protection needs.
forget, we are here to help with any of your
financial queries without any obligation                Higher Rate Taxpayers:                            Also in this issue ...
whatsoever.                                              Premium with basic rate tax relief   £234
                                                                                                           MORTGAGES
Yours financially                                        Claim higher rate tax relief          -£54        Is it time to fix a better deal?
                                                         (up to a further 18% of your

                  ew                        s
       Linda Andr
                                                         income)
                                                         Effective cost to higher rate tax    £180         PENSION OPTIMISATION
                                                         payer                                             How to potentially get up to 35% more
                            LINDA ANDREWS
                                                                                                           for your pension
                                                        You can clearly see that Pension Term
                                                        Assurance looks an attractive proposition          MEDICAL COVER
                                                        and understand why it is causing a lot of          A relatively low-cost solution to hospital
Our goals and our financial                             interest in the industry. However, just as         waiting times
situation changes over time,                            with any other tax allowances, certain
                                                                                                           TRADED ENDOWMENT POLICIES
so it’s essential to review our                         parameters do apply and we’ll be happy to
                                                                                                           Want an alternative lower risk
financial provisions                                    discuss these with you.
                                                                                                           investment?
                                                           Mortgages
Is it time to fix a better deal?

I t was interesting to note from the Minutes of the Bank of England’s Monetary
  Policy Committee’s meeting in May this year that one member, David Walton,
actually voted for an increase in interest rates (Source: Bank of England website,
May 2004) – could this be the first sign in the way the rates are going to go? And,
if so, could now be a good time to fix a competitive mortgage rate for yourself?

If interest rates should increase over the
coming months, as rumblings in the MPC
                                                  Time running out for best deals?
may potentially indicate, then a fixed-
rate mortgage may be a feasible option.           However, people looking to take out a
                                                  fixed-rate mortgage may benefit by doing
A fixed-rate mortgage can give                    so sooner rather than later to get the            Dream Home? Make sure your mortgage is a
peace of mind because your monthly                best deal - rates could rise imminently           practical choice
repayment won’t change over the fixed-            which means that lenders will probably
rate period - usually two years. This             withdraw their cheapest fixed-rate deals.           Please note:
two year period may also give you
                                                                                                      Written quotations    are   available   on
shelter from any other potential rate             Please be aware, there are a vast number            request.
rises, over the coming year or so, and            of mortgages on the market and so it can
perhaps until rates settle down again.                                                                Loans are subject to lender’s terms and
                                                  be quite difficult to source the best deal
                                                                                                      conditions. A deposit or life policy may be
Fixed-rate mortgages are also ideal for           for your particular needs. That’s where             required.
anyone working to a tight budget in the           we come in - we can make detailed
early years, because you’ll know exactly          searches from comprehensive lists,                  Your home may be repossessed if you do
                                                                                                      not keep up payments on your mortgage.
how much your repayments will be and safe         show how much you’d save on monthly
in the knowledge that they won’t increase         payments and the total potential saving,            A broker fee between £250 - £500 may
for the duration of the fixed-rate period.        including the costs involved in switching.          be charged or not. Please ask for details.




                                    Traded Endowment Polices
Want an alternative lower-risk investment?
A   ccording to the Association of
    Policy Market Makers (website May
06) only around 30% of all endowment
                                                  of investing directly in stocks and shares
                                                  or other equity-linked vehicles, such as
                                                  unit trusts, investment trusts and OIECs.
policies actually reach maturity. A               In most circumstances, TEP investors
further 30% are cancelled in the first            can rest safe in the knowledge that they
few years of their intended lifespan.             cannot lose any of their initial investment
The 40% that neither last the full term           provided they continue to pay the
nor get cancelled are either sold or              remaining due premiums and keep the
surrendered somewhere along the way.              policy in force until its stated maturity date.

The policies that are sold on or ‘traded’         This is because the basic “sum assured”
in the market offer potentially good              and annual bonuses allocated by the
investment opportunities to investors.            time of purchase are guaranteed - i.e.
Traded Endowment Policies (TEPs) are
relatively low risk products with the sum
                                                  “locked in” and together are likely to be
                                                  worth more than the initial purchase
                                                                                                      Take some of
assured and guaranteed bonuses to-                price. In addition, the expenses incurred           the risk out of
date already known. They could be ideal           in the early years (commission and
vehicles for building capital to meet future      other costs) have been absorbed                     investment
financial needs or obligations at a fixed point   already by the original policyholder.
in time like 18th or 21st birthdays, school
or university fees and general savings as         However, it should be pointed out that
                                                  buying a traded policy does not give the          Whether you are thinking of buying an
part of a wider portfolio of investments
                                                  new owner the life cover – that stays on          endowment policy or even selling one
- perhaps to supplement a pension.
                                                  the original owner’s life. So if you were         you already have, why not contact us to
TEPs ideally suit investors who are               looking to secure some valuable life cover        discuss all the pitfalls and benefits open
looking for a combination of relative             for yourself you would need to effect             to you – we have access to all the major
safety and security together with growth          a separate life policy on your own life.          market makers and will do our utmost
potential. Such investors are often wary                                                            to secure you the best deal available.
                                          Pension Optimisation
How to potentially get up to 35% more for your pension

I f you could get an extra 35% value
  on your pension, without investing
a single penny more would you
                                                However, most pension plans these
                                                days include a feature called an ‘Open
                                                Market Option’ (OMO), which allows
take the offer up? Of course you                you to use your pension fund to buy an
would wouldn’t you - particularly               annuity with a provider of your choice.
as you’ve worked so hard and paid               And this could mean significantly
into your pension pot for so long.              enhancing your retirement income.

Shopping around is a good idea whatever         This is such an important issue,
you’re buying. So by just shopping              because once you have purchased
around for the best priced annuity, the         your annuity that is it - there are no
Financial Services Authority (FSA) - the        second chances to choose again.
                                                                                            Are you looking forward to retirement knowing
regulatory body for the financial services                                                  you have the best pension deal?
industry - reckons you could potentially        And, because this is such an important
increase your retirement income by up to        matter you should seek professional,        about OMO in pre-retirement letters sent
35%. (Source: FSA website, May 2006).           independent financial advice - and not      to customers a few weeks before they
                                                just rely on the information that your      retire.
Many people coming up for retirement            current pension plan provider offers you.
assume that all they can do is create                                                       We’d all like to have as much money as
an income by using the proceeds of              It is so important that the FSA force all   possible to enjoy in retirement, so why
their pension fund to buy an annuity            insurers to make customers aware of their   not contact us to see whether we can
from their existing pension provider.           rights regarding the OMO facility. Since    increase your retirement income, by
In the long run, that could mean                September 2002, insurers have had to        taking advantage of the best annuity rates
losing out on thousands of pounds.              include either an FSA factsheet or a note   available. Why settle for a lower income?




                                                   Medical Cover
A relatively low cost alternative to
hospital waiting times
N  o-one wants to wait months for treatment on the NHS, nor do they want to pay
   out a small fortune to pay for any alternatives. It could possibly take months to
even see a consultant. And, until you see the consultant, you may not even know
what your health problem is - let alone how long it is going to take to get treated!

Furthermore, a swift diagnosis is the
first step to fast treatment and getting        And, as prevention is better than cure
better sooner. You don’t want to be in          some PMI providers are also concerned
discomfort and worrying what might              about the ongoing health of their clients
be the matter for months on end.                with annual health screening, routine
                                                dentistry, eye tests, and complementary
Private Medical Insurance (PMI) is              medicine etc, all being available through
designed to give you a better, more                                                          Important aspects to consider include:
                                                PMI. Although, as you would expect,
immediate medical service should you fall       the more that is included the more the       •   Do you want a low-cost plan,
ill or suffer an injury - however it does not   premium will be.                                 with reduced benefits, or a fully
replace all the services offered by the NHS                                                      comprehensive plan?
                                                However, low-cost PMI plans may              •   Which hospitals are offered?
                                                be the answer for some but there will        •   What treatment is included and
 The main benefits of PMI cover are:
                                                be limitations to the cover such as              excluded?
    No NHS waiting lists.                      excluding outpatient consultations and       •   Is there a limit on claims?
    Treatment will usually be provided         treatment and a restriction on the number    •   Is both in-patient and out-patient
     in a private hospital.                     of hospitals which may be used etc.              cover provided?
    You can choose the date of                                                              •   Can other members of the family
     treatment.                                 PMI can be an invaluable plan to hold in         be included?
    Usually a choice of consultant to          your armoury, but there are many elements    •   The cost?
     provide the treatment.                     to consider. Why not have a chat with us     •   Does the plan have an excess?
                                                to discuss the best options to suit you.
   Can you help us to
   help others?

 If you are pleased with the service
                                              Baseboard
 and advice we provide then why
 not tell a friend, colleague or                       WIN a £25 Marks & Spencer Voucher!
 relation about us?
 We are a growing firm and do                 We are happy to offer a Marks & Spencer shopping voucher to the first all - correct
 appreciate your support. We also             Sudoku entry, selected in a draw on 1st October 2006. Please complete the name
 consider it a compliment when                and address panel on the left and send it to this office with the completed Sudoku
 you feel able to recommend us to             by the closing date of 30th September 2006. A photocopy will be accepted if you do
 others.                                      not wish to cut up the newsletter. There is no purchase necessary and the name of
                                              the winner will be made available to anybody enquiring after 1st October 2006, Prize
                     Many thanks              draw entry terms and conditions are available on request
                                                                                                                                                   Good Luck!

Please contact me                                                                         SUDOKU
I would like to discuss with you the topics                                                                                               How to play
I’ve ticked below. I understand this
request is without any obligation                  5        6        9                            2                   4       7
                                                                                                                                          The rules of Sudoku
                                                                                                                                          are simple. Enter
Investment                                         7                                              6                                       digits from 1 to 9 into
                                                                                                                                          the blank spaces.
Protection                                                           3          7        4                                    5
                                                                                                                                          Every row must
Inheritance Tax
                                                                                9        1                   6                4           contain one of each
                                                                                                                                          digit. So must every
Pension
                                                                                                                                          column, as must
                                                                                                                                          every 3x3 square.
Savings
                                                   8                 4                   6        3                                       Each Sudoku has
Other (please specify):
                                                                                                                                          a unique solution
                                                   6                                     2        1          5                            that can be reached
                                                                                                                                          without guessing.
Name
                                                                                6                                             3
Address
                                                   4        5                   3                            8        2       6

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Telephone
                                                                                             Helpline
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                                              Please note we are here to help you as much as we can. If you have any financially
                                              related questions or problems, simply call us on the number below and we will try our
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                                              best to help you. Remember there will be no obligation placed on you, and we are
NORRINGTONS                                   genuinely here to help.
48 HIGH STREET
IPSWICH
IP1 3QJ
                                                                           01473 226663
                                              An investment may go down in value as well as up and you may not get back the full amount invested.
                                              The past is not necessarily a guide to the future performance and may not be repeated. Any tax reliefs
                                              referred to are those currently applying and their value depends on the current circumstances of the
                                              investor. Levels and bases of, and reliefs from, taxation are subject to change. YOUR HOME MAY BE
                                              REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. Written details
Regulated by the Financial Services           on request. All loans subject to status. We regret that if our advice is not sought we cannot accept any
Authority                                     responsibility for loss occasioned to any person acting or refraining from acting as a result of any mate-
                                              rial contained in this publication. All graphics shown are solely for design purposes and should not be
                                              construed as having any further meaning.

								
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