In2Matrix Autumn 2013 Financial Focus

We are almost three quarters of the way through the year already, the holidays are over and 2014 is not far off! Forward planning never hurts, so our Autumn newsletter covers some of the major issues which could be relevant to you or your business now or in the future. 

Our feature this edition is on working after age 65 and whether it is a choice or necessity. You may not be thinking about retirement quite yet, but if you want to be able retire at 65 without financial worries, it is worth making plans now. Let us know if you wish to discuss your options. 

Our other stories include: Tackling the financial aspects of divorce with divorce a likely event for many British households, people are increasingly turning to financial advisers, as well as lawyers, when they split up. We are here to advise you, should you decide to part ways. 

Why your estate might now be subject to more tax Thanks to an unheralded clause section in this year’s Finance Act, you could now be in the position that without actually doing anything, your estate has suddenly increased in value for inheritance tax (IHT). 

Spreading your ISA contributions have you made your full 2013/14 ISA investment yet? In volatile market conditions, drip feeding your investment could be a sensible idea if you want to build up a nest egg. 

Where there’s no will...Have you considered what would happen if you die without a will? The answer is that the rules of intestacy apply and the distribution of your estate could be more surprising than you think. Do you need a better reason to update your will today?   

The Care Bill comes into focus The Care Bill, the legislation to reform long term care, has emerged. How will your financial situation affect the funding you may be entitled to should you need long term care?  

Also included is an article on minimum wage and maximum pension. 
For those wanting more information we have created a link to request a call. The link is https://in2autumn2013.eventbrite.co.uk/

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Tackling the financial aspects of divorce

Britain has the highest divorce rate in Europe, according to the EU’s statistical office Eurostat. So, with divorce and separation an occurrence in many households, couples are increasingly turning to financial advisers, as well as lawyers, to sort out their financial affairs when they separate. 

A family breakdown can lead to a wide range of outcomes, partly depending on whether the couple are married or not. An unmarried dependent partner is considerably less protected than a married spouse, which often comes as a surprise to many people when they split up. A dependent partner, however, could have some rights, as may any children.

If a married couple – or civil partners – separate or divorce, the protection is much greater. Nevertheless the position will vary considerably according to whether the split is a clean break or there is an ongoing financial dependency.

The key areas where the financial adviser’s skills and knowledge are critical include:

Pensions A couple’s pension rights are often their most important asset, or at least their next biggest asset after a property or business. There are three main ways to deal with pensions after divorce. The most popular is offsetting, where each party keeps their pension rights untouched but their value is taken into account in the division of the rest of the property. So, in a simple example, John may have a pension fund worth £500,000, and the family home after deducting the mortgage is worth the same amount. Under an offsetting agreement John would keep his pension and his former wife would take the home (subject to some adjustment for tax).

A less common approach is for the divorce court to earmark one spouse’s pension so that part of it is paid directly to the other spouse when the pension scheme member retires.

Alternatively, the courts can demand each individual’s pensions rights be subject to a division at the time of divorce. Each option has its pros and cons and there can be complications in valuing the pension rights themselves.

The home is likely to be a matter of contention with particular issues around arranging mortgages for the existing property or separate new ones.

Investments With people divorcing later in life, it is increasingly likely that a couple will have a portfolio of investments. As each ex-spouse takes their share of the investments, they often discover that their needs have changed following the split.

Where they previously might have wanted to maximise capital growth for the future, the higher priority might now be to generate an immediate income. Likewise, a person who is now on their own for the first time in many years might  develop a different view of the risks they are willing and able to take with their investments.

Life assurance and other cover will need reappraising and probably reorganising. Where one spouse is paying maintenance for children or to the former spouse, it generally makes sense to insure the policy holder’s life and probably their health as well. This might involve adjusting existing policies and their associated trusts or it could mean taking out new ones.

Estate planning and wills also generally require some attention. Divorce will automatically invalidate an existing will and most people prefer to change their wills in any case under these circumstances.

The fact is there are a lot of technical financial issues surrounding divorce and we are here to advise you should your marriage or civil partnership come to an end. The value of your investment and the income from it can go down as well as up and you may not get back the full amount you invested. Tax and divorce/separation laws can change.

The FCA does not regulate will writing and taxation and trust advice.

 

If you would like to find out more please about our tax and financial planning services please contact  edward.grant@in2matrix.com for more information.

The information is intended to provide information only and reflects our understanding of legislation at the time of writing. Before making any decision, we suggest you take professional financial advice.

The value of investments can fall as well as rise and any income from them is not guaranteed. You should be prepared to lose your investment. Past performance is not a guide to future performance.

1st Global BrokersLink Employee Benefits Conference: watch the video http://youtu.be/erpSyh8X5mw

Release date 1st September 2013

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BrokersLink Conference: Watch the Video

This summer saw the first BrokersLink Global Employee Benefits Conference in London hosted by In2Matrix. The worldwide partners came together to share best practice and expert-led training on employee benefit solutions for multinational companies.

The BrokersLink Employee Benefits Practice was launched in April 2013 as a ‘Centre of Excellence’ designed to facilitate access to the international market for the network’s shareholders and clients.

Gerard Baltazar, Chairman of the BrokersLink Employee Benefits Practice, commented in his opening address that, “only those who are prepared to be innovators for their clients in offering new services and solutions will thrive in the rapidly-changing business world”.

To give you a flavour of this inaugural event we have launched a short video capturing the keynote speakers and themes. This can be accessed via http://youtu.be/erpSyh8X5mw

Research shows women are the breadwinners

A third of working mothers are now the main breadwinners in their families, taking a lead on family finances and future planning.

A report by the Institute for Public Policy Research (IPPR) showed that more than 2.2 million women are now the main source of income in their households - a rise of 83% since 1996/97.

This means one in three working mothers is the primary breadwinner for their family, either because they earn more or the same as their partners or because they provide a household's sole income, the IPPR said.

The authors of the report, Condition of Britain, said: "This change is due to a higher rate of female employment, changes in family structures, and shifts in men's employment - especially the employment of low-paid men, whose wages have largely stagnated."

The report found a wide regional disparity in the number of families where women earn more or the same as their partners.

Scotland had the highest level of maternal breadwinning, at 32%, with 31% in Wales and the north-east and the north-west of England. This compares with just 26% in the east of England and the south-west and 27% in London and the South East.

Lord Fraser

With the deepest regret we learned on Saturday that Lord Fraser very suddenly passed away at the age of 68.

Lord Fraser was a well respected member of the House of Lords and we were fortunate to have him serve on our Executive Board.

Lord Fraser was a charming member of our team who brought his insight to our growing business. He was passionate about politics, history and law, but  most of all, was proud of his family.

His intellect and contribution to the In2Matrix Board will be missed.  

Our sympathy goes out to Lady Fiona and his (grand) children.

Meet Gerard Baltazar, RBCC Bulletin issue 2, 2013.

http://issuu.com/russo-britishchamberofcommerce/docs/rbcc_bulletin_issue_2-2013

Financial Planning Pitfalls to avoid

In an ideal world, we would start contributing to our retirement savings accounts the moment we receive our first payslip from our first job. In this time of fiscal uncertainty, there are many financial decisions that can make or break you during your formative years.

Below are some of the key pitfalls to avoid in retirement.

Assuming You Will Retire at a Specific Age There are many factors that can influence the age at which you retire, some of which are not in your control. An unfortunate layoff, forced early retirement or unseen health issues can cause you to retire earlier than expected. If you are counting on the last few years of savings to set everything in order, you may find yourself with a lack of income in a tough job market. This is why it is absolutely imperative that you begin your retirement planning as soon as you can. On the other hand, just because you reach 62 or 65 doesn't mean that you should automatically retire. Take the time to do a cash flow analysis and speak with a financial planner to determine when you can comfortably retire.

Not Updating Your Retirement Plan Reaching retirement doesn't mean that it is time to abandon risk. Many retirees make the mistake of dumping higher risk equities from their portfolio in favour of low-risk bonds. The problem is that bonds don't provide the long-term potential required to sustain a retirement income for twenty-plus years. Understanding investment risk is critical.

We offer all our clients a free online risk profile analysis, just ask for yours.

Failing to Diversify Your Risk Many people who believe their personal savings and state benefits will be enough to take care of their retirement. The addition of a private pension can give you a nice boost, but there is more you can do with your income. To protect yourself against the market, while providing the potential for strong returns, spread your investments across a range of risks. This is where a professional adviser can help structure your asset allocation to create a suitable portfolio.

Retiring With Too Much Debt You should make paying off high-interest credit cards a top priority when approaching retirement. It may not be possible to begin retirement entirely debt-free, but the interest payments on high-interest accounts will eat away at your savings. If you are in good health and can afford to work for a few more years, delaying your retirement may give you the breathing room to eliminate this debt. No one wants to spend his or her retirement paying off pre-retirement expenses.

Refusing to Downsize Lifestyle Depending on the level of savings, retirees should expect to reduce their living income by 25% or more. Many people are tempted to immediately go on a vacation or make a big purchase, but these decisions can have a lasting effect on future savings. The two major areas that a retiree can address are his or her home and vehicles.

Moving to a smaller home or to a less expensive region can take a large chunk out of your expenses. Reducing the number of cars to a single vehicle or acquiring a more fuel-efficient vehicle will also free up more income. This is the trade-off you make for the free time that retirement allows.

If you would like to find out more please about our tax and financial planning services please contact  edward.grant@in2matrix.com for more information.

The information is intended to provide information only and reflects our understanding of legislation at the time of writing. Before making any decision, we suggest you take professional financial advice.

The value of investments can fall as well as rise and any income from them is not guaranteed. You should be prepared to lose your investment. Past performance is not a guide to future performance.

Happy Tax Freedom Day 30th May 2013

Tax Freedom Day—the day when the average UK resident finishes paying George Osborne and begins putting money in her own pocket—is finally upon us.

After 150 days of sending all our money to the Treasury, we can earn for ourselves over the rest of the year.

It is calculated by comparing general government tax revenue with Net National Income (NNI). The total of all government tax revenue – direct and indirect taxes, local taxes and National Insurance contributions – is calculated as a percentage of NNI at market prices.

This year it comes to 41.5%. That percentage is then converted to days of the year, starting from 1 January.

The first day of the year that Britons work for themselves rather than the taxman is Tax Freedom Day.

It has varied quite significantly over the past few decades. In the 1970s it tended to fall in late May, before rising to the latest date on record in 1981 (20^th June). It fell throughout the 1980s to a low of 20^th May in 1993 before rising again to a 24 year high of 3^rd June in 2001.

Tax Freedom Day over the last ten years:

Year	TFD date
2004	26 May
2005	27 May
2006	1 June
2007	29 May
2008	27 May
2009	24 May
2010	28 May
2011	29 May
2012	28 May (29th ex. leap year)
2013	30 May

Every individual will have a different personal tax freedom day subject to their own financial planning strategies. In an era of higher taxation it is important to utilise every allowance, relief and exemption the government allows you to use.

If you would like to find out more please about our tax and financial planning services please contact  edward.grant@in2matrix.com for more information.

The information is intended to provide information only and reflects our understanding of legislation at the time of writing. Before making any decision, we suggest you take professional financial advice.

NEWS LETTER

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NEWS LETTER

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Americas

Mexico: New Client Documentation Requirement

Clients and brokers are required to complete Customer ID Forms prior to policy issuance for any policies requested on or after January 15, 2013, regardless of policy inception date. This is the latest addition to the country's anti-money laundering requirements.

Asia

Hong Kong: D&O Insurance Required for Listed Companies

The Hong Kong Stock Exchange (HKSE) now requires listed companies to have D&O insurance and for the directors of listed companies to undergo continuous professional development training. The new mandates are among several Recommended Best Practices for corporate governance that HKSE upgraded to mandated Code Provisions, effective April 1, 2012.

Japan: Increased Compulsory Motor Liability Premiums

Effective April 1, 2013, the Japanese government is increasing premiums for compulsory auto liability insurance (CALI) by an average of 13.5%. Premiums last increased by an average of 11.7% in April 2011. The greatest impact of this increase will be seen on 24 month period policies for passenger cars; premiums on these policies are expected to rise from 2,890 yen to 27,840 yen per period.

Taiwan: Cash Before Cover

The Executive Committee of the Taiwan Non-life Insurance Association (NLIA) is pushing to implement cash before cover for auto insurance, effective May 2013. If implemented, auto coverage would commence only after premium is received by the insurer.

Europe

Cyprus: Stamp Duty Charge Increase

Policies issued or renewed on or after March 1, 2013 are subject to an increased stamp duty charge. On new contracts for general liability and other classes, the charge has increased from EUR 1.71 to EUR 2.0. For property and fire, the charge has increased from EUR 0.86 to EUR 1.0 per contract for premiums below EUR 1,709, and from EUR 1.71 to EUR 2.0 for premiums above EUR 1,709.

Germany: Compulsory Insurance - Professional Liability

A new law, effective January 1, 2013, has made professional liability insurance compulsory for financial investment intermediaries in Germany. To comply with the new law, intermediaries must have minimum coverage limits of EUR 1.13M (~USD 1.4M) per claim and an annual aggregate of EUR 1.7M (~USD 2.2M) in place by July 1 of this year.

Italy: Road Accident Victims' Fund Tax

The Road Accident Victims' Fund tax rate payable by the insured remains 2.5%, however, as of January 1, 2013, it is charged on 95.3% premium instead of 95.9% - reducing the effective tax rate to 2.3825%.

Russia: Compulsory Carriers' Liability Insurance

Effective January 1, 2013, a new law requires "carriers" to purchase liability insurance to protect the life, health and property of passengers. Carriers are defined as entities or individuals that provide any sort of transportation for a fee. The new law does not apply to companies transporting employees.

In2Matrix Clients Dine with the Prime Minister

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In2Matrix Clients Dine with the Prime Minister

The Annual Carlton Political Dinner is a major event in the calendar of the British Conservative Party, and this year the Chairman and CEO of In2Matrix, Gerard Baltazar, hosted a table at the Dinner for the Company’s Clients and Members of the Board of Directors.

The Prime Minister, the Rt Hon David Cameron MP, the Leader of the Conservative Party, personally shared his thoughts with the group at the In2Matrix table (see photos), and discussed with Mr Baltazar the progress which In2Matrix has made in the past year.

The Dinner was held on 13 September 2012 in the magnificent surroundings of The Dorchester Hotel, Park Lane, London – one of the Capital’s most iconic venues. It was attended by the Prime Minister and members of the British Cabinet (the UK Government) and other members of the Conservative Party, along with senior British business leaders.



Gerard Baltazar Chairman & CEO of In2Matrix Group with Prime Minister David Cameron



Gerard Baltazar Chairman & CEO of In2Matrix Group with Prime Minister David Cameron

and Matthew Donnelly Managing Director of Griffiths &Armour

In2Matrix is a global player in the insurance market and has a presence in over 100 countries through an independent broker network.

In2Matrix Head Office, 200 Aldersgate London EC1A 4HD

www.in2matrix.com   contact@in2matrix.co