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Why choose MW Pensions? (SIPP mis-selling?)

Treating Customers Fairly: Reasons why you should use MW Pensions

These are fairly challenging times to work in the Financial Services sector. The FSA are currently involving themselves in their TCF initiative. Northern Ireland has been done, the North West are currently being processed and apparently it’s the turn of the North East next. Many companies have been experiencing phone calls and visits.

Then, of course, there is the Retail Distribution Review and their review of the SIPP market which will both have far reaching implications for advisers and providers alike.

With this as the backdrop, I thought it might be worthwhile to give you our take on TCF, and to remind you of our core values:-

  • Quality Service
  • Client and Adviser Choice
  • Transparency

The attached leaflet details our approach to supporting these values. To view it, please click

Advisers can have confidence that their clients will be treated fairly and professionally, and that technical support is just a phone call or mouse click away.

Nor are we resting on our laurels. As one of the fastest growing SIPP Providers in the country (see Plimsoll Report 2008) we are continuing to invest heavily in people, training, technology and infrastructure, and are actively working to improve our standards. We are also working on a number of online applications to improve access and communication.

If you would like to know more, please get in touch with us.

Kind regards

Chris Williams

PS. Don’t forget that 75% of cash coming into SIPPs comes via transfers from insured arrangements – the funds are already there!

MW SIPP Administration (IOM) Ltd

NEW QROPS TRANSFER SCHEME SUITABLE FOR UK EXPATS

We are pleased to announce the launch of the MW IOM QROPS SIPP. This is a scheme based on the Isle of Man which is able to transfer UK pension funds offshore and is now open to:-

  • IOM Residents
  • Non IOM Residents

There is also no age restriction i.e. those over age 75 who have ASP concerns can move their pension scheme offshore

It will be of particular interest to those of your clients who are looking to transfer their pension funds and who are:

- UK expats with UK pension funds

- Planning to emigrate in the future

- Approaching 75 or have passed 75 and are in Alternatively Secured Pension (ASP)

- Foreign nationals who have UK pensions

Unlike many other QROPS schemes, we are not specific to only one country such as Australia. To us where the client lives doesn’t matter as long as there is a UK fund to transfer.

To see more detail please click]

The Isle of Man has its own tax regime:-

  • Zero rate IHT
  • Zero rate CGT
  • No Stamp Duty
  • Zero rate Corporation Tax
  • Income Tax with a basic rate of 10% and a higher rate of 18% (but income tax is capped at £100,000 per annum, irrespective of how much you earn)

From 6th April 2008 the Isle of Man is changing its tax treatment of pensions which includes:

  • No need to buy an annuity at 75
  • No tax on death before drawing any benefits
  • If any benefits have been taken,7.5% tax on fund surplus on second (for example, of surviving partner).
  • 30% tax free lump sum

Any pension transfer would be done under QROPS rules (see link above) and would be treated as a Benefit Crystallisation Event by HMRC at the date of the transfer.

One of the conditions to being a QROPS scheme is that there are reporting responsibilities by us as the Scheme Administrator to HMRC for the first 5 years of any significant scheme events. These would include taking any benefits e.g. tax free cash and/or income withdrawal or the death of member. The reporting requirement is not valid if a member has already been living abroad for 5 years or more.

There is obvious potential here for good tax planning. We do not give any tax advice nor do we advise on such matters as residency and domicile. However, we are aware that such suitably qualified advice exists.

This is a legitimate SIPP working within HMRC’s QROPS rules and those of the Island. It is aimed at those genuine cases of people who intend to be non-UK resident and non-UK domiciled when they die, although the scheme is also open to UK residents.

Please feel free to contact us to discuss any client issues you may have.

Kind regards

Chris Williams

Director

High Interest banking Options - click

Tax year-end opportunities for SIPPS

TURN £6,000 INTO £10,000 :

SET UP A SIPP PRE-APRIL FOR AS LITTLE AS £250

The end of the tax year approaches. This gives you the opportunity to save your clients tax by setting up a SIPP. Consider the following scenario:-

Ø Make a personal contribution of £7,800
Ø We claim back £2,200 from HMRC
Ø A higher rate tax payer can claim back a further £1,800

So for as little as a £6,000 outlay you can have a pension fund of £10,000

AND YOU CAN DO IT TWICE!

For tax year 2006/2007 up to 5th April 2007
and
For tax year 2007/2008 from 6th April 2007

How much does a SIPP cost? (all fees subject to vat)

For funds up to £60k
ACORN SIPP Set up fee nil
Annual fee 1% of fund (minimum £250, maximum £600)

For larger funds

FULL SIPP Set up fee £350 (nil for transfers from other SIPPs)
Annual fee £600

What else?

Ø No transfer-in charge for ACORN
Ø Capped transfer-in fee with full SIPP
Ø No transaction charges for contributions, investments or consultation
Ø Online application form
Ø Fully downloadable documentation
Ø Wide investment choice including residential/overseas property (in GDCV)
Ø Your fee can be taken from the fund

What are the next steps?

Phone me Chris Williams on 0151 328 1777

MW SIPP PROPOSITION: AN UPDATE

We have developed WHAT WE BELIEVE TO BE A UNIQUE PROPOSITION, on the following principles:

  • Client and Adviser Choice, of both SIPP and Investment
  • Quality Service
  • Value for money and transparency

This is underpinned by outstanding technical and professional support and market-leading technology.

1. CLIENT AND ADVISER CHOICE

There is now a unique choice of two SIPP options: both now online set up with full documentation

  • MW ACORN SIPP - a starter SIPP for smaller funds (cheaper than a Stakeholder !!)
  • MW SIPP2 - the full SIPP option (including Exotics !)

There is a choice of banks for competitive high interest banking and a choice of the type of account, from instant access to 12 months fixed. We believe this is unique in the marketplace with a rate of at least 0.25% below base for instant access and a further choice of rates for longer term deposits

There is a wide choice of investments, from the full quoted shares and insurance product options with Acorn to the complete choice for the full SIPP, including commercial property, gold bullion, unquoted shares and investing in residential property using Genuinely Diverse Commercial Vehicles.

2. QUALITY SERVICE

We are not and will never be a call centre. You will always deal with the same people.

We offer

  • Personal service and consultancy by specialists
  • Technical advice and support (but not financial advice)
  • Regular newsletters and updates
  • Website resource including a wealth of downloadable information
  • <
  • Trustee meetings with you and your clients

3. VALUE FOR MONEY AND TRANSPARENCY (MORE DETAILS ATTACHED)

  • No hidden fees, commissions or “turns” on bank accounts

  • Clear competitive fee and service structure

  • Full SIPP fee is fixed regardless of fund size

  • Acorn has no set up fee, no transaction charges and an annual fee of 1% of the total SIPP fund, with a minimum,

but also a MAXIMUM fee

  • No additional fees for investments or contributions made

We do not give financial advice, nor do we take commissions. Where we don’t charge a set up fee, clearly you are free to do so, and to take commissions for investments or mortgages. With the client’s agreement, your fees can be paid from the fund. Please call if you wish to discuss further.

PLEASE READ TO FIND OUT MORE ABOUT WHAT IS, WE THINK, A UNIQUE PROPOSITION IN TODAY’S SIPP MARKET PLACE.

Kind regards

Chris Williams

FINAL SALARY SCHEMES: SEVERAL MORE NAILS IN THE COFFIN?

Some new issues have emerged recently, and have yet again increased the scope, responsibility and challenge for Scheme Trustees

This covers the following topics;-

  • Pension Regulator’s view of funding – a recipe for business confusion?
  • Scheme funding assumptions and “prudence” - a double whammy!
  • “appropriate” funding of shortfalls – when is a deficit not a deficit?
  • PPF levy – more costs and trustee responsibility
  • Contingent funding – trustees as corporate financiers?
  • Investing scheme assets – a different view
  • The issue of transfer values
  • The BA effect
All important stuff if you’re a businessman, a trustee or an adviser, and if some of our comments seem unduly jaundiced, we feel that with some of these measures the already beleaguered Final Salary sector is being beset with a proliferation of increased costs, poorly drafted regulations, probable errors, and lack of commonsense or joined-up thinking. It is hard to believe that this is what was intended.

Unfortunately it doesn’t end there. The position of trustees, already difficult, is becoming untenable. An MBA will soon be the lowest qualification for a trustee to have

In addition, it is likely that confusion and misinformation will engulf boardrooms regarding future financial obligations. How can you value a business?
If you have any comments or queries please don’t hesitate to contact us.

Kind regards

Chris Williams
Director

Ps. We can offer corporate schemes a holistic service of essential trustee, consultancy and legal services, and full actuarial and administration services at competitive and transparent fee levels.

BUDGET 06 UPDATE AND HMRC UPDATE ON INVESTMENT IN RESIDENTIAL PROPERTY

The Budget passed without any major shocks or alarms. In fact from a pensions point of view, detail was rather thin on the ground. However, subject to the Finance Bill 2006, (expected in the first half of April) the following issues were either clarified or confirmed;-

IHT treatment for pension surpluses – the Family SIPP
Recycling of tax-free lump sums
Unquoted shares (caution advised in the short term)

The main provisions of A day seem to be confirmed eg contributions limits, ASP, etc
All of the above is covered inr.

On Friday 24th March, HMRC released details of the definition and tax treatment of residential property within SIPPS and SSASs

The main point is that direct investment in residential property, both here and overseas, is permitted by SIPPs and SSASs, in certain circumstances.

covers the above.

Again bear in mind that these are “draft” documents at this stage and will doubtless feature in the Finance Bill. However, on the face of it there has been an outbreak of commonsense. The full details can be found on www.hmrc.gov.uk/pensionschemes/draft-guidance.pdf .

SIPP OPPORTUNITIES FOR CLIENTS AND ADVISORS

A DAY is approaching rapidly, and the changes that come into force offer major opportunities for advisors and their clients. In the last few months we are already noticing the following trends;-

  • SIPPs being set up for property already owned
  • SIPPs being set up ready for larger contributions
  • smaller funds being transferred in from insured arrangements
  • growing interest in overseas commercial property investment
There has been a noticeable increase both in volumes of and interest in SIPPs, and the movement away from insured arrangements gallops apace

Consider the following changes and the huge opportunities they open up:-

  • Connected Parties rule change
  • new rules on contributions, company and personal
  • rules on in-specie contributions,
  • rules on annuity purchase
  • Family SIPP (after clarification)
  • 25% tax free lump sum
  • investment in unquoted shares (cautiously until April)
We have attached a newsletter outlining the changes with some examples of how they might be applied. We have further examples if you’d like to discuss them. We’ve also attached a newsletter which is suitable for clients, existing or potential. Please feel free to adapt it. (If you would like a copy in word format, for ease of adaptation, please let me know).

We are also willing to support advisors at seminars/briefings etc if required. Don’t hesitate to contact us

Regards

Chris Williams

Director

SIPPS FOR ALL!

Self Invested Personal Pensions have been around for about 15 years. They have increased in popularity over the last few years, with 2005 being by some way the biggest year so far.

SIPPs as they are known are set to grow even more the next several years, as they become increasingly “mainstream”

There are a number of reasons for this;-

;-they allow you to control your own investments
;-conventional insurance arrangements are seen as expensive failures
;-they are flexible allowing a wide range of investments
;-fee structures can be transparent(but take care!)
;-they are relatively simple structures – “wrappers” for your investments which allow you to build your own pension
;-you can invest in commercial property
;-there are extremely generous tax advantages

One of the reasons SIPPs are becoming so popular is that from April 2006, all existing pensions legislation is being scrapped – “simplified” This is known as A day – “appointed day”-when many new things become possible for SIPP investors. The reason for the change is essentially threefold;-

;-the existing rules are far too complex
;-as a nation we are not saving enough for our retirement
;-as a nation we are living longer

This is generally known as the “Pensions Timebomb”, although you can insert the doomladen word of your choice here.

For the last couple of years, the main aspect of the A day changes that has been given extensive media coverage has been to include residential property, both in the UK and overseas, as a permitted SIPP investment. This decision was rescinded in December 2005 by the Chancellor on the pretext that abuse of the tax rules and mis selling would ensue – a total nonsense but we are where we are.
One of the byproducts of the media coverage was to get the term “SIPP” into the public consciousness, and if we are to believe the reports, as a hot topic for the dinner table.

In reality, residential property would only have accounted for a small proportion of new SIPPs being created. The changes and opportunities of A day are far reaching and profound and are meant as an incentive or encouragement for people to save more for their retirement

For the first dozen years of their existence, SIPPs were predominantly a vehicle for high net worth individuals to accrue their tax free benefits, quite legitimately. But increasingly over the last couple of years average SIPP fund values have been dropping as more and more people become aware of the benefits and advantages of a SIPP

Let’s face it, the whole aim of A day is to get as many people as possible to start to take more responsibility for their own prosperity in retirement. Almost by definition the more people who do this, the more initial fund values will drop and the more successfully will A day be regarded

Pre-Budget Report 2006


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What is a SIPP

A SIPP (Self Invested Pension Plan) is a financial vehicle that allows individuals to acquire and accumulate assets in a “fund” of their own designed to meet their specific retirement needs.

About SIPPS
Chancellor Gordon Brown introduced legislation in the 1989 Finance Act that made SIPPs possible. SIPPs have been around for some years. Currently there are some 120,000 individual SIPP schemes in place and many commentators believe that, given the changes to SIPP legislation in the 2004 Finance ACT, there will be as many as 500,000 by 2010. The most notable aspect of the 2004 Act was further changes to the Tax benefits for individuals which are now very attractive indeed and the permissible investments. SIPPS remain an ideal way of building wealth over a long period.
In its pure form (eg The MW SIPP), there is the opportunity for freedom of investment, including commercial property and, from 6th April 2006, residential, buy to let and foriegn property. Most people can have a SIPP providing they are less than 75 years old are a UK resident or resident overseas as a Crown Servant or the spouse of a Crown Servant and have relevant earnings or can transfer funds from another scheme. Investors can be employed or self employed.
Governments of all hues love to “tinker” with our financial plans so no one can be sure of what new changes may come along and few of us have the time or know how to enable us to truly monitor our pension arrangements. For this reason and because we are not regulated by the Financial Services Authority and so cannot offer anything other than generic advice about SIPPs we will refer your enquiry to two firms of Independent Financial Advisers who can analyse your particular situation and make recommendations to you with regard to your retirement plans. You, of course, decide which to retain as your advisor. If you already benefit from Independent Financial Advice then please indicate this when you complete the enquiry form.

What is the "MW SIPP"?

  • A Personal Pension Scheme approved by the Inland Revenue, with a whole realm of benefits and a great deal of flexibility
  • Is available to you whether you are employed or self-employed
  • Enables its owner to invest towards retirement in a tax-free environment.
  • Funds can be invested in a wide range of assets (subject to certain provisions), including:

    - Stocks and shares
    - Overseas stocks and shares
    - Futures and options
    - Commercial Property
    - Land
    - Insurance Company Funds
    - Deposits
    - Authorised unit trusts
    - Shares in an open-ended investment company
    - Traded endowment policies
SIPP Specialists Limited and the MW Self-Invested Personal Pension (MW SIPP)

Through our subsidiary SIPP Specialists Ltd, we provide the MW SIPP. As stated above this is an Inland Revenue approved personal pension scheme. The fee structure is completely transparent, with no small print. The services we provide are equally explicit, and our administration is we believe the best in the industry. We are specialists in purchasing property using SIPPs.

Tax Planning.
The MW SIPP offers the opportunity to take full advantage of up to 40% tax relief and growth is not subject to Capital Gains Tax.

  • Any contributions you make to the MW SIPP qualify for tax relief at your highest rate. This means that, if you pay tax at 40% on part of your income, for each £100 invested you would only actually pay in £60 This means that the government is, in effect, giving you back £40.
  • The MW SIPP is free from Capital Gains Tax. This means that you receive the benefit of the whole of any investment growth
  • At retirement a “lump sum” of up to 25% of the whole value of your Pension Plan can be paid to you completely free from Income and Inheritance Tax!
  • If you are employed then contributions made to the MW SIPP , by your employer, are allowable as Corporation Tax deductions
When the inevitable happens in many circumstances the whole of the value of your MW SIPP can be paid out to your family or other dependants free from Income Tax. Above all the MW SIPP is designed to provide you with income in retirement.
  • Your MW SIPP is divided into equal parts, so you could take benefits from part or parts of the investment but not all, phase your retirement or partially retire.
  • When all of the parts are used to pay your benefits, you can take up to 25% of the value as a tax free cash lump sum.
  • Unlike other existing Pension Plans, where legislation demands that when you decide to retire you must buy an annuity at the then prevailing return, after you have taken the tax free cash the remainder of the fund can provide income by either the purchase of an annuity from an annuity provider or by withdrawing income directly from the fund
  • An annuity will normally guarantee a level of income for life whilst income withdrawn from the fund may change depending on the investment return and your income requirements. Whichever method you choose, you will probably want to take some advice about both the advantages and disadvantages of each approach. This will help you to decide the method most suited to your needs and objectives.
  • You can start to draw benefits from the fund at any time between the ages of 50 and 75.
  • Income withdrawal can currently only continue until age 75, when the remaining fund must be used to buy an annuity.
  • The MW SIPP will continue to allow you to invest assets in all of the available ways.
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The laws and rules governing Pensions are subject to change and update. This needs to be borne in mind when using the information on this website which was up to date on our understanding of the law at the time of writing. We will be updating the information on a regular basis

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