Category: Company Blog

Martin Lewis of Money Saving Expert fame has described 2020 as a ‘savings horribillis’ and it is hard to argue! A major high street bank has cut its main savings rate by 0.5% with cash savings rates at record lows.  Most people’s average savings earnings are now around 0.4%!

Often people are unwilling to invest cash savings yet are happy to invest in pension. This is despite many of the underlying assets and risks can be similar. There seems to be an acceptance that pension ‘has’ to be invested but savings don’t?

There still remains a great deal of confusion with investors in regard to pensions and what options are available with their pension, on retirement, in regard to income and lump sum. The danger of pension freedoms is that many people are considering cashing in pensions, paying large amounts of tax and then putting that money in a bank when savings rates are at record lows!

For this reason Approachable Finance will be running some free, no obligation Retirement Seminars at our offices at 6.30pm on Tuesday 31^st March and Thursday 23^rd April. This is a perfect opportunity for anyone to come along in a group environment and get some information on retirement and savings planning. We look forward to seeing you and if it is of interest please RSVP as places are limited.

A common enquiry over the last few years is a request for us to ‘sign a form’ to cash in or transfer a pension in its entirety into a bank account.

Often, we are contacted by people who simply do not understand that there are often better ways of taking pension. Whether it be using ‘guarantees’ associated with their pension that they were not aware or exploring options such as buying an annuity or flexible drawdown.

Whilst it may appear like the easy option of cashing in your pension, you have to consider that a full encashment will often mean a large ‘emergency tax’ bill of at least 20% of the fund value (after tax free cash).  Often the cashed in pension will sit in a bank account earning little or no interest. Not to mention the ‘opportunity cost’ of reducing the figure that gains interest by 20% paid out in tax.

If your pension is in a ‘pot’ which is invested on the stock market, it usually means it can be switched into a ‘Flexible Access’ or ‘Drawdown Pension’.  This means that the pension becomes flexible, meaning it can provide an income, or lump sum, or both. It is also accessible for the term of the pension and doesn’t tie money up like an annuity.

It is always recommended that at the point of retirement, it is worth speaking to a good independent financial advisor about your options.

NHS England currently provides practices with basic cover for GP’s that are off sick. If a GP is away from the practice due to illness for more than two weeks and the practice provides invoices showing the cost of cover for him/her, these costs should be met by the NHS.

 However, the NHS will only pay up to certain amounts, so if a locum costs more than the set limit there will be a shortfall for the practice.

• The NHS will pay up to £1,751.52 per week in England for the first 26 weeks and then for the following the 26 weeks the payment is cut by half to a total payment of £875 per week.

• If a practice arranges locum insurance at £2500pw for their GP’s and one of them goes off sick for more than two weeks the NHS will pay for £1751, on the basis that invoices can be provided, the locum insurance policy will pay the remaining £749. If the GP is still absent after 26 weeks the NHS will then pay £875, and the locum insurance policy will pay £1625, to ensure that the GP is covered up to £2500.
• The NHS payment must be supported by invoices, if the practices is unable to provide the necessary invoices, the payment from the NHS will be delayed.
• The NHS reimbursement scheme only covers GP’s in the practice, not other essential practice staff, such as Nurses. The NHS does not currently cover for other absences, such as, Jury Service or Compassionate Leave either. 

Kind regards,

Chris Dixon BSc (Hons) Dip PFS

Director of Approachable Finance and Approachable Locum Insurance

Often when people get married the thought of saving for a home is not far behind. As both an Independent Mortgage Broker and a Financial Advisor I am often asked about the best way to save for a new home and deposit. The government has just announced the launch of the ‘Help to Buy ISA’. This means that the government will boss your savings by 25% so for every £200 you save you will receive a government bonus of £50. The maximum amount of bonus you can receive is £3000. The ISA’s are available to each first time buyer so if you are planning to buy with your partner you could receive a government bonus of up to £6000 towards your first home! To kick start your savings you can save up to £1200 in your first month and then up to £200 per month after that.