Financial Gain is a Consequence of Stellar Performance
In today’s business world, the pressure for financial performance has created a supercharged atmosphere in which the only goal seems to be to make as much cash as fast as possible. Few industries have changed under this pressure as much as the advertising industry.
Industry professionals are caught in a crossfire between clients who demand ever increasing return on investment (which generally means lower price) and their own managers who seek ever escalating revenues. Today fewer people are doing more work than ever before and earning less. The resulting pressure has taken a lot of the fun out of a business that was traditionally focused on delivering big ideas and powerful solutions.
The problem has been exacerbated over the last fifteen years as the ad agency business has gone public. Estimates vary, yet most agree that over
NHS Pension Benefits – Should You Increase Them
One of the recurring themes we deal with as financial planners is the subject of buying more NHS Pension benefits.
This is now worth a revisit as the situation is probably changing again! For the punch drunk amongst you, we will try to keep this as painless as possible.
To be serious for a moment though, these decisions are often fundamental to your future standard of living and comfort in retirement, as well as the options to semi retire or retire earlier, so it’s worth taking the time to ensure you are making the right decisions.
Traditionally it has always been agreed that the basic NHS Pension Scheme is unbeatable, and that is still the case. However, what about ‘making up’ for lost benefits or attaining the ‘magic 40 years service’?
What is the best way in which you can do this?
Well, the choices to date have been:
Added Years
Here, for a percentage of your pay, you can buy extra years service. For many, this is a good route as:
They are guaranteed defined benefits and so risk free
For married people they enhance your protection for life and illness cover as well
But some would argue:
They are inflexible as once started you are committed to them
Seen as “expensive” by some (typically 4-9% of your pay)
Additional Voluntary Contributions
These are “in house” with the NHS (Standard Life, Equitable Life and Prudential) or you can buy them as “Free Standing” policies with an insurance company of your choice.
Advocates of such schemes would say:
They are flexible as to what you contribute
Have the potential for growth over added years if the stock markets perform
But equally:
Since they are investment based there are no guarantees
Do Nothing
This may be due to confusion, “I can’t afford it” or sheer apathy.
However, it may be the “best” option for you, especially if you are in your 50’s.
The new proposed NHS Pension changes (if approved) will come into effect in 2008, and will have a huge impact on a scheme largely unchanged since 1948.
You can read more at:
http://www.nhsemployers.org/pay-conditions/pay-conditions-1272.cfm
For brevity these changes include:
- Ability to take more tax free cash from your pension
– Abatement of pension on returning to work and part time work whilst taking pension benefits
– Higher earners paying more towards their pension – so 6% now could go to 8.5% for example, although likely to be tiered
– Earnings cap to disappear for high earners so more of your pay is pensionable
– A new facility to be able to “buy” up to