Ask Money

Ask Money: how is pension tax relief calculated?

April 15, 2019

Is the tax relief on pension contributions based on earned income (salary/bonus), or is it based on total income including that from dividend and rental income? I end up paying higher-rate tax when rental income is included.
Satish Shah, by email

Ask Money: smitten by the Sleuth

April 8, 2019

I invest in funds and investment trusts and avoid shares. This reflects my lack of equity knowledge. But I look with envy at Share Sleuth’s results in Money Observer and wonder how to ‘buy the portfolio’ or parts of it. Is this something you would recommend?
Roland Waterhouse, by email

Ask Money: should I feather my NEST?

February 26, 2019

I am thinking of opening a pension fund, and I see the government has set up the National Employment Savings Trust (Nest) scheme. It looks quite good and it’s open to the self-employed, which is what I need. Could you tell me what the drawbacks of the Nest scheme are, compared with other traditional pension funds? For example, I see it doesn’t offer drawdown or the option of an in-house annuity.
Steven Little, by email

Ask Money: accumulation or income shares?

January 19, 2019

I have been checking my portfolio ready for the new year. I am 65 and currently reinvesting all my dividends. My largest holding is in Artemis Global Income shares. I wonder whether I would benefit by changing this holding from accumulation into income shares, as by doing so I would be purchasing extra shares twice a year instead of just adding dividends onto the current share price. Could you please advise me whether this would be prudent?
Stephen London, by email

Ask Money: can I control when my grandchildren inherit investments?

January 5, 2019

In a recent article regarding gifts for children, the use of either a bare trust or a designated account was mentioned for investment trust savings schemes. As I understand it, for either scheme the child is automatically entitled to the investment when reaching 18. I save for my grandchildren via both schemes (with F&C and Alliance Trust), but wish them to have the investment at age 21. Can you advise how to expedite this?
Tim Reavell, by email

Ask Money: I was in the dark on pension possibilities - what are my options now?

December 27, 2018

In October 2015, I took early retirement aged 51, and as I had a final salary pension I lost around 45% of it because of the reductions applied for my age. I didn’t particularly want to do this, but my partner had an accident in 2013 and in 2015 she was medically retired, so our joint income fell dramatically at that time. We concluded the only option was for me to take partial retirement and take as big a lump sum as I was allowed, to pay off as much debt as possible to allow us to live within our new earnings.

Ask Money: should I opt for gifting or a designated account in my IHT planning?

December 22, 2018

I have been considering options for passing on wealth to my adult offspring with inheritance tax (IHT) planning in mind. I am leaning towards the simple option of direct gifting, in the hope that I have seven years of life left in me. However, my financial adviser has suggested that I should consider a designated investment account where I can retain control of monies in terms of managing fund switches.

Ask Money: should DIY investors stick with just one fund?

December 15, 2018

Looking at the Money Observer Model Portfolios in the November Grow Money section, it appears that a FTSE World index tracker does better than most of the other holdings. It seems there is a strong case for personal investors such as myself to choose only one fund, which would be the best world equity tracker.

Ask Money: how can we help our daughter financially?

December 8, 2018

My wife and I own a rental property that provides us with a modest income that supplements our pension income. Our daughter, who will be the sole beneficiary of our reciprocal wills after we both die, has recently had to give up work due to illness, so we are considering options to help her financially by executing part of her legacy in advance. We feel that if we were to offer her direct cash, pride (though virtuous) would override practicalities and she would refuse it.

Ask Money: does borrowing to invest make sense?

December 1, 2018

I would appreciate your opinion on the way I have organised financial affairs for my wife, aged 83, and myself, aged 88. We have already consulted our solicitor and an independent financial adviser (IFA), who both disagreed with my approach but had no clear alternative to offer.