Retirement

Buried Treasure: A guide on how to reclaim forgotten accounts

Buried Treasure: A guide on how to reclaim forgotten accounts

We’ve all experienced the joy of finding cash down the back of the sofa or in an old coat pocket. Now multiply that feeling and imagine the loose change as lost bank accounts worth a substantial amount of money.

For many it would seem inconceivable that bank accounts could be lost or forgotten about, but it happens more frequently than we imagine; moving address and a change in personal circumstances such as getting married, divorced or widowed are main factors.

It is estimated that up to £1 billion is sitting dormant in accounts in the UK in the form current and savings accounts, premium bonds, pension schemes and insurance policies. Banks do try and trace the owners of accounts which is usually prompted by returned letters and statements and accounts with long periods of inactivity.

Legislation set in 2009 now means if an account remains dormant for over 15 years it automatically gets transferred to the government fund and invested into public and social programmes. This however does not affect your right to money which is rightfully yours and you are entitled to reclaim in at any time.

Tracing lost bank accounts
Recent figures suggest that there are around 150 million bank accounts in the UK and around half a million ‘lost’ which can easily be recovered. If you know the provider your account is with, begin by contacting them with as many of the account details as possible such as account name and number. Remember to search accounts that may have been set up in a maiden name. The bank has up to three months to respond and decide on the validity of a claim. If it refuses you can complain to the internal complaints department and if this is unsuccessful you can contact the financial ombudsman service. There are also special websites which offer a free tracing service such as the NS&I’s My Lost Account. It’s worth a go as lost accounts can sometimes build up to a substantial amount due to interest accrued over the years.

Tracing Lost Pensions
On average we change careers five to seven times in our life so its unsurprising that keeping track of all pension paperwork might be difficult. It’s also difficult to keep abreast of insurance mergers over a lifetime as companies dissolve and merge into one another. Those most likely to be affected are those who may have been starting their career amidst the boom of company pension policies in the 80s. Until 1988 it was compulsory to pay into a company pension scheme if there was one in place and if you worked there for a couple of years it’s likely your pension may have been preserved. Recent pension legislation changes have also allowed small personal pension pots of up to £2,000 to be accessed as a lump sum rather than a paltry annuity amount.

Firstly, contact the Pensions Tracing Service, part of the Department for Work and Pensions, who keep the details of up to 200,000 pension providers and their latest contact details. Details of both company pension schemes and personal pension schemes are kept. Try to remember important details: where was the policy run from, did the employer trade under a different name for instance, what type of business was it and when did you belong to the scheme? It’s up to you to contact them and its important to check whether you are entitled to any pension. You may also be able to claim the pensions of relatives that may have passed away.

After being reunited with a potentially substantial amount of money, it’s always a good option to enlist the help of an independent financial advisor and re-invest. For your savings a high yielding savings accounts such as a savings bonds or an ISA will find the best interest rates. Similarly, make the most out of lost pensions by exploring your options regarding annuities.

This post was written by John Hughes who is the resident blogger at Independent Financial Advisor , a UK based site that provides access to financial advisors as well as to debt advice charities for those struggling with their debts.


3 Easy Ways to Get Frugal

3 Easy Ways to Get Frugal

There are a lot of things that one works hard to accomplish. No matter what your goals are, they’ll only be achieved if you are committed to seeing results. A great example is being frugal. The chances of saving a lot of money are only high if you are committed, confident and creative. All you have to do is to carefully think about a plan, then decide what you should and should not do when it comes to spending. From here on out, it’s only a matter of sticking to it!

Read these tips to guide you in your plans

1. Bills

Pay all your bills on time. By doing so, you will not have to pay extra charges. You should also do away with all unnecessary expenses. This way, you will have enough cash to have all the payments made on the day they are due and less bills to pay in the first place.

2. Budget

You have to come up with a budget. Make sure that you list everything that you cannot do without. You should then calculate the amount of cash that you are supposed to use in one month or week. Once you have it all down, you have strictly follow the budget. Only if you are true to the plan will you save any money.

3. Spend Less

Live below your income. It sounds simple, but you’d be surprised how easy it is to spend a little more than you make each month, thinking you can pay it off later. Once you commit to this new method, you’ll be in a great position to actually save cash at the end of each month. Keep in mind, though, that if this is your only or primary method of getting frugal, you won’t see results right away. However, if you’re patient, you’ll see results after only a couple of months.

Through frugality, you will be in a good position to meet any financial goal. Maybe you need to put away more for retirement or college. Maybe you want to go on a trip down the road. Regardless, the best thing about frugality is that it’s a lifestyle choice. Like any healthy lifestyle choice, you’ll get used to your new, positive results.  This is perfect, because if you decide to splurge on a big trip someday, you’ll have the skills to save up for another trip after you’ve returned! Never stop being frugal – you’ll  be happy you listened to that little voice inside your head.


Could Living a Long and Healthy Life Leave You Without Money in Retirement?

Could Living a Long and Healthy Life Leave You Without Money in Retirement?

retirement planWill I have a long retirement? Should I live longer than average will I have enough money to support myself in retirement? Am I saving enough for retirement? These questions are key when you’re deciding how much money to save for retirement in order to live comfortably and have enough money for your entire lifespan.

Obviously, no one knows how long their life will be, although it’s possible to make an educated guess. The most important thing about life expectancy is to save enough money before you retire so that you have enough money to support yourself for the entire time you’re retired. After all, it could be 30 or 40 years.

Retirement Plans

There are a variety of considerations when working at making a retirement plan, but life expectancy is an enormous factor. People used to think that they’d be lucky to live twenty years after retirement. Today, lots of people are living right into their nineties and some even live past 100! This higher lifespan is due to better lifestyles and advances in medicine.

Today one needs to assume that they’re going to need a lot of money when they retire. In fact, retirement can be so long that the average retiree should assume that he or she will need to live off the income from the principal in their savings account and never resort to using any of the principal.

Most of us prefer to think that we’ll live a long and healthy life, but a long time takes extra planning. Use a free retirement calculator that you can find online to help you figure out how much money you’ll need to maintain a comfortable lifestyle for the remainder of your life.

There are ways to give yourself an idea of your own life expectancy. You don’t want to use the tables that are used by life insurance firms and financial advisors that work well when used for groups of people, although you can give yourself a general idea of the life expectancy of the group to which you would belong. Individual life expectancy cannot be calculated like the life expectancy of a group and using one of these tables can get you into hot water. This is because you may live a whole lot longer than the average life expectancy of someone your age. Nobody can make an accurate prediction as to how long they’ll live.

One thing that’s known is that life expectancy grew dramatically in the twentieth century. Early in the century life expectancy was about fifty years. By the end of the century it was about 80 years. Due to medical advances, it seems that life expectancy grows by leaps and bounds every year. That which was fatal last year may be survivable this year.

You can take a look at a life expectancy table and factor in your family history, your lifestyle, your personality type and whatever it is you do for a living, but you’re just making an educated guess. There are no absolutes when it comes to length of life.

Your Family History Can Give You Clues

It’s common and sensible to base how long you expect to live on how long your parents and grandparents lived. If your parents and grandparents all lived into their nineties, things are looking good for you to live into your nineties, too, right? If everyone died young, don’t make assumptions. You are probably living healthier than they did and will be able to take advantage of modern medical advances to boot.

Don’t ever underestimate your own life expectancy because doing this can cause you to seriously underestimate how much money you’re going to need to support yourself in retirement. You could easily run out of money right in the middle of your retirement.

Plan As If You Know That You Will Have a Long Retirement

Unless there’s some pressing reason for you to believe that you will live no more than 20 years post retirement, you need to assume that you’ll live 40 years and plan your retirement with that idea in mind. The very worst thing that could happen is that you’ll have lots of money at the end of your life to bequeath to your children. The best thing is that you’ll have plenty of money to live comfortably in retirement without ever worrying about it running out.

If you make the assumption that you’ll live 30 or 40 years after you retire it means that you’ll have to pledge that you won’t ever touch the principal of your savings. Forty years is a very long time to support yourself in retirement. You’ll have to live off the income from the money that you’ve saved. This concept is critical to a prosperous retirement.

A short retirement means that you can safely spend a little of the principal in your savings. But a long retirement of up to 40 years means that you will have to always take advantage of no more than the income of that principal.

You’ll also need to know the best ways to invest that principal so as to work around inflation and live the life you expect to live.

Pay Your House Off

A great way for retirees to insure that they’ll have enough money to retire is to pay off their mortgage while they’re still working. This will cut down on expenditures when you retire and it will also give you a very valuable asset.

You could budget your savings to make sure that they’ll last until a certain age, but should you live past that age, you can live on your biggest asset – your mortgage free home.

Enjoy Those Golden Years!

Having a longer life expectancy means you may live a long time to enjoy all the hard work that you did during your working years. The most important thing you can do is to make sure that you have enough savings to give you enough money to last your entire life. When formulating a retirement plan assume that you’ll live a good long time and enjoy every year of your well-deserved retirement!

About the Author:

Author Jason Munroe is extremely knowledgeable about one of his favorite subjects money! Living in Nevada with his wife and children, Jason loves to surf the Internet and considers travel to be a passion. When he’s not surfing or traveling, Jason enjoys teaching about wealth building and retirement issues.


How Much You Should Be Saving for Retirement

How Much You Should Be Saving for Retirement

While many pension experts will give you ‘rules of thumb’ to save for retirement, the truth is that the kind of pension pot you will need is completely dependent upon your individual circumstances.

Planning

There are, however, some basic steps that you can take to start planning how much you should be saving.

The most important step in planning how much to save is to calculate how much you will need in income when you retire. You should keep careful track of your expenditures over a few months time if you do not already do so, and review your outgoings.

Consider the expenses that will remain the same when you retire as well as the expenses that will have changed. For example, when you retire you may have paid off your mortgage, but may have extra expenses for travel or healthcare.

Then consider the income that you will have in retirement, as your pension may not be the only source. Be sure to factor money you will get from property rental or other investments, as well as the State Pension.

You can then divide your target retirement income by a reasonable annuity rate to see how much money you will need to purchase that level of income. For example, with annuity rates at record lows, you may want to use the figure 4.5%. If you decide that you want an annual income of £20,000 as a pensioner, you will need to save around £444,000.

If annuity rates go up, which they may well do in the next 10 years, a rate of 5.4% requires you to save £370,000 to get your dream income of £20,000 per year.

Compound interest

If these numbers seem like impossible sums, keep in mind that you will be investing over the long-term, and that your money will ideally have decades to grow until your final retirement date.

Since growth is crucial to reaching your pension pot goals, use a compound interest calculator when figuring how much you will need to contribute to your pension between now and retirement. Younger savers will be able to get away with saving hundreds of pounds less per month than older savers, simply because compound interest and time is on their side.

Another important issue is that once you have planned your contributions, your retirement planning is by no means complete. Keep your calculations under regular review, as figures are likely to change over time.


%d bloggers like this: