New IFA's advice: don't understand the math

gadgetmind

Blue_Parrot wrote: »

Additionally, the IFA was shocked to hear that this spare money is going into a new Lloyds savings account, because Lloyds have set aside £3.2 billion for PPI claims. Since I am not a PPI claimer this is irrelevant to me; and all the high street banks have had to do the same. Barclays £1 billion; Natwest £850 million; HSBC £268 million.

Agreed, unless you were likely to exceed £85k in any one institution, their PPI liability is of no consequence.

Blue_Parrot

Lokolo wrote: »

Have you used up all your ISA allowances?

Yes, it will be used by by the end of the current tax year. Next year's ISA allowance is also accounted for in that that will be used up by next September. After that I'll have a different problem, but that is a year away.

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I have another question and maybe someone looking at this thread can answer it, although I realise it is in the wrong place.

Regarding the £20,000 minimum income requirement which must be proved so that one can go into flexible drawdown, is this proved only once, or do they require proof every year?

This question is not regarding me/my finances but those of my husband, who is not going to retire for another 5 years anyway. I cannot see an answer to this once only/every year question anywhere. I suppose it is possible that no-one knows, yet, since the rules only changed this year.

Thank you for any knowledgeable replies.

gadgetmind

Blue_Parrot wrote: »

Regarding the £20,000 minimum income requirement which must be proved so that one can go into flexible drawdown, is this proved only once, or do they require proof every year?

An interesting question. It seems that the MIR is reviewed every five year BUT once an individual has qualified, they won't be tested again.

Note that the MIR test is stringent. All the income must qualify, must be being drawn (and being drawn enough for you to qualify in that tax year) and you cannot make any pension contributions in the qualifying tax year or get tax relief on any ever after.

Flexible Drawdown is complicated and I suggest that you get advice as it's easy to mess up.

Blue_Parrot

gadgetmind wrote: »

An interesting question. It seems that the MIR is reviewed every five year BUT once an individual has qualified, they won't be tested again.

Note that the MIR test is stringent. All the income must qualify, must be being drawn (and being drawn enough for you to qualify in that tax year) and you cannot make any pension contributions in the qualifying tax year or get tax relief on any ever after.

Flexible Drawdown is complicated and I suggest that you get advice as it's easy to mess up.

Thank you for the reply gadget. That makes three different opinions/versions I have heard.

One is that it only has to be proved once;
Two is that it has to be proved every year;
Three is that which you state.

To settle a potential argument, is there any definitive source on this?

Many thanks.

gadgetmind

Blue_Parrot wrote: »

Thank you for the reply gadget. That makes three different opinions/versions I have heard.

That's the good thing about opinions. (Hit google for the rest of the quote!)

I haven't (yet) found a definitive source, mainly because while I could qualify for MIR, I can meet my needs in other ways.

I have, however, found a lot of back-up from flexible drawdown providers.

For instance here -
http://www.scottishlife.co.uk/scotlife/web/site/Adviser/TechnicalCentralArea/Informationguidance/Benefitoptions/Removalofage75rule.asp

They say -
"Once an individual passes the initial MIR assessment, they can continue to use flexible drawdown while they have funds available. This means that the MIR, once agreed, doesn’t need to be checked again. "

As MIR sources won't drop monetary values, and MIR levels will only change every five years, this seems reasonable. However, so did 120% GAD, and this has been ripped away.

Blue_Parrot

gadgetmind wrote: »

That's the good thing about opinions. (Hit google for the rest of the quote!)

I haven't (yet) found a definitive source, mainly because while I could qualify for MIR, I can meet my needs in other ways.

I have, however, found a lot of back-up from flexible drawdown providers.

For instance here -
http://www.scottishlife.co.uk/scotlife/web/site/Adviser/TechnicalCentralArea/Informationguidance/Benefitoptions/Removalofage75rule.asp

They say -
"Once an individual passes the initial MIR assessment, they can continue to use flexible drawdown while they have funds available. This means that the MIR, once agreed, doesn’t need to be checked again. "

As MIR sources won't drop monetary values, and MIR levels will only change every five years, this seems reasonable. However, so did 120% GAD, and this has been ripped away.

Thank you for that gadget, it is sufficient for my purposes.

I have another question (off topic) but will risk putting it here anyway because then I can sum up.

Equitable Life Compensation.

http://www.bbc.co.uk/news/business-13966118

I am under the distinct impression that in order to gain compensation - unless you are an annuitant - you have to be a policy holder no matter how long the compensation process takes. If you (the policy holder) cash in, move, or in any way stop being a policy holder then you give up your place in the compensation queue. Notice that it keeps saying "eligible policy holders".

This is from the Treasury website: " other policyholders will receive a pro rata share ......"

http://www.hm-treasury.gov.uk/fin_equitable_life.htm

Am I right? (that you have to keep the policy alive and canNOT claim if you stop the policy)

Thanks.