Daily Archives: August 20, 2012

Checking & Savings, Financial, Financial Information, Financial Services, Investment, IRA, Money, Personal Finance, Retirement

Standard Life readies Retail International Bond for RDR

Standard Life today announces changes to its Retail International Bond in the run up to RDR implementation.

Standard Life will facilitate a comprehensive range of adviser charging options on the Retail International Bond from inside or outside the product, so advisers can select the charging method that best fits with their clients’ circumstances and their chosen business model.

Ian Searle, Standard Life International Business Development Manager, said: “The type, timing and source of funding adviser charges all have a potential impact on tax efficiencyand investment performance. Minimising the impact of adviser charges on a client’s portfolio will, therefore, be a key part of the advice process. We’ve developed a flexible range of adviser charging options, including the ability to take an initial charge from outside the Retail International Bond. If a client decides to pay for advice from within the bond, they should remember that these charges will count towards their 5% annual tax deferred allowance.”

From 10 December 2012 Standard Life will start facilitating adviser charging on Retail International Bond without an adviser having to provide additional signatures from existing clients.

The company has also added new functionality to Adviserzone to make it quick and easy to manage adviser charging online on all of Standard Life’s post-RDR products.

At the same time, Standard Life is introducing an explicit, simple stepped product charge on Retail International Bond for all non-insured fund assets – from 0.2% to 0.7%, depending on the size of investment. This stepped charge rewards clients with larger investments.

Standard Life will pass the full value of any mutual fund manager rebates directly to customers, and pass on any enhanced rebates it has been able to negotiate using it’s buying power. Quotations will clearly show the fund’s AMC, the amount of any fund manager rebate, stepped product charge and adviser charge.

Via EPR Network
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Checking & Savings, Financial, Financial Information, Financial Services, Investment, IRA, Money, Personal Finance, Retirement

Prudential Reports Higher Rate Taxpayers Reject £438 Million In Tax Relief

One in four higher rate taxpayers do not contribute to pension schemes despite the attraction of tax relief to help boost their retirement savings, according to independent research from Prudential*. Nationally, this equates to around 216,000 employees missing out on up to £438 million a year in pension tax relief.

The nationwide study of those earning between £42,275 and £149,999 found 21 per cent claiming they cannot afford to contribute to a pension scheme. One in eight (13 per cent) say they do not see the point of saving for retirement, despite the tax benefits ofpensions, while 17 per cent don’t know why they fail to save into a pension scheme.

An average higher rate taxpayer contributing £425 a month into a pension fund receives basic rate tax relief of £85 a month or £1,020 a year, directly into their pension fund. Up to an additional £1,020 a year in higher rate tax relief can be claimed, which could also be used for pension saving.

Figures from HMRC show that around 58 per cent of the estimated 900,000 higher rate taxpayers in the UK contribute to defined contribution pension schemes, while another 15 per cent are members of either non-contributory or defined benefit schemes.

But despite earning average salaries of £58,541, the rest do not save into pension schemes at all. Around 43 per cent of those who don’t save into a pension scheme claim to have made alternative retirement arrangements, 4 per cent have existing Self-InvestedPersonal Pension schemes and another 2 per cent claim they will not retire.

Matthew Stephens, Prudential’s tax expert, said: “Pension saving offers valuable tax reliefs to all workers and particularly to higher rate taxpayers. Basic rate 20 per cent tax relief is available at source plus up to an extra 20 per cent from HMRC for higher rate taxpayers. Turning down what is effectively free money simply does not make sense.

“It is worrying that so many higher rate taxpayers say they cannot afford to save into a pension despite earning healthy salaries. The good news is that it is never too late to take action on saving for retirement and we urge all workers to seek advice on long-termretirement planning.”

The Prudential research shows that recent changes limiting annual tax-free pension contributions to £50,000 a year have not significantly dented pension saving among higher earners. Just 8 per cent said the change had put them off pension saving while 25 per cent were unaware of the change.

Via EPR Network
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