Archive for the ‘ Investments ’ Category

The simple term Self-Invested Pension may be enough to turn most people who are not business minded off, as the investment plan can sound intimidating to an average person, however, they are among some of the best pension plans for a number of reasons and certainly warrant a second look.
couple saving with a SIPP
Therefore, before you automatically dismiss a SIPP as something that cannot possibly help you it may be worth it to take a second to review the following benefits that come along creating your own personal pension plan for the future.

One of the first and most sought after advantages of a self-invested pension is the fact that it offers flexibility and freedom to the investor since it allows them to choose where to invest their funds, and how they want to invest them.

For those who have large pension funds that want to have more control over their investments, a SIPP is really the best choice. After all, it is your money that is being contributed into the pension plan, so why not take the initiative to make sure you know what is happening to it after this point has passed.

Another reason to look into a self-invested pension is the fact that they usually do not come with any penalties or hidden charges. In fact, most SIPP schemes will have transparent charging structures that make it easy for anyone to figure out how their pension is being planned.

It is strongly recommended that you get advice from an independent financial advisor by visiting Think IFA or Unbiased before starting a SIPP

The fee structure generally has nothing to do with the size of the fund and will not change regardless of how long the plan is in place. This often makes an SIPP one of the best pension plans for someone that knows they have a large pension to manage or someone that expects to be building their pension for quite a few more years.

In addition, those who over the age of 50 but not quite yet 75 often find that a self-invested pension is a great way to draw out their pension without locking themselves into a fund that has an annuity attached to it. This is because a SIPP can be used when someone is moving slowly towards ‘income drawdown’ and is a great way to draw income throughout retirement since there are not as many restrictions, fees, or regulations placed on the scheme.

Once again, the freedoms that come with SIPPs are hard to beat when you compare them with other types of pension plans. With this in mind, those that that want to transfer funds from other pensions, control their own investment opportunities, slowly enter into a retirement drawdown, or invest large amounts of money into their pension schemes will likely find the best pension plans for them are SIPPs.

The simple truth is that it is hard to beat the flexibility that comes with a self-invested pension, and the reward for your due diligence will be a comfortable retirement sum later in life making your hard work worth it.

A recent announcement by the Children’s Mutual has stated that the friendly society is planning to move all of it’s savings into it’s Canadian owned rival Forester Life.

This will result in almost 1 million Child Trust Fund holders having their funds transferred across to the rival society without having a say on the matter.

The Children's MutualIt has been rumoured that the Children’s Mutual have been looking for a buyer for quite some time now. It is believed that the cost of running their CTF accounts is unmanageable and the scrapping of the child trust fund by the government compounded their misery as this was their main source of new business.

Formerly known as ‘Tunbridge Wells Equitable Friendly Society’, The Children’s Mutual Society has said to have ‘entered into exclusive negotiations’ with it’s rival Forester Life.

Currently, more than 927,000 customers hold a child trust fund with the society, a majority of them by taking advantage of the government vouchers but there are fears that CTF accounts will perform poorly from now on due to investment providers concentrating on the new Junior ISA Accounts which where launched back in November 2011.

Many people now believe that customers should be able to transfer their Child Trust Fund to a Junior ISA and take advantage of the larger investment options potentially open to them and this news will only strengthen the call of many people and organisations.

However, Forester Life have announced that the takeover should be beneficial for it’s new members as they hope to drive down the cost of managing the funds by economies of scale and it is also worth noting that the money already set aside my the Children’s Mutual for managing the funds would be released to help boost the final or terminal bonus of the Child Trust Fund.

How ever you look at it, surely the coalition government must look more closely at the possibility of allowing CTF holders to transfer child trust fund to a Children’s ISA?

Please note that this article was provided by www.JuniorISAs.org

ISA Deadline Approaching

Well it’s that time of year again when investment providers are tripping over themselves trying to sell their ISAs. The reason being is that this years (2012) ISA deadline is fast approaching (the 5th April 2012).Stocks and Shares ISA

So what does this mean to you?

Well basically, if you didn’t already know, an ISA (Individual Savings Account) is a savings account where you pay no tax on any interest, dividends or bonuses earned from your cash/investment held within the account. Each year you can invest a maximum ammount and if you do not use up this allowance by the 5th April then you will lose it as it cannot be carried over to the next year.

For the tax year 2011/2012 the ISA allowance is:

You can hold both a cash and a stocks and shares isa in the same year should you wish but if you do subscribe to both types of isas then the total combined allowance is £10,680.

A Cash ISA invests in cash which is held within the account. These types of ISAs appeal to many investors as it pays a fixed percentagerate so you know exactly how much your ISA will earn you. However, the downside to investing in cash is that it is vulnerable to the eroding effects that inflation can have.

A Stocks and Shares ISA is where you invest your money into funds and depending upon how well these funds perform will determin how well your ISA will perform. Many stocks & shares providers offer a range of funds with which you can invest in.

For example, Sensible Investments Ltd offer a choice of three different funds which are all managed by Prudential. Their range of actively managed funds include cautious, balanced and adventurous portfolios and depending upon the type of investor you are will determine which fund appeals to you. However, when opening Stocks and Shares ISA account through Sensible Investments Ltd, you can mix your funds. For example, should you invest £10,680, you could place half of your money into the Cautious fund and split the other half between the two other funds like below:

£10,640 total investments in a Sensible Investments Ltd Stocks and Shares ISA

  • 50% (£5,340) into Prudentials Cautious Fund
  • 25% (£2,670) into Prudentials Balanced Fund
  • 25% (£2,670) into Prudentials Adventurous Fund

By splitting your investment into different funds helps spread the risk and you can change your subscriptions at any time (if one fund performs particularly well then you could pool all your money into that fund to try and maximise performance).

For further details about Sensible Investments Ltd range of ISAs please visit their dedicated stocks and shares isa site at www.stocksandsharesisa.org.uk

Junior ISA Update

Since the Junior ISA was officially launched in November 2011 we have seen a steady flow of providers offering their own version of the investment. It seems that the stocks and shares Junior ISA is a much more popular product than its cash version and this is reflected in the amount of providers offering a stocks and shares version when compared to the amount of providers offering a cash version.

The stand out providers are ‘The Children’s ISA Ltd’, ‘Family Investments’, ‘TaxFreeJuniorISA.co.uk’, ‘The Children’s Mutual’, ‘Jump’ and ‘Scottish Friendly’.
Junior ISA

A lot of providers offer very similar accounts but your money goes into different fund(s) dependent upon the provider. The government have also confirmed that you cannot transfer a child trust fund to junior isa which many parents feel is unfair as they feel that their children are now stuck in an unsupported and inferior investment.

There are also some Junior ISA comparison sites cropping up with www.juniorisaproviders.org being the most notable one. Here you can compare many different Junior ISAs from a wide range of the UKs leading providers.

Tax Free Junior ISA

The UK coalition government has annouced plans to introduce a new ISA for children know as a ‘Junior ISA’.

This will replace the ‘Child Trust Fund’ and is to encourage parents to help their children save for their future.
Parents will be able to pay in a capped amount each year which can either be cash, stocks or shares just like with a normal adult ISA (Individual Savings Account) and the child will not be able to receive the funds until they reach adulthood.

It is predicted that education costs such as going to university and also house prices are to continue rising so it is important to help your child to have some savings which can then go towards their university fee’s or help them onto the property ladder.

Unlike the Child Trust Fund, the government will not be making any contributions towards any Junior ISA accounts which has resulted in complaints from many people.
It is believed that only weather families will be able to afford it whilst lower income families will be excluded.

The government is expecting to save around half a billion pounds by scrapping the Child Trust Fund in favour of a tax free junior isa