Spousal By-Pass Trust

For many of us our property will be the largest asset that we will be able to leave for the next generation and with prices once more rising, the probability will be that the majority of our Nil Rate Band (the amount free from Inheritance tax that can be passed on) will be used up by the value of one’s home.

The thought therefore of un-necessarily adding to a future tax bill for our children with hard earned pension savings may come as a shock. This is precisely what could happen when pension benefits are paid to a surviving spouse upon death before drawing a pension. Careful planning can reduce or even remove future tax burdens. By creating a bypass trust and registering it with the pension provider the fund is ring-fenced from future potential inheritance tax (IHT) liabilities.

Upon death the pension amount is paid by the pension provider not to a surviving spouse, but into a Trust. It is important to note that the Spouse can still access the funds through loans or income, however the capital amount never ‘enters’ the estate. Upon second death (the point that IHT is calculated) the monies pass freely onto the named beneficiaries.  

With the removal of the need to secure a pension with your benefits, and individuals working on beyond normal retirement ages, a relatively small and inexpensive amount of planning now can assist with future financial planning.

begin_of_the_skype_highlightingend_of_the_skype_highlightingTo discuss this and how Ward Williams Financial Services could help you, please call (01932) 830664 to organise a no obligation, initial meeting. 

Auto Enrolment Capacity

 

Auto-enrolment is upon us and already there appears to be a number of sizeable obstacles in an employer’s path which either have not been fully considered or are not being addressed.

Obstacles

·  It is estimated that current mainstream pension product providers can support the setting up of around 2,100 new pension schemes each month.

·   It is believed that, at its peak, capacity for around 70 times this amount might be needed.

·  Many have assumed that product providers will be keen to accept increasing numbers of new schemes; however as with commercial organisations in other sectors, providers will only be keen to take on new schemes which they believe will be profitable. This could adversely impact upon small to medium sized companies who have a low to medium average wage structures or have high staff turn-over.

·  This ‘cherry picking’ is likely to come into full effect in 2014/2015 as the main bulk of UK businesses start to implement their auto enrolment.

·  The result could be that those deemed not profitable may be forced to use NEST, as their pension scheme provider. 

Whilst there is nothing inherently wrong with NEST, unlike other providers, NEST provides no administrative support to employers and so small companies, who are more likely to have limited  internal HR resource, will be very much left to their own devices.  Missing your auto-enrolment staging date could result in a sizeable fine being levied, with few, such as lack of administrative support, excuses being acceptable.

Answers

·   Employers must start planning as soon as possible.

·  The Pensions Regulator suggests this should be at least 6 months, Ward Williams Financial Services suggest 9-12 months to ensure everything is in place well in advance.

·  Early establishment will not cost anything extra and contributions need not be started prior to staging date, however with the potential ‘rush’ to enrolment likely to happen in the later stages of 2014, could your business afford to meet the penalties?

To discuss the implications of auto-enrolment and how Ward Williams Financial Services could help you with meeting your obligations, please call (01932) 830664 to organise a no obligation, initial meeting. 

 

10th Anniversary Party

Thursday the 17^th of October was a special evening as Ward Williams Financial Services Ltd celebrated its 10^th Anniversary at the offices on Monument Hill.

Clients of the firm had received an invitation to the event along with commemorative gifts to mark the occasion.

One of the highlights was some beautiful 10^th Anniversary cupcakes that went down particularly well.

Cliff Pocock the Managing Director of the company said;

“It was a real pleasure to be able to invite clients to the Anniversary party; everyone seemed to have a good time. It was also gratifying to receive some kind comments about the service we offer”

Special thanks must go to the members of the Financial Services team who organised the event.

Here’s to the next 10 years!