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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: email@example.com 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 By completing this form and returning it to us you give your consent for us to store your details electronically. If you do not wish your details to be kept by ourselves please submit notification to us. We use this information Email to keep you updated with information we feel may be of benefit to you and not to sell to third parties. Telephone Helpline Best time to ring 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 Please return to: 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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