Is your UK defined benefit pension safe!!!

Pension protection fund explained

High in everybody’s news feed in the last few days is the relatively surprising collapse of Britain’s second-biggest construction company – Carillion.

For many people that are currently in employment with some of the UK’s largest companies day to day work is generally something that is assumed as a given – It is only when something like this happens out of the blue that it brings home just how delicate our working and financial lives can be at times.

The ongoing job roles of the approximately 20,000 British-based employees are under huge threat, but what of their other hard earned benefits? Well luckily their pension rights should largely be preserved, thanks to the Pension Protection Fund (PPF), a private scheme funded by a levy on member companies.

When a firm with a salary-linked pension scheme goes to the wall without enough assets to carry on paying retirees, the PPF steps in. Those already in retirement get their pensions met in full, although future increases may be limited, while those who have yet to reach retirement age receive 90% of their benefits, up to a cap of around £35,000 (€39,500) a year.

The role of the PPF is to protect millions of people throughout the United Kingdom who belong to similar defined benefit pension schemes. If their employers go bust, and their pension schemes cannot afford to meet their liabilities and pension promises, the PPF will compensate the employees for their lost benefits. Tens of thousands of people are already in receipt of compensation from the PPF and hundreds of thousands more will do be in the future. The PPF is a public corporation, set up by the Pensions Act 2004, and is run by an independent Board.

This kind of collapse has huge knock on effects on both the wider markets as well as the multitude of small firms supplying services to the ‘Big Boys’.

Conservative MP Craig Mackinlay warned of a “domino effect” with subcontractors further down the supply chain that have already been waiting for up to six months for payments, may now receive nothing at all for the work they carried out.

Transfer values for Defined Benefit pensions are currently very high, due to a quirk of low interest rates. This could mean a higher transfer value might offset some of the risk you will be taking on if you chose to transfer your benefits.

Should I transfer? Am I in the best scheme for me? Is my scheme underfunded? There are many questions that need to be asked and Pennick Blackwell are happy to assess your personal situation and scheme position and if required walk you through all the potential pitfalls and options available to you.

Financial tips for the New Year

Financial tips for the New Year

Instead of Gyms, Drink and Cigarettes, think about giving your finances the resolution treatment this year

Another year has ended, 2018 has begun with many people looking to make a fresh start, new beginnings and change their lives for the better.  While this is a worthy goal, too many people forget to consider the financial implications of resolutions or their personal finances full stop.  So, while the idea of change for the better is in your mind, why not consider ways to make your finances healthier this year.

These ideas, unlike some of the other resolutions people make at the start of the year, don’t have to be done straight away, many of them can’t.  Rather, use this guide to consider how some or all of the points mentioned can help you manage your finances a bit better with the goal being to either save more or pay less to the bank and get the benefit of extra money down the line.

1: Decide on your goals

First and foremost, consider what you need to tackle and look to how you may achieve your desired effect.  Are you looking to start a savings plan, pay off some debt or loan, discover new investment options or could you do with consolidating debt to save interest payments?

Writing down your financial requirements and situation may allow you to consider what you need to do in order to accomplish your goals, seeing can be believing.

2: Get your mortgage into shape

If you already have a mortgage, there are three things you should be thinking about this year. The first is checking you’re on the right rate; after all, one thing we’ve learned from the Clausula Suelo scandal is we can’t rely on the banks to get it right for us.

The second is to consider a switch to another product or competitor. A short term outlay that comes with switching banks could save you in the long run.  If your conditions are not favourable, a switch could save you a noticeable amount on a monthly basis.

Thirdly, pay extra. Crazy right!  It may not be.  If your mortgage allows it and has no charge to make one off payments, a little saving through the year can work wonders on the long term cost of a mortgage.  While you could be doing something else with your money, inching away at your mortgage is hard to beat. A little effort can, over time, produce substantial returns.

By overpaying an amount every year you’ll reduce what you owe the bank and reduce future payments or cut the term of your mortgage. It also means you’ll cut your interest bill. And paying less interest to the bank is something everybody can appreciate!

3: Consider your pension

If you have one, take the time to read your annual pension benefit statement and figure out how your retirement is shaping up. You owe it to yourself.

And if you don’t have a pension, is it time to think about getting one?

If you have spare cash you can make extra contributions, increasing your pension and your tax benefits. But if your pension is going nowhere, why reward your non-performing fund manager even more?  So many UK Pensions are underfunded and in danger, is leaving it with them the right thing to do?

4: Bump up your savings

Deposit rates may be on the floor but the banks will still charge you a handsome amount to borrow from them so why give them your hard earned money for nothing?

A look at alternative investment options to the banks could increase your return substantially without having your money tied up for a number of years.

Using an investment management company comes with a cost but if you can earn 4% on a well-run investment, after costs, it will still give you more than double what you could probably earn in a bank deposit account.

5: Take control of your debt

While mortgages may account for most of a person’s debt, expensive, short-term debt is also a factor, for example, more than one-third (36 per cent) of credit cards have balances of between 75 and 100 per cent of their limits.

If you have too much debt weighing on your credit card, try and make some inroads this year.

If you have a high amount sitting on your credit card at a rate of around 20 per cent, cutting that down would be one of your best resolutions this year.  Instead of just paying the minimum every month, try to add something every month off the debt.  With the amount of interest charged on cards, a little goes much more than a long way!

If you want more information on any of the above topics or anything else related to your financial needs, please feel free to contact us on any of the following ways in order to set up an appointment for a free financial health check and see how a financial advisor can assist you.

Prepare with Pennick Blackwell and minimise the risks to your money (and health!)

Notary Fees and Mortgage Set Up Claims

The Clausula Suelo is well underway and after various rulings, denials, appeals, European interjection and the Spanish Government’s involvement, Banks are starting, slowly it must be said, to address the situation and refund money to their clients. It still by no means is a done deal when you find a Clausula Suelo in your mortgage agreement but it’s a lot closer to being able to resolve the situation than ever before.

During the whole Clausula Suelo debacle, another questionable banking practice came to light and was actually ruled against by the Spanish High Court in December 2015 but, like the Clausula Suelo, has taken time and effort to get claims moving.

The subject of this new claim is the setup costs of taking out a mortgage. While the client is liable for all costs regarding the purchase of a property “Compraventa”, the ruling states that the banks should be liable for the costs in relation to the mortgaging of the property “Prestamo Hipotecario”.

What this means to the average client is the taxes on the mortgage (1.5% of the value of the property), the Notary fees relating to the mortgage and the registration of the mortgage can be claimed back by the client.

An example here is a client taking out a € 80,000 mortgage on a property valued at € 128,400 would be looking at a claim value of about € 3,300, a nice amount of money for clients who have struggled to pay inflated mortgage instalments. This is a low-level estimation, this amount can go up with the price of the house.

However, this new claim is not limited to clients who have suffered through the Clausula Suelo issue. This claim affects anyone who has taken out a mortgage by and large. If you are currently paying a mortgage, you could well be entitled to claim back these charges.

In order to do so however, the official invoices from the Notary are a must, as well as the receipt of payment of the taxes on the mortgage (Modelo 600). NO claim can be handled without the documented proof of payment and the client needs to present this in order to proceed.

Here at Pennick Blackwell we can handle your claim, assist you in getting copies of the invoices if you do not have them and calculate what you may be entitled to. An email in exchange for € 3,000? Contact us today to get the information and let us help you reclaim what you should not have paid.

Prepare with Pennick Blackwell and minimise the risks to your money (and health!)

To invest or not to invest, that is the question!

I was speaking to a young parent the other day, young children and not old himself at only 37. However, as we spoke and the matters progressed, it dawned on us that he had no consideration in regards to his children’s future financial needs, nor how he could satisfy them apart from the usual work hard and stay employed route.

What he, and many others in his position was missing is that it really is, never too early to start saving for the future. At 35 we all think that the world is laid out for us and we have our lives to live, but, any parent out there knows, the time seems to fly by, where once you held them in the palm of your hand, now they are browsing shops and soon will be looking to college.

We come back to the old misconception that a Financial Adviser is for the wealthy, which is not the case. A Financial Adviser looks to help you look at your situation, provide ideas how to plan for the future and gives you advice on how to obtain those goals. You do not have to use the advice, but can you afford to pass up a free chat!

Investment Funds, Fixed Deposits, Shares, Bonds, Regular Savings Plans, SIPPs, ISAs, the list goes on and on, but do you know how they can help you and which one to choose? A simple, obligation free chat with a Financial Adviser can help you make decisions now that will benefit you in 10 to 15 years’ time… think that is a long time still, it’s as long as the Euro has been in circulation! Any parent with a 10 year old will tell you, they just grew up in an eye blink. The days mount up, so can your savings if you look after them.

Chat with a financial adviser and discover how you can provide for the 18th Birthday, the college education, a Grandchild’s 21st or the wedding you swore you would never indulge in way back when! The simple matter of life is that money will be needed when you least expect it and you need to know how to deal with the demands.

Do you have a pension? Do you know how to set one up? What benefits can you enjoy by having a pension plan in place, even a private one? Look around you and think, how many of my peers are set up for later life? I’ve had a look recently and I can pretty much guarantee that 80% of the people I see on a daily basis are not prepared for their financial future. What will you do when you retire or something happens that needs paying? A client contacted me last week to cash in one of their pensions as they have to pay for both a Wedding and a Funeral in the next month, it can strike that quickly and you need to be prepared!

However, being prepared is easy, a quick, informal chat to set out some guidelines and, more importantly, get you thinking about it, will show you how easy it is to set the wheels in motion and pick the way to save that is best for you!

A new government, a new budget, same old meddling for pensions however

The new budget has tried to crack down on pensions and specifically, QROPS, a right of ex pats abroad but a bugbear for the government and badly run pensions plans in the UK.

However, thankfully, the restrictions put in place in this new insertion into people’s hard earned pensions has been limited. The restrictions are mainly in place to prevent people bringing their money to different continents or “far afield”.

Pennickblackwell however specialise in the transfer of ex pats pensions within the EEA of which Malta, our preferred partner is based. This means that our clients can continue to enjoy the many and wide ranging benefits of QROPS transfers without the added burden of a 25% tax on transfers out of the EEA.

The pertinent point here is that the Budget cracked down on transfers out of the EEA, be careful if you are looking at the Far East, Australasia or any other district outside of Europe, you could well be hit with added charges and, Pennickblackwell are happy to advise you, no matter who you work with, if your chosen destination is a risk or not.

At Pennickblackwell, we pride ourselves on client satisfaction over revenue. If a client has a question or query, we are more than happy to sit down, listen to the concerns and offer them an answer, you have earned this money over your life, it is only you who should benefit and enjoy it now that you can.

If we feel that your decision is a risk to you, or your future, we will tell you and explain why, if we deem it a sound investment, we will also confirm that information to you. You don’t have to be a client to benefit from our advice, our number 1 goal is to help people.

If you have any financial queries or concerns, contact us today for a free, no obligation chat to see if we can help you, either through our unbiased opinion or through our dedicated financial advice.
Don’t get confused in the world of finance, there are specialists available to you and initial consultations are free of charge so you can see how you can benefit from our advice.

Prepare with PennickBlackwell and minimise the risks to your money (and health!)