'Your Money Matters'
Quarterly Client Newsletter 
Spring 2011 Edition
April 2011
Greetings!  

Now that Spring has finally sprung welcome to this year's April edition of 'Your Money Matters'. 

In this edition we will be looking in detail at George Osborne's second budget and in our Financial Tips section we compare the benefits provided by critical illness and permanent health insurance (otherwise know as "income protection") policies.   

 

Finally, we hope that you are finding these quarterly newsletters of interest?  We would welcome your feedback so do let us know if you have any suggestions for financial topics you would like to see included in future editions.  Copies of all six previous editions can still be viewed by clicking 'Previous Newsletters' in the Quick Links section on the right.  
In This Issue
Financial Tips
The 2011 Budget
Financial Tips
In each edition of 'Your Money Matters' we aim to provide you with financial strategies that we follow when advising clients.   
 
Critical Illness Cover Versus Permanent Health Insurance 

We find quite often that clients misunderstand the workings of a critical illness policy and mistakenly believe that it provides full protection against any form of illness.

How do they work and what are they designed to do? 
 
Critical Illness  
Critical Illness policies are designed to cover critical illnesses that could have a severe impact on your lifestyle.  Should you be eligible to claim the policy would pay out if you were diagnosed with one of the specific illnesses covered by the plan.
  
For example, click here for a list of 39 illnesses covered by Legal & General's policy (which is typical of most insurers' critical illness policy).

Most home owners purchase life assurance when they arrange a mortgage but only a minority effect critical illness cover - even though they are five times more likely to claim on the policy!!

Permanent Health Insurance
With this type of insurance the policy will pay you a replacement income if you cannot work through illness or accident and you have a loss of earnings.

Click here to read more about how these two types of policy work and why there is a need for both of them.      

If you think you would benefit from a review of your protection policies talk to your IFA at Firth & Scott today and start the process of ensuring that you and your family are protected.
The 2011 Budget 
 
As is the case these days modern budgets are different in that many planned tax increases and reforms are announced prior to the budget in the Draft Finance Bill (published in December 2010).

 

However, there were a few surprises which had not been foreseen.
  • The promise of a further rise in personal allowances to £8,105 for the tax year 2012/2013.
  • An increase in the tax levy on "non-doms" to £50,000 p.a. from 2012/2013.
  • A reduction in the IHT rate to 36% as a reward for making substantial charitable requests.
  • A reduction in the main rate of corporation tax to 26% from 1 April 2011.
  • An increase of the capital gains tax exemption by RPI to £10,600.

The Chancellor also announced that a consultation was to commence on considering the eventual merger of current income tax and national insurance contributions to form a new type of income tax. 

 
Click here to read more about changes announced in the budget relating to:-
  • Income Tax
  • National Insurance Contributions
  • Capital Gains Tax
  • Inheritance Tax
  • Corporation Tax
  • Savings & Investments (including the new Junior ISA)
  • Pensions
If there are any areas relating to the budget that you would like to discuss, please do not hesitate in contacting your IFA or myself here at Firth & Scott.
  

Article written by Steve Hopkins FCII 
If you wish to discuss any of the points raised in the articles above please do not hesitate in contacting me here at Firth & Scott Financial Services Ltd.   

 

Regards, 

 

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IMPORTANT NOTE

This newsletter is designed to provide you with general information only and does not attempt to give you advice on any particular investment or to recommend any particular investment to you.  If you have any doubt as to whether a particular investment is suitable for you you should contact Firth & Scott Financial Services Ltd for advice.

 

Firth & Scott Financial Services Ltd are independent financial advisers and are authorised and regulated by the Financial Services Authority.
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