How Can You Build A Bigger Pension?

Nowadays people are living longer so how you plan for your retirement is becoming more important.

This article will introduce you to six ways you can make the most from pension planning to build as large a pension pot as possible to enjoy in retirement.

1. Even after retiring you can still pay into a pension pot

After you stop working you can still pay into your pension pot. In fact, you can keep making contributions until you are 75 and receive up to 45% tax relief. Many people who retire still do part time or consulting work and these earnings can be paid into your pension if you wish. *Note: tax rules and the amount you receive in tax relief is subject to change and can differ depending on your individual circumstances.

2. If you switch job you don’t need to lose your pension

Many people think that if they move job they will lose their pension post. When you start a new job you will be asked if you wish to join the pension scheme – you should always take this option, even if it is only a small percentage of your income as the company will match your savings; effectively giving you more money. In order to manage moving jobs you should look to consolidate your pension savings into one pot. For more information about this you should speak to a financial adviser so you do not lose any benefits.

3. Pensions are free from inheritance tax

When you pass away your pension can be passed onto beneficiaries. As it typically sites outside your estate there is no inheritance tax to pay.

If you pass away under the age of 75, your beneficiaries can withdraw what they like from your pension and pay no tax. If you die after 75 your beneficiaries will need to be tax on any withdrawals made.

However, if you have converted your pension pot into an annuity then these rules may be different.

4. Make contributions as and when you like
Another common myth about pensions is that you must make regular contributions. Nowadays pensions are far more flexible and you are able to contribute when you like. You must however avoid gaps in paying National Insurance.

5. Start as early as you can
It is possible to start saving into a child’s pension using a SIPP which allows you to save up to £3600 a year.

6. You can delay your pension

It is not compulsory to take your pension from the day you retire. Instead you can delay your pension to leave to your children, or in some circumstances can take your pension early. Depending on your circumstances you may take your pension earlier or later. It is important that you have enough income to last the duration of your retirement so when and how you take your pension is an important decision. You should thoroughly review your options and seek advice and guidance where possible.

5 Reasons to Hire a Financial Planner

Balancing and planning out your finances can be a very difficult task for everyone. Life can throw anything at you, and it’s up to you to be ready to catch it. The same goes for your finances; you never know when an expensive emergency will arise. By hiring a financial planner, you will be better prepared to handle anything that may come your way. Here are five reasons to consider hiring a financial planner.

Determining your financial status: A financial advisor will help determine where you stand with your total income versus your debts. Together, you will be able to come up with a game plan to reduce the debts and improve your overall income for a validated savings account for emergencies.

Plan a retirement strategy: Are your retirement funds enough to live on with your current expenses? If not, you need to figure out how to invest more money into your retirement. In life, there are always unexpected expenses. It’s best to view your long-term financial goals and outside holdings into account to determine how much you should be investing towards your future.

Written provisions for child care: This is a topic that should determine the day your children are born. If you or your spouse die, it’s very important to have written provisions for their care. They are your number one priority, and together you and your financial advisor will determine what they need to have financially after you are gone.

Find investments for your wealth: Investments can be a great way to boost your financial status. But what investments should you invest in, so you don’t lose money? A financial advisor knows how to handle investments like stocks and other exchanges.

Determine a budget that’s right for your family: Is your monthly income less than your monthly spending? If so, there need to be improvements made to secure your finances and future for your family. A financial advisor will give you advice on how to stay on track and where your lifestyle needs to change to better your finances.

Understanding Solar Loan Rates

There has never been a better time for homeowners to go solar. But with solar tax credits set to expire, that opportunity could slip away. Fortunately, most solar companies offer an array of purchasing options for homeowners regardless of their budget or credit history. These include: easy cash purchases, solar leases, PACE (property assessed clean energy), solar loans at competitive rates.

Cash purchases deliver the greatest long-term savings and best return on the homeowner’s investment. Tax incentives alone allow homeowners to recover 30% of their system costs, and the energy saving will pay for the rest of the system in just a few short years with decades of free electricity on top of that. For added flexibility, cash doesn’t necessarily have to come out of savings, it can also take the form of a home equity loan that can be tax deductible.

On the other end of the spectrum, solar leases can offer all the energy-saving benefits of a cash purchase, with the difference being that the solar company owns the system on the homeowner’s roof. The homeowner simply pays a small monthly amount to “rent” their system. With easy 20-year financing terms are available, and a 20-year system guarantee this is an excellent option for those who want to keep their out-of-pocket costs to zero. Plus, when it’s time to sell, the solar lease can be assigned to the new homeowner – making the property that much more attractive.

PACE programs offer another smart option for those looking for solar with no upfront costs. The solar system is financed through the homeowner’s property taxes. It works like a loan, and still qualifies for the 30% tax credit. With terms up to 230 years, and a 30-year product warranty guarantee, no credit score requirement, and a loan that is transferrable to the new owner, the low monthly payments and immediate savings make this a very attractive option, quick and painless.

 

Sources of Finance | Types of Business Finance

Sources of Finance

There are basically three types of business organizations and for every sort of business organization sources of finance are really important to have. Through these sources of finance, business meets its basic and day to day needs. Sole proprietorship and partnership form of business organization are mostly run on small scale basis. They generally meet their fixed and working capital requirements from their owned capital. It is only the company form of organization, which is run on large scale basis. It requires huge amount of funds to purchase fixed assets, meeting day to day expenses of business and for modernization and replacement of machinery. Let’s discuss the major joint stock company sources of finance in detail.

Sources of Finance in Business

There are two major sources of finance for meeting the financial requirements of any business enterprises, which are as under:

  • Owners Fund
  • Borrow Fund
  1. Owners Fund

Owners fund is also called as Owners Capital or owned capital. It consists of the funds contributed by the owners of business as well as profits reinvested in business. A company cans raise owner’s funds in the following ways:-

  • Issue of equity shares
  • Ploughed back profits
  1. Borrow Fund

The second source of funding to a business is the borrowed fund. Borrowed fund consists of the amount raised by way of loans or credit. It is also known as borrowed capital. The borrowed fund is procured from the following sources;-

  • Debentures
  • Bank Loans
  • Loans from specialized financial institutions
  • Other long term financial institutions

Types of Business Finance

All businesses require an adequate finance. They need money for investment in fixed asset such as land, building, machinery etc. Once business is in operation, money is needed for Working Capital, such as purchase of raw material, payment of wages, utility bills etc.. A going concern also requires extra capital to cover a temporary cash flow crisis, or purchase new improved machinery or simply to expand the business. The financial requirements of a business, on the basis of time duration, are usually classified under three heads which are as follow:

  • Short Term Finance
  • Medium Term Finance
  • Long Term Finance
  1. Short Term Finance

Short term Sources of  finance is defined as money raises for investment in business for a period of less than one year, it is also named as working capital or circulating capital or revolving capital.

The purpose and amount of obtaining short term capital varies with the nature and size of the business. Generally the short term capital is required for meeting the day to day expenses of business such as payment of utility bills, wages to the workers, unforeseen expenses, seasonal upswings in business, increasing inventories raw material, work in progress and finished goods etc.

The various sources of short term finance are as under:-

  • Trade creditor open book account
  • Advance from customers
  • Installment credit
  • Bank Overdraft
  • Cash credit
  • Discounting bills
  • Against bill of lading
  1. Medium Term Finance

Medium term sources of finance are required for investment in business for a medium period which normally ranges from one to five years. The medium term funds are required generally for the repair and modernization of machinery, renovation of the building, adoption of new methods of production, carrying advertisement campaign on large scale in newspapers, television etc. The various sources of medium term finance are as under:-

  1. Long Term FinanceLong term sources of finance refer to the funds, which are required for investment in business for a period exceeding up to five years. It is also named as long term capital or fixed capital. Long term sources of finance are mostly required for the purchased of fixed assets, such as land, building, machinery etc. modernization and expansion of business. The amount of long term finance varies with the nature of business, size of business, nature of the product manufactured, the number of goods produced, and the method of production etc. The various sources of long term finance are as under:-
    • Equity shares
    • Issue of right shares
    • Debentures
    • Loans from industrial and financial institutions
    • Leasing
    • Ploughing back of profits