Why the self-employed need pensions

Pension transfers have passed the £60bn mark as more than a third of a million people access their defined benefit (DB) pots, a Freedom of Information (FOI) request has revealed. The data, supplied to Royal London, showed there have been 390,000 transfers out of DB pension schemes since Freedom and Choice came into force in 2015, with the value of the transfers totalling £60bn. The provider asked The Pensions Regulator to update previous estimates with the watchdog providing figures disclosing that the number of transfers in 2017/18 and 2018/19 sat at 100,000 and 210,000 respectively. The value of transfers was estimated at £12bn in 2016/17, and in 2017/18 the value was confirmed as slightly higher at £14bn. In 2018/19 the value of the transfers out of DB schemes was more than double the year prior, sitting at £34bn. Tim Sutcliffe commented: “The baby boomer generation that has enjoyed the benefits of a Defined Benefit scheme, are now looking for greater flexibility on drawing a pension, better death benefits and ability to withdraw tax-free cash from age 55.” This follows the news the FCA was ‘disappointed' and 'concerned' at the large number of DB transfers being recommended by firms, despite the regulator's stance that transfers are likely to be unsuitable for most clients.

With increasing scrutiny on systems and processes, the need for a high performance server has never been more important. pi has had its own server for many years but the previous server was running at capacity and was rapidly becoming outdated. With an impending date for the operating system to become obsolete, there was an imperative to replace the server before the January 2020 deadline. As a result, pi recently introduced a new state-of-the-art server with ‘failsafe’ options to ensure that no single crash would affect all elements such as email at the same time as internet and data services. IT Director of pi, Keith Hansell, said: “The new server operating system is compatible with the relevant regulations and incorporates greater capacity for data storage and improved performance, ensuring that our systems are more reliable. “We have also upgraded our desktop computers and laptops to improve their performance. These initiatives have put us at the top of our game from a technological point of view. The upgrades form part of a series of on-going enhancements to our already compliant systems. “We opted for ‘virtualisation technology’ on the new server, which allows us to run multiple, logical servers within one physical infrastructure which basically means that not everything is affected if there is a server crash or failure.” Due to increased dependence on the server, there is also a ‘Failover Resilience’ incorporated within the hardware which means that all elements are duplicated. To further benefit the systems, we are taking steps to mitigate against data loss with an improved back-up solution which allows the server to restore in cases of system failure and to recover single files or emails from any given point in time, as opposed to the traditional single ‘Restore to Last Night’ model. Keith continued: “One of the main benefits to advisers is the more consistent, stable performance of the server. Office-based advisers will also notice and benefit from a level of improved performance. “With security and compliance at the cornerstone of every adviser’s business, I would strongly urge that all advisers ensure that their hardware and software is ready for the January deadline so as to continue being compliant and operating at peak performance levels. If anyone has any concerns or uncertainty about this, please feel free to call Neil or myself for help and advice on 01743 282222.”

pi financial Dixon Sutcliffe Limited has been operating in Shrewsbury for 25 years providing financial services. The brainchild of Tim Sutcliffe and Shaun Dixon, pi financial has grown from a two-man-band back in 1994 when it was first established, to a multi-million pound turnover company with over 20 full time employees and a network of around 120 advisers. The firm of today, still reflects Managing Director and co-owner, Tim Sutcliffe’s ambitions for a company that can provide effective, quality financial advice to the masses. “pi financial has grown exponentially and we have set the bar high on being financially astute and putting clients and advisers first. We remain a growing force by working closely with the independent financial advisers that choose to join us but leave them to the advice.” Says Managing Director, Tim Sutcliffe. The IFA-focused compliance of pi financial has helped them to provide a service to advisers that they can value and does not impede the advisory process. “We want the support we offer to remain accountable, so at this point we have capped the numbers of advisers in our network at 120,” says Tim. With advisers joining the length and breadth of the country, pi financial attributes its successful development to a strong ethical approach and transparency in its financial dealings with both advisers and consumers. An on-going commitment to training and investing in its team is at the core of the firm’s ethos. “We are delighted to increase our adviser base as steadily as we have. All the advisers who have joined us have been referred by our existing team of advisers which is a credit to the staff and I would like to think the biggest sign of commitment our team can give us.” Says Tim.

Each year, FTAdviser's Top 100 Financial Advisers list sets out to showcase some of the best financial advisory businesses working in the UK. For the past five years, the list has been based purely on gross sales using data from research partner Strategic Insight, formerly known as Matrix Data. However, this year marks a new dawn for FTAdviser’s Top 100 Financial Advisers list as it has introduced significant changes to the methodology used to rank businesses and based it on a greater volume of data received from Strategic Insight about these companies. This year’s list looks at a range of data and then uses an algorithm to figure out how different advice businesses are doing at recommending assets in different economic and interest-rate environments and how highly qualified advisers are performing. In 2014 pi financial was placed 66th, so this rapid escalation to 15th in the rankings demonstrates the commitment to excellence which underpins the firm’s business model. Tim Sutcliffe, Managing Director of pi financial commented: “This is a great achievement in a well established national table and provides a credible reference point for investors. Equally, following a year of change and challenges, it demonstrates the hard work undertaken by our advisers. “This is an accolade that reflects across the entire firm and is a true testament to the advisers, staff, service and quality that they continue to deliver to clients.”

In this year’s Budget, the Chancellor has extended the Help to Buy equity loan scheme until 2023, but how successful has it really been? The Help to Buy equity loan scheme allowed six out of 10 users to buy a bigger property than they would have otherwise been able to afford, government analysis of the scheme found. More than eight out of 10 buyers would not have been able to buy the same property without assistance, according to the analysis published alongside the 2018 Budget. However, more than a third say they are trapped and feel unable to move up the property ladder – a feeling which is strongest among those in flats and smaller sized property. The introduction of the initiative in 2013 also encouraged lenders into higher loan to value lending and opened up the new build mortgage market to more players by making it more financially viable, providers told the government. From 2021 the scheme is to be extended for two years until 2023 but will be more targeted with regional purchase price caps in place and only first-time buyers allowed, it was revealed in the 2018 Budget. Price caps start at £186,100 in the North East and go up to £600,000 in London. Developers said the scheme had resulted in an additional 43% new homes being built between 2013 and up to January 2015, government analysis showed. And it was estimated between 40-50% of Help to Buy equity loan home sales would not have happened without the assistance. Off the back of the scheme, confidence in the market improved as well as the profile and awareness of the new build market, developers said. Critics have welcomed the extension and clarity of the scheme. An independent financial adviser can assess your situation and place before you the best and most appropriate products for your individual circumstances.

Almost half of older workers feel unsupported by their employers, despite the fact that millions are working longer, research has claimed. Insurance firm Aviva found almost two thirds of over-50s in work, 6.4 million people, were planning to retire later than they expected to 10 years ago. Aviva warned firms' failure to support such workers risked a "disheartened and discouraged over-50s" workforce. By 2030, it is estimated half of all adults in the UK will be over 50. The survey of 2,500 adults found people over 50 were more confident about their ability to keep up at work than their younger counterparts, while also feeling more secure about their skills. The state pension age is set to rise to 68 by 2037 as people live longer. The survey found that around 40% of those over 50 were extending their working lives due to rising living costs or because they did not have sufficient pension savings to fund their retirement. The amount you can save into a pension ultimately depends on what you can afford - but the longer you leave it the more you will need to save. Research regularly shows that we put ambitious targets on our hoped for income in retirement and then underestimate how much we will need to set aside to achieve that. So how much should you save? We take a look at what you might want to retire on and how to get there. How much do you need in retirement? There are a couple of essential things to consider when thinking about how much you would need in retirement. The first is that your outgoings are likely to be lower. One general rule used in the financial industry is that someone aged 40 would need about 50 per cent of their current income to have the same standard of life in retirement. This works on the basis that by the time they retire they will be mortgage-free, not supporting children and no longer spending as much on things such as commuting and other costs involved in going to work each day. The second thing to consider is the state pension. Under the new flat-rate state pension scheme this is £164.35 per week, which is £8,546 per year. Allowing for a full state pension, someone targeting retirement income of £23,000 would need other pension income of about £14,500. The pension pot needed to deliver that income based on taking a 4 per cent income from funds that stayed invested in retirement would be £363,000. How much should you save? Obviously, the amount that you need to save each month depends on how big a pension you want. But it also depends on your age. For example, you may get a decent level of retirement income if you start in your 20s by paying in 12 per cent of your salary, but if you leave it until you're over 40 then you might need to pay in closer to 20 per cent to get the same level of retirement income If you do decide to take control of your own pension, make sure to keep track of any charges which can eat into your returns. If you can take control of your situation early enough, then hopefully, you can enjoy the retirement of your dreams.

Pension scam victims are losing an average of £91,000 each as fraudsters see the potential for looting savings pots. City regulators are now launching a new campaign aimed at alerting people - especially those in their 40s, 50s, and 60s - to the risk of pension fraud. They want people to check any pensions firm they deal with is authorised and credible. How the scam works : The scam usually starts with an unexpected call, text, social media approach or email - offering a free pension review, or a way to make attractive returns on pension savings. But the money may be simply stolen or transferred into a high-risk scheme completely inappropriate for retirement savings. Many offer eye-catching returns or high-rolling investments in hotels or green energy schemes that never materialise, or instead lead to losses. The Financial Conduct Authority's Financial Lives report suggested that 107,000 people aged 55 to 64 could potentially have been victims of pension scams last year It is thought that only a minority of pension scams are ever reported. Many of those losing money may only have relatively small pension pots, but it may be their entire life savings. Pension companies should warn people about scams if a transfer is requested to a scheme that appears to be unauthorised. Tips for avoiding scams : Reject unexpected pension offers whether made online, on social media or over the phone. Check who you're dealing with before changing your pension arrangements. Check the FCA Register or call the FCA contact centre on 0800 111 6768 to see if the firm you are dealing with is authorised by the FCA. Don't be rushed or pressured into making any decision about your pension. Consider getting impartial information and advice from an authorised, independent financial adviser. Campaigners hope the government will introduce a pensions cold calling ban that was first announced nearly two years ago. After the latest consultation, the new ban is scheduled to be put before Parliament shortly, according to the government, but is unlikely to take effect until next year.

The journey to her sporting success has been studded with pitfalls and challenges, but it began four years ago when Toni was challenged by her boss, Tim Sutcliffe, chief executive of Shrewsbury- based pi financial, to take part in the London Triathlon. At that point, Toni, then aged 31, hadn’t ridden a bike since she was 14. She gamely purchased a ‘Triathlon pack’ and went down to the capital and gave it her all. Although she didn’t get placed, she didn’t disgrace herself either and discovered a joy in competing in the three disciplines of running, cycling and swimming. So much so, that she committed to the sport and found herself a training coach – Applied Triathlon Coaching. “It is really hard; the diet and training regime is arduous and there are so many occasions when I would just rather eat junk food; Macdonalds and biscuits being my guilty pleasures,” Toni admits. As a key member of the board at pi financial in her role as business development director, Toni juggles her sport and the demands of her work with a busy family life. As the mother of two young children – Mary aged two and Seren aged 10 and a hard working fiancee, Iain Hebborn, she is pulled in several directions. Recently nominated for the Investment Week and HSBC Global Asset Management 2018 Women in Investment Awards, which have been established to recognise the inspiring achievements of women across all parts of the investment industry, Toni did not set out to become a ‘force for finance.’ Born in Welshpool in 1984, she left school at 16 and decided to take a role working as an AAT modern apprentice with ‘on the job’ training and secured a job with an insolvency company in Manchester. Just four years later, she moved to Shropshire and landed a job in the accounts department at pi financial and never looked back. Toni said: “My role grew in tandem with the company’s growth. With increasing regulation in the financial industry, the need for further qualifications became an on-going requirement. So, I worked my way from accounts assistant to manager and then finance director, attaining my CII along the way. I continued to broaden my horizons and developed a variety of skills, securing further qualifications and evolving alongside the company, achieving distinctions in the ICA AML and financial crime exams and being awarded the position of money laundering officer.” Now, business development director at pi financial, Toni has been with the company for 14 years and perceives her greatest achievement as believing in pi and allowing the company and its team to nurture her into the position she holds today. “Tim has mentored me in financial matters and has also allowed me to develop my sporting achievements. My fiancee, Ian, supports a great deal of our family commitments,” Toni admitted. With her heavy work commitments, what was her motivation to become a top performing athlete? “After Mary was born almost two years ago, I felt so utterly tired. However, at that point, I experienced an epiphany and I thought I can either be a worn out person who is only defined by motherhood and crashes out at the end of each day or I can get my act together and bring my sporting aspirations to fruition,” she explains. Toni chose the latter and embarked on a punishing training schedule which includes run sets, 20 to 60 kilometre bike rides, 3000 metre pace swims, hours on the Swiss ball, open water swims and stretches. With just one day off each week, Toni has striven for and then maintained a level of fitness that was just a pipe dream 10 years ago. This dedication culminated in her earning a place on the British team (age group triathlon) at Thorpe Park last year where she came fourth. She said: “It was really hard but I was really determined as I knew there was a place on the British team at stake.” As a result, Toni has just competed in the European Triathlon Championships in Glasgow for Great Britain and although she secured a place in the World Championship in Lausanne next year, the date conflicts with her wedding in Italy but she remains hopeful that she can replicate her success for 2020. Her position in the Women in Investment Awards will be announced in November, but already this year has seen her reach unprecedented success and next year looks set to be a year to remember for the best of reasons.

Building your own home can create a more valuable and energy efficient house and is often cheaper than buying a residential property. Yet, while self-build is glamourised in many property programmes and articles, the process of financing a project can be rigorous and arduous. Unless you have a load of spare money lying around, you will need a mortgage to fund your self-build. Find an expert Self-build is a niche market for lenders and many have exited in recent years citing a lack of demand. Deals are still available from some lenders such as Norwich & Peterborough, Saffron Building Society, BM Solutions, Leeds Building Society, or specialist Buildstore. Deposits, rates and terms vary depending on planning permissions and the stage of the building. There are additional items you will need such as your planning permission and plans of the house so the lender can do an end value. When applying for a self-build mortgage, your current mortgage or rent commitments will be taken into account by a lender when deciding how much you can borrow for your project. The way affordability is assessed depends on the lender. Make a budget The bank will want to know how much you estimate the project will cost. You will also need to be able to ensure you can afford somewhere to live in the meantime. The amount you can generally borrow to purchase the land will be 75 per cent of its current value, and for the build costs, again you can usually borrow around 75 per cent of the end value. If you already own the land or the property,you can borrow against the value of this, meaning you can borrow more of the build costs. Make a detailed plan A lender will want to see detailed plans for the property, a projection of costs and planning permission details. The whole application process can take around five months on average. You will have to be clear on everything including the people and materials being used. Factors such as build type, construction method, materials, location, and schedule of costs will all impact which lenders will lend and how much. Consider how you will receive payments Lenders typically release the money for a self-build in several stages, taking a project from foundations to the finished property. They may want to inspect each stage before signing off on the next slice of money. Some banks don’t lend until the property is watertight, while others may be happy to just to see the foundations built. There may also be terms about doing all the work yourself or using a contractor and sometimes stipulations about the materials used. Change your rate once the project is complete The initial mortgage rate during the build is often high, between 5 and 6 per cent, but you may be able to switch to a lower rate once the property is built and the lender has done a valuation. You may also be flipped onto a repayment mortgage as well. According to Buildstore, the average end loan-to-value on self builds is 58 per cent. The average cost-to-value is 72 per cent. With such complex procedures, it is helpful if not vital, to have an independent financial adviser on board with your project. He or she can help you through each stage of the process and handle many of the funding complexities. They are also in a position to advise you on tax related issues, for example, those tackling barn conversions are eligible to claim back the VAT on materials. Ends