pension or life cover ?

Most of this thread could come under the most helpful post.


Keep it up.

It's bound to give kronas some idea of what direction he would like to go in.I suspect it may have also given a few others pause for thought.


Incog.

It certainly has Incog. I personally will be hitting the independant financil advice shops over the comming weeks. Though I'm in the market for life insurrance, and not a pension.

[kronas]

well guys, although you have confused me slightly i do see your points, i was not aware that the personal pension IS taxed, although ISA's are being heavily pushed these days.

i suppose i will have to find a independent financial advisor to achieve what would be most suitable for my needs.

i would just like to thank everyone for a most interesting thread, your contributions have been great, and im sure its been very much an educational experiance for some, has been for me

Originally Posted by iadom

I am not sure but I believe that dear old G.Brown has also closed off this avenue.

The number of years you can backdate has been reduced, but IIRC you can still do it for the previous financial year which means that, if you time it right, you've effectively got two chronological years to do it.

Originally Posted by iron25

This whole 'sooner is better' only seems a good idea if you are paying into a company pension scheme that is a final salary scheme.

Nope, because I don't have a final salary scheme, just a personal pension but the money still builds up.

Well, actually I have at least two now because of the way I invest, putting in a regular monthly amount, then topping up to the maximum amount permitted at the end of the financial year.

Originally Posted by Earl of Bronze

Last thing. I was told 6 or 7 years ago, if you ever have a good chunk of mony comming to you. Then invest in Guilts. As I understood at the time, Guilts are loans to the government to pay off the national debt, and earn a fantastic rate of interest. With, I think, a tax free return at the end of the investment period.

Gilts are Government Bonds. They're called that because they're "Gilt Edged" ie they're going to be redeemable unless the entire country's economy goes titsup unlike Corporate Bonds which are effectively loans you make to a company (if it goes bust, you lose everything)

Gilts are complicated instruments because if the Bank of England interest rate goes up, the value of Gilts goes down simply because they pay a fixed rate and that may not be as good as you can get elsewhere.

This does mean that because interest rates are rising, Gilts are now less attractive. For more info see:

http://www.bizhelp24.com/personal_fi...it_trust.shtml

I'd strongly suggest that if anyone wants to get into investment in a big way, they don't jump right in at the deep end with investments like these because if you don't completely understand the way they work, you can end up losing your shirt.

For useful online information see:

http://www.moneyfacts.co.uk/
http://www.iii.co.uk/
http://www.fool.co.uk/
http://www.moneysavingexpert.com/

The last one gives a regular weekly newsletter of helpful tips and information, as well as there being a discussion forum (which will look *very* familiar in style, if not content, to users of this one!)

Other useful resources are:

http://www.switchwithwhich.co.uk/

- How to switch to a better current account/ mortgage/ phone/ energy provider

http://www.unravelit.com/

- How to find cheaper loans, insurance, credit cards etc

http://www.uswitch.com/

- Cheaper gas/ electricity/ phones/ loans/ credit cards etc

[SMHarman]

Originally Posted by Bex

most people do have ISA's now..... but don't forget for mini cash ISA's the gov are lowering the limit to £1000 next tax year, so until march 05 you have a limit of £3000

Which is hardly in line with the governments policy statement to encourage more saving (which is a whole other topic).

I would not be suprised if the £3k limit was extended at the next budget.

Originally Posted by ianathuth

You have to remember the difference between life insurance and life assurance. The former pays out in the event of death, the latter at a predetermined time or death, whichever comes first.

Any Assurance policy is a form of investment.

An Insurance policy pays out when an event occurs. Better described as Death Insurance (though it also generally includes Terminal Illness Payout, so if you are diagnosed with say terminal cancer, it pays out at that point, not on death)

Life insurance itself is cheap. My cover (well I suppose it's actually Mrs H's cover) for 300k costs me £12 a month. In the Assurance policy an element will be for this payout, the balance will be an ivestment vehicle such as a low cost endowment, so if you are paying £70 in a month £12 will go to the life cover and the balance of £58 is a savings plan.

THese days it is better to split the products so you are buying the product you specifically needed. The Life Assurance is a throwback to / vehicle that can be used alongside an interest only mortgage. Realistically you would probably be better off separating the policies and getting cheap life cover from say direct line (use an online price comparator) and a low cost endowment from a better perfoming provider, rather than both from a mediocre providor.

[SMHarman]

Cheaper Car Insurance (and others)

http://www.confused.com

Very good.

[etccarmageddon]

if you put money into a pension scheme all you'll enjoy is gloating over nice figures on a piece of paper. if you put it into a home you will see your money grow and be enjoying it in some tangable form.

[iadom]

Originally Posted by etccarmageddon

if you put money into a pension scheme all you'll enjoy is gloating over nice figures on a piece of paper. if you put it into a home you will see your money grow and be enjoying it in some tangable form.

With all due respect, unless you have very wealthy parents, have inherited a large amount of money or won the lottery, you will have to have a very substantial income or have already saved prudently to afford to invest in property in the first place.

[Bex]

Originally Posted by SMHarman

Which is hardly in line with the governments policy statement to encourage more saving (which is a whole other topic).

I would not be suprised if the £3k limit was extended at the next budget

but you see this is tax free savings. with interest rates going up it means that you earn better interest in normal savings accounts and the higher, longer term, less flexible savings accounts. therefore it doesn't stop people saving but the gov get their share of it.

if you put money into a pension scheme all you'll enjoy is gloating over nice figures on a piece of paper. if you put it into a home you will see your money grow and be enjoying it in some tangable form.

i see your point, but on retirement, you may have paid off your mortgage but you may not have a regular income to subsidise your living expenses

[SMHarman]

Originally Posted by Bex

but you see this is tax free savings. with interest rates going up it means that you earn better interest in normal savings accounts and the higher, longer term, less flexible savings accounts. therefore it doesn't stop people saving but the gov get their share of it.

And tax free is a good encouragement to do something. Docklands and many other parts of the country were regenerated with Enterprise zone tax breaks.

It also makes a big difference to the end result. For a taxpayer, a 5% gross rate means a 4% tax rate net, for a basic rate taxpayer and 3% net rate for a 40%

So an Isa paying 3.5% is a better investment for anyone, than a standard account paying 5%. An Isa is a pretty flexible savings account, immediate withdrawal, CAT standard 0 charges, the ability to transfer between savings providers.

Originally Posted by Bex

I see your point, but on retirement, you may have paid off your mortgage but you may not have a regular income to subsidise your living expenses

But hopefully a pile of capital you can drawdown over your retirement, just no inheretence for your children.

[Bex]

Originally Posted by SMHarman

And tax free is a good encouragement to do something. Docklands and many other parts of the country were regenerated with Enterprise zone tax breaks.

It also makes a big difference to the end result. For a taxpayer, a 5% gross rate means a 4% tax rate net, for a basic rate taxpayer and 3% net rate for a 40%

So an Isa paying 3.5% is a better investment for anyone, than a standard account paying 5%. An Isa is a pretty flexible savings account, immediate withdrawal, CAT standard 0 charges, the ability to transfer between savings providers.

i am not disputing anything that you have said here. however i do think the gov are being sneaky by reducing the limit on the ISA........as far as i remember it was announced at the beginning of this financial year, but those in the financial sector had been expecting it some time. maybe the gov don't see it as capping the amount we can save, since the interest rates on instant and remote access accounts is higher than it has been for a while, so it will still encourage people to save

[Mr_love_monkey]

Personally, I don't think there is any such thing as an independant financial advisor (and if there are any on this board I apologise for offending you). The only way you can truly get independant advice is to get out on the 'net yourself and look at the products around - all advisors get paid from the companies that have the the policies that they sell you - and I don't always think that what is best for you, and what makes them a good profit, always go hand in hand.

My old company stopped using their IFA after he told them to move their pension scheme, for a third time - was it pure coincidence that he got a percentage of all the funds moved across? - I don't think so.

Maybe I'm just very cynical but when it comes to money it's very hard to find someone you trust

Originally Posted by Mr_love_monkey

all advisors get paid from the companies that have the the policies that they sell you

As I mentioned above, those who work for Bradford and Bingley's Market Place service, get a flat salary. Any bonuses/ commissions go to the B&B not to the IFA.