AT the time of writing, there is still much debate in the papers in relation to the Chancellor’s budget which I am sure will be comprehensively covered by other contributors in this edition.
Whilst considering what to cover instead, I was intrigued by the news that Blenheim Palace had discovered that an old trough they had been using as a flowerpot turned out to be a 1,700-year-old Roman sarcophagus worth around £300,000.
After a quick check to see if I had any worthy artefacts lying around the garden, (unfortunately not) I turned my thoughts back to financial planning matters.
Over the years, you may have accumulated various pension arrangements. Many older contracts would have been set up by the direct sales forces which dominated the market in previous years and due to the high upfront commissions paid out, had penal transfer charges incorporated into the contract. This came to the fore as individuals tried to access their pensions to take advantage of the new pension freedoms, which in many cases are not facilitated by these old contracts and found the charges that would be incurred made any transfer less than attractive.
As a consequence of the furore arising from this the government has legislated to remove the high charges from these arrangements and from 31 March exit charges will be capped at one per cent of the pension value. The door is now open for accessing these pots if it is appropriate to your circumstances to do so.
Another potential ‘Roman sarcophagus’ may be available to the many people who have worked at one time or another for one of the larger employers in the 1970s-1990s and have accumulated deferred pension benefits. These are valuable guaranteed rights and in many cases worthwhile retaining. However, due to the continued decline in gilt yield rates and other factors, the value of these benefits has increased significantly over the last couple of years. I have seen transfer values equating to circa 43 times the deferred benefit, so a deferred income of a relatively modest £6,900 per annum could easily be as valuable as Blenheim’s Roman sarcophagus!
This is a highly complex area of financial planning and there are many aspects that need to be taken into consideration, not least to the transfer value and can only be completed by a qualified pension transfer specialist.
If you would like to review your pension arrangements, contact either Gregg Taffs or Peter Brydon, Chartered Financial Planners and Pension Transfer Specialists, at Cave & Sons on 01604 621421 for an initial meeting.
The value of an investment and the income from it could go down as well as up. You may not get back what you invest.
This communication is for general information only and is not intended to be individual advice. It represents our understanding of law and HM Revenue & Customs practice as at (18/03/2016). You are recommended to seek competent professional advice before taking any action.
Cave & Sons Ltd is authorised and regulated by the Financial Conduct Authority. Financial Services Register number 143715
