Ask a planner answers

The following questions have been submitted via our Ask a Planner facility. The answers come from CERTIFIED FINANCIAL PLANNERTM professionals.

The question from Paula, 57, Spain/Manchester.

Hello, myself and my 2 brothers inherited a life assurance trust fund, with Friends life/ Axa. One of my brothers used to manage the fund for us, and it was doing well, but both brothers have now taken their share out, so the fund is just running on, and has lost a lot of money in the last year..I have contacted the financial advisor who originally set the fund up, to see if he can manage the fund, but he just wants to sell me a new product instead...I'm really trying to make this money work for me, as I have lived abroad a lot, and don't have a pension pot....I just don't know who I can go to for trustworthy advice...maybe you can help?

The question, from J Kilburn, 80 from York

I read recently that if you give money away and survive for 6 months that amount doesn't count if you have to go into a care home.  I have 4 grandchildren I would like to give money to now - when they most need it. Is what I read correct?

The question, from J Ferguson, 59 living in the UK

I have about £430,000 in investments in England and the USA.  I am resident in UK for tax and have lived here over 40 years retaining my American passport.What would you recommend for my retirement plans? I only have a small personal pension of about £40,000.

The question, from M.Povey, 66 from Bournemouth

"I've been advised to take out an off-shore bond and discretionary trust in name of grandson to mitigate  some  IHT. My concern is that the costs of such a bond and the complexity of winding it up make it not worthwhile. Any advice welcome."

The question, from Mrs A Downes, 72 from Kent

I have a small private pension pot, current value c£24k.  I know I must turn it into an annuity within the next 2+ years and would like to realise the maximum income, can you advise please?  I am single and childless.  If I die before arranging an annuity does the whole amount become part of my estate please?

The question, from N. Larry, 66 in Bridlington

What constitutes income as to “gifts out of income” e.g. could I divert dividends rolling up in my self-select ISA?

The question, from C. Clarke, 39 in Bournemouth

I currently have a company DCS pension where all investment funds are going to the company's default fund.  I need guidance/advice on where I should be focusing my investment funds in the current market.  I have access to selected UK, Global, Regional Equity funds; Balanced and AlternativeBalanced funds; Bonds and Liquidity funds. I am currently of an age where I can be fairly aggressive in terms of risk (in an attempt to gain some good returns) and would look to move to my conversative funds the closer I move towards a retirement age.  Can you help please?

The question, from Arthur, 32 from London

I work freelance and don't currently have a pension set up - so am looking to get something started.  What's the best type of pension for me? What are my options?.


The question from Campbell, 50, Crawley


I am being made redundant from IBM and I have option of £10k  pension or £8k with lump sum of £56000.  I don't need the cash for anything particular but wondered if worth investing it elsewhere instead or pay some off current mortgage of £350k (19yrs to go)  I have cash ISA but that's all, no shares currently.  What should I do with my pension/lump sum?

The question from Anon.

My partner and I now have some spare cash each month. We have approx. £12,000 of debt, and would like to buy our first house in the next 2-3 years. Do we need to clear our debt before saving for a deposit? Will having debt reduce our mortgage options? or should we arrange a longer-term, lower repayment loan for the debt which will enable us to start saving our deposit now?

The question from Anon.

I am considering remortgage my current flat to raise some capital to buy a second property ('rent-to-buy'. I would remortgage 100k (the flat is worth £380k), this would give me an interest only mortgage of £240k. Myself and my partner would then have a 30% deposit on a new property. We could comfortably afford the mortgage repayments on the new property (which we would move into) and could rent the existing property out for at least double the monthly repayments in that. We both work full time, although I hope to go part time in a few years if we have children. Is this something that is sensible or risky from a financial planning point of view? Thanks for your help.

The question from Natalie, 29, Neatherlands.

: I worked for Credit Suisse in London but resigned in 2013. Because I wasn't employed by the company on a full-time contract for 2 years or more I have to move my pension (ca. GBP 9,000) from the trust managed by Fidelity. I cannot move the money to the Netherlands, as I am not employed at the moment (and don't intend to be in the future) and therefore do not have access to an employer-based scheme. And it's not allowed by law to move employer-based funds to a private-based fund in the Netherlands either. I'm therefore looking for an option in the UK. I am still registered as a resident in the UK. Could you please advise if this is indeed an option and how I would go about finding a suitable plan?

The question, from Neil Coy, 60 from Lincolnshire

I want to retire at 61 my company pensions gives an option of a large lump sum + pension using 31% of my lifetime allowance for tax or a larger pension + small lump sum using 36% of my lifetime allowance. How do I work out the best option for me?

The question, from Mr Baines, 64 from Norfolk

I am 64 and about to work less. I have various assets which I might use for income in my retirement:

  • State Pension x 2
  • Company pension - small
  • SIPP
  • Investments - liquid and let property.

How would a Financial Planner analyse the options and add value?

The question, from Arthur, 32 from London

Can you recommend a tool I can use to track all my finances in one place and goals, including my pension, stock and shares and day to day costs?

The question, from Judy, aged 51

I would really appreciate your help. I have recently become separated after almost 30 yrs of marriage and obviously my retirement plans have changed completely. I work full time as a Nurse but unfortunately only rejoined the NHS pension scheme 5 yrs ago and my pension at 65yrs would barely cover household bills and living expenses. I aim to start saving on a regular basis from March 2015 but do not want to restrict myself too much as need to be able to access money in case of emergencies. I could however spare max £200 a month for pure savings and wondered the best way to safely save/invest this to provide me with the best returns.

The Question, from Ann, aged 58

What and where could I invest £100,000? I would like to know what return per month I could get with no risks. 

The question, from Simon, 27, London 

I was wondering about salary sacrifice. I am currently just in the higher rate tax band, so paying 40% as my salary is roughly 43k. If i was to make a salary sacrifice of of 2k would this be a more efficient way of using my money as I would be contributing more to my pension and presumably my NI would go down. Would I end up with substantially less per month as a result of this? (I appreciate the value this would have to my pension though).

The question, from Catia, 28 from London

I'm now in my late 20's looking to create some sort of financial security plan so later on in life I am able to have a great deal of money saved for my pension , but also at this moment in time I am looking to have some spare money to put towards a mortgage and a house. I would like more information on buying and selling shares. Is this an adviseble route?

The question, from Diane Cox, 58 from Wokingham

I have a Scottish Widows personal pension due at 60 and an LGPS pension due at 66. Also buying avcs . I want to find out if transferring the personal pension into the LGPS is a good idea or not and how the new pension changes affect this decision.

The question, from Matt, aged 18

I have saved a lump of mine over the last few years and I am going to be going away working in Europe for 6 months and I would like to know the best way to increase the money that I already have over that time.

The question, from clifford smith, 64 from Bolton

"I have a small Guaranteed Minimum Pension due March 2015 of [at Nov 2014 ] 9.4k I have got a personal pension from 2010 from which I took 25% tax free. I have various health issues and want to maximise the returns."

The question, from Jean Giner, 64 from London

Can I select an amount from a redundancy payment to be transferred into my personal pension or are there limits set on the amount by HMRC?

The question,from C H Tooke, 86 from Norfolk

At my age is there anyway I can reduce my liability for inheritance tax?

The question, from Joseph Benjamin, aged 59

I am aged 59, my wife is aged 53. I will be 60 years of age in February. I currently work as a Probation officer earning a salary of £38k per annum, my wife works short contracts as an HR consultant earning £60 a year. We have two buy to let properties in the UK, both mortgaged and valued over £800k. Our residential property is valued over £500k with a mortgage of £300k. We have a buy to let in the USA which should provide around $14k a year profit. I have a civil service pension paying about a £100 a month an two smaller pensions with the Post office and the probation service which I could take when I am 60. My wife has her pension in a SIPP. The question is, how and when can we plan to retire?  

The question, from Joanna Lloyd, 53 from Reading

"I've read through some of the profiles and see that the 'ideal clients' have a good nest egg to invest. 

I work through a limited company and charge a reasonable day rate so my friends tell me I should be loaded. I am not extravagant but seem to be trapped in a cycle of never getting ahead of my taxes. I have asked my accountants on many occasions to provide me with advanced information but they're reluctant to help, they can't even tell me how much corp tax I'm building up through the year. Do any planners work with people like me to try to help me get a handle on my basic personal finances, my ltd company finances and to help me plan ahead and finally get some stability?"

The question, from Ravi, 45, London

We have two flats (both mortgaged) which we are holding as our pensions for when we retire. Both flats are in my husbands name. He does a tax return self assessment every year for each flat. We propose to sell the flats to supplement our pensions (I have only been investing in a work pension for circa 10 years, my husband has had a pension for about 18 years but both pensions are worth very little). We would like to know the most tax efficient way of selling the flats to enable us to keep as much of the proceeds of each sale. We have a very small mortgage on our main residence.