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  • 08 Jun 2010 5:06 PM | Margaret George (Administrator)
    Assumptions and Attitudes in Creating Your Comprehensive Financial Plan
    By Dan Woodruff

    Why are assumptions important?

    We all know that life moves on, and prices never stay the same. You therefore need to take account of changes to things like inflation because otherwise your plan will not be accurate.

    Be cautious

    It is better to be cautious and underestimate things (thus having more than is needed in the future). The alternative would be to overestimate effects, which could leave you with less than planned, or having to take more risk.

    You should also think about how things have changed in the past over the long-term, rather than what is happening at the moment, as this might be outside the general norm.

    Assumptions to consider


    Think about the price of goods 10 years ago. How far would £100 have gone then, compared to now. Generally, prices increase over time, so you should factor this into your calculations. This is important because £100 saved now won't be much good in 20 years time. Also, if you want to provide an income for the future in today's terms, you need to work out what £20,000 now will be in 20 years time. See the Retail Prices Index.


    You may base your future ability to plan on your earning capacity. If you overestimate this you might not get back as much as you thought. See the National Earnings Index.


    Your earnings will probably rise, but so will your expenses. Don't forget to factor this into your plan. Of course, some expenses will have a finite period -for example your mortgage will hopefully be paid off in the future.

    Investment returns

    Different assets perform differently. You therefore need to assume that they will grow at different levels. For example, you can expect cash to grow differently to shares, and differently to property. You also need to think about the growth of the underlying assets (the capital), and the income returns. For example, bank accounts have zero capital growth, and low income returns.

    Charges & interest rates

    Don't forget to include product charges into your calculations as these will reduce the value of your savings over time. You should also consider future changes to interest rates on your borrowings.

    Attitudes to consider

    Your general attitudes towards your goals will affect how you approach solutions to your goals. We concern ourselves with monitoring future risks to your financial well being. Here are some important factors to consider:
    Investment risk

    Generally, risk is linked to reward over time. On average, over time, the greater risk you take with your money, the greater return you should hope to make. But this comes at a cost of short-term fluctuations, which can risk you losing capital.

    You should think about how much risk you are prepared to take with specific aspects of your finances. For example, you should probably take no risk with your emergency funds, whereas you might be prepared to take more risk with longer term savings like pensions, which you could make up at a later date.

    Mortality and morbidity risk

    This measures the risk to you or your family of financial loss due to death or ill health. We can measure the likelihood of these events happening using statistical evidence. You should also consider your attitudes towards these risks. Are you concerned about the risk to your family's lifestyle should you or your partner die, or be unable to work due to illness? Think about the likely effects of these events, and the impact on your lifestyle. If you have assets to enable you to weather the storm you may not be concerned. However, if not, you may wish to consider insurance to cover these issues.

    Next steps

    Work out your estimates for future financial change in important indicators such as inflation and earnings. This will have an important bearing on your future plans.

    Measure your risk tolerance. This should be your first step in understanding your attitudes towards investment risks. Don't forget to test both you and your partner if you are a couple.

    You may also wish to consider the financial loss to your family if you or your partner dies or gets too ill to work. This may affect your future ability to achieve your financial goals.

    Want some help?

    We work closely with our clients to develop and maintain their financial plans. If you would like some help in preparing your plan, please contact us.

    Dan Woodruff is a Certified Financial Planner based in Colchester, Essex, UK. He regularly writes articles on financial planning and investments aimed at UK business owners and investors. Go to to find more content, or sign up for his free newsletter or financial planning blog.

    Woodruff Financial Planning is authorised and regulated by the Financial Services Authority.

    Article Source:

    Dan Woodruff - EzineArticles Expert Author

  • 02 Jun 2010 6:39 AM | Margaret George (Administrator)
    Mortgage Endowments - Stick Or Twist?
    By Ray Prince

    We read a huge amount of articles on all sorts of financial matters each week. One that appeared in the press recently about the latest news on With Profits Endowment policies' payouts grabbed our attention.

    Money Management magazine does an annual survey of policy payouts by various companies, and this years results have shown that yet again most are showing a fall compared to last year.

    The background to all this of course is that, particularly in the late eighties and early nineties, Endowment policies were sold alongside interest only mortgages. The policy was supposed to be big enough to pay off the debt after, say, 25 years, and it was commonly said by the salesperson it might give even more than this.

    The way in which With Profits policies work is that annual bonuses are added each year (hopefully) and there's also a final bonus at the end of the term, although neither are guaranteed.

    Homeowners were informed that it was a way of 'smoothing out' the erratic stock market movements, and the policies also had built in life cover.

    It is estimated that something like 2 million policies were sold during this period on this basis, which means that there are many plans due to mature in the next few years.

    At the peak, it was estimated that there were 11 million policies, but with many having been cashed in or matured, it leaves around 5 million still active.

    Not all companies were included in the survey, however many well known names did appear. So let's look at some results compared with 10 years ago, based on a 29 year old paying in £50pm over 25 years:

    Company 10 years ago Now % Fall

    Clerical Medical £104,289 £30,561 71

    Commercial Union £118,567 £30,679 74

    Friends Provident £102,341 £29,966 71

    Legal & General £93,678 £35,603 62

    Norwich Union £89,518 £27,884 69

    Prudential £99,994 £35,834 64

    Scottish Amicable £96,569 £37,635 61

    Standard Life £110,373 £28,139 75

    So if you had a policy maturing in 2000, there is no doubt that you would have done well, having had many years of good growth in the stock market.

    But these are very disappointing results for people with this type of policy now, and can be a worry for many who are coming to the end of their mortgage term.

    This article also majored on a couple in their early 60s who had taken out a policy with Eagle Star in 1988. The loan was £130,000 and was due to be paid off in 2013. They were worried about the policy, and no wonder. On checking its value last year, they were told it was only worth £50k, which was only £3k more than they had paid in!

    On balance, the couple decided to cash in the plan, and downsize.

    This gave them enough to pay off the mortgage debt, but left a very nasty taste in their mouths.

    It remains to be seen if any companies yet to produce their result will give a lower payout. Apparently, last year, the Life Association of Scotland paid out just £23,785!

    Overall, when asked what percentage of policies would fail to meet their targets, the Pru said 75% would fail to do so. The amazing thing here though is that last year they predicted that only 25% would fail...

    Standard Life and Scottish Widows both said that around 97% of their endowment policies would fail to meet their targets.

    So what should you do if you find yourself in this position?

    Well, when we have covered these issues with our clients, the reaction ranges from "we'll make it up from elsewhere" to "this really bothers and annoys me".

    The standard options are:

    - you extend the mortgage term to repay the shortfall

    - pay extra into the loan

    - use other savings to make up the shortfall

    - downsize the home and use the proceeds to pay off the debt

    Some of our clients have been fortunate to have tracker mortgages, and therefore have benefited from low interest rates. In many cases they are paying a third or less of what they were paying each month compared to 2 years ago. So overpaying into the loan has become a very affordable and sensible route to take. Particularly as the next move on interest rates can surely only be up.

    Of course, the other side of the coin is that many of our clients have already paid off their mortgage, and now find they have an endowment policy or two that they are still paying into. In this situation it is really well worth reviewing matters, as you can compare the pros and cons of cashing a policy in or sticking it out until the bitter end.

    Some issues are, for example, do you need the life cover now and what other investment options are there you could use? What about reducing risk by putting the money into cash?

    Another idea is to simply use these monies to fund a special holiday that perhaps otherwise would have to wait?

    After all, life is for living!

    The Financial Tips Bottom Line

    This type of investment has proved to be a poor one in the last few years.

    Of course hindsight is a fine thing, but ensure you know what you are investing in if you are looking for a way to save for your future.


    If you do have an endowment policy, it really is worth reviewing your options. After all, if a plan has, say, 5 years to run at £80pm, you will be handing over nearly £5,000 more to the insurance company.

    Find out what the best option is for you, and have the peace of mind knowing that you've made the right decision.

    Ray Prince is a fee based Certified Financial Planner with Rutherford Wilkinson ltd, and helps UK Resident Doctors and Dentists plan to achieve their financial objectives. Just visit where you can request your free retirement planning guide.

    Rutherford Wilkinson ltd is authorised and regulated by the Financial Services Authority.

    Article Source:

    Ray Prince - EzineArticles Expert Author

  • 02 Jun 2010 6:33 AM | Margaret George (Administrator)
    Investment Risk - What's Your Risk Tolerance?
    By Ray Prince

    As you'll know, the main global stock markets have been VERY volatile over the last 12 months or so.

    And it's likely that you have money invested in one or more of several investment vehicles:

    • ISAs
    • Personal Pensions
    • Self Invested Personal Pensions
    • Life company funds
    • Unit Trusts
    • Open Ended Investment Companies
    • Investment Trusts

    For example, if you have capital invested in ISAs and personal pensions, you may well have your money invested in up to 20 separate investment funds.

    Knowing how much risk your overall portfolio (not just the individual funds) is subject to is a crucial part of investing.

    It's not good enough just to know how the funds may have performed in the past - this just tells you part of the story.

    What you need to know is:

    • what is the volatility of the overall portfolio?
    • does this suit the amount of risk you're comfortable with?
    • and, does it suit the amount of risk you NEED to take?

    So, the first step is to find out how much of your capital you would be prepared to see fall in value before you took any action, positive or negative.

    This is your risk tolerance.

    For example, if you have £100,000 invested and you don't need access to the money for 20 years, you may well be prepared to see a fluctuation of up to 25% in any given year.

    Next, you need to know what the volatility of each fund is. This may also be referred to as 'standard deviation'. This one factor will indicate how risky the fund is.

    As an example, if a fund has achieved an average annual growth figure of 11%, you may well want a piece of the action. However, if the volatility factor is 22, then the fund's range of performance in any given year is:

    • 33% (11+22)
    • minus 11%

    This may well be too much risk to bear.

    Once you know the volatility, you need to link it back to the impact that the loss of capital would have on your short, medium and long term financial plan. You may find that even if you lost 50% of your capital, you would still achieve your income goals in retirement and any other goals.

    By knowing this one factor alone, you may well end up making a different decision than you would have done (with your invested capital).

    I know we've looked at the negative here - the reverse may also happen and the higher volatility could mean that you end up with a higher amount of money than you would have done.

    The Financial Tips Bottom Line

    I hope you've grasped the point - there's SO much more to investing your money than by simply picking a few investment funds based on their past performance.

    Find out how much risk you are REALLY taking with your invested capital. It's a logical thing to do as you had to earn the money in the first place, so surely it deserves to work as hard and efficiently for you as possible?

    Ray Prince is an Independent Financial Planner with Rutherford Wilkinson ltd, and helps UK Resident Doctors and Dentists get the best deals on mortgages, protection and investments, as well as helping them achieve their financial objectives. Just visit to get your free retirement planning guide.

    Rutherford Wilkinson ltd is authorised and regulated by the Financial Services Authority.

    Article Source:

    Ray Prince - EzineArticles Expert Author

  • 02 Jun 2010 6:09 AM | Margaret George (Administrator)
    Financial Planning - Who Really Needs It?

    If you think you're too young for financial planning, or if you believe you've left it too late, think again. No matter what stage you have reached in life, sound financial planning is very important. Financial planning is all about lifestyle. It's about protecting the lifestyle your currently enjoy, for yourself and your loved ones; and it's also about planning for the lifestyle you want to enjoy in the future. However, as you progress in life, your financial priorities changes as your circumstances change. That's why you need to review your financial plan regularly to ensure that it still suits your needs.

    Young, Free and Single

    At this stage you are probably more interested in having fun and enjoying life than you are in financial planning. I totally agree that it's very important to enjoy life and have fun with your friends. However, small financial planning steps taken at this time will make a huge difference to you in the future.

    Key financial areas for you include:

    • Saving regularly
    • Starting a pension
    • Insuring your income
    • Critical illness cover
    • Mortgage advice

    Young Couple - No Children

    If you are living with someone and you haven't yet started a family, this is one of the more affluent stages in your life, when you have two incomes but only one home and no kids! It's important, while you are in this position, that you get started with your financial planning. Later on, if you decide to have children, there may not be much spare money left over for saving. All the key areas of financial planning which apply to the 'Young, Free and Single' also apply to you!

    Couple with Children

    This is when you need to get really serious about your financial planning. You have a responsibility to protect not only your own lifestyle but also that of your loved ones.

    Key priorities include:

    • Life insurance - vitally important!
    • Critical illness cover
    • Education fees planning
    • Income Protection
    • Retirement planning

    Empty Nesters

    So your children have all grown up and fled the nest? Now is the time to really concentrate on your own financial planning - especially on your retirement planning, making up any shortfalls in your pension provision. Life is not a rehearsal. It is important that you plan to be financially independent sooner rather than later so that you can choose to give up work and start doing all the things you want to do while you're still young and fit enough to be able to enjoy them.

    Key areas of concern include:

    • Retirement planning
    • Investment advice
    • Inheritance tax (IHT) planning
    • Paying off your mortgage


    As you reach retirement you have some major decisions to make regarding your pension options and it is critically important that you seek independent financial advice, even if you have never consulted a financial adviser before.

    Key areas of financial planning include:

    • Pension income options
    • Investment advice
    • Wealth management
    • Estate/IHT planning
    • Equity release

    The Elderly

    As you become older and more frail you may have to make plans on how to fund long term care should you need it. Not all financial advisers are qualified to give advice in this very specialised area.

    Key areas of financial planning include:

    • Wealth management
    • Investment advice
    • Pension advice - alternatively secured pension or annuity purchase
    • Estate/IHT planning
    • Long term care fees planning

    So, you see, you are never too young or too old to start financial planning and people of any age can benefit from consulting an expert independent financial adviser.

    If you are seeking financial advice you will want the best advice possible but how do you find a top financial adviser? Firstly you must find an independent financial adviser (IFA) - ideally one who is highly qualified. Certified Financial Planners (CFPs) and Chartered Financial Planners are the most highly qualified financial advisers in the UK. They have reached the pinnacle of their profession. They have not only proven the highest level of technical knowledge; they have also demonstrated an exceptional commitment to their clients by devoting their time and money to achieving the highest qualifications to enable them to give the best possible financial advice. Only about 6% of financial advisers are qualified to this high level.

    You will find IFAs who are CFPs or Chartered Financial Planners at the directory of the UK's top financial advisers. Only financial advisers who give independent financial advice and who have achieved either CFP or Chartered Financial Planner status are listed here.

    Article Source:

    Margaret George - EzineArticles Expert Author

  • 02 Jun 2010 5:55 AM | Margaret George (Administrator)
    Retirement Planning - Your BIG Holiday

    You wake up one Monday morning with the sun streaming through your bedroom window and a cup of tea beside your bed. You glance at your clock. It's almost half past eight but your alarm hasn't gone off. You have a moment of panic. Why didn't anyone wake you? You're about to leap out of bed, then you relax, lie back and breathe a huge sigh of relief as you suddenly remember that this morning there's no need to rush. You aren't going to work today. You're on holiday. In fact you won't have to go to work ever again unless you choose to because this is the start of your BIG holiday - the holiday that will last for the rest of your life - your retirement!

    As you sit up in bed and sip your tea you think about all the things you'll be able to do now that you've finally given up work. This afternoon you've arranged to play a round of golf with three of your friends. Then in a few days' time you and your other half are off on a luxury world cruise. It's a trip you've been promising yourselves for years but you could never find the time to take so many weeks off work.

    You loved running your business, even although it was hard work. However, you're very glad that you've been able to achieve financial independence now, giving you the choice to stop working whilst you're still young enough to enjoy life and able to do all the things you want to do. You get out of bed and go over to the window to admire once again the beautiful, gleaming new car you've just bought with part of your tax-free cash from your pension, and you congratulate yourself on how great it is when a plan finally comes together!

    Is this what retirement is going to be like for you? Have you planned it carefully, and are you reviewing your retirement plans on a regular basis? Many people spend more time planning their next two week break than they do planning their retirement - the longest holiday of their lives.

    Just imagine running out of money part way through your holiday. How bad would that be? Think how much worse it would be if it happened part way through the longest holiday of your life. What could you do about it?

    When you're planning any holiday you have to budget not only for the cost of the fares, the accommodation and the food, you also need to budget for spending money if you're really going to enjoy yourself. You need spending money on your BIG holiday too. How sad it would be to have the time to do all the things you don't have time for now but to be unable to afford to do them. Only when you're in a position of financial independence will you really be able to enjoy your BIG holiday.

    So to plan for the financial freedom to enjoy your BIG holiday you need to decide:

    1. When is my BIG holiday going to start?
    2. How much money will I need?
    3. How much can I realistically afford to save each month?

    You probably know the saying, "Failure to plan is planning to fail!" If you haven't already done so, consult an independent financial adviser and start planning now to make sure you have enough money to really enjoy your BIG holiday of a lifetime - your retirement.

    Margaret George is married and lives near Glasgow, Scotland, in the United Kingdom, where she is an independent financial adviser (IFA).

    She qualified as a financial adviser in August 1993 so she has many years of experience in helping people with their financial planning. She is a partner in Positive Solutions - one of the largest firms of independent financial advisers in the UK, with over 1,700 advisers.

    Margaret strongly believes that financial planning is all about lifestyle - about protecting your current lifestyle for yourself and your loved ones, and also about helping you to plan for the lifestyle you aspire to in the future. She is passionate about helping her clients achieve these objectives.

    Margaret's qualifications:
    BA in Economics and Business Studies from the University of Strathclyde, Glasgow;
    MBA (Master in Business Administration) Strathclyde Graduate Business School;
    Dip PFS - Diploma of the Personal Finance Society.

    You can find more information at

    Article Source:

    Margaret George - EzineArticles Expert Author
  • 31 May 2010 5:18 PM | Margaret George (Administrator)
    Your Retirement - What Will You Actually Do?

    But today's go getters now see retirement as the next stage to their lives and having a long list of ambitions to fulfill (86%). Switching off the alarm clock (52%), becoming spontaneous (49%) and saying goodbye to stress (48%), are the most valued parts of this new stage of life. Also, (52%) say their partners become a bit more romantic!

    They tend to have over 30 social events a month, and comment that relationships have never been better (67%). Indeed 72% think it's the best year of their lives, and they do not feel that society will view them as 'old' until at least age 68.

    Photography is very popular (25%) as is socialising with friends (36%). The 2009 'Things to do before I die' lists include:

    1. Getting to see a few of the Seven Wonders of the World (47%)
    2. Finally learning to speak a new language (23%)
    3. Buying or hiring a motor home or camper van to tour Europe (22%)
    4. Dating a younger man / woman (12%)
    5. Driving a fast sports car like a Ferrari (11%)
    6. Launching their own business (11%)
    7. Learning to play various musical instruments (11%)
    8. Sky diving! (9%)
    9. Going to events like a music festival (9%)
    10. Learning to surf (7%)

    Looking at what our clients decide to do just after retiring this list perhaps looks about right, with travel, boats and sports cars very often up there at the top of the list.

    We're not sure regarding number 4, as to whether it's more risky than sky diving :)

    They were also asked, if they could go back 20 years, what they would do differently with the benefit of hindsight.

    The most common advice they would give to themselves would be:

    • Be more disciplined and save more (47%)
    • Be more savvy with pension planning (41%)
    • Look forward to retiring rather than dreading it (24%)
    • Think more carefully about their spending budget in the first year of retirement (20%)
    • Retire even earlier (21%)
    • Prepare more thoroughly for the first year into retirement (19%) as it can prove expensive

    Quite a few retirees who took part in the survey also said that when they were planning ahead for retirement they found it confusing and advice was not always clear.

    This topic is something we are very passionate about, as we spend a lot of time talking to clients about what they really want to achieve in life.

    20 years ago people got financial advice that centered on buying policies to 'save for the future'. You can still do this of course by dealing with the banks or various salespeople. However, developments over the last few years now mean you can choose to use a Fee Based Financial Planner who will truly focus on what is important for you.

    We constantly find that when agreeing to work with a doctor or dentist, say in their late 40s or early 50s, they have no financial strategy whatsoever. What they do have is a jumble of policies and investments they have collected over the years, and a vague idea that there will be NHS/State Pension benefits to come.

    One of the most common things we find ourselves doing is cancelling quite a few protection plans, as sometimes the salesperson has not taken into account the generous NHS benefits that our clients build up after 20 plus years. If you combine this with older children and less debt, the savings that can be made are substantial. Savings here can be spent or saved to help fund your goals in life.

    Getting back to goals, if you decide to get more serious about your finances, the first thing your planner will do is ask you to write down your goals, aspirations and your timeline. For  those of you who have not been through this process when thinking about your future, we thoroughly recommend it as it will help you focus on what really matters.


    "Dreams are just dreams without a deadline!"

    The Financial Tips Bottom Line

    Plan ahead - if you are not working 50-60 hours a week, what are you going to do with your time in retirement?


    Get organised and write down what you really want to achieve in life before, and during, retirement.

    How much will this cost?

    When by?

    Ray Prince is an Independent Financial Planner with Rutherford Wilkinson ltd, and helps UK Resident Doctors and Dentists get the best deals on mortgages, protection and investments, as well as helping them achieve their financial objectives. Just visit to get your free retirement planning guide.

    Rutherford Wilkinson ltd is authorised and regulated by the Financial Services Authority.

    Article Source:

    Ray Prince - EzineArticles Expert Author
  • 31 May 2010 4:38 PM | Margaret George (Administrator)
    Inheritance Tax Planning - What About Pre-Inheritance?
  • 31 May 2010 3:57 PM | Margaret George (Administrator)
    The Wider Appeal of Alternative Investments
  • 31 May 2010 3:10 PM | Margaret George (Administrator)
    Investment Bonds - Pros & Cons For the Higher Rate Tax Payer

    A Life Insurance Investment Bond is widely available for you to invest in. As with many investments, there are advantages and disadvantages to using this form of tax wrapper.

    One of the main points to bear in mind is that the tax wrapper status of any financial product dictates how much tax you will/won't pay on the investment at outset, during and at the end of the term.

    It is the actual funds where the money is invested that determines how much you will get back when the plan matures or you cash it in.

    One of the main advantages of the Life Insurance Investment Bond, either onshore or offshore, is that you are able to withdraw up to 5% of the amount invested each policy year without triggering what is known as a 'chargeable event gain'.

    Whilst this defers any tax liability to the future (it may not avoid any further tax due), the good news is that each 5% allowance is cumulative therefore and can be carried forward each policy year. For example, if no withdrawals are made in years one to four 25% can be drawn in year five.

    You are not able to take more than the amount invested over the lifetime of the bond, therefore if you withdraw 5% per annum the maximum time period for these withdrawals is 20 years.

    HMRC treat withdrawals as a withdrawal of capital and if the amounts are kept within the tax deferred allowance there is no need for you to declare them on their tax returns.

    As tax on the withdrawals are deferred until the bond or policy segments are surrendered you can defer tax until the most suitable time for your circumstances.

    5% Withdrawals

    The 5% tax deferred allowance provides a gross equivalent income of 6.25% for a basic rate tax payer, 8.33% for a higher rate tax payer and 10% for a 50% tax payer.

    To reiterate though, (and before you get carried away) remember that withdrawals from the bond are tax deferred and not tax free!

    It is possible to extend the number of years that you can take tax deferred withdrawals by taking less than the 5%.

    For example, if you take 4% per annum then this can be continued for 25 years without any immediate tax charge.

    Reducing Taxable Income

    As the withdrawals are treated as a withdrawal of capital they can be helpful when trying to keep your income below certain levels.

    Some clients, or their spouse / partner, may have income that hovers around the 'age allowance trap' area.

    If you are aged 65 or over you have a higher personal allowance, however, this is reduced where taxable income exceeds a certain limit. The limit for 2010/11 is £22,900 and for each £2 of income above this limit the personal allowance will reduce by £1 until it falls to the standard levels.

    The withdrawals from a bond do not count towards income for these purposes and so can be useful for providing additional 'income' whilst maintaining the higher allowances. This is in contrast with other investments, ie deposits, shares, unit trusts and OEICs where the interest or dividends will be added to your income and taxed accordingly.

    Looking at an example, John is 67 and has pension income of £22,000 in the tax year 2010/11. He also has £200,000 on deposit which pays him 3% gross interest, ie £6,000 in the tax year.

    This means his total income of £28,000 takes him over the age related allowance of £22,900 by £5,100. His age related allowance will therefore be reduced by one half of this amount, £2,550, bringing it down from £9,490 to £6,940.

    If he had invested the £200,000 in an Offshore Investment Bond he can take withdrawals of 2.4% giving him annual 'income' equivalent to the net interest from his deposits.

    He would have saved £1,710 in tax in the current tax year by maintaining his entire age related allowance (£2,550 x 20%) and deferring the 20% tax on the interest (£6,000 x 20%).

    He would also have the flexibility to increase these withdrawals in future years and have potential for some capital growth.

    Of course, tax will be payable when a chargeable event is triggered, however, if a lower withdrawal rate is used this can be delayed for some time.


    It is important to bear in mind that we have only looked at one or two factors of Investment Bonds in this article and you should take professional advice before you make any important financial decisions.

    Our view is that you should always weigh up the pros and cons of any investment in line with your individual circumstances before you proceed.

    The Financial Tips Bottom Line

    Investment Bonds, whether onshore or offshore, can offer valuable benefits to investors as part of an overall investment programme.

    Alongside these products, you should also consider other mainstream offerings such as personal pensions, ISAs, unit trusts, deposit savings and investment trusts.

    Ray Prince is a fee based Certified Financial Planner with Rutherford Wilkinson ltd, and helps UK Resident Doctors and Dentists plan to achieve their financial objectives. Just visit where you can request your free retirement planning guide.

    Rutherford Wilkinson ltd is authorised and regulated by the Financial Services Authority.

    Article Source:

    Ray Prince - EzineArticles Expert Author
  • 14 Feb 2010 4:03 AM | Heather Dunne

    The Financial Services Authority undertook a detailed review of various advisers’ advice processes relating to transfers from Personal Pensions.  This is an area not currently deemed a Pension Transfer under the FSA definition. 

    *     This review focused on transfers from Personal Pensions to Personal Pensions and SIPPs and seems to have been undertaken on the basis this is presumed to be churning as against best advice. 

    *     The main aspects which caused the FSA concern relate to charges and investments.

    *     The FSA felt in many cases the differential in charges between the old and the new plan were not sufficiently investigated or disclosed to the clients in adequate detail.  This is an area which we have always considered in depth in any transfer reports.

    *     The FSA were also concerned about the number of illustrations provided for the new plan, which related to the incorrect underlying fund e.g. cash as against the Discretionary Fund Manager or other more expensive options actually taken up by the client.  There are two ways round this:

    ·           Obtaining accurate illustrations, which again is an area we have made clear to our clients, though we appreciate it is easier said than done

    ·           Working a two stage process i.e. considering the transfer and then the ultimate investments at a later date, with appropriate charge disclosure at that point, which we know many of our IFA clients favour and so have incorporated into our process.

    *     The resulting report is available to download from our website if you do not already have a copy. 

    *     The FSA have arranged switching road show meetings in February and required some 1,500 advisers to attend.  These appear to have used sample cases to demonstrate the concerns raised in the report.

    *     At the time we suggested this appeared to be a departure from light touch regulation to a more prescriptive method as suggested by Adair Turner. 

    *     Subsequent experience confirms that this was the first step to more onerous and specific requirements.

    *     We have always undertaken all transfer cases (including PP to PP/SIPP) to much higher standards reflecting not only the actual requirements imposed by eth FSA but the spirit of those regulations.  Where the FSA have visited our client firms the Pension Transfer cases have been confirmed as acceptable and as yet we have had no negative feedback from the FSA in relation to our work.

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