Income limit for age allowance 2013-14?

Question
I have been looking on the web to no avail in order to find out what change if any there will be in 13/14 to the "Income limit for age-related allowance which is at the moment £25,400 for 12/13 " can you assist please?Answer
The income limit for age-related income tax allowances will increase from £25,400 to £26,100 for 2013/14. I agree, it's currently not easy to find - I gave up on the HMRC website, finding the figure in a HM Treasury document here.

As a reminder, as part of the Government's plan to scrap the higher age-related income tax allowances, both will remain frozen at £10,500 and £10,660 respectively, presumably until the standard personal allowance catches up. The £10,500 allowance will be available to those born on or before 5 April 1948 and the £10,600 to those born on or before 5 April 1938.

Read this Q and A at http://www.candidmoney.com/askjustin/784/income-limit-for-age-allowance-2013-14

Which Lloyds staff pension funds?

Question
I'm 36, and have a deferred Lloyds Banking Group money purchase pension fund of circa £60k - invested in "Your Journey Extra".

Thanks to this site's recommendations and advice, I am in the process of arranging a stakeholder pension (now run my own company), and have been interested in trying to evaluate fund performance, whilst matching to my own circumstances (and risk appetite etc), before taking the leap and making my choices.

This has meant I've relooked at the LBG fund too - and although the AMCs seem fair (0.45% for YJ Extra), it's difficult to assess the fund's performance as although the LBG website shows a couple of year's performance I'm not sure how to get peer comparisons or any independent analysis (e.g. Morningstar). I have the option (I think) of switching to different LBG funds, or transferring out (which I'm disinclined to do given the low charges).

Any advice very welcome. (P.S. fantastic site!)Answer
Lloyds TSB doesn't offer much readily accessible information on its staff pension funds, but a little digging on its website reveals fund factsheets which are quite helpful (click on he 'fund information' icons).

The 'Your Journey Extra' fund is run by Blackrock and as at the end of September 2012 invested around a third of the fund in stock markets, just over a third in fixed interest with the balance in cash and other investment types such as absolute return and commodities. This looks pretty sensible overall, especially in the current uncertain climate. Nevertheless, if you won't be drawing a pension for 30+ years there's an argument for taking more risk, depending on what you're comfortable with.

The 0.45% Your Journey Extra fund annual charge appears to cover the costs of underlying investments, although the documentation isn't very clear on this. I'd suggest calling the scheme administrator to check, but assuming it covers underlying investment costs it's very competitive.

Comparing performance is unfortunately a fairly clunky process, as the Lloyds funds aren't included in any online fund data websites (that I can find at least). The Lloyd's fund factsheets show performance since launch (July 2010) over 12 month periods to the end of the last quarter as well as returns over the last year. Taking these figures you can compare to sectors and funds via websites like Morningstar and Trustnet, although it's approximate as the dates to which returns are shown may vary from the factsheet.

In terms of what to compare to, I think the IMA Mixed 20-60% Equity sector is a reasonable benchmark for 'Your Journey Extra' and on this basis the fund has been pretty average

In time you might want access to a wider choice of investments, in which case transferring to a low cost SIPP might be appropriate. But for now I can't see a compelling reason to transfer, although you might consider the Global Journey, Asia Pacific Equity and Emerging Markets Equity funds in moderation if you want to ramp up risk.

Hope this helps and glad you like the site!

Read this Q and A at http://www.candidmoney.com/askjustin/779/which-lloyds-staff-pension-funds

Mercom Oil Sands a good investment?

Question
My husband had a text message today from a company http://www.mercomoil.com asking him to consider buying Mercom Oil shares at 40p a share. Is this a legitimate company or a scam, can you help. How on earth they have got hold of my husband's mobile number I just can't imagine. But you hear about so many dodgy firms out there who try sucking OAP into a false sense of security and my husband has been seriously thinking of putting money into these shares. I'm a bit sceptical of believing messages like this seeing as my husband doesn't have any dealings with stocks and shares.Answer
One simple rule I'll always stick by is to never invest as a result of a cold call/email/text. When investments require a very heavy sell then at best they're probably not very good and at worst a scam.

Mercom Oil Sands was established in February this year and intends to make its fortune by extracting oil in Alberta, Canada. It appears to be very much in its infancy and looks an incredibly speculative investment. The company appears to be having difficulties acquiring an interest in oil sand leases and has also just issued more shares to pay off some consultancy fees, suggesting cash is tight.

The company is listed on the London Alternative Investment Market (AiM) where its shares are trading at 1.66p (at the time of writing) compared to a launch price of 10p, giving the company a market cap of £5.3 million. So whoever is trying to sell the shares at 40p each is clearly a scammer (I very much doubt the text was from Mercom themselves, if so they'd be in big trouble with the regulator).

This type of investment isn't my cup of tea, but if your husband wants to take a punt then he should be able to buy the shares through a stockbroker for considerably less than 40p!

On another note, yes it's really annoying when marketing companies get hold of your mobile number. I give out a dummy number unless it really is vital the company concerned has a correct number for me. I still get pointless PPI/personal injury texts though!

Read this Q and A at http://www.candidmoney.com/askjustin/778/mercom-oil-sands-a-good-investment

Gender neutral insurance update

What's the current state of play re: insurance premiums ahead of the 21 December deadline banning gender from influencing premiums?.

The 21 December deadline for insurers to stop varying insurance premiums based on gender looms. To recap, a ludicrous Eurocrat decision means insurers will no longer be allowed to use facts such as women (on average) living longer than, or having fewer car insurance claims than men when calculating insurance premiums.

Should you take any action before 21 December? Let's take a look at the main types of insurance affected to see the current state of play. My estimates for rates/premiums under the new rules assume business is split 2/3rds to 1/3rd between men and women, which might be incorrect, but these figures nevertheless give a reasonable guide as to what will probably happen.

Pension Annuities

Annuities are effectively a bet with the insurance company on how long you'll live. Because women tend to outlive men their annuity rates have historically been lower.

A quick look at current annuity rates suggests some insurers (e.g. Aviva) have already adopted gender neutral quoting, while others such as L&G are still offering better rates for men. However, in the example I ran Aviva's rate came out top for both men and women, suggesting (for the moment at least) both are getting a good deal.

Figures show annual income from a £100,000 level single life pension annuity for a non-smoking 65 year old:

	Aviva	L&G	Age Expectancy
Male	£5,518	£5,515	86 years
Female	£5,518	£5,193	88.3 years
Current annuity rates sourced from MAS Comparison tables.

Once the market settles down I'd expect women will receive a higher annuity income compared to gender-based quotes while men will see their income fall (other things being equal). However, shopping around remains vital and could certainly help mitigate the reduction for men and further boost income for women.

If you're a male pondering whether to buy an annuity before 21 December then it's certainly worth getting some quotes, but it doesn't look rates will fall off a cliff overnight.

Life Insurance

Life insurance policies are also a bet on how long you'll live, so women generally enjoy lower premiums than men at present. No gender neutral pricing as yet, so we can still only guess the extent of any change.

Figures show monthly premiums for a 20 year level term assurance policy with £200,000 of cover for a non-smoking 30 year old:

	Current	Estimated new	Probability of dying before 50	Estimated cost difference over 20 years
Male	£7.81	£6.81	1 in 28	-£240
Female	£6.32	£6.81	1 in 48	+£120
Current premiums sourced from Cavendish Online.

The new rules will likely mean women getting the short straw, with higher premiums, so buying a policy under current rules might be sensible, provided the premiums are guaranteed to be fixed throughout the term. By contrast, men should enjoy lower premiums after 21 December 2012.

Income Protection

Although women tend to live longer than men, they are more likely to suffer from illness necessitating extended time off work. So income protection premiums have historically tended to be more expensive for women than men.

However, having run some quotes many income protection insurers appear to have already built in gender neutral pricing, so men and women receive the same quotes (everything else being equal). Nevertheless, if you're a male looking to buy such a policy it's worth getting some quotes before 21 December to see whether you can get a competitive deal from one of the few insurers who, quite sensibly, still vary quotes based on gender (there are plenty of online comparison brokers, just google).

Car Insurance

Despite male jokes about women drivers, females actually have fewer claims (on average) so their car insurance premiums are generally lower than men's.

Because car insurance quotes can vary so widely I haven't run a comparison here, but industry consensus seems to be that premiums for women could rise by 25% or more under the new rules, while men's premiums will generally fall. The trouble is because car insurance premiums are reviewable each year there's no way of locking into current rates long term .

Is there any way for insurers to get around this?

Insurers might be able to retain a link between insurance premiums and the likelihood of a claim being made via tighter underwriting. For example, professions, postcodes and health history could have a greater influence over certain premiums than they do at present. And those professions which tend to be dominated by one gender or the other could be ripe for some 'closet' insurance premium sex discrimination.

Read this article at http://www.candidmoney.com/articles/262/gender-neutral-insurance-update

Property entitlement when common law partners separate?

Question
My daughter and her partner are separating after 7 years together. They are not married.

Two years ago they bought a house together. My daughter put in £25000 from the sale of her flat, and I gave them £30000 to build an extension.

My daughter's partner brought no cash to the house purchase and the two of them have been splitting the mortgage payments equally.

He owns a flat which he rents out and he keeps all the profit.

Most of their furniture was bought by my daughter when she had her own flat.

My question relates to his cash entitlement when they split. My daughter would like to keep the house, and "buy out" her partner.

Is she entitled to exclude the £25000 and the £30000 mentioned above from the settlement?

If she offered him a refund of the monies he spent on mortgage repayments and half of the money they spent on additional furniture, would this be all he would be entitled to, or are there other cash considerations to be taken into account?

They live in Scotland.

Hope you can clarify these points. Thanking you in advance,Answer
So-called common-law partners actually have no automatic rights to each other's property, regardless of how long they've lived together, unlike married couples and civil partners. So what matters is whether your daughter and her partner have ever made any written agreements about ownership of assets and, most importantly, who's listed as owner(s) on the house deeds.

Provided your daughter is the sole owner of the house (on the deeds) then she should be in a strong position. Her partner would have no rights to the house (either ownership or to remain living in), although he might be able to claim some money in respect of his mortgage contribution - certainly a basis for negotiation.

However, if his name appears on the deed it makes things more complicated, as he legally owns a share of the house (as stipulated in the deed, probably 50%). In theory this means he could receive a share of the net proceeds were the house sold and he's under no obligation to leave meanwhile.

As for other items, those bought or acquired during the time they lived together are presumed to be owned equally - with the exception of money, investments, vehicles and pets. However, items acquired before then belong to the person who acquired them and gifts or inherited items belong to the person who received them.

In light of this, provided your daughter legally owns the house then the offer you mention sounds perfectly reasonable. If the house has appreciated since purchase (ignoring the extension) then I suppose he might have grounds for wanting some of the notional 'profit', but given the stagnant housing market in recent years I doubt this will be an issue.

If his name is on the deeds then your daughter may have a harder time reaching a fair agreement, depending on how reasonable her partner is. For example, he might try to claim a share of the deposit and extension monies.

Hopefully they can come to a fair and amicable agreement without having to get solicitors involved, else legal fees could quickly dent both their finances.

For more information the Citizen's advice Bureau has a useful guide here.

Read this Q and A at http://www.candidmoney.com/askjustin/777/property-entitlement-when-common-law-partners-separate

How to move ISAs from Bestinvest to another platform?

Question
I currently have a portfolio of 20 unit trusts to the value of approximately £160,000. 18 of them are held within ISA's split between the Fundsnetwork and Cofunds platforms. All were purchased via Bestinvest who have acted for me in a non-advisory capacity.

Bestinvest are now keen for me to transfer my holdings to their "Select" service. However, having read your excellent 'Guide to ISA Discount Brokers', I believe that transfering my holdings to Interactive Investor may be my best option as they rebate all the trail commission and also I already have a share dealing account with them. I want to transfer the holdings "as is" so that they are not out of the market for any length of time. I am aware that I can't do this from Fundsnetwork until 2013 but don't mind waiting till then to transfer all my funds at once.

Something that concerns me, given that I have a total of 20 different unit trust holdings, is the potentially high cost that Bestinvest may charge for the transfer. Unfortunately I have been unable to discover what their transfer charges are and wondered if you had any idea? I know that the transfer charges from their "Select" service are £25 per asset plus a £50 ISA closure fee but I cannot find anywhere that tells me what the transfer charges from their non "Select" service are.

Also do you know if there would be any transfer charges incurred from Fundsnetwork or Cofunds. I can find nothing in their terms and conditions that says that there would be but wondered if you know otherwise?
Also just a quick thank-you for your unbiased, independant site and especially the articles on the RDR which I have found most enlightening. Answer
Under your current service Bestinvest simply acts as broker for the funds held on the Cofunds and FundsNetwork platforms. This means Bestinvest doesn't levy any charges of its own, but receives trail commission from the two platforms, probably around 0.5% of the value of your funds each year.

This gives you two options. The simplest would be to appoint another discount broker as the 'agent' for your funds. All this requires is signing a simple form or letter confirming the change, after which the trail commission will divert to the new broker but the funds remain untouched with Cofunds and FundsNetwork. Cavendish Online rebates all FundsNetwork trail commission with no explicit fee (they receive 0.05% from FundsNetwork). Otherwise Massow's rebates all trail commission from both platforms in return for a one-off £125 fee (provided the commission can be rebated into your investments, which in case of these platforms it can).

The alternative is to transfer the funds to another platform, as you've mentioned. This requires funds to be 're-registered' (also known as an 'in-specie' transfer) in order to keep them 'as is' and avoid having to sell then repurchase. Cofunds allows re-registration of funds held outside of an ISA to other platform but (at time of writing) still doesn't allow ISAs to be re-registered, despite the FSA requiring all platforms to offer this option by the end of this month. FundsNetwork is also inflexible, only allowing non-ISA funds to be re-registered where the total transfer exceeds £40,000 and excluding all non-Fidelity funds from ISA re-registration. Where re-registration is allowed, neither platform (nor Bestinvest) currently charges for this.

I would expect both to adapt their policy in line with the FSA's requirement by the end of the month (although they'll likely drag their heels until the last minute), but until then it's a far from satisfactory situation.

It's worth noting that Interactive Investor uses Cofunds for the fund part of its platform, so it should certainly be possible to seamlessly move your existing funds held via Cofunds from Bestinvest to Interactive Investor. I'd give Interactive Investor a call and ask them how they'll facilitate this.

As for FundsNetwork, if you have non-ISA funds in excess of £40,000 you can re-register now. Otherwise this facility should be available by next month. I'll update when there's some news.

Glad you like the site and you find it useful.

Read this Q and A at http://www.candidmoney.com/askjustin/776/how-to-move-isas-from-bestinvest-to-another-platform