Archive | October, 2012

Protect Your Portfolio From Inflation

29 Oct

Why invest? Market volatility means there is an inherent risk that capital value may drop and the returns achieved may not match our expectations. The answer is INFLATION. How else can we inflation proof the value of our money?

I have no other answer to this life-long question – so the question becomes, how do we protect against dire volatility while maintaining the true value of money?

Many great statistical minds have tried and all have failed to effectively predict volatility and inflation with any consistency. I believe that it is easier and more appropriate to weatherproof a portfolio against the potential situations.

The case for high inflation goes something along these lines: paper money, not backed by any physical store of value, effectively only derives its worth from the goods and services you are able to exchange it for. By printing lots of it, as we have (such as, through quantitative easing [QE]), without a corresponding increase in the number of things you are able to spend it on – its value decreases.

So, if twice as much money can only be used to buy the same amount of stuff, then it must be worth half as much. It is debatable how much money has to be printed before there is any noticeable drop in value; especially since the extra currency gets recycled many times through the banking system, where its impact could be multiplied massively. The worst-case scenario is that there has already been too much extra cash printed and the effects are slowly gathering momentum.

Additionally, there is the fear that by becoming the lender of last resort to governments, notably in the US and UK and more recently the ECB, central banks will be unable to take corrective action without effectively bankrupting their home nations.

High inflation erodes the real value of your portfolio, and this needs to be protected against. One obvious starting point is inflation-linked bonds. The income on these bonds is indexed to the rate of inflation. While this will prevent a fall in the real value of income received, it could still leave you exposed to falling real capital values. A fairly consistent defence against moderately high inflation has been equities. It makes sense to match up markets to currencies; if you are concerned about UK inflation then UK equities are a good choice. They protect both income levels and capital value. Shareholders will always demand a real return, forcing businesses to pay out higher dividend rates to attract investors. At the same time, the higher rates will attract investors seeking income protection who would otherwise be in low -yielding assets such as cash.

If you are a bit more extreme in outlook, with a sizeable number of people predicting the end of the fiat money system altogether, then it is best to hold physical assets. Gold is the favourite of inflation conspiracy theorists and its record price shows the extent of the fear of high inflation. As a homogenous, globally traded commodity, its value tends to increase any time the threat of inflation rises anywhere in the world. The difficulty with investing in gold is that unless you physically have it in your hand, you are just as exposed to the system of interconnected promissory notes as you are with equities or any other paper asset.

Raw materials such as oil, food and other industrial metals and minerals are likewise relatively good bets in a high-inflation environment. These physical assets can not be debased by simply conjuring more up and as they will always be in demand, their value is reasonably assured. Again, it is quite hard to stockpile barrels of crude oil or frozen orange juice concentrate, but if you are looking for security you want as little separation from the physical items as possible. A focused fund can also be a useful addition to a portfolio. It is important to remember that inflation is a risk that is actively managed by most fund managers as part of their standard investment process.

A well-diversified portfolio, not just across asset classes but taking in a good spread of strategies and outlooks will likely cover you from the most likely inflation scenarios.

Good financial health – The WelshMoneyWiz

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Personalised Portfolio Bond – Be Aware Of The Issues

18 Oct

Investment Bonds have formed part of many investment strategies and the tax wrapper purchased by many – care is needed. In recent years there has been an explosion in the number of off-shore bonds and based on assets owned or the contract terms these may be defined as a Personalised Portfolio Bond (PPB), which is taxed differently.

Beware – for a UK resident – taxed in the UK individuals the tax is payable each year based on yearly deemed gain and the cumulative gains – so not just the yearly actual gains – assessed and taxed at your personal rate of income tax.

Personal Portfolio Bond Legislation
The PPB legislation is an anti-avoidance measure which imposes a yearly deemed gain on life assurance and capital redemption policies where the property that determines the benefits is able to be selected by the policyholder.

The deemed gain is subject to income tax where the policyholder is UK tax resident. The legislation can be found in Income Tax, Trading and other Income Act (ITTOIA) 2005 Sections 515 to 526. The PPB legislation applies for policy years ending on or after 6 April 2000 and the tax year 2000-2001 is the first for which a PPB gain can arise.

Personal Portfolio Bond Tax Charge
Where a policy is regarded as a PPB then the PPB legislation imposes a tax charge on an artificial deemed gain on the policy for policyholders who are UK resident individuals, UK resident settlors or UK resident trustees (where the settlor is not UK resident or has died).

The tax charge based on the PPB deemed gain is payable yearly for UK resident policyholders. The PPB deemed gain is calculated at the end of each policy year while the policy is in force. It does not apply on surrender, death or maturity, but previous amounts are taken into consideration as shown in the example below.

How is it Calculated and Applied?
The PPB deemed gain is not based on actual gains. The PPB deemed gain assumes a gain of 15% of the premium and the cumulative gains for each year the policy has been in force. The tax charge on the PPB deemed gain will be the highest rate of tax paid by the investor. Top slicing relief is not available.

What Policy Assets Are Permitted Under the Personal Portfolio Bond Rules?

  • property appropriated by the insurer to an internal linked fund
  • units in an authorised unit trust
  • shares in an approved investment trust
  • shares in an open-ended investment company
  • cash*
  • life policy, life annuity or capital redemption policy, unless excluded (see below1)
  • an interest in non-UK collective investment schemes (not closed-ended funds)
  • Cash includes sums in bank or building society accounts, but not cash that is acquired in order to realise a gain on its disposal.

A life policy, life annuity or capital redemption policy is ‘excluded’ if:

  • the policy or contract is itself a personal portfolio bond; or
  • the value of any benefits under the policy or contract is determinable

directly or indirectly by reference to a personal portfolio bond;

or

  • a personal portfolio bond is property related to the policy or contract.

Some examples of policy assets which are not permitted under the PPB rules :-

  • Any stocks and shares not listed on a recognised stock exchange,
  • Loan Notes linked to the value of an index or a security which are not themselves collective investment schemes,
  • Private company shares,
  • Non UK closed ended funds,
  • Cash held with the intention of currency speculation.

Returning to the UK with a Personal Portfolio Bond
The test of whether a policy is a PPB is an ongoing test. If a policy was originally a PPB but its terms were varied so that it ceased to be a PPB then the PPB tax charge will not arise.

The yearly PPB deemed gain only arises if a policy or contract is a PPB on the last day of the related policy year.

The following options are available:

  1. Do nothing. In which case the tax charge for a PPB deemed gain will apply.
  2. Request the product provider to endorse the policy and therefore restricting the assets to permissible assets only.

Will there be any changes to the assets that are allowed?
Since the PPB rules have been in force, the only changes to the investments have been an extension to the list of assets which are not permitted assets. Once the policy is endorsed, should any assets at a future date cease to be permitted they will have to be disposed of at the first reasonable opportunity.

Cash Holdings – must not be for the purpose of currency speculation. Any cash held in the policy which arises as a result of buying and selling investments (essentially a transaction account), and which is in the currency of the policy is permitted. In addition a bank or building society deposit account in the currency of the policy is permitted as well as a number of others.

Closed Ended Funds
With closed-ended funds, only shares in UK FSA authorised investment trusts are permitted. The Financial Services and Markets Act 2000 states that closed-ended vehicles are not collective investment schemes. Therefore non-UK closed-ended funds cannot fall within the permitted assets. Shares in a non-UK company may not be classed as an OEIC under the Financial Services and Markets Act 2000 and therefore may not be permitted assets. Clarification should be sought on each asset.

It is essential that policyholders inform their fund adviser of their decision regarding endorsing their policy, and restricting what assets they can invest in. It is the policyholders responsibility, along with the fund adviser to monitor your investment selection. The product provider/insurance company are not responsible for this, nor are they obliged to pass on to the policyholder or fund adviser information relating to your selected funds.

What happens if a fund adviser accidentally acquires non permitted assets for a client’s policy?
This is a risk, which is why it is important that a fund adviser knows about the restrictions. It would clearly be an action which would breach the terms of the endorsed policy and that breach must be remedied. It is probable that it would be necessary to discuss the matter in full with HM Revenue & Customs.

Points to consider if assets need to be sold
If assets have to be disposed of to allow a policy to be endorsed, policyholders need to consider the cost of the PPB tax charge against the current market value of the assets and possible future growth.

Consideration also needs to be given to assets with restricted dealing days, ensuring there is sufficient time for receipt of the endorsement request and time to sell the assets and endorse the policy before expiry of
the time limit.

What happens if a policy is not endorsed before the time limit expires?
The tax charge for the PPB deemed gain will apply. The charge is assessed on the day before the policy anniversary each year. The charge will cease to apply for the policy year ending after the policy has been endorsed.

Action checklist

  1. The policyholder should discuss their options with their financial adviser or fund adviser.
  2. Decide whether or not to endorse the policies to avoid the tax charge or continue with it unchanged.

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Assessing The S&P 500 Performance – The Highs & The Lows

12 Oct

What a Difference Five Years Makes – 10 Years Makes – 15 Years Makes

With this week marking the five-year anniversary of the stock market’s record high, much of the attention will and has been devoted to the market’s steep drop and sharp rebound. The chart below shows, the S&P 500 has been swinging in a wide range for the last 15 years. The pattern has been quite extreme – doubling and then falling by half over and over again.

Five years ago, the S&P 500 closed at a peak of 1,565.15.  Since then the index has seen a huge decline followed by a huge rally.  After all those swings, the S&P 500 has declined 7.9% over the last five years (annualized the decline works out to a loss of 1.63% per year). If we extend the period to the last 10 years, the S & P 500 has increased by 85.6% (6.38% per year).

SPX 5 & 10 Year Return Table

Some people may not remember, is that five years prior to the S&P 500’s all-time high made on October 9th, 2007,  the index bottomed out from the 2000-2002 bear market at a level of 776.76.  Following the post-Internet bubble low on 10/9/02, the index rallied more than a 100% before dropping more than 50% from 2007 to 2009.  After bottoming out in March 2009, the index has since rallied more than 100% once again. 

S&P 500 15 Year Performance Chart

With the S&P 500 about 7% away from its all-time high of 1565.15, I am skeptical the market is poised for another multi-year decline. The stronger earnings, higher dividends, reasonable valuations and an improving US economy are four main catalysts why I currently doubt the rally won’t fall off the edge of a cliff.

Conversely, I  don’t expect double-digit returns in the coming years.

I believe that stocks may produce below historic average returns in the years ahead and in the near-term the market and associated economies face daunting challenges in the coming months. This includes – a sluggish global economy, European financial stress, U.S. budget battles and the looming fiscal cliff. However, with better fundamental drivers of value than at similar points in the past 15 years, stocks are likely to weather most potential outcomes better than they have in the past, making a return trip to the lows of the 15-year range unlikely, at least for now. Plus, if history is to repeat itself we are three years into the five-year cycle – but that is a very big “if”.

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Global Economic Recovery – Weakening ?

9 Oct
IMF managing director Christine Lagarde. (KEITH BEDFORD /REUTERS)

The IMF (International Monetary Fund) have reassessed their forecasts lower and have stated “the global economic recovery is weakening as government policies have failed to restore confidence….the risk of further deterioration in the economic outlook was considerable and had increased”.

The IMF downgraded its estimate for global growth in 2013 to 3.6% from the 3.9% it forecast in July. One of the biggest downgrades was to the UK economy, which is now expected to shrink by 0.4% rather than grow by 0.2% this year. (Change in the forecast since the figures produced in July 2012.)

In response to the downgrade, the UK Treasury highlighted the fact that the IMF had “repeated its advice that the first line of defence against slowing growth should be to allow the automatic stabilisers to operate, monetary policy easing and measures to ease the flow of credit – all of which the UK is doing”.

The overall forecasts are now approaching, in my opinion, more realistic estimates for the current cycle. I suggest that the original forecasts were high and the reality is growth but weaker and more muted growth.

IMF’s General Outlook

The overall economic view from te IMF – “output is expected to remain sluggish in advanced economies but still relatively solid in many emerging markets and developing economies”…but “much would depend on action taken by policymakers in Europe and the US”.

IMF annual growth forecasts (% change)
  Latest forecasts Previous forecasts (July)
  2012 2013 2012 2013
SOURCE: IMF WORLD ECONOMIC OUTLOOK
World output 3.3 3.6 3.5 3.9
Euro area -0.4 0.2 -0.3 0.7
US 2.2 2.1 2.0 2.3
Japan 2.2 1.2 2.4 1.5
UK -0.4 1.1 0.2 1.4
China 7.8 8.2 8.0 8.5
Brazil 1.5 4.0 2.5 4.6
India 4.9 6.0 6.1 6.5
Russia 3.7 3.8 4.0 3.9

It highlighted the importance of the European Stability Mechanism (ESM), the eurozone’s new permanent fund to bail out struggling economies and banks launched earlier on Monday. The fund added that greater integration of taxation and spending policies across the eurozone was needed, as well as measures to begin the process of banking union.

The ESM, hailed on Monday by Jean-Claude Juncker, Prime Minister of Luxembourg and chair of the fund, as “an historic milestone in shaping the future of monetary union”, will have a lending capacity of 500bn euros (£400bn; $650bn) by 2014. It will be able to lend directly to governments, but it will also be able to buy their sovereign debts, which could help reduce the borrowing costs of highly-indebted countries such as Italy and Spain.

The IMF’s view of the US, “growth depended on a deal to avoid the so-called fiscal cliff, when automatic spending cuts and tax increases will kick in at the beginning of next year”. If policymakers fail to agree to delay these measures and increase America’s debt ceiling, “the US economy could fall back into recession”, with serious knock-on effects for the rest of the world”….”assuming agreement is reached, the US economy will grow by 2.1% next year”. This year, the US economy will actually grow by more than previously forecast – by 2.2% rather than 2%.

In Asia, “the near and medium-term outlooks are less buoyant compared with the region’s growth performance in recent years”. It highlighted weaker exports as a result of lower demand for goods in the West.

China, the world’s second-largest economy, would grow by 7.8% this year (down from its previous forecast of 8%), and by 8.2% in 2013 (down from 8.5% forecast in July 2012).

It also revised its growth forecasts for India, which would grow by 4.9% this year and 6.1% in 2013. 

Weaker demand for exports would also impact on Latin American economies, as would lower domestic demand due to government policy tightening. As a result, Brazil’s economy would grow by 1.5% this year and 4.0% in 2013.

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Retirement Planning and Retirement Income Options

1 Oct

This article focuses on Money Purchase Schemes – so, schemes where you save up a fund to buy your retirement income e.g. Personal Pensions, SIPPs, SSASs, Stakeholder Pensions, Defined Contribution Workplace Schemes

Key Points

  • You do not have to accept the pension income offered by your pension scheme. You have the right to take your retirement income from a different provider – this is called the open-market option (OMO).
  • Your scheme may not offer the best deal for your money when you retire, so check whether you can get more for your money by using the open-market option.
  • In difficult economic times, your pension fund may be worth less than you expected, so getting the best deal is even more important.
  • Choosing how to take your retirement income can be a complicated decision. I always recommend that you take professional advice from a suitably qualified Independent Financial Adviser authorised by the Financial Services Authority (FSA).

Making your retirement choices and always think before you choose 

Things you should know :-

  • Your pension scheme should send you, no later than 6 months before you are due to retire, details of the choices you have.
  • This information will discuss buying an annuity (an arrangement which provides you with a pension income for the rest of your life).
  • Your pension scheme must tell you that you have the right to shop around and about the different types of annuity that are available.
  • You do not have to accept the annuity quoted by your pension scheme and you can shop around to find the best deal – this is called the open-market option.

Your income in retirement will depend on 4 main things:

  • how much money you and your employer have paid into your scheme;
  • how this money has been invested;
  • how much of this money has been used to pay any charges; and
  • the decision you make now on how you take your retirement income.

If your pension fund rises and drops in value (for example, all or some of it is linked to stocks and shares), you may want to consider switching your fund into a lower risk investment to reduce uncertainty in the run up to retirement. Check with your scheme whether this option is available and whether there is a charge for switching your money.

Making your retirement choices
You may get better value for your money if you shop around using your open-market option.

Before you make any decision, you need to consider:-

  • your overall financial situation;
  • what you might need financially in the future; and
  • how much tax-free cash you want to take (i.e. a pension commencement lump sum).

There are limits on the amount of cash you can have as a lump sum – typically, up to 25% of your fund. The cash you take will affect how much money is left over to buy your pension income.

I would recommend that you take qualified financial advice

What is an annuity?
An annuity converts your pension savings into a series of payments – the pension scheme pays your pension savings to an insurance company who, in return, agrees to pay you a regular income for the rest of your life. This is often called a lifetime annuity.

What affects the cost of an annuity?

  • Type of annuity
  • Age – annuity rates tend to get higher the older you are
  • Sex – annuities for women currently cost more. This is due to a change which will apply from December 2012.
  • Health and lifestyle
  • Prices vary from provider to provider just like any other goods or services you buy, which is why it is so important to consider shopping around.

How does the open-market option work?

You have a choice of who provides your retirement income when you retire. Your pension scheme will normally offer you an annuity but you can also shop around so you can choose the annuity that best suits your needs. Shopping around using your open-market option helps you to:

  • find out how the cost might vary between providers;
  • identify different features which may help you find the annuity which best suits your circumstances and how these features can affect the cost of the annuity or how much pension you get; and
  • decide if you want to choose another option instead of buying an annuity if your scheme allows this.
  • to find out if the annuity offered by your scheme is competitive;
  • if you are in poor health as this may mean you can get a higher annuity; and
  • if your lifestyle may qualify you for a higher annuity, for example, if you smoke or do a particular type of job.

Even if you have been very happy with your pension scheme up to now, consider the open-market option to check that it is offering the best deal for you when you come to retire.

What types of annuity are there?
There are 2 basic types of annuity – a single-life annuity and a joint-life annuity. There are other features that you could choose to include in the basic types, to suit your needs and circumstances. Check which features are included in the annuity offered by your scheme.

Single life – This pays an income to you for the rest of your life.
Joint life – This pays an income to you for the rest of your life. And then, when you die, it continues to be paid (possibly at a reduced rate) to your spouse or partner until they die.

Options you may be able to include:

Level – the pension income you receive stays the same throughout your life.

Yearly increases (escalation) – the pension income you receive increases each year, in line with inflation (the Retail Prices Index (RPI) or the Consumer Prices Index (CPI)), or at a fixed rate, for example, 3% or 5% each year.

Guarantee period – your pension income can be guaranteed for a set period, usually 5 or 10 years, so that it continues to be paid (usually to your widow, widower, civil partner, or to your estate) for the rest of the guarantee period if you die before the period ends. If you include a guarantee period, it may involve a small reduction in the amount of your annuity.

Lump sum on death – if you die, the annuity will pay out a taxable lump sum, equal to the cost of your annuity less any income you have already been paid.

Investment-linked annuities (including with-profit annuities) – these annuities offer the potential for you to receive a higher income but rely on stock-market performance. As a result, your income could go down as well as up.

Impaired life annuities – these annuities can pay a significantly higher income if you have a health problem that threatens to shorten your life. In cases of serious ill-health, where a registered medical practitioner confirms that your life expectancy is less than a year, the law may allow you to take the whole of your pension fund as a lump sum.

Enhanced life annuities – these annuities can pay a significantly higher income if your lifestyle may shorten your life.

What alternatives are there to an annuity?
When you retire, you may decide you do not want to buy an annuity.

Some of the alternatives we describe below may only be suitable if you have a large amount in pension savings or other sources of income and are comfortable taking some risk with your pension. Not every pension scheme offers all or any of these alternatives.

Again, before making a decision you should take qualified financial advice.

Make sure you are comfortable with the risks of choosing one of the alternatives to an annuity.

Cash lump sum – for smaller funds (this is sometimes called trivial commutation). 
If you are at least 60, you may be able to take all your pension savings as a lump sum. You can usually only do this if the total value of all your savings in all pension schemes is less than £18,000. If your fund value in an occupational fund is less than £2,000 then you can take it as a cash lump sum if your scheme rules allow, even if all your pension savings are more than the minimum amount of £18,000.

You usually pay tax on part of these lump sums.

Phased retirement – you can use your pension savings to buy annuities at different ages in the future.

Drawdown pension (sometimes also called income withdrawal or drawdown) – you take an income directly from your pension fund.

Short-term annuities – you can buy a series of annuities each lasting for a fixed term (usually up to 5 years). You can then leave the rest of your savings invested or use them to buy a lifetime annuity.

Putting off buying an annuity
Your scheme rules may allow you to put off (postpone) buying an annuity, whether or not you stop working. By postponing buying an annuity (either for a limited time or indefinitely), you may get a higher annuity because your pension savings will have been invested for longer and you will be older. However, annuity rates and investments can go down as well as up. Check whether you may lose any guarantees or have to pay any charges by putting off taking your pension income. It may also be possible for you to be paid your tax-free lump sum but delay taking any income.

Other ways
There are new options now available which pay a regular income and offer protection and/or guarantees of either investment growth or the amount of pension fund you will have left to buy an annuity later on. They vary in:

  • what they’re called;
  • the guarantee/protection they offer; and
  • the charges they make to cover the cost of the guarantee/protection.

You generally have to give up some investment growth potential to pay for the guarantee/protection.

What things should I keep in mind if I shop around?

  • If you use your open-market option and decide to buy your annuity from another insurance company, your pension scheme might take charges from your fund. You need to get an estimate of the value of your fund (less any charges) before you can ask insurance companies for a quote for an annuity.
  • Make sure you compare like with like. For example, don’t compare a level annuity with one that increases.
  • Make sure any annuity you choose fits with your circumstances. (For example, do you need an escalating annuity or do you qualify for an enhanced annuity?)
  • Check whether you will lose any benefits (for example, the option to buy an annuity at a guaranteed rate) or pay any charges if you don’t take up your pension scheme’s offer.
  • Quotes for annuity rates are often available only for a limited time, usually seven to 28 days. Also find out if there is a ‘cooling-off’ period during which time you can cancel any choice you make.
  • You may find it difficult to shop around if you have a small pension fund (less than £30,000) as some firms will not provide an annuity.
  • Not all companies will deal with you direct and only offer products through financial advisers.
  • If you use the open-market option, the adviser can be remunerated through a commission paid by the insurance company (you may prefer to pay via an agreed fee amount).

If you are comparing annuities under the open-market option, remember to compare like with like.

Frequently asked questions
What if I have a defined contribution fund in more than one pension scheme?
You may want to get financial advice. For example, you may be able to combine the money from all your schemes and use it to buy one annuity rather than buy a different annuity for each scheme. This may give you better buying power.

Do I have to pay tax on my pension income?
Yes, your pension income counts as earned income for tax purposes. Remember that most schemes will allow you to take a part of your fund, normally up to 25%, as a tax-free lump sum, as well as receiving an income.

What if I am contracted out of the additional State Pension (the State Second Pension)?
Your employer’s money purchase scheme will be able to tell you if it is contracted out of the State Second Pension (S2P). (This used to be called the State Earnings Related Pension Scheme (SERPS).) If so, you must currently use part of your pension fund to buy a ‘protected rights annuity’.

How will I know how much I have available to buy an annuity?
You can get an estimate of the value of your pension fund (less any charges for using the open-market option) from your pension scheme. Your pension scheme should send this to you before your retirement date, so you can start to shop around. You should then take off any amount you plan to take as a tax-free lump sum when you retire.

Will the stock market affect the value of my pension fund?
If you are invested in a fund which rises and falls in value (for example, it is invested in the stock market), the value can change. You may want to investigate whether you have the option to switch into a lower risk fund to reduce uncertainty in the run-up to retirement.

Who regulates annuities?
The Pensions Regulator, regulate workplace pension schemes. However, you will usually buy your annuity from an insurance company and these are regulated by the Financial Services Authority (FSA).

If an insurance company cannot pay all amounts due, the Financial Services Compensation Scheme (FSCS) may be able to help you.

Important Points to Consider

  • Once you have bought an annuity, you cannot normally change your mind. So, it’s worth making sure you get the right one.
  • In difficult economic times, your pension fund may be worth less than you expected.
  • Take qualified advice as the implications can last a lifetime.
  • If you want to delay taking your pension income, check for charges or penalties which might apply.
  • Do you want to change funds before you retire?
  • Do you want to take tax-free cash from your fund before you take an income? (Remember the Pension Commencement Lump Sum is only available at the date you take pension benefits and not afterwards – “a use it or lose it” benefit)
  • What annuity options are available from your scheme?
  • Compare what your scheme offers with the open-market option.
  • Do you qualify for an impaired life or enhanced annuity?
  • Would one of the alternatives to an annuity be suitable for you?

Where to get more information
You can get more information from the following organisations.

The Money Advice Service – also produce a range of free guides, available from its website.
Helpline: 0300 500 5000
Typetalk line: 18001 0300 500 5000
Website: http://www.moneyadviceservice.org.uk

Department for Work and Pensions (DWP)
Phone: 0845 606 0265
Textphone: 0800 731 7339
Website: http://www.direct.gov.uk

Financial Services Compensation Scheme (FSCS)
The FSCS helps protect consumers against financial loss when firms authorised by the FSA cannot or are unlikely to pay claims against them.
Phone: 0207 741 4100 or 0800 678 1100
Website: http://www.fscs.org.uk

The Pensions Advisory Service (TPAS)
TPAS is an independent organisation which can help with questions about your pension and annuities. You should also consider using the annuity planner on the TPAS website homepage.
Phone: 0845 601 2923
Email: enquiries@pensionsadvisoryservice.org.uk
Website: http://www.pensionsadvisoryservice.org.uk

The Pension Tracing Service
The Pension Tracing Service can help you track down pension schemes you have been a member of in the past. Their tracing service is free – you can either phone them and ask them for a tracing request form or you can use their online form.
Phone: 0845 600 2537
Textphone: 0845 300 0169
Website: http://www.direct.gov.uk

Your trustees or your scheme administrator
You’ll find their contact details in your scheme literature.

A suitably qualified independent financial adviser

So What is Secured Income?

This is the traditional route of Pension Annuities – there are more options available from permanent and temporary annuities but this is fund and age dependent.

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