Ceri Jones

11 dos and don’ts in pension planning

The majority of us now know not to just accept the annuity we are offered but to instead shop around for the best option available and pay attention to pension charges. However, sadly, there are many other pension planning mistakes that can prove very expensive in the long run.

Here’s a checklist of the principal pitfalls to help you avoid them.

What does coronavirus mean for your retirement plans?

Markets have dropped over 30% since mid-February, but the experts are in no doubt: despite the enormity of the Covid-19 crisis, what goes down will eventually come back up. Nonetheless, for anyone approaching retirement with a defined contribution (DC) pension, such as the 10 million auto-enrolled in workplace schemes and the million people who buy self-invested personal pensions (Sipps) every year, these are worrying times.

Six ways to turbocharge a small pension

The general rule of thumb in order to maintain a comfortable lifestyle in retirement is to aim for two-thirds of your salary, so if you earn £60,000 a year, you should target £40,000 a year in pension income. The exceptions are high earners, who may find that as little as 50% of their salary is adequate for their needs.

10 little-known tax traps and how to avoid them

One of HM Revenue & Customs’ favourite sayings at this time of year is that “tax doesn’t have to be taxing”, but with the UK tax code 10 times longer than the complete works of Shakespeare, there are countless tricks and traps to navigate.

1) Capital gains tax on main residence
A common misconception is that the sale of your main home is exempt from capital gains tax (CGT), but this is not always the case.

Your essential guide to inheritance tax and estate planning

Inheritance tax (IHT) is widely disliked as a double levy on assets built up from taxed income over a lifetime of work.

In fact only 4-5% of UK estates currently pay it. However, as the baby boomer generation dies, leaving homes that have soared in value, many more families will be caught. IHT receipts could rise by a third, from £5.2 billion in 2017 to £6.9 billion in 2024, according to the Office of Budget Responsibility.

Bond investors: the hunt is on for decent yield

Last year was a year of economic disruption and political upheaval. In the investment arena, this uncertain climate is most vividly reflected in $17 trillion (£13.2 trillion) of bonds worldwide that currently yield negative returns. Investors are paying governments and, in some cases, companies for the privilege of lending them money – a far cry from buying bonds for income.

Your essential guide to: the state pension and how the goalposts will shift in future

Like everything to do with pensions, the state pension is fiendishly complicated – and the goalposts keep moving.

In 2016, faced with escalating costs, the government decided to overhaul the system and introduce what it called a new ‘flat’ rate state pension. However, it is not in fact flat at all and depends on the national insurance (NI) record an individual builds up over their working life.

How to adjust your portfolio in response to negative bond yields

Over the summer, expectations of an economic slowdown and political threats such as the US-China trade war created such high demand for secure investments that more than 30% of the world’s bonds (£13 trillion worth) fell into negative yield territory. This means that investors such as pension funds and insurance companies are now willing to buy bonds for more than their face value and take a loss, because they need the security and liquidity government and high-quality corporate bonds provide.