The Sunday Times published their 2012 UK Rich List yesterday, provoking headlines, such as “The rich get richer as the poor get poorer” – a bit of a gimme for any lazy hack, but what does the Rich List really tell us and can we learn something from it?

Well a glance at the top 7 names on the list tells us something: Lakshmi Mittal £12.7bn – Alisher Usmanov £12.3bn – Roman Abramovich £9.5bn – Sri Hinduja £8.6bn – Leonard Blavatnik £7.58bn – Ernesto Bertarelli £7.4bn – The Duke of Westminster £7.35bn.

The top 6 are all global players, controlling companies that are partaking in the industrial revolutions occurring in developing countries such as India, China, Brazil and Russia. They probably own prime UK Central London property, deemed one of the very safest havens, whilst of course the Duke of Westminster at number 7 on the list owns inherited wealth including chunks of Mayfair.

The super-rich then hold blue-chip UK assets whilst fairing in the fortunes of the remarkable transformations happening around the world. Large Western companies are selling into these markets, meeting an almost insatiable demand for the things we all take for granted.

The lesson for us as investors then? A solid UK base but with a global reach to enjoy the new opportunities available. We are unlikely to ever join their elite division, but we could do worse than imitate them.

SIPPs, Self-Invested Personal Pensions offer the opportunity to invest beyond Insurance Company or other Regulated Collective Investment Funds and certainly have their place in modern Financial and Retirement Planning.

Keen investors may choose to buy and sell individual Shares or Bonds within a Pension wrapper. Buying a Commercial Property, often for rental by the SIPP owner’s business, is a sound proposition offering significant tax advantages and stability.

There is however a common abuse of SIPPs where Unregulated Collective Investment Schemes are being peddled, often in very high risk esoteric areas, hiding behind the cloak of respectability a big-name SIPP provider appears to provide.

“Risky? But, my SIPPs with ABC Life or XYZ Bank?” Well, the SIPP Wrapper might be, but the underlying investments end up in Indonesian Bio-fuel growing projects, Caribbean Holiday Resorts (to be built shortly), Land Banking, the Vineyards of Romania or some other wildly speculative venture. The commissions payable to the “Advisers” can exceed 10% of the sum put in!

The Serious Fraud Office are currently investigating the collapse of a Bio-fuel UCIS that was pushed heavily to IFAs including us. Not worthy of a second look! The FSA has specifically warned on the dangers of such “investments” issuing a note here.

We are not saying all UCIS are scams, but anyone being asked to buy into such a scheme really needs to ask why?

If you require advice and guidance on Pensions or any other aspect of Retirement Planning and Investing, please contact us for a no obligation initial meeting, without charge.

The Budget revealed or confirmed how individuals and companies will be taxed for the coming year, from 6th April, and we have produced a convenient two-page Tax & Allowances Guide with all the important numbers.

Personal Allowances are up, but the 40% income tax threshold is down.

For Capital Gains Tax, both the rates and £10,600 exemption remain unchanged, as does the Inheritance Tax nil rate band of £325,000.

The most generous tax concessions for Savers and Investors remain the annual ISA Allowance, now £11,280 (of which £5,640 may be a Cash ISA) and the Pension contribution limits of £3,600 for non-earners and minors through to £50,000 for those earning that sum or more.

Did the Budget address the economic imbalances? Well it began, but barely put a dent in the deficits and demographic challenges faced. The overwhelming message has to be “Use those tax advantages and opportunities whilst they are still there.”

For a general Financial Review or advice in one or more specific areas, please contact us for an initial chat, without cost or obligation.

Pensions were spared any changes, a huge relief given the usual pre-Budget speculation and this is to be welcomed, given the last Government’s constant tinkering and undermining of such an important aspect of personal financial planning.

To recap then Pensions still allow:

• Contributions of up to £50,000 per annum
• The ability to “Carry Forward” unused allowance from three earlier tax years
• Income Tax Relief at the highest rate paid (still 50% for another year)
• Employer/Company contributions attracting Corporation Tax relief
• Largely tax-free investment (Just a Gordon Brown stealth tax on dividends lingers)
• 25% of the fund available as tax-free cash from age 55 onwards
• No compulsion to buy an Annuity

So it’s Carry On Pensions, Matron – at last a Government willing to encourage us to build a comfortable and fulfilling retirement, with tax-breaks, flexibility and incentives along the way.

Clarity Financial Planning Ltd will be a main sponsor for the annual Rotary Club of Coulsdon Manor Annual Village Fair on Saturday 7th July 2012.

A real family day, with over 100 stalls and activities run by Clubs and Charities, Arena events and displays by local Schools and Groups of all ages, a steam railway, a brass band, ploughmans lunches, cream teas and hopefully summer weather, it is certainly the premier Annual Fair in the Coulsdon area.

Posters, banners and flyers will appear in the area nearer to the day, but do please put in it the diary and come along for an excellent community focused afternoon in CR5

Quantitative easing. Not easy to say, but seemingly becoming ever easier for the Bank of England to do. QE (or money printing as it’s known when Zimbabwe does it) allows the Bank of England to buy UK Government Debt and suppress the interest we as a nation pays on the huge sum outstanding. This apparently saves the country money, well at least in the short term. But surely someone pays?

Savers will certainly be aware that they are already paying for QE with interest rates on Deposit based Savings lower than inflation at present, even before it is taxed.

The others paying the price for QE are those approaching retirement with Personal or Stakeholder Pension Plans, or with Defined Contribution Scheme membership, who are finding historically low Annuity rates (the conversion factor of pension funds to income), or the Income Drawdown maxima ever-falling.

It is more vital than ever to shop around for the most favourable Annuity rates and to be aware of other options available in respect of non Final-Salary Pension funds at retirement. An increasing number can now gain an enhanced annuity rate due to past or current health or lifestyle issues, such as smokers, diabetics, those with a high BMI or hypertension. Temporary Annuities are another option, or one backed by an investment element.

Only an Independent Financial Adviser can provide you with all your options on an impartial basis. If you, or someone you care about is approaching retirement please contact us to seek the most appropriate Pension options.

I went to “TRIPS” today, The Retirement Income Planning Seminar, held at the London Transport Museum in Covent Garden, to hear from a number of leading Pension, Annuity and Income Drawdown providers about the challenges facing those at retirement and the more innovative income solutions that are emerging.

For me the most interesting speaker was Jan Holt from Redhill based Annuity specialist provider Just Retirement who revealed some incredible numbers regarding life expectancy and the demographics of the UK population:

A 65 year old male now has an average 19 years to live. In leafy Surrey and Sunny Sussex however that extends to 21 years. A female at 65 has 21 years on average, rising to 24 in the affluent South East. By 2034 the number of people in the UK aged 85 or more is forecast to exceed 3.5 million, a huge increase from the already impressive 1.4 million.

In 1917 King George VI sent 24 messages of congratulations to Brits reaching 100 years of age. In 1954 the newly crowned Queen Elizabeth II sent 255, but this rose steadily to 8,439 in 2007 and a lofty 12,640. It is forecast that in 2034 our Monarch will be sending telegrams (probably a text by then) to 87,900 centenarians!

The numbers are astonishing and of course pleasing in many ways, but decisions made around Pensions and other income generating investments from age 55 onwards, usually 60-65 will have repercussions for decades to follow.

What a compelling reason to seek truly impartial Independent Financial Advice and expertise, in order to make informed choices at the right time.

If you wish to discuss imminent retirement, fully understand your future options, or review investment decisions already made, please contact us for a complementary initial meeting with experienced Retirement Specialist IFA Mark Cooper.

We subscribe to an online IFA Directory called Vouched For. It is an ideal way for the public to seek a truly Independent Financial Adviser who is well qualified, provides a menu of fees and most importantly has been recommended by their clients.

Clients are invited to provide their views, warts-n-all, on service received, quality of the advice, fairness and attitude of the Advisor.

I’m pleased to say the first three were very positive and can be viewed on the Vouched For profile for Mark Cooper or by clicking on the icon above.

If you wish to benefit from Mark’s professional, friendly and client-focussed approach please contact us for an initial meeting, without cost or obligation.

The strike on Wednesday was certainly disruptive, essentially to our children’s education and to poor souls who had, probably long awaited, operations cancelled.

The Union demands are of course ridiculous. Public Sector Pensions and the benefits promised belong to a bygone age where people retired at 60 and lived 10 more years if they were lucky. Longevity has increased by 7 years in the last 20 and what a problem that has created.

Be clear, no Public Sector employee retiring in the next 10 years will suffer any reduction in their pension. Further, all benefits accrued to date will be honoured. It is about future accrual and the fact that these “schemes” are unfunded, simply today’s contributions and Private Sector taxes meeting the pensions in payment.

The irony is that if, just supposing, the Unions manage to preserve the current scheme rules, their pensions are lost anyway – to inflation. The only way to meet the already estimated £1.5 Trillion shortfall is to print the pound into hyper-inflationary oblivion, taking the rest of us with them.

Hobson’s choice for the Public Sector, no choice at all for the rest of us.

From 1st November 2011 any child born after 1st January 2011, or a minor under 18 born before September 2002, may have up to £3,600 per annum paid into a Junior ISA on their behalf, perhaps by Parents, Grandparents or anyone else who wishes to contribute towards their future.

The elegibility is a little complicated because children born between 1st September 2002 and 1st January 2011 received the benefit of a Government contribution or two to a Child Trust Fund, to which top-up contributions can still be made.

Both Cash and Investment JISAs will be available, up to the combined limit of £3,600 p.a. and given the long-term nature of this product at least some exposure to risk should be considered, using an equity based or multi-asset style of fund or funds.

Savings interest is tax-free whilst Investment gains are largely tax-free and the fund is available in full when the child reaches 18. Now therein lies the problem with JISAs – the child becomes absolutely entitled to the fund, in cash that very day should they choose, and that is a concern.

Ideally JISAs could be used to provide funds for University, gap year travel, a deposit on a first property, a first car or another major milestone in their young lives, but, let’s face it, they might just blow it all on short term gratification.

We strongly recommend saving for the long term, but much prefer to keep parents or grandparents in control by investing within a simple Disctretionary Trust, or by investing as an adult, perhaps using a normal ISA allowance and earmarking the money for one or more children.

The tax advantages may not always be the same, but what price do you put on control?

If you wish to discuss any aspect of investment, for you or your children, please contact us for an initial discussion or to arrange a meeting, with no cost or obligation.