SJP 'perks', pensions for kids, and state pension age changes - here's our weekly heads-up on the financial stories that may have caught your clients' attention over the weekend …
St James's Place investors pay for fun afloat
St James's Place advisers have to bring in £150,000 from clients to win a place on the advice giant's annual "jaunt" - described as a "business trip" - according to The Sunday Times. In this article it says that "business trip" is a cruise around the Balearic islands on a "luxury liner" for the use of the company's best-selling advisers.
The article claims the more money SJP advisers bring into the business, the bigger the perks, which include business-class flights, all expenses-paid cruises in glamorous locations and lavish entertainment.
The newspaper also claims: "The company uses a system of credits to determine the pay and perks — including the chance to join the annual overseas conference — earned by its advisers, who are known as partners. One credit is broadly equivalent to £1 of new money brought into the business in a calendar year. Other wealth managers tend to pay a fixed salary plus a bonus."
How to give kids a pension leg-up
More babies are born at this time of year than any other and, while the retirement savings of a new-born might not be on the minds of most parents, says this piece in the Mail on Sunday, there is no better option for a financial gift than a pension pot.
"The rules currently allow relatives to squirrel away up to £2,880 a year in a pension for a child and have it topped up with tax relief to £3,600," says Brewin Dolphin financial planner Jo Douglas.
That ceiling for savings within the scheme, coupled with compound interest, makes for a good incentive to bulk up the pension pot early. Douglas continues: "Anyone starting one for a new born now and paying the maximum amount in every year would contribute a total of £51,840 over 18 years - with the pension receiving a Government top-up in the form of tax relief worth £12,960."
Candid Financial Advice's Justin Modray adds: "If this same person then leaves the pension untouched until they turn 65, they could eventually have a pension pot worth nearly £600,000 assuming an average annual investment return of 4 per cent."
State pension age change came into effect this week
The state pension age is increasing - those who were 65 years and six months reached it this week - and it will reach 66 for both men and women by October 2020.
Under the Pensions Act 2014, reminds this Daily Express article, the state pension age will keep getting later for men and women after that date and will increase to 67 between 2026 and 2028. Then, under the Pensions Act 2007, the state pension age for will rise from 67 to 68 between 2044 and 2046 for both sexes.
Despite those diary dates, the article continues, the Pensions Act 2014 provides a review of the state pension age at least once every five years. That means the above dates are "indicative only" and could be subject to change. One's state pension age can be found online using the government's web-based tool.
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