Category Archives: Money

How Do You Plan For Retirement Successfully?

How Do You Plan For Retirement Successfully?

We all want to have a stress-free retirement. However, very few people give much thought to saving or investing for the future. Those who have taken some steps agree to being overwhelmed, daunted and bored by the entire process. The good news is; successful retirement planning doesn’t have to be boring. It doesn’t have to be overwhelming either. Here’s what you should do to retire successfully.

Step 1: Know your retirement investment options

To retire successfully, you need to invest in things that generate income for you long after you have stopped working. With that in mind, setting up a fixed deposit savings account won’t get the job done. In most cases, savings don’t earn enough interest to cover inflation and leave enough income behind. As a result, you need to consider other options. There are many investments specially meant for individuals planning for retirement. Employers have special retirement investment options for their employees. The government also offers the same. It’s important to take advantage of such investment options but first, understand how they work. Invest in financial education.

When considering retirement investment options, focus on the risk/reward ratio. You should avoid investments that expose you to a lot of risks for obvious reasons. Your retirement funds need to be secure. Nevertheless, the investment option/s you choose should reward you accordingly. Retirement vehicles such as; defined benefit plans, company pension plans, individual retirement accounts, etc. are great. If you don’t mind taking more risk for a higher return, you can consider portfolio investments such as; stocks, bonds, mutual funds, annuities, cash investments, etc.

Step 2: Plan meticulously

This step is obvious but commonly overlooked by many people. Saying you want to retire successfully won’t get you anywhere. You have to formulate a concrete plan to kick start the process. A plan gives you a clear vision for the future. A plan also breaks down the entire process into small manageable steps. Most people become overwhelmed by retirement planning because they look at the entire process as a whole. Planning for 20-40 years of your life can be overwhelming if you look at everything as a whole.

Furthermore, successful retirement planning is all about making clear, definitive steps as opposed to random ones. Financial success isn’t about making one big decision but making small decisions with one big goal in mind. A good plan makes everything easier and gives you direction. You increase efficiency and waste less effort. There are many great planning tools available online today so, it shouldn’t be a problem creating a great retirement plan. The most important idea in every retirement plan is to make sure you save enough and make the most use out of your savings to create long-lasting and growing income streams long after you have retired.

Step 3: Make lifestyle adjustments

To retire successfully, you need to compromise on something. Most people want to be financially free and lead a great lifestyle at the same time. It doesn’t work like that! You need to make lifestyle sacrifices initially. This step is crucial because it can jeopardise a great retirement plan. The most important principle of wealth building is investing/accumulating assets. You will never be rich/accumulate enough money for retirement if you don’t control your expenditure.

Step 4: Start immediately

Time is crucial when planning for retirement. Your probability of success is higher when you have more time. Furthermore, procrastination is among the main causes of failure in life. To retire with enough money, you should start acting immediately. Procrastinating only pushes your retirement date further. You also have less time to make mistakes and recover from them if you procrastinate.

Step 5: Take full responsibility every step of the way

Last but not least, you need to own the entire process. Planning for retirement successfully takes serious commitment and consistency. You have to take all the necessary actions and adjust accordingly when the need arises. If you don’t like the pace at which you are going, make the necessary adjustments. If you aren’t content with the results of a certain retirement investment option, look for another one. You can’t afford to rely on anyone 100% when planning for your future. You must do your homework. It’s important to get expert advice, however, own the entire process. Invest in financial education so that you can be able to make wise decisions on your own.

Summary

Planning for retirement successfully shouldn’t be a daunting task if you follow the steps discussed above to the letter. Investing in financial education is the first and most important step. You also need a concrete plan. You should also make the necessary lifestyle adjustments and start taking action immediately. Lastly, take full responsibility. Don’t blame someone else. You are solely responsible for your financial future.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
What Is Investing and How Can It Work For You

What Is Investing and How Can It Work For You

Overview: What is investing?

Investing can be defined as the art of making your money work for you. There are two main methods of making money. One, you can work for a salary. Two, you can buy assets or anything that gives you a return (i.e. you can invest). Anyone can invest. You can use your own money (savings) or borrow a loan to invest. Investing is very important because your money works for you. When you buy stocks for instance, you just need to wait for them to increase in price. You don’t need to do anything else. You may be required to do research before buying stocks however, that’s very little work compared to working for a salary. Investing is clearly important. It can, however, be challenging given the number of investment opportunities available today. So, how do you find the best investment for you?

Tip 1: Identify your investment needs and goals

To be able to find the best investment for you, it’s important to ask yourself why you are investing in the first place. Although people invest to make more money, one person may be investing for retirement while another person may be investing to get money to buy a home. In such a case, the person investing for retirement is best suited for investment opportunities which take longer to mature compared to someone investing to buy a home. Some investments may also be better for specific investment goals, so it is important to think of what you desire from your investment before you think of investing.

Tip 2: Know your risk appetite

It’s also crucial to know your personal attitude towards risk. Since all investments come with risks, you should know how much you are willing to lose in case things don’t go as planned. You can assess your risk appetite by assessing your investment goals, need for returns as well as your investment time frame. When assessing risk, ask yourself how much money you would afford to lose. If the investment in question is bound to lose you more money than you are willing to lose, it’s time to look for another investment. Shorter investment terms also come with more risk, so it’s important to choose investments with the appropriate risk timeline.

Tip 3: Choose an investment with an appropriate term

To be able to find the best investment for you, you also need to think about how soon you want your money and/or the returns back. If you are not in a hurry to get returns, longer-term investments like property are always better. If you need returns fast i.e. in a few years, you can invest in stocks. The risks are however higher with such investments since stock prices fluctuate.

Tip 4: Identify a suitable investment platform

To find the best investment for you, it’s important to find an investment platform that works for you. For instance, if you value convenience, an online investment platform will be perfect for you. In such a case, investing in stocks and currencies may be perfect for you because there are very many online stock and currency brokers. With such investments, you can do everything from the comfort of your home.

There are many other investment platforms. For instance, you may want someone to invest on your behalf. In such a case, you can choose investments that come with managed accounts. With such investments, you share your investment preferences with an investment expert, and they do everything else for you at a small cost. If you don’t have a problem paying someone to make investment decisions for you, such a platform will be perfect for you. In a nutshell, the investment you choose should come with your preferred investment platform.

Tip 5: Consider your interests/passion

Your investments should also be in line with your interests/passion. If you are passionate about real estate, you should consider investing in real estate before considering other investments. This should be the case because you are more likely to succeed investing in things you are passionate about. Your investment decisions shouldn’t be guided by returns only. Passion will help you maintain consistent interest in your investment. Furthermore, you are more likely to secure investment funds if you are passionate about your investment opportunity.

Tip 6: Get professional investment advice

If you aren’t able to find the best investment for you after considering the above tips, you should seek professional investment advice. An investment expert can help you discover the investment options available to you. He/she can also match investment options with your interests, finances, appropriate term, platform, risk appetite, etc. Although you will be required to spend some money to get expert investment advice, the cost is insignificant compared to the consequences of making bad investment decisions.

Conclusion

Your chances of becoming financially independent are very slim if you are not an investor. Saving alone won’t make you rich. Although choosing suitable investments is challenging, the above tips have simplified the process for you. Start by identifying your reasons for investing. Proceed by assessing your risk appetite. If you fear risk, stick to safer investments. You should also consider choosing suitable investment terms and platforms that match your preferences. Don’t forget to consider your interests or passion to increase your chances of success. Lastly, you can seek professional help if you have problems finding a suitable investment.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
The Ultimate Guide to Becoming Your Own Financial Adviser

The Ultimate Guide to Becoming Your Own Financial Adviser

Did you know that everyone has the ability to manage their own finances? The truth is; you don’t need to hire a financial adviser to manage your finances perfectly. Here’s what you need to do to;

Learn the fundamentals of finance

If you’ve handled money before, chances are you already have the most important financial information and knowledge at your fingertips. You just need to remind yourself or discover what you know. The first and most important step to becoming your own financial adviser is learning the fundamentals. The internet has everything you need to know about finance. The information can, however, be overwhelming. To make things easy, focus on the fundamentals of finance namely; general financial planning principles, investing, taxes, insurance, retirement and estate planning. Most people hire financial advisers to advise them on these areas so learning them goes a long way.

When learning about the fundamentals of finance, pay attention to the sources of information you choose. The internet is packed with information from all kinds of sources, so it is crucial to focus on validated sources only. For instance, it is better to learn about taxes from a tax expert than an individual with little to no experience on tax issues. So, pay attention to your sources to ensure you get accurate information. You should also focus on the basics before you dive deeper.

Apply the knowledge

This may be an obvious step. However, most people hardly apply the financial knowledge they have. Once you learn general financial planning principles like budgeting, apply those principles to the letter. Learning how to prepare a budget will help you track your income and expenditure. You can then proceed and find ways of saving and investing. You don’t need a financial adviser to force you to prepare a budget and save money for investing and emergency expenses.

Applying financial knowledge is crucial for financial success. Learning the fundamentals of finance should help you understand your unique financial circumstances as well as help you craft appropriate financial strategies to help you. Financial success is all about taking action and holding yourself accountable. Having financial goals will help you remember why you are working so hard to manage your finances. Financial goals also come with check-in points for assessing your progress. You should revisit your budget every month. Your investments and financial plan should be revisited quarterly and annually respectively. You don’t need a financial adviser for this.

Manage your behaviour and emotions

Financial advisers do more behaviour management than actual financial advising work. In fact, most people have financial problems because of behavioural problems. For instance, misappropriating finances makes it hard to save money. Regardless, people still spend money on things they haven’t budgeted for. It is usually easy to manage money. However, bad habits and emotions usually get in the way of most people. Furthermore, many people assume history will repeat itself and fail to have contingency plans to ensure they always make prudent decision regardless of their emotions.

For instance, stress tends to distract people from their financial goals. Peer pressure also influences many people negatively when making financial decisions. In a nutshell, many things make it challenging to make seemingly simple but smart financial decisions. To make good financial decisions, start by learning how to manage your behaviour and emotions.

Financial advisers stress on making small consistent steps in the right direction. You also need to create action plans in advance and stick to them regardless of your emotions. You should also be willing to get rid of bad behaviours that have a severe impact on your finances i.e. impulse buying. It’s also important to know when you are making financial decisions based on emotions like fear and greed.

Summary

It costs a considerable amount of money to hire a financial adviser yet, all the advice you need is readily available online. The most important thing is sourcing financial information from reliable sources. You should also pay attention to the fundamentals of finance only to avoid being overwhelmed by information. Last but not least, apply what you have learned and manage your emotions and bad behaviours that tend to ruin many people’s finances. If you have a problem managing your emotions and bad behaviour, think about what is on the line i.e. your future and that of your family. You don’t need a financial adviser to take action in the right direction.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
How to Switch UK Energy Suppliers to Get the Best Deal

How to Switch UK Energy Suppliers to Get the Best Deal

It’s always good to look for new avenues of saving money. Reducing your energy bill is a great place to start. By switching energy suppliers, it is possible for you to save a lot of money every year. What’s more interesting is; it’s not a tedious and time-consuming process as many people are led to believe. In the UK, you just need a recent energy bill, your postcode and approximately 10 minutes. It is possible to switch energy suppliers online or by phone. Here’s what you need to do to get started;

1. Find a reputable energy price comparison website (uSwitch)

Before you decide to switch energy suppliers, it’s important to conduct a thorough price comparison. You can do this using accredited energy price comparison websites like uSwitch. The best energy price comparison websites are accredited by Ofgem. Such websites are proven to offer accurate data and make the process very simple. The websites also compare prices offered by the entire energy market. You also stand to get customised comparisons matching your energy usage when you use reputable energy comparison websites like uSwitch.

2. Enter your postcode and usage information

After finding a reputable energy comparison website, proceed by entering your postcode. Energy prices are usually set regionally for easier comparison. Furthermore, some energy suppliers serve certain areas. Entering your postal code will help you narrow down the best energy plans and suppliers.

Proceed and enter your usage information to get accurate comparison results. It’s also advisable to enter household consumption details. Such details can be found on your energy bill. You can also give estimates. It is important to fill in all the fields to get the best estimate possible.

3. Review the results and pick the best supplier

Once you have estimates from different suppliers, it’s time to pick the best energy plan and supplier for you. The results you get can be overwhelming so consider using filters to refine your results. Depending on your preferences, you can choose to see all energy plans and suppliers or view fixed rate energy plans only, plans without cancellation fees, etc. The best energy comparison websites offer detailed information i.e. most popular energy plans/suppliers in your region so, it shouldn’t be a problem finding the best energy plan and supplier.

4. Make the switch

After identifying a good energy plan and supplier, it’s time to make the switch. You can make the switch by selecting a suitable supplier, plan and providing your personal information i.e. address and bank details (if you have chosen a direct debit plan which is usually the cheapest). Your new energy supplier will be alerted immediately. They should contact you before the cooling off period is over (i.e. the time required to switch energy suppliers). It takes approximately two weeks to finish a switch. Your new supplier should contact you with specific details/information i.e. service switchover date.
Other important information to consider

The above steps are adequate enough to help you find the best energy supplier and make the switch seamlessly. You should, however, be aware of some important details.

Energy supply interruptions?

You shouldn’t expect any interruptions i.e. your new supplier coming to your home to install new piping, cabling, etc. When switching energy suppliers, you only change the company that bills you. Everything else remains the same.

Switching period

It takes approximately 17 days to complete a switch (a 2-week cooling-off period plus an extra 3 days). Your new supplier is supposed to maintain contact with your old supplier to agree on things like a switch over date. Depending on the type of switch i.e. gas and/or electricity, the switch over dates may differ for each. Your new supplier will, however, keep you informed.

If you decide you don’t want to switch energy suppliers, you should contact your new energy supplier before the switching period is over (within 14 days). They should cancel the switch without causing any interruptions to your energy supply.

Summary

The above information summarises what you need to know about switching energy suppliers in the UK. Once you select a good energy price comparison website like uSwitch, you shouldn’t expect to face any other problems. Reputable energy price comparison websites have all the information you need to switch energy suppliers successfully and enjoy huge savings every year.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
Understanding Cryptocurrencies: What you need to know about cryptocurrencies

Understanding Cryptocurrencies: What you need to know about cryptocurrencies

What is a cryptocurrency?

Cryptocurrencies have many definitions. A cryptocurrency can be defined as a digital currency created from a computer code. A cryptocurrency can also be defined as a string of data encoded to signify a unit of currency. There are many cryptocurrencies the most popular being bitcoin. Unlike conventional currencies, cryptocurrencies are free of government oversight and manipulation. They are monitored via peer-to-peer Internet protocols.

Cryptocurrencies are created through ”mining” i.e. adding transaction records to the public ledger of the cryptocurrency in question. Cryptocurrency transactions happen instantly and are known to the entire network. The transactions must be confirmed to be finalised. Cryptocurrency transactions aren’t reversible or forgeable when they are confirmed.

To understand cryptocurrencies in depth, you need to understand their revolutionary, transactional and monetary properties.

Revolutionary properties of cryptocurrencies

Cryptocurrencies stand out from regular currencies because of their properties the most notable being their revolutionary properties. As mentioned above, cryptocurrencies have no oversight body i.e. government or a central bank that can create/influence supply or demand. Cryptocurrencies aren’t just entries in a database as is the case with conventional currencies. Cryptocurrency databases can’t be changed by anyone you can’t see or rules you don’t know.

The currencies derive their name from the fact that the consensus-keeping has been secured using strong cryptography. Unlike regular currencies, cryptocurrencies are secured by math and not trust or people. This makes cryptocurrencies favourable alternatives of regular currency because there is a very slim chance of them being compromised.

Transactional properties of cryptocurrencies

a. Cryptocurrencies are irreversible

Once a transaction is confirmed, it can’t be reversed by anybody including the creators of cryptocurrencies (miners) or government bodies.

b. Pseudonymous

Cryptocurrencies are also pseudonymous meaning accounts and transactions involving cryptocurrencies aren’t connected to any real world identities. Bitcoins are received via addresses which are simply random chains of approximately 30 characters. Although it is possible to assess cryptocurrency transaction flow, it is impossible to connect addresses with the real world identities of users. This property makes cryptocurrencies unmatched in regards to confidentiality.

c. Fast

Cryptocurrency transactions are instant. Transactions are confirmed in a few minutes.

d. Global reach/use

Cryptocurrency transactions take place in a worldwide network of computers which are indifferent of a user’s physical location. You can send/receive money from anywhere.

e. Unmatched security

Cryptocurrency funds are securely locked in a cryptography system which is accessible to the owner only using a private key. Cryptocurrencies are secured by strong cryptography and numbers which are impossible to break.

f. No permission to use

You are free to use cryptocurrencies as you wish. You don’t need any permission to use bitcoins. You can download the respective cryptocurrency software for free, install it and start receiving and sending bitcoins or any other cryptocurrencies.
Monetary properties of cryptocurrencies

a. Controlled supply

Cryptocurrencies are attractive in comparison to conventional currency because their supply is controlled. The supply of cryptocurrencies like Bitcoin decreases with time. Supply is controlled using schedules written in the cryptocurrency code. This simply means that the supply of any cryptocurrency at any time in the future can be estimated today.

b. No debt

Unlike fiat currency, cryptocurrencies aren’t created by debt. Cryptocurrencies represent themselves. They are not loaned into existence like fiat money.

Summary

Cryptocurrencies have a revolutionary impact when you consider their properties. Because cryptocurrencies are pseudonymous, irreversible and you don’t require permission to use them, they solve the problems associated with fiat money. Governments and central banks can’t manipulate cryptocurrencies at the expense of citizens. They can’t prohibit citizens to receive/send money or reverse transactions either.
The controlled supply of cryptocurrencies and global reach/use makes them the perfect currency of the future. Cryptocurrencies are here to stay. So far, they have proven to be the best alternative for fiat money. Although cryptocurrencies are not immune to speculation, they are still a better alternative.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
UK Banks Are Now Paying People to Open Accounts

UK Banks Are Now Paying People to Open Accounts

According to the Financial Inclusion Commission, over 2 million UK citizens don’t have bank accounts. Also, a significant number of UK citizens with bank accounts (50%) prefer handing their money in cash, and 15% of all newly opened accounts are either abandoned or closed.

UK banks have seen this as an opportunity which is why they are now paying people to open and use bank accounts. UK citizens who open new bank accounts or switch accounts stand to enjoy great deals in the form of monthly bonuses, cash backs, loyalty points, interest-free overdrafts, name it! There are many banks with great offers. TSB, for instance, has re-launched its free £125 to customers who switch to its Classic Plus accounts.
If you don’t have a bank account or you are unhappy with your current one, many UK banks have incentives for you. Here’s more on how UK banks are paying people to open accounts.

1. Free switching cash

Switching bank accounts has never been faster and easier. Furthermore, you stand to earn free switching cash. You can use the switching service to open a new bank account and transfer everything in record time. The top UK bank accounts offering free switching cash include; First Direct (offering £125 free switching cash), TSB (offering £125 free switching cash plus 5% cash back) and HSBC (offering £150 free switching cash plus £ to stay).

2. Cashback

UK banks are also offering great deals to people who open accounts paying cashback. These accounts are perfect for people who spend a lot of money on household bills and don’t have enough money to left to earn interest. These accounts are also perfect for individuals who pay their bills via direct debit. Some of the top UK bank accounts with cashback include; NatWest which has a 3% cashback currently for individuals who spend over £270 on household bills monthly. For a monthly fee of £3, NatWest will pay you 3% cashback on your household bills with no limit on the amount of money you can earn.
Santander 123 Lite is offering a 3% cashback with a lower fee £1. However, customers don’t get to enjoy in-credit interest.

3. Free insurance

UK banks are also offering bank accounts with free insurance. These accounts are perfect for individuals who need associated insurance and are always in credit. UK banks which are paying for their clients’ insurance include; Nationwide is offering £600 worth of high-end travel insurance as well as £120 worth of mobile and breakdown insurance. Although customers have to pay £10 per month to enjoy this deal, account holders stand to enjoy great benefits that are otherwise costly.

4. Overdrawing

If you need to open a new account to make your overdrafts cheaper, there are great options for you. UK banks like First Direct and Nationwide have great deals. First Direct has a £250, 0% overdraft plus £125 cash when you put money towards your overdraft to pay it off.

Nationwide has a 12 month, 0% overdraft deal to help you get your finances in order. You also enjoy a £100 bonus for referring a friend who successfully switches/opens a Nationwide current account. Your friend will also receive the bonus.

There are however conditions to enjoy this deal i.e. you must clear your overdraft in a year or start paying applicable charges. Also, Nationwide doesn’t promise to match the overdraft facility clients were receiving previously in cases where clients are switching accounts.

Summary

UK banks are offering many great deals to people who open accounts. These deals range from free switching cash to cashbacks, free insurance, and incentives for overdrawing. It is, however, crucial to check the conditions and fees applicable for you to qualify for the incentives. Missing anything in the fine print can easily reverse your gains. The bank account/s you open must match your needs and the bank’s conditions.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
Financial inclusion in the UK

Financial Inclusion in the UK

What is financial inclusion?

Financial inclusion is a term used to refer to the inclusion of people in a modern financial system fit for everyone regardless of factors like income. For any economy to enjoy consistent growth and prosperity, financial inclusion is of utmost importance. Although Britain is a global leader in financial services, there are still people who lack access to basic banking services. According to the latest World Bank statistics, over 2 million UK citizens are unbanked (don’t have bank accounts).

The UK government understands the importance of financial inclusion which is why a special commission dubbed; Financial Inclusion Commission was formed recently. The commission has members from all sectors including politicians whose aim is improving UKs financial wellbeing.

Financial exclusion brings forth many problems. For instance, citizens who are financially excluded don’t have access to basic financial services which prevents them from participating fairly and fully. Financial exclusion has a negative effect on education, health, employment, housing as well as the overall well-being.

Financial exclusion

Anyone who is not financially included is financially excluded. Financial exclusion affects different people at different times. People with unstable or low income are usually the worst hit by financial exclusion. Other groups of individuals who are bound to be affected include; immigrants, disabled people, single pensioners, lone parents and people who have stayed for a long time without work. Part-time workers and students are also affected by financial exclusion in the UK.

Financial inclusion statistics in the UK

According to recent World Bank statistics, the UK ranks 9th in the world in regards to financial inclusion. The UK has over 1.5 million unbanked adults. Approximately 50% of unbanked adults are interested in having a bank account.

Of all the UK citizens with bank accounts, 50% prefer to handle their money in cash. Customer satisfaction levels in the banking industry stand at 60% for the 4 largest providers.

The newly banked incur the highest penalty charges i.e. approximately 5.6 charges every year. In fact, 26% of newly banked UK Citizens have suffered penalty charges exceeding their gains in savings. Also, 15% of all newly opened accounts are either abandoned or closed.

Between years 1989 – 2012, the UK banking industry lost approximately 7,500 bank & building society branches due to closure. This represents 40% of the entire industry the most affected areas being low-income areas.

Credit statistics

Unsecured consumer credit has increased drastically (tripled) in the past two decades from £51.8 billion to £160.4 billion. It is estimated that over 2 million people take out high-cost loans every year in the UK because they lack access to cheaper forms of credit. Between 3 and 7 million households use any one or more forms of high-cost credit. 49 to 64% of all UK households hold one or more forms of unsecured credit.

The payday loans market has enjoyed the highest growth of all unsecured lending markets. The market has grown from just £330 million to over £3.7 billion in the last decade.

Saving statistics

According to the Financial Inclusion Commission, over 13 million UK citizens lack enough savings to cater for their monthly expenses for a month if they suffered a 25% income cut. The same statistics indicate that UK citizens save less than their counterparts in the EU. Of all UK households, only 41% are active savers.

Insurance statistics

Insurance penetration and uptake statistics are also valuable when assessing financial inclusion in any country. In the UK, 50% of households falling in the bottom half of UKs income distribution chart lack basic insurance coverage i.e. contents insurance. Only 20% of all average income households have contents insurance despite the fact that households which lack contents insurance are three times more likely to be burgled compared to those with insurance.

Summary

A lot need to be done about financial inclusion in the UK. Although only 2 million out of the 64+ million citizens lack basic financial services like banking, UK citizens are still lagging behind in regards to other aspects of financial inclusion i.e. insurance and access to affordable credit. The UK is also lagging behind on saving. However, with the Financial Inclusion Commission in place, the UK is headed for better days.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
How Do Changes To The Pensions in the UK Affect Me?

New Changes To UK Pensions – How Does It Impact You?

UK’s State Pension changed on 6th April 2016. If you attained State Pension age on/after 6th April 2016, you will get the new State Pension with new rules aimed at simplifying everything. Here’s what you need to know about the new changes if you’ve made contributions under the previous/old system.

How are you affected?

If you have been receiving a State Pension, the new changes won’t affect you. You will still continue receiving your pension under the old system rules. The same applies to individuals whose State Pension was taken early i.e. 1953 but deferred to any date after 6th April 2016. In such a case, calculations will still be made using the old system rules. If you had not accumulated any State Pension before/by 6th April 2016, new State Pension rules apply.

Key changes

One of the key changes to UK’s State Pension touches on the earnings-related section applied to employees. This part which was known as Additional State Pension has been abolished. The new pension is now based on National Insurance alone. Currently, the new pension stands at £155.65 per week. It is, however, possible to get more if you have entitlement to more state pension (under the previous system). To be eligible to receive £155.65 per week under the new system, you will require 35 years National Insurance record.

How the new State Pension is calculated

Your National Insurance record as of 6th April 2016 will be used to come up with a starting amount that is higher than what you would get under the previous system. If the starting amount happens to be higher than the new full State pension, you will get the entire new State Pension sum plus anything else above as protected payment which is inflation-adjusted. However, you can’t be able to accumulate more State Pension going forward.

If the starting amount equals the full new pension, you will get the full new pension. However, you can’t be able to accumulate more State Pension going forward. When your starting amount is less than the new full State Pension, you can accumulate more State Pension to a max. of £155.65 per week until you attain State Pension age.

Deferring new State Pension

You can still defer taking your pension under the new changes. For every year deferred, you stand to enjoy a 5.8% increase compared to a 10.4% increase enjoyed under the old system. The new changes also deny you the right to take the entire deferred amount at once.

New State Pension in regards to women’s/widow’s reduced rate National Insurance contributions

The new pension system is based on your National Insurance contributions alone. Your pension can, however, be calculated using different rules resulting in a higher rate if you choose women’s/widow’s reduced rate National Insurance contributions.

Topping up

The new system avails two schemes for topping up your pension. The scheme you use will depend on; if you have attained State Pension Age.

Class 3 Voluntary NI Contributions

In the new pension system, it is possible to make Class 3 NI contributions if you haven’t attained State Pension Age, but you are worried about having enough NI contributions to qualify. The contributions are voluntary and solely meant for helping people fill gaps in their NI records for purposes of boosting basic pension entitlement.

Passing over your pension to your dependants

The new rules have made it easy to pass over your pension to your dependants. For example, if you die before reaching 75, your pension will be transferred over to your dependants tax-free. Tax has also been reduced from 55% to 45% for individuals who die after 75, and your dependants want the entire pension as a lump sum.

For more information, visit https://www.gov.uk/check-state-pension

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.