!nancialsenseYOUR  LOGO

w h a t t y p eo f i n v e s t o r

a r e y o u ?Everyone is playing a guessing

game about the right time to start investing again.

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Telephone: 01234 567 8910 | Fax: 01234 567 8911 | Email you@yourcompany.co.uk | www.yourcompany.co.uk

In March 2011, Her Majesty’s Revenue and Customs (HMRC) collected from the people

£2.7bn in inheritance tax (IHT). This is set to increase further in 2012, but with some careful

IHT planning you need not be caught in this trap.

YOURPHOTO

ISAs the Season to be Jolly!

1 0 w a y s t o c u t y o u r I n h e r i t a n c e T a x b i l l

Junior ISAs

2 !nancialSense

ISA allowances are changing from 6th April 2012.Are you ready?

From the 6th April 2012, the annual ISA investment allowance has been raised to £11,280!And remember, up to £5,640 of that allowance can be saved into a cash ISA with the remainder being able to be invested into a stocks and shares ISA with either the same or a different provider.

time.

TO DISCUSS AN ISA OR ANY OTHER FINANCIAL CONCERNS YOU HAVE, GIVE US A CALL ON YOUR PHONE NUMBER TODAY OR VISIT OUR WEBSITE WWW.YOURCOMPANY.CO.UK

3!nancialSense

WELCOME TO FINANCIAL SENSE MAGAZINE. YOUR PERSONAL FINANCIAL MANAGEMENT GUIDE.WELCOME

In this issue, amongst other things, we look at how to get the best from this year’s ISA season, protecting your hard earned assets and reducing your mortgage.

of the tools available to the Bank of Eng-land to stimulate the economy is interest rates. Lower interest rates mean that it is cheaper to borrow money and people have more to spend, hopefully stimulating the

-tion. Not good news if you’re an income-seeker, but certainly better for those with a mortgage and looking to reduce their costs or term. Not always a subject that’s liked to be discussed, but very important non-the-less.

In order to protect family and loved ones, it is essential to have provisions in place after you’re gone.

The easiest way to prevent unnecessary tax payments, such as Inheritance Tax (IHT), is to organise your tax affairs by

obtaining professional advice and having a valid Will in place to ensure that your legacy does not involve just leaving a large IHT bill for your loved ones.

And as mentioned, also inside this issue, we remind you not to miss the fast-approaching Individual Savings Account (ISA) deadline – you only have until 5 April to use this tax year’s allowance or you’ll lose it forever!

As ever, we hope you enjoy reading the -

cles of interest and wish to discuss them personally, please don’t hesitate to contact us directly. YOUR NAME, YOUR JOB TITLE, YOUR COMPANY NAME

EMAIL YOUR NAME AT YOU@YOURCOMPANY.CO.UK OR VISIT YOUR WEBSITE AT WWW.YOURCOMPANY.CO.UKWelcome to !nancialSense

eMagazine – your personal !nancial management guide.

©TrigoldCrystal MediaNo part of this magazine may be produced without the prior permission of the publishers. Whilst every care has been taken to ensure accuracy of editorial content, no responsibility can be taken for any errors and omissions. Content of the articles featured within this document are designed for your general information and use only and does

and Markets Act 2000. If such advice is required, you should always seek appropriate professional advice. Whilst every effort has been made to provide accurate and timely information, no guarantee can be made that such information is accurate as of the date it is received or that it will continue to be accurate in the future. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts. Levels and bases of and reliefs from taxation are subject to change and their value depends on the individual circumstances of the investor. The value of your investments can go down as well as up and you may get back less than you invested. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

Arranging a mortgage/re-mortgage

Generating a retirement income

Provision for myself and/or family if I’m

diagnosed with serious illness

Protection in the event of premature death

Protection against the loss of regular income

Provision for long-term health care

School fees/further education funding

Protecting my estate from inheritance tax

Other (please specify)

Want to make more of your money?For more information please tick the appropriate box or boxes below, include your personal details and return this information directly to us.

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by us and held in accordance with the Data Protection Act. You agree that such personal information may be used to provide you with details and products or services in writing or by telephone or email.

4 !nancialSense

THINKING OF INVESTING AGAIN - WHAT TYPE OF INVESTOR ARE YOU? THINKING OF INVESTING AGAIN - WHAT TYPE OF INVESTOR ARE YOU?INVESTMENT NEWS

W h at t y p e o fi n v e s t o r a r e y o u ?

In any event, re-evaluate your portfolio regularly and also seek professional advice when reviewing your investment strategy”

5!nancialSense

THINKING OF INVESTING AGAIN - WHAT TYPE OF INVESTOR ARE YOU? THINKING OF INVESTING AGAIN - WHAT TYPE OF INVESTOR ARE YOU?

Everyone is playing a guessing game about the right time to start investing again. There are as many theories as there are pundits.

With the recent ups and downs in the stock market, a key question to ask yourself is: what is your appetite for risk? Consider using the sleep test: if you can’t get to sleep worrying about how your share based investments are doing, then you probably have too much exposure to them. The bigger the risk, the more potential there is for reaping rewards and for courting disaster. But no matter which type of investor you are, you can take certain actions to reduce the risk. Firstly, aim to have at least six months’ worth of living expenses in an ac-cessible savings account. Secondly, in turbulent times like these you should drip-feed your money in by saving regularly, so you don’t have to worry about timing the market. Over the longer term, the ups and downs will be levelled out by regular investing. Finally, spread your savings across the dif-

if one falls the others will remain robust. However, all these asset classes have fallen in value in recent years, so there is no guarantee of future perfor-mance.

Cautious Even cautious investors face some risk. It’s envisaged that this type of inves-tor could have between 20% and 30% in equities, with an equal amount in

cash reserve. A cautious portfolio is low risk, not no risk. Only cash is as

strength of the institution holding the cash. Even with cash holdings, unless

gradually be eroded.

Balanced Moving up the risk scale, you could have 50% in shares and between 20% and 25% in bonds. You can be a little more adventurous by adding global funds to core holdings, with a touch of spice from the east and emerging markets, plus higher yielding bonds.

AdventurousIf you have a strong stomach, you could put between 80% and 100% of spare cash into equities. The longer your time horizon, the more risk you can afford to take. A general rule of thumb is that your age expressed as a percentage should equal the amount of cash you hold in your portfolio. So a 20 year old should have 20 per cent in cash and the rest invested, while a 40 year old should have 40 per cent in cash, and so on.

In any event, re-evaluate your portfolio regularly and also seek professional advice when reviewing your investment strategy.

W h at t y p e o fi n v e s t o r a r e y o u ?

Firstly, aim to have at least six months’ worth of living expenses in an

accessible savings account.

6 !nancialSense

INHERITANCE TAX FEATURE10 WAYS TO CUT YOUR INHERITANCE TAX BILL

10 ways

In March 2011, Her Majesty’s Revenue and Customs (HMRC) collected from the people £2.7bn in inheritance tax (IHT). This is set to increase further in 2012, but with some careful planning you need not be caught in this trap. Here are 10 great tips...

to cut yourInheritance

Tax bill.

1will have no control over how your assets are distributed and you may end up paying IHT unnecessarily. For example, you may have intended to leave everything to your spouse but, in the event of intes-tacy, other relatives may be entitled to a share and IHT would have to be paid.

Make a will. 2All gifts made more than seven years before the donor dies are free

continuing to live in a house you have given away – then HMRC may apply ‘gift with reservation’ rules to apply tax as if the transfer had never happened.

Be Generous sooner rather than later.

7!nancialSense

10 WAYS TO CUT YOUR INHERITANCE TAX BILLINHERITANCE TAX FEATURE

3Donors don’t need to survive seven years for some gifts to become IHT-free. If you cannot afford to give big money away, it makes sense to use the smaller allowances such as the £3,000 per person annual allowance for gifts to anybody and the ability for parents to give up to £5,000 to their children when they marry, and that could be £5,000 from each parent to each adult child.

Make it a wedding to remember. 4

Discretionary trusts can be set up for about £500 and enable assets up to the nil rate band of IHT of £325,000 per person or £650,000 for a married couple or civil partnership to be sheltered from IHT, so long as the donor survives seven years. Unlike outright gifts, these trusts let donors (for instance a parent) retain control of the assets and are a useful way to avoid IHT.

Keep in in the family.

5For those with a substantial income who make a habit of distributing some of it can dramatically cut their tax bills. For the gifts to be IHT-free, they must satisfy three key tests; they must be made out of in-come as opposed to selling assets to fund them, they must be regular or at least the intention must be for them to be regular and they must not reduce the donor’s standard of living.

Make regular gi!s from income. 6

Complex rules govern business property and agricultural land reliefs, so professional advice should be taken, not least about the risk of losing your capital while trying to avoid tax. But, in general, agricul-tural land which is let out can become IHT-free after seven years and could be IHT-free after two years if you play a part in farming it.

Become a gentleman farmer.

7Where injuries suffered during military service are a contributory factor in anybody’s death, then that person’s estate may become IHT-free. Not many people are aware of this exemption but it enabled a Duke of Westminster to avoid IHT when he died many years after injuries sustained during the Second World War and it may now be relevant to more people, following our military intervention in Iraq and Afghanistan.

Do mention the war! 8Now that it is impossible to shelter the family home from IHT and remain living in it, another solution is to spend some of the wealth in that asset before it can be taken into account for tax. Equity release schemes marketed by members of the Safe Home Income Plans (Ship) trade body promise borrowers they will never be in negative equity.

Unlock wealth tied up in bricks & mortar.

9Individual Savings Accounts (Isa’s), are a popular way of avoiding tax on income and gains from a wide variety of savings and investments, but they confer no protection against IHT, so it’s always best to seek specialist advice that can take all your assets into account.

Beware the ISA pitfalls. 10Even more extreme than it sounds. Changing your domicile, the

the country in which you are deemed to be resident for tax purposes.

buried. If you are domiciled overseas, then only assets based in Brit-ain will be subject to IHT, whereas IHT would cover your worldwide assets if you were domiciled here.

Leave the country!

8 !nancialSense

ISAS THE SEASON TO BE JOLLY! ISAS THE SEASON TO BE JOLLY! ISA NEWS ARTICLE

I S A S E A S O N

Like Christmas, the ISA season comes around every year. Okay, it’s not quite as exciting as Christmas, but it does seem to keep getting earlier each year plus it’s much better

you don’t want to miss it. Every UK adult can save up to

tax and capital gains tax. But you have to act before the 5 April deadline, because if you don’t, you have lost this year’s allowance for good.

Use it or lose it, as they say.

You’ve probably already noticed an increasing number of

is gearing up for the start of the season and with so much money currently under funds, is it any wonder that some banks and investment fund managers will even keep their

the Mr & Mrs Come-Latelys a last chance!

However, don’t leave it to the last minute, start planning now!

The ISA rules still confuse many people, so don’t use that as an excuse to squander your allowance. If you don’t pay tax (and don’t expect to in future), you don’t need to worry about an Isa. Everybody else should seize the opportunity (if you’ve got the money in these cash-strapped times). But

a cash ISA, that’s the equivalent of almost 3.45% if you’re a 20% taxpayer, and 4.6% if you’re a 40% taxpayer. Over the years, it can make a big difference.

For more information and to arrange your ISA, why not call or email us now.

ISAs the season to be Jolly!

Remember, we’re here to help!Here are some of the basics...

01 You can invest your full allowance of up to £11,280 in a stocks and shares ISA. If that feels too risky, you can save up to £5,640 in a low-risk cash ISA, and invest a further £5,640 in stocks and shares.

The ISA rules still confuse many people, so don’t use that as an excuse to squander your allowance.

9!nancialSense

ISAS THE SEASON TO BE JOLLY! ISAS THE SEASON TO BE JOLLY!

Remember, we’re here to help!Here are some of the basics...

03 The ISA is a “tax wrap-per” that you place around a range of eligible cash accounts and investment funds. Almost every bank and building society offers a cash ISA, and you can choose from thousands of funds from hundreds of asset managers.

02 Your investment returns are free of income tax and capital gains tax.

01 You can invest your full allowance of up to £11,280 in a stocks and shares ISA. If that feels too risky, you can save up to £5,640 in a low-risk cash ISA, and invest a further £5,640 in stocks and shares.

04 You can’t use your cash ISA like a bank account. If you withdraw money, you have lost that part of the allowance for good.

05 If you’re unhappy with your existing ISA’s, you can transfer them to a different company. But there is one restriction: while you can switch money from cash into shares, you can’t switch from shares into cash (sorry, we don’t make up the rules).

T O P 5 C A S H I S A S

All rates subject to change without notice. Please check all rates and terms before investing or borrowing.

Nationwide BS Online ISA (Issue 3)

3.10% !xed2.10% bonus until 30/09/13

Cheshire BS Direct Cash ISA (Issue 1)

3.06% !xed2.06% bonus until 30/09/13

Barclays Bank Loyalty Reward ISA

3.05% !xed1.00% bonus 1st 12 months

ING Direct Cash ISA 2011/2012

3.00% !xedGuaranteed rate for 12 months

Virgin Online Easy Access Cash E-ISA

2.85% !xed

10 !nancialSense

J u n i o rI S A .

The recent closure of the Government backed Child Trust Funds to new applicants in January 2011, left little choice if you wanted to save for your child’s future. But in November 2011, we saw the launch of the new Junior ISA and once again parents had a tax free haven for their children’s savings. What is a Junior ISA?Most parents want to save for their children’s future. Whether to help fund university fees or to put down a deposit on their

tax free savings account for your little ones. Available from 1st November 2011, the Junior ISA is designed to replace Child Trust Funds and encourage parents to invest for their children’s future.

They’re currently open to any child under the age of 18 who didn’t qualify for a Child Trust Fund account, meaning if your child was born on or after the 3rd January, 2011, or before 1st September 2002 they’re eligible.

What’s more, subject to the £3,600 per tax year limit, anyone can deposit money into a Junior ISA on a child’s behalf.

Switching Junior ISAs between providersEach child can only have one cash and one investment ISA at any one time, but the annual £3,600 allowance mentioned above can be split between the two types of account. It’s also possible to switch the account from one provider to another, although if you have an existing Child Trust Fund, you can’t transfer this to a Junior ISA. When can the money be accessed?Under current Junior ISA regulations, neither children nor parents are allowed to withdraw money from a Junior ISA until the child turns 18. When the child reaches 16 they’ll be able to manage their Junior ISA savings themselves, but still not access the cash until they turn 18. If they decide to hold onto their Junior ISA account it will automatically turn into a standard adult ISA.

Don’t just assume ISA’s are there for adults. They’re also a great tax e"cient way to save for your children. We set out all you need to know so you can take full advantage of Junior ISAs.

FEATURE HEADINGJUNIOR ISAS

Available from 1st November 2011, the Junior ISA is designed to replace Child Trust Funds and encourage parents to invest for their children’s future.

When & Where?

10 !nancialSense

FEATURE HEADING

11!nancialSense

INCOME PROTECTION

monthly income to accommodate the most of your outgoings, especially the essential ones? Income protection insurance could make the difference between ensuring you continue a normal life whilst you recovered or up until you retired,

With any income protection insurance policy, you need to be thorough and look at all the different points of a particular policy, as each one can offer

For more information and to discuss your mortgage, why not call or email us now.

IncomeProtection.A large number of people unfortunately have no insurance policy in place to protect them in the event that they become injured or su#er an illness which places their income in jeopardy.

In Numbers...

2.63mbecause they are unable to work.

14.5kThe average amount such people would be underinsured by.

75%The drop in income an average person

24mThe number of people without income protection insurance.

33%Of people think they could live on less than 35% of their current take-home pay.

17 daysThe length of time most people could support themselves if they could not earn a wage.

20%Of people likely to be off work for longer than six months before they are 65.

12 !nancialSense

COULD YOU KNOCK YEARS OFF YOUR MORTGAGE?MORTGAGE NEWS

A question on many home owners’ lips is what to do with the spare cash in their pockets now rates have been slashed so dramatically. Some borrow-ers on tracker mortgages for example, are now paying less than 1% in inter-est. Should they simply enjoy the lower repayments and save the extra cash, or start overpaying to knock years, and possibly thousands of pounds in inter-est off the mortgage?

So what happens if I overpay?

If we take a £200,000 repayment mortgage with 20 years remaining and an interest rate that has fallen from 5.5% to 3.5%; the monthly cost would

be down from £1,375.77 to £1,159.92. But a borrower who opted to keep repayments at the original, higher level would save over £69,000 in interest and be able to clear the mortgage four years early, which is very impressive.With savings accounts currently offer-ing very low rates, many home owners will save more in interest by overpay-ing than they can earn by putting money away. Indeed, the number of customers making overpayments at some banks has increased by 50% in the past year. It is a safe haven for any surplus money and at the same time reduces the mortgage!

Overpaying also has important ben-

and the threat of negative equity, as borrowers can maintain or possibly increase their equity in the property; a strategy that could prove vital when borrowers reach the end of their deal.

Overpayments are not without their

still rising, can we risk piling money into our mortgages? It is normally bet-

ter to pay off the mortgage as quickly as possible, but practically, you need to have some savings put aside in case of an emergency. A good rule is to make sure that you’ve got at least three months of working capital as a buffer fund in the bank; in case of redun-dancy or temporary loss of income. However, it’s important to remember that you may not have a free hand in the amount of overpayment you can put into your mortgage. For example, while standard variable rate deals usu-ally permit unlimited overpayments, others will only allow overpayments of 10 per cent of the mortgage value each year and some may have early repayment charges.

It’s also worth noting, that in some cases you may be better off using sur-plus cash to pay for accident, sickness or unemployment (ASU) insurance. This enables you to cover your mort-gage for up to 12 months in the event of being unable to work.

For more information and to discuss your mortgage, why not call or email us now.

Could you knock years o# your mortgage?

With rates so low, you could save a lot more interest by overpaying on your mortgage than you can earn by putting surplus cash in a deposit account!

A good rule is to make sure that you’ve got at least three months of working capital as a buffer fund in the bank; in case of redundancy or temporary loss of income.

Rule of thumb

YOUR COMPANY REGULATORY DISCLAIMERYour Company Ltd is an appointed representative of Your Network Ltd, which is authorised and regulated by the Financial Services Authority (FSA 123456).

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE.