I wrote in a previous article about the change in pension retirement age for personal pension plans from age 50 to 55.

When does the change come into effect?

This change comes into effect on 6th April 2010. You may need to take action before that date if you’re aged between 50 and 55 and wish to take pension benefits BEFORE you reach age 55.

Failure to act could mean that you are prevented from taking your pension benefits from your personal pension until you reach 55 – which could have a serious impact on any change in lifestyle you are planning on making in the next 5 years.

Newspaper article highlights opportunity to move t Income Drawdown

This article in the Daily Mail talks about this change in legislation maybe affecting up to 3 million people.

The article highlights the case of a gentleman who will be 50 on 5th April – the day before the change in retirement age comes into effect!

It mentions the option of moving to an “income drawdown” arrangement.

With an “income drawdown” arrangement your existing pension fund is moved into a new contract, tax-free cash (now known as “pension commencement lump sum”) of 25% of the fund value may be taken and the remaining pension fund remains invested and an income may be drawn from it.

This income is limited by the Government Actuaries Department and depends on a number of variables – a financial adviser can provide guidance on this should you decide to take your benefits through this route.

You don’t have to take income immediately from the income drawdown plan and most pension providers have flexible contracts.

You also have the opportunity to move from an income drawdown arrangement to an annuity at any time after commencement (known as vesting – see my article on maximising pension income in year one)

The one downside is that once you move into “income drawdown” the remaining pot will be subject to tax on death, whereas in the “prevested” personal pension plan, the fund might be held outside your Estate through a trust arrangement – you need to check with your specific pension provider to see if your personal pension with them benefits from this kind of trust arrangement.

Alternative Options

You could consider taking your pension benefits by purchasing an annuity. An annuity is an income for life – in exchange for your pension pot (after you have taken your tax-free cash – why wouldn’t you?!) the life company will provide you with an income for life.

This route offers lower risk – once the annuity commences the life office is carrying the risk that you die before the money runs out.

However, annuities are generally inflexible but do suit many people.

It is important to take advice before making any decision.

Alternatively, like most people, you could simply do nothing – many people are not in the fortunate position to be able to benefit from taking their pensions before age 55 – but that’s a topic for another day!

Action needed

If you will be aged 50 or over before the end of this tax year on 5th April 2009 AND you wish to take your pension benefits BEFORE age 55 that you contact an Independent Financial Adviser to ensure that you don’t miss out.

Act quickly as well – don’t leave it until the last minute – with postal strikes, increasing amounts of work in respect of ISA’s etc before tax year end and the generally slow speed at which pension funds move between companies you need to ensure that your IFA has a suitable time in which to understand your position, advise on the most appropriate course of action and to actually physically move the money into the new arrangement!

The whole process can take a few months – even longer depending on the pension provider.

Rob over at Moneywatch has some handy tips for us all to bear in mind with the possible postal strikes in the run up to Christmas.

His excellent article, “Don’t Let the Postal Strike Cost You Money” looks at various implications which we should all think about with the possibility of there being a disruption in the postal deliveries.

The Need to Plan Ahead

He talks about the need to plan ahead, particularly when it comes to paying your bills, credit cards and other important items.

WARNING! Get your tax return to HMRC as early as possible.

Actions I have Taken

For my part, I have tried to move away from dependency on the post over the last 12 months, not only to avoid problems with items getting lost or delayed, but also to do my bit for the environment.

1. Plan ahead – know what bills have to be paid and when.

2. I have moved all bank statements to paperless – I now simply download them once a month from my banks website.

3. If you have to post and it is important consider sending it by “special delivery” – although there is no guarantee that your letter will get through in the event of a strike atleast you’re covered for compensation if it gets lost in the post.

4. If posting ask yourself “could this be emailed or could I phone them instead”?

5. Pay bills by Direct Debit – not only is this less hassle and saves you the cost of a stamp but with some bills you can actually save money by setting up your payments by Direct Debit.

6. If you’re concerned about Christmas shopping not getting through, consider shopping online through a discount voucher site – many online retailers are promising that deliveries will not be affected by strike action – and if you’re really concerned why not get the present delivered direct to the recipient – many online stores will gift-box your purchase these days.

Let’s hope there isn’t too much disruption through any postal strike action – but check out Rob’s article and plan ahead.

Hey folks – it’s that great time of year again when we all panic about getting our tax returns in to HMRC (those of us who complete a tax return that is).

Paper Returns

If you want to send a paper return to HMRC and have them calculate the tax then the deadline is 31st October 2009 (if you received a notice to submit a return before or on 31st July this year – if you received your notice after 31st July then you have 3 months from that date – confusing, I know!)

Online Returns

If you’re looking to have tax collected through your PAYE code (i.e. you’re an employee) then you have to submit online by 31st December 2009.

If you’re self-employed and you wish to calculate your own tax liability then you have until 31st January 2010 (this is the one I go for – note to self – get books to Accountant)


It’s important not to miss a deadline as HMRC may issue you with a fine of at least £100.

More information on tax deadlines from HMRC website.

I thought you should be made aware that I received a spam email today – purportedly from HMRC (Inland Revenue)

The body of the email contained the following text –


Issue: Unreported/Underreported Income (Fraud Application)

Please review your tax statement on HM Revenue and Customs (HMRC) website (click on the link below):

review tax statement for taxpayer id: simon-XXXXXXXXXXXXXXUK” 

Below the above text was a link to a website which looked like it was for the HMRC (Inland Revenue) website, but when you look closer you can see that the address is in fact not a HMRC address –

http:  / / www. online.  hmrc . gov.  nyyyyasz . com / …………………………………..

I have expanded the URL above to ensure it is not clickable (!) – notice that the above address contains nyyyyasz – what you would actually be clicking on would be a sub-domain of the website (nyyyyasz . com) but the above web address is made to look like the official UK HMRC (inland revenue) website!

If you do a DNS you will see that the above domain is not registered to the UK government anyway!

Be careful – there are people out there on the Internet who want to rip you off.

My Tips to Avoid Being Ripped Off

1. Shred all bank statements, credit card statements etc – opt electronic statements if possible.

2. Never click a link in an email from a source you are not familiar with.

3. (I) never click links in emails purporting to be from my bank, mortgage company or credit card company – I simply log in through the usual web address and check my “messages” – if in doubt phone/email your bank/credit card company/mortgage lender to see is they sent the email.

4. Often emails like this are made to provoke a negative reaction from the recipient – the wording is such as to infer a negative outcome if you don’t click and take action immediately – they are simply trying to catch you off your guard such as

“warning – we will cancel your account”

“you owe us tax”

“someone has tried to log into your account fraudulently”

you get the idea.



Please tell friends, family and colleagues about this scam – it could save the a lot of hassle, time, money and heartache.

In our regular feature we will cover some of the topics which readers have been emailing us about. Naturally we can’t give direct financial advice but maybe some of these questions and their answers will be of interest to you.

I hear that ISA rules are changing in October, how does this affect me?

ISA contribution limits are changing on 6th October – here are some of our more popular articles on this subject –

Confused about the new ISA allowances and limits?

Reminder – cash ISA allowance is increasing

Change in ISA allowances – Budget 2009

What is an ISA?

My life insurance company wants to apply a Market Value Reduction if I surrender my Bond, why?

A Market Value Reduction can be applied on the surrender of a with-profits bond (or any with-profits fund for the matter) in times when stock markets and other asset classes may have fallen in value – we have seen this recently with the fall in world stock markets in 2007 and 2008.

The MVR is designed to provide you with a fair surrender value for your plan based on the performance of the underlying investments and also to protect those who remain behind  by basically ensuring you don’t take a “bigger slice of the cake” than you’re entitled to!

This article goes into more detail – Avoiding a Market Value Reduction (MVR/MVA)

I find it difficult to budget – how can I make this easier?

We all have income and expenditure to meet – some of it is the same each month, and some of it is variable.

I wrote an article a few months ago – cashflow forecasting – income and expenditure – there is a great spreadsheet you can download to help you plan and track your monthly income and expenditure.

I have a personal pension – what is the minimum age I can retire?

It is currently age 50, but this is about to change – see this article for more details and urgent actions you might need to take if you’re aged between 50 and 53 now.

My mother is a non-taxpayer. How can she reclaim tax paid on her building society interest?

To reclaim the tax she needs to complete an R40 – she can also register to receive the interest gross from now on – read this article.

And finally……

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I thought I would post about a few interesting articles I have read recently – I thought you might find them interesting reading – a little light relief from all this ISA allowance increase, change in pension age malarkey!

Rob over at MoneyWatch posted an interesting article “Create a Home Inventory” which got me thinking about an old game we used to play at cubs – the cub leader would bring our a tray with about 20 different items on and we used to have a about 20 seconds to look at the tray. The tray would then be taken away and we had to try and remember as many as possible.

I am sure if the worst happened and I was burgled or had a fire I would be able to remember a lot of things but I know for sure that I would not remember everything – I am therefore going to start cataloguing all my possessions – a spreadsheet will do the trick!

Meanwhile, Lee over at FivePencePiece, when he was not busy with Labour Party conference or his appearance on the radio wrote an article entitled Patience is a Virtue. Lee reminds us that nothing happens overnight and that “a journey of a thousand miles begins with a single step”.

I read a book many years ago on the subject of goal planning – one of the most important chapters for me talked about the need to take any task which at first glance might seem very difficult and break it down into smaller, more manageable “chunks” – for example, if you’re overweight and need to lose say 3 stone then this in itself is quite an achievement.

But if you break it down and say “I will lost 1lb per week” which is more than possible given some exercise and changing your diet, then you would achieve your waste loss goal in 42 weeks!

The final blog post I liked recently was “51 Unusual Money-Saving Tips” from over at WiseBread – I love lists – I am always making lists (mainly “to do” lists!) and love this kind of post – it acts like a hub with so much information coming off this hub in a series of “spokes” – just like a wheel on a bike.

Anyway – there should be enough for you to be going on with there – please let me know which posts you have read recently by posting a comment and a link below – please feel free to link to other personal finance blogs you visit.

Well ISA day has finally arrived and the contribution limits increase today for those people aged over 50 before 5th April 2010.

What is the current ISA position?

Anyone aged over 18 in the current tax year is allowed to contribute up to £7,200 to a Stocks and Shares ISA. If they choose, they can use up to £3,600 of this allowance to contribute towards a Cash ISA.

Any unused allowance after making contribution to a Cash ISA can be invested in a Stocks and Shares ISA.

For example, if someone currently places £2,000 into a Cash ISA, before the end of the tax year on 5th April they can either invest an additional £1,600 into their Cash ISA, and invest £3,600 into a Stocks and Shares ISA. Or alternatively, they could leave just £2,000 invested in the Cash ISA and invest £5,200 into a Stocks and Shares ISA.

What is changing on 6th October 2009?

The annual allowance for anyone aged 50 or over before the end of the current tax year is having their ISA allowance increased to £10,200. Of this £10,200 allowance up to £5,100 can be invested in a Cash ISA.

What about for those aged under 50?

For under 50’s their ISA allowance will remain at £7,200 for the rest of the current tax year and their allowance will increase on 6th April 2010 to £10,200 in line with the over 50’s allowance.

We have been suprised and delighted with the success and positive feedback we have received so far for our 2010 year planner. Yet a large number of visitors have asked whether we plan to make an academic year planner for 2009/2010.

So, here is it is – our academic year planner for 2009/2010 – ideal for students at school, college or university as well as for parents who wish to plan ahead in terms of school holidays etc.

Download Academic Year Planner 2009/2010

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Related articles:

Download Free Yearplanner for 2010

Here is our usual monthly list of the top 10 read articles on shrewdcookie.com in September – there are some surprising entries!

1. Change in ISA allowances in Budget 2009

The changes announced in the Budget in respect of increases in the ISA allowances come into effect on 6th October for those over age 50 before the end of the current tax year – can invest up to £10,200 into a Stocks and Shares ISA. Woo hoo!!!

2. New Tax Year – New ISA Allowance

More detail on the changing ISA allowances.

3. Download a Free 2010 Yearplanner

I have put together a great little yearplanner for 2010 – it can be downloaded in A4 (landscape) or larger A3 (printed on 2 sheets of A4 for those without an A3 sized printer!). Feel free to send copies to friends, family and colleagues at work.

4. 19 Essential Money Tips for Students

With the start of the University/College/School term upon us here is a great article which might help a few students who are struggling through on their limited finances.

5.  Pay Yourself First

One of the first principles spoken of in the great book “The Richest Man in Babylon” is the need to pay yourself first – the principle here is to take a fixed percentage off your take-home pay and keep that money for yourself forever – then your lifestyle will change itself to allow you to live on the remainder. Get a copy of this book – a truly great read. It could be the most valuable £4.99 you ever invest!

6. Cashflow Forecasting – Planning Income and Expenditure

Here is a really helpful little spreadsheet which will allow you to plan your income and expenditure on a monthly basis – you will be able to see exactly where your money goes to each month – allowing you to make changes in your expenditure – a great tool for “what if” scenarios – what if I stopped eating out, what if I increased income by £200 per month etc.

7. Personal Pension Minimum retirement age increasing to 55 from 6th April 2010

Those people who will be over 50 before 5th April 2010 and were planning to retire in the next 5 years may have to take some urgent action between now and then – in the worst case scenario you may have to continue working for another 5 years!

8. Wear a uniform to work – here’s some free money!

If you have to wash your own work uniform you could be entitled to some money from the taxman – read the article for more information.

9. Get Money for your Old Mobile Phone

Did you know you can sell old mobile phones – I recently sold my old Sony Ericsson K800i and got £28 for it – worth checking out what yours might get you – see the article.

10. 10 Great Reasons for Writing a Will

Everyone needs and should have a Will – it saves so many problems in the event of your death – and let’s face it the only two certainties in life are death and taxes! Read the article now – you might be surprised.

And finally……

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