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How To Get The Best Remortgage Deals

fb - How To Get The Best Remortgage DealsIn the next twelve months an increase in the base rate of interest is highly likely. Rising house prices caused by the government’s Help To Buy scheme have reached levels that are causing alarm at the Bank of England and a rate rise is the only measure that can slow them down.

Home owners may be considering remortgaging in the coming year before rates rise, and this article is a quick guide to help borrowers think about how to get the best deals they can.

One motivation for getting a new mortgage is for locking in a low fixed rate for the next five years. The lowest APR (annual Percentage Rate) twelve months ago were at an astonishing low of 2.5 percent.

Deals like that are unlikely to come round again soon as interest rates eventually start to rise, but offers of under 3 percent are currently available.

Loan to Value

The rate you are offered will be based on the degree of risk your home loan presents to the lender, amongst other criteria.

Lenders calculate the degree of risk based on the size of the loan compared to the size of the mortgage.

If you are buying a £100,000 property and you can cover the first £50,000 yourself or with help from family members, you will need to borrow £50,000.

This means your Loan To Value (LTV) ratio is 0.5, and the closer the LTV is to one, the higher the risk and the rate of interest will rise accordingly.

Everything you can possibly do to bring the LTV down will help as it will make you more attractive to lenders, save you money in the long run, and put you on a much more stable financial footing in your new home.

The New Lending World

If you haven’t been to see a mortgage advisor in a few years, you’ll notice a big difference as the rules surrounding borrowing have become far stricter since April this year.

The horror stories of irresponsible lending before the 2008 crash, combined with the government’s massive help to home owners with Help To Buy have led regulators to impose stringent new borrowing rules.

Expect your mortgage advisor to want to see your entire financial history, bank records, confirmation of employment, savings, credit reports and more.

Pay off any outstanding debt, even if it’s just £50 on a store card, any black marks on your credit score could be potentially fatal when it comes to securing a lending decision.

Rates

In Britain there are, in general, three types of mortgage deal commonly available, and these are fixed rate, variable rate and tracker mortgages.

A fixed rate mortgage offers borrowers a degree of security, it means that if the base rate of interest rises in the future, the lender will continue to offer the rate that was set and that offer will typically run for five years. It is a way of future-proofing your mortgage against sudden and unexpected mortgage rises and typically most people choose them.

Variable rates have been popular in the last five years. Whereas fixed rates are ‘fixed’ at higher levels to enable the lender to get as much out of the deal as the borrower (arguably more), a variable rate simply responds to the Bank of England’s base rate of interest.

When the base rate is low your mortgage is cheap, and when the rate is high, it’s more expensive. Rates have been half of one percent for six years but this is likely to end soon, leaving many variable rate borrowers seeking fixed rates.

A tracker mortgage is similar to a variable rate mortgage, as it follows the base rate set by the Bank of England but at agreed set margin (perhaps one percent), meaning that a one percent rise in the base rate will not result in a three or four percent rise from your high street lender.

Financial Planning

If you’ve already got a mortgage and you are thinking about protecting your wealth against future changes in the economy it is important to see this as part of your long term financial strategy.

If you are unsure about what next steps to take with your remortgage or would like to speak to a financial advisor.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Financial Conversations Every Couple Should Have

fb - Financial Conversations Every Couple Should HaveIt can be hard to define the point when two people become a couple, planning to be together for the years to come.  When it does happen however it can be an appropriate time to make sure that all practicalities are addressed.  This means ensuring that you and your partner are aligned financially as well as emotionally.  Entering into a relationship means changing from thinking in terms of personal wealth to thinking in terms of family finance.  Here are five questions to get you started on these important conversations.

Do you have savings?

Before you start to align your finances, you both need to be honest to each other regarding the state your finances are currently in.  This means that both of you need to be clear about your financial assets such as savings and their financial liabilities.  You also need to be clear about your attitudes to money.  From this point on you’ll be working to a joint financial plan and it’s crucial that you’re both comfortable with it.  With this in mind, this may be a good point to get some professional advice from a financial advisor.

How would you describe your attitude towards investing?

There are a variety of different investments available and choosing the right one(s) for you depends on a number of factors including your goals, your anticipated time frames and your tolerance for risk.  If you’re to develop a financial plan with which you both feel comfortable, then you need to agree on an investment style with which you both feel comfortable.  You’re also going to have to reach an agreement on how to manage the practicalities of investing.  In other words, who is going to take responsibility for choosing investments and going through the process of buying them?  Even if one partner takes day-to-day responsibility for this, the other partner needs to be in touch with what is happening.  They also need to know where to find all relevant documents in the event of something happening to their partner.

What would happen if one of us died tomorrow?

There are basically two parts to this question:  Why do we need life insurance and if what needs to be in our wills?  The answers depend largely on circumstances. When property or children come around, for example, then making provision for the death of one half of the couple needs to be taken very seriously.  In addition to looking at loss of income from working partners, couples may also need to look at the cost of replacing everything each half of the couple does for free, e.g. providing childcare.  This can mean that life insurance is just as important for the non-working partner as it is for the working one.

What would happen if one of us became severely ill/had an accident tomorrow?

This is a fairly similar question to the one of death; however in this case you also need to think about the cost of providing care for the affected partner as well as (temporary) loss of income and their general input to the family.

What sort of retirement do we want to have?

Understanding how you want to spend your post-work years is the first step in working out how much money will be required to pay for them.  This is another area where is can be particularly helpful to get professional advice from a financial adviser.

THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED

 

Don’t Rely On Using The Sale Of Your Home To Fund Your Retirement

Blog 2014 (2)

As with any major reform to savings, pensions and investments, the recent government changes to annuities has been accompanied by a flurry of newspaper headlines, ranging from the alarming to the surreal.

Deciding how you will fund your retirement is one of the biggest financial decisions you will ever make and one that cannot be taken lightly, but often the information overload that happens courtesy of the media can leave savers feeling more uncertain than ever.

It is tempting in this situation to rely on a tried and trusted method of funding a retirement, the accumulation of equity in a property, but this might not be the safest and most effective way of paying for a retirement.

Using a property to pay for retirement is always gamble because savers have to make educated guesses on the robustness of the property market in the future when they eventually come to sell.

There might be scope for many people to profit if they act fast, sell up when property prices are high, and invest the equity.

The Bank of England’s Monetary Policy Committee may put up interest rates after the next general election and there is no guarantee that Help to Buy will continue in its present form, with some schemes encountering difficulties already.

So what other options might there be?

In the last year the pension market has undergone some radical changes and the options for savers and those who are due to benefit from their pensions have increased.

With the end of compulsory annuities on most pensions, savers have more flexibility to draw down a lump sum of their nest egg at retirement.

Paying off a mortgage or wiping out remaining debt in one go might be more cost effective solution for retirees than simply being tied to an annuity payment.

In September it was announced that pensions could become tax efficient savings funds, not just designed for paying an income later in life but also a way of passing on a pension pot to the next generation.

From April, depending on your age when you die, you may be able to leave your pension fund with no tax to pay on it (previously most inherited funds were taxed at an eye watering (previously it was taxed at an eye watering 55 percent).

It is not possible to leave an annuity policy in a will to a family member and as a result of the announced changes, annuities may become even less attractive as a means of managing ones pension income.

Some 12 million people in the UK in defined contribution pension schemes will be affected by the changes and they will be able to pass their pensions on without incurring penalties for inheritance tax if they are over the age of 75 when they decide to do so.

The government, with next year’s election in mind is looking to offer the electorate a reduction in the taxation burden on pensions and inheritance, and in this way they have given future retirees a lot more options.

If you are uncertain about how best to provide for you and your loved ones in the future, it might be an idea to seek some advice to give you an informed opinion on your possible choices.

To find out more about the options available, speak with a financial advisor.

 

 

 

 

 

How To Build A Nest Egg For Your Child’s Future

fb Building a nest eggWhatever your child wants to do when they’re older, preparing a nest egg for them can be a great help when the time comes for them to spread their wings and fly the nest. As an added bonus, showing your child how to manage the family finances in order to create personal wealth can be a valuable lesson in itself.

Start by making a financial plan

Securing your child’s future is so important that even the busiest people should strongly consider making time to get some high-quality financial advice from a professional financial adviser. There are many steps between birth and young adulthood and a number of decisions for parents to take along the way. In particular parents need to think about the benefits of spending money during their child’s younger years as opposed to investing it for their later ones.

Remember that time can turn pennies into pounds

Even if you can only put aside small amounts each month, it’s still worth doing so. Time will help those pennies grow into pounds. With this in mind, the earlier you start saving for your child, the longer time will have to work its magic. If, however, your child is already well on their way to growing up, then it’s still worth putting aside whatever you can for their future needs. Put quite simply, whatever savings and investments you can build for them, it’s going to be better than nothing.

Invest as much as you can afford

Roughly speaking most children will follow a similar path from birth to the end of compulsory education. During this period the key financial question is often whether a child will attend a private school or a state school. In either case the time the need to complete their core education is essentially the same. After core education is finished young people can choose to follow different paths depending on their interests and talents. These paths can broadly be defined as further education, professional training, employment or a gap year. Each of these paths has different financial implications. It’s worth considering, therefore, having as much money as possible available for them. Even if it is not needed, it may make a significant difference to their start in adult life. For example young people who find jobs may be able to get to them by public transport, but having their own transport can make life much easier.

Aim to invest regularly

Even when money is tight, try to look on investing for your child’s future as an integral part of managing the family finances. This may mean taking the decision to tighten other areas of spending in order to be able to plan ahead. Of course, it’s fine to top it up with extra funds from time to time. For example, family and friends could be encouraged to make donations at Christmas and birthdays instead of spending their full budget on presents. These should, however, ideally be extra funds rather than the bulk of them. Having said that, as always, even if you can only afford to set money aside from time to time, it’s still better than nothing.

Look out for the tax man

Children get the same personal income tax allowance as all people born after 5th April 1948. Under certain circumstances children can receive income from children’s savings accounts (which are different to Junior ISAs) without paying any tax on the interest. For this to happen, their parents need to fill in an R85 form. Junior ISAs, meanwhile, work in much the same way as their adult counterparts. It should however be noted that as soon as the child reaches 18, the full ISA will immediately become their legal property to use as they wish. Parents with concerns about how their child will react when suddenly handed a large sum of money may need to look for other ways to prepare for their future. This may be a good time to get some unbiased financial advice from a professional financial adviser.

Tax bands http://www.hmrc.gov.uk/rates/it.htm

Tax on saving’s interest http://www.hmrc.gov.uk/taxon/bank.htm

Rules on interest on children’s savings from funds given by parents http://www.hmrc.gov.uk/manuals/saimmanual/saim2430.htm

ISAs/Junior ISAS http://www.hmrc.gov.uk/taxon/savings.htm

Stay On Top Of Your Money In Just A Few Minutes Everyday

blog-1-1-2For people who lead busy lives, managing the family finances may be just one of many important jobs to do. Fortunately taking care of your personal wealth can take less time than you might think. Here’s a quick guide to what you need to do and how often.

Once a year – review your goals and your progress towards them

All of your financial decisions should help to bring you closer to your financial goals. In order for this to happen, you need to be clear about what they are. Like many aspects of life, financial goals can change through time. For young adults their major goal may be to buy a house, whereas for older adults it may be investing strategically to finance a comfortable retirement. In between there may well be children to raise and provide for. This annual review can also be a good time to get some unbiased financial advice from a professional financial adviser.

Once a quarter – make sure everyone is on the same page financially

In households where more than one person is financially responsible it’s important to make sure that the people in question stay on the same financial page. In an ideal world, people would take all financial decisions together. In the real world however, time pressures can make this impractical. Sometimes families need to divide financial tasks. This may be done equally or with one person taking most of the day-to-day responsibilities. In this situation people can drift apart, financially speaking, which can lead to problems later down the line. To prevent this from happening it’s important that all the people concerned have regular catch-ups.

Once a month – go over all financial statements from that month

Financial statements give you the reality of your financial situation. If you’ve kept on top of your finances then you’ll already have a pretty good idea of what they ought to say. You should, however, check them thoroughly to make sure of this. In particular take the time to investigate any transactions on your debit or credit card that you don’t immediately recognise. They may just be something you’d forgotten, but they may also be a sign that fraudsters are testing your card. This is also a good time to look out for any recurring transactions and decide if there are savings to be made. For example if you see three months’ worth of gym fees on your card but you’ve only managed to find the time to go a couple of times then is it really worth the cost? Finally, take a good look over your shopping receipts for the last month and see if there are any unnecessary expenses you could trim.

Once a week – tidy up your financial paperwork

These days paperwork is as likely to mean digital records as it is actual paper ones, but in either case financial records can only be any use if you can actually find them. Decide whether you are going to use paper records, digital records or both. Whichever you choose take some time out once a week to decide what you need to keep and what you don’t. Anything you keep needs to be stored in a safe place and organised in a methodical way. While you can use your own preferred system remember that if anything happens to you, even temporarily, someone else may need to take over. Anything you don’t keep needs to be checked for personal details and if necessary shredded before being recycled.

Once a day – keep track of your spending

It’s generally easier to see an elephant than a mouse. Similarly it’s often easier to remember big purchases like a weekly grocery shop than it is to remember all the little items. Fortunately smartphones and their cameras have made it much easier to stay on top of daily spending. Implement a straightforward rule that each and every purchase needs to be tracked. If you are given a receipt, photograph it. If you don’t get a receipt, photograph the item itself. At the end of each day, store these photos in a safe place to be reviewed later.

How To Be A Happy Working Parent

working parent blog imageParents are the people who have photos in their wallets instead of cash. It’s an old joke but it often still gets at least a wry smile. No matter how much dads (and mums) might like the idea of being full-time parents, the reality is that bills still need to be paid and for most people that means at least one parent working. Fortunately there are ways to make this a generally happy experience.

Assess your employer

Beer and pizza on Fridays and a company games console may seem like great perks before you have children but after you have them childcare vouchers and company discounts at useful shops may seem more appealing. It may be that your employer does actually offer family-friendly benefits and you just never noticed them in your pre-child days. If they don’t then you could try having a conversation with your manager or HR to see if there is any appetite to introduce them. If there isn’t then there may be nothing to stop you looking for another employer who is better able to accommodate your family commitments.

Get on top of your finances

The arrival of a demanding newborn can overwhelm everything else in your life, but part of keeping that little baby happy, healthy, and safe is making sure that their financial needs are met for at least the next 16 years. If they go on to further education, then you can add another 5 or 6 years on to that.

Remember that not everything needs to be new

Making savings wherever you reasonably can reduces the demands on your income which may, in turn, give you greater flexibility in terms of your employment choices. While newspapers, magazines, the radio and the TV may all carry adverts aimed at convincing you that your baby needs the brand new product they are selling, it’s worth remembering that new items come at a premium because they are new. In some cases this may be justified. For example parents may feel much more comfortable knowing that safety equipment is brand new (and possibly under guarantee). In other cases, however, second hand may be just fine, particularly in the very early days when babies are growing at an incredible rate. Likewise opting for reusable items rather than disposable ones (nappies for example) can also help to save pennies and ultimately pounds. These savings can then be channelled into other activities such as investing for your child’s future or enjoying quality time with them in the present.

Keep on networking

Young children make huge demands on time as well as on money and it can be very easy to slip into the habit of working to pay the bills and then going home to be with the new family. While watching them grow up is one of the joys of parenthood, it’s worth remembering how much value there is in human networks, both professional and social. Take time to ensure that you still stay connected both to your friends and to your colleagues and wider professional circle. Even if you can’t get out to meet them in person as much as you’d like, or even not at all in the short term, make time to get online and catch up with people in cyberspace.

How To Turn Money Into Happiness

money to happinessAs the Beatles pointed out in their 1964 hit “Can’t buy me love”, there are some things money can’t buy, at least not directly. Money can, however, influence happiness – if used wisely. Here are some tips on how using your personal wealth wisely can help to make you happier.

Health

Money can’t buy good health, but it can be used in a variety of ways to maintain it or improve it. At a fundamental level, money can buy a good diet full of healthy, fresh foods. It can also buy exercise equipment. Being able to manage the family finances so that there is money available for day-to-day bills and savings available to cope with unexpected events can also save a lot of stress, which could arguably come under the heading of a health benefit. Money can assist with quality health-care. It can provide the option to pay for quick access to private treatment rather than having to queue on an NHS waiting list. It can also help ease any convalescence period by providing funds to pay for helpful equipment (such as mobility scooters) or personal assistance.

Education and development – investing in yourself

Money can buy you opportunities and experiences which can enhance your professional options. While employers will pay for mandatory training and may assist with training which has a clear relevance to your current career path, quite simply the more money you have at your disposal, the wider your range of options. You can choose to undertake personal study to further your goals or you can choose to do something else completely. Perhaps you might like to have the security of knowing that you have an alternative means of earning an income if you find yourself between jobs in your main career. Perhaps you have dreams of turning a hobby into a business. Perhaps you just want to do something different. In any case, having money can make this possible.

Getting the right advice and skills

Money can buy other people’s time, knowledge, and expertise to make your life easier. Whether it’s getting someone in to clean the house and mow the lawn instead of doing it yourself, or going to a professional adviser for financial advice, spending money on getting the right people with the right skills can save you time and hassle. That frees up time and energy for other activities, which can bring you a whole lot more happiness. Instead of washing the dishes, use money to buy a dishwasher and spend some extra time doing something you enjoy. Instead of spending all day in the garden doing basic tasks like mowing and weeding, get someone else to do them and focus on the tasks you actually enjoy. Instead of spending time and effort to try to work out the best way to manage your money on your own, get help from a professional adviser who can provide financial advice and take some time out with your friends.

4 Simple Steps to Make Better Financial Decisions Today

4 Simple Steps Blog ImageLife is full of decisions. Some are simple and some are complex. Some are more important than others. Financial decisions have a direct impact on your quality of life. It therefore pays to get them right in every sense of the phrase.

Here are 4 tips you can use to improve your financial decision-making. Starting today.

 

Think about who you are and what your goals are

It may be a cliché to say that everyone’s an individual, but it’s also true and this individuality is reflected in the decisions we take. As well as preferences based on our personality, age also plays a role in our financial decision-making. As children our goal may simply be to save up enough money to afford a special toy. As young adults we our immediate goal may be a deposit on a flat. As we grow into maturity, caring for children and planning for retirement may become more important priorities. In order to make effective decisions, financial or otherwise, we need to understand what our aims are and whether they are short, medium or long-term goals.

Don’t sweat the small stuff – but don’t ignore it either

On the one hand, the old saying “Look after the pennies and the pounds will look after themselves” has stood the test of time because it makes a fair point. Small costs here and there can slip by unnoticed until they turn into a surprisingly large amount. On the other hand, many people lead busy lives and would find it a huge challenge to keep track of every penny they spend and on what, let alone take the time to analyse whether each and every individual purchase was the best possible deal. This is where a little common-sense can go a long way.

You don’t need to do your shopping at 4 different supermarkets to get the absolute best price on everything. It can, however, help to keep tabs on your day-to-day spending and think about where you could trim fat without too much inconvenience. For example, the savings you can make by taking a refillable bottle of water on the train to work as opposed to buying a bottle of water at the station can soon mount up and give a pleasant boost to the family finance.

Your personal wealth is your responsibility

Once you are an adult then you are responsible for your own health, wealth and happiness. This may seem like an intimidating prospect, but it can help to break it down into manageable chunks. You can create a budget so that you have more money than month. You can make notes of when financial purchases are due for renewal (anything from mobile contracts to insurance to mortgage deals ending) and find the time to look for the best deals; at least for the significant purchases. You can plan to ensure that there are funds in place to meet medium to long-term needs, whether it’s replacing big-ticket household items or funding a pleasant retirement.

Getting the right financial advice can more than pay for itself

Just because something is your responsibility, it doesn’t mean that you have to do everything single-handedly. Looking through the financial sections of the press can be a confusing and even intimidating experience for some people. Mortgage approvals, interest rates, market developments, mergers and acquisitions… -it can be a challenge to make sense of what it all actually means. Then of course there are conversations with family, friends and colleagues, some of whom may have their own advice to offer. It may be well intentioned but there’s no guarantee that it’s right for your situation. Fortunately a professional financial adviser can help cut through the headlines and jargon and tips from friends and help you to build your own plan for investing in your future. This advice can be, literally, invaluable.

Financial Tips For Debt-Burdened Graduates

Debt-Burdened Graduates Blog ImageThe late, great, Rik Mayall and his fellow Young Ones lived in a very different era from modern students.  While the trials and tribulations of house sharing may ring familiar bells, the financial landscape facing the modern student is very different to that of their 1980s counterparts, fictional or otherwise.  With universities opening their doors to new and returning students alike in the next few weeks, let’s look at the steps recent graduates can take to find their financial feet.

Understand that you are now your own family and in charge of the family finance

While parents and family will always be there for you, as a graduate you’re now a fully-fledged adult and now in charge of your own future, with all that implies.  Hopefully you will have had the opportunity to learn healthy financial habits such as budgeting, if not then the sooner you start to acquire them, the better it will be for you in the long run.

Try living like a student for a while even when you’re working

Landing your first decent job is arguably one of life’s best milestones.  Those who’ve struggled financially to get through university could well feel justified in treating themselves a bit more generously now that they finally have a regular salary. This is perfectly understandable, but also try to keep a longer-term perspective in mind.  If you can stick to living like a student for a while, you can free up your salary for other purposes, whether this is paying down debt or saving up for a deposit on a house.

Build an emergency savings pot as quickly as you can (even if you have debt)

This may seem like a topsy-turvy piece of advice, but it’s aimed at stopping you from getting (further) into debt.  No matter how great you are at planning ahead, life can always throw something unexpected your way and that something could just as easily be a great opportunity as a problem.  In either case having ready access to funds can save you a lot of hassle when life’s slings and arrows hit you.

Make sure that you are on the electoral roll

Credit checks are a fact of life these days and one of the key points of passing them is being on the electoral roll.  If you’re still sorting out your accommodation options or working in an environment where it may not be feasible to register to vote at your main accommodation (such as in a hotel or holiday park), then it is much better to be registered at your parents’ address (or the address of another family member) than not to be registered at all.

Keep on learning

If you’re a recent graduate then the chances are you have many years ahead of you and that you will see many changes during those years.  To keep yourself employable until you are ready to retire (if you choose to retire), remember to invest time and money in yourself.  Keep your skills up-to-date and work on maintaining and building your social and professional networks.  Your graduation is a huge step in your education, but it is far from over.

http://www.experian.co.uk/consumer/credit-education/electoral-roll.html

Life Insurance – A Simple Way To Save An Inheritance

Simple Inheritance Blog ImageWould you rather leave your worldly goods to your loved ones (or your favourite charity) or the tax man?

Inheritance tax has long been the subject of heated debate, but the chances of it being repealed any time soon, is very remote.  So for most people, the choice of creating a financial plan to deal with it or leave your loved ones to foot the bill is pretty important.

Inheritance Tax Is A Growing Concern

Under current rules transfers of assets between spouses and civil partners are (usually) ignored for the purposes of any tax, including inheritance tax.  Each individual can leave an estate of up to £325K to any other individual or organization before Inheritance Tax becomes payable.

Inheritance Tax is levied at a flat rate of 40% (with a reduction of 4% where the deceased has left at least 10% of their assets to charity).

Any unused portion of this allowance can be transferred to the surviving spouse/civil partner as a percentage.  For example £162.5K would be transferred as an allowance of 50% extra.  This means that the surviving spouse/partner would be able to leave a tax-free estate consisting of their own personal allowance plus an extra 50%.

Looking at these figures and comparing them with house prices, it’s easy to see that many home owners could find their estate subject to inheritance tax.

Inheritance Tax Must Be Paid Before The Estate Is Released

Upon a person’s death, their executor must inform the Inland Revenue of the value of that person’s estate.  They will then receive a formal notification of how much tax is due.  In general, this must be paid within 6 months of the deceased’s death.  If it is not the Inland Revenue will charge interest on the outstanding balance.  Although the payment can be made out of the deceased’s estate, it must be made before the bulk of the estate is released.

There is an exception for funeral expenses, although the bank or building society must agree to allow the executor access to the account.  If they do not, these can be recouped from the estate and can be deducted from its value for tax purposes.  Added together this can all mean that families who have worked hard at money management to put their family finances in good order can find themselves under tremendous financial pressure at a time when they are likely to be feeling highly emotional.

Planning ahead with the help of a financial adviser can help to minimize the stress of dealing with a bereavement.

Life Insurance Can Be A Lifeline

Life insurance can be a very efficient way to ensure that there are funds readily available to cover Inheritance Tax and funeral expenses.   Rather than naming an individual as a beneficiary of the policy, the holder can request that the eventual payout be made into a trust, held on behalf of your preferred beneficiaries.

In this way, the funds will be kept separate from your estate and can be released immediately (and relatively simply).  This can also help to ensure that a surviving partner and/or children have sufficient funds to live comfortably while probate is being undertaken.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.