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 is from Mohinder, 77

Me & my wife own our property. Now she has gone to a nursing home. I am living my own in the property we had made a will which is written by solicitor put into trust 14 years ago. My question is if we sell the house, Social services will start charging nursing home fees from the sale of the property.

The question is from Richard, 50

We have a 25 year endowment policy that is due to mature on 22nd May 2017. We have a repayment mortgage as the endowment was never going to hit the target for clearing our mortgage. With mortgages being so cheap, should we look to improve our house and clear credit card debt, or should we use it to pay off a large chunk of our mortgage?

The question is from Chloe, 25

I've got about £10,000 saved up that I could invest. The only thing is that I'm probably going to want to use it in about two years’ time as a deposit on my first house. Should I invest the money or is two years too short a time period? If investing is an option, what sort of thing should I be looking for?

The question is from Anne, 55

My 26-year-old daughter is earning around £24k/pa. She is saving towards a home deposit but as yet doesn't have a pension. I have a small amount, around £4k, that I can give her to kick start this process and she is willing to add to this each month. We're interested in finding out the best way of doing this.

The question is from Meela, 30

I am a female PhD student, doing random part-time jobs and without much prospect of getting a full-time job after I graduate soon, because I am a non-EU citizen without a work permit. I have £45 000 in savings. How can I invest this amount safely, so that I could get an income from it? I keep it in savings account in a bank.

The question is from Rhian, 33

I am currently trying to raise a loan for debt consolidation, unfortunately, I am having issues because an arrangement to pay is listed on my credit report from a joint account I formerly held with a flat mate. The account was for shared bills and whilst I paid money into the account I never accessed it myself as my flatmate handled all the payments out. I was unaware that there had been issues with the account or that an arrangement to pay had been required for 4 months in 2014-15. The account was closed last year. I was wondering if there was anything I or my former flat mate can do to make clear on my credit report that I was not involved in the arrangement to pay situation?

The question is from Keith, 30

My parents added me to the deeds of their property about 7 years ago. I lived in the property until last year. I am now looking to purchase my own property and don't want to/can't afford to pay the additional stamp duty.

The question is from Catherine, 59.

Thinking about gifting our second property to our daughter. Understand CGT will be payable and will get it valued by RCIS surveyor. Will there be any problems if she later sells it after say 6months to a year and makes a profit?

The question is from C.Roth, 64

My resources are subject to 3 tax jurisdictions: UK, Switzerland, and the USA. I need advice from someone who will know the tax laws, and how to help me fulfil my obligations, but avoid being taxed 3 times on the same income (which is not high).

The question is from  Gulmira, 41

 I would like to know how better to invest money for retirement.

The question is from Ina, 37

I have been living in London in 2006-2010, then the US and then London again since 2015. My husband still lives in the US and we are debating the best location to live. In the near-term, what other sources of income could I activate to make living on one salary in London palatable? In the long-term, I see London as too expensive to live. What financial tools / investments could change that view/perception? Last but not least, I'm an avid saver (ISA, Bonds, Saving accounts) but would like to do more with my money. What can I do?

The question is from Elena, 39.

I currently hold £130k in cash savings, but I am also not in employment right now due to ill-health. I had been keeping my savings in cash for a mortgage deposit, but because of my ill-health my goals have changed and I am now interested in using a proportion of my savings to create an investment pot -with the goal of generating enough passive income to be able to 'buy myself' the ability to work part-time in the future to help manage my condition. I was hoping for advice on whether taking money out of a potential mortgage deposit to create a separate investment pot was a good idea and if yes how much I should allocate to the investment pot - ideally I'd want to generate passive income as quickly as possible. I'd be very grateful for any advice.

The question from Colin, 53.

I would like to understand the best options: how to go about helping my Mum sell her current house (approx value £500k with a £30k remaining mortgage with Halifax) and move into a retirement flat (estimated purchase price £180k). The key objectives are to be in a position to move quickly to buy a retirement flat when one comes onto the market and then how to bridge the gap until my Mum subsequently sells her house with a view to using the funds from the sale of her house to pay off the purchase cost of the retirement flat. Thank you.

The question from Debbie, 55.

My husband and I are about to separate. I earn a lowly £17,000 pa. We have an outstanding £50,000 mortgages. I still have 2 grown up children living at home. One contributes financially, the other is on an apprentice wage. How can I manage to make ends meet? I would ideally like to retire before I am too old to enjoy it!

The question from Roger, 65.

I have two option 32 pension transfer plan with Royal London. I have now reached 65 years of age, what is the best option to take, or should I look around for a better deal with the help of an IFA.

The question from Margarita, 38.

What is the best option for a relatively small amount of cash (for example, £50-70K) to be invested for boosting an annual income? Is it better to invest in shares or to buy a small property for renting it out? Many thanks.

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 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 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 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 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 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 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 C H Tooke, 86 from Norfolk

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

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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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.