We met up with our long time financial adviser, and it was quite a surprise to hear about the changes to the financial system – insurances and savings are now completely separate.
The present climate is pretty awful for savings and investments, and there really is no with-profits type of insurance anymore.
ALL savings have the same tax breaks -so Individual Savings Accounts (ISAs) are not terribly attractive anymore. Most other types of account have better interest rates!
It was a real eye-opener! What a bizarre world.
It looks like funeral costs will have to be from Term insurance, Whole-Life insurance, or borne at the time from whatever cash is to hand.
The good news is that we’re in a better position that we’d thought (mostly by chance).
Years ago, an incorporated company needed a minimum of two directors. This changed and so my latest business had just me as the sole required director when I started it up.
However, when my daughter was ready for nursery, because my wife was not back at work, and we were not claiming state benefits, a nursery place was impossible!
The only way around this was to employ my wife, and so my children were able to get places at pre-school nurseries.
And that was the way we left it – until the changes in workplace pensions of late meant that she had to become a director to avoid all that.
This is a really good position to be in as it turns out; this is our main income source, so if anything happened to either one of us, the survivor would be able to continue access to the money without having to do anything.
There is no point in opening a joint bank account because our individual accounts are barely used, and are mainly fed from whatever we chose to transfer from the business.
All we have to figure out is what happens to the business should anything happen to us both at the same time.
We do have savings, so we have decided to look at splitting this lump into two – one invested in something ethical but risky (and so higher on our ROI) – maybe something like equity crowdfunding or an angel investment, Crowdcube, or Seedrs type of thing – which may be fun if a wee bit too risky. Then again, it may just be safer yet still better than the high street with a P2P/ Peer-to-peer social lending set up (the old marketplace lending scenario is getting good press lately eg Zopa is returning a whopping 7% just now), the rest probably ought to be in a bank or building society – a joint account with good access.
The plan is to use the savings account to cover funeral costs, the business account for the day-to-day living costs and bills immediately following a death, and the higher yield investment to take care of the children’s future whatever happens.
A check on Moneysavingexpert shows that the rates are all terribly low, and that current accounts are better than savings accounts! West Bromwich Building Society offers an easy access account at 1.05%, better rates mean locking away the cash.
Anyway… we’re on the case. The limitations and restrictions mean that everyone is in the same boat, and that everything is actually a lot simpler too. So there is that.