The Merrill Lynch survey findings may prompt similar conclusions in the UK, as both nations have the affluent baby-boomer experience in similar circumstances, so what are the key conclusions we in the UK should take note of?

As a result of living longer, baby boomers plan to be “younger” longer and to work longer. Most baby boomers who responded to the US survey (65%) will stop working for pay and retire in the traditional sense at some point. However, that phase is more likely to begin in the late 60′s than at age 60. While 76% of baby boomers intend to keep working and earning in retirement, on average they expect to “retire” from their current work at around age 64, and then launch into an entirely new job or career.

When asked about their ideal work arrangement in retirement, the most common choices among baby boomers in the US survey would be to:

• Repeatedly “cycle” between periods of work and leisure (42%)
• Have part-time work (16%)
• Start their own business (13%)
• Work full time (6%)

Furthermore, only 17% of the baby boomers in the survey reported that they hope to never work for pay again!

It doesn’t appear, however, to be about the money. While 37% of the baby boomers in the US survey indicate that continued earnings is a very important part of the reason they intend to keep working, 67% assert that continued mental stimulation and challenge is what will motivate them to stay in the game.

The unpredictable cost of illness and healthcare is by far the US baby boomers’ biggest fear. They are three times more worried about a major illness (48%), their ability to pay for healthcare (53%) or winding up in a nursing home (48%) than about dying (17%).

US baby boomer men are looking forward to working less, relaxing more and spending more time with their spouse. Baby boomer women, however, view the dual liberations of empty nesting and retirement as providing new opportunities for career development, community involvement and continued personal growth.

Accumulating the resources, affluent baby boomers list the need for retirement freedom (81%), rather than age (56%) or any other variable as the most decisive factor for when they choose to retire. Recognizing the growing uncertainty of the future economy and government provision, baby boomers who have a plan and feel prepared, are twice as optimistic and far less fearful compared with those who do not.

So do we in the UK echo the US findings in our aspirations and intentions?

It’s understandable that many people involved in a divorce want to minimise the number of meetings they attend and simply let the solicitors get on with sorting it out.

Unfortunately, trying to cut down on meetings could be a serious mistake. Divorces are not just about broken relationships, dividing up the family home and arranging custody of the children. Sadly, they’re about financial planning as well – and meetings with your independent financial adviser may turn out to be even more important than meetings with your solicitor.

Even if a couple have only been married for a relatively short time their financial affairs are likely to be inextricably linked. The mortgage will almost certainly be in joint names; they could well have shared protection policies and pension benefits may need taking into account when assets are divided.

Couples who have been together for longer – and an increasing number of people are now getting divorced in later life – will find the financial situation even more complex. Pensions will certainly be an area that requires specialist financial advice as some people, particularly high-earners in final salary pension schemes, will have built up pension funds which could well be worth more than the family home.

The new rules on pensions sharing in divorce have introduced a variety of options when it comes to dividing accumulated pension funds: they have also introduced the need for some seriously complicated (and potentially contentious) calculations, making expert advice absolutely essential.

All these areas mean independent financial advice can be crucial to making sure that any financial ‘damage’ you suffer as a result of a divorce is kept to a minimum, and that you emerge with a clear idea of the financial planning steps you need to take in the aftermath of the divorce.

Virtually no-one relishes going through divorce proceedings, but if you find yourself in that position, seeking out independent financial advice will be one of the wisest decisions you make. A good IFA will help make sure that you receive the best possible financial ‘result’ from the divorce and will work with your solicitor to see that everything runs as smoothly and painlessly as possible. Whether it’s helping to sort out the mortgage, reaching an equitable settlement of pension assets or any of the other complications that a divorce can throw up, an IFA will be on your side, constantly giving advice with your best interests at heart.

If you are – or fear that you might become – involved in divorce proceedings then please don’t hesitate to contact us. We’ll provide you with expert and wholly confidential advice – and do our best to make sure that the financial pain of your divorce is kept to an absolute minimum.

Things are changing in Europe. Well in political terms they are at any rate. In fact we think this will herald the start of the break up of the Eurozone in its’ present format. Remember that since the introduction of the Euro and the gradual increase in size of the Eurozone, the economic rules have consistently been broken to accommodate the political will. The euro was a political creation; not an economic one. Indeed economically the euro with its’ diverse and incompatible economies in the northern and southern states should never have been born in the first place. In the long run, the euro can’t survive. There are too many countries, with too many different needs. If that sounds like some right wing anti- European dogma, it is not meant to be a political statement; purely an economic rationale.

The control of a centralised monetary policy but without a parallel centralised fiscal policy is unworkable and without a federal structure the Eurozone was always destined to fail as an economic project. The fact it has lasted so long is down to the huge political will from vested interests in Brussels. In the pre credit crunch era, German exports prospered by being part of an artificially cheap currency (relative to the Deutschmark) and at the expense of the Southern European states’ rising spending of borrowed money. Likewise the PIIGS (Portugal, Ireland, Italy, Greece and Spain) countries were happy because they could spend whatever they wanted. Economically times were good and many thought the wonderful euro to be a major reason for this. Even St Gordon publicly announced the end of Boom and Bust! But as we all now know, the good times could never last. As pressures built, the politicians allowed states to join the euro who should never have been allowed to do so; they permitted repeat breaches of the economic safeguards agreed in the Maastricht Treaty resulting in excessive deficits.

The response from the politicians to the credit crisis has been a series of sticking plasters; Quantative Easing, the European Ineffective Stability Piggybank and the LTRO (who comes up with these names? Probably some overpaid European bureaucrat?) have been successively greeted by the vested interests as the answer to the Eurozone problems. Initially stock markets rise and the PIIGS governments’ bond yields fall, only to reverse once the sugar rush wears off. This has been happening for the last two years, only now the sugar rushes do not last as long and the policies become less effective in everything other than increasing future economic problems. Whilst there is the political will, new solutions will no doubt be dreamt up to keep the Eurozone from crumbling.

However, over recent weeks there has been a definite weakening of that precious political will. The severe austerity policies imposed on the PIIGS states by Merkel and Sarkozy have built growing resentment. Economic strikes and demonstrations have contributed to negative sentiment towards their northern European neighbours. This weekend’s Greek elections will be interesting to say the least, with the probability of a new government holding an anti austerity agenda. Likewise in Spain, with unemployment at near one in four adults the new right wing government is having huge problems in imposing the level of cuts agreed with their northern masters – whoops I mean colleagues! As with Italy and Portugal, government bond yields are rising and the authorities are facing greater pressures and challenges to their ability to carry out the austere cuts. Ultimately the political acquiescence is weakening in the southern states and with it the political commitment to the whole euro project will be further challenged.

Whilst discontent in the weaker Mediterranean states might be expected to a degree, it is the weakening of the political will in northern Europe that is most striking. The Dutch coalition government has collapsed after the rejection of the proposed austerity package. This is a significant development as the Netherlands has been one of the most compliant of all Eurozone countries. This weekends results in the elections in France and Greece are bound to bring tension in the Franco German axis which has been the main driver of political will to keep the euro going at all costs. Maybe to an increasing number of voters the cost is now too great and the weakening political will, will gradually lose the strength to keep the Eurozone in its’ present format?

Money which was re-directed in this way was known as ‘Protected Rights’ – as distinct from ‘Non-Protected Rights,’ which was the part of a pension which came from an individual’s own contributions and/or from the contributions of an employer.

Gradually, however, the popularity of this type of arrangement has tailed off and from April 6th this year the option to re-direct funds into a personal pension in this way will no longer be available.

However, many people – especially high-earners – have built up significant amounts of Protected Rights using the previous arrangement. Many will now be thinking that the only option from April 6th is to leave the funds where they are, keep an eye on their performance and take the benefits as and when they retire. But as one door closes, so another opens and new rules introduced from April 6th will give those people who have Protected Rights benefits the chance to transfer the funds if appropriate into Self Administered or Self Invested pension funds.

These schemes – Small Self Administered Pension Schemes and Self Invested Personal Pensions – give the individual investor much greater control over his or her pension and allow a much wider range of investments, including commercial property and individual stocks and shares. If you are a company director, then in some cases it may also be an option to make loans to the company, with repayments then being made to your pension scheme. Additional flexibility also exists when considering the options at retirement to provide benefits.

This is a complicated area of pension planning, and one where specialist advice is very much needed. However, if you have built up benefits within a Protected Rights policy then it would certainly be worth contacting us, as we believe that it would be worthwhile considering the opportunity to consolidate your pension arrangements to obtain potentially greater growth, control of the investment strategy and flexibility in the way in which benefits can be generated from the funds.

New legislation is due to take effect from 6 April 2015 that will see the nil rate band rise in line with the Consumer Prices Index (CPI), instead of the higher Retail Prices Index (RPI). This could result in a lower than anticipated rise of the threshold level. This and subsequent changes to the threshold, will almost inevitably result in more people having to pay inheritance tax.

Consumer research from Legal & General about how people prepare for inheritance tax, reveals that although most people (69%) are aware of the potential IHT hit on their hard earned wealth, the majority of those questioned (69%) have taken no action beyond making a will. The top three reasons given by respondents for putting off estate planning are – ‘It’s too far off for me to consider’ (38%) – ‘I keep putting it off’ (24%) – ‘I don’t know where to start’ (15%). However, half (50%) of the people questioned (who are under the age of 50) said they would like to learn more about tax mitigation after being shown details of IHT charges.

The research responses also show that people looking for help to minimise inheritance tax seek professional advice or guidance. The top 3 sources consumers ask for advice are IFAs (30%), solicitors (26%) and accountants (13%). The Treasury estimates that in 2015–16, around 1,500 more estates will have to complete more complex paperwork for HM Revenue and Customs. Of these, more than half – around 900 – will then be liable for IHT and this figure is expected to continue rising.

According to HMRC:

Sometimes, even if your estate is over the threshold, you can pass on assets without having to pay inheritance tax. Examples include:

• Spouse or civil partner exemption. Your estate usually doesn’t owe inheritance tax on anything you leave to a spouse or civil partner who has their permanent home in the UK – nor on gifts you make to them in your lifetime – even if the amount is over the threshold.

• Charity exemption. Any gifts you make to a ‘qualifying’ charity – during your lifetime or in your will – will be exempt from inheritance tax.

• Potentially exempt transfers. If you survive for seven years after making a gift to someone, the gift is generally exempt from inheritance tax, no matter the value.

• Annual exemption. You can give up to £3,000 away each year, either as a single gift or as several gifts adding up to that amount – you can also use your unused allowance from the previous year but you use the current year’s allowance first.

• Small gift exemption. You can make small gifts of up to £250 to as many individuals as you like, tax-free.

• Wedding and civil partnership gifts. Gifts to someone getting married or registering a civil partnership are exempt up to a certain amount.

• Business, Woodland, Heritage and Farm Relief. If the deceased owned a business, farm, woodland or National Heritage property, some relief from inheritance tax may be available.

While in the first two months of the year markets enjoyed a break from the macro forces that drove markets in Q3 last year, we are very much of the view that the crisis is not over and is likely to cause markets some difficulties again at some stage. Despite the work done by the European politicians who have become accustomed to applying the sticking plasters it is likely that future problems will be as severe as we witnessed in 2011. With that in mind we have been watching the developments in Spain over the last few days with added interest.

Spain was the first country to put in place annual deficit rules for all parties to follow in 2011, agreeing to have no more than 3% annual budget shortfalls. Great idea, especially running into an election, where spending typically wins votes. However, while this turned out to be a good motto, the execution has been disappointing. Spain’s 2011 deficit came in at 8.5%. The principal reason for this was a greater than expected shortfall coming from the independent communities, the largest of which was in Spain’s highly populated Community of Andalucía. Recently local elections were held in the region. The new Prime Minister, Mr Rajoy’s centre right Popular Party was expected to win an overall majority here for the first time. The PM even delayed releasing his 2012 budget in the knowledge that the spending cuts included therein would not win the electors’ favour. Unfortunately his plan did not work. In fact it backfired. Although winning the most seats, it was not enough for a majority and the incumbent centre left have joined forces with a left wing party to take an overall majority. Reducing the deficit in this region will now be a formidable task.

Capping a poor week for Rajoy, the government published figures last week indicating that the central budget deficit has started the year poorly with a shortfall of 1.9% of GDP already for the first two months of the year. This does not include figures from the independent communities. Spain has promised its European partners that its total deficit will be no larger than 5.3% this year (what happened to the 3%??), however at this rate achieving this will be a challenge, especially with the additional problems presented by the communities.

In Spain’s favour, their total debt to GDP still looks healthy compared with the likes of Greece, Ireland, Portugal and Italy, but this can change quickly as annual deficits mount up. Additionally the income tax rises agreed last year will start to take effect from March. The new budget will have some severe austerity measures including a rumoured 15% spending cut for each of the ministries. All of this will help, but how much it will hamper growth, and therefore the future tax take, remains to be seen.

While Spanish bonds have enjoyed a rally from the start of the year, the government bonds have begun trading slowly downwards since the start of the month. In equity markets the picture for once is worse, with Spain being the only major European bourse in negative territory for the year.

The market is right to be nervous. Mr Rajoy needs to deliver and it won’t be easy in the face of a striking workforce. The first general strike has been called. We will be watching developments closely in Spain as failure could trigger a broader sentiment change.

Meanwhile, Portugal has been described as similar to Greece, but with a longer fuse, and as Moneyweek (www.moneyweek.com) argue the coming explosion will be devastating:

Recently Pimco one of the world’s largest bond managers, ruffled eurozone feathers by arguing that Portugal would be the next country to need a fresh bail-out. Portugal is falling into exactly the same economic abyss as Greece. The difference is that Portugal has even higher debts than Greece did. And, because it didn’t fiddle any of its figures, it will be impossible to blame its looming bankruptcy on anything other than the structural flaws built into the single currency. Not only is Portugal sliding into a Greek-style crisis, but it could inflict far worse damage on the euro than Greece has done. Portugal never had a particularly strong economy to start with. But after joining the euro in 1999, it steadily lost competitiveness with the rest of the continent.

The trouble is, the eurozone and IMF are imposing the same policies on Portugal that they imposed on Greece – with the same ugly results. The government, under the terms of its bail-out, is imposing big tax raises, spending cuts, wage cuts, and a little bit of structural reform. The country – one of the EU’s poorest members, with GDP per head of only $21,000, well below Greece’s $26,000 – has been set a target of cutting its deficit to 4.5% in 2012 and 3% in 2013. Citigroup reckons the economy will shrink by 5.7% in 2012 and another 3% in 2013.

Portugal’s main export market is Spain and that too is heading into recession. A slump of more than 6% of GDP this year is possible. The deficit-cutting targets are being missed. Earlier this year, the government revised the deficit forecast up from 4.5% to 5.9% of GDP for this year. If the Greek experience is anything to go by, it will keep being revised up. The economy will shrink, taxes fall, more people will switch into the black economy simply to survive, and the deficit will keep growing. In response, the EU will demand more austerity, and the economy will merely shrink even faster. It is a vicious circle. That means a fresh Portuguese bond crisis seems inevitable. When it happens, it will be every bit as serious as Greece – perhaps more so.

According to figures from the Bank of International Settlements (BIS), total Portuguese debt amounts to 479% of GDP (compared with 296% for Greece). That comes to e783bn, compared with e703bn for Greece. Europe’s banks are even more exposed to Portugal than they are to Greece. In total, the banks have $244bn exposure to Portugal, compared to just $204bn to Greece, says the BIS.

Greece has already defaulted on much of its debt. There isn’t much incentive for Portugal not to follow. That will have two big effects. First, there will be a huge hit to the eurozone banking system. The bulk of Portuguese debt is owed to Germany and France. But those are the official figures. It seems likely a lot of the private debt, which is far more substantial, will be owed to Spanish banks. They are already fragile. Can they take the losses?

Next, it will deal a huge blow to the euro. For one country to default within a monetary union can be written off as an accident. When the second one goes down, it’s more serious. The line that this is all down to one irresponsible government will be unsustainable. The alternative view – that the euro is a dysfunctional currency, wreaking havoc across Europe – will be far more plausible.

A Portuguese default will be the next, and potentially far more dramatic, leg of the crisis. The single currency may have stabilised for now, but once Portugal blows up, it will dominate the headlines again – and rock the markets as well.

And a final view from Aberdeen Asset Management on dear old Greece, who argue the Greek Tragedy is yet to play out:

The self-congratulatory tone of politicians and policymakers following the recent successful restructuring of Greek debt could lead one to think this was the finale to the country’s woes. Indeed the French President, Nicholas Sarkozy, who is facing elections later this year, said “Today the problem is solved.” Unfortunately the restructuring merely signalled the end of the first act. Yes, the €206 billion bond exchange – the largest in history – is a step forward with investors agreeing to take a significant haircut. The International Swaps and Derivatives Association (ISDA) belatedly announced that this was a credit event meaning holders of Credit Default Swaps (insurance against this happening) would be paid some US$3.2 billion.

However, the restructuring is only likely to be the first of many. The deal has wiped some €105 billion off Greece’s €350 billion debt mountain and secured a next round of financial support. Eurozone finance ministers have already agreed to lend €35 billion upon completion of the exchange and may make a further €95 billion available. But the aim of reducing the country debt-to-GDP ratio from 160% to 120% by 2020 still looks an impossible task without further write-offs; Greece’s economy contracted by 7.5% in the last quarter of 2011. This comes at a time when the government is pushing through further austerity measures, including spending cuts equal of 1.5% of output, meaning more job losses. The country may well be in the midst of one of the longest recessions in modern history.

What is woefully lacking in all this is a credible plan for rejuvenation and growth in Greece (and Europe). More specifically there needs to be improvements in relative competitiveness to ensure that the chronic current account imbalances which sit at the heart of the crisis continue to decline. Without action to stimulate growth, austerity alone will worsen the problem and lead to massive social dislocation. There is only so much that the Greek people can and should shoulder.

So recent events are certainly not the solution to Greece’s problems and are arguably just another fudge providing time for policymakers to realise that more radical action is required. The risks of the country exiting the Eurozone continue to increase and if they do, hopefully it will be a managed exit. At the moment markets have not really reacted to these latest developments. Equity markets have moved very little so far since the announcement, indicating a successful exchange was priced in. However, the unresolved structural problems in Greece and the wider European economy mean markets will remain volatile and we could well experience another correction as the remaining acts of this Greek tragedy are played out.

The Chancellor presented his third full Budget since the coalition Government took power on Wednesday, 21st March.

Billed as ‘the budget for working people’ with a promise to ‘back business’, Mr Osborne highlighted the Government’s commitment to three specific areas: a stable economy, a fairer, more efficient and simpler tax system and reforms to support growth.

As the Budget was announced, the Office for Budget Responsibility (OBR) increased its forecast for UK GDP growth in 2012 from 0.7% to 0.8%. It predicted future growth of 2% in 2013, 2.7% in 2014 and 3% in 2015.

Although the Chancellor expects inflation to fall from the current 3.7% to 1.9% by the end of the year, he has reaffirmed the Consumer Prices Index (CPI) inflation target of 2%.

The Government views businesses as the catalyst for economic recovery and the budget reflects this, with a number of announcements supporting business growth. In particular, a reduction on the headline rate of corporation tax to 24% from April this year. Further reductions are planned that will take the rate to 22% in 2014. Mr Osborne highlighted that Britain has moved into being one of the top ten places to do business globally and highlighted his intention to more than double annual exports to £1 trillion by 2020.

Some of the headline announcements affecting individuals include a hike in the personal allowance, a reduction in the top rate of tax from 50p to 45p, age-related allowances for pensioners being reduced or axed and a new stamp duty rate of 7% for properties worth over £2 million.

Over the coming weeks and months, updates and further information on budget proposals, including consultations, will be announced. We will keep you updated on any change in legislation which may affect you.

If you have any questions or queries arising from this budget, then please do not hesitate to contact us.

Tax overview

A key theme in this year’s Budget was the Government’s commitment to making a fairer, more efficient and simpler tax system. A number of wide-ranging reforms to the tax system were announced in addition to a clampdown on tax evasion.

The Government have accepted the recommendation of the Aaronsen Report that a General Anti-Avoidance Rule (GAAR) targeted at abusive schemes would improve the UK’s ability to tackle tax avoidance – a practice which Mr Osborne highlighted as being ‘morally repugnant’. These measures will reportedly increase Treasury revenues by £1bn.

Income Tax

Corporation Tax

Housing

Tax Credits and Benefits

Savings, Pensions and Investments

Business

• The introduction of a new cash basis for calculating tax for small businesses – the aim is to create a simpler tax system for smaller firms with a turnover of less than £77,000. Consultation will take place before the proposed implementation from April 2013.
• The Government will improve and reform the Enterprise Management Incentive Scheme (EMI), which helps SMEs recruit and retain talent, by providing additional support to help start-ups access the scheme.
• From 1 October 2012, VAT will be extended to close loopholes, including applying it to hairdressers’ chairs (to make clear that their rental is already subject to VAT), static holiday caravans (to bring in line with mobile caravans) and certain hot food (because most hot food is already subject to VAT).
• The introduction of an ‘above the line’ Research & Development tax credit from April 2013 with a minimum rate of 9.1 per cent before tax. Loss making companies will be able to claim a payable credit. The R&D incentives for small and medium sized companies will not be affected as part of this change.
• The Government has confirmed that the Asset Purchase Facility will remain in place for the Financial year 2012-13.
• There will be a consultation around simplifying the Carbon Reduction Commitment (CRC) energy efficiency scheme to reduce administrative burdens on business. The Government will bring forward proposals in Autumn 2012 to replace CRC revenues with an alternative environmental tax, and will engage with business before then to identify potential options.
• An internal review will be conducted to examine the role of employee ownership in supporting growth and will also examine options to remove barriers, including tax barriers, to its wider take-up.
• The Government is increasing the funds available to invest through the Business Finance Partnership to £1.2 billion.
• There will be a drive to expand the overseas role of UK Export Finance to enable it to develop finance packages that could help UK exporters secure opportunities identified through UK Trade and Investment’s High Value Opportunities programme.
• There will be a move to incentivise lenders to lend more to smaller businesses under the Enterprise Finance Guarantee (EFG) scheme, by raising the level of lenders’ EFG portfolios (to which the Government guarantee applies) from 13 per cent to 20 per cent.
• 84 per cent of health and safety regulation will be scrapped or improved, including legislating in 2012 so that ‘strict liability’ provisions in health and safety law will no longer hold employers to be in breach of their duties when they have done everything that is reasonably practicable and foreseeable to protect their employees.
• The Government will pilot the best way to introduce a programme of enterprise loans to help young people set up and grow their own business.
• Company car tax rates from 2014–15 to 2016–17 have been set out, including the removal of the diesel supplement in 2016. Changes have also been announced to the capital allowance regime for business cars.

Miscellaneous

• Vehicle excise duty (VED) rates will increase in line with the Retail Price Index (RPI) and rates for heavy goods vehicles will be frozen. The Government also aims to develop a direct debit system to allow motorists to spread their VED payments.
• The Debt Management Office will consult on the case for issuance of gilts with maturities significantly longer than those currently in issue (in excess of 50 years) and/or perpetual gilts. An initiative to manage Government debt over the long term, securing borrowing whilst interest rates are at record lows.
• The Government will extend the Capital Gains Tax regime to gains on disposals by non-resident non-natural persons of UK residential property and shares or interests in such property. This will commence from April 2013 following a consultation.
• There are no further changes to fuel and excise duty.
• Smokers to pay extra duty by 5% above inflation from 6pm on Wednesday, 21st March.
• Alcohol duty unchanged.
• The ten largest cities in the UK will receive funding for superfast broadband. There will also be investment for smaller cities to develop their broadband infrastructure.

Note: This document contains a summary of some of the main points covered in George Osborne’s recent Budget announcement. If you would like any further information on any aspect of this year’s Budget, please do not hesitate to get in touch.

It’s quite clear from Her Majesty’s Revenue and Customs that investors can transfer their ISAs from one manager to another whenever they want. They may in effect transfer their current year ISA subscriptions (and any related income) and/or all or part of their previous years ISA subscriptions (and any related income). There are two constraints – firstly, if the ISA contains current year subscriptions only the entire account must be transferred, and secondly subscriptions to a stocks and shares ISA can only be transferred to another stocks and shares ISA. However, subscriptions to a cash ISA can be transferred to another cash ISA, or to a stocks and shares ISA.

HMRC also tell us that where current year subscriptions are being transferred from a cash ISA to a stocks and shares ISA, the current year subscriptions are treated for all ISA purposes as if they had been made to the stocks and shares ISA. This means that the investor is regarded as never having subscribed to the cash ISA. Within the overall subscription limit, therefore, the investor may subscribe to a cash ISA later in the current year (with the same or a different provider) without breaching the one-ISA-of-each-type-a-tax-year rule.

The transfer procedures are guided by best practice recommendations from HMRC. When an ISA is transferred, the old ISA provider must give the new ISA provider a notice in writing containing information and a declaration.

HMRC has produced a range of model forms, available on-line for use by investors and managers, to enable the transfer processes. In simple terms, you as an investor should choose an ISA product (if helpful your financial adviser or accountant can advise on product suitability), then speak with the new provider and fill out a transfer form, which should contain a note you send to your existing provider. The new provider will contact your existing ISA provider, sorting out the transfer and preserving your existing ISA tax-free status.

There are two additional points to bear in mind – firstly what you certainly must not do, is withdraw your money from an existing cash ISA, in order to re-invest it yourself in a new ISA, as this breaks the ISA transfer link and you lose the tax benefit for that amount – let the approved transfer process take its course, for which there is a guideline of 15 days maximum for transfer completion. The second point to be aware of is that some ISAs still carry a penalty charge by your current provider for transferring out. Check for this – it should have been made clear to you when you purchased the ISA. As we approach the end of a financial year, now is a good time to check the interest rates on any existing cash ISAs you hold!

If you want to find out more, or need advice about managing your ISAs, contact one of the team who will be happy to help.

But for those house owners who bought their property before the mid-1990’s, the degree to which they are upset or suffering may be a lot to do with over-inflated expectations. According to Nationwide and Halifax BS figures, average house prices between 1995 and October 2007 almost quadrupled!

In reality, your house as an investment or nest-egg building vehicle is not so attractive as it was for the twenty-year period between 1998 and 2008. If you bought early then you have been very lucky and should be thankful that your property is now worth so much more, out-performing almost all other forms of investment.

Before the 1990’s, house prices in the UK did generally rise year-on-year, steadily and on average ahead of inflation, and everyone seemed comfortable with this state of affairs. Houses were largely bought and sold not simply to make profit, but because owners were choosing to move, up the property ladder or in employment.

Most house sales did release some equity and house buyers were usually able to buy the extras or do something special with a little extra, after a new mortgage on the purchased property had been negotiated. But in the twenty years up to October 2007, houses and house sales became much more part of an investment market with a new language – buying to invest; buying to sell; a good investment opportunity; buy to let, etc.

Commentators have variously described what happened to UK property prices in 2007 and 2008 as ‘a slump’; ‘the bubble bursting’; ‘the party coming to sticky end’; ‘the wheels coming off the wagon’. Whatever flowery language we use, the outcome was the same; prices tumbled as banks beat a hasty retreat from easy lending.

We could describe current house price forecasts as hesitantly optimistic, with a uniformly small percentage change hovering above or below the line of profitability. The Centre for Economics and Business Research (CEBR) has predicted house prices will rise by 15 per cent over the next five years, as a shortage of homes counteracts economic gloom.

However, if house price do rise 15% over that period, this would be an average of 2.8 per cent annually, a far slower rate than the 20 year ‘boom’ period to 2007.

Perhaps such forecasts will more sensibly return our expectations closer to a reality where houses are what we live our lives in, expecting our investment to be inflation-proof, rather than to be purchased and then sold on for substantial profit. The housing boom years made a lot of money for some of us, but have also contributed significantly to the difficulties faced by anyone trying to get on the property ladder as a first-time-buyer.

If you want to find out more or need advice about property purchase or sale, contact one of the team who will be happy to help.

This average summarises information about the ages at which people stop working – for men, the peak ages for leaving the labour market are 64 to 66 years. For women, the peak ages are 59 to 62 years. Thus, retirement peaks around State Pension Age (SPA) for both sexes. However, many people choose to retire before SPA, and others to work beyond it.

There are inequalities in life expectancy between social classes. The latest estimates for England and Wales show a gap of over three years in life expectancy at age 65 between the highest and lowest classes in the National Statistics Socio-economic Classification (NS-SEC). Within the UK, life expectancy at age 65 is highest in England and lowest in Scotland.

A related question is whether people will be able to enjoy their retirement in good health. In 2008, the latest year for which figures are available, UK men at age 65 had 9.9 years of healthy life expectancy within a total 17.6 year life expectancy, while UK women at age 65 had 11.5 years of healthy life expectancy within a 20.2 year total life expectancy. These figures are for the average person and do not take account of differences in socio-economic class or location.

It seems obvious that extended healthy life expectancy offers us the attraction of later life activity and enjoyment. However, this carries with it the need for us to commit to making the active pursuit of health and well-being part of that life. The way to use ONS statistics is to recognise that in giving us average figures, they set benchmarks for us, for example of healthy life expectancy. Our own attitude of mind and lifestyle should become one of determination to exceed the average, whilst of course, enjoying the process! Good news also is that other ONS statistics forecast the increasing numbers of us who will become happily working octogenarians and active centenarians!

If you want to find out more or need advice about managing a good financial life in retirement, contact your usual adviser who will be happy to help.