Q. My partner is putting pressure on me to make a Will but I am reluctant as solicitors are expensive and she will get everything anyway. Am I wrong?
A. If you don’t have a will when you die, your money, property and possessions will be shared out according to the law instead of your wishes. This can mean they pass to someone you hadn’t intended – or that someone you want to pass things on to ends up with nothing. If you’re not married and not in a civil partnership, your partner is not legally entitled to anything when you die. We recommend to all of our clients that they make a Will and keep it up to date. Whilst there are a number of alternatives, to consulting a solicitor, to make a Will we strongly advise clients to use a solicitor to make sure things are done correctly. A badly drafted Will can be worse than not having one in the first place!
Q. I am 59, and have a retirement annuity pension I paid into many years ago. The fund is just over £30,000. I have plenty of income from the final salary scheme I joined subsequently, so I thought it would be nice to spend this fund over the next few years, before my state pension starts. When I have tried to draw my pension under the new pension freedom rules, the provider will not send me the money because it says I must go through a financial adviser. This doesn’t feel very much like freedom, can you tell me what the problem is?
A. Although the system should be straightforward, and the principle is that you can draw down upon the fund cheaply and smoothly, there are some safeguards built into that system. Many Retirement Annuity contracts date back to the 1980s, a time when it was standard practice to build a “guaranteed annuity rate” into the policy. At the time, this guaranteed level of income from the plan was often well below the annuity rates generally available, but as rates have fallen over the last 25 years, the guaranteed level is now very valuable. The cases where some insurance companies are insisting on advice being taken, are usually those where there is a (potentially valuable) guaranteed annuity rate which would be lost on surrendering the plan. The provider is therefore trying to ensure that you are aware of the value of what you are giving up, which is why they insist on advice being given.
If you have a question you would like Trevor to answer, please email it to: yourmoney@rwpfg.co.uk or post it to Your Money, Rutherford Wilkinson Ltd, Northumbria House, 21-23 Brenkley Way, Blezard Business Park, Newcastle upon Tyne, NE13 6DS.
0191 217 3340
