We, at Planned Departure believe that planning is a continuous process and legacy is just a part of it. An important part of planning is taking care of pensions. Recently, there has been some changes in the State Pension. In this post our adviser partner Mr. Richard Hawkings explains what this initiative is and how it will affect individuals.
A new initiative allows people who reach the state pension age before April 2016, to top up their pension. This includes those that are already drawing the state pension. The Government is allowing retirees to buy extra state pension by paying so-called Class 3A voluntary National Insurance contributions between October 2015 and April 2017.
How will it help?
This will help people reaching state pension age before April 2016 who will not receive the new flat-rate state pension.
Some retirees will be better off under the new system (e.g. women and the self-employed) and the top-up will allow pensioners retiring before that date, and who may feel that they are missing out, a chance to build up a higher future state pension income. Among those who probably won’t achieve the equivalent of the flat-rate state pension of around £151, and will be interested in the top-ups, are people who’ve had career breaks and not paid NI for the full number of years and women bringing up children who’ve missed out on the additional state pension.
How much extra will be paid?
How much you’ll pay for the extra state pension will depend on your age, with the cost falling as your age increases and your life expectancy falls. The maximum extra pension you can buy is £25 per week, thus:
– At age 65 increasing your pension by £1 per week will cost £890, or £22,250 for an extra £25 per week;
– At 70, the cost is £779 for an extra £1 per week, or £19,475 for £25 per week;
– At 75, the cost is £674 for an extra £1 per week, or £16,850 for £25 per week;
– At 80, the cost is £544 for an extra £1 per week, or £13,600 for £25 per week.
How to make an extra purchase?
Making the extra pension purchase can be done either online or by telephone, using a one-off direct debit, online banking transfer or by sending a cheque. Your weekly state pension will increase with immediate effect, although there’s a 90-day ‘cooling-off’ period, during which you can change your mind and get your money refunded, less any payments you’ve already received.
NOTE: Please do not treat this as financial advice.
About the Author:
I have been a Lifestyle Financial Planner / Independent Financial Adviser since 1998. My role is to help clients identify, achieve and maintain their desired lifestyle, without the fear of running out of money, whatever happens ! I help clients and businesses plan their future with regards to their Pensions, Investments, Life cover, Shareholder Protection, Keyman cover, Workplace Pensions.
Recently Facebook released its legacy contact feature in the UK. This is a welcome move by Facebook and highlights the importance of ‘digital legacy’.
However, our digital life and digital footprint goes beyond Facebook and Google. We have pointed out the enormous difficulties loved ones can face trying to unravel their deceased’s digital property.
While Louise Palmer’s story is still fresh in our minds, story of Susan Rowan is surfacing digital legacy problems with another internet giant – Skype.
Susan tried to sort out her husband’s financial affairs after he died of cancer in January. She tried to close his online accounts but was faced with a long painful process of dealing with customer support centres of the online services.
Her experience with Skype left her feeling distressed. To begin with, it was difficult for Susan to contact their customer service over the phone. She had to use web chat and then they refused to refund £25.46 credit to her.
There are many more such cases of family members getting affected by lack of access to digital accounts.
At Planned Departure, our vision is to empower individual to take control of digital life and digital legacy.
The media coverages and now solution from Facebook are helpful in promoting the cause of digital legacy. The UK Law Society has advised people to leave a digital legacy after death, and an increasing number of lawyers are becoming vocal on the same issue.
There is still a long way to go and we need your support!
As we come to a close on our definitions and explanations of the various Wills available, we take a closer look at the difference between a living Will and a living Trust.
Let’s take a living Trust first which may help with costs and delays of probate and assists in keeping the details of your estate private. A living Trust can be divided into either a revocable or irrevocable living Trust.
The revocable living Trust is where you can transfer your assets into the ownership of the Trust and retain control of those assets. As the trustee of your revocable living Trust you can also change or revoke the Trust at any time you want.
The irrevocable living Trust on the other hand allows you to permanently and irrevocably give away your assets during your lifetime. Obviously once you give away your assets it means you have relinquished all control and interest in them. These assets are no longer considered part of your estate.
This should not be confused with a living Will which is a legal document which prompts and supports you in making life support decisions, including organ donation. A living Will becomes effective if something happens to you making you unable to make your own decisions. A living Will lets you approve or decline certain types of medical care in advance.
If you would like to more information relating to Wills in general please do not hesitate to contact us.
We kick start 2015 looking into another type of Will – the Property Trust Will.
This type of Will is designed to protect a property’s value for future generations. It ensures the property is not reduced in value by care fees and can significantly reduce potential liabilities allowing you to keep greater control on how your property is dealt with upon your death.
As with the Joint, Mutual and Mirror Wills, the Property Trust Will is mainly drawn by couples to ensure that their family homes are not sold off.
Most couples own their property as joint tenants. This means that when one of them passes away the property is passed on to their partner. If their partner goes into care, the whole of the property may be sold to pay for care fees.
This Will can sometimes be left in a ‘Discretion Trust’, in which the trustees are the legal owners of all the assets listed.
A Discretionary Trust, also often referred to as a family trust, is a legal arrangement which allows the owner of a life policy to give their policy to a trusted group of people called the trustees. In effect this involves the settlor, the beneficiaries and the trustees.
The settlor is the person creating the trust. The beneficiaries, those that will be receiving the payment and the trustees, those that have legal ownership of the trust from the settlor.
The one who creates this policy also has a list of beneficiaries whom the assets listed are passed on to. The main benefits of a Discretion Trust is that it shows who you want the proceeds to be paid to. This is because the trust can control when the money from the life policy will be paid out.
Money paid out from the life policy is not part of the estate which helps reduce inheritance tax.
In our next blog we will focus on Living Wills and Living Trusts. Please do not hesitate to contact us if you would like more in-depth information relating to Wills.
A few weeks back when I got the opportunity to attend one of the breakfast events organised by Tech Talkfest on Digital Policy. I personally benefited from the opportunity and got to speak to a noted guest – Sir Jim Knight who is a Labour Party MP. It also met many interesting people. So when Zoe and Ghilaine organised other events, I thought I would share this information with other entrepreneurs and like minded people so that everyone could benefit. Because, it’s all about networking and helping others :).
In case you are wondering
What is Tech Taklfest?
Tech Talkfest is a distinct, high caliber, trustworthy network of talented people providing business growth and facilitating fortuitous connections. It is a monthly event organised in London- Shoreditch.
Zoe Cunningham, Britain’s Brightest Woman in 2013 is the founder of Tech Talkfest networking events. She is also the main presenter for Tech Talkfest radio and is the managing director of Softwire Technology.
OK got it
When is the next event and more importantly what is it about?
If you are already sold to the concept then why not join them in the next event. It is definitely going to be an experience worth participating in. Journalists, business men, business women, bloggers, researchers, entrepreneurs or passionate technology professionals and electronic developers, put these dates in your calendars, diaries and notepads :).
The next event is;
FoodTech Talkfest Evening Drinks 12th August 2014
Tuesday 12th August 2014
18:30 – 21:30
Adam St Club, 9 Adam St, WC2N 6AA
Food and Technology are both hot topics right now. Join us and special guests from the tech food world to discuss the cross-over between tech and food and find out how tech is affecting the food industry, making it more accessible.
Claim 20% discount and save £4 to buy me a coffee :).
Use the following link to register and claim your 20% discount. In case you are wondering what to do with the £4 you save. Here’s a hint I love coffee ;).