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FINANCE
We will bring you a financial feature every fourth issue, if you have a financial
question, please write in to the paper. |
| OMO isn't just a washing powder, it stands for
"open market option" and it is an important feature of pension plans. As a
pension plan holder you will probably assume that you should take your pension from the
company with which you have built up your savings. But you can, and should usually
consider, transfer of your pension fund and taking your pension income (annuity) from a
different company. Other companies might offer you a better pension from the money you
have built up. This is partly because annuities are a competitive market and one company
may be willing to pay you more than another and partly because of the financial rules
applying to annuities which may mean one company can pay more income than another. With so
many annuity companies to compare, it is highly likely that you will be able to get a much
better pension by moving the fund. As with any area of financial planning, annuities offer
a wide range of options. Some are governed by rules and regulations, but many are down to
personal choice. For example: Would you like your income to be fixed, (meaning it may be
higher initially but never increases to compensate for inflation) or rise each year by a
fixed percentage, or in line with inflation? If you have a partner, do you want the
pension payments to continue after your death? If so, at what levels? (e.g. half of your
pension amount) If you die early do you want a guaranteed larger amount paid for a set
period to your partner? If when you apply for your annuity you have an illness or
disability which could potentially shorten your life expectancy, some companies offer what
is called an "impaired life annuity" which pays higher levels of income to
reflect the shorter expected payment period. Under conventional Inland Revenue rules
applying to pension annuities your investment funds are used to buy the annuity and so you
obtain no further investment growth from the date of annuity purchase. For some people the
alternative of taking income by way of "Income Drawdown" may be attractive.
Income Drawdown is a facility whereby you can take tax free cash and pension income from
your pension plan without having to purchase an annuity until age 75, Income Drawdown
allows the purchase of an annuity to be deferred. Income is taken directly from your
investment fund, any investment growth on the investments themselves continues to go into
the plan. There are risks involved with Income Drawdown arrangements as annuities rates
could deteriorate and/or investment returns could falter, but for some people, especially
where their pension plan is not their sole source of retirement income, they can be an
attractive proposition. Because the future situation as regards what level of pension you
will eventually get is less clear with Income Drawdown this option is normally only
considered for those who either have larger funds (well over £100,000 after tax free cash
has been taken) or for those whose other resources mean that they are not too dependent on
their pension. One further aspect which appeals to some is that, unlike an annuity where
only income to your chosen beneficiary can continue following your death, until an annuity
is purchased the lump sum value of funds under investment (less a tax charge) can be paid
to your beneficiary upon death. A further option that appeals to some is a "Phased
Retirement" plan. This combines features of both standard annuities and Income
Drawdown type arrangements, all within one plan. The workings of them are probably too
complicated to be covered in this article, but they may be of interest to holders of
larger pension fund amounts. As can be seen from this brief article, there is a lot more
to taking your pension income than simply signing on the dotted line for the first thing
quoted by your existing pension savings company. Once you commit to an annuity there is no
going back, so you owe it to yourself to check out your options. More so than at almost
any other time, you need to seek out a good independent financial adviser, or you could
sell yourself short. |
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| CEASING
TRADING |
| Another sad day for Sheringham, after 13 years the Great
Trading Company, so long a great place to shop in town is closing it's doors. |
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Over the years, they have listened to their customers
requests and whenever possible, they have met the demand. |
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| There has always been a wonderful variety of goods
available for us to choose from. Everything from slippers to sports wear, bags, hats,
make-up, sheats, towels, tools, the list goes on. |
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Amer would like to thank both Locals and Tourists for
their support over the last 13 years. We would like to wish him well in his new venture.
Good luck and Thank You.
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50% SALE NOW ON
EVERYTHING MUST GO
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