Couples splitting up or going through divorce don’t discuss pensions leaving women thousands out of pocket

  • Couples prioritise splitting property and savings and even who keeps the pets
  • But just 9% would want a fair share of their partner’s pension if they divorced
  • Woman are most likely to be left out of pocket

A Scottish Widows survey found that 71 per cent of divorcing couples don’t discuss pensions as part of their settlement, and 48 per cent of women and 41 per cent of men have no idea what happens to pensions when a marriage ends.

Anecdotal evidence suggests women will prioritise keeping hold of the family home to provide stability for children while not bothering so much about pensions, because they don’t fully understand their value.


‘The starting point should always be to find out what pensions there are, what are they worth and how they fit with any other assets such as property and savings and each spouse’s needs for a home and income,’ says the firm.

‘If an adjustment needs to be made to get a fair overall outcome on a divorce this can be done by one person keeping their pension, but the other getting more of the other assets (called “offsetting”); or the court can make a Pension Sharing Order giving a percentage of one person’s pension to the other (which could be 50:50 but often won’t be); or a combination of the two may be needed.

* Confusion about what happens to pensions, with 48 per cent of women and 41 per cent of men having no idea

* Among the women who did discuss pensions during a divorce, 27 per cent had no pot of their own, but every man in this category did have retirement savings

If you need help with any of your Financial Planning including Pension Sharing Orders, please contact me,


Debbie Day on M:07704311021

The Autumn Statement is dead…long live the Autumn Budget!

The abolishment of the Spring budget and a change to the an Autumn budget was the only real surprise from the last Autumn statement, unless you count the fact that the countries financial plan isn’t working?! I have detailed below the main points below but the good news is that fuel duty remains frozen, the basic and higher rate tax thresholds are going up along with a fairly large hike to £20,000 per person ISA allowance.
Please see full details below…


1 Confirmation that the 2017/18 income tax personal allowance will rise to £11,500 and the higher rate threshold to £45,000.

2 The personal allowance is to rise to £12,500 and the higher rate threshold to £50,000, by the end of this Parliament.

3 Once the personal allowance reaches £12,500, it will then rise in line with CPI.

4 National Insurance secondary (employer) threshold and the National Insurance primary (employee) threshold will be aligned from April 2017, so that both employees and employers will start paying National Insurance on weekly earnings above £157.

5 Class 2 NICs will be abolished from April 2018.

6 From April 2018 termination payments over £30,000, which are subject to income tax, will also be subject to employer NICs.

7 The government will introduce a new legal requirement to correct a past failure to pay UK tax on offshore interests within a defined period of time, with new sanctions for those who fail to do so.

8 From April 2017, facility to reduce the taxable effect of benefits –in-kind.

9 From April 2017 personal use of business assets assessed on the period of usage.

10 Salary sacrifice – the tax and employer National Insurance advantages of salary sacrifice schemes will be removed from April 2017, except for arrangements relating to pensions (including advice), childcare, Cycle to Work & ultra-low emission cars. Arrangements in place before April 2017 will be protected until April 2018, and arrangements for cars, accommodation and school fees will be protected until April 2021.

11 The tax advantages linked to shares awarded under Employee Shareholder Status (ESS) will be abolished for arrangements entered into on, or after, 1 December 2016

12 Company Car Tax bands and rates for 2020-21 – to provide stronger incentives for the purchase of ULEVs, new, lower bands will be introduced for the lowest emitting cars. The appropriate percentage for cars emitting greater than 90g CO2/km will rise by 1 percentage point.

13 Simplification of Pay as You Earn Settlement Agreements (PSAs) from 2018/19.

14 New calculation of chargeable gains on life assurance investment bonds to be introduced from April 2017.

15 Amendment to the list of assets that life insurance policyholders can invest in without triggering tax anti-avoidance rules under personal portfolio bonds. The changes will take effect on Royal Assent of Finance Bill 2017.

16 From April 2017 Junior ISA limit £4,128 and Isa limit £20,000.

17 New NS&I Savings Bond to be introduced paying gross interest of 2.2%, over 3 years, for amounts up to £3,000 from Spring 2017.

18 Amendment to the requirements for the tax-advantaged venture capital schemes – the Enterprise Investment Scheme (EIS), the Seed Enterprise Investment Scheme (SEIS) and Venture Capital Trusts (VCTs).

19 Strengthen sanctions and deterrents and will take further action on disguised remuneration tax avoidance schemes.

20 To ensure multinational companies pay their fair share, introduction of reforms to restrict the amount of profit that can be offset by historical losses or high interest charges.

21 Employee business expenses – the government will publish a call for evidence at Budget 2017 on the use of the income tax relief for employees’ business expenses, including those that are not reimbursed by their employer.

22 From April 2017, non-domiciled individuals will be deemed UK-domiciled for tax purposes if they have been UK resident for 15 of the past 20 years, or if they were born in the UK with a UK domicile of origin.

23 From April 2017, inheritance tax will be charged on UK residential property when it is held indirectly by a non-domiciled individual through an offshore structure, such as a company or a trust.

24 From April 2017, the taper rate that applies in Universal Credit will be reduced from 65% to 63% Pensions.

25 Money Purchase Annual Allowance of £10,000 currently applies to limit the contributions to money purchase pension schemes once an individual has ‘flexibly accessed’ their pension benefits. A consultation has today been published as the Government proposes to decrease the level of MPAA to £4,000 from April 2017. This will help prevent the recycling of pension benefits but will still allow those who remain in work to continue with their Auto Enrolment scheme membership.

26 Impending removal of tax and NI advantages from Salary Sacrifice arrangements from April 2017 will not affect pension schemes as they are excluded.

27 A consultation will shortly be published on options to tackle pension scams. This will include a ban on cold calling, giving firms greater power to block suspicious transfers and making it harder for scammers to abuse Small Self Administered Schemes (SSAS).

28 The tax treatment of foreign pensions will be more closely aligned with the UK’s tax regime by bringing foreign pensions and lump sums fully into tax for UK residents. Specialist schemes known as Section 615 schemes used by those employed abroad will be closed to new saving. The 5 year period during which foreign lump payments from pension benefits which have received UK tax relief can be subject to tax will be extended to 10 years for recently emigrated non UK residents. An update will be made to the criteria required to qualify as overseas schemes for tax purposes and a change will be made to align the tax treatment of transfers between pensions.


1 Following the Spring Budget 2017, there will only be one budget announcement each year in the Autumn. The OBR will still produce a Spring forecast however and the Government will make a Spring Statement responding to this forecast.

2 Insurance Premium Tax (IPT) will increase from the current 10% to 12% from 1st June 2017. As this is a tax on insurers it will be down to each insurers own commercial decisions as to how this will affect premiums.

3 The government will ban letting agents’ fees to tenants, to improve competition in the private rental market and give renters greater clarity and control over what they will pay.

4 The Ministry of Justice is consulting on proposals which will reduce the unacceptably high number of whiplash claims and allow insurers to cut premiums.

5 The fuel duty rate will remain frozen for the seventh successive year.

6 National Living Wage to increase from £7.20 per hour to £7.50 per hour from April 2017.

As always, if you have any individual queries on how the changes may effect you then please do get in touch.

All the best

Debbie Day IFA


Politicians Fail To Warn The Public Of State Pension Limitations

Millions of state pensions will fall short of people’s expectations.

Research conducted by life insurance and financial services company Prudential has revealed that a minimum of 1 in 7 people will rely largely on the state pension in retirement, having made little in the way of further pension provision.

This research leads to concern from those within the industry who identify that the state pension will provide less than is expected by the average worker. The latest changes of pension age equalisation and the Cridland report, which could recommend further age rises for when a person can retire point towards a reduction in what the state pension offers.

Tough Political Message

The lack of the public’s understanding on the matter has been put down to politicians reluctance to state unpopular facts. Telling people that the state pension will not pay for the lifestyle they imagined and that they will have to work longer before receiving it could lead to a backlash that politicians are fearful of.

Workers Need To Seek Independent Financial Advice

A misguided belief that the state pension will cover all the costs retirees will be faced with is seen as a major problem. Getting sound independent financial advice now can give workers a more accurate prediction of the amount of money they will have to live on.

To improve their retirement, workers are told to set aside as much as possible, as early as possible in the form of a private pension.

With more people predicted to reach retirement age, the strain on the state pension will continue to grow. Millions will face disappointment if they do not boost their pension pots privately while they still can, a message that the government seems unwilling to give.

Until the next time Debbie @HoskinFinancial

Can a trustee in Bankruptcy force a Bankrupt to draw down a pension?

A recent ruling of the Court of Appeal has dismissed the trustee in bankruptcy’s appeal in the 2014 case of Horton v Henry. This brings to an end a long ongoing saga involving the emotive issue of a bankrupt’s pension.

The case addressed the question as to whether a trustee in bankruptcy can force a bankrupt to drawdown their pension entitlement so that the trustee can apply for an Income Payment Order (“IPO”) under section 310 of the Insolvency Act.

The Judge in the original case determined that the trustee in bankruptcy does not have a right to step into the shoes of the bankrupt and make decisions on his behalf relating to pensions. The Court of Appeal agreed.

This ruling overturns the decision in the 2012 case of Raithatha v Williamson. This case ruled that a person aged over 55 facing bankruptcy would have to use their pension savings to pay their creditors.

However, at the time individuals were only entitled to take a 25% tax-free lump sum from their pension and the majority of people would have had to buy an annuity with the remainder, meaning the remaining 75% of the pension pot was not vulnerable to creditors.

This was no longer the case in April 2015 when pension freedom was introduced meaning that those aged over 55 were given full access to their pensions, not just the 25% tax-free cash, and no longer had to purchase an annuity.

In the 2016 case of Hinton v Wotherspoon the judge ruled that the 2014 Horton v Henry judgement, although subject to appeal, was ‘plainly correct’ in that bankrupts over the age of 55 and had not drawn from their pension, then the fact that they could access their entire pension using the new freedoms should not mean that they should use their savings to pay their creditors by way of an IPO.

The recent Court of Appeal ruling on Horton v Henry means that the position is now clear and a bankrupt cannot be forced to drawdown his pension in the same way that a trustee cannot require a bankrupt to work and receive a salary which would be subject to an IPO.

This of course does not affect the trustees rights to claim pensions where the election to drawdown has already been made or to clawback funds where excessive contributions have been paid into the bankrupt’s pension.

The rulings over the last four years are an attempt to continue to encourage everyone to save whilst also protecting the rights of creditors in a bankruptcy.

Until the next time Debbie @HoskinFinancial

Are you owed an unclaimed pension pot? Thousands of savers are missing fortunes from unclaimed nest eggs

  • 1.6million pension pots are waiting to be claimed
  • Services offer to track down lost pensions for free 
  • There is around £400million in unclaimed pension savings, according to the government 

Millions of pension pots are lying unclaimed and could provide a vital income boost to people in retirement.

Here’s how pensions go missing – and what you need to do to track them down.

Nearly 1.6 million pension pots are waiting to be claimed by people who have lost touch with their retirement savings over decades of employment – known as ‘gone-aways’.

This figure comes from PensionsLink, which aims to reunite people with their missing pensions.

It does this by collecting the National Insurance numbers of gone-aways from pension providers.

People who think one of their pensions may have gone astray can then ask PensionsLink to search its database to see if their plan is on it.

In the first three weeks of this month alone, 68,000 National Insurance numbers were added to the register, following on from 114,000 the month before.


The first step to reunite yourself with long-term savings is to compile a list of employers you worked for and marry them up with your pensions in payment.

If there are companies you worked for which are not paying you a pension, even though you contributed into one, contact their pension department and provide as much information as possible – National Insurance number, period of employment, the role you held and your current contact details.

They should then confirm whether there is a pension due to you – now or in the future.

You can also input your National Insurance number into the free-to-use PensionsLink website to see if any details come up.

Alternatively, turn to the Government’s Pension Tracing Service. Its database holds details of more than 320,000 pension schemes and is also free. Entering a former employer’s details into the search engine will produce contact details for schemes you may have paid into.

Visit, call 0345 6002537 or write to: The Pension Service 9, Mail Handling Site A, Wolverhampton WV98 1LU.          If you need further help contact The Pensions Advisory Service by visiting its website at or calling 0300 1231047.

This brings the total number of people recorded to have lost a pension on PensionsLink’s database to 1.58 million.

The service is free to use and paid for by pension companies – although not all providers are currently signed up. It is similar to the Government’s Pension Tracing Service which assists people in hunting down both workplace and personal pensions.


There is around £400million in unclaimed pension savings, according to the Department for Work and Pensions.

PensionsLink says its research indicates that the average unclaimed pension in the private sector would provide an annual income of £3,000 – up to £7,000 a year in the public sector.

The majority of orphan pensions on the PensionsLink register are defined benefit based – also known as final salary – while a fifth are defined contribution, sometimes referred to as ‘money purchase’ schemes.

Until the next time Debbie @HoskinFinancial

Well what a week!!

New Prime Minster Theresa May is announced: Bank of England HOLDS interest rates: Pound climbs as Hammond is named Chancellor and Bank sticks at 0.5% for now

• New Chancellor ditches emergency budget – plans one a year as normal
• Hammond favours single market, but unknown if Cabinet shares his views
• BoE held interest rates at same seven year level despite forecasts for a cut
• Bank says lack of data post EU referendum to make an informed decision

The pound leapt as Philip Hammond was named Chancellor and the Bank of England held rates – but shares turned down as an expected base rate cut failed to arrive.

Hammond was named as Britain’s new Chancellor, just hours before the Bank of England announced its latest interest rate decision – sticking at 0.5 per cent by a vote of 8 to 1.

The pound spiked against the dollar as the Bank of England revealed the Monetary Policy Committee had voted to hold rates, but the FTSE 100 slid on the news.

Money markets and economists now suggest that the Bank will cut rates in August, when it also delivers its quarterly Inflation Report.
Shortly after the announcement the FTSE 100 fell marginally into the red, down by 3.0 points at 6,668.8, but has since turned up again – trading up 8 points at 6,677.7.1 at 4pm.

Before the decision the index had been trading up 54.1 points at 6,724.56.

The biggest movements were on the currency markets, where the pound jumped 1.6 per cent against the dollar at $1.335, while against the euro is up 1.35 per cent at €1.201.

The Bank of England held fire on delivering a post-Brexit vote rate cut to boost for the economy, but signaled that a cut may be on the cards next month.

Minutes of the highly-anticipated decision by the Monetary Policy Committee showed members voted 8-1 to leave rates at 0.5 per cent, where they have been since March 2009.

The Bank stated that there was a lack of data post EU referendum to make an informed decision on monetary policy.

But the minutes of the MPC meeting did show the economy had been resilient in the run-up to the vote, with the Bank now expecting second-quarter growth to pick up to around 0.5 per cent, from 0.4 per cent in the previous three months.

Most policymakers wanted to wait until the Bank’s quarterly inflation forecasts on August 4 before taking further action, as banks and financial markets have also held up surprisingly well since the vote.

Until the next time Debbie @HoskinFinancial

An Introduction to the Residential Nil Rate Band

By now you have probably heard about the Residential Nil Rate Band (RNRB), which has also been referred to as the Main Residence Nil Rate Band or simply ‘the family home allowance’. This new allowance was announced in the Summer 2015 Budget and will take effect from 6 April 2017.

The RNRB will be an additional allowance to the current nil rate band (NRB) which currently stands at £325,000 and will be frozen at this figure until the end of 2020 to 2021. The RNRB will be introduced in stages until it reaches the full amount of £175,000 after 6 April 2021. From this point onwards it will rise each year in line with the Consumer Prices Index. The new allowance will be phased in as follows:

  • £100,000 for 2017 to 2018
  • £125,000 for 2018 to 2019
  • £150,000 for 2019 to 2020
  • £175,000 for 2020 to 2021

This will mean that by 2020-21 married couples and civil partners may pass on up to £1 million worth of assets to their children and grandchildren free of inheritance tax.

The RNRB will be limited to only one residential property. If you own more than one property, then your personal representatives will need to elect one qualifying property. To qualify for the allowance a property must currently be your main residence or have been used as your main residence at one point. The property that you own as a buy to let and have never used as your residence will not qualify for the RNRB.

A property must be “closely inherited” by Will or under the rules of intestacy “Closely inherited” here means that the property must be inherited by your children, grandchildren or other direct lineal descendants. This also includes your step-children, adopted children, children of whom you have been appointed a guardian of, and also fostered children.

The RNRB will also be available where the property is left on trust where the lineal descendant is treated as the owner of the property for inheritance tax purposes (immediate post death interest trusts, disabled persons trust, bereaved minor or 18-25 trusts). The RNRB will not ordinarily be available where the property is left on discretionary trusts, even if all of the discretionary beneficiaries are direct descendants.

If the net value of your estate is over £2 million (the ‘taper threshold’) then the RNRB will be reduced by £1 for every £2 that the net value of your estate exceeds £2 million.

Finally, the RNRB may be transferred in the same manner as the NRB. On the death of a surviving spouse or civil partner their personal representatives may apply for any unused RNRB to be transferred.

Until the next time Debbie @HoskinFinancial

“Have you got to grips with the Personal Savings allowance?”

One of the most significant changes announced in the 2015 Budget, was the introduction of the Personal Savings Allowance (PSA). This came into effect in April 2016 and it is estimated 95% of savers will no longer pay tax on their savings. Previously basic rate tax payers lost £20 for every £100 earned interest and higher rate tax payers (40%) lost £40. The new PSA enables basic rate tax payers to earn £1,000, and higher rate tax payers £500 in interest without any tax being deducted. Additionally, any savings that are already tax free (such as ISAs) do not count toward this allowance.

All banks and building societies should now be paying interest gross, however savings interest goes beyond bank interest. Any clients invested in corporate bond, fixed interest and distribution funds will also be entitled to have the interest paid gross. Unfortunately, due to the complexity in changing the systems to ensure thousands of funds paid distributions gross, investors will need to reclaim this from HMRC for this tax year (2016/2017).

Are your savings and investments arranged in the most tax efficient way to ensure they are maximising all their allowances?
If you would like further help with your investment/pensions arrangements including the new pension freedoms please contact Debbie Day. 07704311021

DWP changes state pension sharing rules

Clients who divorce after 6 April will find their state pension will be divvied up under a new regime, the Department for Work & Pensions has warned.

The new state pension will be introduced for those reaching state pension age on or after 6 April and the DWP has introduced a transitional arrangement for those who have built up National Insurance contributions under the old system.

An information sheet published by the DWP said couples who start divorce proceedings on or after 6 April will be able to claim each other’s “protected payment”.

This is the excess amount above the new state pension level – currently set at £155.65 – someone will receive if they have high levels of non-contracted-out additional state pension under the outgoing system.

The DWP said: “The full rate of the new state pension will be £155.65. It follows that there is less state pension to share under the new arrangements because around £36 a week of what was additional state pension would no longer be shareable as it will be consolidated into the new state pension.

“In addition, any excess over that amount will be paid as a protected payment and will be revalued by prices rather than by earnings.”

Those who start divorce proceedings before 6 April will be able to claim each other’s additional state pension as is currently the case, regardless of when the pension sharing order takes effect or that the person whose rights are being shared reaches state pension age in the new regime.

The DWP said: “In the new system the process for obtaining valuations from DWP is similar to what happens now.

“DWP will provide the cash equivalent value of the protected payment, as well as the weekly amount. However, the way in which the DWP will implement a share order has changed.”

Under the new rules pension sharing orders in England, Wales and Scotland will be required to specify a percentage of the weekly amount of protected payment and not its cash equivalent value.

The person subject to a debit will have their protected payment reduced by an amount that will exactly equal the amount paid to the person benefiting from it.
The amount will never be different unlike in the current system, the DWP has said.

For more help and advice please do not hesitate to contact me.

Regards, Debbie Day

Pension changes due again in budget.

• Well-off savers warned to top up pensions before Budget
• Apply for protection against cut to £1.25m lifetime savings limit
• Roll over unused allowances for previous tax years.

Millions of savers are about to get walloped by pension tax changes that could slash their retirement savings by tens of thousands of pounds.

High earners in particular are being warned to overhaul their arrangements and bung as much into their pensions as possible up to current tax limits, to avoid losing valuable benefits before the Budget on 16 March.

The big threat is that Chancellor George Osborne will introduce a ‘flat rate’ system, under which all taxpayers receive the same level of pension tax relief regardless of how much they earn – ditching the principle that everyone saves for retirement from untaxed income.
Meanwhile, previously announced measures also mean dramatic cuts in how much the better off can save, both annually and over their lifetime, without having to stump up tax.
There are nearly 4million people in the UK who pay income tax at the 40 per cent or 45 per cent rates and nearly 26million who pay the basic rate of 20 per cent, according to data from the Office for National Statistics in January 2015.

I explain below what is happening to pensions, who will be hit, and what can you do to mitigate the damage. But deciding the best course of action will often be a matter of fine judgement, depending heavily on your personal circumstances.

Lifetime allowance: Total amount you can save without a massive tax bill is falling.
What is it?

The lifetime allowance is the total amount people can put in their pension pot during their lives and qualify for tax relief. It is currently £1.25million. What’s happening?
The present plan is to cut the LTA from £1.25million to £1million from the 2016-17 tax year, and index-link it to inflation from 2018-19, but this could be revised as part of any wider shake-up.

A pension pot of £1million sounds like a lot to most people, but it is very possible that many people in their 20s and 30s now might eventually hit it. A £1million pot will also only secure an income of about £27,000 a year for someone with a defined contribution pension.

Darren Laverty, partner at employee benefits specialist Secondsight, says: ‘Taking into account an annual growth rate of 5 per cent, any individual with a fund currently worth £358,000 with 20 years to go until retirement is likely to hit the £1million ceiling. Similarly, someone retiring in 15 years with a pension pot today of £463,000 could also be affected.’
Laverty also warns most ‘death in service’ benefits paid out by employers will count toward the lifetime allowance, a factor which could unexpectedly leave a bereaved family with a much lower sum once the tax is taken.

What can you do?
If you are concerned that you could be caught out by this new rule, you can apply to HMRC for fixed protection, individual protection or both at once in order to keep the current £1.25million allowance after April.

But be warned there are conditions attached and you need to weigh up the pros and cons of each option carefully, because which one is best for you depends on your personal circumstances and future financial planning.

Fixed protection: You can apply for this no matter what the current size of your pension pot, but you will lose it if you ever make any further contributions.

This includes receiving any further ‘death in service’ benefits, and you should definitely check with your scheme beforehand if you go for fixed protection as your current death benefits could be cancelled too.

If you apply for fixed protection you should cancel direct debits into your pension in advance, as even a small, inadvertent contribution made from 6 April will send your lifetime allowance down to £1million.

For the same reason, you should ensure you opt out of any opportunities to join a pension scheme at either your current job or future ones.

Laverty cautions that losing your fixed protection could trigger a tax liability of 55 per cent on your fund value between £1million and £1.25million – leaving you with a bill of up to £137,500.

Individual protection: You can only apply for this if your pension pot is at least £1million by 5 April this year, but you will be allowed to continue making contributions in future.
If you are interested in this option and your pot is currently below £1million, there is still time to top it up before then.

Meanwhile, people who had a pension pot of £1.25million in April 2014 were given three years to apply for protection against the last cut in the lifetime allowance, which was reduced from £1.5million at that time.

Walker says there is still time to claim this higher protection if you haven’t already as the deadline is the end of the 2016/2017 tax year.

Applying for both fixed and individual protection: Your pension pot must be above £1million and you cannot make any further contributions if you want both protections.

Pursuing this option offers you a failsafe if your pension is between £1million and £1.25million. If you lose your fixed protection for some reason, the individual protection means your lifetime allowance will be fixed instead at whatever level it was on 6 April 2016.

That’s unless or until the Government raises the Lifetime Allowance above £1.25million again at some later date, something which is fairly likely given the probable impact of inflation on the size of pension pots in future

For more help and advice please do not hesitate to contact me.

Kind regards

Debbie Day