Quarter 4 2015 | Issue 1 Client Newsletter

Client Newsletter
October 2015 | Issue 1
Welcome to the first issue
New Look
In recent months we have been reviewing our
branding and communications and in line with
this we have launched our new website at
www.wealthdesign.co.uk.
Please have a look when you get chance. It
was awarded our web designers’ website of
the week!
Testimonials
Choosing the right adviser to work with is an
important decision and testimonials play a crucial
role in making that decision. If you are happy to
share a testimonial, by emailing a couple of lines
about your experience of working with Wealth
Design, we would be absolutely delighted to hear
from you.
Tailored to you
To send us your testimonials or let us know
your preferred communication type please
email Kiran at Kiran@wealthdesign.co.uk
Telephone: 01543 571238 | Email: info@wealthdesign.co.uk
Wealth Design Limited
Lagonda Suite | Virage Point | Green Lane | Cannock | WS11 0NH
Wealth Design Limited is Authorised and Regulated by the Financial Conduct Authority.
The Financial Conduct Authority (FCA) regulates the financial conduct industry in the UK and their address is 25 The North Colonnade, Canary Wharf, London, E14 5HS.

Pension Freedoms …. ‘The story so far’
The April introduction of ‘Pensions Freedom’ has been
and gone. How many new Lamborghini’s have you
seen? We haven’t seen many either!
The hype in April was that millions, if not billions of
pounds was to be released from people’s pensions
and people would go on huge spending sprees. The
popular press reports that the release of funds from
pensions has been ‘significant’ but there is no sense
that all caution has been thrown to the wind.
In our experience clients are being very cautious with
their money, curious about what their new options
are but sensibly biding their time and not ‘going mad’.
Thinking about having a spending spree is one thing
but doing it is another.
What differences have we seen since April?
Final Salary Schemes
Low Gilt Yields have seen high transfer values and many
clients have taken their option to obtain a transfer
value and review their options. Few advisers have the
Regulatory Permissions to advice in this area and so
as we do have such Permissions we have found more
clients looking at what a transfer away from the scheme
means for them. For many it is still not in their best
interests but for others, where personal circumstances
dictate otherwise, it has been a good time to look to
take a transfer.
Don’t forget to ask your Financial Adviser if he is
qualified in this area.
Money Purchase Pensions
Our largest amount of activity is still in this area and
typical areas where we are providing valuable advice
are:
• Looking at ‘collections of pensions’ and seeing
whether there is a costs advantage to consolidating
plans into one arrangement? As well as costs
savings there can be benefits in coordinating an
investment plan, controlling risk and also being
simpler to monitor and administer. People with
several pensions from different phases of their life
is not unusual nowadays. Have you had someone
review your ‘collection of plans’?
• ‘Nomination of Beneficiaries’. One of the later but
more significant pension changes revolve around
benefits on death. It is crucial that all clients review
their nomination wishes and include all those who
they wish to be a class of beneficiary. If death
occurs under the age of 75 years then benefits can
be passed onto nominated beneficiaries tax-free
and so this simple change can save thousands in
taxation and also ensure that those you care about
receive what you want them to receive. Has your
adviser proactively contacted you on this matter?
• Reviewing Investments. Although it is fairly obvious
it has to be emphasised that pensions grow from
the contributions that are made but also from
growth on the accumulated assets. Reviewing
those assets is something that many people have
not done for years and it is holding back the growth
potential on many people’s pension arrangements.
At Wealth Design we pride ourselves on
investigating your risk appetite, your capacity for
loss and then putting together an appropriate
investment profile that can be managed on a proactive
basis with regular reporting to you. Clients
never cease to be surprised at the differences that
can be made in this regard to their pensions and
so we urge people not to leave it too late. Good
management of assets not only makes the most
of rising markets but also protects assets in more
difficult market times. When did you have your
pension investments reviewed?
You should discern from the above that a quality
Independent Financial Adviser should make a positive
difference to your pension planning by:
• Making your pension arrangements as costefficient
and easy to manage as possible
• Ensure your ‘Nomination of Beneficiaries’ is up-todate
and efficiently written to mitigate tax
• Your investments are appropriate to your plans
and risk profile and that they are regularly
reviewed
With our initial meeting funded at our cost you have
nothing to lose by sitting down with us and reviewing
your position. Don’t delay book your meeting today
and contact Wealth Design for a no obligation review.
David W Philips, DipPFS, Director of Wealth Design
Telephone: 01543 571238 | Email: info@wealthdesign.co.uk
Wealth Design Limited
Lagonda Suite | Virage Point | Green Lane | Cannock | WS11 0NH
Wealth Design Limited is Authorised and Regulated by the Financial Conduct Authority.
The Financial Conduct Authority (FCA) regulates the financial conduct industry in the UK and their address is 25 The North Colonnade, Canary Wharf, London, E14 5HS.

The Implications of the Summer Budget –
Income Tax
2015 has been a year of Budgets. Mr Osborne’s July
performance certainly had its fair share of postelection
surprises, one of which was on income tax, as
we explain here.
In the first 2015 Budget Mr Osborne said that the
personal allowance would increase to £10,800 for next
tax year (2016/17) and to £11,000 for 2017/18 and in
July he added another £200 to both figures, so that
next year’s personal allowance will be £11,000 and
2017/18’s, £11,200.
The basic rate tax band was also given a small boost
over the March announcement levels: both the 2016/17
and 2017/18 basic rate bands had another £100 added
to them. The end result is that by 2017/18 the higher
rate tax threshold will be £43,600.
The big Budget surprise was a revision to the tax
treatment of dividends, which will take effect from 6
April 2016. From next tax year every taxpayer will be
entitled to a £5,000 dividend allowance: you will pay
no tax on the first £5,000 of dividends you receive,
regardless of your marginal tax rate. Thereafter the
tax charged on your dividends is 7.5% higher than
currently applies.
Over a million people will see their tax cut. However,
there will be losers from the changes – the Exchequer
will gain about £2bn a year overall in the longer term.
You could be one of those unfortunate extra tax
contributors if:
• You have a substantial investment portfolio,
producing dividends of more than:
• £5,000 if you are a basic rate taxpayer; or
• £21,667 if you are a higher rate taxpayer; or
• £25,250 if you are an additional rate taxpayer.
• You are a private company shareholder/director
who draws your income mainly as dividends rather
than salary and/or bonuses, thereby avoiding
National Insurance contributions.
It is clearly the latter category the Chancellor had
in his sights as the Budget background paperwork
made reference to the dividend changes reducing “tax
motivated incorporation”.
ACTION
The second Budget of 2015 was a radical Budget which
alters – and even reverses – some tax planning strategies.
Although many of the changes will not take effect until
April 2016 or later, now is the time to start planning. If
you believe you could be affected by any of the changes
made to income tax, as explained above, or to inheritance
tax, pensions, buy-to-let, venture capital trusts (VCTs),
enterprise investment schemes (EISs) or business taxes,
the sooner you talk to us the better. And if you think you
are unaffected, you probably need to think again…
Telephone: 01543 571238 | Email: info@wealthdesign.co.uk
Wealth Design Limited
Lagonda Suite | Virage Point | Green Lane | Cannock | WS11 0NH
Wealth Design Limited is Authorised and Regulated by the Financial Conduct Authority.
The Financial Conduct Authority (FCA) regulates the financial conduct industry in the UK and their address is 25 The North Colonnade, Canary Wharf, London, E14 5HS.
You can check this on the FCA’s Register by visiting the FCA’s website www.fca.org.uk/registerFCA No. 647119 or by contacting the FCA on 0845 606 1234.

Long-Term Care:
More Long Grass
The subject of long-term care has been one which
politicians of all parties have regularly kicked into the
long grass, primarily because of the potential costs of
changing the existing system. There are different rules
for the four different parts of the UK, with Scotland’s
currently the most generous and England’s the most
costly because of the size of its population.
The English System - The current rules for England
mean that anybody with capital of more than £23,250
must meet all their own care fees, although they may
be entitled to a £112 a week payment towards nursing
care costs. From April next year, under the Care Act
2014 the most significant change that was due was a
lifetime personal cost cap of £72,000 and a new upper
means test limit of £118,000. However…
A Friday in July - In mid-July the Minister of State for
Community and Social Care wrote to the Chair of the
Local Government Association to say that both new
limits would be put on hold until 2020.
ACTION - This latest deferral is another reminder of
the importance of including potential care costs in
your retirement planning and not relying upon the
government. If you want to consider your options – or
those of an ageing parent – please contact us.
Deposit Protection Cut
The level of protection for bank and building society
deposits has been cut by £10,000 to £75,000, although
for existing deposits the change will not take effect
until the start of next year.
Blame the EU - The reason for the cut is down to the
European Deposit Guarantee Schemes Directive. This
Directive states that every five years non-Eurozone
countries have to recalculate their minimum deposit
protection limit, setting it at the equivalent in their
domestic currency of €100,000, subject to a limited
amount of rounding. The pound has strengthened
against the euro since the limit was last set in mid-2010,
which is good news for Mediterranean holidaymakers,
but bad news for depositors, already suffering over
half a decade of ultra-low interest rates.
Temporary high balances - At the same time as
announcing the cut, the Bank of England introduced
a new £1 million, six month protection level for
‘temporary high balances’. This is designed to cover
circumstances where an account is temporarily holding
a large payment, e.g. an inheritance, pending future
investment or expenditure. There is a specified list of
events covered, including redundancy and divorce.
ACTION - If you have more than £75,000 with one bank
(£150,000 for joint accounts), then you may want to
consider opening an account with a different bank to
retain your deposit protection. Remember different
institutions may count as one bank for deposit
protection purposes if they share a common banking
license (e.g. Halifax and Bank of Scotland). Even though
interest rates look set to start rising slowly in 2016,
holding large sums on deposit may be unwise. Before
going through the money-laundering hoops of opening
a new deposit account, make sure you discuss your
other options with us.
Telephone: 01543 571238 | Email: info@wealthdesign.co.uk
Wealth Design Limited
Lagonda Suite | Virage Point | Green Lane | Cannock | WS11 0NH
Wealth Design Limited is Authorised and Regulated by the Financial Conduct Authority.
The Financial Conduct Authority (FCA) regulates the financial conduct industry in the UK and their address is 25 The North Colonnade, Canary Wharf, London, E14 5HS.
You can check this on the FCA’s Register by visiting the FCA’s website www.fca.org.uk/registerFCA No. 647119 or by contacting the FCA on 0845 606 1234.