Banks continue to fail in addressing the needs of the general public. Even in this modern age, the beginners are going back to basics as they start to work from the ground up. They must take heart in the fact that they are only repeating the journey of others coming out of a severe recession/depression in previous cycles and opportunities await.
In the face of the increased economic feel-good factor followed by growing consumer confidence, our future generation must dig deep into their personal or family financial savings towards reducing the effect of climbing living expenses versus income.
Today, family support does not just come from parents but from many young grandparents or the “baby boomer” who can cover everything from financial to even child care.
As a result, everyone should be focused on maximising their positions as if there are not sufficient savings available either because equity is locked up in capital or property. Pressure and stress affects what should be a happy family life. If income has already been secured through a pension, maybe a long-forgotten small pension pot or dusty, cobweb-ridden life policy could be the answer.
The UK Pension Reform has the potential to provide the answer where there exist pension pots over the small pension threshold of £30,000 and, in other cases, an endowment or with-profit policy could save the day where in the past it was locked up either by large exit penalties or moratoriums.
For a private pension the need to move a pension policy offshore to a Qualified Recognised Pension Scheme (QROPS) would appear no longer to be a necessity.
As a family when looking to maximise your position an important point you have to be aware of is taxation. Whilst politicians produce mouth-watering options for the discerning parent or grandparent willing to take control and do what they feel is right and good, be on your guard.
The number one priority of any government these days is to control the movement of money and, in particular, to increase the level of tax receipts overnight. To that end, when deciding to draw a large sum from a pension make sure you have an idea of what tax (if any) will be taken off and how you can get it back. Beware of the unscrupulous pension adviser looking to waive their magic wand with the promise of making a withdrawal paid gross or promising the best possible return or tax-free draw in lieu of a large fee, make sure they have given you chapter and verse and what the international tax implications are. Any scrupulous and ethical pension adviser will set you straight to ensure you optimise your financial position and not theirs.
Equally, any crystallisation of a life policy must require the glance of an experienced tax adviser before you dive towards the financial salvation of your own kin.
This article is intended to provide a general review of certain topics and its purpose is to inform but NOT to recommend or support any specific investments or course of action.
Raoul Ruiz Martinez is a resident and independent consultant for Finesco Financial Services Ltd., Glasgow and advises private clients on financial investments in both the UK and throughout Europe under MiFID regulation. He can be contacted at the offices of euroFINESCOs.a. either by telephone 289 561 333 or email raoul.ruiz@finesco.com.
Finesco Financial Services Ltd is authorised and regulated by the Financial Conduct Authority (FCA). Some of the services provided are not regulated by the FCA because they are not included within the Financial Services and Markets Act 2000.
Raoul also has regular radio appearances with Raoul’s Rant on the Owen Gee Solid Gold Sunday show and the Money Minute on the Kiss FM Breakfast show, every week, from Tuesday to Thursday.