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Mowatt Financial Planning: December 2010

Tuesday, 21 December 2010

Compensation limits

From 31st December 2010 the deposit compensation limit under the Financial Services Compensation Scheme (FSCS) will increase to £85,000 from £50,000. This means that an individual can hold up to £85,ooo with a financial institution and be protected if that institution were to become insolvent.

The moneysavingexpert site gives detail on financial institutions that are linked an also on institutions not protected by the FSCS.

It's important to keep your exposure to any one financial institution within the compensation limits.

Thursday, 9 December 2010

New Annuity rules

The Treasury has just announced changes to how pension income can be taken. It's good news as it is giving more flexibility. The changes come into effect from 6th April 2011.

The most significant change is that a flexible drawdown option will be introduced allowing withdrawals above a capped limit as long as a minimum guaranted lifetime income of £20,000 per annum can be verified.

The capped limit refers to one of the other options whereby income can be taken between £0 and 100% of the basis amount which is broadly in line with the amount from an annuity.

Of course an annuity will very often be the right choice for the majority of people but this additional flexibility is a welcome development which can hopefully increase the appeal of pensions.

Wednesday, 1 December 2010

Individual Savings Account limits

In case you had not spotted this. The limit for investment in an ISA (Individual Savings Account) will be increased to £10,680 from 6th April 2011. As is currently the case 50% can be invested in a Cash ISA and 50% in a Stocks and Shares ISA.
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