Frequently Asked Questions

For Today - Section 01
  1. I'm 42 and don't have a pension. Is it too late?
  2. Do I really need to write a proper will?
  3. I'm up to my eyes in debt. What can I do?
  4. I’m thinking about opening a savings account. Will my money be safe?
  5. I’m concerned about the security of my personal details. What should I do if I think they’ve been stolen?
  6. My mortgage deal is coming to an end. What are my options?
For Tomorrow - Section 02
  1. My Insurance Company wrote to me ages ago telling me that my endowment was up the spout. I ignored the letter. Am I stuffed?
  2. Mortgages - How much can I borrow?
  3. Mortgages - Should I switch my Mortgage?
  4. New state Pension Age: When might I be able to retire?
  5. So what does this mean?
  6. What is an annuity?
  7. Where can I find or more about The State Pension?
For You - Section 03
  1. I'm really fed up with the poor interest rate on my account at the bank. I don't really understand the stock market. Are there any alternatives?
  2. I'm worried that my mortgage* company is charging me through the nose now my fixed rate has stopped. What should I do??
  3. I've heard that the NHS is getting better. I think I'm going to cancel my Private Medical Cover. What do you think?
  4. IDo I need insurance?
  5. What would happen if I or my partner became seriously ill or disabled?
  6. What would happen if I or my partner died suddenly?
  7. What would happen if I my home were damaged or destroyed?
  8. What about my belongings?
  9. What about health and dental treatment?
  10. Should Insurance Policies be written under Trust?
For Family - Section 04
  1. New state Pension Age: When might I be able to retire?
  2. What will it mean to me?
  3. Where can I find or more about The State Pension?

01

For Today

I’m 42 and don’t have a pension. Is it too late??

Whilst it is true that starting earlier will have a significant impact on your retirement pot, it is never too late and pensions have never been as inexpensive to run or more flexible than now. Now that A-Day has passed, there is also an increased list of options available for your money giving you a huge range of choice and flexibility.

I’ve heard I don’t need to write a proper will?

Technically that is correct, as long as the will is properly witnessed. However, to avoid any confusion on your death and to be able to guarantee that your wishes will be carried out, it makes sense to have your Last Will and Testament drafted by a professional. They will also be happy to review your potential Inheritance Tax position in order to make the appropriate recommendation to mitigate any potential tax and often will have a Wills Storage facility so that your document is kept safe until required.

I’m up to my eyes in debt. What can I do?

Firstly, don’t panic. Secondly, sit down and review the state of all of your finances, not just the debt, but mortgages*, savings and everything else too. The cost of being in debt can vary considerably from provider to provider (eg some may give interest rates starting from 4%, others can go as high as 24% or more!). Your options might vary from considering a consolidation loan, moving outstanding balances onto a credit card with a more competitive interest rate, you could also think about re-mortgaging your house. Alternatively you may even enter into an IVA (Individual Voluntary Arrangement) with your creditors. But thirdly and most importantly, do nothing without taking advice. At Ablestoke we can advise you of your options and if required we can refer you to specialist mortgage brokers and licensed credit brokers depending on your situation.

*Think carefully before securing other debts against your home. Your home may be repossessed for you do not keep up repayments on your mortgage.

I’m thinking about opening a savings account. Will my money be safe?

In Banks and Building Societies, up to £85,000 in an account per authorising institution is covered by the Financial Services Compensation Scheme (FSCS). Further details are available from the FSCS website.
http://www.fscs.org.uk/what-we-cover/products/banks-building-societies/

I’m concerned about the security of my personal details. What should I do if I think they’ve been stolen?

Check your bank and credit card statements regularly. Contact your bank or credit-card provider as soon as you spot payments you haven’t made. Protect yourself be keeping passwords and PINs safe and never give personal or account details to anyone who contacts you unexpectedly.
More information can be found on the CIFAS Fraud prevention website:-
http://www.cifas.org.uk/identity_fraud

My mortgage deal is coming to an end. What are my options?

Start considering your options way ahead of your current deal finishing. This will give you to time to consider what deals are on the market and possibly reserve a rate to start when your current offer finishes. Make sure you are clear about the terms of a new mortgage deal and any fees that need to be paid before you sign up.

02

For Tomorrow

My Insurance Company wrote to me ages ago telling me that my endowment was up the spout. I ignored the letter. Am I stuffed?

No not necessarily. Many insurance companies are honouring their offers of redress made when first the warning letters were issued. In order to confirm this you should phone the company directly and ask. If you feel that the information they provide is difficult to understand or you wish to take advice on what to do next you should seek advice from a Financial Advisor such as Ablestoke.

Mortgages – How much can I borrow?

This depends on your personal circumstances, such as your income, outgoings and whether you are buying alone or with a partner.

Mortgages – Should I switch my Mortgage?

MORTGAGES: WHERE TO GET FURTHER HELP
When asking about a Mortgage, the lender or Mortgage adviser will normally give you information. This may be printed materials or descriptions. This doesn’t mean you’re getting advice specific to your needs and circumstances.

Switching can cut your monthly payments, but you will need to weigh up these monthly savings against the costs of making the switch.

Mortgages – Should I switch my Mortgage?

MORTGAGES: WHERE TO GET FURTHER HELP
When asking about a Mortgage, the lender of Mortgage adviser will normally give you information. This may be printed materials or descriptions. This doesn’t mean you’re getting advice specific to your needs and circumstances.

Disclaimer: Think carefully before securing other debts against your home
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

New state Pension Age: When might I be able to retire?

For many years the age at which you can claim your state pension benefits has been 65 for men and 60 for women.
The last Labour government set out plans, based on recommendations from Lord Turner, to steadily increase the state pension age to 68 for both men and women over the next four decades.
In May 2011, the new coalition Government initially signalled its intent to speed up the process, bringing forward the first rise to 66 for men from 2026 to 2016.

In the end, the Comprehensive Spending Review in October 2010 settled on a less radical option, confirming the rise to 66 for both men and women would come by 2020.
However, the Government said it will have to rise even higher in following years. This could see many Britons working today wait until age 68 or even 70 before they get their state pension.
For women, the new rules mean much more dramatic rises than feared. It had been expected that the women’s state pension age would rise to 65 by 2020. It will now move to 65 by 2018 and then be hiked to 66 (same as men) by 2020.
The previous Labour government’s policy had been to raise the state pension age to 66 by 2026 and then incrementally to 68 by 2046. Retirement was due to equalise for men and women at 65 by 2020, rise to 66 between 2024 and 2026, 67 between 2034 and 2036, and 68 between 2044 and 2046.

So what does this mean?

All men and women under 56 will have to wait at least until 66 before they can retire.
Those born between April 1950 and April 1954 will have their own specific retirement dates that will gradually increase (see below).

MEN – a rough guide
• Under 32s…………………………… can get state pension at 68*
• Aged between 32 and 41………………….. can get state pension at 67*
• Aged between 42 and 56…………………….can get state pension at 66
• Aged between 56 and 57…….can get state pension at 65 + (see below)
• Older than 57………………….can get state pension at 65
WOMEN – a (very) rough guide
• Under 32s…………………………….can get state pension at 68*
• Aged between 32 and 41…………………..can get state pension at 67*
• Aged between 42 and 57………………..can get state pension at 66
• Aged between 56 and 60…….can get state pension at 60-65 (see below)
• Older than 60…………..can get state pension at 60

*Warning! These changes are under review and will be altered by the coalition Government. Expect further announcements ‘in due course’, they say.

What is an annuity?

An annuity converts a lump sum (usually from a pension fund) into retirement income.

In order to understand how annuities work, consider what would happen if there were no annuities.

If you wanted an income from your pension fund when your retire, you would have to make regular withdrawals. However this would create two problems.

  • How much income?
    • If you draw too little income you would die without having spent all your money, but you would leave money to pass on to your family.
    • Yet, if you draw too much you would run out of money and have to rely on your savings or fall back on your family or the State.
  • Where to invest?
    • If you invest too cautiously your income will be lower, but safer
    • if you invest in a more risky way, you might obtain more income if your investments perform well.

Annuities efficiently convert capital into income by providing a high level of guaranteed income for life with no risk. This is achieved by investing in fixed interest investments and applying whats called a mortality cross subsidy.

Where can I find or more about The State Pension?

http://www.direct.gov.uk/en/Pensionsandretirementplanning/StatePension/index.htm

The above link takes you to the DirectGov website where this is explained in detail.

03

For You

I’m really fed up with the poor interest rate on my account at the bank. I don’t really understand the stock market. Are there any alternatives?

It is true that interest rates provided by the banks are quite low. It is also true that the stock market can be daunting to all but the most seasoned industry professionals. The important thing is to be well-informed and kept up to date with exciting alternatives. At Ablestoke we can ensure that clients are as well briefed as possible. At Ablestoke we never recommend investing in a product you do not understand. Part of our role is to clarify the features and risks of the various options available whether they be stock market, or otherwise.

I’m worried that my mortgage* company is charging me through the nose now my fixed rate has stopped. What should I do?

It is common for people to find that their mortgage will become more expensive at the end of a fixed, or discounted rate period. It could be in your interest to look elsewhere for your borrowing, and banks and building societies often make the process inexpensive by paying all, or some of the costs. To find out which alternative lender might have the answer for you, you should seek advice from an Independent Mortgage Advisor such as Ablestoke.

Disclaimer: Think carefully before securing other debts against your home
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

I’ve heard that the NHS is getting better. I think I’m going to cancel my Private Medical Cover. What do you think?

It is true that in some areas the NHS has made great improvements. It still remains the case, however, that your postcode can affect quite dramatically the speed and choice of treatment available, and that the NHS remains stretched. When ill you cannot have too much money on your side. The financial muscle of a large insurer gives you complete peace of mind to choose when are where you are treated, and it is no exaggeration to say that quick treatment can often be the single most important issue in survival and a return to health.

Do I need insurance?

Budget planning will help you get a clear view of the money you’ve got coming in against all your outgoings. This will help you work out how you would cope if you had to pay for replacing items that were stolen or damaged, or how you would manage if you lost an income.

What would happen if I or my partner became seriously ill or disabled?

Insurance products pay out in these instances but some only pay out a lump sum or for a limited time and some do not cover all illnesses. Always check the exclusions before you take out a policy. You can find out about some types of protection insurance in Income protection, Critical illness insurance and Payment protection insurance.

What would happen if I or my partner died suddenly?

Could you or your family manage without the income? Life insurance is about providing some financial security for people who depend on you if you died. It’s also a good idea to check what your pension plans would pay out if you died. For more information see Life insurance.

What would happen if my home were damaged or destroyed?

If your home was destroyed by a fire or flood you would still have your mortgage to pay. Most mortgage providers insist that you take out Buildings insurance with your mortgage but it’s worth checking that the amount covered is enough to rebuild your house.

What about my belongings?

Whether you own your home or are renting, it’s your responsibility to cover your belongings. Contents insurance covers the loss of or damage to the contents of your home – for example, furniture, electrical items such as TVs, computers, radios, and smaller items like cameras, jewellery, briefcases and other items you carry outside of your home. Take time to work out the value of your belongings as it’s all too easy to under-insure.

What about health and dental treatment?

If you think you may need health or medical treatment, or want to be seen more quickly than on the NHS, Health insurance may be worth considering.

Should Insurance Policies be written under Trust?

Many Life assurance plans can be written under trust if you want to leave money to specific people and avoid the lump sum pay–out being subject to inheritance tax. It is worth discussing with a qualified adviser.

04

For Family

New state Pension Age: When might I be able to retire?

For many years the age at which you can claim your state pension benefits has been 65 for men and 60 for women.

The last Labour government set out plans, based on recommendations from Lord Turner, to steadily increase the state pension age to 68 for both men and women over the next four decades.

In May 2011, the new coalition Government initially signalled its intent to speed up the process, bringing forward the first rise to 66 for men from 2026 to 2016.

In the end, the Comprehensive Spending Review in October 2010 settled on a less radical option, confirming the rise to 66 for both men and women would come by 2020.

However, the Government said it will have to rise even higher in following years. This could see many Britons working today wait until age 68 or even 70 before they get their state pension.

For women, the new rules mean much more dramatic rises than feared. It had been expected that the women’s state pension age would rise to 65 by 2020. It will now move to 65 by 2018 and then be hiked to 66 (same as men) by 2020.

The previous government’s policy had been to raise the state pension age to 66 by 2026 and then incrementally to 68 by 2046. Retirement was due to equalise for men and women at 65 by 2020, rise to 66 between 2024 and 2026, 67 between 2034 and 2036, and 68 between 2044 and 2046..

What will it mean to me?

All men and women under 56 will have to wait at least until 66 before they can retire.

Those born between April 1950 and April 1954 will have their own specific retirement dates that will gradually increase. See RETIREMENT PLANNING

Where can I “find or more” about The State Pension?

http://www.direct.gov.uk/en/Pensionsandretirementplanning/StatePension/index.htm

The above link takes you to the DirectGov website where this is explained in detail.

05

General Personal Finance

Who regulates Ablestoke?

Ablestoke Financial Planning LLP (“Ablestoke”) are an appointed representative of Intrinsic Mortgage Planning Ltd and Intrinsic Financial Planning Ltd (“Intrinsic”).
Intrinsic are authorised and regulated by the Financial Services Authority (FSA).

Who are the FSA?

The Financial Services Authority (FSA) is an independent non-governmental body, given statutory powers by the Financial Services and Markets Act 2000.
They are a company limited by guarantee and financed by the financial services industry. The Board sets our overall policy, but day-to-day decisions and management of the staff are the responsibility of the Executive Committee.

The FSA are an independent organisation responsible for regulating financial services in the UK.

The FSA was set up by government. The government is responsible for the overall scope of their regulatory activities and powers.

The FSA regulate most financial services markets, exchanges and firms. They set the standards that they must meet and can take action against firms if they fail to meet the required standards.

What is an IFA?

Independent Financial Advisers or IFAs are professionals who offer independent advice on financial matters to their clients and recommend suitable financial products from the whole of the market.

The term was developed to reflect a UK regulatory position and has a specific UK meaning (although it has been adopted in other parts of the world, such as Hong Kong).

The term “Independent Financial Adviser” was coined to describe the advisers working independently for their clients rather than representing an insurance company or perhaps a Bank.

In 1988 the UK government was introducing the ‘polarisation’ regime which forced advisers to either be tied to a single insurer or product provider or to be an independent practitioner.

The industry has been de-polarised since 2005. There are now three main classes of adviser: tied advisers (working for one financial institution), multi-tied advisers (offering products from a selection of the market) and independent financial advisers.

Who are Ablestoke?

Ablestoke Financial Planning LLP (trading as “Ablestoke” ) are a Financial Planning business, providing advice and financial education to individuals and businesses across a range of services.
These include, but definitely would not be limited to, advice on all types of Insurance, Mortgages, Investments and retirement planning.
Ablestoke offer a range of service plans which assist clients with their Financial Health. By regular contact, discussions and meetings, all aspects of an individual’s and their family’s life are constantly reviewed, especially important during times of change.

Ablestoke are an Appointed Representative of Intrinsic Mortgage Planning Ltd and Intrinsic Financial Planning Ltd.

What is RDR and how does it affect me?

RDR (The Retail Distribution Review)is an FSA led initiative which will change the financial advice landscape forever from January 2013 onwards.

There are 2 main components affecting the financial sector, i.e. those who give advice to consumers:-
1. Commissions currently paid on Investment (including Pension) product advice will cease.
Commissions paid by product providers today will be replaced by fees-for-advice, which must be agreed by the consumer receiving the advice ie a very transparent costing in every case.
2. All Advisers must be qualified to – as a minimum – a diploma level, which will raise Industry standards.
The reasons for the change?
RDR is going to make sure that clients understand what they are paying for. At the highest level, it’s as simple as that.

In practice, every regulated firm providing Financial Advice is having to review their business models (that have historically been based in most cases on commission payments) and ensure that all their advisers are qualified to this new minimum standard.

Thus all advisers will have to consider how they provide a service to their clients, in order to justify charging fees.
The choices open to consumers through advisers will be in 2 main areas:-
a) Where advice is Independent (i.e. beyond service provision, advice on best product for the client is genuinely ‘whole of market’).
b) Where advice is ‘restricted’ (i.e. beyond service provision, advice on best product for the client is from a restricted range of product providers.

Consumers have always paid for their advice – the payment has been called ‘commission’, paid to the adviser by the product provider.
From January 2013, these will have to be called ‘fees’ and approved by and paid by the client (albeit in many cases paid directly from the same investment pot that commissions were paid from).

The major challenge in parallel for the industry is changing Consumer behaviour and use of the Internet for research.
Online searches for financial product information have increased 42% since Jan 2009, with there being 450,000 searches for information on-line per month (source Google UK).

Whether consumers want basic financial education or full-blown advice will dictate the services provided to meet the increasingly segmented consumer needs.

The good news is that Ablestoke has more than 6 years experience of successful fees-based ‘service’ relationship with clients, achieved through the variety of service plans available for clients to choose from.

Why budget?

Whether your finances are a bit under the weather or fighting fit, its always a good idea to keep track of your money.
A budget plan completed correctly will answer two main questions:-
Do I spend more than I earn?
An instinctive assessment is easy – if you’re eating up your savings or building up debts you’re likely to be overspending. Yet before you can solve this it’s important to get an accurate idea of the size and scale of the problem.
What can I afford to spend?
Once you know where you’re spending, you can start to prioritise what you do with your money to enable you to stay within your means.

06

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