SOME TIPS ABOUT MAKING THE MOST OF YOUR STATE PENSION

The State Pension is a regular payment you may get when you reach State Pension Age. The payment will increase each year. It is based on the National Insurance contributions which you paid, you were treated as having paid, or were credited to you during your working life.

To find out when you would receive your State Pension and how much it might be go to: www.gov.uk/state-pension

UPS AND DOWNS OF INVESTMENTS

Recent events in China and their effect on Stock Markets internationally do show the risk that goes

along with such investments. Some general tips that we would recommend:

1. Diversify (Don’t put all of your eggs in one basket.).

2. Invest for the medium to long term (5 years plus).

3. Never invest in what you don’t understand.

4. Keep track of your investments and don’t be shy about taking a profit, or saying goodbye to a bad

investment.

5. Be your own person – don’t follow the herd.

6. Review your investments regularly (at least once or twice a year).

WHAT GUARANTEES CAN I GET ON MY INVESTMENTS?

Some guarantees are still possible. The dilemma for many is that they want to get a reasonable income from their investments but they do not want to take much of a risk.

The investment return on cash deposits is currently very limited – 1 to 2%. Better returns are available with annuities but lifetime annuities generally mean a loss of the cash in exchange for the income. But there are guaranteed funds which can provide a guaranteed income for life while still maintaining access to the capital. A client of ours, who is 70 has taken advantage of such guarantees, and has seen her £100,000 investment increase over the last 9 years to £120,000 while also having her guaranteed income for life increase from 5.0% per annum  originally to 6.5%. The funds are invested for growth in stocks and shares and are reviewed annually. If the fund values have improved above a certain point, the guaranteed income for life is increased, while she is still able to access the capital. If the fund values have gone down in that year, the income stays as it was. If she withdraws capital, then her income would reduce proportionately but would still have the lifetime guarantee. The theoretical worst case scenario is that her fund reduces to nil but she would still have the guaranteed income for life.

If you would like to discuss such a guaranteed investment approach to see if it would suit you, contact us.