The other week, George Osborne, the UK’s Chancellor of the Exchequer presented his latest budget to the House of Commons. Whilst this is largely UK focused many of the points are of relevance to UK expats and also to people with assets in the UK. This article is a brief overview of the relevant points.
If you are a British expat, have a UK pension or property in the UK, you need to read on…
According to figures released by the Pension Protection Fund (PPF) the collective shortfall in company pension schemes increased to a record £312.1bn last month. This marked the highest deficit in final salary pension schemes since records began in 2003 the. In its monthly update the PPF said that only 929 of the 6,432 schemes that it monitors had more than enough funds to meet its long-term obligations.
The funding ratio, which records assets as a percentage of liabilities, stands at a rather worrying 77%, compared with 98% a year ago. This will put many schemes under a great deal of pressure as many employers will have to decide between shoring up a pension scheme and investing into their business.
The PPF which was established to pay compensation in case of insolvency or insufficient assets in company pension schemes said that a reduction in the yield of government bonds which are used to calculate liabilities was behind the figures.
If you are a member of a final salary (defined benefit) UK pension fund this is a good time to review the scheme and see it if is in your interest to transfer to an arrangement under your control, particularly as many schemes are keen for members to leave and are offering enhanced transfer values. I believe that we can expect to see many for occupational pension schemes being wound up. Whilst the PPF will assist members of failed schemes, provided the scheme is a member, it does not provide a guarantee of fully replacing a pension income and may limit the benefits available.
Please do not hesitate to contact me of you would like to discuss the options in relation to a UK pension plan.
It’s amazing how quickly time passes as we get older and our good intentions go by the wayside. A topic that we all need to address is that of how we will manage financially in our later years.
Pensions and retirement planning can be a complex issue and is frequently an emotionally difficult topic. The simple fact is that we’re all living longer and so we need to set aside more money to live on. The real value of company pension plans is diminishing and the burden falls more and more on the individual, away from both the employer and the state.
The sooner you address these issues, the better prepared you will be, so you can relax and enjoy life now. Make an appointment for a chat, free of jargon and without obligation, to plan for your financial future.
If you have UK pensions, whether personal or linked to an employer, these plans should be reviewed to ensure that that they are managed effectively. Some of the options available to expats will be adversely affected by legislation that is due to come into effect early April 2012, so it could be in your interest to have your plans reviewed now.
The world of pensions is full of jargon – SIPPs, QROPS, SERPS and more – and I will explain your options in clear English, with all the details you need to make a clear, informed decision. No myths, no hyped-up sales pitch, no false promises – just simple facts.
Please contact me for more details or to arrange a free consultation keren@holbornassets.com
There are two main threats to your income in retirement.
Consider these facts:
Whilst many of us are aware that we are probably not saving enough for our futures, do we really know just how big a shortfall there will be?
Inflation erodes purchasing power over time to a far bigger extent than many people realise. In simple terms, your income will reduce by half over a twenty year period even with inflation running at just 2%.
Whether you are saving by means of traditional pensions, offshore savings schemes, a portfolio of stocks and shares, property, a combination or even some other method, chances are that you are not setting aside enough for your future. As state pension lose their value in real terms and traditional company schemes are closed, the onus is fully back on the individual to look after himself.
The earlier you start saving, the less you will ultimately need to set aside as compound growth will make a significant contribution to your final fund. If you leave it too late to provide for your later years, then there is a good chance that you will not have time to accumulate a fund large enough to provide the level of income that you would like once you stop working.
There are many ways of planning for the future, but the earlier you start planning the higher the chance of having a comfortable retirement. And when you consider that retirement could easily last over 20 years, you really will want to be in a position to enjoy it.
If you have concerns about your financial future, come and have a no-obligation chat.