Personal pensions ‘vital’ for women

Independent financial advisory Ruth Whitehead Associates has urged women in particular to make sure they have a personal pension set up, as well as other savings, to given them financial security in the future.

Ruth Whitehead, principle advisor for the company, said that it was important for women to take out a personal pension because their National Insurance contributions are more likely to be affected by time taken out from work, which could in turn lower their state penions.

According to the Pensions Advisory Service, only people who have made National Insurance contributions for about 90 per cent of the years in their working lives are entiteled to a full state pension.

Ms Whitehead said that women should consider “three things” to safeguard their financial future, one of them being a pension, although she added that pensions “now can’t be the only route to sorting out your long-term needs”.

She also noted that Isas were a good option, as well as property.

Tags: advisor, independent, principle advisor, state, Ruth Whitehead Associates, Ms Whitehead

DIY holidays are ‘a false economy’

Holidaymakers wishing to save money by purchasing their flights, accommodation and car hire themselves may find that they are not covered by travel insurance, the Association of Independent Tour Operators (Aito) has said.

Booking the different parts of a trip separately could be “a false economy”, since people may be putting themselves at financial risk in the event of something going wrong, according to the organisation.

As many as 20 million consumers on ‘do-it-yourself’ holidays could be risking their money this summer and could even be stranded abroad if a company goes out of business, the Civil Aviation Authority reported.

Consumers are advised to book with one operator because if something goes wrong, such as a plane being cancelled, this could also affect car hire and accommodation arrangements.

A spokesperson for the Aito commented: “Always book with a tour operator because you’re spending quite a considerable amount of money and rather than saving one or two hundred pounds, why risk it if something goes wrong.”

Tags: Human behavior, independent, accommodation arrangements, Civil Aviation Authority, company

AIFA responds to government proposals

Recently the government announced its intentions to crackdown when it came to Independent Financial Advisers to ensure that consumers were receiving sounds advice based on their needs rather than on which lender would be the IFA the most money in commission.

The government stated that financial adviser services would become more standardized and that those wishing to operate as independent advisers would have to seek payment for the advice from the customer and not from the lenders that he or she recommends.

The European Commission has also put forward a green paper that recommends a single, standardized European market.

Chris Cummings from the Association of Independent Financial Advisers stated: “The EU should be mindful that the UK retail financial distribution market is unique because the majority of business in retail financial products is arranged through intermediaries. The delivery of this advice, according to Deloitte research, has the potential to improve the wealth of low to medium income earners in the UK from £38bn to £78bn even if only 10% were to optimise fully the advice given.”

He added: “We support the Commission’s views that there must be a rigorous and thorough analysis before introducing any new regulations, which takes into account both the benefits and the cost to firms and consumers, and the impact on the market. There are many reasons why consumers are naturally restricted from using cross border financial services such as language, taxation, social welfare and currency. The Commission must consider these issues before seeking to force standardisation that will not benefit consumers.”

A letter that has been signed by a number of industry professionals has been signed and sent to the commission to urge officials to improve their knowledge of consumer demand before any action is taken on this issue.

Tom Smith
24th July 2007

Tags: invest, financial, advisers, ifa, independent, earn