With so many different protection options available, making the right decision to protect your personal and financial situation can seem overwhelming. There is a plethora of protection solutions which could help ensure that a lump sum, or a replacement income, becomes available to you in the event that it is needed.
A broad spread of instruments
Pooled investments are also sometimes called ‘collective investments’. The fund manager will choose a broad spread of instruments in which to invest, depending on their investment remit. The main asset classes available to invest in are shares, bonds, gilts, property and other specialist areas such as hedge funds or ‘guaranteed funds’.
Estate preservation doesn’t only affect the very wealthy. Rising property prices have meant that it’s now an issue for an increasing number of people. So what are the areas you need to consider to protect your wealth?
One of the principal tenets of spreading risk in your portfolio is to diversify your investments whatever the time of year. Diversification is the process of investing in areas that have little or no relation to each other. This is called a ‘low correlation’.
A worrying number of people in retirement are not utilising their pension savings efficiently, according to statistics revealed by Skandia (30/07/12). This could result in their pension funds being subject to an unexpected 55 per cent tax charge on death. This tax charge could be avoided or reduced in many cases.
An annuity provides you with a guaranteed income for life when you retire. You buy an annuity using a lump sum from your pension or, perhaps, from some savings. Annuities remove the worry about having to budget for an unknown period of time. We can help you understand the retirement process and find the right annuity for you.
The average UK pensioner household pays out 29 per cent of its income in retirement to the taxman through a combination of direct and indirect taxation, which adds up to an annual tax bill of nearly £42bn, new analysis
[1] from MetLife shows (25/07/12).
Pensions have long been a highly tax-efficient way to save for retirement. If applicable to your particular situation, here are two opportunities you may wish to consider before the rules change next April.
There are many different tax-efficient ways to grow your wealth. We can help you understand the choices and make the investment decisions that are right for you. This will depend on your life priorities, your goals and your attitude to risk.
Understanding how much you need to contribute towards a pension in order to produce the income you need or desire in retirement should be a key part of your financial plan. To arrive at this figure, the calculation needs to take into account any other assets you have earmarked for the long term, inflation, potential future fund growth and any state pension you are entitled to.