This readable little book will educate and amuse mid-career vets, practice principals and partners…
John Bower The Veterinary Record

It’s never too early to begin financial planning for retirement, nor, in Mike Nelson’s encouraging view, is it usually too late. Mike guides you through the language of retirement planning and pensions, showing how tax and investment fit together, with useful tips on ensuring that you receive good advice from the professionals.

Even the financially well-prepared will enjoy reading his experiences, and he offers dry, down-to-earth assessments of the choices that have to be made.

£15.95 (paper) 2004 216x138mm 176pp 978–1-903152-12-7

 

Contents

Who needs this book? – Historical note – What does the future hold? – What can one do? – The effect of gender on veterinary careers – Warning

Part One – Your Personal Balance Sheet

1 Evaluating What You Are Worth Alive

Establishing the starting point – Inventory of assets – Property – Practice property assets – Practice capital account – Practice current account – Practice goodwill – Personal bank balances – Bank or building society savings accounts – Peps and ISAs – Permanent interest-bearing shares (PIBS) – Endowment policies – Pension funds – Goods and chattels – Motor vehicles – Inventory of liabilities – Outstanding mortgage – Practice liabilities – Personal overdrafts – Credit cards and store debit cards – Insurance premiums and pension contributions – Hire purchase – Outstanding income tax – Children’s education

2 Evaluating What You Are Worth Dead

What is the difference? – Why do we need to value your estate? – Valuing assets and liabilities after death – Mortgages – Life insurance policies – Accidental death insurance policies – Practice liabilities – Pension funds – Hire purchase – The effect of what you are worth dead – How about the down side?

3  How Much Does It Cost You to Survive?

How much detail do you need? – Selecting your year-end – Data collection – Recording your income – Expenditure: Mortgage payments – Housekeeping – The Basics: 1 Income tax – Alcohol – Utilities & council tax – Clothing for self and spouse – For children – Educational expenditure – Car expense – Social, entertainment and leisure expense – Insurance – Permanent health insurance and private medical insurance – Travel insurance – Buildings and contents insurance – Professional meetings and congresses – Annual RCVS retention fee and professional subscriptions – House maintenance – Car replacement – Other expenses

4 Gazing into the Crystal Ball

Where are you starting from? – Thirty-five years before retirement – Fifteen to twenty-five years before retirement – Ten to fifteen years before retirement – Five to ten years before retirement – One to five years to retirement – Preparing your outline plans – How can we apply MBO to a crystal ball? – Thirty-five years before retirement – Fifteen to twenty-five years before retirement – Ten to fifteen years before retirement – Five to ten years before retirement – One to five years to retirement – What is the value of gazing into crystal balls?

Part Two – The Pensions and Savings Challenge

5 The Basic Principles of Pension Planning

Historical background to practice – Assistants – Practice pensions – Pensionable employment- The basic principles – Making up for lost time – Can you make up for lost time? – How do you reckon your pension prospects now?

6 Can Practice Disposal Finance your Pension?

The Basics: 2 Capital Gains Tax – CGT liability on sale of business assets – Selling a practice – Practice valuation – Practice goodwill – Selling to the corporates – Leasing your practice to another vet

7 Utilising Practice Premises in Pension Schemes

Self-Investment Pension Plans (SIPP) – Possible changes in SIPP rules – What investments are ineligible for SIPPs? – What investments are eligible for SIPPs? – Setting up SIPPs – What are the advantages of SIPPs? – Can one have a conventional pension plan and a SIPP? – Limitations for partnerships

8 Strategic Pension Planning

Pension options for the self-employed – Retirement annuity contracts – Personal pension plans – Stakeholder pensions – The state pension – The Basics: 3 National Insurance contributions – How do we find an IFA? – Do you have to use an IFA? – What about variation in the charges? – What about past performance? – What about forecasts of final pension fund values? – Can I transfer to a stakeholder with my pension provider? – Can I stop contributing to a pension plan?

9 Pension Planning for Employees

The current position on employee pensions – Employees in veterinary practice – Other veterinary employees – Civil service – Welfare societies and industry/commerce – Current limitations of occupational pensions – Are occupational pension schemes compulsory? – What happens to my occupational pension fund if I leave? – Can you augment occupational pensions? – Additional Voluntary Contributions (AVCS) – Stakeholder pensions – What will a stakeholder pension provide on retirement?

10 The Tax-Free Lump Sum Entitlement

Should I take the lump sum option? – What do you do with the lump sum, anyway? – Is there an easy way to make up the difference? – What about tax-free investment of the lump sum? – Is it fair on a surviving spouse to take a lump sum? – Independent Savings Accounts as tax-free investments – tessa-only ISA – Maxi-ISA – Mini-ISA – Where can you buy ISAs? – What are CAT-marked ISAs? – What are the advantages of a CAT-marked ISA? – Other tax-free investments – National Savings – Friendly societies – Personal Equity Plans – Is taxable Stock Exchange investment worthwhile? – Basic principles of investing in the stock market – What is a balanced portfolio? – Where to get advice on establishing a personal balanced portfolio – Where to get advice on balanced investment in unit trusts – Will my pension income be enough to live on?

11 Annuities: Decisions, Decisions, Decisions

What is an annuity? – Are annuities safe? – Why should annuity rates vary? – What factors influence annuity quotations? – What income might I expect from buying an annuity? – Standard life annuity – Index-linked annuities – Joint life annuities – Impaired life annuities – Due to a health problem – For smokers – Guaranteed annuities – Capital-protected guarantees – What is a drawdown pension? – What is immediate vesting?

12 Mortgage Strategies and Debts

What type of mortgage is better? – Comparison of mortgage interest and interest on savings – The Basics: 4 Interest Rates – How much can my savings reduce mortgage interest by? – Current account mortgages – The piéce de resistance – Paying off debts before retirement

Part Three – Property, Health and Wealth in Retirement

13 Raising More Funds for Retirement

Using your house to free capital – Stamp Duty – The effect of house prices and stamp duty on costs – What are your options? – High house price area factors – Do you want to stay in the same area? – Do you want to go into the country (or town)? – Do you want to move to a lower house-price area? – Selling your house to a developer – Downsizing – Making the most of property development – Retrieving the crock of gold – Raising money through equity release – How much can one borrow with equity release? – But what are the interest rates? – So we can get cash, but at what cost to our estate? – What will be left in the estate if we take equity release? – Is there any way we can reduce stamp duty?

14 Investing in Property to Let

What is involved? – The basic principles of buying-to-let – Buying-to-let is a business – Choosing the property – Tax-deductible expenses – What are the risks of buy-to-let? – What are the returns likely to be? – Selling the property and CGT due – Continuing to let the property – Warning – Let-to-buy property

15 Forget the Wealth – Think of Health

Looking after your health post-retirement – Private medical insurance – Can you afford the premium? – How much does private surgery cost? – When do we think about a retirement home? – What advantage does a retirement home offer? – What if we need to go into a care home? – What are care-home costs? – Financing care-home fees – What makes an ICP differ from an ordinary annuity? – What does an ICP cost? – What if we live so long the money runs out? – A side effect of ICP–mitigating inheritance tax – Tax treatment of ICP income

16 Out to Grass

Preparing for time on your hands – What other work can fill the time? – So what else can one do? – How to cope with a spouse after retirement – Coping with the time on your hands – Negative factors in retirement – Preparing for the last trump – Notifying Registrar of Deaths – If the death occurs abroad – If body is brought back from abroad to England or Wales

Useful Addresses
Index